National Labor Relations Act (NLRA)

The Court of Appeals for the D.C. Circuit today struck down one of the centerpieces of the Obama Administration’s Labor agenda when it invalidated the NLRB’s rule requiring employers to post an NLRB-drafted “Notification of Employee Rights under the National Labor Relations Act.”  Under that rule, employers failing to post the notice would be subject to an unfair labor practice charge. The D.C. Circuit today held that the NLRB departed from its “historic practice” and “negative attitude” toward promulgating rules for employers and in doing so violated the NLRA.

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The Second Circuit recently overturned a National Labor Relations Board (NLRB) decision determining that Stella D'Oro Biscuit Co., Inc. violated the National Labor Relations Act (NLRA) when it failed to provide workers with financial statements to support claims regarding its financial condition.

Under the NLRA, an employer is required to provide evidence of its financial condition when it states to workers that labor concessions would cause undue financial hardship. In overturning the NLRB's decision, the Court pointed out a key point the Board overlooked: The NLRA only compels disclosure of financial information when an employer states it is unable pay. In this situation, however, the company simply stated it was unwilling to pay. Thus, the decision demonstrates a clear repudiation of the NLRB's attempt to change the law.

The decision can be found here.

The Mayans predicted that the world would end in 2012. They were wrong. However, U.S. employers may well be feeling like life is over as they once knew it after the head-spinning events of 2012 in traditional labor law. And the scary thing is, the NLRB has just gotten started, folks, as it enters 2013 with a three-member majority, all of whom are pro-Union Democratic appointees.

Your friends at BTLaborRelations.com have decided to again ring out the old year with our unscientific ranking of the Top 10 Labor Law events of the past year. After putting our heads together, here’s what we came up with:

10. D.R. Horton and Arbitration Agreements. The Board started the year with an astonishing ruling that an arbitration agreement containing a class action waiver violated the NLRA because it infringed on the right employees have to "engage in concerted action for mutual aid or protection." The Board has stood by its decision and recently followed it in an advice memo despite the fact that the Supreme Court and the Courts of Appeals are – so far – turning a cold shoulder to it.

Board Finds Certain Arbitration Agreements Violate NLRA
California Court of Appeals Not Persuaded by D.R.　Horton　Inc. v. Michael Cuda
D.R.　Horton　Files Reply Brief in Appeal of NLRB Decision
In the Spirit of DR　Horton, ALJ Extends Protections to Job Applicants
NLRB ALJ Finds Employee Arbitration Policy Unlawful

9. Ho Ho’s and Hockey. Labor disputes have resulted in the shutdown of one American tradition and has caused a lock-out in another. As previously reported here, after the Bakers Union turned down a concessionary contract, Hostess announced that it was closing its doors and liquidating the Company. While out on the ice, the lights have remained off as the NHL and the NHLPA have continued to struggle to reach an agreement on a new collective bargaining agreement. Today is Day 104 of the lock-out. Here are links to our coverage of the lock-out.

NHL Labor Clock Ticking Entering the Labor Day Weekend
NHL-NHLPA Talks Appear Stalled?
NHLPA Seeks to Block Lockout Under Provincial Labour Law
NHL Lockout: Day 73
NHLPA Decertification in the Works?

8. Recess Appointments. The President’s recess appointments of NLRB members continue to be the issue that won’t go away. On Dec. 5, 2012, oral argument in Noel Canning v. NLRB was held before a three-judge panel of the United States Court of Appeals for the D.C. Circuit. At issue is whether the appointments were legal. If the appointments were not legal, then it calls into question whether under New Process the NLRB had a quorum to act. Our prior posts on this topic can be found here.

7. Off-Duty Access. In Sodexo America, the Board ruled that a hospital policy restricting employees’ off-duty access violated Section 8(a)(1) of the NLRA. USC University Hospital in Los Angeles had an Off-Duty Access Policy which provided that off-duty employees were not allowed to enter or re-enter the interior of the Hospital or any other work areas outside the Hospital except to visit a patient, receive medical treatment or to conduct hospital-related business. The Board found that policy to be overbroad and interfered with employee rights under Section 7 of the Act. Our prior post on this topic can be found here.

6. Quickie Elections and NLRB Posting Rules. The NLRB’s actions in promulgating new posting requirements and revising the election rules to create a "quickie" or "ambush" election made our Top 10 of 2011. And they’re back again because both of those initiatives have been held up by Court action and are still in litigation and on appeal. Perhaps 2013 will be the year when we finally know whether the rules are legal and will be applied or were unlawfully promulgated. Stay tuned. You can access all of our prior postings on these issues here and here.

5. Dues Deductions. The NLRB's relentless march towards dismantling years and years of U.S. labor law continued this month when the Board overruled its own 50-year old policy on whether dues must be withdrawn from employee checks after the expiration of a collective bargaining agreement. The Board, on Dec. 12, 2012, overruled its Bethlehem Steel decision from 1962 and held that after the expiration of a CBA, an employer will continue to be obligated to withdraw dues from employee checks and forward them to the union.

