Reconstituted NLRB Moving Quickly To Enact Reform Agenda

The November 2010 election results appear to have stalled attempts to reform national labor policy through federal legislation. The focus of the reform effort has quickly shifted from legislative action – seeking passage of the Employee Free Choice Act (EFCA) and other amendments to the National Labor Relations Act (NLRA) – to equally significant administrative and regulatory changes enacted directly by the National Labor Relations Board (NLRB).

The changes implemented (and under consideration) by the NLRB involve enhanced enforcement initiatives, modifications to agency policies and procedures, and additional regulatory requirements imposed on employers. Recent developments strongly suggest the NLRB is poised to deliver sweeping changes in 2011 making union organizing easier and compliance potentially more onerous and costly for employers.

Posting Rule Proposed

The proverbial “tip of the iceberg” is the NLRB’s recently issued Notice of Proposed Rulemaking, which, if adopted, requires employers to post in the workplace notices describing for employees their right to organize a union, engage in collective bargaining, and conduct other forms of concerted activity (such as strikes and work stoppages). The NLRB’s proposed rule is “similar to one recently finalized by the U.S. Department of Labor for federal contractors.” Controversial NLRB member Craig Becker helped draft the Executive Order authorizing the DOL’s final rule while serving on the Obama transition team and still employed by the Service Employees International Union.

The stated purpose of the NLRB’s proposed rule is to inform employees of their right to act together to attempt to improve wages and working conditions, to form a union, to join a union, to bargain collectively or to choose not to do any of these things. The proposed rule also provides examples of unlawful employer conduct, but very little in the way of prohibited union conduct. There is also no mention of an employee’s right to withhold a portion of union dues used for non-collective bargaining purposes (such as political contributions) under the U.S. Supreme Court’s Beck decision.

The Notice of Proposed Rulemaking was published in the Federal Register on December 22, 2010. Interested members of the public can submit comments to the NLRB on the proposal until February 22, 2011. Ogletree Deakins is analyzing the proposal and assisting clients in drafting and submitting comments on the proposed rule.

Under the NLRB’s proposed rule, all private employers covered by the NLRA would be required to physically post the notice in a conspicuous place “including all places where notices to employees are customarily posted.” Employers that typically communicate with employees electronically are additionally required to distribute the notice by email or by prominently posting the notice on a company’s intranet or website. If a significant number of workers are not proficient in English, the employer must provide the notice in the language its employees speak.

Employers that fail to post the notice would be subject to sanctions including: (1) finding the failure to be an unfair labor practice; (2) tolling the statute of limitations for filing unfair labor practice charges; and (3) considering the failure to post as evidence of unlawful motive in subsequent unfair labor practice cases.

Although similar notices are required by other federal workplace laws, (e.g., ADEA, ADA, FLSA and FMLA) this is the first time in the 75-year history of the NLRA that the Board
has proposed such a requirement. The proposed NLRA notice differs from other required workplace notices by containing not only a summary of the law, but actual examples of employer conduct which might constitute an unfair labor practice.

Board Member Hayes dissented from the issuance of the proposed rule and strongly questioned whether the Board has the statutory authority to promulgate or enforce the notice posting proposal. This proposal is just one of a host of NLRB initiatives that will radically impact the labor relations landscape for all employers in 2011 and beyond.

Increase In 10(j) Federal Court Injunctions

Labor unions frequently contend that employers utilize unlawful tactics during union organizing campaigns and that the NLRA does not provide prompt, effective redress of such violations. Critics assert that discharges of union supporters, solicitation of grievances, promises or grants of benefits, unlawful interrogations and surveillance during campaigns significantly inhibit employees from engaging in union organizing activity. Alleged unfair labor practices committed during union organizing campaigns have been identified by the NLRB as “nip-in-the-bud” cases.

Acting General Counsel Lafe Solomon has directed Regional Directors of the NLRB to seek a federal court injunction under Section 10(j) of the NLRA in all unfair labor practice cases involving a discharge occurring during a union organizing drive. Solomon also has directed Regional Directors to seek “additional remedies to remove the impact of the discharges as well as the other Section 8(a)(1) violations.” In other words, in addition to injunctive relief for charges involving terminations under Section 8(a)(3) of the NLRA, Solomon has seemingly instructed Regional Directors also to seek injunctive relief in garden variety 8(a)(1) cases arising during a union organizing campaign.

