The media has been covering the budget bill – the Build Back Better Act – which contains controversial provisions on many subjects. Among them are provisions that include new employer penalties under the National Labor Relations Act (NLRA). It appeared that some of the most aggressive of those penalties would not reach the final bill voted on in the House. However, the final bill which passed on November 19, 2021 retained those original penalties.  Details are provided below.

Often overlooked by the press are the bill’s amendments to the NLRA. The bill proposes severe new penalties for employer unfair labor practices (ULPs).

Today, ULPs by either unions or employers are remedied by requiring backpay and reinstatement to prior employment and employment terms. The Build Back Better Act would add new “civil penalties” (fines) in addition to the traditional remedies. But these fines would apply only to employer violations, not unions.

Under the bill, any ULP violation by an employer would additionally be subject to a penalty “not to exceed” $50,000 for each violation.

However, for employers found to have committed certain violations, and any which results in the discharge or “serious economic harm” to an employee, the penalty can be doubled to $100,000 if the employer had been found to have committed a similar violation within five years.

In addition, the bill would add civil fine personal liability for any company officer or director who “directed or committed the violation,” established the policy that led to the violation, or had actual or constructive knowledge of the events and the authority to prevent it but did not act to prevent it. Personal liability has never been part of the NLRA.

It is not surprising that employer groups strenuously oppose these provisions. In addition to the civil penalties above, the bill bans employer acts long held lawful under the NLRA.  It appeared earlier that these would be deleted from the bill, however they were ultimately included in the bill which passed the House. These provisions will effectively ban:

(1)      Permanent replacement of economic strikers

(2)      Employer lockouts

(3)      Advising employees (mistakenly) that they are “supervisors” or “independent contractors” and thus not covered by the NLRA

(4)      Mandating employee attendance at “captive audience” employer campaign meetings

(5)      Entering or requiring employees to enter agreements not to engage in collective actions (such as class action litigation)

Further, the bill applies the same severe civil penalties to these would-be violations.

The bill will now go to the Senate, where it faces an uncertain future. The Build Back Better Act is framed as a budget “reconciliation” bill – a device which allows it to avoid a Senate filibuster requiring passage by a supermajority, which is very unlikely. As a reconciliation bill, it would need a mere 51 votes.

However, there remains a question as to whether it meets the standards for a budget reconciliation bill – meaning it must be limited to budgetary matters. The Senate Parliamentarian decides (in an advisory capacity) whether specific terms of a reconciliation bill meet that standard. In September, the Parliamentarian rejected certain immigration provisions of the original bill on that basis. Senate Republicans reportedly will challenge the remaining NLRA civil penalty amendments as beyond the scope of a reconciliation bill.

We will keep a continuing eye on developments.

 

 

The media has been covering the budget bill – the Build Back Better Act – which contains controversial provisions on many subjects. Among them are provisions that include new employer penalties under the National Labor Relations Act (NLRA).

The political roadblock on the bill is a probable Senate filibuster which would prevent passage. The Biden Administration is attempting to utilize a Senate rule enabling this legislation to be passed as a “budget reconciliation bill,” sidestepping a filibuster and passing with a simple majority – which the Democrats could accomplish on a straight party line vote. However, to use this vehicle, a reconciliation bill must relate only to budget issues.

Versions of this bill have been pending for months. The current iteration is 1,684 pages long (reduced from September’s 2,465 pages). Often overlooked by the press are the bill’s amendments to the NLRA. The bill proposes severe new penalties for employer unfair labor practices (ULPs).

Today, ULPs by either unions or employers are remedied by requiring backpay and reinstatement to prior employment and employment terms. The Build Back Better Act would add new “civil penalties” (fines) in addition to the traditional remedies. But these fines would apply only to employer violations, not unions.

Under the bill, any ULP violation by an employer would additionally be subject to a penalty “not to exceed” $50,000 for each violation.

However, for employers found to have committed certain violations, and any which results in the discharge or “serious economic harm” to an employee, the penalty can be doubled to $100,000 if the employer had been found to have committed a similar violation within five years.

