The National Labor Relations Board (NLRB) has held that an employer did not violate the National Labor Relations Act (NLRA) when it unilaterally changed retirees’ medical benefits without first negotiating with the unions that represented its employees. E.I. Du Pont De Nemours and Co., 368 NLRB No. 48 (Sept. 4, 2019).

The NLRB found the unions waived their right to bargain over those changes. Chairman John Ring and Member Marvin Kaplan were in the majority, while Member Lauren McFerran dissented.

Background

E.I. Du Pont De Nemours and Company manufactures synthetic fibers and related products at facilities throughout the United States. DuPont maintained company-wide employee benefit plans for all its employees and retirees. Although DuPont informed the unions it would negotiate separate plans for union-represented employees, the unions consistently agreed to participate in the company-wide plans.

DuPont’s company-wide benefit plans contained “reservation-of-rights” provisions, which allowed the company to retain the right to suspend, modify, or terminate the benefit plan at its discretion. The unions accepted DuPont’s plans with the reservation-of-right provisions. The collective bargaining agreements (CBAs) with each union also contained similar reservation-of-rights provisions, which recognized DuPont’s right to make unilateral changes to the benefit plans, subject to certain restrictions in the CBAs and the benefit plan documents.

In 2013, DuPont made unilateral changes to its company-wide Dental Assistance Program and Medical Care Assistance Program retirement benefit plans that affected coverage for some of DuPont’s retirees and their covered dependents. One of the conditions on which the company had offered, and the unions had accepted, the unit employees’ participation in dental and medical care assistance programs was that DuPont reserved the right to make changes to the plans or to terminate the programs entirely. Exercising that right, DuPont had made numerous unilateral changes to the programs, without objection by the unions. This time, however, the unions objected and filed unfair labor practice charges with the NLRB alleging the changes were unlawful. DuPont defended against the charges, arguing that the union had “clearly and unmistakably” waived its right to bargain over the changes. An unfair labor practice complaint was issued and sent to trial before an NLRB Administrative Law Judge (ALJ).

Administrative Law Judge Decision

After a trial, ALJ Michael A. Rosas held the unions did not clearly and unmistakably waive their bargaining rights because nothing in the CBAs shows they gave up their rights to bargain over benefit changes. He also noted that the CBAs did not reference the plans.

Board Decision

The Board found that, while retiree healthcare benefits for active bargaining-unit employees is a mandatory subject of bargaining under the NLRA, the unions waived their right to bargain over these changes. Contrary to the ALJ, the Board found the contract language and the parties’ bargaining history and past practice, taken together, demonstrated the unions clearly and unmistakably waived their right to bargain over the changes.

Regarding contract language, the Board found that contractual references to a benefit plan that contains reservation-of-rights language, like those here, can support a finding of waiver, even if the reference would be insufficient, standing alone, to establish waiver.

The Board also found that bargaining history supported a finding that the unions waived their right to bargain over the changes. The unions had agreed to participate in the various plans without bargaining after opposing the plans during collective bargaining and, therefore, “consciously yielded” its position that bargaining should occur. Finally, past practice — numerous unilateral changes made to the old plans without bargaining and without objection from the unions — supported the waiver finding.

Based on these factors, the Board found that the unions had clearly and unmistakably waived their right to bargain over the changes. Accordingly, the Board dismissed the unfair labor practice charges.

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Since this case was decided, in MV Transportation, Inc., 368 NLRB No. 66 (Sept. 10, 2019), the NLRB adopted a new contract coverage standard as the primary standard for determining whether an employer had an obligation to bargain before implementing a change (see our article, Labor Board Adopts ‘Contract Coverage’ Standard in Unilateral Change Cases, Overturns Precedent). Nevertheless, if appropriate, employers should still argue that an obligation to bargain over a change did not exist because the union clearly and unmistakably waived its right to bargain over the change. Under MV Transportation, the clear and unmistakable waiver test applies if the Board does not find the unilateral changes are allowed under its new contract coverage standard.

