The judge held the rules invalid due to the fact a quorum of three members was not present when they were adopted on December 16, 2011.  This is because Member Hayes did not participate in the actual final vote.  Member Hayes believed he did not have to take any further action on the rules because he already had expressed his opposition to them.    As Judge James Boasberg stated in his ruling:

According to Woody Allen, eighty percent of life is just showing up.  When it comes to a quorum requirement, though, showing up is even more important than that.  Indeed, it is the only thing that matters--even when the quorum is constituted electronically.  In this case, because no quorum ever existed for the pivotal vote in question, the Court must hold the challenged rule is invalid.

The Court determined that Member Hayes' inaction on the day of the vote could not count toward a quorum, particularly because the Board did not request he take action as is typical when a vote takes place.  

The judge stressed the narrowness of his decision, and seemed to issue a challenge to the new Board to vote on the rules:

The Court does not reach--and expresses no opinion on--Plaintiffs' other procedural and substantive challenges to the rule, but it may well be that, had a quorum participated in its promulgation, the final rule would have been found perfectly lawful.  As a result, nothing appears to prevent a properly constituted quorum of the Board from voting to adopt the rule if it has the desire to do so.  In the meantime, though, representation elections will have to continue under the old procedures.

Thus, the ambush election rules are invalidated, for now.  

The ruling is not the end of the matter, of course.  The judge expressly stated that he was not reaching the merits of the rules themselves.   So here are some considerations to look for in the future:

• Will the current Board vote to adopt the rules?  The new Board members have been strangely quiet compared to their predecessors, and one doesn't know whether the new group wants to continue down this path.
• There is an issue with the new members as well.  There are some who believe the Members who were appointed in January 2012 were not appointed during a valid recess of Congress, which, if true, would mean these members do not have authority to vote on anything, let alone the ambush election rules.
• Will there be appeals?  Most certainly.  If there is a new vote, then the actual rules themselves will have to be evaluated by a Court.  Which party appeals depends on whether another vote takes place.
• What happens next?  While the judge says elections will have to continue under "old procedures" we will have to see what that means.

As always, we will keep you posted of developments.

The Board recently ruled in favor of an employer concerning an employee's false statement to a third party in Dresser-Rand Company, 358 NLRB No. 34 (April 19, 2012).pdf.  The case is interesting not only because of the conclusion, but for the tactics employed by the union to put pressure on the employer.  It was an extension of these tactics that ended up in an employee's discharge being upheld by the Board as lawful.

In Dresser-Rand, the employer and union had been invovled in a protracted labor dispute over the course of a couple of years.  The parties used all manner of economic weapons against each other.  There was a strike by the union; the employer hired replacement workers and continued to operate.  The union picketed on occasion.  Both parties exchanged heated communications about the dispute. 

One tactic the union employed was to have employees call investment analysts in an attempt to hold company "executives accountable for their actions."  The calls were made from the union hall on a Saturday when the analysts would not be "expected to be at work." The caller would then leave voicemails so as to "avoid creation of a written record of the contents of the representations."  Incredibly, and despite the foregoing manner in which the calls were made, the union's stated intention was to "not talk[] the [employer's] stock price down" and so a written script of the comments was created. 

An employee who volunteered to make calls became frustrated by the employer's proposal in negotiations to eliminate paid time off for union business, something in which the employee, a chief union steward, had a direct interest.  This employee made additional calls from his home, anonymously, to the investment analysts using his own script, part of which made the false statement that the workload at a particular plant "has also dropped off by 50-percent."  After an investigation, the employer discharged the employee.  The union filed charges.

The basic analysis in these cases is that the conduct must be "concerted" meaning related to or on behalf of other employees.  The statements also must be "protected" meaning they must relate to the dispute at hand. Statements that are indirectly related to the dispute and are "blatantly" or "maliciously" false or defamatory are not protected by the Act.  Applying this analysis, the Administrative Law Judge, found that the employee's actions were "concerted" because his "calls to investment analysts were designed to apply pressure to the Employer to amelioriate his own terms and conditions of employment and the terms and conditions of employment of his coworkers...."  Thus, even though the employee's statements were unauthorized by any co-worker, the motivation for making them made them concerted.

Despite the concerted nature of the conduct, the judge found the employee's statements were unprotected, citing the following factors before evaluating the false statement:

• In the voicemails the employee did not disclose his name, unlike the earlier calls.
• The employee identified himself as "a representative of the union employees" at the employer, which gave the impression that the statements were authorized by the employees' representative.
• The employee chose to make unduly negative remarks about other employer operations, about which he had no firsthand knowledge. 

