Vorys on Labor

Vorys on Labor

Insights for the Labor Relations Professional

NLRB Regional Director Orders Election at VW

Posted in Elections, Union Organizing

On November 18, 2015, the NLRB’s Atlanta Regional Director approved the UAW’s election petition for a small unit of skilled maintenance workers at VW Chattanooga and ordered a two-day election for December 3 and 4.  During October, the UAW had petitioned the NLRB to represent a unit of 165 skilled maintenance workers at the VW plant. Earlier in November, VW opposed the UAW’s election petition at a two-day hearing, arguing that the small maintenance group could not be a separate bargaining unit and must be combined with all maintenance and production workers.

VW contended that the skilled maintenance workers shared a “community of interests” with the other maintenance workers as well as the production workers.  According to VW, this shared community of interests included an 11-step wage progression, the same employment policies, and the same working conditions and work shifts.

Though the NLRB Regional Director determined that the skilled maintenance workers shared a community of interests with the other maintenance workers and the production workers, he found that they did not share an “overwhelming” community of interests.  Under the NLRB’s decision in Specialty Healthcare & Rehabilitation Center of Mobile, the NLRB ruled that, to include additional employees in the union’s proposed unit, the employer must demonstrate that those workers share an “overwhelming community of interests.”  The Regional Director found that the small group of skilled maintenance workers was separately supervised and that there was no interchange of workers among the groups.  Thus, he found that the shared community of interests was not “overwhelming.”

VW can appeal the Regional Director’s ruling to the NLRB in Washington, D.C.

Prior Planning in Acquisitions Key to Avoiding Labor-Related Surprises

Posted in Mergers and Acquisitions, Negotiations, NLRB

Acquiring the assets or hiring the workforce of an employer whose employees are unionized poses an additional layer of complexity for the purchaser. Without prior planning, the purchaser can end up losing its right to set the initial terms and conditions of employment. In a case earlier this year, the NLRB provided a good reminder of what some of those planning steps might look like.

The case arose in the context of government contracting. The “purchaser” – also known as the “successor” in NLRB case law – was a company that had taken over a government contract to provide armed security guards at a particular facility. The guards providing the services were unionized, and under the predecessor’s collective bargaining agreement, the guards were paid for time spent collecting and returning firearms and ammunition before and after their shift. In the guard industry, this is often called “guard mount” time.


The successor reduced the amount of paid guard mount time employees received during weekday shifts and discontinued it entirely for weekend shifts. The successor did not bargain with the union before taking these actions. The union claimed that these unilateral changes were unlawful, even as the successor’s initial terms and conditions of employment, because the successor did not provide prior notice to employees.

The NLRB majority disagreed with the union. The majority found that the successor provided sufficient notice to the employees it hired, including employees of the predecessor, that it would reduce paid guard mount time upon assuming the government contract. Specifically, the successor (1) used an application form that stated employees would need to conform to the successor’s policies, practices, and procedures and that the successor had the right to establish and change terms and conditions of employment; and (2) made contingent offers of employment that described new employment terms, and included a statement that employees’ “shift schedules” would be determined upon the company’s operational needs. Continue Reading

UAW Files Election Petition for 165 Maintenance Workers at VW Plant

Posted in Elections, Union Organizing

On October 23, the UAW filed an NLRB election petition to represent about 165 skilled maintenance workers at VW’s Chattanooga plant.  This petition for a union vote comes 20 months after the UAW lost a union election to represent all of the production and maintenance workers at the VW facility.

Following the 2014 election loss, the UAW established a local union in Chattanooga to continue its efforts at convincing the VW workers to join the UAW.  The UAW has claimed that 55 percent of the approximately 1,500 VW workers have joined, but the UAW seeks to represent only about 165 with this petition.

Thus, the UAW is attempting to gain a small foothold within the plant by petitioning for this small unit of skilled workers.  However, by filing the election petition for a small unit, the UAW must not believe that it could win a plant-wide election.

Later this week, the Tennessee legislature is set to hold a hearing in Chattanooga about the status of the incentive package given to VW in light of VW’s diesel emissions scandal.

