Labor Relations Today

Labor Relations Today

Board Finds Deferral to Arbitration Inappropriate Where Employer Clearly Violated the Express Terms of the Collective Bargaining Agreement

Posted in NLRA, NLRB, NLRB Decisions, Uncategorized, Unfair Labor Practices

In Oakland Physicians Medical Center, LLC, 362 NLRB No. 129 (July 22, 2015), the National Labor Relations Board both rejected the employer’s request for deferral to arbitration and found that the employer violated the National Labor Relations Act by making unilateral changes to employee health care coverage, including the premiums paid by the employees, during the term of the collective bargaining agreement (“CBA”).

Article 16.4 of the CBA gave the employer the right to select and change insurance carriers and administrators, as long as similar health coverage was maintained. Article 16.1 of the CBA gave the employer the right to amend the plan design of health insurance benefits with prior notice to the Union, but required employee premiums as listed in a schedule to remain the same.

During the term of the CBA, the health insurance provider terminated its contract with the employer, requiring the employer to obtain new health insurance coverage. The employer obtained new insurance without prior notice to the Union. Employee premiums increased under the new health insurance plan, and the Union refused to agree to the proposed health care changes. Although the employer paid 100% of the employee premiums in the first month of the new health insurance plan, it began deducting the new increased premium amounts thereafter.

The Union filed grievances claiming that the employer’s conduct violated the CBA’s health care provision and filed an unfair labor practice charge challenging the unilateral change mid-contract.  The employer requested deferral to arbitration.

The Board majority, through Chairman Pearce and Member McFerran, rejected the employer’s deferral request. The majority found that the case presented no issue of contract interpretation because of the unambiguous language in the health care provision preventing the employer from increasing employee premiums and requiring prior notice to the Union for any permissible changes.

By altering premium co-shares, and otherwise “amend[ing] the plan design of health insurance benefits,” without notice to the Union, the Respondent engaged in conduct expressly prohibited by the collective-bargaining agreement. These clear violations of the express terms of the parties’ agreement make deferral inappropriate. Further, as the Union refused to give its consent to these changes, it is clear that the Respondent’s conduct constituted an unlawful mid-term contract modification.

In dissent, Member Johnson found that the case should be deferred to arbitration. He relied on Article 16.4 as the operative provision because the employer changed providers and did not simply amend the plan design. Unlike Article 16.1, Article 16.4 did not expressly require prior notice to the Union or prevent the employer from changing employee premiums. It simply required the employer to maintain “similar coverage.”

This contractual provision, even though it directly pertains to the operative facts, is not entirely clear and unambiguous on its face; the term “similar coverage” can reasonably be interpreted as open to at least two plausible interpretations. On the one hand, it is reasonable to construe “similar coverage” to include the level of health benefits. . . . Conversely, the [employer’s] assertion that similar coverage refers to the types of benefits provided under the health plans is equally plausible . . . . Because the term “similar coverage” is susceptible to different reasonable interpretations, an arbitrator is needed to determine what the parties intended by the term . . . .

GOP House Committee Chairpersons Ask DOL and FAR Council to Withdraw Proposed Blacklisting Regs

Posted in Department of Labor, Executive Orders, Government Contracting, House of Representatives

On May 28, 2015, the U.S. Department of Labor and the Federal Acquisition Regulatory (FAR) Council proposed regulatory amendments and guidance to implement the President’s Executive Order 13673, entitled “Fair Pay and Safe Workplaces.”  What the Order and proposed regulations subject government contractors to a broad new set of record-keeping, reporting and compliance requirements. Failure to fulfill these obligations and exhibit compliance with all applicable federal and state labor laws would expose the contractor to the prospects of disqualification, suspension, or debarment.  In sum, the regulations would require all covered contractors and subcontractors to report all unadjudicated administrative rights determinations, arbitral awards and civil judgments against it under a wide variety of federal and analogous state labor laws.  Somewhat shockingly, despite having been directed by the Executive Order to propose regulations almost a year ago, the DOL and FAR Council have not even been able to identify all of the laws that this proposed system would cover.  Yet, the agencies still expect the public comment period to close at the end of this month.

