NLRB Receives Spirited Debate Over Ambush Election Rules During Public Meeting

For 2 days, the National Labor Relations Board (NLRB) heard from speakers on its proposed rules to accelerate the processing of union representation petitions and quicken the timing of elections. The speakers ranged from several labor unions, including the UFCW, SEIU, CWA and AFL-CIO as well as a number of trade associations, including National Federation of Independent Businesses, Coalition for a Democratic Workplace, National Association of Manufacturers, U.S. Chamber of Commerce, and EBG client, National Grocers Association (NGA). The positions of the parties were largely split between the labor unions applauding the NLRB’s proposed rule on making elections faster; whereas, the trade associations and management attorneys emphasizing that the NLRB’s proposed rule was unnecessary and a solution in search of a problem.

EBG attorney, Kara M. Maciel, represented the voice of NGA on three separate panels. First, she argued that the NLRB’s proposed rule requiring employers – for the first time – to submit a written position statement within 7 days of the union’s petition setting forth the employer’s entire legal argument, or risk waiver later, is unduly burdensome and risks that the process leading to a pre-election hearing will become more adversarial and less focused on reaching a negotiated pre-election stipulation. Under current procedures, over 90% of petitions are stipulated to without a pre-election hearing, but under the NLRB’s proposed rule, employers could feel pressured to go to a hearing in light of the written position statement requirement.

Second, Maciel testified that the election date should not be accelerated from the current 34 day median to 10-21 days contemplated by the rule. “Hasty decisions are not good decisions” and she noted that “common sense dictates that the greater the time an individual has to inform himself, and to reflect upon and consider all aspects of a decision, the more likely the decision will be a true reflection of the individual’s interests.” NGA is concerned about the due process rights impairing an employer’s protected 8(c) rights under the National Labor Relations Act if there is not sufficient time to communicate with employees about a union petition for representation.

Finally, Maciel expressed concern over the proposed rules compulsory disclosure of employee’s personal and confidential e-mail accounts and phone numbers on voter lists. The non-consensual disclosure constitutes a gross invasion of employees’ privacy and opens employees up to potential use and abuse of their personal information.

The NLRB will now consider all the written and oral comments submitted by the public on the proposed rules; however, it is widely expected that the NLRB will adopt the rules as proposed. Following the rule-making process, it is likely that trade associations could seek to enjoin implementation of the rule through a court challenge. In the meantime, all employers should brace themselves for the rule and implement training and education for their management team on how to respond to union organizing.

For more information on NLRB's two-day public meeting, please click here.

NLRB Public Meeting: Kara Maciel to Speak on Ambush Election Rules

Our colleague Kara Maciel will speak on behalf of EBG client, National Grocers Association (“NGA”), at the National Labor Relations Board’s public meeting, scheduled for April 10-11, 2014 regarding the Notice of Proposed Rulemaking (“NPRM”) on the “ambush election” representation procedures.

The panels will address the following topics:

  • Panel B.2: Requirement for written statement of position
    Address issues related to the proposed requirement for a written statement of position.
  • Panel E.1 & E.3: Election date
    Please describe the standard to be applied for scheduling an election. The proposed rules state that the regional director should select an election date which is “as soon as practicable.” If you disagree with this standard, please describe the standard you would apply. Specify whether you think the rules should include a minimum or maximum time between the filing of the petition and the election, and, if so, how long this time should be. Also address whether the proposed rules adequately protect free speech interests; if you believe they do not, please state specifically how the proposal can be adapted to adequately address the matter.
  • Panel C: Voter lists
    Address whether or how the rules should address voter lists.

During the open meeting, April 10 and 11, catch the live stream at http://www.nlrb.gov/openmeeting.
 

Groundhog Day: Pro-Labor NLRB Again Attempts to Put The "Fix" In Union Elections: Reissues Discredited "Ambush" Election Rules

By Steven M. Swirsky, Adam C. Abrahms, Kara M. Maciel and Casey M. Cosentino

As previously predicted by the Management Memo on August 1, 2013 and October 30, 2013, the National Labor Relations Board (the “Board”) issued a second Notice of Proposed Rulemaking (“NPRM”) to amend its existing rules and regulations governing union elections procedures. If they look familiar when you see them, there is a good reason for that: you have seen them before.

As readers of the Management Memo are well aware, the NPRM is the latest development in the long saga of organized labor’s attempts to “fix” the representation election process in its favor. Most significantly, the Board’s current attempt only comes after having its more modest 2011 attempt struck down by a federal judge.

The present proposal is identical “in substance” to the Board’s original proposals first contemplated on June 22, 2011, and as such are more aggressive than the Rules ultimately adopted on December 21, 2011, and later struck down. The Board claims the proposed amendments are necessary to, among other things, facilitate the swift resolutions of questions concerning representation, simplify representation-case procedures, eliminate needless litigation, and consolidate all requests for review of regional directors’ determinations into one post-election request. However, if adopted as written, the proposed rules will radically up-end 75 years of Board practice and make it considerably easier for unions to organize employees and win elections.

History of Proposed Rule

The Board first contemplated the proposed amendments in a notice of proposed rulemaking on June 22, 2011. Following a period of public comment, the Board issued a final rule on December 22, 2011, that adopted some of the proposed amendments but deferred other more controversial aspects of the proposed amendments for further consideration. The final rule was immediately challenged in federal court. See Chamber of Commerce of the U.S. v. NLRB, 879 F. Supp. 2d 18, 21, 24 (D.D.C. 2012). In May 2012, the D.C. District Court struck down the final rule on procedural grounds. In response, the Board suspended the implementation of changes to its election representation case process.

Proposed Amendments to the Election Procedure

To the favor of unions, the proposed amendments announced this week would significantly change the existing procedures for union elections in the following ways:

  • Permit electronic filing of election petitions.
  • Require pre-election hearings to be held within 7 days after a hearing notice is served, shortening the time period between the petition and election.
  • Require employers to file a detailed statement of position on any and all issues involved in the petition before the hearing commences (i.e., within 7 days of first receiving notice of the petition). Failure to present an issue in the statement would constitute waiver of the issue in all future proceedings.
  • Grant hearing officers the authority to limit the issues to be heard at the hearing, depriving employers of their ability to litigate valid legal/factual positions prior to an election.
  • Defer resolution of voter-eligibility issues to post-election challenges until after an election, replacing the longstanding practice of having a pre-election hearing to determine such issues. This will allow unions to claim that some supervisors should be included in the bargaining unit, which could prevent an employer from utilizing them in the campaign to communicate its own position to the employees they supervise.
  • Grant hearing officers the authority to deny an employer the ability to file a post-hearing brief.
  • Eliminate an employer’s ability to seek Board review of a Regional Director’s rulings, which would also reduce the time between the petition and election.
  • Shorten the time for holding an election to as early as 10 days after the Regional Director’s direction of election (down from the typical 25 to 30 day minimum that now exists)
  • Require an employer to provide the NLRB with the list of voters’ names and addresses within 2 days after the Regional Director’s direction of an election instead of 7 days.
  • Require employers to provide the phone numbers and email addresses of all eligible voters as well as specifying each employee’s work location, shift, and classification. Currently, employers must only provide name and mailing address to the NLRB, which it then provides to the union. Since unions will use be able to use this information during the days before the election, it is feared that instances of organizers harassing and coercing employees will significantly increase.
  • Grant the Board discretion to deny review of post-election rulings. Currently, the Board is required to decide post-election disputes.

The Board’s False Pretenses and True Intended Harm of “Ambush” Elections

The Board asserts these election “fixes” are necessary to address alleged long delays in the representation process; however, such delays are rare. To the extent that the NPRM seeks to address election delays, objective data of NLRB elections conducted between 2008 and 2010 shows that such delays occurred less than 10 percent of the time. In fact, currently median time between petition and election is only 38 days and almost all elections occur within 56 days. The Board’s current proposal, however, could shorten that period to 10 to 21 days, which essentially eliminates the ability for employers to make a full and meaningful presentation of their position or employees to make a truly informed choice.

Typically, union organizers campaign under the radar for months before a petition is filed and unions wait until they believe that they have the support of the majority of the employees in a unit before they file a petition. Shortening the election period so drastically will erode an employer’s ability to respond to the union’s propaganda and communicate its position on union representation. Employees will vote without having the benefit of hearing the employer’s position. This contravenes the express purpose of the Act, which is to protect employee rights— not union rights and would gut the right that employers are granted by the Act to communicate their positions to employees. This one-sided campaign will almost certainly result in more election victories for unions and less real choice for employees.

Management Missives

It is with intention that the Board’s proposed rules will significantly alter the entire union representation election process in favor of unions. Although it is a proposed rule at this point, and the Board will be accepting public comment through April 7, 2014, with a public hearing that same week, it is likely that the final rule will be issued not long thereafter. To prepare for the Board’s “ambush” election rules, employers should promptly adopt any or all of the following strategies:

  • Examine your workforce for potential vulnerability to union organizing, including wage and hour violations or uncompetitive wages or benefits.
  • Review and update workplace policies that become relevant during union organizing such as solicitation/distribution, electronic communications, and social media.
  • Assess your workforce for potential bargaining unit issues like identifying who are supervisors and which employees share a “community of interest.”
  • Train your managers and supervisors on recognizing early warning signs of union organizing and responding lawfully to union campaigns.
  • Contact legal counsel with any questions or for any assistance with ensuring you are prepared to respond to an organizing campaign consistent with the proposed rules.

Hospitality Employers: Prepare for NLRB Social Media Policy Scrutiny

In a recent Law360 article, "NLRB Social Media Push Looms Large for Hospitality Sector" (subscription required), our colleague Mark Trapp comments on the importance for unionized and non-unionized hospitality employers to review their social media policies.

Following is an excerpt:

With the National Labor Relations Board increasingly interjecting into non-union issues, hotels, restaurants and other labor-intensive hospitality companies need to brace for potential claims and tread carefully when crafting social media policies for employees, experts say.

Over the last few years, the NLRB has been extending its reach — traditionally centered on union or collective bargaining matters — to include the actions and speech rights of groups of employees, even when those groups are not unions, according to a report released Wednesday by the the Cornell Institute for Hospitality Labor and Employment Relations. In these actions, the NLRB often targets companies' broad social media policies for limiting the rights of employees to band together over wrongful job conditions, wages or terms, experts say.

"Certainly you want to take a look at your policies for social media, take a look at your handbook ... and take a look at disciplinary policies," said Mark Trapp of Epstein Becker & Green PC. "It used to be that you didn't have to pay attention to that as a non-union employer, but now you do."

