The New York City Temporary Schedule Change Law (“Law”), which became effective on July 18, 2018, raises new issues that employers with union represented employees will need to address as their existing collective bargaining agreements (“CBA”) come up for renewal.

The Law allows most New York City employees up to two temporary schedule changes (or permission to take unpaid time off) per calendar year when such changes are needed due to a “personal event.” The Law also prohibits retaliation against workers who request temporary schedule changes. Additional detailed information concerning the Law and employers’ obligations can be found in our August 2, 2018 Client Advisory.

What Does the Law Mean for Employers with Union-Represented Employees?

The Law Applies to Employees Covered by a CBA

The Law, as written, applies to employees represented by a union and covered by a CBA. However, the Law contains a qualified exemption for employees covered by a CBA, which specifies that the Law does not apply to any employee who:

[i]s covered by a valid collective bargaining agreement if such agreement waives the provisions of this subchapter and addresses temporary changes to work schedules[.]

The text of the Law also addresses, in very general terms, the question of whether the Law is preempted by the National Labor Relations Act when it comes to interpreting a CBA for purposes of determining whether it contains a “waiver” of the applicable provisions of the Law or addresses changes to work schedules. That provision states that the Law does not:

[p]reempt, limit or otherwise affect the applicability of any provisions of any other law, regulation, requirement, policy or standard, other than a collective bargaining agreement, that provides comparable or superior benefits for employees to those required herein.

What Does This Mean to Employers Whose Employees Are Represented by a Union?

Employers will want to negotiate for express waiver language as well as language stating that the employer and the union agree that their CBA provides employees with scheduling change rights (as well as sick and safety time rights) that are comparable or superior to those mandated by the Law and the City’s Earned Safe and Sick Time Act (“ESSTA”).

While the quoted language from the Law may seem confusing, it appears that the City Council and the New York City Department of Consumer Affairs, Office of Labor & Policy Standards (“DCA”), are taking an approach similar to that followed under ESSTA. ESSTA provided for an exemption from compliance with that statute in cases where (a) employees are covered by a CBA, (b) the CBA contains an “express waiver” of ESSTA’s paid safe and sick time requirements, and (c) the paid safe and sick time benefits under the CBA are substantially comparable to those mandated by ESSTA.[1]

Significantly, in the case of ESSTA, the text of the statute only calls for a waiver and comparable benefits—the requirement that the waiver be an “express waiver” is one that was created by the DCA in its administration of ESSTA. It is foreseeable that the DCA will follow the same approach in its administration and enforcement of the Law. To date, in its enforcement of ESSTA, the DCA has demonstrated an unwillingness to defer to the agreement of an employer and its employees’ bargaining representative or acknowledge that the sick leave or paid time off under a CBA is comparable or superior to such leave or time off under ESSTA.

Accordingly, employers that employ union-represented employees will need to ensure that, as they renegotiate their CBAs and/or negotiate first contracts, the CBAs contain clear and unequivocal language confirming that the employer and the union have agreed to “expressly waive” the provisions of the Law and the provisions of the CBA concerning taking and scheduling time off and temporary schedule changes provide employees with benefits that are “comparable or superior” to those mandated by the Law.

What Happens with CBAs That Were Negotiated Before the Law Took Effect?

While the Law is, in most instances, effective as of July 18, 2018, the 180th day after its enactment, this is not the case for employees covered by a CBA that was in effect on that date. The Law provides that:

in the case of employees covered by a valid collective bargaining agreement … this local law takes effect on the date of termination of such agreement . . .

Accordingly, employees covered by an existing CBA are not covered by the Law until the expiration of the CBA. Upon the expiration of an existing CBA, employers will need to ensure that they propose and secure the necessary express waivers and agreements for comparable benefits in all new or renewal CBAs from this point forward.

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[1] ESSTA also waived the requirement of substantially comparable benefits in the case of employers in the grocery and construction industries whose employees are covered by a CBA containing an express waiver of ESSTA’s requirements.

