The “Mount Everest of Regulations”– Examining the NLRB’s New “Quickie Election” Rules

© 2014 Winston & Strawn LLP

The “Mount Everest of Regulations”– Examining the NLRB’s

New “Quickie Election” Rules

Derek G. Barella William G. Miossi Joseph J. Torres

Winston & Strawn LLP

December 19, 2014


Today’s eLunch Presenters

Derek Barella Partner Chicago

[email protected]

+1 (312) 558-8002

Joseph Torres Partner Chicago

[email protected]

+1 (312) 558-7334

Bill Miossi Partner

Washington, D.C.

[email protected]

+1 (202) 282-5708

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Agenda

• Quick overview of NLRB and its election process • Review NLRB’s new “quickie election” rules • Planning recommendations • Two related NLRB case law developments

• Employee access to work email for organizing purposes • Union’s ability to organize “micro-units”

• Additional planning recommendations

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NLRB and Its Election Process


National Labor Relations Board – Overview

• Agency responsible for the National Labor Relations Act • Handles election (“R”) cases and ULP (“C”) cases

• Initially processed by Regional Offices • Board has ultimate decision/policy authority

• Board itself has five members (including one Chairperson) • Presidential appointees • If confirmed, serve five-year terms

• By tradition, three from President’s party, two from other party • Current Board is considered favorable to organized labor

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NLRB Election Process – Overview

• Can be initiated by employees or a labor union • Employees show support by, e.g., signing petition or authorization

cards • Must involve a defined “unit” (e.g., all janitors, all store employees) • Need at least 30% of employees in proposed unit to signify support

• Unions likely won’t proceed unless they have greater than 50% support

• Process starts by filing a petition to hold election • Unless there are legal problems with proposed unit, election will be set • Currently, average time between petition and election is 38 days • Employers have right to express their opposition and opinions • Union must secure 50% plus one of employees who vote

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NLRB Election Process – Overview (cont’d)

• Two other notable points to keep in mind • No limit on how long employees/union can “campaign” before filing

• No requirement that employees/union announce their pre-petition activity

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Holidays Come Early for Organized Labor

• Long-anticipated wish list items are delivered • Big ticket item

• Changes to rules and procedures for representation elections

• Stocking stuffer • Purple Communications – employees have Section 7 right to

use work email for non-business purposes, including union organizing

• Accessory gift that keeps on giving • Ability to organize “micro-units”

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Why So Important to Labor?

• Union membership stagnant • Total union membership density: 11.3% • Private sector: 6.7%

• Union election win rates hover around 50% • But, ROI is low

• Many more petitions filed than elections held • Time and resources are significant commitments

• To drive membership/dues gains, labor needed a boost

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“Quickie Election” Rules


NLRB Election Rules

• June 2011: NLRB first proposes rules changes • November 2011: NLRB votes to adopt rules changes

• Chairman Pearce and then member Becker vote “aye” • Member Hayes declines to vote or take any action

• May 2012: D.C. District Court invalidates rules changes • Board lacked a properly constituted quorum

• February 2014: NLRB re-issues rules changes • No further action through mid-term elections

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NLRB Election Rules (cont’d)

• Dec. 12, 2014: Divided Board adopts new rules • Chairman Pearce, members Hirozawa and Schiffer majority • Members Miscimarra and Johnson dissent

• Rules changes are effective April 14, 2015

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What’s Changed?

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Current New

• Parties cannot file petitions electronically

• Regions do not electronically transmit certain R Case documents

• Election petitions, notices, and voter lists can be transmitted electronically

• Regions transmit case documents electronically

• Notice of Election is posted in facility after

• RD directs election; or • Approves stipulated election

agreement

• Employer must post Notice of Election within two business days of Region’s service of petition before

• Unit issues are raised or resolved


What’s Changed?

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Current New

• Pre-election hearings typically scheduled within week to ten days from petition

• Region sets pre-election hearing to begin eight days after notice served with petition, and

• Post-election hearing 14 days after filing of objections

• No pre-hearing filing requirements • Non-petitioning party must identify any/all issues in statement of position

• Must be filed one day before hearing

• Issues not raised are waived


What’s Changed?

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Current New

• Employer must provide prospective voter list after RD directs election or approves stipulated election agreement

• Employer must provide prospective voter list with job classifications, shifts, and work locations, to Region and other parties with its pre-hearing statement of position, before unit issues are raised/resolved

• Pre-election hearing addresses issues and disputes concerning scope of proposed unit and voter eligibility

• Pre-election hearings limited to only fundamental questions concerning NLRB jurisdiction and whether election bar exists

• Most issues concerning unit and voter eligibility are “deferred” to post-election proceedings


What’s Changed?

