President Appoints Three to NLRB

The "recess" appointments fill up the Board to 5 members.  Guess what?  The full Board is not stacked with pro-management Board members.  Read the announcement and bios here.

NLRB Giving and Taking Away

Two items from your friends at the National Labor Relations Board.

As predicted, the new NLRB rights poster (discussed here) is postponed again - this time until April 2012.  Announcement here.  H/T Ross Runkel.

For the bad news, the Board just finalized revisions to election rules.  (Announcement is here).  Here is a redline of the changes to the election procedures.  The new rules severely curtail pre-election hearings on such matters as whether the voting unit is appropriate and who is eligible to vote.  Little things like that.  As a result, elections will occur much more quickly after a petition is filed, and there will be shorter "campaign" periods.

Look for the Union label!  There probably will be a few more of them starting next year!

NLRB Soon to Require Poster!

Effective this November, Non-union employers will have to post a new poster explaining to employees their rights under the National Labor Relations Act.  For a simple posting regulation, there sure are a lot of rules.

- Multiple languages if more than 20% of employers speak a language other than English
- posting on intranets
- size of the poster, placement, etc.

The poster's content basically is a short seminar on the National Labor Relations Act, the right to unionize, what unfair labor practices are, how to file a charge, etc.  Handy!

The good news is that the NLRB will let you download the poster free from its website, or you can order paper copies gratis from the Agency. So, printing costs will be minimal.

The regulations are at the bottom of this long long website page, which includes the "comments" to the final proposed rules and the NLRB's response to them.
DGV

NLRB Going Wild

The National Labor Relations Board is proposing a regulation that requires all employers under the NLRB's jurisdiction - both union and non-union- to post a notice explaining to employees their rights under the National Labor Relations Act.  That notice will include helpful information like how to file an unfair labor practice complaint, the right to collectively bargain and elect a union, etc. The entire contents of the notice is posted below.  The proposed regulations currently require qualifying employers to post the notice on paper with the other millions of government posters, and also send the notice out by email or put it on a company intranet. Multiple languages, etc. too.

The proposed regulations are here.  A "fact sheet" is here.  Read the whole proposed poster below. 

This NLRB is on a tear and it won't be long before private sector employers will have to wake up and smell the union. This time I may have to dust off my copy of The Developing Labor Law. My competitors may have to dust off their labor lawyers. OK, I kid! I had too many cookies.


DGV

“EMPLOYEE RIGHTS UNDER THE NATIONAL LABOR RELATIONS ACT

“The National Labor Relations Act (NLRA) guarantees the right of employees to organize and bargain collectively with their employers, and to engage in other protected concerted activity. Employees covered by the NLRA* are protected from certain types of employer and union misconduct. This Notice gives you general information about your rights, and about the obligations of employers and unions under the NLRA. Contact the National Labor Relations Board (NLRB), the Federal agency that investigates and resolves complaints under the NLRA, using the contact information supplied below, if you have any questions about specific rights that may apply in your particular workplace.

“Under the NLRA, you have the right to:

• Organize a union to negotiate with your employer concerning your wages, hours, and other terms and conditions of employment.
• Form, join or assist a union.
• Bargain collectively through representatives of employees’ own choosing for a contract with your employer setting your wages, benefits, hours, and other working conditions.
• Discuss your terms and conditions of employment or union organizing with your co-workers or a union.
• Take action with one or more co-workers to improve your working conditions by, among other means, raising work-related complaints directly with your employer or with a government agency, and seeking help from a union.
• Strike and picket, depending on the purpose or means of the strike or the picketing.
• Choose not to do any of these activities, including joining or remaining a member of a union.

“Under the NLRA, it is illegal for your employer to:

• Prohibit you from soliciting for a union during non-work time, such as before or after work or during break times; or from distributing union literature during non-work time, in non-work areas, such as parking lots or break rooms.
• Question you about your union support or activities in a manner that discourages you from engaging in that activity.
• Fire, demote, or transfer you, or reduce your hours or change your shift, or otherwise take adverse action against you, or threaten to take any of these actions, because you join or support a union, or because you
engage in concerted activity for mutual aid and protection, or because you choose not to engage in any such activity.
• Threaten to close your workplace if workers choose a union to represent them.
• Promise or grant promotions, pay raises, or other benefits to discourage or encourage union support.
• Prohibit you from wearing union hats, buttons, t-shirts, and pins in the workplace except under special circumstances.
• Spy on or videotape peaceful union activities and gatherings or pretend to do so.