The next two weeks appear to be significant for VW’s facility in Chattanooga.

Who Needs a 50-Year-Old Rule? Employers Must Now Continue Dues Deductions Even After Union Contract Expires

Posted in Management, Negotiations, Union Membership, Union Negotiations

Reversing a rule that has been in place for over 50 years, the NLRB has ruled that a “dues checkoff” provision in a union contract outlasts the termination of the contract establishing it. The 3-2 decision, which came out earlier this year, but was overshadowed by the hullabaloo over the joint employer decision, is a complete reversal of a rule established in 1962.

By way of a quick background, “dues checkoff” is a clause in a union contract by which an employer agrees to withhold directly from the pay of an employee the monthly union dues (and sometimes other assessments or fees) the employee owes to the union.  The employer then pays that money directly to the union. Employees must authorize the deduction by way of a writing that permits the employer to take money from their paycheck. The provision is obviously a helpful one for unions, as it enables them to collect dues revenue with a minimum of expense and difficulty.

In the case at issue, the CBA included a checkoff provision. The parties began negotiating for a successor agreement, but didn’t reach agreement by the hand giving moneyend of the term. Thus, the CBA expired. Upon expiration, the employer decided to stop withholding union dues from its employees’ pay. It didn’t bargain with the union before taking this action.

On these facts, the NLRB majority held that the employer’s discontinuation of dues checkoff constituted an unlawful unilateral action. To support its conclusion, the majority set forth both statutory and policy arguments. The majority reasoned that dues check-off constituted a “convenience to employees,” and was a term or condition of employment that was no different from wages, benefits, or other working conditions. These terms cannot be changed unilaterally by an employer merely because the contract setting them forth expired. Nor did the dues checkoff provision involve a surrender of an employer or union’s contractual rights. Therefore, the employer’s unilateral discontinuation of the checkoff was unlawful. To hold otherwise, the majority argued, would frustrate the union’s status as the employees’ bargaining representative and create hurdles for employees to stay in good standing with their unions.

Now former-Member Johnson (R) and Member Miscimarra (R) dissented. They criticized the majority for abandoning its own longstanding rule, which served to balance union-security measures. The dissent also noted that Congress, rather than the NLRB, should be the branch to change the rule for discontinuation of dues checkoff upon expiration of the contract. To the dissent, the majority’s decision will only exacerbate the difficulties facing employers and unions when attempting to adopt collective bargaining agreements.

In a glimmer of good news for unionized employers, the NLRB unanimously agreed that the majority’s rule should not apply to the employer and union in the present case. The NLRB majority acknowledged its departure from its decades-old standard and thus rejected an opportunity to apply its new rule retroactively, i.e. to currently pending cases. The NLRB noted that while it typically applies its new rules retroactively, doing so here would result in unfair results.

The decision raises all sorts of interesting policy questions. For the labor professional, however, there is one key, practical lesson. The majority expressly noted that it was dealing with a dues checkoff provision that, by its terms, didn’t state when it would expire. Thus, if an employer and a union agreed to language permitting the discontinuation of dues checkoff upon contract termination, the outcome could be different. Any such language must constitute a “clear and unmistakable waiver” – a term of art in NLRB case law – of the union’s right to have the check-off continue. Labor professionals facing upcoming contract negotiations should consider whether such language should be a bargaining goal, and if so, consult with qualified labor law counsel over what language would be sufficient.

Court Determines that Employer’s “Out of the Ordinary” Communication was Lawful

Posted in Management, Union Organizing

A federal appellate court recently reigned-in the NLRB’s attempt to limit an employer’s response to union activity.  The case, Intertape Polymer Corp., previously covered on this blog, arose in the context of a union organizing drive.  As discussed in our prior post, the NLRB decided that the employer engaged in unlawful employee surveillance, confiscation of union literature, and interrogation. Based on the surveillance and confiscation allegations, the NLRB ordered a new election.

