HR That Works Blog

April 30, 2012 was the effective date for the new National Labor Relations Board rules governing representational elections. All NLRB election petitions filed starting today will be subject to these new rules. In advance of the rules, the NLRB’s General Counsel’s office released a guidance memorandum last week clarifying several of the rules. The highlights of this memo include:

• On the day an election petition is filed, a notice of hearing will be issued and a pre-election hearing will be scheduled within 7 days or 5 working days.
• Regional Directors are encouraged to narrow the issues at a pre-election hearing and conduct a pre-hearing conference, if necessary.
• The new rules provide that “disputes concerning individuals’ eligibility to vote or inclusion in appropriate unit “ordinarily” need not be litigated or resolved before an election. In his memo, the General Counsel said that eligibility to vote issues should only be litigated at a pre-election hearing if 10 percent or more of the unit is in dispute.
• When deciding voter eligibility issues, the hearing officer is expected to apply the Board’s Specialty Healthcare framework. As we discussed in our Specialty Healthcare Watch blog posts on February 13th and February 14th, the Board will first look to see if the unit proposed by the Union is a “readily identifiable group” and shares a community-of-interest. If so, then the unit is valid and the employer must establish that additional employees it seeks to include share an “overwhelming community of interest.”
• Disputes over whether an employee is a supervisor will not be considered at the pre-election hearing, if the employees in dispute constitute less than 10 percent of the voting unit.
• The hearing officer retains discretion on whether post-hearing briefs will be filed. When post-hearing briefs are not allowed, the parties will be allowed time at the hearing to make an oral argument or submit a brief as an exhibit.
• At the hearing, the officer should ask the parties entitled to receive a voter eligibility list (Excelsior list) if they wish to waive all or any part of the 10-day period they are entitled to have the list.
• Pre-election appeals of hearing officer and regional director decisions will only be granted in “extraordinary circumstances.” For most intents and purposes, neither side will have meaningful review of a hearing before an election.
• Post-election appeals are also more limited. Post-election exceptions and requests for review will now filed directly with the Regional Director, not the NLRB. The Board may grant or deny requests for review of Regional Director decisions, but a denial should be treated as a summary affirmance of the actions of the Regional Director.

Right now, the Labor Board uses a 42-day timeframe from the filing of a petition to an election. The new rules and GC memo do not specifically establish a new timeframe. However, given the changes outlined above, the 42-day period will be shortened. The precise amount of time will depend on whether 10 percent of the possible eligible voters are in dispute, thus necessitating a more complex pre-election hearing, and if the Union waives its right to the voter eligibility list for the 10-day period. A fair estimate is that the election period could be as little as 28 to 30 days with these changes. This means that employers will have fewer opportunities to communicate with employees about the pros and cons of unionization once a petition is filed, thus making it even more important that employers plan now a proactive strategy now that addresses unionization.

A court challenge to the new rules is still pending in federal court. We will inform you of that ruling when it is decided.

Article courtesy of Worklaw® Network firm Shawe Rosenthal (www.shawe.com).

On January 25th the NLRB issued its second lengthy memo on Social Media use by employees. Like the first report, it is disjointed, poorly organized, and leaves employers with more questions than answers. In this 25-minute video Don Phin goes over the learning that can be gleaned from the report. This is a video that applies to every employer!

Citing concerns about delays in processing grievances through parties’ contractual grievance-arbitration procedures, NLRB Acting General Counsel Lafe Solomon has proposed that the Board consider revising the existing policy of deferring charges to arbitration in certain circumstances. To see the press release and additional information, go to http://www.nlrb.gov/news/acting-general-counsel-seeks-changes-deferral-policy.

Very simply, the NRLB non-employee disputes are taking too long to go through the delegated arbitration process and so the Board will be deciding these cases directly to speed up resolution. It will be interesting to see how they will be able to take on this burden with a tight budget. Whether you agree with the approach or not, this is yet one more pro-union move by the Administration.

