IMMEDIATE RELEASE R-2525
April 5, 2004
GENERAL COUNSEL ARTHUR ROSENFELD
REPORT ON RECENT CASE DEVELOPMENTS
National Labor Relations Board General Counsel
Arthur F. Rosenfeld today issued a report on casehandling developments in the
Office of the General Counsel. The
report covers selected cases of interest that were decided during the period
from July 2003 through December 2003. It
discusses cases that were decided upon a request for advice from a Regional
Director or on appeal from a Regional Director’s dismissal of unfair labor
practice charges. In addition, it
summarizes cases in which the General Counsel sought and obtained Board
authorization to institute injunction proceedings under Section 10(j) of the
National Labor Relations Act.
General Counsel Rosenfeld is beginning with this
report a practice of discussing some of the ethical issues in the
administration of the Act. The
issues discussed in the report relate to state bar applications of ABA Model
Rule 4.2 (communications with represented persons) to Agency investigations.
General Counsel’s report can be accessed in the press releases area of the
NLRB web site: www.nlrb.gov or copies can
be obtained by contacting the Division of Information at 202-273-1991.)
OF THE GENERAL COUNSEL
This report covers selected cases of interest that were decided during
the period from July through December 2003.
It discusses cases which were decided upon a request for advice from a
Regional Director or on appeal from a Regional Director's dismissal of unfair
labor practice charges. In
addition, it summarizes cases in which the General Counsel sought and obtained
Board authorization to institute injunction proceedings under Section 10(j) of
this Report, I am beginning a practice of reporting on some of the ethical
issues that confront us in the administration of the Act. We have discussed these at various conferences with the Bar and have
received a number of requests for more information about what we are doing.
The issues discussed in the Report relate to state bar applications of
ABA Model Rule 4.2 (communications with represented persons) to Agency
Arthur F. Rosenfeld
REFUSAL TO BARGAIN IN GOOD FAITH
Obligation to Provide Union with Relevant Medical Information after Enactment
of Health Insurance Portability and Accountability Act
In several cases, we examined the impact of the Health Insurance
Portability and Accountability Act (HIPAA, Pub. L. No. 104-191, 110 Stat. 1936
(1996)) and its regulations against disclosure of health-related information
(the Privacy Rule, 45 CFR §§ 160 & 164 (2002)) on employers’ duty to
provide unions with requested relevant medical information.
We decided that the promulgation of the HIPAA regulations did not
terminate an employer’s obligation to bargain over an accommodation of its
confidentiality interest in health information concerning unit employees.
We reached that conclusion because HIPAA does not absolutely prohibit
the disclosure of such information, and because the HIPAA regulations’
exceptions for providing redacted medical information and for allowing
patients to consent to disclosure are consistent with Board accommodations for
providing confidential information.
The employer operated an on-site medical facility at its plant, which
maintained employee medical records and was staffed by a nurse.
The union representing 1700 employees requested documents relating to
the administration of workers’ compensation claims, the provision of health
care at the on-site medical facility, workplace injuries and illnesses,
including injury reports required by OSHA (Form 301 equivalents), internal
employer injury reports, and medical records.
Relying on HIPPA regulations, the employer stated that it would supply
the information only upon employee consent.
The HIPAA Privacy Rule prohibits "covered entities" (such as
the Employer here) from misusing and sharing individually identifiable
"protected health information" (PHI), relating "to the past,
present, or future physical or mental health or condition of an individual
[or] the provision of health care" (45 CFR § 160.103).
In certain situations, however, a covered entity may disclose PHI
without violating HIPAA. For
example, the Privacy Rule permits a covered entity to disclose PHI upon
receiving an individual’s consent authorization, or even without the
individual’s authorization by redacting information from PHI that may be
used to identify the individual, a process that the Privacy Rule refers to as
"de-identification" (id. at § 164.514(a)-(c)).
Under Section 164.512(a)(1) of the Privacy Rule, a covered entity may
also use or disclose PHI without an individual’s written authorization where
the use or disclosure is required by law.
concluded that the employer unlawfully refused to seek an accommodation
through bargaining with the union over providing confidential information by
insisting on employee consent because the option of redaction, proposed by the
union, appeared to effectively accommodate the competing interests.
We concluded that HIPAA did not alter the employer’s duty to bargain
over accommodations such as consent or "de-identification" of
confidential medical records because HIPAA’s exceptions to nondisclosure of
PHI parallel confidentiality accommodations that have been approved or
fashioned by the Board. See,
e.g., LaGuardia Hospital, 260 NLRB 1455, 1463 (1982); Johns Manville
Sales, 252 NLRB 368 (1980).
also decided that portions of the OSHA-required injury report forms may not
have even been HIPAA-covered PHI because they did not appear to be used or
obtained in the employer’s capacity as a covered entity.
Rather, because OSHA regulations required the employer to complete and
maintain the reports when a work-related injury or illness occurs, the reports
would be "employee records held by a covered entity in its role as
employer," which HIPAA expressly excludes from the definition of PHI.
See 45 CFR § 164.504(f); see also 67 Fed. Reg. 53182, 53192 (2002).
Further, even though the reports may have been held in employee medical
files, HIPAA’s "required by law" exception to the prohibition
against disclosure of PHI would allow the employer to furnish those redacted
portions of the document that OSHA regulations require be provided to an
employee’s collective-bargaining representative, 29 CFR § 1904.35(b)(v)(B).
As such, the employee would have no reasonable expectation of privacy
in those portions of the injury reports.
employer stated that it would no longer provide certain medical information to
the union without employee consent because "HIPAA has taken effect."
In this case, the Union requested access to forms listing employees’
physical capacities upon their returns to work from workers’ compensation or
We initially decided that the employer, which manufactures
hydrocarbon resins, was not a
"covered entity" under HIPAA, despite its assertion that it was
because it sponsored its own employee health benefits plan.
We also decided that the physical restriction forms were held by the
employer in its role as an employer, and the forms were therefore not PHI.
Further, we found no reasonable employee expectation of
confidentiality, since the employer had always previously provided the forms
to the union without seeking employee consent.
Accordingly, we authorized complaint alleging that the employer
unlawfully refused to provide the forms unconditionally.
