Monday, February 28, 2005

Analyzing Ambiguous Statements

Section 8(a)(1) prohibits employers from making coercive statements to employees about their union activity. Employers occasionally utter ambiguous statements that have several reasonable interpretations, some coercive and some not. Recently, the Board split over how to analyze these ambiguous statements. Joseph Chevrolet, Inc., 343 NLRB No. 2 (2004).

In Joseph Chevrolet, the employer terminated a shop steward after he misrepresented that he performed some work that he had not. The employer told the discharged employee “your job got fucked up at the bargaining table.” The General Counsel issued a complaint alleging that this statement violated Section 8(a)(1) by linking the employee’s discharge to his union activity.

The Board majority (Members Liebman and Walsh) found that the employer’s statement coercively linked the employee’s discharge to union activity and that it therefore violated Section 8(a)(1). In dissent, Member Schaumber found that the statement was lawful because it was ambiguous and susceptible to noncoercive interpretations. He noted that the collective bargaining agreement expressly authorized the employer to terminate employees for charging a customer for a repair not made. Member Schaumber thought that it was reasonable to interpret the employer’s statement -- that the employee’s “job got fucked up at the bargaining table” -- as communicating that the employee lost his job for committing an offense worthy of discharge under the collective bargaining agreement. Member Schaumber stated that “since the statement’s meaning is ambiguous and allows for lawful interpretations, the General Counsel has not met his burden of establishing by a preponderance of the evidence that making the statement violated Section 8(a)(1) of the Act.” Id. at 4 (emphasis added). Member Schaumber did not deny the existence of a reasonable, coercive interpretation of the employer’s statement.

In response to the dissent, the majority explained that “[t]he test of whether a statement is unlawful is whether the words could reasonably be construed as coercive, whether or not that is the only reasonable construction.” Under this rule, the majority found that the statement violated the Act, even accepting Member Schaumber’s position that the statement was ambiguous and susceptible to a reasonable, noncoercive interpretation.

Member Schaumber espoused the most pro-employer rule of the following three possible alternatives:

1. An ambiguous statement violates Section 8(a)(1) if it has at least one reasonable, coercive interpretation.

2. An ambiguous statement violates Section 8(a)(1) if its most reasonable interpretation is coercive (among competing reasonable interpretations).

3. An ambiguous statement is lawful if it has at least one reasonable, noncoercive interpretation.

I think that the Board majority wisely employed the most pro-General Counsel of these three alternatives. Where multiple reasonable interpretations of an ambiguous statement exist, we cannot be sure that employees will adopt a noncoercive interpretation over a coercive interpretation. Some employees may hear the coercive message. Thus, to ensure that employers do not interfere with Section 7 rights (purposefully or otherwise), the Board is wise to use the pro-General Counsel rule in Joseph Chevrolet.

In advocating rule set forth in Joseph Chevrolet, I emphasize that the remedy for violating Section 8(a)(1) is a cease-and-desist order. In such an order, the Board directs the guilty employer to stop making ambiguous statements that a reasonable employee could interpret as coercive. In other words, the Board tells the employer to be more precise when making its statements: “If you intend to communicate a noncoercive message, do a better job of it.”

One might argue that Joseph Chevrolet rule will chill employers from communicating valuable messages. An employer might hold its tongue instead of making a valuable comment out of fear that the Board might find some reasonable, coercive interpretation of its statement. I find such an argument unpersuasive for several reasons. First, the cease-and-desist order (“stop doing that”) is not much of a deterrent. Thus, if an employer has some valuable message to communicate, it is not likely to hold back for fear of being told to “stop doing that.” Second, the Board is not quick to manufacture coercive interpretations of seemingly valuable employer statements. Third, these kinds of statements are made, of course, by people: people who speak off the cuff and who are likely to be unaware of the Joseph Chevrolet rule. Thus, I highly doubt that the rule will have any significant chilling effect.

