Tag Archives: NLRB

February 7, 2014

NLRB Again Proposes Rules to Speed Union Elections

After dropping its appeal of a District Court ruling that invalidated its “ambush election” rules, the National Labor Relations Board (NLRB or Board) has proposed those rules again. By a vote of 3-2, the Board reissued proposed amendments to its representation case procedures. The Board states that the amendments are designed to remove unnecessary delays and inefficiencies in representation case procedures. The effect, however, is expected to be an increase in union wins as the union election procedures are streamlined and votes occur quicker.

Board Lacked Quorum When Rules Adopted in 2011

The NLRB first proposed its rules to speed up the union election process in June of 2011. At the time, the Board had just three members as two positions were vacant. Despite an outcry by the business community and receipt of almost 66,000 comments, two of the three Board members voted to adopt the rules. The final rules were published in December of 2011 and went into effect on April 30, 2012.

The U.S. Chamber of Commerce and other interested groups sought to stop the implementation of the ambush election rules by suing the NLRB in federal court in the District of Columbia. Just two weeks after the rules went into effect, the judge in the case invalidated the rules, finding the Board lacked a three-member quorum needed to pass the rules. Although two of the Board members voted in favor of the rules, the third Board member, the sole Republican, did not participate in the vote. Finding that the rules were invalid for lack of the statutorily-mandated quorum, the judge did not need to address the challenge to the rules’ constitutionality and the lack of authority of the NLRB to adopt the rules. In a distinct incident of foreshadowing of this week’s events, the judge specifically stated “nothing appears to prevent a properly constituted quorum of the Board from voting to adopt the rule if it has the desire to do so."

The NLRB appealed the District Court’s decision, asking the U.S. Court of Appeals for the District of Columbia Circuit to reverse the lower court’s ruling. On December 9, 2013, the NLRB withdrew its appeal pursuant to a joint stipulation by the parties. It did so in anticipation of doing exactly what the District Court judge had suggested, namely proposing the rules again so that a properly constituted quorum of the Board can vote to adopt the rules. Board Chairman Mark Gaston Pearce and Board members Kent Y. Hirozawa and Nancy Schiffer approved the re-issuance of the proposed rules.

“Ambush Election” Rules Would Speed Union Election Process

Published in the February 6, 2014 Federal Register, the proposed changes are virtually identical to those proposed in 2011. Highlights of the proposed amendments include:

A union may file its representation petition electronically, rather than by hand or regular mail.
A hearing must be held within 7 days of the union filing its petition.
Employers must provide a comprehensive “statement of position” on the union’s representation petition in advance of the hearing; any issues not included in the statement are waived.
Pre-election hearing is to determine only whether a question concerning representation exists; issues related to individual voter eligibility may be deferred to post-election procedures.
The parties right to file a post-hearing brief is discretionary as allowed by the hearing officer.
Deadline for employer to provide voter eligibility list is shortened from 7 work days to 2 work days from the Direction of Election.
Employer must provide email addresses and telephone numbers for employees eligible to vote in addition to the required names and home addresses.
Election need not wait for 25 days after the issuance of a Direction of Election.
Pre-election appeals to the Board are eliminated, leaving only a discretionary appeal of both pre- and post-election issues after the election occurs.

Two Board Members Dissented

Board members Philip A. Miscimarra and Harry I. Johnson III are not in favor of the proposed rules. Although stating that they share in the majority’s desire to protect and safeguard the rights and obligations of those subject to the National Labor Relations Act, they do not believe it necessary to adopt a “wholesale rewrite” of the Board’s election procedure.

Interested parties and the public may submit comments on the proposed rules until April 7. Electronic comments may be submitted through http://www.regulations.gov. Comments may also be mailed or hand delivered to: Gary Shinners, Executive Secretary, National Labor Relations Board, 1099 14th Street NW., Washington, DC 20570. The Board intends to hold a hearing on the amendments during the week of April 7. We will keep you informed of developments on this issue.

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January 16, 2014

(Un)Happy New Year for NLRB

By Brad Williams

The National Labor Relations Board began 2014 on a sour note, conceding defeat on its controversial “Poster Rule” and facing skeptical Supreme Court justices in the blockbuster Noel Canning case testing the president’s power to appoint NLRB members under the Constitution’s so-called “Recess Appointments Clause.”

