NATIONAL LABOR RELATIONS BOARD
OFFICE OF THE GENERAL COUNSEL
WASHINGTON, D.C. 20570
FOR IMMEDIATE RELEASE R-2544
Wednesday, November 17, 2004
NLRB GENERAL COUNSEL ARTHUR ROSENFELD
ISSUES REPORT ON RECENT CASE DEVELOPMENTS
National Labor Relations Board General
Counsel Arthur F. Rosenfeld today issued a report on casehandling developments
in the Office of the General Counsel regarding the expanding use of neutrality
agreements as an organizational tool. It also discusses a case involving
prescribed Employer speech about the incumbent Union to new hires where the
parties already have a collective-bargaining relationship.
REPORT OF THE GENERAL
During my term as General Counsel, I
have pledged to keep the labor-management community fully aware of the
activities of my office. It is my hope that this openness will encourage
compliance with the Act and cooperation with agency personnel. As part of
this goal, I have continued the practice of issuing periodic Reports of
decisions raising significant legal or policy issues.
This report presents recent case
developments regarding the expanding use of neutrality agreements as an
organizational tool. It has long been settled that an Employer and a Union
violate Section 8(a)(2) and Section 8(b)(1)(A), respectively, by granting and
accepting recognition when the Union does not have the uncoerced support of a
majority of bargaining unit employees. International Ladies' Garment
Workers' Union v. NLRB (Bernhard-Altmann Texas Corp.), 366 U.S. 731, 737
(1961). Cases raising familiar questions of illegal assistance to and
premature recognition of unions continue to be processed under well-established
Board principles. However, considerations separate and apart from these
traditional issues arise when Employers and Unions enter into recognition and/or
neutrality agreements which, among other things, may provide for procedures
during organizing campaigns, recognition upon a card check, and the parameters
of a future collective-bargaining agreement. This report discusses recent
developments in the Office of the General Counsel concerning such issues.
It also discusses a case involving prescribed Employer speech about the
incumbent Union to new hires where the parties already have a
I hope that this information will be of
assistance to the labor law Bar.
Arthur F. Rosenfeld
Agreement and Uncoerced Card Check Majority
In one case, we dismissed Section
8(b)(1)(A) and Section 8(a)(2) and (3) charges involving the validity of a
neutrality agreement. We concluded that the neutrality agreement between
the Employer and the Union was valid and found that there was insufficient
evidence to show that the union had obtained a card check majority through
The union and the employer had entered
into a neutrality agreement whereby the employer waived its right to a Board
conducted election in a specific unit and agreed to recognize and bargain with
the union if the union established a majority in a card check. In
exchange, the union agreed not to organize other employer facilities for twelve
months. Shortly after the neutrality agreement was signed, the union
demanded recognition based on authorization cards it had obtained in the desired
unit. Pursuant to the neutrality agreement, the parties secured the
services of an independent arbitrator to review the authorization cards and to
determine whether the union had obtained majority status. The arbitrator
reviewed the cards and verified that the union had attained majority status.
That day the parties signed a recognition agreement.
Relying on Verizon Information Systems,
335 NLRB 558, 559 (2001), and Briggs Indiana, 63 NLRB 1270 (1945), we found that
the neutrality agreement was valid. Thus, the parties reached agreement to
establish a procedure of voluntary recognition outside the Board's processes,
which included a pledge of neutrality on the part of the employer and a promise
by the union not to undertake organizing certain other employees of the employer
for a period of twelve months. The agreement included verification of
union majority by a card check by an impartial third party.
The charging party had also asserted
that the card check majority obtained by the union was obtained through union
coercion. However, no witnesses supported the charge that the Union
obtained cards by unlawfully harassing employees. The charging party
further alleged that the recognition under the neutrality agreement was invalid
based on two petitions that were circulated and signed by unit employees
indicating that they did not wish to be represented by the union. Both
petitions were circulated after the Union and the Employer executed their
recognition agreement. While the petitions asserted that the cards were
obtained through harassment or were subject to a "suspicious" card
check, the investigation of the charge, as noted above, revealed no evidence of
harassment or coercion in the solicitation of authorization cards.
Moreover, both an arbitrator and the Region verified the union's numerical
majority of cards. Since the investigation failed to establish any
evidence of harassment or coercion in the solicitation of the authorization
cards, we decided to dismiss the charges.
Employer and Union
Unlawfully Dealt with Each Other and Employees on Wage Increase during
Organizational Campaign Under Neutrality Agreement
In this case, we decided that the
Employer's and the Union's dealings concerning the postponement and rescheduling
of a promised wage increase violated the Act. The Employer had other
facilities already represented by the Union and had previously agreed to a
neutrality agreement providing that the Employer would remain neutral during all
Union organizing campaigns.
