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Washington Labor & Employment Wire » The Potential Impact of the Obama Administration on the Labor and Employment Legal Landscape

The Potential Impact of the Obama Administration on the Labor and Employment Legal Landscape

  Part IV - Changing National Labor Policy through Executive Branch Action

In this fourth installment of our examination of the effect of the changing political landscape on federal labor and employment law, we review the potential changes that might be in store for National Labor Relations Board precedent and administration policy affecting labor-management relations.

In the 2008 elections, press reports suggest that organized labor expended a huge amount of cash and deployed its foot soldiers in support of President-elect Obama and Democrat congressional candidates.  Some estimates put labor’s total spending at nearly $400 million and suggest that unions mobilized nearly half a million members in voter-turnout efforts.  The combination of a president-elect who has been overtly supportive of unions with more significant Democrat majorities in both the House and Senate indicates that there are likely to be a number of changes in both law and policy affecting labor-management relations in the United States.

The National Labor Relations Board is the primary adjudicative body that shapes the interpretation and application of the country’s main labor law affecting private-sector employers-the National Labor Relations Act (NLRA).  Because the five-member Board consists of two Democrats, two Republicans, and a chairman selected from the president’s party, Board decisions and legal interpretations on important issues tend to shift with the political winds.  Since 2001, the Board has issued a number of decisions that have drawn the ire of labor unions and Democrats.  Frustration peaked in September 2007, when the Board issued a number of controversial decisions that were collectively described by organized labor as the “September massacre.”

In response to these and other Board decisions, the Senate and House held a joint hearing in December 2007 to examine the impact of these decisions on workers’ rights.  At the hearing, current Board member Wilma Liebman testified that “virtually every recent policy choice by the Board impedes collective bargaining, creates obstacles to union representation or favors employer interests.”  AFL-CIO general counsel Jonathan Hiatt accused the Board of “embark[ing] on a systematic and insidious effort to radically overhaul [] federal labor law” by “narrowing [the NLRA’s] coverage, withdrawing its protections, and weakening its already ineffective remedies.”

Although the Board’s membership has been equally divided in its political affiliation since December 2007, that stalemate is expected to break early in President-elect Obama’s administration with the appointment and Senate confirmation of at least one additional Democrat.  Once this deadlock is broken, the Board will undoubtedly chart a new course for national labor policy.  Among the areas where change is most likely are (1) organizing and recognition; (2) employee coverage; (3) employee rights; (4) striker protection; (5) remedies; and (6) organizing campaign regulation.

Organizing and Recognition

On his campaign Web site, President-elect Obama promised “to strengthen the ability of workers to organize.”  While the Employee Free Choice Act discussed in Part I of this series is one way that President-elect Obama can deliver on this campaign promise, reversal of some key recent Board decisions involving organizing and recognition will also further his stated goal.  In a reconfigured NLRB, the precedents discussed below are at significant risk of reversal.

Salting

In labor relations parlance, “salting” is a practice where union members (salts) apply for employment with a non-union employer for the primary purpose of organizing that employer’s workplace.  Whether salts enjoy the same rights under the NLRA as other employees has been the topic of a number of hotly contested decisions in recent years.  In Toering Electric Co., 351 NLRB No. 18 (2007), the Board altered the standard for applicants claiming discrimination based on union status to establish hiring discrimination claims.  The decision eliminated the Board’s presumption under the framework announced in FES, 331 NLRB 9 (2000), supplemented 333 NLRB 66 (2001), enf’d, 301 F.3d 83 (3d Cir. 2002), that all applicants (including salts) were bona fide employees under the statute and, instead, placed the burden on the NLRB General Counsel (who prosecutes violations of the NLRA) to show that (1) there was an application for employment and (2) the applicant maintained a “genuine interest in employment” with the employer.  Toering Electric potentially limits “salting” by allowing employers to refuse employment to applicants who do not have a bona fide interest in working for the company.  In dissent, Board member Liebman claimed that the Board’s decision was “impossible to reconcile with the National Labor Relations Act, its policies, and with Supreme Court precedent,” and that “without the benefit of briefs, oral argument, or even a request to reconsider precedent, it legalizes hiring discrimination in some, perhaps many, cases involving salts.”

