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.

Our colleagues Lauri F. Rasnick and Jonathan L. Shapiro, attorneys at Epstein Becker Green, have a post on the Financial Services Employment Law blog that will be of interest to many of our readers: “NLRB Finds a Non-Union Employee’s Foul-Mouthed Complaining About Clients Protected Activity and Slams Employer’s Separation Agreement.”

Following is an excerpt:

A recent National Labor Relations Board (“NLRB”) decision by an Administrative Law Judge (“ALJ”) found numerous violations of the National Labor Relations Act (the “Act”) stemming from the reaction of a mortgage brokerage firm to a conversation in which one of its bankers used profanity and complained about a client in an office restroom.  While this decision may seem extreme to some, it is also an example of the expansive view that the NLRB is taking in deciding what types of employee communication and activities, particularly with respect to non-unionized workforces, will be found to be protected by the Act as “concerted activity” relating to employees’ terms and conditions of employment.

Read the full post here.

On August 1st President Obama made a bold statement by appointing Richard Griffin to serve as the NLRB’s General Counsel only three days after the former union lawyer vacated his unconstitutional recess appointment as a NLRB Board Member. The President statement by appointment made at least two things clear –

  1. The President wants an aggressive pro-labor General Counsel and NLRB, and
  2. The President values advancing the labor agenda over cooperation with the US Senate.

As we discussed here on July 30th the Senate confirmed a full Board for the first time in a decade as a result of a “deal” in which Senate Republicans capitulated to a threat from Senate Democrats to change the rules on filibusters. We noted last week that this deal was likely not a good deal at all for employers as it resulted in three former union lawyers appointed as the controlling majority of the Board.

For employers, one of the only concessions of the “deal” was that it resulted in the withdrawal of the pending nominations of Griffin and Sharon Block to the Board. Griffin and Block of course had served as unconstitutionally appointed recess appointments since January 2012. During their period on the Board they issued a number of controversial pro-labor decisions and were generally viewed as activist Board members. To the chagrin of employers and Congressional Republicans they also continued to issue decisions even after multiple Courts of Appeals ruled they were unconstitutionally appointed and had no authority to act. In May Senator Lamar Alexander (R-Tenn.) encapsulated the view of many noting:

My problem is that they continued to decide cases after the federal appellate court unanimously decided they were unconstitutionally appointed. Not only has the President shown a lack of respect for the Constitutional role of the separation of powers… but I believe [Griffin and Block] have as well.

The President’s withdrawal of their nominations was a symbolic, if not substantive victory.

By nominating Griffin to serve as the agency’s top lawyer and prosecutor, the President has both symbolically and substantively thumbed his nose at the Senate Republicans and employers.

In fact, rather than removing Griffin’s influence from the Board by the deal, it seems that the President may have actually enhanced that influence. As the General Counsel Griffin will serve an important policy role in deciding where the prosecutorial direction of the Board. The General Counsel has the final say in whether the Board pursues cases which reverse existing Board precedent, continue recent expansions of Section 7 rights or create entire new theories of employer liability. The recent Boeing controversy as well as the assault on “at-will” agreements, social media policies and similar common sense employer policies are all the result of an aggressive NLRB General Counsel flexing his muscles.

With Griffin’s appointment to such an important position, employers have reason for concern. As if not borne out by the decisions of the Board since he was appointed, Griffin has a long history as a union advocate. For nearly twenty years prior to his 2012 recess appointment to Griffin was employed by the International Union of Operating Engineers as its counsel, rising to serve as the union’s General Counsel and to serve as on the board of directors of the AFL-CIO Lawyers Coordinating Committee. Griffin will now serve as the top prosecutor bringing cases before a Board, the majority of which is comprised of his former union lawyer colleagues.

While Griffin technically needs to be confirmed by the Senate to be General Counsel, in the absence of a confirmation, the Act permits the President to appoint Griffin as Acting General Counsel at any time, and to serve in that role the full powers of a confirmed General Counsel. In fact, Lafe Solomon, the current Acting General Counsel, has been serving in that capacity sine June 2010 without confirmation. So in essence, as soon as the President wants Solomon to pass the baton to Griffin, Griffin will start serving in his new role.

Management Missives

  • Employers should not expect a reversal of course for the Office of the General Counsel as Griffin is likely to continue, if not expand the efforts of Solomon to broaden the Board’s role in non-union workplaces.
  • Union-free employers should dust off their union avoidance programs and redouble their efforts.
  • Unionized employers should be prepared for more strident and aggressive unions.
  • All employers should review their policies and procedures to ensure they are not susceptible to challenge under the Board’s recent pronouncements.

I wrote the October 2012 edition of Take 5: Views You Can Use, a newsletter published by the Labor and Employment practice of Epstein Becker Green. 

In it, I outline five actions that non-union employers should take to retain their union-free status in 2013:

  1. Assess your company’s vulnerability.
  2. Ensure that company policies are compliant and pro-company.
  3. Analyze and arrange your company’s workforce to avoid micro-units.
  4. Be prepared to respond at the earliest signs of union organizing.
  5. Watch for NLRB developments directed at non-union employers.

The following is an excerpt:

With the election around the corner, the nation’s attention turns to politics. However, regardless of who emerges victorious on November 6, one result can be predicted now: 2013 will see an uptick in union activity and union organizing drives. Although labor’s participation and spending in this year’s elections will reach record highs, employers should expect that after the election, unions will refocus their energy on non-union employers.

With private-sector union membership at record low levels and public-sector unions losing influence and members, the labor movement will be forced to recommit to organizing new private-sector members in 2013. While the tactics and tools available to unions may differ under a second Obama term than under a first Romney term, either way, unions will be targeting non-union employers rich with potential members to refill their ranks and coffers.

