Labor & Collective Bargaining : Unions Lawyer & Attorney : Jackson Lewis Law Firm : Employee Free Choice Act, Collective Bargaining

 Author: Daniel Schudroff

Under the National Labor Relations Act, an employer is not permitted to bypass a union and deal directly with employees in connection with their terms and conditions of employment. This direct dealing concept can become complicated, however, when an individual employee asserts a legal proceeding against the employer in which the employee’s union is not a participant and is not involved in settlement negotiations.

Recently, the National Labor Relations Board’s Office of the General Counsel, Division of Advice, encountered this factual scenario in American Water Service Co., 15-CA-086838 (Div. of Advice, Apr. 30, 2013). In this case, an employee suffered a workplace injury and retained an attorney to seek worker’s compensation benefits. Over three years later, with the worker’s compensation action still pending, the employer discharged the employee. The employee’s union grieved the employee’s discharge. A month later, the employee settled the worker’s compensation claim with the employer, and as a term of the settlement, the employee signed a general release which forfeited her right to assert a claim against the employer in connection with her separation. The employer’s representative who typically handled union grievances was unaware of the worker’s compensation settlement and the employer’s worker’s compensation agent was unaware of the union’s grievance.

The Division of Advice preliminarily noted that the Act “requires an employer to attempt to afford the union notice and an opportunity to be present for settlement discussions regarding individual employee claims…, where the employer’s proposed settlement would effectively resolve the union’s grievance over the employee’s discharge.” Based on this standard, the Division of Advice found that the employer engaged in direct dealing, because, although the employer inadvertently failed to apprise the union of the settlement agreement, “the agreement on its face effectively settled the [employee’s] discharge allegation by precluding her from pursuing [sic] any claim arising from her employment.”

Ultimately, however, the Division of Advice recommended the Region dismiss the charge because the employer assured it would permit the union to arbitrate the employee’s grievance provided the union did not seek reinstatement or monetary considerations. Alternatively, the employer agreed to permit the employee to rescind the agreement so the union could seek a reinstatement and/or monetary remedy in arbitration.

This case demonstrates that employers must be mindful of their obligations to provide an employee’s union the chance to be present for settlement negotiations in connection with an individual employee’s lawsuit or administrative proceeding or else risk an unfair labor practice charge asserting unlawful direct dealing. In addition, this guidance highlights the importance of ensuring there is open communication between an employer’s various attorneys/agents who may be representing the employer in more than one forum with respect to the same employee.

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Authors: Daniel Schudroff and Linda Carlozzi

On May 7, 2013, the National Labor Relations Board’s rule which would have required all employers covered by the National Labor Relations Act to post a notice informing workers of their rights under the Act was struck down by the U.S. Court of Appeals for the District of Columbia Circuit in National Association of Manufacturers v. NLRB, No. 12-5068. This is yet another blow to the NLRB; this Court recently ruled that President Barack Obama's January, 2012 recess appointments to the NLRB were invalid in the Noel Canning decision.

The NLRB regulation would have required all employers covered by the NLRA (approximately 6 million employers) to conspicuously post a notice informing employees of their right to organize as well as engage in other protected activities, and listing NLRB contact information.

The separate requirement under Executive Order 13496 for some federal contractors to post is unaffected by this ruling.

A link to the decision can be found here.

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Employers may be interested in a recent post on the Jackson Lewis LLP Workplace Resource Center discussing a recent NLRB decision about  protected concerted activity.  Click here for more information.

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Author: Linda R. Carlozzi

The Restaurant Opportunities Center (“ROC”), an organization that advocates for restaurant employees, is alleged to have failed to disclose its lobbying activities to the IRS as required by federal law, according to a restaurant trade group, “ROC Exposed”.

ROC Exposed alleges that ROC is a “union front” group, and has sent a formal complaint to the IRS requesting an investigation of ROC’s lobbying activities. In the complaint, ROC Exposed requests the IRS “to investigate whether the Restaurant Opportunities Center (“ROC”) engages in lobbying as a 501(c)(3) Public Charity, and is in noncompliance with IRS requirements.

Mike Paranzino, communications director for ROC Exposed, released the following in a press statement: “The Restaurant Opportunities Center has blatantly violated federal reporting requirements for lobbying activities in its pursuit of more and more anti-business mandates.” ROC hosts a “Counter Lobby Day” each year, in which ROC staffers and members meet with members of Congress and lobby for the organization’s preferred policies, aimed to benefit restaurant workers, including the WAGES Act, paid sick leave measures, and minimum wage legislation. ROC also lobbies for such initiatives at other levels of government, the anti-ROC group contends. “They have done all of this while reporting to the IRS that they do not lobby.” This means that the organization is in violation of IRS reporting rules as a nonprofit “Public Charity".

On its website, the ROC identifies the deputy director of food services for UNITE HERE, the hotel and restaurant union, among the organization’s 11-member board of directors.

