Management Memo

Management’s inside guide to labor relations

Is No Class Action Waiver Safe? NLRB Judge Finds AT&T’s Non-Mandatory Arbitration Agreement with Non-Union Employees Unlawful

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Even further expanding the National Labor Relations Board’s (“NLRB”) holdings in D.R. Horton and Murphy Oil limiting employer requirements concerning class action waivers, on June 26, 2015, an NLRB administrative law judge (“ALJ”) ruled that even a non-mandatory arbitration agreement that is voluntarily entered into by employees is unlawful if it requires employees to waive joint, class or collective actions in all forums, judicial and arbitral.

In November 2011, AT&T Mobility Services (“AT&T”) sent via email a Management Arbitration Agreement (“Agreement”) to 24,000 of its employees who were not represented by unions that included a class and collective action waiver.  The email made clear employees had the right to opt-out of the Agreement and provided employees instructions on how to do so electronically.

The email’s subject line read: “Action Required: Notice Regarding Arbitration Agreement.”  Once the Agreement was electronically opened, the page linked to a button marked “Review Completed,” which when clicked, indicated that an employee had reviewed it.  Employees who did not click on the button were sent additional emails until they reviewed and acknowledged the Agreement.

The emails provided each employee with a deadline of February 6, 2012 by which to choose to opt-out of the Agreement and explained that opting out meant the employee was declining “to participate in the arbitration process.”  The messages also included assurances that no adverse action would be taken against employees who choose to opt out, provided employees with a hotline number to call should they have any questions and explicitly stated that all employees could still bring claims before administrative agencies.

In June 2013, three employees filed a wage and hour class action in federal district court.  AT&T convinced the plaintiffs’ attorney that two of three employees had failed to opt-out of the Agreement and thus were bound to arbitrate their claims on an individual basis.  AT&T argued that employees who had not opted out were bound by the Agreement and had waived their right to participate in the class action.

The class action continued in federal court, and the federal district court judge found that only those 175 employees who had opted-out of the Agreement were eligible to participate in the class (and only 20 actually opted to participate).

The two initial plaintiffs who had not opted out of the Agreement proceeded to arbitration with their claims and eventually sought new counsel.  Their new attorney filed an unfair labor practice (“ULP”) charge with the NLRB on their behalf, arguing that the Agreement violated their rights under the National Labor Relations Act (“NLRA”) by interfering with their right to participate in a class action, a form of concerted activity.  The Board’s Regional Director agreed, issued a Complaint, and the matter proceeded to a hearing before an ALJ.

While the NLRB ALJ conceded that the Agreement “initially was not mandatory” due to the opt-out option, she took issue with what she concluded was an absence of evidence that employees were actually appraised “in layman’s terms, of the ‘real-life’ consequences of the choice they were being asked to make.”  On that basis, the ALJ reasoned that once an employee failed to opt-out, there was “no opportunity for an employee to reconsider his or her decision.”

The ALJ held that an employer may not require employees to enter into arbitration and class action waiver agreements—even where the employee voluntarily elects not to opt out—if the agreement includes an irrevocable waiver of the employee’s future rights protected by the NLRA, such as the right to participate in joint, class or collective actions.

As a remedy, the ALJ ordered AT&T to rescind the Agreement, or to revise it to make clear that employees are not required to waive their right to pursue joint, class or collective actions in all forums, arbitral or judicial.

While the ALJ had no problem stating that she was bound by NLRB precedent and the holdings of D.R. Horton and Murphy Oil, she failed to mention that Section 7 of the NLRA also affords employees the right to refrain from—and thus opt out of—collective action.  Specifically, while the current Board, and the ALJ here, have conjured a prohibition on class action waivers out the clause of Section 7 which states that employees “shall have the right to…engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection…,” each has ignored Section 7’s equally important counterpart which provides that employees “shall also have the right to refrain from any or all such activities….”

