Vorys on Labor

NLRB Responds to Court's Decision on Election Rule

Nelson Cary — Tue, 15 May 2012 18:00:00 -0500

The NLRB responded to the decision of Judge Boasberg today. In a press release, the NLRB announced that it will suspend implementation of the election rule. Acting General Counsel Lafe Solomon has also withdrawn the memorandum issued to the regional offices at the end of last month explaining how to implement the rule. Finally, Chairman Pearce (D) said that the NLRB was reviewing the court's decision and considering how to respond.

Labor professionals with election petitions that were filed on or after April 30 should review the press release. It contains information on how the NLRB will process these cases.

Federal Judge Invalidates NLRB Election Rule

Nelson Cary — Mon, 14 May 2012 21:00:00 -0500

Satisfying his promised timeline, Judge James E. Boasberg issued a decision (pdf) today finding the NLRB's election rule invalid. Quoting Woody Allen that "eighty percent of life is showing up," Judge Boasberg found that the rule was invalid because one of the NLRB members did not participate in the vote to adopt it.

When the final rule was approved last December, Member Hayes (R) did not vote on it. Two other members, Chairman Pearce (D) and Member Becker (D), did so, and voted in favor of the rule. While Member Hayes had participated in earlier votes on procedural issues related to the rule, and even made his opposition to the rule known, that was not enough in the court's view. Rather, in a vote that was held electronically, Member Hayes had to do something in order to "show up" and constitute the three-member quorum required in the statute, and reaffirmed by the Supreme Court less than two years ago.

Accordingly, the judge ruled in favor of the U.S. Chamber of Commerce and the Coalition for a Democratic Workplace. The judge held that elections must continue to be conducted under the old rules. The court noted, however, that nothing prevents the NLRB from holding a proper vote with a quorum present to adopt the rule again. The court did not opine on any of the substantive arguments that were made against the election rule.

For the labor professional, the court's ruling may ultimately just delay the adoption of new election rules. The NLRB now has a full five members, although there is controversy surrounding those appointments. Another vote on the rule will present an opportunity to challenge the appointments in court. Judge Boasberg's decision not to reach the substantive arguments against the rule means that any future litigation may still need to address those issues as well.

The court's decision, then, likely removes the immediate concern employers had with the adoption of the election rule. It is not, however, an issue that employers can now set aside as resolved, but rather is yet another one that the prudent employer will want to continue to monitor. The NLRB may announce its position on the decision soon. If so, the NLRB's position will be covered in this blog.

AGC Publishes Answers to Practitioner's Questions

Nelson Cary — Mon, 07 May 2012 04:30:00 -0500

Earlier this year, the Acting General Counsel met with the Practice and Procedure Committee of the American Bar Association's Labor and Employment Law Section. He answered questions the Committee collected from practitioners around the country. He did this last year as well.

Consistent with his practice, the AGC released last week a memorandum (pdf) that summarized the questions that were posed and his answers to those questions. The memorandum covers a broad range of topics, far too numerous to cover effectively on this blog. Labor professionals with a particular interest in practice before the NLRB and its regional offices will want to review the memorandum in detail.

However, there are a few highlights to the memorandum this year that are interesting to note. These are listed below, along with a page number reference to the memorandum where additional information can be found:

Data on the number of cases in which the NLRB has sought a 10(j) injunction in a first contract bargaining situation, and the NLRB's success rate with those actions (pp. 1-2).
Information regarding the number of charges involving the termination of employees during union organizing campaigns, and the number of those cases in which the regional offices found probable cause to believe that the charge had any merit (pp.4-5).
An analysis of regional actions with respect to the inclusion of default language in settlement agreements, including brief discussion of situations in which such language is not included or is included in a limited fashion (pp. 11-12).
A summary of cases decided under Specialty Healthcare, the NLRB's 2011 decision that altered how certain bargaining unit determinations are made (pp. 16-21).
A brief discussion of the regional office's experience handling voluntary recognition cases arising after the NLRB's Lamons Gasket decision (p. 22).
A brief discussion of the "reasonable period of bargaining" required in successor bar cases following the NLRB's UGL-UNICCO decision (p. 23).

AGC Issues Guidance on New Election Rules; Court Denies Motion to Stay

Nelson Cary — Sat, 28 Apr 2012 02:45:00 -0500

With the effective date of the NLRB's new election rules now less than 48 hours away, the NLRB's Acting General Counsel (AGC) continues his implementation efforts. On Thursday, the AGC issued a memorandum (pdf) to the various regional offices of the NLRB containing additional information interpreting the new rule. It also contains implementation instructions for the regional offices.