In 2007, the Board also altered the burden of proof in backpay cases in which an employer was found to have discriminated against an employee or applicant on the basis of that individual’s union affiliation.  Oil Capitol Sheet Metal, Inc., 349 NLRB No. 118 (2007).  Prior to Oil Capitol, the General Counsel was entitled, under Dean General Contractors, 285 NLRB 573 (1987), to a rebuttable presumption that a salt would have remained indefinitely employed with the employer.  Oil Capitol changed this framework, requiring instead that the General Counsel show how long a salt would have stayed on the job to establish the amount of backpay to which a claimant would be entitled.  Thus, the Oil Capitol decision made it easier for employers to limit costly backpay awards in cases in which the employer either terminated or refused to hire a suspected salt.  As she did in Toering Electric, Member Liebman filed a vigorous dissent, arguing that the Board had “overturn[ed] Board precedent endorsed by two appellate courts and rejected by none . . ., without any party having raised the issue, without the benefit of briefing, and without a sound legal or empirical basis.”

Recognition-Bar 

In Dana Corp., 351 NLRB No. 28 (2007), the Board modified the “recognition-bar” doctrine in situations where the employer recognized the union through a voluntary card-check procedure.  The recognition bar precludes challenges to a union’s majority status for a specified period of time.  In Dana Corp., the Board held that employees should have a 45-day period, following the issuance of notice of a voluntary recognition, to file a petition for an election or decertification, before the recognition-bar would take effect.

Reversing NLRB policy dating back to Keller Plastics Eastern, Inc., 157 NLRB 583 (1966), which held that a union’s status as the recognized collective bargaining representative could not be challenged for a reasonable period of time after gaining recognition through demonstrating majority support via card-check, the Board in Dana adopted a rule providing that any voluntary recognition of a union will be vulnerable to challenge by a petition for decertification or election of a rival union for up to at least 45 days following the voluntary recognition.  However, in that 45-day period, the employer must still bargain with the voluntarily-recognized union, that union has the right to represent employees and pursue grievances and the union and employer may even execute a collective bargaining agreement, although all will be done with the risk that the union could lose its recognized status if an employee files a successful petition for decertification or for recognition of a rival union.

Employees seeking to file such a post-recognition petition can do so under the prior rule that they demonstrate that at least 30 percent of the bargaining unit seeks decertification or representation by a rival union.  The 30 percent showing may be based on signatures gained before and after notice of the voluntary recognition of the union.

Member Liebman argued in dissent that the Board’s decision radically departs from “well-settled, judicially approved precedent” and “subjects the will of the majority to that of a 30 percent minority, and destabilizes nascent bargaining relationships.”  Indeed, the Board itself held that, because the decision marked a “significant departure from preexisting law,” and in order to avoid disruption of established bargaining relationships, the new rule applied only prospectively.

Withdrawal of Recognition

A union that is recognized as the collective bargaining representative of a group of employees receives a presumption that it enjoys the support of a majority of those employees.  In Levitz Furniture Co. of the Pacific, 333 NLRB 717 (2001), the Board held that an employer may voluntarily withdraw recognition only where a union has “actually lost the support of the majority of the bargaining unit employees.”  Levitz reversed prior Board precedent that had allowed an employer to voluntarily withdraw recognition based on a good faith doubt as to the union’s majority status, even if the union actually still enjoyed majority support.  Under Levitz, the Board held that an employer bore the burden of showing, through objective evidence, the union’s actual loss of majority status at the time recognition was withdrawn.

In 2007, the Board applied Levitz in two cases that eased the evidentiary burden on employer withdrawal of recognition.  In Wurtland Nursing & Rehabilitation Center, 351 NLRB No. 50 (2007), the Board accepted a petition signed by a majority of workers seeking a “vote to remove the union” as proof of a loss of majority status, without requiring a decertification election.  In Shaw’s Supermarkets, 350 NLRB No. 55 (2007), the Board permitted an employer to withdraw recognition of the union, following the third year of a five-year collective bargaining agreement, after receiving signed slips from a majority of bargaining unit members stating that they did not wish to be represented any longer by the union, without requiring an election on a pending decertification petition.  In her Shaw’s Supermarkets dissent, Board member Liebman stated that the Board had “arbitrarily depart[ed] from longstanding precedent and procedure-and reach[ed] a result that serves neither of the [NLRA’s] goals” of protecting the right of employees to self-determination and promoting the interests of labor stability.