An aggressive timeline for processing nip-in-the-bud cases has been established as well. In addition to increased use of 10(j) proceedings, the NLRB will now fast track the processing of these unfair labor practice (ULP) charges. This includes prompt identi-fication of cases purportedly appropriate for injunctive relief, short time frames for receipt of the employer’s evidence and Board authorization for litigation including expedited trial of the merits before an administrative law judge. Regional Directors are now required to make a determination on the merits of nip-in-the bud ULP charges within 49 calendar days from the filing of the charge. If a decision is made to issue a complaint, the decision regarding whether to pursue injunctive relief under Section 10(j) will be made at the same time.

NLRB Regional Directors also have been directed to seek additional remedies in nip-in-the-bud cases, such as: (1) requiring a “responsible management official” to read remedial notices to assembled groups of employees; (2) union access to the employer’s bulletin boards; (3) providing names and addresses of employees to unions; (4) granting union access to non-work areas during employees’ non-working time; (5) affording unions equal time and facilities to respond to any address made by the employer regarding the issues of unions and unionization; and (5) allowing unions the right to deliver speeches to employees prior to any Board election.

Practical Impact: With the expected increase in Section 10(j) injunctions during union organizing campaigns, employers should carefully evaluate existing training initiatives to ensure supervisors are up to date on NLRA compliance. Training should empower supervisors to communicate lawfully with employees regarding unions and unionization. This is critically important given that even isolated alleged violations of Section 8(a)(1) very well may trigger requests for injunctive relief. Relatedly, a trend is beginning to emerge in which the Board is increasingly overturning union election losses based on extremely technical or questionable alleged violations.

Default Language In Settlement Agreements

On January 12, 2011, Acting General Counsel Solomon ordered all Regional Directors to use “default language” in informal settlement agreements and compliance settlement agreements (GC Memorandum 11-04). If the charged party/respondent defaults on the settlement agreement, the new mandatory “default language” in the agreement would waive the right of the defaulting party to challenge allegations of the complaint or compliance specification.

Under the new default language, the violations set forth in a complaint/compliance specification is deemed admitted and the defaulting party’s answer would be considered withdrawn. The Board may then, without the necessity of trial or any other proceeding, find all allegations of fact and conclusions of law to be adverse to the charging party/respondent on all issues, and may issue an order providing a full remedy. The default language also binds the parties to allow the U.S. Courts of Appeal to enter a judgment against the charged party/respondent enforcing the Board order ex parte.

As a practical matter, the new “default language” raises a host of issues in that it may bind employers not only in the case settled, but also for subsequent conduct arising under the terms of the settlement agreement. For example, where an employer settles a Section 8(a)(5) refusal to bargain charge, would a subsequent charge arising from the same negotiations (such as premature impasse) force default judgment of the settled charge? Would default language in a settled case involving a termination subsequently preclude the employer from disciplining or terminating the employee without risking default judgment and full back pay, with no right to appeal?

In the General Counsel’s Summary of Operations Report FY 2010, Acting General Counsel Solomon stated, just as his predecessors did in past reports, that “the Agency’s effectiveness and efficiency in administering the Act is greatly enhanced by its ability to obtain voluntary resolution of unfair labor practice cases.” He continued: “Over the years, the Agency has achieved an excellent settlement record due to the efforts of Agency staff and the cooperation of the Bar. In FY 2010, the Regions obtained 7,246 settlements of unfair labor practice cases, representing a rate of 95.8% of total merit cases . . . Over the last 10 years the settlement rate has ranged from between 91.5% and 99.5%.”

The new “default language” clearly increases the risk associated with settling cases and may affect an employer’s willingness to voluntarily enter into such agreements. What would a reduction of even 5-10% of settled cases mean for the Board’s operations and budget if it had to litigate those matters? With the current Board’s reversals of precedent, expanded interpretations of what constitutes “protected concerted activity,” and tougher enforcement policies, it would seem that the Board’s caseload will increase. In sum, the new “default language” may discourage voluntary settlements of even “routine” unfair labor practice cases.

Practice Tips: First, try to negotiate out the “default language” before agreeing to an informal settlement agreement or compliance settlement. Some Regional Directors may be anxious to avoid the expenditure of government resources and the time delays in achieving remedial relief through an administrative law judge trial, and will be encouraged to settle even without the default language.

Second, if the Regional Director insists on the “default language” (as most will), at least try to limit the potential default to conduct arising out of the facts of the initial charge, such as failure to honor back pay as agreed or reinstatement of the employee in accordance with the terms of the settlement agreement. Finally, try to preclude future conduct unrelated to the charge in the settlement agreement from triggering the default language.