Overruling Precedent, Board Finds Violation May Be Established Without Specific Unfair Labor Practice Complaint Allegation

In a decision having far-reaching implications, a National Labor Relations Board panel  consisting of Chairman Mark Gaston Pierce and Members Kent Hirozawa and Lauren McFerran, (Member Miscimarra dissented) has overruled almost 10 years of NLRB precedent, deciding  that a violation of the National Labor Relations Act could be found based on an employer’s failure to inform the union that it did not possess information the union requested, despite the absence of a specific unfair labor practice complaint allegation to that effect.

The Board concluded the employer had violated the NLRA by not informing the union representing its employees in a timely manner that it  did not possess information the union had requested about rule and policy changes despite the fact that the agency’s administrative  complaint did not include an unfair labor practice allegation to that effect. Graymont PA, Inc., 364 NLRB No. 37 (June 29, 2016). In so doing, the Board overruled Raley’s Supermarkets & Drug Centers, 349 NLRB 26 (2007).

In Raley’s, the Board majority (Member Liebman dissented) ruled that, although the unfair labor practice complaint alleged the employer had unlawfully failed and refused to provide the union with a copy of an investigative report into possible supervisor inappropriate behavior toward two female employees (or a summary of the pertinent findings) the union had sought, “at no time, even after learning that such a report did not exist, did the General Counsel amend the complaint to allege that the employer violated the Act by failing to timely inform the Union that there were no such reports.” (The dissent had argued that the employer violated the Act by failing to timely inform the union that it did not have reports the union had requested.) 

In Graymont, an NLRB administrative law judge found that the employer had violated the NLRA by unilaterally changing its work rules, absenteeism policy, and progressive discipline policy. Based on Raley’s, the judge also found that the employer did not violate the NLRA by failing to timely inform the union that the information the union had requested about these changes did not exist because it had not been asserted as an unfair labor practice in the complaint.

The Board reversed. It held instead that the “test” in Pergament United Sales, Inc., 296 NLRB 333 (1989), enfd., 920 F2d 130 (2d Cir 1990), should apply. (Interestingly, the NLRB did not cite or mention Pergament in Raley’s.) In Pergament, the NLRB decided that an unalleged violation may be considered where it is so closely connected to the subject matter of the complaint that a finding of violation would not cause “manifest injustice,” would not constitute a denial of due process, and therefore, would not be prejudicial. The Board held that “Raley’s Supermarkets should be overruled to the extent that it precludes the Board from considering [as in Graymont], an unalleged failure to timely disclose that requested information does not exist when, as here, the unalleged issue is closely connected to the subject matter of the complaint and has been fully litigated.”  The Board further explained the complaint “is not the exclusive source of notice of the material issues to be addressed in a Board proceeding” and “notice may also be provided by the General Counsel’s representations at the hearing, or it might be evident from the respondent’s conduct in the proceeding.”

Whether an unasserted violation is so “closely related” to the subject matter of a complaint as to place the employer on notice for purposes of due process has been the subject of Board litigation under Section 10(b) of the Act. In Redd-I, Inc., 290 NLRB 1115 (1988), the Board held that in deciding whether complaint amendments are closely related to charge allegations, it would apply a “closely related” test, comprised of the following factors. First, the Board will look at whether the otherwise untimely allegations involve the same legal theory as the allegations in the pending timely charge. Second, the Board will look at whether the otherwise untimely allegations arise from the same factual circumstances or sequence of events as the pending timely charge. Finally, the Board may look at whether a respondent would raise similar defenses to both allegations.

It is not clear why the Board chose not to apply a Redd-I approach in Graymont. The Pergament standards   arguably are more subjective ( “manifest injustice”, “closely connected”, “respondent’s conduct at the hearing”)  and may indicate that the Board wants more flexibility than Redd-I accords. Whatever the Board’s motivation, we can expect to see more litigation on this subject in the future.

Labor Unions Use Technology to Grow and Maintain Membership

Labor unions today are “tech” savvy, using mobile app and other technology to grow and maintain their memberships.

According to a report in the Bloomberg Bureau of National Affairs Daily Labor Report (136 DLR C-1 July 18, 2016), a number of labor unions, including the International Association of Machinists, Communication Workers of America, and Service Employees International Union, are using app technology to inform members of union news, sign political action petitions, access video clips and pictures, read press releases, view union social media accounts, and report workplace violations, all with the goal of reaching and growing their memberships.