“Poster Rule” Challenge Dropped

On January 6, 2014, the NLRB announced that it would not appeal two federal circuit court decisions that had rejected the Board’s controversial “Poster Rule.” The rule, originally issued in 2011 under the NLRB’s long-neglected rulemaking power, required 6 million private employers to post a government-issued notice advising employees of their rights under the National Labor Relations Act. Business groups excoriated the rule as requiring posting of unbalanced information, and as violative of their free speech rights. Two federal circuit courts broadly agreed, holding that the Board lacked authority to issue the rule, and that its enforcement mechanisms were incompatible with the NLRA.

Although the Board obtained extensions of time in which to appeal these decisions to the Supreme Court, it announced on January 6th that it had “decided not to seek Supreme Court review.” The Board urged that the poster could still be displayed “voluntarily,” but effectively conceded defeat in the litigation. A similar rule issued by the Department of Labor in 2010, and applicable only to federal contractors, remains on the books. However, one of the parties behind the successful challenge to the NLRB’s “Poster Rule” recently filed a lawsuit challenging the DOL’s rule on similar grounds. The DOL has not yet responded in that litigation.

Skeptical Questioning in Noel Canning

On January 13, 2014, the NLRB faced skeptical Supreme Court justices in oral argument in the blockbuster Noel Canning case. The case arose from a Board order finding that an employer had violated the NLRA by refusing to sign a collective bargaining agreement after orally agreeing to the contract. The employer, Noel Canning, appealed the Board’s decision to a federal circuit court on the basis that three of the Board’s members had been improperly appointed by President Obama, and that the Board’s unfair labor practice decision was accordingly void.

The federal circuit court agreed, holding that the Board appointments had violated the Constitution’s so-called “Recess Appointments Clause.” That clause, which has never before been interpreted by the Supreme Court, provides that the president may “fill up all Vacancies that may happen during the Recess of the Senate.” President Obama had appointed the three Board members during a 2012 intra-session break in which the Senate had been convening every three days in pro forma sessions, but had been conducting no business. The federal circuit court held that the Recess Appointments Clause only permits presidential appointments between the Senate’s annual official “sessions,” and only for vacancies that have arisen during these inter-session breaks, not before. Because the federal circuit court found that the Board members’ appointments had been improper, it vacated the NLRB’s decision against Noel Canning.

On January 13th, the Supreme Court held oral argument in the case which implicates such technical questions as whether presidential recess appointments are only permitted during inter- (as opposed to intra-) session breaks; whether the vacancies must arise during Senate recesses, not before; and whether the Senate is in recess when it conducts pro forma sessions every three days. Practically, these questions address the political struggle between presidents and the Senate over appointments, and threaten to eliminate a workaround presidents have increasingly used to place officials in top positions where their appointments would otherwise be delayed or rejected by the Senate.

During the oral argument, the justices seemed broadly skeptical of the NLRB’s position that a robust recess appointment power is needed as a “safety valve” to deal with Senate intransigence; that the president (as opposed to the Senate) may decide when the Senate is actually in “recess;” and that a long history of presidential appointments seemingly at odds with the plain text of the Recess Appointments Clause justifies President Obama’s appointments in 2012. In particular, some justices seemed unpersuaded that there was an intelligible “limiting principle” that would permit a president to decide, on his own, whether the Senate was actually in “recess.” For instance, Justice Kennedy raised the prospect of “lunch break” appointments given the NLRB’s position.

A decision in the Noel Canning case is expected by this June. The Supreme Court might avoid some of the case’s stickier questions, including whether the legal acts of improperly appointed officials dating back to the Washington administration are somehow void, by deciding the case on the narrow question of whether recess appointments are proper when the Senate is convening every three days in pro forma sessions. Curtailment of the president’s recess appointment power will have limited short-term effects following the Senate’s elimination of the filibuster for most presidential appointments last November. That change made President Obama’s need for the power far less pressing because Democrats currently control the Senate. However, any curtailment of the power is likely to have significant longer-term effects, particularly when different parties once again control the Senate and the presidency.

Of course, should the recess appointment power be significantly curtailed come this June, future presidents may still always fall back on that old constitutional standby: “Advice and Consent of the Senate.”

Disclaimer: This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.

