On June 23, 2020, the National Labor Relations Board (“NLRB” or “Board”) overruled a 2016 decision that required employers to bargain over the discipline of employees during negotiations for a first contract.  The Board noted that the decision it issued Tuesday in 800 River Road Operating Co., LLC d/b/a Care One at New Milford, 369 NLRB No. 109 (“Care One”), reinstated “the law as it existed for 80 years,” under which the National Labor Relations Act (“Act”) did not impose a “predisciplinary bargaining obligation” on employers with newly-unionized workforces.  The Board’s restoration of what had been well-settled law under the Act reinstates employers’ ability to apply disciplinary policies in accordance with past practice while negotiating a first collective bargaining agreement (“CBA”).

The Obama Board’s Prior Imposition of a New Statutory Obligation to Bargain Over Discipline

In 2016, a Board majority, with then-Member Miscimarra dissenting, held in Total Security Management Illinois 1, LLC, 364 NLRB No. 106 (“Total Security”) that employers have a statutory obligation to bargain with a union before imposing “serious discipline” on employees once a union has been certified to represent the employees, but before the parties have reached agreement on a first contract.  The Board in Total Security based this purported statutory obligation on the well-established body of law that requires employers to maintain the status quo with regard to terms and conditions of employment that constitute a mandatory subject of bargaining once a union is certified (or voluntarily recognized).

Under the now rejected Total Security standard, employers that had not yet entered into a collective bargaining agreement with a union were required, with few exceptions, to provide notice and an opportunity to bargain before serious discipline of employees represented by that union because such actions involved discretionary considerations.  The notice and bargaining obligation of Total Security applied even if an employer simply adhered to an established disciplinary policy already in place before a union became the representative of an employer’s workforce.  The limited exceptions to this obligation applied when an employer imposed something less than “serious discipline” (under the Board’s ambiguous definition of that term), an employee’s presence at work posed “a serious, imminent danger to the employer’s business or personnel,” or where an employer and union negotiated and implemented an interim grievance-arbitration procedure before agreement to a final CBA.  As presciently noted in the Total Security dissent, the Total Security-imposed bargaining obligations, “replete with qualifications and exceptions . . . ma[de] it impossible for parties to achieve any reasonable measure of certainty and predictability.”

A Return to Well-Settled and Common Sense Bargaining Obligations

In Care One, the Board returned to established precedent regarding the obligation to bargain over employee discipline before parties reach agreement on a first contract.  In the unfair labor practice charges filed against the employer in Care One, the union alleged that the employer ran afoul of the standard announced in Total Security by imposing discipline after the union’s certification, but before the parties entered into a CBA.  Specifically, the union alleged that the employer violated the Act by suspending and discharging employees pursuant to an established disciplinary policy without first providing the union notice and an opportunity to bargain over the discipline.

Reversing the Administrative Law Judge’s decision, the Board rejected the findings that the employer violated the Act by imposing discipline without first bargaining.  The Board held that the correct analysis for evaluating such discipline “must focus on whether an employer’s individual disciplinary action is similar in kind and degree to what the employer did in the past within the structure of established policy or practice.”  Because the employer “applied its preexisting disciplinary policy” in disciplining the employees, the employer’s imposition of discipline was consistent with the Act, even though the disciplinary decisions included the use of discretion and took place without first bargaining with the union.

The standard (re)announced in Care One also is fully consistent with the most recent significant guidance from the Board regarding employer obligations to maintain the status quo with respect to mandatory subjects of bargaining.  Citing its 2017 decision in Raytheon Network Centric Systems, 365 NLRB No. 161, the Board in Care One “recognized that discretionary aspects of a policy or practice are as much a part of the status quo as the non-discretionary aspects.”  Accordingly, “in order to maintain the status quo, an employer must continue to make decisions materially consistent with its established policy or practice, including its use of discretion, after the certification or recognition of a union.”  By reversing the contrary standard set forth in Total Security, as well as the unworkable qualifications and exceptions to that standard, the Board’s decision in Care One serves to remove the uncertainty and conflict over bargaining obligations produced by the Board’s 2016 departure from longstanding principles regarding the duty to bargain.

The Board’s decision applies both prospectively and retroactively to “all pending cases in whatever stage,” thus providing welcome relief to all employers recently involved in the negotiation of a first contract.

The National Labor Relations Board (“Board” or “NLRB”) on Wednesday, May 13, 2020, overruled decades of convoluted Board precedent regarding “dual-marked ballots” in union representation elections – establishing a new bright line test.  A “dual-marked ballot,” to put it simply, is a ballot that has markings in or around both the “YES” and “NO” box, thus, making it difficult, if not impossible, to tell whether the employee who cast the ballot actually intended to vote for or against union representation. Indeed, a dual-marked ballot might also mean that the employee who completed the ballot actually did not want to take a position either way.   The treatment of such a single dual-marked ballot can have dramatic consequences in a close election, as was the case in Providence Health & Services.