In addition, the bill would add civil fine personal liability for any company officer or director who “directed or committed the violation,” established the policy that led to the violation, or had actual or constructive knowledge of the events and the authority to prevent it but did not act to prevent it. Personal liability has never been part of the NLRA.

It is not surprising that employer groups strenuously oppose these provisions. It appears that they have made some headway, considering the provisions that have been deleted from the original bill. In addition to the civil penalties above, the original bill would have banned employer acts long held lawful under the NLRA, including:

(1)      Permanent replacement of economic strikers

(2)      Employer lockouts

(3)      Advising employees (mistakenly) that they are “supervisors” or “independent contractors” and thus not covered by the NLRA

(4)      Mandating employee attendance at “captive audience” employer campaign meetings

(5)      Entering or requiring employees to enter agreements not to engage in collective actions (such as class action litigation)

Further, the bill would have applied the same severe civil penalties to these would-be violations.

However, the Build Back Better Act is still subject to scrutiny as to whether it meets the standards for a budget reconciliation bill – meaning it must be limited to budgetary matters. The Senate Parliamentarian decides (in an advisory capacity) whether specific terms of a reconciliation bill meet that standard. In September, the Parliamentarian rejected certain immigration provisions of the original bill on that basis.  Senate Republicans reportedly will challenge the remaining NLRA civil penalty amendments as beyond the scope of a reconciliation bill.

News reports suggest there will be more political wrangling to come, in addition to any possible adverse report by the Parliamentarian. Will the remaining civil penalties survive to be voted on? We will keep a continuing eye on developments.

 

On October 8, 2021, the National Labor Relations Board (NLRB) West Los Angeles regional office issued an unfair labor practice (ULP) complaint against the Daily Grill for allegedly violating section 8(a)(5) of the National Labor Relations Act (NLRA) by engaging in a pattern of delay intended to frustrate the bargaining process, according to the NLRB press release.

The allegations arise from the employer’s first contract negotiations with UNITE HERE Local 11, the union certified to represent Daily Grill’s employees. Negotiations allegedly ran from November 13, 2019, through December 11, 2020, but since then, the employer has allegedly refused to meet and bargain with the union.

This complaint is notable for the remedial actions it seeks. Here, among other remedies, the complaint asks for an order requiring the employer to bargain in good faith with the union for a minimum of 24 hours a month (for at least six hours per session) until a collective bargaining agreement or lawful impasse is reached and to reimburse the expenses incurred by the union in unproductive bargaining expenses from November 19, 2019, until the employer begins bargaining in good faith. Given the specificity of the remedy sought, this complaint is an early example of the aggressive prosecution policies of new General Counsel (GC) Jennifer Abruzzo (as outlined in her September 8, 2021, Memorandum 21-06). It also portends probable forthcoming changes to the legal landscape under a Biden-appointed NLRB.

Section 8(a)(5) of the NLRA requires employers to bargain in good faith with the certified bargaining representative of its employees; however, “good faith” is not defined by a specific template of the number, frequency, or duration of bargaining sessions.   The complaint against the Daily Grill demonstrates GC Abruzzo’s initiative to introduce strict remedies for NLRA violations, including imposing bright-line rules on the negotiation process when an employer is found to have violated the Act. The complaint exemplifies the region’s eagerness to push forward GC Abruzzo’s goals through burdensome new remedies. Employers should accordingly take caution in assessing their bargaining and labor relations strategies as the complaint demonstrates the regions are ready to quickly push forward on the GC’s month-old goals.

Please contact a Jackson Lewis attorney with any questions.

The use of the “Segal Blend” to calculate a company’s withdrawal liability when it withdrew from a multiemployer pension plan violated the Employee Retirement Income Security Act, as amended by the Multiemployer Pension Plan Amendments Act, because it was not the actuary’s best estimate, the federal appeals court in Cincinnati has held in a milestone decision for employers with withdrawal liability exposure.

Read more about this important 6th Circuit decision.