Despite the fact that every U.S. Court of Appeals that has been asked to review D.R. Horton and Murphy Oil has outright rejected the NLRB’s extreme holdings concerning class and collective action waivers in arbitration agreements, the Board pushes forward undeterred and continues to adhere to, and ALJ’s continue to follow, the Board’s rationale and holdings articulated in those cases.

The unanimity and absence of any split among the Courts of Appeal makes it all the more likely that the U.S. Supreme Court will eventually address the NLRB’s very aggressive anti-arbitration agreement position.  Considering that the NLRB’s view directly conflicts with the Supreme Court’s prior rulings regarding class action waivers in arbitration agreements, it will be interesting to see how the NLRB’s position holds up if and when it ultimately comes under Supreme Court scrutiny.

In the meantime, the area has become increasingly difficult for employers to navigate.  Any employer that wishes to adopt an arbitration agreement with its individual employees that provides for some kind of joint, collective, or class action waiver should contact experienced labor counsel to determine the best course of action for the particular employer.

Salon Writers and Editorial Staff Demand Representation by The News Guild – Union Organizing in Electronic Media Continues to Grow

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In the footsteps of last month’s union election at Gawker, an electronic news site, it has now been reported that all 26 of the writers and editors of San Francisco-based at Salon, another on line news organization, have served the publication with a letter announcing that each of them has designated the News Guild, which until April of this year was known as the Newspaper Guild,  as their collective bargaining representative.

Lowell Peterson the union’s Executive Director commented that the unionization campaigns at Salon and Gawker and a part of the Guild’s broader efforts to represent electronic and new media employees.  The union’s letter to Salon request for recognition explained the employee’s reasons for seeking union representation.  He wrote that while the writers and editors are “pleased to be working for,” their goals are the traditional ones – a desire to improve wages, benefits and other working conditions and a desire for a “voice on the job.” He continued that “I don’t think it’s just one specific issue,” but that “they do understand the value of having a collective voice and they do have concerns.”

Indeed, at the time of the Gawker election in June, Guild President Bernie Lunzer, in an extensive interview with the Washington Post referred to the Gawker vote as a “harbinger” of things to come.  Ironically, several months earlier, the Washington Post had published a lengthy article entitled Why Internet Journalists Don’t Organize  that opined on what were seen then as the many reasons that employees in electronic media and related areas were not interested in union representation and could not be successfully organized.  Ironically that article, which focused on the efforts of a staunch union advocate who had been hired at and was then trying to organize his co-workers from within, quite possibly as a “salt” who took the job with that goal in mind, made clear that this industry had been targeted and that the Guild was working to adapt its message and strategies to appeal to a new generation of workers who have positive attitudes towards unions and their messages.

While Salon’s leadership has not yet publicly indicated whether they will agree to recognize the Guild based on its petition signed by its workforce, will seek an election, either a private election such as Gawker and the Guild agreed upon or one conducted by the National Labor Relations Board, these developments are further reminder that unions are not “dead” and that in fact many are becoming much more adapt at focusing their messages and techniques to appeal to a new generation of workers and the methods of communicating and organizing sub rosa and out of the view of employers.

Coupled with the labor movement’s interest and efforts to pursue employees in high technology and related fields employers would be well served to assess their organizations and their vulnerability to these new age organizing efforts.

NLRB Reverses Longstanding Rule: Employers Now Required to Disclose Confidential Witness Statements in Investigations – a Major Change for Labor Arbitration?

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The National Labor Relations Board (“NLRB” or “Board”), in its June 26, 2015, Decision and Order in American Baptist Homes of the West d/b/a Piedmont Gardens (PDF) has overruled what it described as a longstanding “blanket exemption” allowing employers to protect the confidentiality of witness statements taken during investigations and not provide them to a union in response to an information request. In place of the long standing body of law protecting the confidentiality of witness statements, which was established in recognition of the needs for confidentiality in investigations, the Board has now replaced the rule with a balancing test that weighs the employer’s need to protect confidential information with the union’s stated need for the statements to process a grievance or carry out its other responsibilities.

