Employment Law Alert: NRLB Restricts Challenges to a Union's Continued Majority Status

United States unions need help. Declining membership numbers vastly diminish their political influence. It has been many years since any pro-labor legislation has been passed on the federal level and prospects are this legislative shutout will continue indefinitely. Blocked off from legislative help, the unions have turned to an old friend, the Democratic-controlled National Labor Relations Board, for support and encouragement.

The Board has responded. It continues giving unions advantages employers do not enjoy. In Bake Line Products, Inc., 329 NLRB No. 29 (September 28, 1999), the Board overruled Hospital Employees 1115 Joint Board (Pinebrook Nursing Home), 305 NLRB 802 (1991), thereby allowing unions to threaten they would no longer represent employees if those employees voted, in a NLRB-sponsored deauthorization election, to remove union security provisions from the current labor agreement. Employers cannot tell employees they will close down if employees vote to unionize. Under Pinebrook, unions similarly could not tell employees they would no longer represent them if their dues authorization was revoked. Now that Pinebrook has been overruled (by a 3-to-2 decision, with Republican appointees Brame and Hurtgen dissenting), unions are free to make threats employers cannot. The double standard for election campaigns lives on.

In Bake Line, the union reacted angrily when it discovered the bakery products company’s employees had filed a petition to revoke the union’s authority to enter into a union security agreement. The union told the employees in writing that, if it lost the deauthorization election by a decisive margin, it would consider disclaiming recognition, which would leave the employees unrepresented and would void their labor agreement. In case the employees didn’t understand what that threat meant, the union’s leaflet specifically told employees (1) the employer might not give them their next scheduled wage increase, (2) the employer would be free to fire them without good cause and (3) “It could cause you . . . to lose over a million and a half dollars in increased wage and benefits in 1998.” These threats worked. The employees voted 327-to-203 against revoking the union’s authority to enter into a union security agreement. The employer filed unfair labor practice charges. These would have succeeded if the 1999 Democratic-controlled Board had not decided to overrule Pinebrook, a directly applicable 1991 decision by a unanimous Board panel consisting of Devaney, Raudabaugh, and Stephens.

The Board’s assistance to the floundering union movement extends far beyond “double standard” cases such as Bake Line. Unions historically have great difficulty negotiating initial contracts with employers. Various studies show approximately one-third of the unions who win NLRB elections are unable to reach agreement on a first contract within the 12 months following that election victory. Those unions cannot be challenged by employer-filed RM petitions or by employee-filed decertification petitions during that first year because of the law’s one-year certification bar. That statutory challenge-free period does not apply where an employer voluntarily recognizes a union. A recognized union is only entitled to “a reasonable period of time” for bargaining for an initial contract before the union’s continued majority status can be challenged. Keller Plastics Eastern, Inc., 157 NLRB 583 (1966).

Two Board decisions issued on September 30, 1999 rescued unions trying to negotiate initial contracts following voluntary employer recognitions. In MGM Grand Hotel, 329 NLRB No. 50, the Board held that a reasonable period of time had not elapsed despite 28 bargaining sessions and three separate employee decertification petitions during the first 12 months following the Las Vegas hotel’s voluntary recognition. The hotel voluntarily recognized the union as the representative of its 2,900 employees on November 15, 1996 following years of picketing and demonstrations. The first two decertification petitions, filed at the five-month and ten-month marks, were dismissed by the Regional Director. The third petition was filed on November 6, 1997, nine days short of one year. That petition galvanized the union. It reached agreement two days later and that agreement was quickly ratified 740-to-103 by an impatient membership. The union then had to beat back the third petition, which it did when the Board held 356 days and 28 bargaining sessions had still not given the union a reasonable period of time for bargaining.