NLRB Member Hirozawa Provides 2014 Preview at EBG Client Briefing

By: Adam C. Abrahms

Yesterday, in his first public address since being confirmed by the Senate, NLRB Board Member Kent Y. Hirozawa shared with the attendees of EBG’s 32nd Annual Client Labor and Employment Briefing his views on the current Board and what to expect from it.

His address, coming the day before Halloween, had all the “BEWARE” foreshadowing of a good ghost story; unfortunately for employers, the potential horrors may not be tricks or treats.

Board Poised For an Active and Productive 2014

As we noted here, when Hirozawa was confirmed as part of a package deal in July the Board had its first full complement of 5 confirmed members in over a decade. During his address Hirozawa explained how important it is for the Board to have confirmed members as it provides them a greater ability to efficiently and freely issue decisions without disruptions. He also noted that having a full complement of 5 members enables the Board to be 67% more productive.

Although acknowledging that the new Board has needed some time to get up to speed, something certainly not helped by the government shut down, Hirozawa asserted it is now poised for action. Hirozawa commented that the Board has a large backlog and that the Board is committed to reducing it quickly. He made it clear to the audience in attendance that there were cases in the pipeline and that parties and practitioners should expect the decisions to start issuing.

Given its current composition, an active and productive Board is likely not a good thing for employers.

Hirozawa Discloses Board Agenda

Hirozawa’s remarks went on to discuss the areas where the Board was likely to focus in the coming months and into 2014. Specifically, he noted that Chairman Pearce was likely to drive the Board back towards rule-making. As we discussed here and here, the Board has previously attempted to impose a requirement that employers post a Notice of Emplooyee Rights but the rule was rejected by the Courts. A new fully confirmed Board may take another stab at it.

Hirozawa specifically noted that the Board is likely to readdress election procedure regulations. Although Hirozawa did not talk is such terms, the attendees understood this meant that the so called “Ambush Election” may be on the horizon again. As readers will recall the Board’s last attempt at streamlining the election proceduce was invalidated on a technicality. Again, now with a fully confirmed, and arguably more pro-labor, Board, employers need to beware of what new election regulations might look like.

In addition to rule-making, according to Hirozawa, the Board is likely to continue addressing (and likely expanding on) the same issues that plagued employers under the unconstitutionally consisted Board of the last couple years. Specifically, Hirozawa noted that the Board is likely to issue more rulings on asserted infringements on Section 7 rights in arbitration agreements under D.R. Horton, Inc. and work rules like at-will, off-duty access, social media, confidentiality and other policies. In fact, the clear implication was that the Board very well may find even more categories of seemingly benign employer policies which “chill” or interfere with an employee’s exercise of Section 7 rights.

Ultimately, Hirozawa’s first public address established him as firmly in control of his new role, informed and engaged, however, it also made clear that employers could expect an active and likely unfriendly 2014 from the Board.

Management Missive

  • Employers should expect the frequency of Board decisions to pick significantly in the coming months and those with cases pending should be prepared to receive their ruling sooner than they may have expected.
  • With NLRB rule-making back on the front-burner, non-union employers should examine their union avoidance strategies and programs and explore proactively inoculating against organizing before the rules shift even more in favor of labor.
  • All employers should take a close look at their policies and work rules from a Section 7 perspective.

Government Shutdown and the NLRB: An Update

Our Epstein Becker Green colleagues have posted an NLRB update on the Management Memo blog: “Impact of Government Shutdown on NLRB, Part II: Some Proceedings Delayed Indefinitely, Extensions to Serve and File Documents Granted, New Charges Must Be Filed Within Six Months,” by Steven M. Swirsky, Adam C. Abrahms, and D. Martin Stanberry.

Following is an excerpt:

On Monday October 1, 2013, the Board published a Notice in the Federal Register to the NLRB’s website that supplements the effects of the Contingency Plan that we examined at outset of the government shutdown and NLRB furlough. Significantly, the Notice answers some of the important practical questions confronting employers, unions and employees with business before the Board.

Read the full post here.

Government Shutdown "Closes" NLRB: 1600 of 1611 Employees Furloughed

We recommend this post that was recently published on October 1st, 2013 on the Management Memo blog: “Government Shutdown “Closes” NLRB: 1600 of 1611 Employees Furloughed,” by Steven M. Swirsky, Adam C. Abrahms, and D. Martin Stanberry, our colleagues at Epstein Becker Green.

Following is an excerpt:

The shutdown of the federal government that took effect at 12:01 a.m. Tuesday October 1st has shut down all non-essential operations of the US government, including those of the National Labor Relations Board (Board or NLRB).

The Board’s Contingency Plan for Shutdown in the Absence of Appropriations (“Contingency Plan”) is now in effect, effective today. It details how the shutdown will impact the NLRB’s operations and what the shutdown means for employers, employees and unions with unfair labor practice and representation cases now pending. Our biggest take away: as of midnight, operations at the NLRB have virtually ceased.

Read the full post here.

Senate Confirms a "Full" 5 Member NLRB That Includes 3 Union Lawyers - Are You Ready?

A post on our colleagues' Management Memo blog will be of interest to hospitality employers: "The Senate Has Confirmed a 'Full' 5 Member NLRB That Includes 3 Union Lawyers – Are You Ready?" by Adam C. Abrahms and Steven M. Swirsky of Epstein Becker Green.

Following is an excerpt:

On July 30th the Senate confirmed career union lawyer Kent Hirozawa (D) and retired AFL-CIO Associate General Counsel Nancy Schiffer (D) as well as seasoned management labor lawyers Philip Miscimarra (R) and Harry Johnson (R) to serve on the National Labor Relations Board. The Senate also confirmed current NLRB Chairman Mark Gaston Pearce (D).

The confirmations are of course the result of the Senate Republicans backing down in the face of the threat by Senate Democrats to change Senate rules so that they could force a vote, up or down, on President Obama’s nominations for the Board and other positions. The “deal”, inspired by the threat, included the withdrawal of President Obama’s nomination of his recess appointees, Sharon Block and Richard Griffin , whose appointments were held unconstitutional recess. The President, however, merely replaced Block and Griffin with Hirozawa and Miscimarra, and only after consultation with and approval from AFL-CIO President Richard Trumka and Organized Labor.

So with the first fully confirmed five member Board in ten years, the question for employers is now what? Unfortunately the answer is it is probably going to get worse.

Read the full post on the Management Memo blog.

Eleventh Circuit Overturns NLRB'S Petition to Seek Injunctive Relief Against Mardi Gras Casino

By: Barry A. Guryan

In a case recently decided by the U.S. Court of Appeals for the Eleventh Circuit (National Labor Relations Board v. Harman and Tyner Inc., d.b.a. Mardi Gras Casino, Hollywood Concessions, Inc., 2013 U.S. App. LEXIS 7555), the Court affirmed a District Court’s decision to reject the National Labor Relations Board’s (“NLRB”) petition to obtain temporary injunctive relief seeking to reinstate six discharged employees pending the outcome of an administrative hearing brought as a result of a NLRB Complaint brought against Mardi Gras.  This is one of a series of recent losses the NLRB has received from a number of courts in its strategy to aggressively prosecute employers, many of which are in the hospitality industry.

Mardi Gras operates a casino and greyhound racetrack in Florida. In the underlying administrative complaint against Mardi Gras, the NLRB alleged that the employer had unlawfully discharged certain employees during a union organizing campaign by UNITE HERE Local 355 (the “Union”) in violation of the National Labor Relations Act (the “Act”).  The Act prohibits employers from discriminating against employees for certain protected activities, including the right to engage in union organizing.

Section 10(j) of the Act gives the NLRB the power to petition the Federal District Court “for appropriate temporary relief” pending the outcome of the underlying administrative proceedings. In order to obtain temporary relief under this section of the Act, the NLRB must satisfy two conditions: (1) there is reasonable cause to believe that alleged unfair labor practices have occurred, and (2) the requested injunctive relief is just and proper.  Only the second condition was the subject of the appeal.  The Eleventh Circuit affirmed the District Court’s ruling because it found that the lower court did not abuse its discretion.  It is always important to focus on what the appellate court’s standard of review is in any appeal. In this type of case, it is whether the District Court abused its discretion which gives the lower court much leeway in reaching its decision.

This case is interesting for a variety of reasons, especially for the hospitality industry which has become a prime target of union organization.  While most employers demand that it not only be able to express its position about the need for a union at its place of business, they also demand that its employees be able to vote by secret ballot. Mardi Gras chose to enter into an agreement with the Union that it would take a “neutral approach to unionization” and that it would recognize the Union as the employee’s bargaining representative if a majority of employees signed union authorization cards rather than by secret ballot. In return, the Union agreed that it would not carry on its organizing activities in the casino’s public areas or during the employee’s work time. 

Interestingly, the Agreement was signed in 2004 and expired several years later on December 31, 2011. The Union did not mount a full campaign until the fall of 2011, most likely because they did not believe they had sufficient support until then. There is no explanation in the decision why duration of the Agreement was so long.

As of the date of the District Court’s ruling, the Union had only obtained 92 signatures, far short of a majority of 220 employees. In addition, almost all of the cards (84 of 92) were turned in prior to any of the discharges.  The employees were discharged, in the company’s view, because they “stormed the casino and caused a disruption” in public spaces and on work time. 

Over four months after the union filed charges alleging that the discharges were unlawful, the NLRB filed a petition in District Court seeking a temporary injunction pursuant to Section 10(j) to reinstate the employees pending the outcome of the administrative hearing.

The District Court denied the petition because the evidence did not meet the “ just and proper” standard required by 10(j). The Court of Appeals affirmed ruling that the District Court did not abuse its discretion in making its decision. The Court of Appeals based its decision on the following: (1) almost all of the union authorization cards were returned before the discharges occurred; (2) as of the date of the District Court’s ruling, the union’s campaign was far from successful, the number of card collected being far short of a majority; (3) the Union waited four months after it filed charges to seek temporary injunctive relief (although it found that the time delay was not dispositive, it was strong evidence against granting the relief sought); and (4) injunctive relief sought under this section of the Act is considered to be extraordinary and “sparingly employed” because it acts to short-circuit the administrative process.

There are a number of takeaways that Hospitality Employers can learn from this case:

1.      The NLRB and its General Counsel will continue to seek temporary relief of this kind in order to put more pressure on employers to settle or agree to an order concerning the underlying allegations.