While the Board majority of Chairman Pearce and Members Hirozawa and McFerran opined that the application of the new test does not necessarily mean that a union will be entitled to receive copies of witness statements taken by an employer in all cases where it requests them, it certainly appears, from reading the majority’s opinion and the  burdens that an employer must meet to establish that a witness statement is entitled to protection from disclosure as confidential, that the burden will be an extreme one and that the Board will look with suspicion when an employer raises the defense.

In 1978, in Anheuser-Busch (PDF) the Board held that the general duty to furnish information “does not encompass the duty to furnish witness statements themselves.” Thus, for the past 37 years employers could assure employees who gave statements during an investigation that the statements would not be turned over to the union.  However, in overruling Anheuser-Busch, the Board  majority concludes that “the rationale of Anheuser-Busch was flawed” and, therefore, in their view, “national labor policy will be best served by overruling that decision and instead, evaluating the confidentiality of witness statements under the balancing test set forth in Detroit Edison, a case that involved the standard for determining when and in what circumstances an employer was obligated to produce information that it claimed was confidential, in response to a request for information in collective bargaining.

In crafting a standard for applying Detroit Edison to requests for confidential witness statements, the Board majority noted that the Board “applies a liberal test to determine whether information is relevant: the issue is whether the requested information is of ‘probable’ or ‘potential relevance.’” Such information, to be relevant under this low standard, “need not be dispositive of the issue between the parties but must merely have some bearing on it.” Under Detroit Edison and now Piedmont Gardens, if a party asserts that the requested information is confidential or the statement contains confidential information, “the Board balances the union’s need for the relevant information against any ‘legitimate and substantial confidentiality interests’ established by the employer.”

The challenge for employers in considering whether they may lawfully refuse to provide witness statements or for that matter other information containing what they believe to be confidential information entitled to legal protection as such, is that they Board puts them on notice that there is not a clear and readily identifiable standard for determining what information is entitled to such protection.  As the Board points out in Piermont Gardens, “establishing a legitimate and substantial confidentiality interest requires more than a generalized desire to protect the integrity of employment investigations.”  Rather, only if the employer can establish to the Board’s satisfaction, on a case by case basis that a witness whose statement the union is demanding “needs protection, evidence is in danger of being fabricated, [or] there is a need to prevent a cover up,” will the Board find that the employer may lawfully refuse to provide the union with the witness statements. Even where the employer can meet this substantial burden the Board points out that the employer must then “seek an accommodation that would allow the requester to obtain the information that it needs while protecting the party’s interest in confidentiality.”

One  result of the Board’s about face on the confidentiality of witness statements is likely to be a substantial increase in union requests for copies of investigative statements taken by employers when grievances are filed and processed. Another is a likely increase in the filing and litigation of unfair labor practice charges that focus on whether an employer really requires and is entitled to confidentiality, rather than the merits of the grievance.

A third and perhaps most important consequence of this decision is that many employers and attorneys are likely to reassess when and in what circumstances it is advisable to take witness statements and when, given the increased pressure to produce such statements to unions.

NLRB Dramatically Educates Private School on Meaning of Concerted Protected Activity

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While we have been reminding readers of the fact that  the National Labor Relations Act (the “Act”) protects employees regardless of whether they are represented by a union and the Act applies to non-unionized workforces, too, recently  a National Labor Relations Board (the “NLRB”) Administrative Law Judge issued a decision following an unfair labor practice (“ULP”)  hearing based on a charge filed by a teacher at New York City’s prestigious Dalton School that should serve as an object lesson for employers in all non-union businesses.

The case, Dalton School, Inc., involved a series of emails concerning a school musical. The case arises out of a doomed production of a middle school rendition of Thoroughly Modern Millie. The Charging Party, David Brune, was one of five teachers in the theater department at the Manhattan private school. In late 2013, the theater department starting putting together the Millie production, including assigning roles, rehearsing lines and songs and preparing sets and costumes. In early January 2014, just weeks before opening night, complaints regarding Asian ethnic stereotypes in the play by parents and faculty were received by the school’s administration.  . The school ordered Brune to discontinue all work on the production two weeks prior to the opening; and eventually, certain offending parts of the play were re-written. Brune only learned that the revamped production would open on schedule three days prior to the opening. Despite the short notice, and with a lot of work in that short period, the production was successful.