Please contact a Jackson Lewis attorney with any questions about this case or the NLRB.

A wildcat strike was not protected by the National Labor Relations Act (NLRA) once the striking employees became aware that their union disapproved of and disavowed the strike, the National Labor Relations Board (NLRB) has ruled. CC1 Limited Partnership d/b/a Coca Cola Puerto Rico Bottlers, 368 NLRB No. 84 (Sept. 30, 2019).

The employees’ continued striking, despite their union’s opposition, undermined the union’s exclusive bargaining authority and resulted in a loss of the NLRA’s protections, the NLRB explained.

Chairman John Ring, and Members Marvin Kaplan and William Emanuel participated in the decision.

Facts

A Teamsters Local represented warehouse employee at the company’s bottling plant. In September 2008, during negotiations for a successor collective-bargaining agreement, the union’s main representative at the plant and several shop stewards led employees in a two-hour work stoppage. The company suspended and then terminated the shop stewards.

On October 20, the first day of a strike led by the terminated stewards, the company’s counsel warned the union’s Secretary Treasurer, that it would take action against “the Union and its representatives” unless the illegal strike stopped. The union replied on the same day, making it “abundantly clear that [it] did not send or authorize the presence of Officers or Union members to take part in the strike.” The union stated in its letter that the strikers “were in violation of the statutes of the Union” and engaged in “clearly illegal activity.” The union assured the company that it would “be taking legal and union action” against the “false [union] leaders” who were “threatening … the welfare of the great majority of these workers in order to promote their own ignoble interests.”

The company had its security guards distribute copies of the union’s letter to the striking employees. However, most employees continued to strike for two more days, through October 22. The company ultimately suspended or discharged 86 of the strikers.

2015 Board Decision

The dispute first reached the Board in 2015. The Board decided the strike was protected by Section 7 of the NLRA and that the company unlawfully suspended and discharged the striking employees. CC1 Limited Partnership d/b/a Coca Cola Puerto Rico Bottlers, 362 NLRB No. 125 (June 18, 2015).

The NLRB applied Silver State Disposal Service, 326 NLRB 84 (1998). In that case, the Board developed a two-part test to determine whether a wildcat strike is protected: (1) whether the employees attempted to bypass their union and bargain directly with the employer; and (2) whether the employees’ position was inconsistent with the union’s position.

In ruling the company violated the law, the NLRB assigned little significance to the union’s October 20 strike disavowal letter, because it was the company that had distributed it to the striking employees.

D.C. Circuit Remand

The company appealed the decision to the U.S. Court of Appeals for the District of Columbia. CC1 Ltd. P’ship v. NLRB, 898 F.3d 26 (D.C. Cir. 2018). The Court remanded the case to the NLRB for further explanation of its conclusion that the wildcat strike was protected activity, focusing on the October 20 letter.

2019 Board Decision

Regarding the October 20 letter, the Board found that “[t]he mere distribution of the letter by the security guards cannot negate employees’ knowledge of the Union’s disavowal of the strike and legitimate their conduct in derogation of the Union’s position.” This was especially true, the Board said, because there was no evidence that the notification to the strikers was the result of manipulation or fraud, or that the third-party messengers engaged in misconduct, intimidation, or other coercion in distributing the flyers.

The Board noted that the letter was “facially bona fide” and, “under the circumstances surrounding the strike[,] amply sufficed to establish to the strikers that their Union opposed the strike.” (The Board also found significant the conspicuous absence of union leadership who supported or participated in the strike or conducted or attended the meeting at which the strike vote took place.)

