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WASHINGTON, D.C.   20570

Tuesday, September 1, 1998 202/273-1991


National Labor Relations Board Acting General Counsel Fred Feinstein today issued his fifth report on casehandling developments in the NLRB's Office of the General Counsel. The report covers selected cases of interest that were decided during the period from March 31, 1996 through June 30, 1998. It discusses cases of interest that were decided upon a request for advice from a Regional Director or on appeal from a Regional Director's dismissal of unfair labor practices charges.

On issuing the report Acting General Counsel Feinstein stated:

As has been my practice and that of my predecessors, I am reporting on a number of recent cases raising novel legal issues. These periodic reports are intended to keep practitioners and others informed about matters pending before the Office of the General Counsel. The reported cases arise in a variety of workplace settings, including some that relate to the introduction of new workplace technologies, such as e-mail.

A separate report, which issued on July 23, summarized the Office of the General Counsel's utilization of injunction proceedings under Section 10(j) of the NLRA over the course of Mr. Feinstein's term as General Counsel.

# # #

(The Acting General Counsel's Report can be accessed on the agency's web site: www.nlrb.gov under the press releases button on the home page, or copies can be obtained by contacting the Division of Information at 202-273-1991.)


This report covers selected cases of interest that were decided during the period from March 31, 1996 through June 30, 1998. 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.


Fred Feinstein
Acting General Counsel


Employer Restriction Against Use of E-Mail

Our first reported case presented the issue of whether an Employer's prohibition of all non-business use of electronic mail (E-mail), including employees' messages protected by Section 7 of the Act, was overbroad and facially unlawful.

Several employees in a large unit of approximately 2450 professional and technical employees of one department of the Employer decided to form the Union. As part of the Union's organizing campaign, the employees sent or forwarded various E-mails to fellow employees, including information addressing such subjects as salaries, layoffs, NLRB procedures, and unionization generally. In addition, the Union established a "web page" and posted organizing information accessible through the Internet.

The evidence regarding the Employer's engineering department employees' work was as follows. One employee attested that he spent 75-80% of his time on the computer. Another employee said that E-mail was the way the employees communicated with one another since they were always at their computer terminals. A third employee stated that E-mail was employees' main method of communicating. The evidence established that most or all of the unit employees did a significant part of their work using computers. Moreover, the Employer's own policies, which give all of the affected employees access to the Employer's E-mail system while claiming to limit the use of E-mail to only business-related purposes, showed how essential E-mail was to these employees' work. Finally, the importance of computers and E-mail to the employees' work was demonstrated by the Employer providing approximately ten percent of employees with lap-top computers to enable them to access their E-mail from outside the Employer's facility, and by approving other employees' accessing the Employer's computer network using their own computers. In sum, the employees appeared to communicate primarily by E-mail and spent most of their working time on their computers.

The Employer had a written policy prohibiting use of the Employer's computer resources for non-business, unauthorized, or personal purposes. This policy had not been strictly enforced with regard to E-mail messages, and employees regularly sent each other personal messages and announcements, humorous stories, and other non-business E-mail.

Beginning some eight months after the Union organizing campaign, several of the employees active in that campaign were disciplined for their use of E-mail for Union messages, or for having downloaded information from the Union's web page onto the Employer's computers. We therefore initially decided, under the rationale of E.I. du Pont & Co., 311 NLRB 893 (1993), that the Employer violated the Act by disparately and discriminatorily enforcing its policy on computer use against Union messages. We then considered the additional issue of whether the Employer's E-mail policy was facially unlawful because it completely prohibited any use of the Employer's computer resources for employees' messages otherwise protected by Section 7. The Employer had set forth no exceptions to the rule, nor had the Employer demonstrated, or even articulated, any special circumstances supporting the prohibition.

We analyzed the issue beginning with the line of cases involving no-solicitation and no-distribution policies exemplified by the Board's, and the Supreme Court's, decisions in Republic Aviation Corp., 51 NLRB 1186 (1943), enfd. 142 F.2d 193 (2d Cir. 1944), affd. 324 U.S. 793 (1945), and Le Tourneau Co. of Georgia, 54 NLRB 1253 (1944), enf. denied 143 F.2d 67 (5th Cir. 1944), reversed 324 U.S. 793 (1945).

In Republic Aviation, the employer discharged an employee for wearing a union steward button while working and for handing out union cards inside the plant during non-working time. The employer's action was based upon a rule, prohibiting all solicitation in the plant, which rule had been promulgated prior to the onset of any organizing activity. The Board held that the rule was not discriminatorily applied against the union supporters. However, the Board also held that the "rule prohibiting union activity on company property outside of working time constitute[d] an unreasonable impediment to self-organization" and was unlawful given the absence of special circumstances or "cogent reason, warranting extension of the prohibition to non-working time, when production and efficiency could not normally be affected by union activity."

In Le Tourneau, the employer suspended two employees for distributing union literature in the employer's plant parking lot, based upon a non-discriminatory application of a no-distribution rule. The Board held the rule to be a unreasonable impediment to organization, given the layout of the area surrounding the plant, which rendered the distribution of literature outside of the employer's property "virtually impossible."

In striking a balance between employer and employee rights, the Board articulated several important principles in these cases, affirmed by the Supreme Court. First, the Board and Court made it clear that an employer's managerial or property rights are not, in themselves, dispositive of the lawfulness of even a non-discriminatory rule. Thus, "[i]nconvenience, or even some dislocation of property rights, may be necessary in order to safeguard the right to collective bargaining." Republic Aviation Corp., 324 U.S. at 802 n. 8.

Second, the Board decided that while an employer has a right to expect that employees' working time be for work, an employee equally has a right to use non-working time for activities protected by Section 7, even on the Employer's property, Republic Aviation Corp., 324 U.S. at 803-04 n. 10. In affirming the Board's analysis, the Supreme Court firmly established the rule that, while employers are rebuttably presumed to act lawfully when they limit employees' right to solicit other employees during working times, prohibitions on employee solicitation during non-working time, even in work areas, are presumed to be unlawful. IbId. This latter presumption of unlawfulness may be overcome if the employer can demonstrate that the restrictions are necessary to maintain production or discipline.

Subsequent to Republic Aviation, the Board established a distinction between employer policies limiting employees' solicitation of fellow employees and those that limit the distribution of written materials. In Stoddard-Quirk Mfg. Co., 138 NLRB 615 (1962), the employer discharged an employee, claiming that the employee distributed literature in the employer's parking lot in violation of a rule prohibiting unauthorized distribution of literature on "company premises." The Board held both that the employer's reliance on the rule was pretextual, and that, in any case, the employer's application of its rule would have been unlawful as the asserted conduct took place in the parking lot and not in any work area of the plant.

Stoddard-Quirk is generally cited for the simple proposition that an employer may limit the distribution of written materials in work areas because of a presumed legitimate concern regarding the potential for litter. The Board's opinion in Stoddard-Quirk, however, is much more expansive and subtle than that. The Board does rely on the potential for litter as a basis for its holding, but it explicitly stated that, "because [this consideration] presents only one side of the employer-employee equation, it does not wholly resolve the problem," 138 NLRB at 619. Instead, the Board also examined the employees' interests in distributing literature and concluded that the employees' purpose can be satisfied as long as the literature is received by other employees, such as by distribution at plant entrances or in the parking lot. The Board held that, unlike oral solicitation, the permanent nature of written literature allows it to be read and reread at the receiving employees' convenience. This factor obviates the need for employees to be able to distribute the literature throughout the employer's facility because, unlike solicitation, the purpose of distributing the literature is achieved as long as it is received. The Board's opinion in Stoddard-Quirk also indicates that, in the absence of non-work areas where distribution can take place, the usual presumption permitting an employer to bar distribution in work areas may not apply, 138 NLRB at 621. Finally, the Board in Stoddard-Quirk made it clear that non-work areas must be made available for distribution regardless of other available methods of communication.

Thus, after Stoddard-Quirk, the distinction between solicitation and distribution must be defined based on the nature of the employees' interests and purpose in addition to interests of the employer. Where the communication can reasonably be expected to occasion a spontaneous response or initiate reciprocal conversation, it is solicitation; where the communication is one-sided and the purpose of the communication is achieved so long as it is received, it is distribution. If it is solicitation, it must be permitted in all areas in the absence of an overriding employer interest; if it is distribution, it may be prohibited in work areas unless the employees have no available non-work areas.

In applying these principles to the instant case, we initially decided that the evidence indicated that the employees used the Employer's computers and computer network in such a way as to make them "work areas" within the meaning of Republic Aviation and Stoddard-Quirk. The employees' work tasks involved significant computer and network involvement. The computers were inextricably intertwined with the physical space these employees occupied and the "virtual space" they accessed on the various networks to perform their jobs and, as such, were "work areas" within the meaning of Republic Aviation and Stoddard-Quirk.

Given this conclusion, the application of Republic Aviation and Stoddard-Quirk to E-mail communication was straightforward -- the balance of interests has already been struck in those cases. Thus, here the Employer may not prohibit messages that constitute solicitation as there was no evidence of special circumstances that made such a prohibition necessary in order to maintain production or discipline. Moreover, it was clear that at least some E-mail messages sufficiently carry the indicia of oral solicitation to warrant similar treatment. For example, if two of the Employer's employees had an interactive E-mail "conversation" in real time regarding the Union's organizing campaign, or some collective grievance, when neither employee was on work time, this could not be meaningfully distinguished from any other verbal solicitation. Thus, it has been recognized that at least some E-mail messages are not merely analogues of printed written messages; rather, they have been characterized as "a substitute for telephonic and printed communications, as well as a substitute for direct oral communications," In Re: Amendments to Rule of Judicial Administration, 651 So. 2d 1185 (Fla. Sup. Ct. 1995). There has even been Congressional recognition that E-mail "is interactive in nature and can involve virtually instantaneous 'conversations' more like a telephone call than mail," H.R. Rep. No. 647, 99th Cong., 2d Sess. at 22, discussing the Electronic Communications Privacy Act of 1986.

On the other hand, from the Employer's perspective, at least some E-mail may have seemed more like the printed documents classified as distribution. While E-mail does not cause the physical litter problems that written literature can create, it can take up "cyberspace" and thus has the potential to affect the performance of an employer's computer network. Moreover, even if the message is composed and sent on the sender's non-working time, it may well appear during the recipient's working time, thereby possibly causing disruption and affecting production.

Despite these legitimate employer concerns, we concluded that at least some E-mail nevertheless warrants treatment as oral solicitation. An employer rule prohibiting such solicitation, under the analysis approved in Republic Aviation, should be presumed unlawful in the absence of evidence that special circumstances make the rule necessary in order to maintain production or discipline. Significantly, the Republic Aviation presumption does not consider the availability of alternative means of communication between employees. Thus, if some E-mail is properly classified as solicitation, the Employer's rule was unlawfully overbroad regardless of the ability of employees to otherwise converse, or to distribute literature in non-work areas. A minimal burden placed upon an employer's computer network by such electronic traffic does not constitute special circumstances making the rule necessary to maintain production or discipline, and it should not outweigh the employees' Section 7 interests.

In sum, we decided to argue that the Employer's rule, prohibiting all non-business use of E-mail, including solicitation messages protected by Section 7, was overbroad and therefore facially unlawful regardless of whether a less restrictive rule might be lawful. We noted that, given the breadth of the Employer's rule, we were not presented with the full panoply of issues that might arise in future cases, i.e., whether there is an E-mail equivalent to "distribution"; what the precise definition of "working time" is for employees who work on computers at flexible times and places; or whether there could be reasonable rules limiting the use of E-mail in order to narrowly address particular problems.

Electrical Cooperative Ban on Union Members Serving on Board of Directors

In another case, we decided that a cooperative association that was also a statutory employer violated Section 8(a)(1) by adopting a rule prohibiting members of unions from serving on the cooperative's board of directors.

The Employer was a non-profit electrical cooperative governed by a state law that said that the business of a cooperative must be managed by a board of not fewer than five directors elected by the cooperative's membership. The statute provides that all consumers of the cooperative's service within a stated geographic area were eligible for membership and, except as limited in the bylaws, could serve on the cooperative's Board of Directors, which comprised seven members who were elected for terms of three years on a rotating basis by the membership. Board members were paid twenty dollars for attendance at each meeting of the Board.

The union had three collective-bargaining agreements covering the cooperative's employees, who were prohibited by the cooperative's bylaws from serving on the Board of Directors. The union never objected to that prohibition. The union also had 58 collective-bargaining agreements with over 200 different employers throughout the state.

Our case arose when the cooperative amended its bylaws to prohibit any person from becoming or remaining a Board member of the cooperative who:

is a member, officer, director, or employee of any union local currently acting as a bargaining agent for any group of [the cooperative's] employees, or lives in the same household with and is financially interdependent with any person included within [this section].

The employee who filed the charges in our case was employed by a different employer. He had been a member of the union for 26 years and had also served on the cooperative's Board of Directors since 1995. In response to the new bylaw, the Charging Party resigned his union membership in order to continue as a member of the cooperative's Board.

We decided that to issue complaint alleging that the cooperative violated Section 8(a)(1) when it amended its bylaws to exclude union members from its Board of Directors. However, we found no merit to the Section 8(a)(3) charge.

Initially, we noted that the cooperative's bylaw clearly discouraged membership in the union by forcing employees to choose between union membership and serving on the cooperative's board of directors. We concluded that the Charging Party was entitled to the protection of the Act even though he was not an employee of the cooperative. The Act's definition of "employee" should be understood "in the broad generic sense," and includes "members of the working class generally." Briggs Manufacturing Co., 75 NLRB at 570, n. 3 (1947). See also, e.g., Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 182-187, 192 (1941); Allied Chemical & Alkali Workers Local 10 v. Pittsburgh Plate Glass, 404 U.S. 157, 168 (1971) ("members of the active work force . . . [can] be identified as 'employees'"); John Hancock Mutual Life Insurance Co. v. NLRB, 191 F.2d 483, 485 (D.C. Cir. 1951) (Section 2(3) "includes not only the existing employees of an employer but also, in a generic sense, members of the working class")

We noted that the Board has found that unlawful interference may be found even where the affected employees are not employees of the employer causing the interference. See, e.g., A.M. Steigerwald Co., 236 NLRB 1512, 1515 (1978), citing Fabric Services, Inc., 190 NLRB 540 (1971). Thus, applying the Board's broad construction of the definitions of employer and employee to the discouraging effect of the cooperative's bylaw on protected activity, we decided that the cooperative violated Section 8(a)(1) when it amended its bylaws to exclude union members from its Board of Directors.

We specifically relied on Steigerwald, where a credit union bylaw restricted eligibility for membership to employees of nonunion employers. The credit union, but not the employer, was found to have violated Section 8(a)(1) by maintaining this restriction. The credit union and the employer were both found to have violated Section 8(a)(1) by sending letters to employees threatening them with loss of eligibility for the credit union should they vote for union representation.

We recognized the distinction between this novel case and others where the Board has found a violation even in the absence of a direct employer-employee relationship. In all those cases, unlike this one, even though the respondents were not the employers of the employees involved, the unlawful interference involved some aspect of the employees' employment situation.

For instance, in Fabric Services, supra, employee Smoak was an installer/repairman employed by Southern Bell. He was dispatched by Southern Bell to Fabric Services' plant to perform work on telephone equipment located there. When Smoak arrived at the plant wearing a union pocket protector, the Fabric Services' personnel manager told him that he could not work at the plant while wearing union insignia. Unwilling to remove the pocket protector, he returned to Southern Bell, where he was told to remove his pocket protector and return to his assignment at Fabric Services. The Board upheld the ALJ's conclusion that Fabric Services was liable for interfering with Smoak's protected right to wear union insignia.

In Steigerwald, the effect of the credit union's interference on the employees' ability to carry out their employment duties was not as blatant as that present in Fabric Services. However, the credit union's conduct had at least some connection to the employment relationship because the employees who belonged to the credit union were entitled to their membership by virtue of their employment with Steigerwald.

In contrast to Steigerwald and Fabric Services, in our case there was no direct connection between an employee's employment by another employer and his/her right to serve on the Board of Directors of the cooperative. An individual is entitled to serve on the Board if he or she is a user of the cooperative's service and ratepayer and is elected to the Board, and not by virtue of his or her status as an employee. Nonetheless, the bylaw did have an indirect impact upon an employee's employment situation. An employee who gave up his or her membership in the union in order to serve on the cooperative's Board of Directors also forfeited the right to serve on union committees and have a voice in the negotiation of terms and conditions of employment.

However, we did not find merit to the 8(a)(3) allegation of the charge. A necessary element to any 8(a)(3) violation is discrimination "in regard to hire or tenure of employment or any term or condition of employment." The cooperative's bylaw had no effect on any employee's terms and conditions of employment. Although one may not simultaneously maintain membership in the union and serve on the Board of Directors, we did not view service on the Board as an employment opportunity. Board members were elected by the cooperative's ratepayers; they were not hired by the cooperative.

Providing Organizing Union With Employee Names and Addresses

Two important cases presented the same issue of whether an employer of home care employees should be required to provide the Union, which was seeking to organize these employees, with a list of employee names and addresses because either Union allegedly had no alternative means of communicating its organizing message to these employees.