Since labor unions are not generally permitted on an employer’s property to organize, labor unions are attempting to reach more and more workers through the use of their smartphones by mobile app technology and social media platforms, including Facebook, Snapchat, dedicated websites for blogging and reporting alleged workplace misconduct and the like. The use of technology by labor unions coupled with the National Labor Relations Board’s focus on broadening employee rights through the use of technology requires employers to stay ahead of the game.

In recent years, the NLRB also has developed a website to publicize employer labor violations, permitted the use of electronic union authorization cards in order to establish a “showing of interest” in support of the union representation petition, and allowed workers to use an employer’s email system on non-working time to engage in union organizing and other Section 7 (of the NLRA) concerted protected activities. The NLRB also has developed its own app. According to Bloomberg BNA, once it is free of its budget constraints, the NLRB has plans to upgrade the app to allow “workers, employers, and unions to take action from anywhere,” according to NLRB chairman Mark Gaston Pearce.

The use of technology by labor organizations to address labor issues and beef up declining memberships undoubtedly will increase regardless of the industry, labor climate, and overall workplace demographics.

Because of these new techniques, more and more organizing can be done by unions without face-to-face contact with employees. That could make it easier for unions to “meet with” many more employees in a shorter period of time and more effectively. To persuade employees to sign authorization cards who become star struck by the union’s glossy and upbeat electronic organizing tools. Employers should consider taking a preventive approach and informing their employees about these organizing techniques and cautioning employees not to be persuaded by glossy, upbeat organizing tools.








Ham-Handed Tactic? NLRB Says Union Giveaway Not Grounds for Setting Aside Election Victory

A union’s gift of free hams on the eve of an NLRB-conducted election did not influence the outcome, a union victory, the National Labor Relations Board has determined. Nuverra Environmental Solutions, Inc., 08-CA-164447 (July 8, 2016).

The union had distributed holiday hams to eligible voters five or six days prior to the election. After the union prevailed in the election, the employer filed “objections” with the NLRB’s Regional office, alleging the giveaway unlawfully influenced the results of the election and requesting the Regional Director to invalidate the election and conduct a rerun. The Regional Director denied the request and certified the union as the employees’ bargaining representative. The employer then filed an appeal (“request for review”) with the NLRB in Washington, D.C.

The NLRB denied the employer’s request for review, finding the union’s holiday giveaway did not interfere with the election. The Board noted that: the hams were of modest value ($10-$12); the stated purpose was to extend holiday greetings to the union’s members, their families, and friends; it was a yearly event; the union informed only one unit employee that unit employees were eligible after the employee inquired; attending the giveaway and accepting the hams was entirely voluntary; the union did not link the giveaway to the election and only unit employees who attended the giveaway received the hams.

The Board summarily dismissed the fact that “a potentially dispositive number of employees received free hams” or that the giveaway was so close to the election (the Board also noted that it had refused to overturn other elections where a giveaway occurred even closer, the day before, to the vote date). The Board cited the test articulated in B & D Plastics, Inc., 302 NLRB 245 (1991), for the proposition that the employer had not shown the union’s giveaway “tended to unlawfully influence the outcome of the election.”

Further, the Board concluded, even assuming the giveaway warranted an inference that the free hams were coercive, the union had rebutted that inference by its “uncontradicted” explanation for the timing of the giveaway, that is, the giveaway occurred yearly and was open to all current as well as prospective union members.

The Board did not address whether unit employees who actually received hams, rather than simply being aware of their eligibility to receive them, might have been influenced. The Board also did not consider whether the union had given away hams to other who were not union members and their families in the past or that the date of this giveaway was the same as in the past.

Nuverra likely will be a model for union giveaways in the future. However, more important, it also is a useful guide for employers, since many of the factors cited by the Board as insignificant also should be considered unimportant if similar election objections are raised by a union protesting an employer’s election victory: the voluntary nature of the giving, the fact that it had been done in the past (and not necessarily on the same date), the fact that $10-$12 is considered to be of “modest value,” and the timing of the giveaway.