The facility at issue in this case was
in the midst of an organizing campaign when the Employer contacted the Union for
its position regarding a scheduled wage increase. The Employer sent a
letter to the Union setting out its plan to initiate the pay raise and asked the
Union for comments. The Employer subsequently provided the Union with a
more detailed analysis of its scheduled wage increase. The Union requested
that the Employer postpone the wage increase.
Thereafter, the Employer circulated a
memo to the employees incorrectly stating that federal law prohibits unilateral
increases in wages unless the union agrees and that therefore the wage increase
could not be given. One month later, the Employer announced to employees
that it had obtained the consent of the Union and the wage increase was to be
implemented retroactively. The Union circulated its own memo stating that
it had informed management that it supported a pay raise and in would not file
an unfair labor practice charge.
We initially concluded that the Employer
violated Section 8(a)(1) by placing the onus of the delay in the scheduled wage
increase on the Union. We also concluded that a complaint was warranted to
place before the Board the allegations that: the Employer violated Section
8(a)(2) and (1) and the Union violated Section 8(b)(1)(A) by virtue of their
discussions that led to the postponement and the subsequent grant of the
previously announced pay raise; and that the Employer unlawfully assisted the
Union in violation of Section 8(a)(2) by informing the employees that it was
granting the wage increase based on the Union giving its consent. In our
view, by acting in a manner that fostered the false impression that Union
consent was necessary before the employees could receive a scheduled wage
increase, the Employer granted and the Union accepted the status of a collective
bargaining representative. As a result, the Union was given control over
an important employee benefit even though there was no showing that the Union
represented a majority of the employees. To the contrary, the
investigation established that during this same period, the Employer had been
presented with a petition apparently signed by a majority of the unit who did
not wish to be represented by the Union.
It is well settled that recognition of a
minority union is unlawful under Section 8(a)(2). See Ladies Garment
Workers (Bernhard-Altmann Corp.) v. NLRB, 366 U.S. 731 (1961). In that
case, the Court found that the union violated the Act because a union cannot
accept and act with authority over employees' terms and conditions of employment
when it does not have the support of the majority of employees. The Court
upheld the Board's view that the imposition of a representative on a
nonconsenting majority was a violation of Sections 8(a)(1) and (2) and
Moreover, it is a violation for a union
to participate in conduct that tends to coerce employees in the exercise of
Section 7 rights. Any argument raised by the Union that it had no control
over how the Employer was going to handle the proposed wage increase was belied
by the fact that the Union readily accepted the opportunity to prevent the
Employer from granting an already promised pay raise. The Union also did
nothing to correct the unlawful characterization by the Employer of the Union's
role in the course of these events. Thus, we concluded that the Union
violated Section 8(b)(1)(A) by accepting its role as partner with the Employer
in determining when to grant the pay raise since it was not the majority
representative of the employees at the time the Employer made the decision to
postpone the wage increase. See Bernhard-Altmann, above.
Pursuant to Card Check Procedure Of Neutrality Agreement Due to Contemporaneous
In another set of cases, we decided that
the Employer's recognition of the Union pursuant to an agreed-upon card check
procedure was unlawful where, on the date of recognition, the Union did not have
a card majority because a disaffection petition signed by a determinative number
of employees in the bargaining unit was in existence.
Subsequent to the Union's commencement
of its organizing campaign, the Union and the Employer executed a Memorandum of
Agreement where the parties set forth a number of provisions relating to the
Union's organizing campaign. The Agreement provided that the Employer
would recognize the Union if the Union demonstrated majority support pursuant to
a card check by a neutral third party.
During the Union's organizing campaign,
and prior to the Employer's voluntary grant of recognition to the Union, a group
of employees gathered signatures from other employees in support of an
anti-union petition. The petition was signed by 43 of the 90 employees who
were indisputably in the bargaining unit. Of those, 18 had previously
signed union authorization cards and 12 of those 18 also took steps formally to
revoke their cards. Neither the Employer nor the Union was presented with
this petition prior to the card check and the Employer's grant of recognition.
However, the anti-union petition and the revocation letters were sent to an NLRB
Regional Office by certified mail.
When the authorization card verification
check was carried out as provided in the parties' agreement, the neutral third
party concluded that the Union had the support of a majority, 48 of the 90
employees in the agreed-upon unit. Based on that card check, the Employer
immediately recognized the Union. However, unknown by the parties, 6 of
the 48 employees had later signed the antiunion petition on file in the NLRB
Regional office (43 employees in total signed the anti-union petition).
Because the Union's majority status required the inclusion of the six cards
signed by the employees who later signed the anti-union petition, the Union did
not, in fact, have a majority.
On the same date it granted recognition
to the Union, the Employer received a copy of the anti-union petition via fax
from one of the employees who helped obtain the petition signatures.