The employees’ continued striking after the letter’s distribution was not protected by the NLRA, the Board ruled. The Board did not apply Silver State. Instead, it applied Emporium Capwell Co. v. Western Addition Community Organization, 420 U.S. 50 (1975), where the U.S. Supreme Court held that a strike is not protected if it is an attempt to engage in separate bargaining from the striking employees’ union and interferes with the union’s exclusive bargaining representative status. the NLRB dismissed the challenges to the strikers’ suspensions and discharges. (In a footnote, the NLRB “question[ed] whether the standard set forth in Silver State Disposal for determining whether an unauthorized strike is protected is consistent with the principles of Emporium Capwell Co.”)

***

This decision is an example of the Trump Board’s efforts to clarify the standards with which employers must comply in protecting their businesses from overreaching activity by employees, non-employees and union representatives. (For another example, see our article, NLRB Strengthens Property Rights, Employers May Limit Off-Duty Access by Contractors’ Employees.)

If you have any questions about this decision or the NLRB, please contact a Jackson Lewis attorney.

National Labor Relations Board Chairman John Ring has again informed Democratic leaders of the U.S. House of Representatives Committee on Education and Labor that the Agency will not release documents they requested related to NLRB members’ recusals from Board cases.

On August 15, 2019, Bobby Scott, D-Va., Chairman of the House Committee on Education and Labor, and Frederica Wilson, D-Fla., Chairwoman of the House Subcommittee on Health, Education, Labor and Pensions, again requested documents related to Board members’ conflicts of interest. The document requests originally were made on May 6, 2019, and were responded to on May 23, June 5 and 21. Ring did not give the Committee all of the requested documents, however.

In their August 15, 2019, request, the Committee again asked for: memoranda from the NLRB’s ethics official (who makes determinations on members’ recusals from certain cases); updated lists of cases in which Board members could not participate; documents relating to the “appropriateness” of members’ participation in a certain matter; and an update on the ethics review announced by the Board following its withdrawal of the ­Hy-Brand decision.

Scott’s and Wilson’s requests for NLRB ethics documents is part of House Democrats’ inquiry into the Board’s ethics standards following the NLRB’s withdrawal of its Hy-Brand decision after the Board’s inspector general determined that Member William Emanuel should have recused himself from the case due to his former firm’s representation of a party in a related case. The decision sought to overturn the Board’s Obama-era decision in Browning-Ferris, which substantially expanded the Board’s standard for determining joint-employer status.

In his September 4, 2019, response, Ring again declined to release the requested documents for several reasons. For example, he noted that the documents were “pre-decisional” and their production would violate Board norms that promote candor when evaluating potential conflicts of interest. Ring also maintained the Board’s “longstanding position” that the requested documents contained “pre-decisional” and “privileged” communications among Board members and NLRB staff that cannot be released outside the NLRB. Ring further noted that disclosure of recusal lists could “reasonably be expected to interfere with the Board’s law enforcement function” because parties may be able to claim, as a result, a denial of due process when members recuse themselves from the affected party’s case.

Although the lawmakers argued that memoranda drafted by the NLRB’s ethics official reflect his final “decisions,” Ring clarified that many “decisions” are made during the processing of a case before the members make their decision on the merits of the case. These “decisions” include the Board’s executive secretary’s determinations as to Board members’ case assignments, members’ assignments of cases to their staff attorneys, and recusal decisions. Ring reaffirmed to the Committee leaders his commitment “to transparency and to cooperating with [the Committee] regarding . . . [its] oversight responsibilities.”

As to the lawmakers’ request for an update on the Agency’s internal ethics review, Ring stated that the Agency plans to complete it this fall.

How the NLRB analyzes defenses to unilateral change unfair labor practice charges may be in for a substantial revision.

National Labor Relations Board (NLRB) Chairman John Ring and Member Marvin Kaplan have signaled their interest in reviewing the law in this area. E.I. du Pont de Nemours & Co., 368 NLRB No. 48 (Sept. 4, 2019). In footnote 13 of the decision, they expressed their intention to revisit the applicability of the “contract coverage” defense in a future appropriate unilateral change case.

