Union Organizing Campaigns

As we have previously reported, Unions currently face a serious existential threat as the unionized workforce in America continuously declines and the looming threat of a National Right to Work law steadily grows.  Recognizing that when employees have a choice, they are losing the battle for the hearts and minds, Unions have not taken these deleterious developments lying down and have deployed numerous countermeasures designed to increase their dues paying membership, including unprecedented forays into previously untouched industries and membership pools.  These efforts extend beyond “employees” as unions now are also targeting independent contractors, with one of the most notable being the robust ridesharing industry made popular by apps like Uber and Lyft.

Uber and Lyft have become synonymous with affordable, on-demand transportation throughout the world.  Their innovative business model has reinvigorated the for-hire transportation market –historically dominated by powerful unions and restrictive legislation – with some much needed competition.  These apps have created an inexpensive and efficient alternative in on-demand transportation while giving entrepreneurial drivers an opportunity to earn extra income on their own schedule and their own terms.  This could all change, though, if unions successfully infiltrate the rideshare market:  drivers could lose the flexibility they enjoy, consumers could see a sharp rise in costs and the rideshare market could lose its competitive ability to dynamically adjust to consumer demands.

A Federal District Court Rejects The U.S. Chamber of Commerce’s Motion For Injunction Relief Pending Appeal Of the Court’s Finding That Seattle’s Ordinance Is Not Preempted By The National Labor Relations Act. 

Rideshare drivers utilizing apps like Uber and Lyft are independent contractors and, therefore, are expressly excluded from the collective bargaining rights granted by the National Labor Relations Act (“Act”).  In December 2015, Seattle passed Ordinance 124968, which conferred collective bargaining rights on rideshare drivers.  The U.S. Chamber of Commerce subsequently filed an action in the U.S. District Court of Washington, Western District, claiming, among other things, that the Ordinance was preempted by the Act.  On April 7, 2017, the District Court temporarily enjoyed enforcement of the Ordinance pending the outcome of the litigation.

However, on August 1, 2017, the District Court lifted the injunction after it granted Seattle’s motion to dismiss, finding that the Act’s independent contractor exclusion did not preempt state law. The Court likened the independent contractor exclusion to other exclusions in the Act, such as the agricultural laborer and domestic service worker exclusions, which have long been held not to preempt state law.

In doing so, the District Court rejected the Chamber’s attempt to analogize the independent contractor exclusion to the Act’s supervisor exclusion, which decidedly preempts state law.  Citing to the legislative history of the supervisor exclusion, the District Court reasoned that Congress deemed the unionization of supervisors “a threat to the very purposes of the Act as well as the interests of both labor and management,” and these destructive consequences “would arise regardless of whether supervisors unionized under NLRA or under state law.”  By contrast, the District Court concluded, Congress did not identify unionization of independent contractors “as a threat to the free flow of goods, nor is there any indication that allowing them to participate in the collective action would threaten the independence of labor organizations or the rights of management.”

As further support for its holding, the District Court cited Section 14(a) of the Act, which allows supervisors to organize, but precludes the Board from compelling employers to recognize such unions.  No similar provision exists for independent contractors, agricultural laborers, or domestic workers, so the Court concluded the Act treated these groups alike.

Interestingly, the District Court did not engage in a deep analysis of Congress’ purpose for excluding independent contractors or whether, like the supervisor exclusion, those reasons justified preemption of state law, let alone did it examine whether the Act’s purpose in regulating the free flow of commerce constituted preemption.  It merely concluded that the justifications behind the independent contractor exclusion were different than those driving the supervisor exclusion and, because there was no express exemption specifically applicable to independent contractors like there was for supervisors, independent contractors were intended to be treated “more like the other excluded groups who have long been the subject of state regulation.”

On August 24, 2017, the Chamber filed a motion for injunction relief pending appeal of the District Court’s Order.  The same federal judge that granted Seattle’s motion to dismiss denied the Chamber’s motion for preliminary injunction, thereby permitting the Union to commence its organizing drive of Uber and Lyft drivers.