Counsel to Argue that Board Adopt Limitation to "Perfectly
another case, we decided that an employer was a "perfectly clear"
successor under NLRB v. Burns Int’l Security Services, 406 U.S. 272
(1972) and Canteen Co., 317 NLRB 1052, 1057 (1995), enfd. 103 F.3d 1355
(7th Cir. 1997), and therefore that it was not privileged to
exercise a successor’s usual privilege to unilaterally set initial terms and
conditions of employment. However,
we further decided to argue to the Board that it should limit the
"perfectly clear" exception to situations where employees have been
extended actual unconditional offers of hire by the successor, with no
indication that the predecessor’s terms would be changed, in agreement with
the dissent’s view in Canteen, 317 NLRB at 1057 (Members Stephens and
In this matter, the union had represented employees at a facility of
the predecessor which was then sold to the successor.
Prior to holding a meeting with the predecessor’s employees and
before the purchase became effective, the successor’s president had a short
conversation with a union representative, during which the union
representative asked what would happen to the unit employees after the
purchase. The successor’s
president responded that "[w]e are going to hire all the employees."
Shortly after that conversation, the union representative told the unit
employees that the successor intended to retain them.
Later that afternoon, the successor held a meeting with the unit
employees during which it described its hiring process and told the employees
that their health and dental insurance would change to the successor’s
plans. When asked about wage
rates and vacation amounts, the successor stated that it could not tell
employees their specific wage rates or vacation amounts until the interview
process. The successor then
opened with a majority of its unit employees having been employed in the
predecessor’s unit represented by the union.
The employees were employed at different wages and with different
authorized complaint alleging that the successor employer was a
"perfectly clear" successor, without the freedom to unilaterally set
initial terms and conditions, because it initially informed the union of its
plan to retain the predecessor employees without clarifying that employees
would be working under different terms and conditions.
The Board limits the "perfectly clear" exception to
circumstances in which the new employer actively or implicitly misleads
employees, directly or through their bargaining representative, into believing
that they will be retained by the successor under the same terms and
conditions, or fails to clearly state its intent to establish new terms and
conditions before inviting predecessor employees to accept employment.
In Canteen, for instance, the Board majority imposed a
bargaining obligation under the "perfectly clear" exception because
of the successor's silence regarding new wage rates when it initially
announced to the union its intent to hire the predecessor's employees.
Although the successor in Canteen told the union that it wanted
employees to serve a probationary period and told the employees that it wanted
them to apply for employment, it failed to mention in either discussion the
possibility of other changes in initial terms and conditions.
The successor first mentioned its reduced wage rate to employees one
day after it had communicated to the union its plan to retain the predecessor
employees. The Board found that
the successor thereby violated Section 8(a)(1) and (5).
the successor in the case under consideration would be a "perfectly
clear" successor under the majority holding in Canteen, we decided
that we would also argue to the Board that it adopt the view of the dissent in
Canteen to limit the "perfectly clear" exception to
situations where employees have been extended actual unconditional offers of
hire by the successor prior to any indication being given that the
predecessor’s terms would be changed. Such
a holding would protect employees from being misled into accepting
employment with a successor under the belief that their terms and
conditions would not change. 317
NLRB at 1056 (emphasis in the original).
Unlawfully Insisted on Negotiating Contract by
our next case, we decided that the use of a videoconference system to
negotiate an initial collective-bargaining agreement with the Union is not
comparable to face-to-face bargaining. As
a result, the Employer's insistence on conducting negotiations in that manner
violated the Act's requirement that it meet and confer in good faith with the
After certification as the 9(a) representative of the employees, the
Union requested bargaining for an initial contract.
The Employer insisted that such bargaining be conducted via its
videoconference system – i.e., the Employer's negotiating team in Florida
would bargain with the Union's negotiating team, seated in the Employer's
Portland, Oregon office, by way of a secure video link.
The Union objected to that demand, proposing instead that the parties
meet in person at either the Union's office, the Employer's Portland office,
or a mutually agreed upon neutral site. The
Union ultimately canceled the first session because the parties were unable to
resolve this issue, and no bargaining had taken place.
The Employer asserted that negotiating by videoconference should
satisfy the Board's "face-to-face" bargaining requirement, and
further defended its position on the grounds that it widely utilized
videoconferencing to train employees, to hold daily management briefings, and
to conduct meetings with employees and vendors.
The Employer also asserted that videoconference bargaining would be
more cost effective and less time consuming than meeting in person, and would
ultimately lead to more productive bargaining sessions.
On the other hand, the Union contended that videoconference negotiating
was akin to bargaining by telephone, which the Board has held does not satisfy
the face-to-face bargaining requirement.
The Union further asserted that videoconference bargaining would not
allow for a complete give-and-take of ideas and proposals or permit the
parties to gain a "feel" for the other side.
The Union was apprehensive about the fact that the videoconference
system would allow only one person at a time to speak and would not permit the
parties to see everyone on the other side's team.
The Union was also concerned that the Employer would record bargaining
sessions, as it had initially suggested, and that this possibility would
engender reticence and distrust.
Although the Board, with court approval, has consistently interpreted
Section 8(d) to require that parties negotiate face-to-face, and has
determined that insisting on negotiating by telephone or mail is unlawful, it
has never articulated its rationale for that determination.
However, we decided that absent agreement, sound policies require
in-person collective-bargaining negotiations, which necessarily involve the
communication of difficult messages and the existence of strong differences of
First, we were concerned that videoconference bargaining, over the
objections of one of the parties, would not permit parties to
contemporaneously exchange draft language or written proposals (which in many
instances are prepared or revised spontaneously during the course of a
bargaining session), sign-off on tentatively agreed-upon terms in the midst of
bargaining, or hold sidebar conferences with members of the other side's
negotiating committee. We were
further concerned that videoconference bargaining would not permit the parties
to observe nuances of eye contact and body language, both on the part of the
individual speaking and on the part of those observing.
In addition, the Union's apprehensions about speaking candidly when it
could not be certain as to who was in the room and as to whether the sessions
were being recorded were not unreasonable.