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December 3, 2013

Divided Fifth Circuit Overturns D.R. Horton on Enforceability of Employer’s Arbitration Agreement Prohibiting Class Claims

By Jeffrey T. Johnson

In a much-anticipated decision, the Fifth Circuit Court of Appeals rejected the National Labor Relations Board’s controversial D.R. Horton decision, which held that an arbitration agreement requiring an employee to waive his or her right to bring class claims violated the National Labor Relations Act (NLRA). Agreeing with its sister circuit courts, the Fifth Circuit held that the NLRA did not override the Federal Arbitration Act (FAA) meaning the employer’s arbitration agreement must be enforced according to its terms, including the agreement’s preclusion of class claims. D.R. Horton, Inc. v. NLRB, No. 12-60031 (5th Cir. Dec. 3, 2013). The Court upheld, however, the NLRB’s finding that the arbitration agreement could be misconstrued by employees as precluding the filing of unfair labor practice charges which violates Section 8(a)(1) of the NLRA.

Arbitration Agreement Prohibiting Class Claims Does Not Violate NLRA

The Fifth Circuit’s ruling puts to rest a thorny issue for employers who have struggled with the Board’s D.R. Horton decision. The controversy arose in early 2012 when the NLRB concluded that home builder D.R. Horton violated Sections 7 and 8(a)(1) of the NLRA by requiring employees to sign a Mutual Arbitration Agreement that precluded employees from filing class or collective claims related to their wages, hours or other working conditions. In re D.R. Horton, Inc., 357 NLRB No. 184 (Jan. 3, 2012). The Board found that the agreement interfered with the exercise of employees’ substantive rights under Section 7 of the NLRA which allows employees to act in concert with each other for their mutual aid or protection.

Two of the three judges on the Fifth Circuit panel disagreed. First, the majority found that the use of class action procedures is not a substantive right but is instead a procedural device. Then, the judges analyzed whether there is a conflict between the NLRA and the FAA that would preclude application of the FAA to enforce the arbitration agreement according to its terms. Relying on the U.S. Supreme Court’s decision in AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011), the Fifth Circuit determined that requiring a class mechanism is an impediment to arbitration and violates the FAA so the Board’s attempt to fit its rationale into the FAA’s “savings clause” failed. The Court then concluded that neither the NLRA’s statutory text nor its legislative history contains a congressional command to override the FAA. Failing to find an inherent conflict between the NLRA and the FAA, the Court ruled that the arbitration agreement must be enforced according to its terms under the FAA.

The Fifth Circuit pointed out that every one of its sister circuits to consider this issue had refused to defer to the NLRB’s rationale in D.R. Horton, and had held arbitration agreements containing class waivers enforceable. The two judges in the majority stated, “we are loath to create a circuit split.” Judge Graves dissented, stating that he agreed with the Board that the arbitration agreement interfered with the exercise of employees’ substantive rights under Section 7 of the NLRA.

Agreement Violates NLRA Because Employees Might Believe it Prohibits Filing Unfair Labor Practice Charges

The arbitration agreement used by D.R. Horton required that employees agree to arbitrate “without limitation[:] claims for discrimination or harassment; wages, benefits, or other compensation; breach of any express or implied contract; [and] violation of public policy.” Although the agreement provided four exceptions to arbitration, none of the exclusions referred to unfair labor practice charges. All three judges found that this could create a reasonable belief that employees were waiving their administrative rights, including the right to file unfair labor practice charges under Section 8(a)(1) of the NLRA. Therefore, the Court enforced the Board’s order that D.R. Horton violated Section 8(a)(1) because an employee would reasonably interpret the arbitration agreement as prohibiting the filing of a claim with the Board, validating the need for D.R. Horton to take the ordered corrective action.

Challenges to Composition of the Board Rejected

While this case was on appeal to the Fifth Circuit, the D.C. Circuit issued its Noel Canning decision which vacated an order of the three-member panel of the Board by ruling that recess appointments of the panel members were invalid. Noel Canning v. NLRB, 705 F.3d 490 (D.C.Cir. 2013) cert. granted 133 S.Ct. 2861 (U.S. June 24, 2013)(No. 12-1281). Because the panel that decided the D.R. Horton case included a member appointed by recess appointment, the Fifth Circuit asked the parties to submit briefs on whether it must consider the constitutionality of the recess appointments. The Court ultimately decided it need not consider the issue, finding that it retained jurisdiction to resolve the dispute at hand and leaving it to the U.S. Supreme Court to decide the constitutionality of the Board’s recess appointments. The Fifth Circuit also rejected D.R. Horton’s challenges that Board Member Becker’s recess appointment expired before the Board issued its decision, and that the Board had not been delegated authority to act as a three-member panel.