Ninth Circuit Temporarily Grants The Chambers’ Emergency Motion For Injunction Relief While It Considers The Merits Of The Motion

On August 29, 2017, the Chamber filed an emergency motion for injunctive relief with the Ninth Circuit Court of Appeal.  The Ninth Circuit temporarily granted the motion while the Court considered the merits of the motion.  Seattle filed its opposition to the Motion on September 5, 2017, and the Chamber’s filed its reply September 7, 2017.  Importantly, this truly could only be a temporary reprieve for rideshare companies as the Ninth Circuit Provided no indication one way or the other as to its leaning on the merits.

The Fate Of Unionization of Rideshare Drivers

Ninth Circuit’s ruling effectively stayed the Union’s right to begin its efforts to unionize Uber and Lyft drivers, but this reprieve may only be temporary.  If the Ninth Circuit denies the emergency motion, it will clear the way for Teamsters, Local 117 to begin its organizing drive while the Chamber appeals the dismissal of its lawsuit to block the Ordinance.  However, even if the Court denies injunctive relief and Teamsters successfully organizes the drivers, the Ninth Circuit could still decide the Act preempts Seattle’s unprecedented ordinance and reverse the Union’s gain.  If Ninth Circuit sides with Seattle, though, and permits the Ordinance to stand, this scenario will likely be repeated in other cities across the nation as Unions, with the aid of the members of city councils and legislatures they funded and elected, desperately seek to reverse the long running trend of declining membership by targeting new industries.  And if this occurs, the rideshare industry will likely be dramatically transformed in fundamental ways – ways that may destroy the flexibility and affordability that made this industry so popular in the first place.

In Midwest Division-MMC, LLC, d/b/a/ Menorah Medical Center v. NLRB, the D.C. Circuit rejected the Board’s unprecedented application of Weingarten rights to voluntary meetings, by reversing the Board’s Decision that would have extended the right of employees to have union representation at meetings at which the employees’ attendance is not compelled.

Kansas state law requires hospitals to establish an internal mechanism to monitor the standard of care provided by nursing professionals.  Pursuant to this law, Menorah Medical Center (“Menorah” or “Hospital”) established a Nursing Peer Review Committee (“Committee”) to investigate alleged violations of the prevailing standard of care.  If substantiated, the Committee reports the violation to the state licensing agency, but the Committee itself does not impose discipline.  If a violation is reported, the state, not the employer, may suspend or revoke a nurse’s license.

In May 2012, two nurses received letters alleging that they had engaged in unprofessional conduct. The letters advised that the nurses could address the Committee at a hearing “if you choose,” but also gave the nurses the option to submit a written statement in lieu of a personal appearance.  Both nurses requested union representation at the Committee hearing, but the Hospital denied their requests.  Their union subsequently filed an unfair labor practice charge alleging that the Hospital violated the National Labor Relations Act (“Act”) by denying the nurses’ requests for union representation at the hearing.

The D.C. Circuit Court Finds There Is No Right to Union Representation at Voluntary Meetings

The Board found that the Hospital’s denial violated the Act because employees have a right to union representation under Weingarten in “interviews where there is a reasonable belief that the employee will be disciplined,” regardless of whether the employees’ attendance is compulsory or voluntary.  This was an overt expansion of employees’ Weingarten rights which only apply to a unionized employee’s right to representation at a mandatory meeting an employer requires them to answer potentially incriminating questions which may result in disciplinary action by the employer.

The D.C. Circuit Court, however, unanimously reversed the Board’s decision. The Circuit Court, quoting the Supreme Court’s Weingarten decision, held that an employee’s Weingarten rights are infringed only when an employer compels an employee’s attendance at an interview that might reasonably be expected to lead to discipline and denies his or her request for union representation.  Specifically, the Supreme Court in Weingarten delineated the limited representation right as:

…the employee’s individual right to engage in concerted activity by seeking the assistance of his statutory representative if the employer denies the employee’s request and compels the employee to appear unassisted at an interview which may put his job security in jeopardy.

Here, the Hospital’s letters to the nurses clearly conveyed their attendance at the hearing was voluntary and even allowed them to submit a written statement as an alternative to attending.  Accordingly, the right to union representation under Weingarten was not triggered.