However, the petition was not faxed until after the completion of the card check
and the employer's grant of recognition. Subsequently, the Union and the
Employer negotiated the terms of a collective-bargaining agreement. The
agreement was ratified and went into effect except for the union security and
dues check-off clauses.
While the Employer here may have
recognized the Union in good faith, we concluded that it violated Section
8(a)(1) and 8(a)(2) by granting recognition pursuant to the card check, and that
the Union violated Section 8(b)(1)(A) by accepting such recognition, because at
the time recognition was granted, the union did not, in fact, have demonstrable
majority support. In deciding that good faith of the parties is not a
defense where a union did not actually have majority support, we relied on
International Ladies' Garment Workers' Union v. NLRB [Bernhard-Altmann], 366 US
731, 736-738 (1961). In Bernhard-Altmann, the Supreme Court held that an
employer unlawfully granted recognition to a minority union and unlawfully
negotiated and executed a collective bargaining agreement with that union, where
at the time of recognition the union did not in fact have cards from a majority
of the unit employees. Both the union and the employer believed that the
union had cards from a majority of the proposed unit, but the union was in error
and the employer did not check. Similarly, the Board stated in
Alliant Foodservice, Inc., 335 NLRB 695, 697 (2001), "We acknowledge that
an employer, like Alliant, could recognize a union in good faith and unwittingly
violate Section 8(a)(2) if, it turns out, majority support does not, in fact,
Bernhard-Altmann and the cases we
decided here illustrate the risks of voluntary recognition generally.
Authorization cards, on which voluntary recognition is often based, are
typically collected during the organizing campaign over a period of time and
employee sentiment can fluctuate over the course of the campaign. While
acknowledging the benefits of voluntary recognition, the Board and courts
nevertheless have recognized that a Board-conducted election provides the most
reliable basis for determining whether employees desire representation by a
particular union. Linden Lumber v. NLRB, 419 US 301 (1974). Board
elections provide for a secret vote under laboratory conditions and under the
supervision of a Board agent. Voluntary recognition, based on cards or
similar indicia solicited by the union, does not guarantee these protections and
so, while legitimate, is a less reliable method of establishing majority
support. See, for example, NLRB v. Gissel Packing Co., 395 U.S. 575, 602
(1969) ("secret elections are generally the most satisfactory – indeed
the preferred – method of ascertaining whether a union has majority
Proof that employees signed
authorization cards for two different unions or proof that employees signed
petitions inconsistent with their cards can permit an inference that a union
lacked the support of a majority at the time of recognition. For example,
the Board has consistently held that where an employee signs an authorization
card for each of two unions, neither card is counted in establishing the
majority status of either union unless it can be clearly established that one of
the two cards was repudiated by the dual card signer. See Flatbush Manor
Care Co., 287 NLRB 457, 458, 471 (1987) (employer violated Section 8(a)(2) by
recognizing a union where five of six card signers also signed cards for another
union), and Katz's Delicatessen, 316 NLRB 318, 330 (1995), enf'd 80 F.3d 755 (2d
Cir. 1996) (where union card signers subsequently signed a petition on behalf of
another union, the union cards could not be counted toward majority support for
that union). An employer and a union also violate Sections 8(a)(2) and
8(b)(1)(A), respectively, even if they do not know that a determinative number
of employees signed cards for a different union. Le Marquis Hotel, 340
NLRB No. 64 (2003), slip op. at 9 (while employer may not know about the dual
cards, if it recognizes a union without the confirmation of a representation
election, it assumes the risk of mistaking the extent of the union's support,
and of committing the unfair labor practices associated with the recognition of
a minority union).
In connection with the general
principles that these cases illustrate, we also decided to recommend to the
Board that it reconsider and reverse the line of cases holding that an
employee's revocation of a signed authorization card is not effective until
received by or communicated to the union. See Alpha Beta Co., 294 NLRB
228, 230 (1989). The rule that effective revocation of an authorization
card requires notice to the union has been criticized as contrary to the
principles of protecting employee free choice. See Struthers-Dunn, Inc. v.
NLRB, 574 F.2d 796 (3d cir. 1978), criticizing 228 NLRB 49 (1977). In that
Gissel case, subsequent to the union's demand for recognition but prior to a
stipulated election, a disaffection petition that revoked some previously signed
authorization cards was mailed to the Regional Office but not to the union.
The Board held that the petition did not alter the card majority of the union at
the time the union demanded recognition and that the cards could not be
effectively revoked in the absence of notification to the union prior to the
demand of recognition. The Third Circuit, by contrast, concluded that this
position did not "accord proper recognition to the free and voluntary
expression of opinion by the employees." 574 F.2d at 801.