 

As we discussed in our recent report on National Labor Relations Board General Counsel (“GC”) Jennifer Abruzzo’s August 12th agenda for the direction of NLRB case law, employers should be ready for an aggressive expansion of remedies that the NLRB will seek. In the short time since the GC’s memorandum was published, NLRB Chairman McFerran expressly stated her willingness to explore new remedies for unfair labor practice violations.

If there were any doubts about how quickly the GC would act to expand penalties that employers may face, they were put to rest with the issuance of the GC’s newest memorandum published on September 8, 2021 (NLRB GC Memo 21-06).  GC Abruzzo  instructs NLRB regions to immediately seek expanded remedies in a wide array of cases. The memorandum directs regions to take aggressive positions on remedies to prepare cases for NLRB consideration regarding expansion of the scope of damages.

The GC instructs regions to seek the following types of remedies that would significantly increase the risks faced in any alleged unfair labor practice (“ULP”) litigation:

  • Consequential damages, front pay, and for discharged employees. The GC previously advised regions to refer cases involving these potential remedies to the Division of Advice. Now, the GC has instructed regions to affirmatively seek these expanded remedies in discharge cases.
  • Expanded union access. In cases involving employer ULPs during union organizing, the GC requires remedies such as providing unions with employee contact information and allowing unions to hold “captive audience” employee meetings on company property.
  • Reimbursement of union organizing costs. New cases may seek to require employers pay business agent wages, attorney fees, travel costs, and other costs unions incur where an employer’s objectionable conduct causes an election to be re-run.
  • Damages based on speculative contract terms. In refusal to bargain cases, the GC is considering an extraordinary remedy enabling the Board to premise a monetary damages on what the employer speculatively would have agreed to in bargaining, had it bargained in good faith. As this is the GC’s second explicit reference to this novel theory in the matter of weeks, this will likely by a significant objective for the GC and the Board.
  • Public publishing of remedial notices in newspapers, websites, and on social media. Posting notices regarding resolution of ULP charges has long been standard practice. Now, the GC is encouraging mandates to publish these notices in local newspapers, company websites, or social media pages, reaching audiences far beyond those employees who may have been impacted by any alleged violation.
  • Hiring individuals selected by the union. In the event an unlawfully discharged employee chooses not to return to work, the GC wants regions to require the company hire a qualified applicant selected by the union.
  • Regional oversight of bargaining. Bad faith bargaining claims should be remedied by (among other things)
    • a rigorous bargaining schedule imposed by the region,
    • employer-submitted progress reports,
    • compelled mediation,
    • managerial training,
    • reinstatement of unlawfully withdrawn bargaining proposals,
    • reimbursement of a union’s negotiation expenses, and
    • regions should seek a ban on challenges to a union’s majority status (such as decertification or withdrawal of recognition) for at least one year.
  • Increased remedies and protections for undocumented workers. In cases involving undocumented workers, regions may seek U or T visas or deferred immigration actions to permit those workers to remain employed, and employer sponsorship for work authorizations to remain in the United States. Regions could also seek additional make whole damages, such as the establishment of a fund that employers must pay to ensure employers are not “unjustly enriched” due to the status of undocumented workers.

The GC also instructs regions to secure visits for inspections and discovery rights to monitor compliance, longer posting periods, NLRA training for all employees, broader cease and desist orders, and public reading of notices by management officials to all employees. The GC promised that she will issue another memorandum on settlements that could modify litigation strategies as well.

Over the next four years, it appears inevitable that the NLRB will expand its view of what constitutes an unfair labor practice and simultaneously increase penalties on employers based on those new precedents. It is important for  employers to carefully assess their labor relations strategies.  If you have any questions about these topics, potential risks before the Biden Board, or your workplace rules and policies, please contact a Jackson Lewis attorney.

The National Labor Relations Board (NLRB) must reconsider its newest ruling on the rights of certain employees to access private property to engage in activity on behalf of a union, the U.S. Court of Appeals for the District of Columbia has directed in an August 31, 2021, decision remanding NLRB v. Local 23, American Federation of Musicians. If the Board changes its holding on remand it will be the third time the rule on access to private property has changed in the last 10 years. This case comes to the NLRB at a time opportune for change.

