NLRB Issues Numerous Controversial Anti-Business Decisions

After a slow start due to the Senate confirmation fight over National Labor Relations Board (NLRB) Member Craig Becker (eventually given a recess appointment by President Barack Obama) and the need to reconsider scores of decisions from the former two-Member Board (as a result of the U.S. Supreme Court’s New Process Steel decision), the NLRB has now begun to issue significant decisions.

The decisions of the new three-Member majority of former union lawyers who currently sit on the Board are starting to make dramatic changes to national labor law policies and, as we predicted, have recently expanded the law in ways that substantially favor unions. In one day, August 27, the current NLRB majority, consisting of Chairman Wilma Liebman and Board Members Mark Pearce and Craig Becker, issued over 30 major decisions, in many cases over the dissents of former Member Schaumber (whose term expired that day) and current Member Brian Hayes.

These and many other decisions reversing labor law precedent are predicted in “The National Labor Relations Board in the Obama Administration: What Changes to Expect,” written by Ogletree Deakins lawyers Hal Coxson and his son, Chris Coxson, for the U.S. Chamber of Commerce. In addition, both attorneys serve as editor for a bi-monthly publication for the U.S. Chamber entitled NLRB Insight, designed to keep up with fast-breaking developments.

While the Board’s recent decisions are too numerous to discuss in detail for purposes of this article, there are many that, under questionable and closely contested facts, expand interpretations of “protected concerted activity.” The result is a clear pattern where the Board exercises increased scrutiny of employer conduct when a union loses a representation election. The Board then overturns the results of the election based on the union’s objections, and orders new, rerun elections. See, e.g., First Student, Inc., 355 NLRB No. 78 (Aug. 9, 2010) (election observers too “closely aligned” with management); Transcare New York, Inc., 355 NLRB No. 56 (July, 29, 2010) (employer “surveillance” too close to voting site); DHL Express, Inc., 355 NLRB No. 144 (Aug. 27, 2010) (“surveillance” by security guards in the course of their duties); Mandalay Bay Resort & Casino, 355 NLRB No. 92 (Aug. 17, 2010) (management’s “solicitation of grievances” even though consistent with established past practice pre-dating union’s election petition); Stabilus, Inc., 355 NLRB No. 161 (Aug. 27, 2010) (wearing of union t-shirts contrary to consistently-maintained enforcement of company policy requiring company uniforms).

As to employer objections in representation election cases, however, the new Board is less eager to overturn union election victories. See Affiliated Computer Services, Inc., 355 NLRB No. 163) (Aug. 27, 2010) (dismissing employer’s objection based on threatening letters from elected public officials distributed to unit employees); Independence Residences, Inc., 355 NLRB No. 153 (Aug. 27, 2010) (NY Labor Law §211-a, which prohibits employers from using state funds to train managers, supervisors, or administrative employees in ways to encourage or discourage union organizing or participation in a union organizing drive, and prohibits funding to hire attorneys, consultants, or contractors to counsel employers on union organizing, is not preempted by the National Labor Relations Act, and therefore is not grounds to set aside a representation election. This decision flies in the face of the Supreme Court’s Chamber of Commerce v. Brown ruling that a similar California law was preempted).

The August 27 decisions also involve issues of important national labor policies – for example, important future “salting” issues in the construction industry (see Ken Mor Electric Company, Inc., 355 NLRB No. 173 (Aug. 27, 2010)), and an important “bannering” decision. In the latter, the new Board majority ruled that displaying large union banners, such as those depicting giant inflatable rats, held or posted outside a neutral employer’s business to prevent the neutral employer from doing business with the “primary” employer with whom the union has a labor dispute, is permissible. The Board held that “bannering” is similar to “handbilling” rather than unlawful “picketing” of a neutral employer under the NLRA’s secondary boycott prohibitions. Carpenters Local 1506 (Eliason & Knuth of Arizona, Inc.), 355 NLRB No. 159 (Aug. 27, 2010).

As members Schaumber and Hayes wrote in strong dissent in Eliason & Knuth: “the express terms of the statute and its legislative history, as well as decades of Board precedent, demonstrate that the conduct in this case is a form of secondary coercion that Congress intended to outlaw by its adoption of Section 8(b)(4)(ii).”

Referring to the Taft-Hartley Act amendments which, as they stated, “were a response, in part, to abuses of union power, (and which) brought needed protection to neutral employers, their employees, and customers,” the dissent argued that bannering “spreads labor discord by coercing a neutral party to join the fray.”

The dissent concluded “Today, the majority puts that neutral party right back into the fray. … We will not be alone in finding this decision to be most troubling and ill-advised.”

Cases Yet to be Decided

Perhaps the two most controversial issues, yet to be finally decided (but some would say preordained), where the Board requests public comment through the filing of amicus curiae (“friend of the court”) briefs, involve questions of employee rights to file petitions for secret ballot decertification elections following voluntary recognition of a union without an election (“recognition bar” in Dana Corp.) and where a successor employer takes over an operation and hires a majority of the former employees (“successor bar” in MV Transportation).

In 3 to 2 decisions, over the dissents of Board members Schaumber and Hayes, the Board majority granted review and invited interested parties to file briefs in two sets of cases that question when a labor union’s support among employees can be challenged.

One set of cases (Rite Aid Store #6473 and Lamons Gasket Co.) asks the newly constituted Board to reconsider the 2007 decision in Dana Corp., 351 NLRB 434. In that decision, the Board majority held that when an employer agrees to voluntarily recognize a union based on signed authorization cards, it must post a notice advising the employees that they have a right, within 45 days of the notice, to file a petition for an election to decertify the union or in support of a rival union, if they so desire. If the notice is not posted, the union and employer may not later claim that their subsequent contract bars a petition by a rival union or for decertification for the three-year “contract bar.”

The second set of cases (UGL-UNICCO Service Company and Grocery Haulers, Inc.) seeks review of the Board’s 2002 decision in MV Transportation, 337 NLRB 770, on the duties of a successor employer – one that takes over its predecessor’s business and hires primarily from its workforce – toward an incumbent union. MV Transportation held that the employer’s obligation to recognize and bargain can be challenged by the employer, employees, or a rival union. The MV Transportation decision in turn reversed the Board’s 1999 decision in St. Elizabeth Manor, Inc. 329 NLRB 341, which held that an incumbent union is entitled to a reasonable period of time for bargaining without challenge to its status. This was known as the “successor bar doctrine.”

Ogletree Deakins will file amicus briefs in both sets of cases on behalf of several trade associations.