2.      Employers must be careful to keep close attention to the timing and documenting of its business justification of any adverse action it takes against employees, especially if the action is in close proximity to protected activity such as a union organizing campaign. This is especially true since the NLRB, under the Obama administration, has become more aggressive in prosecuting cases to enforce the provisions of the Act.  It is also especially true at this time since unions have increased their efforts to unionize employers in certain industries including the hospitality industry which is so labor intensive.

3.      If employers are faced with a petition for temporary relief initiated by the NLRB, they must be aware of the wide discretion that the District Court has in granting such relief even though it is considered “extraordinary relief.”  They should consult with Labor counsel to respond in an effective way.  If employers lose at the District Court level, it will be very difficult to overturn its decision on appeal.

 

Court of Appeals Rules NLRB Notice Posting Violates Employer Free Speech Rights

By Adam C. Abrahms and Steven M. Swirsky

In another major defeat for President Obama’s appointees to the National Labor Relations Board (NLRB or Board), the US Court of Appeals for the DC Circuit found that the Board lacked the authority to issue a 2011 rule which would have required all employers covered by the National Labor Relations Act (the “Act”), including those whose employees are not unionized, to post a workplace notice to employees. The putative Notice, called a “Notification of Employee Rights Under the National Labor Relations Act,” is intended to ostensibly inform employees of their rights to join and be represented by unions and to engage in other activity protected by the Act. The rule would also have made it an unfair labor practice for an employer to fail to post the required notice and such failure also could be considered proof of anti-union animus in other Board proceedings.

Although proposed in 2011 and scheduled to become effective on April 30, 2012, the requirement has yet been put into effect. As we discussed previously, last year, the US District Court for the District of Columbia had held that the Board lacked the authority to make it an unfair labor practice for an employer to fail to post the notice, holding that this exceeded the Board’s authority under the Act. Just prior to the rule going into effect, the DC Court of Appeals issued an emergency injunction in support of the District Court’s opinion and the NLRB opted to not enforce the rule pending the appeal.

Perhaps what is most noteworthy about the Court’s recent opinion, authored by Senior Circuit Judge Randolph, is the Court’s reliance on employers’ free speech rights which are protected by Section 8(c) of the Act. That section of the Act ensures employers the right to communicate their views concerning unions to their employees. The Court noted that while Section 8(c) “precludes the Board from finding non coercive employer speech to be an unfair labor practice, or evidence of an unfair labor practice, the Board’s rule does both.” That is because under the rule an employer’s failure to post the required notice would constitute an unfair labor practice and the Board’s rule would have allowed the Board to “consider an employer’s ‘knowing and willful’ noncompliance to be ‘evidence of anti union animus in cases in which unlawful motive [is] an element of an unfair labor practice.”

The Court focused on the question of the right of employers to “free speech,” under both Section 8(c) of the Act and under the First Amendment to the Constitution, noting that the rule would have required employers to disseminate information and that “the right to disseminate another’s speech necessarily includes the right to decide not to disseminate it,” relying on analysis from prior Supreme Court and appellate court decisions which it referred to as “compelled speech” cases.

Interestingly, the Court’s conclusion that the Board’s rule violates Section 8(c) because it makes an employer’s failure to post the Board’s notice an unfair labor practice, and because it treats such a failure as evidence of anti-union animus, suggests the Board might be able to find an alternate route to a notice posting requirement if it did not seek to create such a remedy for an employer’s failure to post the notice. However, the Court refused to leave the portion of the Board’s rule requiring the Notice posting in effect even without the enforcement and remedial provisions, because they were an inherent part of the Board’s purpose in adopting the rule. For now the beleaguered Board will need to decide whether it wishes to appeal this decision to the Supreme Court, attempt to craft a new rule with the currently constituted Board that this same Court of Appeals has ruled was unconstitutionally appointed in its Noel Canning decision or postpone any action until a new Board is confirmed by the Senate.

President Obama Nominates Three Members to National Labor Relations Board - But Will the Senate Confirm?

by: Adam C. Abrahms, James S. Frank, Kara M. Maciel, and Steven M. Swirsky

President Obama has taken action designed to bolster the National Labor Relations Board’s continuing move to bolster unions and take the National Labor Relations Act further into non-union workplaces. On April 9, 2013, President Obama announced his plan to submit three more nominees to serve the National Labor Relations Board (“NLRB”). If these and the two other pending nominations are confirmed this would bring the NLRB to its full complement of five Members. 

These new nominations – who must be confirmed by the U.S. Senate – were announced against the backdrop of the NLRB v. Noel Canning decision in which the U.S. Court of Appeals for the D.C. Circuit ruled that the NLRB now lacks constitutional authority to act because the recess appointments previously made by President Obama in January 2012 were not valid. The NLRB plans to appeal the D.C. Circuit’s decision to the U.S. Supreme Court by April 25, 2013. 

The three new nominations include the current NLRB Chairman, Mark Gaston Pearce, and two Republicans, Harry I. Johnson, III, and Philip A. Miscimarra, both lawyers in private practice. While Mr. Johnson and Mr. Miscimarra both have represented management over their careers, Chairman Pearce came to the NLRB from a practice representing unions.

Mr. Pearce has served as NLRB Chairman since August 2011, and has been a Board Member since March 2010.  Previously, Mr. Pearce, who started his career at the Board’s Buffalo, New York Regional Office in 1979, was a founding partner of Creighton, Pearce, Johnsen & Giroux from 2002 to 2010.  Before founding the Creighton, Pearce firm, Mr. Pearce worked as an associate and junior partner at Lipsitz, Green, Fahringer, Roll, Salisbury & Cambria LLP from 1994 to 2002.

Harry I. Johnson, III is a partner with Arent Fox LLP. Previously, Mr. Johnson worked at Jones Day from 1994 to 2010. Mr. Johnson received a B.A. from Johns Hopkins University, an M.A.L.D. from Tufts University’s Fletcher School of Law and Diplomacy, and a J.D. from Harvard Law School.

Philip A. Miscimarra is a partner with Morgan Lewis & Bockius LLP, a position he has held since 2005. Since 1997, Mr. Miscimarra has also been a senior fellow at the University of Pennsylvania's Wharton Business School.  Mr. Miscimarra received a B.A. from Duquesne University, an M.B.A. from the University of Pennsylvania’s Wharton School of Business, and a J.D. from the University of Pennsylvania Law School.

President Obama previously submitted the nominations of Richard F. Griffin, Jr. and Sharon Block, who are currently serving as Board Members but whose recess appointments were struck down as invalid by the D.C. Circuit in Noel Canning. Member Block came to the NLRB from the US Department of Labor. Both of those nominations are before the Senate.

WHAT HOSPITALITY EMPLOYERS SHOULD DO NOW

Considering that all five nominations must now be confirmed by the Senate, where the Republican minority has frequently blocked the President’s nominations, it is unclear how and when the Senate will respond, and whether the NLRB will enjoy a full complement of Members in order to conduct lawful business any time soon. Merely announcing the nominations will not pave the way immediately for a full, validly appointed NLRB. Indeed, it may not be until the next Congress, following the 2014 mid-term elections that the Senate even considers a package deal with the White House.  

If a compromise could be achieved and all five Members were sworn-in this year or next, the Board would continue with a liberal, union-friendly majority with Chairman Pearce and Members Griffin and Block. They could be expected to continue a pro-union agenda, which would certainly bring continued aggressive enforcement and further broadening of the Board’s view of protected, concerted activity and the Act’s application in non-union workplaces. Moreover, there will be many questions about whether a new NLRB will be able to cure prior decisions that were put into doubt by Noel Canning.   

For now, our advice and recommendations to hospitality employers remains the same as following the ground-breaking decision of Noel Canning. Employers should closely monitor how courts in their jurisdictions decide similar cases challenging the recess appointments, and watch how the Supreme Court will address it next term, should it take the NLRB’s petition for certiorari, while watching to see what happens in the Senate.   

The NLRB--Organizing by Pop-Up Unions in Break-Out Units

By: Allen B. Roberts

I wrote the February 2013 version of Take 5 Views You Can Use, a newsletter published by the Labor and Employment practice of Epstein Becker Green. In it, I discuss an alternative view of five topics that are likely to impact hospitality employers in 2013 and beyond. One topic involved the potential for labor organizing by pop-up unions in break-out units.  

Despite some perceptions of cohesiveness and political acumen, influence and wherewithal following the 2012 election cycle, labor unions represent only about 7.3 percent of the private sector workforce in the United States, and only 6.6 percent of workers are actually union members. When concentrations in certain industries and geographic areas are factored, that leaves entire swaths entirely union-free, or substantially so.

Foreseeably for the next four years, unions will continue to benefit from a National Labor Relations Board ("NLRB") that has innovated changes in substantive law and introduced procedures during the past four years that facilitate organizing and restrict the time for responsive employer communications. That advantage has not yet translated into material membership gains by "Big Labor"—although it may still.

However, together with other breakthroughs by way of social media and electronic and physical access to employer premises and communications systems, expanded interpretations of protected concerted activity, and such movements as Occupy Wall Street and grass roots organizations, conventional unions may be eclipsed, if not displaced, by one-off, special purpose organizations formed solely to serve discrete affinity groupings of employees in new bargaining units. If this occurs, it will be enabled by two bedrock principles of the National Labor Relations Act ("NLRA"), aided by a recent interpretation in case law.

First, notwithstanding the attention given by supporters and critics alike to large, well-financed conventional unions with institutionalized structures and processes, the NLRA defines a "labor organization," capable of winning certification as the exclusive representative of employees, to mean any body that exists, in whole or in part, for the purpose of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work. This means that an outside force, planning and funding offsite meetings and campaigns, is not necessary; something as simple as a homegrown pairing or grouping of workers having common interests or worries could qualify as a labor organization.

Second, with respect to the NLRB's formulation of a unit appropriate for collective bargaining purposes, it is not necessary that the unit be the most appropriate or that it conform to management's organizational structure. Historically, the NLRB has been mindful of its authority to make determinations of the unit appropriate for purposes of collective bargaining, consistent with legislative policy assuring that employees have the "fullest freedom" in exercising statutory rights to organize. If it survives Circuit Court of Appeals challenge on review, an NLRB standard adopted in 2011 could lead to a proliferation of small, fractionated bargaining units; it would place the burden on an employer contesting the appropriateness of a labor organization's preferred bargaining unit to show that employees excluded from the unit sought by the petitioning labor organization share an "overwhelming community of interest" with another readily identifiable group. If a readily identifiable group exists based on such factors as job classification, department, function, work location, and skills, and the NLRB finds that the employees in the group share a community of interest, the petitioned-for unit will be an appropriate unit, despite an employer's contention that employees in the unit could be placed in a larger unit that also would be appropriate—or even more appropriate.

