Labor Relations, Congress And The NLRB In Transition In The Age Of Covid-19

This edition of Highlights will focus on impending shifts in traditional labor law arising from the CARES Act, National Labor Relations Board decision trends and retrenchment of policy directions from those taken under the Obama Board. Thomas Lenz, a partner and former NLRB attorney contributed the section on procedural updates. Robert Fried may be reached at: [email protected], 925-251-8515 (direct) or 925-998-0742 (cell).

Quorum Confirmed

On July 29, 2020 the Senate confirmed appointments of current Board Member Marvin Kaplan (Republican) and past Board Member Lauren McFerran (Democrat).  Employers should expect that the Board panel’s continuing quorum will enable further action on pending cases and policy initiatives to alter the private sector labor relations landscape.

Future Counterpoint

A change in administration could bring many of the pro-labor changes embodied in the Protecting the Right to Organize (PRO) Act. Notable provisions include authority for the NLRB to fine companies up to $50,000 per violation; compensation for retaliation in addition to current remedies back pay and reinstatement and enhanced protected organizing rights for independent contractors and gig workers by recognizing such individuals as protected “employees” under the Act. The latter change would directly impact the transportation modes as where truck drivers and others are currently the subject of major state legislation and litigation. Class action decision makers should be especially sensitive to the impact on such representative actions to the extent that formal recognition of concerted protected activity would be a unifying factor in validating class claims.

Cares Act

In the same time period Congress passed the CARES Act. It created a pool of funds to provide “Assistance for mid-sized businesses” which, in section 4003(c)(3)(D), purported to create a lending program that obligated the recipient of the loan to certify that it “will remain neutral in any union organizing effort for the term of the loan.”

The CARES Act provision mandates “neutrality” as a government edict, as a condition of receiving government funds. Such requirements are related to so-called “project labor agreements” and other mandatory bargaining and living wage agreements, as are common in the air transport, support and shuttle industries. What is different about the CARES Act approach is that it purports to tie agreement of “neutrality” to the mere receipt of funds from government rather than a more direct condition of doing business, like a project labor or labor peace agreement.

It is worth noting that the present NLRB General Counsel identified situations in which even traditional neutrality agreements might violate the Act. (On November 20, 2019, the NLRB’s Office of the General Counsel granted an appeal filed by the National Right to Work Legal Defense Foundation (NRTWLDF) on behalf of a hotel housekeeper in Seattle finding that a neutrality agreement arguably violated the NLRA and that the hotel’s recognition of the union pursuant to that agreement was unlawful.)

Summary of Current Board Changes

In late July 2020, the NLRB announced another set of proposed rules intended to affect the representation election process.  In summary, the NLRB proposals would roll back certain reforms of the Obama Board on requiring employers to provide personal contact information of employees eligible to vote to a labor union in the days before an election.  Specifically, personal telephone numbers, cellular phone numbers, and personal email addresses would no longer be required items for disclosure.  The NLRB states privacy rights and squaring NLRB obligations with other laws for the proposed change.

Additionally, the NLRB would allow absentee ballots in union representation elections for those employees eligible to vote in an election where such employees are on a military leave of absence from employment.

Changes to Representation Election Case Rules

The Obama Board was credited with creating the so-called “quickie” election rules, which limited the access to pre-election hearings and other procedural elements, viewed by labor as effective tools to delay elections and permit employers more time to campaign.

Private sector employers who have faced union organizing activity may be familiar with the election processes at the National Labor Relations Board (NLRB).  Those processes were significantly changed with the 2014 rules, which took effect in 2015.  Those changes drastically accelerated the election process, limiting employer opportunities to prepare, communicate, or even to raise questions in hearing or otherwise about the propriety of the petitioned-for election.  

After announcing the proposed rule, receiving comments, and going final with it, the inevitable challenging lawsuit was filed. A May 30, 2020 court order from the federal district court in Washington, DC has allowed NLRB to implement all but five aspects of the rule changes.

The court’s order blocked the following five rule changes from taking effect:

  1. Allowing pre-election hearings to address litigation of voter eligibility issues;
  2. Setting fixed time frames between a hearing and an election after hearing;
  3. Allowing more time for an employer to prepare and submit a voter list after litigation at hearing;
  4. New standards limiting employee eligibility to serve as an observer during an NLRB election; and
  5. The timing for NLRB’s Regional Directors to issue a certification of representative, after a union wins an election.