Last week, the Republican chairs of various House Committees and Subcommittees called upon the agencies to withdraw the problematic proposals. In the alternative, they requested an additional ninety days for analysis and submission of comments by stakeholders:

Agencies must have strong foundations on which to propose new guidance of a new regulation and must afford interested parties the opportunity to assess the changes and provide substantive and informed comments on those proposals. To ensure compliance with the spirit of the Administrative Procedure Act (APA), the comment period should allow for a deliberative process to ensure that interested parties have a complete understanding of how current and future proposals work together so that they can provide meaningful input to the agencies. This is especially true when proposals threaten due process, impose onerous reporting burdens and limit competition by favoring certain competitors while blacklisting others, resulting in significant job losses.

The proposed regulations and guidance do all these things — as well as represent an unauthorized and unconstitutional exercise of powers reserved to the Congress. Moreover, there is the real possibility that they will actually increase government cost, despite their publicly proclaimed intent. It is difficult to see how the original sixty days is near enough time to deliberate over such extensive amendment of the federal labor laws.

The letter is signed by: Reps. John Kline (R-MN), Chairman, Education and the Workforce Committee; Steve Chabot (R-OH), Chairman, Committee on Small Business; Jason Chaffetz (R-UT), Chairman, Committee on Oversight and Government Reform; Jim Jordan (R-OH), Chairman, Subcommittee on Health Care, Benefits and Administrative Rules; Richard Hanna (R-NY), Chairman, Subcommittee on Contracting and Workforce; Crescent Hardy (R-NV), Chairman, Subcommittee on Investigations, Oversight and Regulations; Phil Roe, M.D. (R-TN), Chairman, Subcommittee on Health, Employment, Labor and Pensions; and Tim Walberg (R-MI), Chairman, Subcommittee on Workforce Protections.  Comments on the proposals were originally due July 27, 2015.

ALJ Holds That Successor Employer Violated NLRA By Failing To Hire Predecessor’s Union Employees

Posted in NLRA, Unfair Labor Practices, Unions

In Eastern Essential Services, (22-CA-133001, July 13, 2015), an ALJ found that a successor cleaning company violated the National Labor Relations Act when it refused to hire members of the predecessor’s cleaning crew due to their union affiliation. The employer, a janitorial cleaning service, took over the cleaning contracts for three buildings in New Jersey.  When the employer did not hire any employees from the predecessor’s cleaning crew, the former employees filed an unfair labor practice charge.

The employer argued that it has a long-standing policy never to hire the current employees working in a building that it takes over, and, instead, hires exclusively through its “internal reference system.”  The ALJ, however, opined that the employer failed to offer a “convincing rationale” for the “internal reference system.”  Among other things, the ALJ reasoned that, “[the employer] does not claim that the employees it obtains through the system are more able workers than the incumbents are or even that is has confidence in their ability to perform the work.”  Additionally, the ALJ discredited the employer’s reliance on the policy, finding that the employer did not always follow the stated policy.  As a result, ALJ held—in sweeping terms—that the employer’s “decision to ignore the obvious choice of hiring an experienced and available workforce supports a reasonable inference that its decision was motivated by animus toward the Union.”

The ALJ further ordered the employer to hire the aggrieved employees “in their former positions or, if such positions no longer exist, in substantially equivalent positions, without prejudice to their seniority or any other rights or privileges previously enjoyed, discharging if necessary any employees hired in their place.”

NLRB to Decide Whether It Can Impose Mixed Units of Both Solely and Jointly Employed Workers

Posted in NLRA, NLRB Decisions, Representation Elections

For those that have followed developments in labor law over the years, it should come as no surprise that the National Labor Relations Board is again visiting the issue of whether it can direct a representation election for a unit consisting of both jointly employed temporary workers and regular workers employed solely by the user employer. On July 7, 2015, the Board invited:

the filing of briefs in order to allow parties and interested  amici an opportunity to address issues raised in Miller & Anderson, Inc. (05-RC-079249), including whether the Board should adhere to its decision in Oakwood Care Center  (343 NLRB 659), which disallowed inclusion of solely employed employees and jointly employed employees in the same unit absent consent of the employers, and if not, whether the Board should return to the holding of M.B. Sturgis, Inc. (331 NLRB 1298), which permits the inclusion of both solely and jointly employed employees in the same unit without the consent of the employers.

