NLRB Reverses Course, Permits Employer Unilateral Changes

The National Labor Relations Board has restored the right of unionized employers to implement changes that are consistent with past practice (as long as the change does not materially vary in kind or degree from past changes), even if that practice developed under a management rights clause in a collective bargaining agreement that has expired, and whether or not the changes are discretionary. Raytheon Network Centric Systems, 365 NLRB No. 161 (Dec. 15, 2017).

The NLRB overruled E.I. du Pont de Nemours, 364 NLRB No. 17 (2016), which had significantly restricted the right of employers to unilaterally implement changes — even where a past practice existed – if the practice arose under a management rights clause in an expired collective bargaining agreement. The Board also held that every action constitutes a change, regardless of whether the employer has a practice of making similar changes in the past, if the employer’s actions involve any discretion.

In this case, Raytheon and the union had a long history of entering into labor agreements that allowed the company to make unilateral changes to its health plan. The union never objected or requested to bargain about such changes the company made every January between 2001 and 2011. In 2012, however, when the labor agreement expired during negotiations for a successor agreement, a significant topic was whether the next agreement would continue to permit the company to unilaterally make changes to the health plan. The parties did not reach an agreement, and in January 2013, the company made discretionary changes to the health plan as it had done every year from 2001 to 2011. The union filed a charge with the NLRB, claiming Raytheon had violated its duty to bargain.

An NLRB administrative law judge ruled against Raytheon, finding the unilateral changes violated the company’s obligation to maintain the “status quo” while a contract was not in effect.

Reviewing longstanding Supreme Court precedent, the Republican-dominated Board explained that an established past practice can become part of the “status quo,” even if the practice grew out of the exercise of a contractual right during the term of a labor agreement. It held that a given action constitutes a change that must be bargained about only if the action materially differs “in kind or degree” from those the employer has made in the past. The Board also held that this principle applies even where the changes may involve discretion.

Finally, the Board made it clear that, while the employer may be able to make an action without bargaining, it still has a duty to bargain upon request by the union over the general subject matter at issue. For example, Raytheon could not refuse to bargain over health insurance in its entirety. However, it was not precluded from making changes consistent with past practice while bargaining.

Raytheon ensures that unionized employers retain the ability to run their businesses by making the same kinds of decisions they always have made, even when a labor contract is not in effect. How broadly the decision will be applied remains to be seen. Employers should view the decision as a potential shield to protect continued normal business operations.

Union Membership Rates Remain Low – And AFL-CIO Claims Victories

Despite the National Labor Relations Board’s “quickie election” rule, the percentage of unionized workers in the private sector remained essentially stable 2017, according to the Bureau of Labor Statistics of the U.S. Department of Labor.

Only 6.5 percent of private-sector workers were in unions in 2017, an increase of 0.1 percent over the previous year. As expected, public-sector employees had a much higher union membership rate: 34.4 percent. 

According to the report, men (11.0 percent) had a slightly higher union membership rate than women (10.0 percent). Among states, New York had the highest union membership rate (23.8 percent), while South Carolina had the lowest (2.6 percent). Among race and ethnicity groups, Black workers had the highest union membership rate (12.6 percent), followed by White (10.6 percent), Hispanic (9.3 percent), and Asian (8.9 percent) workers.  

Union membership rates were highest for workers over age 45: 13.2 percent of workers between ages 45-54 were unionized, and 13.5 percent of workers aged 55-64 were union members. Aside from the public sector, industries with the highest percentage of union membership in 2017 were utilities (23.0 percent), transportation and warehousing (17.3 percent), telecommunications (16.1 percent), and construction (14.0 percent). 

Despite the stagnant union membership rate, in a January 19 press release, AFL-CIO President Richard Trumka said the “power of working people is on the rise.” While claiming “critical organizing victories over a range of industries,” Trumka maintained that the BLS figures were “more than numbers on a page, it’s a growing movement of working people that can’t be measured as easily.”  

Both unionized and union-free employers should be aware of local, industry, occupation, and other union membership trends. If you have any questions, please feel free to contact Jackson Lewis.