The Board has not followed the Alpha
Beta principle in the dual card cases, where it has cautioned that while
employers may rely on a majority showing of cards where two unions are gathering
cards, it acts at its peril if the recognized union does not in fact enjoy
majority support. See e.g., Bruckner Nursing Home, 262 NLRB 955, 957-58
& n.13 (1982), cited in Le Marquis Hotel, above, 340 NLRB No. 64, sl. op. 7
(employee's execution of second union authorization card for competing union
indicates shifting employee sentiments, despite lack of notice to the first
union of the employee's shifting support; no reference to Alpha Beta or
principles articulated therein). Therefore, we decided to recommend that
the Board should "accord proper recognition to employee free choice"
and find that an employee's card is effectively revoked by signing of a
disaffection petition even if the employee has not communicated that
disaffection to the union, and that cases to the contrary, such as the Board's
decision in Struthers-Dunn, above, should be reversed.
Check Agreement Amounted to Unlawful Recognition and Bargaining In Advance of
Union Obtaining Majority Status
In several cases involving a Union's
organizing campaign at two of the Employer's facilities, we decided that the
parties unlawfully used a partnership agreement as a vehicle to negotiate terms
and conditions of employment for employees whom the Union did not yet represent.
In our view, these agreements violate Section 8(a)(1) and (2) and Section
In August 2003, the Employer and the
Union entered into a national partnership agreement. Most of the 17-page
agreement was devoted to setting ground rules for the Union's ongoing organizing
campaign and to establishing procedures whereby an independent neutral party
could ascertain if the Union had obtained signed authorization cards from a
majority of employees prior to the Employer's formal grant of recognition.
Several pages of the Agreement, however, addressed the parties' substantive
understandings regarding appropriate terms and conditions of employment should
the Union be recognized as the employees' bargaining representative. Thus,
the partnership agreement specified a minimum duration for any negotiated
agreement and set forth additional mutual understandings regarding no strike-no
lockout terms; interest arbitration; healthcare costs; minimum job
classifications; flexible compensation; and mandatory overtime rules.
At one facility the Union did not
demonstrate its majority support through a third party card check until after
the signing of the partnership agreement and the announcement of the agreement
and some of its terms to the employees. At the other facility, the Union
has never demonstrated majority support.
Although card check agreements that
limit an employer's expression of opposition to its employees' unionization can
be legal, we decided to issue a complaint and argue that the agreement here,
because of the substantive provisions noted above, impermissibly settled some
terms and conditions of employment to be included in a future
collective-bargaining agreement and narrowed the areas of disagreement between
the parties on other conditions of employment. By negotiating these
substantive terms, the Employer effectively both recognized the Union and
engaged in collective bargaining prior to the Union's demonstration of majority
support, in violation of Section 8(a)(2).
It has long been recognized that an
employer's recognition of a union that has not been selected by a majority of
the bargaining unit constitutes a form of unlawful support or assistance to that
union and interference with the free choice of those employees in violation of
Section 8(a)(2). See International Ladies' Garment Workers' Union v. NLRB
(Bernhard-Altmann), 366 U.S. 731, 736-738 (1961); Wilkes Corp., 197 NLRB 860,
860 n.2. (1972); Nitro Super Market, 161 NLRB 505, 515 (1967); Majestic Weaving
Co., 147 NLRB 859, 860 (1964), enf. denied on other grounds 355 F.2d 854,
859-860 (2d Cir. 1966).
In Majestic Weaving Co., above, the
Board overruled Julius Resnick, Inc., 86 NLRB 38 (1949), and held that an
agreement to terms of a contract with a minority union constituted unlawful
support. The Board reasoned that employee rights were clearly abridged by
an employer's treating a minority union as the bargaining representative for the
unit. The Board flatly asserted that the fact that the employer
conditioned the actual signing of the contract on the union's "achieving a
majority at the 'conclusion' of negotiations is immaterial." 147 NLRB
at 860. The Second Circuit, although declining enforcement on procedural
grounds, stated, "we would entertain no difficulty if the Board, after
appropriate proceedings, should fashion for prospective application a principle
along the general line of that adopted here; rational basis plainly exists for
some such specification of the language of § 8(a)(2) even in cases like this
where no other union was on the scene when the negotiations occurred."
NLRB v. Majestic Weaving Co., 355 F.2d 854, 859-860 (1966).
In our cases, three general factors
supported the conclusion that the partnership agreement crossed the threshold
from a permissible agreement merely settling procedures for resolving questions
concerning representation to an agreement that is tantamount to a grant of
recognition that unlawfully assisted the union in gaining employee support.
First, the agreement is not limited to procedural issues or
"principles" relating to the settling of representation disputes.
Unlike neutrality agreements found lawful in the past, the agreement here
included a preliminary Employer and Union agreement on substantive employment
terms such as overtime, job classifications, health benefits, and contract
duration. In addition, the Employer's agreeing to an interest arbitration
provision in exchange for the Union's no-strike pledge guaranteed employees a
collective-bargaining agreement, either through negotiations at the table or
pursuant to the award of an independent arbitrator.