The judge then addressed the issue of the false statement about the workload "dropping off" by 50 percent.  The judge seriously questioned whether such a statement had any value at all towards putting pressure on the employer in negotiations.  The judge also found the employee's explanation to not be credible, in part, because the employee asserted his intention was to not harm the employer.  The judge stated:

This is absurd.  No reasonable person could conclude that information regarding a 50 percent drop in production conveyed to investment analysts would not harm the Company.  Indeed, it is evident that the entire purpose of the statement was to harm the Company. . .

In determining that the statement concerning the drop off of workload was "maliciously false," and not protected by the Act, the judge noted it represented "a four-fold" exaggeration of what actually occorred and that such an "asserted level of decline" would be a "material factor [for investment analysts] in making decisions regarding the Company's stock." 

The judge also considered the timing of the statements to be relevant. noting that they had been calculated to cause the maximum amount of harm, being made during an economic recession:

Against that backdrop, [the employee] made his reckless and maliciously false statements to the financial community.  Coming during the devastating economic downturn, [the employee's] fictitious claim that the [plant] workload had dropped in half was surely calculated to cause fear and consternation among those who owned the Company's stock or were considering such ownership.

The judge found the discharge to be lawful, which was upheld by the Board on appeal.  The decision, weighing in at 34 pages, contains a very thorough collection of Board cases in assessing whether an employee's statement to a third party loses protection of the Act. 

Despite this lofty goal, it seems that, as with virtually everything the Board does these days, the Guidance Memorandum is much more likely to raise more questions than it will answer.  It certainly will remain controversial.

The main question is: do the new rules change the timeframes for holding elections?

 The answer is yes, but only if the employer contests the petitioned-for unit.  

The Guidance Memorandum states, "The final rule does not establish new timeframes for conducting hearings or elections."  This is sort of accurate.  The new regulations do not alter the timing of representation elections where the parties agree on the voting unit and the election is held by Stipulated Election Agreement.  

The new regulations, however, absolutely alter the timeframes for conducting elections if the employer contests the petitioned-for unit.  If the employer decides it does not agree with the unit sought by the union, then the new regulations empower the Regional Director to curtail all aspects of bargaining unit litigation, the only point of which is to shorten the timeframe.  The Guideline Memorandum notes the new regulations allow the regions to:

•  Issue a notice to show cause, which "elicits the functional equivalent of an offer of proof, and permits the regional director to determine whether to conduct a hearing and the regional director and hearing officer to plan for permitting or precluding litigation on certain or possibly all issues."  p. 17.  In other words, the employer will have to convince the Regional Director that its proof is worthy of a hearing but the discretion remains with the Regional Director.
• Post-hearing briefs.  The Guidance Memorandum notes the "revised rules give the hearing officer discretion related to the filing and content of post-hearing briefs to regional directors..." and "The hearing officer should consult with regional management before determining whether to permit briefs."  p. 17.  The regulations give the Regional Director power to determine whether he or she will consider written legal arguments related to the hearing (if he or she grants a hearing).
• Timing of election after decision. Curiously, the Guidance Memorandum states, "As soon as possible after issuance of a regional director's Decision and Direction of Election, the decision should be emailed or faxed tot he parties so that they have an opportunity to revise (or state) their position on the method, date, time and place of the election. The Board agent will attempt to reach the parties as expeditiously as possible to obtain agreement before the region specifies the method, date, time and place of the election."   P. 21.  

All of this still leaves unanswered the question of how soon after the decision will the election be held.  We do know, although it is mentioned elsewhere in the Guideline Memorandum, that Section "101.21(d) [of the regulations] is amended to eliminate the recommendation...that the regional director should ordinarily not schedule an election sooner than 25 days after the decision and direction of election in order to give the Board an opportunity to rule on a pre-election request for review."  P. 3.  So, an employer gives up the possibility of having at least 25 days in which to communicate with its employees in a campaign if it contests the voting unit.

But how much sooner than 25 days?  No one knows the answer definitively, but employers should consider this passage in the Guidance Memorandum:

As the Board acknowledged in its Notice of Proposed Rulemaking (NPRM)....a party may waive its right to have the voter eligibility list for 10 days....A new waiver form has been created for that purpose which permits waiving all or part of the the 10-day period.