Afterwards, Brune shared his views with how the school’s administration handled the concerns and the changes in the play with the other faculty members in the school’s theater department. Through a series of drafted letters to school management, and e-mails within the department, Brune and the others spoke of the redress they felt they should receive for the mishaps with Millie and their views as to how to avoid a repeat in the future. In one of these emails, Brune accused school management of lying to the theater department.

A month after he sent the emails, Brune was called into a meeting with the school management, where they debriefed on the Millie situation. The head of the school asked Brune if he ever said anything negative about the school administration, such as accusing it of lying. He denied saying anything negative. On April 17, 2014, Brune was again summoned to a meeting with School management, but this time, he was presented with a copy of an email he had sent to other teachers during February, in which he wrote that  that management had lied to the theater department and the students. At this meeting, Brune was told his contract would not be renewed for the next year and that he could leave immediately or finish out the school year.

Rather than going quietly into the good night, Brune filed a ULP charge with the New York regional office of the NLRB claiming that he had been terminated for engaging in protected concerted activity, that is his communications with his fellow teachers. Following an investigation, the Board’s Regional Director issued a complaint and the matter was tried before ALJ Arthur J. Amchan.

In defending against the claims, Dalton denied that the decision not to renew Brune’s contract for the following year was not related to any concerted, protected activity.  Rather, the school asserted that the decision not to renew Brune’s contract was based on the fact that he had been dishonest in the March meeting when asked whether he ever stated that School management lied about the Millie production.

The ALJ found otherwise, and concluded that Dalton rescinded his employment contract because he had engaged in protected, concerted activity when he communicated with his fellow teachers about how the school’s administration had handled the matters. Specifically, the ALJ concluded that the e-mails between the theater department members discussing how to address concerns about the Millie production with school management were concerted protected activity. The Judge reasoned that since the e-mails clearly identified each employee who was involved in the e-mail chain, Dalton was aware that there was more than one employee involved in the communications, putting it on notice that the activities were concerted. The ALJ further found that the school’s actions in the March meeting violated the Act because they were designed to “trap” or catch Brune in a lie about the February e-mail.

This case is a vivid illustration of how employee actions about a wide range of work related matters, including in non-unionized workplaces, can rise to the level of protected activity, even if the actions are as simple as the exchange of emails among co-workers.

Gawker, “New Media,” and Labor Unions—More Insights

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Last week we reported on the June 3rd vote by Gawker media’s employees for union representation and speculated what it meant in the broader context of union organizing among Millennials.

Today, Rachel L. Swarns of the New York Times provided some insight based on interviews and reporting with Gawker workers.

The article notes a recent study by the Pew Research Center finding that those in the 18-29 age group view unions more favorably than those in other age groups, with almost twice as many having a favorable view of unions than those who don’t.

Swarns also points out the issues that organizers from the Writers Guild concentrated on during the organizing drive: severance, set minimum salaries for every job, annual meetings with supervisors to discuss performance, salaries and promotions, and contractual restrictions on the company’s ability to make changes to medical coverage without the union’s agreement.

As the article concludes, while both sides may have treated the union drive in a less adversarial manner than is typical, negotiations for a contract will be the hard part.  That comes next.

Gawker Media Employees Vote For Union Representation – What Does This Mean?

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On June 3, 2015 editorial employees at Gawker Media (“Gawker”) voted to be represented by the Writers Guild of America, East (“the Union”).  In this Newspaper%20and%20keyboard%2025536850_jpgclosely watched organizing drive, employees of a leading “new media” outlet, chose an old line print journalism union to bargain with their employer, becoming one of the first (if not the first) digital media outlets to unionize.  This follows on the heels of increased union organizing and pressure in the technology field and organized labor’s Silicon Valley Rising campaign. Interestingly, the election was not conducted by the NLRB but through VoteNet, which Gawker’s own reporting described as “an independent online voting system.”