In the first of these two otherwise separate cases, the Employer employed approximately 300 homecare employees who were dispatched by telephone to their work at clients' homes in six counties. The Union had been unable to contact employees at the Employer's office, and had received little response to radio public service announcements and newspaper ads. The Union asked the Employer for a list of employee names and addresses, but the Employer refused asserting that it did not provide employee names and addresses to anyone. The Union proposed two alternatives to the Employer: (1) allow the Union to send a mailing out through the Employer's office, where the content could be approved by the Employer prior to the mailing; or (2) ask employees who wish to receive information about the Union to sign a form giving the Employer permission to release their names, addresses and phone numbers to the Union. At a Board of Directors meeting, both proposals were tabled.

We decided to issue complaint alleging that the Employer's refusal to provide the Union with a list of employee names and addresses violated Section 8(a)(1) of the Act.

This case presented an issue of first impression. The Board at that time had never before squarely addressed the question of whether an employer commits an unfair labor practice by failing to disclose names and addresses to a union prior to the scheduling of an election. However, we concluded that the Board's analysis in the seminal case of Excelsior Underwear Inc., 156 NLRB 1236 (1966), is instructive.

In, Excelsior, the Board considered whether "a fair and free election [can] be held when the union involved lacks the names and addresses of employees eligible to vote in that election, and the employer refuses to accede to the union's request therefor?" Id. at 1238. The Board held that in a representation proceeding an employer must provide a petitioning union with a list of employee names and addresses "within 7 days after the Regional Director has approved a consent-election agreement entered into by the parties" or after "the Regional Director or the Board has directed an election . . . ." Id. at 1239. The Board based its decision primarily on its view that, without such a list, a union without access to the premises would have no method by which it could be certain of reaching the employees with arguments in favor of representation.

We of course noted that the Board's reasoning in Excelsior has not been further applied to the organizing context. Indeed, the Board has in dicta indicated that there presently exists no requirement that employers disclose employee names and addresses during an organizing drive. See, e.g., Pike Co., 314 NLRB 691 (1994); Gray Flooring, 212 NLRB 668 (1974). However, in those cases the Board was merely describing the current state of the law, and did not actually resolve the question of whether the Board should require such disclosure.

We decided to argue that the Board should require such disclosure in situations where there are no other real alternative means of reaching employees and the employer has no legitimate countervailing interest in not disclosing employee names and addresses. In reaching that conclusion, we considered that the Supreme Court has recognized that "the right of self-organization depends in some measure on the ability of employees to learn the advantages of self-organization from others." Central Hardware Co. v. NLRB, 407 U.S. 539, 543 (1972). We further considered that in some circumstances the inherent nature of an employer's workplace or workforce might defeat all reasonable efforts by a union to reach employees. For instance, if an employer's employees reside throughout a wide geographic area and never report to a central location, but receive their assignments over the telephone or other communications device, a union cannot reasonably be expected to reach those employees by using the traditional means of union organizing such as handbilling, picketing, advertising, and home visits.

We also considered that it may be anticipated that recent economic, technological and demographic trends will dictate an increase in the number of situations where unions can no longer rely on the traditional means of organizing to reach employees with their message. For instance, the past several decades have seen a change from an industrial, manufacturing-based economy to a more service-oriented economy. As a result, a growing number of employees in the workforce no longer file in and out of the traditional factory gate for rigidly pre-determined shifts. Instead, many employees work at varied locations or worksites for the same employer, or travel from customer to customer to deliver their employer's services. In addition, the growing traffic problems faced in urban and densely suburban settings has lead to an increase in "flextime" -- where employees report to and depart from work at varying times. Finally, due to the increase in the use of personal computers, many employees now work from their homes and communicate with their workplace by telephone or computer modem. Thus, a union will less frequently be able to rely on the predictability of reaching most employees at their workplace by handbilling at the workplace entrance or exit during "shiftchange."

Therefore, we decided to argue that the Board should require an employer to disclose employee names and addresses upon the request of a union where the union has no reasonable means of reaching employees with its message of self-organization. Unions possessing such a list will then be able to communicate their message to employees through telephone calls, mailings of literature, or home visits.

With regard to whether employers generally have a significant interest in non-disclosure of employee names and addresses, we noted that, in Excelsior, the Board found that such a list is not like a customer list, and that an employer would appear to have no significant interest in keeping the names and addresses of his employees secret. The Board also found that the disclosure of employee names and addresses does not infringe on employees' Section 7 rights, nor subject employees to the danger of harassment and coercion. The Board's reasoning in Excelsior is equally applicable to the question of whether employers have a legitimate interest in non-disclosure of employee names and addresses during an organizing campaign. Indeed, the information to be disclosed, and therefore the employer interests involved, are identical.

In this first case, the evidence demonstrated that, without a list of employee names and addresses, the Union had no means of communicating its organizing message to the approximately 300 employees who were dispatched by phone from five Employer offices to a service area which extended over six rural counties. The employees rarely, if ever, appeared in the Employer's offices: paychecks were mailed from the office and there had been no training sessions or Employer-wide meetings in two years. The employees were not registered or bonded with the state, excluding the possibility of contacting them through state records. Any resort to mass media would have been prohibitive considering that the employees resided in a large geographic area.

We noted that the Union had made a serious effort to reach the Employer's employees. The Union visited many of the Employer's offices, met with the Employer's director, and even enlisted the help of other homecare workers to apply for jobs with the Employer in an attempt to gain further information or perhaps meet employees at the worksite. However, those efforts only demonstrated to the Union that the Employer's employees would be impossible to reach through traditional means. In addition, the Union sponsored several public service announcements on the radio, and ran costly newspaper ads. Those media efforts covered only a portion of the Employer's geographic area and met with little response.

In these circumstances, we concluded that the Union had no means of reaching the employees with its organizational message absent a Board remedy requiring the Employer to provide it with employee names and addresses. Furthermore, we concluded that the Employer had not asserted a legitimate countervailing interest in keeping the names and addresses secret. Accordingly, in the absence of contrary authority, we decided to issue complaint in this case to put before the Board the at that time novel issue of whether the Employer violated Section 8(a)(1) by refusing to provide the Union with a list of employee names and addresses, upon request, when the Union had no reasonable alternative means of communicating its organizing message to the employees.

In the second and later of these two separate cases, the Employer provided home health care from its main office and from two additional offices in a service area extending over three contiguous counties in a metropolitan area. The Employer employed approximately 450 employees who provided home maker and personal services to the Employer's clients at their homes. Around 250 of those employees received assignments from the Employer's main office. Approximately half of the employees regularly reported to the main office on Fridays to pick up their paychecks while the rest received their checks by mail. And employees in groups of 10-15 reported to the main office for "in service" training. There were no meetings for all employees. In addition, employees visited the Employer's three offices to pick up supplies and drop off time sheets.

The Union filed an election petition to represent the 250 home makers and personal care workers who reported to the Employer's main office. However, the Employer and Union later agreed that the only appropriate unit included the 450 employees at the Employer's three offices.

The Union's representation petition, for the main office, had been supported by 122 signed authorization cards. The Union had obtained those cards through several means. Non-employee Union organizers had visited the main office and written down the license plate numbers of some 70 cars that entered the facility, from which the Union had obtained 53 addresses. Those 53 addresses resulted in 18 Union contacts with employees, 14 of whom had been interested in the Union and formed the nucleus of the 28-employee Union organizing committee.

Several months later, an organizing committee member obtained an employee list dated the prior year from a former employee. The list contained 565 employee names, addresses, and telephone numbers. Of those listed employees, 137 were no longer employed by the Employer and 253 had moved. There was no evidence the Union attempted to reach these employees by mail, or to obtain forwarding addresses from the Postal Service. Of the 175 listed employees still working for the Employer for whom there were current addresses, the Union was able to obtain 65 signed authorization cards. Overall, the Union estimates that 84% of the employees it contacted signed cards.

Since the appropriate unit was much larger than the unit originally petitioned for by the Union, the Union continued to organize. On a pay day, non-employee Union organizers solicited and distributed handbills at the Employer's main office for approximately three hours, also recording 30 license plates. Those 30 license plates resulted in 9 "good" addresses which the Union contacted, resulting in 2 signed authorization cards. At that point, the Union decided not to perform any additional license plate checks because it resulted in only a "20% contact rate." The Employer informed two non-employee Union organizers who were soliciting at a nearby public bus stop that they could not solicit at the bus stop because it was private property. The Employer called the police. Since the Employer had called the police to run off the non-employee Union organizers, the Union did not utilize employees during non-working time at the Employer's office during check pickups because the Union did not believe the Employer would permit it.

An employee on the Union's organizing committee then sent a letter to the Employer on behalf of the Union requesting that a list of employee names and addresses be sent to her "so that we can contact them about choosing a representative regarding our wages and working conditions." The Employer did not respond to the request.

Five months later, the Union observed 197 employees entering the Employer's three offices. The Union did not attempt to contact any of these employees. Two months after that on, a pay day, the Union distributed handbills to employees entering two of the Employer's offices. The Union distributed handbills to 78 of the 128 cars entering the parking lots. The Union did not utilize any mass media in its organizing campaign as its media consultant indicated that such advertisements would not be productive.

The Employer contended it was not required to provide the Union with a list of its employees and their addresses because the Union had not demonstrated that it had no alternative means of reaching employees.

We decided to dismiss the charge because the Union had not demonstrated that it could not reach a sufficient number of employees to achieve a necessary showing of interest in the representation proceeding, which would entitle the Union to a list of names and addresses of all employees. We reached that conclusion in light of the Union's prior success in identifying and contacting employees, and in light of the Union's lack of evidence that such means or other available means would not be successful in the future.

This second case arose after the Board decision in Technology Service Solutions, 324 NLRB No. 49 (1997). In that case, the Board indicated that an employer's failure to respond to a union's request for names and addresses of bargaining unit employees prior to either the direction of an election or a consent election -- thus, before a union has made a showing of interest -- may constitute a violation of Section 8(a)(1) where an organizing union is unable to communicate with employees or where employees cannot communicate with one another. The employer's operations in Technology Service Solutions were spread out over eight states, its employees generally worked alone out of their vehicles and homes and at customers' locations, and, with the exception of an annual meeting, did not otherwise regularly gather at any common location. The Board rejected the ALJ's basis for dismissal that the employees "are not inaccessible and that organizing them is not impossible," and consequently remanded the case to the ALJ. The linchpin of the General Counsel's theory in Technology Service Solutions was that employees have the Section 7 right to discuss organization among themselves and the right to know about unionization from union officials.

We concluded that, unlike the record in Technology Service Solutions, the Union in the instant case had not demonstrated the inability of unit employees to exercise either the right to learn from Union officials about Union representation or the right to discuss this issue among themselves. Thus, the instant case differed dramatically from Technology Service Solutions with regard to the degree of employee inaccessibility. The geographical dispersion of employees in several counties was much less, nearly half the Employer's workforce of 450 employees picked up their paychecks at the same location on the same day of the week, and groups of 10-15 employees gathered at the Employer's offices for training. The Union successfully communicated its organizing message to significant numbers of employees using organizing means already available to it, i.e., recording license plates and handbilling on or near the Employer's property, and had not demonstrated that future use of those previously successful means of communicating with employees would be futile.

We examined analogous Board decisional law governing union access to employer property, and considered it instructive but not binding. Those decisions hold that a union must demonstrate that its prior successful means of communicating with employees would be futile before the Board will grant a union access to the employer's premises.

For example, in the Lechmere, Inc v. NLRB, 502 U.S. 527, 540 (1992) decision, the Supreme Court stated that the "accessibility [to employees by the union] is suggested by the union's [prior] success in contacting a substantial percentage of them directly, via mailings, phone calls, and home visits." Based on this accessibility, and the availability of another reasonable alternative means of communicating with employees (signs near the employer's parking lot), the Court denied non-employee Union organizers access to the employer's property. Moreover, the Board has held that reasonable alternative means of communication need not be "the most effective means." Hardee's Food Systems, Inc., 294 NLRB 643, 644 (1989), review denied 904 F.2d 715 (D.C. Cir. 1990). Similarly, in SCNO Barge Lines, 287 NLRB 169, 169, 171 (1987), review denied, 867 F.2d 767 (2d Cir. 1989) the Board denied a union access to employees onboard the employer's boats where the union had "achieved a fair measure of success" in communicating with employees in the past, because "the [u]nion simply did not make sufficient efforts with the means at hand to show that those means were unworkable."

Applying the principles inherent in Lechmere and SCNO Barge Lines, we decided that the Union had not demonstrated that license plate observations and handbilling would not be successful methods of communicating with (or among) employees in the future. Although it was conceivable that future license plate observations would not yield additional uncontacted employees if the same employees visited the Employer's offices each pay day, the Union did not attempt to ascertain if the same employees visited the Employer's offices each week, though it could easily have done so. The Union also failed to establish that additional handbilling would be futile. In addition, handbilling could have been performed by employees on the Employer's parking lots and walkways, not just non-employee Union organizers, enabling employees to communicate with each other regarding the merits of Union representation. Although the Union's rationale for not using employees to handbill was its concern that the Employer would not permit employees access to or near its property because non-employee organizers had been so excluded, Board law allows employees greater access to their employers' property than non-employees. See Tri-County Medical Center, Inc., 222 NLRB 1089 (1976)

Finally, the Union failed to show that it could not contact more employees based on the outdated employee list in its possession. Specifically, there is no evidence that the Union attempted to communicate with the 253 employees who had moved, through mailings requesting an address correction and that the mailings be forwarded. Since the Union could have contacted additional listed employees using this method, resort to the list cannot be deemed futile.

Showing Pro-Union Video At Employee Break Time

In another case, we considered whether an employer's refusal to allow union supporters to show a pro-union video in the employer's lunch room during employee break time violated the Act.

During an organizing campaign at the Employer's facilities, the Union made a written request to the Employer to show a union video in the employee lunch room during lunch and break periods. The Union offered to provide the necessary equipment and to pay for the electricity. The Employer denied the union's request because the lunch room was provided to afford employees time for rest and relaxation during lunch and breaks and also because such activity might create conflict. The Employer otherwise recognized employees' right to distribute literature, including copies of videos, in nonwork areas during nonwork time.

We decided that the Employer's refusal to allow the employee union organizing committee to show a union video in a nonwork area during nonwork time violated Section 8(a)(1) of the Act. Break time is an employee's time, not company time. Anderson Co., 305 NLRB 878, 880 (1991). Thus, an employer may not prohibit employees from distributing union literature on its premises in nonwork areas during nonwork time without a showing that the prohibition is necessary to maintain plant discipline or production. Sahara Tahoe Hotel, 292 NLRB 812 (1989). We considered a union video to be a modern-day equivalent of campaign literature. Thus, the Employer's refusal to allow the employee union organizing committee to show a union video in a nonwork area during nonwork time is the equivalent of a prohibition on the distribution of union literature in nonwork areas during nonwork time.

We considered the employer's concern that the showing of the union video would interfere with its employees' rest and relaxation in the lunchroom. However, there was no evidence that the Employer had otherwise regulated activities in the lunchroom and a prohibition promulgated solely in response to union activity would violate the Act. Similarly, although the Employer also expressed concern that the showing of a union video might create conflict, there was no evidence that the Employer regulated other activities in the lunchroom that have the potential for conflict, such as discussion of politics, religion or the Union itself. We therefore decided that the Employer had not established that it had a legitimate justification for its refusal.

Other arguments were also considered and rejected. Thus, the showing of a union video in a nonwork area during nonwork time is not the equivalent of allowing nonemployee organizers to campaign on an employer's premises, any more than is employee distribution of union-produced literature. Further, while the distribution of copies of a video is similar to the distribution of literature that employees may read later, since employees may watch the video on their own VCRs at home, there may be some employees who wish to consider the Union's message but do not own VCRs. Moreover, we deemed the showing a video to be the equivalent of solicitation, in that it is an oral transmission of a message, and concluded that the fact that the Employer would permit distribution of copies of the tape should not prevent the Union from being able to use the tape to orally convey its message.

Finally, we noted that any settlement attempts or agreement in this case could include reasonable accommodations of the Employer's concerns regarding potential interference with the current uses of the lunchroom.

Requiring Employee Uniforms With Union Logo

Another case presented an issue of first impression concerning whether the Employer and the Union violated the Act when their collective-bargaining agreement required unit employees to wear a uniform that included a display of the Union's name and logo.

We noted that these cases presented a simple, fact-based, question: did the required display of the Union's name and logo constitute support for the Union. If not, Section 7 was not implicated and there was no violation. If so, Section 7 protected employees who chose to refrain from exhibiting such support, and the uniform requirement interfered with this protected right. We were unable to conclude in the absence of guiding precedent that the Board would not find a violation. Therefore, we decided to issue complaint to allow the Board to address this issue of first impression. We instructed the Region to make the following arguments both for and against a violation.

Argument for no violation

In our view, the argument that the required display of the union's name and logo did not constitute support for the Union was more persuasive, because the display could be deemed to be solely a non-discriminatory recognition of the Union's lawfully mandated role as the Section 9(a) representative of all unit employees. In other words, the uniform display may have been instituted with the legitimate intent of truthfully informing the public of the Employer's collective-bargaining relationship with the Union.