For at least 25 years, how the Board has interpreted the National Labor Relations Act regarding this particular issue has hinged purely on the composition of the National Labor Relations Board. Until 2000, the Board had relied upon Greenhoot, 205 NLRB 250 (1973), and Lee Hospital, 300 NLRB 947 (1990), for the proposition that employer consent is necessary whenever there is a mixed unit of jointly employed employees and solely employed employees. However, a Democratic controlled Board in 2000 reversed the 10-year precedent of Lee Hospital and held that it could impose a unit consisting of jointly employed employees and solely employed employees in M.B. Sturgis, 331 NLRB 1298 (2000). Relying upon decisions predating Greenhoot and Lee Hospital in which the Board had found appropriate units comprised of both solely employed employees and jointly employed employees without requiring consent, the Board determined that Greenhoot and Lee Hospital were wrongly decided.

M.B. Sturgis did not stand for long, however. In 2004, the Republican controlled Board decided Oakwood Care Center, 343 NLRB 659 (2004), in which it held that M.B. Sturgis was wrongly decided. Specifically, it ruled that bargaining units consisting of both jointly employed temporary workers and regular workers employed solely by the user employer constitute multiemployer units, which require the consent of both employers as:

Congress has not authorized the Board to direct elections in units encompassing the employees of more than one employer.

With its invitation for briefs in Miller & Anderson, the current Democratic controlled Board appears inclined to return to the M.B. Sturgis standard as it asks interested parties to address the following questions:

  1. How, if at all, have the Section 7 rights of employees in alternative work arrangements, including temporary employees, part-time employees and other contingent workers, been affected by the Board’s decision in Oakwood Care Center, 343 NLRB 659 (2004), overruling M.B. Sturgis, 331 NLRB 1298 (2000)?
  2. Should the Board continue to adhere to the holding of Oakwood Care Center, which disallows inclusion of solely employed employees and jointly employed employees in the same unit absent the consent of the employers?
  3. If the Board decides not to adhere to Oakwood Care Center, should the Board return to the holding of Sturgis, which permits units including both solely employed employees and jointly employed employees without the consent of the employers? Alternatively, what principles, apart from those set forth in Oakwood and Sturgis, should govern this area?

If the Board does overrule Oakwood and reinstate M.B. Sturgis, that would further the impact of the Board’s imminent decision in Browning-Ferris, in which many expect the Board to adopt a much broader joint employer standard. Interested parties have until August 5, 2015 to submit their briefs to the Board.

You can continue to follow this issue on the blog, on Twitter (@LRToday), and our Flipboard magazine.

NLRB Sets Aside Election Results Due to Bonuses Paid During Critical Period

Posted in NLRB Decisions, Representation Elections

In SBM Management Services, 362 NLRB No. 144 (July 8, 2015), the National Labor Relations Board held that an employer’s distribution of bonuses to 11 employees in a bargaining unit of approximately 35 employees just days before a vote on union representation violated Section 8(a)(1) of the National Labor Relations Act and ordered that a new election be held.

The Board found that six days before the election, the employer held a meeting in which about 27 unit employees attended. Nine employees were recognized at the meeting for exemplary performance and received a surprise bonus check, eight in the amount of $100 and one in the amount of $75. Two other employees received a $100 bonus in the form of a gift card the next day—five days before the election. The bonus amount equaled approximately one-third of the employees’ regular weekly salary. The employer had never before distributed bonuses to any employee at the facility. Several days later, the employees voted against the union in a 20-8 vote.

In determining whether the employer engaged in objectionable conduct during the critical period, the Board applied the following standard set forth in United Airlines Services Corp., 290 NLRB 954 (1988):

In determining whether a grant of benefits is objectionable, the Board has drawn the inference that benefits granted during the critical period are coercive, but it has allowed the employer to rebut the inference by coming forward with an explanation, other than the pending election, for the timing of the grant or announcement of such benefits.

The Board found that the employer failed to rebut the inference that it was trying to influence the union vote as the employer provided no explanation as to why it could not wait until after the election to reward its employees with those bonuses. Accordingly, the Board set aside the results of the election and directed a second election.