Over 65,000 written comments were received by the NLRB in response to its proposed ambush election rules, which would result in holding elections as quickly as ten days after the filing of a petition. The Board had open hearings for two days in July to hear comments from business and labor about the proposed rules. In our July issue of the Employment Law Bulletin, we predicted that while the Board would be very hospitable and act like it truly cared about concerns expressed by the business community, it would move forward with establishing the rules in the manner they were proposed.

In an effort to issue the final rule before the Board has only two members and therefore would be unable to do so, Board Chair Mark Pearce held a vote among the three Board members–himself, Craig Becker and Brian Hayes–yesterday, November 30, 2011, to approve a scaled-back version of the original ambush election rules. (Becker’s term expires at the end of December. Hayes, a Republican and former Senate staffer, has aggressively and publicly opposed the Board’s notice posting rule and these proposed rules.)

As a result of yesterday’s 2-1 vote in favor of changing the Board’s election rules, some but not all of the rules in the original proposal are now slated for a final vote, some time before Becker’s term expires and after the final rules are circulated to all three Board members.

Yesterday’s vote represented at least a brief retreat from the original rules, which would have resulted in union elections being held as quickly as ten days after the filing of a petition. Instead, the new rules narrow the scope of pre-election hearings, virtually eliminate pre-election appeals, and strike down the current rule providing that a vote cannot be held sooner than 25 days after the Board’s Regional Director issues a Direction of Election. Although the final rule is a significant step back from forcing a union vote within ten days of a petition, it certainly opens the door for Regional Directors to schedule union votes much sooner after the petition is filed. Indeed, the clear intent of the rule is to encourage elections within the first 25 days after the filing of a petition, much sooner than the current average of 38 days between the filing of a petition and a union vote.

Member Hayes has spoken out against the Board’s attempt to implement these rules without a clear quorum and has even hinted that he may resign prior to the final approval of these rules, which would prevent a two member Board from implementing what’s left of the ambush rules.

As we have stated previously, we expect ambush election rules–in some form–to become effective, whether it’s a result of this Board’s action or actions by the Board after new appointees are seated. Either way, whatever action this Board takes is likely to be challenged in court.

Article courtesy of Worklaw® Network firm Lehr, Middlebrooks & Vreeland, P.C.

The U.S. Department of Labor (“DOL”) and Internal Revenue Service (“IRS”) both recently announced efforts aimed at curbing employer misclassification of workers as independent contractors.

• DOL Announces Memorandum of Understanding with the IRS. On September 19, 2011, the DOL announced that it had signed a Memorandum of Understanding with the IRS to coordinate efforts to address the misclassification of workers as independent contractors. Seven state agencies have already signed onto the Memorandum: Maryland, Connecticut, Massachusetts, Minnesota, Missouri, Utah, and Washington.

The initiative between the agencies is meant to “improve departmental efforts to end the business practice of misclassifying employees in order to avoid providing employment protections.” The Memorandum will enable “the DOL to share information and coordinate law enforcement with the IRS and participating states in order to level the playing field for law-abiding employers and ensure that employees receive the protections to which they are entitled under federal and state law.”

• IRS Announces Voluntary Settlement Program for Employers who have Misclassified Workers as Independent Contractors. Two days after the DOL announced its joint initiative with the IRS to coordinate enforcement to end the practice of misclassifying workers, the IRS on September 21, 2011, launched the Voluntary Classification Settlement Program (“VCSP”), a new program that will allow employers to resolve prior misclassification issues by voluntarily reclassifying workers as employees for future tax periods and paying a reduced amount in employment taxes.

To be eligible to participate in the VCSP, the employer must: 1) consistently have classified the workers as independent contractors or non-employees; 2) have filed all required Form 1099s for the prior three years; and 3) not currently be under an audit by the DOL, IRS, or a state agency concerning the classification of the workers at issue.