Gawker officially remained neutral during the campaign, and permitted its editorial staff to publish internal discussions regarding unionization on the company’s consumer facing website. Hamilton Nolan, the writer who spearheaded the organizing drive published an article titled Why We’ve Decided to Organize in which he argued “every workplace could use a union.” After the date of the election was announced, Gawker created a page for employees to discuss the upcoming election. Of the 118 writers eligible to vote, 75 voted in favor of representation and 27 voted against.

The public online discussion among the employees preceding the vote offers interesting insights into union organizing activity in the new media industry. It appears that the primary arguments by those supporting representation was not to push for an immediate improvements in salary and benefits. Rather, union supporters argued that representation would help them preserve and maintain their existing compensation in the event of future downturns. Others expressed the view that pay practices would become more transparent with a union. Opponents argued that the status quo was satisfactory and that bringing an old line union like the Writers Guild into the company would hurt the company’s culture. Opponents also complained of a hurried election process where their concerns were marginalized or shouted down.

In an interview on CNBC’s Squawk Alley following the vote, Gawker Founder and CEO, Nick Denton said that the writers “…have made it clear both to the management and to the union that they like the way they work and none of that is going to change,” echoing his prior sentiments that he was “pleased Gawker is leading the movement in the online media world toward collaboration and inclusion.” Only time will tell as to how the introduction of the Union will impact the Gawker workplace both on a short and long term basis.

Key takeaways for employers:

  • The technology, media and telecommunications industry remains an important target for organized labor.  Indeed, while perhaps counterintuitive, the new crowd of hip, highly educated innovators and creative-types may prove to be fertile ground for more traditional organizing efforts
  • Even highly skilled and well compensated workers can be vulnerable to union organizing. Employers’ efforts to maintain non-union status should be carefully tailored to address employee concerns and unique circumstances on a case by case basis.
  • Employer educational efforts remain a critical tool for helping to educate employees about the downsides of representation.

First Challenge to NLRB’s New Election Rules Dismissed –Rules Held Constitutional

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One of two lawsuits challenging the National Labor Relations Board’s authority to issue the expedited election rules that took effect on April 14, 2015, has now been dismissed by Judge Robert L. Pitman of the United States District Court for the Western District of Texas in Austin.  In his 27 page decision, Judge Pitman that the plaintiffs, including Associated Builders and Contractors of Texas and the National Federation of Independent Businessmen, could not establish that the NLRB’s December 14, 2014 rule “Representation – Case Procedures; Final Rule,” (the “New Rule”) should be declared by the Court to be invalid under the Administrative Procedures Act, that the New Rule violated employers’ rights under the National Labor Relations Act (the “Act”) by compelling them to provide unions with employees’ names and information before an election is directed or agreed to, by denying employers of their rights to a hearing prior to an election and by interfering with employers’ rights to free speech as provided for in Section 8(c) of the Act.

Rather than attacking the application of the New Rule in any particular case or circumstances, the plaintiffs argued that the changes cumulatively were such that the New Rule violated the Act and the rights of employers and employees under the Act and thus the New Rule should be found to be invalid in its entirety and in all circumstances.   The decision methodically addressed and rejected each of these claims and granted the Board’s Motion to Dismiss and for Summary Judgment. While the Court rejected the Board’s argument that the claims asserted in the challenge should be dismissed because they were not ripe, noting that the filing and processing of more than 141 Representation Petitions (as noted yesterday that number was up to 280 within 30 days) under the New Rule, the Court explained that because the lawsuit challenged the very existence and adoption of the New Rule and not the way that it had been applied by the NLRB in any particular circumstances, the challenge  was one that needed to be analyzed as a “facial challenge,” not an “as-applied challenge.”  This meant that the plaintiffs has the burden, in their purely legal attack, of establishing that the New Rule “could never be applied in a constitutional manner.”