The Court also rejected the Board’s finding that, after denying a request for union representation in these circumstances, the employer must discontinue the interview unless the employee voluntarily agrees to continue after the employer explains to the employee that he or she has a choice to continue the interview without a representative present or not have the interview at all.  The Court explained that the letters sent to the nurses made it clear that their attendance was voluntary, and Weingarten “contains no suggestion that the NLRA requires an employer to renew advice to an employee that her attendance at a hearing is optional.”  The Court distinguished the precedent relied upon by the Board on the ground that all the cases involved compulsory attendance at interviews.

The Concurrence Suggests Weingarten Rights Do Not Apply Outside Interviews Conducted by Employers

Notably, in a concurring opinion, Circuit Judge Kavanaugh emphasized that the majority’s opinion assumes arguendo that Weingarten rights could apply to peer review committees without deciding this threshold question.  Judge Kavanaugh explained that, were the Court to decide this threshold question, he would hold Weingarten rights do not apply in peer review committee interviews.  Rather, Weingarten rights exist “to redress the perceived imbalance of economic power between labor and management,” and therefore apply primarily in the context of disciplinary investigations conducted by the employer.  When the interview is conducted by a state-mandated peer review committee that is not part of the employer’s disciplinary process, Weingarten rights do not apply.

Featured on Employment Law This Week:  An employee’s Facebook rant was protected activity, says the Second Circuit.

In the midst of a tense union campaign, a catering company employee posted a profanity-laced message on Facebook. The post insulted his supervisor and encouraged colleagues to vote for unionization. The employee was subsequently fired. Upholding an NLRB ruling, a panel for the Second Circuit found that the post was protected under the NLRA and the employee should not have been terminated. The Court noted that Facebook is a modern tool used for organizing. Our colleague Ian Carleton Schaefer is interviewed.

Watch the segment below and read our recent post about the ruling.

On March 21, 2017, the National Labor Relations Board (“NLRB” or “Board”) found that a Teamsters local violated Section 8(b)(1)(A) of the National Labor Relations Act (“Act”) by failing to provide sufficient information about the financial expenditures of the local and its affiliates to two workers employed in a bargaining unit who exercised their rights to object to paying union dues and fees pursuant to Communications Workers v. Beck, 487 U.S. 735 (1988).

Teamsters Local 75 – Schreiber Foods

In Teamsters Local 75, affiliated with the International Brotherhood of Teamsters, AFL-CIO (Schreiber Foods) the NLRB issued its Second Supplemental Decision and Order following up on prior Board decisions in the case’s long history and unanimously held that Teamsters Local 75 unlawfully sought to collect union dues and fees from two employees who invoked their Beck objector rights.  Specifically, the Board ruled that the Union failed to provide adequate and detailed financial disclosures because, in addition to the providing the details about the local’s own expenditures of employees’ dues, the Board ruled the local must also provide details about its affiliates’ financials resulting from the local’s “per capita tax” expenditure—that is the portion of dues money that the local shares with its affiliates.  With respect to the Teamsters, the “per capita tax” is the amount that a local of the Teamsters union pays, using a portion of each employee members’ dues money, to three affiliated entities—the International Brotherhood of Teamsters (International), the relevant Conference of Teamsters (Conference), and the relevant Teamsters Joint Council (Jt. Council).

The Board’s Reasoning

The Board relied in part on its rationale and holding in Teamsters Local 579 (Chambers & Owen), 350 NLRB 1166, 1170-1171 (2007), wherein the Board overturned its prior holding that a union that pays per capita taxes to its affiliates is not required to provide Beck objectors with information regarding “how its affiliates determined the chargeability to the objectors of the per capita taxes that the affiliates received and spent.” Id. at 1168.  Rather, in Chambers & Owen, the Board not only held that “this affiliate information must be furnished to a Beck objector so that he or she can determine whether to file a challenge” id. (emphasis in original), but it also found that the union’s failure to provide such information violated Section 8(b)(1)(A) and its duty of fair representation. Id. at 1169, 1171.

What the Board Will Now Require

Here, the Board reached the same conclusion—and went a step further—noting that Teamster Local 75 must provide the Becks objecting employees with the following detailed expenditure information:

[T]he major categories of its expenditures, the percentage of each category that it considers chargeable and nonchargeable, and a detailed explanation of how it calculates its allocation of expenditures; the names of its affiliates and other entities with which it shares income from dues and fees, the amounts of income shared, the major categories of expenditures of each affiliate or other entity and the percentages of each category those affiliates and other entities consider chargeable and nonchargeable, and a detailed explanation of how the affiliates and other entities calculated their expenditure allocation.