These concerns were particularly germane where a newly certified Union
was seeking to negotiate its first contract with the Employer, and the parties
consequently had no history to guide them and had not yet established a
relationship of trust. Finally,
we noted that although the Employer argued that it used videoconferencing for
a wide range of business activities, none of the other uses the Employer made
of its system -- i.e., training employees and conducting meetings with
management, employees, and vendors -- involved dynamics comparable to those
involved in collective-bargaining.
another case, we decided that an employer that was bargaining for an initial
collective-bargaining agreement lawfully insisted on separate bargaining over
interim health insurance coverage, but then unlawfully implemented its interim
health insurance proposal before reaching a bona fide impasse.
Employer had always provided its employees with a health insurance benefit.
Every year, the Employer had solicited bids, under certain criteria,
from various health insurance providers. After reviewing the bids, the Employer offered employees a choice of
providers and plans for the following year.
The Union was certified in December 2001 and the parties began
bargaining for an initial agreement. In
August 2002, during this bargaining, the Employer learned that one of its
existing health insurance providers would not offer its current plan after
December 31. Since the Employer
could not maintain the status quo during bargaining past that date, employees
enrolled in the discontinued plan would have to change plans before the end of
the year. The Employer therefore
proposed separate bargaining over an interim agreement for health insurance.
The Employer submitted its proposal for such an interim agreement,
offering employees a choice of several health insurance plans including a
catastrophic insurance plan as a default.
Union opposed bargaining over health insurance on an individual, interim
basis. The Employer responded
that interim health insurance might be necessary because employees enrolled in
the discontinued plan might be forced into the catastrophic default plan on
January 1, 2003. Throughout
September and October, the parties continued to disagree over both the
necessity of an interim health insurance and also over the terms of any health
early November, the Employer stated that a deadline of November 30 for open
enrollment in health plans may be necessary to avoid jeopardizing employee
plan enrollments. The Employer
also stated that the parties could continue to bargain over health insurance
as part of an overall agreement. At
the close of the parties' November 15 session, the Employer announced that it
would implement its proposal for interim health insurance, effective January
1, 2003. The Employer stated that
it did not think the parties could wait any longer and that the Employer's
proposal was as close to the status quo as possible given the withdrawal of
one of the existing plans. Later
that day, the Employer posted a flyer to advise employees of its decision to
decided that the Employer was privileged to seek bargaining over the discrete
issue of interim health insurance where some coverage was scheduled to expire
during the parties' negotiations. Therefore,
if the parties had bargained to a good-faith impasse over just this issue, the
Employer would have been privileged to implement its proposal without reaching
an overall impasse for an entire agreement.
We also decided, however, that the parties were not at impasse over
interim health insurance when the Employer implemented its alternative
proposal. Thus, the Employer’s
implementation of its own interim insurance proposal was unlawful.
negotiations for a new bargaining agreement, an employer may not unilaterally
implement changes unless the parties have reached an overall bargaining
impasse on the entire bargaining agreement.
Pleasantview Nursing Home, 335 NLRB 961, 962 (2001). However,
the Board recognizes an exception to this general rule: when a "discrete
event" occurs during contract negotiations so that bargaining can not
wait for an overall impasse, an employer may bargain to impasse over a single
subject rather than over an entire agreement.
Brannan Sand & Gravel, 314 NLRB 282 (1994); Stone
Container, 313 NLRB 336 (1993).
though the Employer was privileged to bargain for an interim agreement on
health insurance, we further decided that the Employer had unlawfully
implemented its alternative health insurance proposal.
There was no evidence that the parties had been at impasse prior to the
Employer's implementation. In
fact, the Employer had not even argued that the parties had reached impasse.
Lawfully Paid Strike Replacements Unilaterally
Implemented Wage Rate
one case, we decided that the Employer did not violate Section 8(a)(1) and (5)
of the Act when it continued to pay strike replacements unilaterally
implemented wage rates after the strike ended, but before any strikers had
been recalled and before agreement was reached on a new contract.
Similarly, the Employer did not violate the Act when it refused to
engage in separate bargaining over the replacements’ wages apart from
negotiations over a successor agreement for the entire unit.
the most recent collective-bargaining agreement expired, the Employer and the
Union were unable to reach agreement on a successor contract, and bargaining
unit employees engaged in an economic strike that lasted approximately one
year. During the strike, the
Employer hired permanent replacements at higher starting wage rates than
provided for in the expired contract. After
the Union made an unconditional offer to return to work, the Employer
continued to operate with the permanent replacements.
The Employer also continued to pay the strike replacements at
the unilaterally set wage rates. The
strikers were placed on a preferential hire list, but none of the strikers
were recalled to work as there were no vacancies.
parties did not resume negotiations for a successor contract until some seven
months after the strike ended. However,
approximately five months after the end of the strike, the Union claimed the
Employer was violating the expired collective-bargaining agreement by failing
to pay the strike replacements the contractual wage rates and periodic
increases set forth in that agreement. The
Union requested that the Employer bargain about the alleged contract
violation. The Union argued that
the Employer was required to pay the replacements in accordance with the wage
rates and periodic increases in the parties’ expired contract.
The Employer argued that it had no obligation to pay the replacements
in accordance with the expired agreement.
Employer’s normal bargaining obligations do not extend to the terms and
conditions of employment for replacements of striking employees during a
strike because a union cannot be expected to represent the interests of the
replacements equally with the interests of the strikers and an employer cannot
be effectively prohibited from hiring replacements.
327 NLRB 871 (1999); Capitol-Husting
Co., 252 NLRB 43, 45 (1980), enfd. 671 F.2d 237 (7th Cir. 1982).
In Service Electric Co.,
281 NLRB 633 (1986), the Board adopted the administrative law judge’s
determination that the employer was not required to pay strike replacements in
accordance with the terms of an expired collective-bargaining agreement under
the circumstances of that case. The
administrative law judge based his decision primarily on his determination
that the evidence failed to establish that the strike had ended.
However, the administrative law judge further determined that even if
the strike had ended, the Employer would not be required to pay the
replacements the contractual wage rates because the underlying dispute had not
been resolved, the strikers had not offered to return to work, and the
replacements continued to work. The
administrative law judge reasoned that because the unreinstated strikers’
jobs continued to be occupied by replacements, the positions of the parties
did not differ from their positions during the strike.
The administrative law judge also noted that diverting the parties’
attention from their principal focus of reaching agreement on a new contract
to negotiating an agreement on the entirely separate issue of the
replacements’ wages would not further the overall bargaining process.