What this means is that if an employer contests the unit, the election possibly could be directed in as little as a week after the decision.  How?  The Board requires the voter eligibility list (the list of employees entitled to vote) to be provided 7 days after a decision is made by the Regional Director on a unit issue.  Ordinarily, the union must be given 10 days to consider the list, which would put an election at 17 days after decision. Under the Guideline Memorandum, the Acting General Counsel points out that it is possible for the union to waive "all or part" of the 10 days.  

Unions do not usually waive the 10 day period, but we are likely to see this happen more frequently in contested unit cases (and perhaps even uncontested cases) after the new regulations go into effect.  This is because after the Board's decision in Specialty Healthcare, which we previously addressed here, here and here, the Board's new standard for determining the appropriateness of a bargaining unit incentivizes unions to petition for the smallest grouping of employees.  A smaller group of employees is more likely to be known by the union, and such knowledge makes having the voter eligibility list for a period of time less relevant.

In sum, the new regulations  greatly inhibit an employer's ability to contest a unit grouping by forcing an election in much shorter timeframe.

The case is being heard by the Sixth Circuit Court of Appeals in Cincinnati, Ohio.  As of April 23, 2012, the principal parties and friends of the court have filed their briefs.  Just as with the underlying case, it is anticipated that the court will receive numerous briefs from interested parties. The next step will be for the court to hold oral argument.  A decision is not expected for several months.

We were privileged to file amicus briefs separately on behalf of two distinguished organizations, the Retail Industry Leaders Association ("RILA") and the Coalition for a Democratic Workplace ("CDW").  As the briefs demonstrate, the Board's rule in Specialty Healthcare imposed an entirely new legal framework without proper notice and discussion, as well as violated key provisions of the NLRA.  Those briefs are attached here RILA Amicus Brief (Apr 23 2012).pdf and here Coaliton For A Democratic Workplace Amicus Brief (April 23, 2012).pdf

As always, we will be watching this case very closely and will report significant developments as they occur. 

The case involved a restaurant operated by a contractor and located inside the hotel/casino.  The restaurant contractor’s employees desired to pass out handbills to other restaurant employees and customers of the restaurant at its entrance, publicizing their efforts to organize a union at the restaurant. The hotel/casino barred them from doing so.  The restaurant entrance was located inside the hotel/casino, and the hotel/casino argued that it had the right to bar non-employees from entering its property to engage in union handbilling.

In its decision below, 356 NLRB No. 119 (March 25, 2011), the Board had said it was addressing only the “narrow” situation where “a property owner seeks to exclude, from nonworking areas open to the public, the off-duty employees of a contractor who are regularly employed on the property in work integral to the owner’s business, who seek to engage in organizational handbilling directed at potential customers of the employer and the property owner.” (Emphasis added.)

The Board held that a property owner may prohibit off-duty employees of a subcontractor from engaging in handbilling to customers only where (i) it can demonstrate that activity of the subcontractor’s employees “significantly interferes” with the owner’s use of the property; or (ii) there is another legitimate business reason to justify the exclusion.  “The need to maintain production and discipline” (as defined by the Board’s case law) are “legitimate business reasons.”  Here, because the hotel/casino could demonstrate neither, its barring of access to the contractor’s employees was deemed a violation of the National Labor Relations Act.

In affirming the Board’s decision, the court held that “the governing statute and Supreme Court precedent grant the Board discretion over how to treat employees of onsite contractors for these purposes.”  Slip op. at 6.  The court also rejected the hotel/casino’s argument that its actions were justified because the targets of the handbilling were not just fellow employees but customers of the restaurant, and that the area adjacent to the restaurant entrance was a “working area” where handbilling could be banned.  Slip op. at 7-8.  As to both matters, the court held the Board was acting well within its authority.

The Board’s decision, which we originally reported on here, is of a piece with other recent Board decisions broadening the rights of employees to engage in protected concerted activity, with or without a union.

As we previously discussed, a Federal District Court in South Carolina ruled that the NLRB lacked authority to issue the rule.  This occurred after another Federal Court in the District of Columbia held that the rule was valid, but the enforcement mechanism was not.  The injunction came in the DC litigation.