Quick Hits: Tuesday, July 14, 2015

Posted in Federal Court Litigation, NLRB Administration, Quick Hits, Representation Elections, Unions

twitter-ballot#SEIUElectionFail:  Michael Vandevort reports on an interesting recent case where an NLRB ballot was invalidated on the basis of a contemporaneous Tweet. Voting in a mail ballot election, open April and May, the eligible employee voted for the union, and announced that fact by posting a photo of herself filling out the ballot on Twitter (pictured).  According to the Certification of the election results:

The Regional Director recommended that the challenged to the ballot of Andrea Miller be sustained on the ground that the voter destroyed the secrecy of her ballot.

In the absence of exceptions, the results were certified by the Board.  While this ballot would have resulted in the union’s victory in the election, the tally remained 2-2, and the union was not certified.

New Digs: The National Labor Relations Board has opened its new headquarters in Southeast DC near Nationals Park and the Washington Navy Yard.   According to the Board:

The 1015 Half St. SE office will house all Headquarters’ staff for the Board and the General Counsel in addition to the Region 5 – Washington Resident Office staff.  The new location will reduce the Agency’s footprint while maintaining its ability to effectively and efficiently meet the needs of the public.

Board Reads First Amendment Too Narrowly:  The D.C. Circuit Court of Appeals overturned a Board order, holding that unless it is a “sham,” an employer’s request to police to arrest alleged trespassing pickets is protected by the First Amendment:

Requesting police enforcement of state trespass law is an attempt to persuade the local government to take particular action with respect to a law. As we see it, that fits squarely within the traditional mold of a petition to government protected by the Noerr-Pennington doctrine.

AFL-CIO on CEO Pay Disclosure: The labor federation issued a press release today announcing that it had delivered petitions to the U.S. Securities and Exchange Commission (SEC), demanding that the commission implement a proposal requiring companies to disclose their CEO-to-median worker pay ratio per the Dodd-Frank Act of 2010.

Court of Appeals Reverses Board Decision Allowing Employees to Wear “Inmate,” “Prisoner” Shirts in Customer Homes

Posted in Federal Court Litigation, NLRB Decisions, Unfair Labor Practices

With a subtle introductory rebuke, the Court of Appeals for the District of Columbia has reined in one of the National Labor Relations Board’s more outrageous decisions of the past few years.  In Southern New England Telephone Company v. NLRB, No. 11-1099 (D.C. Cir., July 10, 2015), the court vacated the Board’s ruling that the employer violated the Act when it disciplined technicians for wearing T-shirts identifying themselves as “Inmates” and “Prisoners” on service calls to customer homes.

Common sense sometimes matters in resolving legal disputes.

So begins the Court’s order. Employers may be relieved that someone has finally said so to the Board. (Whether the Board adopts this simple principle going forward is another matter.)

During collective bargaining negotiations, the employees’ union distributed the T-shirts in question to its members. The shirts were white with black lettering, bearing the label “Inmate #” on front and “Prisoner of AT$T,” with vertical stripes above and below the lettering on the back.  It said nothing about the union or the ongoing labor dispute.  The employer suspended 183 employees who wore the shirt in public interactions on behalf of the company. The union filed a charge and both the Administrative Law Judge and Board majority held the employer’s actions violated the employees’ Section 7 rights.

The Court vacated the ruling based on the “special circumstances” exception to the general rule protecting employee rights to wear union apparel:

A company may lawfully prohibit its employees from displaying messages on the job that the company reasonably believes may harm its relationship with its customers or its public image.

One need not read too far into the Court’s introductory passage, however, to find sympathy with those who recognize the extent to which recent Board decisions have been handed down in a vacuum, divorced from business realities:

Common sense sometimes matters in resolving legal disputes. This case is a good example. AT&T Connecticut banned employees who interact with customers or work in public – including employees who enter customers’ homes – from wearing union shirts that said “Inmate” on the front and “Prisoner of AT$T” on the back. Seems reasonable. No company, at least one that is interested in keeping its customers, presumably wants its employees walking into people’s homes wearing shirts that say “Inmate” and “Prisoner.”

Thus, the Court restored the “special circumstances” exception, which would have been all but eliminated if this case was left to represent its boundaries.

