NLRB Declines to Endorse Its Longstanding Policy of Not Deferring Information-Request Cases to Arbitration

In New Island Hospital, 344 NLRB No. 3 (2005), the Board refused to defer an information-request case back to arbitration because of the Arbitrator’s delay in resolving it, but refused to endorse its longstanding policy against deferring all information-request cases.

In New Island Hospital, a union filed a grievance alleging that the employer breached their CBA by failing to implement staffing guidelines (set forth in the CBA) that required a minimum number of nurses per patient. The union demanded arbitration after the employer failed to resolve the grievance to its satisfaction. Later, the union asked the employer for information on nurse/patient ratios to help make its claim in the arbitration. The employer refused, so the union served an arbitral subpoena on the employer for that information. In response, the employer moved the Arbitrator to quash the subpoena. The Arbitrator reserved judgment on the motion. He also postponed the arbitration hearing due to his illness.

After the Arbitrator informed the parties that he would delay his ruling on the employer’s motion to quash, the union filed a ULP charge with the NLRB. The General Counsel issued a complaint alleging that the employer violated Section 8(a)(5) by refusing to furnish the information to the union. The employer moved the ALJ to defer the case to arbitration. The employer argued that the union had chosen the arbitration route to resolve its information-request dispute, and that the union was stuck with its procedural choice. The judge denied the employer’s motion to defer, citing the Board’s longstanding policy against deferring information-request cases. He then found that the employer violated the Act by refusing to furnish the requested information. The employer excepted to the ALJ’s decision.

The Board agreed with the ALJ’s decision not to defer, but for a different reason. The Board majority (Chairman Battista and Member Schaumber) explained that it would be inappropriate to defer the information-request case back to the Arbitrator because over 10 months had elapsed since the Arbitrator was first asked to rule on the issue and he had not yet resolved it. Importantly, the majority stated that “[w]e find it unnecessary to pass on whether, absent such a delay, the Board properly should defer an information-request allegation to arbitration where a charging party has invoked the grievance-arbitration process and has also filed a charge with the Board.” In contrast, Member Liebman concurred on the ground that the Board never defers information-request cases. She did not rely on the Arbitrator’s delay.

The majority’s decision not to endorse its longstanding policy creates uncertainty regarding the circumstances in which the Board will hear or defer information-request allegations. Back in 2002, Member Bartlett stated in a concurring opinion that he would defer all information-request claims to arbitration if the information relates to an alleged contract breach -- even if the charging party never invoked the grievance-arbitration process. Phoenix Coca-Cola Bottling Co., 338 NLRB 498, 499 fn.2 (2002). Member Bartlett’s rule would shift the costs of litigating these disputes from the government to the unions. Undoubtedly, unions would end up with less information.

Unions would likely receive less information than they currently do even if the NLRB were to adopt a rule (less harsh than Member Bartlett’s) channeling information-request claims back to arbitration where the charging party demands arbitration and later goes to the NLRB. Unions might take this course of action for several reasons (either because they anticipate that the arbitrator will not require the employers to turn over all relevant information or because they run out of litigation resources). Under a new rule, the Board might turn unions away once they have invoked the grievance-arbitration process. We must wait and see what tack the Bush Board takes.

President Bush Nominates Ronald E. Meisburg to the NLRB

On January 24, 2005, President Bush nominated Ronald E. Meisburg, a Republican, to fill one of two vacant seats on the National Labor Relations Board. He is nominated to serve a term ending August 27, 2008. Meisburg recently finished a recess appointment at the Board.

During his recess appointment, Member Meisburg consistently sided with his Republican colleagues over his Democratic counterparts in cases involving important policy issues. See Harborside Healthcare Inc., 343 NLRB No. 100 (2004) (articulating standard for prounion supervisory conduct and finding that supervisors engaged in objectionable conduct by soliciting authorization cards); Crown Bolt Inc., 343 NLRB No. 86 (2004) (refusing to presume dissemination of plant closure threats); Oakwood Care Center, 343 NLRB No. 76 (2004) (overruling Clinton Board decision on user and user/supplier employee units); Brown University, 342 NLRB No. 42 (2004) (holding that graduate assistants are not statutory employees); Dana Corp., 341 NLRB No. 150 (2004) (granting review to determine whether to maintain the voluntary recognition bar); IBM Corp., 341 NLRB No. 148 (2004) (holding that nonunion employees are not entitled to a coworker at investigatory meeting).

