Featured on Employment Law This Week – Philip Miscimarra, Acting Chairman of the National Labor Relations Board (NLRB), has given a strong indication of the changes likely to come once President Trump fills vacant seats on the NLRB.

In a sharply worded dissent, Miscimarra doubled down on his disagreement with the NLRB’s controversial 2014 rule on union representation elections. Miscimarra argues that the rule’s heavy emphasis on election speed interferes with an employee’s right to make informed decisions on union representation and is inconsistent with the requirements of the statute. In another dissent, he argues that the NLRB’s current standard for reviewing employee handbook provisions “defies common sense” and should be replaced with a test balancing competing interests.

Watch the segment below and see our recent post.

A recent decision of the United States Court of Appeals for the District of Columbia Circuit in connection with an employer’s challenge to a National Labor Relations Board (“NLRB” of “Board”) representation election in which the Board certified a “wall to wall” bargaining unit provided clear evidence of just how critical it is for employers to make detailed “offers of proof” concerning issues the Board will not allow them to litigate under the amended election rules which took effect in April 2015.

While this case involved a representation petition filed before the new election rules took effect, its lessons concerning the importance of offers of proof concerning issues that the Board will not permit a party to litigate in a representation case under the amended rules are even more important now.

Judicial Review of the Board’s Representation Case Findings

After the union won the election and the employer challenged the Board’s unit determination by refusing to bargain, the Court recently held that the Board erred in finding that a “wall to wall” bargaining was appropriate because it ignored the facts the employer presented, without challenge, in an “offer of proof” offered at a Board conducted representation hearing.  The Court held that the offer of proof contained facts that supported the employer’s contention that the employees in the unit  the union sought to represent did not share a community of interest, which under the National Labor Relations Act (the “Act”) is necessary. See, NLRB v. Tito Contractors, Inc. (No. 15-1217, D.C. Circuit, February 3, 2017).

The Union Sought a Wall To Wall Unit

The union in this case petitioned for an election in in a single “wall to wall” unit, including workers in diverse job classifications at multiple facilities..  The employer argued that the proposed unit was not an appropriate unit under the Board’s unit determination standards and asked for a hearing on the issue.  The employer argued that a hearing was necessary because the  petitioned for unit was inappropriate because the employees performed different jobs at different locations and under different terms and conditions of employment and sought a hearing on that issue. While the Regional Director scheduled a hearing, the Hearing Officer refused to permit the employer to call witnesses and present its evidence on the issue. The Region instead directed the employer to make an offer of proof, describing what its witnesses and evidence would show, if it were permitted to present its evidence, to rebut the presumption under Board law that an employer wide unit was an appropriate unit.

The Hearing Officer’s Refual to Accept the Employer’s Offer of Proof Into Evidence

The employer made a detailed offer of proof showing that it operates a diverse contracting business comprising “two discrete halves”- one side that involves labor, and a second side that involves recycling. It explained that (1) the labor side employed painters, tile installers, masons and carpenters who performed work for customers, (2) the recycling business involved three separate recycling contracts with a different customer and (3) the recycling work is performed at multiple sites, located many miles from each other and under differing working conditions.

Upon the employer made its offer of proof, the Hearing Officer went off the record and consulted with the Acting Regional Director, and then summarily rejected the employer’s offer of proof and denied any hearing on the issue. An election was then directed in the wall to wall unit the union requested.

While the employer requested review of the Decision and Direction of Election (“D&DE”) and the Hearing Officer’s ruling on the offer of proof, the Board affirmed the Hearing Officer’s rulings including the refusal to accept the offer of proof into evidence and denied the employer’s request for review of the Acting Regional Director’s decision directing an election in the unit the union had requested in a perfunctory two line denial.

The Court’s Decision

After the election, the employer sought review by the Court of Appeals and the Board sought to have its findings affirmed and the order directing the employer to bargain with the union enforced.