There was no evidence of animus against employees who are not members of the Union. Nor was there any evidence that the Employer or the Union agreed to the uniform requirement in order to influence unit employees' support for the Union. In the absence of such evidence of unlawful motivation or discrimination, a Section 8(a)(3) violation would exist only if the use of the Union's name and logo on the required uniforms were "inherently destructive of important employee rights." Great Dane Trailers, Inc., 388 U.S. 26, 33 (1967).

If the uniform requirement were seen as a non-discriminatory recognition of the Union's representative status, it would not be "inherently destructive" of employees' right to refrain from supporting the Union. Rather, the adverse effect of the uniform requirement on employees' rights would be comparatively slight. In that circumstance, a violation would not exist because the Employer had come forward with evidence of legitimate and substantial business justifications for the display of the Union's name and logo on the required uniform: the uniform display reasonably furthered the Employer's goal of projecting a positive and professional image to the public and potential customers by signifying a stable labor-management partnership. Such a labor relationship would make service interruptions due to labor disputes less likely, and would lead to employees who were more likely to have been well-trained, well-paid, and more experienced within a more stable work environment. Thus, pursuant to Great Dane Trailers, in the absence of any evidence of an unlawful motivation, there was no basis for finding a Section 8(a)(3) violation.

As for the Section 8(a)(1) allegation, the argument for dismissal also properly began with a finding that there is nothing in the joint display of the Employer's and the Union's name and logo that discriminated on the basis of Union support, nor indicated that the employee wearing the uniform was a supporter of the Union. The uniform requirement was consistent with a mere recognition of the Union's lawfully mandated role as the Section 9(a) representative of all unit employees. The uniform was no more than an expression of this labor-management relationship to the public, similar to a "union label" affixed to an employer's product.

Similarly, any ambiguity in the message conveyed to third parties by the required display of the Union's name and logo arguably did not unlawfully interfering with the employees' Section 7 rights. We recognized that a third party might misinterpret the presence of the Union's logo on a unit employee's uniform as a sign of individualized support for the union. On the other hand, nothing in the uniform requirement set any limitation on the right of an affected employee to express his or her personal neutral or anti-union sentiments to third parties. An employee was still free to clarify his or her support for the Union, or lack thereof, to any interested party. Thus, pursuant to this argument, the employer's uniform requirement, including the union's name and logo, did not violate the Act.

Argument for violation

On the other hand, we recognized the counterargument that the display of the Union's name and logo, with no enhancement or additional explanation, necessarily connoted support for the Union. Indeed, there would be no issue as to the meaning of the uniform display if the Union were not the Section 9(a) representative, i.e., if there were no Union in place or if there were another bargaining representative.

We noted that the "no violation" argument presupposed that the Union's logo on the Employer's uniform said nothing about the employees' support for the Union. We recognized that this argument could fail for the following reasons.

First, since Section 7 protects both the right to support a union and the right to refrain from such support, the result should perhaps be the same regardless of which right is being asserted. Thus, where employees voluntarily wear the incumbent union's name and logo on their uniforms, the Board would certainly find such conduct to be protected against employer reprisal. In such a case, the Board likely would reject an employer's argument that the employees' Section 7 rights were not interfered with because the employees were not exhibiting support for the union -- only acknowledging its Section 9(a) status. Similarly, the employees here arguably were required to support the Union by wearing the display which interferes with and restrains their Section 7 rights.

Second, although the Employer and the Union claimed that the Union logo was being displayed to communicate with the general public, members of the public were not likely to know whether or not the union was the Section 9(a) representative of the particular employee's bargaining unit. This likely ignorance of the Union's representative status, and the failure of the uniform display to note that the employee was indeed represented by the Union, weakened the argument that the Union's logo signified solely a recognition of the Union's representative role, and not an expression of support for the Union.

In other words, while it may be permissible for an employer to require its employees to clearly communicate to the public that its workforce is represented by a union, the display required here might not sufficiently impart that message. Under this view, requiring the display of the Union's name and logo did require employees to exhibit support for the Union.

If the required display of the Union's name and logo indeed required employees to exhibit support for the Union, then they had a Section 7 right to refrain from exhibiting such support. This statutory right cannot be waived by the Union.

If the required display of the Union's name and logo violated Section 8(a)(1) because it constituted a forced expression of support for the Union, then it followed that it also violated Section 8(a)(3) for the Employer to make such an expression of support a condition of employment. There was no extrinsic evidence of animus against employees who were not members of the Union. or that the Employer or the Union agreed to the uniform requirement in order to influence unit employees' support for the Union. Nonetheless, if the required display of the Union's name and logo interfered and restrained the employees' Section 7 right to refrain from supporting the union, it would be "inherently destructive of important employee rights." Great Dane Trailers, 388 U.S. at 33. In sum, even absent of proof of an unlawful motivation, and despite the fact that the employer had come forward with legitimate and substantial business justifications for the display of the union's name and logo on the required uniform, a violation of Section 8(a)(3) nevertheless would exist.

Offering Economic Incentives For Crossing A Picket Line

In another case, we considered the novel issue of whether a joint employer violates the Act when it offers its employees an economic incentive as an inducement to cross the picket line of unit employees of the other joint employer.

In March, Employer A recognized the Union as the representative of its employees. The drivers utilized by Employer A were not specifically included within the unit. The drivers were leased from various companies, including Employer B. The evidence indicated that Employer A had such control, direction and supervision over the leased drivers that Employer A and Employer B constituted "joint employers" of the drivers. Thus, while Employer B controlled the wages and benefits actually paid to its drivers, they were supervised by supervisors of Employer A who could report problems with particular drivers to Employer B and have them replaced. Employer A also controlled drivers' schedules, work assignments and hours of work. See Windemuller Electric, 306 NLRB 664 (1992) and Floyd Epperson, 202 NLRB 23 (1973). One of the drivers employed by Employer B to work at Employer A was Driver C, who was paid $10.00 per hour.

Employer A and the Union commenced negotiations for an initial contract on September 30. One of the controversial subjects in the negotiations was the Union's desire to include the drivers in the recognition clause. The Union began a strike on November 18. Driver C and apparently all or most of the other drivers refused to cross the picket line. Employer B informed Employer A that in order to get drivers to work during the strike, it would have to pay $25.00 per hour. Employer A signed a contract with Employer B for that rate effective during the strike. Employer B offered Driver C $16 per hour to work during the strike and he and other drivers crossed the picket line.

It is well settled that a refusal to cross a picket line is protected activity. P.B. & S. Chemical Co., 321 NLRB 525, 529 (1996). In the instant case, the evidence clearly established that Employer B offered Driver C a substantial increase in his pay in order to induce him to cross the picket line in contravention of his Section 7 right to honor such a line. Although the Union was not recognized to be the representative of a unit which included the drivers, that lack of representation does not preclude finding a violation of unlawful inducement to drivers by Employer B. Thus, Section 8(a)(1) itself includes inducements as well as threats as conduct which is prohibited if directed against Section 7 rights. Although the Board and court cases regarding the crossing of picket lines appear to focus on threats, discipline, and discharge rather than inducements, there is no logical basis to exempt an employer from a finding that it committed an independent violation of Section 8(a)(1) on the basis that the conduct was an inducement rather than a threat. In addition, although the strike was not specifically against Employer B, the evidence clearly established that Employer B, a joint employer with Employer A, would be affected by the outcome of the dispute concerning the status of the drivers.

We also decided that the traditional Section 8(a)(1) remedy should be sought against Employer A since it clearly made Employer B's inducement effective by accepting the contract for the higher pay rates during the strike. In this regard, by agreeing to a new contract with a substantial increase in its costs which were tied to the duration of the strike, Employer A had to know or should have known that the wages of drivers would be materially increased as a result of its new contract. Cf. Capitol EMI Music, 311 NLRB 997 (1993)(an unlawful motive for a discharge of an employee furnished by a personnel agency can to be vicariously imputed to the employer solely on the basis of its status as a joint employer).

Accordingly, we decided that a complaint should issue against both Employer A and Employer B for violating Section 8(a)(1) by paying higher wages to drivers in order to induce them to cross the Union's picket line. While we concluded that complaint was warranted in the circumstances of this joint employer relationship, we recognized that the employer could have advertised for and hired replacement employees at the higher rate it eventually paid to employee C. Moreover, the issuance of complaint in this matter does not indicate that complaint would be warranted in the case of an employer seeking to pay its employees a higher remuneration to cross the picket line of another unrelated employer.


Paying For Meetings and Meeting Space For Employee Safety Committee

In another interesting case, we considered whether the Employer's safety committee was a Section 2(5) labor organization under Electromation, Inc., 309 NLRB 990 (1992), and if so, whether the Employer provided unlawful assistance by paying employees for meeting and by providing meeting space.

Our case arose in a state which long ago had enacted a section of the State Administrative Code requiring employers with 11 or more employees to have a safety and health committee. The code set forth the manner in which committee members were to be selected, the terms of the members and procedures for filling vacancies, the ratio of the number of employee-selected and employer-selected members, and committee meeting requirements. The code also set forth the issues required to be addressed at committee meetings. The code specifically required the safety committee to review safety and health inspection reports in order to assist in the correction of identified unsafe conditions; to evaluate accident investigations in order to determine if the causes involved were properly identified and corrected; and to evaluate accident and illness programs and discuss recommendations for improvement.

The Employer had a safety committee which was intended to be in compliance with the state code, and which was composed of 10 employee members and three Employer members. It appeared that employee members were either elected or appointed by their fellow employees. However, at least one employee member, the current committee chairman, was appointed to serve by his committee coordinator.

A review of safety committee meeting documents revealed that the committee met several times a month and discussed the safety of numerous working conditions. It appeared that the Employer-selected members functioned as regular committee members rather than Employer representatives, i.e., did not address or raise subject matters on behalf of the Employer. Instead, the committee made specific recommendations which an Employer representative outside the committee either denied or agreed with and acted upon. For example, when the committee had recommended that the Employer perform sampling tests for asbestos and contaminated water, and the Employer agreed to perform those tests. The committee's recommendations for additional crane and forklift training for new hires, and its recommendation regarding hazardous gas, were both denied. However, its recommendation for sun visors was accepted. Sometimes the Employer agreed in part and denied in part the committee's recommendations.

We decided initially that the committee was a Section 2(5) labor organization.

The Board and the courts have generally taken an expansive view of what constitutes a labor organization under Section 2(5). See NLRB v. Cabot Carbon Co., 260 U.S. 203 (1959); Ona Corporation, a Division of Onan Corporation, 285 NLRB 400 (1987); American Tara Corporation, 242 NLRB 1230, 1241 (1979). In Electromation, supra , the Board found three essential elements which must be present to support such a conclusion: (1) employees participate in the organization or committee; (2) the committee exists for the purpose, in whole or in part, of "dealing with" the employer; and (3) these dealings concern conditions of work or other statutory subjects such as grievances, labor disputes, wages, rates of pay, or hours of employment. A fourth element may require showing that the employees are acting in a representational capacity, because Section 2(5) defines a labor organization as including an "employee representation committee" (emphasis added). In Electromation, the Board found that an employee committee was "representational" and thus found it unnecessary "to determine whether an employee group could ever be found to constitute a labor organization in the absence of a finding that it acted as a representative of the other employees." Id., at 994, note 20.

In NLRB v. Cabot Carbon Co., supra, the Supreme Court held that the term "dealing with" is not synonymous with the more limited term "bargaining with," but rather must be interpreted broadly. The "dealing with" requirement is satisfied by any consultations between an employer and a representative group of its employees that look toward the resolution of grievances or the improvement of terms and conditions of employment. In E.I. Du Pont & Co., 311 NLRB 893 (1993) the Board explained that "dealing" involves a "bilateral mechanism," i.e., "a pattern or practice in which a group of employees, over time, makes proposals to management, management responds to these proposals by acceptance or rejection by word or deed, and compromise is not required."

In our case, we decided that the safety committee met all of the criteria for a Section 2(5) labor organization. First, employees clearly participated in the committee. Second, the committee also existed to "deal with" the Employer. The committee considered and evaluated employee safety proposals and then made recommendations concerning those proposals to the Employer, who responded by accepting or denying those proposals. Third, the subject of those proposals, safety, is a mandatory subject.

We noted that in E.I. du Pont, the Board found that, although the employer violated the Act by creating and dealing with safety committees, its participation in "safety conferences" was not similarly unlawful because the conferences amounted to "brainstorming sessions where employees were encouraged to talk about their experiences with certain safety issues and to develop ideas and suggestions" and did not have "the task of deciding on proposals for improved safety conditions." E.I. du Pont, supra, 311 NLRB at 894. In the instant case, however, the safety committee engaged in the same types of activities that established a labor organization in E.I.du Pont: the committee members discussed proposals and decided whether to reject the proposals or to recommend them to the Employer. Thus, there was a "bilateral mechanism" for dealings between the Employer and the committee.

It is not clear to what extent, if any, employee committee members must serve in a representational capacity in order for the committee to constitute a 2(5) labor organization. See Electromation, supra, 309 NLRB at 994, note 20. However, it was clear that the members of the committee in our case served in such a representational capacity. Employee members were either elected or appointed by their fellow employees. For all of the above reasons, we concluded that the safety committee was a Section 2(5) labor organization.

We then decided that the Employer in our case did not unlawfully assist the committee in violation of Section 8(a)(2) essentially because the Employer's provision of minimal financial support was no more than "friendly cooperation." See Duquesne University of the Holy Ghost, 198 NLRB 891 (1972).

The Board has clearly held that the use of company time and property does not per se establish unlawful employer support and assistance. See, e.g., BASF Wyandotte Corp., 274 NLRB 978, 980 (1985). The Board has countenanced paid employee time for meeting with the employer where the employee representative group was an independent, dues collecting union, which had been lawfully established and dealt with at arms length. See, e.g., Coamo Knitting Mills, 150 NLRB 579 (1964); Sunnen Products, Inc., 189 NLRB 826 (1971). In contrast, the Board has sometimes found paid employee time for meeting with the employer together with other administrative support to be unlawful assistance where an employee group had no charter, by-laws or financial independence.

In Duquesne University, supra, the employee committee collected no dues and had no financial independence from the employer. The committee not only met on the employer's premises on paid time, but also received administrative support from the employer who paid for and distributed the committee's election ballots and also printed and distributed the committee's newsletter. The Board stated: "If the record were devoid of any evidence of assistance but that. . . we would be reluctant to find that evidence sufficient to warrant an unlawful assistance finding due to the special circumstances of this case, i.e., where an employer, here a university, so freely makes available its facilities, time and services to any desirous organization..." The Board proceeded to find unlawful assistance because the employer engaged in numerous other acts of unwarranted interference, viz., the employer's personnel director gave "advice and counsel" to the employee committee; the employer established an oversight committee to act as an "advisory body" to the employee committee; and the vice president acted as an "advisor" to the employee committee.

The Board appears to suggest in Duquesne University that the minimal financial assistance provided in that case would have been unlawful but for the "special circumstances" there, i.e., that the university made its space and services freely available to other organizations. Other Board cases, however, suggest that the provision of the minimal financial support noted in Duquesne University may be lawful even absent mitigating "special circumstances."

In Janesville Products Div., Amtel Inc., 240 NLRB 854 (1979), the employer established outside the Section 10(b) period an employee council of five elected members. The council had no charter and collected no dues. The council met regularly on the employer's premises during paid employee time, and minutes of the meetings were prepared at the employer's expense. The employer also provided administrative support for the council's elections by providing ballots and allowing the election during paid time. The ALJ, adopted by the Board, noted that this amount of financial support, standing alone, would not have constituted unlawful assistance. Although the ALJ cited Duquesne University supra, he did not refer to any "special circumstances" in support of his conclusion. The ALJ proceeded to find a violation based upon additional conduct, viz., the employer's intrusion into the council's structure by successfully persuading the council to increase its size, and by successfully persuading the council to hold an election on a specified date.

In Kaiser Foundation Hospitals, 223 NLRB 322 (1976), the employer dealt with a Registered Nurses Representation Committee (committee) which had a constitution and by-laws but otherwise was a wholly internal union which did not appear to be financially independent. The committee met on the employer's premises on paid time, and employees attended meetings without obtaining prior approval from the employer. The employer also provided administrative support in the form of the use of typewriters, a copying machine, bulletin boards, and the employer's loudspeaker system. The ALJ found this minimal support did not "undermine the freedom of choice and independence of the employees in dealing with their employer." Id. at 326.

Although the Board disagreed and found unlawful assistance, the Board focused not on the above provision of minimal support, but instead upon the employer's provision of clear assistance at two committee meetings. The Board explicitly relied upon the fact that at one meeting employer managers attended and openly encouraged employee participation in the committee's activities, and at the second meeting, another employer manager participated in the discussion of terms and condition of employment, after a Board petition had been filed, in violation of the Board's Midwest Piping doctrine. The Board stated: "Contrary to the Administrative Law Judge, we find that these acts of assistance rendered to the Committee by Respondent exceeded the bounds of permissible cooperation and constituted unlawful aid and assistance." (emphasis added).

