Labor & Employment Law Daily NLRB final rule revises, codifies several representation policies, procedures
Thursday, April 2, 2020

NLRB final rule revises, codifies several representation policies, procedures

By Lisa Milam, J.D. and Joy P. Waltemath, J.D.

The final rule revises the NLRB’s blocking charge policy, voluntary recognition bar, and Section 9(a) construction industry provisions, making some substantive changes to the rule as initially proposed.

The NLRB announced on Tuesday, March 31, that it has finalized several amendments to its representation rules that it says will “better protect employees’ statutory right of free choice on questions concerning representation.” The final rule alters several Board policies, none of which were previously set forth as formal regulatory provisions.

The Board first issued a notice of proposed rulemaking (NPRM) on August 12, 2019, to modify several provisions of Part 103 of the NLRB’s Rules and Regulations. The final version announced Tuesday, slated for publication in the Federal Register on Wednesday, April 1, and to take effect 60 days thereafter, entails several substantive revisions to the provisions as first proposed, in response to comments received.

The final rule revises and formalizes three NLRB policies related to union representation and elections:

Blocking charge policy

Under current Board policy, a union representation election is blocked at the request of a party when an unfair labor practice charge is pending. The final rule replaces this approach with a “vote and count” or “vote and impound” procedure. Under the new rule, when an unfair labor practice charge and blocking request have been filed, the NLRB regional director will continue to process an election petition and conduct an election; however, ballots will either be counted or impounded, depending on the nature of the charge filed.

Ballots impounded. When the party seeking to block an election has alleged violations of Section 8(a)(1) and 8(a)(2) of the Act, or violations of Section 8(b)(1)(A) that challenge the circumstances surrounding the election petition (or the employee showing of interest submitted in support of the petition), ballots will be impounded for up to 60 days post-election. Ballots also will be impounded when the unfair labor practice charge alleges that an employer has dominated a union in violation of Section 8(a)(2) and seeks to disestablish a bargaining relationship.

“The ballots shall be impounded for up to 60 days from the conclusion of the election if the charge has not been withdrawn or dismissed, or if a complaint has not issued, prior to the conclusion of the election,” the rule provides. “If a complaint issues with respect to the charge at any time prior to expiration of that 60-day post-election period, then the ballots shall continue to be impounded until there is a final determination regarding the charge and its effect, if any, on the election petition. If the charge is withdrawn or dismissed at any time prior to expiration of that 60-day period, or if the 60-day period ends without a complaint issuing, then the ballots shall be promptly opened and counted.”

The 60-day period will not be extended, even if more than one unfair labor practice charge is filed serially.

Ballots not impounded. For all other types of unfair labor practice charges, ballots will not be impounded; they will be opened and counted at the end of the election.

Not certified regardless. However, regard less of the nature of the charge filed (and thus, whether the ballots are to be counted or impounded), the election results will not be certified, nor will a certification of representative be issued (if applicable), until final disposition of the unfair labor practice charge; and, if an unfair labor practice is found, a determination of the effect of any such violation on the election petition.

Proposed rule vs. final rule. In the NPRM, the Board proposed to adopt the vote-and-impound procedure in all cases. (NLRB General Counsel Peter B. Robb first suggested this approach in comments responsive to the Board’s initial Request for Information when it first signaled it would revisit the 2014 Obama-era election rules.) However, the final rule, unlike the proposed rule, applies the vote-and-impound procedure for certain categories of unfair labor practice charges.

Impact.The blocking charge policy revision is the most significant of the NLRB’s amendments, Mark Kisicki, a Shareholder in the Phoenix office of Ogletree Deakins, told Labor & Employment Law Daily when the NPRM was issued. While the rule change might not result in more elections being held overall (given that an election is typically held eventually, even though it may be significantly delayed), Kisicki posited that the new policy certainly could result in more decertification elections being held.

Voluntary recognition bar

The rule also modifies the Board’s “voluntary recognition bar” by reestablishing a notice requirement and 45-day open period for employees (and rival unions) to file an election petition after an employer voluntarily recognizes a union under Section 9(a) of the Act (and thereby bars a subsequent election petition). The rule overturns Lamons Gasket Co., issued on the final day of Democrat Wilma Liebman’s tenure as NLRB chair, which had abandoned 40 years of Board precedent, and restores the Board’s 2007 Dana Corp. approach. The notice and open period procedures are incorporated in the Board’sRules as a new Section 103.21(a).

Proposed rule vs. final rule. In its final rule, the Board clarified that the provision “shall apply only to an employer’s voluntary recognition on or after the effective date of the rule, and to the first bargaining agreement reached after such voluntary recognition.” Among other revisions from the proposed rule, the final rule clarifies that the employer “and/or” (rather than “and”) union must notify the regional office when voluntary recognition has been granted, and now requires that an employer distribute the notice to bargaining unit employees (and sets forth the wording of the notice) electronically if this is the usual means by which the employer communicates with employees.