The Court rejected the Board’s decision. The Court held that the requirement that the Board’s decision be supported by substantial evidence included a requirement that the Board consider and analyze contrary evidence as well.  The Court concluded that the offer of proof plainly showed evidence that countered the conclusion of a community of interest for three reasons.  First, neither the union nor the Board challenged the employer’s assertion that its business was comprised of two separate and discrete operations—labor and recycling – performing different types of work at different facilities.  Second, the Court concluded the Board erred when it ignored the facts contained in the employer’s offer of proof, which evidenced a lack of interchange among the employees in the two operations, a fact the Acting Regional Director acknowledged and cited as a justification for a mail ballot election.  Third, the Board ignored the significant differences among the employees’ wages, hours and working conditions.  Based on the Board’s failure to address the contrary evidence, the Court granted the employer’s Request for Review and remanded the case to the Board for further proceedings.

Judge Karen L. Croft Henderson, who authored the decision, added a separate concurrence in which she admonished the Board for issuing a two sentence order which, like the Region, failed to adequately consider the evidence outlined in the Offer of Proof.

What This Case Means For Employers

Although this case was decided under the Board’s pre-2015 expedited election rules, it offers a number of important lessons for cases under the new expedited rules which include increased reliance on offers of proof to avoid lengthy hearings.

First, the Court of Appeals held that the Board’s responsibility to base findings on substantial evidence included the responsibility to review and analyze contrary evidence, even if that evidence is only in an offer of proof that is rejected.

Second, employers, faced with the requirement of presenting an offer of proof, should include in such offer as much specific factual detail as necessary to support its arguments. By so doing, the employer may be able to establish a sufficient record for an appellate court to determine whether the Region and the Board gave the offer adequate consideration.

Finally, under the new election rules, the Board takes the position that an employer waives any issues that it does not raise in the Statement of Position that must be filed with the Regional Director and served on all other parties by noon on the business day prior to the eighth day after the petition is filed.  For that reason it is critical that an employer identify with as much particularity as possible all issues that it intends to raise at the hearing including all issues as to which it may seek to make offers of proof.

Featured on Employment Law This Week: The NLRB reverses its mixed-guard unit recognition rule. If a union represents both security guards and other employee groups, then an employer’s decision to recognize the union is voluntary. Before this decision, employers could also withdraw their recognition if no collective bargaining agreement was reached.  Now, employers must continue to recognize the union unless and until the employees vote to decertify it in an NLRB election.

View the episode below or read more about this story in a previous blog post, written by Steven M. Swirsky, co-editor of this blog.

Two years ago, as we discussed here and here, in NLRB v. Noel Canning, 134 S. Ct. 2550 (2014), the U.S. Supreme Court held unconstitutional President Obama’s January 2012 recess appointments of Members Block, Flynn and Griffin to the National Labor Relations Board (“Board” or “NLRB”). The decision cast into doubt the validity of hundreds of NLRB orders and official actions.

Recently, in Advanced Disposal Services East Inc. v. NLRB, decided April 21, 2016, the employer, Advanced Disposal Services, unsuccessfully attempted to invalidate actions taken by Regional Director Dennis Walsh by arguing the invalid recess appointments meant the Board lacked a quorum when it appointed Walsh as a Regional Director for Philadelphia based Region 4. Advanced claimed Walsh’s appointment was therefore invalid, and he lacked authority to oversee the election involving Advanced’s employees in which those employees elected to be represented by the Teamsters Local No. 384 by a vote of 60-58. Because Walsh’s actions facilitating that election were beyond his power, the election was invalid. Following the Board’s certification of the bargaining unit, Advanced refused to bargain with the union, drawing an unfair labor practice charge.

Absent the Noel Canning-based argument concerning the validity of the Regional Director’s appointment, the case would present nothing more than a garden-variety refusal to bargain case, and the only legal issue would be whether substantial evidence supported the Board’s decision. However, the question as to the appointment of the Regional Director created a closely watched legal issue carrying potential implications for many other employers in similar situations.

The case worked its way to the Third Circuit Court of Appeals, which first had to determine whether Advanced had waived its challenge to Walsh’s appointment by failing to raise the issue prior to the election, as required by the Board. Before the Third Circuit, the Board asserted that had Advanced raised this issue prior to the election, it could have corrected it.