Kentucky’s Right-to-Work Law Survives Challenge

Kentucky’s right-to-work law has survived a challenge by the AFL-CIO and Teamsters union. The Kentucky legislation passed in the first week of the 2017 legislative session, making the Bluegrass State the 27th to adopt right-to-work legislation (Missouri was the 28th).

A Kentucky state court dismissed the unions’ challenge to the law, which prohibits unions and employers from requiring an employee to be a union member, or pay any dues or like amounts, as a condition of continued employment. The law does not apply to existing union contracts, only to new ones or those renewed after the law became effective in January 2017.

The unions argued the law’s prohibition of “union security” payments from nonunion employees is an unconstitutional taking from unions and violates the equal protection clause of the Kentucky Constitution. The court disagreed, holding that unions do not have a protected property interest in dues or fees generated by collective bargaining.

NLRB Extends Time For Filing Responses To “Quickie Election” Request For Information

The National Labor Relations Board has extended the time for filing responses to its request for information regarding its 2014 election rule. The new date for submissions is Monday, March 19, 2018. In that request for information, the NLRB asked three questions:

  1. Should the 2014 Election Rule be retained without change?
  2. Should the 2014 Election Rule be retained with modifications? If so, what should be modified?
  3. Should the 2014 Election Rule be rescinded? If so, should the Board revert to the Representation Election Regulations that were in effect prior to the 2014 Election Rule’s adoption, or should the Board make changes to the prior Representation Election Regulations? If the Board should make changes to the prior Representation Election Regulations, what should be changed?

The amendments, which took effect on April 14, 2015, allowed union organizing to move at an accelerated pace by, among other things, significantly reducing the time between the filing of a representation petition and the election from an average of approximately six weeks to an average of 23 days. Other provisions create substantial burdens on employers by requiring, within seven days, the submission of an onerous Statement of Position addressing all potential bargaining unit issues, the provision of copious amounts of information regarding potential voters, and deferring critical election issues, such as supervisory status issues, until after the election is held.

While the Board’s stated purpose in adopting the 2014 rules was to simplify representation-case procedures, the rules placed substantial pressure on employers to make critical decisions and produce important documentation within tight deadlines. By compressing the time period between the filing of the petition and the election, the rules also eliminated much of an employer’s ability to communicate with its employees about unionization issues.

The official Request for Information as approved by the Board, including the dissenting views, may be found here. Instructions for filing responses are available here on the NLRB’s website.

Action Items for Employers

Jackson Lewis, a nationwide management labor law firm whose attorneys have represented employers in thousands of NLRB representation case matters, is analyzing the rules to make recommendations to employers or employer groups about the best courses of action. Employers and employer groups who wish to comment will have a full opportunity to do so, either singly or in conjunction with labor counsel experienced in representing employers in representation cases.

If you or an industry group of which you are part desire further information or guidance or representation in submitting comments, please contact Philip Rosen, Jon Spitz, Thomas Walsh, Howard Bloom or the Jackson Lewis attorney with whom you regularly work.


Missouri to Vote on State’s Right-to-Work Law

When Missouri Republican Governor Eric Greitens signed “right-to-work” legislation into law on February 6, 2017, the Show-Me State was on the way to becoming the 28th state to prohibit unions and employers from requiring any employee to be a union member, or pay any dues or like amounts, as a condition of continued employment. Now, the fate of the legislation will be put before voters in November.

Just 10 days before the law’s August 28, 2017, effective date, labor union activists delivered several hundred thousand signatures in support of a referendum to put the legislation to a public vote. The referendum asks whether the people of Missouri wish to adopt the legislation, with a “yes” vote being in favor of the right-to-work law’s continued existence. A copy of the right-to-work referendum can be found here.

Although the Secretary of State reportedly rejected approximately 20 percent of the 310,567 signatures submitted by labor union supporters, the nearly 250,000 signatures remaining were more than twice the 108,467 needed to put the issue to a vote. On November 22, 2017, the Secretary of State certified that the referendum has sufficient support.

