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WASHINGTON, D.C.   20570

Wednesday, September 3, 2003 202/273-1991


National Labor Relations Board General Counsel Arthur F. Rosenfeld today issued a report on casehandling developments in the Office of the General Counsel. The report covers selected cases of interest that were decided during the period from January 2003 through June 2003. It discusses cases that were decided upon a request for advice from a Regional Director or on appeal from a Regional Director's dismissal of unfair labor practice charges. In addition, it summarizes cases in which the General Counsel sought and obtained Board authorization to institute injunction proceedings under Section 10(j) of the National Labor Relations Act.

(The General Counsel's report can be accessed in the press releases area of the NLRB web site: www.nlrb.gov or copies can be obtained by contacting the Division of Information at 202-273-1991.)

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This report covers selected cases of interest that were decided during the period from January 2003 through June 2003. It discusses cases which were decided upon a request for advice from a Regional Director or on appeal from a Regional Director's dismissal of unfair labor practice charges. In addition, it summarizes cases in which the General Counsel sought and obtained Board authorization to institute injunction proceedings under Section 10(j) of the Act.

Arthur F. Rosenfeld
General Counsel


Withdrawn Lawsuit Not Presumptively Baseless

In this case, we decided that an allegedly unlawful lawsuit was not presumptively baseless merely because it had been voluntarily withdrawn.

The Unions and the Employers began negotiations for a bargaining agreement which they agreed would cover a multiunion/multiemployer bargaining unit. The parties also agreed that when the membership of the Unions voted on the Employers' final offer, "all votes of the involved employees of the Employers shall be pooled with a single overall acceptance or rejection." When the Employers presented their last, best and final offer, the Unions recommended that their membership reject it. The Unions then began conducting membership meetings to discuss and vote upon the offer. The Unions announced that the voting would be completed by October 7, and that if the offer was rejected by a two-thirds majority, a strike could commence at any time thereafter.

On October 3, one of the Employers filed a Section 301 lawsuit against the Unions alleging that they had violated the voting agreement by engaging in voting irregularities during contract ratification. The Employer alleged, for example, that Unions had permitted friends and family of Union members to vote; permitted certain employees to take as many as five ballots to vote more than once; and permitted an employee to cancel his initial ballot and cast another vote. The Employer sought damages and an injunction barring the Unions from "taking any action" based on a vote conducted in violation of the parties' voting agreement.

On October 8, the Unions announced the results of the contract ratification voting. Sixty percent of the votes were against ratification, a number insufficient to authorize a strike. On October 12, following additional negotiations, the parties reached agreement on a contract. The Employer then voluntarily withdrew its lawsuit claiming that it had become moot once the parties had settled on a collective- bargaining agreement.

We decided that the lawsuit was not presumptively baseless even though the Employer had withdrawn it.

In Vanguard Tours, 300 NLRB 250 (1990), enf. denied in pertinent part 981 F.2d 62 (2d Cir. 1992), the Board held that an employer's withdrawal of a lawsuit, without a judgment on the merits, was presumptively an admission that the suit lacked merit, i.e., was "baseless" and thus possibly unlawful. The Board placed the burden upon the employer of rebutting this inference that its withdrawn suit was baseless. However, the Supreme Court subsequently held that a completed lawsuit may be reasonably based even though it is ultimately unsuccessful. See BE&K Construction Co. v. NLRB, 122 S. Ct. 2390 (2002). Even though an unsuccessful lawsuit may have attacked activity that was ultimately determined to be protected under the Act, the suit nevertheless enjoyed First Amendment protection if the plaintiff reasonably believed that the conduct was unprotected and illegal. The Court therefore found that unsuccessful or meritless lawsuits were not necessarily baseless.

We decided that the Vanguard Tours rationale impinged upon genuine First Amendment petitioning and did not survive BE&K Construction. We therefore concluded that the Employer's lawsuit was not presumptively baseless even though the Employer had voluntarily withdrawn the suit.

Lawsuit Filed to Impose Costs of Litigation

In another BE&K Construction case, we decided that the Employer's lawsuit against an employee for allegedly misrepresenting his ability to perform a job to which he was reinstated pursuant to a Board order was baseless and retaliatory. We further decided that, even if the lawsuit was reasonably based, it was still unlawful because it would not have been filed but for a motive to impose the costs of litigation on the employee, regardless of the outcome.

