Under the leadership of former Chairman Wilma Liebman, the National Labor Relations Board charted a distinctly pro-labor course and generated considerable controversy. The decision to file a complaint seeking to halt Boeing Co.’s efforts to build its latest generation airliner at a non-union plant in South Carolina rather than a unionized facility in Washington state drew condemnation from business leaders and members of Congress alike. A final rule, issued Aug. 30, 2011, requiring all employers to post a notice informing employees of certain rights under the National Labor Relations Act resulted in three separate lawsuits in federal court seeking to block the rule. (The effective date of that rule has now been pushed back to April 30, 2012, at the request of the court.)

The controversy surrounding the NLRB has not subsided in the months since Liebman left office. If anything, it has increased with a new “quickie election” rule that a two-member NLRB majority rushed to finalize in December before the expiration of the recess appointment of member Craig Becker. (That rule is also slated to take effect on April 30.) In the new year, President Obama added fuel to the fire with recess appointments of three new members (two Democrats and one Republican) during a time when the Senate may or may not have been in recess (depending on whether so-called “pro-forma” Senate sessions attended by a few Republican senators in which no official Senate business is conducted prevent the Senate from being in recess). Those appointments were promptly challenged by the plaintiffs in the pending litigation over the notice rule.

All of which leaves the short-term future of the NLRB very much up in the air. If the recess appointments are not valid, then any actions the newly constituted NLRB may take to implement or enforce its new rules may be subject to challenge under the Supreme Court’s 2010 decision in New Process Steel L.P. v. NLRB, in which the court held a two-member NLRB lacks authority to act.

Notwithstanding this aura of uncertainty, several of the key decisions issued by the NLRB shortly before Liebman’s term ended in August 2011 are likely to have a lasting impact. In particular, it continued its march to circumscribe the statutory prohibition against secondary boycotts in Section 8(b)(4)(ii)(B) by expanding the scope of conduct that it considers to be noncoercive persuasion, rather than proscribed threats or intimidation. (See the NLRB’s Aug. 11, 2011, decision in Local Union No. 1827, United Brotherhood of Carpenters and Joiners of America (United Parcel Service) and its May 26, 2011, decision in Sheet Metal Workers International Association, Local 15 (Galencare Inc.))

In addition, the NLRB also reversed two Bush-era decisions and issued reformulated statements of its recognition bar doctrine — see the Aug. 26, 2011, decision in Lamons Gasket Co., overruling a 2007 case, Dana Corp. — and the successor bar doctrine — see the Aug. 26, 2011, decision in UGL-UNICCO Service Co., overruling MV Transport.

Finally, the NLRB announced a new unit determination rule for non-acute health care facilities, which will have broad application across virtually all industries, in its Aug. 26, 2011, decision in Specialty Healthcare and Rehabilitation Center of Mobile. This article will examine these decisions and their potential impact on employers.

THE DISAPPEARING SECONDARY BOYCOTT

The secondary boycott provisions of Section 8(b)(4)(ii)(B) make it an unfair labor practice for a labor organization or its agents to “threaten, coerce or restrain any person,” including a neutral employer, where an object of that conduct is “forcing or requiring that person” to, among other things, “cease doing business with any other person.” This statutory provision serves the important purpose of protecting neutral employers from “coerced participation in industrial strife” between a union and a primary employer.

In 2010, the NLRB held that the display of large stationary banners outside the workplaces of neutral employers, unaccompanied by picketing, did not “threaten, coerce or restrain” the neutral employers. Such nonpicketing conduct could be considered coercive “only when the conduct directly caused, or could reasonably be expected to directly cause, disruption of the secondary’s operations,” the NLRB said in its Aug. 27, 2010, decision in United Brotherhood of Carpenters, Local Union No. 1506 (Eliason & Knuth of Arizona Inc.)

In Galencare, the NLRB expanded its ruling in Eliason & Knuth to hold that the display of a large (16 ft. x 12 ft.) inflatable rat adjacent to the entrance of a neutral hospital, and a union member at the vehicle entrance of the hospital displaying a leaflet directed at incoming and outgoing traffic, constituted “peaceful persuasion.” In United Parcel Service, the NLRB likewise extended its rationale from Eliason & Knuth to cover the display of large stationary banners placed less than 15 feet from the driveway entrances to the neutral employers. It also held that individuals who were stationed on a curb beside the driveway entrance to one of the neutral employers to distribute handbills, and who stepped off the curb when a vehicle approached to motion the driver to roll down his or her window, and then walked in front of or around an oncoming vehicle, were not engaged in picketing, blocking or other proscribed conduct. The NLRB even upheld the display of banners at the neutral gates of two workplaces where a reserved gate system had been established.