Facts.

In Providence Health & Services, Service Employees International Union Local 49 (“Union” or “SEIU”) was seeking to organize and represent a group of employees at Providence Health & Services—Oregon (“Employer”).  In an NLRB representation election, a union must receive a majority of the valid ballots cast to be certified.  If the vote is a tie, the union loses and will not be certified as the bargaining representative.

An election took place in December 2018, which after the Regional Director’s decision regarding two controversial ballots, resulted in 384 votes for the Union, and 383 votes against union representation.  However, the Employer appealed to the Board and challenged a single ballot which was dual-marked and which the Employer argued should therefore not have been counted:

The Regional Director, citing to previous Board precedent, and in line with an administrative law judge’s recommendation, had concluded that the “smudging” along the diagonal line in the “NO” box was what he concluded to be an obvious attempt by the employee to erase the marking.  Accordingly, the Regional Director held that it was the clear intent of the employee to vote “YES.”    Consequently, for a moment in time, it looked as though the Union had won the election by a single vote.

The Regional Director’s ruling, like the ALJ’s recommendations, relied on a line of cases finding “a dual-marked ballot is void unless the voter’s intent can ‘be ascertained from other markings on the ballot (such as an attempt to erase or obliterate one mark),’” to find the smudging was intent.  Quoting TCI West, Inc., 322 NLRB 928, 928 (1997), enf. denied 145 F. 3d 1113 (9th Cir. 1998).

The Board’s New Bright-Line Rule.

However, in reviewing this case, the Board reviewed and overruled decades of complex, convoluted, and contradictory precedent on how to interpret a dual-marked ballot.  Finding “it difficult to discern any consistent approach,” the Board concluded that any “attempts to determine voter intent based on additional markings, attempted erasures, smudges, or other ostensible ‘corrections’ are impermissibly subjective.”  The Board reasoned that they themselves have no special expertise in judging such markings and thus, ultimately, each decision regarding a dual-marked ballot resorts in speculation.  Furthermore, any speculation by the Board is inconsistent with other established Board precedent directing the Board to avoid speculation regarding any such markings when deciding the validity of a ballot.

Accordingly, the Board concluded that “the Board and our stakeholders will best be served by the establishment of an objective, bright-line rule pertaining to dual-marked ballots.”  The new rule throws out decades of contradictory and speculative precedent in favor of this simple bright-line rule:

[W]here a ballot includes markings in more than one square or box, it is void. 

This new bright-line rule will be applied retroactively.

Consequently, in the case at issue, the Board voided the   ballot at issue as it included markings in more than one square, resulting in 383 votes for the union and 383 votes against representation.  As a union is required to receive a majority of the votes to be certified and therefore the union did not receive the necessary majority.  Under the Board’s one year election bar doctrine, that means that the union cannot file for another election in that unit for at least one year.

Change in Official Election Ballots.

In addition to the new bright-line rule, the Board decided to modify the official election ballot language in order to attempt to reduce or eliminate instances of dual-marked ballots.  Official election ballots currently state, among other instructions, “If you spoil this ballot, return it to the Board agent for a new one.”  The Board noted that the term “spoil,” like dual-marked ballots themselves, was not clear and could lead to confusion.

This instruction will now be replaced with a much more detailed instruction regarding the voiding of ballots:

“If you make markings inside, or anywhere around, more than one square, return your ballot to the Board Agent and ask for a new ballot.  If you submit a ballot with markings inside, or anywhere around, more than one square, your ballot will not be counted.”

Employers should take care to speak with their employees about this instruction to make sure they do not simply ignore this important language.

While the bright-line rule itself is retroactive, the Board made it clear that the change in ballot forms is only applicable “prospectively,” and that the change will be implemented as soon as possible.  Notably, it is not grounds for filing an objection if an election is held with ballots containing the old language.  Accordingly, it is even more important for employers to communicate with employees this new bright-line rule, as it may not be reflected on their ballots as of yet.

Impact.

Importantly, the new bright-line rule concerning dual-marked ballots applies retroactively, meaning that not only will it impact future elections but also elections and challenges to elections that are currently ongoing.

This new rule comes at a critical time as the Board’s Regional Offices resume conducting elections, albeit mainly by mail election ballots, previously put on hold due to the COVID-19 pandemic.  As stated by the Board, election ballots may not yet reflect this newly adopted language so employers should take care to communicate the bright-line rule to employees before they receive their ballots.  It is important that employers communicate to their employees what to do if they accidently check the wrong box, get a smudge on their ballot, or simply spill a drop of their morning coffee on their ballot: get a new ballot from the region conducting the election.