NLRB Overrules Precedent, Holds Bargaining Units Combining Jointly- and Solely-Employed Employees Okay Without Consent

The National Labor Relations Board has decided that bargaining units combining employees who are jointly employed by a user employer and supplier employer and solely employed by the user employer do not require the consent of either employer. In so doing, the NLRB overturned its 2004 decision in Oakwood Care Center, 343 NLRB 659. Miller & Anderson, Inc., 364 NLRB No. 39 (July 11, 2016). The Board in Oakwood Care Center decided that in order for these employees to be combined in the same bargaining unit, all parties must consent. We will have more about this decision shortly.

Court Repudiates NLRB’s Award of Attorney’s Fees and Expenses for Their ‘Deterrent Effect’

The United States Circuit Court of Appeals for the District of Columbia has determined that the National Labor Relations Board lacks inherent power and the authority under Section 10(c) of the National Labor Relations Act to order an award of attorneys’ fees and litigation expenses to itself and a labor union.

The Board found that the employer, a hotel operator, had committed, in the words of the Court, a “host of severe and pervasive unfair labor practices” and ordered the employer to pay the attorneys’ fees and litigation expenses of the NLRB’s General Counsel and the International Longshore & Warehouse Union Local 142 based on the Board’s “inherent power” to control its proceedings. HTH Corporation, 361 NLRB No. 65 (2014). The Board also contended that these remedies were “clearly compensatory” (rather than punitive) and needed to preserve the integrity of Board processes, serve as a deterrent to violations of Board Orders, and to protect the rights of parties.

However, on May 20, 2016, the three-judge Circuit Court of Appeals panel denounced the Board’s rationale and denied enforcement of that part of the Board’s order.  Writing for the Court, Judge Williams said the NLRB is a creature of statute with powers limited to those set forth in the NLRA.  Concurring, Judge Henderson agreed the Board’s only power is that which is granted by Congress and “contrary to the Board’s apparent belief, it is not a court of law or equity.”  The Court noted that, due to statutory constraints on its authority, the Board may only impose remedies that are remedial and not punitive. The Court rejected the Board’s assertion that it has “inherent authority” to control and maintain the integrity of its own proceedings through an application of the bad-faith exception to the American rule and order payment of attorneys’ fees and litigation expenses. Although the NLRB had not argued the applicability of Section 10(c) (which authorizes the Board to “take such affirmative action…as will effectuate the policies” of the Act), the Court decided it was appropriate to determine whether the Board’s remedy was authorized by that Section because, among other things, “the distinction between inherent authority and implicitly granted authority [under Section 10(c)] is a subtle one.”

The Court found that “any attempt to rest on the compensatory character of a fee award” collides with the basic underpinnings of the “American rule” that parties are free to assert rights and defenses and each bears its own expenses. In addition, the Court noted “the Supreme Court has consistently classified application of the bad-faith exception to the American rule as punitive,” citing Hall v. Cole, 412 U.S. 1, 5 (1973).

The Court also rejected the Board’s claim that ordering payment of fees and expenses serves “as a deterrent to violations” of its orders, noting that such a remedy flies in the face of Supreme Court precedent. In Republic Steel Corp v. NLRB, 311 U.S. 7, 12 (1940), the Supreme Court “firmly rejected the Board’s reliance on deterrent effect” when it ordered a party to pay another’s expenses, noting if “a deterrent effect is sufficient to sustain an order of the Board, it would be free to set up any system of penalties which it would deem adequate to that end.”

The Court  expressly did not decide whether the power to shift fees in cases of a party’s bad faith may be implicit in a provision of the NLRA other than Section 10(c), so it is not inconceivable that the Board in the future may seek to  order fee-shifting based on its reading of another statutory provision.





Workplace Dress Codes – Auto Dealer Can’t Bar Workers from Wearing Message Pins, Court Affirms NLRB

A divided panel of the U.S. Court of Appeals for the First Circuit has upheld a National Labor Relations Board decision that a Massachusetts automobile dealer’s policy banning the wearing of “message pins” violated union insignia protections under the National Labor Relations Act. Boch Imports, Inc., d/b/a Boch Honda v. NLRB, Nos. 15-1653, 15-1721 (1st Cir. June 17, 2016).

