In a critical new ruling, the National Labor Relations Board held that “union job targeting programs, including those funded in part by voluntary deductions from the wages of union members employed on State-funded public works projects, are clearly protected under Section 7 of the Act.” This latest ruling throws up yet another roadblock in front of contractors already contending with a stagnant economy and burdensome regulations.
Job targeting programs, also known as market recovery funds, are yet another one of the economic weapons organized labor can deploy against non-union contractors. As part of these programs, unions collect dues which are then used to subsidize “union friendly” contractors. Yet, job targeting programs aren’t just about keeping organized labor’s allies in business; these subsidies put non-union contractors on the defensive, as the union shops are able to lower the gap between union and non-union contractors.
In this case (J.A. Croson Company, 359 NLRB No.2, 2012), the collective bargaining agreement contained a dues-checkoff provision requiring member employers to “deduct and remit to the Union, pursuant to voluntary authorizations signed by unit employees, due in the amount of 1.75 percent of the employees’ gross wages as a “Market Recovery Assessment.” The money collected was then used to fund the union’s “job targeting program, which funneled money to unionized contractors. The purpose of this program was clear: to “lower union contractor’s overall costs to complete targeted projects, enabling union contractors to submit competitive bids.”
In response to the union’s job targeting program, J.A. Croson Company, an ABC member, filed a lawsuit charging that the wage deductions violated state law. The Ohio Supreme Court eventually held that this lawsuit was preempted by the National Labor Relations Act (Act), and an administrative law judge found that Croson’s lawsuit did not violate the Act. The Board, however, reversed the judge’s ruling, holding instead that union job targeting programs are “clearly protected by Section 7 of the Act.” Consequently, the Board also held that Croson’s state court lawsuit was preempted by the Act, and that Croson’s lawsuit did not garner First Amendment protection: Indeed, by merely filing the lawsuit, Croson violated Section 8(a)(1) by interfering with union activity.
As a result of the Board’s J.A. Croson Company decision, the playing field has, once again, been titled in favor of organized labor.
Terence Flynn, a Republican, nominated to the Board by President Obama has resigned from the National Labor Relations Board (NLRB) effective July 24, 2012. In the interim, Flynn has recused himself from all agency activities.
Flynn was one of three recess appointments made by the Obama Administration.As the constiutitonality of these appointments remains suspect, each one is currently being contested in court. Specifically, the lawsuit filed against these appointments claims that, becayse Congress was technically in session when the appointments were made, the Administration lacks the authority to make an "interm" appointment.
A Vacuum
Flynn’s resignation now leaves the NLRB with three Democratic appointees, and just a single Republican. Considering the current political climate in our nation's capital, its unlikely the President will make another appointment before the 2012 election. And should the President buck conventional widsom and make a new appointment, the odds of such an appointment being Republican are almost zero.
Flynn’s resignation sets the stage for another political battle between the administration and the Congress over a NLRB appointee. This new battle will continue even as litigation over the temporary appointment continues in the court.
It is unlikely we will see a resolution of this issue until after the elections this Fall.
In an important victory for employers and proponents of individual freedom, U.S. District Judge James Boasber threw out a recent NLRB “Snap” election mandate.
Woody Allen and the Quorum Requirement
“According to Woody Allen, eighty percent of life is just showing up,” Boasberg wrote in an opinion issued today. “When it comes to satisfying a quorum requirement, though, showing up is even more important than that.”
In this case, Boasberg held that only two of the three members of the Board actually voted on the rule—3 members are required to constitute a quorum. Although the Board claimed its "snap" election rule was based on a 2-1 vote, the Board’s sole Republican member, Brian Hayes, was not able to cast his vote, as he was given only a few hours notice via the NLRB’s electronic ballot system. Boasberg ruled that, despite the Board’s claims to the contrary, Hayes’ inability to vote did not constitute a vote. Therefore, with a final vote of just 2-0 on what’s supposed to be a five-member Board, the court ruled that there was no quorum and therefore the rule was invalid.
As a result, representation elections will continue under previously established procedures unless the board votes with a proper quorum.
Bottom Line for Employers
Boasberg’s decision is, most likely, a temporary reprieve for employers. Given that Obama has (through dubious recess maneuverings) appointed new members to the Board, the passage of yet another Snap election rule seems likely—as does the another battle over whether a quorum exists. Until the President stops playing games with recess appointment—or a more business friendly President is elected—employers should expect uncertain regulatatory climates to persist.
This morning, April 17, 2012, the United States Court of Appeals for the District of Columbia granted an emergency injunction delaying the implementation of the NLRB Notice Posting rule. The court will hear oral arguments to fully review the law and issue a ruling expected sometime this summer. This ruling by the court of appeals comes on the heels of the decision on Friday, April 13, 2012 by the District Court of South Carolina invalidating the whole NLRB Notice Posting rule.
The National Association of Manufacturers (NAM) and the Coalition for a Democratic Workplace asked for the injunction after U.S. District Judge Amy Berman dismissed their legal challenge last month.
