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In this Issue:

News and Analysis

The Good, the Bad and the Ugly

By Cliff Nelson
Atlanta Office

NEWS & ANALYSIS

Poster posting is postponed again – new effective date is April 30. The National Labor Relations Board has announced it is postponing the requirement that employers post a notice informing employees of their rights under the National Labor Relations Act. The posting requirement was initially to have gone into effect in November 2011. Then the effective date was moved to January 31, 2012, because the Board wanted to allow more time “to allow for enhanced education and outreach to employers.” As previously reported, the notice rule is currently under challenge in federal courts in the District of Columbia and South Carolina. According to Bloomberg BNA, after a District of Columbia judge told NLRB lawyers that the legal issues deserve more time for consideration than the January effective date provided, the NLRB announced that “postponing the effective date of the rule would facilitate the resolution of the legal challenges that have been filed with respect to the rule.” As a result, the posting requirements will now go into effect on April 30.

Obama’s recess appointments to NLRB stir controversy. On February 13, President Obama sought the Senate’s confirmation of the three NLRB members he recess appointed last month. As Constangy previously reported, recess appointments of Republican Terrence Flynn and Democrats Sharon Block and Richard Griffin on January 4 touched off a firestorm of controversy, largely because the Senate was, at that time, conducting brief pro forma sessions that were intended to prevent Obama from making recess appointments. Traditionally, a Senate recess of more than three days is required in order for the President to exercise this authority. The White House has taken the position that the convening of periodic pro forma sessions in which no business is to be conducted do not interrupt the recess. Some legal scholars disagree, pointing to the December 2011 extension of a payroll tax reduction approved in a pro forma Senate session and subsequently signed by the President. The validity of these recess appointments is being raised in several court proceedings, so it is unlikely that the Senate will confirm the appointments any time soon. Until these two issues are resolved, it will be argued that the NLRB now lacks a quorum of three members that the Supreme Court has said is required for the Board to issue final decisions.

Business groups sue to block “quickie election” rule. Business groups, including the U.S. Chamber of Commerce, the Coalition for a Democratic Workplace, and the Society for Human Resources Management, have filed suit in federal district court seeking to enjoin the Board from enforcing its “quickie election” rule, slated to take effect April 30. Opponents’ briefs make a number of arguments against the rule. They argue that the NLRB cut corners in finalizing the new rule before the departure of recess appointee Craig Becker. (Without Becker, the NLRB at the time would have had only two members and no quorum to reach final decisions.) They also fault the NLRB for allegedly failing to give the public comments a meaningful review or allowing Republican Member Brian Hayes adequate time to present his viewpoint or circulate a dissent. Finally, they say that the rule will have a significant adverse impact on small businesses, who may not have legal counsel or consultants readily available to consult about election issues.

NLRB expands “micro” bargaining units beyond health care. As we predicted last August, the NLRB has quickly expanded its ruling in Specialty Healthcare and Rehabilitation of Mobile to industries outside of non-acute health care. In its December 30 decision, DTG Operations Inc., the two Democrat members of the Board reversed an earlier decision from an NLRB regional director and decided that 31 rental service agents at a DTG rental car operation at Denver International Airport constituted an appropriate unit, even though the Denver operation has 109 employees. (The regional director had found that a bargaining unit of all 109 employees was the smallest appropriate unit.) NLRB Chairman Mark Pearce and Member Becker followed the two-step process that they outlined in Specialty Healthcare. First, they found that the petitioned-for unit was appropriate by applying traditional community-of-interest principles. Second, they found that the other employees at the rental car company did not share an “overwhelming community of interest” with those sought by the petitioning union. Thus, the Board remanded the case to the Regional Director with instructions to direct an election in the unit sought by the union.

Dissenting Member Hayes noted that the Regional Director had found that all 109 of the DTG employees did share an “overwhelming community of interest” and that her factual findings under the very test espoused by Pearce and Becker should not be subject to reversal. According to Hayes, the majority decision showed that determining an appropriate unit under the Act is now “the union’s choice, and the likelihood is that most unions will choose to organize incrementally petitioning for units of the smallest scale possible.”