In our view, the employees could easily
surmise that their employer had already implicitly recognized the union as their
representative. An employer's making such an agreement regarding working
conditions with a union that the employees have never chosen to represent them
reasonably tends to establish that union in a privileged position in the
employees' eyes. Because of this employer assistance, the union is no
longer "merely an outsider seeking entrance" (NLRB v. Golden Age
Beverage, 415 F.2d 26, 30 (5th Cir. 1969)), but an insider seeking ratification
of a representational relationship already agreed to by their employer without
regard to the unit employees' views.
Second, the conclusion that the Employer
granted implicit recognition is also established through examination of the
parties' conduct in light of the Board's standard for what constitutes voluntary
recognition. "Bargaining with a union is, of course, one of the ways
an employer can implicitly recognize a union." Operating Engineers
Local 150 v. NLRB [Terracon, Inc.], 361 F.3d 395, 400 (7th Cir. 2004), enforcing
339 NLRB No. 35 (June 6, 2003).
The limited provisions that the Employer
and the Union here disclosed to the employees confirm that the so-called "aspirational
agreements" reached by the parties in fact manifested a mutual commitment
to minimum job classifications, flexible compensation, mandatory overtime, and
the like. These mutual understandings, which narrowed the differences
between the parties over working conditions, were the product of exactly the
kind of bargaining over substantive terms that the Act reserves for majority
representatives. They also demonstrate that concessions were made at the
expense of the employees whom the Union did not represent at the time of the
agreement. The agreed-upon concessions sacrificed for at least four years
the right of the future represented employees to strike and guaranteed
collective-bargaining agreements with such terms and conditions of employment as
healthcare costs containment measures, mandatory overtime, and minimum job
classifications. The Agreement ultimately assigned other employee
interests to binding arbitration in accordance with the principles and policies
agreed to by the Employer and the Union prior to the Union's having achieved the
support of a majority.
A third feature of these cases served to
magnify the impact of premature recognition on the employees' right to refrain
from having the union represent them. Because the partnership agreement
contained confidentiality provisions, only the Union and the Employer knew the
exact nature of the agreement with respect to substantive matters.
Employees to be covered by the agreement could see the document only if they
made a special request, but otherwise knew only what the Union and the Employer
chose to tell them about it. What they did learn — the substantive
provisions discussed above — was sufficient to warrant the employees'
inferring that the Union was already functioning as their Employer-recognized
representative. But where, as here, that employer-union agreement is
generally kept confidential from the employees themselves, the impression that
the union has a special insider relationship with the employer is magnified,
because employees can only speculate as to the extent of the special
arrangements the employer may have made with the union about their working
In sum, the Employer's confidential
agreement with the Union dealing with working conditions manifests to the
employees that the Employer had already engaged in the kind of give-and-take
bargaining about unit working conditions that is tantamount to recognizing a
minority union as the unit employees' representative.
We did dismiss another case involving
the same Employer and Union, because the Union had obtained majority support
through authorization cards prior to the execution of the national partnership
agreement, and thus it could not have had the effect of a pre-recognition
agreement that unlawfully assisted the Union in gaining employee support.
Limiting Employer's Future Investments To Companies which Union Could Later
Require to Execute Neutrality Agreement
In a case of
first impression, we decided that the Union and Employer violated Section 8(e)
when they entered into an agreement limiting the Employer's future investments
to companies which the Union later could require to be bound by a Neutrality
was an investment firm; the Union did not represent any of the Employer's
employees. In November, 2000, the Employer and the Union entered into an
agreement consisting of two parts: a Side Agreement and a Neutrality Agreement.
The Side Agreement specified how the parties would require certain companies
called "covered business enterprises" (CBE) to also be bound to the
parties' agreements, in particular the Neutrality Agreement. The Side
Agreement defined a CBE as one in which the Employer:
indirectly (i) owns more than 50 percent of the common stock; (ii) controls more
than 50 percent of the voting power; or (iii) has the power, based on contracts,
constituent means, to direct the management and policies of the enterprise . . .
The Side Agreement then provided that no
less than six months after the Employer had invested in a CBE, the Union might
notify the Employer of the Union's intent to organize that CBE. The
Employer would then require the CBE to execute the Neutrality Agreement.
Agreement provided that any signatory CBE would grant the Union access to its
premises to distribute information and to meet with employees; furnish the Union
with employee names and addresses; and recognize the Union based upon a majority
showing after a neutral card check procedure. Upon a showing of majority
support, the CBE would bargain within 14 days of recognition, and would submit
to interest arbitration any open issues after 90 days of bargaining. The
Section 8(e) charge attacked not the Neutrality Agreement itself, but only the
Side Agreement, which limited the Employer's choice of investments to those
companies that might be required to sign the Neutrality Agreement.