According to ROC Exposed, “ROC is a labor union front group disguised as a restaurant industry employment center and watchdog.” ROC Exposed noted that in 2012, House Oversight Committee Chair Darrell Issa (R-Calif) launched an investigation into ROC’s activities and federal funding received by the organization from the Department of Labor.

It remains to be seen what will result from ROC Exposed’s complaint. If ROC Exposed is successful in its challenge to ROC, “worker advocacy” groups similar to ROC could come under closer scrutiny and challenge by other industry trade groups.

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Author: Tom Walsh

As you read here  last week, the National Labor Relations Board has asked the Supreme Court to review the decision in Noel Canning v. NLRB, 705 F.3d 490 (D.C. Cir. 2013). Noel Canning is the celebrated case in which the federal appeals court for Washington D.C. held that President Obama’s controversial 2012 NLRB recess appointments exceeded his constitutional authority.

The most important question presented is whether this presidential authority can be exercised only between formal sessions of the Senate, or whether any Senatorial “time off” constitutes an adequate recess.   At the end of 2011, Senate Republicans avoided formal announcement of a recess. In early January, 2012, during a three-day break in the actual conduct of Senate business, President Obama announced the “recess appointments” of Sharon Block (D), Terence F. Flynn (R), and Richard F. Griffin (D) to the NLRB – circumventing the need for Senate approval of Board nominees.  Noel Canning challenges the validity of those appointments.

This case holds great interest not only to the labor law community, but also to the public-at-large because of the strategic political importance of the presidential recess appointment.

As crucial  as this case is to the NLRB (every case since January 2012 – and possibly longer – runs the risk of being nullified), and as serious as the question it poses about presidential power , the Supreme Court is not required to hear it. The Court has broad discretion to choose the cases it wishes to hear. Here, however, the Board’s petition to the Court cites the 11th Circuit’s decision in Evans v. Stephens, 387 F.3d 1220 ( 2004), which on generally analogous  facts held a judicial recess appointment valid. The existence of apparently conflicting decisions between or among appeals courts is referred to as “a split in the circuits” – a traditional basis for Supreme Court consideration. Commentators expect the Court will agree to hear the case.

The question is a difficult one: the constitutional language is vague, the circumstances giving  rise to the provision are dated, and the power has been used inconsistently. However, the D.C. Circuit’s decision captured the imagination with its now-famous observation that the White House’s interpretation would “demolish the checks and balances inherent in the advice-and-consent requirement” and would allow the President “to appoint his desired nominees at any time he pleases, whether that time be a weekend, lunch, or even when the Senate is in session and he is merely displeased with its inaction.”   

Add to this the complication that the President now has formally nominated five individuals for full terms on the Board, including those now serving the disputed recess appointments. Action on these nominations is stalled as Senate Republicans contend that the current recess appointees should cease serving. It may be that no action will be taken, and that all Board decisions will be suspect until the Supreme Court rules.

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Author: Tom Walsh

The NLRB’s recent decision in Norquay Construction, Inc., 359 NLRB No. 93 (April 15, 2013) has caused some concern. Some of the facts in Norquay are somewhat unusual: a union agent who wanted to uphold so-called “area standards” and was being ejected from the employer’s construction site was found to have fallen down stairs upon being pushed by an employer agent. At trial, the Administrative Law Judge decided that while pushing the agent may have been an unlawful act, it was not specifically an unfair labor practice under the National Labor Relations Act. The Board reversed the ALJ, finding the NLRA’s protection extends to union agents acting to uphold area union labor standards, and thus, the employer’s conduct was an unfair labor practice.

This conclusion is not the surprising part of its decision. The surprising aspect to many Board observers is that the remedy imposed by the NLRB for the employer’s putative assault included not only back pay, but also medical expenses “if it is shown… that [the union agent] incurred medical expenses and suffered a loss of pay and benefits as a result of the unlawful assault.” Such a remedy, while not unheard of, is rare. The ALJ made no findings as to whether the union agent was injured and, as a result, about whether he lost wages or benefits. The Board ordered that these be determined through the post-case NLRB compliance process. If it is found that union agent incurred medical expenses, they will be awarded.

The employer argued that an award of medical expenses would be inappropriate. The NLRB, mindful that this remedy is suspiciously close to a tort remedy, cited two of its decisions to explain why an award of medical expenses is an appropriate remedy. In Freeman Decorating Co., 288 NLRB 1235 (1988), the Board acknowledged it does not award tort remedies. Instead, medical expenses awarded under the Act are not for physical injuries suffered, but for reimbursement of medical and rehabilitative expenses not covered by insurance. (In Freeman, the individual who had been discriminated against was an employee who had been unlawfully discharged and lost insurance coverage.)

The Board also cited Nortech Waste, 336 NLRB 554 (2001). That case also involved an employee. The employee had been discriminatorily assigned to a less-desirable job and suffered an injury at that job. The NLRB ordered the employer to provide backpay, lost benefits, and medical expenses up to the time when she was medically released to return to work. The Board explained its “prior reluctance” to award medical expenses thusly: while tort remedies for “nonspecific” personal injuries like pain and suffering are within the expertise of state tort actions, medical expenses arising from the employer’s discriminatory acts “are specific and easily ascertained.”