327 NLRB at 871, fn. 1 (1999), the Board refused
to pass on the issue of the continuation of different terms and
conditions of employment for replacements after a strike has ended.
However, the Board noted that after the strike has ended and the
underlying labor dispute has been resolved, it is clear that strike
replacements become members of the bargaining unit, and their employment terms
are governed by the newly negotiated contract.
Id. at 871.
Grinnell Fire Protection Systems,
332 NLRB 1345 (2000), enfd. in part, 272 F.3d 1028 (8th Cir. 2001), an
information request case, the Board reiterated that once a strike is over, any
replacements who remain employed assume the same status as other unit
employees and the terms under which they work will be governed by any newly
bargained contract. The Board
noted that the union was entitled to information regarding strike
replacements, not because it could insist on bargaining over the terms under
which they worked as strike replacements, but because in bargaining for a new
agreement, it was bargaining over terms that would be applicable to all unit
employees, including those who worked as replacements.
determined that the Act does not require an employer to pay strike
replacements in accordance with the expired collective-bargaining agreement
under circumstances where the strike has ended, but no strikers have been
recalled and no new contract has been reached.
Service Electric Co,
supra. Rather, the
Union is in a position to bargain over the terms and conditions of employment
of the strike replacements when it bargains for a new agreement on behalf of
the entire unit. See Grinnell
Fire Protection Systems, supra.
DUTY OF FAIR REPRESENTATION
May Not Compel Beck Objectors to Share
Arbitration Costs or to Submit Multiple Objection Letters in Order to Receive
another case, we decided that a local union violated an objecting
nonmember’s rights under Communications Workers of America v. Beck,
487 U.S. 735 (1988), by maintaining policies that required non-members who pay
a reduced fee to send a second objection letter in order to receive a
breakdown of the fee and that required challengers to share the cost of
the local union’s policies and procedures, employees who object to full
membership and request non-member status are sent a letter from the union
listing the percentage of fees to be paid by financial core members.
Only an employee who submits a written objection to those percentages
is considered to be an "objector."
The union then provides the objector with an explanation of how the
reduced fee was calculated and furnishes a detailed list of those categories
of expenditures deemed to be "chargeable" and
union also includes its independent auditor’s report indicating the union
expenditures on which the reduced fee is based.
We concluded that the union violated Section 8(b)(1)(A) of the Act
because its initial disclosure failed to include a breakdown of the
expenditures and calculations used to arrive at the reduced fee.
California Saw & Knife Works, 320 NLRB 224 (1995), enfd. 133 F.3d
1012 (7th Cir. 1998), cert. denied, 525 U.S. 813 (1998), the Board held that
when a non-member objects to a union’s use of dues or fees for
non-representational purposes, the union must reduce the fee so that it
reflects representational expenditures only.
The union also must apprise the objector of the percentage of the
reduction, the basis for the calculation, and that there is a right to
challenge the calculation. Id.
at 233. In order to satisfy the
duty of fair representation, the information provided to the objector
regarding the basis for the calculation of the reduced fee must be
"sufficient...to enable objectors to determine whether to challenge"
the calculation. Id. at
239. The Board cited Chicago
Teachers Union Local 1 v. Hudson, 475 U.S. 292 (1986), for its finding
that "[b]asic considerations of fairness, as well as concern for the
First Amendment rights at stake...dictate that the potential objectors be
given sufficient information to gauge the propriety of the union’s
fee." Id. at 233.
The Board then noted that the notion of "fairness" clearly
implicated a union’s statutory duty of fair representation.
Hudson, supra, (a case arising in the public sector), the
Supreme Court found unlawful a union’s procedure that allowed nonmembers to
raise objections only after a deduction was made.
The Court reasoned that leaving nonunion employees in the dark about
the source of the figure for the agency fee – and requiring them to object
in order to receive information – placed an unfair burden on nonmembers.
475 U.S. at 306.
determined that the requirement that the charging party had to submit a second
letter to receive a breakdown of expenditures placed an undue burden on his
exercise of his Beck rights. Therefore,
the union violated its duty of fair representation by failing to include in
its initial disclosure to the charging party a breakdown of the expenditures
and calculations used to arrive at the reduced fee.
Stated simply, there appeared no valid reason why the union needed a
noted that the Board in Teamsters, Local 443 (Connecticut Limousine
Service, Inc.), 324 NLRB 633 (1997), did not find unlawful a procedure
similar to that used in the instant case.
However, the validity of the procedure was not directly in issue in
that case. Rather, the question
before the Board was whether the Union had violated its duty of fair
representation with respect to the adequacy of its disclosure.
The Board was not faced with nor did it specifically address the issue
of the timing of the disclosure of the audited breakdown of expenses.
In footnote 5, the Board noted the General Counsel’s assertion that
the union’s disclosure of certain information was untimely.
However, the Complaint did not specifically allege an unlawful delay,
and there was no exception filed to the administrative law judge’s failure
to find a violation based on unlawful delay.
Therefore, the Board found no violation.
Moreover, the development of the law since California Saw and Connecticut
Limousine virtually mandates that unions have this information readily
available. Thus, circumstances
have changed since these cases, which virtually eliminates any argument that
the information is not immediately available and its production is burdensome.
concluded that the union violated Section 8(b)(1)(A) of the Act by requiring
the challenger to the union’s calculation of the reduced fee to pay half the
cost of the arbitrator.
Board in California Saw and Knife Works, supra, found that a
union lawfully required a challenger to bear his own costs for transportation
to the hearing, lost time, and legal fees; however, that case is silent on the
issue of splitting the arbitrator’s fee.
By requiring that objecting nonmembers share the cost of arbitration,
the union was conditioning the individual’s use of the challenge procedure
to have his dispute heard by an impartial arbitrator on a willingness to pay
money. While it could be argued
that employees merely have a right to some appeal procedure, it was decided
that if a union establishes an arbitral procedure, employees should have an
unfettered right to use that procedure. Therefore,
it was determined that the union’s procedure in this case, which requires
employees to share the cost of arbitration, is unlawful.
