The National Labor Relations Board recently issued several decisions that directly impact both union and non-union employers.  In the first case, the Board ruled that voluntary recognition does not bar a decertification petition or a rival petition during the 45 days following recognition.  In the second case, the Board held that filing a reasonably based lawsuit is not unlawful regardless of the motive behind the suit.  The third case modified the standard for hiring bias claims brought under the National Labor Relations Act (NLRA).  In the fourth and final case, the Board found that the “at-will” status of replacement workers does not prevent an employer from considering the replacements to be “permanent.”  Below is a summary of each of these important rulings.

Dana Corp.
On September 29, 2007, in a 3-2 decision, the Board held that “no election bar will be imposed after a card-based recognition unless (1) employees in the bargaining unit receive notice of the recognition and of their right, within 45 days of the notice, to file a decertification petition or to support the filing of a petition by a rival union, and (2) 45 days pass from the date of notice without the filing of a valid petition.” 

Metaldyne Corporation and Dana Corporation separately and independently entered into card-check agreements with the International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America, AFL-CIO.  After the union made showings of majority support, the employers recognized the union.  Later, employees in each of the respective employer’s bargaining units filed petitions seeking decertification elections.  The petitions were filed 22 (Metaldyne) and 34 (Dana) days after the voluntary recognition.  The Metaldyne petition was supported by more than 50 percent of the employees in the bargaining unit and the Dana petition had over 35 percent support.  The respective Regional Directors dismissed the petitions based upon the recognition-bar doctrine.

The bargaining unit petitioners appealed the Regional Directors’ dismissals and argued for a change in the Board’s recognition-bar law.  In balancing the interests of employee choice and bargaining stability, the Board found that “the immediate post-recognition imposition of an election bar does not give sufficient weight to the protection of the statutory rights of affected employees to exercise their choice on collective bargaining representation through the preferred method of a Board-conducted election.” 
The Board held that “[i]f a valid petition supported by 30 percent or more of the unit employees is filed within 45 days of the notice, the petition will be processed.  The requisite showing of interest in support of a petition may include employee signatures obtained before as well as after the recognition.”  The Board declined to change the 30 percent support threshold for decertification petitions.  Additionally, the Board made clear that the modified recognition-bar principles announced in Dana “will govern regardless of whether a card-check and/or neutrality agreement preceded the union’s recognition.”
Under the new recognition-bar framework, employers and/or unions “must promptly notify the Regional Office of the Board, in writing, of the grant of voluntary recognition.”  After receiving the notice of recognition, the Regional Office will send the employer an official notice to be posted during the 45-day period.  In its decision, the Board directed that the General Counsel prepare and distribute to the Regional Directors the notice contemplated by the decision.
Breaking with established precedent, the Board ordered that Dana would only apply prospectively.  The Board reasoned that retroactive application would result in an “inequitable disruption of bargaining relationships established on the basis of the former voluntary-recognition bar doctrine.”
Dana will greatly affect employers’ and unions’ efforts to avoid the Board election process in establishing bargaining relationships.  The card-check recognition now becomes a first step in establishing the bargaining relationship.  With a 30 percent showing of decertification support during the notice period, affected employees can force a Board-conducted secret ballot election.  Moreover, during the notice period, the employers and unions remain free to express their “non-coercive views” on a potential bargaining relationship.

BE&K Construction Co.
BE&K Construction Co. filed a lawsuit against several unions alleging violations of the NLRA and antitrust law.  In 1999, the Board found that the lawsuit violated Section 8(a)(1) because the unions won summary judgment in the case and because the lawsuit had been filed in retaliation for the unions engaging in protected activity under the NLRA.  The Sixth Circuit enforced the Board’s order, but the U.S. Supreme Court reversed on First Amendment grounds. 
On remand, the Board recently held that “the filing and maintenance of a reasonably based lawsuit does not violate the [NLRA], regardless of the motive for bringing it.”  Because the Board found that BE&K’s lawsuit was “reasonably based in law and fact,” it held that the company’s action did not violate Section 8(a)(1).
In BE&K, the Board extended the Supreme Court’s 2002 decision in Bill Johnson’s Restaurants Inc. v. NLRB.  In Bill Johnson’s, the Court held that “[t]he filing and prosecution of a well-founded lawsuit may not be enjoined as an unfair labor practice, even if [the suit] would not have been commenced but for the plaintiff’s desire to retaliate against the defendant for exercising rights protected by the [NLRA].” 
Based upon the Supreme Court’s remand addressing First Amendment concerns, the Board extended the Bill Johnson’s rationale, holding that “we see no logical basis for finding that an ongoing, reasonably-based lawsuit is protected by the First Amendment right to petition, but that the same lawsuit, once completed, loses that protection solely because the plaintiff failed to ultimately prevail.  Nothing in the Constitution restricts the right to petition to winning plaintiffs.” 
The Board held that this new standard applies “regardless of whether the lawsuit is ongoing or is completed.”  The Board noted that the chilling effect on the right to petition exists in the early stages of litigation, after its conclusion, and even before initiating litigation, when the prospect of liability could deter action. 
Under the Board’s new standard, a lawsuit challenging conduct under the NLRA only loses its First Amendment protection (and therefore is exposed to unfair labor practice charges) when “it lacks a reasonable basis and was brought with the requisite kind of retaliatory purpose.”  A lawsuit “lacks a reasonable basis” if no reasonable plaintiff could expect to prevail.