The Board had found that the Employer's earlier termination of the employee had violated Section 8(a)(3) and had ordered the Employer to offer reinstatement and remit backpay. Shortly after returning to work, the employee refused on several occasions to do certain of his job tasks, implying that health problems prevented him from performing those tasks. The Employer again discharged him. We concluded that the second discharge was lawful because it was for insubordination.

After a circuit court enforced the Board's order of backpay for the employee's first discharge, the Employer filed a Chapter 7 bankruptcy petition claiming to have no assets. The Employer then created a new corporate entity which proceeded to satisfy all of the Employer's other debts, but not the Board's backpay order. The Employer never notified the Board, as a creditor, about the transfer of its assets to the new company even though that notice was required under the Bulk Sales Act. The Employer's owner later admitted that he had filed the bankruptcy petition to avoid paying backpay. Under the threat of a trustee- initiated Bulk Sales Act suit, the owner agreed to satisfy the backpay obligation by paying the judgment in full with interest.

The same day that the Employer paid the judgment, it filed a state court civil action against the employee seeking $20,000 in compensatory damages and $100,000 in punitive damages. The state court complaint alleged that the employee had stated at the time he was rehired that he was physically and mentally capable of performing the job, when he knew or should have known that he was not physically and mentally able to perform. The complaint further alleged that, during the short period of his reinstatement, the employee caused disruptions in production which cost the Employer $5,000 per week, and that the employees' actions in failing to perform his duties were malicious entitling the Employer to $100,000 in punitive damages. The Employer later explained that the compensatory damages were the employee's wages and benefits for the duration of his re-employment, plus an hour per day of extra supervision, two hours per day of another management personnel's time, and one hour per day of the distracted mechanics' pay.

In deciding that the suit was baseless, we first determined, under applicable state law, that the lawsuit was alleging a breach of contract and not a tort. We next determined that the damages that the Employer was seeking - wages, benefits, and other consequential "damages" plus punitive damages - were not recoverable under a breach of contract lawsuit. Even assuming that the Employer had filed a technically viable lawsuit, that lawsuit was essentially baseless because the Employer had failed to demonstrate that it could recover any of the damages it sought.

We then decided that the lawsuit was retaliatory under Bill Johnson's Restaurant v. NLRB, 461 U.S. 731 (1983). The lawsuit was baseless, sought punitive damages in an amount five times the alleged compensatory damages, and reflected the Employer's prior animus against the employee's exercise of Section 7 activity. The timing of the lawsuit, filed only one week after the Employer finally agreed to pay the backpay it owed and more than four years after the alleged damages occurred, demonstrated retaliation against the employee for exercising his protected right to file charges with the Board. We also noted that the Employer's owner specifically stated that he had filed for bankruptcy in order to avoid paying the employee's backpay.

Finally, we decided that the Employer's filing of a lawsuit with no chance of yielding financial recovery indicated that the suit was filed to impose the costs of litigation on the employee. The Employer continued to maintain the lawsuit even though it received an affidavit from the employee declaring that his health had deteriorated to the point that he needed a kidney transplant, he had no assets, owed a significant amount of debt, was being supported by social security disability payments, and could not pay any court judgment. Under these circumstances, there was sufficient evidence to find that the suit would not have been filed but for a motive to impose the costs of litigation on the employee, regardless of the outcome of the suit. Therefore, even if the suit were reasonably based, it violated Section 8(a)(1) of the Act.

Rights of Employees of a Contractor Working on Another Employer's Property

In two related cases remanded to the Board by the D.C. Circuit Court of Appeals, we took the position that employees of a contractor working on another employer's property retain their rights as employees when dealing with their own employer, but may be treated as nonemployees when they deal with the property owner employer.

New York New York, LLC ("NYNY"), a hotel and casino complex in Las Vegas, Nevada, contracted with Ark Las Vegas Restaurant Corp. ("Ark") to operate restaurants and fast food outlets inside the NYNY complex. The Union, which represented some of NYNY's employees, began a campaign to organize the Ark employees working on NYNY's premises.

In July, 1997, three off-duty Ark employees stood in an area located just outside the main entrance to the casino and began distributing handbills to NYNY customers. The handbills stated that Ark had no Union contract. A NYNY official first told the Ark employees that they were trespassing, and then had them escorted off the premises by the police.