More “last minute” NLRB rulings help unions. Shortly before Chairman Wilma Liebman’s term expired in September 2011, we reported on the NLRB’s rush to issue decisions expanding unions’ power. Unfortunately, the Obama Board continued this practice immediately before controversial Member Craig Becker’s recess appointment expired on December 31. The following 2-1 decisions largely overrule longstanding NLRB precedent to favor organized labor:

Union can use employee’s photo in campaign flyer without his consent. – In its 2001 decision in Allegheny Ludlum Corp., the NLRB wrote that an employer would violate the rights of employees by depicting an employee who had not volunteered in a videotape “which indicates, explicitly or implicitly, that a specific employee or employees either support or oppose unionization.” Now, in Enterprise Leasing Co. – Southeast LLC, Pearce and Becker ruled that the Teamsters’ unauthorized inclusion of a photo of a single employee in a campaign flyer did not interfere with a representation election. The majority noted that Allegheny Ludlum involved a group of employees rather than a single worker. Once again, Hayes dissented, saying, “I can think of no valid justification for the Board to apply different standards to a union’s unauthorized use of an employee’s image in campaign propaganda, and my colleagues offer none.”

Employer who is guilty of unfair labor practices must reimburse Board as well as union. – The NLRB has now ruled that an employer must reimburse not only the union but also the Board for attorneys’ fees and expenses incurred in investigation, preparing and litigating unfair labor practice charges against the company. In Camelot Terrace, all three Board Members agreed that the conduct of the employer violated the Act, and that the employer should be required to compensate the union for its illegal conduct. But Pearce and Becker found that the company should have to reimburse the NLRB General Counsel as well, finding that the Board has “inherent authority” to impose such sanctions for conduct that abuses Board processes. Member Hayes dissented over this issue, citing Unbelievable, Inc. v. NLRB, in which the U.S. Court of Appeals for the District of Columbia Circuit found that the NLRB is not “free to invoke principles of ‘inherent authority’ in order to unilaterally vest the Board with powers beyond those contemplated by the legislature.”

Employer unfair labor practices may require re-run election to be held offsite. – In 2 Sisters Food Grp., Inc., the Board unanimously agreed that the employer’s interference with employee rights required setting aside the results of a vote against union representation, and ordered a re-run election. But Pearce and Becker remanded the case with instructions for the Regional Director to consider the option of holding the re-run election away from the employer’s premises. They asked the Regional Director to reflect on whether the employer’s control of its premises – which allowed the exclusion of union representatives and limitation of the onsite activity of employees – would give the employer an unfair advantage. In his dissent from this part of the decision, Hayes said that Congress should address any limitations that could be constitutionally imposed to redress the claimed advantage held by an employer. In a separate dissent, Becker argued that an employer should not be allowed to have mandatory employee meetings before an election, because the employer threatens to discharge or discipline employees if they choose not to attend or refuse to listen to the employer’s views on union representation.

Field supervisors lacked authority to “effectively recommend” discipline, Pearce and Becker say. – One indication that an employee has supervisory status under the Act is that he or she has the authority to “effectively recommend” discipline. In DirectTV, the employer filed an objection to an 85-80 vote in favor of union representation by claiming that its field supervisors were “supervisors” within the meaning of Section 2(11) of the Act, and had engaged in pro-union activities that interfered with employee free choice. According to the employer, the field supervisors had authority to prepare forms that began the disciplinary process but could not administer the discipline until the forms were reviewed and approved by operations and site managers, and Human Resources. An NLRB hearing officer found that the field supervisors effectively recommended discipline by deciding whether to initiate the process and what level of discipline to recommend. Pearce and Becker, however, said the record did not show what weight managers gave to the recommendations or the extent to which managers conducted independent investigations before approving discipline. Accordingly, Pearce and Becker found that the field supervisors were not “supervisors” under the Act and that their participation in union activity provided no basis for denying the union certification as the employees’ bargaining agent. Hayes dissented, emphasizing that multiple levels of review are necessary to ensure compliance with federal and state employment laws.