We decided in our case that the minimal support provided to the safety committee did not amount to unlawful assistance even if "special circumstances" comparable to those in Duquesne University are required to be present.

First, the minimal financial and administrative support provided to the non-independent committee here was not meaningfully different from the levels of support found to constitute "friendly cooperation" which was given to the similarly situated non-independent unions in Janesville Products, and Kaiser Foundation. In those cases as here, the providing of committee meetings on premises on paid time, with minimal attendant administrative support, was not viewed as coercive of employee free choice even in the absence of any "special circumstances." However, to the extent that "special circumstances" may be required for the provision of such minimal support to a non-independent union, we noted that they were also present in this case.

The safety committee here, established sometime outside the 10(b) period, was mandated by the State Administrative Code. There was no evidence that when the Employer initially set up the committee, it had taken full responsibility, and that employees had not then been aware of the mandate of the state code. Nor was there any evidence that employees currently were not fully aware that the instant committee, its structure and meeting requirements, were followed in compliance with the state code. In addition, the Employer asserted that its payment of employees while sitting on the committee was also required by both federal and state wage and hour laws. In sum, this was not a case where an employer initiated the establishment of a safety committee and paid employees for meeting thereon.

Accordingly, we decided to dismiss the charge because the Employer's provision of minimal financial and administrative support did not amount to unlawful interference coercing employees from exercising their Section 7 rights.


Discharge for Repeated Strikes

In another case, we decided that a union "salt" was lawfully discharged for engaging in an unprotected intermittent work stoppage.

A union member "salt" was hired by the Employer who was aware that he was affiliated with the Union when it hired him. Immediately upon starting work, the "salt" began talking with three employees about the employer's lack of benefits. While still on work time, the four employees, with the union "salt" as their spokesperson, approached the foreman and asked about wages and benefits. The foreman directed them to return to work. The union "salt" stated that the employees were engaging in concerted activity and that they would not go back to work until they had an answer from the owner. The foreman called the owner at home, told the employees that the owner had said "no" to their requested benefits, and again directed the employees to return to work, which they dId.

About a half hour later, again while working and not on a break, the union "salt" and one employee approached the foreman and asked about a medical plan. The foreman told them to go back to work or go home and stated that he was the boss and that there would be no medical plan. The union "salt" then asked the foreman to call the owner again, and stated that the employees would not return to work until they had an answer from the owner. After calling the owner a second time, the foreman returned and told them that the owner had said "no" to a medical plan; the employees went back to work as directed.

About one hour later, at break time, the union "salt" and another employee engaged in activity described as "informational picketing". The union "salt" already had picket signs in his car that said, "ULP Strike against [the Employer]." Before returning to work, the four employees got together again and approached the foreman and asked about dental and annuity plans. The foreman said "no" to both requests. The union "salt" asked him to call the office. The foreman said that he was the boss and directed the employees to return to work. When the union "salt" told the foreman that they were engaged in concerted activities and wanted an answer from the shop, the foreman told him to go home. When the union "salt" again stated the employees were engaged in concerted activity and wanted an answer from the office, the foreman told him to go to the shop and pick up his check because he was fired. The union "salt" returned the company tools and then he and another employee picketed for two hours.

The union "salt" faxed a letter to the employer stating that he had not quit and that he was engaged in a "ULP strike".

Based on these facts, we decided to dismiss the charge because the union "salt" was discharged for engaging in unprotected intermittent strikes.

Employees may not be discharged or otherwise discriminated against for engaging in concerted work stoppages to protest working conditions. NLRB v. Washington Aluminum Co., 370 U.S. 9 (1962); McEver Engineering Inc., 275 NLRB 921 (1985), enfd. 784 F.2d 634 (5th Cir. 1986). However, a refusal to work will be considered unprotected intermittent strike activity "when the evidence demonstrates that the stoppage is part of a plan or pattern of intermittent action which is inconsistent with a genuine strike or genuine performance by employees of the work normally expected of them by the employer." Polytech, Inc., 195 NLRB 695, 696 (1972); John S. Swift Co., Inc., 124 NLRB 394, 396 (1959); Embossing Printers, Inc., 268 NLRB 710, 723 (1984), enfd. mem. 742 F.2d 1456 (6th Cir. 1984). Recurrent strike activity is considered to be an unprotected intermittent strike where (1) there are more than two separate strikes, or threats of repeated strikes, Chelsea Homes, Inc., 298 NLRB 813, 831 (1990); Robertson Industries, 216 NLRB 361, 361-362 (1975), enfd. 560 F.2d 396 (9th Cir. 1976); Crenlo, Div. of GF Business Equipment, Inc., 215 NLRB 872, 878-879 (1974), enfd. 529 F.2d 201 (8th Cir. 1975), and (2) they are not responses to distinct employer actions or problems, but rather part of a strategy to use a series of strikes, in support of a single goal, because this would be more crippling to the employer and/or would require less sacrifice by employees than a single strike. Pacific Telephone and Telegraph Co., 107 NLRB 1547 (1954); John S. Swift Co., Inc., 124 NLRB at 396; Polytech, Inc., 195 NLRB at 696 (1972). For example, in Embossing Printers, Inc., 268 NLRB at 723, the Board held that employees' actions in leaving work three different times, in order to attend union meetings regarding contract negotiations, were not separate responses to new problems but rather constituted an unprotected intermittent strike.

Here, the strikes appear to have been orchestrated by the union "salt" as part of a plan to conduct intermittent strikes in order to harass the employer into dealing with the union or suffer the consequences. In this regard, during the first four hours of the union "salt's" employment, he led his three co-workers into stopping work on three separate occasions within a 4 hour period, until the foreman called the owner about the employees' questions concerning whether the employer had a pension plan, a medical plan, and dental and annuity plans. The union "salt" already knew the Employer did not provide those benefits. Thus it appears that his objective was to provoke the Employer into firing him. Indeed, he came to work with ULP picket signs against the Employer already in his truck, which he used during his break after the first two work stoppages. As in Embossing Printers, supra, these work stoppages were not in response to any distinct employer actions or problems. Rather, they were part of a strategy to use a series of strikes, in support of a single goal, because this would be more crippling to the Employer and/or would require less sacrifice by employees than a single strike. Since the union "salt" was not engaged in protected activity when he led three intermittent strikes within four hours, his discharge was lawful.

Lawful Failure To Reinstate Striker

In another case, we considered whether further proceedings were warranted against three separate employers for allegedly failing to reinstate the same employee after that employee allegedly had gone out on a separate strike against each employer.

Employer A

On May 3, Employer A hired an unpaid Union organizer as an electrician helper. On May 4 and 5, Employer A allegedly interrogated the organizer about his Union affiliation; the organizer never filed any charges against these unlawful interrogations. Instead, over two weeks later on May 24, the organizer gave Employer A a letter from the Union stating that the organizer was going out on an unfair labor practice strike with another employee. That employee earlier had applied for work with Employer A but had not been hired. The organizer and the other employee picketed Employer A for around 30 minutes on May 24, telling Employer A that the Union was picketing to protest Employer A's alleged unlawful refusal to hire Union employees. Employer A did not hear from the organizer for 10 months until March 1 of the following year, at which time the organizer offered unconditionally to return to work. There is no evidence that Employer A had any work for the organizer at that time.

Employer B

Employer B hired the organizer on August 1, 1995 as an electrical helper. The organizer' employment application indicated his Union membership and the organizer later wore a Union shirt to work. Four days later on August 5, the organizer and another employee announced that they were going out on an unfair labor practice strike. Over two weeks later on August 24, the organizer and another individual picketed Employer B for around one hour. Employer B did not hear from the organizer for five months until March 1 of the following year, at which time he offered unconditionally to return to work. Employer B responded that it was not hiring any electricians or helpers at that time. Neither the organizer nor the Union filed any other relevant Board charges against Employer B.

Employer C

Employer C hired the organizer as a journeyman electrician on August 10. The organizer' employment application indicated his Union membership and he wore a Union shirt to work every day. On August 16, during his lunch break, the organizer handbilled at the job site with language protesting Employer C's payment of non-union substandard wages. Employer C told the organizer that he had "caused a lot of trouble" by his handbilling and transferred him to another job site on that day. On August 24, the organizer went on strike advising Employer C that he was protesting the discharge of another employee. The organizer admitted that he did not know the reason for that employee's discharge. Neither the organizer nor the discharged employee picketed or engaged in any other strike activity at that time.

Around two weeks later on September 5, the organizer arrived at Employer C with the discharged employee, whom Employer C had called back to work. Employer C also "rehired" the organizer at this time. The organizer asked Employer C for more money and, when he was refused, the organizer and the other employee announced that they were going out on an economic strike. Neither employee engaged in any picketing or other activity after leaving Employer C that day. Employer C did not hear from the organizer for around 5 months until, on February 28 of the following year, the organizer offered unconditionally to return to work. Neither the organizer nor the Union ever filed any charges against Employer C despite the organizer' initial strike to protest Employer C' discharge of the other employee.

We decided that further proceedings were not warranted against any of the three Employers because it was not clear that the organizer was engaged in strikes over legitimate disputes with these Employers, and because it would not effectuate the purposes and policies of the Act to proceed in the factual circumstances of these cases.

First, we noted that the Board's recent decision to dismiss a similar allegation in DeMuth Electric, Inc., 316 NLRB 935 (1995) was closely analogous to the instant case. In DeMuth, the union referred member Price to a nonunion employer as an unpaid "salting agent" to organize employees. After Price had worked for one week, the union gave him a cap with a union logo and a tape recorder. The ALJ specifically found that Price intended to use these items to "bait" the employer into committing unfair labor practices. Id. at 938. In fact, shortly thereafter in a taped conversation between Price and the employer, the employer unlawfully interrogated Price, threatened him with discharge, and issued an overly broad no solicitation rule.

Price then advised the employer that he was going out on strike. Price gave no reason for this action although the employer specifically asked him to do so. According to Price, he did not immediately go out on strike but instead worked four hours because he wanted to see if the employer would further harass or fire him after the taped "baiting" conversation.

The employer wrote Price a letter asking him "to please advise as to the reason you are on strike." Price did not respond to this request. Around three months later, Price wrote the employer that he was ending his strike and unconditionally offering to return to work. The employer's failure to reinstate Price as a returning unfair labor practice striker was alleged as unlawful.

The ALJ in DeMuth noted that shortly after Price had purported to go out on strike, he obtained other employment at substantially higher pay. The ALJ concluded that Price used the employer's unfair labor practices as an excuse to find a better paying job, and that Price had not gone out on strike but had "voluntarily quit":

He did not picket, he did not explain why he was on strike, he did not ask to negotiate differences and he did not contact Respondent for over 3 months. On the other hand, he did take full-time employment...at scale wages. Any objective view of his actions poststrike would lead one to believe that he had either voluntarily quit his employment...or had abandoned his strike, if he was in fact on strike.

A majority of the Board panel adopted the ALJ's grounds for dismissal of the refusal to reinstate allegation.

We decided that further proceedings were unwarranted in our case in large measure because of the rationale of DeMuth. Here, as in that case, the organizer engaged in a strike within days of being hired, and did not attempt to negotiate his alleged differences with the various Employers, i.e., the organizer did not provide them with any meaningful opportunity to address the bases for claimed reasons for going out on strike. Although the organizer did engage in picketing, he did so for only an extremely brief period against Employer A and Employer B, and even then only after almost two weeks had passed after he had begun his alleged "strikes." In addition, the organizer engaged in a clear pattern of repetitive strikes in purported protest of unfair labor practices, even though neither the organizer nor the Union ever filed any charges against these unfair labor practices. These circumstances, which were absent in DeMuth, clearly suggest that the organizer simply contrived the purported bases of his "strikes' and, as in DeMuth, was not engaged in any legitimate dispute with any of the above employers. Moreover, where in DeMuth organizer Price waited three months before offering unconditionally to return, the organizer waited over 10 months to offer to return to Employer A and five months to offer to return to the other Employers. Finally, the organizer offered to return to all three employers virtually simultaneously. This clearly suggested that these offers as well were not the result of a decision to abandon any kind of strike.

Accordingly, we decided to dismiss the charges against all three Employers.


Hiring Replacements for ULP Strikers At Different Terms of Employment

In another case, we considered whether the Employers unlawfully hired replacements for unfair labor practice strikers at terms and conditions of employment different than those of the strikers they replaced.

During an unfair labor practice strike, the Employers hired replacements at lower wages than it had paid the strikers, and made no contributions for the replacements to the Unions' pension and other fringe benefit plans. The Unions and pension funds filed charges alleging unlawful unilateral changes in terms and conditions of employment. We decided that the Employers thereby violated Section 8(a)(1) and (5) of the Act.

The Board held in Times Publishing Co., 72 NLRB 676, 684 (1947), that an employer was privileged to set its own terms and conditions of employment under which economic striker replacements would be hired. However, the Board's analysis in that case depended heavily on its conclusion that requiring negotiations with the Union over such terms would effectively nullify the employer's right to hire permanent replacements. The direct dependence of an employer's right to set terms and conditions for replacements for economic strikers on the employer's Mackay right to hire such replacements was re-emphasized in Service Electric Co., 281 NLRB 633 (1986). Thus, we decided that the basis for an employer's right to set terms and conditions for strike replacements as articulated by current Board law is only sustained insofar as the employer in fact has a Mackay right to hire such replacements.

In unfair labor practice strikes, an employer has no Mackay right to permanently replace striking employees. From the earliest days of its administration of the Act, the Board has held that unfair labor practice strikers must be returned to their positions immediately upon their offer to return. Therefore, the predominant rationale expressed by the Board in Times Publishing Co. and Service Electric Co. is inapplicable to cases involving unfair labor practice strikes.

We also reasoned that, in an unfair labor practice strike, the parties are not exercising their rights to use their respective economic weapons in the free play of collective bargaining, and there can be no argument that an employer needs greater flexibility of action to weather the union's use of its strike pressure in support of bargaining demands. Instead, the strike is caused by the employer's unlawful conduct as a matter of law. The Board's primary concern must be to remedy the employer's unfair labor practices, and the Board must focus its concern on the employee victims of the unlawful conduct. Indeed, we concluded that permitting an employer to set different terms and conditions for unfair labor practice striker replacements would have the perverse effect of strengthening an offending employer's ability to weather a strike caused by its own unfair labor practices.

We noted that the Employers in our case were likely to argue in their defense that they were not required to maintain the strikers' terms and conditions of employment for the replacements because, as a matter of law, replacements for unfair labor practice strikers are temporary employees and therefore are outside the strikers' bargaining units. However, we concluded that, even assuming that is the case, maintenance of the terms and conditions of employment during an unfair labor practice strike is necessitated by the relationship between the employer and the strikers, not the relationship between the employer and the replacements. Regardless of whether the replacements themselves are in the bargaining unit, they occupy bargaining unit positions. Employers must be required to maintain the bargaining unit's terms and conditions to avoid undermining the striking employees' union by giving the employer an economic weapon with which it can prolong the strike.

Finally, we decided to allege a Section 8(a)(5) violation even if it were concluded that the strike at issue in the instant cases was an economic strike, thus putting to the Board the issue of whether its decision in Service Electric Co., supra, should be overruled. In recent opinions, Member Browning and Chairman Gould stated their belief that employers have an obligation to bargain over the terms and conditions of employment of replacements for economic strikers. See Harding Glass Co., 316 NLRB 985, 985 fn. 5 (1995); Chicago Tribune Co., 318 NLRB No. 71, slip op. at 9 fn. 30 (August 31, 1995). Therefore, we decided that this issue should be preserved for the Board's consideration.

Automated Meter Reading System As a Mandatory Subject

In another case, we considered whether the Employer, an electric utility company, violated Section 8(a)(5) by refusing to bargain over its decision to automate its meter reading function, which included the resulting elimination of the meter reader job classification, because that decision did not involve a mandatory subject of bargaining within the meaning of Section 8(d) of the Act.

Until the events underlying the charge, the Employer used a manual meter reading system whereby unit employee meter readers would visit every home and business and record electricity usage. Without notifying or bargaining with the union, the Employer entered into a long-term, multimillion-dollar contract with an independent company for the installation, operation and maintenance of an automated meter reading (AMR) system. This system electronically transmitted usage data to the Employer's mainframe computers, and completely eliminated the need for manual meter reading.

The Employer asserted that it had decided to automate its meter reading function for two reasons: (1) to increase reliability in the monitoring of real time usage and in the reporting and management of power outages (which the state utility commission had urged it to improve); and (2) to enable it to provide new customer services -- including "real" time charging, no home visits and customer selection of on/off dates and billing dates -- which it projected would enable it to better compete with lower priced electricity suppliers. The Union estimated that approximately 100 meter readers and between 50 and 100 meter installers, repair shop employees, technicians and other field service employees would lose their jobs as a result of the Employer's decision.