4. At-Will and Confidentiality Provisions. The Board continued to press its authority and jurisdiction over non-union workplaces in decisions dealing with routine at-will disclaimer acknowledgments and confidentiality policies for internal employer investigations. The Board has found both to be violative of employee rights under Section 7 of the Act. Board action in both of these areas is forcing employers to closely examine at-will disclaimers and the manner in which they conduct internal investigations. Here are our previous posts on these subjects.

3. The Holiday Blitzkrieg. The Board’s holiday gift to U.S. organized labor didn’t go unnoticed. In an avalanche of game-changing rulings, the Board acted to "gut" Beck rights for dues protestors; required employers to deduct union dues even after contract expiration dates; exerted jurisdiction over teachers in charter schools; required employers to pay taxes and social security costs on backpay awards; required bargaining over discretionary discipline in the time frame between union recognition and enactment of a first contract; overturned "Facebook firings"; and overturned a well-settled rule that protected witness statements from disclosure to the union.

2. Social Media. The Board clearly identified social media as a priority issue in 2012. During the year, Acting GC Lafe Solomon issued three separate guidance memos on social media in which the agency made it clear that it viewed most employer restrictions on off-duty work-related social media chatter to interfere with employee rights to engage in protected concerted activity. We’ve written about this issue repeatedly during 2012. You can find out prior posts here.

1. Right to Work. After years and years of no progress on Right to Work legislation, amazingly and somewhat surprisingly, Indiana and Michigan during 2012 became the 23rd and 24th states in the U.S. to pass Right to Work laws. Both are also the first Rust Belt states to pass the legislation. The actions of both states underscore the disconnect that is occurring in labor policy in the U.S. As federal labor policies continue to accelerate to the left, states such as Indiana, Michigan, Ohio, Wisconsin and Arizona try to hold the line. Looking forward to 2013, the dramatically differing directions of state and federal labor policy may prove to be one of the most interesting stories of the coming year.

We at the BTLabor Relations blog thank you for staying with us during 2012 and hope you continue to follow us in 2013. Happy New Year!

For the last 30 years, the NLRB has held that employers were not required to produce to a Union copies of witness statements gathered in the course of an employer's disciplinary investigation. In Anheuser-Busch, Inc., 237 NLRB 982 (1978), the Board had held that witness statements were confidential material and that “an employer’s duty to furnish information under Section 8(a)(5) of the National Labor Relations Act (NLRA) does not encompass the duty to furnish witness statements.” The Board concluded in that case that “requiring either party to a collective bargaining relationship to furnish witness statements to the other party would diminish rather than foster the integrity of the grievance and arbitration process.”

Not any more. The Board in two separate opinions this month reversed its stance on this issue and now will use a "balancing test" to determine whether witness statements must be disclosed.

In Stephens Media, 359 NLRB No. 39 (2012), and Piedmont Gardens, 359 NLRB No. 46 (2012), both issued in mid-December, the Board dropped Anheuser-Busch's categorical exemption of witness statements from the duty to furnish information and switched to the balancing test articulated in the Supreme Court's Detroit Edison decision.  Under this balancing test, employers must conduct a fact-specific analysis that balances a union’s need for the information against the employer’s legitimate and substantial confidentiality interests.

Copies of the decisions are available here and here.

The NLRB continued to hold its position on arbitration agreements in an advice memorandum released last week, finding that an employer’s mandatory arbitration agreement violated the NLRA despite the fact that it explicitly excluded claims in front of the NLRB and was silent as to whether it prohibited arbitration on a class basis. The Division of Advice applied the Board’s holding in D.R. Horton, 357 NLRB No. 184 (2012), and held that the fact that the employer interpreted the agreement to prohibit class claims was enough for the agreement to restrict employee’s Section 7 rights.

The D.R. Horton case has been widely criticized as contradicting U.S. Supreme Court cases regarding arbitration (see AT&T Mobility LLC v. Concepcion) and is currently on appeal at the Fifth Circuit.

The NLRB’s advice memo is Concord Honda, Case No. 32-CA-072231, available on the Board’s website here.

See our previous coverage of D.R. Horton:

Board Finds Certain Arbitration Agreements Violate NLRA

California Court of Appeals Not Persuaded by D.R. Horton Inc. v. Michael Cuda

D.R. Horton Files Reply Brief in Appeal of NLRB Decision

In the Spirit of DR Horton, ALJ Extends Protections to Job Applicants

NLRB ALJ Finds Employee Arbitration Policy Unlawful

Back in July, we told you about Michigan's second stab at putting limits on the use of Project Labor Agreements (PLA) in the state. Michigan's first PLA-limiting law was blocked by a federal court ruling that the subject area covered by the PLA law was pre-empted by the National Labor Relations Act.

Late last week, a federal court judge in Michigan called strike two on the state finding the revised version of the PLA bill also was pre-empted by the National Labor Relations Act.