On the other hand, Member Meisburg was the Republican most likely to break from his party colleagues and join a Democrat to find that an employer violated the Act. These cases turned more on their facts than on an issue of law. See RC Aluminum Industries, Inc., 343 NLRB No. 103 (2004) (Meisburg and Liebman in majority finding discharge unlawful; Battista dissenting); CBS Broadcasting, Inc., 343 NLRB No. 96 (2004) (Meisburg and Walsh in majority finding that employer violated Section 8(a)(5) by refusing to bargain with one union in unit with joint representative; Schaumber dissenting); Abbott Northwestern Hospital, 343 NLRB No. 67 (2004) (Meisburg and Liebman concurring that employer violated Section 8(a)(3) by refusing to hire another employer’s striking employees; Battista dissenting); Parkview Hospital, Inc., 343 NLRB No. 13 (2004) (Meisburg and Walsh in majority finding that employer violated Section 8(a)(3) by giving union supporter a poor evaluation; Schaumber dissenting). I found only one case in which a different Republican (Battista or Schaumber) joined with a Democrat to find a violation where Meisburg dissented. Fachina Construction Co., 343 NLRB No. 98 (2004) (Battista and Liebman in majority finding that employer violated Section 8(a)(3) by discriminating against employees for engaging in protected activity; Meisburg dissenting).

Thus, Member Meisburg was the swing vote on the Board; sort of a Justice O'Connor of the the NLRB.

http://www.whitehouse.gov/news/releases/2005/01/20050124-10.html

NLRB Allows Employer to Change Past Practice on Wage Increases Without Bargaining to Impasse

The Bush Board handed employers a major victory by holding that an employer did not violate Section 8(a)(5) when it changed its system of granting wage increases without first bargaining to impasse with its newly-certified union. TXU Electric Co., 343 NLRB No. 132 (2004). In every year from 1978 to 1999, the employer performed a wage review in which it considered a number of factors (e.g., market condition and employee retention). Every December, the employer granted a wage increase based on that year's wage review. The amount of the wage increase was left to the employer's discretion - there was no objective formula for reaching it.

The union won an election in February 1999 to represent some of the employer's employees. During bargaining in May 1999, the employer notified the union that it planned to conduct its annual wage review, but that it would not apply the new review to unionized employees. The employer told the union that it planned to apply the new review to nonunion employees only. The union did not expressly object. Importantly, however, the parties did not bargain to impasse or agreement by December 1999. In December 1999, the employer granted wage increases to nonunion employees under the new 1999 review (resulting in a 3.6% wage increase). In contrast, the employer applied its old 1998 review to unionized employees and paid them accordingly (resulting in a lower wage increase).

The union filed an unfair labor practice charge, and the Board's General Counsel issued a complaint alleging that the employer bargained in bad faith by changing a term or condition of employment without first bargaining to impasse.

In a 2-1 decision, the Board majority (Chairman Battista and Member Schaumber) held that the employer acted lawfully when it departed from past practice by refusing to apply the new 1999 wage review to its unionized employees. The Board found that the employer satisfied its bargaining obligation by giving the union notice of its intended change and an opportunity to bargain about it. The Board explained that:

"We agree with the concurring opinion in Daily News of Los Angeles, 315 NLRB at 1244, that where, as here, a discrete event occurs every year at a given time, and negotiations for a first contract will be ongoing at that time, an employer can announce in advance that it plans to make changes as to that event. '[T]he employer's bargaining position may be to continue the practice for that year, to modify it, or to delete it for that year.' As long as the union is given advance notice and an opportunity to bargain as to those matters, the employer can carry out the changes even if there is no overall impasse at as of the time of the change."

TXU Electric, 343 NLRB No. 132, slip op. at 4.

The Board majority explained that the anniversary date for action was fast approaching and the employer had to do something with respect to wage increases without waiting for an impasse. The Board held that an employer facing such a dilemma satisfies its bargaining obligation by giving notice and an opportunity to bargain before proceeding with the change.

