Labor & Employment Law Daily Solicitation of employee views about key bargaining terms was improper direct dealing
Wednesday, July 24, 2019

Solicitation of employee views about key bargaining terms was improper direct dealing

By Ronald Miller, J.D.

An employer engaged in improper direct dealing when its chief negotiator spent 25 minutes speaking with employees about subjects that were to be addressed during negotiations, and asked what they hoped to see in a new agreement.

Substantial evidence supported the Board’s findings that an employer engaged in direct dealing with employees and denigrated a union in the eyes of employees, ruled the D.C. Circuit. The appeals court also held the employer prematurely declared an impasse in negotiations on the basis of the format of a new collective bargaining agreement, and unilaterally implemented new terms and conditions without first reaching an overall impasse. Additionally, the court found no merit to the employer’s contentions that the Board violated its due process rights and improperly imposed a notice-reading remedy (NLRB v. Ingredion, Inc. dba Penford Products Co., July 19, 2019, Rogers, J.).

Bargaining positions. In March 2015, the employer acquired a corn processing plant. Approximately 1,645 of the plant’s employees were represented by a union. The employer recognized the union and assumed the existing collective bargaining agreement, which was scheduled to expire on August 15, 2015.

On June 1, the parties commenced negotiations on a new CBA. The union proposed to modify the CBA in several ways. For its part, the employer proposed to start from scratch with an entirely new CBA. The parties had not yet reached an agreement on August 18, when the employer declared an impasse and presented its “last, best, and final offer.” After rejecting the union’s counteroffer on September 10, the employer unilaterally implemented the terms of its final offer.

The union filed charges with the NLRB alleging that the employer committed numerous unfair labor practices.

New terms unilaterally implemented. An administrative law judge determined that the employer had committed several violations of the NLRA. Specifically, the ALJ found that the employer violated Section 8(a)(1) by “denigrating the Union” and by threatening employees that they could lose their jobs if they went on strike. Additionally, the ALJ determined that the employer violated Section 8(a)(5) by engaging in direct dealing with employees, by unilaterally implementing new terms and conditions without first reaching an overall impasse, and by failing to respond in a timely manner to a union request for information.

The Board affirmed all five violations, and directed the employer to cease and desist its violations, rescind the unilaterally implemented terms and conditions of employment, and compensate employees for losses incurred as a result of the violations. In addition, the Board ordered the employer to have its chief negotiator read a Board notice to employees.

Direct dealing. The record showed that less than two months before the start of negotiations, the company’s chief negotiator spent approximately 25 minutes speaking with employees about subjects that were to be addressed during negotiations. He criticized the work schedules and health insurance benefits provided by the existing CBA, and asked what the employees hoped to see in a new agreement. They expressed interest in a wage increase, an increased pension multiplier, different work schedules, more vacation days, and health insurance coverage for early retirees.

Under Board precedent, an employer violates Section 8(a)(5) and (1) if it “attempt[s] to arm itself for upcoming negotiations” by directly “soliciting the sentiment of the employees on a subject to be discussed at the bargaining table.” Petitioning for review, the employer acknowledged that its chief negotiator spoke to at least five employees during a visit to the plant, but asserted that his “impromptu conversations” were too “brief and general” to constitute direct dealing. The employer pointed to nothing in the record, however, that would cause the court to doubt the reasonableness of the Board’s finding. Consequently, the Board’s finding rested on substantial evidence.

Denigration of union. One of the employer’s managers told an employee not to sign his retirement papers because “there was a better contract coming” and he “would like the retirement that Ingredion was going to propose.” Further, he told the employee not to “let a few people in the union sway what [he] want[ed] to do.” The manager claimed that the chief negotiator had given him permission to discuss the topic with employees. Shortly after speaking with the first employee, the manager approached another employee who was considering retirement and told him to contract his union representatives and “have them get a hold of the company and start negotiating.” On these facts, the Board found that the manager had unlawfully denigrated the union in the eyes of employees by falsely representing that it was unwilling to negotiate on certain subjects.

The Board has held that an employer violates Section 8(a)(1) by misrepresenting the union’s bargaining positions in a way that “tends to undermine” employee support for the union. The employer argued that the manager did not violate the NLRA because he asserted only “a non-actionable opinion, not a ‘threat or reprisal or force or promise of benefit.’” But the Board found that the manager’s statements were misleading, and the record evidence supported its conclusion that the violated Section 8(a)(1) by misrepresenting the union’s position in a way that tended to cause employees to lose faith in the union, the appeals court held.

Impasse. Next, the Board found that the employer violated the Act by unilaterally implementing new terms and conditions of employment when the parties had not reached an overall impasse in bargaining. The employer contended that it bargained with the union to a valid impasse over a single issue—the format of the new CBA. However, the record showed that although the union’s proposals used the format of the existing CBA and the employer’s proposals used a different format, that fact did not prevent the parties from proceeding to negotiate and reach an agreement on some material issues. Moreover, at the time the employer declared impasse, major economic issues had received little attention from the parties. Consequently, the Board concluded that further discussion of substantive terms could have resulted in the parties reaching a compromise with respect to the format and language of a new agreement. Thus, substantial evidence supported the Board’s finding that although the format of the new contract was a “major issue,” it did not create an overall impasse.

Delay in providing requested information. Although the employer promptly responded to most of the union’s requests for information, it took 11 weeks to provide pension-related information. According to the employer, it made a reasonable effort to produce the items as promptly as circumstances allowed. However, the appeals court observed that the employer’s contemporaneous explanation for the delay differed from the explanation it presented to the court. The employer did not tell the union that the pension-related information would be difficult or time-consuming to retrieve, but that it did not provide the information because it intended to discontinue the existing pension plan. This was not a valid reason for delaying compliance with an information request, explained the appeals court.

Remedial orders. Finally, the appeals court found no merit in the employer’s claim that it was denied due process by the Board’s remedial order requiring it to rescind all discipline imposed under the unilaterally implemented terms and conditions of employment. Moreover, as to the employer’s objection to the provision directing it to read aloud a notice describing its legal obligations, the appeals court found that because the employer’s chief negotiator played a central role in several violations, the Board did not abuse its discretion by imposing the remedy.

Accordingly, the appeals court denied the employer’s petition for review of the Board’s order and granted the Board’s cross-application for enforcement.

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