It may be tempting for employers to believe this bright-line rule will not have a substantial impact as only a small amount of ballots will be impacted by this new precedent.  However, the Employer and the Union in Providence Health Services would strongly disagree.  Employers seeking to more fully understand this bright-line rule and the impact it can have on elections, particularly during this unprecedented time in our Nation, should reach out to counsel for further guidance.

­­Amid the ever-increasing impact of the COVID-19 crisis across the country, the National Labor Relations Board (“NLRB” or “Board”) announced on Wednesday that the two-week freeze on representation elections currently in effect would end on April 3, 2020.  In the weeks leading up to the nationwide postponement of elections, which included both manual and mail ballot elections, the Board implemented an agency-wide telework policy and announced the closure of several Regional Offices.  According to the Board’s website, at least six Regional Offices remained closed as of March 30, 2020, with another 14 Regional and Subregional Offices closed to the public.

In the press release announcing the moratorium on elections, the Board stated that the two-week suspension was “necessary to ensure the health and safety of our employees, as well as those members of the public who are involved in the election process.”

Concerning the resumption of elections, NLRB Chairman John Ring stated on Wednesday that the Board’s “General Counsel now has advised that appropriate measures are available to permit elections to resume in a safe and effective manner, which will be determined by Regional Directors.” Neither that announcement nor any other documents made public by the NLRB to date have explained those measures, though most observers anticipate that the NLRB will move to a greater if not exclusive reliance on employees voting by mail ballots.

In a letter to Chairman Ring the day before the NRLB announced that it would resume elections, Representative Bobby Scott (D-VA) urged the Board “to permit Regional Directors to direct elections to take place as soon as practicable if, in their discretion, the elections can safely be done, especially when considering the possibility of mail ballots.”  The announcement the Board issued the following day, however, does not require that forthcoming elections be conducted by mail ballot only, or provide any specific parameters for conducting elections as the effects of the COVID-19 crisis continue to mount.

As a practical matter, mail ballot elections appear to be the most likely manner of conducting elections in the immediate future given the growing restrictions implemented by the Federal, state, and local governments to curb the spread of COVID-19 cases.  Informally, some NLRB Regional Offices have indicated that they are preparing guidance regarding procedures for the resumption of elections, and will release such guidance once finalized.  Other Regional Offices have indicated that they are not presently scheduling any elections, even as the two-week suspension of elections concludes.   At least one Regional office has begun informing parties that the ballots will be counted via Skype conferences and not in person following the voting by mail.

Given the differing routes that Regional Offices currently appear to be taking, as well as the varying impact of the COVID-19 crisis in different areas of the country, it appears that Regional Offices will evaluate local conditions and resume elections based on pertinent circumstances.

Employers and advocates should remain up to date on the legal restrictions applicable to the areas in which workforces are located, as well as any guidance issued by Regional Offices, and be prepared to navigate the Board’s representation procedures, implement communication strategies, and monitor the election process without the in-person interactions normally accompanying election proceedings.

On the heels of guidance regarding when the duty to bargain may be suspended or modified during the COVID-19 pandemic, the National Labor Relations Board (“NLRB” or “Board”) finalized rulemaking today that changes three aspects of the Board’s representation election procedures (“Final Rule”).

The Final Rule overhauls the handling of unfair labor practice charges commonly referred to as “blocking charges” when a petition for an election is pending, revamps the Board’s voluntary recognition bar doctrine, and changes the evidentiary requirements for barring elections in the construction industry when an employer has voluntarily recognized or entered into a collective bargaining agreement (“CBA”) with a union.  Originally proposed on August 12, 2019, the Final Rule is scheduled to be published on April 1, 2020, eight days after the Board announced it would be delaying implementation of broader changes to other representation case procedures.

An End to Voting Delay via Blocking Charges

The first, and potentially most impactful, amendment in the Final Rule modifies the Board’s current practices that permit a party to a representation proceeding to block an election, including a decertification, based on pending unfair labor practice (“ULP”) charges.  Such ULP charges, known as blocking charges, are typically filed before an election by a union that is seeking to represent a new bargaining unit of employees, or by an incumbent union facing a decertification vote.  Under the Board’s current procedures, the party filing blocking charges may ask that the election be deferred until after the Board resolves the charges.  Observers of the election process have often viewed blocking charges as a delay tactic by unions seeking to shore up waning support as election day approached, or as a means of avoiding or delaying employee attempts to remove a union through decertification, sometimes for years.

