Winston & Strawn: Labor News January 2013

Labor & Employment Practice at Winston & Strawn

Select events and news from the world of organized labor for December 2012

Organizing
Strikes & Labor Disputes
Major Contract Settlements & Negotiations
Court Decisions to Note
Significant NLRB Decisions to Note
Crime, Corruption & Other Misdeeds
Legislation & Politics
Miscellaneous
Upcoming Events
Recent Publications

Organizing

In the purported largest effort in U.S. history to unionize “fast food” employees, workers staged “mini-strikes” at Burger King, Wendy’s, McDonald’s, KFC, Domino’s, and other fast food restaurants across New York City. Campaign organizers, including New York Communities for Change, UnitedNY.org, the Black Institute, and the Service Employees International Union, are marketing the campaign as “Fast Food Forward.” The striking workers are seeking wages of at least $15 an hour and the creation of an unusual, city-wide union of fast food workers that would cover members across multiple stores and franchises.

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Strikes & Labor Disputes

Bakery, Confectionary, Tobacco Workers, and Grain Millers (BCTWG) members locked out by American Crystal Sugar rejected the company’s fourth and final proposed contract, ensuring that the 16-month lockout will continue indefinitely. American Crystal stated that pay and benefits proposed are similar to the terms provided to its replacement workers. The Company’s first contract proposal included a $2,000 signing bonus and increased wages by 14 percent over 5 years, but union officials say the offer was rejected because it included language allowing for increased flexibility to outsource work and would have required employees to pay increased health insurance costs. The union then twice rejected amended offers postponing some of the health cost increases until 2013, along with an assurance that jobs would not be outsourced.
More than 150 technicians and customer service representatives of Consolidated Communications in Eastern Illinois struck as contract talks stalled. The telecommunications company and union have been negotiating with the assistance of a federal mediator since October.

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Major Contract Settlements & Negotiations