In June 2002,
the Employer acquired a manufacturer of industrial products. On July 11,
2003, the manufacturer and the Union entered into a similar set of Side and
Neutrality Agreements, pursuant to the Employer's direction based on its Side
Agreement. The Employer admitted that it had required the manufacturer to
enter into those Agreements pursuant to the November 2000 Side Agreement.
The manufacturer's Side Agreement explicitly stated that the manufacturer had
entered into its Neutrality Agreement as a CBE defined by the Employer's
November 2000 Side Agreement.
decided that the manufacturer's execution of its Neutrality Agreement in July
2003 was an application or reaffirmation of the Employer's November 2000 Side
Agreement. The Section 8(e) charge filed on August 6, 2003, against that
two-year old Side Agreement therefore was a timely filed charge. We then
decided that the Employer's Side Agreement violated Section 8(e) because it
contained a "cease doing business object" in that it limited the
Employer's choice of investments to those entities which would be worthwhile
investments even if they became bound to a Neutrality Agreement. Moreover,
it was secondary because it did not concern organizing the Employer's employees
but rather was directed at the organizational relations of the Union and other,
makes it an unfair labor practice for a union and an employer "to enter
into any contract or agreement, express or implied, whereby such employer . . .
agrees to . . . cease doing business with any other person . . . ."
The Board has applied the Section 8(e) "cease doing business"
proscription to agreements that impose only a partial cessation of business and,
in particular, to agreements that interfere with business investment decisions.
Carpenters Dist. Council of Northeast Ohio (Alessio Constr.), 310 NLRB 1023,
1025 n.9 (1993). To determine whether a "cease doing business"
agreement is secondary and unlawful, the Board considers whether the agreement
addresses the labor relations of the contracting employer regarding its own
employees, or is "tactically calculated to satisfy union objectives
elsewhere." National Woodwork Mfrs. Ass'n v. NLRB, 386 U.S. 612, 620,
"cease doing business" object, in Alessio, the Board found unlawful
the parties' "integrity clause" which provided that, where the
employer participated in the formation of another company that engaged in the
same or similar business or employed similar employees, the employer's
collective-bargaining agreement would apply to the second business. The
Board found that this "integrity clause" had a "cease doing
business" object because it was "calculated to cause Alessio to sever
its ownership relationship with affiliated firms . . ." by requiring
Allesio to apply its bargaining agreement to such firms. Cf. Painters
Dist. Council 51 (Manganaro Corp., MD), 321 NLRB 158, 164-167 & n.20 (1996)
(distinguishing Alessio and finding lawful an anti dual-shop clause, where the
clause on its face preserved unit work of signatory employer, and where the
signatory employer had effective right to control the dual shop).
that the investment restriction in Alessio involved the actual imposition of the
parties' entire bargaining agreement, while the Side Agreement investment
restriction here involved the possible imposition of only the Neutrality
Agreement. However, the Side Agreement on its face did restrict the
Employer's investment decisions. The Employer agreed to invest only in
entities that must become bound to their own Side and Neutrality Agreements if
the entity were a CBE under any of the criteria in the Side Agreement, and if
the Union subsequently invoked the Neutrality Agreement. We therefore
decided to issue a complaint arguing that the potential imposition of the
Neutrality Agreement was a clear restriction, limiting the range of businesses
in which the Employer may choose to invest, sufficient to have a Section 8(e)
"cease doing business" object.
Side Agreement did not mandate the automatic, immediate application of the
Neutrality Agreement, the fact remained that it would be implemented
subsequently at the Union's option. Therefore, these time and Union option
conditions did not eliminate the impact of the investment restrictions.
Rather, these conditions merely delayed the actual effect of these investment
restrictions until the Union decided to organize the CBE.
As to its
secondary nature, the terms of the Side Agreement investment restriction did not
concern the labor relations of the Employer. Rather, the investment
restriction was directed solely at the organizational relations of any CBE of
the Employer. Therefore, if a CBE were a separate employer, the investment
restrictions were secondary because they necessarily would be "tactically
calculated to satisfy union objectives elsewhere."