Sixth Circuit Panel Criticizes NLRB Jurisdiction Over Indian Tribes, But Affirms Exercise

Posted in Federal Court Litigation, House of Representatives, NLRA, NLRB, Senate

When Congressional Subcommittee Chairman Phil Roe (R-TN) commenced a hearing last month on the Tribal Labor Sovereignty Act of 2015 (H.R. 511), he explained:

The subjective nature of the [NLRB]’s process for determining jurisdiction has also produced a mess of legal confusion. Years of litigation have produced inconsistent and misguided board decisions, compounding the uncertainty felt by Native American tribes and their businesses.

A July 1, 2015 decision by a panel of the Court of Appeals for the Sixth Circuit will do little to ease that uncertainty.  In Soaring Eagle Casino and Resort v. National Labor Relations Board, Nos. 14-2405/2558 (6th Cir., July 1, 2015), the panel strongly questioned the recent jurisprudence in this area, but felt constrained by another panel’s decision weeks earlier in NLRB v. Little River Band of Ottawa Indians, No. 14-2239 (6th Cir., June 9, 2015) to uphold the Board’s assertion of jurisdiction.

As clearly and critically as it might put it, the Court stated:

[I]f writing on a clean slate, we would conclude that, keeping in mind “a proper respect both for tribal sovereignty itself and for the plenary authority of Congress in this area,” Santa Clara Pueblo, 436 U.S. at 60, the Tribe has an inherent sovereign right to control the terms of employment with nonmember employees at the Casino, a purely tribal enterprise located on trust land. The NLRA, a statute of general applicability containing no expression of congressional intent regarding tribes, should not apply to the Casino and should not render its no-solicitation policy void.

The Court reserved significant skepticism for one of the issues at the heart of the Board’s San Manuel holding and the recent Little River Band decision:

… [the] analytical dichotomy between commercial and more traditional governmental functions of Indian tribes. See Coeur d’Alene, 751 F.2d at 1116–17 (differentiating between “tribal self-government” and “commercial activity”); San Manuel, 475 F.3d at 1314–15. The Little River majority characterizes this distinction as one between “core” tribal concerns and those lying on the “periphery” of tribal sovereignty. 2015 WL 3556005, at *8. We believe this government-commercial or core-periphery distinction distorts the crucial overlap between tribal commercial development and government activity that is at the heart of the federal policy of self-determination. See Bay Mills, 134 S. Ct. at 2043 (Sotomayor, J., concurring) (“For tribal gaming operations cannot be understood as mere profit-making ventures that are wholly separate from the Tribes’ core governmental functions.”). Indeed, that distinction flies in the face of congressional pronouncements to the contrary in the IGRA.

Still, acknowledging it was not “writing on a clean slate,” the Court held it was “bound to conclude the NLRA applies to the Soaring Eagle Casino and Resort,” and to uphold the Board’s exercise of jurisdiction.  The dispute among judges on separate Circuit Court panels, may provide opportunity for en banc review; and, the deepening split among Circuits could increase the chance of ultimate Supreme Court resolution.

In the meantime, it will be interesting to watch whether such express criticism of the fundamental reasoning expressed in the Board’s relatively recent complete reversal on the issue of jurisdiction over tribal government enterprises factors into the ongoing legislative debate over the Tribal Labor Sovereignty Act.  The bill, the companion of which has been reported favorably by the Senate Committee on Indian Affairs, would add “any enterprise or institution owned and operated by an Indian tribe and located on its Indian lands” to the National Labor Relations Act’s list of exclusions.

More resources and commentary:

The Road Ahead: Top 10 Labor Issues to Watch in the Back Half of 2015

Posted in Amici Briefs, Department of Labor, Executive Orders, Expedited Elections, Federal Court Litigation, Government Contracting, Government Contracts, House of Representatives, Legislation, Micro Units, NLRA, NLRB, NLRB Decisions, NLRB Rule-Making, Persuader Rules, Representation Elections, Senate, State/Local Issues
road ahead

1.  Will the Courts Uphold the New Expedited Election Rules?

The National Labor Relation Board’s new expedited election rules took effect on April 14, 2015, but not before two lawsuits could be filed seeking to invalidate them in January 2015. The first lawsuit was filed by business groups, including the U.S. Chamber of Commerce, in the U.S. District Court for the District of Columbia. The second, by the National Federation of Independent Business (NFIB) Texas, Associated Builders and Contractors (ABC) of Texas and the Central Texas Chapter of ABC, was filed in the U.S. District Court for the Western District of Texas. The lawsuits assert that the NLRB provided no adequate justification for overruling decades of Board and judicial precedent balancing employer, employee, and union rights in the election process.