United Auto Workers Local 933 members ratified a five-year labor contract with Allison Transmission Holdings covering 1,550 employees at various locations in Indianapolis. The contract provides for a $5,000 ratification bonus and retains a two-tier wage and benefit structure. Tier one employees and skilled workers in tier two receive lump-sum payments in 2013, 2014, 2015, and 2016 equal to 3 percent of their base wage. Production workers in tier two will receive wage increases from 2 percent to 4 percent in 2013, 2015, and 2016, and a lump-sum payment equal to 3 percent of their base wage in 2014. Allison Transmission will also increase its matches for tier-two employee 401(k) contributions to 6 percent.
Allied Pilots Association (APA) members ratified a six-year collective bargaining agreement (CBA) with American Airlines covering approximately 8,000 pilots. Under the agreement, pilots will receive a 4 percent date-of-signing wage increase, a 2 percent pay increase at the end of the first and second years of the contract, a mid-contract pay adjustment of 17 to 24 percent, and a 2 percent wage increase at the end of the fourth and fifth years of the contract. The contract also provides: pilots with a 13.5 percent equity stake in the airline when it emerges from bankruptcy, that the airline make a 14 percent contribution to the pilots’ 401(k) plan, and concessions on benefits, scheduling and work rules. The CBA was approved by a bankruptcy judge over objections from several pilot groups. The court also allowed the elimination of lump-sum pension payments for pilots.
Communications Workers of America District 3 members and AT&T ratified a three-year collective bargaining agreement covering 22,000 wireline, utility, advertising, publishing, and billing employees in nine states throughout the Southeast. Under the new agreement, workers will receive annual wage increases totaling 8 percent and a defined benefit plan multiplier of 3 percent over the term of the contract. Employees’ health care contributions will also increase. Earlier this year, CWA members in two other regions ratified their contracts. In August, CWA members ratified separate three-year contracts covering more than 13,000 workers at AT&T Midwest and about 5,000 workers at AT&T Legacy. Negotiations are continuing to renew contracts covering around 18,000 workers at AT&T West and around 3,200 workers at AT&T East.
In an effort to win the sole casino license in Western Massachusetts, the Mohegan Tribal Gaming Authority agreed to a union-organizing neutrality agreement with the Pioneer Valley Central Labor Council AFL-CIO. The agreement provides that any future employees at the prospective Mohegan Sun casino resort can form a union, join or assist labor organizations, and negotiate labor contracts without interference by their employer. The casino resort employs around 2,000 workers. Although the Mohegan Sun is owned by a Native American tribe, the president of the labor federation did not know whether organizing and collective bargaining would be conducted under federal labor law or tribal law.
Minnesota Nurses Association (MNA) and six Twin Cities-area hospital systems reached a tentative contract agreement providing for wage increases totaling 4.5 percent over three years for 11,000 nurses.
SEIU Local 1021 members approved a four-year contract covering 223 janitors, security, and maintenance personnel at the Port of Oakland and Oakland International Airport. The agreement, reached after a one-day strike, will be applied retroactively to July 1, 2011, and will provide employees with a $3,500 signing bonus and a 2.5 percent cost-of-living increase in 2013 and 2014. Local 1021 members had previously rejected a tentative agreement calling for no furloughs, preservation of above average salaries, and a requirement that employees begin making a 5 percent contribution to their own retirement.
ALPA members ratified a four-year joint collective bargaining agreement with United and Continental Airlines covering approximately 10,200 pilots, but terms of the agreement were not released.
Members of New England Health Care Employees Union District 1199, SEIU ratified a four-year collective bargaining agreement with Women’s & Infants’ Hospital in Providence, Rhode Island, covering 1,700 nurses, technical, clerical, and service workers. The contract provides for wage increases of 2 percent in 2014, 1.75 percent in 2015, and 2.5 percent in 2016. The contract also provides for two market rate adjustments if the pay falls behind prevailing wages at surrounding hospitals. Under the contract, employees who currently do not pay premiums for health insurance will contribute starting in 2014. The hospital will also make contributions to the workers’ defined benefit pension plan at 8.5 percent. The contract is also designed to provide for professional development and additional staffing flexibility.
