Practices and Procedures

Since earlier this year, reports have circulated that National Labor Relations Board (“NLRB” or “Board”) General Counsel Peter Robb planned to introduce changes in its case handling processes and organizational structure that would move certain authority away from the Regional Directors and transfer substantive decision making authority to Washington. While the General Counsel denied the specifics, he acknowledged that as the Board was faced with a reduced case load and budgetary pressures, some changes would be necessary and appropriate. It now appears safe to say that change is indeed coming to the NLRB and that more is likely.

Changes to NLRB Case Processing – Part 1

On July 30, 2018, the Division of Operations-Management in the General Counsel’s Office issued Memorandum ICG 018-06, addressed to the agency’s Regional Directors, Officers-In-Charge and Resident Officers, entitled Changes to Case Processing Part 1, outlining a series of steps intended to “streamline” certain aspects of the processing of representation petitions and the investigation and determination of unfair labor practice charges.

As the memo points out

Please note that this is not intended to be a final report with respect to the initial memo. Rather it focuses on a limited number of the 59 items, with the expectation that some of the other items in the January 29 memo will be addressed in one or more memos soon to follow.

The changes announced in the memo were effective immediately and fall in four main areas.

Representation Case Decision Making

While the number of representation cases in which hearings take place to resolve issues such as which employees share a community of interest, whether employees are supervisors and/or managers thus should or should not be included in a bargaining unit, and therefore eligible to vote in a representation election continues to be limited, the memorandum adopts changes in how decisions are written in those cases, with the goal of making the process “more efficient,” and addressing what the memorandum refers to as “wide disparities” in the length of time that passes between the close of a hearing and the issuance of a Decision and Direction of Election or a Decision dismissing a petition without ordering an election.

A new centralized approach will be followed in the drafting of post representation case hearing decisions, with the task delegated to regional and district teams.  The new system provides for the designation of a limited number of attorneys and/or field examiners in each of four Districts who will be assigned to serve as the primary decision writers in each District for an initial term of one year, working under a manager of decision writing in that District.

The Memorandum notes that not all representation case decision writing will necessarily be assigned to the new teams, and that “Regions may decide to keep particular matters in-house.” No guidance is offered as to when and in what circumstances Regions may keep matters in-house.

Streamlining Advice Branch Submissions

The Memorandum also adopts a new and streamlined process for submission of cases to the Division of Advice in Washington for guidance.  As noted on the Board’s website,

The Division of Advice provides guidance to the Agency’s Regional Offices regarding difficult and novel issues arising in the processing of unfair labor practice charges, and coordinates the initiation and litigation of injunction proceedings in federal court under Section 10(j) and (l) of the National Labor Relations Act.

The Memorandum points out that “Delays in processing cases submitted to Advice has been a cause of criticism” both within the NLRB and outside the agency.  Often, until now, when a Region and/or the General Counsel’s Office in Washington have determined that an issue or matter warranted review and consideration by Advice, the Region would have to prepare and send to Washington a detailed legal and factual memorandum, preparation of which could be time consuming.

Under the Memorandum, the Regions are encouraged to adhere to following process instead:

  • “Regions may submit short form memos to Advice.
  • The form of that a short form memo may take will vary depending on the particular matter.
  • In some cases, e.g. questions about work rules, the submission may be as simple as an e-mail, as explained in GC 18-04, the General Counsel’s June 6, 2018 Memorandum “Guidance on Handbook Rules Post-Boeing.
  • In other cases, where all the necessary evidence can be found in the FIR (Final Investigative Report) or Agenda Minute, a memo incorporating those document, and emphasizing any factual or legal issues that the Region believes are important.

Streamlining Ethics Issues

The Memorandum describes certain steps that the General Counsel’s Office will be taking to make what it refers to as “ethics guidance memos that could be useful in other cases” part of an internal data base organized by subject matter for access by NLRB personnel.