 What This Means Going Forward

This holding essentially means that unions will have to disclose much more detailed financial information when employees exercise their Beck rights—information that unions will likely be far more resistant and hesitant to provide.  With affiliates’ expenditures coming under greater scrutiny, it also makes it more likely that Beck dues objectors will seek to have less of their money going to the unions (and their affiliates) activities.  With more Americans than ever choosing to be union-free and/or choosing not to be union members, this decision places much more power with individual employees, and emboldens their protected right to refrain from union activity, a right already afforded under the Act but often glossed over by unions.

In 2016 private sector union membership dropped to its lowest level in history – a dismal 6.4%. Given the laws and systems in place related to union membership, this means that at least 94.6% of all American private sector workers currently choose not to be union members. The drop, recently reported in a routine annual report issued by the U.S. Department of Labor’s Bureau of Labor Statistics, also was the largest year over year percentage drop in recent years, dropping 0.3%, from 6.7% in 2015.

While the percentage of union members as a portion of the total workforce saw a steep drop, possibly more disturbing to union bosses is the fact that the actual raw numbers of union members also dropped over 100,000 members from 7.554 million to 7.435 million dues paying members. This loss of dues revenue could hurt unions’ efforts to organize members as well as lobby and elect politicians.

Report reveals employees choosing to reject unions.

What is remarkable about these numbers is what is behind them. All of the above numbers are based on union membership, individuals who are dues paying members either by choice or as a result of a compulsory union security clause in a non-right-to-work state. What the above numbers do not show is the numbers and percentages of the employees represented by unions.

The percentage represented remained relatively stable, only dropping 0.1% from 7.4% to 7.3% of all private sector employees. More striking, the raw number of employees represented actually slightly increased from 8.411 million to 8.437 million. The fact that there are actually more total employees represented by the unions but less total employees who are union member may be the biggest news of the recent report. It indicates that more employees are choosing to reject joining a union, even though the union represents them.

This fact has import not only in analyzing how union membership fell to a record low, but also what could be on the horizon for unions. Specifically, this drop seems caused by the growing support for the “Right-to-Work” movement.

The Right-to-Work resurgence.

 Right-to-Work refers to statutes which are adopted for the express purpose of allowing employees the right to choose to join and pay dues to a union or choose not to be a union member. At their heart is employee choice – employees having the choice to decide whether they want to be a member of the union or decide they want to keep their job but not be a union member.

While the movement is far from new, it has enjoyed a resurgence in the recent years. This resurgence did not start in the typical Right-to-Work strongholds of the South, but bubbled up from historically union strongholds in the Rust Belt; possibly getting its genesis with the very public brouhaha over the 2011 Wisconsin public sector reforms instituted following the election of Governor Scott Walker.   Shortly thereafter the Right-to-Work movement’s renaissance began as in 2012 Michigan and Indiana became Right-to-Work states; shocking the labor community and freeing private employees in those states from compulsory union membership. Wisconsin followed, extending Right-to-Work to its private sector employees in 2015. West Virginia passed Right-to-Work in 2016 and already this year both Missouri and Kentucky have joined the ranks for a total of 28 states now guaranteeing private sector employees the right to choose whether or not to become dues paying union members. New Hampshire seems poised to join the others as the 29th state soon. Add to this the counties and municipalities which have recently passed local Right-to-Work laws; a practice under dispute but sanctioned in late 2016 by the 6th Circuit Court of Appeals in UAW v. Hardin. Together, the Right-to-Work movement is experiencing its greatest success since the 1950s.

The new BLS report shows this resurgence has had real impact on the labor movement. Not just in the loss in the national percentage or even in the loss in raw number of members; rather by delving into the report, the true scope and possibly future can be ascertained. For example, Wisconsin, in its first year following giving employees the Right-to-Work, saw its total (public and private, BLS does not separate on a statewide basis) union membership dropped from 8.3% down to 8.1%.   Michigan dropped from 15.2% down to 14.4%. Moreover, when you look all the way back to 2011, the year before Michigan passed Right-to-Work, Michigan’s union membership rate was 17.5%. In just 5 years, Michigan unions have lost 3.1% and dropped from 671,000 down to 605,000 dues paying members. This is a remarkable 10% plus loss in their ranks. Indiana likewise as dropped from 11.3% in 2011 down to 10.4% in 2016 despite tremendous job growth in traditionally unionized industries. Obviously, it is too soon to understand the true impact of Wisconsin, let alone West Virginia, Missouri and Kentucky, but if their precursor states are an indication, 6.4% may not be the historic low for long.

