NLRB Holds that the Harborside Applies Retroactively

In December 2004, the NLRB reversed precedent and held that a supervisor commits objectionable conduct (i.e., conduct that will invalidate an election) if she asks employees to sign union authorization cards, absent mitigating circumstances. Harborside Healthcare, Inc., 343 NLRB No. 100 (2004) (overruling Millsboro Nursing, 327 NLRB 879 (1999)).

On May 17, 2005, a divided Board held that Harborside’s rule against supervisory card solicitation applied retroactively to conduct that predated Harborside. SNE Enterprises, Inc., 344 NLRB No. 81 (2005). The events in SNE Enterprises occurred before the Board issued its Harborside decision. During an organizing campaign, two supervisors asked employees to sign authorization cards. The union later won the election. The employer alleged that the supervisors tainted the election by soliciting authorization cards. Applying then-current law, a regional director upheld the union’s election victory, finding that the supervisory card solicitation was not objectionable.

Reviewing the regional director’s decision, the Board majority held that Harborside’s new rule applies retroactively to supervisory card solicitation that occurred before the Board issued Harborside. The majority, Chairman Battista and Member Schaumber, first claimed that the Board had already given retroactive application to the new rule in Harborside itself. The majority then explained that the Board normally gives retroactive effect to new rules unless doing so would cause “manifest injustice.” Factors relevant to determining whether retroactive application of a new rule would cause manifest injustice include: (1) the extent to which parties relied on preexisting law; (2) the effect of retroactivity on the accomplishment of purposes of the Act; and (3) any particular injustice arising from retroactive application. Weighing those factors, the majority found that retroactive application of Harborside’s rule would not cause manifest injustice. Id., slip op. at 1.

First, the majority noted that the record contained no evidence that the supervisors at issue actually relied upon the Board’s pre-Harborside law. Second, the majority found that retroactive application would not significantly prejudice any party. Retroactive application would, at worst, require the Board to hold a new election and the union to conduct another campaign. The majority thought that an order requiring a new election is not nearly as burdensome as an order imposing backpay liability and requiring reinstatement. The majority found that “to the extent that the Union may be harmed, we believe that the statutory interest in protecting employees’ Section 7 rights under the Act and assuring free and fair elections outweigh any injustice resulting from the retroactive application of the Harborside standard.” Consequently, the majority remanded the case back to the regional director to evaluate the employer’s objections under Harborside’s new rule.

Member Liebman dissented. She argued that the Board would cause manifest injustice if it applied Harborside’s new rule retroactively. She emphasized that Harborside overruled precedent on the card solicitation issue and therefore argued that retroactive application would implicate reliance interests. She further argued that applying Harborside retroactively to invalidate election victories would inflict significant harm on unions. Liebman asserted that a Board certification is a valuable legal interest and the most important asset to unions under the Act. She explained that “[s]tripping a union of its electoral victory, and requiring it to expend the resources to conduct another electoral campaign (and perhaps pursue related legal proceedings), is a substantial burden.” She contended that there was no meaningful distinction between the burdens imposed by an order invalidating an election and an order imposing monetary or other legal liability. Thus, Liebman found that the relevant factors weighed in favor of finding “manifest injustice” and against retroactive application of Harborside.

Finally, Liebman challenged the majority’s assertion that Harborside itself applied the new rule retroactively:

"In fact, the new rule was not actually applied by the full majority in Harborside itself. One member of the three-member majority (Member Meisburg) did not find that the supervisor at issue in that case actually solicited any authorization cards from any unit employees she supervised, and thus he did not rely on that particular conduct in voting to set aside the election. Thus, a majority of the Board did not in fact apply this new principle retroactively. My colleagues insist that, despite Member Meisburg’s individual position, the 'standard set forth in Harborside' was applied retroactively. But had supervisory card solicitation been the only issue presented, there would have been no majority to set aside the election there and no retroactivity issue."

Id., slip op at 3 n.1.

President Bush Nominates Dennis P. Walsh to Serve on the NLRB

On April 27, 2005, President Bush nominated Dennis P. Walsh, a Democrat, to fill one of two vacant seats on the National Labor Relations Board. He is nominated to serve a term ending December 16, 2009. Walsh served on the NLRB from December 2000 to December 2001 and again from December 2002 to December 2004.

During his time at the NLRB, Walsh demonstrated that he is a mainstream Democrat who consistently adopts pro-union interpretations of the Act when choosing between competing, reasonable alternative interpretations. Walsh dissented from each of the major decisions issued by his Republican colleagues. See Harborside Healthcare Inc., 343 NLRB No. 100 (2004); Crown Bolt Inc., 343 NLRB No. 86 (2004); Oakwood Care Center, 343 NLRB No. 76 (2004); Brown University, 342 NLRB No. 42 (2004); Dana Corp., 341 NLRB No. 150 (2004); IBM Corp., 341 NLRB No. 148 (2004).

Walsh also demonstrated that he will apply precedent even when he disagrees with it. Ingram Barge Co., 336 NLRB 1259, 1259 n.1 (2001); Ark Las Vegas Corp., 335 NLRB 1284, 1284 n.2 (2001).

Walsh and fellow Democrat Wilma Liebman agreed with each other in the vast majority of cases. This cannot be overstated. Nevertheless, Walsh and Liebman sometimes disagreed. The cases in which they disagreed provide insight into Walsh’s jurisprudence. I found 18 such cases. Walsh’s position was more pro-union (or pro-GC) than Liebman’s position in 14 of these 18 cases. Though it is difficult to generalize, I think that the cases below show that Walsh is slightly more likely than Liebman to hold against an employer on the merits, and is somewhat more likely than Liebman to award extraordinary remedies.

