United States: Big Changes At The NLRB

Last Updated: September 21 2017
Article by Ogletree Deakins

XYZ Logistics has certainly had its share of labor troubles lately. Its truck drivers have been represented by the Teamsters for decades, and it has been bargaining a new union contract for what seems like forever. The predecessor contract expired months ago; and, while the company has continued to check off union dues under the provisions of the expired contract, it is giving serious thought to suspending the checkoff in order to exert financial pressure on the union to settle. Also, before the contract expired, XYZ fired John Doe, the union's chief steward, for allegedly driving while impaired. The union timely grieved the discharge, but missed the contractual deadline to file for arbitration. The Teamsters have also just filed an unfair labor practice (ULP) charge over the termination.

Were the problems with the drivers not bad enough, John Smith—one of its warehouse forklift operators—has been openly attempting to unionize the company's warehouse employees for some time. Among Smith's many complaints is the fact that during peak work periods, XYZ uses temporary forklift operators from ABC Staffing Co. to pick up the slack. Smith believes XYZ should instead utilize its own employees and pay them overtime.

When the company first learned of Smith's activities, it sent its corporate vice president (VP) of human resources to the warehouse operation to assess the situation, and he ran into Smith on the loading dock. Upon meeting Smith, the VP asked: "How are things going?" Smith replied: "Not great. Our warehouse manager is a terrible supervisor." The VP replied: "I'll look into that." Smith promptly filed ULP charges over the exchange, and the Board's regional office has issued a complaint alleging that the company unlawfully "solicited grievances" and "impliedly promised" to remedy them in an effort to discourage unionization.

In fact, the efforts of Smith and the Teamsters among the broader unit of warehouse employees had already fizzled, but Smith did find a good deal of support among his fellow forklift operators. Consequently, a few days ago the Teamsters filed a petition seeking an election in a unit of "all forklift drivers employed solely by XYZ Corporation, and by XYZ and ABC Staffing as joint employers."

While frantically compiling the voter eligibility lists and assessing its position on the petition, the company received two more ULP charges. The first claimed that Joe Jones, the lead forklift operator, whom the union claims to be a statutory supervisor, threatened the forklift drivers with a loss of pay and benefits if the union were to win the election. The second alleged that the "harmonious workplace and civility" provision in XYZ's handbook violates the National Labor Relations Act (NLRA) because it would "chill" a reasonable employee from exercising his or her rights under Section 7 of the Act.

While the volume of XYZ's NLRA problems may be unique, their substance is not. Most of them stem from changes in, or expansions of the law by, the National Labor Relations Board (NLRB) under the Obama administration; and many, if not all, are likely to be modified or completely overruled by the incoming NLRB majority. For XYZ, however, the fact that change may be coming is only of academic interest—it needs to know what to do with the petition and charges right now. Like most employers, XYZ's decision to settle or contest a ULP case, or to oppose or stipulate in a representation case, is typically guided by three practical considerations: likelihood of success, consequence, and cost.

Settle or contest?

The prospect of a changing Board majority will almost certainly alter an employer's likelihood-of-success calculation in every instance. However, that may not always be the
critical factor. For example, the "solicitation of grievances" complaint certainly appears to be an example of Board overreach and disregard of an employer's statutory free speech rights. As such, it certainly seems a new Board majority would be unlikely to find a violation on these facts. However, standing alone, while this complaint may be aggravating, it is of little practical consequence. Not only is there no monetary remedy at play, but more significantly, the substantive act occurred before the petition was filed. Since it is outside the "critical period" in the lead- up to a representation election, the union cannot use the incident to secure a rerun election if it loses in the pending representation case.

Apart from principle then, the only reasons for not settling the matter would be either the possible negative impact on the election, or the likely insistence by the NLRB that XYZ's settlement must contain a "default" provision. As to the first reason, XYZ can simply wait until after the election to entertain settlement; and, as to the second, it can wait until November of this year to see if a new NLRB General Counsel opts to modify the current "default" policy.

Post-petition conduct. The two other ULPs in the warehouse unit present a different set of considerations. Both charges relate to post-petition conduct and, therefore, could form the basis for election objections. Thus, they could carry a much greater consequence than simply an eventual notice posting. Beyond this, other considerations attach to each. The ULP involving Jones is inextricably bound up with the pending election petition. The determination of Jones's supervisory status may have strategic importance in the context of the ongoing organizing campaign. Accordingly, immediate representation case considerations may well drive XYZ's position on this charge.