In New York New York I, the Board found that NYNY violated Section 8(a)(1) of the Act when it prohibited the employees of Ark from distributing the handbills to customers in the sidewalk area just outside the main entrance to the casino. 334 NLRB No. 87, slip op. 9-10. The Board explained that "employees of a subcontractor of a property owner who work regularly and exclusively on the owner's property are rightfully on that property pursuant to the employment relationship, even when off duty." The Board noted that Ark's employees were not strangers, such as nonemployee union organizers, who NYNY may treat as trespassers.

In April, 1998, four off-duty Ark employees stood on NYNY's property just outside the entrances to two restaurants operated by Ark and began distributing handbills to both ARK and NYNY customers. NYNY's security personnel told the Ark employees that they were trespassing on private property, and escorted them out of the complex.

In New York New York II, the Board again found that NYNY violated Section 8(a) (1) when it prohibited Ark's employees from distributing handbills in front of Ark restaurants located inside the NYNY complex. 334 NLRB No. 89, slip op. 8. The Board again explained that "the off-duty Ark employees who took part in the handbilling ... inside the casino ... were not trespassing when they did so, but were lawfully on [NYNY's] premises pursuant to their employment relationship with Ark."

The U.S. Court of Appeals for the District of Columbia Circuit consolidated New York New York I and New York New York II and decided both cases in a single opinion. New York New York, LLC v. NLRB, 313 F.3d 585 (D.C. Cir. 2002). The Court first noted that the Board's two decisions were supported by previous Supreme Court cases which drew a distinction "between invitees and trespassers." However, the Court then stated that the Supreme Court's more recent decision in Lechmere, Inc. v. NLRB, 502 U.S. 527 (1992) ("Lechmere"), undermined that distinction by reaffirming the principle that the Act confers rights upon employees, not nonemployees, and that employers may restrict nonemployees' organizing activities on employer property. The Court therefore remanded the two cases so the Board could explain why, in areas within the NYNY complex but outside of Ark's leasehold, Ark's employees should enjoy the same rights as NYNY's own employees. The Board directed supplemental briefing on the remanded issue.

We first took the position that the Ark employees had full employee rights, even though they were working on NYNY property, to the extent they were attempting to deal their own employer. There was no question that if the Ark employees' workplace had been on Ark-owned property, the Ark employees would have been entitled to distribute union literature on that property. Allowing a property owner to post its property against all self-organizing activity by employees working on its premises, even when those employees were on their own time and in nonworking areas, would have the effect of denying to those employees the right to exercise core organizational rights at their regular jobsite. We therefore argued that employees working on another employer's property should retain their rights as employees when they seek to deal only with their own employer or their fellow employees.

We then took the position that employees working on another employer's property may be treated as nonemployees when they deal with that employer. Treating Ark employees as nonemployees to the extent that they attempted to deal with NYNY takes into account the Court's concern for the legal principles affirmed in Lechmere, i.e., that "an employer cannot be compelled to allow distribution of union literature by nonemployee organizers on his property."

This was not the approach that the Board has taken in the past. We therefore argued that the Board should overrule prior cases holding the contrary, see e.g., Gayfers Dept. Stores, 324 NLRB 1246 (1997). The Board could then allow NYNY to treat Ark's employees as nonemployees to the extent they used NYNY's property to deal with NYNY, i.e., to appeal to NYNY's customers, while requiring it to accord Ark employees their full employee rights to the extent Ark employees attempted to use NYNY's property to deal with Ark or with their fellow Ark employees.

Announcing Changes in Employee Benefits Immediately Before an Election

In our next case, we decided that the Employer unlawfully announced changes in employee benefits two days prior to a Board election.

The Union represented a unit of production and maintenance employees at one of the Employer's facilities. On September 11, the Union filed an election petition to represent a residual unit of about 50 employees. The election was scheduled for October 16. The Employer previously had announced a comprehensive review of all employee benefit plans and programs in order to develop one benefit design. The Employer had indicated at that time that the details of the new employee benefits program would be communicated by September 30.

On September 30, the Employer distributed a memorandum that "highlighted" the employee benefit changes, including a number of benefits enhancements, which would take effect the following January. The memorandum stated that the specifics of the new benefits would be revealed at meetings at each facility from mid-October through November 3.