Armstrong Machine Co., 343 NLRB No. 122 (2004) (Liebman and Battista held that employer acted lawfully when telling employees that he thought they were supervisors and therefore ineligible to vote in election; Walsh dissented, arguing that employer’s statement was unlawfully coercive).

Overnite Transportation Co., 343 NLRB No. 134 (2004) (Liebman and Battista held that employer lawfully terminated employees who did not disclose their felony convictions on job applications; Walsh dissented, arguing that terminations violated 8(a)(3) because employer failed to satisfy its Wright Line rebuttal burden)

Wilshire at Lakewood, 343 NLRB No. 23 (2004) (Liebman and Battista held that employer did not violate 8(a)(1) by maintaining handbook rule that prohibited employees from walking off the job without supervisor’s permission; Walsh dissented, arguing that handbook rule chilled employees from engaging in protected strike activity and therefore violated the Act)

Fantasia Fresh Juice Co., 339 NLRB 928 (2003) (Liebman and Battista awarded EAJA fees to employer because they found that the General Counsel’s exceptions were not substantially justified; Walsh dissented, arguing that GC’s position was substantially justified)

Outdoor Venture Corp., 336 NLRB 1006 (2001) (Liebman and Hurtgen held that employer did not violate 8(a)(3) by refusing to reinstate strikers because, even assuming that employer engaged in unlawful direct dealing, such direct dealing did not prolong strike; Walsh dissented and would have remanded for factual findings to determine whether employer engaged in direct dealing because he thought such direct dealing, if it occurred, might have prolonged the strike)

Yuker Construction Co., 335 NLRB 1072 (2001), (Liebman and Truesdale held that employer acted lawfully in discharging employees for engaging in unprotected conversation; Walsh, dissenting, found conversation to be protected and hence found that employer violated Section 8(a)(3) by discharging employees)

Lee Lumber & Building Material Corp., 334 NLRB 399, 405 n.54 (2001) (Liebman, Hurtgen, and Truesdale placed burden on General Counsel to show that employer did not bargain for a reasonable time before employee disaffection petition circulated; Walsh, dissenting, would place burden on employer to show that it bargained for a reasonable time before disaffection petition circulated)

The Bakersfield Californian, 337 NLRB 296 (2001) (Walsh and Hurtgen found that employer did not violate 8(a)(5) when it announced implementation of McClatchy-type merit pay program because employer did not actually grant any increases; Liebman dissented, arguing that announcement violated 8(a)(5))

E.S. Sutton Realty Co., 336 NLRB 405 (2001) (Liebman and Hurtgen reversed ALJ’s credibility determination to find that employer violated Section 8(a)(3) by refusing to consider for hire and refusing to hire union applicants; Walsh, dissenting, would not overturn ALJ’s credibility determination and consequently would dismiss the complaint).

Local One, Amalgamated Lithographers of America (Metropolitan Lithographers Ass’n), 366 NLRB 801 (2001) (Liebman and Truesdale would find that union violated Section 8(b)(1) by refusing to refer one of its members to an employer; Walsh, dissenting, would find no violation because he thought that union had a neutral reason for its refusal to refer).

Allied Production Workers Local 12 (Northern Engraving Corp.), 337 NLRB 16 (2001) (Walsh and Hurtgen held that union violated 8(b)(1) by deducting dues from non-members’ paychecks; Liebman, dissenting, would find no violation because she interpreted nonmembers’ checkoff authorizations as clearly authorizing deduction of dues even after employees resigned union membership)

Smithfield Packing Co., 344 NLRB No. 1, slip op. at 14 n.61 (2004) (Liebman and Battista issued limited extraordinary remedies; Walsh would have ordered even more extraordinary remedies)

Arandess Mgmt Co., 337 NLRB 245 (2001) (Liebman and Hurtgen refused to require employer to make pension contributions on behalf of replacement workers as remedy for E’s unlawful refusal to apply CBA to them; Walsh would require employer to make contributions)

Postal Service, 339 NLRB 1162, 1163 n.4 (2003) (Liebman and Acosta did not require employer to read Notice aloud to employees as remedy for employer’s violations; Walsh would require employer to read Notice)

The Boeing Co., 337 NLRB 152 (Liebman and Hurtgen agree with employer that petitioned-for unit was not appropriate; Walsh dissented, arguing that unit was appropriate)

Temptations, 337 NLRB 376 (2001) (Liebman and Hurtgen held that Board lacked jurisdiction over strip club because strippers’ tips are not properly included when determining whether an employer meets the Board’s monetary jurisdictional standards; Walsh, dissenting, would assert jurisdiction by including tips)

Verizon Information Systems, 335 NLRB 558 (2001) (Liebman and Hurtgen dismissed Union’s election petition because Union previously invoked arbitration agreement to resolve representation dispute; Walsh would have held election, arguing that Union did not clearly and unmistakably waive right to Board election)

Postal Service, 340 NLRB No. 166 (2003) (Walsh and Battista set aside board settlement and reinstated complaint against respondent-union for undermining settlement agreement; Liebman would not reinstate complaint)

The nominations of Dennis Walsh and Ronald Meisburg are now pending in the Senate. General Counsel Arthur F. Rosenfeld’s term expires in less than one month. Member Peter C. Schaumber’s term expires on August 27, 2005. The Senate could confirm Walsh and Meisburg as a package and wait until September to confirm a package to fill the Rosenfeld and Schaumber vacancies. Alternatively, the Senate could wait until September to confirm a four-nominee package. Unfortunately, if the Senate waits until September, the Board will no longer have a quorum, and case processing will screech to a halt.