Changes to Post Investigation Decision Making at the Regional Level

Perhaps the most significant change adopted in the Memorandum is the establishment of what it refers to as the delegation of “appropriate case-handling decision-making authority to supervisors” in the Regional Offices, a responsibility that has traditionally been vested almost exclusively with the Board’s Regional Directors.  According to the Memorandum,

such decision-making authority may include approving dismissals, withdrawals, or settlements in appropriate situations.

The Memorandum explains that in those cases where the investigator and her or his supervisor “agree on the merit or lack thereof in a case, this is the final decision.”  The Memorandum suggests that this will allow Regional Directors “to focus on higher priority, more complex case-handling matters.” All merit decisions, that is, cases in which there is a decision to issue an unfair labor practice complaint, “should be made by the Regional Director or his/her designee.

While the Memorandum states that “the extent of this delegation will be left to a Director’s discretion,” it makes clear that Regional Directors will be expected to regularly exercise their discretion to delegate such decision making authority, pointing out that doing so will be considered in the Regional Directors’ annual performance appraisals.

Early Retirement Buyout Program

The following week, on August 7, 2018, the Board announced it was creating a Voluntary Early Retirement Authority (“VERA”) program and a Voluntary Separation Incentive Payment (“VSIP”) program.  The Board has described these programs as intended to “to better manage its caseload and workforce needs,” address what the Board has described as a “current staffing imbalance by allowing it to “realign Agency staffing with office caseload” and “reallocate its limited resources and to, among other things, provide employees with the tools they need, including training and improvements in technology.”

What Comes Next?

The Memorandum makes clear that this is but a first and indeed an interim step as the General Counsel continues to attempt to better utilize the agency’s limited resources while fulfilling the agency’s responsibilities to the public.

As is explained in footnote 1, the Memorandum “is not intended to be a final report” and that additional memoranda addressing some or all of the ideas identified in the January 29 memo January 29 memo are “soon to follow.”

This was a featured story on Employment Law This Week – watch it here.

In its long awaited decision in Mark Janus v. American Federation of State, County and Municipal Employees, the United States Supreme Court clearly and unequivocally held that it is a violation of public employees’ First Amendment rights to require that they pay an “agency fee” to the union that is their collective bargaining representative, to cover their “fair share” of their union representative’s bargaining and contract enforcement expenses. The Janus decision overturns the Court’s own 1977 decision in Abood v. Detroit Board of Education, which had found state and local laws requiring public sector employees to pay such fees to be lawful and constitutional. Commentators expect the decision to have serious economic consequences for unions in the heavily organized public sector.

While the Court in Abood had previously found that such laws requiring employees to pay representation or agency fees if they elected not to become dues paying members were permissible justified and to be upheld on the grounds that (1) they “promoted labor peace” and (2) that the effect of “free riders,” that is workers who benefitted from a union’s efforts but did not contribute to its efforts on their behalf justified mandating employees contribute, the Janus majority rejected both of these legal underpinnings in finding Abood had been improperly decided.

In Janus, Justice Samuel Alito concluded that the fears of interference with labor peace were unfounded based on the experience since 1977, and in any case, that these concerns, even if supported by evidence, could not satisfy the Court’s “exacting scrutiny” test that the majority held should be applied to circumstances such as these, where a state or local government entity sought to compel employees to subsidize the speech of others, i.e. their union representative and union member co-workers, who may endorse or support a union’s goals and objectives in collective bargaining and in its dealings with the employer. Notably, the analysis made clear that the speech in question was not political speech or campaign activity by unions, but rather speech in connection with positions taken in collective bargaining and labor relations. The Court also found that even if the agency fee statutes were evaluated under the less rigorous “strict scrutiny” test, it would have concluded that they were unconstitutional under that test as well.

What Does Janus Mean for Public Sector Employers and Workers?

At this time there are some 22 states in which agency fees are permitted by state or local law and an additional 28 states where they are not authorized. Under federal sector labor laws, the unions that represent employees of federal agencies and entities are not permitted to require employees to pay agency fees or become union members as a condition of continued employment.