On the supervisory issue itself, XYZ will also need to keep in mind that the current Board majority has been so "situational" and inconsistent in its supervisory determinations that the entire extant analytical framework under NLRA Section 2(11) may be headed for reconsideration by the new Board, or even by the federal courts. Even more than the supervisory analysis, the current Board position on the legality of employer handbooks clearly appears headed for substantial revision. Since XYZ's disputed handbook policy appears particularly innocuous and unrelated to any actual employee discipline, XYZ may merely want to stipulate to the salient facts, but refuse to settle any complaint based on the existence of the policy.

The ULPs and potential ULPs involving XYZ's already organized drivers also involve a number of practical considerations. A few years ago the current Board overruled decades of precedent holding that an employer was privileged to terminate dues checkoff once the collective bargaining agreement containing the requirement expired. Given the right case, a new Board will likely reverse that decision and revert to prior law. However, it is unclear if such a case is currently in the Board's decisional pipeline. So, even if XYZ is convinced that the law will be changing, it has to recognize that if it suspends checkoff, it will result in the issuance of a complaint and cause XYZ to incur litigation expenses until such time as the change in the law actually takes place. Moreover,

the suspension of checkoff could color the Board's analysis of any other alleged bargaining misconduct and could alter the parties' respective rights should the union eventually go out on strike. Consequently, although the law will almost certainly change, XYZ must, in this instance, weigh the anticipated bargaining leverage it would gain from checkoff suspension against the costs of defending its position and the effect of having an outstanding ULP during bargaining.

The discharge of John Doe also raises some practical considerations for XYZ. Because the union missed the filing deadline, XYZ could take the position that the matter is not arbitrable. However, this would throw resolution of the discharge to the NLRB, which is traditionally sensitive to claims that an employee is being "singled out" because of his union activity. Consequently, XYZ might want to consider waiving the procedural defect and consenting to arbitration if the NLRB defers the charge.

There is, however, one final wrinkle: The current Board has changed its deferral standards and, as a consequence, Doe may be more likely to get a second bite of the apple on his discharge through the NLRB. This changed deferral standard may well be altered by the new Board, but this matter is likely to move much faster than the pace of change at the Board, so XYZ needs to either evaluate its options under current law or plan on protracted litigation over the discharge.

Representation case issues. XYZ's representation case issues are no less complicated. The "forklift only" unit demand and the "joint-employer" claim regarding ABC Staffing are both clearly problematic and consequential. While a new Board is very likely to revisit and, perhaps, reverse the Obama Board on both the "micro-unit" and joint-employer issues, XYZ simply cannot sit back and wait for the law to change. If it proceeds to election in the requested forklift unit without opposition and loses the election, it will very likely be stuck with that unit since even if a new Board reverses Specialty Healthcare, it is not going to simultaneously invalidate all the micro-units that have previously been certified under the case. Doing so would almost certainly be deemed too destabilizing. Given this consequence, XYZ clearly has to fight the unit issue now.

 That same logic applies equally to the joint-employer issue. The new Board will very likely revisit the current Board's expansion of the joint-employer doctrine. Indeed, it is an issue of such great interest to all stakeholders, with so many ramifications, that it is likely destined for years of litigation before the Board and courts. Moreover, XYZ's situation also involves a corollary to the joint-employer issue—the so- called Miller & Anderson multi-employer unit issue. The new Board majority is very likely to overrule Miller & Anderson and return to a doctrine that finds such multi-employer units are not appropriate absent the consent of both employers. However, whether it is the joint-employer claim or the Miller & Anderson unit configuration, XYZ needs to fight them now or run the risk that it loses the election and is stuck with the requested unit if subsequent changes by a new Board do not apply retroactively.

Uncertainty ahead. As noted, XYZ's issues are not atypical and will be faced by many employers in the coming months. So what is the larger lesson that can be gleaned from the XYZ scenario? Yogi Berra probably provided the best answer to that question when he observed: "It ain't over till it's over." We all know that a host of Obama Board decisions are likely to be revisited by the new Board. That said, no one knows when that will happen, and no one knows exactly what the new Board might do in a given instance.

With respect to the latter point, a new Board may completely overrule, or merely refine or modify, existing Obama Board doctrines. In either event, the practical impact of such future decision-making has way too many variables to be dispositive right now for the particular circumstances of a particular employer. To put it another way, we know that dozens of Obama-era cases will be reconsidered, but we do not know, with certainty, what their exact outcomes will be.

The good news for employers is that they now have the prospect of obtaining a different result at the Board level on a host of representation and ULP case issues. The bad news is that until a new Board issues controlling decisions that apply to an employer's specific issues, the employer is still going to have to litigate the claim in order to preserve and, hopefully, prevail on the given issue.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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