As part of their frustration with the September 2007 Board decisions, labor groups noted that, on the same day that the Board decided Dana, which made it more difficult for unions to achieve voluntary recognition based on employee signatures without having to face an election, it also decided Wurtland, which eliminated the requirement of such an election for employers who sought to withdraw recognition of a union based solely on employee signatures.

Prohibitions on Use of Employer E-mail

In Register-Guard, 351 NLRB No. 70 (2007), the last decision by the Board when its membership consisted of a majority of Bush appointees, the Board held that employers could legally prohibit employees from using company e-mail systems for personal and other non-job-related reasons, including union solicitations, as long as the restriction or its enforcement is not discriminatory.

By reaching this conclusion, the Board declined to evaluate e-mail communication the same way it does face-to-face communication between employees.  As a result, the Board did not apply its well-established body of law that generally prohibits any restrictions on solicitations not occurring during work time and, instead, evaluated the issue the same way it had in situations dealing with employee use of employer-provided equipment, such as bulletin boards, telephones and televisions.  Under this body of law, the Board has found that employees have no inherent right under the Act to use equipment provided by an employer for union-related communications, and therefore employer restrictions on the use of its equipment are lawful as long as they are not discriminatory.  Because Register-Guard prohibited the use of its e-mail system for all solicitations that were not business related and was therefore not facially discriminatory against union-related solicitations, the Board held that the employer’s policy was lawful.

In addition, the Board also held that the employer’s enforcement of a policy against union solicitations was not discriminatory, even though it had allowed other personal use of its e-mail system, because the employer had not allowed any other e-mail solicitations for outside organizations, except for an employer-sponsored solicitation on behalf of the United Way. The Board therefore suggested that an employer could lawfully permit certain types of solicitations based on their content (i.e., charitable solicitations) while prohibiting other types (i.e., noncharitable or commercial solicitations), so long as the distinction made is not based on any activity protected under section 7 of the NLRA.

Once again, Member Liebman, along with Member Walsh, dissented in the decision, stating that the ruling “confirms that the NLRB has become the Rip Van Winkle of administrative agencies.”  Member Liebman argued that “[o]nly a Board that has been asleep for the past 20 years could fail to recognize that email has revolutionized communication both within and outside the workplace” and that, as a result, “[i]n 2007, one cannot reasonably contend, as the majority does, that an email system is a piece of communications equipment to be treated just as the law treats bulletin boards, telephones and pieces of scrap paper.”

Notice of Beck Rights under Executive Order 13201

In February 2001, President Bush issued Executive Order 13201, which requires nonexempt federal contractors to post a notice informing employees of their “Beck rights,” including that they (1) cannot be required to join a union or maintain membership in a union to keep their jobs; (2) can be required under certain conditions to pay uniform periodic dues and initiation fees to unions as a result of union-employer security agreements; and (3) can object to use of their payments for certain purposes and can only be required to pay the portion of dues and fees used to support collective bargaining, contract administration or grievance adjustment.  The decision represented the Bush administration’s effort to inform workers of their rights to not join a union or pay certain fees and dues unrelated to collective bargaining, as enunciated by the Supreme Court in Beck v. Communication Workers of America, 487 U.S. 735 (1988).  In February 1993, President Clinton revoked a similar executive order issued by President George H.W. Bush in April 1992.  It is reasonable to assume that President-elect Obama will likely follow President Clinton’s example early in his administration.

Employee Coverage

As a cosponsor of the Re-Empowerment of Skilled and Professional Employees and Construction Tradeworkers (RESPECT) Act (H.R. 1644, S. 969) (see Part I of this series), President-elect Obama has supported reversing the “Kentucky River trilogy,” a series of 2006 Board decisions that provided for a broad definition of who could qualify as a supervisor and, therefore, be ineligible for participation in a union under the NLRA.  See Oakwood Healthcare, Inc., 348 NLRB No. 37 (2006) (charge nurses); Golden Crest Healthcare Center, 348 NLRB No. 39 (2006) (charge nurses); Croft Metals, Inc., 348 NLRB No. 38 (2006) (lead persons).