NLRB won’t defer to arbitration in most cases if it has to wait too long. Bloomberg BNA reports that Acting General Counsel Lafe Solomon has issued a memorandum to NLRB Regional Offices, advising that cases alleging unlawful discrimination or interference with employee rights should no longer be routinely deferred to CBA grievance procedures if arbitration cannot be completed within one year. The Region will follow up every 90 days to determine the status of a grievance and, once a year has passed, the Region should issue a “show cause” letter seeking an explanation for the delay. If there is good cause for continuing deferral, such as an imminent arbitration decision, the Regional Director may continue to defer. The Solomon memo does not change handling of the deferral of Section 8(a)(5) failure to bargain charges because they usually involve contract interpretation and, according to Solomon, such matters are often better left to an arbitrator’s skill and expertise.

More on the NLRB and social media. The Office of the General Counsel has issued another report on the latest social media cases, following up on a report issued in August 2011. Most of the employers’ social media policies were found to be in violation of the Act because they had a “chilling effect” on employees’ right to engage in protected concerted activity, but a portion of one policy and all of another were upheld, providing some guidance to employers who want to amend their social media policies. The decisions on employee terminations were mixed. Constangy’s blog, Employment & Labor Insider, has links and details.

THE GOOD, THE BAD AND THE UGLY

That’s gotta hurt! Teamsters have to pay for wage increase as sanction for untimely negotiation request. A U.S. District Court has found that a Teamsters local in Chicago acted arbitrarily when it failed to properly request negotiations with the employer under the contract’s wage-reopener clause. On two occasions before the request deadline, a union steward reminded the Local’s business agent to send a re-opener notice to the employer, but the union failed to do so until nine days after the deadline. The union claimed a “clerical error,” saying that its system supplied notice of only expiring contracts, not re-openers. The court said that the union’s failure to track re-openers “’reflects arbitrariness’ in the way that contracts are handled.”

Just what our economy needs: Work stoppages idled more workers in 2011. U.S. Department of Labor statistics show that work stoppages more than doubled in 2011, idling 113,000 workers, according to an item in Bloomberg BNA. The total amount of work time lost more than tripled, increasing from 302,000 days in 2010 to 1 million days in 2011. Two major work stoppages that occurred during 2011 included the strike against Verizon Communications by the International Brotherhood of Electrical Workers, in which 45,000 workers were idled; and the four-month lockout of about 1,900 players by the National Football League. Most of the work stoppages occurred in the health care and construction industries.

Ontario’s loss may be Indiana’s gain: Caterpillar to move Canadian jobs to U.S. after lockout. The Wall Street Journal recently reported that Caterpillar, Inc., will soon close a 62-year-old locomotive plant in London, Ontario, ending a standoff with locked-out workers. The Company had been pressuring the Canadian Auto Workers union for more than six months to agree to a new contract with wage cuts of approximately 50 percent. (The Canadian workers’ wages were approximately $35 USD per hour.) On January 1, Caterpillar locked out the Ontario plant workers and said it would stop production until the union accepted new terms. The union said no to wage cuts but offered to consider reductions in vacation time and other concessions. The jobs are expected to move to Muncie, Indiana, where last year Caterpillar opened a locomotive plant offering wages ranging from $12 to $18.50 per hour. Coincidentally (?), just days before the Caterpillar announcement, Indiana Gov. Mitch Daniels signed a “right-to-work” law

About Constangy, Brooks & Smith, LLP
Constangy, Brooks & Smith, LLP has counseled employers on labor and employment law matters, exclusively, since 1946. A "Go To" Law Firm in Corporate Counsel and Fortune Magazine, it represents Fortune 500 corporations and small companies across the country. Its attorneys are consistently rated as top lawyers in their practice areas by sources such as Chambers USA, Martindale-Hubbell, and Top One Hundred Labor Attorneys in the United States, and the firm is top-ranked by the U.S. News & World Report/Best Lawyers Best Law Firms survey. More than 130 lawyers partner with clients to provide cost-effective legal services and sound preventive advice to enhance the employer-employee relationship. Offices are located in Alabama, California, Florida, Georgia, Illinois, Massachusetts, Missouri, New Jersey, North Carolina, South Carolina, Tennessee, Texas, Virginia and Wisconsin. For more information, visit www.constangy.com.

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