The memorandum is quite lengthy and detailed. Perhaps the most interesting issue for the labor professional, however, is the guidance the memorandum contains on how regional offices should exercise the discretion the new rule gives them on limiting issues that can be litigated in the initial representation case hearing. It was this litigation, among other items, that the NLRB majority believed to be unnecessary and slowing down the election process. Thus, the NLRB's rule announced that "ordinarily" disputes over eligibility to vote or inclusion in the bargaining unit need not be resolved before the election is held.

The AGC defined "ordinarily" by reference to the number of possible employees impacted by the eligibility or inclusion issue. If 10% or more of the employees in the particular unit are impacted, the question could be addressed in the representation case hearing.

The AGC also specifically commented on the issue of deciding which employees are supervisors. The memorandum makes clear that these questions are subject to the rule. Thus, if there are only a small number of employees who are claimed to be supervisors, the regional office has the discretion to refuse to decide those questions until the election has taken place.

In related developments, Chairman Pearce (D) issued a concurring opinion and Member Hayes (R) issued a dissenting opinion about the new rule yesterday. These opinions continue to debate the questions that have been presented to the court in the Chamber's lawsuit.

In addition, the federal court handling the Chamber of Commerce's lawsuit challenging the rule denied a motion filed by the Chamber to prevent the rule from going into effect. In his ruling earlier today, the judge stated that he would issue his opinion on the merits of the rule before May 15, 2012.

In light of these developments, labor professionals should review the guidance from the AGC, or discuss it with their labor counsel, to determine how it will impact their operations. The AGC's guidance and the NLRB's rule is very technical and detailed. Even the FAQs the AGC issued are lengthy, although not quite as technical as the memorandum itself. It is quite likely, therefore, that the guidance will effect employers in different ways. In addition, labor professionals will want to watch closely for the court's ruling in the Chamber's lawsuit. That ruling will be reported on this blog.

Did I Say Something Wrong? NLRB Issues New Ruling on Employer Comments During Union Campaign

Nelson Cary — Mon, 23 Apr 2012 04:30:00 -0500

By Nelson D. Cary and Ashley M. Manfull

Recently, the NLRB, in a three-member panel of Members Hayes (R), Flynn (R) and Block (D), ruled on various statements the employer made during a union organizing drive about the changes to the employer-employee relationship should employees vote for the union.

In Dish Network Corp., 358 N.L.R.B. No. 29 (April 11, 2012), the NLRB held that the employer did not violate the NLRA by informing its employees: “If a workplace is Union, you have to go to your Steward with your complaints, and he decides whether to bring them to the Company’s attention, not you. He controls your fate, not you.” Relying on Tri-Cast, Inc., 274 N.L.R.B. 377 (1985), the NLRB held that an employer does not violate the NLRA by informing employees that unionization will bring about a change in the manner in which the employer and employee deal with each other. The NLRB determined that the employer’s statement was not a threat, but rather correctly pointed out to employees that the union decides which grievances it wishes to pursue.

However, Member Block wrote a concurring opinion expressing her view that the Tri-Cast rule should be re-examined in a future case. That decision, she reasoned, “has come to stand for the proposition that almost any employer statement involving the impact of unionization on employees’ ability to individually pursue grievances is permissible.” Member Block would like the NLRB to clarify that employer statements that implicitly misstate the law are not permitted, such as in this case where the employer’s statement implies that employees will lose the right to bring complaints to management individually.

While condoning the employer’s statement regarding future grievances, the NLRB determined that other statements made by the employer during the union campaign did violate the NLRA, including:

Statements threatening employees that if the union is elected, there would be more stringent enforcement of company rules on dress code and attendance;
Informing employees that they would be paid differently than employees at other locations;
Giving employees the impression that election of the union would be futile because the Company would bargain to impasse; and
Informing employees that they would remain on the same pay plan because of their union organizing activities.

The opinion is important for the labor professional for at least three reasons:

It is an important reminder that the employer’s speech during a union campaign is highly regulated;
It underscores the importance of training for supervisors and managers confronting a union organizing drive to ensure that they lawfully convey the employer’s message about unions; and
It suggests that yet more change to established NLRB precedent could be forthcoming in a future case presenting the same facts.

Now for Some Bad News: Court Affirms NLRB's Property Access Rule

Nelson Cary — Thu, 19 Apr 2012 04:30:00 -0500

On Tuesday, the federal court of appeals in Washington, D.C. announced good news for employers. It blocked the enforcement of the NLRB’s notice posting rule pending resolution of the appeal over the legality of that rule.

That good news, however, overshadowed some bad news for employers coming out of that same court of appeals on the same day. It affirmed the NLRB’s decision in New York New York, 356 N.L.R.B. No. 119 (2011). Readers of this blog may recall the coverage of that decision when it issued about a year ago. In that case, the NLRB held that employees of a contractor doing business on another employer’s property must be permitted access to the employer’s property for the purpose of organizational handbilling.

