On March 7, 2012, the U.S. District Court for the District of Columbia denied a request made by the National Association of Manufacturers and other business groups to prohibit the NLRB from enforcing its rule requiring employers to post a notice of employee rights under the National Labor Relations Act, pending their appeal of the District Court's March 2, 2012 decision upholding the rule.

The District Court held that there would be no irreparable harm to employers if the NLRB's notice posting rule were permitted to become effective prior to the issuance of a decision by the U.S. Court of Appeals for the District of Columbia regarding the appeal, because the posting of the notice only makes employees aware "of the rights that they are already guaranteed by law."  The District Court further stated:  "If the Court of Appeals ultimately determines that the Board exceeded its authority in promulgating the Rule, the employers can take the notice down."

Accordingly, although an appeal of the District Court's March 2 decision has been filed, employers are required to post the notice beginning on April 30, 2012.

On March 2, 2012, the U.S. District Court for the District of Columbia issued a decision in the lawsuit filed by the National Association of Manufacturers ("NAM") and the National Right to Work Legal Defense and Education Fund ("NRTW") challenging the notice posting rule promulgated by the National Labor Relations Board ("NLRB").  The Court held that the NLRB had the authority to require employers to post a notice informing employees of their rights under the National Labor Relations Act ("NLRA"), but did not have the authority to issue a blanket rule that failure to post the required notice will be considered an unfair labor practice and did not have the authority to permit tolling of the six-month statute of limitations for unfair labor practice charges in situations where an employer fails to post the required notice.

Although the Court determined that the NLRB exceeded its authority by promulgating a blanket rule that an employer's failure to post the required notice will in all cases constitute an unfair labor practice, the Court held that the NLRB is nevertheless free to determine on a case by case basis whether an employer's failure to post the notice interfered with employees' exercise of their rights under Section 7 of the NLRA.  The Court stated that the NLRB can "make a specific finding based on the facts and circumstances in the individual case before it that the failure to post interfered with the exercise of his or her rights."

In addition, the Court also upheld the portion of the rule providing that the NLRB may consider an employer's failure to post the required notice as evidence of the employer's unlawful motive in unfair labor practice cases where motive is an issue.  The Court found that the NLRB had the authority to issue this portion of the rule because the rule "does not make a blanket finding that will govern future individual adjudications or create a presumption of anti-union animus wherever an employer fails to post the provision."  Therefore, although some of the NLRB's enforcement tools were struck down by the U.S. District Court for the District of Columbia, there could still be significant negative consequences to employers who fail to post the required notice.

It is not clear at this point whether the plaintiffs or the NLRB intend to appeal the Court's decision, or if an appeal will result in a delay of the effective date of the notice posting rule.  Accordingly, employers should be prepared to post the required notice by the April 30, 2012 effective date.

Last month, the Acting General Counsel for the National Labor Relations Board ("NLRB") issued a second report on 14 social media cases recently reviewed by his office.  Although the report does not have the force of law, the report offers some insight into the NLRB's ongoing efforts to reconcile decades of federal labor law on protected employee speech under the National Labor Relations Act ("NLRA") with the new frontier of Twitter, Facebook, and other social media.  Until the NLRB has issued more definitive rulings on the subject, employers should be mindful of the following in crafting their social media policies.

First, a broad "non-disparagement" clause in a social media policy is likely to be considered per se unlawful.  For example, the Acting General Counsel found a policy that prohibited "making disparaging comments about the company through any media . . ." to be unlawful because it could reasonably be construed by employees to restrict their right under Section 7 of the NLRA to discuss wages and working conditions, and it contained no disclaimer language that made clear the policy was not intended to restrict such protected activity.  Employers should avoid using broad and vague terms such as "disparaging," and should instead provide examples of prohibited conduct whenever possible.

Second, even a detailed disclaimer may not save an overly restrictive policy.  In one case, the policy instructed employees not to identify themselves as working for the employer unless they were discussing terms and conditions of employment in an "appropriate" manner.  The Acting General Counsel found the policy to be unsalvageable despite a lengthy disclaimer stating that the policy was not intended to restrict NLRA Section 7 rights and quoting NLRA Section 7 verbatim.  The Acting General Counsel determined that employees still could not discern what types of discussions the employer considered to be "appropriate" or "inappropriate."