In exchange for agreeing to re-classify its workers, the employer will: 1) pay a reduced amount that effectively equals just over 1% of the wages paid to the workers for the most recent tax year (instead of the typical 10% tax due on wages); 2) not be liable for any interest and/or penalties on that amount; and 3) not be subject to an audit by the IRS as to the previous misclassification for the workers being reclassified under the VCSP. Employers are not required to reclassify all workers and may choose which to reclassify under the program.

Employers who wish to participate in the program must submit a VCSP application at least 60 days before it reclassifies the workers. The IRS will then review the application and determine whether to accept the employer into the VCSP.

Employers should exercise caution before participating in the program. First, participation in the VCSP does not shield the employer from potential liability under the Fair Labor Standards Act (“FLSA”). If an employer voluntarily reclassifies an independent contractor, it is opening itself up to potential unpaid overtime claims from those workers whom it reclassified. In addition, employers who participate will, for the first three years in the VCSP, also be subject to a special six-year statute of limitations (instead of the three-year limitations period that normally applies to assessment of employment taxes). It appears that the three-year extension of the statute of limitations period applies not just to the misclassification of workers, but to all payroll taxes. Finally, the VCSP application provides the IRS with information regarding an employer’s misclassification, and it is unclear whether the IRS can use this information in a later audit if it rejects the employer’s application to participate in the VCSP.

Article courtesty of Worklaw® Network firm Shawe Rosenthal (www.shawe.com)

A National Labor Relations Board Administrative Law Judge ruled on September 28th, 2011 that Knauz BMW, a Chicago area car dealership, did not wrongfully terminate an employee for his Facebook postings. However, Judge Joel P. Biblowitz also found that the dealership had an overly broad employee policy, and ordered posting of a notice informing employees of their right to engage in protected concerted activity.

The case involved the employee’s posting to Facebook of two incidents, one involving a sales event and another involving an accident at an adjoining dealership. In the first, the employee, a car salesman, and coworkers were unhappy with the quality of food and beverages at a dealership event promoting a new BMW model. Though the salespeople did not directly complain to their employer that the food offerings could affect their commissions, they discussed with each other that their sales could suffer as a result. Following the event, one salesman posted photos and commentary on his Facebook page critical that only hot dogs and bottled water were being offered to customers. Other employees had access to and commented on the Facebook page.

On the same day, the salesman posted photos of an accident that had occurred earlier involving a vehicle from an adjacent dealership that was accidently driven into a pond. Both dealerships are part of the same ownership group. Judge Biblowitz found that while the postings involving the sales event and the subsequent exchange of comments with other employees was protected activity, the postings involving the accident were not. Further, the judge found that the salesman was terminated for the accident postings, and therefore not protected under the National Labor Relations Act.

Regarding the employee policy, Judge Biblowitz found that certain paragraphs were overly broad and tended to chill employee rights by prohibiting employees from participating in interviews with or answering inquiries concerning employees. Though the employer had changed the policy prior to the hearing, the judge ordered that a notice be posted at the dealership informing employees of their right to engage in protected concerted activity.

Inc. Magazine did an excellent article on the history of the workplace you can read by clicking here.

Many, many an employer has given me grief over the NLRB’s new posting requirements. Whew. “I feel ya” I tell them. Then I tell them it’s the law and I didn’t do it!  So yes you have to post it. Just do it. You can tell your employees the Obama administration required you do so, which is a fact. Half of them will be happy about the idea and the other half will think it’s ridiculous. Or something like that.

Federal Contractors are already familiar with this posting requirement. The justification for having them post it in 2009 was:

“The Department of Labor’s regulations implement Executive Order (E.O.) 13496 signed by President Barack Obama on January 30, 2009.  E.O. 13496 advances the Administration’s goal of promoting economy and efficiency of Federal government procurement by ensuring that workers employed in the private sector and engaged in activity related to the performance of Federal government contracts are informed of their rights to form, join, or assist a union and bargain collectively with their employer. Knowledge of such basic statutory rights promotes stable labor-management relations, thus reducing costs to the Federal government.” Really?? So this is saving the government money. Good thing. They need it.

