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The National Labor Relations Board has recently overruled 50-year-old precedent, rendering it more difficult for employers to oust an incumbent union. Before the NLRB issued its decision in Levitz Furniture Co., 333 N.L.R.B. No. 105 (March 29, 2001), the National Labor Relations Act prescribed a “reasonable” standard, permitting employers to withdraw recognition of a union based on a good faith doubt about whether a majority of employees in the bargaining unit still wished to be represented by the union. Under the Levitzstandard, however, employers must continue to recognizea union unless the union has in factlost the support of the majority ofthe bargaining unit members. Whether a union is entitled to represent a group of employees depends upon whether a simple majority of those employees wish to be represented. With certain exceptions, it is unlawful for an employer to deal with a union that does not enjoy the support of a majority of employees. Sometimes, for a variety of possible reasons, existing unions lose the support of a majority of the employees they represent. At that point, the question becomes, what is the employer required or permitted to do about that loss of support? One possibility is for the employer to stop dealing with the union on its own. The other is for the employees themselves to vote the union out. In Levitz Furniture Co., three of four members of the current Board — Chairman Truesdale and Members Liebman and Walsh — held that an employer may “withdraw recognition” — that is, unilaterally decide to stop dealing with a union as the representative of employees — “only where the union has actually lost the support of the majority of the bargaining unit members.” In so doing, the Board explicitly overruled Celanese Corp., 95 N.L.R.B. 664 (1951), which for a half century permitted employers to withdraw recognition not only when a majority of the employees no longer wish to be represented by the union, but also when the employer had a good faith doubt, based on “objective considerations,” about whether a majority of employees in the bargaining unit still wished to be represented by the union. In other words, employers were permitted under Celaneseto be wrong about the union’s majority status as long as they had acted in good faith and there was evidence to support their decision to withdraw recognition. This is no longer the case. The Board’s reversal of Celanesemeans that employers who withdraw recognition act at significant peril of being found in violation of the Act if they are later unable to demonstrate in an unfair labor practice proceeding that the union had in fact lost the support of a majority of the bargaining unit at the time recognition was withdrawn. However, in an effort to encourage employers to utilize the Board’s election procedures, the Board relaxed the standard for when employers may file a petition for an election among employees to test whether the union continues to enjoy the support of a majority of the employees. Such petitions may now be filed based on a reasonable good faith “uncertainty” — rather than “disbelief” — regarding the union’s continuing majority status. By simultaneously raising the standard for withdrawing recognition and relaxing the standard for employer petitions, the Board has expressed a clear preference for the secret-ballot election as a means of determining whether or not employees will be represented by a union. ‘LEVITZ FURNITURE COMPANY’ Local 101, United Food & Commercial Workers International Union, AFL-CIO (“Local 101″), represented all full-time and regular part-time associates at a Levitz location in San Francisco starting in October 1992, when it took over for a local of the Retail Clerks International Association. On or about December 1, 1994, Levitz received a petition from employees stating that they no longer wished to be represented by Local 101. Calculating that a majority of the employees in the bargaining unit had signed the petition, Levitz advised Local 101 that it would be withdrawing recognition from the union when the collective bargaining agreement between them expired on January 31, 1995. On December 14, 1994, Local 101 wrote to Levitz claiming that it had objective evidence that it still represented a majority of the bargaining unit at the San Francisco store. Levitz responded that it would rely on the evidence that it had received to the contrary. It never investigated Local 101′s claim and withdrew recognition when the agreement expired. Local 101 then charged Levitz with an unlawful withdrawal of recognition and refusal to bargain. SETTLED LAW REVERSED In briefing the issue, the Board’s General Counsel, who acts as the prosecutorial and policy-testing branch of the agency, and the amici curiae on behalf of the Union, urged a standard under which employers would neverbe able to withdraw recognition absent an election or agreement between the parties to test the union’s majority status in another manner. Levitz and its amici argued for both retaining the Celanesedoctrine andlowering the standard for obtaining such elections. The Board staked out a position somewhere in between these extremes, but a position that nevertheless meant overruling a well-established rule of labor law. When the National Labor Relations Act was passed in 1935, there was no vehicle by which employers could initiate an election. According to the Levitzdecision, this provided some justification for the old standard under which employers were entitled to withdraw recognition based on a good faith doubt as to the union’s majority support, which at the time was the same standard under which employers were entitled to refuse to recognize a union in the first instance (thus forcing the union to petition the Board to conduct a representation election). Because the employer could not initiate an election to test the union’s majority status, it was permitted to act on its good faith belief that the union no longer had majority status. In 1947, however, as part of the Taft-Hartley amendments to the Act, Congress introduced employer-initiated elections, known as “RM” petitions. This allowed employers, as well as employees and unions, to request an election for the employees to decide whether they wanted to continue to be represented by a union. Despite this change in the law, the Board