Third, restrictions on the disclosure of confidential or other non-public information should be worded such that they cannot be reasonably interpreted to impinge upon an employee's right to discuss wages, working conditions, and other subjects protected by NLRA Section 7.  In rejecting one employer's policy which prohibited disclosure of "confidential, sensitive or non-public information concerning the company on or through company property," the Acting General Counsel determined that the language could reasonably be understood to prohibit employees from discussing subjects protected by NLRA Section 7.  In contrast, the Acting General Counsel approved a pharmaceutical employer's policy prohibiting disclosure of confidential or proprietary information, including customers' personal health information and "embargoed information" such as product launch and release dates and pending reorganizations.  He reasoned that an employee has no right to disclose "embargoed" corporate information and would understand that the remainder of the rule was intended to protect customer privacy interests and not to prohibit discussion about working conditions.

Fourth, a policy that requires employees to expressly state that their comments are their personal opinions, and not those of their employer, each and every time they post on social media sites, is regarded by the Acting General Counsel as an unlawful burden on employees' exercise of their NLRA Section 7 rights.  However, the Acting General Counsel appears to have carved out an exception for policies that require such disclaimers where an employee's post involves the endorsement or promotion of the employer's products or services.

Prior blog posts regarding the NLRB's treatment of social media cases can be found here, here, here, and here.

The U.S. Chamber of Commerce and the Coalition for a Democratic Workplace filed a motion for summary judgment on February 3 in their court challenge to the National Labor Relations Board's final rule amending the procedures applicable to representation elections.  In their motion for summary judgment, the business groups requested that the United States District Court for the District of Columbia invalidate the NLRB's amendments to the representation election procedures on several grounds, including:  (1) the amendments were adopted by only two members rather than a three-member quorum; and (2) the final rule is inconsistent with the provisions of the National Labor Relations Act.

The NLRB also filed its own motion for summary judgment in the case on February 3, defending its rule-making process and seeking dismissal of the business groups' complaint.

Each party now has the opportunity to respond to the other party's motion by February 28.  The NLRB's final rule is currently scheduled to go into effect on April 30.  It is not clear at this point whether oral argument will be scheduled by the court or whether a decision will be issued by the effective date of the final rule.

The National Labor Relations Board ("Board") announced today that it has agreed to postpone the effective date of its rule requiring employers to post a notice of employee rights under the National Labor Relations Act until April 30, 2012.  This is the second postponement of the effective date of this rule, which was initially scheduled to take effect on November 14, 2011.  After lawsuits were filed against the Board in September challenging the Board's authority to implement the rule, the Board announced in October that it was postponing the effective date of the rule to January 31, 2012.  This most recent postponement to April 30, 2012 comes at the request of the U.S. District Court Judge who recently heard oral arguments with respect to one of those lawsuits.

As anticipated, the National Labor Relations Board ("Board") adopted a final rule amending the procedures applicable to union representation elections, just before losing its quorum when Member Becker's recess appointment expires at the end of this year.  Members Pearce and Becker approved the final rule without the endorsement of Member Hayes.  The final rule will be published in the Federal Register today (December 22, 2011), and will become effective on April 30, 2012.

The amendments to the union representation election procedures, which are summarized in a prior blog post regarding the November 30, 2011 Board resolution to proceed with the drafting of the final rule, are intended to shorten the time period between the filing of a representation petition and the election.

The U.S. Chamber of Commerce and the Coalition for a Democratic Workplace filed a lawsuit on December 20, 2011 in the U.S. District Court for the District of Columbia, challenging the Board's authority to adopt the final rule, and seeking an order enjoining the Board from enforcing the final rule.  We will keep you posted on any significant developments in that litigation.

On Wednesday, November 30, 2011, the three-member National Labor Relations Board ("Board") approved a resolution by a 2 to 1 vote to move forward on a narrowed version of the rule on "quickie" union representation elections proposed in June.