With the Janus decision, simply put, provisions in collective bargaining agreements that require public employees to become union members, pay union dues or pay agency or representation fees as a condition of continued employment have been found to be unconstitutional and to impermissibly interfere with public employees’ freedoms of speech and assembly.

What is not yet clear is precisely how and when public sector employers and unions will be applying the decision. However, it is likely that as public employees who object to paying representation fees or paying union dues learn of this decision and the fact that they can no longer be compelled to pay agency fees or dues, employees will tell their employers to discontinue withholding fees and dues and paying them over to unions.

What is also already apparent is that there is likely to be resistance. Already, within hours of the release of the Janus decision, New York’s Governor Andrew Cuomo issued his own statement signaling his views and opposition to the decision. He also announced his intention to issue an executive order shielding the addresses and phone numbers of public employees to make it more difficult for advocates to reach out to state employees and notify them of their options.

What Does Janus Mean for Public Sector Unions?

Simply put, if public employees exercise their right to stop paying agency fees to the unions that represent them, the unions will feel an immediate and substantial hit in their revenue and all that comes with that. The amounts at stake are substantial. According to a report by the Empire Center for New York State Policy, approximately 200,000 public workers in New York State alone are presently paying agency fees of more than $110 million dollars annually.

The Court was not unmindful of the financial and other impacts that the decision will have on unions that represent public employees. As Justice Alito wrote

We recognize that the loss of payments from nonmembers may cause unions to experience unpleasant transition costs in the short term, and may require unions to make adjustments in order to attract and retain members. . . “But we must weigh these disadvantages against the considerable windfall that unions have received” until now.

The impact in other states like California, Illinois (where the plaintiff in Janus is employed) and other states will clearly be substantial.

What Does Janus Mean in the Private Sector?

The Court’s decision in Janus is limited in its direct and immediate impact to public sector and does not apply to private sector employees who are covered by collective bargaining agreements containing union security clauses. Those clauses, which are only found in contracts in states that are not right to work states, require employees to become union members or pay agency or representation fees as a condition of continued employments.

That said, it is highly likely that the Janus decision will have spill-over effects in the private sector. As we reported last year, unions have a duty to make clear to employees who they represent under contracts containing union security clauses, that employees have rights and are not required to pay the same amount as agency fees as those who are members.

Additionally, the past few years have seen a resurgence in states passing laws to become right to work states and outlaw mandatory membership and/or agency fees. It can be anticipated that the Janus decision will likely result in more states and advocacy groups considering such legislation.

On June 7, 2017, in RHCG Safety Corp. and Construction & General Building Laborers, Local 79, LIUNA, the National Labor Relations Board (“NLRB” or the “Board”) rejected an employer’s contention that “a text message cannot be found to constitute an unlawful interrogation” and found that a coercive text message, just like a coercive face-to-face meeting or a coercive phone call, could serve as evidence that the employer had unlawfully threatened or interrogated employees concerning their union support or activity in violation of the National Labor Relations Act (“NLRA” or the “Act”),  and thus could support a finding that the employer committed an unfair labor practice (“ULP”).  The Board noted that the employer had offered “no reason why the Board should provide a safe harbor for coercive employer messages via text messages.”

The Act’s Protection of Employee Activity

The Act provides all employees with the right to engage or refrain from engaging in protected, concerted activity, that is activity concerning their terms and conditions of employment, including but not limited to the right to join and be represented by unions and to engage in collective bargaining with their employers. It is well established that these rights, which are provided for in Section 7 of the Act, protect and apply to employees in both unionized and non-union settings.  The Act prohibits both employers and unions from engaging in conduct that interferes with employees in their exercise of their Section 7 rights.  Under Section 8(a)(1) of the Act, it is an ULP for an employer or its agents to restrain or coerce employees in the exercise of their Section 7 rights.  For example, it is unlawful for an employer to interrogate an employee about his or her support for a union or that of other employees.  It is a violation of Section 8(a)(3) of the Act for an employer to terminate, discipline or otherwise take action against an employee because of his or her exercise of Section 7 rights.

