Labor Law's Changing Tides
It is not unusual for the National Labor Relations Board (NLRB) to change its position on recurring and important issues for both unionized and nonunion employers. Political changes at the White House and the appointment of new board members often herald a new direction in the board’s rulings. Nevertheless, the unusual number of reversals that have been recently issued by the board on key issues has attracted national attention.
In five rulings issued since June 2004, the NLRB has changed course on issues involving employee rules of conduct, an employee’s right to representation at investigatory interviews, organizational rights of temporary staff, and the impact of unlawful employer rules and statements on NLRB-conducted union elections. Several of these decisions affect nonunion as well as unionized employers. A sixth case currently awaiting decision is expected to define the reach of agreements between employers and unions that circumvent the traditional NLRB-supervised election process, in which employees vote on whether they wish to be represented by a union. Following is a look at how these new decisions are redefining what employers can and cannot do.
Rules of conduct. During the past several years, the NLRB has heard a number of cases on employee conduct rules, which usually appear in an employee’s handbook or policy manual. These rules tend to cover a wide array of topics, including whether employees may discuss wages with coworkers, wear unauthorized pins and decals, or distribute information on company premises. In analyzing the lawfulness of these rules, the board has focused on whether the rule reasonably tends to chill the exercise of employee rights.
Under NLRB rules, employees have the right to choose to engage in union activity and, involving two or more employees, to try to bring about changes in the “terms and conditions of employment or otherwise improve their lot as employees.” The NLRB’s position has been that it is an unfair labor practice for an employer to maintain an unlawful rule, even if the rule is not enforced.
Based on this analysis, the board has found that rules prohibiting “loud, abusive or foul language” or “using abusive or threatening language to anyone on company premises” are unlawful as written. The board’s rationale has been that, without further explanation by the employer about what it specifically considers abusive or foul language, these rules could reasonably be interpreted by employees as prohibiting lawful activity.
Recently, however, the board has adopted a different approach to employee conduct rules in terms of what employees may reasonably interpret as prohibiting union activity. In Lutheran Heritage Village–Livonia (NLRB, No. 75, 2004), the board was asked to decide the lawfulness of a rule that prohibited “using abusive or profane language in the presence of or directed toward a supervisor, another employee, a resident, a doctor, a visitor, a member of the resident’s family, or any other person on company property.” In the past the NLRB would have found the rule unlawful as written. However, in this case, the board decided that employees would not reasonably construe the language to prohibit lawful union activity. The board recognized that an employer has a legitimate right to maintain order and to establish a “civil and decent workplace.” The board also found no evidence that the rule actually had been applied to such activity or that the company had adopted the rule in response to union activity.
Upholding another rule of conduct in the same case, the board found no problem with the rule prohibiting “harassment of other employees, supervisors, and any other individuals in any way.” The mere maintenance of this rule was not unlawful, ruled the board, because there was no justification for concluding that employees will interpret the rule unreasonably to prohibit conduct that does not rise to the level of harassment, or to presume that the company will apply it in that manner. In the past, the board likely would have found such a rule prohibiting harassment to be unlawful.
Representation. In another decision affecting all employers, regardless of the presence of a union, the board has ruled that nonunion employees do not have the right to have a representative present during an interview that might lead to disciplinary action. Such a right currently exists for unionized employees. In a three-to-two decision issued in June 2004, the board found that the so-called Weingarten rights of unionized employees do not apply to employees not represented by a union. (IBM Corporation, NLRB, No. 148, 2004).
The IBM case overrules a 2000 decision by the board and marks the fourth time in the past 23 years that the board has changed its position on this issue of an employee’s right to representation during an investigatory interview.
The issue of Weingarten rights dates to 1975, when the United States Supreme Court (NLRB v. J. Weingarten Inc., No. 251, 1975) upheld a decision by the board that unionized employees have a legal right to insist on union representation during an investigatory interview conducted by their employer, provided that the employee “reasonably believes” that the interview might result in disciplinary action. The Court explained that this right arises from federal labor laws that are a “guarantee of the right of employees to act in concert for mutual aid and protection.”
However, the right set out by the Court is limited to unionized employees and to situations in which an employee specifically requests representation. An employer is not required to advise the employee of this right in advance, and the right is triggered only in the case of investigatory meetings that may result in disciplinary action and not to meetings when, for example, the employer merely communicates a decision regarding a disciplinary matter.
