NLRB Proposes Changes to Union Election Procedures – and Board Update

The National Labor Relations Board (NLRB or Board) has been increasingly energetic as 2019 progresses. Its latest initiative is the August 12 publication of new proposed rules that would change three important aspects of the NLRB union representation election (union election) procedures. This LawFlash covers important resulting takeaways.

We first describe the Board’s most recent proposed changes in NLRB union election procedures.  Comments on these proposed changes are due on October 11, 2019. The changes would differ from existing NLRB law in three respects:

1. No More “Blocking Charges.” Under the proposed rule, the Board would no longer postpone union elections—substantially or sometimes indefinitely—based on an unproven charge of unlawful conduct prior to the election.

2. Modified “Voluntary Recognition Bar.” Under the proposed rule, when an employer voluntarily recognizes a union in the absence of an NLRB election, employees would now have the right—previously recognized by the Board in Dana/Metaldyne, 351 NLRB 434 (2007)— to subsequently petition for an NLRB election.

3. Construction Industry “Pre-Hire” Relationships. Under the proposed rule, when evaluating construction industry “pre-hire” collective bargaining agreements, the Board would require actual evidence of employee majority support—rather than mere contract language stating that such support exists—before a pre-hire agreement will have equal footing with a conventional labor agreement.

We next touch upon the Board’s increased reliance on rulemaking to address other significant issues, which is a substantial departure from the Board’s near-exclusive reliance on case-by-case adjudication throughout the agency’s 84-year history.

We conclude by describing how this dramatic change in the law is consistent with other high- impact NLRB cases and initiatives in 2019.

The New Proposed Rule Addressing Union Representation Elections

The Board is no stranger to regulations governing representation elections. The NLRB during President Barack Obama’s administration made two attempts to substantially change the Board’s procedures governing union representation elections. In 2011, the Board published a proposed rule, 76 Fed. Reg. 36812 (June 22, 2011), that would have substantially accelerated union representation elections, among other things, and a subset of the proposed modifications were adopted in a final rule, 76 Fed. Reg. 80,138 (Dec. 22, 2011), that was invalidated by the US District Court for the District of Columbia.[1] In 2014, the Board published a near-identical proposed rule, 79 Fed. Reg. 7318 (Feb. 6, 2013), which the Board adopted with minor changes in a final rule.[2] Then-Board Members Philip Miscimarra and Harry Johnson—now partners at Morgan Lewis—dissented from the proposed and final election rule.[3] In December 2017, after the 2014 election rule had been in effect for more than two years, the Board sought public input on whether the 2014 election rule should be retained without changes, modified, or rescinded.[4]

On August 12, 2019, the NLRB published a Notice of Proposed Rulemaking (NPRM or Proposed Rule), with an indication that public comments may be submitted within 60 days (by October 11, 2019), with an additional two weeks for reply comments. The proposed rule, if it is incorporated into a final rule, would make three significant changes to the Board’s Rules and Regulations dealing with union representation.

1. Elimination of “Blocking Charges.” The first proposed change would modify the Board’s blocking charge policy by establishing a “vote and impound” procedure for processing union representation election petitions when a party, prior to the election, has filed a charge alleging that unlawful conduct interfered with the election.

Under the Board’s traditional blocking charge doctrine, the filing of such a charge prior to an election would permit the charging party to indefinitely “block” or postpone the election, often for many years, until the Board determined whether the underlying charge had merit. Many union blocking charges have been filed prior to union decertification elections (effectively canceling any employee decertification vote) or prior to representation elections where the union believes it will ultimately lose. In this manner, the blocking charge can prevent a union defeat and instead permit the union to indefinitely continue organizing activities.

Under the Board’s proposed rule, the Board would still resolve any charges that allege unlawful election interference. However, if such charges are filed, employees will be permitted to vote in the election as scheduled, and the ballots will be impounded until the Board determines whether unlawful conduct interfered with the election. If the Board finds that the charge lacks merit, the votes will be tallied and the results of the election will be certified by the Board. If the Board finds that unlawful conduct interfered with the election, the Board may order a “rerun” election and/or other remedies currently available in cases involving unlawful election conduct.

2. Return to Dana/Metaldyne “Voluntary Recognition” Principles. The second proposed change would eliminate the “voluntary recognition bar” that has been in place since the Board’s 2011 decision in Lamons Gasket Co., 357 NLRB 739 (2011), which held that voluntary union recognition by an employer will bar any employee decertification vote or a rival union election petition for a “reasonable period” until the employer and recognized union attempt to negotiate an initial collective bargaining agreement. Under this approach, if the parties entered into a new contract, the Board’s separate “contract bar” rule would then preclude any decertification or rival union petition for the duration of the contract up to nearly three additional years.

