Board Changes Policy on Ousting ‘Mixed-Guard' Union

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By Lawrence E. Dubé

June 10 — Overruling a 32-year-old precedent, the National Labor Relations Board held an employer that voluntarily recognizes a “mixed-guard union” must continue to recognize and bargain with the union unless and until it has lost the majority support of employees ( Loomis Armored US, Inc., 364 N.L.R.B. No. 23, 6/9/16 ).

“The Board’s decision restores sanity in this area of labor law, and returns to guards the right possessed by all other employees covered by the National Labor Relations Act to enjoy a stable collective bargaining relationship that is not subject to destruction at the whim of their employer,” Andrew H. Baker, a partner in Beeson Tayler Bodine in Oakland, Calif., told Bloomberg BNA June 10. Baker represented the Teamsters union locals that filed unfair labor practice charges against Loomis Armored US Inc.

The NLRB held in 1984 in Wells Fargo Corp., 270 N.L.R.B. 787, 116 LRRM 1129 (1984), that an employer could withdraw recognition from a mixed-guard union for any reason as long as there was no contract in effect.

Chairman Mark Gaston Pearce and Members Kent Y. Hirozawa and Lauren McFerran said June 9 the “better approach” would be to apply the same rule the board applies to non-guard units. The NLRB's new policy will not apply to cases that are already pending before the agency, and the board dismissed several complaints against Loomis.

Member Philip A. Miscimarra dissented from the board's change of policy, stating there was no compelling reason to reconsider Wells Fargo.

California Dispute Turned on NLRB Policy

Section 9 of the NLRA, 29 U.S.C. § 159, covers union representation petitions, elections and NLRB certifications. But Section 9(b)(3) prohibits the board from certifying a union to represent security guards if the union admits into membership employees other than guards or if the union is “affiliated directly or indirectly” with another organization that has non-guard members.

In Wells Fargo, the board interpreted Section 9(b)(3) to mean that an employer that granted voluntary recognition to a “mixed-guard union” could later withdraw recognition from the union if there was no collective bargaining agreement in effect.

In 2010, Loomis informed Teamsters locals in California that it would withdraw recognition from the unions upon expiration of their collective bargaining agreements. The unions, representing about 300 security guards, had bargaining relationships with Loomis that had been in place from 10 to 47 years; in each case, the company had granted voluntary recognition to the union.

“The Respondent's only stated basis for withdrawing recognition was that Section 9(b)(3) of the Act, as interpreted by the Wells Fargo Board, permitted it to do so,” the current board said.

Doug Bloch, political director for Teamsters Joint Council 7, told Bloomberg BNA June 10 there was no specific dispute or event that prompted the company's action. Instead, he said, Loomis apparently opted to withdraw recognition “just because they could.”

Six different locals had bargaining agreements with different expiration dates, but Bloch said once the first agreement terminated and Loomis withdrew recognition, the rest “fell like dominoes.”

An administrative law judge dismissed unfair labor practice complaints against Loomis, but the unions and the NLRB's general counsel urged the board to find that the company's termination of its bargaining relationships was unlawful.

Precedent Allowed Withdrawing Recognition

Wells Fargo was enforced by the U.S. Court of Appeals for the Second Circuit, and the board reaffirmed the ruling several times.

However, Pearce, Hirozawa and McFerran said the ruling created an “unwarranted exception” from the general rule that once an employer grants voluntary recognition to a union it must continue to recognize and bargain with the organization until it is shown the union has actually lost the support of a majority of employees.

Congress intended Section 9(b)(3) to protect employers from being required to bargain with a union where there was a potential for guards to have a conflict of interest that would interfere with their enforcing the employer's property rights against non-guard employees, the board said.

In Wells Fargo, a majority of board members concluded the conflict of interest would be present whether a mixed-guard union was certified by the board or recognized by an employer. Finding an employer's withdrawal of recognition of a mixed-guard union unlawful would allow a union to obtain “indirectly” bargaining rights that it could not obtain through an NLRB certification, the Wells Fargo board said.

Board Changes Course but Not Retroactively

However, Pearce, Hirozawa and McFerran said Section 9(b)(3) only prohibits the NLRB from issuing a certification of a mixed-guard union. It “does not speak to the termination of collective-bargaining relationships between employers and mixed-guard unions,” they observed.

The “fundamental purpose” of Section 9(b)(3) “is to permit employers to decide for themselves” whether to recognize and bargain with [mixed-guard] unions,” the board said, and issuing a remedial bargaining order against an employer that withdraws recognition “does no more than restore the status quo that the employer, not the Board, created.”

The board said union organizing of guards has increased in recent years, and voluntary recognition agreements have become increasingly common. “Construing Section 9(b)(3) to permit an employer to withdraw from a stable collective-bargaining relationship with a mixed-guard union would undermine a central purpose of the Act,” the board said.

The board said its “usual practice” is to apply new policies and standards to all pending cases, but employers that have relied on Wells Fargo for decades could face costly liability if the board's new policy were applied retroactively. The Board said it will “decide this case and other pending cases under Wells Fargo,” and it dismissed the unfair labor practice complaints against Loomis.

Teamster official Bloch said the union is disappointed that the board dismissed the cases against Loomis without ordering a remedy for the employees affected by the company's action. However, he said the NLRB decision will set an important precedent for guards and for other unions, including the Service Employees International Union, which filed an amicus brief in Loomis.

Dissent Backs NLRB's Original Position

In his dissent, Miscimarra acknowledged that Wells Fargo addressed a “difficult balancing of competing considerations,” but he found the 1984 decision applied Section 9(b)(3) “in the most appropriate manner.”

Miscimarra said Congress chose to adopt restrictions on unions with mixed membership. “There is no evidence that Congress focused narrowly on technical details regarding Board certification as opposed to voluntary recognition,” he said.

An attorney representing Loomis Armored US Inc. did not respond to Bloomberg BNA's June 10 request for comments on the board decision.

To contact the reporter on this story: Lawrence E. Dubé in Washington at ldube@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

For More Information

Text of the opinion is available at http://src.bna.com/fNa.