Much as the NLRB's approach has been perceived to benefit large, established unions, it may not be surprising if employee groups, newly aware of the NLRB's outreach and enlargement of rights to engage in protected concerted activity through social media and other means, realize also that they are capable of becoming homegrown, single-purpose labor organizations with authorization from the NLRB to define a bargaining unit by its lowest common denominator—or to invade and fractionate existing bargaining units currently represented by Big Labor.

For more Take 5 Views You Can Use, read the full version here.

NLRB Recess Appointments "Invalid From Their Inception" and "Void" for Lack of Constitutional Authority Rules the D.C. Circuit

 by: Adam C. Abrahms, Kara M. Maciel, Evan J. Spelfogel and Steven M. Swirsky

In a time when employers do not receive much good news out of Washington D.C., the U.S. Court of Appeals for the D.C. Circuit may have given some very welcome relief to employers facing issues before the National Labor Relations Board (“NLRB” or “the Board”) in light of recent precedent reversing NLRB decisions.  Quoting from early Constitutional authority including The Federalist Papers and Marbury v. Madison, the D.C. Circuit ruled today that President Obama’s “Recess Appointments” of three new NLRB members in January 2012 were unconstitutional and as a result the Board lacked any constitutional authority to act since that time. Noel Canning v. NLRB

 

In a unanimous panel decision written by Chief Judge Sentelle that The New York Times called “an embarrassing setback for the President,” the Court analyzed two constitutional questions, both focusing on whether the Board lacked authority to act because three Board members were never validly appointed. The first issue examined whether the Senate was “in Recess” when the appointments were made, and the second whether the vacancies these three members purportedly filled “happen[ed] during the Recess of the Senate,” as required for recess appointments under the Constitution.

 

As to the first issue, after dissecting the Board’s arguments, the Court ruled that “the Recess” referred to in the Constitution to permit a presidential recess appointment is limited to the Recess between Sessions of the Senate and does not include brief adjournments or other intrasession recesses. Likewise, the Court ruled that the power to appoint during the Recess was limited and could only be issued if the vacancy both first arises (i.e, “happened”) during the Recess and also was filled during that Recess.

 

Noting that the Board conceded on appeal that the appointments at issue were not made during the intersession Recess because the President made them on January 4, 2012, after Congress began a new Session on January 3, 2012 and while that new Session continued, the Court held that “[c]onsidering the text, history and structure of the Constitution, these appointments were invalid from their inception.”

 

The Court also found, and the parties did not dispute, that based on the Supreme Court’s ruling in New Process Steel, L.P. v. NLRB,if the vacancies were not properly and lawfully filled, the Board would only be left with two valid members and would therefore be left without a quorum to act. Consequently, the Court ruled conclusively that the Board’s order in the underlying case was “outside the orbit of the authority of the Board because the Board had no authority to issue any order [because] it had no quorum,” stating that the “lack of quorum raise questions that go to the very power of the Board to act and implicate[s] fundamental separation of powers concerns.”

The Court further rejected any argument that its ruling otherwise would make government inefficient through an ineffectual federal agency, stating: “The power of a written constitution lies in its words. It is those words that were adopted by the people. When those words speak clearly, it is not up to us to depart from their meaning in favor of our own concept of efficiency, convenience, or facilitation of the functions of government.”

 

In short, the Court vacated the Board’s order, finding that the company’s “understanding of the constitutional provision is correct, and the Board’s is wrong. The Board had no quorum, and its order is void.” 

 

This decision, which certainly will be appealed to the U.S. Supreme Court, provides much anticipated relief to business groups and employers who have been struggling with the aggressive, pro-labor agenda of the current Board. It also leaves the Board with only one validly appointed member, Chairman Mark Pearce, whose term is set to expire in August 2013, effectively shutting the Board down with respect to any ongoing activity. That’s good news for employers who were anticipating new regulations on the speedy election rule or the notice posting requirement. In addition, for those Board rulings that have been issued since January 4, 2012, there is a strong argument that those decisions are similarly invalid, certainly if those cases are pending within the jurisdiction of the D.C. Circuit. 

 

WHAT EMPLOYERS SHOULD DO NOW

All employers with cases pending before the Board or on appeal should review this decision closely with legal counsel to examine its impact on current cases and potentially cases recently decided but yet appealed. NLRB Chairman Mark Pearce issued a statement today in response to and disagreeing with the Court’s decision, “the Board will continue to perform our statutory duties and issue decisions."

Epstein Becker Green will follow future developments.

Webinar Recording: Employment Practices Facing NLRB Scrutiny

Steve M. Swirsky

By Steven M. Swirsky

On Friday, November 16, I participated in a free 75-minute webinar discussion with Lafe E. Solomon, Acting General Counsel of the National Labor Relations Board.  The webinar was moderated by Terence H. McGuire of the Practical Law Company.  We discussed:

  • Factors that the NLRB considers when deciding whether to prosecute unfair labor practices based on these employment practices.
  • Legal considerations surrounding these employment practices besides compliance with the National Labor Relations Act.
  • The NLRB’s stance on what is and is not a lawful at will disclaimer.
  • Social Media and communications policies.
  • The NLRB’s position on employer requirements for confidentiality in connection with workplace investigations.
  • Waivers of the right to pursue claims in class actions.
  • What's next on the NLRB's prosecutorial agenda and how employers can prepare.

Click here to view this complimentary webinar, “Employment Practices Facing NLRB Scrutiny.” 

NLRB Deflates Hotel Bel-Air's Severance Agreements to Union Employees

By Paul Burmeister

The National Labor Relations Board (“NLRB”) has ruled that negotiations between the Hotel Bel-Air and UNITE HERE Local 11 were not at impasse when the employer implemented its last, best final offer, which included severance payments to union employees. Hotel Bel-Air, 358 NLRB 152 (September 27, 2012). The NLRB upheld the ALJ’s order for the employer to bargain with the Union and to rescind all the signed severance agreements containing a waiver of future employment with the Hotel Bel-Air.

The Hotel Bel-Air is a luxury hotel located in Los Angeles. The Hotel Bel-Air (“Employer”) has a lengthy collective bargaining history with the Union. The last collective bargaining agreement between the parties had expired on September 30, 2009.  Shortly before the expiration of that contract, the Union sent a notice to the employer to bargain a successor contract. However, the Employer responded that the Hotel was scheduled to close for a period of two years for renovation, and that the parties should meet to bargain the effects of the closure.

Over a six month period following the expiration of the contract, the parties met on several occasions, but were unable to hammer out a successor agreement or a culmination of effects bargaining. On April 9, 2010 the parties met across the table and were unable to come to a fruitful conclusion of the bargaining. The Employer declared the April 9, 2010 proposal as its last, best and final offer and stated it would deem negotiations at impasse if the offer was not accepted in a week. Not only did the deadline for acceptance get extended, but the parties continued ‘off the record’ discussions to resolve the collective bargaining agreement and the effects bargaining.

Despite the continued ‘off the record’ discussions, the parties were unable to come to an agreement, and the Employer eventually implemented its April 9, 2010 last, best and final offer on July 7, 2010. As part of the implementation, the Employer sent each of the union employees a severance agreement and a general release offering payment in exchange for a waiver of any recall right to employment following the reopening of the Hotel Bel-Air.

The Union filed an unfair labor practice charge alleging the Employer implemented its offer without bargaining to an impasse and for dealing directly with the employees. In both instances, the NLRB ruled in favor of the Union.

The NLRB decided that the parties were not at impasse. Since the parties continued meeting after April 9, 2010, albeit ‘off the record’, those meetings were considered in whether impasse was reached. As there was evidence of continued bargaining and in some instances, agreement, the possibility of a fruitful discussion between the parties would have broken any impasse.

Second, without a valid impasse, the letter sent on July 7, 2010 offering terms of severance directly to the employees circumvented the union and was considered direct dealing. Further providing evidence of direct dealing, the cover letters to the employees stated that the Employer was “very happy to give you the opportunity to decide for yourself whether you want to accept this offer.” The Employer’s arguments that the employees no longer worked for the Hotel also fell flat. The employees were informed in the letter that they were waiving their recall rights, obviously evidencing the possibility of a return to work. Accordingly, the severance packets sent to employees were direct dealing and ordered rescinded by the NLRB. The Board allowed the Employer to negotiate the recoupment of severance payments already made instead of barring the Employer from such a request.

When negotiating with labor unions, hospitality employers should keep the following tips in mind: 

  • Management should use ‘off the record’ discussions during bargaining with trepidation. While it may be a tool in advancing bargaining, they are considered to be part and parcel with the negotiations. If there is an impasse, even off the record discussions discussing settlement likely will break the impasse.
  • Management should consider whether an impasse exists or not prior to communicating changes to terms and conditions of work directly to employees.

*Posted by permission from the Management Memo blog.

NLRB's Scrutiny of Employment-at-Will Disclaimers Signals a Trend to Employers

By:  Bill Milani, Susan Gross Sholinsky, Dean Silverberg,  Steve Swirsky, and Jennifer Goldman

EBG has prepared an Act Now Advisory on the NLRB’s recent stance on employment-at-will disclaimers, which are generally incorporated in employee handbooks. Two recent claims filed before the National Labor Relations Board in Arizona alleged that language used in employers handbooks regarding at-will employment (and how that arrangement could not be changed) were overly broad and could therefore chill employees’ rights under the National Labor Relations Act.

Hospitality employers should review their employee handbooks in light of the NLRB's recent enforcement position. 

NLRB Launches Website Targeting Non-Union Employees

by Adam C. Abrahms

Continuing its effort to “outreach” to non-union employees and educate them on their rights under the National Labor Relations Act, the NLRB has launched a new webpage on Concerted Activity.  The NLRB’s announcement  of its new webpage made clear the page is designed to inform employees of their rights “even if they are not in a union.”   

The webpage, in addition to giving basic descriptions of concerted activities, asserts that “The law we enforce gives employees the right to act together to try to improve their pay and working conditions or fix job-related problems, even if they aren’t in a union.”  The main feature of the webpage is an interactive map of the United States which highlights cases from various regions as examples of the Board’s activities on behalf of non-union employees who were engaged in activity the Board considers protected even though it is unrelated to union organizing.  Examples include cases involving employees complaining about safety issues, employees posting statements on Facebook and videos on YouTube critical of the employer, employees discussing workplace issues with the news media, employees “violating” an employer handbook’s unlawful confidentiality policy and employees  signing letters to management complaining about wage cuts.

