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

Adding to the troubles employers are beginning to face with the new National Labor Relations Board is a report that the agency’s General Counsel (GC) has some new ideas to ratchet up employers’ costs of litigation, and even settlement.  The GC, the Board’s chief prosecutor, professes fears that victims of alleged discrimination on account of union activity may think the Board lacks teeth in remedying claimed violations. He is weighing a requirement that employers pay alleged discriminatees at least three months’ back pay where the employer settles a discrimination case before litigation, and at least one year’s worth of back pay after litigation – whether or not the victim has suffered any actual loss of pay!

The General Counsel, we are told, thinks the National Labor Relations Act does not forbid this remedy.  We strongly disagree.  This is a punitive measure by any standard.  It is unrelated to actual losses suffered by the employees involved; indeed, it would constitute a windfall for them.  No employee reasonably should expect “a big payday” merely for complaining of discrimination to the Board, even persuasively, yet that’s precisely what is promised.  In fact, it seems the aggrieved employee has only to convince some regional Board officials to move forward with an agency complaint and the employer will have to pay a minimum of three months’ wages just to settle.  If the employer exercises its right to contest the accusation before a judge, it risks getting tagged with even more onerous damages.

The current Act contains no provision for punitive damages.  It speaks of “reinstatement of employees, with or without back pay.”  The Board, to our knowledge, has never construed the Act to allow the kind of remedy considered here.  The General Counsel’s proposal seems to be just the latest assault on employers by an agency unconstrained even by its own statute.

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Jackson Lewis has filed a “friend-of–the-court” brief on behalf of the U.S. Chamber of Commerce, urging the National Labor Relations Board to adhere to its three-year-old decision in Dana Corporation, 351 NLRB 434 (2007) (originally known as Dana/Metaldyne).  That decision allows employees to test immediately through a decertification petition and Board-conducted election their employer’s extension of voluntary recognition to a union based on a card check or similar evidence of majority preference.  The filing came in Lamons Gasket, Case No. 16-RD-1597, where the agency is preparing to revisit the issue amidst much controversy.  James Stone and Kelli Webb Michaud in our Cleveland office wrote the amicus brief, with valuable assistance from Michael Lotito, Phil Rosen, and Harold Weinrich.  Mr. Stone had been lead counsel for Metaldyne in the earlier case.

Prior to Dana, in a rule first announced in Keller Plastics, 157 NLRB 583 (1966),the NLRB observed a strict bar, usually for a year, during which it would not consider a NLRB decertification petition or other attempt to oust the union following an employer’s granting of voluntary recognition. As a result, employees in many cases were prevented for a year from obtaining a secret ballot election to decide freely whether to have union representation (or to change unions) while the recognized union and company negotiated a contract.

This rule developed in a different era. When voluntary recognition was relatively rare and an inflexible rule of this sort might be justified in order to preserve labor peace.  A secret ballot election was generally regarded as a preferred and more reliable indicator of employee free choice, but in a few cases allowances could be made. 

Card-check-based voluntary recognition agreements grew increasingly common in recent decades, however, often based on neutrality agreements.  The safeguards of Board-conducted balloting became harder to secure for employees.

The Board in Dana attempted to harmonize voluntary recognition arrangements made by employers and unions with the need to protect employees’ fundamental right of free choice in choosing (or not choosing) a collective bargaining representative.

It required an employer who voluntarily recognized a union to notify employees in a posting that voluntary recognition had been granted, but that the NLRB would accept, for a limited time (45 days following posting), a request to vote on keeping that recognition (or for a  rival union).  At least 30 percent of the unit employees had to back the move for the Board to hold an election.

Approximately 54 elections have been held under Dana. In 15 cases (approximately 28 percent), employees rejected the recognized union. In two of those elections, employees voted to replace the recognized union with a rival.

Now, however, pro-union members have been appointed to the NLRB.  To no one’s surprise, the new Board has decided to re-examine Dana. When the United Steelworkers (“USW”) challenged the direction of a Dana election following a decertification petition contesting Lamons Gasket’s recognition of the USW, the Board seized its opportunity. Over a vigorous dissent by its Republican members, the Board majority directed reassessment, indicating Dana, in its view, likely was unnecessary, burdensome, and contrary to NLRB precedent.

The U.S. Chamber of Commerce, like many employer groups, is concerned that the Board will sacrifice employee free choice in order to help unions organize. The Chamber assisted Jackson Lewis in preparing the amicus brief supporting the Dana rule.

It is axiomatic that NLRB-conducted elections are the preferred form of ascertaining employee choice as to union representation (or the lack thereof). The U.S. Supreme Court, the NLRB, employers, employee groups and even unions all have so concluded. We argue in our brief that Dana helps assure employee free choice and offers valuable safeguards against the abuses of voluntary recognition through card check and neutrality agreements. We reject the current Board’s suggestion that the relatively few instances where recognition has been rescinded under Dana means that the rule is unimportant. This experience may signal just the opposite: that mindful of Dana, parties to such agreements are careful not to overreach.  Remove the shadow of Dana, and the old abuses will return.

As a form of “consumer protection” for employees, we believe the rule critical to vindicating employee rights under the NLRA.

Briefing in the case will be completed in November, and a decision by the NLRB is expected early next year.
 

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In J&R Flooring, Inc., dba J. Picini Flooring, 356 NLRB No. 9 (Oct. 22, 2010), the “full” four-member National Labor Relations Board held, “[E]mployers and unions that are found to have violated the Act should be required to distribute remedial notices electronically, such as by e-mail and/or posting on an intranet or the internet, in addition to the traditional posting of a paper notice on a bulletin board.”  The ruling applies to all pending and future cases.  Member Brian Hayes, the lone Republican on the Board, dissented, arguing that the Board should not have turned an extraordinary remedy into a routine one.

The NLRB’s decision is flawed.  It assumes that if an employer uses electronic communications for any purpose, it uses them for all purposes.  Employers communicate different kinds of information differently.  Employees are familiar with these choices and adjust their expectations for getting information accordingly.  Official government notices to employees (e.g., minimum wage, fair employment practices, OSHA) are communicated to workers in many workplaces by physical postings; if other government notices are not communicated by intranet or e-mail, why should NLRB settlement agreements have to be handled uniquely?  If employees are used to seeing such notices on lunchroom bulletin boards (where they go for coffee, vending, etc. and can talk to each other on non-work time), why is such a posting suddenly ineffectual for Board notices/settlements?  Shouldn’t the NLRB have to prove that such postings don’t work, rather than assume the contrary as a matter of law? 

Some NLRA cases find interference with employee rights only where employers treat other union solicitations differently, rather than other solicitations in general.  Why doesn’t the Board look for comparisons here?  Is it laying the groundwork for overruling its 2007 Register-Guard decision (which restricted the use of employer electronic communications systems for union organizing) by establishing here that electronic communications are the only effective ways of transmitting important information in the workplace?

Now the Board’s regional directors seem to be compounding J. Picini’s error.  These officials serve as the NLRB General Counsel’s field prosecutors. Reports are reaching us that some of them are insisting that electronic notification now apply to all NLRB settlement agreements.  Most unfair labor practice cases are settled before hearing, rather than litigated.  Thus, a far greater number of cases could become subject to the new requirement than was contemplated by the decision itself.   J. Picini offers no support for this expansive application; as the Board, itself, framed the issue, the decision would apply only to (a) violation findings (b) made by the Board.

The problem with the regional directors’ demands is that they may involve “prosecutorial discretion.”  Unless they are instructed otherwise, these officials can seek electronic notification of an agreement as a condition of settling a case, even if the Board’s decision does not say so.  Settlement is a negotiation.  “If you don’t like the terms offered, you can litigate,” they will say.   Litigation, though, is not practical in many cases.

That is why the NLRB General Counsel should bar such requirements in agency settlements, or reserve them for special cases.  Whether the present General Counsel would be inclined to do so, however, is doubtful.   Of course, if the Board’s litigation caseload spiked because of respondents’ refusals to settle with such requirements, or if Members of Congress started questioning the justification for such notification, things might change. 

But I wouldn’t hold my breath.

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It was only a matter of time before Big Labor started to get from the Labor Board what it has been after all along. Failing to achieve compulsory unionism through enactment of the Employee Free Choice Act, unions appear to be relying on the NLRB appointees they supported to achieve the same goals administratively.