Even if the RESPECT Act does not become law, the Obama Board will be positioned to abandon the Kentucky River trilogy in favor of a more restrictive definition of “supervisor.”  Indeed, current Democrat Board member Wilma Liebman noted in dissent to Oakwood Healthcare that the majority’s decision “reflect[ed] an unfortunate failure to engage in the sort of reasoned decision-making that Congress expected from the Board.”

The Obama Board may also revisit coverage principles applied in other recent Board decisions that characterized workers as “non-employees,” “managers” or “independent contractors,” thus excluding them from coverage under the NLRA.  See, e.g., LeMoyne-Owen College, 345 NLRB No. 93 (2005) (faculty members); St. Joseph News-Press, 345 NLRB No. 31 (2005) (newspaper carriers and haulers); Pennsylvania Academy of Fine Arts, 343 NLRB 846 (2004) (artists’ models); Brevard Achievement Center, 342 NLRB 982 (2004) (disabled individuals working as janitors); Brown University, 342 NLRB 483 (2004) (teaching assistants).

Employee Rights

At the joint congressional hearing, the AFL-CIO’s general counsel complained that the Board during the Bush administration had diminished employees’ rights through its decisions, with those rights being “forced to yield [] to employer property interests, however miniscule, to employer discretion, to national security, to deferral to arbitration, and to other statutes.”  It is foreseeable that the Obama Board will strike a different balance of these various interests in its decision-making, tilting back in favor of greater protection of employee conduct.

The Board’s vacillations in the last 25 years on the issue of “Weingarten rights” for non-union employees provide another illustration of the influence of the political slant of the Board on national labor policy.  In 1975, the Supreme Court recognized, in NLRB v. J. Weingarten, Inc., 420 U.S. 251, that unionized employees had a right to representation at investigatory interviews that could result in disciplinary action.  In the 1980s, the Board first extended Weingarten rights to non-union employees and then, three years later, reversed itself.  In Epilepsy Foundation of Northeast Ohio, 331 NLRB 92 (2000), the Clinton Board finally restored Weingarten rights to non-union employees.  However, in IBM Corp., 341 NLRB No. 148 (2004), the Bush Board overruled Epilepsy Foundation.

Striker Protection

Permanent Replacements

On his campaign Web site, President-elect Obama promised to “work to ban the permanent replacement of striking workers, so workers can stand up for themselves without worrying about losing their livelihood.”  In Jones Plastic & Engineering, 351 NLRB No. 50 (2007), a Republican Board majority found that striker replacements whose job applications said they were at-will employees could be considered permanent replacements who would block the reinstatement of workers seeking to return to work after an economic strike.  This decision overruled the Clinton-era rule in Target Rock, 324 NLRB 373 (1997), which stated that at-will disclaimers undermined an employer’s attempt to show that the replacements were permanent.

Partial Lockouts

In 2004, the Bush Board issued two decisions that permitted employers to lock out some workers while permitting others to continue working.  See Midwest Generation, 343 NLRB 69 (2004), rev’d and remanded sub nom. Local 15, IBEW v. NLRB, 429 F.3d 651 (7th Cir. 2005); Bunting Bearings Corp., 343 NLRB 479 (2004), remanded, 179 LRRM (BNA) 2896 (D.C. Cir. 2006).  In the view of organized labor, these decisions undermined the right to strike.  However, in both cases, the courts of appeal refused to enforce the Board decisions.

In Midwest Generation, the Board allowed an employer to lock out strikers who had unconditionally offered to return to work, while it allowed those who had crossed the picket line to continue working.  In reversing the Board, the Seventh Circuit found that there was no proof that the partial lockout was justified by operational needs, and that the partial lockout was not justified as a lawful means of putting economic pressure on holdouts.