The case in question arose in the context of a union organizing campaign by Laborers Union Local 79 among employees of RHCG Safety Corp. (also known as Redhook Construction Group). The union had petitioned the NLRB for a representation election, in which employees were to vote on whether they wanted Local 79 to become their bargaining representative. During the campaign, an employee texted his supervisor, to inquire about returning to work after an approved leave of absence. The supervisor replied by text, “U working for Redhook or u working in the union?” According to the unanimous Board decision, in which Chairman Miscimarra joined with Members Pearce and McFerran, an employee would understand the supervisor’s message to strongly suggest that working for Redhook was incompatible with supporting or working in the union.  The Board therefore agreed with the Administrative Law Judge (“ALJ”) who had conducted the ULP hearing, that the text message constituted an unlawful interrogation and violated Section 8(a)(1) of the Act.

In its exceptions to the ALJ’s decision Redhook argued to the Board that a text message could not constitute an unlawful interrogation, but according to the Board’s decision, Redhook failed to offer any reason to support its position that a text message could not support a finding of an unlawful interrogation.  The Board rejected Redhook’s contention, finding “an unlawful interrogation need not be face-to-face.”   The Board also rejected the argument that the text message at issue was inadmissible at the ULP hearing because the screenshot of the text offered by Counsel for the General Counsel did not include the entire communication between the employee and his supervisor.  The Board reasoned that the Federal Rules of Evidence permit introduction of only a part of a writing, and there was nothing in the record to suggest the text message at issue was incomplete or that the “missing” text messages could have negated the coercive nature of the “are-you-for-the union” inquiry.

What Should Employers Do Now?

The Board’s decision highlights the need for employers to carefully consider how to communicate with employees in the ordinary course of business and during an organizing campaign. Given the issues workplace texting presents for employers, it is advisable for employers to review their communication policies to make clear what methods of communication are allowed in the workplace.  Employers should also review their record retention policies to make sure that all permissible mediums of communication are covered by the policy.  Texting is a casual form of communication. To the extent employers permit text messaging among employees, it may also be necessary for employers to remind employees that text messages are workplace conversations, and the dos and don’ts applicable to face-to-face meetings and telephone calls apply equally to text messages.  Employers should also pay even greater attention to all forms of communications, both formal and informal, and by the company as well as by supervisors and managers whose actions and statements can be attributed to the employer, in the presence of organizing or other union activity.

In yet another decision that exhibits the current Board’s overreaching and expansive view of its jurisdiction, the Board recently ruled that nurses who supervise and assign other hospital staff are not statutory supervisors.

A Position Expressly Created to be Supervisory is Not Supervisory, According to the Board

In 2016, Lakewood Health Center (“Lakewood”) restructured its staffing system and replaced charge nurses with a newly created position, Patient Care Coordinator (“PCC”). According to the uncontradicted testimony of Lakewood Vice-President of Patient Care Danielle Abel, the hospital created this new position for one specific reason – “to ensure accountability for shift-by-shift work flow of the department….in addition to supervising the employees on their shift.” According to the job description, a PCC “provides overall supervision of staff and patient care,” is “responsible for daily nursing assignments,” and “retains overall accountability for the work flow for their shift, and remains accountable if duties are delegated to another qualified staff member.” Abel testified, without contradiction, that PCCs must assess the patient’s needs and the nurses’ skills when assigning nurses to patient care tasks and are accountable for the nurses’ performance.  The undisputed evidence further showed that PCCs were the highest ranking authority present evenings, nights and weekends and, for the majority of the time, the only person present with the authority to assign and direct nurses.  The Minnesota Nurses Association filed an election petition asserting that the PCCs should be included in the bargaining unit, thereby adding one more dues-paying classification to the potential bargaining unit.