Enter NLRB Member Mark Gaston Pearce. The former union lawyer from Buffalo said in a speech at the Suffolk University Law School in Boston, that the NLRB should seek to hold its representation elections “as brief[ly] as possible” after a union files its petition. Finding “intriguing” the Canadian system where elections are held within 5 to 10 days after a petition is filed and eligibility issues are decided later, Pearce said “we can do better” than the current 38-day pre-election period.  He claims the current longer time permits more unfair labor practices to be committed, jeopardizing the chances of a valid election.

The time from petition to election is a product of the National Labor Relations Act itself. The procedures the Board has worked out over many decades to help ensure a fair election that reflects the free and informed choice of employees have worked well overall. In fact, unions win about 66% of all elections the NLRB conducts and of those they lose, only a very small number are ever overturned because of employer unfair labor practices, facts Pearce failed to discuss.

Of course, employees are much less likely to vote for union representation once they have had the opportunity to hear their employers’ side. But because union organizing is usually conducted secretly, employers would not know they need to share their views with their workforce until an election petition has been filed.  A “quicky” election, then, really seeks to cut off debate over unionization before it begins. It would make an employer’s statutory “free speech” rights under Section 8(c) virtually meaningless.

Unions file their election petitions by getting employees to sign authorization cards without employees necessarily knowing all the facts. The quicky election would simply rubber-stamp the cards. Casting a ballot would be mere window dressing, an exercise almost as meaningless as the drafters of EFCA could have hoped.

The NLRA contemplates an informed electorate. Unions and their supporters cannot be depended upon to tell employees the downside of unionization — only employers are in a position to do so. Indeed, the Act incorporates a right of employer free speech. As for unfair labor practices, the Board has ways to address them. Its Acting General Counsel, in fact, just unveiled a new protocol for seeking federal court injunctions and speedy hearings where pre-election violations are charged. (See NLRB to Weigh Injunctions Routinely for Unlawful Discharges in Organizing Campaigns, Plans Acting GC.) What proponents of quicky elections really are saying is that employers should have no role in NLRB elections, a position advocated many years ago by Craig Becker, now a Board colleague of Mr. Pearce. That is not the law. It should not be the law.

Perhaps this is lightning rod and a hint of things to come from the pro-union Board majority. By floating the possibility of only a 5- or 10-day period from petition to election and drawing criticism for it, employers, they figure, may be grateful when a 14- or 21-day rule ultimately is pushed through. Thirty-eight days is little enough time for employers to fulfill their informational role intended by the NLRA. They should resist any effort to cut it further — not to 5 days, 10 or 21.

It may be only a matter of time before quicky elections become standard, but if and when that happens, it will have a profound impact on employers and employees alike.

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The National Labor Relations Board was told by the U.S. Supreme Court in June that it had lacked authority to issue hundreds of decisions and orders from January 2008 through April 2010 with only two members in office.  At the time of the High Court’s ruling in New Process Steel, L.P. v NLRB, 130 S.Ct. 2645 (2010), nearly 100 cases were pending in the Supreme Court or the courts of appeals involving such Board decisions.  It was clear then that these cases would have to be revisited by the Board having a proper quorum.  That process has now begun.  However, it is hardly reassuring.

On August 5, the Agency issued four brief decisions and orders in these previously heard cases.  In three of them, the courts of appeals had denied enforcement to the Board’s orders on the authority of New Process Steel.  In the fourth, the appellate court had remanded the case to the agency for further proceedings before the case was decided.  The decisions are virtual clones.  Dutifully reciting that the current three-member panel had considered the administrative law judge’s decision in light of the exceptions and briefs (filed earlier), the NLRB panel summarily reaffirmed its previous two-member decision in each of the cases, for the reasons already stated, incorporating by reference the earlier decision in the new determination.  Chairman Liebman and Member Schaumber, who had issued the earlier, defective decisions and orders, were members of the panel in each instance, joined by Member Pearce. They explained:

Consistent with the Board’s general practice in cases remanded from courts of appeals, and for reasons of administrative economy, the panel includes the members who participated in the original decision.  Furthermore, under the Board’s standard procedures applicable to all cases assigned to a panel, the Board members not assigned to the panel had the opportunity to participate in the adjudication of this case any time up to the issuance of this decision.

This explanation is consistent with a press release issued earlier explaining the Board’s intentions. 

The Board plainly is giving short shrift to its compulsory reexamination.  It is going through the motions.  It is reassigning these matters to the same two members who considered them originally, and evidently is not soliciting any further briefing or argument.  The results are easily foretold.   Rubber stamps are the order of the day.

Does this numbing exercise suffice?  We don’t know, but the Board’s cursory treatment is likely to produce its own spate of appeals.  The circuit courts, and perhaps the Supreme Court, then have a chance to consider whether the Board has made amends for its past mistakes.

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The National Labor Relations Board (NLRB) announced on June 20, 2010, that Lafe Solomon was tapped to serve as the NLRB’s Acting General Counsel.  The General Counsel, as “gatekeeper” of cases at the NLRB, is responsible for the investigation and prosecution of unfair labor practice cases. 

Mr. Solomon began his career with the NLRB 38 years ago as a field examiner in the Seattle office.  Most recently, Mr. Solomon served as director of the NLRB’s Office of Representation Appeals.

Mr. Solomon replaces Ronald Meisburg as outgoing General Counsel.  Mr. Meisburg, whose term as General Counsel did not expire until August, resigned his position effective June 20, which prompted President Barack Obama to appoint Mr. Solomon to the post.

As always, we will continue to follow this story.  Check back for updates.

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“If it ain’t broke, don’t fix it,” says the old adage.  So why is the National Labor Relations Board thinking of “tampering” with its time-tested booth-and-ballot box voting procedure for holding union representation elections?  No one is complaining about the current method.  Unions certainly should not; they have been winning a sizable and growing share of these contests.  Nevertheless, and despite the President’s professed vexation with things technological, his recently installed pro-labor NLRB wants to go hi-tech in conducting these elections, or at least use mail or telephone balloting routinely. 

The NLRB has published a Request for Information to explore possible sources for “secure electronic voting services” and is soliciting information about “proven solution[s]” for other techniques, as well.  Here is the text:

The NLRB's requirements are for the acquisition of electronic voting services to support conducting secret-ballot elections to determine representation issues. Specifically, the Agency requires a proven solution that supports mail, telephone, web-based and/or on-site electronic voting; that includes the necessary safeguards to ensure the accuracy, secrecy, observability, transparency, integrity, accountability, and auditability of Agency-conducted elections; and that has demonstrated experience in protecting similar type elections from both deliberate misconduct and simple error. With respect to electronic voting capabilities, the Agency specifically requests information, to the extent available, relating to what safeguards, if any, could be implemented to ensure that votes cast remotely were free from distractions or other interferences, including undue intimidation or coercion. The Agency also requests, to the extent available, information relating to experience regarding the level of participation achieved through remote electronic voting technology (vs. traditional on-site elections, whether manual or electronic).

The combination of the NLRB's continuing technological modernization, the numerous locations and size of offices, and varying end-user competency levels may add complexity to the electronic voting services solution.

Obviously, the Board recognizes that these procedures are far more vulnerable to misconduct and are more likely to subject employees to interference, undue intimidation and coercion.  From working with computers, moreover, we know that any safeguards likely will be effective only until the next determined malefactor thinks up ways of getting around them. 

So why bother?  Unions are still smarting over their failure to push through EFCA (Employee Free Choice Act).  They are looking for ways to achieve administratively what they could not in legislation.  Perhaps unions see in new NLRB voting procedures an opportunity to further leverage their power.  They can target individual, dispersed workers more effectively and diminish the influence of employers in opposing organization.   

The Board is fast-tracking this RFI.  It wants responses by June 29. 

The system may not be broken, but with a union-friendly administrative agency in place, we have not heard the last of an idea that may benefit organized labor. 

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The Chairman’s statement could signal slower change than forecast – but don’t bank on it

For the first time in more than two years, the Board has clear quorum.  The question now turns to how the agency will exercise its authority. This is an issue of no small concern.  For an agency that is supposed to bring order and stability to labor-management relations, change and uncertainty are unsettling.  This is all the more true when its Chairman expresses seemingly conflicting intentions.