The Court recognized that rights of access to private property to engage in union-related activities have traditionally depended on the connection of the person to the property. Traditional employees who work on the employer’s property have the greatest access rights and generally cannot be prohibited from engaging in union activity on the employer’s property during non-work time and in non-work areas of the property.  On the other hand, a property owner can generally deny non-employees, such as union organizers, access to its premises.

Local 23 dealt with a third category: employees of a contractor who work on premises owned by a third party. Musicians represented by Local 23 were employed by the San Antonio Symphony, which had a contract to provide 22 weeks of performances at a facility owned by the Bexar Performing Arts Center Foundation, known as the Tobin Center. The musicians also performed for the Ballet San Antonio at the Tobin Center. To cut costs, the Ballet switched from live to recorded music, which reduced the number of paid performances for the musicians.

To protest the use of recorded music, the musicians distributed leaflets at the Tobin Center criticizing the Ballet and urging patrons to insist upon live music. The Tobin Center informed the leafleteers that they were not permitted on Center property and should move to the public sidewalk. They complied, but Local 23 filed an unfair labor practice charge.

The rule that existed at the time of the charge was filed was that a third party property owner could not deny access to contractor employees who are “regularly employed on the property” unless the property owner could establish that the activity substantially interfered with its use of the property. Applying that rule, and administrative law judge found the musicians had a right to engage in leafleting on Tobin Center property.

The NLRB reversed the judge. The Board held  a property owner could exclude contractor employees from its property unless they work “regularly and exclusively on the property” and the property owner could not show they had “one or more reasonable alternative means to communicate their message.” Applying its new rule, the Board found the contractor musicians had no right of access.

Local 23 sought review at the Court of Appeals. The Court found the NLRB had acted arbitrarily in drafting its new rule. The terms “regularly” and “exclusively” were poorly defined – indeed, the NLRB’s examples were in conflict with the very words themselves. The Court remanded the case to the Board “to proceed with a version of the test it announced … or develop a new test altogether.”

The Board’s newly constituted Democrat majority and current General Counsel Jennifer Abruzzo have articulated a desire to expand access rights for unions and employees. Because the case has been remanded to a Board with a Democratic majority, we think the likelihood is that the Board will develop a new test which will expand the rights of employees to access private property for the purpose engage in union activity. Employers should stay tuned.

The Senate confirmed two union lawyers – David Prouty and Gwynne Wilcox – to seats on the National Labor Relations Board (NLRB) on July 28, 2021, ensuring a Democratic majority for the first time in almost four years.

This follows the Senate’s confirmation of Jennifer A. Abruzzo, President Joe Biden’s nominee for General Counsel of the NLRB.

With these key nominees in place, expect the Board to continue its shift to a pro-union view.

The Senate voted 52-47 to confirm Wilcox’s nomination. Prior to her appointment to the Board, Wilcox was a partner at Levy Ratner P.C., a union-side law firm in New York, and served as associate general counsel for 1199SEIU United Healthcare Workers East, the largest health care union in the United States. She fills the seat that has been vacant since former Chair Mark Pearce’s term expired in 2018.

Prouty was confirmed by a slightly higher 53-46 margin. Like Wilcox, Prouty has a long background serving unions – he most recently was General Counsel of SEIU 32BJ, the largest union of property service workers in the United States.

Both Prouty and Wilcox will serve five-year terms, though Prouty will not be seated until Republican member William Emanuel’s term expires on August 27, 2021. Once Prouty is seated, the Board will have a 3-2 Democratic majority.

In a statement released on July 29, the AFSCME praised Wilcox as a “preeminent labor rights attorney” and noted she “will be instrumental in guiding the development of federal labor law and upholding workers’ freedom to form unions.” SEIU 32BJ’s statement noted it was “excited to see how [Prouty’s] righteous advocacy for workers will help build back up the NLRB as a robust defender of the rights of workers in our country,”

These confirmations come only a week after the Senate’s razor-thin 51-50 confirmation of Abruzzo to the General Counsel position. Abruzzo will serve a four-year term overseeing the investigation and prosecution of unfair labor practice cases and supervising NLRB field offices in their processing of cases. As General Counsel, Abruzzo will have the power to shape the interpretation and application of the National Labor Relations Act (NLRA) by determining which cases to bring to trial and which legal theories to present. It is expected this will pose challenges for employers, given her public statements that she believes “vigorous enforcement of the [NLRA] will help level the playing field for workers and their freely chosen representatives.”