Since the Court’s 1975 decision, the board has frequently changed directions on whether Weingarten rights apply to employees who are not unionized. In 1982, the board ruled that Weingarten rights applied to nonunion employees. Two years later, the board reversed its position.
Then, in Epilepsy Foundation of Northeast Ohio (NLRB, No. 676, 2000), the board once again extended the Weingarten rights enjoyed by unionized employees to nonunion employees. The board concluded that its earlier rulings were inconsistent with the Court’s rationale in Weingarten and reasoned that these rights should be granted to all staff regardless of union membership.
In the newest case, involving IBM, three nonunion employees alleged that their rights were violated when they requested and were denied coworker representation during investigatory interviews stemming from a workplace-harassment complaint. After they were terminated, the employees filed unfair labor practice charges with the NLRB.
The former employees alleged that the denial of representation during the investigatory interviews was unlawful. The administrative law judge—part of the NLRB—who heard their case agreed, ruling that IBM had violated federal labor law.
IBM appealed the decision to the full NLRB. Rejecting the finding of the law judge and reversing its earlier ruling in the Epilepsy Foundation case, the board found that the employees did not have a right to have a coworker present at the investigatory interviews.
The board wrote that its decision was based on policy issues underlying an employer’s need to conduct confidential and discreet investigatory interviews in the workplace. The board noted that “some employers, faced with security concerns that are an outgrowth of the troubled times in which we live, may seek to question employees on a private basis.”
The board specifically recognized that employers must be able to conduct fact-finding interviews in sensitive situations and that the confidentiality of such interviews cannot be compromised. In its written opinion, the board noted that “consideration of these features of the contemporary workplace leads us to conclude that an employer must be allowed to conduct its required investigations in a thorough, sensitive, and confidential manner. This can best be accomplished by permitting an employer in a non-union setting to investigate an employee without the presence of a coworker.”
In addition to the policy considerations, the board found that the extension of Weingarten rights from unionized to nonunion employees is inappropriate due to the dissimilarities between work forces. For example, in Weingarten, the Supreme Court said the presence of a union representative at an investigatory interview is essential to protect the interests of the bargaining unit as a whole and to redress the imbalance of power between employers and staff.
In IBM Corp., the board indicated the same rationale does not apply to a nonunion workplace, where coworkers do not have an obligation to represent the interests of the entire work force. Moreover, coworkers in a nonunion setting are less able to redress an imbalance of power since there is no collective bargaining agreement or bargaining unit, which conveys authority to the representative. Nonunion coworkers lack the experience of a skilled union representative to elicit facts and facilitate interviews, and are unlikely to achieve the purpose and goals contemplated in Weingarten, the board said.
The board clarified that nonunion employees do have the right to request the presence of a coworker at an investigatory interview, and an employee cannot be disciplined for making such a request. However, where employees are not represented by a union, employers have no obligation to accede to such a request.
Unlawful rule. As already noted, employee handbooks or company policy manuals typically contain rules governing a wide range of employee conduct. Those rules may prohibit, for example, insubordination or false statements about the employer. The board has long taken the position that the mere maintenance by an employer of an unlawful employee conduct rule—without any evidence the rule was ever enforced—is an unfair labor practice.
For example, many employee handbooks contain rules that limit the ability of employees to solicit other employees on the company premises. Interpreting federal labor law, the board has set parameters for these rules to ensure that employee rights are protected. Generally speaking, such rules must be applied consistently to all types of solicitations, including those for charitable purposes and other matters unrelated to work. Plus, those rules may not completely bar solicitations on the premises, and may not require the employee to get his employer’s permission to engage in solicitation. If they are not worded properly, these rules might be considered an unfair labor practice if they appear to bar, for example, discussing union issues with coworkers at lunch.
In such a case, the offending rule also would interfere with the free choice of employees who are to vote in a board-conducted union election, making the mere maintenance of such an unlawful employee conduct rule valid grounds to overturn a union’s defeat. Unless, the board has said, “it is virtually impossible to conclude that the misconduct could have affected the election results.”
The practical implication of this “virtually impossible” standard has been that, when an employer commits an unfair labor practice during the critical period—defined as the period between the date the union filed its election petition with the board and the date of the election—and the union objects on that basis after losing the election, the board sets aside the results and orders a new election.
For example, nine days after the union had filed a petition with the NLRB for an election to represent one company’s 310 employees, the company president announced that, in response to employee complaints, it was extending employee lunch breaks by three minutes and suspending another aspect of the attendance policy—in violation of an existing union agreement. The employees voted against unionization by 181 to 106. The union filed objections seeking a new election. Deciding that it was possible to conclude that the employer’s violations could have affected the results of the election, the board set aside the results of the first election and ordered a new one.