Society of Professional Engineering Employees in Aerospace (SPEEA) Local 2001 members ratified a six-year contract with Spirit AeroSystems covering 820 engineers in Wichita. The contract provides a ratification bonus of $2,500 and guaranteed salary increases of 3 percent in years two and four of the agreement. The contract also provides for potential wage increases each year that will be based on market trends. The contract also reduces health benefit costs, while at the same time increasing premium contributions from 15 percent to 20 percent over the term of the contract. The contract also improves job security for bargaining unit employees and improves protections against outsourcing.
United Food and Commercial Workers (UFCW) locals 5 and 8 members ratified a collective bargaining agreement with Raley’s Supermarkets covering around 7,000 employees in northern and central California. The locals and Raley’s had previously reached a tentative agreement, ending a nine-day strike. Although union locals initially impounded the ballots pending the resolution of outstanding grievances due to the company’s alleged changes in the CBA before it was ratified, the ballots were finally counted and the contract was approved. Raley’s agreed to remain in a UFCW trust-administered health plan, under which retiree health care is preserved and active members have no health care premiums. The contract also provides for changes in weekly schedules, a weekly guarantee of work, and an alternative dispute resolution program.
The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (Alliance) agreed to extend negotiations on a master contract covering 14 ports along the East and Gulf coasts until February 6, 2013, averting a threatened strike by 15,000 dockworkers. The parties also agreed in principle on the issue of container royalty principles, but details on the agreement were not disclosed. The extension came after President Obama was urged by a coalition of more than 100 national and state business and trade associations, the National Retail Federation, and Florida Governor Rick Scott to invoke the Taft-Hartley Act to keep the two sides at the bargaining table in order to avoid an East Coast/Gulf Coast shut down.
SEIU Local 32BJ members ratified a 45-month contract with AlliedBarton Security Services, Securitas Security Services, ABM Industries Inc., and G4S Secure Solutions, covering 2,500 private security officers in Philadelphia. The citywide contract provides wage increases totaling $1.70 an hour over the term of the contract. The security contractors agreed to recognize the union as the bargaining agent for the employees based on authorization cards signed by a majority of the workers. Full-time security officers will receive employer-paid health insurance, effective January 1, 2014. All security guards will receive two days of paid sick/personal leave per year, and current employees will be reimbursed for deposits they made in the past for their uniforms.
Ending a five-day strike, IAM Local Lodge 2385 members ratified a three-year contract with Goodman Manufacturing Company in Fayetteville, Tennessee, covering 1,110 workers at the air conditioning and heating parts factory. The contract includes wage increases of 30 cents per hour in the first and second year, and 35 cents per hour in the third year of the contract. The contract also contains reduced health insurance premiums. Employee contributions toward health insurance premiums will increase 5 percent in the first year, and contributions will increase to match the percentage contributed by salaried employees in the second and third years of the contract. The contract also addresses shift changes, allowing workers moved from a continuous shift to work the next available shift. Members had previously rejected the company’s first proposal, claiming that it failed to address on the job concerns and contained significant increases in employee health care costs.
For all settlements reported through December 12, 2012, the average first-year wage increase in 2012 was 1.6 percent, compared to 1.4 percent in 2011, according to an analysis of data by Bloomberg BNA. The median first-year wage increase was 2 percent, compared with 1 percent reported in 2011. The weighted average was 2 percent, compared with 1.1 percent in 2011. When construction and state and local government contracts were excluded, the 2012 all-settlements average, median, and weighted average increased to 2.3 percent, 2.3 percent, and 2.3 percent respectively, compared to 1.9 percent, 1.9 percent, and 1.3 percent in 2011. When lump-sum payments were factored into wage calculations, the all-settlements numbers for 2012 increased to 2 percent, 2 percent, and 2.8 percent respectively, compared to 1.7 percent, 1.5 percent, and 2.5 percent in 2011.

