The Government Stimulus Plan for Unionizing America's Workers

September 2015 Update on the Government Stimulus Article Below:

The following article was written in 2014 and remains on my website as a historical summary of the various attempts to help labor unions in their organizing efforts. The various attempts discussed were rendered invalid by the courts, except for the, NLRB’s recent election rule changes, which result in a much quicker NLRB election. Because of these new rules employers should train their managers and supervisors in advance of any known union organizing efforts.

 

I.        Introduction

To unionize a company the relevant employees typically vote in a secret ballot election held by the National Labor Relations Board (NLRB).  In 2007, and again in 2009, legislation was proposed that would have replaced the secret ballot election process.  That proposed legislation carried the misleading name of “The Employee Free Choice Act.”  It would have amended the National Labor Relations Act (NLRA) by replacing the secret ballot vote with a simple counting of signed union authorization cards.  If the union showed the NLRB that a majority of the employees had signed the cards, the employer would be ordered to bargain with the union as the exclusive representative of all employees in the bargaining unit.  In the eyes of employers, the major problem presented by that method was that employees could be coerced or misled into signing such cards.  To the relief of all employers, this highly controversial legislation repeatedly failed to pass.

Now, however, unions and the Obama Administration have concluded that they can accomplish the same objective with amendments to the NLRB’s Rules and Regulations, which do not need legislative approval, as well as with case decisions by the newly appointed members of the NLRB that greatly expand what constitutes a violation of the NLRA (called an “Unfair Labor Practice” (ULP)).

II.        The Government’s “Stimulus Plan” for Unionization

There are three major elements of this “stimulus plan” designed to ensure greater successes for unions in organizing new employers:

(1)   The first element has been implemented recently by opinions of the NLRB, published in September and October 2012, which came as a total surprise to most employers and their attorneys.  In essence, the NLRB has held that provisions that are commonly found in companies’ employee handbooks or in employee confidentiality agreements will now constitute ULPs.

(2)   The second element is the NLRB’s mandate that a notice of “Employee Rights Under the NLRA” must be posted by all private industry employers.  Employers were initially given a deadline of November 2011 to post this, but such deadline was lifted as a result of litigation begun by the U.S. Chamber of Commerce and other industry organizations.  That litigation is now at the appellate court level and oral argument to the U.S. Court of Appeals for the District of Columbia was heard on September 11, 2012.  The Court will likely issue an opinion shortly, and, in all likelihood, some form of such notice will be required soon. (A copy of the original proposed notice can be found here.)

(3)   The third element is the new Rules published by the NLRB that sharply limit the delay that could take place under the former Rules prior to an election.  Most of the former provisions dealing with pre-election hearings and appeals will be eliminated.  These have long been under attack by the unions because they have benefitted employers due to the delay that they created.  The implementation of these new Rules has also been stalled by litigation, bu. However, when they are eventually implemented companies will see elections occurring almost as quickly as they would have under the twice rejected “card check” legislation mentioned above.

Owners and executives of companies that want to remain union-free must be aware of these major developments in order to protect against the potential consequences of them. Each element of the government’s “stimulus plan” for unionization as well as the consequences of committing a ULP are discussed in more detail below.

1.         Recent NLRB Rulings that Common Company Policies now Constitute ULPs

The modern employer must deal with a multitude of “employee rights” created by federal, state, and even local authorities.  The NLRA was one of the earliest pieces of such legislation.  It created new rights for employees and restricted their employers.  The NLRA was passed in 1935 and specifically provided that employees had the right to join unions and bargain collectively with their employer. It also provided that employees could engage in “concerted activities” in dealing with their employer, such as protesting their wages and working conditions, even when there was no union involved.  The rights the NLRA affords employees are spelled out in great detail in the proposed “Employee Rights Under the NLRA” notice.

Company policies that attempt to restrict employees in the exercise of their rights have always been ULPs, but now the NLRB has greatly expanded its view of what type language is a restriction of these rights.  A typical illustration of a policy that obviously restricts employees in the exercise of these rights would be one that prohibits employees from discussing their wages with one another.  Any such policy has long been held to constitute a restriction on employees’ rights and, therefore, is a ULP.  Likewise, a rule that clearly restricts employees from discussing their wages or working conditions with a union is also a ULP.  In essence, what the new NLRB members, which were appointed by Obama, have done by virtue of their decisions is analyze employer’s policies under a microscope.  If they can possibly be read as a restriction of employees’ rights, they are illegal and a ULP.  Notably, these rulings have been made without any evidence whatsoever that any employee actually interpreted the relevant company policies as prohibiting protected activity.

