November 15, 2007

NLRB Modifies Voluntary Recognition Bar to Allow 45-Day Period for Petitions

The NLRB announced a major change by lifting an indeterminate ban to employees wishing to challenge a union voluntarily recognized by their employer.

In 1966, the NLRB announced a ruling that after an employer voluntarily recognized a union upon a showing that a majority of employees had signed union authorization cards, the NLRB barred for “a reasonable period of time” any attempt by employees to file a petition seeking an opportunity for a secret ballot election. This reasonable period, practically speaking, extended for months to give the union a full opportunity to negotiate a bargaining agreement.

In recent years, unions have redoubled their efforts with neutrality agreements, corporate campaigns and other means to try to bind or force employers to recognize unions on the basis of a card majority and thereby to deprive employees of their right to vote by secret ballot concerning whether they wanted union representation.

In light of these new union strategies, the NLRB on October 2, 2007, announced a sweeping change to its recognition bar doctrine and held that employees now have 45 days after receiving formal notice that their employer has voluntarily recognized a union based on a card check majority to file a petition for a decertification election or to support an election petition by a rival union.  Dana Corp., 351 NLRB No. 28 (2007).

Under the board’s new policy, a bar to election petitions for a reasonable period of time following recognition will not be imposed unless the employees have received formal notice of their employer’s recognition of the union and their right to file a decertification petition or support a rival union and 45 days passes from the date of notice without the filing of a petition supported by at least 30 percent of employees in the unit. Under the board’s new policy, the employer and/or the union must notify the NLRB Regional Office in writing about the voluntary recognition and the employer must then post an official board notice in the workplace for 45 days informing employees of their right to file a decertification petition within that period to enable them to vote by secret written ballot. The new rules apply regardless of whether the card check recognition was the result of a formal neutrality agreement between the company and the union or otherwise.

After stating its new rule, the board explained that votes are cast in privacy in representation elections supervised by neutral NLRB agents while “card signings are public actions, susceptible to group pressure exerted at the moment of choice.” The board also reasoned that “union card solicitation campaigns have been accompanied by misinformation or a lack of information about employees’ representational options including the purpose for which the card will be used and the consequences of voluntary recognition.”

The board’s Dana decision will provide strong protection to employees against union encroachment on their secret ballot rights under current law. The decision also expresses the strong public policy arguments against passage of the Employee Free Choice Act pending in Congress pursuant to which unions are seeking to amend federal labor law to strip employees of their rights to vote in secret ballot elections in union organizing campaigns.

NLRB Rules Strikers Lost Job to “At-Will Replacements”

In another recent decision, the NLRB has clarified that at will employees hired to replace striking workers can be properly classified as permanent replacements, enabling the employer to retain the replacements.

Under current law, an economic striker who unconditionally offers to return to work at the conclusion of a strike is entitled to immediate reinstatement unless the employer can show a legitimate and substantial business justification for refusing to reinstate the former striker. One such legitimate and substantial business justification is an employer’s permanent replacement of economic strikers with new employees as a means of continuing its business operations during a strike. However, in order to lawfully refuse to reinstate returning strikers, an employer has the burden of showing a mutual understanding with the replacements that they were permanent.

The law in this area has been confused since the board’s decision in a case called Target Rock Corp. in which the board held that striker replacements hired as at-will employees pursuant to standard employment at-will language found in applications for employment were not permanent replacements. However, in Jones Plastic and Engineering Co., 351 NLRB No. 11 (2007), the board overruled its decision in Target Rock and held that at-will employees hired during a strike were properly classified as permanent replacements for strikers. The board reasoned that an employer’s hiring of permanent replacements for striking employees pursuant to a standard policy of at-will employment “as legitimate protection against individual employee lawsuits” was not inconsistent with a finding under NLRA that the replacements were permanent with respect to the replaced strikers.

Hiring permanent replacements for striking employees has always been tricky business. On the one hand, an employer has to prove an understanding with striker replacements that they are permanently replacing strikers. On the other hand, in Belknap v. Hale, 463 U.S. 491 (1983), the Supreme Court held that where an employer had offered striker replacements permanent employment and then decided to allow striking employees to come back and to discharge the striker replacements, the discharged striker replacements could sue the employer for breach of contract and fraud. Under Belknap, a company could also wind up between a rock and a hard place (i) if after offering replacements permanent employment the company wanted to enter a strike settlement agreement with the union to take back striking employees to end the strike or (ii) if the NLRB found that the strike was an unfair labor practice strike (in which case a company can only hire temporary but not permanent replacements) and ordered the company to reinstate the replaced strikers.  The board’s Target Rock decision just added further confusion to an employer’s attempts to prevent itself from being caught on the horns of a dilemma.

Employers planning to hire permanent replacements during a strike should still have striker replacements sign carefully drafted statements to protect employers from potentially conflicting claims. We recommend the following language which the NLRB approved in its recent decision overruling Target Rock.

I [name of employee] hereby accept employment with [name of employer] as a permanent replacement for [name of striker] who is presently on strike against [employer].  I understand that employment is at-will and may be terminated at any time, with or without cause by either employee or employer.  I further understand that my employment may be terminated as a result of a strike settlement agreement reached between [employer] and [union] or by order of the National Labor Relations Board.

Questions about this article can be directed to its author, Clinton Morse, in the Firm’s Roanoke office at (540) 510-3023 or [email protected].