Favorable Result for Employers

Although there are pros and cons to using arbitration agreements in the employment context, today’s ruling by the Fifth Circuit (absent review by the Supreme Court) removes the impediment to incorporating class action waivers in employment arbitration agreements. The decision reinforces, however, that certain language within an arbitration agreement may violate the NLRA if it is reasonably seen as limiting an employee’s right to file an unfair labor practice charge. Employers should consult with employment counsel to review whether arbitration agreements are appropriate for their workforce, and if so, to ensure the wording of the agreement is enforceable.

August 26, 2013

Ninth Circuit Joins Growing Trend – Declines to Follow D.R. Horton and Upholds Arbitration Agreement Prohibiting Class Claims

By Jeffrey T. Johnson

On August 21, 2013, the Ninth Circuit Court of Appeals, in Richards v. Ernst & Young, LLP, Case No. 11-17530, became the third federal Circuit – together with the Second and Eighth – to reject the National Labor Relations Board’s (NLRB’s) controversial D.R. Horton decision, which held that an arbitration agreement requiring an employee to waive his or her right to bring class claims violated the National Labor Relations Act. The Richards Court also rejected the plaintiff’s argument that Ernst &Young had waived its right to arbitrate her claims by waiting to seek arbitration until after discovery and several rulings by the court. Therefore, the Court held that the arbitration agreement between Richards and Ernst &Young was enforceable, even though it precluded class arbitration.

Federal Courts of Appeal Reject NLRB’s D.R. Horton Decision

Decided in January 2012, the NLRB’s D.R. Horton ruling attempted to thwart efforts by employers to reduce their risk of class action claims through the use of arbitration agreements containing a class/collective action waiver. In re D.R. Horton, Inc., 357 NLRB No. 184 (Jan. 3, 2012). Despite D.R. Horton, employers have continued to argue for the enforceability of such agreements, and like Ernst & Young, have often prevailed in court. In fact, the overwhelming majority of courts that have considered the enforceability of mandatory arbitration agreements with class waivers subsequent to the D.R. Horton decision have rejected the NLRB’s reasoning and refused to follow its holding.

In addition to numerous district courts so ruling, the Ninth Circuit becomes the third federal appellate court to reject D.R. Horton. In January 2013, the Eighth Circuit Court of Appeals held that a class arbitration waiver in the employer’s mandatory arbitration agreement did not preclude arbitration of the employee’s claims under the Fair Labor Standards Act (FLSA). Owen v. Bristol Care, Inc., 702 F.3d 1050 (8th Cir. 2013). The Eighth Circuit found that without a congressional mandate under the FLSA indicating that a right to engage in class actions overrides the mandate of the Federal Arbitration Act in favor of arbitration, the NLRB’s rationale in D.R. Horton must be rejected.

Earlier this month, the Second Circuit Court of Appeals also upheld an arbitration agreement containing a class action waiver in another FLSA case brought against Ernst & Young in New York. Sutherland v. Ernst & Young LLP, No. 12-304-cv, 2013 U.S. App. LEXIS 16513 (2d Cir. Aug. 9, 2013). Despite the employee’s argument that the class action waiver removed the financial incentive for her to pursue a claim under the FLSA, the Court ruled that the arbitration agreement must be enforced. Like the Eighth Circuit, the Second Circuit declined to follow the D.R. Horton decision.

NLRB ALJ’s Bound by D.R. Horton Precedent

Despite employer victories in court, arbitration agreements with class action waivers are still being invalidated by the NLRB and its Administrative Law Judges (ALJs). Just this week, an NLRB ALJ found that the employer violated the NLRA with its mandatory class waiver arbitration agreement of employment claims. Despite the employer’s attempt to distinguish its agreement from the one at issue in D.R. Horton and to point out how courts have rejected the D.R. Horton rationale, the ALJ stated that he was bound by the D.R. Horton decision and required to apply it unless it is overturned by the Supreme Court or reversed by the NLRB itself.

Fifth Circuit to Decide D.R. Horton Appeal

The D.R. Horton decision is currently on appeal in the Fifth Circuit. Union and non-union employers alike will be watching to see whether the Fifth Circuit will follow the other circuits that have rejected the NLRB’s rationale, and overturn the D.R. Horton ruling. If, on the other hand, the Fifth Circuit affirms the D.R. Horton decision, the split between the Circuit Courts could result in the Supreme Court taking up the issue. We will continue to monitor these cases and keep you informed.