The court of appeals affirmed this ruling, holding that the NLRB appropriately used its discretion in balancing the rights of the property owner with those of the contractor's employees in permitting access for the handbilling. Specifically, the NLRB held that the property owner must demonstrate that the activity of the contractor's employees "significantly interferes" with the use of the property or that exclusion of the contractor's employees from its property is justified by another legitimate business reason, such as "the need to maintain production and discipline."

The court rejected the casino's other arguments. First, the court found irrelevant the fact that the handbilling was aimed at customers rather than fellow employees. Second, the court rejected the argument that the handbilling occurred in a working area of the casino, deferring to the NLRB's finding that the handbilling did not take place in a working area. Finally, the court rejected the casino's safety arguments, finding substantial evidence to support the NLRB's determination that the handbilling posed no safety hazard.

For the labor professional, the case is an important reminder that appellate courts will, in the right case, defer to the reasoned decisions of the NLRB. Moreover, it demonstrates how important it is to build a factual record supporting the employer's decision at the agency level. Finally, affirmation of the NLRB's decision in New York New York reminds the labor professional of the need to avoid blanket assumptions about the access rights of nonemployees.

Federal Appeals Court Enjoins Notice Posting Rule; NLRB Responds

Nelson Cary — Tue, 17 Apr 2012 19:31:18 -0500

The requirement to post a notice of employee rights under the NLRA that was to have taken effect on April 30, 2012 has once again been delayed. Today, the federal court of appeals in Washington, D.C. granted (pdf) a request for an order enjoining the NLRB's notice posting rule pending an appeal of a lower court decision finding that the rule was lawful. The court of appeals' order followed on the heels of, and specifically referenced, a decision in South Carolina finding that the rule was unlawful. The court of appeals cited, among other things, the uncertainty regarding the enforceability of the posting requirement as one of the reasons supporting its decision to grant the injunction.

Shortly after the court of appeals ruling, NLRB Chairman Pearce (D) issued a statement regarding enforcement of the notice posting rule. Acknowledging the court's ruling in Washington, D.C., and citing the "strong interest in the uniform implementation and administration of agency rules," Chairman Pearce declared that the NLRB's regional offices will not implement the rule. The delay the NLRB announced will last until "resolution of the issues before the court." At the same time, Chairman Pearce also announced the NLRB's intent to appeal the South Carolina decision, as well as to take its own appeal of the portion of the lower court's ruling in Washington, D.C. that struck down two of the three enforcement mechanisms in the rule.

These developments are a welcome response to the uncertainties created by the conflicting court rulings. Labor professionals can wait for a court decision on the legality of the NLRB's rule, and should expect to hear more later this year. The court of appeals announced an expedited briefing schedule and set oral argument for September.

NLRB Notice Posting Rule Unlawful

Nelson Cary — Sat, 14 Apr 2012 10:23:26 -0500

Last year, the U.S. Chamber of Commerce challenged the legality of the NLRB's notice posting rule in federal court in South Carolina. Yesterday, Judge David C. Norton found (pdf) that the NLRB did not have the authority to issue the notice posting rule and that it was, therefore, unlawful under the Administrative Procedure Act.

Judge Norton reasoned that the notice posting rule was not "necessary to carry out" the NLRA because there is no provision in the NLRA itself that requires any type of notice posting. He also found that the overall structure of the NLRA contemplates that the NLRB will serve a reactive function, responding to charges or petitions filed by others. The notice requirement constituted a proactive attempt to dictate employer conduct prior to the filing of any such charge or petition. Finally, Judge Norton found that Congress did not intend to give the NLRB the power to require a notice posting. The NLRA, unlike other labor legislation enacted around the same time and since, does not contain a provision requiring employers to post a notice of the rights afforded under the statute.

With Judge Norton's ruling, labor professionals are faced with conflicting rulings from two federal judges. The District of Columbia decision is currently on appeal, and the court of appeals has been asked to stay the ruling of the district court judge in that case pending appeal. The NLRB will likely appeal the South Carolina decision as well. Thus, litigation over the rule will continue.

Whether the NLRB, in light of the South Carolina decision and the continuing litigation, will voluntarily delay the effective date of the notice posting rule is yet to be seen. To be sure, the NLRB has already delayed the effective date on prior occasions even before the District of Columbia and South Carolina decisions were issued. If the NLRB does so, or as any additional developments occur, this blog will cover them.

Highlights From Acting General Counsel's Annual Operations Summary

Nelson Cary — Sat, 17 Mar 2012 10:22:22 -0500

Last week, AGC Lafe Solomon issued his annual summary of operations (pdf) for FY 2011. The summary reviews the various functions of the Acting General Counsel's office, which include conducting secret ballot union elections and investigating and prosecuting unfair labor practice charges against employers and unions.