The Final Rule changes the Board’s procedure to allow the election to proceed despite pending ULP charges.  This change effectively ends the ability to block employees from voting in an election through the filing of ULP charges.  In the rule the Board initially proposed, ballots would have been impounded in all cases with pending ULP charges.  Under the Final Rule, election ballots will be either counted or impounded until after the charges are resolved, depending on the nature of the charges.

Ballots will be impounded only where the party filing ULP charges requests to block the election process and the charges filed:

  • Allege violations of Section 8(a)(1) and 8(a)(2) or Section 8(b)(1)(A) of the National Labor Relations Act (“Act”) and challenge the circumstances surrounding the petition or showing of interest; or
  • Allege violation of Section 8(a)(2) through employer domination of a union and that the employer seeks to disestablish the bargaining relationship.

For all other ULP charges, the ballots cast in an election will be opened and counted at the conclusion of the election.

In cases that trigger the impounding of ballots, the Regional Director will impound ballots for up to 60 days from the conclusion of the election if the ULP charge has not been withdrawn or dismissed prior to the conclusion of the election.  If a complaint issues within the 60-day period, the ballots will remain impounded until the charge is resolved.  If the ULP charge is withdrawn or dismissed within the 60-day period, or the 60-day period expires without issuance of a complaint, the ballots will be opened and counted.  Significantly, the serial filing of additional ULP charges will not serve to extend the 60-day period.

Under the Final Rule, regardless of the type of ULP charges involved, the Board will not issue a certification of the results until the charges are resolved.  The overall impact of the Board’s modification of its practices is that a blocking-charge request may only delay the vote count or certification of results, but will not delay the Board conducting a representation election.  The Final Rule is scheduled to be published on April 1, 2020, and will become effective 60 days after publication.

Voluntary Recognition Bar

The second amendment in the Board’s Final Rule reworks how the Board handles representation petitions after an employer has voluntarily recognized a union.  Under current Board practices, when an employer voluntarily recognizes a union under Section 9(a) of the Act, the union is insulated from any challenge to its majority status for “a reasonable period of time” to allow for collective bargaining.  The Board has defined a reasonable period of time as “no less than 6 months after the parties’ first bargaining session and no more than 1 year.” Lamons Gasket Co., 357 NLRB 739, 748 (2011).  When parties reach agreement on a CBA during this insulated period, the Board generally bars elections for up to 3 years of the new contract’s term under the contract bar doctrine, which can effectively serve to bar subsequent petitions for a total of up to 4 years.

Under the Final Rule, for voluntary recognition of a union to serve as a bar to a subsequent representation petition, unit employees must receive notice that voluntary recognition has been granted and be provided with a 45-day open period to file a decertification or for a rival union to file a petition to represent the unit.  The notice must be posted in conspicuous places where notices to employees are customarily posted, and must be distributed to employees electronically if the employer customarily communicates with employees through electronic means.

Correspondingly, agreement to a first contract with a voluntarily recognized union will not serve to bar petitions for up to 3 additional years if the notice and open-period requirements of the Final Rule have not been met.  The Final Rule applies prospectively to the voluntary recognition of a union on or after the effective date of the Final Rule.

Recognition of Unions in the Construction Industry

The last amendment in the Board’s final rule pertains to recognition of unions in the construction industry.  Under Section 8(f) of the Act, employers and unions in the construction industry may enter into pre-hire agreements without any vote by employees.  Such pre-hire agreements, however, do not serve as a bar to subsequent petitions for a Board election.

Nonetheless, under the Board’s current standards, employers and unions that have entered into such agreements may convert the 8(f) pre-hire relationship into a traditional collective bargaining relationship under Section 9(a) of the Act, and may do so absent a Board-conducted election or a demonstration of majority support.  Under a 2001 decision, Staunton Fuel & Material, 335 NLRB 717, the Board held that construction unions could establish Section 9(a) collective bargaining relationships by entering into a contract with language stating that: (1) the union requested recognition as a majority or Section 9(a) bargaining representative of employees; (2) the employer recognized the union as the majority or Section 9(a) representative; and (3) the recognition was based on the union showing, or offering to show, evidence of majority support.

The Final Rule provides that contract language alone cannot create a Section 9(a) bargaining relationship in the construction industry.  Instead, the Board will require positive evidence that proves a union demanded recognition from an employer and the employer granted recognition based on a demonstration of majority support.  The Final Rule’s amendment concerning the recognition of construction unions applies to voluntary recognition extended on or after the effective date of the Final Rule, and to any CBA entered into on or after the date of voluntary recognition extended on or after the effective date of the Final Rule.