The resolution authorizes the Board to prepare a final rule to be published in the Federal Register containing six elements that were found in the originally proposed rule.  The goal of the scaled down proposal is to decrease the delays that Board Members Pearce and Becker have argued are impediments to unions winning representation elections.  The six elements of the final rule would eliminate pre-election litigation and appeals over a number of issues.  The six amendments to the existing representation election process are summarized below:

• The first amendment would limit the issues that may be raised at a pre-election representation hearing only to those issues that are relevant to whether a question of representation exists that should be resolved by an election.  In other words, issues pertinent to the scope of the proposed bargaining unit, the supervisory status of certain individuals, and other issues that do not affect whether or not a representation election should be held would only be permitted to be raised after the election.
• The second amendment would give the hearing officer at a pre-election representation hearing the discretion to determine whether or not post-hearing briefs may be filed.
• The third amendment would eliminate the right to seek Board review of a Regional Director's pre-election rulings prior to the election, leaving only the possibility of a post-election review of any such rulings that have not been rendered moot by the election.
• Because pre-election requests for review to the Board would be eliminated, the fourth amendment would end the practice of delaying the scheduling of a representation election for purposes of giving the Board the opportunity to rule on requests for review.
• The fifth amendment would clarify the standard for seeking special permission to appeal to the Board.
• The sixth amendment would give the Board full discretion to determine whether or not it will consider requests for review of a Regional Director's or Administrative Law Judge's disposition of post-election objections to the election.

These proposed amendments, while not as broad as those originally proposed in June, will nevertheless have the effect of speeding up the election process.  This will have a significant impact on the manner in which employers react to the filing of a representation petition.

At this point, the Board will draft the language of the final rule, which must then be approved by a majority of the Board.  The Board currently has a quorum of three members, but will be down to two members when Member Becker's recess appointment expires at the end of this year.  It is clear that Members Pearce and Becker will do everything they can to get the final rule drafted and approved before the Board loses its quorum.

The National Labor Relations Board has once again exercised its rarely used “rule-making” powers, this time to propose a shorter timetable for representation elections. On June 22, 2011, the Board published a notice of proposed rulemaking to change and tighten its procedures “prior and subsequent to conducting a secret ballot election to determine if employees wish to be represented for purposes of collective bargaining.”

The proposed rule:

• Establishes electronic filing of election petitions and other documents (intended to speed up processing).
• Requires pre-election hearings to begin seven days after a petition is filed (currently, up to two weeks).
• Defers litigation of all “eligibility” issues if they involve less than 20 percent of the bargaining unit until after the election. (These issues would be decided post-election if needed.)
• Eliminates pre-election appeals of rulings by NLRB Regional Directors.
• Reduces the time in which an employer must provide an electronic list of eligible voters from seven days to two days.

These proposed procedures will permit much quicker elections, and, in some cases, could result in union representation elections within as little as two to three weeks after a union files its election petition. Under current practice, an employer has a 42-day time period to give employees its position on unionization prior to a vote. Many employers believe that this six-week period after an election petition is filed is critical to an employer’s ability to make its case against union representation (because the Union has typically been actively campaigning before it files the election petition). The Board’s proposed change appears to be purposefully designed to improve the odds of a favorable election outcome for unions, a view expressed in dissent by Board Member Brian Hayes.

Comments on the proposed rule from interested parties must be received on or before August 23, 2011. After the comment period, the Board may revise the proposed rule, or may issue it as a final rule as early as September 2011.
 

Earlier today, the United States Department of Labor (“Department”) issued a Notice of Proposed Rulemaking which would expand the reporting requirements of employers and the labor relations consultants they hire to advise them during a union organizing campaign. The Labor-Management Reporting and Disclosure Act (“LMRDA”) already requires employers and labor relations consultants to file annual reports with the federal government to disclose agreements (and any associated payments), where a purpose of the agreement is to persuade employees “to exercise or not to exercise, or persuade employees as to the manner of exercising, the right to organize and bargain collectively.”

However, the LMRDA does not require a report when the services rendered relate to the “giving or agreeing to give advice” to an employer. This so-called “advice exception” has long been interpreted to exempt various activities engaged in by consultants, including the preparation of speeches and other written material used by an employer during a union organizing campaign, as long as the consultant does not meet directly with the employees for the purpose of engaging in persuader activity and the employer is free to accept or reject the written material prepared by the consultant.
 