Notice Must Include Auditor Letter or
Otherwise Identify Auditor
this case, we decided that the Union violated its duty of fair representation
under Section 8(b)(1)(A) of the Act because its Beck notice did not
include sufficient information to enable non-member objectors to determine
whether to challenge the Union’s dues calculations where the notice did not
include a copy of the auditor’s opinion letter or otherwise identify the
Union provided non-member objectors with a Beck
notice setting forth the major categories of Union expenditures and stating
that the expenditures had been audited by an independent accountant.
However, no further information was provided about the audit.
the duty of fair representation standard applicable to unfair labor practice
charges, a union’s breakdown of its expenditures in its Beck notice
must be verified by an audit. California
Saw & Knife Works,
320 NLRB 224, 240-242 (1995), aff’d. 133 F. 3d 1012 (7th Cir. 1998),
cert. denied 525 U.S. 813 (1998). Although
the auditor need not pass on the correctness of the union’s allocation of
expenditures to the chargeable and non-chargeable categories, the auditor must
undertake an independent verification of selected transactions and confirm the
reliability of the financial information contained in the union’s financial
Artists, AFTRA (KGW Radio),
327 NLRB 474, 476-477 (1999).
a case arising in the public sector, the 9th Circuit found that the
mere representation in an agency fee notice that the financial information had
been audited was not sufficient. Rather,
the Court held that an agency fee notice to objectors must include a
certification from an independent auditor that the summarized figures had been
audited and had been correctly reproduced. Cummings v. Connell,
316 F.3d 886 (9th Cir. 2003), cert. denied 123 S.Ct. 2577 (2003). See also
Wessel v. City of
Albuquerque, 299 F. 3d 1186 (10th Cir. 2002) (Notice to
agency fee objectors in the public sector must include information about the
audit itself so that objectors can determine whether to mount a challenge).
cases arising in the public sector, which are based on First Amendment
considerations, the Board analyzes a union’s duty to Beck
objectors under the duty of fair representation standard.
However, the same considerations that led the 9th Circuit to
conclude that public sector unions must provide information about their audits
to non-member objectors would also apply to unfair labor practice cases.
The Court found that without information about the audit itself,
objectors would not have sufficient information to make a determination as to
whether to challenge the union’s representational fees.
316 F.3d at 891-892. The
Board has held that the duty of fair representation includes a duty to provide
information sufficient to enable a Beck
objector to determine whether to challenge the union’s dues reduction
e.g., Television Artists, AFTRA, 327 NLRB at 477-478 (1999).
Thus, we determined that the duty of fair representation includes a
duty to provide information about the audit itself to enable the Beck
objectors to determine whether to mount a challenge.
We further determined that a union can fulfill its duty in this regard
if it includes in its Beck
notice a statement that the figures therein were based on an independent audit
and provides a copy of the auditor’s opinion letter.
of Comments by Union with State Administrative Agency Constituted Unlawful
Secondary Boycott When Done Solely to Impose Additional Costs on Employer
a case involving a novel application of BE & K Construction Co. v. NLRB,
536 U.S. 516 (2002), we decided that the Union violated Section 8(b)(4) by
filing comments with a state environmental agency in opposition to the
licensing of a construction project.
The Employer had received a license from the state environmental agency
to build a hotel near a local waterfront.
The Employer then applied for an amendment to the construction license
to allow it to convert the top floors of the building to residential use. The
Employer began the initial construction of the project while the application
was pending. The Union picketed
the site in objection to the Employer’s use of a nonunion subcontractor.
Union agents indicated that the Union would be "relentless"
until they succeeded in making the project a union job, and that if the
Employer gave the work to a union contractor, "all this would go
Several days after the Union withdrew its pickets as part of a
settlement with the Employer, it filed comments with the state environmental
agency objecting to the Employer’s proposed license amendment.
A local city official met with representatives of the parties in an
attempt to resolve their dispute. At
that meeting, an Employer representative asked a Union agent why the Union had
submitted "its frivolous" comment to the environmental agency.
The Union agent responded that he would do "whatever he had to do
or use any means to get the job." The
state environmental agency granted the Employer’s request for an amendment
of its construction license and the Union has filed an appeal with the agency.
We decided that the Union filed its comments with the unlawful
secondary object of forcing the Employer to cease doing business with a
nonunion subcontractor. We then
decided that the comment filing was unlawful because the Union would not have
filed the comments but for a motive to impose the costs of the litigation
process, regardless of the outcome.
first noted that union lobbying or petitioning a state environmental agency is
activity of the type generally protected by the First Amendment.
As such, under Edward J. Bartolo Corp. v. Florida Gulf Coast
Building Trades Council, 485 U.S. 568 (1988), the fact that the Union’s
conduct may have a secondary object would not necessarily cause it to lose the
protection of the First Amendment. However,
we further noted that in BE & K, the Supreme Court provided
guidance as to when governmental petitioning might not enjoy First Amendment
insulation from an unfair labor practice proceeding.
In that decision, the Court majority suggested that a reasonably based
lawsuit might be considered unlawful if the suit would not have been filed
"but for" a motive to impose litigation costs on the defendant,
regardless of the outcome of the case. Although
this case did not involve a lawsuit, we applied BE & K because it
addresses the First Amendment issues implicated by government petitioning.
Though they seemed frivolous, we were unwilling to characterize the
Union’s environmental comments as baseless.
We recognized the wide discretion accorded to the state agency in
determining when the granting of a license would serve the public interest.
Given that these comments were filed in the context of a discretionary
administrative proceeding, we could not say that the comments would not, in
some respect, influence the state agency’s decision.
we decided that the Supreme Court’s language in BE & K provided a
basis for finding a violation under the Act.
Thus, even assuming the comments were reasonably based, the Union
violated Section 8(b)(4) because they would not have filed the comments
"but for a motive to impose costs on the defendant, regardless of the
outcome of the suit." BE
& K, 536 U.S. at 536-537. The
evidence showed that the only reason the Union filed the comments with the
state environmental agency was to coerce the Employer to use union
contractors. The Union never
offered a non-coercive motive for its filing of the comments or showed that it
had any real interest in the outcome of the environmental process.
In these circumstances, the Union’s filing was not genuine
petitioning, entitled to First Amendment protection, but was intended solely
to impose costs and delay on the Employer until it was coerced into using a
union contractor. And, because
the Union’s ultimate success in filing its comments was irrelevant under
this standard, there was no need to hold the matter in abeyance to await the
decision of the state environmental agency.
