News & Analysis

The Good, the Bad and the Ugly

NEWS & ANALYSIS

Quickie elections seem here to stay, but Senate Republicans aren’t giving up. On July 29, the National Labor Relations Board won another challenge to its “quickie election” rules pursued by employer groups. This time, Judge Amy Berman Jackson in federal court in the District of Columbia pushed aside arguments of the U.S. Chamber of Commerce and the National Retail Federation, among others, seeking to invalidate the rule for exceeding the Board’s authority under the National Labor Relations Act, and violating the Administrative Procedures Act and the First and Fifth Amendments to the U.S. Constitution.

The rule, which became effective this past April 14, changed the procedures for representation cases. One key effect of the changes was cutting the time between union petition and election, thus depriving employers of campaign days to communicate with employees before the vote.

Judge Jackson concluded that, although the employer groups’ “policy objections may very well be sincere and legitimately based . . . in the end, this case comes down to a disagreement with choices made by the agency entrusted by Congress with broad discretion to implement the provisions of the NLRA and to craft appropriate procedures.”

The plaintiffs say that they intend to appeal.

Judge Jackson’s decision comes after a federal judge in the Western District of Texas dismissed a similar challenge. The Texas decision, issued by Judge Robert L. Pitman, is now before the U.S. Court of Appeals for the Fifth Circuit. (The Fifth Circuit hears appeals from federal courts in Louisiana, Mississippi, and Texas.)

Meanwhile, Republicans in the Senate have introduced proposed legislation called the Employee Rights Act, which - among other things - would undo the “quickie election” rule, require new certification elections periodically if there was 50 percent workforce turnover since the last Board election, require certifications to be based on a majority of employees in a bargaining unit (rather than a majority of the unit employees voting), and establish bargaining-unit-wide voting rights for strike votes (instead of the typical union-members-only voting rights). The proposed legislation, if passed, would change some of the more “undemocratic” aspects of U.S. labor law that favor unions. But passage is unlikely while President Obama is in office, given his expressed willingness to use his veto power to stop anything lessening the power of organized labor, which has been a foundation of his political support.

At this point, due diligence for employers would include getting out in front of any campaign activity by auditing labor readiness, supervisory status of lead persons and other classifications of employees in “gray areas,” and workplace rules and policies that recent Board decisions and a General Counsel’s memorandum have categorized as unlawful interference with employees’ Section 7 rights. The suggested time for that due diligence is now.

NLRB punts on Northwestern University football players, declining to decide whether they can have a union election. On August 17, the NLRB dismissed the representation petition filed by the College Athletes Players Association, which sought collective bargaining representation for scholarship football players at Northwestern. In March 2014, the Chicago Regional Director had decided that the players were “employees” under the NLRA. The full Board didn’t rule either way on this finding but instead unanimously decided that it didn’t want to exercise jurisdiction in the case. According to the Board, it would be difficult for the union to bargain about standards set, not by Northwestern, but by athletic conferences and organizations. The Board commented that in other contexts its exercise of jurisdiction helps promote uniformity and stability in labor relations, but not in this case. Is this the “final horn” on student athletes as employees? Probably not: other players have lawsuits pending in which they claim to be “employees.”

Confidentiality be damned #1 – NLRB again reverses long-established precedent and gives unions access to confidential witness statements in most cases. On June 26, the NLRB, in a 3-2 decision pitting the Democrat majority against the Republican members, decided that employers are normally required to provide confidential witness statements to unions that request them in connection with the processing of grievances. The Board’s decision, in American Baptist Homes of the West dba Piedmont Gardens, applies only to refusals to supply witness statements that occur after the date of the decision because the Board recognized that it was overturning precedent that had existed since 1978. The Piedmont Gardens decision comes two and a half years after an earlier decision reached the same result but was voided for lack of a quorum by the Supreme Court’s decision in Noel Canning.

Even under Piedmont Gardens, an employer does not have to produce the statements if it can establish that it has a legitimate and substantial interest in confidentiality that outweighs the union’s need for the statements. But this may not be a very meaningful exception. (Read on.)

The Board’s decision lumps witness statements provided with assurance of confidentiality into the same bucket with other information relevant to the union in the processing of grievances and its other collective bargaining duties. The Board majority explained that “establishing a legitimate and substantial confidentiality interest requires more than a generalized desire to protect the integrity of employment investigations.” According to the Board, the employer must establish there is some need for witness protection, or some danger of destruction of evidence, fabricated testimony, or a cover-up. Even if such a need exists, the employer may not simply refuse to disclose the statements but instead must “seek an accommodation that would allow the requestor to obtain the information it needs while protecting the party’s interest in confidentiality.” The majority contends the parties can bargain over the accommodation.

The Board majority decision ignores the realities of workplace investigations. In order to gather facts, employers often have to give assurances of confidentiality to witnesses who are otherwise reluctant to state facts “on the record.” These assurances result in better investigations, and benefit employers and employees alike. So now, with the Board’s new rule, an employer cannot accurately give assurances of pre-hearing confidentiality and is therefore likely to get less relevant information. The Board’s new rule is thus likely to impede investigations and fact-gathering, as the dissenting panel members in the Piedmont Gardens case point out.