Of the information reported, perhaps the most interesting given the NLRB's current regulatory efforts was the data on union representation elections. The AGC reported that 91.7% of all union representation elections were completed within 56 days of filing the election petition. Moreover, the median time taken to conduct the union election was 38 days from the filing of the petition. Of the elections conducted, 89% were held pursuant to agreement of the parties.

Despite the speed with which regional offices conduct union elections, the NLRB continues to explore administrative rulemaking designed to accelerate the election cycle. Moreover, in the face of evidence that the vast majority of elections are held pursuant to an agreement (i.e., without any litigation or disputes), the NLRB's rulemaking process targets the elimination of various procedures the NLRB says lead to litigation that slows down the election process.

The AGC also reported that total case intake for union election petitions was down in FY 2011 by 12.2%. This statistic is particularly striking given the continuing weakness in union membership data. The Bureau of Labor Statistics reported earlier this year that union membership stood at 11.8% of the total workforce, and only 6.9% of the private sector workforce. Given these numbers, a decline in representation petitions (one way in which unions can increase membership) is unexpected.

Other highlights from the report of interest to the labor professional include:

Total intake of all types of cases during FY 2011 was down 5.9%.
Of the 22,177 total unfair labor practice cases filed in FY 2011, the AGC found that additional proceedings were warranted in 37% of them.
The number of unfair labor practice complaints (which required the employer or union to defend its conduct before an administrative law judge (ALJ)) issued in FY 2011 increased to 1,342 cases.
The AGC won 87% of all the cases litigated before the NLRB or an ALJ.
The amount of backpay, fees, dues or fines recovered on behalf of employees was down significantly from FY 2010 at a total of just over $60 million. The figure in 2010 was over $85 million.

Federal Court Finds NLRB Posting Requirement Lawful, But Some Remedies Invalid

Nelson Cary — Mon, 05 Mar 2012 19:12:48 -0500

As readers of this blog know, the NLRB’s notice posting requirement has been the subject of several legal challenges. Last Friday, the U.S. District Court for the District of Columbia was the first to consider whether the NLRB’s requirement that employers post the notice exceeded its authority under the NLRA. The result for employers is mixed. Judge Amy Berman Jackson held that:

1. The requirement to post the notice is a lawful exercise of the NLRB’s discretion. Thus, the NLRB may by rule require that employers post the notice the NLRB has prepared.

2. The NLRB cannot, however, automatically deem an employer’s failure to post the notice an unfair labor practice in violation of Section 8(a)(1) of the Act.

3. In addition, the NLRB cannot toll the statute of limitations in unfair labor practice actions against employers who have failed to post.

4. But, the NLRB can consider an employer’s “knowing and willful” failure to post the notice as evidence of unlawful motive in an unfair labor practice proceeding involving some other alleged violation of the NLRA (e.g., an alleged discriminatory discharge of a union supporter).

In analyzing the validity of the NLRB’s notice posting rule, Judge Jackson noted that Section 156 of the NLRA “expressly grants the Board the broad rulemaking authority to make rules necessary to carry out any of the provisions of the Act.” However, the court agreed with the Plaintiffs in the case in ruling that the NLRB lacked the authority to deem a failure to post to be an unfair labor practice under the NLRA. Judge Jackson noted that while Section 158(a)(1) of the NLRA prohibits employers from impeding or hampering an employee’s exercise of their rights, it does not prohibit a mere failure to facilitate the exercise of those rights. Accordingly, the failure to post the notice could not itself constitute an unfair labor practice.

In striking down the tolling portion of the rule, the court noted that the NLRA establishes an unambiguous six-month statute of limitations. In adopting the tolling rule, the NLRB adopted an exception that “substantially amends the statute of limitations that Congress expressly set out in the statute.” The regulation, therefore, exceeded the NLRB’s authority.

In addition to her ruling on the posting, Judge Jackson declined an invitation to rule on the validity of President Obama’s recess appointments, an issue that Plaintiffs raised after filing their lawsuit.

The Plaintiffs in the case (National Association of Manufacturers and Coalition for a Democratic Workplace) filed their Notice of Appeal with the court today. A second federal lawsuit challenging the notice posting rule is pending in South Carolina. The court has yet to rule in that case.

The court has not ordered any delay in the notice posting requirement pending appeal, nor has the NLRB announced another voluntary delay in the rule to facilitate an appeal. Assuming this remains the case, all private sector employers subject to the NLRA will be required to post the required notice in the workplace by April 30, 2012. The notice can be found on the NLRB website.

