Take Two: NLRB Begins its "Do Over" on Union Election Rules

As expected, the NLRB has again proposed to amend various procedural rules that relate to the way in which union election petitions are processed. These changes are primarily designed to speed up the processing of requests for secret ballot elections. They are widely regarding in the employer community as the "quickie" or "ambush" election rules.

The procedural history of this rulemaking effort begins in 2011 when the NLRB proposed numerous changes to the union election rules.   After receiving extensive public comment, and holding public hearings, the NLRB adopted a subset of the proposed rules on December 22, 2011.  Employer groups then challenged the rule in federal court.  The court held that the NLRB lacked a quorum when it issued the final rule because then Member Hayes (R) was absent from the vote.  While the NLRB appealed the ruling, it ultimately decided to withdraw that appeal and return to the rulemaking process.

The notice of proposed rulemaking issued by the NLRB last week is a nearly verbatim recitation of the 2011 proposal.  It updates some of the data that the NLRB relied upon in 2011.  It also includes a new dissent to the rulemaking effort written by Members Miscimarra (R) and Johnson (R), and a new response from the NLRB majority to that dissent.  Otherwise, the changes proposed are the same.

Some of the changes the NLRB is proposing include:

  • Permitting the filing of petitions for election electronically with the NLRB;
  • Requiring the union's showing of interest (usually, signed union authorization cards) to be filed with the petition, rather than permitting an additional 48 hours for the submission of such evidence;
  • Requiring that the employer provide to the union, in addition to the names and addresses of employees in the bargaining unit, the email address (if available), location, shift, and classification of each employee;
  • Shortening the period of time for making available the foregoing information about employees from seven days to two days;
  • Requiring that the representation case hearing begin on the seventh day after filing of the petition;
  • Adopting a new "Statement of Position" form in which the parties explain their respective position on any issues relating to the petition (e.g., exclusion of individuals as supervisors or the appropriateness of the unit), and further providing that failure of a party to complete the Statement of Position would constitute a waiver of the right to litigate any issue not identified;
  • Delaying until after the election resolution of certain questions about the eligibility of or inclusion of employees in the bargaining unit, provided that the numbers affected by such questions do not exceed 20% of eligible voters;
  • Limiting the types of evidence that can be introduced at the representation case hearing;
  • Limiting the opportunity to file written briefs after the close of the representation case hearing;
  • Eliminating the right of a party to request that the NLRB review decisions of the Regional Director regarding the representation petition; and
  • Requiring that a party filing objections to the election results submit their objections, and the evidence supporting those objections, within seven days after the votes have been counted.

For the labor professional, the NLRB's changes are quite significant.  For some of the changes, their significance is easy to grasp.  For example, the substantial expansion of the information about employees that the employer must provide to the union after a petition is filed is one that helps unions in their organizing efforts.  Other changes, while more procedurally obscure, are substantively even more troubling.  For example, limiting the resolution of questions about the unit means that employees, when they go to vote in a secret ballot election, may not understand with any degree of certainty with whom they are banding together to negotiate with their employer. 

Those desiring to comment on the proposed rulemaking have until April 7, 2014 to do so.

UPDATE: Department of Labor's LMRDA Proposal has Broad Implications for HR Departments and In-House Counsel

By Allen Kinzer and Nelson Cary

Recently, we alerted you to the U.S. Department of Labor’s effort to change the reporting requirements for businesses who engage external advisors in connection with union organizing issues. As we continue to review these proposed regulations, their scope becomes even more problematic for employers. 

For example, suppose you are a human resources professional or an in-house counsel for XYZ, Inc. In your role, you provide employee relations or labor and employment legal services to XYZ, Inc. and XYZ’s corporate affiliate, AB, LLC. These services are provided under a formal or informal agreement, and there is an accounting transfer of expenses from AB to XYZ for these services. Under the DOL’s new proposal, both AB and XYZ could be required to file reports about these services and the amounts charged for them.

At issue is Section 203 of the Labor-Management Reporting and Disclosure Act (LMRDA). It requires, among other things, that employers file reports with the DOL when they enter into an agreement with a consultant or contractor to persuade employees about unions. The DOL proposes to interpret Section 203 to require reporting when the contractor engages in “persuader activity,” which the DOL proposes to define as:

providing material or communications to, or engaging in other actions, conduct, or communications on behalf of an employer that, in whole or in part, have the object directly or indirectly to persuade employees concerning their rights to organize or bargain collectively. 

The DOL’s examples of “persuader activity” include:

  • Developing employer personnel policies or practices designed to persuade employees; and
  • Training supervisors or employer representatives to conduct individual or group meetings designed to persuade employees.