What this analysis also suggests is that 6.4% is not lily fully reflective of the percentage of American private sector workers who want to be dues paying members. With 22 states still allowing compulsory union membership through union security clauses and with those states actually having the majority of remaining union members, the true number of individuals who actually want to be union members is possibly far less.

National Right-to-Work, a real possibility?

This currently trapped group of American forced union members and their potential liberation is what could be even more concerning for unions and their coffers than the recent report of the historic low. Until very recently the Right-to-Work movement had realistically only been a state by state movement. For the first time, however, there is a real possibility that national Right-to-Work legislation could pass. In January Representatives Steve King of Iowa and Joe Wilson of South Carolina introduced the National Right-to-Work Act which would prohibit compulsory union membership for private sector employees covered by the National Labor Relations Act and the Railway Labor Act. While similar legislation has been proposed consistently in years passed, President Trump has stated he is a supporter of Right-to-Work (while President Obama would have swiftly vetoed it). With majorities in both the House and Senate, potentially the only thing stopping the Act would be a Democrat filibuster in the Senate. If Republicans held firm and could convince 8 Democrat Senators to join with them to break a filibuster and allow a vote, the US could have a national Right-to-Work law. Given the current division in Washington this may seem unlikely but 25 Democrat face election next year and 9 of those are from Right-to-Work states, including Michigan, Indiana, Wisconsin, Missouri and West Virginia plus another one from the teetering state of New Hampshire. Certainly it is possible.

As if these legislative threats were not enough, the battle over employee choice is being fought in the courts as well. Unions sighed collectively in relief last year when the Supreme Court deadlocked on the issue of whether compulsory dues collection from public sector employees was constitutional in Friedrichs v. California Teachers Association allowing the pro-union decision of the 9th Circuit to stand. However, in February the same lawyers who brought the Friedrichs case filed a new, virtually identical, suit in Yoon v. California Teachers Association. Likewise the case of Illinois public sector workers rights to choose to be union free is currently pending before the 7th Circuit in Rauner v. American Federation of State, County and Municipal Employees, Council 31. While these cases deal with public sector employees, many labor unions fear that an adverse ruling could be the first step towards a judicial determination that the NLRA’s sanctioning of union security clauses unconstitutionally violates individual employees’ free speech and freedom of association rights. Such a ruling would effectively make a national Right-to-Work law by judicial declaration.

Unions will not go quietly into the night.

Union’s will not take this existential threat without a counter offensive. Not only will they fight in Congress, the state houses and the courts, spending millions on lawyers and politicians, but they will fight in the workplace as well. With their backs to the wall employers should expect unions to be aggressively organizing, trying to use the Obama era gains they got through the Ambush Election rules and scores of pro-union NLRB decisions as the foundation for organizing drives. Unions will continue to try to grow their ranks in already heavily Democratic and more unionized states like New York (23.6%), California (15.9%), New Jersey (16.1%) and elsewhere where they can use their ranks, dues base and political clout to target employers. They will also continue to target industries where they have had more success like hospitals and other healthcare providers as well as industries where they are actually currently gaining like hospitality/accommodations (where membership is up from 7.4% to 7.6%) and telecommunications(where membership is up from 13.3% to 14.6%). They also will continue to push the traditional boundaries of the employment relationship, targeting franchisors in the fast food and other industries as well as the gig economy and companies such as Uber and Lyft utilizing independent contractors.

While the impact of the Right-to-Work resurgence and recent union membership reporting certainly indicates that giving employees a choice is a threat to labor unions; equally certain is that this threat is likely to cause more activity and challenges for employers who may be a target of unions seeking to replace lost revenue.

The year-end episode of Employment Law This Week  looks back at the biggest employment, workforce, and management issues in 2016.