The new webpage is part of the NLRB’s concentrated effort to inform non-union employees of the rights protected by the Act and the availability of the agency as a resource to employees who feel they had their rights violated.  This new webpage should be viewed in the same vein as the Board’s parallel efforts to require all employers to post  a “Employee Rights Notice Posting,”  print and distribute brochures and bring media attention to its aggressive pursuit of cases involving employers’ social media policies.  While the posting requirement has been enjoined by the U.S. Court of Appeals, the other more informal efforts of education and outreach like the webpage, brochures and media attention cannot be challenged and are likely to continue to expand.

In announcing the new webpage NLRB Chairman Mark Gaston Pearce made the agency’s goal clear, stating:

A right only has value when people know it exists…  We think the right to engage in protected concerted activity is one of the best kept secrets of the National Labor Relations Act, and more important than ever in these difficult economic times. Our hope is that other workers will see themselves in the cases we’ve selected and understand that they do have strength in numbers.

Given the NLRB’s continuing efforts, hospitality employers must be more mindful than ever that their policies and actions could be scrutinized by an aggressive National Labor Relations Board even if they do not have a union.  As the agency’s efforts continue, employers should expect more employees to be aware of their option to bring complaints to the Board for adjudication.  When employees do so, employers can also expect for the agency’s investigation to reach not only the specific incident involving the complaining employee but potentially the lawfulness of the employers’ general policies and procedures.  Either way, employers must consider whether their policies and actions impact or interfere with protected concerted activity even where there is no union present. 

NLRB v. Specialty Healthcare: The Hot Debate Rages On

By: Paul Rosenberg

Last week the National Labor Relations Board (“NLRB”) urged the U.S. Court of Appeals for the Sixth Circuit to uphold its controversial Specialty Healthcare decision.  The NLRB’s 3-1 split decision in Specialty Healthcare and Rehabilitation Center of Mobile, overturned a 1991 decision and held that an employer that challenges a proposed bargaining unit on the basis that it improperly excludes certain employees is required to prove that the excluded workers share “an overwhelming community of interest” with those in the proposed unit. 

The NLRB argued its ruling merely codifies an old standard – not created a new one.  The NLRB also asserted that it is only required to approve an appropriate bargaining unit – not the most efficient unit or the one that is the most convenient for the employer.  On the contrary, in its brief before the Court, the company argued that the NLRB's decision to approve the “mini unit” represented a “sea change” that will have an impact not merely in the health care industry, but in all cases falling within the board's jurisdiction.  That brief argued that the “overwhelming community of interest” standard effectively makes every discrete job classification (i.e. job title) a viable bargaining unit and essentially delegates unit determination to the petitioning union.

Congress has also entered into the fray.  Earlier this week, South Carolina Senator Graham announced that he would introduce an amendment to the Labor, Health and Human Services appropriations bill when the Senate Appropriations Committee marks it up.  The measure would ban the use of federal funds to implement the Specialty Healthcare ruling.  Senator Graham explained the legislation is necessary to protect the private sector: 

You expect an agency not to become a political advocacy group, and this ruling is just creating havoc in the private sector when the private sector is not doing fine.

Hospitality employers should continue to monitor whether Specialty Healthcare is allowed to stand.  Should the ruling remain in-tact, UNITE HERE, IUOE and other labor unions will have an open road to cherry pick job titles within departments.  To prepare for this possibility hotels’ executive committees should conduct quarterly reviews with department heads to determine if there are weak areas within specific departments which may be susceptible to organizing.  Once areas of vulnerability are discovered they should be promptly corrected.

D.C. Circuit Puts the Kybosh on the NLRB's Ambush Election Rule Quipping that "Eighty Percent of Life is Just Showing Up"

By: Kara M. Maciel and Elizabeth Bradley

The U.S. Court of Appeals for the D.C. Circuit is rapidly becoming the champion of employers in the fight against the National Labor Relations Board’s (the “Board”) attempt to implement radical new rules governing the workplace.

Last month, on April 17, 2012, the D.C. Circuit enjoined the implementation of the Board’s rule requiring that employers post a notice informing employees of their right to join or form a union. Yesterday, the D.C. Circuit struck another blow to the Board by holding that its proposed union election rules are invalid. The Court reasoned that the Board did not have authority to issue the rule because it lacked the required three-member quorum when it was enacted.

In its opening sentences, the Court’s decision aptly quipped, “According to Woody Allen, eighty percent of life is just showing up. When it comes to satisfying a quorum requirement, though, showing up is even more important than that. Indeed, it is the only thing that matters – even when the quorum is constituted electronically.”

Although the National Labor Relations Act provides that “three members of the Board shall . . . constitute a quorum,” the December 16, 2010 final rule revising union election procedures was only voted on by Chairman Pearce and Member Becker. Member Hayes did not vote; nor did he affirmatively abstain from voting. In its decision, the Court held that Member Hayes could not be counted toward the quorum requirement because he took no affirmative action in response to his receipt of the final rule. Because the final rule was not acted upon by three members of the Board, the quorum requirement was not met and the Court held that the rule is invalid. 

The Court declined to address the other procedural and substantive challenges to the rule. While this decision does not prohibit the Board from properly constituting a quorum and voting on the proposed rule; for now, representation election will continue to proceed under the old procedures.

In response, the NLRB suspended the implementation of changes to its election representation case process, which had taken effect April 30.  The Board also withdrew the guidance to regional offices issued prior to the effective date and advised regional directors to revert to their previous practices for election petitions starting today.  About 150 election petitions were filed under the new procedures. Many of those petitions resulted in election agreements, while several have gone to hearing. 

For more information about what employers should do in response to the Court's decision, please see our Act Now Advisory.

 

The NLRB Continues To Help Unions Organize: Do Not Get Caught Flatfooted

By:  Paul Rosenberg

The National Labor Relations Board (“NLRB”) seems intent upon helping unions organize employees.  It continues to pass rules, issue decisions, or announce new policies which will almost certainly facilitate union organizing.  The latest example occurred on March 22 when the NLRB announced that in the next two weeks it is launching an “educational” website aimed at informing non-union employees of their rights under the National Labor Relations Act (“NLRA”).   In conjunction with this unprecedented website the NLRB is preparing brochures which will provide “real life” cases to inform non-union workers of their legal rights.   The NLRB has yet to determine the distribution mechanism for the brochures.

The NLRB’s latest unprecedented initiative comes on the heels of the new notice posting rule which will be in effect beginning April 30.  That rule requires that employers post a notice informing employers of their rights under the NLRA.  The notice must be posted in all locations in which the company traditionally posts similar notices, such as wage and hour and discrimination posters.  The required poster size is intentionally larger than that of other bedrock employment notices such as minimum wage, family medical leave, and equal employment opportunity rights.    

The dissemination of information to employees will inevitably lead to employees questioning existing policies and/or seeking out union representation.  Consequently, in the coming weeks you should review all your policies and procedures.  This review should extend beyond the typical legal audit.  You should consider whether there are new policies which can be administered to help create an employee-centric environment less susceptible to unionization.  Further, because the NLRB’s purported educational efforts will likely result in an uptick in union organizing, all managers should be trained on the “do’s and don’ts” of how to respond if a union comes knocking. 

Off-Site Union Elections Could Place Hospitality Employers at a Disadvantage

By:  Paul Rosenberg

As described in our blog on January 5, 2012, the National Labor Relations Board’s (“NLRB”) new rules governing union elections introduce a host of changes which will place employers at a disadvantage.  The new rules will go into effect on April 30, 2012, subject to a legal challenge pending in federal court.  However, they are seemingly just the beginning of the NLRB’s concerted effort to drastically change a process which has been in place for several decades.  A recent decision ignoring 75 years of precedence is illustrative.

In 2 Sisters Food Group, Inc., 357 NLRB No. 168 (2011) the United Food and Commercial Workers International Union asked that an election be overturned because the election took place on the employer’s premises. While the Board did not grant the request, it remanded the matter to a regional director, the local official of the NLRB, in charge of administering union elections. In its remand the NLRB laid out four factors for the regional director to consider:

1)            the union’s objection to having the rerun election on the employers' premises against the employer's request that it be held on-site;

2)            the employer's alleged "prior unlawful and objectionable conduct";

3)            the advantage the employer would enjoy based on the election being held on premises it owns or controls; and

4)            potential alternative sites.

Viewed in context with the upcoming rules, the decision in 2 Sisters Food Group, paves the way for off-site elections to become the norm.  The rules’ underlying purpose is to streamline the election process by eliminating an employer’s ability to litigate pre-election unit composition questions. In that same vein, the NLRB will not want to prolong an election’s outcome via litigation over situs issues. As such, to avoid having to determine if a rerun election is appropriate because an election was held on an employer’s premise, it is hardly a leap of faith to see how the Board will rely upon 2 Sisters  Food Group to justify “off-site” elections in the first instance.           

Off-site elections will favor the union. Prior to filing a petition with the NLRB for an election, a union must obtain signatures from 30% of the workers in unit which it seeks to represent. Given this fact, employers rely upon a high voter turnout to surpass the support the union garnered prior to the petition being filed. Off-site elections, however, will decrease voter turnout as some employees will view leaving the workplace to vote as an inconvenience. 

The decision in 2 Sisters Food Group combined with the new rules signal an obvious intent from the Board to preclude employers from participating in the union election process and educating their workers about the potential pitfalls of unionization. UNITE HERE – the largest hospitality union in the United States - will surely ramp up its organizing efforts to capitalize on its new found advantages. Thus, if you have not already done so it is imperative to put together an action plan to ensure that you are equipped with the proper “tool kit” to defeat an organizing drive.

Class Action Arbitration Bans - the Obama NLRB Attempts to Trump the Federal Arbitration Act and the Supreme Court

by David D. Green, Frank C. Morris, Jr., Allen B. Roberts

Two recent decisions on arbitration, one from the National Labor Relations Board ("NLRB" or "Board") and one from the Supreme Court of the United States, present an interesting question: Can employers limit employees from launching potentially costly class actions? Some employers have applicants or new employees sign a separate agreement, or include a clause in application forms or in the employee handbook (which employees acknowledge), requiring employees to bring future disputes to arbitration and to agree that the arbitration will be individual only – not a class or collective action. These companies apparently hope that arbitration, and the avoidance of a jury trial, will be less costly than defending a court action if a dispute arises. They also hope to eliminate the attraction and risk of class and collective actions, which often are seen as providing undue leverage and a larger total payday to claimants and their attorneys.