Following the D.C. Circuit while distinguishing contrary precedent from the Eighth Circuit, the Third Circuit held the argument was “not a mere procedural technicality,” but instead implicated the very power of the Board to act. Accordingly, it constituted an “extraordinary circumstance” under the National Labor Relations Act, allowing Advanced to raise the issue for the first time on appeal.

However, that was not the end of the matter. In July of 2014, about one month after Noel Canning was decided, all five members of a properly constituted Board ratified its prior personnel decisions, including Walsh’s appointment. Shortly thereafter, Walsh ratified his prior acts in office, including the election involving Advanced. The Board argued these ratifications meant that the employer’s procedural challenge to the election results must fail.

The Third Circuit held that both the Board and the Regional Director had properly ratified their earlier actions. Thus, the Court agreed with the Board that its actions were ultimately procedurally valid. The only remaining question was whether substantial evidence supported the Board’s decision to overrule Advanced’s objection and its refusal to grant a new election. Finding that the Board’s decision was backed by substantial evidence, the Court denied Advanced’s petition for review and granted the Board’s cross-application for enforcement.

This disposition may represent the likely end of the line for similar challenges to invalid, but subsequently ratified appointments. Unless an employer can show that the ratification was somehow tainted, courts may be inclined to accept that the subsequent ratification makes the challenged determination valid. Epstein Becker Green will continue to monitor this issue.

Unions no longer will need to gather employees’ signatures on authorization cards before they can file a petition with the National Labor Relations Board (“NLRB” or “Board”) for a representation election.  General Counsel Richard F. Griffin, Jr. has issued Memorandum 15-08 (pdf) announcing that effective immediately unions filing petitions will be allowed to submit and the Board will “accept electronic signatures in support of a showing of interest if the Board’s traditional evidentiary standards are satisfied.”

Acceptance of Electronic Signatures Flows from the Amended Election Rules

As the General Counsel points out, when the Board voted to adopt its Amended Election Rules in December 2014, it made clear that additional changes to the election procedures and rules were likely.  The Board held at that time that its regulations, as they then existed, were “sufficient to permit the use of electronic signatures” to form the basis for the 30% showing of interest required when a petition for an election is filed.  At that time the Board assigned to the General Counsel the responsibility “to determine whether, when and how electronic signatures can be practically accepted” and to “issue guidance on the matter.”

The Minimum Requirements for Electronic Signatures

For an electronic signature to be acceptable and considered authentic and reliable by the Board’s Regional Offices, the General Counsel has ruled that it must include the following information

  1. the signer’s name;
  2. the signer’s email address or other known contact information (e.g., social media account);
  3. the signer’s telephone number;
  4. the language to which the signer has agreed (e.g., that the signer wishes to be represented by ABC Union for purposes of collective bargaining or no longer wishes to be represented by ABC Union for purposes of collective bargaining);
  5. the date the electronic signature was submitted; and,
  6. the name of the employer of the employee

The Memorandum also explains the procedures for submission of a showing of interest based on electronic signatures as follows:

A party submitting electronic digital signatures must submit a declaration (1) identifying what electronic signature technology was used and explaining how its controls ensure: (i) that the electronic signature is that of the signatory employee, and (ii) that the employee herself signed the document; and (2) that the electronically transmitted information regarding what and when the employees signed is the same information seen and signed by the employees.3

When the electronic signature technology being used does not support digital signatures that lend itself to verification as described in paragraph 2, above, the submitting party must submit evidence that, after the electronic signature was obtained, the submitting party promptly transmitted a communication stating and confirming all the information listed in la through lf above (the “Confirmation Transmission”).