Based on an unfair labor practice charge filed by a union representing some Boch Honda employees, the NLRB’s regional office in Boston issued an unfair labor practice Complaint against Boch Honda, contending the dress code and personal hygiene provision in Boch’s employee handbook, which banned employees who had contact with the public from wearing pins, insignias and other message clothing, was unlawful.  An NLRB Administrative Law Judge found the provision violated the NLRA with respect to insignias and other message clothing, but held that the ban on pins was lawful because of Boch’s interests in promoting workplace safety and preventing damage to vehicles.

Boch Honda appealed the unfair labor practices finding to the Board.  The NLRB’s General Counsel also appealed, excepting to the Judge’s refusal to find the ban on pins unlawful. Upholding its ALJ generally, the Board,  however, disagreed with the ALJ’s failure to find a violation in the ban on pins, because the ban was not narrowly tailored to address workplace safety and prevention of damage to customers’ vehicles.

Boch Honda sought review of the NLRB’s decision in the First Circuit, contending the NLRB ignored Boch Honda’s substantial interest in protecting its public image, which justified its insignia and message clothing bans. It also contended the pin ban was justified by safety concerns.

The Court denied Boch Honda’s appeal and granted the NLRB’s petition for enforcement, concluding the ban on pins violated employees’ right to wear union insignia during work hours.  The Court noted the NLRB can require employers to demonstrate “special circumstances” to justify a ban on employees wearing union insignia. The Court explained that special circumstances exist, for example, when the wearing of  “union attire” could jeopardize employee safety, damage machinery or products, or unreasonably interfere with a public image that the employer has established. The Court also explained that the limitations must be tailored to the particular special circumstances advanced by the employer.

The Court held that Boch Honda had not met the special circumstances standard because it had “simply failed to explain why . . . non-uniformed employees’ wearing a small and unobtrusive union pin (for example) would unreasonably interfere with the general professional environment Boch sought to create.”  The Court also rejected Boch Honda’s argument that its interests in promoting workplace safety and preventing damage to vehicles justified its blanket ban on pins because it was not sufficiently narrowly tailored. Although the Court agreed that an employee’s pin could fall into an engine while the employee was working under the hood of a car or damage the car’s paint or leather, the ban on pins was not narrowly tailored to protect against those situations.

Dissenting only as to majority’s decision on the pin ban, Judge Norman Stahl disagreed that the NLRA automatically grants employees a presumptive right to wear union paraphernalia at work, and noted the NLRB’s decisions on worker attire make it difficult for companies to design or enforce lawful dress code policies.  Judge Stahl noted that by “rubber-stamping” the NLRB’s “arbitrary infatuation” with workplace dress codes, the Court was granting the NLRB the authority to play “fashion police.”

An unfair labor practice charge can be filed with the NLRB by a union, employee, or other person at any time to challenge a workplace conduct, social media, or dress code policy.  The “ground rules” by which the NLRB judges the legality of such policies can, and do, change, so that periodic review and revision of workplace policies is prudent and necessary.

Court Halts Labor Department’s New Persuader Rule

The U.S. District Court for the Northern District of Texas, Lubbock Division, has issued a nationwide preliminary injunction against the U.S. Department of Labor’s “persuader” rule promulgated under the Labor-Management Reporting and Disclosure Act. National Federation of Independent Business, et al. v. Perez, Civil Action No. 5:16-cv-00066-C (N.D. Tex. June 27, 2016). Unless the ruling is overturned by the U.S. Court of Appeals for the Fifth Circuit or the U.S. Supreme Court, the new rule will not go into effect on July 1, 2016.  For more on this important decision, please click here.

No Supreme Court Rehearing in Case on Public Sector Unions’ Right to Charge Mandatory Union Fees

The United States Supreme Court has refused to rehear Friedrichs v. California Teachers Association et al., in which the Court had issued a 4-4 opinion in April. Friedrichs v. California Teachers Association, No. 14-915 (Mar. 29, 2016). Friedrichs  sought to overrule, on First Amendment grounds, Abood v. Detroit Board of Education, a 1977 Supreme Court decision  allowing public sector unions to require members and non-members to pay agency service fees (also known by the euphemism “fair share payment”), as long as workers are not forced to pay a portion of the fees that covers political or ideological activities.