Read the full advisory online

 

Mandatory Employee Arbitration Agreements: The NLRB Throws a Wrench into Their Enforceability

By:  Forrest G. Read, IV

Arbitration agreements can be an effective way for employers in the hospitality industry to streamline and isolate an employee’s potential claims on an individual basis and protect themselves from a proliferation of lawsuits with many plaintiffs or claimants. But the National Labor Relations Board’s (“Board”) January 6, 2012 decision in D.R. Horton, Inc. and Michael Cuda, notably finalized by two Board Members on departing Member Craig Becker’s final day, has caused significant confusion as to how employers can enforce such arbitration agreements with their employees over employment claims, including wage and hour disputes. 

In D.R. Horton, the Board concluded that an employer commits an unfair labor practice under the National Labor Relations Act (“NLRA”) when it requires, as a condition of employment, its employees to sign an arbitration agreement that precludes them from filing, in any forum, any class or collective claims addressing their wages, hours or other working conditions against the employer. However, the Board’s decision in D.R. Horton appears to be inconsistent with, if not directly contradicts, a recent U.S. Supreme Court decision upholding the validity of class action waiver provisions in consumer arbitration agreements under the Federal Arbitration Act, which many employers and members of the labor and employment bar interpreted as extending to waiver provisions in employment-related agreements.

Notwithstanding the Supreme Court’s unmistakable and consistent pro-arbitration stance, the Board in D.R. Horton directly concluded that Supreme Court precedent regarding arbitration agreements did not apply to the employment context.  The Board’s decision is controversial because it was issued by two Members leaving employers left to question its validity and confused as to which precedent to follow.  In addition, it represents another example of the Board’s willingness to insert itself into matters outside the traditional unionized workplace and find NLRA violations outside the labor-management realm.

D.R. Horton is also controversial because it places courts at an intersection of whether to follow and apply Board or Supreme Court precedent.  Indeed, since the Board’s ruling in D.R. Horton, at least one court in New York weighed in on the issue and, in following Supreme Court precedent, tentatively ruled that D.R. Horton does not apply in the wage-hour context where the employee had voluntarily entered into an arbitration agreement not as a condition of employment. But the court noted that D.R. Horton may have applied and led to a different conclusion if the argument had been made that the arbitration agreement had been presented to the employee in a confusing fashion or had operated through compulsion by the employer (even if presented voluntarily).

In short, the question of whether employment-related arbitration agreements are enforceable will remain a murky one until D.R. Horton, currently a hindrance to hospitality employers that seek to compel individual arbitration of wage and hour claims with their employees, is appealed and decided upon by an appellate court. In the meantime, employers should be cautious about the application of such agreements. Any current arbitration agreements (particularly those that include class action waivers) should be reviewed for enforceability, and perhaps suspended depending on how the waiver provisions were worded and the circumstances under which they were agreed to. In addition, hospitality employers should carefully consider whether and how to present new arbitration agreements to employees and scrutinize the agreement’s waiver provisions before they are executed.

NLRB Increases Scrutiny of Employer Restrictions on Employee Social Media Usage

By:      Ana S. Salper

No governmental body has been more active in addressing social media’s impact on the workplace than the National Labor Relations Board (“Board”). For both unionized and non-unionized employers, the Board has been aggressively scrutinizing the contours of employer discipline of employees for their activities on social media sites, and has regulated and constricted the scope and breadth of employer social media policies. Following his first report in August 2011, National Labor Relations Board Acting General Counsel Lafe Solomon has now released a second report describing social media cases reviewed by his office.

Solomon’s report covers 14 cases, half of which address issues regarding employer social media policies, the other half of which involve discharges of employees after they posted comments to Facebook. The report underscores two main points:   

1)      Employer social media policies must be narrowly tailored enough so as not to prohibit protected concerted activity under the National Labor Relations Act (the “Act”), such as the discussion of wages or working conditions among employees, and

2)      Mere “gripes” made by an employee on a social media site are generally not protected if they are not made in relation to group activity among employees.  

One of the cases highlighted by the report is of particular relevance to hospitality industry employers.  The employer, a restaurant chain operator, had a section in its employee handbook entitled “Team Member Conduct & Work Rules.” The rules provide that “insubordination or other disrespectful conduct” and “inappropriate conversation” are subject to disciplinary action. The Charging Party was a bartender at one of the employer’s restaurants. The employer hired a new General Manager for the restaurant, who in turn hired a personal friend as a bartender.   The Charging Party and other bartenders immediately began having various problems with the new bartender. One such problem involved the new bartender receiving preferential shifts over the Charging Party, who was the most senior bartender and until then had been able to secure the more profitable weekend shifts based on her seniority. 

A few months after the new bartender began working at the restaurant, the Charging Party learned that the new bartender was serving customers drinks made from a pre-made mix while charging them for drinks made from scratch with more expensive premium liquor. The new bartender was spoken to about this and a note was made in his personnel file. Following this incident, the Charging Party posted various updates on her Facebook page indicating that a coworker was a “cheater” who was “screwing over” the customers, and that dishonest employees and management that “looks the other way” will be the “death of business.” The Charging Party was Facebook “friends” with coworkers, former coworkers, and customers. 

In the days that followed, several coworkers complained to the General Manager about the Charging Party’s Facebook posts, worried that customers would see them. The Employer then discharged the Charging Party for violation of the work rules, specifically for communicating unprofessionally to fellow employees on Facebook. 

In reviewing the case, the Board concluded that the employer’s work rules were unlawfully overbroad because the prohibitions on “disrespectful conduct” and “inappropriate conversations” would reasonably be construed by employees to preclude protected activity under Section 7 of the Act. “Protected concerted activity” is generally found when an employee is engaged in discussions about his or her wages, hours, and terms and conditions of employment with, or on the authority of, other employees, and when such activity is the logical outgrowth of concerns expressed by the employees collectively. The Board upheld the Charging Party’s discharge, however, because it found that her posts on Facebook regarding her fellow bartender’s job performance had only an attenuated connection with terms and conditions of employment.

The case accentuates the line the Board has drawn between: 

1)                          employee protests over quality of service provided by an employer, which are unprotected where such concerns only have a tangential relationship to employee terms and conditions of employment, and

2)                          employee protests addressing the job performance of their coworkers or supervisors that adversely impacts their working conditions, which are protected under the Act.  

If, for example, in this case, the Charging Party had made the posts because she had a reasonable fear that her failure to publicize her coworker’s dishonesty could lead to her own termination, her activity would have been protected. Instead, the Board found that she made the posts because she was upset that he was passing off low-grade drinks as premium drinks and management condoned the action. 

Thus, hospitality employers should be on notice: if you have not done so already, it is time to carefully craft and review your social media policies and any other handbook policy that is broad enough to encompass social media site usage. In addition, be mindful of your disciplinary and discharge decisions based on employee conversations that you may deem inappropriate or unprofessional – for the Board may view them otherwise. 

NLRB Recess Appointments Challenged -- Could Further Postpone Notice Posting

By:  Evan Rosen

As Hospitalty Labor and Employment Law Blog readers are aware, on August 30, 2011, the National Labor Relations Board (the “Board”) issued a rule requiring employers to post notices informing employees of their right to join or form a union.  We blogged about the impact of the notice and its requirements on hospitality employers here.  The rule was originally supposed to go into effect in November, but was subsequently pushed back to January 31, 2012 as a result of mounting criticism against the rule.  Indeed, several lawsuits have been filed by business groups alleging that the Board overstepped its discretion in imposing the rule on employers.  A federal judge in one of the cases recently asked the Board to further postpone the posting requirement so that the legal challenges could be heard, and the Board agreed, this time postponing the rule’s implementation to April 30, 2012

The rule's implementation could be further complicated by President Obama's recent recess appointments to the Board.  On January 5, 2011, three new members were appointed to the NLRB bringing it up to its full compliment of 5 members.  Because the recess appointments were appointed while the Senate conducted pro forma sessions -- and thus was not technically in recess -- several business groups and Congressional leaders have criticized the appointments.  In the lawsuit filed by the National Federation of Independent Business challenging the NLRB's posting requirement, the NFIB, last week, filed an amended complaint asserting new claims that the recess appointments were unconstitutional and illegal.  If the claims are successful, the Board could lose its three recess appointments, leaving it down to only 2 members which would fall below quorum and prevent the Board from issuing any rules or decisions. 

Whether the recess appointments stand and the notice posting is implemented remains to be seen but it brings a lot of uncertainly to hospitaity employers with respect to NLRB compliance.  This is particularly true where unions have been aggressively seeking new hospitality employers to organize.  Stay tuned! 

Top Legal Issues for the Hospitality Industry to Watch in 2012

by:  Matthew Sorensen

 1.      Deadline For Compliance With New ADA Accessibility Rules Approaching:

 On March 15, 2012, hospitality establishments will be required to be in compliance with the standards for accessibility set by the Department of Justice’s final regulations under Title III of the ADA (2010 ADA Standards). The regulations made significant changes to the requirements for accessible facilities, and will require additional training of staff on updated policies and procedures in response to inquiries from guests with disabilities. Among the most significant changes for hospitality businesses are:           

·         New structural and communication-related requirements for automatic teller machines (“ATMs”);

·         Accessible means of entry for pools and spas – for pools, a sloped entry or a pool lift is required for the primary method of entry, and for spas, the means of entry may be a pool lift, transfer wall, or transfer system;

·         At least 60% of public entrances must be accessible as compared with 50% under the former standards;

·         A new requirement to modify hotel policies to ensure that individuals with disabilities can make reservations for accessible guest rooms during the same hours and in the same manner as individuals who do not need accessible rooms;

·         Golf facilities must have either an accessible route or golf cart passages with a minimum width of 48 inches connecting accessible spaces of the golf course.

2.      Tip Credit and Tip Pooling Lawsuits Remain The Lawsuit Du Jour:

 In recent years, the number of individual and collective action lawsuits involving allegations of tip credit and tip-pooling violations by hospitality businesses has significantly increased. Given the ever changing web of state, federal and local laws regarding tip credit and tip pooling arrangements, it is important that hospitality employers with tipped employees periodically audit their pay practices to ensure compliance with all applicable rules. To minimize the risk of tip credit and tip pooling violations employers should ensure that:

·         They inform tipped employees of any tip credit claimed against their wages;

·         Employees report their tips and that proper records of tips are maintained; and

·         Management and other categories of workers who are precluded from participating in tip pools by federal, state or local law do not participate in such pools.

