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NLRB Offers Controversial Ruling

The National Labor Relations Board ruled that employers and unions could make secret agreements prior to employees having the chance to decide on whether or not to organize. Employment attorneys say the decision will promote and assist union efforts.

Thursday, January 13, 2011
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Employment lawyers and a dissenting member of the National Labor Relations Board are sounding an alarm over a recent NLRB decision they say threatens to undermine the role and interests of employees in the union-representation process.

The long-awaited Dec. 6 decision in the Dana Corp. case dismisses a complaint that the Maumee, Ohio-based auto-parts manufacturer violated the National Labor Relations Act by illegally assisting the United Auto Workers as it sought to organize one of the company's plants.

Without informing employees, Dana and the UAW agreed in 2002 that Dana would announce its neutrality to union representation, would provide a list of employee addresses to start the representation process and would allow the union access to the company's St. Johns, Mich. plant to meet with workers in non-work areas.

In return, the UAW agreed to abide by some provisions in any future collective-bargaining agreements, including mandatory overtime, flexible compensation, attendance controls, continuous improvement and teamwork programs, and healthcare-cost controls.

The "establishment of collective-bargaining relationships based on self-interested union-employer agreements that pre-empt employee choice and input" are prohibited by the statutory provisions of the NLRA, writes Brian Hayes, the lone Republican on the Board, in his dissent from the ruling.

In the majority opinion, Chairman Wilma Liebman and Mark Pearce ruled "the Board and courts have long recognized that various types of agreements and understandings between employers and unrecognized unions fall within the framework of permissible cooperation."

Board member Craig Becker recused himself due to a potential conflict of interest because he had written a brief supporting the practice prior to joining the Board.

Employment lawyers are concerned.

"Setting aside the lofty words about cooperation and labor peace, the effects of the decision appear to promote and assist unions to obtain new members," a legal alert from Philadelphia-based Duane Morris states.

"If played out to its reasonable, logical extension, the decision would permit a practice that the NLRB has historically found illegal: top-down organizing, [which] occurs when a union that does not represent a majority of an employer's employees reaches an agreement."

A legal alert from Philadelphia-based Jackson Lewis warns that it's likely "this decision will encourage unions and employers to enter into pre-recognition agreements, especially where an organizing campaign may not be beneficial to either side."

Hal Coxson, a shareholder in the Washington office of Ogletree Deakins and principal in Ogletree Governmental Affairs, a subsidiary of the firm, is far more succinct. The decision, he says, "takes a voluntary recognition contractual agreement and gives it teeth."

In other words, he says, "this is a move toward getting rid of the secret-election balloting, encouraging union representation based only on cards."

What should HR do?

"If you have a charge filed against your company," says Coxson, "review the charge and if it's a significant issue, then you should consider going forward, knowing that you will lose in the NLRB and maybe have some hope in the appeals court.

"If it's not a significant case," he says, "settle, because you're going to lose before the NLRB."

Coxson also suggests HR executives look for ways to support their companies' trade associations and other amicus-brief-writing organizations, such as the New York-based Council on Labor Law Equality and the Washington-based National Chamber Litigation Center, "because brief writing is where the battle is going to be. It's in the courts that this will have to be fought."

Dana is not the only recent move by the NLRB to arouse employment attorneys' concerns. Amicus briefs were recently sought by the Board to reconsider the "other" Dana ruling (as it's called in legal circles) that requires employers to notify employees of voluntary recognitions and grant them 45-day windows in which to file petitions for elections to decertify that union or support a rival one.

On Dec. 20, the agency's General Counsel also issued a new directive that broadens the class of cases that can be subject to an expedited process the NLRB would use to decide whether an employee who was discharged during a union-organizing drive be reinstated with full back pay. That directive contains many more ways in which employers can be perceived to inhibit union activity.

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"Going forward," James Redeker, an employment attorney with Duane Morris, writes in a legal alert, "allegations of employer promises, grants of benefits, solicitation of grievances and restrictions on employee communications during a union-organizing drive that tend to 'chill' union activity will be added to the classes of 'hallmark' violations -- discharge, threats of plant closure or job loss -- that the Board will process on an expedited basis with the intent of obtaining injunctive relief."

There's also concern over a recently proposed NLRB rule that would require private employers to post a "much lengthier and involved list of examples" of employees' organizing rights than what is currently required of governmental agencies by the U.S. Department of Labor, says Coxson, "such as, 'You have the right to wear insignias,' or 'You have the right to gather and speak to other employees about union organizing.'

"What it does not include," he says, "are employees' rights to withhold percentages of union dues if they disagree with union politics or activities. Nor does it include exceptions to the rights that are listed," he adds, "so, for instance, lab technicians who are required to wear lab coats now may think they have the right to wear union shirts instead."

In defense of the proposal, the NLRB says many employees protected by the NLRA are unaware of their rights because no one is required to inform them of those rights.

"The NLRA," the Board states, "is almost unique among major federal labor laws in not including an express statutory provision requiring employers routinely to post notices at their workplaces informing employees of their statutory rights."

In addition, it states, the majority of private-sector employees are not represented by unions and therefore lack an important source of information about NLRA rights.

While acknowledging that this latter point is, indeed, the case, Coxson says, "we are urging that if there is to be a notice at all, it just be a list of the rights, without comment."

The Dana case was initiated shortly after the company and union signed the pre-recognition letter of agreement. Three employees who became aware of it filed charges with the regional NLRB office in Detroit, claiming the agreement violated the National Labor Relations Act's prohibition on employers from providing certain kinds of support to unions or creating their own company unions.

That led to a complaint being brought in 2004 by the general counsel of the Bush administration's NLRB, which was dismissed by the NLRB in 2005. It came up for appeal in 2006, but was long delayed because of vacancies on the Board.

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