“Under the NLRA, it is illegal for a union or for the union that represents you in bargaining with your employer to:
• Threaten you that you will lose your job unless you support the union.
• Refuse to process a grievance because you have criticized union officials or because you are not a member of the union.
• Use or maintain discriminatory standards or procedures in making job referrals from a hiring hall.
• Cause or attempt to cause an employer to discriminate against you because of your union-related activity.
• Take other adverse action against you based on whether you have joined or support the union.

“If you and your co-workers select a union to act as your collective bargaining representative, your employer and the union are required to bargain in good faith in a genuine effort to reach a written, binding agreement setting your terms and conditions of employment. The union is required to fairly represent you in bargaining and enforcing the agreement.

“Illegal conduct will not be permitted. If you believe your rights or the rights of others have been violated, you should contact the NLRB promptly to protect your rights, generally within six months of the unlawful activity. You may inquire about possible violations without your employer or anyone else being informed of the inquiry. Charges may be filed by any person and need not be filed by the employee directly affected by the
violation. The NLRB may order an employer to rehire a worker fired in violation of the law and to pay lost wages and benefits, and may order an employer or union to cease violating the law. Employees should seek assistance from the nearest regional NLRB office, which can be found on the Agency’s website:

www.nlrb.gov.

You can also contact the NLRB by calling toll-free: 1-866-667-NLRB (6572) or (TTY) 1-866-315-NLRB (1-866-315-6572) for hearing impaired.
“*The National Labor Relations Act covers most private-sector employers. Excluded from coverage under the NLRA are public-sector employees, agricultural and domestic workers, independent contractors, workers employed by a parent or spouse, employees of air and rail carriers covered by the Railway Labor Act, and supervisors (although supervisors that have been discriminated against for refusing to violate the
NLRA may be covered).

“This is an official Government Notice and must not be defaced by anyone.”

California Court of Appeal Invalidates Anti-Injunction Law

I am still a bit behind on blogging because of last month's trial. Here's one that came down in the middle of the trial.

As the courts in this case noted, California law ma[d]e it nearly impossible to get an injunction against a union picketing in front of a private business. Labor Code Section 1138.1 and Code of Civil Procedure Section 527.3 impose significant procedural hurdles and substantive limitations on courts to issue injunctions against "peaceful picketing." These protections were extended to private property, such as outside the front entrance of retail stores.

The court first held that the entrance of a FoodsCo, including the sidewalk and "apron" were private property, not a public forum. The court distinguished cases that held enclosed shopping malls were public areas. Because the FoodsCo entrance and surrounds were private, the court noted, the company could prohibit speech without violating the picketers' First Amendment or California constitutional rights.

The court then examined whether the anti-injunction laws violated FoodsCo's rights. FoodsCo sought an injunction againt a union's trespass. The union had picketed from the opening of the store until the present, five days per week, 8 hours per day. The complaint was that FoodsCo was operating non-union.

The trial court denied the injunction because FoodsCo had not adequately proved its entitlement to an injunction under the Labor Code's special provision, Section 11381.1. The business owner must prove, among other things, that the police are unwilling or unable to provide assistance, and other grounds that do not apply to the issuance of trespass injunctions generally.
Here is the money quote:

Accordingly, as applied in this case, the Moscone Act violates the First and Fourteenth Amendments of the United States Constitution. The Act affords preferential treatment to speech concerning labor disputes over speech about other issues. It declares that labor protests on private property are legal, even though a similar protest concerning a different issue would constitute trespassing. And it denies the property owner involved in a protest over a labor dispute access to the equity jurisdiction of the courts even though it does not deny such access if the protest does not involve a labor dispute.

So, unless the Legislature acts somehow to create a constitutional anti-injunction law, the courts will have to enforce anti-trespass injunctions against unions on the same basis as it does so outside the union picketing context.

The case is Ralphs Grocery Company v. UFCW, Local 9 and the opinion is here.

U.S. Supreme Court Issues Two More Arbitration Decisions

The U.S. Supreme Court closed out its employment cases for the 2010 Term with two arbitration decisions. The Court held in one opinion that the arbitrator must resolve an arbitrability issue. The Court reached the opposite result in the other. Here's what happened.

In Granite Rock Co. v. Teamsters, the company and its union agreed on a new contract. But the Company would not agree to hold the union harmless for strike-related damage. The union continued to strike. The company argued the strike violated the "no-strike" clause in the parties' new contract, which also contained an arbitration clause. The union believed the agreement was not properly ratified and, therefore, not a contract when the strike occurred.