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Court Decisions to Note

The United States Court of the Appeals for the Sixth Circuit held that a union-represented United Parcel Service driver’s Americans with Disabilities Act claim is not preempted by Section 301 the Labor-Management Relations Act, which is intended to prevent state courts from ruling on state law claims whose resolutions depend on interpretations of collective bargaining agreements subject to federal law. The district court had held that Section 301 preempted the claim because the claim required an interpretation of a temporary alternative work program contained in the company’s collective bargaining agreement with the union representing the worker. The Sixth Circuit reversed, holding that Section 301 preemption does not apply to a federal discrimination claim under the ADA filed in federal court. The court reasoned that a claim under the ADA is a separate, statutorily created federal cause of action independent from a collective bargaining agreement-based claim under the LMRA. Although the employee may have had a contract-based action under Section 301 of the LMRA, the court held that this contract right does not include statutory rights under the ADA. Watts v. United Parcel Serv. Inc.
The United States Court of Appeals for the District of Columbia Circuit remanded an unfair labor practice case to the National Labor Relations Board (NLRB or Board), finding that the Board failed to explain its conclusions that a pharmacy benefits manufacturer interfered with a pharmacy worker’s rights by asking him to remove a union-sanctioned T-shirt and maintaining a policy prohibiting insulting, provocative, and confrontational messages on employee clothing. The employer argued that the worker’s shirt—bearing a union logo and message stating that the employee did not need an employee recognition program to do his job—was insulting to the company and harmful to the company’s effort to attract and retain customers who occasionally toured the facility. Although the NLRB held that the company’s harm to customer relations claim lacked evidentiary support, the court held that the Board failed to adequately explain what evidence was required. The court also held that the Board failed to explain how the employer’s dress policy was overbroad and how it interfered with employees’ statutory rights under the NLRA. Medco Health Solutions of Las Vegas Inc. v. NLRB.
The United States Court of Appeals for the Fourth Circuit affirmed an NLRB ruling that statement of state and local NAACP officials did not taint a United Food and Commercial Workers (UFCW) local’s victory in a representation election at Ashland Facility Operations. The court held that the nursing home failed to establish that the NAACP officials acted as agents of the union. The court further concluded that the officials did not create the “general atmosphere of confusion, violence, and threats of violence” necessary to justify denying the union’s NLRB certification because of third party conduct. Although the court recognized that the NLRB has set aside election results when parties have used inflammatory racial appeals, the court refused to extend that principle to racially inflammatory statements made by third parties during an election campaign. Ashland Facility Operations LLC d/b/a Ashland Nursing & Rehab. Ctr. v. NLRB.
The United States Court of Appeals for the District of Columbia Circuit held that a Santa Barbara News-Press publisher was protected by the First Amendment when it fired eight journalists during a battle over editorial control at the paper. In vacating an NLRB decision ordering the workers’ reinstatement, the court disagreed that the publisher committed multiple labor law violations during a union-organizing campaign. The court concluded that the workers’ campaign was focused on journalistic autonomy and content control, subjects not protected under federal labor law. Although the court recognized that that the simultaneous pursuit of goals, such as journalistic control and wages, presents a “conundrum,” the court held that workers cannot extend the NLRA’s protections “by wrapping an unprotected goal in a protected one, by tossing a wage claim in with their quest for editorial control.” Ampersand Publ’g LLC v. NLRB.
The United States Court of Appeals for the District of Columbia enforced an NLRB order requiring KLB Industries to disclose customer and pricing information to the UAW to support its claim during bargaining that it was experiencing competitive pressures that required it to seek substantial wage reductions from its employees. The court noted that the NLRB has applied a “liberal discovery-type standard” for union requests for substantiation of employer’s claims of competitive disadvantage. The court held that where an employer raises a competiveness claim as its central justification for wage concessions, the union is entitled to information verifying that claim. Finding that the UAW tailored its information request to the claim made by the employer, the court held that denying the request was an unfair labor practice in violation of the NLRA. KLB Indus., Inc. v. NLRB.
The United States District Court for the District of Oregon denied an NLRB petition to hold a union and two of its locals in contempt of a preliminary injunction that prohibited the union from engaging in secondary actions and threats arising from a labor dispute with a port operator, port, and other union at the Port of Portland, Oregon. The Board had obtained an injunction under Section 10(l) of the NLRA, barring the unions from engaging in work slowdowns and stoppages. The NLRB regional director contended that in an act of “all-out flaunting” of the preliminary injunction, the union sent letters that threatened four carriers with the filing of grievances in support of the union’s claim to work on the containers. The District Court held that the NLRB failed to show that the unions clearly and convincingly violated the injunction. The court reasoned that based on the context in which the preliminary injunction was issued and its specific provisions, the union could have reasonably and in good faith believed that the injunction did not prohibit them from threatening to pursue collective bargaining agreement grievances against the carriers. More specifically, the court found that nothing in the order expressly or specifically forbid union conduct aimed at carriers. Further, whether the letters constituted unlawful coercion of neutral employers under the NLRA was a “complex legal question subject to reasonable differences.” Hooks v. Int’l Longshore & Warehouse Union Local 8.
A divided California Supreme Court ruled that although a United Food and Commercial Workers (UFCW) local lacked a state constitutional right to picket on a private walkway in front of a grocery store’s customer entrance, two California statutes protect peaceful union picketing and leafleting at the site to inform consumers of the union’s dispute with the nonunion grocery store. The court held that a private walkway fronting a grocery store’s customer entrance is not a public forum where a union enjoys free speech rights. It held, however, that California’s Moscone Act and Labor Code Section 1138.1 protect labor speech on private land in front of businesses. Noting that the California laws provide more expansive protection to union picketing and leafleting outside of retail stores than does the U.S. Constitution, the court reasoned that the state statutes do not violate the U.S. Constitution because they do not limit speech and state statutory law may single out labor-related speech for particular protection in the context of a statutory system of economic regulation of labor relations. Ralph’s Grocery Co. v. United Food & Commercial Workers Local 8.