Now that the referendum has been certified by the Secretary of State, the right-to-work law passed by the legislature and signed by Governor Greitens remains on hold pending the results of the vote. Currently, the referendum is set to be on the ballot during the November 2018 mid-term elections, but the legislature could schedule a different day in 2018 for the referendum vote.

Regardless, along with a highly anticipated 2018 mid-term election, the people of Missouri will determine whether Missouri becomes the 28th right-to-work state.


NLRB General Counsel Signals Important Changes at NLRB

National Labor Relations Board General Counsel Peter Robb continues to outline his plans for change at the NLRB.  First came his sweeping five-page Memorandum directing NLRB Regional Offices to submit to his Division of Advice for review cases involving “significant legal issues.” See our article, “New Labor Board General Counsel Issues Plans For Reversing Course.”  That was followed by his Memorandum to Regional Offices setting forth a variety of circumstances under which those offices should process “currently active [representation] cases” applying the NLRB’s recent decision (PCC Structurals, Inc.) that overruled Specialty Healthcare.  For more on that Memorandum, see “New NLRB GC Opens Door to Possible Widespread Bargaining Unit Changes.”

Robb’s latest plan for change was revealed in a recent conference call with NLRB regional directors. During that January 11, 2018 call, Robb said he wants to reorganize the agency’s 26 regional offices into a smaller number of districts or regions, run by officials who report directly to the General Counsel, Bloomberg Law has reported. This could place decision-making in the hands of officials who are not located in the local regional offices.  An NLRB spokesperson said there is currently no plan to reorganize the Board’s regional office structure.

Robb’s reported plan could change significantly how the NLRB operates. Presently, regional directors generally decide how their offices investigate unfair labor practice (ULP) charges and handle representation proceedings. They decide the course of ULP allegations against employers and unions: a formal complaint for hearing by an administrative law judge or dismissal.

Jackson Lewis attorneys are available to discuss the possible effect of the GC’s reported ideas for change on your organization. We will continue to report on important NLRB decisions and other developments that affect your workplace.

Most NLRB Personnel on Furlough Until Appropriations Bill Signed into Law

Bloomberg BNA reports that 99.4 percent of the National Labor Relations Board’s employees (1,426 out of 1,435) are furloughed beginning January 22, 2018, according to the Board’s contingency plan.

If your organization has a case before the Board, expect to receive a communication from the Board Agent assigned to the case noting the Regional Office is closed and will reopen when an appropriations bill is passed by Congress and signed by the President.

The Board’s contingency plan can be found here.

The government shutdown also means other issues for employers. Please see our article, Implications of a Government Shutdown on Federal Contractors.

Management-Side Attorney John Ring Selected for Seat on Labor Board

President Donald Trump has nominated John Ring, a Washington, D.C.-based management-side labor and employment lawyer, to fill the vacant seat on the five-member National Labor Relations Board. If confirmed, Ring would replace former-NLRB Chairman Philip Miscimarra, a Republican, and restore a 3-2 Republican majority to the Board. Miscimarra’s term ended on December 16, 2017.

Currently, the Board consists of Republicans Marvin Kaplan and William Emanuel and Democrats Mark Gaston Pearce and Lauren McFerran. Prior to Emanuel’s confirmation on September 25, the Board had a Democratic majority for nearly nine years. In the weeks leading to Miscimarra’s departure, during which the Board had a 3-2 Republican majority, the Board issued several decisions reversing labor-friendly decisions and rulings by the Obama-era Board.


New NLRB GC Opens Door to Possible Widespread Bargaining Unit Changes

The National Labor Relations Board General Counsel’s Division of Operations Management has issued a sweeping Memorandum to Regional Offices setting forth a variety of circumstances under which those offices should process “currently active [representation] cases” applying the NLRB’s recent decision (PCC Structurals, Inc.) that overruled Specialty Healthcare. “Currently active cases” is defined very broadly – it includes almost all representation cases (open RC, RM and UC cases).  The only exceptions are for cases presently before the Board on appeal (“request for review”) and “where the employees do not comprise a conforming unit in the context of an acute care hospital.” Memorandum OM 18-05 (December 22, 2017).