The Board’s Continuation of its Rulemaking Agenda

Despite the indefinite postponement of all representation elections and the limitations imposed on the operations of NLRB Regional Offices due to the impact of COVID-19, the Board issued the Final Rule within the general timeframe expected for the rule, given the extension of deadlines for comments to the initial proposal for the rule.  Notably, in the Final Rule, the Board specifically references its broader changes to other representation case procedures that were scheduled to become final on April 16, 2020, but which are currently postponed until at least May 31, 2020 due to legal challenges filed by organized labor earlier this month.  In this Final Rule, the Board notes that those broader changes to representation election rules are still “scheduled to take effect in Spring 2020.”  For now at least, the Board appears positioned to continue its planned rulemaking changes despite the uncertain times.

On March 27, 2020, NLRB General Counsel John Ring issued General Counsel Memorandum 20-04, entitled “Case Summaries Pertaining to the Duty to Bargain in Emergency Situations” providing employers with guidance “regarding the rights and obligations of both employers and labor organizations, particularly in light of responsive measures taken to contain the virus,” including both “measures taken out of prudence” as well as and other actions that “have been required by state, local or federal authorities.” Our Act Now Advisory reports on the General Counsel’s review of summarized in the Memorandum are those touching on the duty to bargain during public emergency situations and those touching on the duty to bargain during emergency situations particular to an individual employer. Stay tuned to this blog and Epstein Becker Green’s Coronavirus Resource Center for updates.

In the chaos of a global health pandemic and what some economists are calling the Great Suppression, Americans have shown amazing solidarity in the battle against the coronavirus (“COVID-19”).  Nationwide, citizens are social distancing and staying home while businesses are closing their doors and redeploying their resources to meet emergent demands.  However, this collective American commitment has come at a steep economic cost.  Millions of Americans suddenly find themselves unemployed or unable to work while previously thriving businesses have been thrown into financial despair.  Unfortunately, rather than join in the collective effort, labor unions seized on the desperation to gain unprecedented advantages, suppress employer rights and deprive employees of their full freedom of choice – namely unions were able to obtain a single sentence in the CARES Act which mandates employers remain silent and commit to not oppose unionization of their employees in order to obtain the loans needs to maintain those jobs and save their businesses.

After Almost a Week of Wrangling, Congress Passed the CARES ACT Stimulus

Reeling from shelter-in-place, isolation orders and mandated closures, American businesses and citizens will soon receive some much needed relief.  After stalling in Congress for nearly a week, on Friday, March 27, President Trump signed into law the Coronavirus Aid Relief Economic Security Act (“CARES Act”), a historical stimulus package that will provide a broad range of critical financial assistance to American workers, families and businesses confronting the extraordinary challenges of the COVID-19 crisis.  (For a broader analysis of the CARES Act see here).

This bill is unprecedented in both its momentous scale and its overwhelming bipartisan support.  In a time when most acts of Congress seem to split directly down party lines, the CARES. Act passed unanimously in the Senate and nearly unanimously in the House of Representatives, and President Trump signed it into law the very same day.  This begs an important question, though.  Why, if the bill had such widespread support among Democrats and Republicans alike, did it take nearly a week to reach the President’s desk when every day delayed was another day where uncertainty wreaked havoc on economic markets and Americans went without critical relief?

The answer is disappointingly simple.  It was politics as usual as legislators vied for advantages for their top political contributors.  One of the political demands that held the bill up, and ultimately made its way into the signed law, was a Democratic-backed union neutrality mandate.  Tucked away in a single line in the middle of the multi-hundred page Act, this provision dramatically alters core rights of employers and employees under the National Labor Relations Act (“NLRA”) and could have seismic repercussions for businesses who have no choice but to submit to this condition in order to secure an economic lifeline during the coronavirus pandemic.

What is “Neutrality”?

Simply put, “neutrality” is a waiver of an employer’s statutorily protected free speech rights.  Under the NLRA both unions and employers enjoy federally protected free speech rights.  For employers, these rights, which are known as 8(c) rights, allow an employer to share facts, opinions and experiences about unions with its employees.  These rights are essential tools during union organizing drives, necessary to allow employers to combat misinformation and educate employees on the realities of unionization, particularly those unions often downplay or ignore such as the cost to employees on investment of union dues, the impact of strikes on employees and the workplace, the loss of a direct relationship with their employer and the reality that employees can, and often do, lose wages and benefits in union negotiations.

Hearing both perspectives allows employees to make informed and free choices on whether  or not they want to be represented by a union.  “Neutrality,” however, destroys this crucial balance of perspectives by requiring employers to remain impartial and silent on unions while unions remain free to give their one-sided point of view to employees.  It is of course not surprising, then, that the ultimate consequence of “neutrality” is that it is much easier for unions to organize employees.