Our colleague Laura Monaco discusses the National Labor Relations Board’s decision in Miller & Anderson, which expanded the already-relaxed joint-employer standard adopted by the Board in its August 2015 decision in Browning Ferris Industries

The show also reviews the Trustees of Columbia University decision on collective bargaining and union organizing.  

Watch the segment below and read Epstein Becker Green’s recent Take 5 newsletter, “Top Five Employment, Labor & Workforce Management Issues of 2016.”

As we previously reported, the ambush election rules implemented by the National Labor Relations Board (“Board”) last year tilted the scales of union elections in labor’s favor by expediting the election process and eliminating many of the steps employers have relied upon to protect their rights and those of employees who may not want a union. We warned that in addition to rapidly expediting election timeframe, the regulations were full of technical and burdensome procedural mandates on employers.  The Board further emphasized the pro-union impact of these requirements in a Decision last week when it overturned the results of an election that a union overwhelming lost based on a hyper-technicality.  Even though there was no prejudice to the union, the Board gave the union another bite at the apple despite the employees’ resounding rejection of union representation; effectively denying the employees their voice and imposing even more burdens on the employer.

New Regulations require service of Excelsior List on union

Section 102.62(d) of the Board’s New Rules and Regulations provides that an employer “shall provide to the regional director and the parties…a list of the full names [and other information] of all eligible voters… within 2 business days after the approval” of the Stipulated Election Agreement. This list of eligible voters is commonly referred to as an “Excelsior list.”   Section 102.62(d) further provides that the Employer’s failure to follow these procedural mandates “shall be grounds for setting aside the election whenever proper and timely objections are filed.”

The Petition and Election at issue

On Thursday, March 3, 2016, URS Federal Services, Inc. (“Employer”) and the International Association of Machinists and Aerospace Works, District Lodge 725 (“Union”) entered into a Stipulated Election Agreement. The Employer filed the list of eligible voters, commonly referred to as an “Excelsior list,” with the Region on Saturday, March 5, but failed to serve the list on the Union.  While the Board’s Decision noted the Employer never offered any explanation for its oversight, the fact is that under the prior regulations an employer need only file the list with the Region; the requirement to serve the union is new.  While the Employer did not directly send it, the Region forwarded the list to the Union on Monday, March 7, thus the Union timely received the list within two business days of the approval of the Stipulated Election Agreement.

The Union lost the election 91 to 54. After its crushing defeat, the Union filed objections, seeking to overturn the election because of the Employer’s deficient service, even though it had timely received the list and never complained of service issue before.

Regional Director finds no harm, no foul

The Acting Regional Director for Region 20 acknowledged that the Employer failed to serve the Union, but declined to set the election aside because the Union had suffered no prejudice since it received the list within two business days of the approval of the Stipulated Election Agreement as required by the Election Rules. The Regional Director explained that “[t]o hold otherwise would exalt form over substance.”  Relying on well-established Board precedent, the Regional Director also concluded that the employer’s technical violation did not frustrate the purpose of the Excelsior rule, which was to ensure that employees are provided a “full opportunity to be informed of the arguments concerning representation.” Bon Appetit Management Co., 334 NLRB 1042, 1043 (2001).

Board puts form over substance to favor Union

The Board rejected the Regional Director’s decision, reasoning that “[t]o allow parties to ignore the service requirements set forth in Section 102.62(d) without any explanation or excuse would undermine the purpose of those provisions.” The Board never articulated what purpose it was referring to, other than to insinuate that strict enforcement was necessary to ensure “all parties take their obligations seriously under the amended Rules.”  (italics in original).  Notably, the primary purpose of the service requirements – to ensure employees are fully apprised of the arguments concerning representation – had not been undermined since the Union timely received the list from the Region.

Dissent detail Board’s pro-union hypocrisy

As dissenting Board Member Philip A. Miscimarra (“Miscimarra”) explained, the Board’s decision is troubling for several reasons. Not only does the holding elevate form over substance, but it contravenes longstanding precedent that the Board should not overturn election results lightly “unless presented with clear evidence that the results may not reflect the will of the voters.”  In furtherance of this principle, the Board has previously declined to overturn elections despite allegations of death threats or widespread voter fraud.  In stark contrast, the Board here accepted the Union’s contention that a “purely technical violation of a service requirement, timely cured by the Region, warrants overturning election results that overwhelmingly disfavored” the Union.