3.      Increase In Organizing Efforts By UNITE HERE:

The NLRB’s new rule amending the procedures for union election cases introduces a number of union-friendly changes to the election process, including the elimination of the right to seek NLRB review of regional directors’ pre-election rulings. These changes increase the risk that unions will seek approval of smaller units for elections that are based on the extent to which employees in such units support union representation. 

In addition, the NLRB has also announced that its new rule requiring employers to post a notice describing employee rights under the NLRA will go into effect on April 30, 2012. The notice has the potential of generating more discussion of unionization among employees as well as more employee and union-initiated representation campaigns. 

It is anticipated that groups like UNITE HERE will likely attempt to capitalize on these recent changes to increase unionization in the hospitality sector.

4.      Social Media Remains A Hot Topic With The NLRB:

As the use of social media has steadily grown among restaurants and hoteliers, so too has the NLRB’s interest in cases involving social media policies and social media-related discipline. While employees do not receive protection under the NLRA merely by posting a work-related complaint on a social media website, under some circumstances employee complaints made using social media may be found to constitute protected concerted activity. 

As such, hospitality employers need to remain cautious when crafting social media policies and any time they contemplate taking adverse action against an employee for social media activity. 

5.      U.S. Supreme Court to Address The Patient Protection and Affordable Care Act (PPACA):

The U.S. Supreme Court is scheduled to address the challenges to the constitutionality of PPACA in 2012 and it is possible that the Court will issue an opinion on the matter before its June break. If the statute, or at least the portion of the statute that applies to employers and insurance companies, is found to be constitutional, hospitality employers with more than 50 employees will be required to provide certain mandated levels of healthcare coverage to all employees who regularly work more than 30 hours per week by 2014, or face penalties. 

Lessons Learned: 

In light of these issues, it is important that hospitality employers take action to evaluate their policies and practices, including those related to pay, social media, employee handbooks, and health insurance to ensure that they are compliant with applicable legal requirements. It is equally important that they plan proactively to address the potential business challenges posed by the NLRB’s new union-friendly election and notice rules and PPACA.

Addressing Employee Work Stoppages: Does Your Hotel Have an Internal Employee Complaint Procedure?

By: Paul Rosenberg

On December 9, 2011, the U.S. Court of Appeals for the District of Columbia (“the Court”) refused to enforce a National Labor Relations Board (“NLRB”) decision that a hotel unlawfully suspended hospitality workers who engaged in a work stoppage.  Fortuna Enters. LP v. NLRB, D.C. Cir., No. 10-1272 (December 9, 2011).  In this case, UNITE HERE – the largest hospitality union in the country – was seeking to organize employees of the hotel. While the union organizing drive was ongoing, the hotel suspended an employee pending an investigation into whether he stole property from a hotel guest. The next morning, 70-100 employees gathered in the hotel’s cafeteria demanding to speak with management regarding their co-worker’s suspension.  This type of assembly is a common tactic which UNITE HERE relies upon to cause a wedge between management and the employees. In this case, the strategy proved somewhat effective.

Management requested that all employees return to work as scheduled. Many of the employees ignored this request, and those who refused to begin their scheduled shifts were suspended. In total, 77 employees were suspended for five days for insubordination and failing to follow instructions.  The union filed an unfair labor practice charge against the hotel alleging that the workers’ suspension was unlawfully related to its organizing drive at the hotel.

UnderSection 7 of the National Labor Relations Act, workers have an unfettered right to form, join, or assist unions and to engage in “concerted activity” for the purpose of collective bargaining or other mutual aid or protection.  Indeed, as we discussed in an earlier blog post, the NLRB recently issued a rule requiring that, in January 2012, all employers – both unionized and non-union – post a workplace poster explaining Section 7 rights.  While workers are entitled to exert pressure on employers through “on the job” work stoppages in support of their Section 7 rights, such actions must be balanced against the property rights of employers. The NLRB and courts consider the following factors in applying this balancing test: 

1.      the reason the employees have stopped working;

2.      whether the work stoppage was peaceful;

3.      whether the work stoppage interfered with production, or deprived the employer access to its property;

4.      whether employees had adequate opportunity to present grievances to management;

5.      whether employees were given any warning that they must leave the premises or face discharge;

6.      the duration of the work stoppage;

7.      whether employees were represented or had an established grievance procedure;

8.      whether employees remained on the premises beyond their shift;

9.      whether the employees attempted to seize the employer's property; and

10. the reason for which the employees were ultimately discharged.

In upholding the unfair labor practice charge, the NLRB noted the employer lacked a formal grievance procedure for employees to raise their concerns. However, the Court rejected this conclusion and reversed the decision of the NLRB. Specifically, the Court explained the hotel had an “open door” policy for employee complaints. The hotel’s policy allowed a “team member” to raise “problems” with a supervisor, human resources director, and general manager. Hotel managers had relied on this policy previously to address group grievances regarding uniforms, equipment and working conditions. Consequently, the Court found “the Board’s grievance procedure finding was therefore not supported by adequate evidence.” 

The Fortuna case underscores the importance of including a broadly worded complaint resolution process included in your employee handbook. Having the procedure in place, however, is not the end of the story. Every hospitality employer should make certain that its employees know to whom to voice workplace complaints. Failing to update your handbook and educate your employees could lead to operational turmoil. Moreover, UNITE HERE continues to aggressively target non-union properties. Details regarding UNITE HERE’s continued efforts and tactics designed solely to organize hotel workers can be found at www.hotelworkers.rising.org. If employees are unaware that a forum is at their disposal to raise problems, UNITE HERE could lawfully permit employees to interfere with the guest experience by engaging in an “on site” work stoppage in support of their Section 7 rights.

NLRB Approves Resolution to Make It Significantly Easier for Unions to Organize the Hospitality Industry

By:  Evan Rosen

Yesterday, the National Labor Relations Board (the “Board”) voted, 2-1, to approve its Resolution to drastically amend the rules governing union elections.  While the Board’s stated reason for the amendment is to reduce unnecessary litigation, it is apparent that this purpose is a sham, and that the real reason is to make it significantly easier for unions to organize employees, especially those in the highly targeted hospitality industry. 

The Board did not vote on the entire proposal detailed in their June 22, 2011Notice of Proposed Rulemaking, but rather on a narrower version focused on representational hearings, appeals, and evidentiary issues. Importantly, however, the Resolution eliminates language restricting a Regional Director from scheduling an election until at least 25 days after the direction of an election. Finally, the other proposed amendments to shorten election times, which are identified in the June 22, 2011 Notice of Proposed Rulemaking, are not off the table; rather, the Board will continue to deliberate on them. The Board will now draft a final rule based on the Resolution and will vote again for the final rule to be issued.  

The Resolution will result in a shorter campaign period for elections and will make it significantly more difficult for employers to appeal unlawful election results. Under current procedures, 95% of elections are held within 55 days of a union filing of a petition for representation. The average length of time is about 38-42 days.   Under the Resolution, this period of time is likely to be reduced considerably because there will be less pre-election litigation, and the Board will no longer be required to wait 25 days to direct an election. Consequently, the Resolution shall restrict an employer’s ability to assess the appropriate unit and effectively litigate the issues. It will also impair an employer’s ability to seek Board review of a Regional Director’s election rulings by making such review “discretionary.” 

The reduction in the election time frame is particularly worrisome because union organizing often occurs “under the radar.” Frequently, union organizers have campaigned for several months leading up to the union’s filing of a petition, and have done so without the employer’s knowledge. Indeed, most unions will not even call for an election until at least 65-70 percent of the targeted workforce has signed “authorization cards” turning over to the union the employee’s right to negotiate his or her wages, benefits, and terms of conditions. 

The new rules are detrimental to employees who will not have the benefit of understanding all of the facts before they are required to vote. The current campaign period of 38-42 days generally provides sufficient time for employers to combat the union’s propaganda and to share their own views of unions with their employees. In contrast, under the Resolution, unprepared employers may lack sufficient time to share the facts with employees and rebut the union’s propaganda and promises. The lack of a clear appeals process may also incentivize unions to unlawfully coerce employees to vote for the union. This will almost certainly result in more election victories for unions.

All hospitality employers should prepare ahead of time to ensure that their workforces do not become susceptible to union organizing. Among other things, we suggest the following action items:

·         Train managers in effective labor relations so they know what to do if a union organizing drive occurs, and what they can and cannot say without committing an unfair labor practice

·         Review and update no solicitation policies and ensure they are uniformly applied

·         Conduct an internal review to determine if there are any issues that may be the impetus for a union organizing drive

·         Conduct a wage/benefit comparison to ensure your practices are competitive with competitors who have unionized workforces

·         Determine if there are additional perks and other benefits that can be given to employees to enhance loyalty for management

·         Prepare campaign materials in advance to thwart a union campaign

NLRB Extends Employer Notice Posting Deadline to 2012

By:  Kara M. Maciel

On August 25, 2011, the National Labor Relations Board (“NLRB”) adopted a final rule to require all employers to post a notice of employee rights under the National Labor Relations Act (“NLRA”). The required posting provides information to employees about the right to organize a union, bargain collectively, and engage in protected concerted activity – as well as the right to refrain from such activity. Significantly, this posting requirement is required for all hospitality employers – large and small -- regardless of whether your operations are unionized or not.  

Now, the NLRB has postponed the deadline to post the notice from November 14, 2011 to January 31, 2012.  The NLRB stated the extension was “in order to allow for enhanced education and outreach to employers, particularly those who operate small and medium sized businesses.”   A copy of the notice is now available on the NLRB’s website .    

Failing to post the required notice after January 31, 2012 could lead to an unfair labor practice. The NLRB may extend the 6-month statute of limitations for filing a charge involving other unfair labor practice allegations against the employer as a result of the failure to post the notice. A willful failure to post the notice may also be considered evidence of unlawful motive in an unfair labor practice case involving other alleged violations of the NLRA. 

Hospitality employers should communicate now with all their managers and supervisors about the do’s and don’ts of union organizing and what they can and cannot say to employees who have questions in light of the NLRB’s poster.  Many clients have asked whether they should post their own "notice" next to the NLRB's poster.  For several reasons, such a posting could cause more harm than good.  First, it could draw unncessary attention to the NLRB posting and raise more questions from employees.  But more importantly, the NLRB is increasingly aggressive in ferreting out potential unfair labor practices, espcially those that indicate union animus, regardless of the unionized status of the workplace.  The NLRB could use the employer's poster as evidence of union animus, similar to its practice of using an employer's handbook policies as evidence of union animus, against employers.  Rather than posting a competing notice, a training and communication message to employees is essential.  Through strategic verbal communication strategies, employers can effectively defend against union interference and business interruption.