“The facts in this case and the law have always been on the side of manufacturers, and we believe that granting an injunction is the appropriate course of action for the court. The ‘posting requirement’ is an unprecedented attempt by the board to assert power and authority it does not possess,” said Jay Timmons, NAM’s president and CEO, in a statement.
Other business groups celebrated the injunction.
“For the last several months, [Associated Builders and Contractors (ABC)] has vigorously fought NLRB’s politically motivated policies that threaten to paralyze the construction industry in order to benefit the special interests of politically powerful unions,” said Geoff Burr, ABC’s vice president of federal affairs, in a statement. “The NLRB’s notice posting rule is a perfect example of how the pro-union board has abandoned its role as a neutral enforcer and arbiter of labor law.”
Bottom Line for Employers
In our opinion, these decisions will require the NLRB to postpone the April 30, 2012 date. Check back here for more information.
From our friends over at LaborUnionReport, a must-read posting about an Obama-appointee's recent ruling regarding the NLRB's union posters:
Last week, "Federal Judge Amy Berman Jackson approved the union-dominated National Labor Relations Board’s mandate on nearly all private-sector companies to post so-called “union rights posters.” Additionally, Berman Jackson, an Obama appointee to the United States District Court for the District of Columbia, declined to hear a challenge to Obama’s recent NLRB appointments.
In the union rights poster ruling, Berman Jackson ruled that the NLRB did not exceed its statutory authority to require private-sector employers that fall within the scope of the NLRB to post notices to employees advising them of their right to unionize. This means that most companies with two or more employees (outside of the airline or railroad industries) will be required to post the union rights posters (see PDF copy here) on April 30, 2012."
Read the rest of the article over at LaborUnionReport.
Unions need dues to survive, and the Service Employees International Union (SEIU) is certainly no exception. And as the amount of union dues collected across the country continues to plummet, organized labor is devising more and more “innovative” ways to keep its coffers full.
Perhaps unsurprisingly, this campaign to squeeze every last dime out of potential union members—and taxpayers—has found its way to Connecticut.
In-Home Health Care Workers Under Siege
The SEIU has launched an aggressive campaign to collect dues from in-home health care workers. Last December, Governor Malloy signed an executive order paving the way for daycare providers and personal care attendants to collectively bargain. And now, the SEIU is sending innocuous looking union authorization cards to employees’ homes. While the cards ask only if the employees wish to join the union, they do not inform employees of the consequences of replying: If the SEIU receives a majority of all returned cards in its favor, it becomes the exclusive bargaining representative for all of the state's in-home health care employees.
Should these in-home health care workers wind up being represented by the SEIU, Connecticut taxpayers will be de facto paying dues to the SEIU. After all, these in-home caregivers are paid, in part, through a subsidized state program. If chunks of these employees’ subsidized salaries are then passed along to the SEIU, taxpayers will be footing the bill for Organized Labor’s radical political agenda, and its leaders' bloated six figure salaries and out-of-control boondoggles. It’s unlikely that this is the scenario Connecticut taxpayers envisioned when they learned their monies would be subsidizing in-home health care workers.
Bottom Line for Employers
Frightened by underfunded pension plans and declining union membership, the SEIU is getting desperate. But a desperate union is a dangerous union—particularly when the union in question is the SEIU. Employers should view this latest dues-grab as yet another example of how unions are willing to do whatever it takes to remain relevant. And as more and more workers decide union membership isn’t the right choice, organized labor is turning to its political allies (and their access to taxpayer money) for support.
--Ryan O'Donnell is an Siegel O'Connor associate specalizing in union avoidance campaigns.
Lost amongst the fervor of the President’s recess appointments to the National Labor Relations Board (NLRB) was the prior announcement by the NLRB of its postponement of the effective date of its controversial new notice-posting rule from January 31 to April 30, 2012.
The rule, first proposed by the NLRB on December 22, 2010, and made final on August 30, 2011, requires most private-sector employers to notify employees of their rights under the National Labor Relations Act (NLRA). The required notice may be accomplished by posting an 11 by 17 inch poster similar to other federal workplace posters containing notices of rights, rules and policies. The poster must advise employees of their rights to organize and bargain collectively with their employers, among other NLRA guarantees.
When the rule became final, the effective date of the notice-posting requirement was November 14, 2011, but was subsequently postponed to January 31, 2012. At the time of postponement, the NLRB stated that it had postponed the effective date “in order to allow for enhanced education and outreach to employers, particularly those who operate small and medium sized businesses.” It is likely, however, that the NLRB was motivated to postpone by the filing of several lawsuits by business and trade organizations seeking to block the rule by challenging its legality. In announcing its most recent postponement of the rule’s effective date on December 23, 2011, the NLRB expressly stated that it was doing so “at the request of the federal court in Washington, DC hearing a legal challenge regarding the rule. The Board’s ruling states that it has determined that postponing the effective date of the rule would facilitate the resolution of the legal challenges that have been filed with respect to the rule.”