Granite sued the Teamsters in federal court alleging breach of contract against the local union, and interference with contract against the International. District court allowed a jury to decide when the agreement was ratified - which determined if the strike was arbitrated or resolved in court. Once the jury decided the agreement was properly ratified, the district court sent the case to arbitration over the merits of the breach of contract issue. The Ninth Circuit, though, held that the arbitrator should have decided the ratification issue.

The Supreme Court held the district court got it right. The court was required to decide if the parties agreed to arbitrate the breach of the no-strike clause issue, because courts enforce arbitration only to the extent the parties agreed. The date the contract was ratified amounted to a dispute over the applicability of arbitration to the dispute. If ratified, there would be a valid contract. Here's how the court put it:

a court may order arbitration of a particular dispute only where the court is satisfied that the parties agreed to arbitrate that dispute. See First Options, supra, at 943; AT&T Technologies, supra, at 648−649. To satisfy itself that such agreement exists, the court must resolve any issue that calls into question the formation or applicability of the specific arbitration clause that a party seeks to have the court enforce. See, e.g., Rent-A-Center, West, Inc. v. Jackson, ante, at 4−6 (opinion of SCALIA, J.). Where there is no provision validly committing them to an arbitrator, see ante, at 7, these issues typically concern the scope of the arbitration clause and its enforceability. In addition, these issues always include whether the clause was agreed to, and may include when that agreement was formed.

So, the court, not the arbitrator, had to decide when the contract was ratified.

This decision was 7-2, authored by Justice Thomas. Justices Sotomayor and Stevens dissented from this part of the opinion, but joined in the unanimous decision that there is no claim for tortious interference under federal law.

The opinion in Granite Rock Co. v. Teamsters is here.

Just a couple of days earlier, though, the Court held in Rent-a-Center West, Inc. v. Jackson that the arbitrator must decide arbitrability, albeit in a different context. Granite was decided under Section 301 of the LMRA. Rent-a-Center is a Federal Arbitration Act case. But the Court cites FAA decisions in Granite, too. So, the analysis is probably the same.

Jackson sued for employment discrimination in Nevada federal court. Rent-a-Center sought to compel arbitration. Jackson argued the agreement was "unconscionable" under Nevada law, which is a defense to the enforceability of the arbitration agreement.

But the arbitration agreement provided: "[t]he Arbitrator, and not any federal, state, or local court or agency, shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this Agreement including, but not limited to any claim that all or any part of this Agreement is void or voidable."

So, unlike in Granite, the parties' agreement expressly gave the arbitrator the authority to determine whether the agreement was void, or enforceable. The Court held that, given the parties' "clear and unmistakable" agreement, any dispute over this provision was itself a question for the arbitrator to resolve:

The delegation provision is an agreement to arbitrate threshold issues concerning the arbitration agreement. We have recognized that parties can agree to arbitrate"gateway" questions of "arbitrability," such as whether the parties have agreed to arbitrate or whether their agreement covers a particular controversy.

The Court then analyzed whether the FAA permitted the court to permit the arbitrator to decide if the agreement was unconscionable. The Court held that the FAA did permit this. In particular, the court decided that Jackson alleged the entire arbitration agreement was invalid, not exclusively the provision conferring on the arbitrator the right to decide unconscionability. Had Jackson been able to argue this delegation provision alone was unconscionable (and how would he do that?) the court may have come down a different way.

Therefore, Jackson's challenge to the arbitration agreement as "unconscionable" must be decided by the arbitrator.

If arbitration agreements reserve the power to decide unconscionability to the arbitrator, that will certainly affect courts' power to decide "unconscionability" claims by plaintiffs seeking to avoid arbitration agreements.

This one was 5-4. The dissent argued the majority simply got it wrong, synthesizing the law as follows:

questions related to the validity of an arbitration agreement are usually matters for a court to resolve before it refers a dispute to arbitration. But questions of arbitrability may go to the arbitrator in two instances: (1) when the parties have demonstrated, clearly and unmistakably, that it is their intent to do so; or (2) when the validity of an arbitration agreement depends exclusively on the validity of the substantive contract of which it is a part.