Picketed to Compel Employer
Agree to Neutrality Agreement with
and Organizational Object
In our final case, we decided that the Union violated Section
8(b)(7)(C) by picketing the Employer for more than 30 days to obtain a signed
neutrality agreement. We concluded that both the picketing and the neutrality
agreement had a recognitional and organizational object.
The Union asked the Employer to sign a neutrality/card check agreement
and warned that it would begin picketing in three days if the Employer did not
sign. When the Employer did not
sign the Agreement, the Union picketed for nine days over the course of six
weeks. The Union informed the
Employer that it would stop picketing if the Employer signed the Agreement.
The Agreement contained typical neutrality provisions such as
prohibiting the Employer from stating or implying its opposition to the Union,
promising to take a positive approach to unionization, granting the Union
access to the Employer’s premises, and furnishing the Union with a list of
employee names and addresses. The
Agreement also provided that the Employer would "recognize the Union if
the Union submits authorization cards from a majority of employees as verified
by a disinterested third party agreeable to both parties," and that it
would "not file a petition with the Board in connection with any Union
demands for recognition made under the Agreement."
We decided that the Union's picketing was unlawful because it
encompassed both an organizational and recognitional object, and because the
Union maintained the picketing for these objects for more than 30 days without
filing an election petition.
first decided that the picketing had an organizational object.
The Union essentially conceded that the object of its picketing was to
obtain the Employer’s signature on the Agreement.
It initially threatened to picket unless the Employer signed the
Agreement, and then later stated that it would stop the picketing if the
Employer signed the Agreement. And,
it was clear that the Agreement itself had an organizational object, since it
required the Employer to grant the Union access to its facility for the
express purpose of organizing its employees, and to provide employees’ names
and addresses. This object was
underscored by the Agreement’s requirement that the Employer not only remain
neutral, but also affirmatively advise its employees that it "welcomes
their selection of a collective bargaining agent."
EXCERPTS OF ETHICS ISSUES
Version of 4.2 (3/18/04)
Region sought advice about a case development that implicated Arizona’s Bar
rules. In this case there was a
dispute among the president and other officers of the Governing Board of the
Employer as to whether the Doe law firm represented the corporation regarding
the 8(a)(1) charge in this case. Earlier
in the processing of the case the Doe firm had filed a notice of appearance
with the Region on behalf of the Employer.
One of the Governing Board members stated in an e-mail correspondence
to the Region that action would not be taken to remove the law firm for
these circumstances we determined that it was appropriate to consider the
company "represented" based on the notice of appearance that the
Region had on file. In addition,
one of the Governing Board members stated that action would not be taken to
remove the law firm for several months.
Formal Op. 95-396 (July 28, 1995) discusses what to do when contact is
initiated by a person known to have been represented by counsel in the matter,
but who declares that the representation has been or will be terminated.
The opinion states, "As a practical matter, a sensible course for
the communicating lawyer would generally be to confirm whether in fact the
representing lawyer has been effectively discharged.
For example, the lawyer might ask the person to provide evidence that
the lawyer has been dismissed. The
communicating lawyer can also contact the representing lawyer directly to
determine whether she has been informed of the discharge."
The opinion goes on, however, to describe circumstances where the
communicating lawyer may need to go beyond determining that the person has
discharged the lawyer. Thus,
"if retained counsel has entered an appearance in a matter, whether civil
or criminal, and remains counsel of record, with corresponding
responsibilities, the communicating lawyer may not communicate with the person
until the lawyer has withdrawn her appearance."
version of Rule 4.2 (3/18/04)
one case the charge alleged that the Employer made unlawful statements to
employees. The employees were Spanish speakers and the Employer
representative spoke in English, using an employee translator to translate
into Spanish. The message that the employees heard came from the employee
translator, who was designated by the Employer to translate statements
that the Employer made at the meeting into Spanish. The question
presented by the Region was whether, because the Employer designated the employee
as its translator, it was responsible for whatever the employee said
to the employees in Spanish. Given this limited agency status, do the skip
counsel rules preclude the Region from interviewing this employee translator
out of the presence of Employer counsel?
of whether or not the witness actually translated the Employer's message
correctly, if the message conveyed to the employees is proven to be an unfair
labor practice, the witness can impute liability to the Employer.
Accordingly, we advised that the witness falls within Rule 2-100(b)(1) of
California's version of the skip counsel rule, Rule 4.2, and that we could not
interview the witness ex parte without prior consent from the Employer's
Rule 2-100(A) of California's Rules of Professional Conduct provides that an
attorney may not communicate, either directly or indirectly, with a
"party" the attorney "knows to be represented by another lawyer
in the matter," without the consent of the other lawyer.
Rule 2-100(B)(1) defines "party" to include "[a]n
officer, director, or managing agent of a corporation," and Rule
2-100(B)(2) provides that a "party" also includes any employee of a
corporation where "the subject of the communication is any act or
omission of such person in connection with the matter which may be binding
upon or imputed to the organization for purposes of civil or criminal
liability or whose statement may constitute an admission on the part of the
Hawaii’s Version of 4.2 (3/18/04)
The Region was investigating charges alleging that Employers A, B and C
violated Section 8(a)(1) and (5) by refusing to bargain with the Union and to
abide by the collective-bargaining agreement.
The charges further allege that Employer C had no business purpose
other than to supply labor to Employers A and B, and that the three companies
constitute a single employer/ alter ego.
Mr. Smith owns all three companies.
Smith is also the President of C and an Officer/ Director of A and B.
A and B are represented by the same counsel, who advised the Region
that there is no representational relationship with C.
No attorney has entered an appearance on C’s behalf.
The Region is aware that it may not interview Mr. Smith ex parte
concerning A and B without the prior consent of company counsel.
However, the Region wishes to separately interview Mr. Smith ex parte
regarding C’s position, with hopes of soliciting information establishing
that C is an alter ego of A and B, and that C unlawfully refused to bargain
with the Union.
The relevant jurisdiction is Hawaii.
Region was instructed to issue Mr. Smith an investigatory subpoena with notice
to A and B’s counsel. With this
subpoena, the Region can question Mr. Smith about matters pertaining to all
three companies. If, however, Mr.