On the other hand, a contrary rule (such as the rule that an ambiguous statement is lawful if it is susceptible to a lawful interpretation) creates an opportunity for employers to use ambiguous language to communicate a coercive message. The potential for harm that this rule creates is greater, in my mind, than the potential chilling that might occur under Joseph Chevrolet.

Of course, employers might also be worried that such an 8(a)(1) violation will be used to support a Gissel bargaining order or to infer that a contemporaneous discharge was unlawfully motivated. I suggest that the Board can give appropriate (read “little”) weight to this type of violation when analyzing these types of issues.

Friday, February 11, 2005

Announcing Benefit Improvements to Employees Outside the Bargaining Unit

The Seventh Circuit held that an employer can violate Section 8(a)(1) by announcing to eligible voters that it is granting a new benefit to non-unit employees where the employer intends to influence an election. NLRB v. Curwood Inc., No. 03-3972, 2005 WL 295636 (7th Cir. Feb 09, 2005). In Curwood, the union filed an election petition to represent production workers, but not maintenance workers. Later, the employer announced that it was going to improve the maintenance workers’ pensions. The Board found that the employer violated Section 8(a)(1) – which prohibits employers from interfering with employees’ rights to form, join, or assist unions – by making the announcement.

The court recognized that an employer can interfere with employees’ right to join unions, in violation of Section 8(a)(1), by announcing to them that it is improving the benefits of employees outside the proposed unit. The court explained, however, that motive is critical. An employer will violate the Act by making the announcement only if the employer’s purpose is to influence the eligible voters. The court remanded the case to the Board to make a determination about the employer’s motive. Thus, Curwood shows that some 8(a)(1) violations turn upon an employer’s motive.

As a side note, at the oral argument, Judge Easterbrook expressed his disapproval of the holding in NLRB v. Exchange Parts Co., 375 U.S. 405 (1964), that an employer can violate Section 8(a)(1) by granting benefits to employees in the proposed unit for the purpose of influencing the election result:

Easterbrook: Your real problem is that you don't agree with Exchange Parts.
Employer's lawyer: Oh, I actually do.
Easterbrook: You do?
Employer's lawyer: Yes.
Easterbrook: Because I don't. I think it's a stupid decision. If I were you I would be arguing against it and trying to set up a case where I would bet there is a decent chance that the Supreme Court would overrule it. But, no, if you agree with Exhange Parts, that's fine.

Streaming audio of the argument is at:

Thursday, February 10, 2005

NLRB Expresses Concerns Over Standard Remedy for Unlawful Discharge in the Construction Industry

The Bush Board recently signaled “concerns” over precedent holding that the standard remedy for unlawful discharge in the construction industry is reinstatement and backpay. Cheney Construction, Inc., 344 NLRB No. 9 (2005).

The construction industry is unique because employers frequently hire employees to work on a single construction project. Employees often work on a project until it ends and then seek work from another employer. Sometimes, however, a construction-industry employee will move to her employer’s next project.

The Board has grappled with the question of the appropriate remedy for unlawful discharge in the construction industry. In Dean General Contractors, 285 NLRB 573 (1987), the Board set forth the current law. The Board majority held that a standard remedial order will require a construction-industry employer to reinstate a discriminatee and pay him backpay. The majority explained that an employer will have an opportunity at the compliance stage of litigation to prove that it would not have transferred the discriminatee to a new project. If the employer makes that showing, then reinstatement is inappropriate and backpay will terminate on the date that the discriminatee’s project ended.

The dissent in Dean General argued for a presumption that a discriminatee in the construction industry was hired only for a single project. Consequently, the dissent would place the burden on the General Counsel to prove that a discriminatee would have continued to work for the employer after the project ended. Only if the General Counsel could satisfy this burden of proof would the dissent order reinstatement and backpay beyond the date of the project. The dissent indicated that the General Counsel could make this showing at the hearing on the merits or at the compliance stage (provided that the General Counsel inform the ALJ at the original hearing that it intended to litigate the issue at the compliance stage).