Abruzzo worked for the NLRB for over two decades in various capacities, including as Deputy General Counsel and Acting General Counsel under President Barack Obama. Abruzzo also served as Special Counsel for Strategic Initiatives for the Communications Workers of America (CWA). Abruzzo is likely to push for pro-union policies and interpretations of the NLRA, aligning with President Biden, who has been on record stating he will be “the most pro-union president you’ve ever seen.”

Following her confirmation as General Counsel, Abruzzo appointed Peter Sung Ohr to serve as Deputy General Counsel. Ohr previously served as Acting General Counsel under President Biden following the early firing of former General Counsel Peter Robb (by President Biden), who had nearly 10 months left in his four-year term. Due to legal challenges to his authority arising from Ohr’s sudden appointment as Acting General Counsel (following Robb’s arguably premature dismissal), Abruzzo is expected to ratify the General Counsel actions taken by Ohr to resolve any open questions on his authority.

This pro-union shift will present challenges to employers that just began embracing Division of Advice opinions, General Counsel memoranda, and Board case law decisions under the President Donald Trump administration. Under President Biden, along with a General Counsel that previously worked for the CWA (and the NLRB) and a Democratic majority on the Board, employers can expect to see pro-union and pro-employee opinions, memoranda, and decisions that will further promote employee Section 7 rights, the rights for employees attempting to organize in the workplace, and more.

Please contact a Jackson Lewis attorney with any questions.

A union’s use of Scabby the Rat (an inflatable rat “approximately 12 feet in height with red eyes, fangs, and claws”) and inflammatory banners targeting a neutral employer, without more, does not violate the National Labor Relations Act (NLRA), the National Labor Relations Board (NLRB) has ruled. Lippert Components Inc., 371 NLRB No. 8 (July 21, 2021).

For more than three decades, unions have displayed Scabby (or other inflatable animals, including gorillas) on public property to protest companies for reasons including doing business with employers the union finds objectionable. Whether Scabby is akin to lawful handbilling or unlawful picketing directed at a neutral employer is the subject of much debate. (See our article, Why Is ‘Scabby the Rat’ a Legal Dilemma?, for legal background on Scabby.)

Republican-appointed NLRB General Counsels have tried to eradicate Scabby when deployed against neutral employers. In the early 2000s, General Counsel Arthur Rosenfeld (a Republican appointee) issued complaints over the use of Scabby, arguing it was inherently a symbol of a labor dispute and its display constituted signal picketing or otherwise coercive conduct in violation of NLRA Section 8(b)(4). The Republican-appointed majority NLRB at that time avoided ruling on the issue, finding it unnecessary to address Scabby due to the other union misconduct. See, e.g., Ranches at Mt. Sinai, 346 NLRB 1251 (2006); Brandon Regional Med. Ctr., 346 NLRB 199, 200 n.3 (2006). Scabby continued to make appearances at union demonstrations.

In Lippert Components, a union displayed Scabby and two large banners near the public entrance of a large trade show in Indiana for a four-day period in 2018. One banner criticized a manufacturer for alleged safety violations. The other criticized a neutral supply company for doing business with that manufacturer. The supply company filed an unfair labor practice charge alleging, among other things, the rat-and-banner display violated NLRA Section 8(b)(4)(ii)(B).

Under Section 8(b)(4)(ii)(B), it is unlawful for a union “to threaten, coerce, or restrain” a neutral employer where an objective is for the neutral employer to cease doing business with another entity. The NLRB’s prior General Counsel Peter Robb (a Republican appointee) issued a complaint against the union, alleging the rat-and-banner display was unlawfully coercive and constituted “signal picketing.”