August 20, 2013

NLRB Judge Strikes Down Employer’s Dress Code Following “Slave” Shirt Discipline

By Brian Mumaugh

What is wrong with an employer’s dress code that prohibits clothing that displays vulgar or obscene phrases, remarks or images which may be racially, sexually or otherwise offensive as well as clothing that displays words or images that are derogatory to the Company? It is overly broad and interferes with employees’ Section 7 rights under the National Labor Relations Act (NLRA or Act) to engage in union and/or protected concerted activity, according to an Administrative Law Judge (ALJ) for the National Labor Relations Board (NLRB). The ALJ’s review of the dress code came after the employer disciplined an employee who wore a T-shirt with the word “slave” on it next to a picture of a ball and chain and the employee’s time clock number. Dismissing the employer’s argument that the shirt would be racially offensive to visitors who toured its facility, the ALJ found that the employer violated the Act by sending the employee home without pay to change his “slave shirt.”

The History of the “Slave Shirt”

Mark Gluch was a long time employee of automotive parts manufacturer Alma Products Company and a vigorous supporter of the union representing his bargaining unit. The 2012 incident that gave rise to this case occurred when Gluch wore the “slave shirt” to work during a period of contentious negotiations for a new union contract. The origin of the shirt, however, dated back to 1993 when company employees developed and paid for the “slave shirts” to send the company a message during an earlier round of difficult contract negotiations. The shirts resurfaced in 1996 when the bargaining unit employees wore them while picketing during a strike. Immediately following the strike, as many as 30% of the unit employees wore the “slave shirts” to work on any given Friday. No discipline or policy infraction was noted or enforced at that time.

Company Seeks to Avoid Racially Offensive Shirt

When a new president and CEO, Alan Gatlin, took over for Alma Products in 2005, he noticed employees wearing the “slave shirt.” Finding the shirts to be racially offensive, he felt embarrassed that customers and visitors to the facility would see employees wearing the shirt and be offended. He testified that in his view, the shirts did not reflect well on the Company with customers as they tried to get new business. Gatlin asked the human resources manager to draft a dress code policy which was implemented in early 2006. The dress code policy did not specifically reference the “slave shirt” but included general prohibitions against clothing that displayed “vulgar/obscene phrases, remarks or images which may be racially, sexually or otherwise offensive and clothing displaying words or images derogatory to the Company . . .” The policy also stated “[i]f you are uncertain whether an article of clothing is appropriate under this policy, follow the old adage of better safe than sorry and refrain from wearing it at work.”

After implementing the dress code in 2006, it appears that employees seldom wore the “slave shirt” to work. However, during difficult union contract negotiations in April 2012, Gluch and other employees began wearing pro-union shirts and pins and Gluch wore the “slave shirt” to work. Gluch’s supervisor gave Gluch the option of removing the shirt or turning it inside out so that the writing would not be visible. When Gluch refused to do so, he was sent home without pay for wearing the shirt.

ALJ Rejects Company’s Concerns About Racial Discrimination

The union filed an unfair labor practice charge claiming, among other things, that the policy and the Company’s enforcement of the policy, violated the Act. The Company argued that the shirt’s “slave” reference was offensive to African-Americans due to the history of slavery in the United States. Noting that an important buyer from Chrysler was African-American as was a new production supervisor at the facility, the Company asserted that it was entitled to discipline Gluch for wearing the racially offensive shirt. The ALJ rejected this argument, stating that the NLRB has repeatedly found employees to be protected even when they displayed messages that likened their working conditions to those of a slave. The ALJ noted that the dictionary definition of “slave” does not reference race, but instead focuses on the condition of servitude or being subject to a person or influence. In addition, given the shirt’s history that it had been worn to work over the past two decades as support for the union, the ALJ determined that it would not be seen as carrying a racial message. Moreover, the Company had a policy prohibiting racial discrimination since the 1990s, yet had failed to take any action to prohibit wearing the “slave shirt” as racially offensive prior to Gluch’s wearing of the shirt in 2012.