The tie vote resulted in affirmance of the decision of the U.S. Court of Appeals for the Ninth Circuit ruling in favor of the defendants and permitting required payment of agency service fees for nonmembers in the public sector. The plaintiffs had argued that their First Amendment rights were violated when the government, through a collective bargaining agreement, required the employees to pay an agency fee to a union whose views they did not necessarily wholly share. (Agency fees are similar in amount to the dues paid by union members.) The tie vote came about after the death of Justice Antonin Scalia, who was expected to vote to overturn Abood. The Court’s decision in Friedrichs, however, is not precedential, and the Court may revisit the issue when it again has nine justices.

NLRB Drops 30-Year Precedent on Employers’ Right to Unilaterally Oust Unions Representing ‘Mixed-Guard’ Units

A divided National Labor Relations Board has overturned its 30-year-old rule that an employer may withdraw recognition, even without a showing of a loss of majority status, from a voluntarily-recognized union that represents both guards and non-guards (“mixed-guard union”) with respect to a unit of guards.

Adopting a new rule proposed by the NLRB General Counsel and the six Teamsters-affiliated unions which represented Loomis employees at various California locations, the Board holds that an employer of security guards, like other employers, remains bound by a collective-bargaining relationship into which it voluntarily entered unless and until the union is shown to have actually lost majority support among unit employees. Loomis Armored US, Inc., 364 NLRB No. 23 (June 9, 2016). 

Section 9(b)(3) of the National Labor Relations Act prohibits the NLRB from “certifying” any union which represents both guards and non-guards as the bargaining representative of a unit of security guards, but does not prohibit an employer from voluntarily recognizing such a union. Historically, the NLRB has held if an employer did so, it could still withdraw recognition from such a “mixed-guard union” if no bargaining agreement is in place, even if the union had not lost majority support among employees.

The Board articulated three reasons for its decision. First, although Section 9(b)(3) prohibits such mixed-guard unions from being certified by the Board, it does not expressly address the situation where an employer voluntarily recognizes a mixed-guard union for a unit of guards, but then seeks to withdraw such recognition.  Second, the Supreme Court has observed that exemptions from NLRB coverage should be narrowly construed so as not to deny the protections of the NLRA to workers.  Third, the new rule will promote the statutory purpose of fostering stable labor-management bargaining relationships.

The new standard will not be applied retroactively. For the foreseeable future, the rights of any employer which is a party to a mixed-guard bargaining relationship are as set forth in Loomis.  As with any other unit of employees, once an employer voluntarily recognizes a mixed-guard union as the representative of its security guards, the employer must continue to recognize and bargain with the union unless and until it can be shown that the union has actually lost majority support among unit employees.  Absent that showing, the Board will hold that an employer’s unilateral withdrawal of recognition from the union will violate the employer’s duty to bargain under the NLRA.



NLRB Associate General Counsel Warns Regions About ‘Potential Literacy Issues’

The Associate General Counsel of the National Labor Relations Board has notified the NLRB’s Regional Directors, Officers-in-Charge and Resident Officers that they “should be cognizant of potential literacy issues when considering remedies” and consider requiring employers who have been found in violation of the Act to read aloud the Board’s “Notice To Employees” to assembled employees to overcome written language barriers in appropriate cases. Memorandum OM 16-21 (June 21, 2016).

Remedies in unfair labor practice cases against employers almost always include a “Notice to Employees” that must be posted in conspicuous places in the employer’s workplace, typically for 60 days. (The Notice contains several paragraphs beginning with “WE WILL” and “WE WILL NOT” by which an employer assures employees it will comply with the National Labor Relations Act and not repeat the violations of the Act that the Board has found.)

The Board has required that a notice be read aloud to employees where an employer’s misconduct has been “sufficiently serious and widespread that reading of the notice will be necessary to enable employees to exercise their Section 7 rights free of coercion.” This re­medial action is intended to ensure that “employees will fully perceive that the [r]espondent and its managers are bound by the requirements of the Act.”

The Associate General Counsel’s memorandum seeks to ensure that Notice readings are extended to situations “where a traditional notice posting remedy may be ineffective because some unit employees are unable to read the notice, either in English or the language of their country of origin.” The Memorandum also instructs that regional offices that become “aware of literacy issues among affected workers” during the investigative stage of a case “should seriously consider whether traditional notice posting will sufficiently remedy the statutory violations if the charge allegations are found to have merit.”