The majority believed this rule required arbitration because both prongs were satisfied. But the dissent argued (1) because the agreement was alleged to be unconscionable, Jackson could not have "clearly and unmistakably" submitted arbitrability to the arbitrator. The dissent also argued

when a party raises a good-faith validity challenge to the arbitration agreement itself, that issue must be resolved before a court can say that he clearly and unmistakably intended to arbitrate that very validity question. This case well illustrates the point: If respondent’s unconscionability claim is correct—i.e., if the terms of the agreement are so one-sided and the process of its making so unfair—it would contravene the existence of clear and unmistakable assent to arbitrate the very question petitioner now seeks to arbitrate. Accordingly, it is necessary for the court to resolve the merits of respondent’s unconscionability claim in order to decide whether the parties have a valid arbitration agreement under §2. Otherwise, that section’s preservation of revocation issues for the Court would be meaningless.

The bottom line: unless or until Congress overturns this decision, it appears employers will be able to avoid courts' rulings on unconscionability and have arbitrators decide them instead.

The opinion in Rent-a-Center West, Inc. v. Jackson is here.

EFCA Debate and Article

So, I wrote this column on the Employee Free Choice (sic) Act or EFCA if you haven't seen it already. Someone must have read it, because I was invited to debate EFCA on the radio on Friday, January 23, 2009 at 7:00 a.m. Roy Ulrich, a lawyer and the host of "Morning Review" on KPFK-FM in LA, hosted the forum.

I was up against a professor from my alma mater. I think she would rescind my diploma if it were up to her.

The interesting aspect of the debate is the opinion my opponent offered about the motivation behind this law. It's not about expanding union representation at the workplace for the sake of workers, etc. It's about the labor "movement." The more members the unions get, the more money they earn. The more money they earn, the more they can lobby politicians and affect election outcomes. Their hope is to elect politicians who will change world TRADE POLICY and become anti-"globalization." Now, *I'm* not saying that's what EFCA is really about. Rather, "that's what she said."

Anyway, if you want to hear my radio stylings, you may do so here. The King of all Media has nothing to worry about. (And "baba booey" to you all.)

DGV

U.S. Supreme Court Clarifies Standards for Unions to Charge Nonmembers Service Fees

An employee member of a collective bargaining unit may choose not to be a member of the union that represents the unit. However, under First Amendment jurisprudence, the union may charge the non-member a "service fee" for bargaining services. But the union must carve out the portion of dues spent on activities unrelated to collective bargaining (such as political activity). In Locke v. Karass, the Court addressed whether the union could include the costs associated with litigation directed by the national union. The Court in a unanimous opinion held that such expenses may be charged as part of the service fee when:

(1) the subject matter of the (extra-local) litigation is of a kind that would be
chargeable if the litigation were local, e.g., litigation appropriately related to collective bargaining rather than political activities, and (2) the charge is reciprocal in nature, i.e., the contributing local reasonably expects other locals to contribute similarly to the national’s resources used for costs of similar litigation on behalf of the contributing local if and when it takes place.

Wake up. This is important stuff. The case is Locke v. Karass and the opinion is here.

Election Day is a Vote on the Employee Free Choice Act

This is not a "partisan" blog. We don't care for whom you vote. We represent employers/ management, though. So, we tend to discuss legal developments through a prism of how they affect the employer. And that's. O.K.

I bring up the election because, let's face it, all blogs are about the election. Why should ours be any different? Oh, and it's pretty much a given that the fate of the so-called "Employee Free Choice Act" will turn on which candidate is elected President next Tuesday. It pays to know what the law is, what it will bring to your business, and whether you can live with it. We can certainly live with it here at SV (once we hire enough lawyers to handle all of the work that this law is going to generate for us.) Hint hint.

Essentially, the law (if passed) will make it possible for unions to organize workers without a secret ballot election, merely by signing up a "majority" of the workers in an appropriate bargaining unit. Once the union demonstrates its status as representative, contract negotiations must start within 10 days of the union's request. The parties must negotiate a first contract in 90 days. If the parties fail, then there's mediation. If you're ok with all this so far, then here's the part that might concern you if you are a business owner or manager (and maybe if you're a union member too): if mediation fails, a government appointed arbitrator will decide on a first contract for you. ("Hello, I'm the government arbitrator. I'm here to help. So, I'll be deciding the employees' wages, and what the terms of your contract will be, too!") If you don't believe, me, the link to the proposed law is here.