Equally, and perhaps more, concerning is that the Board has effectively created a double standard for unions and employers. In Brunswick Bowling Products, LLC, 364 NLRB No. 96 (2016), a decision issued a mere three months earlier, the Board unanimously upheld the Regional Director’s decision to excuse the union’s untimely service of its Statement of Position.  As Miscimarra aptly pointed out, although the Board has long tolerated minor deviations from the Excelsior list requirements, no such “history of leniency” exists with respect to the service requirements for Statements of Position.   Yet, when a union violated the historically inflexible service requirements for Statements of Position, the Board excused the union’s noncompliance, but refused to do the same for an employer who failed to comply with rules that have traditionally permitted slight deviations, “even though the service error could not have affected the election results because the Union received the voter list on the same day it would have received the list had no service error been committed.”

Employers are advised to continue to adhere to Obama Board’s Regulations and Decisions

During the last eight years, the Obama Board has overturned longstanding Board precedent and expanded the rights of unions far and wide. Many employers may anticipate some relief from the onerous burdens imposed by the Board during the last eight years as a new administration comes to DC.  However, this case is a sober reminder that the Board intends to enforce the rules it has promulgated during the last eight years, and employers cannot afford to become lax in their obligations under these rules and must remember the Decisions rendered remain the standards to which they will be held.

A new Act Now Advisory will be of interest to many of our readers in the retail and food service industries: “Union Organizing at Retail and Food Service Businesses Gets Boost from New York City ‘Labor Peace’ Executive Order,” by our colleagues Allen B. Roberts, Steven M. Swirsky, Donald S. Krueger, and Kristopher D. Reichardt from Epstein Becker Green.

Following is an excerpt:

New York City retail and food service unions got a boost recently when Mayor Bill de Blasio signed an Executive Order titled “Labor Peace for Retail Establishments at City Development Projects.” Subject to some thresholds for the size and type of project and the amount of “Financial Assistance” received for a “City Development Project,” Executive Order No. 19 mandates that developers agree to a “labor peace clause.” In turn, the labor peace clause will compel the developer to require certain large retail and food service tenants to enter into a “Labor Peace Agreement” prohibiting their opposition to a “Labor Organization” that seeks to represent their employees. …

If the objective of the Executive Order is to assure labor peace by way of insulation from picketing, work stoppages, boycotts, or other economic interference, it is not clear how its selective targeting of retail and food service tenants occupying more than 15,000 square feet of space—and the exclusion of other tenants and union relations—delivers on its promise. There are multiple non-covered tenants and events that could occasion such on-site disruptions as picketing, work stoppages, off-site boycotts, or other economic interference.

As a threshold matter, there is no particular reason why a labor dispute with a tenant occupying space shy of 15,000 square feet—among them high-profile national businesses—somehow is less disruptive to the tranquility of a City Development Project than one directed at a tenant whose business model requires larger space.

Also, the Executive Order does not address the rights or responsibilities of either landlords or their tenants that are Covered Employers bound to accept a Labor Peace Agreement when faced with union demands for neutrality that go beyond the Executive Order’s “minimum” neutrality requirements. There could be a dispute over initial labor peace terms if a union, dissatisfied that the Executive Order’s Labor Peace Agreement secured only a Covered Employer’s “neutral posture” concerning representation efforts, were to protest to obtain more ambitious and advantageous commitments that are coveted objectives of union neutrality demands, such as …

Read the full Advisory here.

The National Labor Relations Board (“NLRB” or “Board”) has reversed the findings of an Administrative Law Judge (“ALJ”) who found that an employee who was told he was fired and then almost instantly told by the owner of the company he worked for that he was not fired and continued to work without any loss of compensation or working time had in fact been unlawfully discharged in violation of the National Labor Relations Act (“NLRA” or the “Act”). It would seem that if “discharge is the ‘capital punishment’ of employment,” this case presents a rare example, in the Board’s eyes of an out of body after death experience, in which the executioner is held liable for killing someone who is unquestionably still alive.