We have heard that the NLRB, now firmly in Democratic hands, would kick over the traces of the “Bush Board.”  In short order it would reverse precedents that were deemed inimical to organized labor and employees, some may say.  Chairman Wilma Liebman, herself, has signaled her eagerness to make changes.  Yet a close examination of her views suggests changes in Board law could take place more deliberately - maybe.  That two of the four members, Craig Becker and Mark Pearce, will owe their positions to Presidential fiat, rather than Senate confirmation, matters more to the Chairman, she professes, than many would allow. 

This is not the first time Ms. Liebman has been on a Board of recess appointees.  It happened in 2002.  Speaking to both union- and management-side labor lawyers about her experience at the American Bar Association meeting of the Section of Labor Law (August 13, 2003), then-Member Liebman was quoted as saying, “Recess appointees should be hesitant to overrule precedent because it could be seen as a rush to judgment and undermine public confidence. In contrast, a decision to overrule precedent by a fully confirmed board can be perceived as having more credibility.”  She continued, “Recess boards should be caretakers and keep the railroad running and not make major policy decisions.” 

At least that is what she said when Republicans controlled the Board. We will be watching keenly whether Chairman Liebman will keep the Board from jumping the tracks of established policy now that Democrats are in charge.  Regrettably, few, if any, practitioners (management or labor) believe she will remain true to her word on this.  Odds are Liebman and Becker will work at peak throttle to reverse major Board decisions in order to fulfill their vision of Labor Law Reform, while bypassing Congress.  This “EFCA-lite” likely would include:

• Rapid-fire elections
• Diminished ability for employees to receive information from management and make an informed decision
• Much earlier union access to employees names and addresses
• Access to employer premises for union organizers
• Restrictions on employers’  ability to communicate effectively with their own employees
• Union access to employer-maintained electronic technology
• Doubt created over the supervisory status of first line managers

Should the new “recess Board” fail to stay within the limited role the Chairman has espoused, an explanation certainly will be expected from her.  It may be called for sooner rather than later.   

Martin Payson also contributed to this article.

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This article was written by Roger P. Gilson, a partner in our Stamford, Connecticut office.

Secretary of Labor Hilda Solis’s comments at the AFL-CIO annual meeting last week confirmed speculation that, with or without the resolution of health care legislation, President Obama will announce his recess appointment of Craig Becker to the National Labor Relations Board when Congress breaks for the Easter recess. While this effectively could preclude Becker from serving a normal five-year term, he would serve for about a year-and-a-half, enough time to have a profound impact on labor relations in this country. 

In addition, some say the President also will appoint to the Labor Board union-lawyer Mark Pearce, who was previously nominated, and an as-yet-unnamed person (this would be in place of Bryan Hayes, the previous nominee for the currently vacant “Republican seat” on the Board). Some believe a recess appointment of Becker would be something the President can deliver to his labor supporters in advance of the upcoming mid-term elections.  

Filling the Board’s vacancies with recess appointments now would give the Board time to achieve significant labor law reform through rulemaking without EFCA, which is unlikely to pass any time soon.  Under current law, the NLRB, without Congress, may implement significant change through administrative rulemaking. It did so when it issued rules on the appropriate bargaining unit for acute care hospitals, which significantly reduced delays in scheduling union elections within that industry.   

Rulemaking could be used to streamline election procedures, expand voting “access” through electronic or absentee balloting and enhance special remedies and penalties for employer unfair labor practices in initial organizing and first contract situations. Along with traditional case-by-case decisionmaking and the development of internal agency policies, the Board could use rulemaking to realize some of the advantages unions sought, but have yet to achieve through EFCA. 

There may be another reason for recess appointments. The U.S. Supreme Court has agreed to review a case on whether the current two-member Board had a sufficient quorum when it issued decisions over the past year-and-a-half. The District of Columbia Circuit Court of Appeals has ruled that it did not, though the majority of the other circuits have said otherwise. If the Supreme Court rules against the Board, it will nullify all of those decisions. Without an appropriate number of Board members, the current two-member Board cannot rectify the situation.  If the anticipated recess appointments materialize, a more labor-oriented Board would have the chance to re-consider and re-write those decisions.

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The American Bar Association is meeting this week in Puerto Rico while the AFL-CIO holds its mid-winter meetings in Orlando.  EFCA and the state of union organizing have drawn the attention of both groups.

Fred Feinstein, former General Counsel of the National Labor Relations Board, spoke at the Bar Association meeting.  He thinks EFCA in a compromised form is still a possibility.  Card check is gone but mandatory arbitration and increased penalties might remain, along with expedited elections.

Mr. Feinstein attributed the delay for passage of EFCA to more pressing items, such as health care, having to take priority.  Since the health care legislation appears to be coming to a climax, it seems that the “health care” rationale for delaying an EFCA vote will no longer justify inaction. EFCA, at least in some form, will have to be brought up for a vote or buried.

The AFL-CIO leadership has been aggressive in their comments about the political environment.  Gerald McEntee, the chair of the Executive Council’s Political Education Committee, told reporters that it is “time to draw a line in the sand” regarding political candidates who generally do not support labor.

As Mr. McEntee said, “If you are not with us, then you are against us.”

The first candidate to feel Labor’s anger is Senator Blanche Lincoln of Arkansas.  She has been one of the Democratic Senators who has expressed concerns over EFCA.  She also joined the Republican filibuster against Craig Becker as a potential appointee to the National Labor Relations Board.

Another Democrat has emerged to challenge Senator Lincoln in an upcoming Arkansas primary, which is a prelude to the Senator’s reelection bid in November.  A variety of unions have already pledged $3 million to Senator Lincoln’s opponent.

The AFL-CIO is planning on surpassing the $53 million they spent in 2008 this coming November.  They are focusing on six states, California, New York, Illinois, Nevada, Ohio, and Pennsylvania, for major political activity, especially around Senate candidates like Harry Reid (D-Nev.) and Barbara Boxer (D-Calif.).

We cannot help but wonder where all of this money comes from.  Organized labor has lost another 840,000 members since last year.  Yet the money flows, somehow, from the pockets of union members to their union officials for candidates the AFL-CIO support.

Terry Madonna of Pennsylvania’s Franklin & Marshall College conducted a poll in January.  Mr. Madonna said, “We have seen a decline in support among union members for both Obama and the Democrats…part of it is that unemployment brings low job performance ratings, no matter what the party.  And less enthusiasm means that union members are less likely to vote.”

This has to be of considerable concern to politicians who count on labor not only for financial support but also for the active involvement of union members in their campaigns.  Perhaps this is why Vice President Joe Biden appeared earlier this week at the AFL-CIO meeting in Orlando.  He, too, kept EFCA in play, saying that the Administration was still committed to its passage, at least in some form.  Secretary Solis gave the audience reason to expect a recess appointment for Mr. Becker, perhaps as soon as the end of March.

But privately, labor officials have to question whether any legislative change to the National Labor Relations Act is still possible.  After all, if the Senate will not approve Craig Becker as a member of the National Labor Relations Board, the probability that EFCA proponents can muster sufficient support to amend the National Labor Relations Act must be considered remote.

Robert Haynes, the president of the Massachusetts AFL-CIO, said, “We are demoralized…we are not happy about anything.”

We admire Mr. Haynes for his candor.

Another reason for labor’s demoralized status should be that the public’s opinion of unions is declining.  The Pew Research Center for the People, in a poll released on February 23, said that only 41% of those responding had a favorable view of unions, down from 58% in 2007.  A 17% plummet in approval ratings over a two-year period should trouble any thoughtful individual.  

But the Administration presses on.  Last Friday, the New York Times reported that different departments within the Administration are preparing regulations for federal government contractors that could boost the fortunes of unions.  While the specifics have not been released, some reports suggest that high-paying contractors (such as those with union contracts) will be given an edge, while contractors with labor and environmental violations will be disfavored.  Unions have been urging the Administration to utilize its procurement power to enhance labor’s position.  We will monitor those developments carefully and be closely involved in efforts to check any unwarranted uses of government power in this regard.

And what is Andy Stern up to these days, you may ask?  The President has named him as a member of the Deficit Reduction Panel.  Representative Darrell Issa (R-Calif.) believes the appointment is “irresponsible.”  Representative Issa’s House and Oversight and Government Reform Committee has just issued an extensive report detailing the relationship between the SEIU and ACORN.  In what direction does Mr. Stern hope to take the Deficit Commission?  Perhaps he discussed this with Administration officials during one of his 28 visits to the White House since the current Administration took office.
 