Thus, in Dean General, the majority and the dissent disagreed about which party bears the burden of proving continued employment. The majority placed the burden on the employer to show that the discriminatee would not have continued employment beyond the project. If an employer fails to satisfy its burden, the Board order will require reinstatement and backpay. In contrast, the dissent in Dean General would have placed the burden on the General Counsel to prove that the discriminatee would have continued employment beyond the project. If the General Counsel fails to satisfy his burden, the Board order will not require reinstatement and will limit backpay to the end of the completed project.

In Cheney Construction, Chairman Battista and Member Schaumber recognized that Dean General represents current Board law. However, they expressed concerns “whether that case was correctly decided.” 343 NLRB No. 9, slip op. at 1 fn.9. In the absence of a third Republican Board Member, the Board applied Dean General.

Update on NLRB’s Position on Deferring Information-Request Cases to Arbitration

On January 28, I noted that the Board has a longstanding policy against deferring information-request cases to arbitration and identified a case in which Chairman Battista and Member Schaumber refused to endorse that policy. See New Island Hospital, 344 NLRB No. 3 (2005). Well, on February 4, Chairman Battista and Member Schaumber made clear that they would like to overrule that longstanding policy when they have a third Member’s vote to do so. SBC California, 344 NLRB No. 11 (2005). By tradition, the NLRB requires three votes to overrule precedent. Ingram Barge Co., 336 NLRB 1259, 1259 fn.1 (2001); Redway Carriers, Inc., 274 NLRB 1359, 1359 fn.4 (1985). In accordance with this tradition, Chairman Battista and Member Schaumber applied current law in SBC California even though they disagreed with it.

As you can see, the two Board vacancies work to the Democrats’ advantage. Until a third Republican is placed on the Board, there will be no change in the law, provided that the Board sticks with tradition.

Wednesday, February 09, 2005

NLRB Holds That Employers May Lockout Full-Term Strikers While Allowing Nonstrikers and Crossovers to Remain Working

In Midwest Generation, the Board held that an employer did not violate Section 8(a)(3) -- which prohibits employers from discriminating against employees to discourage union membership -- when it locked out full-term strikers while allowing nonstrikers and crossovers to continue working. 343 NLRB No. 12 (2004). The Board found that the employer distinguished between the two groups of employees not because of union membership (or Section 7 activity), but rather because of a legitimate desire to place economic pressure where it would be most effective: on the employees who remained on strike until the union called it off.

The union and the employer in Midwest Generation were negotiating for a successor contract. The union called an economic strike in support of its bargaining demands. The vast majority of employees joined the strike. Eight employees refused to strike and remained at work (the nonstrikers). During the course of the strike, 47 striking employees crossed the picket line and returned to work (the crossovers). Eventually, the union ended the strike and made an unconditional offer to return to work. In response to the union’s offer, the employer instituted a partial lockout, refusing to let the full-term strikers return to work until the union agreed to a new collective bargaining agreement. The employer simultaneously allowing nonstrikers and crossovers to continue working.

The union filed a ULP charge, and the General Counsel issued a complaint alleging that the employer violated Section 8(a)(3) by discriminating between full term strikers on the one hand and nonstrikers and crossovers on the other.

The Board majority (Chairman Battista and Member Schaumber) held that the employer acted lawfully in discriminating between the two groups. The majority explained that a lockout violates Section 8(a)(3) only if the employer is motivated by antiunion animus. To determine whether antiunion animus motivated the employer’s partial lockout, the majority employed the framework set forth in NLRB v. Great Dane Trailers, 388 U.S. 26 (1967). Under the relevant part of that decision, the employer must first come forward with a “legitimate and substantial business justification” for its different treatment of employees. Only then must the Board’s General Counsel prove antiunion motivation. In the absence of proof of a legitimate and substantial business justification for the different treatment, the employer’s discrimination is unlawful.

The Board majority found that the employer established a legitimate and substantial business justification for its lockout: to apply economic pressure on the union to accept its bargaining demands. The majority further found that the employer established a legitimate and substantial business justification for the partial nature of its lockout: to pressure full-term strikers to abandon the union’s bargaining demands.