An administrative law judge (ALJ) found the rat-and-banner display did not constitute picketing or otherwise coercive nonpicketing conduct in violation of Section 8(b)(4)(ii)(B). The ALJ relied on Eliason & Knuth of Arizona, 355 NLRB 797 (2010), and Brandon Regional Medical Center, 356 NLRB 1290 (2011) (“Brandon II”). These decisions, respectively, held displaying banners or an inflatable rat near the entrance of a neutral employer, without something more, does not “threaten, coerce, or restrain” a neutral employer in violation of Section 8(b)(4)(ii)(B). In Brandon II, the NLRB was comprised of three Democrat-appointees and one dissenting, Republican, appointee.

The ALJ’s decision regarding the rat-and-banner display was appealed to the present NLRB, which (currently) is comprised of three Republican-appointees and one Democrat-appointee. In a 3-1 decision, the NLRB dismissed the complaint, holding the display did not violate Section 8(b)(4)(ii)(B). The majority issued two concurring decisions. Chair Lauren McFerran, the only current Democrat-appointee to the NLRB, endorsed the rationale in Eliason & Knuth and Brandon II as the basis for dismissing the case. Members John Ring and Marvin Kaplan agreed that the rat-and-banner display did not violate Section 8(b)(4)(ii)(B), but took issue with Eliason & Knuth and Brandon II, which they believe interpreted Section 8(b)(4)(ii)(B) too narrowly. The majority also summarily agreed the display did not constitute “signal picketing.”

Member William J. Emanuel dissented, arguing that Eliason & Knuth and Brandon II should be overruled and that the rat-and-banner display was tantamount to picketing or, alternatively, was coercive nonpicketing conduct, which violated Section 8(b)(4)(ii)(B). Member Emanuel warned that by deeming lawful the “display of banners and giant, inflatable rats directed at neutral employers” such conduct will proliferate.

Unions likely will be emboldened by this decision in their use of large banners, inflatable rats, and other pressure tactics against neutral, as well as primary, employers. Jackson Lewis attorneys are available to discuss lawful responses to union tactics.

The National Labor Relations Board (NLRB) dismissed a union’s push to organize a micro unit of 87 employees at a Nissan assembly plant in Tennessee based on the traditional community-of-interest standards for determining whether a unit is appropriate. Nissan North America, Inc., 10-RC-273024 (June 11, 2021).

The International Association of Machinists and Aerospace Workers (UAW) filed a petition to represent a unit of Tool and Die Maintenance Technicians. However, the employer asserted the only appropriate unit had to include all production and maintenance employees — a total of about 4,300 employees. The Acting Regional Director agreed with the employer, finding the only  appropriate unit included all production and maintenance employees, not just the Tool and Die Maintenance Technicians.

The union argued that the Tool and Die Maintenance Technicians should stand alone as a craft unit because the employees had specialized skills that other plant employees could not perform. The employer maintained that these employees were not sufficiently distinct from other plant employees to warrant separate representation.

The Acting Regional Director agreed with the employer, finding the Tool and Die Maintenance Technicians were not journeyworker craftsmen and thus not a craft unit. Further, she found they share a community of interest sufficiently distinct from employees excluded from the proposed unit to warrant a separate appropriate unit. Relying on PCC Structurals, Inc., 365 NLRB No. 160 (2017), in which the NLRB returned to the traditional community-of-interest standards for determining whether a unit is appropriate, the Acting Regional Director found the Tool and Die Maintenance Technicians shared a community of interest with the remaining plant employees and the only appropriate unit was a plant-wide unit of production and maintenance employees. Under NLRB rules, a petition must be supported by employee signatures amounting to at least 30 percent of the unit. Once the unit was expanded to 495 times the originally requested size (in this instance), the union could not show adequate support and the petition was dismissed.