Under the Board's decision in Dubuque Packing, 303 NLRB 386, 391 (1991), enfd. in rel. part 1 F.3d 24, 31-33 (D.C. Cir. 1993), pet. for cert. dismissed 146 LRRM 2896 (1994), in order to make a prima facie showing that a work relocation decision is a mandatory subject of bargaining, the General Counsel has the initial burden of showing that the decision was "unaccompanied by a basic change in the nature of the employer's operation." The employer then has the burden of rebutting the General Counsel's prima facie case or proving certain affirmative defenses. Dubuque, 303 NLRB at 391. Where the Board concludes that the employer's decision concerned the "scope and direction of the enterprise," there will be no duty to bargain over the decision. See Noblit Brothers, Inc., 305 NLRB 329, 330 (1992); Holly Farms Corp., 311 NLRB 273, 277-278 (1993), enfd. on other issues 48 F.3d 1360 (4th Cir. 1995), affd. ___U.S. ___, 152 LRRM 2001 (1996). The employer also may avoid bargaining if it demonstrates that (1) labor costs were not a factor in the decision or (2) even if labor costs were a factor, the union could not have offered labor cost concessions that could have changed the employer's decision. Dubuque, 303 NLRB at 391. Although Dubuque Packing specifically concerned work relocation decisions, its principles are applicable to "Category III" decisions, including a decision to automate, as described in First National Maintenance Corp. v. NLRB, 452 U.S. 666, 677, 686 n. 22 (1981). A Category III decision is a decision that has a direct impact on employees, but has as its focus the economic profitability of an employer's business. Id., 452 U.S. at 677.

In applying these standards to this case, we decided that we would be unable to meet our initial burden of establishing that the Employer's decision to automate its meter reading function did not constitute a basic change in the nature of the employer's operation. Although the Employer is still in the business of supplying electricity, the automation of the meter reading function involved a major commitment of capital, and would alter many aspects of the Employer's operation, including load management, rate determination, outage response and the provision of expanded services to customers. Such changes constitute a fundamental shift in the nature of the business of supplying electricity in the new competitive environment of the 1990s, where customers can now choose among several competing power companies. See Holly Farms Corp., 311 NLRB at 278; Litton Business Systems, 286 NLRB 817, 819-821 (1987), enfd. in rel. part 893 F.2d 1128 (9th Cir. 1990), revd. On another issue, 501 U.S. 190 (1991). Compare Bob's Big Boy Family Restaurants, 264 NLRB 1369, 1371 (1982)(subcontracting which involved no capital restructuring or investment was a mandatory subject of bargaining).

Moreover, even assuming that the automation decision did not involve a basic change in the nature of the Employer's enterprise, the Employer established that the automation was motivated primarily by its dual needs to improve its outage management, and to compete more effectively with suppliers of low cost electricity by offering new customer services. These concerns caused the Employer to automate even though the new system required a capital investment of about double the labor costs the Employer predicted it would save through automation. Under these circumstances, the Employer effectively demonstrated that the union had no control over the factors motivating the Employer's decision, and that the issue was not amenable to resolution through the collective-bargaining process.

Refusal To Supply Financial Information

In another case, we considered whether the Employer had violated the Act when it refused to provide financial information to the Union.

At the beginning of negotiations for a successor collective-bargaining agreement, the Employer informed the Union that it had lost customers and claimed it was losing substantial amounts of money. The Employer proposed a wage freeze and contractual changes which would reduce employees' total pay. However, during the course of negotiations, the Employer did offer to give each employee a $500 bonus if the Union agreed to a 90 day no-strike clause.

On the same day that the Employer presented its final offer to the Union, it sent the employees a letter seeking support for the proposal and explaining, inter alia, "we are trying to bring the bottom line back into the black......" and asked for a vote in favor of the final offer "so we may retain your jobs and get back in the black in the short term ..." It ended with the statement, "The future of [the Employer] depends on it." Subsequently, the Union asked to see the Employer's books and records, explaining that it could not understand the Employer's demand for a lengthy wage freeze and other cutbacks while at the same time offering a $500 bonus. Therefore, based on the Employer's claims of "substantial losses," the Union stated that it was imperative to ascertain the extent of this loss, if any, and wanted its accountants to inspect the company books and records before the parties engaged in further negotiations. The Employer refused the request, stating that it had made no claim of financial inability to pay, explicitly or implicitly, and that its claim of business losses by itself indicated no more than an unwillingness to pay. Subsequently, the Employer implemented its final offer without providing the requested financial information to the Union.

We decided that, even under current Board law, the Employer's statements constituted a claim of inability to pay the wages desired by the Union, and therefore the Employer violated Section 8(a)(5) and (1) of the Act by refusing to provide financial information to substantiate its claim.

Although an employer is not required to provide financial information which is not relevant to the union's duties as collective-bargaining representative, an employer's claim of financial inability to meet a union's bargaining demands triggers an obligation to furnish, upon request, financial information substantiating that claim. NLRB v. Truitt Mfg. Co., 351 U.S. 149 (1956). In Nielsen Lithographing Co., 305 NLRB 697 (1991), petition for review denied sub nom. Graphic Communications International Union, Local 508 O-K-I, 977 F.2d 1168 (7th Cir. 1992), the Board refined the dichotomy between claims of inability to pay and unwillingness to pay. The Board held that a claim of competitive disadvantage or lower profits is not the same as a claim of financial inability to pay, and such a claim does not raise any obligation under Truitt to turn over the requested information. 305 NLRB at 699. The Board explained that "an employer's obligation to open its books does not arise unless the employer has predicated its bargaining stance on assertions about its inability to pay during the term of the bargaining agreement under negotiation." Id. at 700. The Board acknowledged that a claim of economic hardship might establish a claim of inability to pay in appropriate circumstances, but it reiterated that the distinction was between a claim of "can't pay," and a claim of "does not want to pay." Id. The Board emphasized that it did not "equate 'inability to compete,' whether or not linked to job loss, with a present 'inability to pay.'" Id. at 701

While the Board has continued to adhere to Nielsen, in more recent cases it has found an effective inability to pay claim, even though such a claim was not explicitly made by the employer. Thus, in The Shell Co., 313 NLRB 133 (1993), the Board required the employer to disclose relevant financial data where the employer informed the union that economic conditions had affected them "very badly", that present circumstances at the employer's operation were a matter of "survival," and that the employer needed the employees' help because of the economic conditions. Similarly, in Stroehmann Bakeries, Inc., 318 NLRB 1069, 1070 (1995), enf. denied 95 F.3d 218 (2nd Cir. 1996), the Board found that the employer in effect claimed an inability to pay despite its express disclaimer because it based its bargaining position on assertions of huge losses and projected continuing losses due to market factors. Likewise, in ConAgra, Inc., 321 NLRB 944 (1996), enf. denied 117 F.3d 1435 (D.C. Cir. 1997), the Board explained that "a determination that an employer is claiming that it cannot, as opposed to will not, pay a union's proposed wage demand is not dependent on the words used but rather on the substance of the employer's assertions." In finding that the employer's representations, "although carefully couched in terms of competitive disadvantage," amounted to a claim of inability to pay, the Board relied on statements of the employer's representative "that he had seen the Company decline over the last 4 years," "the situation is serious and fragile," "if we are not competitive we cannot survive," and "we must do something to be able to survive;" and the employer's representation that if immediate measures were not taken the probabilities were that the company would not be here in the future.

Applying the Board's more recent precedents, we concluded that the Employer's claims that it was losing substantial amounts of money and needed its final offer in order to "get back into the black" were in fact claims of inability to pay. Thus, the Employer asserted that it was presently operating at a loss, not merely that its competitive position would create a future adverse impact if not corrected. By making claims of alleged losses and its need for its contract demands to insure its future as well as employees' job security, the Employer made in effect an assertion that it had an inability to pay the Union's demands. Therefore, the Union is entitled to the financial information to substantiate the Employer's claims.

We also decided to ask the Board to reconsider its decision in Nielsen Lithographing Co., supra, and adopt the position articulated in that case by then Chairman Stephens, in dissent, that the dichotomy between inability to pay claims and unwillingness to pay claims should distinguish between "an objective factual claim (subject to verification) and a subjective claim (not subject to verification)." 305 NLRB at 706. Chairman Stephens agreed that a requirement of substantiation would not flow from "general assertions of competitive disadvantage alone." Id. at 703. However, he expressed his view that in circumstances where the employer raises verifiable factual allegations regarding its economic condition and the effect that condition would have on its business and on employees' jobs, the employer was obligated to furnish the union with information to verify the factual financial basis of its bargaining position. IbId. The critical focus of the analysis is a determination whether the employer indicated a "linkage between the employer's bargaining posture and its stated unsatisfactory economic status." Id. at 706. Chairman Stephens concluded that the appropriate standard for requiring substantiation was that enunciated by the Board in Gas Spring Co., 296 NLRB 84, 97 (1989), enfd. 908 F.2d 966 (4th Cir. 1990), cert. denied 498 U.S. 1084 (1991):

An analysis of the relevant decisions . . . demonstrates that no matter what particular words have been said, when an employer has steadfastly relied upon its own poor financial condition and projected injury to its business, it has been required to produce information to support its claim. To the contrary, where the employer has made no statements about its own finances, and merely talked about the general economy or its relationship with its competitors, no unfair labor practice has been found [296 NLRB at 97].

We would argue before the Board that it should return the law to the position articulated in Gas Spring. The rationale for our position is that the bargaining agent must possess adequate information on a matter at issue if it is to take a realistic position and fulfill its statutory function. Where, as here, an employer adverts to its bottom line in rejecting union demands, but refuses to provide substantiating data, the union is forced to negotiate in the dark without knowing whether the employer's position is put forward in good faith. The Board's current position encourages "gamesmanship," such as occurred here, where an employer's statements suggest that it cannot afford the union's demands, but the employer also invokes the mantra that it is not asserting an inability to pay. By changing the Board's standard to requiring employers to verify the factual financial basis of its bargaining position, we would move towards a more objective standard which would aid the collective bargaining process.

Requiring employers to substantiate verifiable claims would not necessitate opening up the books whenever an employer expressed an unwillingness to meet union demands. Only information needed to assess the factual basis of the employer's claim would have to be produced. See e.g. Craig & Hamilton Meat Co., 271 NLRB 853, 855-856 (1984) (union's request for financial information irrelevant to employer's claims that, owing to market changes, it had less need for skilled workers and employees' services were worth no more than it was willing to pay). Similarly, a claim that the employer is unwilling to pay more than the competition is paying would require verification only as to what the competition is paying. A claim that the employer was losing money because of competitive disadvantage would require verification of economic loss. See Empire Terminal Warehouse Co., 151 NLRB 1359, 1360, 1371 (1965), affirmed sub nom. Dallas General Drivers W & H Local 745 v. NLRB, 355 F.2d 842, 845 (D.C. Cir. 1966).

Regressive Proposals As Bad Faith Bargaining

In another case, we considered whether an Employer engaged in bad-faith bargaining after the commencement of the strike by making regressive proposals and reneging on tentative agreements, thereby rendering its lockout unlawful, and if not, whether the lockout violated Section 8(a)(3) under Eads Transfer, 304 NLRB 711 (1991), enfd. 989 F.2d 373 (9th Cir. 1993) because the Employer failed to notify the Union of a lockout pending the signing of a new agreement until four days after the striking employees offered unconditionally to return to work.

The parties negotiated for a new contract for approximately nine months prior to the Union's going out on an economic strike on May 1. The Employer presented four contract proposals. Negotiations centered around the Employer's concerns about lowering its costs and the Union's strong desire to continue Union control and Employer contributions to various employee benefit funds. After the strike began, the Employer hired temporary replacements to perform the bargaining unit work and continued its operations.

After the strike began, the parties met for nine negotiation sessions. The parties' first poststrike bargaining session began took place on May 22, when the Employer's proposal (its fifth) included for the first time Union maintenance and control of the employee health & welfare and pension funds. However, this proposal also included earlier Employer proposals such as a wage freeze, a reduction in vacation and holidays, and a 180-day probationary period. The Employer contended that it decided to try a different bargaining approach after the strike because of the Union's continued refusal to agree to Company control of employee benefit funds, and because of the strike.

During this meeting, the Employer also discussed its intention to contract out its non-bulk manufacturing work, the retail-oriented portion of the business which represented one-quarter of the work The Employer maintained that this subcontracting would not affect the unit. It explained that it believed that it could survive with Union-controlled funds and still meet its "bottom line" if it obtained its requested concessions in other areas and if it contracted out the non-bulk manufacturing work and hired temporary help at lower wage rates during its busy summer season.

On May 23, the Union mailed a counter-offer agreeing to the Employer's proposals regarding payroll, vacation and contribution rates to the Union funds; making counterproposals regarding overtime, vacation and minimum wage; and rejecting the Employer's offers as to jurisdiction, probationary period for temporary help, and holidays. On July 6, the Employer mailed its sixth contract proposal, which was identical to its fifth one except for some movement regarding the minimum wage rate.

At a meeting on June 18, the Union made a counterproposal regarding the use of temporary employees but indicated that the employees would not agree to a wage freeze or a reduction in time off. The Union also stated that it wanted to find out more about what work was to be subcontracted.

The Employer mailed its seventh proposal to the Union on June 20. The offer included yearly wage increases of $.00, .10, .15, and .20; the Employer's earlier agreement to maintain the Union's health & welfare and pension funds; provisions regarding the use of temporary employees, the probationary period, reduction in holidays and vacations, and the subcontracting of all non-bulk manufacturing work. When the parties met on June 27, the Employer advised the Union that its last offer was its "bottom line." The Employer reiterated that the work to be subcontracted in the future was the non-bulk manufacturing work and committed that the move would not impact the existing four full-time employees. The Union responded that the wage proposals were "way too low," that the employees would not accept a reduction in holidays or vacations, and that it regarded the Company's position as a "slap in the face."

On July 9, unidentified persons entered and vandalized the Employer's plant, uncapping storage tanks in the production area and dumping approximately $10,000 of wood finishing oil.

On July 20, the Union forwarded a written proposal to the Employer which included wage increases of $.40/hour yearly. On July 25, 1996, the Employer announced that because of a near shutdown of its facility due to "serious vandalism" and the failure to make progress in negotiations, it wanted to return to its earlier contract goals. The Employer then presented its eighth contract offer which renewed its proposal to eliminate the Union benefit funds and replace them with Company-sponsored funds. The offer included, among other things, a wage increase of $.25 each year. The Employer advised the Union that subcontracting was not relevant to the current negotiations because it was intended as a future plan, and that the Company would talk to the Union about it at the appropriate time.

At the end of the July 25 meeting, the Union suggested that the employees return to work while the parties continued to negotiate. The Employer advised the Union that there might be conditions on returning the employees to work. Four days later, the unit employees appeared at the Employer's facility and asked to return to work. The Employer stated that they could only return to work when the parties had a signed contract.

Another bargaining session was held on August 8. The Union stated that the Employer's July 25 offer was "unacceptable," and that the Union was only willing to continue negotiating from the Company's May 22 proposal. The Employer noted that the Union had not offered a counterproposal to the Company's latest offer. On August 15, the Union mailed a counterproposal that included a $.25/hour yearly wage increase (retroactive to October 1, 1995) and the Union trust fund contributions as agreed to by the parties on May 22. The Union made some movement on holidays and vacation scheduling.

The parties met again on September 9, when the Company presented its ninth proposal. Although it proposed Company-run benefits, the Employer agreed to the Union's last proposals regarding holidays and the $.25/hour yearly wage increase (except for the Union's proposal that the increase be retroactive), and made some movement regarding limitations on vacation scheduling. The Employer said that the Company had agreed to the Union funds only if the Union would agree to the Company's bottom line. The Employer noted that much had changed since the parties began negotiations, including the fact that the business had continued to suffer because of the strike.

The last bargaining session was on October 11; no further progress was made at that time.

Based on these facts, we decided that the Employer's conduct after the commencement of the strike did not constitute bad-faith bargaining in violation of Section 8(a)(5) and (1) of the Act. We further conclude that the Employer lawfully notified the Union that the strikers were being locked out until a new contract was signed.

A party's withdrawal of its agreement on an issue and substitution of a regressive proposal is often considered an indicium of bad faith, but not a per se violation. See, e.g., Reliable Tool Co., 268 NLRB 101, 101 (1983). Regressive bargaining must be examined in the context of the parties' negotiations. In considering a party's justification for a change in proposals, the Board has held that although the reasons need not be totally persuasive, they must not be "so illogical as to warrant an inference that by reverting to these proposals [the party] has evinced an intent not to reach agreement and to produce a stalemate in order to frustrate bargaining." Hickinbotham Bros. Ltd., 254 NLRB 96, 103 (1981), cited in Barry-Wehmiller, 271 NLRB 471, 473 (1984).

The Board has found bad-faith bargaining where an employer's proposals and bargaining tactics, taken as a whole, evidenced an intent not to reach agreement. See, e.g., Wisconsin Steel Industries, 318 NLRB 212, 222 (1995); ConAgra, Inc., 321 NLRB 944, 945 (1996), enf. den. 117 F.3d 1435 (D.C. Cir. 1997). However, the Board generally finds regressive proposals to be lawful where they are preceded by good-faith bargaining, relate to an intervening change in the employer's circumstances (such as the successful weathering of a strike) or otherwise have a logical justification. See, e.g., Pipe Line Development Co., 272 NLRB 48, 51 (1985); Barry-Wehmiller Co., 271 NLRB at 472-473; and Reliable Tool Co., 268 NLRB at 101.