The Board majority then shifted the burden to the General Counsel to prove antiunion animus. The majority found that the General Counsel failed to satisfy his burden. The majority conceded that the employer discriminated between full-term strikers on one hand and nonstrikers and crossovers on the other. It found that this fact did not establish antiunion motivation. The majority explained that the employer had the legitimate motive of placing additional economic pressure on full-term strikers to achieve its bargaining goals. It was unnecessary for the employer to place similar economic pressure on nonstrikers and crossovers, argued the Board majority, because they had eschewed the strike weapon.

Member Walsh dissented. He found that the employer failed to satisfy its initial burden under Great Dane of establishing a legitimate and substantial business justification for the partial nature of its lockout. He noted that the employer tried to justify the partial nature on the ground that it was unnecessary to place economic pressure on nonstrikers and crossovers because they had eschewed the strike weapon. Walsh attacked this justification from two angles. First, he noted that the full-term strikers had also eschewed the strike weapon by terminating the strike and offering to return to work. Thus, there was no need to place particular pressure on them. Second, Walsh noted that the employer and the Board majority improperly assumed that nonstrikers and crossovers do not support the union’s bargaining demands. Walsh noted that employees may refuse to participate in a strike for reasons other than lack of support for a union’s bargaining demands. Thus, Walsh found that the employer failed to establish a legitimate reason for locking out the full-term strikers while allowing the nonstrikers and crossovers to continue working. Consequently, he voted to find that the employer violated Section 8(a)(3).

I think that Member Walsh has the better of the two arguments. The (allegedly) legitimate justification identified by the majority was the employer’s desire to place targeted pressure on those employees who support the union’s bargaining demands. The majority essentially finds that the employer legitimately assumed that full-term strikers support the union’s bargaining demands and that nonstrikers and crossovers do not (or support them to a lesser extent). This might be generally true as an empirical matter. However, exceptions to this general rule do exist. Employees may refuse to strike even though they support their union’s demands. Likewise, some employees may strike even though they do not support their union’s demands. Thus, there is not a perfect correlation between participation in a strike and support for a union’s demands or between rejection of a strike and lack of support for a union’s demands. Nevertheless, the majority’s decision allows employers to discriminate between employees based on their protected activity because of the questionable assumption that such a correlation exists.

Thursday, February 03, 2005

Round-Up of D.C. Bar Association's Discussion of Dana/Metaldyne and the Voluntary-Recognition Bar Doctine

The D.C. Bar Association hosted a discussion on Dana/Metaldyne, voluntary recognition, neutrality agreements, and related topics.

As background, in Dana/Metaldyne, 341 NLRB No. 150 (2004), the Board granted review to reevaluate its long-established "voluntary-recognition bar" doctrine. Under that doctrine, a voluntarily-recognized union enjoys an irrebuttable presumption of majority support for a reasonable period of time. During that reasonable period, the Board will not process a decertification petition. Under current law, an employee who suspects that the union lacked majority support at the time of recognition cannot obtain an NLRB election. In Dana/Metaldyne, however, the Board could eliminate the voluntary-recognition bar or limit it. Various amici have urged the Board to create a window of opportunity immediately following recognition during which a petitioner could file a decertification petition with the support of some percentage of the employees (e.g., 30% or 50%).

At the discussion, Nancy Schiffer of the AFL-CIO derided the Board's decision to grant review in Dana/Metaldyne. She emphasized that the Supreme Court, the Circuit Courts, and the Board have long recognized voluntary recognition as a valid method for a union to become a bargaining representative. Schiffer argued that eliminating or limiting the recognition bar will destroy voluntary recognition. The bar insulates a newly-recognized union from the pressures associated with retaining majority support she argued. Eliminating or limiting the bar will destabilize the relationship between the union and its members and between the union and the employer. Schiffer argued that eliminating the bar would allow a minority of employees to "hijack" the process from the majority of employees who signed cards.