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Significant NLRB Decisions to Note

The NLRB unanimously denied a union’s motion to reconsider its 27-year-old Tri-Cast ruling on employer remarks during union-organizing campaigns. More importantly, however, the panel split 2-1 on the issue of the Board’s authority to overrule precedent that is not properly challenged by a party to an NLRB proceeding. The majority held that the Board retains the authority to decide a case on grounds that were not briefed as long as the case is decided on the record. The majority reasoned that NLRB regulations on the filing of briefs are limits on the parties, and not on the authority of the Board. The dissent argued that while the NLRA does not prevent the board from exercising its discretion to reconsider precedent, NLRB regulations do prohibit such action where no party challenges the precedent by filing timely exceptions. The dissent cautioned the decision is “pav[ing] the way for the Board in any case, regardless of the scope of exceptions filed or issues litigated, to address and overrule precedent.” Dish Network Corp.
The NLRB held that employers must give notice and offer to bargain before enforcing discretionary discipline on its union-represented employees, but the Board declined to apply the new rule retroactively. Noting that it had not previously commented on prediscipline bargaining standards, the Board held that unions have to be informed of changes in workplace policy and rules and discretionary employee suspensions, demotions, and terminations that are made on a case-by-case basis before they are implemented. The new rule does not apply, however, to written or oral warnings for misbehavior. In so holding, the Board reasoned that “the lesson of well-established board precedent is that the employer has the duty to maintain an existing policy governing terms and conditions of employment and a duty to bargain over discretionary applications of that policy.” The Board also dismissed concerns that the new rule would create an excessive burden or delay on employer actions, and emphasized that unions only have an opportunity rather than a requirement to bargain. Alan Ritchey, Inc.
The NLRB ruled that employers must disclose witness statements obtained without a confidentiality promise. The Board held that a newspaper company that fired an employee for alleged insubordination violated its duty to bargain with the union by refusing to release witness statements obtained without confidentiality promises. While noting that Anhesuer-Busch, Inc., 237 N.L.R.B. 982 (1978), held that the duty to furnish information “does not encompass the duty to furnish witness statements themselves,” the Board looked to existing precedent to determine what constituted “witness statements.” It found that employee statements are not exempt from disclosure where there is no showing that the employee had adopted the statement or received an assurance of confidentiality before signing the statement. Although the witness in this case reviewed and signed the statement, the Board held that the document was not exempt from disclosure because the newspaper obtained the statement from the employee without promising to keep it confidential. Hawaii Tribune Herald.
The NLRB recently ruled that a mandatory dispute resolution program maintained by an employer violated the NLRA because employees could reasonably interpret the program as blocking them from filing charges with the Board. The employer instituted a grievance-arbitration program and subsequently fired 20 employees who refused to sign an agreement to be bound by it. Although the agreement did not explicitly restrict workers’ rights under the NLRA, the Board found that it could reasonably be construed as prohibiting the employees from filing claims with the NLRB because the agreement required workers to use the program to bring “any claim of any kind.” The Board noted that the agreement was “densely packed with legalese” and was designed to be broad. The employer argued that the agreement protected the right to file NLRB charges, pointing to language in the agreement that stated that employees could still file charges or complaints with government agencies. The Board disagreed, holding that the language did not name any statute or agency or explain that an administrative charge is an exemption to the broad and nonexhaustive list of claims that the agreement mandated be brought through the program. Supply Technologies.
In the Board’s first lengthy discussion analyzing the issue of “protected, concerted activity” in the context of social media, the NLRB found that an employer unlawfully terminated five employees because of their Facebook posts and comments about a co-worker. The Board utilized the analytical framework established in Meyers Industries, 268 N.L.R.B. 493 (1983) and its progeny, holding that an adverse employment decision is unlawful if it is motivated by an employee’s protected, concerted activity and the employer knows the activity was concerted. In this case, an employee voiced her intention to take her criticisms of her fellow co-workers’ job performance to management. The other employees, all off-duty and using personal computers, responded to the criticisms on Facebook, and were subsequently terminated for violating the employer’s zero-tolerance bullying and harassment policy. The Board held that the online exchange was protected, concerted activity because it was the workers’ first step toward group action to defend against the accusations that they believed would be made to management. The Board noted that even if the exchange was construed as harassment and bullying under the employee’s policy, a workplace policy cannot be enforced if it discourages protected activity. Hispanics United of Buffalo.