This, too, may be changing course. In Delta Brands, Inc., (NLRB, No. 10, 2005) decided in February, the board appears to have moved away from the “virtually impossible” standard in assessing the impact of an unfair labor practice on election results. Adopting a more employer-friendly stance, the board used a standard of review taking account of “all of the facts and circumstances to determine whether the atmosphere was so tainted as to warrant the setting aside of the election.”
The Delta Brands case involved a small unit of employees who had voted ten to eight against union representation. The employer’s 36-page employee handbook contained an unlawful no-solicitation rule that predated the union’s campaign. The rule was unlawful because it prohibited solicitation for any purpose except where employees got the employer’s authorization. During the critical period, one new employee was hired and given the employee handbook; two other recently hired employees had received the handbook within a six-month period before the union filed the petition requesting the election.
Although the employees were required to sign a receipt for the handbook and acknowledge they had read it and would abide by its contents, there was no evidence that the employer had called attention to the no-solicitation rule at the time of their hire or anytime thereafter. Furthermore, there was evidence that the employer routinely made exceptions to the rule by allowing solicitations for charitable and fund-raising events.
When the union challenged the election loss on the basis of the unlawful handbook rule, a hearing officer for the NLRB found that the rule reasonably could have affected the outcome of the election. On these grounds, the hearing officer recommended that the company’s election victory be overturned and a new election conducted.
Rejecting that recommendation, the board instead certified the election results in which the union was defeated. Based on a review of all of the facts and circumstances, the board found that the rule was not adopted in response to the union’s organizing campaign and that the brief rule was part of a handbook that contained numerous other provisions. The board further noted that only one employee had received the handbook during the critical period, that there was no evidence that the employer called attention to the rule, and that employees had no reason to believe that the employer would enforce the rule to deter them from exercising the right to engage in union or protected concerted activities.
The opinion of the case states that “in these circumstances, we do not believe that the inclusion of the no-solicitation rule in the employer’s policy manual, standing alone, is sufficient to establish that the outcome of the election could have been affected.”
Although this case involved an unlawful no-solicitation rule, the board is likely to apply the same principles to any unlawful employer rule that the union raises as the basis for seeking to overturn the results of a board-supervised election.
This case has not been appealed, but the union can appeal the NLRB decision to federal appellate courts.
Temporary workers. In December 2004, the board issued another reversal (Oakwood Care Center, NLRB, No. 75, 2004) that may be of significance to security industry employers that either provide or use temporary security staff to augment permanent workers.
In its previous decision (M.B. Sturgis, Inc., NLRB No. 1298, 2000), the board had cleared the way for temporary workers procured through a staffing company to be included along with a company’s nonunion regular workers in voting for union representation. In an existing unionized work force, the change meant that temporary workers could be merged into existing bargaining units. Specifically, the board had decided that it was permissible to have employees solely employed by the company (called the regular employer), and employees “jointly employed” by the regular employer and a supplier employer, in the same bargaining unit for purposes of union representation.
Since 2004, a number of cases have been decided following the M.B. Sturgis ruling. In one such case, for example, drivers and warehouse workers employed by the same company were covered by a collective bargaining agreement. The employer decided to expand its use of temporary employees and notified the union that some temporary employees would work at the facility for four to five months.
The union demanded that the employer apply the collective bargaining agreement to these temporary employees. When the employer did not, the union filed an unfair labor practice charge at the NLRB. The board decided that the temporary employees were jointly employed, and therefore, the temporary employees were automatically added to the existing bargaining unit and covered by the terms of the union contract. Under the Oakwood Care Center case, a result of a three-to-two ruling, union organizers will not be able to conduct a union representation election in a bargaining unit with a mix of workers unless both employers agree that the union can include both types of workers.
Threats. In another close decision (Crown Bolt, Inc., NLRB, No. 86, 2004), the board reversed a four-year precedent concerning threats of plant closure made during a union organizing drive. In issuing the three-to-two ruling, the board said it would not presume that an employer’s threat to close the facility if the employees voted for union representation, which was made only to one or two workers, was disseminated throughout the bargaining unit.
In the case, a unit of employees at a facility in California rejected union representation by 34 votes. The International Brotherhood of Teamsters filed objections to the conduct of the election and charges of unfair labor practices. One of the charges involved an alleged threat of facility closure made by a production manager to an employee during the critical period prior to the election. While there was evidence that this employee, in turn, told two other employees about the threat, there was no evidence that they had told anyone else.