Chuck Cohen of Morgan Lewis brushed aside Schiffer's criticism of Dana/Metaldyne. Cohen noted that the Clinton NLRB reversed precedent on six occasions, each time creating another obstacle for employees wishing to decertify a union. These six Clinton-Board decisions cemented existing bargaining relationships and made it more difficult for employees to remove their union or switch unions. In contrast, the Bush Board is merely considering a change in one case that will make it easier for employees to remove their union or switch unions. Thus, Cohen did not really argue the merits of eliminating or limiting the voluntary-recognition bar. Instead, he essentially argued that the Bush Board is less activist than was the Clinton Board.

Ellen Farrell from the NLRB set forth the General Counsel's position on the voluntary-recognition bar. The GC is urging the Board to limit, but not eliminate, it. She said that the bar serves the legitimate function of stabilizing a new bargaining relationship. She noted, however, that coercion and fraud - however rare - can taint a card check. Accordingly, the GC urges the Board to process an election petition shortly after voluntary recognition if the following conditions are met: the petition must be filed with 30 days from the date that the employer notifies the employees that it has voluntarily recognized the union and the petition must have the support of 50% of employees. If a petitioner can obtain support from at least 50% of the employees, then the Board is justified in questioning the card check's validity.


The panel also discussed neutrality agreements. The generic term "neutrality agreement" covers a host of different types of provisions. A basic neutrality agreement requires the employer to remain silent about the merits of unionization during an organizing campaign. Other neutrality agreements merely obligate the employer (and sometimes the union) from saying anything "negative" about the other side. More detailed neutrality agreements may also give a union access to a facility and employees' names, addresses, and phone numbers. They may also limit the duration of the organizing drive and prohibit a union from picketing. Frequently, parties sign a card-check agreement along with their neutrality agreement.

Nancy Schiffer praised neutrality agreements as a way to bypass slow NLRB election processes. She suggested that employers sign neutrality agreements because they want to limit the duration of a campaign, prevent picketing, and avoid NLRB litigation. She suggested that neutrality agreements are a vital part of today's union movement.

Chuck Cohen criticized neutrality agreements because they "silence" one party and prevent employees from hearing the employer's legitimate argument against unionization. He suggested that employers sign neutrality agreements because of union leverage (through its bargaining power at another facility, a corporate campaign, or its government contacts). Cohen implied this leverage was illegitimate during his critique of neutrality agreements.

An audience member picked up on Cohen's criticism and asked Ellen Farrell whether neutrality agreements constitute unlawful assistance in violation of Section 8(a)(2). She replied that employers have no statutory duty to present employees with an argument against unionization. Thus, an employer's voluntary decision to enter into a neutrality agreement and remain silent is not unlawful assistance, she argued. She did note that where two rival unions are campaigning, the employer has a duty to treat them equally.

The panel next discussed "neutrality-plus agreements," in which the parties simultaneously negotiate a neutrality agreement and some substantive terms of a CBA that will apply if and when the union obtains majority support. Ellen Farrell stated that the GC has issued a complaint in a case alleging that an employer and a union violated the Act when they signed a neutrality-plus agreement. That agreement included a no-strike/no-lockout clause, an interest-arbitration clause, a minimum-duration clause, and a clause limiting the amount the employer would spend on health care. Farrell gave the GC's view that the neutrality-plus agreements are unlawful because they give the (minority) union special status. In fact, she argued that the neutrality-plus agreement constituted an unlawful grant of recognition even though the substantive terms would not kick in until the union obtains majority status. Farrell distinguished lawful after-acquired stores clauses (see post below) on the ground the unions in those cases have majority status at Facility A and negotiate the neutrality-plus agreement (to apply at Facility B) on behalf of the employees at Facility A, who are "vitally affected" by the terms and conditions at Facility B. (Confusing, I know.)

In sum, the rules governing the voluntary-recogntion bar and neutrality agreements may change. The Bush Board has several cases pending that will decide some of these issues. Stay tuned.