The Memorandum, entitled “Representation Case Procedures in Light of PCC Structurals, Inc., 365 NLRB No. 160 (2017),” gives parties to representation cases an extensive opportunity to relitigate directed bargaining unit determinations (bargaining unit determinations made by the Regional Director) that were made under the Specialty Healthcare standard and even to withdraw from election agreements (stipulated or consent). Regional Directors are reminded that they have discretion to entertain requests to revisit a unit determination, by way of approval of a request to withdraw from an election agreement upon an “affirmative showing of unusual circumstances,” reopening the record after close of a pre-election hearing or after issuance of a decision and direction of election upon a showing of “extraordinary circumstances,” and treating a request for review as a motion for reconsideration of his or her pre-election decision. According to the Memorandum, the change in the law in PCC constitutes such an “unusual” or “extraordinary” change in circumstances as to warrant reconsideration.

Regions are instructed “to consistently apply the Board’s new analysis at all stages of case processing in currently active cases and to utilize the practices set forth in the memorandum in all active cases.” Regional Directors are instructed to “routinely entertain a party’s request to introduce evidence relevant to a PCC analysis in a currently active case . . .” Such a request can take many forms, including a motion after opening of a hearing or issuance of a decision and direction of election, or pursuant to a request by letter after entering into a stipulated or consent election agreement, even if an election has already been held.

The Memorandum is so broad that even where no party has sought reconsideration of an election agreement or unit determination in a currently active case, Regions are instructed to issue a Notice to Show Cause directing any party to the case to show cause, with specifics, as to why the stipulated or directed bargaining unit is inappropriate pursuant to the analysis set forth in PCC. (The show cause notice will require a party to affirmatively identify with significant specificity those community of interest factors a party is relying upon to show that the directed unit is not sufficiently distinct from another employee group such that it should be rendered inappropriate.)

The Memorandum also takes on several of the short time frames engendered by the April, 2015 “quickie election rule.” First, Regional Directors are given discretion to set hearings beyond the eighth day after service of the Notice of Hearing in matters involving, among other things, “substantial community of interest issues.” In fact, the Memorandum appears to assume that additional time will need to be granted because “[u]nder the community-of-interest standard set forth in PCC, a fact intensive analysis is required . . .” Second, the Memorandum notes that they have discretion to postpone hearings and the due date for the Statement of Position for up to two days upon the showing of special circumstances and for more than two business days upon the showing of extraordinary circumstances. Finally, and perhaps most important, the Memorandum also reminds Regional Directors that election dates are supposed to be set based on the circumstances of each case, and that the “substantial change in the law such as that in PCC is a circumstance where additional time may be required to set an election date.”

This Memorandum gives employers a broad opportunity to ask the Regional Director to revisit a directed bargaining unit determination or to request withdrawal from a stipulated or consent election agreement, even if an election has been held. It represents a unique opportunity for a possible “second bite of the apple” and an chance to perhaps transform all or part of your unionized organization to union-free.

Jackson Lewis attorneys are available to discuss the Memorandum and its possible effect on your organization.



Kaplan Named Chair of Labor Board

President Donald Trump has named new National Labor Relations Board Member Marvin E. Kaplan Chairman. Kaplan was sworn in as a Board Member on August 10, 2017, for a term ending on August 27, 2020.

Kaplan said:

“The President’s announcement is an honor and privilege, and I look forward to serving as Chairman of the National Labor Relations Board. I remain committed to working with my colleagues to achieve the important goal of issuing timely decisions that apply the National Labor Relations Act in a way that protects the rights of employees, employers, and labor organizations throughout the country.”

Kaplan also recognized former Chairman Philip A. Miscimarra for his service on the Board.

Currently, there are four Board members (two Republicans and two Democrats), with one vacant seat that Trump is expected to fill with a Republican.