In a terse one-page decision, the Board characterized the undisputed evidence as vague and conclusory and found that Lakewood failed to provide tangible examples demonstrating the PCCs’ supervisory authority. Although Abel testified that PCCs were accountable for assigning and supervising nurses, the Board dismissed her testimony as “simply a conclusion without evidentiary value.”  The Board likewise discounted Abel’s testimony that PCCs exercise independent judgment when assigning nurses because no one testified that the nurses have differing levels of skill and ability and, for most of the shifts in evidence, there was only one nurse available, stating that independent judgment cannot be established if there is “only one obvious choice.”

Miscimarra’s Scathing Dissent Exposes the Flaws in the Board’s Decision

Board member Miscimarra’s dissent harshly rebuked the majority’s decision as abstract, thinly supported and inconsistent with the undisputed evidence. Miscimarra noted that both the PCC job description and Abel’s testimony established, without contradiction, that PCCs were accountable for assigning and responsibly directing subordinate nurses.  In fact, according to Abel’s unrefuted testimony, the very reason that Lakewood created this new position was to impose accountability for patient care and staffing issues on a single person.  Miscimarra strongly criticized the majority for “disregard[ing] unrebutted evidence merely because it could have been stronger, more detailed, or supported by more specific examples,” particularly given that the PCC position was created a mere four months prior to the hearing.  He also noted that the Board apparently and unreasonably wanted specific testimony “to establish the commonsense fact that some employees are more skilled than others” and chastised the majority for ignoring the practical reality that the PCC is often the highest ranking person present at Lakewood, explaining that “[s]omeone has to be in charge at this facility at all times.”  Miscimarra ended his dissent with a biting, but particularly apt, reproach that “the finding that PCCs are not supervisors under Section 2(11) provides yet another illustration of the principle that ‘common sense’ is not so common.”

Employers Must Be Prepared

This decision stands as a stark reminder that employers must be prepared with documentation, examples and other specific evidence supporting supervisory determinations to combat the hostile and skeptical review of the current Board. This decision also signals that 2017 will be no different than 2016 for the Board – it will continue to issue decisions that assail employer’s rights and bolster its relevancy even when it flies in the face of common sense and basic workplace practicalities.

The National Labor Relations Board (“NLRB” or “Board”), in its recent decision in Graymont PA, Inc., 364 NLRB No. 37 (June 29, 2016), has fired the latest salvo in its long running dispute with the United States Court of Appeals for the District of Columbia Circuit concerning the issue of what legal standard should be applied when a union claims that an employer has made a unilateral change in terms and conditions of employment during the term of a collective bargaining agreement and the employer claims that the union waived its right to bargain over the topic in question in a management rights clause or a “complete agreement” clause.

In Graymont, the Board adhered to its “clear-and-unmistakable” waiver approach to analyzing claims under Section 8(a)(5) where the employer claims that the union waived its right to bargain over a particular matter during the term of a collective bargaining agreement (“CBA”). The three-member majority rejected  the employer’s argument that the  “contract coverage” standard applied by the D.C. Circuit and several other Courts of Appeal was the correct standard for assessing such claims.

This decision comes on the heels of an unpublished decision by the D.C. Circuit in which that court again rejected the Board’s “clear and unmistakable” waiver standard as being applicable to such disputes. In Heartland Plymouth Court MI LLC v. NLRB, No. 15-1034 (May 3, 2016), the D.C. Circuit laid out its disagreement with the NLRB concerning the so-called “contract coverage rule”:

As we have noted several times, there is a “fundamental and long-running disagreement” between this court and the Board as to the appropriate approach by which to determine “whether an employer has violated Section 8(a)(5) of the National Labor Relations Act when it refuses to bargain with its union over a subject allegedly contained in a collective bargaining agreement.” The Board insists such questions turn on whether the Union “clearly and unmistakably” waived its bargaining rights on the subject through the CBA, but we have repeatedly held “the proper inquiry is simply whether the subject that is the focus of the dispute is ‘covered by’ the agreement.” Under our precedent, if a subject is covered by the contract, then the employer generally has no ongoing obligation to bargain with its employees about that subject during the life of the agreement.