For example, in Flex Frac Logistics, LLC,  358 NLRB No. 127 (Sept. 11, 2012) the company defined its restricted confidential information to include “personnel information and documents” and provided that “no employee is permitted to share this confidential information outside the organization”  The NLRB held that this language was “unlawfully overbroad because employees would reasonably believe that they are prohibited from discussing wages or the terms and conditions of employment with non-employees, such as union representatives…”

In addition, in Knauz BMW, 358 N.L.R.B. No. 164 (Sept. 28, 2012), the company’s policy cautioned employees to be “courteous” at all times and went on to say that “no one should be disrespectful or use profanity or any other language which injures the image or reputation of the dealership.”  The NLRB found that this was a ULP, concluding that this policy was unlawful “because employees would reasonably construe its broad prohibition against disrespectful conduct and language which injures the image or reputation of the dealership” as limiting their right to protest their working conditions to the employer as well as their right to discuss their complaints with a union.

In Costco Wholesale Corporation, 358 N.L.R.B. No. 106 (Sept. 7, 2012), the restrictions on the employees’ right to criticize the company were contained in the company’s social media section of the employee handbook.  Specifically, the employees were told that they must not make electronic postings “that damage the company, defame any individual or damage any person’s reputation.”  The NLRB held that “employees would reasonably conclude that the rule requires them to refrain from engaging in certain protected communications” that are critical of the company or its management.

These holdings present more than just challenges to companies regarding the wording that goes into their employee handbooks and agreements.  It is obvious that to the new NLRB if company policies can conceivably be read as restricting employees’ rights, regardless of whether there is evidence of any actual interpretation by employees, the company can be convicted of a ULP.  The consequences of such a conviction are discussed in greater detail below.  It is important to note at this point, however, that such a conviction and the resulting required posting of a ULP conviction notice for all employees to see can have a very adverse effect on employees’ views of the company.  Such is particularly harmful if a union organizing drive is under way or on the horizon.

2.        The Required Posting of the NLRB’s Notice to Employees of Their Rights

While the posting of the “Employee Rights Under the NLRA” notice is currently embroiled in litigation, it is quite probable that the proposed notice, or a very similar type of it, will ultimately be required to be posted on every employer’s bulletin board.  Notices from many federal agencies, such as the EEOC and the U.S. Department of Labor, are already posted on such boards.  State agencies likewise require postings of workers compensation notices, etc.  Since these have been mandated for years and information about employees’ rights under the NLRA is similar to the type of information contained in these other posters, it is reasonable to believe that a similar notice from the NLRB will end up being required.  One of the principal objections to the NLRB’s proposed notice, however, is that failure to post the notice itself is a ULP. Such a penalty goes too far, as one U.S. District Court has already held.

The impact of such a posting is that more and more employees will want to, and will feel free to, discuss their issues with a union representative.  Union representatives are highly trained to convince employees that the union can solve their problems.  They tell employees that before the union can do that, “You and your fellow employees must sign these little authorization cards.”  The union representatives then put the complaining employee, and others of a like mind, to work as an “in plant organizing committee.”  In the typical scenario, the employer knows nothing about this activity (which is intentionally kept secret) until the union has achieved a majority of employees’ signatures on union authorization cards.  At that point, the company is informed by the union that it is making a claim for representation of all the employees through a letter to the company or through a Petition for an Election filed with the NLRB.

Before the company receives this information, it is quite likely that a first level supervisor will learn that one (or more) of his/her employees is actively supporting a union and may discharge the employees or threaten the employees with retaliatory action.  Such acts are viewed by the NLRB as official company actions, resulting in one or more ULPs having been committed prior to the company management even knowing anything about the union’s presence!  The NLRB has also held in some cases that, if a supervisor or manager is shown the signed union cards and looks at them, this amounts to accepting such cards as conclusive; thus, the company has elected to rely on the cards themselves and has waived its right to an election.  For these and many other reasons, it is absolutely critical that all supervisors and managers be trained as to what they can and cannot do when faced with union activity, including a request for them to look at the union cards.  Unfortunately, except in certain industries where union organizing is known to be active, companies have generally been lax in providing this type training in recent years.

3.        The Election Rule Changes Proposed by the NLRB

These Rule changes have been temporarily postponed by a United States District Court.  They were stalled by a very technical point that the NLRB did not have a quorum present when it enacted them.  In all likelihood, this is something that will be corrected, and the new Rules will go into effect soon.