With respect to the plaintiffs’ claim that in almost every case an employer would be denied a hearing in circumstances in which they would have been afforded the right to one,  the Court explained, to succeed the plaintiffs were obligated “to establish there is ‘no set of circumstances exists’ (sic) under which the New Rule would be valid,” and that “even if the New Rule ordinarily limits the scope and timing of the pre-election process, the deference granted a Regional Director to extend and expand” on the limits concerning the content and scheduling of representation hearings “renders Plaintiffs’ challenge unavailing.”

While the District Court’s decision is disheartening for employers hoping for a quick end to the Ambush Election rules, as we have reported another challenge to the New Rule remains pending before the District Court for the District of Columbia. Moreover, an appeal from the Associated Builders and Contractors of Texas decision to the 5th Circuit is all but inevitable.  Meanwhile, the New Rule continues in effect with a steady flow of new petitions.  As these cases proceed, we can expect that in addition to the early cases challenging the New Rule on its face, cases will emerge challenging the actual application in the real world presenting examples of the actual impact on the rights of employers and employees that the plaintiffs in the facial challenges anticipated.

Worse Than Feared … NLRB Reports First Month of Ambush Election Rules Yields More Petitions, Dramatically Quicker Elections

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A couple weeks ago we provided anecdotal reports from several NLRB Regional Directors that after one month the new Ambush Election Rules union elections were being held in considerably less time, with the Regional Directors claiming elections were being scheduled between 25-30 days.  Last week, according to BNA’s Daily Labor Report and Law360, the NLRB released national results of the first month showing that the impact was worse than anticipated.

More Union Petitions Under Ambush Elections Rule

Between April 14 (the day the rules when into effect) and May 14, 280 representation cases were filed.  This was a 17% increase in filings over the same period in 2014 and a 32% increase from the last month under the old rules.  While some of the increase is likely attributable to unions strategically waiting for the new rules to go into effect, employers can certainly expect increased union activities and more petitions.

Election Period Cut by Over 40% – Just 23 Days

Even more troubling than the increase in petitions is the dramatic decrease in time to respond to the petitions.  According to the NLRB’s first month results the median time between the filing of a petition and an election date has been cut down to only 23 days.  This is over 40% less time than the prior median of 38 days and provides employers just over three weeks to respond to the petition and mount a campaign.  Of course one third of this median time would be spent preparing for a hearing and collecting/providing the information now required by the Board.

The additional information, requirements, and restrictions of the new rules may be a reason that almost all of the petitions have resulted in stipulated election agreements where employers agree to forgo a hearing and stipulate to the election issues, including date.  In fact, the NLRB reported that of the 280 petitions only 4 went to a hearing.  That means in an astonishing 98.5% of all petitions the employer forwent their rights to a hearing and agreed to election issues with the union.  This is a considerably higher percentage than the typical 80% or so of petitions that historically have resulted in stipulated election agreements and suggests that employers are either apprehensive about hearings under the new rules and/or being threatened with even shorter election times if they proceed to a hearing.

In the 4 cases where a petition went to a hearing two of the cases resulted in a directed election in 23 days from petition filing, with one election directed in 26 days and the other 30 days.  These election dates are far sooner than the median length of 59 days under the old rules.

It should not be over looked that 23 days is a median time frame and, as noted, where cases went to a hearing, 23 days was the earliest date ordered.  This means that of the 276 petitions which resulted in stipulated election agreements many had elections in less than 23 days.

Again, the official results after the first month seem even worse than expected for employers, as the increasing number of them that are the target of union organizing will have very little time to prepare.

Management Missives

As we have advised, we recommend employers concerned about union organizing prepare now:

  • Examine your workforce for potential vulnerability to union organizing, including wage and hour violations or uncompetitive wages or benefits.
  • Review and update workplace policies that become relevant during union organizing, such as solicitation/distribution, electronic communications, and social media policies.
  • Assess your workforce for potential bargaining unit issues, such as identifying supervisors and which employees share a “community of interest.”
  • Train your managers and supervisors to recognize the early warning signs of union organizing and on how to respond lawfully to union campaigns.
  • Contact legal counsel with any questions or for any assistance to ensure that you are prepared to respond to an organizing campaign.