Given all of the uncertainty, the DC Circuit Court of Appeals issued a Grant of Injunction Pending Appeal.pdf which effectively acts to stay the requirement pending resolution of the litigation.  The Court explained its reasoning as follows:

We note that the Board postponed operation of the rule during the pendency of the district court proceedings in order to give the district court an opportunity to consider the legal merits before the rule took effect.  That postponement is in some tension with the Board's current argument that the rule should take effect during the pendency of the court's proceedings before this court has an opportunity to similarly consider the legal merits.  We note also that the district court's severability analysis left the posting requirement in place but invalidated the primary enforcement mechanisms for violations of the requirement.  The Board has indicated that it may cross-appeal that aspect of the district court's decision.  The uncertainty about enforcement counsels further in favor of temporarily preserving the status quo while this court resolves all of the issues on the merits.

So, for the next several months at least, employers are not required to comply with the NLRB's posting requirement. We will keep monitoring the situation and will keep you informed here of new developments.

One of the principal arguments against the NLRB's promulgation of this particular rule is that it is not authorized by the Act, as similar notices are authorized in the other federal employment legislation.  Section 6 of the NLRA grants authority to the Board to promulgate rules that are "necessary" in carrying out its mission.  Judge David Norton noted that the Board's rulemaking authority in Section 6 of the Act is "terra incognita" and that courts have "rarely explored the parameters of Section 6, the reason being the Board has rarely exercised its rulemaking authority."  Concluding that Section 6 did not authorize the Board to issue the rights notice posting, the Judge ruled:

First, the plain language of Section 6 requires that rules promulgated by the Board be 'necessary to carry out' other provisions of the Act.  Defendants [NLRB] argue that the rule is 'necessary to carry out' Sections 1 and 7 of the Act, but confuse a 'necessary' rule with one that is simply useful.  It can be said that the notice-posting rule 'aids' or 'furthers' the aspirational goals of Section 1 by notifying employees of their rights under Section 7, but defendants have not shown that the rule is 'necessary.'

Of course, the Act has been in existence since 1935, and no such notice has ever been required.  In the intervening years, the ablity to share and research information has become, literally, as easy as pressing a button.  It does seem a stretch that after all these years such a poster is "necessary."

The main question that will be on everyone's minds in the immediate future:  what happens next?  The Board most certainly will appeal the ruling.  In the separate litigation in DC, the plaintiffs sought to stay the ruling, which was denied.  It seems likely a new attempt at staying the effective date of the rules will be made shortly. 

As always, we will keep you posted as developments occur.

Protecting The Identity Of Employee Informants

In Alcan Rolled Products-Ravenswood LLC, 358 NLRB No. 11 (February 27, 2012).pdf the NLRB addressed a common situation involving employees who report on other employees in a unionized workforce.  A bargaining unit member had two accidents while driving a forklift, both of which caused property damage.  The employee in question was tested for drugs and alcohol; the drug test was negative, while the test revealed the presence of alcohol, but apparently not at high enough levels to warrant action under the policy.  While the employer was investigating the second accident, several bargaining unit members expressed concern for safety working with the employee, with one stating that the employee was in need of help.  The supervisor in charge had assured all bargaining unit members that the discussions were "off the record."

During a meeting about the accidents, the employer informed the union that it intended to discharge the employee for the accidents, and mentioned that some bargaining unit members had expressed concern about working with the employee. The union requested the names of the employees; the employer refused to provide the information.  In doing so, the employer advanced two reasons as to why it did not have to disclose the information.  First, that the employer did not intend to rely on the information because whatever the co-workers had told it was not relevant to the discharge.  Second, that the information was confidential.

The NLRB adopted the Administrative Law Judge's conclusion that the employer violated Section 8(a)(5) of the Act, which requires employers to bargain in good faith, by not trying to reach an accommodation with the union over the provision of the employee names.

The ALJ ruled that employer "did not forswear reliance on the information" obtained from co-workers mainly due to its written responses to the union during the grievance process.  In these letters, the employer stated that the discharged employee's actions "put other employees and you at risk."  The takeaway here is that employers should be very careful what they put in written responses to the union, as it sometimes can be perceived as contrary to a position taken with respect to an information request.

The employer also asserted that it did not have to provide the names of the employee witnesses because the information was "confidential," specifically, that it had given assurances that the conversations were off the record.  In rejecting this assertion, the ALJ noted that an employer's assurances of confidentiality to an employee are not enough to cloak the employee's identity as "confidential."  The ALJ noted in a footnote:

I do not criticize the efficacy of this management approach (although it is worth bearing in mind that confidentiality can also encourage dishonest reports, as the informants need never face scrutiny).  But management's willingness to grant confidentiality cannot, by itself, create a legitimate employer interest in confidentiality for purposes of avoiding disclosure of otherwise relevant information to a union.