The unions have been critical of the NLRB’s election Rules for many years because of the delay that they caused before a union election could be held.  The unions object to this delay because it gives the employer an opportunity to provide information to employees about the various difficulties they can encounter if the union wins.  The unions argue that it gives the employer time to commit ULPs and coerce employees to vote against them.  It is certainly true that it gives the employer time to try to get employees to vote against the union.  However, employers need this time because in the typical situation the union has a substantial head start before the employer even knows that the union is on the scene and soliciting signatures on union authorization cards.

The dimensions of the collective bargaining unit are defined under the current NLRB hearing process.  That is, the NLRB decides what employees and job classifications are included in the unit and, thus, can vote and those that are not and cannot vote.  There are many issues to consider in this regard.  Sometimes there are multiple stores or plants and the NLRB must decide— will there be one single unit or many separate ones? Will all departments be included or just the one the union wants?  The list of potential issues goes on and on. Under the existing Rules, these issues are resolved prior to the election. Under the new proposed Rules, however, the election takes place without resolving most such issues.

One issue that is present in almost every case is whether or not certain individuals are “supervisors.”  Supervisors are not included in the bargaining unit and are deemed to be a part of “management.”  This creates several problems for the company because, as stated, if an individual is a supervisor, he or she is a representative of the company and speaks for the company.  The company certainly wants him or her to speak favorably for it.  In fact, it has a right to require such from its supervisors.  However, if the individual is found to be a bargaining unit employee, the company could have committed a ULP by insisting that such individual speak favorably for the company.

Under the new Rules, the company and the union can still each make challenges to a particular voter, and that voter’s ballot will be impounded and only opened if it would impact the result of the election.  But that does not solve the problems – it only delays them, which can make them more difficult to resolve at a later date.  With the issue of who is and who is not a supervisor left in the air the company can be seriously hamstrung by not knowing with certainty who is on its “team.”

What is very clear is that under the new Rules elections will take place within a matter of weeks instead of months.  In fact, as mentioned above, they will be completed in about the same timeframe as would have resulted under the twice-defeated “card check” legislation.

4.        The Consequences Associated with a ULP Violation

 Unlike many other statutes there are no fines assessed for ULP violations.  The awards of the NLRB may be so severe though that they actually force a company out of business; these are extreme cases, however, which are not often encountered and not discussed here.

In the typical case, the ULP involves a company retaliating against employees for their union-related activity by discharge, demotion, or transfer.  In such cases the NLRB orders the individuals reinstated and “made whole” with back pay and benefits.

The first distasteful part of such an award (beyond the costs) is that the company must post NLRB notices that describe the company’s ULP conviction and its acknowledgement that it will not violate the NLRA in the future.  The second distasteful part is the required reinstatement of the employees to their prior positions.  Typically, such persons will become even stronger advocates for the union and generally will be troublemakers.

ULPs can also cause the NLRB to order a company that has won an election to conduct a whole new election.  In some cases the NLRB will conclude that because of the company’s ULP actions, a fair election can simply not be held, and, thus, it will “certify” the union as the bargaining agent without even holding another election!

It is also important that managers understand the ULP trial process. They need to know that trials of ULPs do not occur in a courtroom and there is no impartial jury selected.  Instead, the hearing is held before an Administrative Law Judge (ALJ) who is also an employee of the ALJ branch of the NLRB.  Likewise, the prosecuting attorney works for a branch of the NLRB.  This is obviously not a comfortable forum for an employer.  The ALJ ultimately makes the decision and writes an opinion.  Any appeals from that decision go to the NLRB for review.  Thereafter, appeals from the NLRB decision must be made to the relevant U.S. Court of Appeals for the region of the nation involved.  The Courts of Appeals place great weight on the NLRB’s decision because it is the agency charged with administering the NLRA.  This process is expensive and is quite often unsuccessful for employers.

III.        Conclusion

It is now more essential than ever that non-union companies do not wait until they learn of union organizing.  Instead, they should conduct routine training of supervisors and managers on union issues because when this “stimulus plan” goes into full effect (with its posting of a Notice to employees and the NLRB’s new Rules) it will be too late to begin to do so after the union activity becomes obvious.

May 2015 Update:

The NRLB expedited election rules became effective on April 14, 2015 and thus are currently in effect! Several cases challenging these rules have been filed but no court has yet entered any  rulings that halts or delays their effectiveness.

For more information, please contact Durwood D. Crawford by phone at 214-533-3373  or by email at durwoodc@durwoodcrawford.com.