Member Brian Hayes issued strongly worded dissents in both Galencare and United Parcel Service. In United Parcel Service, Hayes denounced the NLRB’s approach as “undercut[ting] the prophylactic purpose of Section 8(b)(4)(ii)(B) of the [National Labor Relations] Act as enacted by Congress and as interpreted by the Supreme Court.” In particular, he emphasized that the “predominant element of such bannering is confrontational conduct, rather than persuasive speech, designed to promote a total boycott of the neutral employers’ businesses, and thereby to further an objective of forcing those employers to cease doing business with the primary employers in a labor dispute.” Thus, such bannering is the “confrontational equivalent of picketing,” which is “the precise evil Congress sought to outlaw through Section 8(b)(4)(ii)(B).” Likewise, in Galencare, Hayes again emphasized that “the predominate characteristic of this union activity is, like picketing, to intimidate by conduct, not to persuade by communication.”

The significance of these cases for employers is clear — absent traditional picketing involving patrolling and picket signs or placards, a neutral employer will be hard pressed to establish that any union conduct directed at that employer violates the secondary boycott provisions of Section 8(b)(4)(ii)(B). Fortunately, nothing in these decisions changes the fact that traditional picketing of neutrals, blocking of ingress and egress, trespassing, and violence remain unlawful, and employers retain the right to seek protection from both the NLRB and the state courts.

HELPING UNIONS TO ORGANIZE (BY ANY MEANS NECESSARY)

On Aug. 26, 2011, the NLRB issued a flurry of decisions that will directly impact how unions organize and will protect unions from challenges by dissatisfied employees in the context of voluntary recognitions and successorship situations.

In Lamons Gasket, the NLRB overruled its 2007 decision in Dana Corp., which had established a 45-day period following the voluntary recognition of a union during which employees could file a petition seeking an election (with a 30 percent showing of interest), and which required the posting of a notice informing employees of their right to do so. In place of the Dana Corp. framework, the NLRB adopted a modified version of its prior recognition bar rule, which holds that an employer’s voluntary recognition of a union (upon a showing of majority support in an appropriate unit) will bar an election petition for a “reasonable period of time.” It defined the reasonable period of time to be no less than six months after the parties’ first bargaining session and no more than one year.

In UGL-UNICCO, the NLRB overruled its 2002 decision in MV Transport, which had in turn eliminated the short-lived “successor bar” doctrine established in the 1999 decision St. Elizabeth Manor Inc. Noting that there had been a dramatic increase in corporate mergers and other major corporate transactions in recent years that had the potential to “destabilize” collective bargaining relationships, the NLRB majority overruled MV Transport and reinstituted the successor bar doctrine. This doctrine allows a union that has been recognized by a successor employer a reasonable period of time for bargaining, during which its majority status cannot be challenged through a petition filed by employees or a rival union.

As in Lamons Gasket, the NLRB also defined that “reasonable period,” but adopted different rules depending on whether the successor employer exercised its legal right to set initial terms and conditions of employment, as allowed under the Supreme Court’s 1972 decision in NLRB v. Burns International Security Services Inc. If a successor employer has “expressly adopted the existing terms and conditions of employment as the starting point for bargaining without making unilateral changes,” the reasonable period of bargaining under the successor bar doctrine will be six months from the date of the parties’ first bargaining meeting. However, if a successor employer exercises its right to set initial terms and conditions of employment, rather than simply adopting the existing union contract’s terms, the NLRB imposed a longer period for bargaining: a minimum of six months and a maximum of one year from the parties’ first bargaining meeting.

The NLRB made a further modification to the successor bar doctrine by providing that when the parties reach agreement on a contract during the “reasonable period for bargaining,” and there was no open period permitting the filing of a petition during the final year of the predecessor’s bargaining relationship with the union, then the contract bar period during which election petitions will not be permitted will be reduced to two years from the usual three. Not surprisingly, Hayes dissented in these cases as well, primarily to lament the lack of any empirical evidence to support the NLRB’s decision, which he characterized as driven by ideology.