Nonetheless, the ALJ deemed the identity of witnesses to be confidential due to a long line of NLRB decisions dealing with the situation.  Employers have legitimate confidentiality concerns to foster employee reporting of safety violations and criminal conduct, and to protect employees from the potential threat of retaliation.  That the information was confidential, though, did not absolve the employer of any responsibility.  If information is deemed to be "confidential" then the employer must attempt to reach an accommodation over the disclosure of the information by bargaining with the union.  The employer in the case asserted that there was no accommodation that would have been acceptable, but the ALJ concluded this was preemptive and that the employer's failure to try was what constituted a violation of the Act.  Thus, the ALJ gave some guidance:

While I agree that is far from clear that the Union would have accepted any offer of accommodation, the Respondent's duty was to make the effort.  It could have, for instance, offered to provide the identities to a designated union official, subject to bargained restrictions on the Union's use and dissemination of the information.  It could have offered to provide the identities subject to a confidentiality agreement to an International Union unaffiliated with the facility for use interviewing the employees.  Certainly there are other potential accommodations that the parties could discuss.

The case does not break any new ground.  It does, however,  illustrate a common problem with the response to an information request made by a union.  An employer should never outright reject an information request.  Information requests can be irksome if for no other reason than it often seems that the union does little or nothing with the information.  Simply denying an information request on confidentiality grounds brings some risk of a violation of the Act.   First, in order for the information to be "confidential" it must be proven that there is a legitimate employer interest in it; we know from this case that merely assuring employees that their identities will remain confidential is not enough.  There must be an articulable basis.  Second, even if the information is confidential, the employer still must bargain over the the circumstances under which it is disclosed.  In other words, just because it is confidential does not privilege an employer from ever turning it over to the union.  There is no requirement that the parties actually reach an accommodation, just that they try.  

Supervisors And The Representation Election Process

A recent DC Circuit Court of Appeals case illustrates another recurring theme under the NLRA: the importance of understanding which individuals in a workforce are supervisors within the meaning of the Act.  As a general rule, supervisors are excluded from the voting unit.  Individuals who fall within the statutory Section 2(11) definition of "supervisor" often possess enough authority over employees that they can violate the Act.  It is important to understand which folks are supervisors before organizing occurs as the employer in  Veritas Health Services, Inc. v. NLRB, No. 11-1107, (DC Cir. March 13, 2012).pdf recently found out.

in Veritas, the employer hospital underwent an organizing drive targeting the nursing staff.  At least some of the union adherents were "charge nurses" (the equivalent of leadpersons or forepersons in other workplaces), with two in particular, who "actively encouraged subordinate registered nurses to support the Union."  These activities included telling nurses that they "need" to attend union meetings and "need" to sign an authorization card.

The union gained enough support to file a petition for an election.  During the processing of the petition, the parties agreed that the charge nurses were supervisors and removed them from the voting unit.  The charge nurses then switched sides and campaigned for the employer.  The employer lost the election and challenged the results based on the charge nurses/supervisors pro-union conduct.  The DC Court of Appeals rejected this claim, finding that under NLRB authority the conduct did not interfere with the freedom of choice.  Specifically, the Court found that the passage of time (the pro-union conduct was pre-petition) and the fact that the charge nurses campaigned for the employer such that "registered nurses would have no reason to feel pro-Union coercion or interference from the [charge nurses'] prior conduct."  

Again, not anything new, however it does illustrate the importance of understanding which individuals in a workforce are supervisory.  As the Court noted:

 ...supervisors do not usually engage in pro-union activities against the wishes of management.  But the issue of pro-union conduct by a supervisor sometimes arises when it was unclear or disputed at the time of the pro-union activity whether the employee was a statutory supervisor.

It is often the case that employers do not know (and have not considered) whether certain classifications within a workforce are supervisory until an NLRB petition is filed.  By that time, however, it is often too late.  If an employer grants a particular classification authority over employees, it should also do an analysis of whether such position would be considered supervisory under the Act, and understand the potential consequences.

On March 2, 2012, Federal Judge Amy Berman Jackson handed down the split decision in the case of National Association of Manufacturers v. NLRB (Civ. Action No. 11-1629).pdf.  NAM, a trade association, challenged the NLRB's authority to require the rights poster, as well as the agency's contention that failure to post the notice could constitute an unfair labor practice. 