Aftershocks from D.C.'s "Labor Law Earthquake" Likely to be Felt Throughout the U.S. Hospitality Industry

By:  Kara M. Maciel and Mark M. Trapp

On August 23, 2011 the Washington D.C. area experienced a 5.9 magnitude earthquake. A week later, a “labor law earthquake” of far greater magnitude had its epicenter in a federal agency in D.C. In the coming weeks and months, its aftershocks will be felt by unprepared employers, particularly those operating hotels, restaurants, spas and clubs in the hospitality industry.

In an opinion that America’s largest private sector labor union called a“monumental victor[y] … for unions,” the National Labor Relations Board (“NLRB” or “Board”) upended decades of precedent and placed virtually all employers at risk of organizing by so-called “micro unions.” The decision, Specialty Healthcare and Rehabilitation Center, 357 NLRB No. 83 (Aug. 26, 2011), was made public on August 30, 2011.

At issue in the case was the appropriate standard to be applied in determining the scope of a bargaining unit which the United Steelworkers sought to represent. The union had petitioned the NLRB to represent a unit consisting solely of 53 certified nursing assistants (“CNAs”) employed by a skilled nursing facility. The employer, on the other hand, asserted that the unit should include not only the CNAs, but all other nonprofessional service and maintenance employees at its skilled nursing facility.

For the past 20 years the Board consistently approved facility-wide “service and maintenance units” consisting of nonprofessional service and maintenance employees. Nevertheless, casting aside its own 20 year-old precedent, in Specialty Healthcare the Board majority laid out a radical new standard which will allow unions to organize employees in groups as little as two individuals, even when those individuals share a community of interest with other (excluded) employees. Obviously, this will make it much easier for unions to organize employees, as they can selectively choose which groups, and perhaps even which employees, they wish to represent.

Under the new standard, organized employees need only be “readily identifiable as a group (based on job classifications, departments, functions, work locations, skills, or similar factors)” and share a community of interest. Previously, a union bore the burden of showing that the unit it sought to represent had interests sufficiently distinct from other employees to exclude those other employees from the unit. Under the new standard, an employer bears the burden of showing that the excluded employees share an “overwhelming community of interest” with the employees in the petitioned-for unit – a burden which Member Hayes described as “virtually impossible.”

It is a truism that a union normally does not petition to represent those employees it has been unsuccessful in organizing, but instead will “propose the unit it has organized.” Laidlaw Waste Systems, Inc. v. NLRB, 934 F.2d 898, 900 (7th Cir. 1991). In direct contrast to the command of the National Labor Relations Act that “the extent to which employees have organized shall not be controlling” in determining whether a unit is appropriate, Specialty Healthcare allows a union to pick and choose the employees it chooses to represent (i.e., those it can persuade) and to organize them in small groups based only on negligible differences with other employees. 

Plainly, as the dissent recognized, this case had nothing to do with employees’ free choice, and everything to do with “reversing the decades-old decline in union density in the private American work force.” Combined with the NLRB’s recent mandate that employers post a notice informing their employees of the right to organize, and its proposed rule shortening the timeframe in which employers may respond to union organizing, the intended result is clear. As Member Hayes noted, “the majority seeks to make it virtually impossible for an employer to oppose the organizing effort either by campaign persuasion or through Board litigation.”

Clearly, as a result of the Specialty Healthcare decision, hospitality employers face greater risk that unions will target small groups of employees, as noted by the dissent, under the announced standard, the NLRB’s regional directors “will have little option but to find almost any petitioned-for unit appropriate.” Once a union successfully gets its foot in the door, it will next seek to organize further small groups of sympathetic employees, while ignoring those employees who disagree with its message. For example, while the housekeeping department may be cross-trained with the front desk staff to provide guest service and truly share a "community of interest", unions could now focus on on department, or employees within a department to organize, rather than an entire group of employees at a hotel.  Similarly, a union could organize the front of the house resturant staff, and then work its way to the back of the house employees.  In light of the recent aggressive organizing tactics by UNITE HERE, hospitality employers would be well served to carefully analyze their operations and take immediate steps to address any potential vulnerabilities.

Epstein Becker Green's Labor and Employment Practice Chair, Jay P. Krupin, Testifies on Union Election Rules in First NLRB Hearing

As you may know, the authors of this blog are attorneys at Epstein Becker Green, a national law firm with approximately 300 lawyers practicing in ten offices throughout the U.S.

On July 19, 2011, Epstein Becker Green’s Jay P. Krupin testified before the National Labor Relations Board (NLRB) concerning the Board’s dramatic rulemaking proposals to modify the representation election process. The firm was one of only a handful of management-side firms invited to provide testimony on behalf of clients at this first-ever NLRB hearing.

Vigorously arguing against the proposed changes, Jay asserted, among other things, that the “blatantly pro-labor” proposals to shorten the pre-election period would significantly hinder employees’ ability to make informed decisions. Jay further admonished the Board for improperly usurping Congress’s power to change federal labor law, and reminded the Board that the legislature has specifically refused to act on the Employee Free Choice Act, which would have called for the changes that the Board now seeks to implement by fiat.

Union Solicitation - Strategies for the Hospitality Industry

By:  Kara M. Maciel and Evan Rosen 

In recent weeks the Obama Administration’s National Labor Relations Board (the “Board”) has been very active in soliciting public comments and amicus briefs on a wide range of decisions and proposed regulations that could drastically change the labor relations landscape. One of these topics are the rules surrounding the scope of union solicitation on a non-unionized employer’s private property. 

We have received many inquiries from our clients about the Board's review of whether to change the solicitation rules. In light of the renewed focus on union solicitation, we want to remind you what the current rules state and what action steps the hospitality industry can take to prevent and respond to a union solicitation.

Under federal labor law, solicitation rules differ for employees and non-employees. As a general rule, employers may prohibit non-employees from engaging in solicitations or handbilling on private property. There are, however, two exceptions to this general rule. First, non-employees may have a right to access an employer’s private property if there are no other available channels of communication for which it can communicate with employees. Thus, if your employees live on company premises, this could be an issue to look into. The second exception is where the employer discriminates against the union by allowing other groups to solicit on its premises. Accordingly, if your company allows other groups – even charitable or civic organizations – to solicit on company property, you are opening the door to the union as well. 

The stated purpose of the National Labor Relations Act is to protect employee rights, and in particular, their right to engaged in protected concerted activity. Thus, employees are given greater freedom to solicit on company property than non-employees. The current rule is that an employer may restrict an employee from soliciting other employees except during working time and working locations. Thus, an employee may only solicit other non-working employees if he or she is off the clock and in a break room or non-working space. 

There are some important steps that hospitality employers should take to prevent and respond to a union solicitation effort:

1)         Draft and implement a legally enforceable no-solicitation policy.

  • Insert the policy in your employee handbook.
  • Place no-solicitation signs next to every entranceway.
  • Consult labor counsel to ensure the policy is not overly broad, and thus illegal.

2)         Enforce the no-solicitation policy consistently and uniformly.

  • Your company may not permit charitable, civic, or religious organizations to solicit on its premises if it also wishes to restrict union solicitation.
  • Enforce the policy evenhandedly to all groups wishing to solicit.

3)         Provide labor relations training to all managers.

  • Managers must know how to recognize union organizing.
  • Managers must know what to do if they see signs of union organizing.

4)         If non-employee union solicitation occurs, politely ask the solicitor to leave the premises. 

  • If the solicitor refuses to leave, call security.
  • Consider whether to communicate with your employees to counteract the union’s message.
  • Contact labor counsel immediately to develop a comprehensive strategy to thwart the union organizing effort.

Knowing the rules of the game and these proactive steps that you can take to protect your and your employee's privacy rights can be beneficial to effectively responding to a union organizing and solicitation attempt. 

Now is the Time to Review Your No-Solicitation Rules: The NLRB Is Considering Expanding Union Rights to Organize on Employer Premises

By:     Michael Casey, Peter Panken, and Steven Swirsky

The new Obama National Labor Relations Board (“NLRB” or the “Board”) has signaled that it will likely be granting union organizers the right to enter employers’ premises to conduct union organizing activity. This would reverse a trend in the last few years of preserving an employer's property rights, and of confining union organizers to areas outside of an employer's private premises, including those areas open to the public, in hotels, restaurants, clubs and other hospitality venues where non-employees are allowed access.

It has long been the law that an employer is generally permitted to limit access to its private property, so long as the employer does not discriminate against outside union organizers. However, it has been widely recognized that the exception of allowing charitable and sometimes civic organizations to solicit on company premises has not opened the floodgates to union organizers.

But the newly constituted NLRB, composed of a majority of attorneys who had in their law practices represented unions, has now issued an invitation "for all interested parties to file briefs regarding the question of what legal standard the Board should apply in determining whether an employer has discriminated against nonemployee union agents seeking property access."

Given the current composition of the NLRB, which has supported union positions over those of management in virtually every case decided by it since the new members were seated this past spring, we fully expect a decision that greatly expands the rights of non-employee union organizers to enter an employer's premises to engage in union activity. The Board would not have issued its "invitation" if it planned to reaffirm existing interpretations of law.

Epstein Becker Green intends to file an Amicus Brief with the NLRB in support of the greatest possible protection of Employer rights to bar outsiders from their premises.

WHAT HOSPITALITY INDUSTRY EMPLOYERS SHOULD DO NOW

Employers are well advised to consider the following actions to preserve, as best possible, intended restriction and to ready their businesses for a likely change in Board law:

1. Review all existing rules and policies prohibiting non-employees from soliciting on company premises, as well as those restricting solicitations by employees to be sure that the rules themselves do not create undue risks.

2. Revise those rules and policies that are most likely to be subject to adverse scrutiny by the NLRB.

3. Review the manner in which such rules and policies are applied and administered to ensure that lawful non-solicitation rules are consistently enforced and appropriate documentation is maintained.

4. Establish protocols to monitor the enforcement of the rules and to maintain written records of communications regarding such rules and policies and their application.

5. Consult with counsel promptly when any non-employees, including union organizers, seek permission or attempt to enter company premises, to assess vulnerability to unfair labor practice charges, discover what actions may be taken lawfully, and assess the precedential value of decisions made and actions taken.

6. Assess the risk associated with allowing charitable solicitations on company premises (although many employers allow United Way solicitations and similar solicitations, these employers may be well advised to have such solicitations conducted by off-duty employees rather than outsiders).