It was not always thus. For several years, under Specialty Healthcare, 357 NLRB 934 (2011), employers seeking to challenge the scope of the proposed unit had to “demonstrate that the additional employees the proponent [sought] to include share[d] an overwhelming community of interest with the petitioned-for employees, such that there is no legitimate basis upon which to exclude certain employees from the petitioned-for unit because the traditional community-of-interest factors overlap[ped] almost completely.” In many cases this proved to be an insurmountable threshold and enabled unions to organize smaller groups of employees, giving rise to the term “micro units.”

Unions have argued against the traditional community of interest standard and seek a return to the standard under Specialty Healthcare. Here, the UAW has stated it will file a request for review with the NLRB.  If it does, the case might not come up for consideration until there is a more union-friendly Biden NLRB Board that may be willing to return to the Specialty Healthcare standard.

For more information about the appropriateness of bargaining units, please contact a Jackson Lewis attorney.

“Absent threats or promises, § 8(c) [of the National Labor Relations Act] unambiguously protects ‘any views, argument or opinion’ – even those that the agency finds misguided, flimsy, or daft,” the D.C. Circuit has held. Trinity Services Group, Inc. v. NLRB, No. 20-1014 (D.C. Cir. June 1, 2021)

The Court was asked to “decide whether employers are entitled to express opinions that the [National Labor Relations] Board considers baseless” under the National Labor Relations Act (NLRA). Known as its free-speech provision, Section 8(c) of the NLRA provides: “The expressing of any views, argument, or opinion, or the dissemination thereof, whether in written, printed, graphic, or visual form, shall not constitute or be evidence of an unfair labor practice …, if such expression contains no threat of reprisal or force or promise of benefit.”

In Trinity Services Group, Inc., 368 NLRB No. 115 (2019), a  Board panel majority (Members Lauren McFerran and Marvin Kaplan) held a manager’s “patently false” statement blaming the union for confusion over an employee’s paid time off (PTO) bank violated Section 8(a)(1). Then-Chairman John Ring dissented, reasoning the challenged “remarks were a lawful expression of his personal opinion, protected by Section 8(c).” The D.C. Circuit agreed with the Chairman Ring.

The employer maintains a standard PTO plan for its facilities across the country, except for a unionized facility in Arizona.  The company’s  centralized payroll processing sometimes caused confusion, indicating a union employee had PTO to use, but the local management believed they did not. In this a case, an employee requested three days of PTO, which the central payroll system indicated she had. However, the local  manager disagreed. He told her she did not have any PTO available, saying “that is a problem that the Union created regarding paid leave”; “You need to fix that with the Union”; and “that’s the problem with the Union.” Ultimately, the employer gave the employee one day of PTO. This conversation arose while a successor contract was being negotiated. There was a tentative agreement to align the PTO plan with the non-union plan, but no overall agreement had been reached. There were also several open grievances challenging the employer’s PTO calculations.

The Board panel majority held the manager’s statements violated the NLRA. They reasoned these “statements were patently false …. There was no objective basis to blame the Union” for its PTO calculations. Giving significant weight to the context of contract negotiations and outstanding grievances, the Board found this “misrepresentation … would undermine the Union’s status as bargaining representative and reasonably tend to cause an employee to lose faith in the Union’s representation on the PTO issue.”

The D.C. Circuit noted the NLRA does not contain “this misstatement rule” and that no NLRB precedent had created it. Accordingly, it found substantial evidence did not support a finding these statements of opinion violated the NLRA. The Court ended its decision recognizing that it is up to Congress to change the NLRA in such a fashion, expressing no opinion on whether change is warranted: “Perhaps a no-misstatement rule would be good labor policy. Or perhaps not.”

The Court’s holding is reminiscent of the NLRB’s controversial decisions between 1977 and 1982, in which it considered whether a false statement uttered during a pre-election campaign would be deemed “objectionable conduct.” Ultimately,  in Midland National, 263 NLRB 127 (1982), the Board held that it “will no longer probe into the truth or falsity of the parties’ campaign statements” and would not automatically set aside elections because of misrepresentations during the lead up to an election, with a limited exception for forged documents. This position has not changed for the past 39 years.

Please contact a Jackson Lewis attorney with any questions as we continue to monitor NLRB decisions and all proposed legislation.