The law, entitled the Michigan Fair and Open Competition in Government Construction Act, would have barred local communities from entering into contracts (PLAs) which required bidders, contractors and subcontractors to adhere to the terms of or become signatories to collective bargaining agreements for work on that particular project.  The Court applied the U.S. Supreme Court's decision in Garmon which concluded that the right to enter into PLAs is a right protected by Sections 7 and 8 of the NLRA. 

We'll continue to monitor this - and the previous case - as they go through the appellate system. 

The NLRB has continued to chip away at employer efforts to implement alternative dispute resolution programs in the workplace.  In a decision issued on election day, an NLRB ALJ found that 24 Hour Fitness USA, Inc.'s arbitration policy violated the National Labor Relations Act even though employees could opt out of the program and even though it specifically informed employees of their right to file a separate NLRB charge.

This follows an earlier decision by the full Board in D.R. Horton, 357 NLRB No. 184 (2012) where the Board likewise struck down an employee arbitration program because they deemed it violative of employees' Section 7 rights to engage in protected concerted activity to resolve wage and other disputes with their employer.  24 Hour Fitness' program gave employees 30 days to opt out of the mandatory arbitration process.  The ALJ called this opt out feature "an illusion" and found that employers cannot require employees to affirmatively act (sign and return an opt out form to the company) in order to preserve rights otherwise guaranteed by law.

The ALJ also found that even if a small number of employees opted out, their right and ability to work collectively with co-workers to advance employment claims would still be thwarted because most employees would not opt out.  The Judge highlighted this point in a colorful footnote:

"Charging Party and its amicus ally suggested that I essentially conclude the Respondent deliberately designed its initial employment documents in order to, among other things, dupe new employees into being bound by its arbitration policy. Although I am not willing to reach that conclusion based on the limited evidence in this case, I would be startled to learn that the number of employees who made a conscious, fully-informed decision to be bound by Respondent’s highly self-serving arbitration policy even came close to the infinitesimal number of employees who actually opted out."

A copy of the full decision can be found here.

On the eve of the Presidential election, AFL-CIO president Richard Trumka declared that the Employee Free Choice Act ("EFCA") – the controversial measure that would make it significantly easier for workers to unionize – would be passed into law if President Obama is elected to a second term.

EFCA was a prominent part of President Obama's early platform, but stalled in Congress. The NLRB has sought to implement parts of EFCA via regulatory changes and case decisions. See our reports here and here. While efforts to adopt a broader version have not yet fully materialized, the Board continues to move in that direction. The bottom line is that the election today likely will have a direct impact on businesses and the process employees have to follow to form a union.

The Atlantic's full report on Trumka's comments can be found here.

In a decision issued last week, the NLRB found that an employer violated the National Labor Relations Act by terminating the wife of a man who was seeking to organize part of the company's workforce. The husband, a driver, sought to organize the company's 200 drivers.  When the company found out about these efforts, the wife's supervisor relayed the CEO's message that the plant would shut down if it was unionized and inquired about her husband's attempts to organize.  The supervisor even asked the wife to discourage her husband's organizing efforts.  She refused and was terminated on the following day.  Based upon finding of union surviellance and discrimination, the NLRB unanimously ordered the wife to be reinstated and made whole. 

The decision can be found here.

In a long-awaited opinion, the Arizona federal district court dismissed a lawsuit brought by the NLRB challenging an Arizona constitutional provision which requires that union elections be conducted by secret ballot.  The opinion, dated yesterday, is a blow to the NLRB, which had taken the position that the state’s secret ballot constitutional provision was facially invalid because it was preempted by federal labor law.  The district court found that the constitutional provision did not on its face conflict with the NLRA, but left open the possibility that the law could be challenged “as-applied” to a specific case.

The secret ballot provision had been added to the Arizona constitution in response to the Employee Free Choice Act (EFCA) proposed in Congress in 2009, which would have required an employer to recognize a union if a majority of employees signed cards stating their desire for representation.  This “card check” method of recognition is currently allowed by the NLRA, but employers have the option of demanding that election of the union be confirmed by a secret ballot.  South Carolina, South Dakota, and Utah all passed similar constitutional amendments. 

The NLRB took the position in January of 2011 that such provisions impermissibly conflicted with the NLRA and threatened to file a lawsuit to enjoin the states from enforcing the laws.  The Board ultimately sued only Arizona in what many saw as a test case for challenges in other states.  Yesterday’s opinion would seem to put an end to those challenges, but the NLRB has already issued a statement emphasizing the district court opinion’s language that “as applied” challenges may still be appropriate. 

NLRB Chairman Mark Gaston Pearce responded to the decision: “Although we continue to believe that a preemption finding should have been made, we are very pleased that the court recognized that these choices are guaranteed to employees by federal law and cannot be taken away by the states.” 

This suggests that the NLRB may take another crack at the law in the future.  An appeal of the court’s opinion to the Ninth Circuit is also a possibility.