The NLRB held that employers must respond promptly to union requests for information, even when the information requested may be irrelevant to the union’s representation of employees. The Board held that although the employer was correct that the information requested was ultimately irrelevant and did not ultimately need to be provided, the employer committed an unfair labor practice because of its delayed response to the union. Although the NLRA requires that unionized employers provide unions with requested information that is relevant and necessary to the unions’ performance of its duties as the employees’ collective-bargaining representative, the Board concluded that employers have a duty to respond in some form to all requests for “presumptively relevant” information. IronTiger Logistics, Inc.
The NLRB overruled 50 years of labor law precedent, ruling that a collective bargaining provision authorizing an employer to deduct union dues from an employee’s paycheck (“dues-checkoff”) continues in force after the collective bargaining agreement expires. In so holding, the Board abandoned its well-established rule from Bethlehem Steel, 136 N.L.R.B. 1500 (1962) and its progeny, which held that a dues-checkoff provision expires with the expiration of the collective bargaining agreement containing it. The Board first explained that a dues-checkoff provision is a mandatory bargaining subject, which generally cannot be unilaterally changed without bargaining in good faith until the parties reach impasse. Most mandatory bargaining terms also remain in force according to the labor contract’s terms, even after the contract expires. While the Board acknowledged that some mandatory bargaining terms do not survive a contract’s expiration, the Board reasoned that these provisions are unique because they involve voluntary waivers of rights guaranteed by the NLRA. By contrast, the Board found that dues-checkoff provisions do not function as waivers, but rather as an administrative convenience. The Board analogized dues-checkoff to employer withholdings for employee savings accounts and charitable contributions, which do survive expiration of the contracts authorizing them. Moreover, the Board claimed that its historical precedent on the issue was fundamentally flawed. In Bethlehem Steel, the Board held that because a union-security provision cannot survive a contract’s expiration (and a dues-checkoff implements a union security provision), dues-checkoff also cannot survive the contract’s expiration. However, the current Board found that union-security and dues checkoff provisions were independent, as evidenced by so-called “right-to-work” laws, which prohibit union-security clauses but allow dues-checkoff provisions. The Board further noted that while a union-security clause imposes a mandatory obligation (i.e., membership); a dues-checkoff clause requires a voluntary action in that it must be authorized by the individual employee. WKYC-TV, Inc.
The NLRB adopted changes to backpay orders it issues in unfair labor practice cases, requiring employers to file a report to the Social Security Administration (“SSA”) allocating backpay awards to the appropriate calendar quarters and also requiring employers to compensate employees for the adverse tax consequences of receiving lump sum backpay awards. The Board found that failing to credit backpay to the quarters covered by the backpay award may disadvantage employees by potentially depriving them of Social Security credits. The Board concluded that it will now require employers to file a report to the SSA allocating backpay awards to the appropriate calendar quarters. Further, the Board found that an employee who receives a lump sum back-pay award covering more than a single calendar year may fall into a higher tax bracket and face more income tax liability than if the unfair labor practice had not occurred. The Board concluded that it will require employers to compensate employees for the adverse tax consequences of receiving lump sum backpay awards. Latino Express.
The NLRB held that private sector unions are not required to provide nonmember objectors with audit verification letters and that lobbying expenses may be chargeable to nonmember objectors. The Board distinguished case law holding that public-sector unions were required to provide objectors with independent audit verification letters, holding that private-sector conduct is properly analyzed under the duty of fair representation, breached only by conduct that is arbitrary, discriminatory, or in bad faith. The Board held that the duty of fair representation does not impose a per se obligation on unions to provide objectors with an audit verification letter. The Board also held that under Communication Workers v. Beck, 487 U.S. 735 (1988), lobbying expenses, like all other union expenses, are chargeable to objectors to the extent that they are germane to collective bargaining, contract administration, or grievance adjustment. The Board further held that germane lobbying activities are chargeable to objectors even if they are extra-unit, provided that they were incurred for services that are otherwise chargeable and that may ultimately inure to the benefit of employees in the objector’s bargaining unit because of the union’s participation in an expense-pooling arrangement with other locals. United Nurses and Allied Professionals.