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This article was written by Roger P. Gilson, a partner in our Stamford, Connecticut office.

Secretary of Labor Hilda Solis’s comment at the AFL-CIO annual meeting on March 3^rd confirms speculations that, with or without the resolution of health care legislation, President Obama will announce the appointment of Craig Becker to the National Labor Relations Board when Congress breaks for its two-week Easter recess, beginning March 29. 

While this “recess appointment” effectively could preclude Becker from serving the normal five-year term were he confirmed by Congress, he would serve about 18 months, enough time to have a profound impact on our nation’s labor law. 

Some say the President also will take the opportunity to appoint Mark Pearce, a union-side labor lawyer previously nominated (and had been expected to win confirmation) and another as yet unnamed person in place of the previous nominee to fill the currently vacant “Republican seat” on the Board.  

In addition to fulfilling the President’s need to respond to the interests of his supporters in organized labor, these appointments will allow the Board to initiate and achieve substantive rulemaking before Becker leaves. 

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Seeming to hint at a possible recess appointment of Craig Becker to the Labor Board, Secretary of Labor Hilda Solis stated at today’s AFL-CIO annual meeting that organized labor would be "very pleased" with how the Craig Becker nomination is resolved.  Union officials are predicting that President Barack Obama may appoint Mr. Becker when Congress breaks for the Easter holiday.

Stay tuned.

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An article in the February 11th edition of The Wall Street Journal quotes a number of Union leaders calling for President Obama to seat Craig Becker as a member of the National Labor Relations Board as a “recess appointment” despite the fact that, earlier this week, the Becker nomination failed to garner the 60 votes needed to overcome a filibuster. 

Service Employees International Union (SEIU) President Andy Stern said, “I think [Craig Becker] should be appointed.  I think a majority should rule here, and I hope the [P]resident takes it under strong consideration.”  Leo Gerard, President of the United Steelworkers Union, also asked for a recess appointment of Becker.

President Obama has not indicated whether he would appoint Becker while Congress was in recess.

We will let you know as soon as we hear anything new.

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As expected, the Senate Democratic majority failed to muster the votes necessary to invoke cloture on the nomination of Craig Becker to the NLRB yesterday. The U.S. Chamber of Commerce’s release below provides additional details as well as three possible directions this might take.

***

TO:     All Members of the U.S. Chamber’s Labor Relations Committee and other interested members of the business community

We wanted to take a minute and update you on the status of the nomination of Craig Becker to the NLRB.

A few minutes ago, the Senate voted against cloture, which means they will not now proceed to a confirmation vote (the vote was 52-33, with 60 required to move forward; Democrats Lincoln (AR) and Nelson (NE) joined all Republicans voting in opposing the motion). As you know by now the Chamber opposed this nomination, and we thank those of you who helped in this effort.

There are several possibilities on where things move from here and we wanted to lay them out for you.

First, the failure to reach 60 votes on this cloture motion is not, by itself, fatal to the nomination. Sen. Reid could file another cloture petition at any time and seek another vote. However, the bipartisan vote in opposition is a sign that it will be very difficult for Mr. Becker to be confirmed at this time.

Second, the President could exercise his authority to make one or more recess appointments to the NLRB during the next Senate recess (scheduled around President’s day). Today, during a news conference, the President indicated that he would seek to make his first recess appointments during the upcoming recess, but he did not specifically mention the NLRB. If he chooses this route, a recess nominee could remain in place until the end of the next session of Congress, or December 2011. He could theoretically make a recess appointment of Mr. Becker, though he might also choose another individual so that Mr. Becker does not build up a record at the NLRB that could be criticized.

Third, Mr. Becker could withdraw and another nominee could be nominated.

At this point it is unclear what the next course of action is. The political dynamics will change if either of the later options is exercised and they will change regardless as time moves forward and we come closer to the expiration of Board Member Schaumber’s term (in July) and General Counsel Meisburg’s term (in August). The Supreme Court is also expected to definitively settle the question of whether a two-member board can issue decisions this spring.

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With the Administration’s nomination of Craig Becker for a seat on the National Labor Relations Board set for a cloture vote in the Senate today, Nebraska’s Democratic Senator Ben Nelson has announced he will join with Republicans in opposing the Senate leadership’s motion to cut off debate on Becker.  Cloture would clear the way for a vote on the nomination itself.  A vote for cloture already was viewed as unlikely following the Democrats’ loss of a 60-member “supermajority” in the upper house with the surprise election in January of Republican Scott Brown in Massachusetts.  Brown took his seat last week.  With Nelson entering the ranks of the opposition, the likelihood of cloture grows dimmer still.

Speculation about Nelson’s motives swirls around his defection from Democratic ranks on the controversial nomination.  Some contend that he made the move to appease his conservative constituents, angered over his backing the Democrats’ healthcare overhaul, compounded by accusations of deal-making to garner his support.  Judging that Becker’s nomination was in trouble and that the Democrats could not muster enough votes to prevent a filibuster anyway, they say, he may feel it was an opportune moment to demonstrate his independence from party-line voting and re-establish his credentials with right-leaning Nebraska voters.  Whatever his reasons, however, it remains to be seen whether Nelson’s step will prompt other conservative Senate Democrats to buck their leadership.

However matters may go in the Senate, the President still might try to place Becker on the Board through a recess appointment, when the opportunity presents itself.  This may depend on how much pressure organized labor – and Becker’s champion, SEIU boss Andrew Stern, in particular – may exert on the Administration for this candidate.  There may be considerable political risks for the Democrats in trying this end-run.

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This article was written by Tom Walsh, a partner in our White Plains, NY office.

The specter of EFCA may seem to be fading as support dwindles for the more controversial aspects of the Administration’s agenda. But don’t count out the pro-union reform forces yet. Not by a long shot.  Much has been said of the Craig Becker nomination – still a possibility either by formal confirmation or recess appointment – and the probability that a Becker-Liebman dominated NLRB could implement pieces of EFCA-style reform through Board decisions. But that’s not the only iron labor has in the fire.

The federal government’s ability to set rules for federal contractors gives it tremendous power to affect the employment and labor relations policies of such employers – without the pesky scrutiny that legislation attracts. Unions have long been aware of this, and have sought to tap into that power for years.

The news is that the Administration (encouraged by SEIU’s Andrew Stern, a frequent White House guest) is readying a new contracting initiative that would give a preference to unionized companies.  Conversely, non-union would-be government contractors would be at a real disadvantage.

For generations, public contracts have been awarded to the lowest-bidding contractor capable of performing the work. To protect contractors’ employees from being squeezed by the competitive bidding rule, Congress enacted the Service Contract Act and the Davis Bacon Act (among others). Under these laws, the Department of Labor analyzes regional wages and benefits, and sets the prevailing wage contractors must pay.

While this system has worked pretty well, it has not completely pleased unions. The prevailing wage rate often is lower than inflated union contracts. That means unionized employers can’t compete as readily against non-union companies (and unionized employees lose work opportunities).

Labor and the White House are reportedly contemplating new rules – which have not yet been made public – to give unionized employers an advantage. Called the “High Road Contracting Policy,” it would require the DOL (and all federal agencies) to create new bureaucracies to assess the labor-friendliness of bidding contractors. “Prevailing wage” would be supplemented with standards of a “living” wage, health insurance, employer-paid retirement benefits, paid sick days, and possibly more. Agency officials would give a subjective preference to contractors, providing these higher levels of compensation.  Applying these standards to those of area union contracts would instantly benefit union contractors.

But the potential new rules go further.  Employers who have been found to have violated labor laws would be restricted (or possibly barred) from being awarded federal contracts. 

Ironically, these contemplated rules seem likely to encourage federal agencies to award contracts to the highest bidder, not the lowest, contrary to the object of competitive bidding.

The good news is that some Senators have taken note and have raised concerns. They say, correctly, that the “High Road” rules would dramatically increase the cost of public work to taxpayers. They note that smaller companies (and, although unstated, non-union contractors) would be pushed out of competition.  They’ve asked the Office of Management and Budget to address their concerns. No reply has been received yet.

We will keep you posted on developments.

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As expected, the Senate HELP Committee has approved the nomination of Craig Becker to the NLRB on a party line vote. The U.S. Chamber of Commerce’s release below provides additional details.