The most important issue presented to the court, and the most problematic holding to come out of the NLRB’s decision in the case, was whether the employer engaged in unlawful surveillance. Regular readers of this blog will recall that the employer distributed leaflets at its main gate. On some occasions, union supporters showed up to distribute leaflets at the main gate as well, in view of the supervisors distributing the company’s leaflets.

The NLRB held that the employer’s leafleting was “out of the ordinary” compared to its previous methods of communicating with employees, and because it placed union leafleting under surveillance, was unlawful. The court rejected this reasoning, holding that the employer had a right to express its viewpoint through leafleting. Significantly, the employer did not take any coercive actions (e.g., photographing or recording the employees, attempting to pressure employees not to take the union leaflets, or recording which employees took the union’s leaflets). Moreover, the employer’s purported surveillance was brief and simultaneous with pro-union efforts. Continue Reading

Electronic Signatures for Union Authorization Cards Get a Green Light

Posted in Elections, Union Organizing

The last several years have seen significant decisions benefiting unions announced around Labor Day.  This year was no different.  There was the more easily satisfied joint employer test and a decision allowing dues checkoff provisions in a union contract to survive the expiration of that contract.  (More on that development coming soon!)

Add to these a new guidance memorandum (pdf) from the NLRB’s General Counsel (GC).  In the “quickie” or “ambush” election rulemaking, the NLRB directed the GC to issue guidance on whether electronic signatures should be accepted for the showing of interest required of a union.  This showing of interest is the threshold demonstration of support a union needs in order to get a secret ballot election.

The GC, in a memorandum released to the public earlier this month, has concluded that electronic signatures will be accepted.  An electronic signature must provide a Regional Director with “prima facie evidence (1) that an employee has electronically signed a document purporting to state the employee’s views regarding union representation and (2) that the petitioner has accurately transmitted that document to the region.”  In such cases, the electronic signatures are presumed to be valid. Continue Reading

It’s All About Control: NLRB Expands Key Joint Employer Rule

Posted in NLRB, Union Organizing

The NLRB dealt a blow to employers yesterday, releasing its long-awaited decision in Browning-Ferris Industries. In a 3-2 decision (pdf), the NLRB rolled back nearly thirty years of case law to “restate” its joint employer standard.  The result:  a far more expansive test that is centered firmly on the question of control — even indirect or potential control — over a work force.

At issue in the case was a Browning-Ferris Industries (“BFI”) waste recycling plant. BFI hired a staffing agency—Leadpoint Business Services—to provide some of the workers for the facility. The dispute arose when the Teamsters attempted to unionize the plant, arguing that BFI was the joint employer of Leadpoint’s workers. The NLRB sided with the union.

In doing so, the NLRB announced that it will find two or more entities are joint employers of a single work force if they are both employers within the meaning of the common law and they share or codetermine the essential terms and conditions of employment, which include, but are not limited to, wages, hiring, firing, discipline, scheduling, or assigning work.

This test was first announced about 30 years ago. The NLRB majority claimed, however, that this standard has been impermissibly and inexplicably narrowed over the years to exclusively focus on an employer’s actual exercise of control instead of the contractual right of an employer to control essential terms and conditions of employment. Therefore, while claiming to simply “restate” and “reaffirm” the existing test, the NLRB overruled the decisions it claimed had improperly narrowed the test.

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Contentious Negotiations Ahead for Detroit 3 and UAW

Posted in Benefits, Negotiations, Unions

Within the next two weeks, the GM, Ford, and Fiat-Chrysler will begin the serious negotiations for new collective bargaining agreements.  The ceremonial opening of these negotiations occurred last month.  The current agreements expire on September 14, and all sides face serious issues.

During the 2011 negotiations, two of the three companies were being bailed out by the U.S. taxpayers.  As part of the 2011 bailout and the bankruptcies, the UAW was forced to give up its right to strike.  The UAW now has its strike rights back, and the three companies are profitable.