Complaints About a Supervisor of Non-Union Employees: Concerted Protected Activity

The case involved employees who were neither represented by a union nor seeking to become represented who did paving and related work for a paving contractor that was performing work at the University of Arizona’s Tech Park location. Over time the employees had a number of complaints about what they considered to be rude, demeaning and unprofessional remarks and treatment by the supervisor of their crew. They sought out the owner and met with him to express their concerns and to ask him to reign in or replace the supervisor. Under the Act, this was deemed to be concerted and protected activity concerning their terms and conditions of employment.

The Board Reversed Its Own Administrative Law Judge

In Bates Paving & Sealing, Inc., 364 NLRB No. 46 (2016), Chairman Mark Pearce and Member Kent Hirozawa, acting on Exceptions filed on behalf of the Board’s General Counsel reversed the decision of ALJ Amita Baman Tracy who had found, based on her review of the evidence including the credibility of witnesses including employee Juan Marana (“Marana”), that the evidence did not support the General Counsel’s claim that Bates Paving had discharged Marana in a heated meeting between employees and the owner of the company about concerns the employees had expressed about their treatment at the hands of their immediate supervisor, Robert Padilla (“Padilla”) and what the owner told the workers were problems with their work on a recent paving project. Marana claimed that as tempers rose in the meeting, the owner told him he was “f***ing fired,” and that he should leave.   The ALJ found that Marana’s testimony was not credible and was in fact contradicted by the sworn affidavit he provided to the NLRB during the investigation of the unfair labor practice charge. In fact, the ALJ pointed out in her decision that in his affidavit, the owner “told him that he was not fired,” and that Marana’s “responses changed throughout his testimony.”

Marana admitted that after the meeting where he exchanged words with the owner, the owner made it clear to him that he was not fired and that he should work the next day as scheduled. Marana also admitted, as both the ALJ and the Board found, that he did not lose even a single hour’s pay.

The ALJ did not however give the company a clean pass on its actions at this and found that the owner had in fact told Marana to leave and to stop his statements about the supervisor. However while she that the owner’s statements about firing Marana “would tend to restrain or interfere with employees in the exercise of their Section 7 rights.” Because she concluded that Marana was not discharged, whatever the employer may have said, the employer could not be found to have unlawfully discharged him because he did not lose his job.

Why The Board Disagreed With the ALJ

Although the Board did not expressly overrule the ALJ on the facts, in reality they did just that. While the ALJ found Marana not to be credible, essentially because she concluded that he knew he was not fired and in reality never lost even an hour’s worth of pay, the Board took what can be described as an absolutist view of the facts, and concluded, perhaps in a subconscious channeling of Donald Trump’s trademark line from The Apprentice (“You’re fired!”), that the very act of saying the words constitutes a discharge, the “capital punishment” of employment. However it seems that at most what the employer here did was threaten to invoke the industrial death penalty, and not the act of execution.

The Board tried to justify its overriding of the ALJ’s credibility determination, i.e. her finding that Marana did not really believe he was actually fired, by focusing not on what he thought but on what message the other employees who were present in the meeting or heard of it later would take away. In this regard the majority wrote

An employer cannot avoid Board sanction simply by reversing the discharge before an employee suffers financial costs. The message has been sent that the employer is willing to take this extreme action and the employee victim is likely to understand that a “change of heart” may not come so quickly, if at all, if he again engages in protected concerted activity.

What Does This Mean For Employers

There are a number of important takeaways in the Board’s decision in Bates Paving & Sealing. They include not only a reminder that the Act applies and employees are protected in a wide range of circumstances where there is neither union representation in the picture nor any suggestion that employees may be seeking to bargain or to designate a union to bargain on their behalf.

The decision clearly demonstrates that the Board is continuing to aggressively apply the concept of protected concerted activity. It also delivers the message that the adage “No Harm, No Foul,” does not apply in labor law. Innocent or momentary lapses in judgment are likely not to be excused even where an employer quickly undoes any potential harm, if the matter gets to the Board’s attention.

One of the featured stories in Employment Law This Week is the DOL’s publication of its controversial final rule around labor relations consultants.

The so-called “Persuader Rule” requires employers to disclose when they hire a consultant to help fight attempts at unionization. But the rule, as written, is potentially much broader and could require employers to disclose information about a wide range of consultants and others who they rely on for training and communication.

View the episode below or read more about the new rule in an earlier blog post.