***

TO:   Members of the U.S. Chamber’s Labor Relations Committee and other interested members of the business community

As scheduled the Committee on Health, Education, Labor, and Pensions held a hearing on Tuesday on the nomination of Craig Becker to the National Labor Relations Board (NLRB). Today it voted to approve the nomination on a party line vote of 13 to 10. It is expected that one or more Senators may try to place a “hold” on the nomination, but as you may know a hold can be overcome through a cloture vote (requiring 60 votes).

When we alerted you to this last week, we noted that we were especially concerned that Senate leadership might try to move this nomination to the Senate floor before Sen.-Elect Scott Brown (R-MA) could be sworn in, which was expected on Feb. 11. Until Sen.-Elect Brown is sworn in, Democrats enjoy a 60 vote majority and thus, if they are all united, can break any Republican filibuster or hold.

However, all signs now indicate that Sen.-Elect Brown will be sworn in today.

At this point, we still expect Senate leadership to attempt to force a vote on Mr. Becker’s nomination for early next week. We understand that the original plan was for Majority Leader Reid to file a cloture petition on the Becker nomination on Friday, with a vote scheduled for the afternoon of Monday, February 8.

We do not know where all the votes stand on the cloture, but we are in a better position today than we have been previously, and there is a real chance that this nomination can be blocked. In addition to having Sen. Brown in place (and we should note that we do not know for sure how he intends to vote, but the chances of him voting with the business community are greater than the chances of his predecessor), we also have Sen. Enzi (R-AK) and Sen. Murkowski (R-AK) who have now voted against the nomination in today’s committee consideration (you may recall that they both supported a package of NLRB nominees last year that included Becker).

However, to be successful, we need to continue to communicate with key Senators to ensure that they realize the importance of opposing this nomination. We have activated our grassroots network with tremendous success (more than 25,000 contacts to the Hill so far) and would encourage those of you who are able to do the same.

A list of key Senators follows:

Democrats

Bayh (IN)

Bennet (CO) (supported Becker in Committee, but should still hear from business)

Landrieu (LA)

Lincoln (AR)

Ben Nelson (NE)

Pryor (AR)

Warner (VA)

Webb (VA)

Republicans

Brown (MA)

Collins (ME)

Enzi (WY) (voted against Becker in Committee, deserves thanks)

Murkowski (AK) (voted against Becker in Committee, but did so by proxy, so reinforcement would be helpful)

Snowe (ME)

Voinovich (OH)

Also, you may be interested in the Chamber’s latest letter in opposition to the nomination, which can be accessed here:

http://www.uschamber.com/issues/letters/2010/100204becker.htm

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Senator Orrin Hatch’s (R-Utah) opening remarks on the first day of Senate HELP Committee hearings on the nomination of Craig Becker to the NLRB, available here, contained a salvo of questions probing the nominee’s controversial positions on key labor relations law issues, such as his view that employers should have no right express their views to employees in union representation elections.   

After pointing out some of Becker’s more polemical writings, the Senator said skeptically, “[M]ost importantly, [Mr. Becker] should explain how productive a board member he can be when he is required for at least one year, and possibly longer, to recues himself under the government ethics rules from cases involving the AFL-CIO and the SEIU, when he continues to be employed by both.” 

Senator Hatch, long an outspoken legislator on national labor and employment law issues, along with Senate HELP Committee Chairman Senator Tom Harkin (D-Iowa) will be the keynote speakers at Jackson Lewis’ Corporate Counsel Conference on May 13 in Washington D.C.

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Immediate action called for by the U.S. Chamber of Commerce in connection with the Becker nomination to the NLRB. See Chamber’s release below.  Additional information about the possible impact of this appointment will be found in several recent Jackson Lewis EFCA and Labor Law Reform blog. If you would like to discuss the significance of this development or have any questions please call Mike Lotito, Marty Payson, Phil Rosen, Roger Kaplan or the Jackson Lewis attorney with whom you regularly work.

***

TO: All Members of the U.S. Chamber’s Labor Relations Committee

We wanted to take a moment to update you on the nomination of Craig Becker to the NLRB. As you may recall, at the end of last year his nomination was returned to the White House since no unanimous consent agreement was reached to keep his nomination pending (unanimous consent was reached for the nominations of Brian Hayes and Mark Pearce who are still pending).

Last week, the president re-submitted Mr. Becker’s nomination to the Senate. Today, the Senate HELP Committee scheduled a hearing on Mr. Becker’s nomination for Tuesday, Feb. 2, at 4:00 p.m. It has also scheduled committee consideration of Mr. Becker’s nomination for Thursday at 10:00 a.m.

It is expected that should the Committee again approve Mr. Becker’s nomination, one or more Senators will place a hold on the nomination. However, a hold does not prohibit a nomination from moving – rather it means that supporters of the nominee need to schedule floor time and get 60 votes to force a vote on the nominee.

Even though the Massachusetts election seems like old news, Sen.-Elect Brown has not been seated and does not expect to be seated until Feb. 11 – that means Senate leadership has a narrow window to try to confirm Mr. Becker during this lame-duck period while they maintain a supermajority of 60 votes.

It should also be noted that while Republican Senators Mike Enzi and Lisa Murkowski supported Becker’s nomination last year as part of a package, it is not at all clear that they will support Mr. Becker this time around especially in light of the way Becker supporters appear to be ramming this through.

Thus, now is the critical time for those opposing the Becker nomination to weigh in both with HELP Committee members and with moderate Senators. The Chamber earlier sent a letter (link below) calling for a hearing on Mr. Becker and we also coordinated a joint sign-on letter for members of the business community opposing the nomination (link below).  There is another joint sign-on letter being prepared for national trade associations and if you would like the text or more information please let me know (this letter is for national trade associations only).

I would encourage those of you with grassroots programs to activate them – we sent out a grassroots letter a few days ago and quickly generated more than 6,000 letters to Capitol Hill. We plan to do another grassroots communication as well.

Key targets on the HELP Committee include Democrat Michael Bennet (CO) (he is new to the Committee) and Republicans Lisa Murkowski (AK) and Mike Enzi (WY).

Key targets not on the HELP Committee include Republicans Olympia Snowe (ME), Susan Collins (ME),  George Voinovich (OH) and Democrats Ben Nelson (NE), Lincoln (AR), Pryor (AR), Landrieu (LA), Bayh (IN), Hagan (NC), Webb (VA), and Warner (VA).

Chamber letter calling for a hearing:

http://www.uschamber.com/issues/letters/2009/090724becker.htm

October association sign-on letter:

http://www.uschamber.com/issues/letters/2009/091020nlrb.htm

Background information on what to expect from the Obama NLRB:

http://www.uschamber.com/publications/reports/0909nlrbreport.htm

Michael J. Eastman

Executive Director, Labor Law Policy

U.S. Chamber of Commerce

1615 H Street NW

Washington, DC  20062

(202) 463-5342

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The Senate HELP Committee will hold a hearing on the Craig Becker nomination to the NLRB on February 2 at 4:00 p.m. (http://help.senate.gov/Hearings/2010_02_02/2010_02_02.html).  The Committee will then consider him and we expect Becker’s nomination will be approved and likely referred to the full Senate for confirmation.  Senate Democrats may try to rush Becker’s confirmation vote as their 60-vote “supermajority” will vanish with the swearing-in of Massachusetts’ Republican Senator-elect Scott Brown. 

It has been reported that a group of 66 labor law professors said in their January 21, 2010, letter to the Senate’s majority and minority leaders that they “believe firmly that, if confirmed, Mr. Becker will prove to be one of the most respected Board Members in the history of the NLRB.” This may not be as objective an academic assessment of Becker’s qualifications as it seems.  Two leaders of this group, Catherine Fisk of the University of California-Irvine School of Law and Benjamin Sachs, like Becker, have ties to SEIU. They were appointed to the SEIU Ethics Review Board in 2009. Additionally, Sachs was Assistant General Counsel of SEIU, and Fisk has been openly in favor of EFCA. Another leader of the group, James Brudney of Ohio State University’s Moritz College of Law, was a law firm associate who represented unions and was Counsel to the Senate Subcommittee on Labor 1987-1992, when the Senate had Democrats in the majority.

We will keep you updated. 

