On Dec. 21, 2011, the two Democratic members of the National Labor Relations Board (NLRB) handed labor unions a Christmas present—a package of representation election rules changes the board described as necessary to reduce unnecessary litigation, but that business interests decried as giving unions an unfair advantage by shortening the election time frame.
The action was not unexpected, as the board had voted 2-1 in November to authorize drafting of the rules changes, seeking to mitigate political opposition by moving forward with a package that was less onerous to management than a proposal unveiled six months earlier. Nonetheless, it provoked predictable outrage from Republicans on Capitol Hill and a legal challenge from the U.S. Chamber of Commerce.
The outrage sprang partly from the rules changes themselves—changes predicted to reduce the average time between when a union files a petition to hold a representation election and the date the election is held from the current 38 days to somewhere between 17 and 25 days, according to varying analyses by several corporate law firms.
But much of the controversy is focused on the way the board approved the changes. Although only three of the five board seats were filled, the two Democratic members, Chairman Mark Pearce and Craig Becker, decided to approve a rules change over the strong objection of the only Republican member, Brian Hayes. Hayes argued that never in the history of the board had a rules change been effected with the approval of only two members. The entire rules change was rushed to final approval before Becker’s recess appointment expired at the end of December, with the expectation the board would be left powerless with only two members, Pearce and Hayes. (As it turned out, President Obama in January brought the board up to its full strength.)
“They were so anxious to push something through before Becker went off the board that they were sloppy and careless about the whole thing,” says James Walters, a partner at Fisher & Phillips.
Road to Reform
In June 2011, the NLRB proposed a sweeping set of election rules changes, including provisions that would have required employers to provide unions with telephone numbers and email addresses of employees within two days of an election petition being filed. Under the old rules, employers have seven days and need only provide names and home addresses of employees. Another proposed change called for electronic filing of election petitions.
These and other proposed changes generated 65,000 comments and sparked an outcry on Capitol Hill. In an apparent effort to mitigate political opposition and have final rules ready before Becker’s departure, the board on Nov. 30, 2011, authorized a stripped-down rules change limited to curtailing litigation over election-related issues. Pearce issued a statement saying the other proposed changes remained on the table for future consideration.
“The board made a strategic retreat, but it’s not a final surrender,” says Hal Coxson, a shareholder at Ogletree Deakins. “They took out some of the most objectionable provisions, but the chairman indicated this is not the end of it.”
When the vote was taken, most observers thought the board would be unable to take any further action in 2012, as it would have been reduced to two members and a 2010 Supreme Court ruling required three members for a quorum. But the president filled the three vacant NLRB seats in early January (See “Filling Seats”), potentially allowing Pearce to revive the tabled rules changes.
The final rules significantly change the process in elections in which employers contest issues such as the composition of the bargaining unit, which happens in about 10 percent of elections. The issues often involve whether certain employees should be classified as supervisors, excluded from the bargaining unit. In such cases, a hearing has been held before an NLRB regional hearing officer.
The new rules limit hearings to “issues relevant to the question of whether the election should be held,” according to an NLRB statement. The hearing officer has broad authority to limit testimony to “relevant issues,” and to decide whether to accept post-hearing briefs. The changes also eliminate the employer’s right to appeal the hearing officer’s decisions prior to the election, instead requiring that all appeals be consolidated into a single post-election appeal. Currently, the election date may be postponed to allow for appeals before the election, but that practice will no longer be permitted.
The net effect is to significantly shorten the time between the filing of an election petition and the election date in contested elections. The time frame is crucial, management attorneys say, because companies are often caught unaware by an election petition and need time to prepare employee communications that present the argument for staying nonunion.
“Academicians have found in study after study that the more time between the filing of a petition and the conducting of the election, the better chance the employer has,” Walters says, adding that even under the old rules, unions won two-thirds of the elections held in recent years.
The U.S. Chamber of Commerce immediately filed a lawsuit in the U.S. District Court for the District of Columbia aimed at blocking the rules.
“Not only did the board circumvent its own operating procedures to finalize this rule, but the rule itself short-circuits statutorily mandated safeguards intended to ensure fair elections,” Robin Conrad, executive vice president of the National Chamber Litigation Center, said in a statement announcing the filing of Chamber of Commerce, et al. v. NLRB. “The blatantly partisan purpose of this rule is to ensure that employers have no time to talk to their workers about unionizing, and that the only information workers will get will come from the union.”
Additionally, Sen. Mike Enzi, R-Wyo., vowed in a Dec. 21, 2011, statement to use the Congressional Review Act (CRA) to challenge the “ambush election” rules. The CRA allows either the Senate or the House to introduce a joint resolution of disapproval with the full force of law to stop a federal agency from implementing a recent rule or regulation, according to Enzi.
Congressional anger over the recess appointments may stoke further efforts to block the rules. Thus, although the new rules are supposed to be effective April 30, when they will actually take effect, if ever, remained in doubt at press time.