The NLRB Elevates Form Over Substance to Give Union Another Bite at the Apple

The National Labor Relations Board (NLRB) recently issued another decision appearing to prioritize the interests of organized labor above all else. In URS Federal Services, Inc., 365 NLRB No. 1 (December 8, 2016), the two Democratic Board members, over the dissent of the lone Republican member, reversed a regional director and held that a technical violation of the Board’s representation case rules—which did not prejudice the union or impact the election in any way—was nevertheless sufficient grounds to overturn the results of a representation election where the union was defeated by an employee vote of 91 to 54.

Background

In December 2014, the NLRB issued a final rule amending its representation case (“R-case”) procedures. The amended R-case rules became effective on April 14, 2015, and require, among other things, that an employer faced with a petition for union representation transmit electronically a list of eligible voters—commonly known as an “Excelsior list”—to the regional director and “other parties,” including the petitioning union, within two business days of a stipulated election agreement or a regional director’s direction of election.

The Board majority explained that one of its goals in amending the R-case rules was simply “to codify the requirement of” Excelsior Underwear, Inc., 156 NLRB 1236 (1966), while altering “the content and timing of its provision to the nonemployer parties to the case.” The majority stated that the two objectives of Excelsior were “(1) [e]nsuring the fair and free choice of bargaining representatives by maximizing the likelihood that all the voters will be exposed to the nonemployer party arguments concerning representation; and (2) facilitating the public interest in the expeditious resolution of questions of representation by enabling the parties on the ballot to avoid having to challenge voters based solely on lack of knowledge as to the voter’s identity” (emphasis in the original).

At the time, the majority claimed the amended rules would change “an employer’s obligations concerning the content, timing, and format of the voter list” and expressly denied any departure from the nearly 50 years of precedent subsequent to the Excelsior decision which vested in a regional director the discretion to excuse technical violations when an employer had substantially complied with its Excelsior obligations. The majority pointed out that the language providing that an employer’s failure to comply “shall be grounds for setting aside the election” was taken directly from the Excelsior decision itself and therefore represented no change in the law.

The Decision in URS Federal Services, Inc. 

Pursuant to the amended R-case rules, the employer in URS Federal Services timely provided the regional director with the required Excelsior voter list before it was due. The employer did not transmit the list directly to the union, but the regional director forwarded it to the union the next business day, on the day it was due. The parties proceeded with the election, and the employees voted overwhelmingly against union representation by a 91-to-54 vote. The union timely objected to the election based on the employer’s technical failure to have served the union directly with the Excelsior list. Citing Excelsior precedent, the regional director found the employer to have substantially complied with its obligations and noted no harm to the union, particularly since the union received the list when it was due. The regional director also considered the margin of defeat and decided, based on the totality of circumstances, to overrule the union’s objection.

The Board granted the union’s petition for review, contending it raised “a substantial issue warranting review” and proceeded to reverse the regional director and order a second election. The URS Federal Services majority of Chairman Pearce and Member McFerran suggested that the amended R-case rules language requires an election to be set aside whenever there is a failure to serve the voter list and a timely objection is filed. The majority claimed that the “mandatory” language of the rules deprives a regional director of the discretion to excuse such a failure. Despite the Board’s express adherence to precedent when explaining the purpose of the amended R-case rules in December 2014, the URS Federal Services majority nevertheless asserted that, in enacting the amended R-case rules, “the Board deliberately created certain new bright-line provisions and consequences for noncompliance.”

Member Miscimarra dissented. Observing that the regional director had looked “to precedent—which was not repudiated by the Election Rule” and concluded that the employer’s technical failure did not frustrate the purpose of the Excelsior rule, Miscimarra accused the majority of disregarding decades of precedent to lightly set aside an election, improperly overriding a regional director’s discretion, and reaching incongruous results based on whether a union would benefit from the decision.

Key Takeaways

The Board continues its apparent pattern of searching for any basis upon which to reach results unfavorable to employers. Employers resisting union petitions for representation would do well to follow to the letter every requirement of the R-case rules, as even minor technical failures may result in an election being set aside and the petitioning union getting a second shot at employees.