Under the National Labor Relations Act (NLRA), employers have a duty to bargain in good faith with the union that represents its employees about mandatory subjects of bargaining (e.g., wages, hours, and other terms and conditions of employment). An employer’s unilateral change to a mandatory subject of bargaining without first offering to bargain with the union is a violation of the NLRA, unless the employer has a valid defense, such as the union’s waiver of the right to bargain.

An employer has a difficult burden to establish a waiver defense; it must prove the union clearly and unmistakably waived its right to bargain over the topic. This can be shown through contract language, bargaining history, and/or past practice. An employer must show the parties “unequivocally and specifically express[ed] their mutual intention to permit unilateral employer action with respect to a particular employment term, notwithstanding the statutory duty to bargain that would otherwise apply.” Provena St. Joseph Med. Ctr., 350 NLRB 808, 811 (2011). Under this standard, the Board narrowly construes waivers and has been hesitant to imply waivers not expressly mentioned in the collective bargaining agreement (CBA).

The Board in Provena applied the “clear and unmistakable waiver” standard in analyzing the employer’s defense. Then-Chairman Robert Battista dissented, writing that he would have applied a less restrictive “contract coverage” standard to the case. He explained:

Under this [contract coverage] test where there is a contract clause that is relevant to the dispute, it can reasonably be said that the parties have bargained about the subject and have reached some accord. Thus, there has been no refusal to bargain. In sum, the issue is not whether the union has waived its right to bargain. The issue is whether the union and the employer have bargained concerning the relevant subject matter. If so, the Board and the courts should honor the fruit of that bargaining.

Where the contract coverage defense is asserted in response to a unilateral change allegation, the employer would claim the change was allowed by a clause or clauses in the CBA. If the union disagreed, it would be expected to file a grievance alleging the clause or clauses did not permit the unilateral change and that the employer’s actions violated the CBA. Through the grievance process, an arbitrator would apply normal principles of contract interpretation to decide whether the contract clause or clauses were relevant to the dispute. If they are found relevant, the arbitrator would determine if the employer’s change violated the CBA.

The contract coverage defense has been adopted by some U.S. Courts of Appeal, including the D.C., First, and Seventh Circuits. If the defense is adopted by the NLRB, employers will have an easier burden to defend against unilateral change allegations.

We will report any further developments. Please contact a Jackson Lewis attorney if you have any questions about this issue or the NLRB.

According to a recent Gallup poll, almost two-thirds of Americans approve of labor unions.

After reaching an all-time low of 48% in 2009, approval of labor unions has increased steadily to 64%. This increase crosses political party lines. According to the Gallup poll, 82% of Democrats approve of unions. Although only 45% of Republicans approve of unions, this represents a significant increase from only 29% in 2009. Approval among Independents also has grown 17% since 2009, to 61%.

According to Gallup, unions have enjoyed higher approval ratings only twice since 1970: in 1999 and 2003. Union leaders partially credit highly publicized strikes and walkouts for the rise in support, and they have pledged to organize more aggressively to capitalize on the growing popularity.

As public support for unions grows, it is more important than ever for employers to educate supervisors about how to recognize early warning signs and lawfully respond to organizing by explaining what union representation may mean for employees and their families. Jackson Lewis attorneys are available to work with employers to provide legal advice on these issues, and on how employers can create an environment where employees feel well-treated and see no need for union representation.

 

Two of the four members of the National Labor Relations Board (NLRB) have indicated they are willing to rethink a key element of the Board’s more-than-40-year-old precedent regarding employers’ off-duty employee access rules under the National Labor Relations Act (NLRA). Southern Bakeries, 368 NLRB No. 59 (Aug. 28, 2019).

Members William Emanuel and Marvin Kaplan, both nominated by President Donald Trump, wrote in a footnote in Southern Bakeries that they were prepared to “reconsider … in a future appropriate case” the “third prong” of the test in Tri-County Medical Center, 222 NLRB 1089 (1976), for determining the validity of employer off-duty employees access rules.