  1. The Confirmation Transmission must be sent to an individual account (i.e., email address, text message via mobile phone, social media account, etc.) provided by the signer.
  2. If any responses to the Confirmation Transmission are received by the time of submission to the NLRB of the showing of interest to support a petition, those responses must also be provided to the NLRB.
  3. Submissions supported by electronic signature may include other information such as work location, classification, home address, and additional telephone numbers, but may not contain dates of birth, social security numbers, or other sensitive personal identifiers. Submissions with sensitive personal identifiers will not be accepted and will be returned to the petitioner. They will not be accepted until personal identifiers are redacted

Questions Remain About Authentication

GC Memorandum 15-08 lays out the General Counsel’s instructions to the Board’s Regional Offices and to unions seeking to file elections under the new rules as to the nuts and bolts of collecting and verifying electronic signatures in place of actual signatures on cards that have been the norm since the NLRB began conducting elections 80 years ago and appears on its face to establish procedures for the agency’s employees to follow to verify the authenticity of electronic signatures submitted in support of a petition for an election, as anyone who has had even cursory experience with the Board’s handling of a union’s showing of interest knows, employers have little if any opportunity to meaningfully challenge a showing of interest even where it has substantial doubts as to its authenticity.  While the processes described in the Memorandum appear robust on their face, the fact remains that an employer or other interested party will never really know whether and to what degree the processes are being followed.

What Allowing Electronic Signatures Means

Although the General Counsel and the Board suggest that the decision to allow use of electronic signatures for a showing of interest is not significant and is consistent with the Board’s opinion that it is Congress’s intent that “that Federal agencies, including the Board, accept and use electronic forms and signatures, when practicable—i.e., when there is a cost-effective way of ensuring the authenticity of the electronic form and electronic signature given the sensitivity of the activity at issue, here the showing of interest,” it would be a mistake to view this development in isolation.

Rather, it should be seen as yet another demonstration of the fact that the Board and the General Counsel share the view that the purpose of the Act and the agency is to encourage and promote collective bargaining and make it easier for employees to unionize. The decision to allow electronic signatures should be viewed alongside the Board’s decision last week in Browning Ferris Industries jettisoning its long standing test for determining joint employer status for a that looked to whether the entity claimed to be a joint employer had exercised direct and immediate control over the terms and conditions of employment of the workers in question, for a new far looser test that simply  asks whether the purported joint-employer possesses the authority to control the terms and conditions of employment, either directly or indirectly.”. As the Board puts it, “reserved authority to control terms and conditions of employment, even if not exercised, is clearly relevant to the joint-employment inquiry.”

Given the lowering of the bar for a union to obtain an election that is augured by the move to accept electronic signatures, effective immediately, we can certainly expect a continued increase in organizing and the filing of petitions, followed by ever faster elections.

Evidence continues to mount as to how much more quickly representation elections are being held since the National Labor Relations Board’s (“NLRB” or “Board”) Amended Representation Election Rules that took effect on April 14, 2015. Melanie Trottman of The Wall Street Journal has crunched the data and reports today that the median number of days between the filing of a representation petition and the day on which employees vote has fallen to 23 days in uncontested elections where the employer and union stipulated to the terms for the vote, and 25 days in the 20 contested cases in which the election was directed by the Board after a hearing.  In comparison, during the Board’s 2014 fiscal year, the last full year before the new rules took effect, the median time was 38 days for all elections and 59 days in contested elections.

While challenges were filed to the Amended Election Rules by business groups, the two District Courts that have considered arguments that the NLRB exceeded its authority when it adopted the new Rules last December in each case the challenge was dismissed.   Both cases are being appealed.

Meanwhile, employers and unions alike continue to await the Board’s decisions in two other cases likely to have major impacts on organizing and representation case law. In Browning-Ferris, the Board is considering whether to adopt standard for determining joint-employer status that would make it much easier for unions to claim that separate businesses are joint employers.  In Miller & Anderson  the Board will decide whether it will continue to follow its decision in Oakwood Care Center (pdf), which disallowed inclusion of solely employed employees and jointly employed employees in the same unit absent consent of both employers, and if not, whether the Board should return to the holding of M.B. Sturgis, Inc. (pdf), which permits the inclusion of both solely and jointly employed employees in the same unit without the consent of the employers.