Smith retains a personal attorney concerning the alter ego/ refusal to bargain
charges, the company attorney for A and B need not be present when the Region
interviews Mr. Smith.
Rule 4.2 of Hawaii’s Rules of Professional Conduct mirrors the
language of the ABA’s 1995 Model Rule.
Hawaii’s rule provides that “In representing a client, a lawyer
shall not communicate about the subject of the representation with a person
the lawyer knows to be represented by another lawyer in the matter, unless the
lawyer has the consent of the other lawyer or is authorized by law to do
Comment 4 to Rule 4.2 provides in relevant part that “[T]his rule
prohibits communications by a lawyer for another person or entity concerning
the matter in representation with persons having a managerial responsibility
on behalf of the organization, and with any other person whose act or omission
in connection with that matter may be imputed to the organization for purposes
of civil or criminal liability or whose statement may constitute an admission
on the part of the organization.” No
cases or ethics opinions in Hawaii address Rules 4.2.
Smith plainly falls within Rule 4.2 in his capacity as owner, officer, and
director of the alleged alter ego/single employer companies, A and B, which
are represented by counsel.
Further, in view of the nature of the alter-ego/single employer
allegations and the information needed to support alter ego/single employer
status, we advised that, as a practical matter, the questioning about the
relationships between the companies could not be segregated to matters
pertaining only to C. Thus, the
questions posed to Mr. Smith about C would tend to focus on the relationships
between the companies.
As we further discussed with the Region, if Mr. Smith retains a
personal attorney concerning the alter ego/ refusal to bargain charges, then A
and B’s attorney need not be present when the Board Agent interviews Mr.
Smith or be given notice of the interview.
Comment 4 of Hawaii’s Rule 4.2 provides that “If an agent or
employee of the organization is represented in the matter by his or her own
counsel, the consent by that counsel to a communication will be sufficient for
purposes of this rule.” However,
during such interview, the Board Agent would have to be careful not to elicit
or obtain information protected by A or B’s attorney-client privilege.
In particular, we would recommend that the Board Agent inform Mr. Smith
at the beginning of his interview not to divulge any such privileged
communications, including communications with or instructions from A and B’s
Version of 4.2 (3/18/04)
Region issued a Complaint alleging that Employer A violated Section 8(a)(1) by
unlawfully refusing to convert the Charging Party’s status from temporary to
permanent, by then terminating the employee, and by later refusing to rehire.
Employer B is a temp agency that supplied employees to Employer A.
Region would like to pretry a current supervisor of Employer B in connection
with its case. This current
supervisor’s signature appears on a letter terminating the Charging Party.
The Region believes that this supervisor could provide testimony
regarding the Charging Party’s termination.
The Region further believes that this testimony would support the
Region’s allegations in its Complaint that the supervisor acted as Employer
A’s agent in the alleged unlawful conduct, for example by notifying the
Charging Party of the termination.
A is represented by counsel. The
supervisor and Employer B are unrepresented.
The relevant jurisdiction is Maryland.
The Region may not contact the supervisor ex parte without obtaining
prior permission from Employer A’s counsel.
version of Rule 4.2, the ex parte communication rule, provides that in the
case of a represented organization, the Rule’s prohibitions extend to “(1)
current officers, directors, and managing agents, and (2) current agents or
employees who supervise, direct, or regularly communicate with the
organization’s lawyers concerning the matter or whose acts or omissions in
the matter may bind the organization for civil or criminal liability.”
Because Employer B is unrepresented, there are no skip counsel issues
vis-à-vis the witness’s employment relationship with Employer B.
However, as a general rule, Rule 4.2 encompasses “agents” who act
on behalf of a represented organization as well as employees.
Although the supervisor is an employee of B, as the individual who
notified the Charging Party of the termination, the supervisor is an
“actor” in the underlying unfair labor practice.
The Region wants to talk with the supervisor to establish that the
supervisor acted on behalf of Employer A in signing the termination letter.
As an actor/agent of Employer A, the supervisor falls within
Maryland’s Rule 4.2 and is therefore presumed to be represented by Employer
Version of 4.2 (3/18/04)
Region was investigating charges against the Employer, which is affiliated
with a recognized religious denomination.
The Region anticipates that a religious official of the church is going
to contact the Board’s Regional Director in order to obtain information
about the unfair labor practice allegations and determine if he should become
involved in the Employer’s handling of the case.
The religious official is an ex-officio member of the board of
directors of the Employer. The
Employer is represented by an attorney. The
Regional Director wants to know whether it would be appropriate to talk with
the official ex parte. The
Regional Director is licensed in Minnesota, which is where the contact would
The Region was instructed not to communicate with the official ex parte
without prior permission from the Employer’s counsel.
There were two considerations that entered into that determination:
The term “ex officio” describes someone who has a right because of an
office held. Here, for example,
the official sits on the Employer’s board of directors by virtue of his
being an official of the religious organization with which the Employer is
affiliated. Under Minnesota’s
version of Rule 4.2, an attorney may not conduct ex parte interviews
with five classes of current employees/agents of a represented party.
These five classes include:
whose acts or omissions in connection with the matter may impute liability
to the organization
who are responsible for implementing the advice of the organization’s
whose own interests are directly at stake in the representation
who can make binding evidentiary admissions, and who are not mere fact
witnesses to an event for which the organization is being sued.
v. Plainfield Trucking, Inc.,
2002 WL 31397850, slip op. at 3 (D.Minn. 2002).
member of a board of directors is considered a “manager” under Minnesota
ethics law. See Fleetboston
Robertson Stephens, Inc., 172 F.Supp.2d 1190, 1192 (D.Minn. 2001)(former
chairman of the board/CEO was a former managerial employee).
We concluded that an ex officio member of a board is the same as
a “member” and therefore a “manager”, or falls within any of the other
classifications covered by Minnesota’s version of Rule 4.2.
Our determination that the Region should not interview the witness without the
consent of counsel was also based on the fact that it appeared the witness was
in a position to implement the advice of counsel as he indicated that he was
considering becoming involved in the litigation.
