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www. NYLJ.com
©2008 ALM Properties, Inc.
Volume 240—NO. 109
Friday, December 5, 2008
Labor Relations
Expert Analysis
NLRB: Rare ‘Gissel’ Order, MOU
Not Bar to Decertification Petition
I
n 2008, the National Labor Relations Board
(board), operated with only two out of five
members, Chairman Peter Schaumber and
Member Wilma Liebman, since the Senate
did not approve President George W. Bush’s
nominations for new board members.
According to the board, it has the authority
to continue issuing decisions pursuant to §3(b)
of the National Labor Relations Act (act) and a
March 2003 opinion by the Justice Department,
which found that if the full board delegates all of
its powers to a three-member panel and one of
those members leaves the board, the remaining
two members constitute a quorum.
While the two-member board did not reverse
any precedents this year, it did decide a number
of notable cases.
This month’s column summarizes some of
those decisions, including the rare issuance
of a Gissel bargaining order and findings
that an employer’s confidentiality provision
violated the act and that a memorandum of
understanding with a union did not serve as a
bar to a decertification petition.
We also discuss some recent court of appeals
cases reviewing board decisions relating to
expired collective bargaining agreements,
unilateral changes to retirement benefits for
current employees, and the at-will status of
replacement employees.
‘Gissel’ Order
In American Directional Boring Inc., 353
NLRB No. 21 (2008), the board issued the
extraordinary remedy of a Gissel bargaining
order, requiring the employer to bargain with
John P. Furfaro is a partner at Skadden, Arps, Slate,
Meagher & Flom and Risa M. Salins is an associate at
Skadden, Arps, specializing in labor and employment
law. Caroline P. Jacobson, an associate at the firm,
assisted in the preparation of this article.
By
John P.
Furfaro
And
Risa M.
Salins
the International Brotherhood of Electrical
Workers (IBEW), absent an election, in light
of the “egregiousness and pervasiveness” of the
company’s unfair labor practices.
As the board noted, the Supreme Court in
NLRB v. Gissel Packing Co., 395 US 575 (1969),
recognized that such a remedial bargaining order
is appropriate in “‘exceptional’ cases…marked
In 2008, the NLRB, had only two out of
five members. The two-member board
did not reverse any precedents, it did
decide some notable cases.
by unfair labor practices so ‘outrageous’ and
‘pervasive’ that traditional remedies cannot
erase the coercive effects,” thus rendering a
fair election impossible.
Here, the employer was found to have
discharged 13 union supporters (approximately
22 percent of the bargaining unit), many of
whom were leaders of the organizing campaign,
and created fake disciplinary reports in support
of their terminations. The company also
was charged to have threatened job losses,
increased subcontracting of work and even
company shutdown if the IBEW’s organizing
effort was successful; threatened discipline for
wearing union pins; and created an impression
of surveillance of employee activities. The
board found such conduct was “in the realm
of those exceptional cases warranting a [Gissel]
bargaining order.”
The board rejected arguments that a Gissel
order would be inappropriate because of
turnover of management and the passage of
time (almost five years) since the unfair labor
practices occurred. It found that although the
manager who purportedly committed many
of the violations had left, his actions were in
accordance with the anti-union sentiment of
the company’s owner, and that the passage of
time “will not dissipate the coercive effects of
the [employer’s] unlawful coercive conduct.”
Confidentiality Provisions
The board in Northeastern Land Services Ltd.,
352 NLRB No. 89 (2008), held that a temporary
employment agency violated §8(a)(1) of the act
by including a confidentiality provision in its
employment contracts prohibiting workers from
disclosing the terms of their employment.
This case arose when the temporary agency
terminated Jamison Dupuy because he discussed
his compensation with the company where
he was placed for temporary employment, in
violation of the confidentiality provision in his
contract. The agency’s standard employment
contract stated: “[T]he terms of this employment,
including compensation, are confidential to
Employee and the NLS Group. Disclosure of
these terms to other parties may constitute
grounds for dismissal.”
The board found that employees of the
temporary agency would reasonably interpret
such confidentiality provision to prohibit them
from discussing the terms and conditions of
their employment with a union organizer, an
activity protected by §7 of the act. Relying on
the standard articulated in Lutheran Heritage
Village-Livonia, 343 NLRB 646 (2004), that a
work rule violates §8(a)(1) if “employees would
reasonably construe the language of the rule to
prohibit Section 7 activity,” the board concluded
the confidentiality provision was unlawful.
Mr. Dupuy’s termination for breaching the
confidentiality provision, therefore, was also a
violation of the act, for which the board ordered
his reinstatement and back pay.
Friday, December 5, 2008
Contract Bar
In Coca-Cola Enterprises Inc., 352 NLRB No.
123 (2008), the board found that a memorandum
of understanding (MOU) between the employer
and a union did not constitute a bar to a
subsequent decertification petition.
Coca-Cola and the Teamsters are parties to a
five-year collective bargaining agreement (CBA)
dated August 2004 through 2009. In September
2007, they entered into an MOU covering the
effects on certain drivers and warehouse workers
of implementing a new distribution method,
including supplemental pay for some deliveries
and a commitment to provide training on
new equipment.
In November 2007, over three years after the
CBA began, an employee filed a decertification
petition. Under board precedent established in
General Cable Corp., 139 NLRB 1123 (1962),
a bargaining contract of more than three years
duration bars all decertification and rival union
petitions for just three years. In this case, the
employer asserted that the MOU signed after the
first three years of a long-term contract between
the parties, but before the decertification petition
was filed, served as a contract bar because it
amended the parties’ underlying CBA.