Moreover, the Board’s statement that the employer needs to “seek an accommodation” from the union and that the parties can bargain over the accommodation would be laughable if the treatment of witness statements were not such a serious and important issue of policy. How will the “seeking accommodation” and bargaining end? Does a union have any incentive not to demand the witness statements? Real bargaining occurs only when parties can, if needed, exert economic leverage, not when there is a one-sided Board rule that gives all the leverage to the union. Can the employer bargain to impasse mid-term over the accommodation and implement a last, best, and final offer? Any bets on how a majority of this Board would rule on that? 

Confidentiality be damned #2 – NLRB finds that employers may not categorically require confidentiality in internal investigations. But, wait! There’s more! On June 26, the Board, by a 2-1 panel vote in Banner Health System, decided that an employer cannot categorically instruct employees involved in an internal investigation to keep the investigation confidential. In this case, the employer used an interview form that instructed employees that the investigation interviews were confidential and not to be discussed while the investigation was ongoing. The two Democrat members on the panel found that employees have a right to discuss disciplinary investigations among themselves and that employers wishing to maintain confidentiality in investigations can do so lawfully only if they show, through objectively reasonable grounds, that lack of confidentiality will compromise the integrity of the investigation.

NLRB "invites briefs" on joint employer bargaining unit issue. On July 7, as expected, the Board invited briefs in Miller & Anderson, Inc., a representation case in which the union asks the Board to overturn its Oakwood Care Center rule on joint employment. The Oakwood Care rule provides that true “employees” will not be combined in a bargaining unit with workers supplied by a temporary staffing contractor, unless the employer and the contractor both consent. The Board’s notices give the impression of an even-handed attempt to hear both sides, but many commentators see the Board as simply going through the motions with a predetermined outcome. That outcome would be a return to the rule of M.B. Sturgis, which allows bargaining units that include “employees” and workers who are supplied by a staffing agency, regardless of the consent of the employer and the agency.

THE GOOD, THE BAD AND THE UGLY

Déjà vu all over again – and poor Lafe Solomon can’t get a break. Two years ago we reported on the case of Hooks v. Kitsap Support Tenant Services, Inc., in which a federal judge in Washington state held that the appointment of the NLRB's then-Acting General Counsel Lafe Solomon from June 18, 2010, through November 4, 2013, was invalid because it did not comply with the Federal Vacancies Reform Act of 1998. Now, the U.S. Court of Appeals for the District of Columbia Circuit, in SW General, Inc. (dba Southwest Ambulance) v. NLRB, has reached a similar conclusion, finding that Mr. Solomon’s service as Acting General Counsel after January 5, 2011, was invalid because the Vacancies Act made him ineligible to serve once he was nominated on that date to the vacant General Counsel position requiring the advice and consent of the Senate.

The Southwest Ambulance case began on January 31, 2013, when Mr. Solomon issued an unfair labor practice complaint against the employer before the Board. Mr. Solomon prevailed – at first – even though Southwest Ambulance argued that Mr. Solomon’s service after January 5, 2013, was invalid. But Southwest Ambulance had the last laugh at the D.C. Circuit. The employer argued that the plain language of the statute supported its contention that Mr. Solomon was no longer eligible to serve, and the appeals court agreed.

The Vacancies Act governs temporary appointments to positions that would normally require the advice and consent of the Senate. The law includes restrictions that the President and the Board (and Mr. Solomon) apparently simply ignored in allowing Mr. Solomon to serve as Acting General Counsel while his nomination to the General Counsel position was pending.

The decision is great for Southwest Ambulance, but it may be too late for many employers, who may not have not have raised the issue in litigation proceedings at the Board. The D.C. Circuit alluded to this in its opinion, indicating that it was not creating a “Noel Canning” situation, in which hundreds of Board decisions were voided because of invalid recess appointments. That having been said, employers who are litigating cases based in whole or in part upon actions of the Office of General Counsel during the time that Mr. Solomon was Acting General Counsel after January 5, 2011, may still be able to raise the issue.

Lafe Solomon was a long-time, high-ranking employee of the Board for many years before his appointment by President Obama to the Acting General Counsel position on June 18, 2010. He subsequently was nominated for the General Counsel position, but the Senate twice failed to confirm his nominations. The President withdrew his nomination in August 2013, and instead nominated Richard Griffin for General Counsel, a position that Mr. Griffin still holds today. 

“A party of one” is enough for “concerted” activity. An NLRB panel, by a 2-1 vote in 200 E. 81st Rest. Corp., recently found that a restaurant server acting alone engaged in protected “concerted” activity when the server filed a lawsuit. The New York City restaurant allegedly fired a server for filing a putative collective action alleging violations of the minimum wage and overtime requirements of the Fair Labor Standards Act. Although nobody joined him in the lawsuit, the Board panel majority found that the legal claim was “concerted” because it was made, not only on behalf of the plaintiff, but also on behalf of unnamed others. This is yet another example of the expansive approach to “concerted” protected activity taken by the current Board and its administrative law judges.

“Gas menagerie” doesn’t violate NLRA, judge says. An administrative law judge for the NLRB has found in favor of a union that placed an inflatable Scabby the Rat, along with an inflatable cockroach, pig, “fat cat,” and 20-foot banners, on a construction site in Las Vegas. Laborers Local 872 was protesting the use of a particular subcontractor on the site, where a resort was being built. The ALJ found that the banners and inflatable critters did not prevent access to the site and also found that the protest was not an unlawful secondary boycott. Want to see the helium-filled animals? Here they are.

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