An administrative law judge dismissed every unfair labor practice allegation except the supervisor’s alleged threat of plant closure. Relying on the board’s 2000 decision in Springs Industries (NLRB, No. 40, 2000), the law judge presumed that the threat had been widely disseminated among members of the bargaining unit and recommended that the election be set aside.
The Springs Industries case had overruled the longstanding precedent in Kokomo Tube Co., (NLRB, No. 357, 1986), where the board found a threat of plant closure made to a single employee insufficient to overturn an election in the absence of evidence that the information had been disseminated. In Springs Industries, the burden was shifted, thus requiring the employer to prove that the threat was not disseminated or not disseminated sufficiently to have affected the election results.
Reconsidering the issue, the current board ruled that, without evidence that the threat of plant closure was disseminated among bargaining unit employees, there can be no presumption that the information had an effect on the election.
Agreements. Unions increasingly are pressuring employers to enter into “neutrality agreements” that essentially remove the opportunity for employees to vote in a board-supervised election. Depending on how vulnerable an employer is to a union’s pressure tactics—for example, when a union mounts a corporate campaign that strikes many aspects of the business—an employer may agree not to oppose unionization or may recognize the union based on the signed authorization cards from a majority of employees.
In June 2004, the board agreed to review two cases that raised important issues involving how unions could circumvent traditional processes in seeking to represent employees in collective bargaining. The cases involved attempts to decertify unions that had been recognized by employers without an election, based on union authorization cards signed by a sufficient number of bargaining unit employees.
In both cases, petitions to decertify the unions were filed shortly after the employers had voluntarily recognized them, and the unions filed charges with the board. Applying a doctrine used by the board barring decertification petitions for a reasonable period of time following a voluntary union recognition, the board dismissed the petitions.
The facts in the two cases were strikingly similar: the companies and the unions entered into neutrality agreements before the union had obtained any authorization cards signed by employees. After entering into the agreements, the unions began organizing and eventually obtained cards signed by a majority of the employees. A few weeks after the employers voluntarily recognized the unions, employees of both companies, apparently unhappy with the union’s representation of them, filed petitions to decertify the unions.
It has been a longstanding policy of the NLRB to encourage voluntary recognition and bargaining between employers and unions to promote the harmony and stability of labor-management relations. In line with this policy, the board has permitted the parties “a reasonable time to bargain and to execute the contracts resulting from such bargaining.” Because the parties in these cases had not had a reasonable period of time to bargain before the decertification petitions were filed, the board dismissed them.
Voting to grant the request for review, the majority of board members acknowledged the NLRB’s longstanding policy on voluntary recognition. However, they distinguished the cases under consideration based on the fact that “an agreement was reached between the union and the employer before authorization cards, evidencing the majority status, were obtained.”
The board likely found this significant because in the cases on which the precedent is based, the agreement was reached after the authorization cards proved that the majority of the employees actually wanted union representation. In the cases under review, no such evidence exists.
The majority of board members said that recent changes in the labor relations environment warranted a reexamination of the long-held doctrine. The majority also stated that board-supervised elections—as opposed to voluntary recognition—are the best method for determining whether employees desire union representation.
It appears that the issue scheduled for review is limited to circumstances where the parties entered into a voluntary recognition and neutrality agreement before authorization cards were obtained. Presumably, despite a possible reversal of the doctrine on this issue, the voluntary recognition bar still would preclude a decertification petition for a reasonable period of time where the union obtained signed authorization cards from a majority of employees prior to entering into a voluntary recognition agreement. Nevertheless, an adverse decision could be a major blow to unions looking to obtain neutrality and card check agreements to avoid the snags of the more traditional union recognition process.
While many employers may feel removed from the circumstances that result in legal proceedings before the NLRB, when and how the board changes direction affects the labor relations climate for all employers. Although the current board seems inclined to redirect the course of its decisions toward one that is more favorable to the rights of employers, these cases also demonstrate how quickly the tide can and does turn.
Howard M. Bloom is a partner with the national workplace law firm of Jackson Lewis LLP in Boston. He regularly represents employers in all aspects of labor relations, including union campaigns, contract administration and negotiations, work stoppages, and all other employment law matters.
Margaret R. Bryant is the editor-in-chief for Jackson Lewis communications in the firm’s Pittsburgh office.
The information provided by the authors should not be construed as legal advice.