On October 2, the plant manager at the facility in the instant case told employees that their insurance plan, holidays and vacations, and the 401K plan all would be better under the new plan. He said that a package would be delivered to employees by the end of October but that he could not discuss specifics because of the upcoming election. He further said that if the Union got in, then "we" (the Company and Union) would have to negotiate a plan.

On October 14, two days before the election, the Employer held a meeting at the facility in the instant case to explain in detail the changes in the various plans. Within the next two weeks, the Employer made similar presentations at its other facilities. The Employer offered an explanation as to why its presentations were timed between mid-October and November 3. However, the Employer did not explain why the facility in the instant case was chosen for the first presentation, occurring immediately before the election. After the election, some employees stated that they had voted against the Union because they liked the Company's newly announced health insurance plan.

In Mercy Hospital, 338 NLRB No. 66 (2002), the Board held that, ven if an employer develops benefit changes independent from a union organizing campaign, "an employer cannot time the announcement of the benefit in order to discourage union support, and the Board may separately scrutinize the timing of the benefit announcement to determine its lawfulness." The Board "will infer that an announcement or grant of benefits during the critical period [of an election] is coercive, but the employer may rebut the inference by establishing an explanation other than the pending election for the timing of the announcement or bestowal of the benefit." Id., sl. op. 2.

Here, the Employer announced the details of its benefits changes at this facility two days before the election. The Employer did not present any evidence justifying its choice of this facility as the first facility to announce the changes. We therefore decided that the Employer had not rebutted the inference that its announcement was timed to discourage employee support for the Union at this facility, in violation of Section 8(a)(1) of the Act.


Oral Agreement for Superseniority

In another case we decided that the Employer lawfully granted superseniority during a layoff to the local union president based on a previous oral agreement with the Union.

The parties' written collective-bargaining agreement contained clauses referring to seniority and layoff, but contained no clause referring to superseniority. The former local union president then negotiated an oral modification to that agreement. The oral modification provided that the former president would be taken off his regular production shift and spend his entire work time adjusting grievances and administering the bargaining agreement. This oral agreement was never reduced to writing nor formally announced to unit members. However, the parties' agreement allowed for the oral modifications, and the employees were aware of the special status granted to the local president.

Our case arose when the current local union president was not laid off, even though his department was shut down, because there was work for him to perform as union president. The former union president who had negotiated the oral modification filed the charge in our case alleging that the Employer had unlawfully accorded superseniority to the current union president.

We decided that the Employer's granting of superseniority to the current union president was lawful under the oral modification to the bargaining agreement because the modification allowed the local union president to work full-time administering the agreement and process grievances. See Gulton-Electro Voice, Inc., 266 NLRB 406, 408 (1983), enf'd 727 F.2d 1184 (D.C. Cir. 1984). The bargaining agreement also allowed for oral modifications. We were concerned, however, that a secret agreement governing superseniority would violate principles of good labor policy. The Board and the courts have expressed problems with secret agreements that contradict fundamental terms of a ratified contract. See, e.g., Merk v. Jewel Food Stores, 945 F.2d 889, 893 (7th Cir. 1991),cert. denied, 504 U.S. 914 (1992).

Although the agreement in our case was oral and not written, we decided that it was lawful and had not been kept secret. Employees were not unaware that the Union president was assigned to work full time on grievance handling and contract administration. Moreover, the former union president who had negotiated this oral agreement was the Charging Party in our case. Finally, no other unit employee was laid off or lost work on account of the grant of special status. We therefore decided to dismiss the charges in this case.


Discontinuing Dues-Checkoff After Contract Expiration

In Hacienda Hotel, 331 NLRB 665 (2000), enf. denied sub nom. Local Joint Executive Board of Las Vegas v. NLRB, 309 F.3d 578 (9th Cir. 2002), the Board held that the Employers did not violate Section 8(a)(5) by discontinuing dues-checkoff after the bargaining agreements expired where those contracts contained no union-security clauses. The Ninth Circuit Court of Appeals remanded the Board decision, and the Board ordered supplemental briefing on the remanded issue.

We took the position before the Board that its original decision was justified. However, we also offered an alternative rationale if the Board decided to reverse its original decision.