Unionized Employees at NLRB Distribute Fliers

Nelson Cary — Sun, 26 Feb 2012 12:06:11 -0500

The NLRB apparently has some issues with its own unionized employees. According to a recent report, members of the NLRB Union, a labor union that represents NLRB attorneys, agents, and others in regional offices around the country, passed out fliers at a labor law conference. The flier accuses Chairman Mark Pearce (D) and Acting General Counsel Lafe Solomon of various actions like:

reducing the time unionized employees have to participate in grievance meetings and arbitrations;
unilaterally limiting what employees earn from a performance incentive program; and
limiting alternative work schedules and telecommuting.

The NLRB has taken a number of steps recently to promote the ability of employees in the private sector to unionize and to otherwise strengthen collective bargaining. The rules requiring a notice posting and speeding up union elections are just two examples of these actions. Labor professionals shouldn't expect the NLRB's own union issues to slow the pace of its union-friendly actions. Indeed, both the notice rule and the election rule are still slated to become effective on April 30, 2012.

NLRB's Acting General Counsel Issues Second Report on Social Media Cases

Nelson Cary — Sun, 29 Jan 2012 17:24:46 -0500

By Nelson Cary and Ashley Manfull

Recognizing that the increased use of social media by employees commenting on work-related matters has led to many complex issues for employers, the Acting General Counsel (AGC) issued its first report in August 2011 summarizing cases involving social media issues. As the complexities of this issue are far from resolved, the AGC has now issued a second report summarizing 14 new social media cases that the AGC has considered.

The AGC’s second report (pdf), issued on January 24, 2012, focuses significant attention on (1) whether an employee’s use of social media to comment on various work-related issues constitutes concerted protected activity; and (2) whether employer policies seeking to impose limitations on an employee’s ability to comment on work-related issues are overly broad or could reasonably be interpreted to prohibit comment on Section 7 protected speech.

The 35-page report may be well worth the read for labor professionals struggling to understand the extent to which employee comments in a public forum can be regulated and/or subject to disciplinary action. For those with less time or interest, however, some of the more noteworthy highlights in the report are summarized below.

Of the 14 cases briefed in the AGC’s report, seven of them address whether employer policies limiting employee communications are overly broad. In five of the seven cases, the AGC determined that the following policy language was overly broad and thus unlawful:

· Employer rule prohibiting “making disparaging comments about the company through any media, including online blogs”;

· Employer rule that employee discussion of terms and conditions must be in an “appropriate” manner, without defining “appropriate”;

· Employer work rule prohibiting “insubordination or other disrespectful conduct” and “inappropriate conversation”; and

· Employer policy prohibiting disclosure of confidential, sensitive or non-public information concerning the company without further definition.

However, in two of the cases analyzed, employer social media policies withstood scrutiny where the employer’s rule specifically listed plainly egregious conduct that was prohibited (vulgar, obscene, threatening, intimidating, harassing, and/or unlawful discriminatory comments) and limited employee disclosure of confidential information to matters protected by federal law, like securities or health information laws.

Eleven of the 14 cases summarized by the AGC addressed whether an employee was properly terminated because of on-line forum posts. In five of the 11 cases, the AGC determined that the employee was discharged for engaging in protected concerted activity:

· Employee initiated Facebook discussion because Employer transferred her to a less lucrative position, which included discussion of potential for class action lawsuit;

· Employee posted comments on Facebook complaining about being reprimanded for her involvement in fellow employees' work-related problems;

· Employee posted message on Facebook about the promotion of a coworker she believed to be unfair; post led to three responses from co-worker “friends” discussing the promotion and mismanagement concerns;

· Employee engaged in Facebook conversation with other employees concerning negative attitude of Operations Manager and “drama” he caused at work; and

· Employee made numerous on-line posts related to labor issues, unfair labor practice charges filed, and critical of employer’s management style, which elicited supportive responses from numerous employees.

On the other hand, in six of the 11 cases, the AGC found that the employee was not unlawfully terminated for engaging in the following types of conduct. For example:

· Employee Facebook posts griping about her supervisor reprimanding her for failing to perform a task she was not instructed to perform;

· Employee Facebook post complaining about her coworker’s job performance where it had a very limited connection to the terms and conditions of her employment;

· Employee’s angry, profane comments on Facebook ranting against her coworkers that they blamed her for everything and she hated them.

· Employee Facebook post that her coworker’s annoying habit was driving her nuts and she was “about to beat him with a ventilator.”

Labor relations professionals should continue to keep several points in mind when attempting to determine the landscape of social media cases in light of the AGC’s August 2011 and January 2012 reports:

· The AGC’s reports only summarize conduct that the AGC believes violates the law. Until the complaints make their way to the NLRB, it is unknown whether the NLRB will agree with the AGC’s conclusions;

· Whether a violation of Section 7 exists is an extremely fact intensive question. Each employment action and policy must be examined on its own set of facts and circumstances; and

· Employer policies regarding employee conduct and use of social media should be crafted from the perspective of what conduct a “reasonable” employee would understand as being limited. Policies restricting employee posts should avoid overly broad language, ambiguous words, and undefined terms.