Key to the ALJ’s analysis of the dress code policy was its general prohibition of words or images that are derogatory to the Company. The ALJ found that the policy interfered with employees’ Section 7 activity, such as protected statements to coworkers, supervisors or third parties who deal with the Company, because it would prohibit employees from objecting to their working conditions and seeking the support of others in improving them. The dress code policy was found to be unlawfully overbroad because it prohibits all communications derogatory to the company regardless of whether the words are racially or sexually discriminatory or are protected as concerted activities under the National Labor Relations Act. In addition, by directing employees to be “safe” not “sorry,” the ALJ stated that the policy directs employees to construe the prohibition on derogatory comments such that it prohibits Section 7 activity.

Dress Code Policies That Do Not Restrict Section 7 Activity

With the NLRB (and its ALJs) striking down a variety of employer policies relating to both union and non-union employees, it is difficult to draw a bright line to determine which policies pass scrutiny and which do not. That said, employers can learn lessons from this recent decision that may help keep their dress code policy away from NLRB review. First, use specific examples of acceptable versus unacceptable attire rather than general statements that require interpretation. Second, if your workplace warrants different dress standards for different segments of employees (e.g., public-facing employees vs. behind the scenes employees), make those standards clear and justified by business necessity. Third, if you include a statement that prohibits derogatory words or images on clothing, include a statement that communications protected by Section 7 are permissible under the dress code. Finally, enforce your policy in a uniform and consistent manner, so that all dress code violations are treated similarly regardless of the employee or supervisor involved.

Disclaimer:This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.

May 14, 2013

D.C. Circuit Court Tears Down NLRB Poster Rule

By Brad Williams

The writing’s still not on the wall. On May 7, 2013, the U.S. Court of Appeals for the District of Columbia Circuit rejected the National Labor Relations Board’s (NLRB) controversial poster rule requiring 6 million private employers to post a government-issued notice advising employees of their union-related rights. The rule remains in limbo pending a related appeal in the U.S. Court of Appeals for the Fourth Circuit, and potential appeal to the U.S. Supreme Court.

Poster Rule and Business Group Backlash

The controversial rule was issued in August 2011 under the NLRB’s purported statutory authority to enact rules “necessary” to carrying out the National Labor Relation Act’s provisions. The Board had long been empowered under Section 6 of the Act to engage in administrative rulemaking, but had generally eschewed this power to enforce union-related rights through case-by-case adjudication. In justifying its unusual poster rule, the NLRB claimed that many employees were unaware of their union-related rights. It cited the small percentage of unionized employees in the private workforce, and claimed that immigrants and high school students were particularly unlikely to be aware of their workplace rights.

The NLRB poster rule required all private employers covered by the Act—6 million businesses—to post an 11-by-17 inch government-issued notice in “conspicuous places,” and on intranet or internet sites used to communicate with employees. The poster advised employees of their rights to organize and join unions, to collectively bargain, and to strike and picket. Failure to post was an unfair labor practice, and could separately be used as evidence of an employer’s unlawful motive in other Board cases. The statute of limitations on unfair labor practice charges would also be tolled in cases where employers failed to post.

Business groups excoriated the rule as unbalanced. The poster did not advise employees of their additional rights to decertify unions, to refuse to pay dues in right-to-work states, or to object to dues payments in excess of those needed for representational purposes. The rule also arguably implicated employers’ free speech rights, and exceeded the NLRB’s Section 6 authority because the Act does not expressly mandate that the Board educate employees about workplace rights. Some groups claimed that the Obama administration was also improperly attempting to bypass the legislative process through substantive rulemaking.

District Court Challenges and the D.C. Circuit Court’s Injunction

The rule was originally slated to become effective in November 2011, but implementation was twice delayed due to litigation in the U.S. District Courts for the Districts of Columbia and South Carolina. In the former case, a district court judge upheld the rule as a valid exercise of the Board’s Section 6 power, but invalidated two of its enforcement mechanisms. Nat’l Ass’n of Mfrs. v. NLRB, 846 F. Supp. 2d 34 (D.D.C. 2012). In the latter case, a judge held that the Board had exceeded its Section 6 authority because the Act nowhere required employers to post notices of employee rights. Chamber of Commerce v. NLRB, 856 F. Supp. 2d 778 (D.S.C. 2012).

Both district court opinions were appealed. Just two weeks before it was finally scheduled to become effective—on April 30, 2012— the D.C. Circuit Court enjoined the rule’s enforcement pending resolution of the District of Columbia appeal. The NLRB directed its regional offices to not implement the rule pending resolution of the issues before the D.C. Circuit Court.