U.S. District Court Judge Amy Berman Jackson on Wednesday issued a 72 page opinion (PDF) rejecting each of the arguments raised by the U.S. Chamber of Commerce, the National Retail Federation and other business groups and found that the Amended Election Rules adopted by the National Labor Relations Board in December 2014, which took effect in April 2015, in an action that argued that the Board had exceeded its authority, violated the Administrative Procedures Act and that the Amended Rules were unconstitutional.

This is the second district court decision to reject such challenges to the Amended Election Rules. In April, Judge Robert L. Pitman of the U.S. District Court for the Western District of Texas rejected a similar challenge brought by the Associated Home Builders of Texas and the National Federation of Independent Businessmen.

Since the Amended Election Rules took effect in April, there has continued to be a dramatic increase in the number of petitions filed by unions across the county.

Clearly the dismissal of these challenges will not be the final answer to the questions surrounding the election rules.  Not only is it almost certain that these decisions will be reviewed on appeal, but Congressional oversight and, potentially, legislative action to reverse the Board’s rulemaking remains a possibility.

Steven M. Swirsky

The National Labor Relations Board (NLRB or Board) invited interested parties to submit amicus briefs in Miller & Anderson, Inc. in connection with the Board’s reexamination of critical issues affecting the ability of unions to organize employees employed by temporary and staffing agencies (“temporary employees”) in the same bargaining units as employees of an employer that supplements its direct workforce with temporary employees.

Elections Involving Joint-Employers

Under the existing law, the Board will only conduct an election and certify a unit that includes employees of joint employers if both of the joint employers agree to such an arrangement.  The Board’s grant of the petitioning union’s request for review of a regional director’s dismissal of petition for an election because one of the joint employers did not agree, appears to telegraph the Board’s intention to abandon that requirement.

Easing the Test for Finding a Joint-Employer Relationship

The NLRB has previously suggested when it invited amicus briefs in imminently in Browning-Ferris that it is about to adopt a new test, based on what it calls “economic realities,” for deciding whether a business is a joint employer with another entity such as a temporary agency or employee leasing service, of the personnel that the agency supplies to work for its client.

More Elections and Unions Representing Temps

If it does so, and then decides in Miller & Associates to create an easier pathway for temporary employees, part-time employees and other contingent workers” to obtain union representation, and be included in bargaining units alongside “regular employees” employed by the principal employer, could radically change the landscape and lead to organizing and bargaining over terms and conditions for temporaries and other contingent workers.  The bargaining obligation would apply not only to the staffing agency that writes a temporary worker’s paycheck, but also to the temporary agency’s client for whom the temporary worker does work.

Under the Board’s 2014 decision in Oakwood Care Center a bargaining unit composed of both “solely employed employees” and jointly-employed employees would only be found to be an appropriate unit for bargaining and the Board would only direct an election in a unit of jointly and solely employed employees if both of the employers (i.e. the principal employer and the temporary or staffing agency supplying personnel to work with the principal employer’s employees) consented to such an arrangement.  Not surprisingly, few, if any, employers agreed to this.

Why Is the Board Doing This Now?

What the Board has indicated in its July 6, 2015 Notice and Invitation to File Briefs is that it is, at a minimum, looking at abandoning the requirement of consent of both employers and returning to the legal standards that preceded Oakwood, which standard was adopted by the Board in 2000, during the Clinton Administration in M.B. Sturgis which had permitted the Board to direct an election in a unit included both solely employed and jointly employed employees without the need for the consent of the two employers.

The fact that the Board has now, after three years, granted the union’s 2012 request for review of a Regional Director’s decision in Miller & Anderson stating that the union’s appeal of the dismissal of its election petition  “raises substantial issues warranting review with respect to the applicability of Oakwood Care Center,” strongly suggests that the Board intends to eliminate the requirement that when a union seeks an election in a unit including  employees the Board finds to be employed by joint-employers, that both employers must consent for an election to take place.

What To Expect

Given the expectation that the Board will shortly announce a much relaxed standard for finding employers to be joint-employers, this is not surprising.  However, what it also likely presages is a continuation of the union campaigns, such as those in the realm of franchisor-franchisee relationships in fast food and elsewhere and the Board’s movement towards more findings of joint employer status.

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.

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.