The NLRB extended the doctrine of “inherently concerted” activity, finding that conversations about job security are protected regardless of whether the conversations contemplated future group activity. In this case, two employees discussed whether an internet job posting meant that the employer was going to terminate one of its employees. Although a conversation is generally protected when it contemplates group action, the Board held that the contemplation of group action is not required where the conversation is “inherently concerted.” The Board had previously found wage discussions inherently concerted. In this case, the Board concluded that job security discussions were also inherently concerted, reasoning that job security, like wages, is a vital term and condition of employment. Job security discussions, thus, are protected, regardless of whether the conversations contemplate group activity. Sabo, Inc. d/b/a Hoodview Vending Co.
An NLRB Administrative Law Judge rejected a claim that Amalgamated Transit Union (ATU) illegally coerced employees by allowing its rank-and-file union members to post threats or coercive comments about an ongoing strike and the consequences for employees who failed to support the union on its Facebook page. Citing case law under the NLRA holding that unions may become responsible for the misconduct of picketing workers on a union picket line if the union fails to take corrective action or disavow the misconduct, Acting General Counsel Solomon argued that ATU had a duty to disavow statements posted on its Facebook page. The judge disagreed, rejecting the argument that a Facebook page was an extension of the picket line. The judge cited to the Communications Decency Act, which provides that “[n]o provider of user of an interactive computer service shall be treated as the publisher or speaker of any information provided.” Finding that the federal law precluded treating the local as “the publisher or speaker” of the comments made by rank-and-file union members, the judge found that the union had no duty to disavow them. Amalgamated Transit Union Local 1433 (Veolia Transp. Servs.).
A NLRB Administrative Law Judge ruled that a grocery store operator did not violate the NLRA by failing to bargain with a union about a work scheduling pilot program. In 2010, the union and Kroger agreed to test the program in three stores beginning in February 2011. The pilot program, however, was not implemented and neither party lodged any grievances at that time. In a March 2012 meeting, the last time the program was discussed before the charge, an employer representative responded to questions about the program by discussing a new electronic scheduling tool the company planned to unveil in 2013. The judge rejected the idea that the announcement of the electronic scheduling system amounted to a refusal to bargain, noting that the tool was flexible enough to accommodate the pilot program. The judge also found that the delays regarding the pilot program prior to March 1, 2012 were a result of a lack of enthusiasm by both parties and not the bad faith of the company. Kroger Limited Partnership I Mid-Atlantic.
In a memorandum issued to regional offices, the NLRB Division of Advice concluded that an employer’s requirement that employees sign noncompetition agreements did not violate the NLRA, but the employer’s maintenance or enforcement of a moonlighting ban may have unlawfully interfered with employees’ rights to engage in “salting.” In salting campaigns, union members apply for work with nonunion companies and, with or without disclosing their union affiliation and intentions, solicit support for a union upon hire. The memorandum concluded that even if the noncompetition agreement, here limited in geographic scope to three states, would limit employees from becoming salts in a specific geographic area, that incidental effect on the worker’s rights is too attenuated to establish a violation of the NLRA. Although the moonlighting policy at issue prohibited all outside employment and thus clearly prohibited salting, the memorandum concluded that merely adopting a moonlighting ban does not violate the NLRA unless there is evidence the prohibition was adopted in response to employees’ union activity such as salting or was applied to restrain workers from engaging in protected activity.
In a memorandum issued to regional offices, the NLRB Division of Advice concluded that a New York labor union representing public sector employees did not commit an unfair labor practice by prohibiting its in-house lawyers from wearing t-shirts in support of the United Steelworkers local that represented them. The New York State Public Employee Federation (Federation) asked the six lawyers in its legal department not to wear the union-provided T-shirts, expressing the view that T-shirts are not acceptable attire in the office. Although employees have the presumptive right to wear union insignia at work unless the employer can show special circumstances justifying a prohibition or limitation of such conduct, the memorandum cited several cases that held that special circumstances may be present if a display of union insignia interferes with the employer’s creation of a public image as part its business plan. The memorandum found that although the Federation did not have a written dress policy, the organization attempted to present its legal department in the image of a private law firm and lawyers were expected to wear professional business attire. The memorandum concluded that the Federation had a legitimate business interest prohibiting the shirts.