Here’s the justification for the current NLRA posting requirement:

“The Board believes that many employees protected by the NLRA are unaware of their rights under the statute and that the rule will increase knowledge of the NLRA among employees, in order to better enable the exercise of rights under the statute. A beneficial side effect may well be the promotion of statutory compliance by employers and unions.” Or… more union campaigns.

After getting employer feedback the NLRB granted a few concessions with the notice: “The Board received approximately 6,500 comments during the 60-day comment period following publication of the Proposed Rule in the Federal Register, and accepted an additional 500 that arrived after the deadline. In response to the comments, some parts of the rule were modified. For example, employers will not be required to distribute the notice via email, voice mail, text messaging or related electronic communications even if they customarily communicate with their employees in that manner, and they may post notices in black and white as well as in color. The final rule also clarifies requirements for posting in foreign languages. Similar postings of workplace rights are required under other federal workplace laws.”  Nice of them. So post it in black and white.

Since many have asked; here’s what the penalty is for not posting it

Q: What will be the consequences for failing to post the Notice?

The NLRB does not audit workplaces or initiate enforcement actions on its own. A failure to post the Notice would need to be brought to the Board’s attention in the form of an unfair labor practice charge by employees, unions, or other persons. In most cases, the Board expects that employers who fail to post the Notice were unaware of the rule and will comply when requested by a Board agent. In such cases, the unfair labor practice case will typically be closed without further action. The Board also may extend the 6-month statute of limitations for filing a charge involving other unfair labor practice allegations against the employer.

If an employer knowingly and willfully fails to post the Notice, that failure may be considered evidence of unlawful motive in an unfair labor practice case involving other alleged violations of the NLRA.

Q: Can an employer be fined for failing to post the Notice?

No, the Board does not have the authority to levy fines.

Here’s the reality: This agenda is about Power. Politics always is. For the 8 years of the Bush administration employers got most of the breaks. Now it’s the employees turn. The way blue collar workers have always exercised their rights is through unions. Your daddy or granddaddy may have been in one. I continue in my belief that there are good and bad unions, employees, bosses, and…yes, even politicians. Ultimately it is the market place that should determine who succeeds in business and who does not. All employers face this pressure, including the political ones. What are you going to do different than your competition to rise above all of it is my question?!

Here’s a last thought: Imagine if the government required an Employer Rights Notice Under What is Left of Capitalism posting like the one I created. I think I’m starting to sound like Ayn Rand…and I used to be an employee rights attorney! What’s that tell you? Enough already. Fact is, while this agenda may garner votes it does little to help people grow in their careers and that my friends is the main reason unions have been fighting to hold on for survival. Post my poster at your own risk. Maybe you just leave on the bulletin board at the country club.

Conflict between the National Labor Relations Board and Congressional Republicans (primarily the House Oversight and Government Reform Committee and its chair, Darrell Issa (R-Cal.)) continues to escalate. Animosity between the two began in 2010, with President Obama’s nomination of Craig Becker to the NLRB and his subsequent recess appointment of Becker to serve on the Board after Becker failed to garner sufficient Senate support to be confirmed the old fashioned way. Becker, formerly General Counsel to the Service Employees International Union, opined in his prior career that employers should have no rights to express their views about unionization during the course of a union organizing campaign. The Obama NLRB has consistently moved closer to Becker’s viewpoint. Examples include initiating litigation against Boeing for building a non-union facility in Charleston, South Carolina, which neither constituted a transfer of work nor caused the layoff of any Boeing union-represented employee in Seattle. The House Oversight Committee conducted hearings in Charleston, South Carolina, and forced NLRB General Counsel Lafe Solomon to testify at those hearings.

Continuing to fuel its regulatory revolution, the NLRB on June 21, 2011, proposed sweeping changes to union representation election rules and procedures (which could result in less than 10 days between the filing of a union petition and the date of an election), to reduce the amount of time employees have available to consider all of the facts and information necessary before making such a critical decision, and to limit employer rights regarding voter eligibility.

