The “Mount Everest of Regulations”– Examining the NLRB’s New “Quickie Election” Rules
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On December 12, 2014, a divided National Labor Relations Board issued its long-expected final rule dramatically speeding up the union representation election process. The Board’s amendments to the existing election process, passed on strict party lines, represent a significant policy change that will strengthen the power of unions by easing their ability to win elections in non-union workplaces. Both Republican members of the Board dissented from the agency action, terming the final rule “the Mount Everest of regulations: massive in scale and unforgiving in its effect.”
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The “Mount Everest of Regulations”– Examining the NLRB’s New “Quickie Election” Rules
- 1. © 2014 Winston & Strawn LLP The “Mount Everest of Regulations”– Examining the NLRB’s New “Quickie Election” Rules Derek G. Barella William G. Miossi Joseph J. Torres Winston & Strawn LLP December 19, 2014
- 2. © 2014 Winston & Strawn LLP Today’s eLunch Presenters Derek Barella Partner Chicago DBarella@winston.com +1 (312) 558-8002 Joseph Torres Partner Chicago Jtorres@winston.com +1 (312) 558-7334 Bill Miossi Partner Washington, D.C. WMiossi@winston.com +1 (202) 282-5708 2
- 3. © 2014 Winston & Strawn LLP Agenda • Quick overview of NLRB and its election process • Review NLRB’s new “quickie election” rules • Planning recommendations • Two related NLRB case law developments • Employee access to work email for organizing purposes • Union’s ability to organize “micro-units” • Additional planning recommendations 3
- 4. © 2014 Winston & Strawn LLP NLRB and Its Election Process
- 5. © 2014 Winston & Strawn LLP National Labor Relations Board – Overview • Agency responsible for the National Labor Relations Act • Handles election (“R”) cases and ULP (“C”) cases • Initially processed by Regional Offices • Board has ultimate decision/policy authority • Board itself has five members (including one Chairperson) • Presidential appointees • If confirmed, serve five-year terms • By tradition, three from President’s party, two from other party • Current Board is considered favorable to organized labor 5
- 6. © 2014 Winston & Strawn LLP NLRB Election Process – Overview • Can be initiated by employees or a labor union • Employees show support by, e.g., signing petition or authorization cards • Must involve a defined “unit” (e.g., all janitors, all store employees) • Need at least 30% of employees in proposed unit to signify support • Unions likely won’t proceed unless they have greater than 50% support • Process starts by filing a petition to hold election • Unless there are legal problems with proposed unit, election will be set • Currently, average time between petition and election is 38 days • Employers have right to express their opposition and opinions • Union must secure 50% plus one of employees who vote 6
- 7. © 2014 Winston & Strawn LLP NLRB Election Process – Overview (cont’d) • Two other notable points to keep in mind • No limit on how long employees/union can “campaign” before filing • No requirement that employees/union announce their pre-petition activity 7
- 8. © 2014 Winston & Strawn LLP Holidays Come Early for Organized Labor • Long-anticipated wish list items are delivered • Big ticket item • Changes to rules and procedures for representation elections • Stocking stuffer • Purple Communications – employees have Section 7 right to use work email for non-business purposes, including union organizing • Accessory gift that keeps on giving • Ability to organize “micro-units” 8
- 9. © 2014 Winston & Strawn LLP Why So Important to Labor? • Union membership stagnant • Total union membership density: 11.3% • Private sector: 6.7% • Union election win rates hover around 50% • But, ROI is low • Many more petitions filed than elections held • Time and resources are significant commitments • To drive membership/dues gains, labor needed a boost 9
- 10. © 2014 Winston & Strawn LLP “Quickie Election” Rules
- 11. © 2014 Winston & Strawn LLP NLRB Election Rules • June 2011: NLRB first proposes rules changes • November 2011: NLRB votes to adopt rules changes • Chairman Pearce and then member Becker vote “aye” • Member Hayes declines to vote or take any action • May 2012: D.C. District Court invalidates rules changes • Board lacked a properly constituted quorum • February 2014: NLRB re-issues rules changes • No further action through mid-term elections 11
- 12. © 2014 Winston & Strawn LLP NLRB Election Rules (cont’d) • Dec. 12, 2014: Divided Board adopts new rules • Chairman Pearce, members Hirozawa and Schiffer majority • Members Miscimarra and Johnson dissent • Rules changes are effective April 14, 2015 12
- 13. © 2014 Winston & Strawn LLP What’s Changed? 13 Current New • Parties cannot file petitions electronically • Regions do not electronically transmit certain R Case documents • Election petitions, notices, and voter lists can be transmitted electronically • Regions transmit case documents electronically • Notice of Election is posted in facility after • RD directs election; or • Approves stipulated election agreement • Employer must post Notice of Election within two business days of Region’s service of petition before • Unit issues are raised or resolved
- 14. © 2014 Winston & Strawn LLP What’s Changed? 14 Current New • Pre-election hearings typically scheduled within week to ten days from petition • Region sets pre-election hearing to begin eight days after notice served with petition, and • Post-election hearing 14 days after filing of objections • No pre-hearing filing requirements • Non-petitioning party must identify any/all issues in statement of position • Must be filed one day before hearing • Issues not raised are waived