For example, in Challenge-Cook Bros., 288 NLRB 387 (1988), the Board held that the employer did not violate Section 8(a)(5) and (1) when it altered its bargaining position after the beginning of a strike. Specifically, the employer withdrew its retroactive pay and pension proposals and, for the first time, announced its desire to eliminate the Union security clause in the contract. The Board found this to be a "reasonable reaction" to the strike, noting that there was no evidence that the employer asserted its proposal disingenuously or that it was unwilling to discuss it with the union. Id. at 388-389.

Applying the foregoing principles, we decided that the Employer's overall conduct after the strike began did not indicate an intent to avoid reaching an agreement with the Union. Here, the Employer had specific reasons for changing its proposals. The Employer's first major change in position occurred in its first post-strike proposal (on May 22), where, in exchange for a wage freeze and concessions in various other areas, the Employer for the first time offered to continue the Union's health & welfare and pension funds. These changes were not made without any logical explanation but rather were based on developments in the negotiations, including the strike and the Union's refusal to agree to Company-run benefit funds. Given the Employer's concession on the key issues of the benefit funds, its May 22 reversion to earlier positions on wages and other issues cannot be considered regressive.

A second major change in position was made by the Employer on July 25 when it proposed once again to replace the Union's benefit funds with Company-run ones and offered a wage increase of $.25 per year. Although this proposal was regressive, it was made in light of actual changes in circumstances affecting the Employer's assets and the parties' bargaining positions. Costly vandalism had occurred, regardless of whether it was carried out by the striking employees. In addition, the Employer had successfully weathered a strike by using temporary replacement workers.

Moreover, throughout the negotiations the Employer had met regularly with the Union, presented numerous written proposals, and made concessions in important areas. In addition, the Employer's arguably or actually regressive proposals were not made at a time when the parties had reached, or were even close to reaching, a complete agreement, compare Mead Corp., 256 NLRB 686, enfd. 697 F.2d 1013 (11th Cir. 1983); Pittsburgh-Des Moines Steel Co., 253 NLRB 706 (1980), enf. den. 663 F.2d 956 (9th Cir. 1981); and Luther Manor Nursing Home, 270 NLRB 949 (1984), enfd. 772 F.2d 421 (8th Cir. 1985). And the Employer remained willing to bargain over each of its proposals. Finally, there has been no Employer conduct away from the bargaining table to suggest bad-faith bargaining. Accordingly, the lockout was lawful to the extent that it was not in furtherance of bad faith bargaining.

We then decided that the Employer's delay in notifying the Union that the employees were locked out pending the signing of a new agreement until four days after the employees offered unconditionally to return to work was not unlawful under Eads Transfer. 304 NLRB at 711. In Eads Transfer, the Board found that the Employer violated Section 8(a)(3) when it refused to reinstate economic strikers who unconditionally offered to return to work, where the Employer did not inform the strikers of a lockout until nearly three months after it received the first offers to return. The Board concluded that if the Employer wanted to "invoke the benefits of Harter to suspend effectively the Laidlaw rights of the strikers to return to work, it was obligated to declare the lockout before or in immediate response to the strikers' unconditional offers to return to work." Id. at 713 (emphasis added).

In our case, the Union suggested during the Thursday, July 25 bargaining session that the Employer return the employees to work while the parties continued to negotiate. The Employer indicated that it would check with Company management. Later that evening, the Employer told the Union that there might be conditions on the strikers' returning to work. Four days later, when employees appeared at the plant and asked to return to work, the Employer told them that they could return to work only when the parties had a signed contract.

In our view, the Eads Transfer requirement that the notice be "in immediate response" to the unconditional offer to return, does not mean "instantaneous." We reasoned that, as a practical matter, some time normally is required for an Employer to consider how it wants to respond to an offer to return to work. We therefore concluded that the four days (including a weekend during which the Employer "generally" did not operate) that elapsed in this case was not an unreasonable period of time. We noted that the Board accords an employer a reasonable period of time to reinstate unfair labor practice strikers. Indeed, the only cases where the Board has found an unreasonable delay in informing employees of lockouts were where employers had taken much longer than a few days to explain that the lockouts were in support of bargaining demands. Compare Eads Transfer and Highland Superstores, 314 NLRB 146 (1994) with Ancor Concepts, Inc., 323 NLRB No. 134, slip op. at 3, n.12 (1997).

Overruling The "Good Faith Doubt" Standard

In an important case, we argued that the Board should revise current standards under which an employer may (1) withdraw recognition from a Board certified incumbent union; and (2) conduct polls and/or file decertification election petitions involving incumbent unions.

In part one of a supplemental brief filed with the Board, we argued that the Board should overrule Celanese Corp. of America, 95 NLRB 664 (1951) (Celanese), and hold that no employer may lawfully withdraw recognition from a certified bargaining representative unless, at a time when the employer is still honoring its bargaining obligation, a majority of the employees reject union representation in a secret ballot election. Under our proposal, the rebuttable presumption of majority status accorded an incumbent Section 9(a) representative would be revised: a Board-conducted secret-ballot election (or its private agreed-upon equivalent) would become the only means by which that presumption could be rebutted. So-called "actual loss" evidence less reliable than a Board-conducted secret-ballot election would no longer be grounds for an employer's unilateral rupture of the bargaining relationship. Instead, "actual loss" evidence would be treated in the same manner that comparable "actual majority" evidence is treated under Linden Lumber Div., Summer & Co. v. NLRB, 419 U.S. 301 (1974). That is, such evidence would be insufficient to require a nonconsensual alteration of the representational status quo. We did not propose that the Board alter its blocking charge rules, although we noted that the proposed rules should result in fewer blocking charges, since there will be fewer occasions where employers withdraw recognition in advance of election.

In part two of our supplemental brief, we re-examined the appropriate standard for the Board's processing of employer decertification petitions and for evaluating the legality of the employer's conducting non-coercive polls. The Supreme Court in Allentown Mack Sales & Service v. NLRB, 118 S.Ct. 818 (1998) ("Allentown Mack"), had vindicated the Board's authority to maintain its traditional standards for employer polls and decertification petitions. However, we decided to argue that the current Board standard is insufficiently protective of the right of a majority of a unit to have an exclusive bargaining representative. We therefore argued that employer decertification petitions and noncoercive employer polls, that is, polls otherwise complying with the Board's standard in Texas Petrochemicals Corp., 296 NLRB 1057 (1989), remanded, on other grounds, 923 F.2d 398 (5th Cir. 1991), both should be appraised under the standard of United States Gypsum, 157 NLRB 652 (1966), as modified, to take account of the Supreme Court's decision in Allentown Mack and the Board's accumulated experience. United States Gypsum also should be modified, in our view, to make clear that the Board's test requires, not "doubt" in the sense of "reasonable uncertainty" (Allentown Mack 118 S.Ct. at 823), but an affirmative showing of "reasonable grounds for believing that the union has lost its majority" (United States Gypsum, 157 NLRB at 656).

The United States Gypsum standard should be further modified to provide clearer guidance concerning its evidentiary requirements. We proposed that, absent special circumstances, employer decertification petitions should be processed, and Texas Petrochemicals polls be found lawful, only where three conditions are satisfied: (1) there is direct evidence that at least 30% of the unit does not want union representation; (2) in addition, there is other evidence warranting a reasonable belief that other employees feel similarly; and (3) that objective evidence, viewed in its totality, supports a reasonable belief that the union no longer has the support of a majority. Under our proposed rules, we anticipated that employers will conduct Texas Petrochemicals polls, not to demonstrate support for an RM petition, but to test out their reasonable loss-of-majority beliefs in order to determine quickly and inexpensively whether to invite the greater costs of a Board-conducted election.

PART 1: The Board should overrule Celanese on the ground that experience has demonstrated that the Celanese rules no longer well serve the statutory policy of exclusive representation and majority rule.

Under Celanese, an employer may lawfully break off a Section 9(a) relationship by showing either that (1) the union did not in fact enjoy majority status at the time of its refusal to bargain; or (2) the employer had a good faith doubt, founded on a sufficiently objective basis, that the union no longer had the support of a majority. Although the Celanese rules are longstanding, the Supreme Court has never expressly considered their validity, NLRB v. Curtin Matheson Scientific, Inc., 494 U.S. 775, 788 n.8 (1990), and the Board's power to alter those rules "remains an open question." Id. at 800-801 (Blackmun, J., dissenting). See also Allentown Mack, 118 S.Ct. at 823-824 n.2, 828-829 (same).

In their origin, the Celanese rules for the nonconsensual ending of a bargaining relationship were rationally related to the Board's rules for the nonconsensual beginning of a collective bargaining relationship. Under the early regime of Joy Silk Mills, Inc., 85 NLRB 1263 (1949), enfd. 185 F.2d 732 (D.C. Cir. 1950), cert. denied, 341 U.S. 914 (1951), an employer confronted with authorization cards or similar evidence that an actual majority of its employees had selected a union to represent them had an affirmative duty to consider that evidence and could not insist on an election without a good faith doubt of its reliability. Under such a regime, an employer that, at an appropriate time, was confronted with comparable evidence supporting a good faith doubt that its employees no longer wanted union representation could, with consistency, act on that evidence to break off a bargaining relationship. Celanese approved just such a result.

As recognized by the Supreme Court in NLRB v. Gissel Packing Co., 395 U.S. 575, 592-594 (1969), the Board gradually abandoned the Joy Silk doctrine. In Aaron Brothers, 158 NLRB 1077 (1966), the Board made it clear that an employer faced with an initial bargaining demand "no longer needed to come forward with reasons" for rejecting it. Gissel, 395 U.S. at 593. The rule that an employer "need give no affirmative reasons for rejecting a recognition request" (Id. at 594) was thereafter further extended in Linden Lumber Div., Summer & Co. v. NLRB, 419 U.S. 301 (1974).

In Linden Lumber, the Supreme Court upheld the Board's conclusion that an employer that has not engaged in any unfair labor practices impairing the Board's election processes (and that has not otherwise agreed to be bound by a less formal procedure) has an absolute right to refuse to consider any evidence of majority status other than the results of a Board election. Evidence less reliable than a Board-conducted election, such as authorization cards, petitions, or participation in a recognitional strike, was deemed too equivocal a basis to require an employer either to grant initial recognition or even to file an election petition. Id. at 305-306. Moreover, if an employer did grant voluntary recognition on the basis of evidence less reliable than a Board election, and it turned out to be mistaken about the fact of the union's majority, the employer's good faith in granting recognition would not save it from being found to have unlawfully assisted a minority union. Garment Workers v. NLRB (Bernhard-Altmann), 366 U.S. 1 (1961).

Since Linden Lumber transformed the landscape of initial recognition law, the Board's continued adherence to the Celanese rules for ending a bargaining relationship has produced a number of anomalies that call into question the consistency and the fairness of the Board's rules. Under Linden Lumber, an employer confronted with evidence that a majority of its employees desire union representation is nevertheless entitled to insist its employees be afforded the full panoply of procedural protections afforded by the Board's election processes (as well as by judicial review) before being required to recognize that choice. The Section 7 rights of those employees who may wish to refrain from collective bargaining are thus scrupulously protected against encroachment, while the Section 7 rights of employees who want collective bargaining are deferred, sometimes for years. Under Celanese, by contrast, that same employer is entitled to rely on the same kind of informal evidence that it spurned as a justification for beginning bargaining to terminate a bargaining relationship. The employees' right to bargain is thus given short shrift, while the employees' right to refrain is instantly gratified.

Moreover, Linden Lumber, in combination with Bernhard-Altmann, provides a positive disincentive to an employer's granting voluntary recognition in good faith by holding the employer to strict account if the union in fact lacks a majority. The Celanese rules, by contrast, privilege an employer who breaks off a bargaining relationship in good faith, even if the union in fact represents a majority. In this circumstance as well, the Board's rules are skewed in favor of the rights of those employees who wish to refrain from collective bargaining, not those who demonstrably want it.

Finally, Linden Lumber holds that an employer has no duty to act on "actual majority" evidence less reliable than a Board-conducted election when presented with a demand for initial recognition. Under Celanese, however, the Board has interpreted Section 8(a)(2) to require an employer to break off bargaining with an incumbent union when presented with "actual loss" evidence less reliable than the results of a Board election. See, e.g., Maramount Corp., 317 NLRB 1035 (1995) ("An employer is not privileged to continue recognizing a union as its employees' exclusive representative when the employer has objective evidence that the union no longer represents a majority of its employees.") And despite the Board's avowed preference for resolving representational disputes through the protective procedures of a Board-conducted election, see Underground Service Alert, 315 NLRB 958 (1994), the Board permits an employer unilaterally to break off an existing bargaining relationship, even while an election petition is pending, on the basis of evidence that Linden Lumber deems too uncertain to require the employer to alter the representational status quo. See, e.g., Atwood & Morrill Co., 289 NLRB 794 (1988). That result fails to heed the Supreme Court's longstanding dictum that an employer's self-help reliance on employee rights to break off bargaining relationships is not conducive to industrial peace. Brooks v. NLRB, 348 U.S. 96, 103 (1954); Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 50 n.16 (1987).

In our view, the time has come to end the foregoing anomalies in Board law and to bring the law governing the nonconsensual ending of collective bargaining relationships into harmony with the law governing the commencement of such relationships. Accordingly, we argued that the Board should overrule Celanese and hold that no employer may lawfully withdraw recognition from a certified bargaining representative unless, at a time when the employer is still honoring its bargaining obligation, a majority of the employees reject union representation in a secret ballot election conducted at an appropriate time. Under our proposed rule, absent an agreement by the employer and the incumbent union to test majority status by another means, a Board-conducted election should be the only means by which an otherwise lawful Section 9(a) bargaining relationship could be broken off.

Part 2: Celanese's good faith doubt standard should be abandoned as a measure for evaluating employer election petitions or polls questioning majority status

The Celanese good faith doubt standard is one of the bases for both the Texas Petrochemicals polling standard and the United States Gypsum decertification election petition standard recently considered by the Supreme Court in Allentown Mack. While an inquiry similar to that now conducted under the good faith doubt standard should continue to be a part of Board law, we argued that the Board's current standard should be both revised and clarified.

Initially, we argued that the standard for employer decertification petitions and polls should be the same. We noted recent discussions concerning the differences and similarities between employer polls and Board elections, (e.g., Allentown Mack, 118 S.Ct. at 829-833 (Rehnquist, C.J., dissenting); Texas Petrochemicals, 296 NLRB at 1060-1061). These discussions insufficiently emphasized a relevant similarity that, in our view, justifies the Board's continuing to decide the appropriateness of employer polls and decertification petitions by reference to the same standard. That relevant similarity is that, in both cases, the incumbent union is required to turn its attention from representing employees to getting out the vote on a particular day.

Unions, like other organizations, have limited resources, and concentrating their resources in one area often means diluting them in another. For that reason, the stability interest vindicated by the various Board rules regulating the appropriateness of conducting an election has long been expressed in terms of guarding against "[t]he danger of permitting an employer to disrupt bargaining and continuously challenge a Union's majority, diverting its attention and resources from representing the workers to defending itself." Peoples Gas Sys. v. NLRB, 629 F.2d 35, 44 (D.C. Cir. 1980).

The Board's United States Gypsum standard is addressed to that same danger. United States Gypsum is a reasoned effort to deter unwarranted employer petitions that would impair "uninterrupted and stable bargaining relationships" by needlessly compelling incumbent unions "to engage in endless election campaigning" at the end of each contract. 157 NLRB at 655. Employer polling presents an identical danger. Accordingly, we argued that the Board should continue to regulate Texas Petrochemicals polling under the same standard it applies to employer decertification petitions.

We proposed that, absent special circumstances, employer decertification petitions should be processed, and Texas Petrochemicals polls be found lawful, only where three conditions are satisfied: (1) there is direct evidence that at least 30% of the unit does not want union representation; (2) in addition, there is other evidence warranting a reasonable belief that other employees feel similarly; and (3) the objective evidence, viewed in its totality, supports a reasonable belief that the union no longer has the support of a majority.

The proposed 30% minimum reconciles a number of opposed concerns. On the one hand, a policy of employee free choice that is based on majority rule is inherently number-driven. The Board, in administering its Celanese standards, has thus appropriately been concerned about the extent of so-called "head count" evidence of loss of majority. As the Board has explained, unsolicited statements from unit employees that they no longer want union representation are "[t]he most persuasive evidence" in support of a claim of good faith doubt. Liquid Carriers Corp., 319 NLRB 317, 319 (1995), enfd. 101 F.3d 691 (3d Cir. 1966). On the other hand, judicial concerns have been voiced that the Board cannot fairly "insist that good-faith doubt be determined only on the basis of sentiments of individual employees," without also easing its restrictions on employer polling. NLRB v. Curtin Matheson Scientific, Inc., 494 U.S. 775, 797 (1990)(Rehnquist, C.J., concurring) (emphasis supplied).