On June 1, 2015, the NLRB notched an important victory as the Texas court dismissed the lawsuit by ABC and NFIB. In dismissing the complaint, Federal District Judge Robert L. Pitman emphasized the great deference that must be accorded to government agencies, as well as the “significant deference to the Board and the Regional Directors in applying the very provisions Plaintiffs challenge.”

Plaintiffs suggest the deference is illusory as the standards under which the Regional Directors may exercise that discretion are “extraordinary” and thus effectively unavailable. However, as discussed above, Plaintiffs are bringing a facial challenge to the New Rule. As a result, they are required to establish there is “no set of circumstances exists” under which the New Rule would be valid.

Judge Pitman also explained that since employers have “almost unfettered ability to rapidly disseminate their election position after an election petition is filed,” the rule could not be found to violate employer speech rights, either. On June 2, 2015, ABC and NFIB appealed Judge Pitman’s decision to the Fifth Circuit Court of Appeals where it remains pending. Meanwhile, no ruling has been issued yet in the U.S. Chamber-led lawsuit pending in Washington DC, but a decision should be issued before the end of the year.

2.  Will the Board Adopt a New Joint Employer Standard?

In May 2014 the Board invited interested parties to submit amicus briefs in Browning-Ferris Industries, a case involving the routine application of the Board’s decades-old standard for determining whether two or more businesses may be found to be “joint employers.” Under the existing standard, two or more employers must “share or co-determine matters governing essential terms and conditions of employment.” Predictably, unions and their allies submitted briefs proposing that a much broader standard be adopted, and the NLRB’s General Counsel’s brief argued that the Board should abandon its current joint employer standard in favor of an amorphous “totality of the circumstances” test.

Under that standard, the Board finds joint employer status where, under the totality of the circumstances, including the way the separate entities have structured their commercial relationship, the putative joint employer wields sufficient influence over the working conditions of the other entity’s employees such that meaningful bargaining could not occur in its absence. This approach makes no distinction between direct, indirect and potential control over working conditions and results in a joint employer finding where “industrial realities” make an entity essential for meaningful bargaining.

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NLRB Flip Flops, Finds Employer Legally Terminated Employee for Dishonesty

Posted in NLRB Decisions, Unfair Labor Practices

On remand because of the Supreme Court’s ruling in NLRB v. Noel Canning, 134 S.Ct. 2550 (2014), the National Labor Relations Board reversed course in Fresenius USA Manufacturing, Inc., 362 NLRB No. 130 (June 24, 2015), and found that an employer lawfully terminated an employee for dishonesty during an investigation of employee misconduct. The 2015 decision is a stark contrast to the one delivered by the Board panel in 2012 that included Members Griffin and Block, whose recess appointments were determined to be invalid in Noel Canning.

In 2012, the Board held that the employer unlawfully terminated the employee for anonymously writing vulgar statements on union newsletters because the employee was engaged in protected union activity. Specifically, during a decertification campaign, the employee anonymously wrote the following statements on three union newsletters: “Dear P—ies, Please Read!”; “Hey cat food lovers, how’s your income doing?”; and “Warehouse workers, RIP.” The Board concluded that not only did the employee’s vulgar language not cause him to lose protection of the Act, but that the employee had a right under the National Labor Relations Act to be dishonest during the employer’s investigation in response to employee complaints about the comments:

[The employer’s] questioning of [the employee] put him in the position of having to reveal his protected activity, which Board precedent holds an employee may not be required to do where, as here, the inquiry is unrelated to the employee’s job performance or the employer’s ability to operate its business. … As a result, although [the employer] had a legitimate interest in questioning [the employee] and lawfully did so, [the employee] had a Sec. 7 right not to respond truthfully. We therefore find that [the employee’s] refusal to admit responsibility for the comments cannot serve as a lawful basis for imposing discipline.

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