In her 46 page decision, Judge Jackson upheld the right of the NLRB to require the notice posting, but struck down the rules making it an unfair labor practice for an employer's failure to post the notice.

There are two parts to the NLRB's regulations on the rights poster.  Subpart A is the requirement that employers post the notice, and Subpart B concerns the agency's intended enforcement for employers that fail to post the notice.. 

Subpart A - Judge Upholds NLRB Requirement That Employers Post Rights Notice

NAM challenged the NLRB's authority to require employers to post the rights notice.  The theory for this contention is that in every piece of federal employment legislation where a notice of some sort is required to be posted (e.g., FMLA, FLSA, OSHA, etc.), the statutes all expressly require the responsible agencies to develop a notice for posting.  The NLRA is silent on this issue, and so the argument goes, Congress did not authorize the NLRB to make such a notice posting a mandatory requirement. 

Judge Jackson seemed to have little problem disposing of this issue in favor of the NLRB.  After a lengthy discussion of the NLRB's rulemaking authority and relevant caselaw, the Judge ruled:

Therefore, the Court cannot find that in enacting the NLRA, Congress unambiguously intended to preclude the Board from promulgating a rule that requires employers to post a notice informing employees of their rights under the Act.  Neither the text of the statute nor any binding precedent supports plaintiffs' narrow reading of a broad, express grant of rulemaknig authority.

So, absent a stay of this ruling pursuant to an appeal, the notice poster will be required as of April 30, 2012.

Subpart B - Enforcement Consequences For Failing To Post The Notice

NAM also challenged the NLRB's enforcement aspects of the rules.  

NLRB Cannot Make Failure To Post The Notice An Unfair Labor Practice

The NLRB rule states the consequences of failing to post the notice: "Failure to post the employee notice may be found to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed by NLRA Section 7. . ."  This is the most controversial and troublesome aspect of the rulemaking from a legal and practical perspective.  Yes, employers dislike having to post the notice at all, particularly in a labor relations climate that is more contentious than it has been in 20 years.  In the age of social media and instanteous information sharing, why must an employer be required to inform employees of the rights when such information is available from myriad sources?

What the NLRB attempts to do by these regulations, however, is to go much farther than mere publication of information.  By making the failure to post an actual unfair labor practice, the potential consequences for employers are extremely serious.  First, the NLRB's designation of a failure to post information that has never been required in the 77 years of the NLRA as interference, restraint or coercion of employee choice is quite a stretch.  The agency appears to be suggesting that an employer's failure to, in the future, give this information to employees interferes with free choice, an assertion that requires several leaps of logic.

Second, and most important, if the failure to post this notice is an unfair labor practice, then it could be grounds to overturn an otherwise properly held secret ballot election.  Yes, that's right.  As we have previously pointed out, the mere existence of an unlawful handbook policy could overturn a representation election, even where there is no evidence the policy played any part in an employee's choice on the secret ballot.  Indeed, the NLRB has ruled that the mere existence of the policy can overturn the election, even when employees are already represented by a uniion and seek to end such representation.  

Judge Jackson struck down this portion of the rule, stating "Plaintiffs maintain, and the Court agrees, that the agency lacked the authority to deem a failure to post to be an unfair labor practice under the Act."  In discussing the statutory framework and caselaw, the Judge concluded:

In other words, section [8(a)(1)](the provision of the NLRA making it an unfair labor practice to interfere with employee choice) prohibits employers from getting in the way - from doing something that impedes or hampers an employee's exercise of the rights guaranteed by [Section 7] of the statute.  It does not prohibit a mere failure to facilitate the exercise of those rights.

Judge Jackson went on to state that "nothing in this decision prevents the Board from finding that a failure to post constitutes an unfair labor practice...."  The Judge made clear, however, the Court's expectation of the agency if it was to assert that an emploiyer's failure to post is an unfair labor practice:

But the ruling does mean that the Board must make a specific finding based on the facts and circumstances in the individual case before it that the failure to post interfered with the employee's exercise of his or her rights.  The Court is not making an absolute statement that inaction can never be interference; rather this memorandum opinion simply holds that the Board cannot make a blanket advance determination that a failure to post will always constitute an unfair labor practice.