Under the Board’s proposed rule, the Board would return to the prior “voluntary recognition” principles that had been established by Dana/Metaldyne, 351 NLRB 434 (2007) (which had been overruled by the Lamons Gasket decision). The proposed rule would still provide a voluntary recognition bar for a “reasonable period” after an employer voluntarily recognized a union, but only if two requirements are satisfied: (a) the parties must give written notice advising the NLRB’s Regional Office that the union has been voluntarily recognized and the employer must post a notice (supplied by the NLRB Regional Office) indicating that employees have a 45-day period in which a decertification or rival union election petition may be filed; and (b) there is no filing of a decertification or rival union petition during the 45-day period.

3. Construction Industry “Pre-Hire” Agreements. The third change introduced by the proposed rule would affect construction industry “pre-hire” collective bargaining agreements, which may be entered into without any showing of employee majority support for the union. These types of agreements are an exception to the normal rule, established by Section 9(a) of the National Labor Relations Act (NLRA or Act), that employers can only extend recognition to a union and enter into a collective bargaining agreement based on a showing that a majority of employees in an appropriate bargaining unit support union representation. Based on unique considerations involving the construction industry (especially the need for contractors to have certainty regarding costs before bidding for particular contracts), Section 8(f) of the Act permits a construction industry employer to enter into a “pre-hire” union agreement without any showing of employee majority support, and often before the employer has hired any employees. (In fact, many construction industry “pre-hire” agreements provide for the employer to obtain employee referrals from a union “hiring hall.”)

Because “pre-hire” agreements (often called “Section 8(f)” agreements) do not require any showing of employee majority support, such agreements are subject to very different rules than conventional labor contracts (often called “Section 9(a)” agreements) that are premised on a showing of majority support. Under the different rules governing “pre-hire” agreements—which were articulated by the NLRB in John Deklewa & Sons, Inc., 282 NLRB 1375, 1378 (1987), enforced sub nom. Iron Workers Local 3 v. NLRB, 843 F.2d 770 (3d Cir. 1988), cert. denied, 488 U.S. 889 (1988)— such agreements are voluntarily entered into, they create no “contract bar” (unlike the normal NLRB “contract bar” rule that generally preclude any employee or rival union petitions during the term of the contract), and the bargaining relationship may be abandoned by either party upon expiration of the agreement. These differences make it important for the Board to determine whether a particular agreement is a “pre-hire” Section 8(f) contract or a conventional Section 9(a) contract.

In Staunton Fuel & Material, 335 NLRB 717 (2001), the NLRB held that certain language in a collective bargaining agreement would, standing alone, be sufficient to establish that a construction industry agreement was a conventional Section 9(a) contract, even when there was no evidence that the union, at any time, made any showing of employee majority support. However, the US Court of Appeals for the DC Circuit rejected the approach articulated by the Board in Staunton Fuel, based on the court’s conclusion that, without an actual showing of employee majority support, NLRA Section 9(a) prevented the Board from relying exclusively on contract language to find that parties had entered into a conventional collective bargaining agreement, as opposed to a “pre-hire” agreement.[5] See Nova Plumbing, Inc. v. NLRB, 33 F.3d 531 (2003), relying on International Ladies' Garment Workers' Union (ILGWU) v. NLRB, 366 U.S. 731 (1961). Former NLRB Chairman Miscimarra likewise dissented from the Board’s Staunton Fuel approach in King’s Fire Protection, Inc., 362 NLRB 1056, 1059-1063 (2015) (Member Miscimarra, dissenting).

The Board’s proposed rule would adopt the reasoning of the DC Circuit, and overturn Staunton Fuel. The proposed rule indicates that a construction industry labor agreement will not be considered a conventional Section 9(a) agreement that would bar an election petition “absent positive evidence that the union unequivocally demanded recognition as the Section 9(a) exclusive bargaining representative of employees in an appropriate bargaining unit, and that the employer unequivocally accepted it as such, based on a contemporaneous showing of support from a majority of employees in an appropriate unit. Contract language, standing alone, will not be sufficient to prove the showing of majority support.”