Because the official wanted to talk with the Region to obtain
rather than provide information, we determined that the Region should
go through counsel to make sure the official was someone entitled to the
For these reasons, the Region should obtain prior permission from the
attorney before talking directly with the official and should ask the
Employer’s attorney if he or she wants to be present during the conversation
with the official about the ulps.
Version of Rule 4.2 (3/19/04)
Region was investigating alleged unlawful conduct directed against employees.
The charges also alleged that the Employer unlawfully subcontracted
bargaining unit work, interrogated employees, and discharged employee Smith
because of her union activity. The
Region wanted to talk with some of the Employer’s former supervisors.
These former supervisors were first-line supervisors and were not
involved in the decision to subcontract the work or discharge Smith although
one of them, Supervisor X, is alleged to have interrogated Smith about her and
other employees’ union activities.
Region believes that the former supervisors would provide evidence of the
Employer’s knowledge of the employees’ union activity and union animus.
Specifically, the Region believes Supervisor X would testify that he
overheard two managers discussing getting rid of employees and that the other
former supervisors would testify that they were told to fire the employees for
relevant jurisdiction is Nevada.
The Region was instructed that it could interview the former
supervisors, ex parte, but could not solicit or obtain attorney-client
SCR Rule 182 provides that “In representing a client, a lawyer shall not
communicate about the subject of the representation with a party the lawyer
knows to be represented by another lawyer in the matter, unless the lawyer has
the consent of the other lawyer or is authorized by law to do so.”
the six-month period from July 1, 2003 through December 31, 2003, the Board
authorized a total of 14 Section 10(j) proceedings. Most of the cases fell within factual patterns set forth in General
Counsel Memoranda 01-03, 98-10, 89-4, 84-7, and 79-77.
Three cases were somewhat unusual and warrant discussion.
The first case involved an employer’s withdrawal of recognition from
an incumbent union. The employer
and the union had negotiated a new tentative collective-bargaining agreement
in December 2002 to cover a unit of some 62 nursing home employees.
The union membership ratified the new contract in late December.
In early January 2003, the employer paid the employees a ratification
bonus and implemented a contractual wage increase.
The union's president signed this printed agreement in February.
In March, however, the employer withdrew recognition from the union,
based upon the receipt of a document showing signatures of 31 unit employees
desiring to no longer be represented by the union.
Region concluded that (1) the parties' tentative December 2002 labor agreement
barred any attempt of the employer to question the union's majority status
during the term of the agreement, and (2) the union's subsequent execution of
the printed agreement prevented the employer from thereafter lawfully
withdrawing recognition from the union. The
Region thus issued a Section 8(a)(5) complaint alleging that the employer’s
withdrawal of recognition from the union was unlawful.
We concluded, and the Board agreed, that 10(j) relief was warranted to
restore and maintain the status quo ante of union representation in order to
prevent irreparable harm to the parties' collective-bargaining relationship
and to employees by their loss of the benefits of collective bargaining
pending Board adjudication. Further,
the employer's continued disregard of the union's representational role could
be expected inevitably to lead to even further erosion of employee support for
the union over time, and would promote instability in labor relations during
the contract term.
The district court granted the requested injunctive relief.
The second case involved the warrant for an interim bargaining order
under NLRB v. Gissel Packing Co., 395 U.S. 575 (1969). The
employer responded to a successful union organizing campaign among its five
truck drivers by making numerous coercive statements to employees, including
threats of plant closure and discharge, discharging four drivers for
supporting the union, and subcontracting all of the driving work to a labor
broker in order to avoid the union. Shortly
thereafter, the union withdrew its representation petition. The Region concluded that the employer's serious and pervasive
violations of Section 8(a)(1) and (3), including its discharge of 80% of the
unit and its subcontracting of unit work, prevented the holding of a fair
election and support a Gissel bargaining order remedy.
concluded that 10(j) relief, including interim rescission of the subcontract
and restoration of the driving work to the bargaining unit, reinstatement of
the four discriminatees, and a remedial Gissel bargaining order, was
warranted to restore the lawful status quo ante, prevent the inevitable
irreparable erosion of union support among the unit employees, and prevent the
irreparable loss to unit employees of the benefits of collective bargaining
pending a final Board decision.
The district court granted the requested injunctive relief.
third case involved a union organizing campaign which had resulted in an
unresolved Board election and also implicated employee access to the Board’s
processes. During the union's
organizing campaign, the employer engaged in various 8(a)(1) conduct.
Nonetheless, the union proceeded to an election.
The election ended with 14 votes in favor of union representation, four
against, and 17 determinative challenges.
After the election, the employer's 8(a)(1) conduct escalated.
The employer, among other things, twice directed employees to go to the
Regional Office to attempt to withdraw the union’s election petition,
ordered employees to file unfair labor practice charges against the union in
an effort to leverage the union to withdraw the petition, commanded employees
to sign a letter to the Region demanding that copies of their investigative
affidavits be sent to the employer's facility, and directed employees to sign
letters retaining specific counsel paid for by the employer.
The Region’s Section 8(a)(1) complaint alleged as unlawful the
employer’s conduct dealing with the employees’ participation in Board
concluded and the Board agreed, that injunctive relief under Section 10(j), as
well as a temporary restraining order, were just and proper to preserve the
union's status at the employer's facility during the Board’s resolution of
the consolidated representation case, and to protect the Board's investigative
and prosecutorial processes and guarantee that
employees have full and free access to participate in the Board's processes.
Prior to filing the 10(j) petition, the parties entered into a
settlement of the unfair labor practice charges which also resolved the
pending representation proceeding.
The 14 cases authorized by the Board fell within the following
categories as described in General Counsel Memoranda 01-03, 98-10, 89-4, 84-7
Number of Cases
Interference with organizational
campaign (no majority)
cases settled before petition; one case settled after petition.
Interference with organizational campaign
one case; one case is pending.
Subcontracting or other change to
avoid bargaining obligation
Withdrawal of recognition from incumbent
four cases; one case is pending.
Undermining of bargaining representative
settled before petition.
Successor refusal to recognize and
was withdrawn based upon changed circumstances.
Conduct during bargaining
Mass picketing and violence
Notice requirements for
strikes and picketing
(8(d) and 8(g))
Refusal to permit protected activity
Union coercion to achieve unlawful
Interference with access to Board