In other words, and it seems incredible we are having such a discussion, the NLRB actually must prove in an unfair labor hearing that the mere failure to provide information that is readily available from any number of sources, interfered with an employee's Section 7 rights.  This is exactly the kind of analysis that should take place when it is asserted an employer's handbook provision is unlawful, but doesn't; there should be a requirement that the existence of the so-called overbroad language actually interferes with an employee's rights. Unfortunately, what really happens in handbook cases is the NLRB merely says certain language in an of itself interferes with Section 7 rights without any proof that anyone read it, was aware of it or that the policy otherwise held any significance.

NLRB Cannot Toll Statute of Limitations By Rule

The Judge also ruled that the NLRB cannot use the failure to post the notice to toll the NLRA's six month statute of limitations.  Judge Jackson noted, "the NLRA does not authorize the Board to enact a rule which permits it to toll the statute of limitations in any future unfair labor practice action involving a job site where the notice was not posted."  In reaching this conclusion, the Judge noted there exists extensive legislative history on the six month statute of limitations contained in the NLRA, and that in certain circumstances it is appropriate to toll the statute.  Such tolling is not automatic and must be supported by proof.  The Judge's opinon notes, "The Final Rule strips away the case-specific nature of the equitable tolling doctrine by imposing it as the rule rather than the exception. The Court found it particularly troubling that the NLRB's conception for the rule stated that the employer must prove that the tolling did not apply:

This turns the burden of proof on its head.  The plaintiff [the NLRB in unfair labor practice cases] generally bears the burden of proving that equitable tolling should apply in the individual case, but the rule demands that the employer prove that across the board, unlimited extension should not apply. 

In other words, the NLRB cannot use an employer's failure to post a notice to automatically toll the statute of limitations for other unfair labor practices alleged at the workplace. 

Free Speech Callenge Rejected

NAM also challenged the rule on free speech grounds, that the NLRB was compelling employers to make certain speech.  The Court rejected this argument ruling that "the Board's notice posting requirement does not compel employers to say anything" and that the poster falls into the category of "government speech."

The Judge concluded Subpart A (the notice posting requirement) could be severed from Subpart B, meaning absent some court intervention, the posting requirement will go into effect as planned.

It seems likely both sides will appeal the ruling.   Also, it is highly likely another Court soon will rule on these issues in the U.S. Chamber's litigation. We will keep an eye out for further developments.

The fact is the NLRB's micro union standard and election procedure regulations are probably only the tip of the proverbial iceberg.  These are the changes the NLRB could accomplish; remember, the NLRB's original proposed election regulations were much broader in scope, and were only scaled back after a wave of intense opposition.  So, the NLRB clearly is receptive to more sweeping change. 

A recent decision demonstrates just how receptive the agency could be in the coming months.  In the final hours of 2011, the NLRB issued 2 Sisters Food Group, Inc., 357 NLRB No. 168 (December 29, 2011).pdf, which to date has gone unnoticed.  This decision, however, provides us with substantial evidence of NLRB mission creep.

The facts in 2 Sisters are fairly basic.  The union lost a representation election by a vote of 66 to 87, with more than enough challenged ballots to alter the outcome.  The union then filed numerous objections, some of which were sustained, some of which are rejected.  The employer was found, for example, to have unlawfully terminated a union adherent during the election campaign.  Standing alone, an unlawful termination would be enough to warrant a rerun election (indeed, Chairman Pearce and Members Becker and Hayes all agreed to sustain the finding that the termination was unlawful, which means the election would be thrown out in any event). 

The truly remarkable aspect of the 2 Sisters decision is that the vast majority of it deals with issues that had no effect whatsoever on the election.  These issues show how unions will attempt to cash in on the NLRB's receptivity to change by bringing challenges asking the agency to overturn or alter existing law.  Here are a few examples-

Handbook violations.  As we have previously detailed, the NLRB has been finding that the mere existence of "overbroad" handbook violations may be enough to overturn an election even when there is no evidence the policy was enforced, let alone that employees were even aware of it.  In 2 Sisters, Chairman Pearce and Member Becker found that the employer's rule subjecting employees to discipline for "inability or unwillingness to work harmoniously with other employees," was an unfair labor practice (and, therefore, also grounds for an objection) because "it was sufficiently imprecise that it could encompass any disagreement or conflict among employees, including those related to discussions and interactions protected by Section 7, and that employees could reasonably construe the rule to prohibit such activity."  The NLRB also ruled the requirement that employees arbitrate all disputes violated the Act.