The board looked to its holding in
Southwestern Portland Cement Co., 126
NLRB 931 (1960), that two kinds of contract
extensions can serve as a contract bar: (1) a
new agreement embodying new terms and
conditions, or incorporating by reference the
terms and conditions of the long-term contract,
or (2) a written amendment expressly reaffirming
a long-term agreement and indicating a clear
intent on the part of the contracting parties to
be bound for a specific period.
The board found that the MOU did not
satisfy either alternative, noting that it was
referred to as an “Addendum” in union notes;
did not have a readily discernible effective or
expiration date; had limited terms affecting only
a minority of the bargaining unit; and, while
it affirmed the parties rights and obligations
under the CBA, it did not incorporate the
terms of the CBA. Accordingly, the board held
that the MOU did not constitute a bar to the
decertification petition.
Expired CBA
The U.S. Court of Appeals for the Second
Circuit, in Cibao Meat Products Inc. v. NLRB,
No. 07-1192-ag, 2008 WL 4779574 (2d Cir Nov
4, 2008), upheld the board’s 2007 decision that
an employer violated the act when it unilaterally
stopped making fringe benefit contributions
required by a CBA after the contract expired,
and that the employer failed to show an
economic exigency justifying its conduct.
The employer, a New York meat-processing
company, was party to a CBA with UNITE
HERE effective March 2001 to February 2005,
pursuant to which the company was to make
payments to a multiemployer pension fund and
a health and welfare fund. In early 2005, the
parties began negotiations for a replacement
to the expiring CBA, during which the
employer made clear its intent to discontinue
contributions to the benefit funds in favor
of other benefit programs, and in fact ceased
making contributions when the CBA expired.
Bargaining for a new CBA continued until
February 2006 when the employer announced
that the parties had reached an impasse. The
board found that impasse was never reached
and concluded that the employer violated
§8(a)(5) of the act by unilaterally ending its
benefit contributions.
On appeal to the Second Circuit, the
employer argued that its actions were justified
because of “economic exigency,” citing allegedly
improper actions by the union’s auditor. The
Second Circuit found that the board has
recognized there may be “economic business
emergencies” where an employer is justified
in making unilateral changes before impasse
occurs, but such changes are only defensible
in extraordinary circumstances requiring
immediate action by management. Here, there
was no evidence the auditor’s actions created
such an economic emergency.
The Second Circuit also rejected a contention
that §302 of the Labor Management Relations
Act, which generally makes it unlawful for
an employer to pay “any money or other
thing of value” to a labor union, would be
violated by continuing fund contributions.
Section 302(c)(5)(B), however, specifically
allows employers to make payments to unionmanagement trust funds where “the details
of those payments are specified in a written
agreement with the employer.” The court joined
the Seventh, Ninth and Tenth circuits in holding
that an expired CBA satisfies the writtenagreement requirement of §302(c)(5)(B).
Retirement Benefits
In Southern Nuclear Operating Co. v. NLRB,
524 F.3d 1350 (DC Cir 2008), the District of
Columbia Circuit affirmed the board’s 2006
holding that an employer generally could
not make unilateral changes to the future
retirement benefits of current employees
without first bargaining, even where the benefit
plan documents contain reservation-of-rights
clauses granting the employer rights to amend
or terminate benefits. However, the court found
that where a CBA expressly incorporates the
terms of a retirement benefit plan, including
a reservation-of-rights clause, the employer is
authorized to make unilateral benefits changes
without bargaining.
The benefits at issue were retirement benefits
for current employees that vested if and when
an employee retired. The District of Columbia
Circuit was not persuaded by the employer’s
argument that such benefits are not a mandatory
bargaining subject. The court relied on the
Supreme Court’s decision in Allied Chemical &
Alkali Workers v. Pittsburgh Plate Glass Co., 404
U.S. 157 (1971), which held that retirement
benefits for workers already retired are not
mandatory bargaining subjects because retirees
are not “employees” under the act, but stated in
dictum that “the future retirement benefits of
active workers are part and parcel of their overall
compensation and hence a well-established
statutory subject of bargaining.”
The District of Columbia Circuit also rejected
the employer’s argument that reservation-ofrights clauses in its benefit plan documents gave
it the right to unilaterally change the retirement
benefits. The court held, on the other hand, that
for locations at which local unions had agreed
to language that expressly incorporated all terms
of the plans into the CBAs, the employer’s
unilateral change to retirement benefits did
not violate the act.
Replacement Employees
In one final case worth noting, United
Steelworkers v. NLRB, 544 F.3d 841 (7th Cir
2008), the Seventh Circuit upheld the board’s
2007 determination that the “at will” status of
replacement employees does not affect their
classification as permanent replacements.
Accordingly, permanent replacements will not
be automatically displaced by economic strikers
who unconditionally offer to return to work.
Conclusion
A number of circuit court actions are pending
that challenge the board’s authority to issue
decisions with the approval of a two-member
panel. This September the board filed an
appellate brief defending its authority in the
case of Laurel Baye Healthcare of Lake Lanier
Inc. v. NLRB (Docket No. 08-1162), before the
District of Columbia Circuit. It remains to be
seen how this question will be resolved and, if
the two-member panels are found to be outside
the act, how that determination will affect other
rulings by two-member panels.
Reprinted with permission from the December 5, 2008 edition
of the New York Law Journal. © 2008 ALM Properties,
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