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 February 26, 2018, in a unanimous decision by Chairman Marvin Kaplan and Members Mark Pearce and Lauren McFerren, the National Labor Relations Board (“NLRB” or the “Board”) reversed and vacated its December 2017 decision in Hy-Brand Industrial Contractors, Ltd. (“Hy-Brand”), which had overruled the joint-employer standard set forth in the 2015 Browning-Ferris Industries (“Browning-Ferris”) decision. The decision followed the release of a finding that a potential conflict-of-interest had tainted the Board’s 3-2 vote. What this means, at least for the moment, is that the lower standard for determining joint-employer status in Browning-Ferris is the law once again.

What Is The Browning-Ferris Standard?

As we previously reported, under the Browning-Ferris standard, “[t]he Board may find that two or more entities are joint employers of a single work force if they are both employers within the meaning of the common law, and if they share or codetermine those matters governing the essential terms and conditions of employment.”  Under Browning-Ferris, the primary inquiry is whether the purported joint-employer possesses the actual or potential authority to exercise control over the primary employer’s employees, regardless of whether the company has in fact exercised such authority.  This standard is viewed as employee and union-friendly, and led to the issuance of complaints alleging joint-employer status in an increased number of circumstances.

What Did Hy-Brand Set As the Test for Joint-Employer Status?

Later, in Hy-Brand, as we noted, the Board rejected the Browning-Ferris standard and returned to a more employer-friendly standard, based on the common law test for determining whether an employer-employee relationship exists as a predicate to finding a joint-employer relationship and adding more than just the right to exercise control.  Under Hy-Brand, a finding of joint-employer status would require proof that putative joint employer entities have actually exercised joint control over essential employment terms (rather than merely having “reserved” the right to exercise control), the control must be “direct and immediate” (rather than indirect), and joint-employer status will not result from control that is “limited and routine.”  This decision had stopped at least some cases relying on Browning-Ferris in their tracks.

What Happens Next?

While Hy-Brand has been reversed for the time being, we expect the Board, once the Senate acts on President Trump’s nomination of John Ring to fill the seat vacated this past December by then Chairman Philip Miscimarra, to reinstate the joint-employment standard articulated in Hy-Brand or a similar standard.

As noted above, the reversal of Hy-Brand follows the ethics memo published by NLRB Inspector General David Berry finding that Member William Emanuel should have abstained from the decision in Hy-Brand because of the fact that the law firm of which he was a member was involved in the case.  There are a number of other cases in which similar conflict issues have arisen, also arguing that Member Emanuel should recuse himself.

Congress May Act

Separate and part from a future Board decision, as we noted in November, the House of Representatives passed the Save Local Business Act (H.R. 3441) which, if enacted, would amend the National Labor Relations Act and the Fair Labor Standards Act to establish a Hy-Brand-like direct control standard for joint employer liability.  The reversal of Hy-Brand may now put increased pressure on the Senate to pass the bill.

What Should Employers Do Now?

Employers and other parties with matters before the Board involving joint-employer issues now, whether in the context of unfair labor practice cases or representation cases, now will need to focus on both the Browning-Ferris standard and the Hy-Brand test to ensure that they preserve all arguments and issues recognizing the likelihood that sooner rather than later the Board will adopt a test that requires more than is required under Browning-Ferris to establish the existence of a joint-employer relationship, with all of the attendant responsibilities.  We will continue to follow this issue and report on developments.

In the months following Donald Trump’s inauguration, those interested in the National Labor Relations Board (“NLRB” or “Board”) waited anxiously for the new President to fill key positions that would allow the Board to reconsider many of the actions of the past eight years. Over the last six months, the Board has begun to revisit, and overrule, several union-friendly and pro-employee Obama-era Board decisions. The Board’s new General Counsel has also given clear guidance as to where else employers can expect to see his office pursue further changes in how the National Labor Relations Act (“NLRA” or “Act”) will be interpreted and enforced.

In this Take 5, we offer an overview of key aspects of what the new Board has done to date, and what can be expected going forward:

  1. What to Look Out for This Year at the NLRB
  2. Hy-Brand Industrial Overrules Browning-Ferris and Sets New NLRB Standard for Determining Joint-Employer Status
  3. NLRB Ruling in The Boeing Co. Establishes New Standards Governing Employee Handbook Rules and Policies
  4. The Trump Board Signals a Return to Traditional Standards in Representation Cases
  5. As the NLRB Steps Back, Cities Step Forward

Read the full Take 5 online or download the PDF.