In Hacienda Hotel, the Board relied on the long line of cases following Bethlehem Steel, 136 NLRB 1500 (1962), which held that an employer's dues-checkoff obligation does not survive contract expiration. Bethlehem Steel does not, however, discuss the effect vel non of a union security clause on this holding.

The dues-checkoff exception to the usual rule against unilateral changes after contract expiration was originally developed in the context of a contract containing both union-security and dues-checkoff. The Board explained, however, that it had since "clearly come to stand for the general rule that an employer's dues-checkoff obligation terminates at contract expiration." 331 NLRB at 667.

The Ninth Circuit vacated the Hacienda Hotel decision finding that the Board failed to supply an adequate rationale for departing from the usual rule. The Court pointed out that, unlike Bethlehem Steel, the bargaining agreements in these cases contained no union-security clauses, and the Board has never supplied a rationale for its finding that dues-checkoff survives contract expiration absent a union-security clause. Some of the earlier Board cases rely on Bethlehem Steel's rationale that a dues-checkoff provision "implement[s]" a union-security clause, while others have noted that Section 302(c)(4) permits dues- checkoff only when there is a valid contract in effect. The Court noted that the Board could reach the same decision on remand provided that it offered a reasoned explanation for departing from the usual rule against post contract expiration changes.

In our supplemental brief on remand, we offered the following rationale to support the Board's original decision: because dues-checkoff implicates an employee's Section 7 right to refrain from assisting a union, and Section 302(c) (4) requires that the terms of an employee's dues deduction authorization be honored, an employer cannot continue dues-checkoff after contract expiration where the contract itself ties dues-checkoff to the term of the agreement. The Board should recognize that dues-checkoff, like union-security, is a creature of contract because dues-checkoff is rooted in both the employee Section 7 right to assist or refrain from assisting a labor organization and also in Section 302(c) (4)'s requirement that the terms of an employee's dues deduction authorization be specified and honored. The Board should not infer that employees intended to continue to support a union through dues deduction when a bargaining agreement explicitly provides that dues deduction ends when a contract ends. That decision should be left to the employees who rely on the terms of the bargaining agreement. In our case, where the dues-checkoff agreements provided that the employers would deduct dues only "during the term of the Agreement," the dues-checkoffs should end when the contracts ended.

We also suggested an alternative rationale if the Board desired to reverse its prior decision and find that there is an insufficient basis for excepting dues-checkoff, even absent union-security, from the general rule prohibiting unilateral changes after contract expiration. If the Board believed that the rationale articulated above, based on the policies of Section 7 and Section 302(c)(4), does not provide a sound statutory or policy basis to except dues- checkoff from the general unilateral change rule, the Board could reverse its prior decision and, following the analysis of the Hacienda dissent, could find that there is no statutory or policy justification for excluding dues-checkoff from the general rule that after a contract expires, an employer cannot unilaterally change dues-checkoff without bargaining to impasse.


Financial Disclosure of Affiliate Expenses

In another case, we decided that a local union violated an objecting nonmember's rights under Beck (Communication Workers of America v. Beck, 487 U.S. 735 (1988)) by failing to an explain how its affiliates spent the per capita dues money which the Local sent them.

The Local provided objectors with a proper Beck disclosure which specified a category for per capita taxes that was allocated as partially chargeable. The Local provided a separate breakdown naming four affiliates to whom it sent per capita taxes. This breakdown disclosed the amount each affiliate received, and the amount each affiliate allocated as chargeable. The Local used the percentages of chargeability supplied by each affiliate to allocate the portion of chargeable financial assistance to that organization. The Local provided the complete financial disclosure statement of only one of these affiliates, the International Union. The Local did not provide financial disclosure statements for its other three affiliates, nor did it provide any explanation of how those affiliates spent the per capita dues money the Local provided them.

The International's financial disclosure statement set forth several subcategories of charges and the amounts the International allocated as chargeable. The disclosure allocated as fully chargeable the amounts the International forwarded to its own affiliates. However, the International did not provide the financial disclosures of any of these affiliates.