- 15. © 2014 Winston & Strawn LLP What’s Changed? 15 Current New • Employer must provide prospective voter list after RD directs election or approves stipulated election agreement • Employer must provide prospective voter list with job classifications, shifts, and work locations, to Region and other parties with its pre-hearing statement of position, before unit issues are raised/resolved • Pre-election hearing addresses issues and disputes concerning scope of proposed unit and voter eligibility • Pre-election hearings limited to only fundamental questions concerning NLRB jurisdiction and whether election bar exists • Most issues concerning unit and voter eligibility are “deferred” to post- election proceedings
- 16. © 2014 Winston & Strawn LLP What’s Changed? 16 Current New • Parties have right to file post-hearing briefs within seven days of hearing, with permissive extensions • Oral argument allowed before close of hearing • No post-hearing briefs unless RD determines they are necessary • RD schedules election 25-30 days after decision and direction of election to allow filing of request for review with NLRB • 25-30 day scheduling parameter is eliminated • Most requests for NLRB review of RD decisions are “deferred” to post- election
- 17. © 2014 Winston & Strawn LLP What’s Changed? 17 Current New • Employer must provide Excelsior voter list with names and home addresses • Due seven days after RD decision or approval of stipulated election agreement • Employer must provide Excelsior voter list with names, home addresses, personal phone numbers, and personal email addresses (if available) • Due two days after RD decision or approval of stipulated election agreement • Board required to review every aspect of most post-election disputes • Board’s review of post-election disputes is more limited and subject to discretion
- 18. © 2014 Winston & Strawn LLP Practical Impact of the New Rules Petition RD Decision and Direction of Election Election Pre-election hearing and unit issues Opportunities to seek NLRB review Median 38 days — Maximum 42 days Petition DDE Election Limited hearing and unit issues 14-21 days (likely) Limited opportunity for NLRB review Current New 18
- 19. © 2014 Winston & Strawn LLP Practical Impact of the New Rules Petition DDE Election Limited hearing 14-21 days (likely) Union campaign likely ongoing for 6+ months Limited opportunity for NLRB review 19
- 20. © 2014 Winston & Strawn LLP What’s Next? • Legal challenges likely • Focus on claimed due process/First Amendment flaws in rules • Grounds for prior invalidation by D.C.D.C. have been cured • Member Schiffer off/Member McFerran on – unlikely shift in Board position or agenda in near future • Employers should prepare for life under the new rules 20
- 21. © 2014 Winston & Strawn LLP Recommendations • Labor relations strategy must become even more proactive vs. reactive • The best counter-campaign is a sustained employee engagement effort • Principal focus should be on positive aspects of workplace • Not the negatives of having union • Cannot begin when the petition is filed • Too little, too late 21
- 22. © 2014 Winston & Strawn LLP Recommendations (cont’d) • Candidly assess your position on unionization • What is our labor relations philosophy and policy? • What is senior management’s awareness of risks? • What is their commitment level? • What resources is the organization prepared to dedicate to: • Sustained employee engagement • Development and execution of game plan for responding to organizing effort • Who is responsible for executing organization’s plan? • Pace of election will make sustained “pondering” challenging 22
- 23. © 2014 Winston & Strawn LLP Recommendations (cont’d) • Candidly assess your organization’s strengths and risks • How effectively do you measure employee satisfaction? • How effectively do you address risks that are identified? • How effective is your management team in sustained engagement? • How effective do you track external pressures? • Organizing activity in peer/geographically-proximate companies • Market terms and conditions of employment • How effective and sustained are your training efforts? • Positive employee relations and engagement • Recognizing signs of organizing 23
- 24. © 2014 Winston & Strawn LLP Recommendations (cont’d) • Develop a plan for moving forward • Risk assessment: baseline and going forward • Action items for addressing identified risks • Evaluate existing training and hiring programs • Consider role of counsel to establish, maintain privilege where appropriate 24
- 25. © 2014 Winston & Strawn LLP Other Notable Developments
- 26. © 2014 Winston & Strawn LLP Purple Communications, Inc. • Employees have “presumptive” right to use employer’s email for protected communication (including union organizing) during nonworking time • So, two options to eliminate employees’ new “right”: • Don’t give access to email, at all; or • Rebut presumption by establishing undefined “special circumstances” • Total ban: unlikely, the “rare case” • Controls over email systems: must be uniform, consistently enforced, necessary to maintain production and discipline 26
- 27. © 2014 Winston & Strawn LLP Micro-Units • Specialty Healthcare, 357 NLRB No. 83 (2011) • A union’s petitioned-for bargaining unit should be upheld • To overcome, employer must show another group shares an “overwhelming” community of interests with the proposed bargaining unit • Macy’s Inc., 361 NLRB No. 4 (July 22, 2014) • Proposed unit was appropriate • Board rejected arguments based on common employment terms and proximity • Neiman Marcus Grp., 361 NLRB No. 11 (July 28, 2014) • Board rejected proposed unit • Proposed unit did not follow existing “administrative or operational lines” 27
- 28. © 2014 Winston & Strawn LLP Recommendations • E-mail usage • Evaluate your current solicitation/distribution policy to ensure compliance • Evaluate your current monitoring efforts • Micro-units • Assess where your organization might be vulnerable to such efforts • Consider appropriate steps to mitigate possible risks 28
- 29. © 2014 Winston & Strawn LLP Questions?
- 30. © 2014 Winston & Strawn LLP Thank You. Derek Barella Partner Chicago DBarella@winston.com +1 (312) 558-8002 Joseph Torres Partner Chicago Jtorres@winston.com +1 (312) 558-7334 Bill Miossi Partner Washington, D.C. WMiossi@winston.com +1 (202) 282-5708 30