In our hypothetical, suppose XYZ’s in-house lawyer or HR professional drafts or revises an “open door” or complaint policy for AB’s employee handbook. Persuader activity? Or, XYZ’s in-house lawyer or HR professional trains AB’s supervisors on the Do’s and Don’ts of how to respond to questions from employees regarding unions. Persuader activity? Or, XYZ’s in-house lawyer or HR professional trains AB’s supervisors on how to respond to harassment complaints and how to properly and fairly discipline employees. Persuader activity?

Here’s the DOL’s guidance in its proposed interpretation: Does each activity directly or indirectly have the object of persuading employees concerning their rights to union representation? If yes, then the DOL’s proposal requires both XYZ and AB to report the arrangement between them and annually report the accounting transfers from AB to XYZ. The forms are the LM-10 for AB and the LM-20 and LM-21 for XYZ.

Given the intrusive scope of these rules, one would think the regulation would have elicited more comments. As of July 13, however, only 34 comments have been filed.  We anticipate that some of the major, business-oriented groups, like the U.S. Chamber of Commerce, will ultimately submit written comments.  The deadline for submission of formal comments to the DOL is August 22, 2011.  We will continue to monitor those submissions and update this blog with new developments.

Big Brother Watching You? DOL Demands More Information from Employers About Union Avoidance Activities

By Nelson Cary and Allen Kinzer

Yesterday, the U.S. Department of Labor (DOL) proposed to do away with an interpretation of the Labor-Management Reporting and Disclosure Act (LMRDA) that has prevailed for nearly 50 years.  At issue is Section 203 of the LMRDA, which requires, among other things, that employers file reports with the DOL when they enter into an agreement with a consultant or contractor (including attorneys) to persuade employees on the issue of unions.

Section 203(c) of the LMRDA contains an exception to the reporting requirement for "advice" given to an employer.  Since 1962, with the exception of a few days during the end of the Clinton Administration, the DOL's interpretation of the advice exemption provided that services of an attorney drafting letters or speeches to employees or reviewing communications the employer drafted to ensure legality were "advice" and thus not reportable.  In essence, so long as an attorney submitted oral or written material to an employer and the employer had the decision whether to accept or reject the advice, the attorney's activities were not reportable under the “advice exception."  If the attorney (or other consultant or contractor) met directly with employees, however, the activities became reportable. 

Under the proposed interpretation, the “advice exception” would be limited to advising employers what they may lawfully say to employees, employers' compliance with the law, or general guidance on NLRB practice or precedent. Reportable activities would now include any actions, conduct or communications on behalf of an employer that could directly or indirectly persuade workers concerning their right to organize and bargain collectively, regardless of whether the consultant has direct contact with workers and regardless of whether the employer accepts or rejects the proposals.  This interpretation specifically includes preparation of persuasive scripts, letters, videos, or other digital media for use by an employer or revisions to employer documents by an attorney or consultant. (See page 61 of DOL Notice (.pdf))

Further, under the new interpretation, persuader activities may additionally include:

  • Training or directing supervisors and other management representatives;
  • Creating employer policies to prevent organizing;
  • Determining the timing and tactics of employer activities; and
  • Providing seminars or webinars offered by attorneys or consultants that include "union avoidance" topics where guidance is offered to attendees.

(See page 62 of DOL Notice.)  In addition to this substantially different interpretation of the LMRDA, the DOL also proposes to make changes to the LM-10 and LM-20 forms.  These are the forms used by the employer and consultant, respectively, to provide the information the DOL requires them to report.  The DOL also wants to implement an E-Filing system.

The implications for the labor professional of the DOL's proposal are difficult to understate.  The proposed changes drastically reinterpret the reporting requirements for employers and attorneys/consultants and significantly amend the forms and instructions for reporting under Section 203.  The DOL's proposed interpretation expands the reach of the LMRDA and increases, therefore, the scope of conduct that could trigger potential criminal liability on the part of employers (and others engaged in persauder activity) who fail to comply.  A substantial chilling of an employer's right to free speech during a union organizing campaign, which Section 8(c) of the NLRA purports to guarantee, may be the ultimate result.

Labor professionals will want to act proactively.  Among other things, they should consult with their attorney to determine how the proposed interpretation impacts their existing relationships.  Employers or their trade organizationas may also want to submit comments to the DOL on the proposed interpretation.  The deadline for receipt of comments is August 22, 2011.  After comments are received, the DOL will finalize its interpretation, publishing it in the Federal Register.