The private sector workforce is about 7% unionized now. When employers are able to explain to employees what unionization will bring, employers win the election about 50% of the time. But when employers are silent, unions win a vast majority of the time - possibly 80% of the time? If there is no secret ballot, no campaign and a union's representation will be based only on whether union organizers can convince employees to sign an authorization card at a pizza and beer fest down at the local union hall? Well, you do the math.

So, here's a selection of law firm articles on the EFCA. If you seek balance, try Yoga. Or you can Google the AFL-CIO's or union advocates' explanation of the law, too. Again, the text of the current version of the bill, HR 800, is here. There, now you can vote.

DGV

Ninth Circuit: Cab Operators Were Employees, Not Independent Contractors

When a union organizes an employer's workers, the National Labor Relations Act governs the union election. Independent contractors cannot be organized because they are not considered "employees." When an employer claims that workers are independent contractors as a defense to union organizing, the NLRB (and a reviewing court) will apply federal law. In NLRB v. Friendly Cab Co., opinion here, the Ninth Circuit held that Friendly's cab drivers were employees, not independent contractors, and therefore were properly organized by the union. The opinion thoroughly discusses the criteria federal courts apply to independent contractor analysis in the labor law context.

NLRB: Employees Have No Right to Email About Unions

Not news: Employees use email for personal reasons. News: Employees have no special right to use email for union activities. Employees and their advocates argued to the National Labor Relations Board that employers' property rights should yield to employees' right to communicate under section 7 of the National Labor Relations Act. In a case of first impression, the NLRB said "no" in The Guard Publishing Company, opinion here. So, Employers have the right to ban employees from using their email system for personal reasons.
But if employees email each other about sports, gossip, etc., can the employer selectively ban union talk? Not necessarily. Employers that single out section 7 rights for discriminatory treatment commit an unfair labor practice under section 8(a)(3) of the NLRA. The Board had an answer for that issue as well. In the opinion, the Board re-defined what constitutes "discrimination" in the context of employer policies. The employer may lawfully ban communications about non-work-related activities, so long as the employer's distinctions are not "along section 7 lines." Example: the employer may allow solicitations by charitable organizations, but ban all other solicitations (including by unions).
The decision was 3-2 over a strong dissent, the Board is about to turn over some members, and I hear there's an election coming up next year. So, the degree to which employers may rely on this decision for the long term is unclear. For now, however, employers have more latitude regarding their policies regarding the use of employer property, and their solicitation and distribution policies.

DGV

Congress Considering "Card Check" Bill to Increase Unionization

According to these interesting data from the Bureau of Labor Statistics, about 7% of the private sector employees are unionized; that number is about 36% for government employees. So, many don't pay attention updates like this. That may change soon. Congress is interested in increasing that percentage.

Here's a quick and oversimplified overview of union organizing under current laws:

When unions attempt to organize employees, they collect "authorization cards" from employees. Once they obtain enough cards, they typically present them to the employer and demand the right to bargain. (Some unions go straight to the NLRB and petition for an election). But the employer can reject the cards and demand a secret ballot election usually conducted by the National Labor Relations Board. Once the Board processes a petition for an election, the union and employer have about six weeks to "campaign" until the election. The union and the employer present their respective cases, and the employees vote in a secret ballot. The NLRB counts the votes. Unions and their advocates argue this election process deters unionization because employers use unfair or illegal election tactics. Employers argue they and the unions present the facts and let the employees decide. About half the time, the employees decide against the union. Unions don't like that success rate.

So, apparently a majority of the House of Representatives would like to skip all that secret ballot election stuff and let the union obtain representation rights just by collecting authorization cards. HR 800, The Employee Free Choice Act would do just that.

It's a lot easier to organize employees when the employer does not get a chance to explain why union representation is not a good idea. And the First Amendment gives unions a free reign on what they can say to obtain a signature on an authorization card. I bet peer pressure increases the number of signatures. Organizers' unchallenged promises about the benefits of unions help, and there could even be some signature hanky-panky once in a while too. (Such a cynic).

No one is paying attention to the rest of the Bill, though. Another section would require unions and employers to mediate and then arbitrate if negotiations do not quickly result in a new collective bargaining agreement. Lots of power in the hands of one arbitrator to unilaterally "impose" an agreement. Another provision imposes penalties of up to $20,000 per violation of "unfair labor practices" committed by employers before the first collective bargaining agreement is signed.

This Bill is not new. But with the power shift in Congress, this year it is gaining traction. Vice President Cheney has said publicly it will be vetoed if passed. But sometimes deals are made.... So stay tuned.