Labor and Employment Law Alert
December 2007
Authors:
www.klgates.com
Changing Course at the NLRB
Hayes C. Stover
412.355.6476
hayes.stover@klgates.com
Jennifer J. Froehlich
412.355.6344
jennifer.froehlich@klgates.com
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Part I
Exercising their 3-2 majority status, Republican appointees on the National Labor Relations
Board (Board) have reversed or substantially altered key Board precedents in many areas.1
While many or all of these decisions will be appealed, organized labor will bemoan them
as a continuing erosion of union rights. In this Alert, and a Part II to follow, we examine
these decisions and their potential impact on both unionized and currently non-union
employers.
Recognition-Bar Doctrine
In arguably the biggest reversal, the Board majority in Dana Corp., 351 N.L.R.B. No. 28,
altered forty years of precedent regarding the recognition-bar doctrine. Announced in Keller
Plastics Eastern, Inc., 157 N.L.R.B. No. 583 (1966), the recognition bar doctrine applied
when an employer in good faith voluntarily recognized a union based upon evidence that
a majority of the employees supported the union (a “card check majority”). The Board
imposed an election bar for a “reasonable period of time” thereafter to give the employer and
union time to reach an agreement and solidify the collective bargaining relationship. Other
employees and unions were barred from filing election petitions during this “reasonable
period of time.”
Dana Corp. changes that. The Board majority found the recognition bar doctrine faulty
in that it did not afford employees an opportunity to investigate and challenge a union’s
card-check majority, and accordingly created a 45-day window for that to be done. Now,
when an employer recognizes a union based upon a card-check majority, the employer or
union must notify the Board, and the employer must post a notice to be obtained from the
Board which informs employees of the employer-union recognition and of their right to
file a decertification petition or support a rival union’s election petition during the next 45
days. If no one files a decertification petition and no one files an election petition for a rival
union during the 45 days, the recognition-bar takes effect. The Board will process petitions
supported by 30 percent or more of the employees which are filed with the Board within
the 45-day period. “These principles will govern regardless of whether a card-check and/
or neutrality agreement preceded the union’s recognition.” Furthermore, a contract reached
“on or after the date of voluntary recognition will not bar a decertification or rival union
petition unless notice of recognition has been given and 45 days have passed without a
valid petition being filed.” The Board majority found that this new procedure would better
preserve employees’ rights to choose their representation while still preserving the interests
of the employer and union to pursue a successful collective bargaining relationship. Because
of the significant change effected by the decision, it will be applied prospectively only.
Not surprisingly, dissenting Members Liebman and Walsh questioned the reversal of over
40 years of settled Board precedent. They first asked why an employer would now choose
to voluntarily recognize a union if it could be challenged immediately by a decertification
petition, and suggested that the new guidelines subvert the voluntary recognition process.
1
The text of the cases discussed can be found at http://nlrb.gov/ under Research/Decisions/Board Decisions.
Labor and Employment Law Alert
In their view, if an employee files a petition and the
incumbent union prevails, this process still will have
caused great strain on the early stages of the collective
bargaining relationship.
The dissenters also argued that this new process is a
“Catch 22” for the union. Even though required to
do so, the employer has no motivation to commence
bargaining during the 45 days because the contract
could be placed in jeopardy by decertification or a
rival union. In their view, this makes it difficult for
the union to begin meaningful bargaining with the
employer immediately upon recognition.
The union also has to maintain its support among
employees during this period to avoid an election or
decertification petition. Without a motivated employer
with which to bargain, the 45-day window makes the
union’s job difficult, and puts pressure on it to produce
results that might be impossible to achieve during the
45-day period.
Despite the new limitations established by Dana Corp.,
card checking still gives the union an advantage.
Card check provisions are frequently coupled with a
neutrality pledge by the employer. Moreover, there
is an advantage to the union to be recognized subject
to possible loss of recognition, as distinguished from
not being recognized at all. Demands for card checks
will continue.