The CARES Act Neutrality (Hush Money) Mandate 

Although the CARES Act provides multiple different kinds of loans and other financial assistance – including Paycheck Protection Program loans (for small businesses with up to 500 employees and nonprofit organizations), expanded Economic Injury Disaster Loans (for small businesses with up to 500 employees, sole proprietors, independent contractors,  and nonprofit organizations), Emergency Relief Loans (for air carriers, businesses critical to maintaining national security, and credit facilities established by the Federal Reserve) and various tax credits – probably the most fundamental part of the assistance package is the Act’s Mid-Sized Business loan program.  Under the CARES Act Mid-Sized Business loans, mid-size businesses (those with 500 to 10,000 employees) can obtain a loan with no greater than a two-percent annualized interest rate, and no interest or principal payments for six months, to enable them to retain at least 90 percent of the business’s workforce, at full compensation and benefits, until September 30, 2020.

One of the “compromise” amendments Democratic legislators were able to exact was labor unions’ demands that as a condition of any Mid-Sized Business loan, the borrowing employer must make a “good-faith certification” that they “will remain neutral in any union organizing effort for the term of the loan.”

In other words, if a mid-size business needs a loan in order to weather their temporary closure, shelter-in-place orders, new mandated paid leaves, or loss of revenue from other economic impacts of COVID-19, it must agree to waive its free speech rights and acquiesce to a targeted union misinformation campaign to unionize its employees.  Notably, while hopefully COVID-19 will be a short term crisis, this unprecedented disruption of the Labor-Management balance will silence employers for the duration of their loan term and, if the employees are misled into unionizing, the impact is usually permanent given the restrictions and difficulties the NLRA places on decertifications.

Moreover, it remains unclear who will determine when a violation occurs and what the consequences for violation will be.  Some may argue that a violation is an unfair labor practice that should be adjudicated by the National Labor Relations Board with all the attendant Board remedies.  However, given that Section 8(c) of the NLRA specifically protects employers’ right to not remain neutral, the Board would presumably be without jurisdiction to hear such claims absent further legislation.  That said, the other potential consequences outside Board processes could be even more impactful and range from mid-term calling of the remaining balance of the loan, detrimental modification of loan terms, financial penalties, and/or the loss of tax advantages.  Questions still remain as to who would decide an actual violation occurred and when such penalties are warranted and whether labor unions would have third party rights to enforce them.

While the CARES Act is silent on such matters, regulations illuminating the answers to these questions may be forthcoming.  The CARES Act gives the Secretary of the  Treasury the authority to promulgate regulations to enforce the provisions of the CARES Act, and these regulations could shed more light on the actual consequences for violating the neutrality mandate and who will adjudicate violations.  Notably, this authority is not limited in time and theoretically a different Secretary of the Treasury in a different Presidential Administration could amend or create new regulations which have significant consequences.

Unions Have Already Begun Efforts to Profit from Hush Money Neutrality – What Employers Should Expect

For businesses to whom these loans are a vital lifeline through the coronavirus pandemic, the union neutrality mandate in the CARES Act amounts to a compelled waiver of employers’ federally-protected free speech rights that will give unions a significant advantage in organizing drives.  Legislatively-mandated union neutrality inevitably leads to an uptick in union organizing drives, and since these loans will be a matter of public record, unions will have a literal roadmap on which employers to target.  Thus, employers who obtain these loans should be fully prepared to contend with union organizing campaigns.  In fact, the loans are not even available yet, some employers are reporting that unions are not waiting to exploit this political advantage and have already started inquiring about the employer’s intent to obtain  a CARES Act loan and raising the union neutrality mandate.

Clearly in these troubling times employers need to take necessary steps, including seeking CARES Act loans, to maintain their financial solvency and ensure their ability to maintain jobs and payroll for their employees, they should do so understanding that their silence is part of the cost.

The impact of the novel coronavirus has slammed employers across the globe, and federal agencies such as the National Labor Relations Board (“Board”) are no exception.  The Board announced Thursday the unprecedented step that it was suspending all representation elections, including mail ballot elections, for at least two (2) weeks until at least April 3rd.

Just days earlier, the Agency implemented a nationwide telework policy in both its headquarters and regional offices, encouraging employees of the agency to work from home.  While implementing the election freeze, the Agency highlighted that operations would be limited and open regional offices will maintain “minimal staff.”   In a press release, the Agency stated “given the closure of several regional offices and limited operations and significant telework at others, the Board does not believe that it is possible to effectively conduct elections at this time.”