The dispute regarding the appropriate standard made all the difference in the Graymont decision. There, a Board majority held that the Union did not clearly and unmistakably waive its right to bargain over unilateral changes made by the Employer to its work rules, absenteeism policy, and progressive discipline schedule.

In Graymont the employer unilaterally implemented various changes to its work rules, absenteeism policy and progressive discipline schedule; believing it had the management right to do so under it CBA.  There the employer sought to rely  on a negotiated management rights clause under which it retained “the sole and exclusive rights to manage; to direct its employees; … to evaluate performance, … to discipline and discharge for just cause, to adopt and enforce rules and regulations and policies and procedures; [and] to set and establish standards of performance for employees.” . The union initially filed a grievance, but then withdrew it and filed an unfair labor practice charge with the NLRB alleging that the employer had made unilateral changes and failed to bargain.

The Board applied its “clear and unmistakable” waiver standard, and found that the Union did not waive its rights to bargain when it entered into the CBA, because the Board concluded that the CBA’s management rights clause did not “specifically reference” the rules and policies changed – i.e., the work rules, absenteeism policy and progressive discipline policy.

The majority ruling is just the latest example of how the Board’s waiver analysis operates to deprive employers of the benefits of their negotiated agreements – particularly in management rights clauses – and force further bargaining over rights employers understandably believe they have already secured, often in return for other concessions, at the bargaining table. In bargaining with the Union, the employer in Graymont secured the clear right “to adopt and enforce rules and regulations and policies and procedures.” Yet the majority found this language insufficiently clear to constitute a “clear and unmistakable” waiver by the union of its right to bargain, during the term of the CBA, over such changes.

Dissenting, Member Miscimarra noted that “Management-rights language may be general and, at the same time, clear and unmistakable.” Thus, in agreeing to the broad language, “the Union clearly and unmistakably waived its right to bargain over the changes.” He also agreed that therefore the union “had already bargained and agreed that Graymont had the right to make these changes unilaterally.”

The NLRB’s Graymont decision once again demonstrates the uphill battle employers face in asserting their rights, even those secured in writing after bargaining. In effect, the Board’s waiver approach can ignore even clear language, and render rights secured at the bargaining table illusory.  We often encounter employers who believe they have negotiated a strong broad management rights clause only to feel they are victims to a bait-and-switch type attack from a union filing an unfair labor practice charge based on the employer exercising the very rights it thought it had secured.

Combined with the its recent disinclination to defer such matters to arbitration, where they belong, the Board’s decision highlights the danger of an employer acting unilaterally, even with what may appear to be clearly-established rights. Employers should bear this in mind when negotiating, and seek to make management rights clauses as specific as possible. Employers should also bear in mind the Board’s approach to such actions when contemplating unilateral moves, and plan accordingly.

Stop Sign CrosswalkToday, the United States District Court for the Northern District of Texas issued a nationwide preliminary injunction halting the Department of Labor’s (“DOL”) controversial new Persuader Rule and its new Advice Exemption Interpretation, previously discussed here and here.  The Rule and Interpretation marked a dramatic change by requiring public financial disclosure reports concerning payments that employers make in connection with “indirect persuader activities” that were not reportable under the long standing rules, but that would, if the new rule were to take effect, for the first time, be considered reportable as persuader activity.

Injunction Issues Just In Time

The injunction was issued in advance of the July 1, 2016, enforcement date, which the DOL had stated employers, and labor relations consultants, including attorneys, would need to start reporting engagements covered by the new Rule and Interpretation.  Employers and attorneys have raised concerns about the impact on the attorney-client privilege, including the chilling effect and interference with their ability to obtain/provide advice traditionally exempt from disclosure.

In granting the injunction, the Court concluded:

[The DOL is] hereby enjoined on a national basis  from implementing any and all aspects of the United States Department of Labor’s Persuader Advice Exemption Rule (“Advice Exemption Interpretation”), as published in 81 Fed. Reg. 15,924, et seq., pending a final resolution of the merits of this case or until a further order of this Court, the United States Court of Appeals for the Firth Circuit or the United States Supreme Court.  The scope of this injunction is nationwide.