Striker Reinstatement
In Jones Plastic & Engineering Co., the Board held that
the at-will employment status of strike replacements is
not a factor demonstrating that they were not hired as
permanent replacements. 351 N.L.R.B. No. 11. Jones
Plastic reverses the Board’s decision in Target Rock
Corp., 324 N.L.R.B. 373 (1997), insofar as that case
held that the at-will status of strike replacements is an
indicia that they are not permanent.
Employers generally must reinstate economic strikers
who offer to return to work without condition.
However, an employer is not required to take
back striking employees if it has hired permanent
replacements to continue business functions during the
strike. The burden of proof is on the employer, as an
affirmative defense to rehiring strikers, to prove that
it communicated to the replacements that they were
permanent and the replacements in turn knew that they
were permanent replacements.
In Jones Plastic & Engineering Co., the employees
struck after a bargaining impasse, and the employer
hired replacements. The replacement employees were
hired as at-will employees, and the company made it
clear during the hiring process that this was the case.
The replacement employees signed paperwork that
said they were permanent replacement employees, and
which in some cases named the striking employees
they replaced. Several replacement employees testified
that they were told by various company administrators
that they were permanent replacements for the striking
employees. The company also sent a letter to each
striking employee informing them that the company
had “begun to hire permanent replacement employees”
and that their jobs were in jeopardy if they did not
return to work immediately. Several months after
this letter, the union made an unconditional offer on
behalf of its members to return to work. The company
responded by letter that it had hired permanent
replacement employees and the strikers would be
placed on a preferential hiring list. The union filed an
unfair labor practice claiming that the company refused
to reinstate the striking employees.
In reaching its decision that the replacement employees
were permanent, the majority rejected Target Rock’s
consideration of at-will employment status as a
factor suggesting replacements are not permanent.
It reasoned that requiring more job security than atwill status to make replacements permanent would
be giving them even more job security than the actual
striking employees. This, the Board stated, “would
permanently disadvantage the strikers (who would
remain as at-will employees) in contravention of the
Act’s fundamental principles.” In overruling Target
Rock, the Board stated that precluding employers from
hiring permanent replacements on an at-will basis
would effectively prevent them from hiring permanent
replacements at all in the circumstance where the
strikers were at-will employees.
Board Members Liebman and Walsh dissented and
stated that the majority opinion overruled a nonexistent
precedent, in that Target Rock never purported to hold
at-will employment incompatible with permanent
replacement status. Indeed, the dissenters stated that
before its decision in Target Rock, the Board held in
J.M.A. Holdings, Inc. that “at-will employment was not
incompatible with permanent replacement status.” 310
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Labor and Employment Law Alert
N.L.R.B. 1349 (1993). However, the majority did not
discuss J.M.A. Holdings or even mention it.
The dissenters would have held that the employees in
Jones Plastic were not permanent because of language
in their employment agreements that provided they
could be terminated (1) as a result of a strike settlement,
and (2) “at any time, with or without cause.” The
dissenters viewed this language as demonstrating that
the replacement employees had no rights in relation
to the striking employees and, thus, could not be
permanent replacements.
Dues Check Off Post-Contract Expiration
when it agreed to contract language that it was in effect
“for the term of this agreement.” Specifically limiting
dues check off to the term of the contract meant that
it was not a mandatory subject of bargaining under
the unilateral-change doctrine articulated in NLRB
v. Katz. 369 U.S. 736, 743 (1962). The Supreme
Court in Katz held that with only a few exceptions, an
employer cannot unilaterally change existing terms and
conditions following expiration of a contract absent an
impasse in negotiations. Because it was the contract
that stopped the obligation for dues check off, and
not unilateral action by the employer, it was not a
mandatory subject of bargaining.
In Hacienda Hotel, Inc. Gaming Corp.(“Hacienda
Hotel”), a Board majority held that the employer did
not commit an unfair labor practice when it unilaterally
stopped deducting union dues from its employees’
paychecks as provided in an expired contract. 351
N.L.R.B. No. 32. The employer claimed that its
collective bargaining agreements clearly limited dues
check off to the term of the contract by providing as
follows:
Board Chairman Battista concurred in the opinion, but
advocated a more aggressive approach. In his view,
dues check off should never be a mandatory subject
of bargaining at contract end, regardless of whether its
duration is addressed in the contract.
