Labor & Employment Law Daily NLRB modifies approach to employer confidentiality interests when unions request information
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Monday, December 23, 2019

NLRB modifies approach to employer confidentiality interests when unions request information

By Ronald Miller, J.D.

The Supreme Court has directed the Board to construe the duty to provide requested relevant information with due regard for confidentiality interests that would be adversely affected by such disclosure, and to be guided by those considerations when formulating remedies for violations of that duty.

In a decision by a four-member panel of the NLRB, the Board modified its precedent to ensure that a certification-testing employer preserves both its right to secure judicial review of the underlying representation case and, if the union’s certification is upheld by a court of appeals, to engage in accommodative bargaining with respect to information as to which it has raised a legitimate defense, such as confidentiality, that would normally require such bargaining. Here, the Board found that conflicting lines of precedent created a legal catch-22 for the employer because it is simultaneously challenging the validity of the union’s certification and raising legitimate confidentiality interests with respect to some of the requested information. According to the Board, it had never adequately addressed the manner in which these lines of precedent collide. It determined that the conflict can best be resolved by modifying the remedy for the violations found. Member McFerran filed a separate opinion concurring in part and dissenting in part (NP Palace, LLC dba Palace Station Hotel & Casino, December 16, 2019).

Refusal to bargain. Following a representation election on January 9, 2018, the union was certified as bargaining representative of a unit of employees. Thereafter, the employer refused to bargain. By letter dated January 22, the union requested that the employer provide it with certain information. That same day, the employer denied the request. By letter dated January 31, the union requested additional information. Again, the employer denied the request. It never furnished the union any of the requested information.

Summary judgment request. On May 2, 2018, the General Counsel issued a complaint alleging that the employer violated Section 8(a)(5) and (1) by refusing to recognize and bargain with the union and refusing to furnish relevant information. The employer filed an answer admitting in part and denying in part the allegations. On May 9, 2018, the General Counsel sought partial summary judgment on the basis that an employer acted unlawfully by failing and refusing to furnish information necessary for the union’s performance of its duties as the bargaining representative of a unit of employees.

In response to the Notice to Show Cause, the employer argued that there were disputed issues of material fact as to (1) whether the requested information was necessary for and relevant to collective bargaining, and (2) whether the union’s need for the information outweighed its interest in preserving the confidentiality of certain information requested, including internal “wage or salary plans,” confidential policies on its gaming machines, and precautions to combat illegal gaming and money laundering.

On May 14, 2019, the Board issued a decision granting in part the General Counsel’s motion for summary judgment finding that the employer violated Section 8(a)(5) and (1) by refusing to recognize and bargain with the union following its certification. In that decision, the Board also severed and retained for further consideration the complaint allegations that the employer unlawfully refused to furnish relevant information requested by the union. The present decision resolves those information request allegations.

Presumptively relevant information. As an initial matter, the Board granted the General Counsel’s motion for summary judgment with respect to the presumptively relevant information requested by the union. The Board found that the employer failed to raise triable issues with respect to most of the items in the union’s information requests. However, the Board concluded that because job descriptions for non-unit personnel and unit employees’ Social Security numbers are not presumptively relevant, it denied the General Counsel’s motion with respect to the employer’s failure to provide that information.

Similarly, the Board denied the General Counsel’s motion with respect to the employer’s failure to provide requested information about customer complaints, again finding that the information was not presumptively relevant. Although the Board’s 2011 ruling in Mercedes-Benz of San Diego found that requests for customer complaints was presumptively relevant information, there was no analysis or explanation for that finding. Here, the Board overruled Mercedes-Benz of San Diego and other cases finding that customer complaints about unit employees are presumptively relevant.

Confidentiality interests. The Board turned next to the employer’s confidentiality argument. Here, the Board found that the employer articulated legitimate confidentiality interests with respect to some of that requested information. It was undisputed that when the union requested the information, the employer did not offer to engage in accommodative bargaining. Under current Board law, its confidentiality defense was thereby waived. However, this rule of law placed the employer in an untenable legal position, because a separate line of precedent holds that by bargaining with the union, it would waive its right to challenge the validity of the union’s certification in a court of appeals.

It would be contrary to the intent of Congress to hold that an employer must waive this right in order to assert a confidentiality defense to an information request, or vice versa. Still, the Board concluded that the employer failed to satisfy its statutory obligations when it failed to either furnish the purportedly confidential information or seek to engage in accommodative bargaining with the union.

Remedy modified. Rather, the Board determined that the conflict can best be resolved by modifying the remedy for the violations found. Under the remedial approach adopted, if a certification-testing employer articulates a specific confidentiality interest in particular requested information, the Board will determine from the filings whether the confidentiality interest is legitimate on its face. If the Board finds that it is, it will remedy the violation by ordering the employer to engage in accommodative bargaining. If the Board finds that the defense is not legitimate, it will remedy the violation by ordering the immediate production of the required evidence.

Because the Board found that the employer asserted legitimate confidentiality interests, it was not ordered to furnish that information but rather to engage in accommodative bargaining with the union over their respective interests. Accordingly, the Board granted in part and denied in part the General Counsel’s motion for summary judgment with respect to allegations that the employer unlawfully failed to furnish relevant information.

Partial concurrence and partial dissent. In a separate opinion, Member McFerran argued that the majority wrongly overruled precedent holding that customer complaints about bargaining unit employees are presumptively relevant to a union’s fulfillment of its duties. Further, the dissent disagreed with the majority’s imposition of a new scheme permitting an employer that is unlawfully refusing to bargain with a Board-certified union—in order to test the certification—to simultaneously preserve a confidentiality defense (and other defenses, such as overbreadth and burdensomeness) to the union’s requests for relevant information, even where employer did not raise the confidentiality issue or offer to bargain an accommodation with the union at the time the request was made.

According to McFerran, the majority’s new approach to confidentiality defenses in the test-of-certification context is a product of its perception that current law is unfair to employers; but this perception has no basis in the relevant statutory policies.

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