Employment Law Daily 5th Circuit upholds NLRB’s ‘quickie’ election rule
Tuesday, June 14, 2016

5th Circuit upholds NLRB’s ‘quickie’ election rule

By Ronald Miller, J.D. The NLRB’s revised rule modifying the procedures for union representation elections did not violate the NLRA or the Administrative Procedure Act (APA), ruled the Fifth Circuit, affirming a district court’s decision refusing to enjoin its enforcement. Reiterating the high burden faced by the employer groups that brought this facial challenge to the validity of the rule, the appeals court held that the challenged provisions neither exceeded the scope of the Board’s authority under the NLRA nor violated the APA’s arbitrary and capricious standard (Associated Builders and Contractors of Texas, Inc. v. NLRB, June 10, 2016, Clement, E.). Facial challenge. The challenged NLRB rule amended the procedures for determining whether a majority of employees wish to be represented by a union for purposes of collective bargaining. Trade groups representing employers argued that the rule exceeded the Board’s statutory authority under the NLRA and violated the APA. They asked a district court to vacate the rule changes as facially invalid and enjoin enforcement. The Board filed a cross-motion for summary judgment, contending that it was entitled to deference and that the rule changes were reasonable and consistent with the requisites of the NLRA and the APA. The provisions challenged by the employer groups fell into three categories: (1) rule changes that limit the scope of the pre-election hearing, particularly the deferral of individual voter eligibility issues; (2) rule changes that require employers to disclose to unions personal employee information; and (3) rule changes that cumulatively shorten the time period between petition and election to less than 30 days. To succeed on their facial challenge, the employer groups had to show that "no set of circumstances exists under which the [Rule] would be valid." Eligibility challenges. The employer groups contended that the rule exceeded the Board’s authority under Sec. 9 of the Act by allowing regional directors to preclude employers from contesting voter eligibility issues in pre-election hearings. For its part, the Board countered that the Act’s requirement that the Board hold an "appropriate hearing" on questions of representation did not demand pre-election litigation of all voter-eligibility issues. The Fifth Circuit concluded that the Board had the better argument. Prior versions of the regulations neither expressly stated the purpose of the hearing nor specifically limited the evidence that could be introduced. In the new rule, the Board addressed the administration of the pre-election hearing and emphasized that the purpose of the hearing "under Section 9(c) of the [NLRA] is to determine if a question of representation exists." Employers are now required to submit a written "Statement of Position" that identifies any basis for contending that the proposed bargaining unit is inappropriate, any challenges to voter eligibility, and "all other issues the employer intends to raise at the hearing." However, hearing officers and regional directors may decline to hear evidence on issues "that need not be decided before the election," including issues of individuals’ eligibility to vote. Contrary to the employer groups, the actual language of the rule neither "precludes" nor "prevents" the presentation of evidence regarding voter eligibility. The rule simply indicates that "[d]isputes concerning individuals’ eligibility to vote or inclusion in an appropriate unit ordinarily need not be litigated or resolved before an election is conducted." The rule neither eliminates the possibility that a hearing officer could address these issues at an earlier stage nor prohibits an employer from ever raising such issues. The employer groups failed to identify any statutory language or legislative history that required litigation of all voter eligibility at the pre-election hearing. Moreover, because this was a facial challenge, the employer groups had to demonstrate that the provisions would not be valid under any set of circumstances. Contrary to their contention, the Board’s rule provides regional directors discretion to determine voter eligibility issues in pre-election hearings. Regional directors can also postpone the time for submitting a Statement of Position on a showing of either special or extraordinary circumstances. Consequently, because the rule changes to the pre-election hearing did not exceed the bounds of the Board’s statutory authority under the NLRA, the appeals court affirmed the lower court ruling. Disclosure of employee information. The employer groups also challenged rule provisions that required the disclosure of personal employee information, both before and after the pre-election hearing. They argued that this requirement conflicted with federal privacy law and thus constituted an impermissible interpretation of the NLRA. Additionally, they asserted that the broader disclosure requirements were an arbitrary and capricious invasion of employees’ privacy rights, in violation of the APA. The new disclosure provisions expand Excelsior Underwear by requiring two separate disclosures of employee information. First, within two days of a direction of election, employers must produce a voter list that contains the full names, work locations, shifts, job classifications, and contact information of all eligible voters. Second, employers must disclose the names and job duties of employees to a petitioning union before any determination that the petition is supported by a sufficient showing of interest to proceed to an election. The employer groups suggested that federal law has moved away from Excelsior Underwear’s justification for disclosure and towards increasing privacy protections. However, they failed to identify any federal law that restricted the disclosure of employee information to unions by employers. Similarly, they failed to note any change in circumstances that would undermine the Board’s concern for encouraging an informed employee electorate by allowing unions the right of access to employees. Because the disclosure requirements reasonably furthered this valid objective, the rule change did not violate the NLRA. Nor were the disclosure provisions arbitrary and capricious under the APA. Here, the appeals court pointed out that the rule changes were "intended to better advance the two objectives articulated by the Board in Excelsior"; namely, to ensure fair and free choice by maximizing voter exposure to non-employer party arguments; and to resolve questions of representation by facilitating knowledge of voters’ identities. Moreover, the Board concluded that "advances in recordkeeping and retrieval technology" warranted reducing the time period for production of the voter list. Because the rule accords such deference to the regional director, the facial challenge to the turnaround time failed. Further, exposing employees to a potentially increased risk of identity theft and data breach in order to ensure an informed electorate did not rise to the level of arbitrary and capricious agency action, the appeals court held. Employer free speech rights. Finally, the employer groups argued that the rule violated the NLRA by interfering with protected speech during election campaigns. Specifically, they contended that the cumulative effect of the rule change improperly shortened the overall pre-election period in violation of the "free speech" provision of the Act. Under the new rule, "[e]lections will no longer be automatically stayed in anticipation of requests for review," instead "[t]he regional director shall schedule the election for the earliest date practicable." Relying on legislative history, the employer groups pointed to the 1959 amendments to demonstrate congressional opposition to "quickie" union elections. However, because the statutory text is unambiguous, the employer groups’ citations to legislative history were unpersuasive. To the extent that the employer groups argued that the timing provisions violated the APA, they failed to explain how or why the rule change inhibits meaningful debate or qualifies as arbitrary and capricious. In declining to create a specific deadline for elections, the Board addressed concerns about impairing speech rights. Because the Board considered the potential burdens on speech and afforded the regional director discretion in setting an election date, the employer groups’ challenge on this basis failed.

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