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National Labor Relations Board Chair Liebman wrote in a March 2008 Journal of Labor and Society:

“The existence of a strong independent trade union movement is critical to a democratic society. Similarly, the system of collective bargaining … affords an effective mechanism to distribute resources and as such, it furthers a collective national sense of fairness …. Unquestionably, collective bargaining contributed to the expansion of the middle class, and the decline of organized labor is often linked to the decline of the middle class and growing income inequality.”

Chair Liebman’s writings, taken as a whole, along with her background as a union lawyer, clearly show her support for “the modernization” of our labor laws to further promote “fairness.” She has not, however, been able to place her mark on our laws. This is because Ms. Liebman either has had a minority or dissenting view on decided cases or been unable to act with the current two-person membership on the Labor Board.

Regardless of EFCA’s fate, a Labor Board with Ms. Liebman and Mr. Becker in the majority, over time, could radically change existing law to “encourage” collective bargaining. Indeed, it is not uncommon for Ms. Liebman to cite approvingly Mr. Becker’s writings to bolster her positions advocating “change.”

What will their agenda look like? Professor Samuel Estreicher of New York University School of Law has articulated it rather well. In his opinion — and we dare say, in the view of a majority of the new Labor Board and the Board’s new General Counsel, all of whom will be in place sometime in 2010 — expect the following based on the current National Labor Relations Act, without legislative change:

1.      Board elections to take place in 14 to 21 days after a petition is filed, depending upon the complexity of issues, instead of today’s 42-day target;

2.      Elections directed with the ballots of contested voters sealed until a post-election hearing is held;

3.      Voting through the Internet and by mail instead of at the employer’s premises;

4.      Greater use of rulemaking;

5.      A new, required poster explaining employee rights to organize with a model authorization card. One possible card would authorize union representation without an election;

6.      Some right of union access to employee premises to meet a new test of “laboratory conditions” for a “fair” election;

7.      Revised “Excelsior” list requirements for turning over names and addresses when, possibly, 30 percent of the employees sign union recognition cards instead of union authorization cards;

8.      Permission for a union and an employer to negotiate key terms of an agreement and publicize them in the absence of majority support;

9.      Expanded Labor Board requests for injunctive relief, including reinstatement, to remedy alleged unfair labor practices;

10. Imposition of negotiation timetables, payment of union bargaining expenses, and union access rights as remedies for “bad faith” bargaining; and

11. Labor Board advisory opinions that an employer’s bargaining conduct was in bad faith so any strike would prevent the hiring of permanent replacements.

EFCA may or may not be dead. The Labor Board, however, lives to re-interpret the statute another day. It’s only “fair.”

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As reported here, the Senate late last year unanimously refused to carry over Mr. Becker’s nomination for consideration in the next Session of Congress. The nomination was thus returned to President Obama.  Now, according to the New York Times, President Obama has decided to renominate Craig Becker as a member of the National Labor Relations Board.

Due to the controversy surrounding Mr. Becker’s beliefs and the fact that Senator McCain already placed a hold on Mr. Becker’s first nomination, this is a bold move for the President.  Hopefully, this time the Senate HELP committee will hold hearings to allow for a robust debate regarding Mr. Becker’s qualifications.

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Craig Becker’s NLRB nomination may not have been thrown under the bus, but it certainly seems to have been thrown off of it. 

Just prior to adjournment on December 24, the Senate unanimously refused to carry over Mr. Becker’s nomination for consideration in the next Session of Congress.  It was returned to the President.  As a result of the adjournment and a Senate standing rule, Mr. Becker’s nomination is ended unless the President resubmits it to the Senate in the next Session, beginning in January.

That the Senate excluded Becker’s nomination from a general agreement to carry forward most pending nominations at the NLRB and other agencies — those of fellow Board nominees Mark Pearce and Brian Hayes are among the nominations postponed — appears to send a message to the White House that the Senate is in no mood for a fight over the controversial candidate.  Whether anyone at the White House is listening is another story. 

Following the Becker nomination’s approval in October by a Senate Committee vote, generally split along party lines, Senator John McCain (R-AZ) put a “hold” on the nomination.  The move would have required a supermajority of 60 votes for Mr. Becker when his nomination came before the full Senate for a vote. 

The same reception could await a renewed Becker nomination in 2010.  In fact, next time the HELP Committee might actually have to hold hearings on the nomination, a step that was avoided in October.  In the meantime, the other two Board nominations also are likely to be held up despite their inclusion in the carry-over, since Democrats do not want a Labor Board equally divided between Democrats and Republicans.

President Obama could make a recess appointment of Mr. Becker or someone else.  He would not need Senate approval for this step.  But that would be only a stopgap.  Eventually, a regular nominee would have to be submitted to the Senate, and there is little chance opposition to Mr. Becker will abate with the passage of a few months.  A less controversial choice might be the best option for the Administration.

Of course, this Administration setback raises a larger question: where is EFCA?  The Board nominations were viewed by some as a backstop to the proposed legislation; if EFCA ran into trouble, advocates of labor law change at least could take solace in a pro-Labor NLRB that could overturn unfavorable agency decisions.  But for now, it seems, the nominations have become unstuck. 

And EFCA is yet to be taken up.  Can Big Labor push through this hotly debated bill if the Senate won’t confirm the Administration’s nominee whose views most closely conform to the overhaul sought by EFCA, delaying action on all NLRB nominees?  Maybe not.  Perhaps that is why unions have begun to focus on changing state laws. (See With EFCA “Reform” on Hold in Congress, Unions Turn to State Legislatures for Labor Law Change.)  One such effort, for example, in Oregon, resulted in a law that would bar employers from holding group meetings with employees to discuss unionization.  Jackson Lewis is representing employers in a challenge to that enactment.  

Congressional Democrats, however, also could try to push through EFCA wrapped up in a broader jobs bill, which reportedly is “on deck” after health care legislation is settled. This could speed consideration of EFCA and make opposition to the proposed NLRA amendments more difficult for lawmakers.  Employers and their allies in Congress must be on guard that any EFCA measure is considered separately from a general employment bill.

Meanwhile, a cloud hangs over the NLRB’s many decisions issued during the past two years as the U.S. Supreme Court prepares to take up whether the agency has been authorized to act with only two members.  (See U.S. Supreme Court to Decide Appeals Court Conflict Over NLRB Quorum.) A Board joined by three new members would resolve this problem for future cases.  At this writing, however, the chances seem to be dimming that Craig Becker will be part of any long-term solution to this issue.  

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In an earlier post, we told you that two of this blog’s authors, Michael J. Lotito and Harold R. Weinrich, were going to be present at the U.S. Chamber of Commerce Labor Relations Committee’s November 17 meeting, where NLRB Chairman Wilma Liebman was a scheduled speaker.  As promised, here is a firsthand report about Chairman Liebman’s comments.

Chairman Liebman told the group that a number of “significant issues” were on the agenda to be addressed by the new “Obama Board.”  This list included:

·         Revisiting the Dana Corporation case, relating to pre-recognition bargaining in the context of a neutrality agreement;

·         On remand of the New York, New York Hotel, LLC case,  dealing with, as the D.C. Circuit Court framed it, whether individuals working for a contractor on another’s premises should be considered employees of the property owner, thereby granting them access to the property owner’s premises;

·         Considering cases dealing with the issue of whether “bannering” constitutes unlawful picketing or protected “handbilling”; and

·         Revisiting the Hoffman Plastics case to address whether undocumented-alien employees, who are knowingly hired, should be entitled to back pay if they are unlawfully terminated by their employer for engaging in protected union activity.

Consistent with her comments at last week’s American Bar Association meeting, Chairman Liebman again indicated that the NLRB intends to make greater use of rulemaking.  Indeed, the Board has retained rulemaking experts to educate them regarding the intricacies of the process. Finally, the Chairman noted that a pending rulemaking petition regarding minority unions was of less concern to her than a petition, pending since 1993, asking the Board to adopt a rule requiring employers to post a notice in the workplace setting forth employee rights under the National Labor Relations Act.

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Imberman & DeForest, Inc. recently published a survey “Keeping the Workplace Union-Free.” The survey analyzes NLRB election data and offers several “findings” and “lessons” which should be helpful to our readers.  The survey is based not only on NLRB election data but also on interviews Imberman & DeForest conducted with key executives at 285 companies from the five “Great Lakes States” (Illinois, Indiana, Michigan, Ohio and Wisconsin).