Other provisions are allowed to take effect immediately.  Those changes now in effect include:

  1. Scheduling the hearing at least 14 days from issuance of the notice of hearing, instead of the 8th day after petition filing under the 2014 rules, and providing the parties more time in which to investigate and resolve potential hearing issues;
  2. Posting the notice of election within five days of petition filing instead of two days;
  3. A more accommodating time frame in which a non-petitioner (typically the employer) can file a more informed statement of position on issues raised in the election petition;
  4. A new requirement that a petitioner (typically a union) file and serve a responsive statement of position;
  5. The reinstatement of Post-Hearing Briefs, which the 2014 rules made discretionary in the rare instance of a pre-election hearing and which largely denied parties the ability to be heard on points of law;
  6. The reinstatement of  Regional Director discretion on the timing of a notice of election after a hearing and the direction of an election;
  7.  New procedures for ballot impoundment when a request for review is pending on an issue in pre-election litigation;
  8. A new prohibition on bifurcated requests for review;
  9. Formatting changes for certain election case documents; and
  10. New terminology as well as to define time frames in “business” days rather than calendar days.

NLRB’s General Counsel issued a guidance memorandum regarding implementation of the rule. GC Memorandum 20-07.  In the wake of the district court ruling, the Board maintains that it followed all legal requirements in issuing the rules. It is expected that NLRB will appeal the court’s ruling.

Additional Rules Related To Union Representation

NLRB separately embarked on a rulemaking process to address some nuanced issues involving union representation.  They involve three principal concepts:

  1. The “blocking charge” concept, by which a party to an NLRB representation election proceeding can file an unfair labor practice charge to allege unlawful conduct and, by filing the charge, delay a workplace election on union representation.  The NLRB rule changes would help to remove obstacles to workplace elections through blocking charges, allowing elections to be held (and employees to vote) while NLRB charges are pending.
  2. Whether notice is required to employees before an employer’s voluntary recognition of a labor union claiming to represent the employees becomes binding.  The NLRB rule changes would require employers to post a notice to employees for 45 days before such voluntary recognition becomes binding.  The rule echoes an NLRB concept from years ago in a case called Dana Corporation, where employers were required to post a notice regarding recognition in the workplace.  NLRB had abandoned the Dana Corporation rule for several years before the latest rulemaking. 
  3. Whether a construction industry employer is bound indefinitely to a bargaining duty with a labor union where bargaining relationships in the construction industry typically run coextensively with a labor agreement (ending when a contract expires), employees have not voiced majority support in an NLRB election or otherwise for union representation, and a union’s claim to majority support is based upon unverified boilerplate contract language.  (This firm played a major role in litigation against NLRB on construction industry bargaining relationships and employee rights of choice in Nova Plumbing and Colorado Fire Sprinkler cases which are referenced in NLRB’s comments on the rule.)  NLRB’s rule overrules a case known as Staunton Fuel/Central Illinois which had imposed long-term bargaining relationships in the construction industry on employees and employers in the absence of evidence employees wanted such union representation.

Employee Speech Reined-In as Employer Discipline Rights Expand

Recent years have seen employee rights expand in raising issues with wages, hours, and working conditions. NLRB case rulings protected employees through inflammatory situations and dialogues, despite the employees’ use of profanity toward supervisors and often what management has considered hostile, offensive, and abusive conduct.  A change in course came in July 2020 when the NLRB issued a decision in the General Motors case.  The General Motors ruling overruled case authority in three different contexts (employee to management communications, employee to employee communications including social media, and picket line communications) which set different standards on protected employee conduct. 

The NLRB panel decided to harmonize standards for regulating whether employers may discipline such misconduct by reference to a long-standing standard for defensible discipline in NLRB’s Wright Line ruling from 1980.  Under Wright Line, regardless of whether an employee engaged in protected activity, an employer’s action against the employee will be more likely lawful if the employer can establish that the employee would have taken the same action regardless of protected activity.  Essentially, an employer’s consistency in following its own standards will be critical in establishing a defensible case.  With this ruling the NLRB panel hopes to reconcile inconsistencies which could result in employee outbursts being protected activity at NLRB, under federal labor law, while at the same time violating standards under other state and federal workplace laws involving harassment, discrimination, and abusive conduct. 

COVID-19 TBD

The COVID-19 work environment and remote work environments, the transition to Zoom and other media and social media based employee communication tools alter the ways in which employee communication and interaction occur. The issues to be tested are whether the broadening of access to workplace communication tools will accelerate the potential for workplace concerted activity mischief. Certainly, it should accelerate the revision of workplace policies including no solicitation policies since the NLRB will not shift its basic approach – that alteration of workplace communication or access policies after an actionable issue has arisen will not be recognized as a defense and will likely engender unfair labor practices on its own. The NLRB retains the power to order policies to be halted or changed to protect workplace protected activity.

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