Bottom Line for Employers
The new notice-posting rule puts significant, new and unprecedented burdens on employers which can only lead to contentious relationships between managers and employees and disrupt otherwise harmonious workplaces. Given that the new rule has already been postponed twice, employers should wait to comply until April 30, 2012, or whenever the litigation over the rule’s lawfulness is resolved, assuming of course, it is declared lawful at all.
In a shocking political powerplay, Present Obama made three recess appointments to the National Labor Relations Board: Sharon Block, Terence Flynn, and Richard Griffin. Block and Flynn are Democrats, while Griffin is a Republican.
While Obama's appointments ensure the NLRB will not be powerless for the next 12 months, questions have already begun to swirl as to whether the President's actions are constitutional. Specifically, Article One, section Five of the Constitution states:
Neither House, during the Session of Congress, shall, without the Consent of the other, adjourn for more than three days...
As The Washington Examiner has pointed out, this clause "presents a problem for President Obama, who claims to have just made a recess appointment when the Senate is not actually in recess. The Constitution says the Senate cannot recess for more than three days without the House's permission. The House has not granted permission, and as a result both houses have been holding pro forma sessions out of constitutional necessity."
Regardless of whether the President's actions are ultimately constitutional, they ensure that the Board will remain both active and Labor-friendly throughout 2012.
Bottom Line for Employers
Today's NLRB appointments look to be cut from the same partisan cloth as Obama's previous appointments. Look for the Labor-friendly approach of the 2011 Board to continue through the end of the year.
On Wednesday, November 30, the Board adopted a resolution incorporating some of its prior proposals for “quickie” or "snap" elections. While the Board did not adopt its previously proposed rule, it did vote to accelerate the voting process for union elections.
As presently constituted, the Board has only three members, two of whom are union attorneys appointed by President Obama. And of these two union attorneys, one was a recess appointment whose term expires at the end of 2011. Therefore, beginning next year, the Board will only have two members left—and without a quorum of at least 3 members, the Board cannot enforce its decisions. Any wonder why the current Board is rushing to get such unpopular rules, such as “snap elections,” passed?
Danger: New Board Rules Ahead
The new “snap” or “quickie” election rule must be drafted and approved by the Board. The new rule will:
- Empower the hearing officer the authority to limit evidence to be introduced at the representation hearing;
- Allow the submission of a post-hearing brief only at the discretion of the hearing officer;
- Eliminate the employer’s right to seek review of the Regional Director’s pre-election rulings;
- Eliminate the present requirement that the Regional Director normally not schedule an election until 25 to 30 days after the direction of the election; and
- Make post-election Board review of Regional Director’s and ALJ’s post-election disputes discretionary.
Fortunately for employers, the Board resolution did not include parts of the earlier proposed rule including a the requirement that employers make available the email address and telephone numbers of employees on the Excelsior list, and change the period of filing for the Excelsior list from seven to two days.
Bottom Line for Employers
If the Snap Election Rule as presented above is adopted, it will significantly aid the unions and union representatives in their attempts to organize employees. Employers will have considerable less time to communicate their positions on unionization to employees.
These proposed changes also hurt employees, who will now be denied the opportunity to learn what unions can, and cannot, do.
If this proposed rule is adopted, the National Labor Relations Board will do what the United States Congress could not when it failed to pass the union’s “card check” bill: Attempt to reverse a decade-long decline in private sector union membership—at the expense of both employers and employees.
-Bud O’Donnell specializes in matters before the National Labor Relations Board including representation elections and unfair labor practice hearings. He also advises clients on plant closings and relocation issues, and has represented clients in collective bargaining, grievance arbitration and strike consultation in numerous industries.
In a shocking decision, the NLRB has scheduled for Nov. 30 a vote on a modified version of the proposal to shorten union election periods.
As Siegel O’Connor previously noted, current Board member Craig Becker’s term is due to expire at the end of the year, leaving the ordinarily five-member Board with just two members. The Supreme Court recently held that the NLRB must have a “quorum of three members” in order to fully exercise its powers. Therefore, in order to secure passage of this controversial SNAP election regulation, the two Democratic members of the Board have decided to rush forward with a vote next week.
And not only are the two Democratic members of the Board rushing this vote but, as Tina Korbe at Hot Air documents, they’ve excluded the sole Republican member of the Board, Brian Hayes, from the revision process. Specifically:
- Hayes has not been informed of how the rest of the Board plans to address the responses received during the proposed rulemaking comment period last summer;
- Hayes has not been informed of what portions of the proposed rule will be excluded, included, or modified in the final version; and
- Hayes was offered a “take-it-or-leave-it proposal last Tuesday, and he was given three days—3 days—to respond. Potentially dissenting members are traditionally given 90 days to act on a proposed draft.
In response to this treatment, Hayes has sent a letter to Members of Congress. Unfortunately, given the current political make-up of Washington, any remedial actions taken by the House will likely be defeated in the Senate.
Bottom Line for Employers
Can anyone stop the Board from imposing SNAP elections on employers across America? Board Member Hayes still has one card left to play: He can resign immediately, leaving the Board with only two members, and stripping it of rulemaking power. Such a move would be drastic, to be sure. But with employers still struggling to survive in a tough economy, this country simply cannot afford SNAP elections.