We noted that
if the Side Agreement were applicable only to CBEs that constitute a
"single employer" with the Employer, no Section 8(e) violation could
arise because two separate employers would not exist to "cease doing
business." We concluded, however, that the Side Agreement was not
limited by its terms to CBE entities that constitute a single employer with the
Employer. The Side Agreement applied to entities which the Employer merely
owned or over which it controlled voting power. Neither ownership nor
voting power control is sufficient to establish "single employer
In sum, the
Side Agreement, in our view, violated 8(e) on its face. It had a partial
"cease doing business" object because it limited the range of
businesses in which the Employer was able to invest by requiring the potential
imposition of the Neutrality Agreement. It was secondary in character
because it was directed at the organizational relations of other, separate
Amicus Brief in
Representational Cases Urging Board to Retain Voluntary Recognition Bar With
Limited Exception in Certain Circumstances
In addition to
the unfair labor practice complaints discussed above, we filed an amicus brief
with the Board in consolidated representation cases (Dana Corp. and Metaldyne
Corp., 341 NLRB No. 150 (2004)), where the employers had granted the unions
voluntary recognition based upon a majority authorization card showing, pursuant
to neutrality and "card check" agreements between the employers and
unions. Employees in each case filed decertification petitions, dismissed
by the Regional Directors under the Board's long-standing "recognition bar
doctrine." Pursuant to that policy, the Board will not process
election petitions for a reasonable period of time after voluntary recognition.
Keller Plastics Eastern, Inc., 157 NLRB 583, 587 (1966).
In its decision to review the dismissals
of the petitions in these cases, the Board signaled its view that they raise
substantial issues as to whether, and under what conditions, an employer's
voluntary recognition of a union should bar a decertification petition. We
took the position before the Board that the recognition bar should be retained
as an important and effective means of promoting voluntary recognition and of
furthering the purposes and policies of the NLRA, but that a limited exception
is warranted in certain circumstances raising a significant question of whether
the union actually had majority support when recognition was granted.
As discussed in our brief, both
Board-conducted elections and voluntary recognition are accepted ways of
establishing a legally valid collective bargaining relationship. A
Board-conducted election is the most reliable way of determining whether a
majority of bargaining unit employees desire exclusive representation by a
particular union. See Linden Lumber v. NLRB, 419 U.S. 301, 304 (1974),
citing NLRB v. Gissel Packing Co., 395 U.S. 575, 603 (1969); NLRB v. Cayuga
Crushed Stone, 474 F.2d 1380, 1383 (2d Cir. 1973) (discussing procedural
safeguards and secrecy of Board elections). A card check procedure is a
less reliable, but nevertheless legitimate, way to demonstrate that a majority
of employees support a particular union. See Gissel, 395 U.S. at 602.
Because of its practical advantages of quickly permitting bargaining to commence
where that is the desire of the employees and employer, the Board and the courts
have sanctioned voluntary recognition based on a card check since the earliest
days of the NLRA as a "favored element of national labor policy."
NLRB v. Lyon & Ryan Ford, Inc., 647 F.2d 745, 750 (7th Cir. 1981), citing
NLRB v. Broadmoor Lumber Co., 578 F.2d 238, 241 (9th Cir. 1978).
In our brief, we took the position that
the Board should retain the voluntary recognition bar because it effectuates the
purposes of the NLRA in several ways. As with the similar bar that is
imposed after the Board has certified a union pursuant to a Board-conducted
election, the voluntary recognition bar, among other things, gives a union time
to negotiate an agreement without undue pressure and removes incentives for an
employer to delay or undermine bargaining in hopes of ousting the union.
See Brooks v. NLRB, 348 U.S. 96, 98, 100-101 (1954); NLRB v. Broad Street
Hospital & Medical Center, 452 F.2d 302, 304-305 (3d Cir. 1971). The
aim of the bars is to ensure that the bargaining representative, once validly
chosen by a majority of employees, has the opportunity to engage in effective
bargaining to obtain a contract without interruption. See San Clemente
Publishing Corp., 167 NLRB 6, 8 (1967), enfd. 408 F.2d 367, 368 (9th Cir. 1969).
However, we further argued that an
exception to the recognition bar is warranted in certain circumstances because
of the inherently less reliable nature of authorization cards, compared to a
Board-conducted election, as an indicator of employee choice. Unlike a
card-check agreement, a Board election is a "solemn" occasion,
conducted under "safeguards to voluntary choice," including the
"privacy and independence of the voting booth." Brooks, 348 U.S.
at 99-100. In further contrast to certifications, where the election date
is certain, in the card check context employees generally will not know when
majority status is achieved or when recognition will be granted.
Therefore, if during the card collection period individuals change their minds
as to their desire for representation, they may not know when to revoke their
cards in order to ensure that their true intention is not misrepresented by a
count that includes them.