In Bunting Bearings Corp., the Board permitted an employer to lock out only non-probationary employees (all of whom were union members), while allowing its probationary employees (all of whom were non-union) to continue working.  The Board justified the partial lockout on the basis that the non-probationary employees had more of an interest in the outcome of contract negotiations.  Because there was a perfect correlation between union membership and lockout status, the D.C. Circuit remanded to the Board for the employer to demonstrate that the partial lockout was motivated by legitimate objectives.  On remand, the Board found that the partial lockout tainted the decertification petition later circulated by a majority of employees and issued an affirmative bargaining order.

Remedies

Backpay

In 2007, the Board issued several decisions that either limited backpay relief or made proof of such relief more difficult for claimants.  For example, as discussed above, Oil Capitol eliminated the presumption of continuing employment for salts.

In St. George Warehouse, 351 NLRB No. 42 (2007), a Republican Board majority held that the General Counsel bears the burden of production on the issue of whether an illegally discharged employee took reasonable steps to apply for available jobs in order to mitigate damages.  The Board reasoned that the General Counsel, as advocate for the former employee, was more likely to have information regarding the former employee’s job search efforts.  In dissent, the Democratic Board members noted that the majority had departed from 45 years of precedent in relieving the wrongdoer-employer of its burden of production on this issue.

In Grosvenor Resort, 350 NLRB No. 86 (2007), the Board held that employees who wait more than two weeks to seek interim employment will be denied backpay for that period because such delay was unreasonable and would “reward idleness.”  In his dissent, Member Walsh complained that the majority had only paid “lip service” to well-established Board principles and created “bad policy” that produced inadequate remedies and would “embolden others to commit violations that would otherwise result in more substantial backpay obligations.”

Bargaining Orders, Injunctive Relief, and Other Extraordinary Remedies

At the December 2007 joint congressional hearing, the AFL-CIO’s general counsel asserted that the Board’s past efforts to craft effective remedies beyond backpay and notice posting have “virtually disappeared under the Bush Board.”   He further argued that under the Bush administration the Board “virtually eliminated the bargaining order as a remedial tool,” and that section 10(j) injunctive relief has also “all but disappeared.”  Under the Obama Board, employers are likely to see a renewed emphasis on special and extraordinary remedies, including an increased use of bargaining orders and authorization of section 10(j) injunctive relief proceedings.

Employer Regulation During Organizing Campaigns

The Obama administration may also reinstitute Department of Labor regulations that would drastically expand the Labor Management Reporting Disclosure Act (LMRDA) to require consultants and attorneys to register under the LMRDA and file reports if they prepare a speech, handout, letter or video for use by the employer during a union organizing campaign.

The LMRDA currently requires all entities acting as “persuaders” in the context of a union organizing campaign to register with the federal government.  Entities who enter into agreements with employers to provide persuader services are also required to file reports within 30 days detailing the amount paid by the employer and containing “a detailed statement of the terms and conditions” of the arrangement or planned services to be provided.  There is an exemption in section 203(c) of the LMRDA that exempts from the reporting requirements the services of “such person by reason of his giving or agreeing to give advice to such employer.”  This “advice” exemption to the reporting requirements of the LMRDA historically has included persuasive material prepared by consultants or attorneys for use by the employer.

In January 2001, at the tail end of the Clinton administration, a regulation was introduced that would have altered the longstanding interpretation of “advice” under the section 203(v) of the LMRDA.  Under the new regulation, lawyers and consultants who simply review and revise persuasive material prepared by the employer would not have to report that activity.  However, the regulation stated that if a “consultant or lawyer or their agent communicates directly with employees in an effort to persuade them,” then the “advice” exemption would not apply, and there would be a reporting requirement.  The regulation further provided that the duty to report would be triggered even without direct contact between the consultant or lawyer and employees, as long as persuading employees was a direct or indirect object of the activity by the consultant or attorney.

In April 2001, the Bush administration rescinded the new LMDRA regulation promulgated by the Clinton administration.  The Obama administration’s Department of Labor will likely reinstitute the Clinton administration regulation.  Such a regulation, particularly coupled with the passage of the Employee Free Choice Act, may limit the ability of employers to successfully oppose a union organizing campaign.

*   *   *

In the final chapter of our five-part series, we will explore expected changes in national trade policy under the Obama administration.