Tri-County

Under Tri-County, an employer’s rule prohibiting access by off-duty employees is valid only if three conditions are met: “it (1) limits access solely with respect to the interior of the plant and other working areas; (2) is clearly disseminated to all employees; and (3) applies to off-duty employees seeking access to the plant for any purpose and not just to those employees engaging in union activity.” . The third prong of the test has proven to be vexing for employers because it does not even permit an employer to maintain a rule that allows an employee to return to the workplace for innocuous reasons, such as to pick up a paycheck.

NLRB General Counsel Memo

Among other responsibilities, the NLRB hears appeals of decisions made by administrative law judges in unfair labor practices cases. In connection with their desire to review the Tri-County test, Members Emanuel and Kaplan will find a willing ally in NLRB General Counsel Peter Robb. The General Counsel decides which unfair labor practice charges to prosecute and, therefore, to shepherd through the NLRB processes to the Board. In a memorandum issued on December 1, 2017, Robb listed the types of cases he would like to present to the Board with the goal of convincing the NLRB to reverse or modify current law (“to present [to the Board] an alternative analysis” to the existing one). NLRB Memorandum GC 18-02 (“Mandatory Submissions to Advice”). Among them were cases arising under Tri-County.

If you have any questions about Southern Bakeries or the NLRB, please contact a Jackson Lewis attorney.

UNITE HERE hopes to increase its membership by one-third, to 400,000 members, by 2024, according to Bloomberg Law.

UNITE HERE represents employees in the hotel, gaming, food service, airport, textile, manufacturing, distribution, laundry, transport, and other industries. With approximately 300,000 members and a well-publicized history of strikes and demonstrations, it is widely recognized as one of the most aggressive and combative unions in the country.

Although such an increase in membership is ambitious, UNITE HERE has met similar goals in the past. It announced at the union’s 2014 constitutional convention that it would add 50,000 employees by its 2019 convention. UNITE HERE added 62,000 employees during that five-year period.

UNITE HERE stated it would increase focus on southern states with traditionally lower unionization rates in order to reach its 100,000-member goal. It also pledged to support more members in elections for political office.

As UNITE HERE and other unions continue to gain political strength and organize aggressively throughout the country, it is increasingly important for employers to educate supervisors about their rights and responsibilities in response to organizing. Jackson Lewis attorneys are available to advise employers in such legal matters, and on how employers can create an environment where employees feel well-treated and see no need for union representation.

 

 

The National Labor Relations Board has issued a proposed rule to modify three aspects of its election procedures.  According to the board’s announcement, the Notice of Proposed Rulemaking (NPRM), which will be published in the Federal Register on Monday and be subject to a comment period, would affect the Board’s blocking charge rule, voluntary recognition bar and collective-bargaining relationships in the construction industry:

  • Blocking Charge Policy: The NPRM proposes replacing the current blocking charge policy with a vote-and-impound procedure. Elections would no longer be blocked by pending unfair labor practice charges, but the ballots would be impounded until the charges are resolved.
  • Voluntary Recognition Bar: The NPRM proposes returning to the rule of Dana Corp., 351 NLRB 434 (2007). For voluntary recognition under Section 9(a) of the Act to bar a subsequent representation petition—and for a post-recognition collective-bargaining agreement to have contract-bar effect—unit employees must receive notice that voluntary recognition has been granted and a 45-day open period within which to file an election petition.
  • Section 9(a) Recognition in the Construction Industry: The NPRM proposes that in the construction industry, where bargaining relationships established under Section 8(f) cannot bar petitions for a Board election, proof of a Section 9(a) relationship will require positive evidence of majority employee support and cannot be based on contract language alone, overruling Staunton Fuel, 335 NLRB 717 (2001).

For more information, see our article, Representation-Case Procedures, Students as Employees, Access to Private Property on NLRB Rulemaking Agenda. Jackson Lewis is preparing a more extensive analysis of the proposed rule, which will appear on our website shortly.