Toering Electric Co.
In Toering Electric Co., the Board made it more difficult for “salts” to gain the protections of the NLRA in hiring discrimination claims.  The Board defined “an applicant entitled to statutory protections against hiring discrimination as someone genuinely interested in seeking to establish an employment relationship with the employer.”  Further, the Board imposed on the General Counsel “the burden of proving . . . that an alleged discriminatee meets this definition.”
In the 1990s, the IBEW assisted Local 275 in targeting Toering, a union-free electrical contractor in Michigan, for a salting campaign.  The union submitted member resumes to Toering, and when they were not hired filed discrimination charges.  The administrative law judge (ALJ) held that, by failing to hire union-affiliated applicants, Toering violated Section 8(a)(3) of the NLRA.  Toering appealed.
In a 3-2 decision, the Board held that “only those individuals genuinely interested in becoming employees can be discriminatorily denied the opportunity on the basis of their union affiliation or activity; one cannot be denied what one does not genuinely seek.”  The NLRA does not protect the relationships between employers and those applicants who do not desire to enter into an employment relationship with the employer.
The Board recounted that its existing precedent assumed that applicants genuinely desired to be hired and were protected by the NLRA.  The applicant’s genuine interest would have to be raised by employers as a defense to discrimination claims, requiring the employer to prove the applicant’s lack of interest. 
In modifying the existing framework, the Board held that “the General Counsel’s burden of proof in all hiring discrimination cases includes the burden to prove that the alleged discriminatee was an applicant entitled to protection as a Section 2(3) employee, i.e., an applicant genuinely interested in seeking to establish an employment relationship with the employer.”  To do so, the General Counsel must prove that: “(1) there was an application for employment, and (2) the application reflected a genuine interest in becoming employed by the employer.”  Only after the General Counsel makes this showing does the employer need to rebut the genuineness of the application.  If the employer produces such evidence, then, as part of his prima facie case, the General Counsel must rebut the employer’s evidence and prove the employee’s genuine interest by a preponderance of the evidence.

Jones Plastic & Engineering Co.
In Jones Plastic & Engineering Co., the Board held that the company properly classified replacement workers during an economic strike as “permanent replacements,” despite the fact that the replacements were told of and acknowledged their at-will status.  The Board majority distinguished existing precedent in Target Rock Corp. (which held that proof of at-will employment did not support an employer’s position that its striker replacements were permanent) and found that Jones Plastic’s statements and documents given to the replacements detailing their at-will status were not inconsistent with “permanent” replacement status, and were merely “a legitimate protection against employee lawsuits.”
In April 2001, the Steelworkers Union was certified as the collective bargaining representative of the bargaining unit consisting of the production and maintenance workers at Jones Plastic’s Camden, Tennessee, facility.  In 2002, after failing to reach a contract agreement with Jones Plastic, the union commenced an economic strike.  Later, the union made an unconditional offer for all economic strikers to return to work.  Jones Plastic rejected the strikers return because it had filled its ranks with permanent replacements.  The union filed unfair labor practice charges, alleging that Jones Plastic violated Section 8(a)(3) of the NLRA.
Before the Board was the narrow issue of “whether employees hired on an at-will basis may be found to be permanent replacements for striking employees.”  Relying on the arguments made in a concurring decision in Target Rock, the Board found that “permanent” status refers to the employer’s intention to keep the replacements after the strikers make an unconditional offer to return to work, while “at-will” refers to the employer’s right to terminate the employment of the replacements, with or without cause.  Thus, the Board overruled Target Rock “to the extent that it suggests that at-will employment is inconsistent with or detracts from an otherwise valid showing of permanent replacement status.”

Note: This article was published in the August – December 2007 “Double Issue” of The Employment Law Authority.

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The attorneys in Ogletree Deakins’ Traditional Labor Practice Group have vast experience in complex and sophisticated traditional labor law matters. This includes experience advising and representing employers of all sizes and across virtually all industries in connection with union representation campaigns, collective bargaining negotiations, strike preparations, labor arbitrations, and National Labor Relations Board proceedings.

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