The Check Off Agreement and system heretofore
entered into and established by the Employer
and the Union for the check-off of Union dues
by voluntary authorization, as set forth in
Exhibit 2, attached to and made part of this
Agreement, shall be continued in effect for the
term of this Agreement.
At its most basic, Hacienda Hotel stands for the
proposition that contract language limiting employee
rights to the term of the contract will be enforced,
and that the matters so limited will not be considered
mandatory subjects of bargaining. More broadly, this
case could indicate the beginning of an erosion of Katz,
which in turn would strengthen the employer’s position
at contract expiration.
When the Board first considered this case, more than
seven years ago, it relied on its prior decision in
Bethlehem Steel Co., 136 N.L.R.B. No. 1500 (1962),
to conclude that the employer had the right to stop
dues check off when the contract expired. On appeal,
the Ninth Circuit Court of Appeals found clarification
needed. Because the contract in Bethlehem Steel had
a union security clause as well as a dues check off
provision, and the contract in Hacienda Hotels did not,
the Ninth Circuit held that the Board needed to explain
clearly how it had come to the same decision in both
cases despite different contract provisions.
On remand, the Board majority came to the same
conclusion it originally reached. However, instead
of relying on Bethlehem Steel as it did the first time,
it relied strictly on the contract language. It held that
the union effectively waived its right to continuation
of the dues checkoff after expiration of the contract
Dissenting Members Liebman and Walsh took
the opposite view. They “would hold that, as a
general matter, dues checkoff survives contract
expiration…”.
Sample Election Ballots
In a non-controversial decision, a three member panel
in Ryder Memorial Hospital declared sample ballots
used during election campaigns after the date of that
decision will not be reviewed on a case-by-case basis.
351 N.L.R.B. No. 26. Instead, both sample and official
election ballots will contain the following Boardcreated disclaimer: “The National Labor Relations
Board does not endorse any choice in this election.
Any markings that you may see on any sample ballot
have not been put there by the National Labor Relations
Board.”
Prior to Ryder Memorial Hospital, the Board evaluated
whether use of a replicated ballot altered the outcome
of an election on a case-by-case basis using a two-part
test outlined in a SDC Investment, Inc. 274 N.L.R.B.
December 2007 | 3
Labor and Employment Law Alert
556, 557 (1985). First, the Board determined whether
it was facially apparent who created the sample ballot.
If it was clear on the face of the ballot who created
it, the Board held the ballot unobjectionable because
there was little chance of employees thinking the
Board created or endorsed the ballot when another
unrelated party clearly created and distributed it. If it
was not clear who created the sample ballot, the Board
analyzed the “nature and contents” of the sample ballot
to determine if an employee could be led to believe that
the Board created or endorsed the sample ballot.
In Ryder Memorial Hospital, the Board stated that
it had two main concerns about the use of sample
ballots which replicate official Board election ballots:
(1) that employees not be misled into believing that
the Board created or approved the sample election
ballots distributed by employers or unions; and (2) that
employees not think that the Board endorsed either side.
In this case, the hospital objected to certification of the
bargaining units because of the union’s distribution of
the altered sample ballots prior to the election.
With that disclaimer in place, the Board reasoned,
there no longer will be any facially confusing altered
sample ballots, the possibility of employee confusion
from sample ballots will be eliminated, and employees
will not be mislead to believe that the Board endorses
a particular party in a representation election.
Accordingly, the need for case-specific review will be
eliminated. However, if an individual or party alters
or removes the Ryder Memorial Hospital disclaimer
from the sample ballot, the Board will assume that the
removal or alteration of the disclaimer was intentional
and deem the distribution of the ballots as “per se
objectionable” and become the basis for setting aside
an election.
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