held four years later in Celanesethat employers were still permitted to withdraw recognition if they possessed a good faith doubt regarding the union’s continuing majority status. Thus, as long as the employer had some reasonable ground for its belief, and had not instigated the employees’ dissatisfaction with the union through its own unlawful activity, a withdrawal of recognition was not unlawful despite the possibility that the employer’s belief, while held in good faith, might be wrong. Part of the justification for this rule was that the union was always free to file a new representation petition after the employer withdrew recognition, thereby reestablishing its majority support through an election. In reversing the Celanesedoctrine, the Board held that “there are compelling legal and policy reasons why employers should not be allowed to withdraw recognition merely because they harbor uncertainty or even disbelief concerning unions’ majority status.” First and foremost was the Board’s desire to eliminate the possibility of withdrawal of recognition from a union that has not actually lost majority support. Thus, under the new rule, the employer may withdraw recognition only when there is actual loss of support; the employer’s good faith is irrelevant. The Board also placed the burden of demonstrating the actual loss of majority status on the employer. At the same time, to encourage employers to use the Board’s election procedures rather than resorting to self-help by withdrawing recognition, the Board lowered the standard for filing RM petitions. The standard for filing an RM-petition had been the same as the standard for withdrawing recognition: good faith doubt of the union’s majority status. Under the Celanesedoctrine, the Board had interpreted good faith doubt to mean good faith “disbelief.” In Allentown Mack Sales & Serv. v. NLRB, 522 U.S. 359 (1998), however, the United States Supreme Court held that good faith doubt means “reasonable uncertainty,” not “good faith disbelief.” Following the Court’s lead, the Board held that an employer now may request an election based on its “uncertainty” that the union continues to enjoy majority support, which may be based on employee claims of dissatisfaction with the union and unverified employee statements about the lack of union support among otheremployees in the bargaining unit. The Board reasoned that relaxing the standard would encourage employers to seek an election rather than acting unilaterally, promoting both employee free choice and stability in collective bargaining relationships. To protect employers against the possibility of violating labor law by recognizing unions that do notenjoy majority support, the Board held that “an employer that has evidence of actual loss of majority support will not violate [the Act] if it files an RM petition and continues to recognize the union while election proceedings are ongoing.” The good news for Levitz was that the Board, recognizing the substantial change in the law it was making, unanimously decided not to apply the new rule retroactively. Thus, the Board, dismissing the complaint, found that Levitz had notacted unlawfully at the time by withdrawing recognition from Local 101 based on its good faith uncertainty of the union’s majority status. THE DISSENT Member Hurtgen, the lone Republican on the Board, dissented from that part of the decision that overruled Celanese; he concurred with the majority only in (i) lowering the RM standard for filing an employer petition and (ii) dismissing the complaint against Levitz. He argued that the Board should place greater value on precedent, which provides stability, predictability and certainty in the law. He further argued that the majority had placed undue emphasis on the National Labor Relations Act’s fundamental objective to “encourage the practice and procedure of collective bargaining,” at the expense of employees’ explicit legal right notto be represented by a union they do not support. Finally, Member Hurtgen reasoned that RM-petitions, notwithstanding the relaxed standard, fail as an alternative to good faith withdrawal of recognition because unions can prevent the processing of such petitions by filing “blocking charges” — unfair labor practice charges that, with certain limited exceptions, automatically block the processing of a representation petition until they are investigated and resolved. Even if blocking charges are not filed or are expeditiously resolved, the union can challenge the results of the election, leading to additional litigation, during which the employer must continue to recognize a union that no longer enjoys the support of a majority of employees. As Member Hurtgen concluded, “the RM road can be a long and difficult one.” PRACTICAL CONSEQUENCES REMAIN TO BE SEEN The practical consequences of Levitzare difficult to predict. First, because there always is a degree of risk in withdrawing recognition, many employers have taken a conservative approach and done so only where the evidence was strong enough to demonstrate an actual loss of majority support. Thus, for some, the new rule changes very little. Second, the decision provides no guidance with respect to timing: What happens if the employer receives compelling evidence that a majority of the employees no longer wish to be represented by the union, but by the time the employer actually informs the union that it will no longer recognize the union, the situation has changed and a majority of employees want to keep the union? Third, although the Board “lowered” the standard for RM petitions to “uncertainty,” in practice the difference between the words “uncertainty” and “disbelief,” the former standard, may be difficult to discern and easy to manipulate depending on the facts of the case. Finally, it is conceivable that a new Republican majority on the Board could reverse Levitz. Two things are certain. Employers must be aware that it is no longer enough to withdraw recognition based on a reasonable, good faith belief in the loss of the union’s majority support; they must be sure they are correct. And further litigation will be required to answer the questions left open in Levitz. Peter Conrad is a partner, and John Fullerton is an associate, in the Labor and Employment Law Department at Proskauer Rose LLPin New York City.

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