As noted above, while the Board’s award of medical expenses to the union business agent may raise eyebrows, it is not without precedent. It is, however, a potential red flag to employers. Because of the NLRB’s expansive view of remedies, it is possible that we may see  a rise in allegations by employee-charging parties of physical or emotional harm in Board unfair labor practice charges. This could result in awards of medical expenses not being rare at all.

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Author: Howard Bloom

Yesterday, as expected, the National Labor Relations Board filed its petition for a writ of certiorari in National Labor Relations Board v. Noel Canning, A Division of the Noel Corp, et al. in the United States Supreme Court. A copy of the petition is here.

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Author: Howard Bloom

Many employers maintain rules in their employee handbooks and/or personnel policies governing how investigations of possible employee misconduct will be handled. Such rules often include admonishments to employees about maintaining the confidentiality of the investigation and, therefore, they implicate Section 7 of the NLRA and protected concerted activity. Indeed, in Banner Health, 358 NLRB No. 93 (2012), the NLRB held that a blanket rule prohibiting employee discussions of ongoing investigations is invalid because it does not take into account the employer’s burden to demonstrate a particularized need for confidentiality in any given situation. Thus, an employer must “determine whether in any give[n] investigation witnesses need[ed] protection, evidence [was] in danger of being destroyed, testimony [was] in danger of being fabricated, and there [was] a need to prevent a cover up.”

Since Banner Health, employers have struggled to find wording for their investigations rules that passes legal muster while conveying the clear message that confidentiality is a possibility. Fortunately, the NLRB’s Division of Advice has provided some new guidance that helps clarify the situation.

A union filed an unfair labor practice charge at a Regional Office of the Board against an employer, alleging the employer’s investigations rule was unlawful. Following investigation of the charge, the Regional Office asked the NLRB’s Division of Advice for an opinion whether or not to issue a complaint. The Division decided a complaint should be issued alleging the rule was unlawful. The Division also set forth the following wording of a lawful investigations rule:

[Employer] has a compelling interest in protecting the integrity of its investigations. In every investigation, [Employer] has a strong desire to protect witnesses from harassment, intimidation and retaliation, to keep evidence from being destroyed, to ensure that testimony is not fabricated, and to prevent a cover-up. [Employer] may decide in some circumstances that in order to achieve these objectives, we must maintain the investigation and our role in it in strict confidence. If [Employer] reasonably imposes such a requirement and we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.

Although Division of Advice decisions are not binding on the five-member NLRB, those decisions serve an important function in the processing of unfair labor practice charges. They weigh heavily in regional officials’ decisions to issue unfair labor practice complaints (or dismiss charges) in the absence of a definitive Board decision. Few unfair labor practice charges are referred to the Division for review by Regional Offices, but those Regional Offices are well aware of the Advice Memoranda issued by the Division. Therefore, an employer that adopts the rule set forth above, deemed lawful by the Division, is much less likely to face a complaint from a Regional Office.

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Author: Howard Bloom

The NLRB’s petition to the United States Supreme Court for review of Noel Canning is due April 25. The Supreme Court will be the most important battleground for resolution of the question whether President Barack Obama’s recess appointments of NLRB Members Sharon Block, Richard Griffin and former-Member Terence F. Flynn were constitutional. 

Even after the petition for review is filed, other skirmishes over the appointments will continue. A number of them are being fought now. For instance, in a case involving Laboratory Corporation of America, the U.S. District Court for the District of Columbia  recently transferred a Noel Canning dispute to the federal District Court in New Jersey based on a request by the NLRB. See Noel Canning Update: NLRB Fights Back. Now, Congress has entered the fray as a bill prohibiting the NLRB from acting at this time makes its way from the U.S. House of Representatives to the Senate.

The House passed H.R.1120, the “Preventing Greater Uncertainty in Labor-Management Relations Act,” by a 219-209 vote. The bill states, “The Board shall not appoint any personnel, nor implement, administer, or enforce any decision, rule, vote, or other action decided, undertaken, adopted, issued, or finalized on or after January 4, 2012, that requires a quorum of the members of the Board. ” These prohibitions would cease when one of three circumstances exists: (1) the NLRB has a quorum consisting of Senate-confirmed members; (2) the Supreme Court issues a decision on the validity of the disputed recess appointments; or (3) a sine die adjournment (an adjournment without another date or time to meet having been set) of the first session of the 113^th Congress. (The sine die adjournment of the first session of the 113^th Congress would mark the end of the recess appointments of Members Block and Griffin.) Except where the prohibitions terminate because of a Supreme Court decision, the bill also would require a Senate-confirmed quorum of the Board to act upon any of the decisions the Board made when the recess appointments were in question before those decisions may be enforced.

The bill is largely symbolic – another example of Republicans’ disdain for the current NLRB and how the White House has handled the Board nomination process. It is not expected to pass the Senate, and, in the unlikely event it does, President Obama has made it clear he will veto it.

The battle rages on.

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