Under California Saw and Knife Works, 320 NLRB 224 (1995), enfd. 133 F.3d 1012 (7th Cir. 1998), cert. denied 525 U.S. 813 (1998) a union complies with its duty of fair representation by providing objectors with sufficient financial information "to enable objectors to determine whether to challenge" the union's calculation of chargeable dues. A union need not disclose all of its expenditures but need only disclose "major categories" of expenditures. Thus, where the Union here provided summaries of its affiliates' expenditures, which disclosed major categories of union expenditures, the Union did not violate its duty of fair representation even though the summaries did not include supporting schedules and audits.

Following California Saw, the Board has held that a union need only provide objectors with the amount transferred to affiliate organizations and the percentage chargeable to the objectors. But in Penrod v. NLRB, 203 F.3d 41 (D.C. Cir. 2000), rev'g Teamsters Local 166 (Dyncorp Support Services), 327 NLRB 950, 954 (1999). The D.C. Circuit reversed the Board's decision in Dyncorp. The court held that if an affiliate allocated any portion of the union's contributions as chargeable, the union was required to provide an explanation of how that affiliate used those funds. On remand from the D.C. Circuit, the Board accepted the court's decision as the law of the case but did not explicitly adopt the D.C. Circuit's rationale. Teamsters Local 166 (Dyncorp Support Services), 333 NLRB No. 141, slip op. at 1 (2001). The Board subsequently indicated that it still agreed with its decision in Dyncorp though it was not required to reach the issue. Office Employees Local 29 (Dameron Hospital Assn.), 331 NLRB 48, 50 fn. 8 (2000). Thus, while it appears that the Board adhered to its decision in Dyncorp, the Dameron Board did not clearly reject the D.C. Circuit's decision in Penrod because the union had in fact provided the complainant with the International's breakdown.

In our case, the Union provided the International's financial disclosure but failed to provide any indication as to how its other affiliates spent the percentage of money that they allocated as chargeable. While this would appear sufficient under the Board's decisions in Dyncorp, the D.C. Circuit court's decision in Penrod called those decisions into question and, more significantly, for the reasons noted in the next case reported herein of developments since the Board's California Saw & Knife Works decision, we decided to place this issue before the Board and argue that the Local was required to provide an explanation as to how its affiliates, other than the International, spent the money sent to them.

However, as to the other issue presented in our case, the International provided a breakdown of its own expenditures into subcategories and then identified chargeable portions, as the international union had done in Dameron. We found no authority that even arguably suggested that a union must provide a further layer of financial breakdown, i.e., must break down the financial expenditures of the affiliates of its affiliates. We therefore decided that the International's disclosure, breaking down affiliation fees into subcategories, clearly satisfied the California Saw disclosure requirement.

Initial Beck Notice to Contain Percentage of Dues Reduction

In another Beck case, we considered what information a union was required to give initially to employees regarding their union dues if those employees chose to either remain full members under a union-security clause, or to become non- member fee payers who objected to paying non-representational costs. We decided that the amount of full dues and the percentage reduction that objecting employees would receive is information essential to an employee's ability to decide on an informed basis whether to object, and that requiring unions to provide this information in their initial notices is not overly burdensome.

In California Saw & Knife Works, 320 NLRB 224, 233 (1995), the Board found that when or before a union seeks to collect dues and fees under a union-security clause, it must inform employees of their right to be or remain nonmembers and that nonmembers have the right to, among other things, be given sufficient information to enable the employee to decide whether to object to paying for nonrepresentational costs. Under current Board law, an initial Beck notice need not provide the percentage of a union's expenditures that is spent on non- representational matters. See Teamsters Local 166 (Dyncorp Support Services), 327 NLRB 950, 952 (1999), enf. denied sub nom. Penrod v. NLRB, 203 F.3d 41 (D.C. Cir. 2000). Rather, such information is required only if an employee actually makes a Beck objection. We decided, in agreement with the Court of Appeals decision in Penrod v. NLRB, that an initial Beck notice should contain such information.

When California Saw issued in 1995, the concern that caused the Board not to require disclosure of the percentage reduction in dues in an initial Beck notice was that calculating this percentage for inclusion in an initial notice, when there might not yet be any objectors, would likely be an expensive and time- consuming burden upon unions. However, the burdensome nature of such a requirement no longer appears to be a significant concern. A review of Board and court decisions revealed that at least 26 national and international unions, collectively representing well over 10 million employees, have Beck systems in place, and that their affiliated local unions can rely on the international's chargeable percentage under the Board's "local presumption." Thus, the importance of this information for making informed decisions as to whether to become a Beck objector now appears to outweigh any burden associated with compiling the percentage information and providing it to employees in the initial notice.