NLRB Election Process Rulemaking: It's Not Over Until It's Over

Nelson Cary — Fri, 27 Jan 2012 13:35:10 -0500

The NLRB published a final rule on the election process late last year. In doing so, however, the final rule left out a number of changes to the election process that were originally proposed in June 2011. For example, there were proposed changes to the requirements to provide lists of employee names and contact information after an election petition is filed, the timing of providing that list, and other issues. As previously explained, the NLRB announced last month that it would keep these additional changes to the election rules under consideration for possible future action.

In an interview published by the Associated Press yesterday, NLRB Chairman Pearce (D) confirmed his intention to continue pushing forward with these additional regulatory proposals. "We keep our eye on the prize," the AP quotes Chairman Pearce as saying. "Our goal is to create a set of rules that eliminate a lot of waste of time, energy and money for the taxpayers." Chairman Pearce announced his hope that the NLRB will propose the rules "soon," according to the AP.

For the labor professional, this most recent development confirms that there is likely more rulemaking yet to come on the so-called "ambush election" or "quickie election" rule. This announcement does not, however, alter the currently announced effective date for the final rule published last month on the election process. It is still scheduled to become effective on April 30, 2012.

NLRB Invalidates Arbitration Agreement Prohibiting Class/Collective Actions

Nelson Cary — Mon, 23 Jan 2012 04:00:00 -0500

By Nelson Cary and Ben Shepler

New year, same controversial NLRB. In a decision that seems destined for appeal, the NLRB recently ruled that employers may not utilize individual arbitration agreements that prevent employees from joining in employment-related class or collective actions. The NLRB’s decision is notable because, among other things, it arguably conflicts with both the Federal Arbitration Act (FAA) and with a recent pro-arbitration decision issued by the United States Supreme Court.

In D.R. Horton, Inc., 357 N.L.R.B. No. 184 (Jan. 3, 2012) (pdf), the NLRB held that homebuilder D.R. Horton committed an unfair labor practice by requiring employees to sign a mandatory arbitration agreement that (1) forced employees to submit employment-related disputes to binding arbitration and (2) prohibited the arbitrator from considering these disputes as part of a class or collective action. This prohibition came under fire in 2008, when a former D.R. Horton employee attempted to initiate a collective action arbitration alleging violations of the Fair Labor Standards Act.

In a 2-0 decision, with Member Hayes (R) having recused himself, the NLRB held that participation in class or collective actions is protected concerted activity under the NLRA. Accordingly, the arbitration agreement violated the NLRA because it prohibited employees from participating in protected concerted activity. The NLRB further held that the arbitration agreement violated the NLRA because the agreement appeared to prohibit employees from filing unfair labor practice charges with the NLRB.

As part of its decision, the NLRB also considered an important issue of first impression: whether the prohibition on class/collective action waivers in arbitration agreements the NLRB found in the NLRA put the NLRA in conflict with the pro-arbitration FAA. The NLRB determined that no conflict existed, noting that the NLRA would also prohibit other contracts that barred employment class or collective actions, regardless of whether the contract involved arbitration.

Finally, the NLRB addressed concerns that its decision conflicted with a recent pro-arbitration opinion from the United States Supreme Court. In AT&T Mobility v. Concepcion, 131 S. Ct. 1740, 1753 (2011) (pdf), the Supreme Court held that the FAA preempted a California law that prohibited class action waivers in consumer arbitration contracts. The NLRB attempted to distinguish AT&T Mobility by pointing out that the case involved a conflict between the FAA and state law, whereas the arbitration agreement at issue in D.R. Horton involved a potential conflict between two federal statutes, the FAA and the NLRA.

The strength of the NLRB’s reasoning will almost certainly be tested on appeal. In the interim, labor professionals should review all individual, non-collectively bargained arbitration policies. In particular, labor professionals should consider:

Allowing employees to participate in employment-related class or collective actions. According to the NLRB, an arbitration agreement can prohibit class or collective arbitration so long as employees were allowed to bring these claims in court. The NLRB chose not to address the opposite scenario: whether an arbitration agreement could allow class or collective arbitration claims, but prohibit those claims in court.

Allowing employees to file unfair labor practice charges with the NLRB. Excluding such claims from the scope of an arbitration agreement improves the likelihood that the arbitration agreement will not run afoul of the NLRA.