D.C. Circuit Court’s Opinion

On May 7, 2013, Judges A. Raymond Randolph, Karen Henderson, and Janice Rogers Brown of the D.C. Circuit Court—all Republican appointees—rejected the rule after finding each of its enforcement mechanisms incompatible with the Act.

Writing for the court, Judge Randolph first noted that the Act’s free speech provision—Section 8(c)—precluded the NLRB from finding employer speech containing no threat of reprisal or promise of benefit to be an unfair labor practice, or evidence of such a practice. But he found that the poster rule did precisely that. It provided that failure to post was both an unfair labor practice, and could be used as evidence of other unfair labor practices. Drawing on First Amendment jurisprudence, he rejected any claim that the government-issued poster merely reflected the Board’s, and not an employer’s, speech. First Amendment principles protect both the “dissemination” and the “creation” of messages. They also protect the right not to speak, so the “right to disseminate another’s speech necessarily includes the right to decide not to disseminate it.” Judge Randolph thus found two of the rule’s enforcement mechanisms invalid.

He next held that the rule’s purported tolling of the statute of limitations in cases where employers failed to post the notice was incompatible with Congressional intent. The Board failed to prove that in enacting the 6-month statute of limitations on unfair labor practice charges, Congress contemplated potential tolling where employers failed to post, or where employees were unaware of their union-related rights. Judge Randolph thus held that the rule’s remaining enforcement mechanism was also invalid.

Because each of its enforcement mechanisms conflicted with the Act, Judge Randolph rejected the rule’s notice posting requirement after noting that the NLRB had expressly rejected the option of issuing a rule that depended solely on voluntary compliance.

In a concurring opinion, Judges Henderson and Brown agreed with Judge Randolph’s reasoning, but would have taken his decision one step further. They argued that, regardless of whether the enforcement mechanisms were valid, the NLRB lacked Section 6 authority to issue the poster rule. They urged that the Act invested with Board with only reactive power—such as responding to unfair labor practice charges, or responding to election petitions filed by parties—but not any proactive authority to guard against potential statutory violations. “The NLRA,” they concluded, “simply does not authorize the Board to impose on an employer a freestanding obligation to educate its employees on the fine points of labor relations law.” Nat’l Ass’n of Mfrs. v. NLRB, No. 12-5068 (D.C. Cir. May 7, 2013).

Fourth Circuit Appeal and Potential U.S. Supreme Court Review

While the D.C. Circuit Court firmly rejected the poster rule, the related challenge from South Carolina remains pending before the Fourth Circuit. That court heard oral arguments in the case in March 2013, and the parties have already submitted their differing interpretations of the D.C. Circuit court’s opinion in supplemental filings. The Board has not yet updated its website to address the effect, if any, the D.C. Circuit’s opinion may have on its own enforcement position.

Regardless of how the Fourth Circuit eventually rules, the NLRB’s poster rule seems likely to end up before the U.S. Supreme Court. The writing’s still not on the wall, but the Supreme Court is one step closer to posting its own thoughts on the matter.

November 9, 2012

NLRB: Irrelevant Union Requests Demand Timely Response

by Bradford J. Williams

A union’s request for information demands a timely response, even if the requested information is irrelevant to the collective bargaining relationship or any underlying grievance. That’s the ruling of a recent National Labor Relations Board (NLRB) decision expanding an employer’s duty to bargain in good faith under Section 8(a)(5) of the National Labor Relations Act (NLRA). Employers must now timely respond to all requests for information involving bargaining unit members or risk an unfair labor practice charge.

The statutory duty to bargain in good faith includes the duty to provide unions with information needed to engage in collective bargaining or administration of a collective bargaining agreement (e.g., through a grievance procedure). As such, the NLRB has long held that employers must timely provide unions with information that is relevant and necessary to their performance as collective bargaining representatives. It has also long held that employers must timely object to requests for relevant information that might lawfully be withheld on the basis of confidentiality, privacy, or other interests.

Before its decision last month, however, the NLRB had never previously decided whether an employer must timely respond to a union’s request for information that is determined (or admitted) to be irrelevant. An employer must now timely respond.