In footnotes to two recent unpublished NLRB decisions,  NLRB Chairman Marvin Kaplan, who was named to that role by the President following the December 16, 2017 conclusion of Philip Miscimarra’s term, and Member William Emanuel offered interested observers an indication of two additional areas of Board law that they believe warrant reconsideration once Mr. Miscimarra’s replacement is nominated and confirmed, and the Board returns to a 3-2 Republican majority.

While unpublished Board decisions “are not intended or appropriate for publication and are not binding precedent, except with respect to the parties in the specific case,” as in the two cases discussed below, can offer important insights into what Board members are thinking about significant matters, and therefore can give readers an idea what to expect when particular issues come before the Board in future cases. In this regard, they, like the General Counsel’s recent Memorandum on Mandatory Submissions to Advice, give meaningful guidance to employers and advocates.

The Board is Likely to Revisit and Move Away from Obama Era Holdings re Confidentiality in Settlement Agreements

During the past eight years, one of the signatures of the Obama Board was its effort to expand the application of the National Labor Relations Act’s relevance to non-union workplaces. One aspect of this was a series of Board decisions finding that when employers sought to include broad confidentiality provisions in private settlement and separation agreements with employees that restricted the employees’ ability to disclose the terms of such settlements to others, including employees, they were impermissibly restricting employees’ ability to act together with other employees concerning terms and conditions of employment.

In a footnote to a December 27, 2017 unpublished decision denying a motion for summary judgment in an unfair labor practice complaint issued against Baylor University School of Medicine, Chairman Kaplan and Member Emanuel wrote as follows:

Members Emanuel and Kaplan agree that there are genuine issues of material fact warranting a hearing and that the Respondent is not entitled to judgment as a matter of law.

However, they believe that, to the extent not already permitted under Board precedent, the legality of confidential severance agreements for former employees should be reconsidered

While the Baylor University decision does not answer the question of when and in what circumstances the Board will recognize an employer’s right to lawfully require confidentiality in settlement agreements and other agreements that where they would have been found to interfere with employees’ Section 7 rights, the tea leaves more than suggest a change in Board law as soon as the Board returns to five members and an appropriate case is before the new majority.

The Board is Likely to Change How It Interprets and Applies the Blocking Charge Rule

Another important area that Chairman Kaplan and Member Emanuel indicated they want to see the Board re-examine is a Board doctrine commonly referred to as the Blocking Charge Rule.

Under the Board’s 2014 Amended Election Rules, the NLRB holds that when an unfair labor practice charge is filed during the pendency of an representation petition, the Board will not conduct the election if the party that has filed the charge, typically the petitioning union, or in the case of a decertification petition, the incumbent union facing a vote to decertify it as the representative, if the charge alleges actions by the employer that the union claims prevent or interfere with a fair election. Many observers believe that such blocking charges are used tactically by unions that are concerned they face defeat at the polls.

Under the 2014 Amended Election Rules, it is quite easy for a union to use such a charge to block an election:

Section 103.20 of the final rule requires that a party wishing to block processing of the petition must file a request to block and simultaneously file a written offer of proof in support of its unfair labor practice charge. If the Region believes the charge precludes a question concerning representation and no request is filed, the Region may ask the Charging Party if they wish to request to block.  If so, the Charging Party should be informed that they must file a request to block and an offer of proof, including the names of witnesses who will testify in support of the charge and a summary of each witness’s anticipated testimony. In addition, the Charging Party must promptly make the witnesses available to the Region.

In a December 20, 2017 unpublished decision in a case involving a decertification petition filed by an employee of ADT, in which the incumbent union filed ULP charges, to prevent an election:

Member Kaplan agrees with the decision to deny review here. He notes, however, that, consistent with the Petitioner’s suggestion, he would consider revisiting the Board’s blocking charge policy in a future appropriate case. Member Emanuel agrees that the determination to hold the petition in abeyance in this case was permissible under the Board’s current blocking charge policy, but he believes that the policy should be changed. Specifically, he believes that an employee’s petition for an election should generally not be dismissed based on contested and unproven allegations of unfair labor practices.