Member Walsh dissented vigorously, describing the majority's holding as "a radical and unjustifiable departure from the Board's overall impasse rule." He voted to find that the employer had violated Section 8(a)(5). Walsh described the employer's wage system as having fixed aspects (criteria and timing) and discretionary aspects (the amount of the increase). He would not allow the employer to change the fixed aspects of its past practice without first bargaining to impasse. He would, however, permit the employer to take action on the discretionary aspect after giving notice and an opportunity to bargain.

I think that the dissent has the better view here. The general rule is that an employer may not change terms or conditions of employment without first bargaining to impasse or agreement. The rationale behind the impasse rule is that unilateral action prior to impasse undermines the collective bargaining process by removing issues from the bargaining table and by painting the union as impotent.

In TXU Electric, the Board has recognized an exception to the impasse rule where the term or condition of employment is a discrete, recurrent event that involves some amount of employer discretion. The majority's justification for its exception is that an employer faces a dilemma when the annual time for action rolls around. It must take some action on that date even though impasse has not occurred. Thus, the majority relies on necessity as its justification for the exception to the general impasse rule in this situation.

Member Walsh is quite right, however, to point out that the employer faces a dilemma only with respect to the discretionary aspect of its annual wage review program. Its 22-year practice provided a clear guide as to what to do regarding the fixed aspects: conduct the annual wage review using the fixed criteria and adjust wages (leaving aside amount) at the fixed time, December. The employer faced the dilemma only with respect to the amount of the wage increase. When December rolled around it had to set an amount even though it had not yet bargained to impasse or agreement. The Board majority found that the employer's dilemma as to the amount of wages privileged it to change the entire program (both fixed and discretionary aspects). In fact, the majority opinion would have allowed the employer to have entirely eliminated its wage review program ("[T]he employer's bargaining position may be to continue the practice for that year, to modify it, or to delete it for that year.").

Member Walsh persuasively argues that the employer's dilemma regarding the amount of the increase necessitates an exception to the impasse rule only as to that subject. He suggested that the dilemma does not privilege the employer to unilaterally change the fixed aspects of the past practice. In short, the exception, justified as it is by necessity, should be narrowly tailored to allow the employer to escape its dilemma but otherwise bind it to its established past practice.

TXU Electric is a significant decision. Many, if not most, employers have a system of granting wage increases on an annual basis in some discretionary amount. TXU Electric holds that newly-unionized employers do not violate Section 8(a)(5) if they provide notice and an opportunity to bargain before departing from that past practice. The employer's action in TXU Electric can have two powerful effects: it places a considerable amount of bargaining pressure on the new union, and it has the potential to foment dissatisfaction with the new union.

I will note that there is another obstacle for employers who want to respond to unionization by discontinuing a past practice of granting annual wage increases that are discretionary in amount. Section 8(a)(3) prohibits employers from discriminating to discourage union membership. In its decision, the Board noted that the General Counsel failed to argue that the employer engaged in unlawful discrimination by maintaining its wage practice for nonunion employees while changing it for union employees.

Welcome!

Thanks to Phillip Wilson, who is Laboring Away at the Institute, Michael P. Fitzgibbon of Thoughts from a Management Lawyer, and George Lenard of George's Employment Blawg for kindly referring their readers to this blog.

This post presents an opportunity to describe the purpose of Labor Law Blog. This blog will focus on traditional labor law (mostly NLRA, but also RLA and public sector labor law). I plan to describe recent cases, analyze them, and discuss their practical implications for unions and employers. The Bush NLRB has recently issued some significant decisions (Brown University, IBM, Oakwood Care Center, etc.). Labor law is changing in important areas. I hope to keep labor lawyers informed of these changes. I also hope to provide some commentary. Feel free to submit comments on the posts.

Fourth Circuit Holds That Requiring Employees to Wear Union Logo is Unlawful

The Fourth Circuit reversed the NLRB and held that an employer and a union violated the National Labor Relations Act by enforcing a provision in a collective bargaining agreement that required employees to wear a union logo next to the employer’s logo on their uniforms. Lee v. NLRB, 2005 WL 14896 (Jan. 4, 2005).