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Crime, Corruption & Other Misdeeds

The United States District Court for the Eastern District of Washington dismissed Carpenters and Joiners of America’s (Carpenters) claim that the AFL-CIO’s Building & Construction Trades Department (BCTD) violated the Racketeer Influenced and Corrupt Organizations Act by waging an extortionate campaign to force Carpenters to affiliate with them. The court held that the Carpenter’s RICO Act claim failed because it did not adequately plead that BCTD engaged in racketeering activity causing injury to Carpenter’s business or property. The court found that BCTD’s attempt to reaffiliate with Carpenters was lawful “hard bargaining” rather than the wrongful use of economic fear amounting to extortion, despite the allegation that the reaffiliation was unwanted by Carpenters. Finding insufficient allegations of extortion, the court characterized the dispute as one between competitor unions. Carpenters & Joiners of Am. v. Bldg. & Constr. Trades Dep’t.

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Legislation & Politics

Michigan became the 24th state to enact “right-to-work” legislation, prohibiting “compulsory unionism” by declaring invalid so-called “union security” or “closed shop” clauses in collective bargaining agreements. Such contract provisions are commonplace in union-negotiated labor contracts in states without right-to-work legislation, and they operate to compel union membership by providing that membership and payment of union dues is a condition of employment, either before or after hiring. Two separate right-to-work laws, for public and private workers, rapidly progressed through the Michigan legislature. H.B. 4003 covers public-sector workers but exempts police officers and firefighters from coverage, while H.B. 4054/S.B. 116 covers private-sector workers. The law includes an appropriation of funds, meaning that voters will not have an opportunity to overturn the law though a referendum. In response to the laws, unions are attempting to lock in collective bargaining agreements before the law takes effect in March 2013. President Obama and organized labor have denounced Republican lawmakers in Michigan for pursuing right-to-work initiatives.
The House Oversight and Government Reform Committee released a staff report calling into question the NLRB’s fairness and neutrality, asserting that the Board “has morphed into a rogue agency plagued by systematic problems.” Citing the agency’s overreach in litigation and regulatory matters and inappropriate conduct by Board officials, the report concluded that the “NLRB appears to be sacrificing fairness to job creators in order to promote pro-union policies.” The 22-page report—titled President Obama’s Pro-Union Board: the NLRB’s Metamorphosis from Independent Regulator to Dysfunctional Advocate—discusses the disregard of ethics rules and agency procedures and the uncertain legality of President Obama’s recess appointments to the Board.
The House Education and the Workforce Committee Chairman John Kline asked the NLRB to respond to an NLRB inspector general report finding that three NLRB employees inadvertently engaged in prohibited ex parte communications when they discussed the merits of a pending unfair labor practice complaint against Boeing Co. in an email exchange addressed to a list of agency officials, including then-Chairman Liebman. Although the Inspector General found that the references to the merits of the complaint in emails to Chairman Liebman technically infringed upon the Sunshine Act and NLRB regulations, which prohibit ex parte communications with Board members, the Inspector General concluded that the communications were inadvertent and were not intended to influence Board decision-making in that case. Chairman Kline asked the NLRB to arrange a briefing for the House Committee staff on policies and procedures adopted in response to the report.
President Obama intends to nominate Nicholas Christopher Geale to fill a vacancy on the National Mediation Board (NMB) and nominate NMB member Linda Puchala to a second term on the three-member panel. If nominated, Geale will fill the seat left vacant by the resignation of Republican Elizabeth Dougherty. Since 2011, Geale has served as the director of oversight and investigations on the staff of the Senate Committee on Heath, Labor and Pensions. Prior to joining that committee, Geale served as a counselor to the Deputy Secretary of Labor from 2007 to 2009. Puchala has served on the NMB since 2009.
The NMB adopted a final rule implementing amendments to the Railway Labor Act enacted by Congress earlier this year that changed representation election procedures for airline and railroad workers, which included a higher showing-of-interest requirement for unions seeking representation. In its final rule, the NMB concluded that Congress amended the RLA to require a 50 percent showing-of-interest before the NMB can authorize an election in any craft or class, including in cases arising from the merger of two or more airlines or railroads. Departing from its long-standing practice of requiring only a 35 percent showing-of-interest in merger cases, the NMB reasoned that Congress did not provide an exemption from the new higher showing-of-interest threshold for merger cases. The final rule also alters the procedures used in runoff elections where more than one union is on the ballot but none receive a majority of votes cast. The NMB will now place the two options, rather than the two unions, that received the most votes in the original election on the runoff ballot. The NMB will also no longer require a participant in the original election to make a written request for a runoff where no options received a majority vote.
The Michigan legislature approved S.B. 865 authorizing municipalities or districts to choose one of four alternatives when in financial distress: an emergency manager, a consent agreement, mediation, or Chapter 9 bankruptcy. The new law gives broad powers to an appointed manager or advisory board, including the ability to alter or void collective bargaining agreements. S.B. 865 replaced a voter-repealed law authorizing the governor to appoint to jurisdictions in financial distress emergency managers who could alter or void labor contracts. S.B. 865 includes an appropriation of funds, meaning that voters will not have an opportunity to overturn the law though a referendum. Governor Snyder is expected to sign S.B. 865 into law.

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Miscellaneous

In an effort to produce a more even distribution of case intake among regional offices, the NLRB approved a proposal from NLRB Acting General Counsel Lafe Solomon to reorganize the agency’s field office structure. The changes will reduce the number of regional offices from 32 to 28, but will leave the total number of field offices unchanged at 51. Under the reorganization adopted by the Board, Region 34 (Hartford, Conn.) will be designated a sub-regional office of Region 1 (Boston, Mass.), Region 26 (Memphis, Tenn.) will be designated a sub-regional office of Region 15 (New Orleans, La.), Region 16 (Overland Park, Kan.) will be designated a sub-regional office of Region 14 (St. Louis, Mo.), and Region 11 (Winston-Salem, N.C.) will be designated a sub-regional office of Region 10 (Atlanta, Ga.).

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Upcoming Events

February 7, 2013
Health Care Reform – Imminent Deadlines and Litigation Risks
eLunch
March 21, 2013
Social Media in the Workplace
eLunch

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Recent Publications

December 31, 2012
NLRB Finishes 2012 by Issuing Numerous Notable Decisions for Union and Non-Union Employers
Briefing
December 20, 2012
NLRB Reverses Longstanding Practice and Rules that a “Dues-Checkoff” Provision Survives a Contract’s Expiration
Briefing
December 20, 2012
EEOC Approves Strategic Enforcement Plan
Briefing
December 12, 2012
Michigan Enacts Right-to-Work Laws
Briefing

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