Tables May Turn in Collective Bargaining Cases

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By Lawrence E. Dubé

Management lawyers hope the National Labor Relations Board will adopt a new approach to collective bargaining when a Republican majority takes over the board in the coming months.

During the past several years, Democratic majorities on the board staked out positions on the duties of unionized employers under federal labor law. But President-elect Donald Trump can fill two vacancies on the board shortly after he takes office. That would quickly swing the panel to a 3-2 Republican majority.

Change won’t happen overnight, because the board will have to wait for new cases that will allow the new members to weigh in on issues addressed by President Barack Obama’s board. However, lawyers interviewed by Bloomberg BNA expect major changes in NLRB rulings on the duty of joint employers to bargain with unions. They also anticipate the board will at least slow its expansion of unions’ rights to demand information from management.

Employers and unions are accustomed to seeing the agency oscillate on policy issues when the White House changes hands, Kenneth J. Yerkes, a partner who chairs the labor and employment department at Barnes & Thornburg LLP, told Bloomberg BNA. However, he said, “all of the change of law and the trajectory” of recent board decisions on bargaining appeared “to reason to a conclusion that is favorable to labor.”

The new board may reconsider some of the most important rulings of Obama appointees, and there could be major changes in the board’s analysis of union-management relations, Yerkes and another management lawyer told Bloomberg BNA.

The board has “reverse-engineered” precedent in recent cases to justify outcomes that were favorable to unions, Yerkes said. He’s hopeful a new board will fairly analyze the behavior of employers and negotiators as well as the process of collective bargaining.

James M. Stone, office managing principal of Jackson Lewis PC’s Cleveland office, said he expects a “less activist, more neutral” NLRB will revisit some of its most controversial rulings.

New Board May Change Case Analysis

Unionized employers are required to bargain in good faith with the organization representing employees. The NLRB has issued dozens of decisions under Section 8(a)(5) of the National Labor Relations Act, which sets employers’ good faith obligations.

The act traditionally has allowed employers and unions leeway to reach their own agreements through negotiations that may include rough-and-tumble rhetoric and economic pressure.

However, the management lawyers argued that the board has in recent years been too willing to intervene in labor-management relationships and too quick to conclude that employers were engaged in unlawful attempts to frustrate the honest give-and-take of good faith bargaining.

Some of the most important decisions going back to 2011 overruled earlier precedents and were adopted over the objection of dissenting Republicans on the board.

Prior rulings—some favoring employers and some favoring unions—were focused on an employer’s participation in a bargaining process, said Yerkes, who is based in Barnes & Thornburg’s Indianapolis office. But the board’s recent holdings reversed a traditional legal analysis to arrive at a particular result, he said.

“For me, that’s the mischief,” Yerkes said. He added that he hopes the board will return to analyzing an employer’s bargaining conduct by examining what the organization did, when, and why, rather than constructing an analysis to justify a particular result.

Joint Employment Cases Could Be Rolled Back

Until Trump announces his selections for the NLRB vacancies, predicting board actions is “reading tea leaves,” Stone said. His firm, however, “believes, for sure, there will be a tempering of the activism” that was shown in recent decisions, he said.

Stone cited two cases that caused “massive uncertainty” for employers: Browning-Ferris Industries of California, Inc. 362 N.L.R.B. No. 186, 204 LRRM 1154 (2015) and Miller & Anderson, Inc., 364 N.L.R.B. No. 39, 206 LRRM 1885 (2016).

The NLRB held 3-2 in Browning-Ferris that separately owned companies can be considered joint employers if they retain indirect control over an employment relationship covering a group of employees.

In Miller & Anderson, the board held 3-1 that unions can seek representation elections in units that combine workers of one company with employees who are provided to the company by another organization.

The rulings were a “significant expansion of the law” and have created considerable confusion about the bargaining obligations and business relationships of franchisers and franchisees, contractors and subcontractors, and other business entities, Stone said.

"[O]ne would expect” the new NLRB will abandon Browning-Ferris and go back to requiring evidence of direct and substantial control over employment, Stone said. He also said the board would likely revisit and change its Miller & Anderson decision to reinstate a requirement that employers consent to multi-employer bargaining before the NLRB can order independent companies to negotiate jointly with a union.

Obama Board Precedents Will Be on the Table

Several other decisions on bargaining issues were the result of 3-2 or 3-1 decisions, and could see a reversal if heard by a new-majority board.

The following list of decisions include cases defining mandatory subjects of bargaining under the NLRA (discipline, work rules, and employer practices), rulings on employer obligations to refrain from making unilateral changes and discontinuing union dues deductions after the expiration of a collective bargaining agreement, and board decisions on the obligation of an employer to allow a union reasonable time to negotiate a contract after the union becomes an employee bargaining agent.

Total Security Management Illinois 1 , 364 N.L.R.B. No. 106, 207 LRRM 1282 (2016) . The board found 3-1 that an employer violated Section 8(a)(5) of the NLRA by discharging three employees in an exercise of discretionary discipline without providing notice and an opportunity to bargain to a newly certified union that had not yet negotiated a contract.

E. I. Du Pont de Nemours , 364 N.L.R.B. No. 113, 207 LRRM 1356 (2016) . The board found 3-1 that discretionary unilateral changes ostensibly made pursuant to a past practice developed under the management-rights clause in an expired collective bargaining agreement were unlawful.

Graymont PA, Inc. , 364 N.L.R.B. No. 37, 206 LRRM 1723 (2016) . A company unlawfully failed to tell a union it didn’t have any material responsive to the union’s request for information about changes in work rules and policies, the NLRB held in another 3-1 ruling.

Loomis Armored US, Inc., 364 N.L.R.B. No. 23, 206 LRRM 1605 (2016). Overruling a 32-year-old precedent, the NLRB held 3-1 that an employer that voluntarily recognizes a “mixed-guard union” must continue to recognize and bargain with the union unless and until the labor organization has lost the majority support of employees.

Lincoln Lutheran of Racine , 362 N.L.R.B. No. 188, 204 LRRM 1234 (2015) . An employer’s duty to abide by a union dues checkoff provision under which it deducts dues from employees’ paychecks and remits them to the union survives the expiration of the relevant collective bargaining agreement, a divided board ruled 3-2.

American Baptist Homes of the West , 362 N.L.R.B. No. 139, 203 LRRM 1717 (2015) . An employer had no blanket right to deny union requests for access to witness statements that were secured during a company investigation, the board held 3-2.

Pressroom Cleaners, Inc. , 361 N.L.R.B. No. 57, 201 LRRM 1001 (2014) . In a 3-2 decision, the NLRB found that when a successor employer has violated the NLRA by unilaterally changing a predecessor’s terms and conditions of employment, the board will order restoration of the predecessor’s terms and conditions until the parties bargain in good faith to agreement or impasse.

Lamons Gasket Co. , 357 N.L.R.B. 739, 191 LRRM 1157 (2011) . In a 3-1 decision, the board ruled that a representation election petition is barred for a reasonable period of time following voluntary recognition of a union designated by a majority of employees.

UGL-UNICCO , 357 N.L.R.B. 801, 191 LRRM 1175 (2011) . The NLRB decided 3-1 to restore a “successor bar” doctrine requiring employers to recognize incumbent unions for a reasonable period after a business transition without challenging the majority status of the employees’ bargaining agent.

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

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

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