President Obama Uses Recess Appointments to Fill NLRB Vacancies

Nelson Cary — Thu, 05 Jan 2012 07:43:05 -0500

By Nelson Cary and Micah Dawson

In College Football Bowl week terminology, some would say President Obama ran an “end-around” play on the Senate yesterday. Using his recess appointment power, he filled the three vacancies on the National Labor Relations Board, despite the Senate's refusal to act on those appointments. President Obama appointed his two most recent nominees, Deputy Labor Secretary Sharon Block (D) and union attorney Richard Griffin (D), to year long positions. Obama also appointed Board counsel Terence Flynn (R), whose appointment had lingered for nearly a year, to fill the final vacancy on the five-member board, giving it a full contingent for the first time in a number of years.

The Chamber of Commerce, and Republicans, expressed immediate outrage and questioned whether the recess appointments were legal. The argument against the appointments centers on the meaning of the recess appointment power contained in the U.S. Constitution. Republicans point out there is not currently a “recess” as neither chamber has passed an adjournment resolution, and both chambers have been holding pro-forma sessions every three days.

Whether the Chamber of Commerce or other business groups will file a lawsuit challenging the recess appointments is yet to be seen. Labor professionals should monitor these developments as such a lawsuit would join a growing string of litigation involving the NLRB.

When is a Supervisor Not a Supervisor? The NLRB Finds No Proof of Supervisory Authority

Nelson Cary — Tue, 03 Jan 2012 04:00:00 -0500

Think that just because an employee has the title "supervisor" and is involved in the disciplinary process that the employee will necessarily be a supervisor under the NLRA? Think again.

In a recent decision, the NLRB examined the duties of an employee with the title "field supervisor." This employee was the first level of leadership for hourly, non-supervisory employees. The field supervisor monitored the productivity of those employees, examined their work, and inspected their vehicles. The field supervisor could give verbal warnings to those employees for performance or attendance issues. The field supervisor could also initiate what the employer called an "employee consultation form" (ECF), recommending to higher management that more significant disciplinary action be taken. Following the referral of the ECF to higher management, multiple levels of management, along with a human resources manager, would review the ECF before accepting or rejecting it. The employer established that higher management rarely rejected an ECF from a field supervisor.

In DirectTV, 357 N.L.R.B. No. 149 (Dec. 22, 2011) (pdf), the NLRB held in a 2-1 decision that the employer failed to prove that the field supervisor was a "supervisor" under the NLRA. To be a supervisor under the NLRA, an employee must possess certain authority with respect to other employees. One such authority is the power to discipline another employee, or to effectively recommend that disciplinary action be taken.

The NLRB noted that "effectively recommend" means that the recommended action is taken without an independent investigation by superiors, and not simply that the recommendation is ultimately followed. The NLRB then found that the employer proved merely that management ultimately followed the recommendation. According to the majority, the employer didn't prove what weight higher management attached to the field supervisor's recommendation. It also found that the review by other levels of management constituted "independent investigation" by the superiors. Finally, the majority found fault with the employer's proof because it didn't demonstrate what impact the ECFs had on an employee's job status, future tenure or discipline.

Member Hayes (R) dissented. He found that the record clearly established that the field supervisor had the independent, discretionary authority to discipline other employees. The subsequent review by higher levels of management was not unique and to be expected to "assure procedural compliance with myriad Federal and State employment law regulations." He also noted that the record contained evidence that ECF's seeking discipline up to and including termination have been approved and implemented. Accordingly, Member Hayes would have held that the field supervisors are supervisors under the NLRA.

For the labor professional, the NLRB's decision is an important reminder of four points:

Titles don't matter; duties do. Regardless of what title an employer bestows upon an employee, it is important to match the duties to that title.
"Effectively recommend" is not easily proved. The NLRB will clearly look closely at how the alleged supervisor interacts with other members of management and what authority the person actually exercises.
The burden of proving supervisory status is on the party asserting it. If an employer anticipates taking the position that an employee is a supervisor, then the employer should be prepared with documentary evidence to prove that the employee exercises the statutorily required authority.
Knowing which employees are supervisors is critical. In this case, the evidence suggested that the field supervisors were involved in prounion activity. The union won the election by only a five vote margin. Because the field supervisors were not "supervisors" under the NLRA, their prounion activities didn't require a second election.

Notice Posting Rule Delayed Again

Nelson Cary — Fri, 23 Dec 2011 15:17:50 -0500

The NLRB announced today that it is delaying the effective date of its notice posting rule. This is the second delay the NLRB has announced. This time, however, the NLRB stated that the delay was at the request of the federal judge in Washington, D.C. who will decide two of the three cases that business groups and others filed challenging the rule. At a court hearing earlier this week, the judge asked the NLRB to delay the effective date of the rule. The new effective date for posting the required notice is April 30, 2012.