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Current New

• Parties have right to file post-hearing briefs within seven days of hearing, with permissive extensions

• Oral argument allowed before close of hearing

• No post-hearing briefs unless RD determines they are necessary

• RD schedules election 25-30 days after decision and direction of election to allow filing of request for review with NLRB

• 25-30 day scheduling parameter is eliminated

• Most requests for NLRB review of RD decisions are “deferred” to post-election


What’s Changed?

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Current New

• Employer must provide Excelsior voter list with names and home addresses

• Due seven days after RD decision or approval of stipulated election agreement

• Employer must provide Excelsior voter list with names, home addresses, personal phone numbers, and personal email addresses (if available)

• Due two days after RD decision or approval of stipulated election agreement

• Board required to review every aspect of most post-election disputes

• Board’s review of post-election disputes is more limited and subject to discretion


Practical Impact of the New Rules

Petition RD Decision and Direction of Election

Election

Pre-election hearing and unit issues Opportunities to seek NLRB review

Median 38 days — Maximum 42 days

Petition DDE Election

Limited hearing and unit issues

14-21 days (likely)

Limited opportunity for NLRB review

Current

New

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Practical Impact of the New Rules

Petition DDE Election

Limited hearing

14-21 days (likely)

Union campaign likely ongoing for 6+ months

Limited opportunity for NLRB review

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What’s Next?

• Legal challenges likely • Focus on claimed due process/First Amendment flaws in

rules

• Grounds for prior invalidation by D.C.D.C. have been cured

• Member Schiffer off/Member McFerran on – unlikely shift in Board position or agenda in near future

• Employers should prepare for life under the new rules

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Recommendations

• Labor relations strategy must become even more proactive vs. reactive

• The best counter-campaign is a sustained employee engagement effort • Principal focus should be on positive aspects of workplace • Not the negatives of having union

• Cannot begin when the petition is filed • Too little, too late

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Recommendations (cont’d)

• Candidly assess your position on unionization • What is our labor relations philosophy and policy? • What is senior management’s awareness of risks? • What is their commitment level? • What resources is the organization prepared to dedicate to:

• Sustained employee engagement • Development and execution of game plan for responding to

organizing effort

• Who is responsible for executing organization’s plan? • Pace of election will make sustained “pondering” challenging

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• Candidly assess your organization’s strengths and risks • How effectively do you measure employee satisfaction? • How effectively do you address risks that are identified? • How effective is your management team in sustained engagement? • How effective do you track external pressures?

• Organizing activity in peer/geographically-proximate companies

• Market terms and conditions of employment

• How effective and sustained are your training efforts? • Positive employee relations and engagement

• Recognizing signs of organizing

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• Develop a plan for moving forward • Risk assessment: baseline and going forward • Action items for addressing identified risks • Evaluate existing training and hiring programs

• Consider role of counsel to establish, maintain privilege where appropriate

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Other Notable Developments


Purple Communications, Inc.

• Employees have “presumptive” right to use employer’s email for protected communication (including union organizing) during nonworking time

• So, two options to eliminate employees’ new “right”: • Don’t give access to email, at all; or • Rebut presumption by establishing undefined “special

circumstances” • Total ban: unlikely, the “rare case” • Controls over email systems: must be uniform, consistently

enforced, necessary to maintain production and discipline

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Micro-Units

• Specialty Healthcare, 357 NLRB No. 83 (2011) • A union’s petitioned-for bargaining unit should be upheld

• To overcome, employer must show another group shares an “overwhelming” community of interests with the proposed bargaining unit

• Macy’s Inc., 361 NLRB No. 4 (July 22, 2014) • Proposed unit was appropriate

• Board rejected arguments based on common employment terms and proximity

• Neiman Marcus Grp., 361 NLRB No. 11 (July 28, 2014) • Board rejected proposed unit

• Proposed unit did not follow existing “administrative or operational lines”

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Recommendations

• E-mail usage • Evaluate your current solicitation/distribution policy to ensure

compliance • Evaluate your current monitoring efforts

• Micro-units • Assess where your organization might be vulnerable to such

efforts • Consider appropriate steps to mitigate possible risks

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Questions?


Thank You.

Derek Barella Partner Chicago

[email protected]

+1 (312) 558-8002

Joseph Torres Partner Chicago

[email protected]

+1 (312) 558-7334

Bill Miossi Partner

Washington, D.C.

[email protected]

+1 (202) 282-5708

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The “Mount Everest of Regulations”– Examining the NLRB’s New “Quickie Election” Rules