The survey highlights two critical findings.  First, smaller companies lose a greater percentage of union elections than do larger ones.  Second, companies, regardless of size, which are subject to “stealth” union election petitions lose “a far higher percentage of their votes than do companies that were aware of pre-petition union organizing efforts.”

As the report indicates, the survey’s two findings “are critical,” especially in considering the “quickie” election component of the EFCA “compromise.”  The authors state that some of the compromise proposals call for “elections to be held within 5 to 10 days of a union petition.”  The authors argue such a short time frame “eliminates and/or severely restricts management’s ability to inform employees about the negatives of unions…,” making the “results of any such election [] preordained.”

Essentially, the authors argue that if “quickie” elections become law, then every election would become a stealth campaign, which, as we indicated, gives unions a significant advantage.

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In an article posted today, Susan J. McGolrick, a writer for the Daily Labor Report (subscription required), recounted some highlights from Chairman Wilma Liebman’s comments at the November 5th American Bar Association Section of Labor and Employment Law’s annual meeting.  

Chairman Liebman said she felt “very privileged” to be chairman of the NLRB at a “historic time” when “we’re poised for changes” in Labor Law.  She commented on the United States Supreme Court’s decision to take a case challenging the NLRB’s authority to act with only two members, something the Board has been doing for the past 22 months.  Liebman noted that of the 538 Board rulings issued during that time, only 77 of them have been appealed to U.S. Circuit Courts challenging the Board’s authority to render a decision.  In terms of an anticipated decision of the United States Supreme Court, Liebman stated, “If we lose, we’ll have to decide what to do, but we’re hopeful we’ll win.”

Chairman Liebman argued that Congressional inaction has fostered “deep divisions” and “controversy” in labor law and has “facilitated” the NLRB’s “flip-flopping” and “policy oscillation.”  She stated that she believes it is better to have “periodic legislative change” to account for an ever-changing workforce, as opposed to relying on Board decisions to do the same thing.  Liebman declared that she is happy with the current debate over labor law issues in Congress, especially after “decades of silence” — a reference to the fact that Congress’ last major overhaul of the National Labor Relations Act, the nation’s principal labor law, took place in 1947.

Chairman Liebman indicated that once the NLRB has a full complement of five members, she wants to “give some thought to” something the NLRB has not done since the 1980s: rulemaking.  She said rulemaking may be especially helpful in representation cases.

Next week Chairman Liebman will be speaking at the U.S. Chamber of Commerce Labor Committee meeting.  We are members of this committee and two of this Blog’s authors will be there. 

Stay tuned for a first-hand report.

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With a clear conflict among the federal Circuit Courts and with the National Labor Relations Board and employers calling to have the Board quorum issue settled, the United States Supreme Court has agreed to decide whether the NLRB is authorized to render decisions while three of its five seats remain vacant.  The Court granted certiorari to the Board’s September 29 request to determine whether the National Labor Relations Act authorizes the agency to act with only two members if the Board previously delegated its full powers to a three-member group that included the two remaining members. 

The Court said it would review the Seventh Circuit’s decision in New Process Steel v. NLRB (No. 08-3517, 7th Cir. May 1, 2009) (where, this May, the Court held that the Board had such authority) in a brief order issued November 2. A petition for certiorari is still pending in Laurel Baye Healthcare v. NLRB (No. 08-1214, D.C. Cir. May 1, 2009) (where, also this May, the District of Columbia Circuit held that the Board lacked such authority), as well as in two other cases, from the Second Circuit and the First Circuit, both of which sustained the Board’s position, albeit on somewhat different grounds from the New Process Steel decision. Snell Island SNF v. NLRB (No. 08-3822/08-4336, 2d Cir., June 17, 2009) and Northeastern Land Svcs. v. NLRB (No. 08-1878, 1^st Cir., Mar. 13, 2009). A ruling on the petition in Laurel Baye is expected shortly.

The dispute concerns the meaning of a provision in the National Labor Relations Act creating the NLRB. It provides, in part, that the NLRB: 

is authorized to delegate to any group of three or more members any or all of the powers which it may itself exercise. . . . A vacancy in the Board shall not impair the right of the remaining members to exercise all of the powers of the Board, and three members of the Board shall, at all times, constitute a quorum of the Board, except that two members shall constitute a quorum of any group designated pursuant to the first sentence hereof.

29 U.S.C. § 153(b).

Since January 2008, the Board has been functioning with only two members — Chairman Wilma Liebman and Member Peter Schaumber. In December 2007, when the Board still had four members (with two recess appointments about to expire), it delegated its powers to a three-member panel. When Board membership shrank to two, the agency said the NLRA allowed it to continue operation. The two-member Board is estimated to have issued more than 400 decisions in the nearly two years it has been operating.

President Barack Obama has nominated three candidatesto fill the empty seats on the Board:  two labor-side attorneys, Craig Becker and Mark Gaston Pearce, and the current Republican Labor Policy Director for the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP), Brian Hayes. These nominees have cleared the HELP Committee but one or more Senator’s have placed holds on Mr. Becker’s controversial nomination. These Senatorial holds will delay the nominations from reaching the Senate floor for a confirmation vote.

The Supreme Court’s decision in New Process Steel is expected next Spring. 

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By a vote of 15-8, mainly along party lines, the Senate Committee on Health, Education, Labor and Pensions (“HELP”) earlier today approved the Administration’s nomination of Craig Becker to the Labor Board. The other two nominees (Mark Pearce and Brian Hayes) received unanimous votes. The Committee’s action makes it more likely all three nominations will reach a floor vote, but opposition to the Becker nomination from Senator John McCain (R-AZ), protesting the lack of a public hearing on the controversial nominee, could delay the vote.

Calling Mr. Becker the most controversial Board nominee in a long time, Senator McCain remarked on the lack of a public hearing accorded by the leadership. The Arizona Republican said that in the absence of a public hearing on the Becker nomination, he will do everything he can to block Mr. Becker’s nomination, including placing a hold on the nomination. The Senator suggested others might do the same. 

In addition to speaking during the session, Senator McCain had written to HELP Committee Chairman Tom Harkin (D-IA), expressing his concerns with the Becker nomination and asking for a hearing. Harkin responded that McCain’s threatened move could hold up all the nominations.

Senator Harkin appeared to dismiss the concerns raised by other Senators, members of the public and the business community about Mr. Becker’s positions on labor law issues. Saying he had reviewed Mr. Becker’s writings, and thought them as typical of academics stating their arguments in a provocative manner simply to prompt discussion. Defending his decision to permit Mr. Becker’s nomination to pass out of Committee without a public hearing, Senator Harkin also stated that the HELP Committee has not held a public hearing for a non-chairman nominee to the NLRB since 1980, and that he was merely following that tradition.

In a surprise to some observers, the Ranking Member on the Committee, Senator Michael Enzi (R-WY), went along with the majority on Mr. Becker's nomination. Mr. Hayes, it has been noted, is a former aide to the Senator and the nominations, thus far, have been treated as a group. Senator Lisa Murkowski (R-AK) also voted to approve Mr. Becker's nomination.

If Senator McCain or another Senator puts a hold on Mr. Becker’s nomination, a cloture vote by the Senate would be required to shut off debate and retain the nomination, but such a move also may represent the staking out of a negotiating position by an influential member. Like-minded colleagues might be persuaded to join Senator McCain in asking for greater scrutiny of the Becker nomination. Still, Senate Democrats may be able to muster the 60 votes needed to end debate and reach a confirmation vote on Mr. Becker and the others. Cloture votes usually are scheduled on a Friday to be held the following Tuesday. Therefore, absent a negotiated resolution, a cloture vote on Mr. Becker’s nomination could take place as early as  Tuesday, October 27th. 

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As previously reported in this space, employer groups have been asking the Senate’s Committee on Health, Education, Labor & Pensions (“HELP”) to schedule public hearings on the Administration’s nomination of Craig Becker to the National Labor Relations Board.  So far, the requests have not been answered.  The HELP Committee is slated to take up Mr. Becker’s nomination, along with those of fellow nominees Mark Pearce and Brian Hayes, in a closed-door markup session on the morning of Wednesday, October 21.  We have learned meanwhile that a number of major trade associations are writing the HELP Committee Chairman and Ranking Member opposing Becker’s nomination in light of positions he has taken in public writings on restricting employer rights and other labor relations law issues, and asking the Committee leaders to hold a full hearing on the nominee.