In its October 23, 2012, decision, the NLRB held that a company engaged in interstate trucking violated Sections 8(a)(1) and 8(a)(5) of the NLRA by failing for a period of four and one-half months to respond to a union’s request for information involving the company’s drivers. This was so even though the union admitted that the request was irrelevant to any pending grievance. In its ruling, the Board characterized the requested information as “presumptively relevant” at the time the request was made because it related to unit employees. The Board determined that the company had a duty to “respond promptly” to the union’s request, even if just to explain its reason for refusing to provide the (irrelevant) requested information.

The Board’s latest decision is troubling. Employers may now no longer ignore union requests, even when the requested information is clearly irrelevant to collective bargaining or contract administration. Instead, they must promptly respond to all requests and either (a) provide the requested information, or (b) explain why it is being withheld. This is true with respect to any requests involving bargaining unit members. Employers are thus encouraged to consult counsel immediately after receiving information requests to ensure the preparation of an adequate and timely response. Failure to do so may expose employers to unfair labor practice charges and give unions leverage in ongoing negotiations or grievance proceedings.

November 5, 2012

NLRB Affirms At-Will Disclaimers

By Dora Lane and Mark Wiletsky

Most employers today provide a handbook or another document confirming employees' at-will status. Until recently, there was no question that this is a good business practice. But earlier this year, an NLRB (National Labor Relations Bureau) administrative law judge concluded in Am. Red Cross Ariz. Blood Servs. Region, No. 28-CA-23443 (Feb. 1, 2012), that such a disclaimer violated the employees’ right to engage in concerted activity under the National Labor Relations Act (NLRA). The judge reasoned that the disclaimer, which said “I further agree that the at-will employment relationship cannot be amended, modified or altered in any way,” effectively precluded employees from engaging in concerted activity (a protected right under the NLRA) to alter their at-will status.

Thankfully, the NLRB—which enforces the NLRA—has pulled back. On October 31, 2012, the NLRB issued two memos regarding the enforceability of “at-will” provisions in employee handbooks. The first memo involved a provision, stating as follows:

“No manager, supervisor, or employee at Rocha Transportation has any authority to enter into an agreement for employment for any specified period of time or to make an agreement for employment other than at-will. Only the president of the Company has the authority to make any such agreement and then only in writing.”

This provision was found permissible because it explicitly permitted the company’s president to enter into written employment agreements that modify the employment at-will relationship, and therefore included the possibility of potential modification of the at-will relationship through a CBA ratified by the president.

The second memo involved the following provision:

“No representative of the Company has authority to enter into any agreement contrary to the foregoing ‘employment at will’ relationship.”

This provision was determined to be lawful (but a closer question than the first provision) because it only highlighted the company’s policy that its own representatives cannot modify the at-will relationship and reinforced that the handbook did not create a contract of employment.

With both of those provisions, the NLRB distinguished the American Red Cross case because there the at-will employment relationship could not be altered or modified “in any way."

Bottom line: As with its position on social media policies, the NLRB appears to be splitting hairs in terms of what type of language is, and is not, a violation of the NLRA with respect to at-will disclaimers. While these two decisions suggest that the NLRB will not take an unreasonably aggressive approach in challenging at-will disclaimers, it's not a bad idea to compare your own disclaimer to the ones the NLRB approved to avoid any potential issue with the NLRB.

June 22, 2012

NLRB’s New Website

The U.S. Department of Labor received much fanfare when it rolled out its new timesheet app. In its news release of 2011 (http://www.dol.gov/opa/media/press/whd/WHD20110686.htm), DOL indicated that it believed the application would ensure that workers received the wages to which they were entitled.

Not to be outdone, although not as an application, the National Labor Relations Board announced that it has launched a new interactive website to describe the rights of employees to engage in protected concerted activity under Section 7 of the National Labor Relations Act. The webpage can be found at: http://www.nlrb.gov/concerted-activity.

You will see that the NLRB details numerous case examples where it found the conduct of employers to violate the act. The interactive map serves to lead the reader to the detail of a case that provides factual detail about the violation. This is just another example of how the social media network can be used as a public relations effort to justify an agency's public purpose and to inform employees of their rights.

For more information on the NLRB or other traditional labor relations questions, feel free to send a comment or reach me directly.

Steven M. Gutierrez

May 15, 2012

National Labor Relations Board Election Rule Invalidated

A federal judge has invalidated the "ambush election" rule by the National Labor Relations Board ("NLRB"). Brian Mumaugh and Brad Williams summarized the decision by Judge James E. Boasberg of the United States District Court for the District of Columbia and its impact on employers in a post, which is available on Holland & Hart's website by clicking here.