In Allentown Mack, the Court appeared to be satisfied that a 20% showing would be too low but thought a demand for a 50% "head count" showing would be too high. 118 S.Ct. at 824. That perception is consistent with the 30% standard that is the Board's traditional measure for determining whether an employee decertification petition should be processed. See Dresser Industries, 264 NLRB 1088 (1982). The Board, in any event, would be justified in insisting that an employer decertification petition that purports to vindicate the employees' organizational rights should not be processed without first meeting that traditional standard.

Requiring a minimum showing that at least 30% of the unit employees have expressed opposition to continued union representation would introduce a degree of certainty into a legal standard that has long been criticized for being too unpredictable in operation because of "the shifting views of the members of the Board and the courts . . . ." Peoples Gas Sys. v. NLRB, 629 F.2d 35, 44 (D.C. Cir. 1980). The new minimum requirement would continue to screen out cases where the Board previously found no good faith doubt. See, e.g., Tile, Terrazzo & Marble Contractors Assn., 287 NLRB 769, 784 (1987) (28 of approximately 100 employees). While the new requirement would appear also to screen out some cases where the Board did previously find good faith doubt, see, e.g., J&J Drainage Prods. Co., 269 NLRB 1163, 1163 n.1, 1171 (1984) (6 of 32 employees); Stormor, Inc., 268 NLRB 860, 867 (1984) (20% of employees), it would sweep in, not only cases where the Board has found a good faith doubt, see, e.g., U-Save Food Warehouse, 271 NLRB 710, 715 (1984) (3 of 9 employees), Naylor, Type & Mats, 233 NLRB 105, 107-108 (1977) (13 of 31 employees), but also cases where reviewing courts have criticized the Board for failing to do so. See, e.g., Tube Craft, Inc., 289 NLRB 862, 871 (1988) (5 of 12 employees), and Johns-Mansville Sales Corp., 289 NLRB 358, 361 (1988) (217 of 509 employees). On balance, the new refinement would appear to be an improvement over the existing standard.

2. We then argued that a 30% standard is a necessary, but not sufficient, condition for employer decertification petitions and polling: something more than a 30% "head count" is required to guard against the danger that employer decertification petitions will be filed or employer polls held, not because 50% of the employees are desirous of a change, but because the employer finds it advantageous to divert the incumbent union's "attention and resources from representing workers to defending itself." Peoples Gas Sys. v. NLRB, supra, 629 F.2d at 44. Under our proposed rule, that gap would have to be filled by other reliable evidence justifying a belief that there are enough other employees with similar sentiments that the union has lost its majority. The guidance that Board cases give concerning what kinds of evidence the Board finds persuasive would thus continue to be relevant under the new standard we propose.

Implicit throughout the foregoing discussion was our assumption that the Board will decide to abandon "good faith doubt" as a standard for an employer's challenging an existing bargaining relationship and substitute a test requiring that the employer, as a condition of Texas Petrochemicals polling or having its decertification petition processed, first demonstrate by objective evidence that there are affirmative reasons to believe that the incumbent has lost its majority. That, in our view, has long been the Board's intent, but, as the Supreme Court squarely held in Allentown Mack, if that is the Board's intent, it has not been expressed with the requisite clarity in the Board's decisions. 118 S.Ct. at 823-829.

The problem is illustrated in the Board's decision in Laystrom Manufacturing Co., 151 NLRB 1482, 1484 (1965), where the Board explained its Celanese standard as follows:

The applicable test, as defined in the Celanese case, is whether or not the objective facts furnish a "reasonable basis" for the asserted doubt, or, put another way, whether or not there are "some reasonable grounds for believing the Union has lost its majority status since its certification."

The difficulty with that formulation, according to Allentown Mack, is that "doubt" by definition means "uncertainty," not "belief." Allentown Mack, 118 S.Ct at 823. The Court held that by formally maintaining a "doubt" standard, while apparently administering a "belief" standard, the Board has, for too many years, been "applying a rule of primary conduct or a standard of proof which is in fact different from the rule or standard formally announced." Id. at 827. The result has been to prevent "both consistent application of the law by subordinate agency personnel (notably administrative law judges), and effective review of the law by the courts." Id.

It would be appropriate in these circumstance for the Board to make clear what its standard is. A fair balancing of the interests of bargaining stability and employee free choice warrants a rule that holds that mere uncertainty not only is an insufficient justification for breaking off a lawful bargaining relationship, but also is an insufficient justification for employer decertification petitions and polls. We therefore argued that the Board's formulation of its traditional standard should therefore be modified to make clear that the Board's test requires, not "doubt" in the sense of "reasonable uncertainty" (Allentown Mack. 118 S.Ct. at 823), but an affirmative showing of "reasonable grounds for believing that the union has lost its majority" United States Gypsum, 157 NLRB at 656.

Insisting to Impasse On Union-Security Clause

In another case, we considered whether an employer could insist that a union-security clause contain language informing employees of their rights under NLRB v. General Motors, 373 U.S. 734 (1963), and CWA v. Beck, 487 U.S. 735 (1988).

The Union and the Employer had had a bargaining relationship covering two units for some 50 years. The existing union-security clauses required new employees to "apply for membership in the Union with[in] thirty (30) days after date of their employment and pay or tender payment of established dues and initiation fee" and to remain members thereafter. The charge alleged that in bargaining for new collective-bargaining agreements, the Employer had insisted that the former union-security clause be replaced by the following clause:

All members of the bargaining unit shall, as a condition of employment, fulfill at least financial core obligations to the union. In the event new employees are hired, such employees shall within thirty days of hire, be subject to the same financial core requirements as current employees. Such obligations can be met in one of two ways: (1) union membership and the payment of uniform periodic dues and initiation fees, or (2) non-membership in the union and the payment of an amount equivalent to such portion of dues and fees necessary to enable the union to perform the duties of an exclusive representative of the employees in dealing with the employer on labor-management issues. The appropriate portion required of non-members shall be calculated by the union subject to acceptable accounting standards and in accordance with the requirements of the Labor Management Relations Act of 1947, as amended.

The Union insisted that the old clause be retained.

Complaint issued on the theory that the foregoing clause proposed by the Employer constituted an unwarranted intrusion into the relationship between the Union and the employees it represented, because the clause related to the amount of agency fees the Union could collect. Hence, because the Employer had insisted on specific contract language, namely the union-security clause set forth above, insistence on the clause constituted insistence on a permissive subject of bargaining. This theory relied on Service Employees Local 35 (North Bay Center), 287 NLRB 1223 (1988), enfd. 905 F.2d 476 (D.C. Cir. 1990), and Briarcliff Pavilion, 260 NLRB 1374, enfd. mem. 725 F.2d 669 (3d Cir. 1983).

At trial, a Union official testified that the Employer insisted that it needed the above union-security clause. On cross-examination, however, the Union official retreated from the above testimony and agreed that the Employer also said that it wasn't wedded to the exact language of the union-security clause. The Employer witness testimony, buttressed by the Employer's bargaining notes, established that the Employer had indeed proposed the foregoing clause, but had also said that it did not insist on the clause language verbatim; it said it would consider any other clause which informed employees of their General Motors and Beck rights. Thus, the evidence adduced during the trial shows that the Employer had not insisted to impasse on any particular union security language but had insisted to impasse that the clause in some way reflect an employee's Beck rights.

We decided to inform the ALJ that we wished to withdraw the complaint and dismiss the charge.

The evidence presented at trial established that the Employer insisted to impasse on a clause that reflected both the Supreme Court's General Motors and Beck interpretations of the type of union-security clause that the proviso to Section 8(a)(3) permits. The Board has long held that an agency shop clause or a clause requiring employees to pay dues and initiation fees as a condition of employment is a mandatory subject of bargaining. See, e.g., General Motors Corp., 133 NLRB 451 (1961). Therefore, the question became whether the Employer's additional insistence that the clause reflect an employee's Beck right made the clause nonmandatory. We believed not, if, like the agency shop clause, the clause reflects only an obligation to pay.

Thus, a union-security clause which only informs employees that all that is required as a condition of employment is that they pay the equivalent of initiation fees and dues or only representational expenditures is a mandatory subject of bargaining, and does not intrude into areas which are reserved to the sole discretion of the union. Such a clause which is limited to informing employees of those rights and obligations does not prevent a union from designing Beck notices of its own choosing and from devising accounting and dispute resolution procedures which are appropriate to its own situation.

As noted above, it is axiomatic that union security is a condition of employment and therefore a mandatory subject of bargaining. See, e.g., NLRB v. Andrew Jurgens, Co., 175 F.2d 130, 133 (9th Cir. 1949); United States Gypsum Co., 94 NLRB 112, 114 fn. 9 (1951). Once that is established it is difficult to then argue that wording that accurately reflects the union security obligation under the Section 8(a)(3) proviso as interpreted by the Supreme Court makes the clause nonmandatory.

Most recently, the Board held, in California Saw and Knife Works, 320 NLRB 224 (1995), enfd. 133 F.3d 1012 (7th Cir. 1998), and Paperworkers Local 1033 (Weyerhaeuser Paper Co.), 320 NLRB 349 (1995), rev'd sub nom. Buzenius v. NLRB, 124 F.3d 788 (6th Cir. 1997), that employees subject to union-security clauses have the right, as a condition of employment, to be told that they can object to paying for more than the portion of their bargaining representative's expenditures that are germane to collective bargaining.

In sum, a clause that sets forth an employee's right to pay only representational expenditures is a mandatory subject of bargaining, because its relation to the amount of fees to be paid to a union is remote.


Disclosure and Chargeability Under The Beck Decision

In another case, we considered whether a Local's disclosure of financial information required by CWA v. Beck, 487 U.S. 735 (1988), was unlawfully deficient where (1) the Local failed to provide information about the expenditures of an affiliated union; and (2) the Local's listed categories of expenses included numerous "mixed categories" which contained both chargeable and nonchargeable expenditures.

The Local remitted $1787.50 of dues to a state-wide affiliate organization, claimed those dues as fully chargeable, but failed to provide information about the expenditures of that affiliated union. The Board has held that one of the financial disclosure obligations of a union under Beck includes the duty to provide summaries of the major expenses of affiliated organizations to which the union remits union-security collected dues. The Local in this case asserted that it need not have provided financial information concerning the affiliate because its dues remitted to that affiliate constituted a de minimis amount of the Local's total expenditures. We noted, however, that there was no contention that the Local's remitted dues, together with similar remitted dues from other Locals, constitute a de minimis amount of income to the affiliated organization receiving these types of union dues.

We decided that, absent evidence that these dues are de minimis in total, i.e., both as expenditures of the local unions and also as income to the receiving affiliate, we would not dismiss this otherwise meritorious allegation on the ground that further proceedings would not effectuate the policies of the Act. In other words, we decided that where a local union forwards a very small percentage of its dues to an affiliated organization, such as to its state-wide district or to its international union, such a small percentage of local dues would not be a basis for ignoring those amounts on a de minimis basis. Accordingly, we decided to issue complaint alleging that the Local's financial disclosure unlawfully failed to provide a breakdown of the expenses of the state-wide affiliate to which the Local remitted a portion of its union-security collected dues.

We next decided that the Local's disclosure was also unlawfully deficient because its excessive use of "mixed categories" constituted a failure to properly list the major categories of both its own expenses and those of the International Union to which the Local remitted a portion of union-security collected dues.

The Local's financial disclosure for its International listed fifteen categories of expenses. Almost all of the listed categories - thirteen of the fifteen - were "mixed categories" which were required to be further broken down into chargeable and nonchargeable amounts. The two largest listed categories were "mixed", viz., "Salaries" expenses of $2.7 million, and "Servicing and Organizing" expenses of $2.6 million. These two "mixed" categories alone amounted to more than 50% of the International's total expenditures. The financial disclosure for the Local's expenses listed seven "mixed" categories out of the total of 18 categories. However, the "mixed" categories comprised $127,700 of the Local's total expenses of $162,700. Therefore, the totaled "mixed" categories amounted to over 78% of the Local's total expenditures.

The Board has addressed a union's use of "mixed" category expenses noting "the potential for unlawful manipulation by a union hiding nonchargeable expenses..." California Saw and Knife Works, 320 NLRB 224, 240 (1995). The Board sanctioned only "the limited use of mixed categories" (emphasis in original) noting the impracticality of providing all backup data and the slight burden imposed upon objectors to challenge the union's calculations for such mixed categories.

We decided that both the Local and the International unlawfully placed the majority of their respective expenditures into "mixed" categories. In our view, this was not a "limited" use, and improperly placed on the Beck objectors the burden of challenging the calculations for major portions of expenditures as well as for the most important expenditures. Accordingly, we decided to issue complaint alleging that the Local's financial disclosure unlawfully failed to properly provide a breakdown of expenditures into major categories of expenditures.


Changing Dispatch Procedures

In another case, we considered whether a Union violated the Act by changing its long established dispatch practices.

For more than 20 years, the Union had dispatched employees based on employer requests for named employees. Citing the collective bargaining agreement and the unfair distribution of work among users of the hiring hall resulting from the current practice, the Union announced to its membership and to signatory employers that it was changing its hiring hall procedures and would no longer allow employers to call employees from the hiring hall by name. The Charging Party Employer rejected the Union's offer to discuss the proposed change arguing that under Section 8(d) of the Act, it was under no obligation to do so. The Union thereafter implemented the change and refused to honor name requests from signatory employers.

The applicable collective-bargaining agreement required a signatory employer needing workers to notify the Union of the location, starting time, duration, type of work to be performed, rate of pay and number of workers needed. The employer had the right to reject any job applicant referred by the Union, provided it did not discriminate on the basis of union membership or activities. The Union was to furnish workers with the qualifications and license requested and was to select applicants on a nondiscriminatory basis, also unaffected by union membership. If the Union was unable to furnish workers, an employer would be free to procure workers from any other source as casual employees on a one day basis.

The contract also contained a "zipper clause" providing that the agreement constituted the sole and entire existing agreement between the parties and superseded all prior agreements or commitments, oral or written, and expressed all the obligations of and restrictions imposed upon each of the respective parties during its term. The zipper clause further provided that the agreement could be altered or amended only by written agreement and that the waiver of any breach or any term or conditions by either party would not constitute a precedent for the future waiver of any breach, or term or condition, nor deprive such party of the full benefit of rights under the agreement pertaining to any breach, term or condition. Finally, the Union's published hiring hall rules and regulations stated that they were subject to the provisions of the applicable collective bargaining agreements and were not to be interpreted in any manner which was inconsistent with such agreements.

We decided that the Union's long-standing practice of permitting the employer to request that named individuals be referred for employment had become an implied term of the collective bargaining agreement and that the Union violated Section 8(b)(1)(A) and (2) of the Act by unilaterally failing to comply with such implied term.

It is well settled that an employer [or union] violates the Act by changing a term of a collective bargaining agreement during its term without the consent of the other party. Bonnell/Tredegar Industries, 313 NLRB 789, 790 (1994), enf'd., 46 F.3d 339 (4th Cir. 1995). In Bonnell, the Board found that the past formula used by the employer to determine the amount of Christmas bonuses was an implied term of a contract providing that the bonus plan "shall remain in full force and effect during the term of this Agreement." Id. at 791. The Board noted that an "implicit contract term is just as significant for Section 8(d) purposes as an express term." IbId. It further found that a "zipper clause" does not effect "obligations, restrictions, agreements, commitments and practices that are part of the bargaining agreement." IbId. Thus, the union in Bonnell was not obligated to bargain regarding the bonus during the term of the agreement and the employer could not lawfully change the formula used to determine bonuses. See also, Smiths Industries, 316 NLRB 376, 376 (1995)(a long-standing past practice regarding employee paid time to perform union business became an implied term and condition of employment, even if the practice may have deviated from the letter of the parties' agreement); Keystone Consolidated Industries, 309 NLRB 294, 296-297 (1992). Cf. E. I. du Pont, 294 NLRB 563 (1989), remanded sub nom. Martinsville Nylon Employees v. NLRB, 969 F.2d 1263 (D.C. Cir 1992).

We decided that the zipper clause did not preclude this result. The zipper clause remained unchanged when the current agreement was negotiated and the Union had maintained the same practice for many years prior to the negotiation of the existing agreement, as well for an additional year after the current agreement went into effect. The contract provided for a hiring procedure, but like the bonus provision in Bonnell, did not provide specifics with respect to the dispatch of employees. Moreover, although the agreement did not specifically provide for dispatches based on name requests from an employer, neither did it provide for a rotational dispatch system as instituted by the Union. Accordingly, it was concluded that the parties intended to continue the long-standing practice of allowing for name calls, which remained unchanged following negotiation of the extant agreement despite the continuation of the zipper clause.

Finally, we considered Board precedent holding that a union operating an exclusive hiring hall violates Section 8(b)(1)(A) and (2) if it departs from "clear and unambiguous standards set out in a collective bargaining agreement." Stage Employees Local 545 IATSE (Greater Miami Opera Assn.), 310 NLRB 763, 771 (1993). We noted that the language in the instant bargaining agreement was not clear and unambiguous. However, because the long-standing past practice allowing for name calls had become an implied term of the agreement, we also determined, consistent with the above precedent, that the Union violated Section 8(b)(1)(A) and (2) by unilaterally changing that term without demonstrating that such change was "necessary to the effective performance of its representative function." Plumbers Local 38 (Bechtel Corp.), 306 NLRB 511 (1992). See also, Electrical Workers IBEW Local 1579 (CIMCO), 311 NLRB 26, 30 (1993).