Details of NLRB Election Rule Published; Chamber Files Lawsuit

Nelson Cary — Thu, 22 Dec 2011 17:39:48 -0500

By Nelson Cary and Micah Dawson

Earlier today, the NLRB formally published their new election rules in the Federal Register. Chairman Pearce (D) and Member Becker (D), whose term ends next week, voted in support of the new rule. Member Hayes (R) withheld his vote. Member Hayes can vote against finalizing the rule and publish a statement of dissent any time before the rule takes effect on April 30, 2012.

As expected, the new rule makes significant changes to union election procedures, including:

Empowering the hearing officer to limit evidence produced at the initial hearing to only that necessary to determine whether a question concerning representation exists;
Eliminating the automatic right to file briefs with the regional director after the initial hearing;
Eliminating a party's right to appeal the regional director's determinations to the NLRB prior to the election, and providing for only a single appeal, after the election, and then only over issues that the election hasn't rendered moot;
Eliminating language in the NLRB's regulations providing that elections are typically not scheduled for a date sooner than 25 days after the election petition has been filed;
Clarifying the standard for seeking special permission to appeal to the NLRB from a regional director's decision; and
Making NLRB review of the regional director's decisions discretionary, rather than mandatory.

The rule, which has increasingly been referred to as the “ambush election” rule by those opposed to it, significantly limits employers’ legal right to object to the petitioned-for unit prior to a union election. By shortening the amount of time between petition and election, it also curtails employers' ability to communicate with workers during the union election process. With less ability to communicate, the rule limits the time during which an employee is certain to hear both sides of the story: both the case for and the case against union representation.

Even before the NLRB announced that it would publish this final rule, the U.S. Chamber of Commerce sought to nullify it. On December 20, 2011, the Chamber filed a federal lawsuit challenging the new rule. The lawsuit attacks the validity of the new rule, stating that it violates Board procedure and denies employers' free speech rights. In addition to asking the court to vacate the rule, the Chamber’s lawsuit (pdf) seeks a preliminary injunction barring the rule from being enforced.

For the labor professional, the final rule is a major development. Employers that are currently non-union should carefully consider the implications of the rule in light of their individualized circumstances. Those employers may want to revisit their strategies given this development.

The Chamber's lawsuit adds an additional level of complexity for the labor professional. After business groups filed court challenges against the NLRB's notice posting rule, the NLRB delayed the effective date of that rule. It is uncertain whether a similar delay will be announced here, given that the NLRB is at risk of losing one of its three members, and thus being unable to act.

NLRB Adopts New Election Rules Adopted

Nelson Cary — Wed, 21 Dec 2011 15:32:06 -0500

The NLRB announced today that it has formally adopted the revisions to the election rules that were originally proposed earlier this year. The official notice will be published in the Federal Register tomorrow. The rule, which some have referred to as the "quickie" or "ambush" election rule, will become effective on April 30, 2012. Stay tuned to vorysonlabor.com for additional details about the final rule.

New NLRB Nominations: President Obama Nominates Two New Candidates for Labor Board Vacancies

Nelson Cary — Sat, 17 Dec 2011 16:31:11 -0500

Earlier this week, President Obama nominated two Democrats, Sharon Block and Richard Griffin, to serve as members of the NLRB. Ms. Block currently works at the U.S. Department of Labor, an agency which has attracted attention over its controversial proposal to modify the rules governing "persuaders" in labor organizing campaigns. Mr. Griffin serves as General Counsel for the International Union of Operating Engineers. Additional information about Ms. Block and Mr. Griffin can be found in the NLRB's press release regarding their nominations.

The nominations come at an interesting time for the NLRB. Currently, there are only three members on the NLRB. One of those members, Craig Becker (D), holds a recess appointment that will expire at the end of the year. If the Senate does not act on these nominations, or the nomination of Terence Flynn (R), whose nomination has been pending for months, the NLRB will fall to two members. It will then no longer be able to issue decisions or new administrative rules.

Labor law professionals should not expect quick action on these nominations. Sen. Lindsey Graham (R-S.C.) declared, even before the President announced his nominations, that he would continue to place a "hold" on any nominees to the NLRB. According to his press release: "I will continue to block all nominations to the NLRB until we get satisfactory answers regarding their role in [the decision to issue a complaint against The Boeing Company's decision to open a new plant in South Carolina]. Given its recent actions, the NLRB as inoperable could be considered progress."

While the President could make recess appointments to the NLRB, like he did with Member Becker, the House has taken steps to remain in session. Reportedly, these steps will prevent the Senate from going into full recess, preventing recess appointments from being made.

Issues awaiting NLRB action, and that could be delayed if the NLRB were unable to act, range from a proposed rule that would speed up the union election process to a decision on a case with potentially significant impact on employer solicitation and distribution rules.