Read the full version on EBGlaw.com.

It seems with each passing month the National Labor Relations Board or its Acting General Counsel opens yet another new front on its assault on non-union employers.  A trend has emerged which puts labor law in conflict with standard employment practices.  From hire, to control of the workplace and employer property, to the manner post-termination disputes are handled, the NLRB is directing employers to ignore conventional wisdom, and often times other legal mandates, to alter the way they deal with their employees.

Much attention has been given to the NLRB’s more direct pro-union organizing efforts like efforts requiring all employers to post an NLRB Rights Poster  and efforts to dramatically alter the timeframe and process for union elections through the new Ambush Election rules.

With both of those frontal efforts now struck down by various courts and on appeal, the NLRB is continuing its efforts in other ways.  While some are more benign like the NLRB’s stated “educational” efforts, including its new informational website targeting non-union employers, several decisions this year exposed another much more concerning trend – one which targets the common sense employment practices of many employers.  Specifically, in a string of decisions the NLRB has staked out positions which are at odds with conventional wisdom and guidance on a broad range of issues which literally cover the entire life cycle of non-union employment.

From hire, the Acting General Counsel has prosecuted the use of standard At-Will Policies, asserting after decades of unencumbered use that their mere maintenance may violate the National Labor Relations Act.   While we have written in detail previously about this, it clearly conflicts with the common sense approach many employers have relied on, and many employment counsel have advised on, as a most basic tenant and practice of a non-union employer.

During employment, the NLRB has targeted employers’ control of their workplace both on their physical property and beyond.  We have written previously about the recent though steady erosion of employers’ property rights and ability to control Off-Duty Access by employees.  The Acting General Counsel also has aggressively pursued employer Social Media Polices, going so far as to issue numerous memoranda and even a model policy, but still leaves more questions than answers on the line for employers seeking to protect their interests against cyber-slander and other inappropriate online activity.

In what could be the most troubling development, the NLRB is taking positions which could create a dilemma for employers who both want to conduct a proper harassment investigation to comply with the Civil Rights Act (and similar state harassment laws).  As previously discussed, the NLRB recently found that asking an employee to keep a harassment investigation confidential violated the Act.

In one of the more brazen decisions, the NLRB has taken odds with numerous state and federal courts and, seemingly, the US Supreme Court by deciding in D.R. Horton, Inc. that the Act prohibits employers from seeking arbitration agreements which include class action waivers.  This decision, which arguably conflicts with the pro-arbitration decision by the US Supreme Court in AT&T Mobility v. Concepcion, is likely destined to be decided by the Court, until then employers must make the decision of which authority to follow.

Each of these NLRB positions forces employers into a Sophie’s Choice on whether to adhere to the NLRB’s new and aggressive view of the National Labor Relations Act or to continue to follow tried and true practices and, more important, the directives of the EEOC, state law and even the US Supreme Court.

The question now is what is next and how can non-union employers prepare?

Management Missive

  • Management should review its At-Will policies to see if they could be made less vulnerable to unfair labor practice charges.
  • Management should review its Social Media, Off-Duty Access and Harassment/Discrimination Investigation policies, weighing the various risks and benefits of each.
  • Management should review its arbitration agreements to determine the best practice after weighing the risks and benefits of class waivers.
  • Management should stay vigilant as the NLRB’s efforts continue.

Over the past year the NLRB has issued a series of decisions which, taken together, mark a dramatic shift in the property rights of employers and expand the right of employees seeking to use their employer’s property to organize.

Two decades ago, in Lechmere, Inc. v. NLRB, the U.S. Supreme Court ruled that employers had a right to limit or deny non-employee union organizers access to their property provided the denial was nondiscriminatory and consistent with state law.  For almost four decades, following its decision in Tri-County Medical Center, Inc., the NLRB has maintained that an employer could prohibit their own employees off-duty access to the working areas of its property, again provided it did so non-discriminatorily.   In a series of decisions the Board has significantly limited these employer rights.

First in New York New York LLC dba New York Hotel & Casino, the Board granted a right to the employees of a contractor/restaurant to access and use the property of the landowner/casino to try to organize the contractor’s employees.  In so doing the Board removed the ability of employers who have on-site contractors to exercise their state property rights and limit off-duty access of the contractors’ employees.

More recently, in Saint John’s Health Center and Sodexo America LLC, the Board has essentially rendered meaningless the provisions of Tri-County Medical Center enabling employers to prohibit off-duty access of employees to working areas.  In both cases the employers had policies prohibiting off-duty access with the exception of attending employer “sponsored events” or for employer-related business.  The Board ruled that because those employers allowed employees to come on to the employers’ premises to attend events as determined by management they did not fall within the Tri-County rule.  However, as the dissent pointed out in both cases, the Board’s new position in essence means that an employer cannot allow an off-duty employee to come on its property to attend a retirement party, pick up a check or fill out employment related paperwork (i.e. vacation or leave request) without also allowing the employee off-duty access to engage in union organizing.

Management Missive

  • Management should review its policies and practice on providing off-duty employees access, ensuring that any exceptions are both narrowly tailored and specific.
  • Like all such policies, Management should make sure that any rules it wishes to have are promulgated prior to any evidence of union activity, recognizing that once organizing activity begins they likely will not be able to adopt any new rules.
  • Management must ensure that any off-duty access rules are clearly articulated and uniformly enforced.
  • Management should seek counsel’s advice prior to disciplining any employees for violating \an off-duty access rule.