The proposed rules narrow dramatically the advice exception. According to the proposed rules:

With respect to persuader agreements or arrangements, “advice” means an oral or written recommendation regarding a decision or a course of conduct. In contrast to advice, “persuader activity” refers to a consultant’s providing material or communications to, or engaging in other actions, conduct or communications on behalf of an employer that, in whole or in part, have the object directly or indirectly to persuade employees concerning their rights to organize and bargain collectively. Reporting is thus required in any case in which the agreement or arrangement, in whole or in part, calls for the consultant to engage in persuader activities, regardless of whether or not advice is also given.

This new definition would thus require reporting with respect to a variety of drafting and training activities which previously fell within the advice exception. For a list of those activities, click here.

The Department’s stated rationale for this change is that undisclosed persuader activities are having a deleterious effect on the rights of workers and that greater reporting will help employees make a more informed choice as to whether to exercise their Section 7 rights. Organized labor supports increased reporting because it believes an employer will be less likely to hire an outside consultant to counter an organizing effort if it has to disclose that it has done so and the amount it pays for the consultant’s services.

The Department is accepting public comment on the proposed rules until August 22, 2011. For more information on the comment process, click here.
 

The United States Department of Labor announced recently that its Office of Labor-Management Standards will begin collecting data on employers and their representatives who are involved in representation cases before the National Labor Relations Board. The initiative, termed the Persuader Reporting Orientation Program or “PROP,” may be part of the Department of Labor’s efforts to stem the tide of union losses in organizing campaigns. We reported previously on the Agency’s plan to revise the longstanding interpretation of the “advice exception” to reporting obligations under the Labor-Management Reporting and Disclosure Act (“LMRDA”) 29 U.S.C. § 433.

Pursuant to PROP, the Office of Labor-Management Standards will review certain petitions filed with the National Labor Relations Board. It will then send what the Agency calls an “orientation letter” to the employer and its representative, “informing them of their potential reporting obligations under the LMRDA.” Under the LMRDA, an employer is required to file an annual report with the federal government in which it discloses agreements (and associated payments), where a purpose of the agreement is to persuade employees with respect to their right to organize. A willful failure to file such reports can result in criminal liability.
 

An employer may be less likely to spend money on third party advisors in connection with an organizing campaign if it is required to disclose those expenditures. The Agency’s efforts to increase disclosure thus appear to be designed to provide a disincentive for employers to use third parties to assist in opposing an organizing campaign.

Coincidentally, the day after the Department of Labor announced the PROP initiative, the United States Bureau of Labor Statistics issued a press release indicating that the percentage of unionized private sector workers in the United States had dropped to 6.9% in 2010, the lowest level since records have been kept. New York, however, is the most heavily unionized state in the nation, with 24.2% of public and private sector employees represented by unions. North Carolina has the lowest percentage, 3.2%.
 

Last month, we posted on the NLRB’s renewed focus on remedies, including the use of federal court 10(j) injunction proceedings in cases involving discharges of union organizers. Last week, the NLRB’s Acting General Counsel, Lafe E. Solomon, issued a memorandum to Regional Directors discussing other remedies they should seek in cases involving alleged employer unfair labor practices committed during a union organizing campaign. The expressed rationale for this initiative is that stronger remedies are often required for unfair labor practices committed during a union organizing campaign in order to ensure a fair election. One cannot help but wonder, however, if the Board’s new-found emphasis on remedies related to organizing campaigns is not designed to compensate for the Obama administration’s inability to fulfill its promise to its union supporters by passing the Employee Free Choice Act.

One of the alternative remedies would require a member of management to read the Board’s notice of violation to all employees (or have the Board Agent read it in the presence of a management employee), instead of simply posting it on the bulletin board. The Acting General Counsel believes the information in the notice is more likely to reach all employees if it is read to them, and that a personal reading “places on the Board’s notice the imprimatur of the person most responsible” for the violation. In other words, the employees are more likely to think the notice means something if it is read to them by a member of management.

Another alternative remedy on which the memorandum focuses is permitting union access to employees in cases which involve unfair labor practices which have an adverse impact on employee-union communication. The memorandum concludes that in such cases, the appropriate remedy may be to allow the union to post information on the employer’s bulletin board, or to provide the union with the names and addresses of employees so that it can communicate with them directly. The memorandum also concludes that in rarer cases, the best remedy may be to permit the union to hold captive audience meetings with the employees as often as the employer does so, or to allow the union access to employees in non-work areas during non-work time.