Finally, the decision in Specialty Healthcare has perhaps the most far-reaching implications of any of the NLRB’s recent gifts to organized labor. Overruling its 20-year-old decision in Park Manor Care Center, the NLRB found that a petitioned-for unit of certified nursing assistants (CNAs) at a nursing home was appropriate, rather than a larger unit consisting of all service and maintenance employees, including the CNAs, as well as other employees such as cooks, dietary aides and various clerical employees. In doing so, the NLRB not only jettisoned its long-standing approach to unit determinations in the non-acute health care setting, it adopted a new standard for determining appropriate units in all industries that has the potential to radically change union organizing tactics and create labor relations headaches for all employers not covered by the NLRB’s health care rule.

The new standard announced in Specialty Healthcare states that “when employees or a labor organization petition for an election in a unit of employees who are readily identifiable as a group (based on job classifications, departments, functions, work locations, skills or similar factors), and the NLRB finds that the employees in the group share a community of interest after considering the traditional criteria, the NLRB will find the petitioned-for unit to be an appropriate unit, despite a contention that employees in the unit could be placed in a larger unit which would also be appropriate or even more appropriate, unless the party so contending demonstrates that employees in the larger unit share an overwhelming community of interest with those in the petitioned-for unit.”

In dissent, Hayes called the decision “perhaps the most glaring example in cases decided recently of my colleagues initiating a purported empirical inquiry into the effects of extant precedent, only to end by overruling that precedent in the absence of any factual justification, for the purely ideological purpose of reversing the decades-old decline in union density in the private American work force.” He also pointed out that the NLRB’s new “overwhelming community of interest” standard would “make the relationship between petitioned-for unit employees and excluded co-workers irrelevant in all but the most exceptional circumstances.” This result is contrary to the NLRB’s traditional community of interest analysis, pursuant to which it would determine not only whether the employees share a community of interest, but also “whether the interests of the group are sufficiently distinct from those of other employees to warrant the establishment of a separate unit.”

In addition, Hayes pointed out the logical outcome of the NLRB’s new test — overly fragmented workforces with the potential for representation of multiple employee groups by multiple, competing unions. As Hayes succinctly put it: “This test obviously encourages unions to engage in incremental organizing in the smallest units possible.”

On Dec. 30, 2011, the NLRB decided DTG Operations Inc., which seems to confirm many of the fears expressed by Hayes and other critics of the Specialty Healthcare decision. The decision in DTG Operations makes clear that the Specialty Healthcare standard will apply to employers outside the non-acute health care setting, and confirms that the NLRB will effectively defer to a union’s decision to engage in incremental organizing through petitions focused on smaller bargaining units.

In DTG Operations, the NLRB reversed a regional director decision dismissing a representation petition for rental service agents employed by the owner of Dollar Rent a Car and Thrifty Car Rental agencies at the Denver International Airport. The regional director found that the rental service agents had an overwhelming community of interest with the employer’s other hourly employees and ruled that only a wall-to-wall unit would be appropriate. Applying Specialty Healthcare, current NLRB Chairman Mark G. Pearce and Becker reversed that decision. The NLRB held that the rental service agents shared a community of interests and that the employer had failed to demonstrate the overwhelming community of interests necessary to require other employees to be included in the petitioned-for unit. In doing so, the majority focused on the separate job responsibilities, and differences in pay (particularly an incentive pay plan exclusive to the rental service agents) to support its decision.

Once again, Hayes dissented. According to him, the majority’s decision demonstrates that it is virtually impossible for an employer “to prove that an overwhelming community of interests exists with excluded employees.” The result, according to Hayes, is that “Board review of the scope of the unit has now been rendered largely irrelevant,” and that the ultimate decision about the scope of the unit “is the union’s choice.” 
 
Andrew J. Rolfes is a member in Cozen O’Connor’s labor and employment practice group. He represents management clients in a wide variety of labor and employment matters, including representing both private and public sector employers in union representation elections, unfair labor practice proceedings, labor arbitrations and the negotiation of collective bargaining agreements. He can be contacted at arolfes@cozen.com.

Jeffrey L. Braff is a member in Cozen O’Connor’s labor and employment practice group. He has more than 30 years of experience handling the full gamut of labor and employment issues, with particular emphasis on union avoidance and collective bargaining. Before entering private practice, Braff was assistant general labor counsel for the Consolidated Rail Corp. (Conrail). He can be contacted at jbraff@cozen.com.