NLRB Reiterates Its Position That Undocumented Workers Are Entitled to “Conditional Reinstatement” in Unfair Labor Practice Cases

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As reported in Epstein Becker Green’s May 2015 Immigration Alert, the National Labor Relations Board (the “Board” or “NLRB”) continues to focus on issues concerning the rights of undocumented workers whose rights under the National Labor Relations Act (the “Act”) are interfered with for engaging in union activity and other forms of protected, concerted activity covered by the Act.

In its March 27, 2015, Supplemental Decision in Mezenos Maven Bakery, Inc., 362 NLRB No. 41 (2015), the Board, in response to a remand from the United States Court of Appeals for the Second Circuit, addressed the issue of whether the Board “should order the conditional reinstatement of employees who, at the time they were unlawfully discharged by [their employer], lacked proper documentation to work in the United States.” Four years earlier, the Board had found that under the Supreme Court’s decision in Hoffman Plastic Compounds, Inc. v. NLRB 535 U.S. 137 (2002), it was precluded from awarding the employees back pay “because they were undocumented workers, even though it was the Respondent and not the employees who had violated the Immigration Reform and Control Act (IRCA).”

While the Second Circuit affirmed the Board’s conclusion that the employees were not entitled to back pay because of their status, it asked the Board to answer the question of whether they were entitled to offers of conditional reinstatement, that is “offers of reinstatement conditioned upon their presentation to Mezenos of IRCA-compliant documentation to show that they were lawfully present in, and authorized to work in the United States” (362 NLRB No. 41, at page 2).  The Board concluded, in addressing the question of conditional reinstatement, that Hoffman “did not cast doubt on the use of conditional reinstatement in cases involving undocumented discriminatees,” and held that “conditional reinstatement is important in the immigration context in order to provide a meaningful remedy for the Respondent’s unfair labor practices.”  In  ordering conditional reinstatement, the Board stated that it would not decide in this case what constitutes a reasonable period for the discriminatees to meet the condition of reinstatement, noting “what constitutes a reasonable period . . . as that determination ‘will depend essentially on the situation in which the employee finds himself.’”

Several weeks earlier, on February 27, 2015, NLRB General Counsel Richard F. Griffin, Jr., issued General Counsel Memo 15-03, Updated Procedures in Addressing Immigration Status Issues that Arise During ULP Proceedings. The Memo reiterates the fact that the Act applies to and protects employees, including undocumented aliens, and that even in those cases where a discriminatee may not be eligible to receive back pay or unconditional reinstatement, the Board will continue to pursue such cases.  The Memo, which is intended to provide guidance to the Board’s Regional Offices, also describes the NLRB’s structures for interagency cooperation with the Departments of Justice and Homeland Security and the Board’s Memorandum of Understanding with the Department of Justice’s Office of Special Counsel for Immigration-Related Unfair Employment Practices.

As the Mezenos Maven Bakery decision and GC Memo 15-03 clearly demonstrate, the NLRB is continuing to vigorously pursue cases involving unfair labor practices in which the alleged discriminatees are undocumented workers.

Regional Directors Report Data on the NLRB’s Amended Representation Election Rules After One Month—Court Challenges Continue

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May 14th marked the one-month anniversary of the effective date of the NLRB’s Amended Representation Election Rules (“amended rules”).  That day, the Regional Directors for NLRB Regions 2 (New York, NY), 22 (Newark, NJ), and 29 (Brooklyn, NY) discussed their offices’ experiences processing representation petitions filed since the amended rules took effect on April 14th.

With respect to the questions of how the amended rules are actually affecting representation petitions and elections, while one month may not be representative, the data to date does offer some insights that will be of interest to employers, unions, and practitioners.  Perhaps the most interesting fact is that in these three Regional Offices, there were NO hearings held on petitions filed since the amended rules took effect.  In every case, the parties entered into a stipulated election agreement or a consent agreement, or the union withdrew its petition. Out of a total of 32 petitions filed in these regions during the one-month period, eight went to an election and 24 were withdrawn without an election.