The NLRB’s Increased Reliance on Rulemaking

The NLRB’s proposed election rule demonstrates that the current NLRB has fully embraced rulemaking as a vehicle for addressing significant areas of labor law, as opposed to its predecessors. This is a departure from the Board’s traditional reliance almost exclusively on case-by-case adjudication. Previously, Board attempts at rulemaking have been few and far between since the passage of the NLRA. For example, the Board engaged in a successful rulemaking in 1987 Board rule governing bargaining unit determinations in the healthcare context, and then nearly a quarter of a century passed before the Obama administration NLRB attempted two different rulemakings, as noted above: the 2011 notice-posting rulemaking (which was struck down in the courts), and the union election rulemaking (which was upheld in the courts). Other than these attempts, all the widespread changes in Board law during the last 50 years have occurred through case-by-case consideration and adjudication.

Today, however, the Board admittedly has a different approach, as NLRB Chairman John F. Ring himself has noted “the Board majority’s strong interest in continued rulemaking.” One potential reason: the Obama administration NLRB successfully “opened the door” to rulemaking over large-scale issues, such as general representation case procedures. Regardless of the ultimate cause, the current Board is engaged in, or will consider, rulemaking in the following areas:

• The Board’s current union election procedures, generally (there will be a second proposed rule dealing with the remainder of election procedures to be announced in the near term)
• The Board’s current standards for blocking charges, voluntary recognition, and the formation of Section 9(a) bargaining relationships in the construction industry (see analysis above)
• The Board’s joint employer rule to determine when an entity has an employer relationship with employees of another technical employer
• The standard for determining whether students who perform services at private colleges or universities in connection with their studies are “employees” within the meaning of Section 2(3) of the NLRA (29 U.S.C. Sec. 153(3))
• Standards for access by union organizers and off-duty employees to an employer’s private property

Thus, the proposed rule discussed in this LawFlash is merely part of a large tapestry of proposed rules in existence or on the way. This is obviously a broad agenda, and employers should stay attuned to the progress of all these rulemaking efforts.

The NLRB’s Busy 2019

The Board’s NPRM is the latest sign that the Republican-majority Board is now in high gear. In addition to the proposed rule, the Board has issued a number of very significant decisions for employers, a sample of which include the following:

• Cordúa Restaurants, Inc., 368 NLRB No. 43 (August 14, 2019) (clarifying the Board’s approach to mandatory arbitration agreements following Epic Systems and concluding, inter alia, that such agreements are lawful even if promulgated in response to Section 7 activity)
• Walmart Stores, 368 NLRB No. 24 (July 25, 2019) (finding strike was part of an unprotected intermittent strike despite months of strike inactivity and no serious operational difficulties for the employer occurred)
• UPMC Presbyterian Shadyside, 368 NLRB No. 2 (June 14, 2019) (overruling several cases from the early 1980’s to hold that employers may deny nonemployees access to public spaces, such as cafeterias, for engaging in Section 7 solicitation or promotional activities)
• Prime Healthcare Paradise Valley, LLC, 368 NLRB No. 10 (June 18, 2019) (finding that an arbitration agreement generally but expressly requiring all employment claims to be decided in arbitration, thus explicitly prohibits the filing of claims with Board and is unlawful)
• SuperShuttle DFW, Inc., 367 NLRB No. 75 (January 25, 2019) (overruling the Board’s 2014 FedEx decision, to return to the pre-FedEx test for independent contractor status)[6]
• Alstate Maintenance, LLC, 367 NLRB No. 68 (January 11, 2019) (narrowing the circumstances under which a complaint made by an individual employee is considered concerted activity under Section 7 of the NLRA)
• Electrolux Home Products, Inc., 368 NLRB No. 34 (August 2, 2019) (finding that pretextual reasons, standing alone, do not show a violation of Sections 8(a)(3) and (1) of the NLRA)
• Johnson Controls, Inc., 368 NLRB No. 20 (July 3, 2019) (reversing in part Levitz Furniture Co., 333 NLRB 717 (2001) insofar as unions can no longer defeat an employer’s withdrawal of recognition in a ULP proceeding with evidence of employee signatures showing that the union reacquired majority status in the interim between anticipatory and actual withdrawal)

These decisions provide a harbinger of additional significant opinions we anticipate will issue before Board Member Lauren McFerran’s decision expires in December 2019.

CONTACTS

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers: 

Dallas
Robert Sheeder

Los Angeles
Nicole Buffalano
Douglas Hart
Harry Johnson

Philadelphia
Joseph Ragaglia

Washington, DC
Daniel Bordoni
Jonathan Fritts
Philip Miscimarra