 

In an effort to save pension plans from insolvency, the U.S. House of Representatives has passed the Rehabilitation for Multiemployer Pensions Act of 2019 (H.R. 397).

The Act would allow the federal government to make grants and loans to multiemployer pension plans that are insolvent or facing insolvency. To accomplish its purpose, the Act proposes to establish the Pension Rehabilitation Administration, an agency within the Department of Treasury that would be authorized to issue bonds to finance loans to the insolvent pension plans. The Congressional Budget Office estimates that if H.R. 397 becomes law, the Act would cost $48.5 billion in the next 10 years. A similar version has been introduced in the Senate, but that bill has not progressed beyond introduction.

Approximately 10 million people participate in multiemployer pension funds. Between 10% and 15% of multiemployer pension fund participants are in funds that are projected to become insolvent within the next 20 years, according to the Congressional Research Service. Supporters of the Act consider it necessary to prevent a loss of benefits to retirees. Opponents believe the Act is a waste of money because, although it may temporarily infuse money into struggling pension funds, it does not include provisions requiring the structural changes necessary to solve the problems that led to insolvency in the first place.

Please contact a Jackson Lewis attorney with any questions about the bill.

 

 

The National Labor Relations Board has reminded employers that they must tolerate a certain degree of heated discourse during a union organizing campaign before discipline or termination may be warranted.

On June 27, 2019, the Board, in Pacific Green Trucking, Inc., 368 NLRB No. 14, ruled that a union organizer was unlawfully terminated for his union support and organizing activity, not, as the company asserted, for “fighting” with coworkers.

Although the employment “at will” doctrine generally allows employers to terminate an employee (and allows an employee to quit) for any reason, or even for no reason at all, the National Labor Relations Act protects most private-sector employees from discrimination or retaliation for engaging in protected concerted activity under Section 7 of the NLRA, such as engaging in union organizing.

The employee allegedly was spearheading an organizing effort. He alleged that he was interrogated, treated less favorably, and ultimately terminated because of his union activity, in violation of the NLRA.

The Board invoked its familiar Wright Line doctrine to examine whether the employer’s legitimate, non-discriminatory reason for terminating the union organizer (“fighting”) was a mere pretext for anti-union animus.

After the Board found that the company’s manager knew of the employee’s union organizing activity, it inferred anti-union animus from the manager’s statement that he “knew [the employee] was with the Union” and that the employee “shouldn’t do that” because the company “was giving [the employee] work” – comments the Board considered an implicit threat of job loss. It also found the statement to constitute an unlawful interrogation because it implicitly called for the employee to confirm or deny the statement.

The Board also found the manager’s reference to “fighting” an unlawful “euphemism for discussing or debating the union,” citing several other Board cases referring to similar euphemisms for union activity, including referring to an employee as a “problem person” or an “instigator.”

Thus, absent specific evidence of physical violence, and considering what it already had found to be unlawfully threatening and coercive statements toward the employee, the Board found the employee’s termination unlawful. The Board found further support for its decision in the fact that the company did not contest the employee’s unemployment claim. This suggested to the Board that the company did not sincerely believe the employee was terminated for cause, or that he had quit.

This case provides valuable lessons for employers experiencing union organizing, including:

  • A statement by a manager to an employee that the manager “knows” the employee supports the union may be unlawful interrogation, because the statement implicitly call for the employee to confirm or deny it;
  • Enforcement of workplace civility rules and policies against “fighting” with coworkers, without reliable evidence of actual (or credible threats of) physical violence, may be found to be evidence of unlawful “code” for anti-union discrimination;
  • Failure to oppose an employee’s unemployment compensation claim may give rise to an inference by the NLRB that the employee did not quit or was not terminated “for cause.”

Regardless of an employee’s “at-will” employment status, employers must be cautious before disciplining or terminating an employee during any stage of a union organizing effort. Consult your experienced labor and employment attorney for guidance.