Given the lesser safeguards associated
with the use of authorization cards, we stated that there is a need for some
limited exception to the current voluntary recognition bar doctrine. This
need is evidenced by cases applying the bar where employee activity,
contemporaneous with or shortly after the recognition, indicated that the card
count supporting recognition did not, in fact, reflect the deliberate choice of
employees that would justify the imposition of a bar. See Montgomery Ward
& Co., 162 NLRB 294 (1966), enfd. 399 F.2d 409 (7th Cir. 1969); Rockwell
International Corp., 220 NLRB 1262 (1975). Such cases illustrate our point
that while stability is a benefit of applying the recognition bar, the bar
should not apply in order to "stabilize" a new relationship where it
is so immediately evident that majority support for the recognized union is
Accordingly, we proposed in the amicus
brief that the Board allow, as a limited exception to the voluntary recognition
bar, the holding of an election in situations where support, either for
representation by another union or for no union representation, is expressed in
writing by at least 50 percent of the bargaining unit employees either at the
time the employees receive formal, written notice of the employer's recognition
of the union, or no later than 21 days thereafter. We further proposed
that a decertification petition must be filed no later than 30 days after that
formal notice of recognition.
We took the position that any showing of
less than 50 percent opposition would not support an inference that a majority
of employees likely did not actually support the union at the time of
recognition; a minority of employees usually oppose representation even in
organizing drives culminating in certifications following a Board election.
Moreover, because there has already been a showing of majority that has not been
challenged in an unfair labor practice proceeding, reliance on the usual
"showing of interest" for an RD petition (30 percent) is insufficient
to justify an exception to the recognition bar.
Our rationale for the proposed 21-day
cutoff for the showing of interest was that a more extended period could allow
time for active undermining of a union's valid majority support, essentially
continuing the organizing campaign and contributing to the very instability that
an election bar is meant to prevent. Allowing 30 days for the actual
filing of the petition would accommodate situations where employees may be
unrepresented and/or unfamiliar with Board procedures. Further, in order
to avoid litigation over when those 21- and 30-day periods begin, we proposed
that the Board require that they begin when the employer and/or the union give
formal written notice to the unit employees of the voluntary recognition.
Finally, we argued that this position
should apply regardless of whether voluntary recognition is established pursuant
to a card check agreement preceding card-signing and accompanied by a neutrality
agreement, as in the cases before the Board, or pursuant to an ad-hoc card check
after employees sign cards. In both instances, the voluntary recognition
must be based on cards signed freely by a majority of employees to be
In sum, we took the position that the
recognition bar doctrine, with our proposed limited exception, balances two
competing goals: on one hand, the right of a newly recognized union,
designated by a majority of employees, to enjoy the benefits of exclusive
representative status free of challenge for a reasonable period; and on the
other, the need to guarantee employee free choice by deterring the entrenchment
of a union that does not truly enjoy uncoerced majority support.
Our brief to the Board can be found in
its entirety at: http://www.nlrb.gov/nlrb/about/foia/DanaMetaldyne/NLRBGC.pdf
Contractual Requirements that Employer Encourage New Employees to Join Incumbent
Union and Grant Union Access to Orientation Meetings
We concluded in this last case that a
clause in a collective bargaining agreement requiring the employer, in a
right-to-work state, to "recommend" to new employees that they become
members of the union had represented them, and to grant the union access to new
employees during orientation meetings, did not violate Sections 8(a)(2) and (1)
and 8(b)(1)(A). Under Section 8(c) of the Act, an employer has a right to
express views for or against a union so long as the expression does not contain
threats of reprisal or promises of benefit.
The Employer regularly held orientation
meetings for new employees during which a low-level, non-production supervisor,
reading from a prepared text, recommended that the employees become members of
the union. The Employer would inform employees that the Union would be
given a chance to meet with them during the meeting. When it was the
Union's turn to address the employees, a steward, usually from the shift to
which the employees were to be assigned, would take over the meeting on behalf
of the Union. The steward would hand out a packet of information to the
employees, including the application for membership and dues checkoff
While there was no uniform practice
regarding the role of management during the union-led portion of the orientation
meetings, management officials would normally leave the room for some period of
time and re-enter before the meeting ended. There was no evidence
establishing that these managers either actually observed employees signing any
documents provided to them by the Union or individually encouraged them to do
so. Additionally, while there was some evidence that the company may have
collected cards among other documents that were signed by the employees, these
collections were for the purpose of providing the materials to the Employer's
human resources department for processing.
We concluded that where there is an
incumbent union, an employer does not violate the Act by merely encouraging
employees to join the existing union and allowing the recognized bargaining
agent to meet with new employees. See, e.g. Duquesne University, 198 NLRB
891 (1972). Thus, the situation differed from organizing campaigns as in
Famous Castings Corp., 301 NLRB 404, 407 (1991), where a supervisor told an
employee to talk to union representatives and, after they left, gave an employee
authorization cards to distribute. This conduct violated Section 8(a)(2),
since it was "not a situation where a company was engaging in friendly
cooperation with an incumbent union."
There were no threats, no promises of
benefits, and no evidence that supervisors individually pressured employees to
sign cards. In these circumstances, under Section 8(c) the Employer could
lawfully "recommend" membership in the incumbent union to employees at
an orientation meeting.