The problem with these kinds of violations is twofold.  First, there is no evidence that the rules were actually construed to prohibit protected union activity (or any other activity for that matter).  Indeed, the election seems to have been hotly contested, which is actually proof the "harmonious" and "arbitration" handbook policies had no effect on the election.  One can see how important the handbook rule might be if that was the only objection to an election:  the NLRB would be nullifying free choice based on a purely theoretical impact of a policy found in a multi-page handbook odds are the employees received, yet never actually read.  Second, and more important, this finding shows that since the NLRB is more receptive to such charges, employers can and should expect unions to raise more of these challenges.  The ruling creates an incentive for the union to scour the employer's handbook in search of some innocuous phrase, such as a requirement that employees work "harmoniously."   No proof other than the policy is required because the NLRB decides what the employee would "reasonably construe" a rule to mean.  So, the union will hold onto the issue until after the results of the election are known.  If the union loses, then it will simply file objections asking the results be overturned based on some obscure policy buried in the handbook.  While this is an area of law that changes, and will continue to change, each employer should review its handbook in an attempt to remove such hidden land mines.

Employer Meetings.  The union in 2 Sisters objected to the employer's holding of mandatory meetings during the campaign to discuss its views on the union.  Even though the union acknowledged that the employer's meetings were not objectionable under the law, it still asked for the rule to be changed.  Although the NLRB did not reach this issue, Member Becker, in a three page dissent, left a parting shot, which is sure to set the stage for the next few months.  

Since 1953, it has been the law that the employer may hold mandatory meetings in which it expresses its view on the union.  The employer is prohibited from holding such meetings during the twenty-four hour period prior to the election.  Member Becker made clear his view that such rule should be discarded. and employers should be prohibited from holding any mandatory meetings to discuss the union:

Board-supervised elections have been called the 'crown jewel of the Board's accomplishments' under the Act. . .By continuing to permit employers to require that employees attend campaign meetings as a condition of continued employment, the Board does not simply tarnish that jewel, it fractures it.  I would not continue down this long but fundamentally misguided path.

So, the rule of the last 59 years has been wrong, despite the make-up of the NLRB changing from pro-labor to pro-management numerous times.  Member Becker would have it that an employer may not call a meeting to discuss with its own employees a matter that concerns everyone at the workplace just because the topic is the union.  As extreme as the view may sound, we can expect the issue will be raised again in the coming months, and the NLRB likely will have some receptivity to it.

Site of the election.  Having secured a rerun election, the union in 2 Sisters requested that the second election be held off-site away from the employer's premises.  The NLRB did not grant the request yet expended five pages of the decision noting that the Regional Director has the ultimate authority to direct an election to be held at a place other than an employer's premises.  The opinion sets out guidelines the Regional Director should consider in making his or her decision on the site of an election.  Why spend so much time talking about this issue?  Clearly, the NLRB is sending a signal.  There is enough language in these pages that indicates a new tactic may be for the union to request a location for an election other than an employer's workplace, and if its request is denied, create yet another issue to attack the results.  Thus, the NLRB seemed to be setting this issue up for the future:

While the existing empirical work on this subject is not definitive, it is persuasive and creates concern that holding representation elections on premises controlled by one party without the consent of all other parties is inconsistent with the Board's obligation to insure[] that no party gains last minute advantage over the other.

With the exception of mail ballot elections, the representation election is almost always held at the employer's premises.  This is not for any nefarious reason, but a more fundamental, logical one inherently tied to the NLRB's mission:  the employer's premises is where the employees are most likely to be located and where the NLRB can ensure the greatest turnout. 

Calling the majority's discussion of the election site "unwarranted" and "unprecedented," Member Hayes, summarized the issue succinctly in his dissent:

To some, myself included, it may seem surpassingly strange to premise a change in the requirements for resolving disputes about where to hold a Board election on the prospect that an employer might exercise its right to communicate with employees on a question concerning representation.  By now, however, we should be accustomed to my colleagues' concern that this should happen.  Time and time again, they have demonstrated a willingness, if not open zeal, for limiting employer communications. . .

Again, 2 Sisters issued in the final days of 2011 and has received no attention. The arguments made by the union in the case are telling, however, about some of the strategies employers are likely to see in the very near future as unions continue efforts to curtail employer communication.  Of course, the make-up of the NLRB has changed recently, so no one knows what will happen, but it is a safe guess the agency will at least be receptive to the change.