Likewise, due to the potential  exposure of several agency personnel  to the COVID-19 virus, the NLRB has announced temporary closures of various regional offices including those in Cleveland, Chicago, Denver, Detroit, Manhattan, New Orleans and San Francisco as the agency managed potential Board Agent exposure to COVID-19.  The Agency noted the closures are evolving and stated that it would continue to update the public on its website.

What This Means for Employers and Advocates

While the NLRB and its regional offices continue to function, processing newly filed petitions and unfair labor practice charges, the agency is functioning at a reduced level.  Representation elections that had been scheduled to take place between now and April 3rd have been postponed, as have representation petitions and most other proceedings.  NLRB personnel do continue to investigate ULP charges and attempt to secure agreements for elections in pending representation cases, asking parties to agree that any agreed elections will take place in the future on dates to be determined by the agency’s Regional Directors once operations return to something closer to normal. It is inevitable however that pending cases will be delayed and that backlogs in case processing and resolution will continue to grow.  While the agency will continue to handle incoming cases, and Board employees will continue to work remotely, there will most certainly be a lag in case processing and hearing procedure as the Board navigates remote case-processing and strained adjudication and case-processing capabilities.

We will continue to provide updates as the Board’s guidance evolves.

As we have discussed in prior Advisories, the 2019 Novel Coronavirus (“Coronavirus” or “COVID-19”) public health emergency is raising important issues for employers addressing rapidly developing disruptions to the workplace and the lives of employees with mass school closures, workplace closings, the need to reduce staff and expenses, etc. Employers with  unionized workforces must take certain additional considerations into account when developing and implementing response plans to the current crisis.

Under the National Labor Relations Act (“NLRA” or “Act”), employers have a legal duty to bargain with labor unions representing their employees regarding the employees’ wages, hours and other conditions of employment.  In addition, many employers are party to collective bargaining agreements (“CBA”) with the unions that represent their employees that contain provisions directly relevant to the types of adjustments that may be necessary for businesses to respond to the unprecedented challenges this pandemic and its broad effect on society and commerce presents. Absent language in a CBA recognizing an employer’s right to act, either by adjusting schedules, reducing the numbers of employees working, modifying pay and/or benefits, employers generally may not make unilateral changes to these terms without first providing their employees’ union representatives with reasonable notice and an opportunity to bargain over the same.  The current public health emergency does not eliminate these legal obligations of employers, although it certainly affects what may be deemed reasonable notice and an opportunity to bargain given the ongoing emergency.

Accordingly, unionized employers planning their responses to Coronavirus should consider the following factors:

  • Have a Plan
    • Regardless of whether an employer’s employees are represented by a union, leading healthcare experts all agree that employers should have a preparedness and response plan (guidance on preparedness for employers is available from the CDC and WHO).
    • To assist, please feel free to review Epstein Becker & Green’s Coronavirus resource center and/or attend our free webinar on Friday.
  • Review CBA and Work Rules
    • Assess whether the current CBA includes language permitting, or prohibiting, the employer from take certain of the actions called for by response plan to protect the health and safety its workforce. For example:
      • Is there a “force majeure” or other public emergency clause that may apply;
      • What do the existing CBA and applicable employer policies provide regarding the prevention of ill or contagious employees coming to the workplace, or being sent home from the workplace;
      • What do the CBA or existing policies provide regarding the permissible or mandatory usage of, or restrictions on using, paid sick leave, paid time off, vacation, short term disability, and Family and Medical Leave in instances where employees are infected, caring for an infected family member or quarantined due to possible exposure to COVID-19;What restrictions are in place regarding the potential use of salaried supervisors and managers, outside contractors, and/or temporary workers for potentially filling temporary workforce vacancies created by the current public health emergency.
      • What restrictions, if any, does the CBA provide concerning reducing hours and/or days of employment, modifying pay and benefits, reducing staffing levels and other contingencies.
    • Identify elements of your proposed/draft Coronavirus Response Plan that may conflict with the terms of your CBA, and those that conflict with existing policies and/or practices that are in effect outside of the CBA.
    • Proposed changes in the CBA will require notice to the union and/or the union’s written consent to avoid a contract breach, even if for a temporary change, while changes in policies and practices outside of the CBA require notice and a reasonable opportunity (under the circumstances) to bargain over changes – either to agreement or impasse before implementation.
    • Contact union leadership regarding the immediate need implement a COVID-19 response plan, and management’s need and availability to meet as soon as possible to discuss and resolve the same. While there is no fixed period for what is reasonable notice, given the current public health emergency it may be reasonable to require the union to meet potentially the same day or at least by the following day, but the point is it need not be notice where the union is provided one or two weeks or more to respond or bargain.
  • Meeting with Union Leadership
    • Union leaders are under pressure from their members for answers regarding development of a Coronavirus Response Plan, and may welcome the opportunity to learn of the Company’s proposed plan, and to have input into the same. In this regard, one a Coronavirus Response Plan is finalized, the union leadership may prove to be a valuable additional resource in communicating the same to employees, and to identifying for management question and issues that employees raise that neither management nor the union anticipated.
    • Examples of appropriate topics to discuss with union leadership include:
      • Usage of paid sick leave, paid time off, and other forms of paid and unpaid leave in instances where workers are infected or quarantined;
      • Obligations for an employee to disclose if he or she has been infected with or exposed to COVID-19, or has recently traveled to a “high risk” country as designated by the CDC;
      • Criteria for an employee’s return to work; and
      • Possibility of shutdown by government, public health officials or management, which may involve the need to make a temporary layoff, possibly including a voluntary layoff or relaxing strict compliance with existing layoff procedures, or include invoking total and/or partial plant closure language in a CBA, etc.
    • As the Coronavirus crisis continues to develop, it will be important to keep union leadership informed of any needed changes to the Coronavirus Response Plan. This ongoing dialogue will serve to help provide the union leadership with timely notice of any particular issues affecting the workplace as they arise, and rapid completion of the employer’s obligation to bargain with the union over the same prior to implementing further changes in employees’ terms and conditions.
  • Monitor Legal and Regulatory Developments
    • Stay up to date on actions being taken by your federal, state and local governments, as well as regulatory updates from the CDC and OSHA, and timely share such notices that potentially affect your workforce with the union leadership.