BellSouth and the CWA signed a collective bargaining agreement that required employees to wear a uniform displaying the CWA logo next to the BellSouth logo. Two employees who did not want to wear the CWA logo filed an unfair labor practice charge with the NLRB. The NLRB’s General Counsel issued a complaint alleging that BellSouth and the CWA violated the two employees’ statutory right to refrain from engaging in union activities.

The NLRB held that Bellsouth and the CWA acted lawfully in requiring all employees to wear uniforms bearing the twin logos. It applied a balancing test that balanced the two employees’ right to refrain from engaging in union activities against the interests of BellSouth and the CWA in conveying a positive public image via the CWA logo.

The NLRB found that the two employees had a legitimate interest in refraining from wearing the CWA logo because it implies support for the CWA. The employees’ interest was diluted by two factors. First, the NLRB explained that the presence of a union affects the degree to which an employee may engage in or abstain from union activities. Second, the CWA logo was not isolated, but rather it appeared next to the BellSouth logo. The NLRB found that the twin logos did not so much convey that the individual employee donning the uniform supported the CWA as much as it communicated that the employee was simply an employee of a unionized company. Thus, the employees’ interests were moderate.

On the other hand, the Board found some heft to BellSouth’s and the CWA’s interests in conveying an image to the public that BellSouth’s labor relations are harmonious and that its employees are well paid and highly trained. The NLRB found that the balance of interests weighed in favor of BellSouth and the CWA and against the dissenting employees. Based on this balance, the NLRB found that the collectively-bargained logo requirement was a “special circumstance” that justified any intrusion on the dissenters’ rights to refrain from union activity.

The Fourth Circuit disagreed. First, the court noted the precedent that holds that employees have a Section 7 right to wear union insignia absent special circumstances. The court found a reciprocal right to refuse to wear union insignia, absent special circumstances, from Section 7’s “right to refrain” language. The court then examined BellSouth’s and the CWA’s purported special circumstance for prohibiting employees from refusing to wear the CWA logo: the desire to convey a public image as a company with stable labor relations, a well paid workforce, and highly trained employees. As a factual matter, the court found that the CWA logo did not communicate that message. The court stated that a customer could view the CWA logo with suspicion and associate it with service disruptions and labor disputes. Because the court found that the logo in fact communicated an ambiguous message or possibly a negative image, the court held that BellSouth and the CWA did not establish a special circumstance justifying an intrusion on employees’ Section 7 right to refrain. Finally, the Fourth Circuit dismissed the notion that the logo requirement was any more of a special circumstance because it was the product of collective bargaining. The court suggested that the right of an individual to wear or refuse to wear union insignia is a right that unions cannot bargain away.

Consequently, the Fourth Circuit reversed, remanded, and ordered the NLRB to modify its order consistent with its opinion (i.e., to find that BellSouth and the CWA had violated the NLRA).

Under the Fourth Circuit’s ruling, employers and unions cannot agree to require employees to wear a union logo. How then can a union gain greater public recognition through a company’s uniform policy? The Fourth Circuit might have reached a different result if the collective bargaining agreement had allowed dissenting employees to opt out of wearing the union logo. Thus, unions and employers might be allowed to negotiate a uniform requirement where the default uniform contains the union logo, provided that a dissenting employee is able to request a uniform without the union logo. In its opinion, the NLRB suggested that such an opt-out might have its own Section 7 implications because employees would then be required to signal their favor or disfavor of the CWA. The NLRB stopped short, however, of saying that such a scheme would be unlawful.

Voluntary Recognition, Neutrality and Card Check Agreements: Are the Rules About to Be Changed?

The D.C. Bar's Labor & Employment Section is hosting a brown bag program to discuss potential changes in the NLRB's treatment of voluntary recognition, neutrality, and card-check agreements.

The program is on Thursday, February 3, 2005 from 12:30 to 2:00 pm at the D.C. Bar Conference Center 1250 H Street NW, Washington D.C.

Speakers include former Board Member Charles I. Cohen, Ellen Farrell of the NLRB, and Nancy Schiffer of the AFL-CIO. The speakers are sure to debate Dana/Metaldyne and Shaw's Supermarkets.

Registration info is at http://www.dcbar.org/for_lawyers/events/search_results.cfm?categoryID=195,197