Employer Change of "Call Out" Procedure

In another case, similar to the case above, we considered whether an employer arguably violated the Act by unilaterally modifying the terms of an extant collective bargaining agreement by changing past practice and implementing new overtime "call out" procedures for maintenance employees.

The parties had a long term collective bargaining relationship and had agreed to a current contract which contained language regarding call out procedures. Both parties agreed that the call out procedures, when adopted many years previously, had applied only to production employees and did not cover maintenance employees. However, the Union contended that upon elimination of a certain unit position some 15 years earlier, the parties had begun following the same call out procedures for maintenance employees. The Union further contended that during the term of the prior collective bargaining agreement, that the Employer had sought to meet and discuss the development of the call out procedures as they related to maintenance employees but had not pursued the matter after the Union took the position that it would not agree to changes absent a written mutual agreement, as envisioned by the contract. When the Employer raised the matter during the term of the current agreement, the Union again indicated that it would be willing to engage in formal discussions but only if the Employer agreed that it would not make changes absent a written mutual agreement. Ultimately the Employer implemented its changes, without agreement by the Union, and the Union filed a grievance alleging violations both of the contract and past practice.

The Union argued that the change in procedures amounted to a mid-term modification of the contract and, as such, required mutual agreement. The Employer acknowledged that the past practice had become a term and condition of employment about which it had to bargain but contended that since it was not included in the written contract, it was privileged to implement the change upon an impasse in negotiations.

We decided that the past practice had arguably become not only an implied term and condition of employment, but also, since the practice followed the contractual language regarding call out procedures, an implied contract term. As such, the Employer was not privileged to make changes during the term of the contract, absent mutual agreement.

In reaching this decision, we relied on the cases cited in the above case and concluded that a broad reading of Bonnell/Tredegar Industries, 313 NLRB 789, 790 (1994), enfd. 46 F.3d 339 (4th Cir. 1995), supports the argument that the absence of a written provision specifically mentioning call out procedures for the maintenance employees did not preclude finding that the past practice, which paralleled the contractual provision for the production employees, had become an implied term of the contract.

Although the parties agreed that the contractual provision was intended to apply only to the production employees at the time it was originally negotiated, the language in the provision did not limit its applicability to production employees. Moreover, it appeared that the provision had long been applied to maintenance employees. In these circumstances, particularly given the lack of timely negotiations to create a specific procedure for the maintenance employees, such practice had arguably became an implied term of the contract. Thus, as in the above case, the fact that the Union declined to discuss the issue would not privilege the Employer to implement its changes unilaterally.

We further concluded, assuming the Employer agreed, that the matter was appropriate for resolution through the parties' grievance-arbitration machinery. As explained in United Technologies Corp., 268 NLRB 557 (1984), deferral is appropriate when the following criteria are present: the dispute arose within the confines of the a long and productive collective-bargaining relationship; there is no claim of employer animosity to the employees' exercise of protected rights; the parties' contract provided for arbitration in a very broad range of disputes; the arbitration clause clearly encompasses the dispute at issue; the dispute is eminently well suited to such resolution; and, the employer has asserted its willingness to utilize arbitration to resolve the dispute.

In our case, the Union had filed a grievance over the change, indicating that the dispute was cognizable under the contract, and it appeared that the parties' respective positions as to whether the contractual call out procedures were applicable to the maintenance employees raised issues of contract interpretation. See, e.g. Textron Lycoming, 310 NLRB 1209 (1993)(deferral appropriate when language in letter agreement that supplemented the contract created a question concerning how the contract clause should be interpreted); Public Service Co. Of Oklahoma, 319 NLRB 984 (1995)(deferral of direct dealing allegation based on contract language recognizing Union as sole and exclusive "bargaining agency").


Liability Of Joint Employer

In another case, we considered whether an Employer had sufficient knowledge of and acquiescence in unfair labor practices of its joint employer to impose liability under Capitol EMI Music, 311 NLRB 997 (1993).

The evidence established that an electric contractor and a staffing company were joint employers, and that the contractor violated Section 8(a)(1) and (3) by making unlawful statements to two union employees referred by the staffing company and unlawfully terminating them. We decided that the staffing company was not liable for its joint employer's unfair labor practices.

In Capitol EMI Music, supra, the Board held that a temporary employment agency (Graham) was not liable for the Section 8(a)(3) discharge of an employee committed solely by its customer (Capitol), and that the unlawful conduct of the customer could not be imputed to the temporary agency merely because the two entities were joint employers of the discharged employee. However, the Board stressed that its holding "is a narrow one, dependent on the nature of the particular joint employer relationship and the absence of evidence suggesting that Graham either knew, or should have known, of Capitol's unlawful motives." Id. at 997. The only reasons for the discharge given by Capitol to Graham were legitimate on their face and were not disputed by the discharged employee when recounted to him by Graham's manager. Moreover, Graham received no information putting it on notice of Capitol's unlawful motive that "would have required Graham to check further on Capitol's reasons for requesting [the employees'] removal." Id. at 1001.

In our case, unlike in Capitol EMI, the employment agency was put on notice that the discharged employees might have been discharged because of protected union activity. Thus, one of the employees told the agency that the contractor's field manager had said the termination was not related to his work or ability. However, the agency discussed the termination with the contractor, and was told that the employee was terminated for violating its no-solicitation/no-distribution policy, despite having been warned not to do so. The contractor also told the agency that the job would end the next day, so that no replacement was necessary, and indeed did not request further referrals. There was no evidence that the agency knew or should have known that the contractor was fabricating its reasons for removing the employee.

We decided that, in those circumstances, it was not unreasonable that the agency did not investigate further as to whether the employee had been soliciting and distributing Union literature during work times and in work areas, as alleged by the contractor, and did not seek to examine a copy of the contractor's no-solicitation policy. We noted that the agency did not sanction the unlawful termination by sending a nonunion employee as a replacement, and that the agency assured the employee that it would continue to refer him to electrician jobs, and offered to put him to work as a laborer until an electrician's job became available. Based on all of those factors, we concluded that the agency did not unlawfully acquiesce in the contractor's unlawful discharges and should not be held jointly liable for the unfair labor practices.

Retroactive Remedy for Union Fines

In another case, we considered the ramifications of fines against Union members for having crossed a Union picket line, where those members, employed under a contract with a union-security clause requiring "membership in good standing" in the Union, had never been informed of their rights to become only "financial core members" under NLRB v. General Motors Corp., 373 U.S. 734 (1963)("General Motors") and Communications Workers v. Beck, 487 U.S. 735 (1988)("Beck"), in violation of Section 8(b)(1)(A).

The union-security clause contained in the parties bargaining agreement required Union "membership in good standing" as a condition of employment. However, the contract did not define membership, did not indicate that full Union membership was not required, and did not indicate that an employee could satisfy this obligation by paying representational fees. There was also no evidence that the Union notified employees of their right to be a nonmember, or of their right to pay only representational dues and fees.

During a strike following expiration of the contract, four Union members (the Charging Parties) crossed the picket line and returned to work without first attempting to resign their membership. After returning to work during the strike, the Charging Parties learned of their right to resign from Union membership, and to object to nonrepresentational Union dues. Each Charging Party then mailed the Union a letter resigning Union membership; three also objected to the use of their Union dues and fees for activities unrelated to representation.

The Union sent each Charging Party a letter informing them that they had been charged with violating an article of the International Union's constitution prohibiting the crossing of an authorized picket line and working for a firm whose employees are on strike. None of the Charging Parties attended Union hearings on these charges. Each was found guilty of having violated the constitution and was fined for each day worked during the strike prior to resignation. The Union had not yet attempted to collect the fines.

We noted that the Charging Party individuals did not allege that the union-security clause was unlawful on its face. We decided first that the Union violated Section 8(b)(1)(A) by having failed to inform these employees of their right to be nonmembers, and also of their right to pay only Union dues and fees related to representational activities prior to obligating the employees pursuant to a union-security clause.

In Electrical Workers, Local 444 (Paramax Systems), 311 NLRB 1031, 1040 (1993), enf. denied 41 F.3d 1532 (D.C. Cir. 1994)(Paramax) the Board held that, as part of its duty of fair representation, a union that negotiates a union-security clause requiring employees to be union "members in good standing" has an obligation to inform employees "that their sole obligation under the union-security provision [is] to pay dues and fees." The notice requirement was imposed because the Board, for the first time, concluded that "members in good standing" union-security clauses are ambiguous and misleading as employees may erroneously "interpret the clause as requiring full membership and all attendant financial obligations. . . . ." Such an interpretation is contrary to the Supreme Court decisions in General Motors and Beck which respectively hold that employees subject to a union-security clause have the right to be nonmembers (subject to the duty to pay periodic union dues and fees), and that a union has a fiduciary duty not to spend an objecting nonmember's dues and fees on nonrepresentational activities.

Even where there is no alleged ambiguity in the union-security clause, the Board has held that a union likewise breaches its duty of fair representation when it fails to provide employees a one-time notice "of the statutory limits on union-security obligations" as set forth in Beck and General Motors prior to obligating them to pay dues under the union-security clause. See Paperworkers, Local 1033 (Weyerhauser), 320 NLRB 349, 350 (1995), rev'd sub nom. Buzenius v. NLRB, 124 F.3d 788 (6th Cir. 1997), petition for cert. filed 66 U.S.L.W. 3427 (Dec. 8, 1997)

In our case, the Union violated Section 8(b)(1)(A) and its fiduciary duty to the Charging Parties under the rationales of both Paramax and Weyerhauser. Like the union in Paramax, the Union had negotiated a union-security clause requiring that employees be and remain Union "members in good standing", which has the potential to mislead employees into believing they must be full dues-paying Union members in order to keep their jobs. Additionally, as in Weyerhauser, the Union breached its fiduciary duty by obligating the Charging Parties to a union-security clause without providing them a one-time notice of their rights under Beck and General Motors.

We noted that the remedy under extant Board law for these violations includes giving retroactive effect to resignation from Union membership. We therefore also decided to argue that the Union's disciplinary action against the Charging Parties for having crossed the picket line subsequent to their retroactive resignations should be vacated.

In a recent decision involving a union's failure to inform employees of their Beck and General Motors rights, Rochester Mfg. Co., 323 NLRB No. 36, slip op. at 3-4 (1997), petition for review pending sub nom. Cecil v. NLRB (6th Cir., No. 97-5302), the Board held that, in order to fully restore the status quo ante, the appropriate make-whole relief should include "nunc pro tunc reimbursement" of all nonrepresentational dues to employees who failed to receive such notification and who elect to become nonmember objectors after receiving notice of their rights, retroactive to the time period covered by the complaint. The Board subsequently applied this remedy without discussion in Grocery Employees, Local 738 (E.J. Brach), 324 No. 180, slip op. at 2 (1997), and Local 74, Service Employees (Parkside Lodge), 323 NLRB No. 39, slip op. at 2 (1997).

Our case raised an issue of first impression: whether the retroactive remedy first articulated in Rochester for a union's failure to provide unit employees a one-time notice of their right to resign and to object to non-representational dues and fees also precludes a union from maintaining otherwise lawful disciplinary actions against members for conduct which occurred during the period of their retroactive resignation. We decided to argue in our case that a reasonable extension of the Rochester remedy is that, for those members who choose to retroactively resign their union membership, a union may not discipline them for crossing the picket line during that time period.

In our view, the Charging Parties here were entitled to the retroactive resignation remedy detailed in Rochester. As discussed above, the Union did not inform them of their Beck and General Motors rights, which violated the Act under Paramax and Weyerhauser. Once the Charging Parties did learn of their rights from other parties, they exercised those rights immediately by resigning from the Union and (in all but one case) objecting to their dues being used for nonrepresentational purposes. Consequently, applying the remedy in Rochester, the Charging Parties were entitled to resign retroactive to the six month Section 10(b) period prior to filing the instant charges. This would mean their resignations became effective, nunc pro tunc, well before the strike during which they crossed the picket line in violation of the Union Constitution. Applying Rochester, those Charging parties who objected to nonrepresentational dues also were entitled to reimbursement of those dues deducted during that same time period.

In sum, Board precedent requires the Union, for having violated the Act, to honor the Charging Parties' resignations retroactive to prior to the strike. It would be anomalous to hold that the Union may ignore those retroactive resignations (which remedy the Union's unlawful conduct) and be able to consider the Charging Parties to have been full Union members subject to discipline for having crossed the picket line during the strike. Therefore, the Union's discipline of the Charging Parties, who were legally considered not to be members of the Union at the time they crossed the picket lines, must be vacated.

Contributions To Pension Fund For Striker Replacements

In another case, we considered what would constitute an appropriate remedy for the Employer's unlawful termination of a pension fund during the time when covered employees had been out on strike.

We decided that an appropriate remedy would be to require the Employer to make contributions to the fund for the work done in the unit by the striker replacements during the time when employees had been on the unfair labor practice strike. We based our conclusion on the Board's broad remedial authority under Section 10(c) of the Act, and on the necessity of preventing financial instability of the fund.

In devising remedies under Section 10(c), the Board must attempt to create "a restoration of the situation as nearly as possible to that which would have obtained but for the unfair labor practice (a return to the status quo). NLRB v. J.H. Rutter-Rex Mfg. Co., 396 U.S. 258, 263 (1969). In APRA Fuel, 320 NLRB No. 53 (1995), the Board stressed that Congress has vested the Board with broad authority to remedy unfair labor practices. The Board noted in APRA that the Court "has consistently recognized that the Act addresses the expansive public policy goals of maintaining and promoting industrial peace, and leaves 'the adaptation of means to end to the empiric process of administration.'" Citing Phelps Dodge v. NLRB, 313 U.S. 177, 194 (1941), and further cited Phelps Dodge for the proposition that "[t]he exercise of the process was committed to the Board [b]ecause the relation of remedy to policy is peculiarly a matter for administrative competence." A.P.R.A., supra, slip op. at 3.

Based on the above, we decided that requiring the Employer to pay the Pension Fund for work done in the unit from the time of the unlawful termination of the Fund is within the Board's broad remedial authority under 10(c), and is not inconsistent with Board law. In our view, restoration of the status quo ante included the protection of the financial security of the pension fund, and was not a prohibited punitive remedy.

When an employer unilaterally ceases payment into a pension fund, restoration of the status quo ante is the traditional remedy. Even in circumstances where an employer unilaterally substitutes its own benefit plan for the union's plan, the Board requires the employer to restore the status quo ante, by paying into the pension fund notwithstanding the fact that the employer will be paying for two benefit plans.

In Manhattan Eye, Ear, & Throat Hospital, 300 NLRB 201, enf. denied, 942 F.2d 151 (2d Cir. 1991), cert. denied 466 U.S. 937 (1984), the Board ordered the employer to make the union pension and welfare funds whole for contributions it withheld after, in connection with its unlawful withdrawal of recognition, it had unilaterally substituted benefit plans of its own choosing for those specified in its collective-bargaining agreement. The Board rejected the employer's argument that requiring such reimbursement would be punitive because neither the funds nor the unit employees suffered monetary losses as a result of the employer's unlawful acts. The fact that the employer had a substitute plan did not, in the Board's view, alleviate its obligation to the union funds, since (1) the Board was obligated to remedy the employer's unlawful acts; (2) employees have a clear economic stake in the viability of funds to which part of their compensation is remitted; and (3) employees' status with respect to the funds is subject to change. Thus, the Board presumed that the employer's failure to contribute to benefit funds harms those funds even though no unit employees were covered by the funds at the time of the hearing. See also Stone Boat Yard, 264 NLRB 981 (1982), enfd. 715 F.2d 441 (9th Cir. 1983), cert. denied 466 U.S. 937 and Central Management, 314 NLRB 763, 773 (1994).

Although none of these cases involved payment to trust funds during the time when employees were on strike, we decided that requiring the employer to make contributions to the pension fund, for work done in the unit by striker replacements after the employer's unlawful termination of the pension fund, was the only effective remedy. This relief would maintain the financial integrity of the pension fund and return it to the financial position it would have had but for the Employer's unfair labor practices. But for the strike caused by the Employer's unfair labor practices, the pension fund would have received contributions for at least 600 more employees.

We further reasoned that even if the Employer's unfair labor practice had not directly created unfunded liability, this remedy was not providing a "windfall" to the pension fund. Rather, it merely guaranteed that the pension fund would not be financially jeopardized by the Employer's unlawful termination of contributions, and that the Employer would not benefit from its unfair labor practices by saving millions of dollars in labor costs at the expense of the pension funds.

We noted finally that this remedy was not contrary to extant Board law as to an employer's right to refuse to bargain about terms and conditions of employment for economic strike replacements, see e.g. Mackay, 304 U.S. 333; Times Publishing Co., 72 NLRB 676, 684 (1947); Goldsmith Motors Corp., 310 NLRB 1279 (1993). Nor did this remedy require the Employer to finance a strike against itself. See e.g. General Electric Co., 80 NLRB 510 (1948); Illinois Bell Telephone Co., 179 NLRB 681, 685 (1969).

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