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Employers in New York, the second-most unionized state in the country, have lost another key point of leverage in collective bargaining.  Effective February 6, 2020, Senate Bill 7310 reduces the amount of time striking workers in the private sector must wait before they are eligible to receive unemployment benefits.  While New York is one of only a handful of states to allow strikers to receive unemployment benefits,[1] the seven week waiting period that has applied until now, has served as a deterrent to strikes. The new, shorter waiting time has the potential to profoundly affect the calculus and reduce employers’ economic leverage in collective bargaining because earlier access to unemployment benefits will soften the blow that a strike has on an employee’s financial well-being and potentially increase the willingness of unions and employees to strike.

Access to Unemployment Benefits While Striking in New York

The Supreme Court has long held that the National Labor Relations Act does not preempt a state’s ability to determine whether unemployment benefits are available for employees engaged in a labor dispute.  As unemployment benefits are generally available only to those workers who are ready willing and able to work, employers might reasonably expect that workers who voluntarily withhold their labor in a strike would not be eligible for such benefits.  While most states appear to agree and do not permit employees who are on strike to collect unemployment insurance benefits, New York remains an outlier.

Historically, striking employees in New York had to wait seven weeks before they could file for unemployment benefits, unless there was a lockout or the employer hired replacement workers.  This waiting period meant that striking workers could not receive their first benefit check until the ninth week of the work stoppage.  The purpose of the delay in benefits was to prevent the state from inserting itself prematurely into a private-sector labor dispute and to “avoid the imputation that a strike may be financed through unemployment insurance benefits.”  Matter of Burger, 277 App. Div. 234 (1950).  This thoughtful counter-balance reduced the risk of frivolous strikes and work stoppages, while providing an eventual safety net for those rare instances where a labor dispute suffered a long impasse.

Reducing the Waiting Period

Under New York’s amended law, the amount of time that striking workers must wait before receiving unemployment benefits is reduced from seven weeks to two weeks.  This law modifies a previously adopted bill that would have required workers to wait just one week after the start of the strike to be eligible to receive unemployment benefits.   Had the legislature not amended the 2019 bill, for the purposes of unemployment benefits in New York, striking workers would have been treated similarly to those employees who became jobless involuntarily.

A New Calculus for New York Employers

A reduction in the waiting period for unemployment benefits potentially changes the dynamics in collective bargaining by reducing the incentive for unions and workers to avoid strikes and the economic hardship on those who strike and increasing the pressure on employers to concede to union demands to avoid strikes.  Over the last two years there has been a recent upsurge in major strike activity. With unemployment benefits now available sooner, unions may be more willing to initiate or prolong a strike to improve their bargaining position.  New York employers should be wary of how this shift in the costs of striking could affect future labor negotiations and update their existing strategies accordingly.

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[1] The list of states permitting striking workers to receive unemployment benefits is short.  In 2018, New Jersey passed a bill permitting striking workers to begin collecting unemployment benefits 30 days after the start of a strike.  Other states, such as GeorgiaNew Hampshire, Rhode Island, West Virginia, provide benefits if unemployment continues after the labor dispute ends, so long as the worker did not participate in the strike and are not a member of the union involved in the labor dispute.