What is not clear at this point is how many of the petitions were withdrawn after employers filed Statements of Position challenging the proposed units as inappropriate.  Under the amended rules, if an employer contends that the petitioned-for unit is not appropriate and should include additional classifications and/or locations, the employer must provide both the Regional Office and the petitioning union with the names, classifications, work locations, and shifts of the employees whom the employer believes must be included in the unit. Once a union receives that employee data, it may very well choose to withdraw its petition and then expand its organizing to include the additional employees. It is foreseeable that, in at least some cases, unions may be filing petitions with the expectation that the units will be challenged, in order to get such valuable data.

With respect to the question of how quickly votes are taking place under the amended rules, Regional Directors Karen Fernbach (Region 2), David Leach (Region 22), and James Paulsen (Region 29) reported that the elections based on petitions filed after the amended rules took effect were scheduled for between 25 and 30 days from the petition date.  This data confirms the expectation that the amended rules would result in faster elections than under the long-standing rules that they replaced.  Under the former rules, elections typically took place between 36 and 42 days after the filing of a petition.

The Regional Directors also reviewed the procedures under the amended rules, which were recently summarized in General Counsel Memorandum 15-04 issued by the Board’s General Counsel Richard F. Griffin, Jr.  Under the amended rules, employers not only must post a notice informing employees of the filing of a petition within two days but also must provide the Board and the petitioning union with a list of the names and job titles/classifications of all employees in the petitioned-for unit and all other employees whom the employer believes should be included in the unit.

The fact that there have not been any hearings in these three Regional Offices in the first month of the amended rules is probably a reflection of the fact that the amended rules make it much harder for an employer to have a hearing. The Regional Directors confirmed the fact that employers that want to raise issues, whether about unit composition, supervisory status, or other issues, are generally being told that they may not call witnesses but rather should make offers of proof to establish a record and basis for future appeals and challenges to the Board’s findings.

The Regional Directors acknowledged that, even where employers wish to make offers of proof at pre-election representation hearings, hearing officers are under instructions not to burden the R case record with protracted offers of proof and not to allow parties to delay the hearing “unnecessarily.”  Further, the Regional Directors stated that they were under orders not to allow hearings to go on for too long or permit any post-hearing briefs.  All argument would have to be made orally at a hearing.

According to the three New York area Regional Directors, unless the employer has raised eligibility issues as to more than 20% of the total voter complement, all unit placement and eligibility issues will be reserved for the challenged ballot process at the election or for a post-election hearing.  Obviously, if the challenged ballots are not determinative, issues as to those voters will never be heard. While this benchmark is not included in the amended rules, it has been mentioned on a number of occasions by representatives of the NLRB at various training programs conducted for the labor and management bars throughout the country.  It appears that this 20% standard has now replaced the 10% threshold that the Board relied upon under the prior rules and procedures.

The employer’s Statement of Position must be filed and served on the union within seven days of the filing of the petition and not later than noon on the day before the hearing is scheduled. Any issues not so raised will be waived.

On Friday, May 15, the day after the Regional Directors spoke, U.S. District Court Judge Amy Berman Jackson in Washington, D.C., heard argument on plaintiffs’ motion for summary judgment in the lawsuit brought by the U.S. Chamber of Commerce and other business groups challenging the validity of the amended rules under the National Labor Relations Act (“NLRA”). The hearing focused on the plaintiffs’ claims that the amended rules violate the NLRA and the Administrative Procedures Act. While it is generally not possible to predict from argument how the court will rule, Judge Jackson appeared skeptical that the plaintiffs had established that they were entitled to summary judgment at this stage, suggesting that the litigation is likely to continue.

The amended rules will present significant challenges for employers and their counsel.  More importantly, all of this will be layered onto the much shorter period between the petition and the actual voting, requiring employers to focus year round on appropriate practices and communications to their employees concerning the benefits of maintaining a non-union status.

We will continue to monitor and share data concerning the impact of the amended rules.