When will the Regional Directors be justified in seeking such remedies? The memorandum suggests that whenever a Regional Director has a discharge case warranting a 10(j) injunction proceeding, a notice-reading remedy should be sought. In addition, the memorandum appears to leave little doubt that the notice-reading remedy should be considered in cases involving so-called “hallmark violations,” cases involving threats of discharge, layoffs, or plant closure. But it goes much farther, and discusses at length how lesser violations, such as grants or promises of benefits, solicitation of employee grievances, and improper employer interrogation or surveillance can have a severe impact on employee free choice. The memorandum appears to encourage the Regional Directors to consider seeking the notice-reading remedy in all cases where such typical 8(a)(1) violations are “serious.” It also states broadly that: “When the employer’s unfair labor practices interfere with communications between employees, or between employees and a union, Regions should also seek union access to bulletin boards and employee names and addresses.” Nowhere does the memorandum explain what types of violations are those which interfere with communication. Presumably, an employer’s enforcement of an improper no-solicitation, no-distribution policy would be sufficient.

Only time will tell whether these alternative remedies are used by the Regional Directors in unusual cases when needed to remedy serious employer unfair labor practices in order to obtain a fair election, or are used routinely in an effort to give unions a leg up in organizing campaigns. In the meantime, the threat of these alternative remedies is yet another reason for employers to be extremely careful when responding to union organizing campaigns and to train their managers and supervisors to avoid committing unfair labor practices.
 

As part of its Spring 2010 regulatory agenda, the U.S. Department of Labor (“USDOL”) has indicated it plans to revise its longstanding interpretation of federal law on the reporting and disclosure requirements for employers in connection with a union’s organizing campaign. Such reporting is required under the Labor-Management Reporting and Disclosure Act (“LMRDA”), which contains various financial disclosure requirements for employers, unions and others. Among other things, the LMRDA requires employers to file annual reports with the federal government to disclose agreements made with third parties (and any associated payments), where a purpose of the agreement is to persuade employees with respect to their right to unionize. A willful failure to submit a required report or material false statements made on the report are crimes.

However, the LMRDA does not require reporting to the federal government where the services rendered relate to the “giving or agreeing to give advice” to an employer. Since at least 1962, the long-standing interpretation of the “advice exception” excludes from reporting various persuader activities performed by third party consultants, including the preparation of documents and materials to be used by the employer during the organizing campaign. As long as the third party consultant does not meet directly with employees in connection with persuader activities, agreements relating to these types of services need not be reported. The Office of Labor-Management Standards, which enforces the LMRDA, states that the advice exception has been “broadly interpreted to exclude from reporting any agreement under which a consultant engages in activities on behalf of the employer to persuade employees concerning their bargaining rights but has no direct contact with employees, even where the consultant is orchestrating a campaign to defeat a union organizing effort.” (Emphasis added). In fact, Judge (now Justice) Ruth Bader Ginsburg upheld this interpretation of the “advice exception” when the United Auto Workers sought to challenge the agency’s position in the late 1980s. U.A.W. v. Dole, 869 F.2d 616 (D.C. Cir. 1989).
 

The Obama administration now seeks to narrow the scope of the “advice exception” to require greater reporting and disclosure of an employer’s use of consultants in connection with union organizing efforts. Given the dramatic decline in union membership (now just 7.2% of private sector workers), unions are exploring every avenue to stem the losses. And the Obama administration apparently believes that changing the USDOL's long-standing interpretation of the “advice exception” may help unions reverse that trend by requiring employers to disclose the dollars spent in opposing a union organizing effort.

Because the process of notice and comment rule-making is currently ongoing, with initial promulgation of the draft regulation slated for November 2010, it is not clear exactly what form the revised regulation will take. Many believe that the administration will attempt to revive some version of the regulation that was promulgated in the last days of the Clinton administration and quickly rescinded by the Bush administration. Were the proposed Clinton administration regulation adopted, all services related to the preparation of materials would be reportable, if a purpose of the materials was to persuade employees – even if the consultant never engaged in persuader activities directly with employees.