Two significant issues will likely dominate the negotiations:

  • Wages: As part of the 2011 bailout, the UAW agreed to a two-tiered wage system.  New hires are paid about $10 less than the existing UAW members.  The new hires are paid around $17 per hour, and the top-tier receives about $28 per hour.  The UAW wants pay back for agreeing to this lower wage tier when the companies were down.  What will happen to the two-tier wage system?  Will the upper tier get a raise?
  • Health Insurance: Under the Affordable Care Act (ACA or ObamaCare), health insurance plans with rich benefits and high costs will be taxed in 2018.  The so-called “Cadillac Tax” under the ACA is not a tax on luxury cars, but is a 40% excise tax on “luxury” health insurance plans.  Generally, the tax is 40% of the cost of a health insurance plan in excess of $10,200 for single coverage or $27,500 for family coverage.  The IRS is currently determining how to compute the tax.  All employers would like to avoid this Cadillac Tax.  Whether the Detroit 3 and UAW can fashion a way to avoid, or at least minimize, the tax remains to be seen.

The UAW just received several pieces of stinging news.  Mitsubishi will close its UAW plant in Normal, Illinois.  It was originally a joint venture with Chrysler.  With the closure, 1,200 UAW members will be laid off.  Also, Ford announced that it is expanding its manufacturing operations in Mexico.

The UAW wants to deliver some good news to its membership, and the Detroit 3 wants to stay profitable.  It should be an interesting set of negotiations.

Northwestern Football Players Lose Effort to Unionize: NLRB Declines to Exercise Jurisdiction

Posted in NLRB, Union Organizing

Earlier today, the long-running saga of whether NCAA Division I football players are employees under the NLRA came to an end — at least temporarily.  The NLRB unanimously declined to exercise jurisdiction over Northwestern University’s scholarship football players and dismissed the union election petition.

In January 2014, Northwestern University’s scholarship football players filed a petition with the NLRB seeking representation for the purpose of collective bargaining.  They argued that they were employees.  In March 2014, an NLRB regional director in Chicago agreed and ordered that an election be held, sending shockwaves through the NCAA football world.  Northwestern requested that the NLRB review the potentially massive decision, and the NLRB has been considering the matter for more than a year.

The NLRB’s decision did not address the central question of whether Northwestern’s players — or any other group of NCAA athletes, for that matter — are employees.  Instead, it decided that asserting jurisdiction over the issue would not effectuate the policy of the NLRA, which is to promote stability in labor relations.   The NLRB cited the high degree of control the NCAA exercises over how the scholarship athletes practice and play.  It also noted that the vast majority of NCAA — and Big Ten — member institutions are public universities over which the NLRB cannot assert jurisdiction.

While this is a win for Northwestern and — by extension — the NCAA, it may not have settled the issue over the longer term.  Arguments about whether NCAA Division I student-athletes are employees, and therefore entitled to compensation, continue to swirl.  With the NLRB not only sidestepping that question, but also limiting its decision to the Northwestern petition, labor professionals may not have heard the last of this issue.  For example, the NLRB explicitly noted that it was not addressing what it might do with a petition for all scholarship football players (or at least those at all private universities) in the NCAA Division I Football Bowl Subdivision.

NLRB 2, Employers 0: The Election Rule Wins Again

Posted in Elections, Rulemaking, Union Organizing

Another federal court, this one in Washington, D.C., has come down on the side of the NLRB’s new election rule.  Deciding a case the U.S. Chamber of Commerce and several other employer organizations filed, and to which one employer was added, the court found that the NLRB did not act “arbitrarily or capriciously” in issuing the election rule.

As readers of this blog know, the NLRB’s rule – sometimes referred to as the “ambush election” rule – has been in effect since April 14, 2015.  It makes numerous modifications to the election procedures the NLRB has followed for decades.  The intent of those changes is to speed up the process between filing an election petition and holding a secret ballot election.  Initial data suggests that the NLRB has succeeded in that goal.

The decision is lengthy (pdf).  Those with a particular interest may want to read all 72 pages.  In summary, however, the Chamber and the other plaintiffs alleged that the election rule violated the NLRA, as well as the First and Fifth Amendments to the U.S. Constitution.  They also argued that it was arbitrary and capricious under a federal law governing the review of administrative agencies actions.

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