District Court Order Provides Employers Comprehensive Victory

The Northern District of Texas went one step further than the United States District Court for the District of Minnesota, which last week ruled that the DOL’s Persuader Rule exceeded the agencies authority under the LMRDA, but stopped short of issuing an injunction.  The Court’s Order here gives employers a comprehensive victory, finding not only a substantial threat of irreparable harm but also that the Texas plaintiffs will likely succeed in establishing:

  • The DOL exceeded its authority in promulgating its new Advice Exemption Interpretation in the new Persuader Rule;
  • The new Advice Exemption Interpretation is arbitrary, capricious and an abuse of discretion;
  • The new Advice Exemption Interpretation violates free speech and association rights under the First Amendment;
  • The new Advice Exemption Interpretation is unconstitutionally vague; and
  • The new Advice Exemption Interpretation violates the Regulatory Flexibility Act.

Preliminary Injunction May Only Be Temporary Reprieve for Employers

Obviously a preliminary Injunction is just that, preliminary and temporary in nature.  It is anticipated that the DOL will file an appeal and, depending on the results of the Presidential Election later this year, this could be a looming threat for employers for some time.

Accordingly, employers should first do all they can, including signing long-term agreements with law firms and/or labor relations consultants before July 1, to be prepared in the event the Rule ultimately becomes effective, so as to potentially shield themselves from the obligation to report and disclose so-called indirect persuader activity that has been exempt from reporting under the former rules.

Featured on Employment Law This Week: The National Labor Relations Board (NLRB) finds the hiring of permanent replacements for strikers to be an unfair labor practice.

In a 2-1 decision that could benefit unions during contract negotiations, the NLRB found that a continuing care facility in California violated federal labor law when it hired permanent replacements after a series of intermittent strikes. While the NLRB and courts have long held that an employer’s motivation for hiring permanent replacements is irrelevant, in this case, the board held that if the hiring is motivated by an intent to discourage future strikes, it interferes with employees’ rights under the National Labor Relations Act (NLRA). The employer in this case will likely seek judicial review. However, in the meantime, the decision adds new risks for employers that may wish to hire permanent striker replacements.

View the episode below or read more about this story in a previous blog post, written by frequent contributor Steven M. Swirsky.

One of the top stories featured on Employment Law This Week: The U.S. Court of Appeals for the Seventh Circuit has joined the National Labor Relations Board in finding that arbitration agreements containing class action waivers violate the National Labor Relations Act (NLRA).

At issue is a collective and class action by employees of Epic Systems about overtime pay. The company was seeking to dismiss the case based on a mandatory arbitration agreement that waived an employee’s right to participate in a collective or class action. Unlike the Fifth Circuit, the Seventh Circuit found that a class-action waiver like this one violates the NLRA and, because the contract is unlawful, its enforcement is not required by the Federal Arbitration Act. The Seventh Circuit’s decision creates a split in the federal circuits that means that the U.S. Supreme Court will likely weigh in on the issue.

View the episode below or read more about this story in a previous blog post by Steve Swirsky.

https://www.youtube.com/watch?v=_Eooxpk6vNs&feature=youtu.be&t=1m45s

A featured story on Employment Law This Week is the NLRB’s crackdown on employers restricting the content of personal emails sent through the employer’s email system.

In 2014, the NLRB ruled that employees who have email through their employers can use that email to communicate about union-related issues. In a recent election at Blommer Chocolate Company, the union claimed that company email rules interfered with the voting process. Employees were allowed to use the company’s email system for personal emails, but were prohibited from expressing personal opinions in their emails to coworkers. The NLRB found that this rule interfered with elections and that a second election should occur. One of the questions that arises from this ruling is the issue of where the line is between what employers can prohibit – harassment, for example – and what they cannot.

View the episode below or read more about the NLRB’s ruling in an earlier blog post.

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

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

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

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

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

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

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

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

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

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

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

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