MGM was an unusual case with complex multi-level negotiations covering more than 50 separate employee classifications. However, it should not surprise Board watchers that the minimum “reasonable period of time” following voluntary recognitions just happened to end up at the one-year statutory mark applicable to Board certifications. Decertification petitions by employees, employer-filed petitions supported by objective considerations or rival union petitions can still be filed during the first year following voluntary recognition but clearly are subject to dismissal under MGM. Their principal utility will be to goad the union into modifying its bargaining demands to reach a quick agreement in the hope that will convince the petition filers to withdraw.,P. Assistance to unions during the critical first “bargaining year” was also featured in St. Elizabeth Manor, 329 NLRB No. 36 (September 30, 1999), a successorship case. Local 50 SEIU had represented the service and maintenance employees at a Missouri nursing home for several years. One year into the current labor agreement, a new company acquired the nursing home through an asset purchase and hired a majority of its employees from the predecessor company. Under Board law, this successor employer could decline to adopt the union agreement and could establish different initial terms and conditions, but was obligated to recognize Local 50, which it promptly did. Recognition by a successor employer did not entitle the union to a reasonable period of time for bargaining under Southern Moldings, Inc., 219 NLRB 119 (1975). In that case, a unanimous Board panel of Fanning, Murphy and Penello created a special exception for successor employers. The Board held that a union that is recognized by a successor employer who does not adopt the union’s contract has only a simple rebuttable presumption of continuing majority status. That union, under this Southern Moldings exception, does not enjoy the “reasonable period of time for bargaining” unions enjoy in non-successor recognition situations. This meant unions recognized by successors could be challenged by employees or rival unions at any time following that recognition.

The Board abandoned this successor employer exception in Landmark International Trucks, 257 NLRB 1375 (1981). However, that decision was reversed by the Sixth Circuit (699 F.2d 815, 1983), and the Board accepted its defeat and reinstated the exception in Harley-Davidson Transportation, 273 NLRB 1531 (1985). St. Elizabeth Manor, as Yogi Berra used to say, is deja vu all over again. By a 3-to-2 vote, the Board has again abandoned the successor employer exception. If this decision is upheld on appeal, there will again be one rule allowing all unions a reasonable period of time for bargaining without challenge following any recognition by a employer, even a successor employer. There will, however, be a new term. Recognizing that a successor employer’s recognition is hardly voluntary since it is a direct product of hiring a majority of employees from the predecessor employer, the Board will (if its abolition of the successor employer exception is upheld on appeal this time) use the term “successor bar” rather than “recognition bar.“

St. Elizabeth Manor has been pending before the Board since August 1995. The case is still not over because the Regional Director must determine if the four months of bargaining prior to the filing of the decertification petition afforded Local 50 a reasonable period of time for bargaining. The Regional Director must examine “what the parties accomplished in their negotiations” during the three bargaining sessions. If, as MGM suggests, Local 50 was not given a reasonable period of time, the uncoerced decertification petition will be dismissed and the parties, five years later, will be sent back to the bargaining table.

The successor employer exception may yet live on. The Sixth Circuit in Landmark Trucks refused to permit the Board to abandon the exception because, while the relationship between the employees and the successor employer is new, the union and a majority of the workforce have a pre-existing relationship where the employees “have had the opportunity to determine their union’s effectiveness.” In other contexts, the Board stresses the importance of using NLRB elections to determine employee sentiments. Why should an uncoerced decertification petition (the facts in St. Elizabeth Manor) be quashed and a secret-ballot election canceled? Indeed, as dissenting members Brame and Hurtgen point out, the successor employer situation necessarily involves an incumbent union with overall knowledge of the operation that “may exceed that of the new owners.”

The bottom line is that the Democratic-controlled Board wants to assist incumbent unions wherever possible. MGM effectively extends the safe harbor no-challenge period following voluntary recognitions to the same one-year irrebutable presumption mark established by law following Board certifications. St. Elizabeth Manor, if upheld on appeal for a change, does the same thing for successor employer recognitions. The goal is to give incumbent unions a lengthy protected period within which to negotiate initial contracts, a task that, to date, has been very difficult for unions to accomplish.

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