Rationale. In resurrecting the Dana Corp. approach, the Board was persuaded by the dissent of then-Member Brian Hayes (now co-leader of Ogletree’s Traditional Labor Relations Practice Group) in Lamons Gasket. The Democratic majority in that case had cited NLRB election statistics to note the limited number of elections held under Dana procedures; in Hayes’ view, however, these numbers supported, rather than detracted from, the need for notice and an open period following voluntary recognition.

“The Dana policy was adopted to minimize the reach of so-called ‘top-down’ organizing efforts, in which employees were given no vote prior to recognition of the union,” Hayes told Labor & Employment Law Daily. However, the Board, in its proposed rule, had stressed that its newly codified rule provision “does not diminish the role that voluntary recognition plays in the creation of bargaining relationships,” and “is not intended to and should not have the effect of discouraging parties from entering into collective-bargaining relationships and agreements through the undisputedly valid procedure of voluntary recognition based on a contemporaneous showing of majority support.”

Nonetheless, the new rule “ensures that employee free choice has not been impaired by a process that is less reliable than Board elections.”

Impact. In restoring the 45-day notice and disapproval window following voluntary recognition, the Board recognizes the need for employees to be aware of what their employer has agreed to with a union, Ogletree’s Kisicki had pointed out. Without such a notice requirement, employees may otherwise remain uninformed about their rights. In his view, “It’s hard to undermine the requirements of DanaCorp. if you value industrial democracy.”

Construction industry recognition

NLRA, Section 8(f), unique to the construction industry, allows an employer to enter into a collective bargaining agreement with a union without the union having earned the majority support of the employer’s workers. “While the impetus for this exception is that construction industry employers often executed pre-hire agreements with a labor organization in order to assure a reliable, cost-certain source of labor referred from a union hiring hall for a specific job, the exception applies as well to voluntary recognition and collective-bargaining agreements executed by a construction industry employer that has employees,” the Board had explained in rolling out its proposed rule.

A standard bargaining agreement under Section 9(a) of the Act is based on majority status, so the relationship may not be unilaterally terminated when the contract ends. But under an 8(f) relationship, either party may unilaterally terminate the relationship at the end of the contract. Thus, unlike a Section 9(a) bargaining relationship, one established under Section 8(f) cannot bar petitions for a Board election.

Heightened burden. However, a Section 8(f) bargaining relationship can become a Section 9(a) bargaining relationship if the union comes to gain majority status among the bargaining unit. The Board’s final rule heightens the proof required to demonstrate this change in status, and codifies that burden. Specifically, it provides that contract language alone will not suffice; “positive” extrinsic evidence of a union’s majority status must be shown before a Section 8(f) construction industry contract can be turned into a Section 9(a) agreement.

That is, majority support cannot be established based solely on language set forth in a bargaining agreement negotiated between the union and construction industry employer that simply states as such. Rather, there must be a showing “that the union unequivocally demanded recognition as the Section 9(a) exclusive bargaining representative, and that the employer unequivocally accepted it as such, based on a contemporaneous showing of support from a majority of employees in an appropriate unit,” the rule provides. The change is to be set forth in stand alone Section 103.22 of the Board’s Rules.

Rationale. The NLRB has endured decades of criticism from the D.C. Circuit over this issue, notes Kisicki, noting that the fix is long overdue. Under the Board’s Staunton Fuel decision, an initial bargaining relationship under Section 8(f) could become a Section 9(a) relationship at any time after the hiring of employees if the employer and union execute a contract with the prescribed Section 9(a) recognition language.

“Without any extrinsic proof that a majority of those employees ever supported the recognized union, the current contract bar policy will prevent them, or a rival union, from filing a Board election petition to challenge the union’s representative status for up to three years of the contract’s duration,” the Board explained in its NPRM. The Staunton Fuel approach “conflicts with statutory majoritarian principles and represents an impermissible restriction on employee free choice, particularly in light of the protections intended by the second proviso of Section 8(f),” the Board reasoned. Thus, in the final rule, it overturns Staunton Fueland adopts the D.C. Circuit’s position in Nova Plumbing, Inc. v. NLRB, which held that contract language alone was insufficient to show majority support.

Proposed rule vs. final rule. The final rule states that the construction industry amendment “applies to an employer’s voluntary recognition extended on or after the effective date of the rule, and to any bargaining agreement entered into on or after the effective date of voluntary recognition extended on or after the effective date of the rule.”

Why rulemaking? The three representation changes set forth in the NLRB’s final rule reflect policies established through Board common law, policies subject to reversal whenever a new presidential administration upended the ideological makeup of the Board. The Trump NLRB has embraced rulemaking to effectuate more permanent changes in labor policy, saying that it can offer greater certainty and consistency by promulgating formal rules, rather than through reliance on case adjudication. By codifying these policies in the NLRB’s formal Rules and Regulations, the Board noted, “employers, unions, and employees will be able to plan their affairs free of the uncertainty that the legal regime may change on a moment’s notice through the adjudication process.”

Compliance assistance. The NLRB intends to post on its website a compliance guide to the final rule changes for small entities once the rule is formally published.

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