Issa requested documents from Solomon regarding the NLRB analysis and decision to issue a complaint against Boeing. Issa gave Solomon a deadline of Tuesday, July 26, 2011, at 5:00 p.m. In refusing to comply with Issa’s request, Solomon wrote that, “It remains my belief that premature disclosure of the Boeing case file would severely impact the parties’ due process rights and the Agency’s legal processes.” The question now is whether Issa will take the next step of issuing a subpoena to Solomon and, if so, will Solomon provide the requested documents.

Article courtesy of Worklaw® Network firm Lehr Middlebrooks & Vreeland, P.C.

The National Labor Relations Board will publish in the Federal Register tomorrow a Notice of Proposed Rulemaking, which proposes amendments to its existing rules and regulations governing procedures in representation cases. The proposed amendments are intended to reduce unnecessary litigation, streamline pre- and post-election procedures, and facilitate the use of electronic communications and document filing. 

“One of the most important duties of the NLRB is conducting secret-ballot elections to determine whether employees want to be represented by a labor union,” said Chairman Wilma B. Liebman in a statement. “Resolving representation questions quickly, fairly, and accurately has been an overriding goal of American labor law for more than 75 years.” Click here to view her full statement. 

If finally adopted after a public notice-and-comment process, the proposed amendments would:

•  Allow for electronic filing of election petitions and other documents.
   
• Ensure that employees, employers and unions receive and exchange timely information they need to understand and participate in the representation case process.
   
• Standardize timeframes for parties to resolve or litigate issues before and after elections.
   
• Require parties to identify issues and describe evidence soon after an election petition is filed to facilitate resolution and eliminate unnecessary litigation.
   
• Defer litigation of most voter eligibility issues until after the election.
   
• Require employers to provide a final voter list in electronic form soon after the scheduling of an election, including voters’ telephone numbers and email addresses when available.
   
• Consolidate all election-related appeals to the Board into a single post-election appeals process and thereby eliminate delay in holding elections currently attributable to the possibility of pre-election appeals.
   
• Make Board review of post-election decisions discretionary rather than mandatory.

For details on the proposed amendments, view our fact sheet here and summary here.

As the Notice of Proposed Rulemaking states: 

The Board believes that the proposed amendments would remove unnecessary barriers to the fair and expeditious resolution of questions concerning representation. The proposed amendments would simplify representation-case procedures and render them more transparent and uniform across regions, eliminate unnecessary litigation, and consolidate requests for Board review of regional directors’ pre- and post-election determinations into a single, post-election request.  The proposed amendments would allow the Board to more promptly determine if there is a question concerning representation and, if so, to resolve it by conducting a secret ballot election.

Board Member Brian Hayes dissented from the proposed rulemaking.  In his opinion, 

The Board and General Counsel are consistently meeting their publicly-stated performance goals under the current representation election process, providing an expeditious and fair resolution to parties in the vast majority of cases, less than 10 percent of which involve contested preelection issues.  Without any attempt to identify particular problems in cases where the process has failed, the majority has announced its intent to provide a more expeditious preelection process and a more limited postelection process that tilts heavily against employers’ rights to engage in legitimate free speech and to petition the government for redress.  Disclaiming any statutory obligation to provide any preliminary notice and opportunity to comment, the majority deigns to permit a limited written comment period and a single hearing when the myriad issues raised by the proposed rules cry out for far greater public participation in the rulemaking process both before and after formal publication of the proposed rule.  The majority acts in apparent furtherance of the interests of a narrow constituency, and at the great expense of undermining public trust in the fairness of Board elections.

His dissent may be found here.

In the Notice of Proposed Rulemaking, the Board responded to the dissent.

Note to employers: The NRLB will continue its efforts to help unionize the workplace. It is simply a political issue so don’t get too caught up in the logic of it. Do be aware of your exposure and rights however.