One of the more interesting aspects of this decision and footnote is that both Chairman Kaplan and Member Emanuel, although not disagreeing with the Regional Director’s application of the rule in the case before them, each expressed their view that the Blocking Charge Rule, which is not a rule at all but rather a Board-created doctrine or policy “should be changed.”

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

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

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

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

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

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

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

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

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

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

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

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.

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

New Regulations require service of Excelsior List on union

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

The Petition and Election at issue

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

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

Regional Director finds no harm, no foul

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

Board puts form over substance to favor Union

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

Dissent detail Board’s pro-union hypocrisy

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

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

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

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

Steven M. Swirsky

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

Elections Involving Joint-Employers

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

Easing the Test for Finding a Joint-Employer Relationship

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

More Elections and Unions Representing Temps

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

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

Why Is the Board Doing This Now?

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

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

What To Expect

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

By Paul Burmeister

The National Labor Relations Board (“NLRB”) has ruled that negotiations between the Hotel Bel-Air and UNITE HERE Local 11 were not at impasse when the employer implemented its last, best final offer, which included severance payments to union employees. Hotel Bel-Air, 358 NLRB 152 (September 27, 2012). The NLRB upheld the ALJ’s order for the employer to bargain with the Union and to rescind all the signed severance agreements containing a waiver of future employment with the Hotel Bel-Air.

The Hotel Bel-Air is a luxury hotel located in Los Angeles. The Hotel Bel-Air (“Employer”) has a lengthy collective bargaining history with the Union. The last collective bargaining agreement between the parties had expired on September 30, 2009.  Shortly before the expiration of that contract, the Union sent a notice to the employer to bargain a successor contract. However, the Employer responded that the Hotel was scheduled to close for a period of two years for renovation, and that the parties should meet to bargain the effects of the closure.

Over a six month period following the expiration of the contract, the parties met on several occasions, but were unable to hammer out a successor agreement or a culmination of effects bargaining. On April 9, 2010 the parties met across the table and were unable to come to a fruitful conclusion of the bargaining. The Employer declared the April 9, 2010 proposal as its last, best and final offer and stated it would deem negotiations at impasse if the offer was not accepted in a week. Not only did the deadline for acceptance get extended, but the parties continued ‘off the record’ discussions to resolve the collective bargaining agreement and the effects bargaining.

Despite the continued ‘off the record’ discussions, the parties were unable to come to an agreement, and the Employer eventually implemented its April 9, 2010 last, best and final offer on July 7, 2010. As part of the implementation, the Employer sent each of the union employees a severance agreement and a general release offering payment in exchange for a waiver of any recall right to employment following the reopening of the Hotel Bel-Air.

The Union filed an unfair labor practice charge alleging the Employer implemented its offer without bargaining to an impasse and for dealing directly with the employees. In both instances, the NLRB ruled in favor of the Union.

The NLRB decided that the parties were not at impasse. Since the parties continued meeting after April 9, 2010, albeit ‘off the record’, those meetings were considered in whether impasse was reached. As there was evidence of continued bargaining and in some instances, agreement, the possibility of a fruitful discussion between the parties would have broken any impasse.

Second, without a valid impasse, the letter sent on July 7, 2010 offering terms of severance directly to the employees circumvented the union and was considered direct dealing. Further providing evidence of direct dealing, the cover letters to the employees stated that the Employer was “very happy to give you the opportunity to decide for yourself whether you want to accept this offer.” The Employer’s arguments that the employees no longer worked for the Hotel also fell flat. The employees were informed in the letter that they were waiving their recall rights, obviously evidencing the possibility of a return to work. Accordingly, the severance packets sent to employees were direct dealing and ordered rescinded by the NLRB. The Board allowed the Employer to negotiate the recoupment of severance payments already made instead of barring the Employer from such a request.

When negotiating with labor unions, hospitality employers should keep the following tips in mind:

  • Management should use ‘off the record’ discussions during bargaining with trepidation. While it may be a tool in advancing bargaining, they are considered to be part and parcel with the negotiations. If there is an impasse, even off the record discussions discussing settlement likely will break the impasse.
  • Management should consider whether an impasse exists or not prior to communicating changes to terms and conditions of work directly to employees.