We are following the Board nominations closely and will keep you posted.   

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According to the Senate HELP committee's October 21st agenda, all three of the Administration's NLRB nominations will be "marked up" - acted upon- in an "Executive Session" beginning at 10:00am. 

We will keep you posted.

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 With Contributions from Roger Kaplan

The Solicitor General of the United States, on behalf of the NLRB, has filed a petition with the United States Supreme Court, asking the Court to settle the dispute among the Circuit Courts as to whether the NLRB is authorized to render decisions with only two members in office.  The District of Columbia Circuit in Laurel Baye Healthcare v. NLRB this past May had held that the Board lacked such authority. Three other circuits, however, have reached an opposite conclusion (the First, Second and Seventh Circuits, in Boston, New York and Chicago, respectively). The Board in Laurel Baye, and employers in each of the other cases, petitioned the Court for a writ of certiorari to review the particular Circuit Court opinion.

The Board on September 29 asked the Court to determine whether National Labor Relations Act authorizes the agency to act when only two of its five positions are filled, if the Board previously delegated its full powers to a three-member group that included the two remaining members. On the same day, the NLRB responded to the petition in the Seventh Circuit case — New Process Steel — asking the Justices to grant review there, too, on the same issue. 

Since January 2008, the Board has been functioning with only two members, Chairman Wilma Liebman and Member Peter Schaumber. Shortly before, four members, including two recess appointments about to expire, delegated the Board’s powers to a three-member panel; when  Board membership shrank to two, the agency said the NLRA allowed it to operate in that fashion. (Despite professing to carry on its duties as usual, the two-member Board may have been hedging its bets until an undisputed quorum again is present.  Students of the agency have suggested there may have been fewer decisions, and those often are in “soft,” non-controversial cases. In a number of instances, one member or the other has suppressed disagreement with Board precedent “for institutional reasons,” we have been told.)

President Barack Obama has nominated three candidates, including Craig Becker, to fill the empty seats on the Board.  These nominees are awaiting confirmation by the Senate.

In view of the clear conflict among Circuits and the Board’s and the employers’ desire to have the quorum issue settled, not to mention the Second Circuit’s observation that the High Court will have to have the last word on this subject, many believe the Supreme Court will grant certiorari. The Court begins its new Term October 5. 

We will keep you posted.

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In response to the United States Department of Labor’s request for public comments on its proposed rulemaking implementing President Barack Obama’s Executive Order No. 13496, Jackson Lewis LLP, on behalf of its clients and other employers, has provided the Department with detailed comments and suggestions for improvements to the proposed rule. The Executive Order, signed January 30, 2009, requires covered federal contractors and subcontractors post a notice apprising employees of the right to unionize and to engage in certain protected activities under federal labor laws. It and the proposed rule could have a profound effect on federal contractors since a failure to comply with the posting requirement or with the terms of the notice could result in the loss of Federal contracts or debarment. (For more information on the Executive Order, see President Signs Three Pro-Union Executive Orders and DOL Proposes Regulations Clarifying Contractors' Obligation to Notify Employees of Right to Organize.) 

Jackson Lewis, one of the nation’s largest labor and employment law firms counseling federal contractors and others, submitted its comments on September 2, 2009. The full text of the comments may be accessed here (pdf). A summary of our comments follows:   

     NLRA Preemption - The Firm maintained the Executive Order is preempted by the National Labor Relations Act (“NLRA”), the nation’s principal labor relations law, to the extent it seeks to impose obligations and penalties on contractors and subcontractors beyond those already established by the NLRA.  

     Scope of Rule – The Firm objected to the Department’s attempt to make primary contractors responsible for compliance by their subcontractors. The Department should clarify that primary contractors have no obligation to police subcontractors, other than to adhere to specific enforcement directives of the Secretary. With respect to the obligation of primary contractors to place in subcontracts language requiring subcontractors to post the required notice, the Firm suggested the Department impose this requirement only on subcontracts valued in excess of $100,000. This amount is consistent with the minimum threshold applicable to primary contracts under the Executive Order. It would exclude subcontractors who perform minimal work from being subject to the Order’s obligations. 

     Limitations on Posting Obligation – The Firm recommended that the Department limit the posting obligation to cover only employees who perform work directly related to the performance of the contract. Further, the Firm suggested the Department expressly permit employers who post notices electronically and physically to post the required notice only physically. Electronic posting would cause the notice to be sent to the vast majority of employees who do not perform work related to the contract. Additionally, the Firm suggested the Department permit the required notice to be consolidated into commercially available “all-in-one” posters employers already use to comply with other federal and state law posting requirements.  

     Exemption for Employees Working on Contracts Outside the United States - The Firm suggested that the Department add an exemption to the proposed rule for employees working on contracts and subcontracts in foreign countries who are not subject to the NLRA. This exemption is modeled on a similar exclusion made by the Office of Federal Contract Compliance Programs (“OFCCP”) in the affirmative action context. 

     A More Reasonable Notice - The Firm urged the Department to adopt a shorter, more balanced notice. The Executive Order’s purpose is to enable employees to make informed choices regarding their right to unionize (or not unionize) and the proposed longer, more detailed notice may frustrate this objective by confusing and intimidating the reader. The Firm also pointed out specific concerns with the contents of the proposed notice. 

     Adjudication of Unfair Labor Practices - The Firm recommended the Department make clear in the final rule that the National Labor Relations Board will have exclusive jurisdiction to adjudicate disputes arising from alleged violations of the substantive notice. Such disputes would involve rights conferred by the NLRA, which the Board administers.  The Firm pointed out the possibility of conflicting decisions and wasted government resources. 

     Reinstatement After Debarment - Finally, the Firm recommended improvement of the debarred-contractor reinstatement process.  To promote transparency, we suggested the Department incorporate the reinstatement guidelines contained in other laws regulating federal contracts that call for written decisions explaining why a reinstatement request was granted or denied.

No date has been set for the issuance of the final rule.

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President Obama sent his nominations for the three empty seats on the NLRB to the Senate on July 9, 2009. One of the three, Craig Becker, is currently the Associate General Counsel for the Service Employees International Union (SEIU). Although Mr. Becker has much labor law experience, he has some extreme ideas for reforming labor law, many of which would involve stripping employers of many long-established protections.

In 1993, Mr. Becker wrote an article for the Minnesota Law Review, Democracy in the Workplace: Union Representation Elections and Federal Labor Law, 77 Minn. L. Rev. 495 (Feb. 1993), in which he claims that the current union election process is flawed and proposes  wholesale changes to fix them.

For example, Mr. Becker proposes that “employers should be stripped of any legally cognizable interest in their employees’ election of representatives.” This would m ean an employer would lose its right to participate in hearings before the Board to resolve issues related to the election, or even to have an observer present at the election, among other things. Mr. Becker proposes eliminating the 72-year-old mandate of the Taft-Hartley Act that the Board certify unions based only on the results of an NLRB-supervised secret ballot election. Mr. Becker also proposes restricting, and in some cases eliminating, an employer’s “free speech” rights during an election campaign, although the right is spelled out in the Act.  In short, Mr. Becker would go further than even EFCA .

What is most disturbing, back in 1993, Mr. Becker, then writing as an academic, suggested that many of his drastic “reforms” could be accomplished through the Labor Board’s re-interpretation of the Act. He would sidestep legislation while kicking over the traces. Now, Mr. Becker is poised to take his seat on the Board where he could try to effectuate his ideas.  

We do not know whether the Senate will conduct hearings on Mr. Becker’s nomination before voting on his confirmation, although the U.S. Chamber of Commerce, on July 24, requested the Senate Health, Education, Labor and Pensions Committee do exactly that. R. Bruce Josten, the Chamber’s executive vice president for government affairs, said, in a letter to HELP’s chairman and ranking member, that SEIU “has a record of using questionable pressure tactics with the goal of forcing employers and workers to recognize unions without the democratic protection of secret ballot elections.” He cited SEIU's “intense advocacy” of the proposed Employee Free Choice Act and said Becker might attempt through Board decisions to impose card-check certification and “the effective elimination of secret ballots.”

In early-August, a Republican staffer reportedly said Senator Michael B. Enzi (R-Wyo.), HELP’S ranking member, wants a hearing on all three NLRB nominees. However, HELP so far has not announced any plans for a hearing and has not yet scheduled a vote.

We will keep you advised as the confirmation process progresses.

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