We therefore issued a complaint to put before the Board the issue of whether a union violates its duty of fair representation by failing to provide employees such information in its initial Beck notice.


Union Fines for Crossing a Picket Line

In our last reported case, we decided that the Union unlawfully fined employees for crossing a picket line under at least one of the following three theories: 1) the Union had not informed the employees of their right to be nonmembers under NLRB v. General Motors, 373 U.S. 734 (1963), and their right to object to paying nonrepresentational dues under Beck; 2) the Union had misled at least one employee about her right to resign prior to the strike; and 3) the Union fines contravened a strike amnesty agreement.

The employees had been Union members working for the Employer as registered nurses. The Employer's bargaining agreement contained a union-security clause requiring Union membership. Prior to a strike, one of the employees submitted a resignation letter to the Union. The employee withdrew her letter when the Union told her that it would seek her termination unless she rescinded her resignation. This employee along with two other employees then crossed the Union's picket line, without resigning from the Union.

At the conclusion of the strike, the Union's membership approved a strike settlement agreement that contained, among other things, a strike amnesty clause prohibiting both the Employer and the Union from taking any action against any employee who did or did not participate in the strike. In particular, the Union agreed that "(no) member of [the Union] (would) retaliate against any nurse or other employee who chose, in any way, to oppose the strike."

Several months later, the Union president brought internal union charges against each of the above employees. Upon learning of the charges, each employee resigned from the Union and asked for her Beck rights. However, the Union failed to provide the employees with proper Beck financial information concerning the expenditure of Union dues. The Union president's charges eventually resulted in fines against the employees. We first decided that the Union violated Section 8(b)(1)(A) of the Act by disciplining these "employee-members" for crossing the picket line because the Union either had never informed those "members" of their General Motors and Beck rights, or had misinformed them of these rights.

In California Saw & Knife Works, 320 NLRB 224, 231-235 (1995), the Board required unions to notify all newly hired nonmember employees of their rights under General Motors and Beck. That notice requirement for newly hired employees has been expanded to include all employees who had never been given proper notice. See Rochester Mfg. Co., 323 NLRB 260 (1997), affd. 194 F.3d 1311(6th Cir. 1999), cert. denied 529 U.S. 1066 (2000). In addition, once notice has been given, the employees have a reasonable period of time in which to resign their union membership, and any resignation will be treated retroactively. In our case, the Union imposed fines against employees for working during a strike when the Union had failed to inform them of their rights. Since the employees had a right to resign retroactively under Rochester Mfg. Co., the fines were unlawful.

Second, under Pattern Makers v. NLRB, 473 U.S. 98 (1985), a union cannot restrict members from resigning in the face of a strike. With respect to at least one of these employees, the Union intentionally misled her concerning her right to resign, causing her to rescind her resignation. Imposition of the fine against that employee was unlawful for the additional reason that it restrained and coerced that employee's right to resign.

Finally, the Union had signed a strike amnesty agreement promising to forego the pursuit of any employee who failed to join the strike. The plain language of the amnesty agreement stated that no discipline was to be imposed on any conduct connected to the strike. There was no language or extrinsic evidence delineating any type of conduct to be excluded from the Union's no-retaliation pledge. We therefore concluded that the fines were also unlawful because the strike amnesty agreement prohibited the Union from disciplining these employees for strike related activities.

Section 10(j) Authorizations

During the four month period from February 1, 2003 through May 31, 2003, the Board authorized a total of five Section 10(j) proceedings. Most of the cases fell within factual patterns set forth in General Counsel Memoranda 01-03, 98-10, 89-4, 84-7, and 79-77.1

One case, involving a successor employer, was somewhat unusual and therefore warrants discussion.

The Employer was in the solid waste removal business. It had a small bargaining unit covered by an extant collective-bargaining agreement with a union. It purchased the assets of another waste hauling company, which had a larger bargaining unit whose employees were represented by a different Union. The Employer combined the two operations into a new single facility. It commenced operations of its new business with a unit of 22 drivers, helpers and mechanics, a majority of whom were employees who had formerly worked for the predecessor employer it had purchased. The Employer then refused to recognize the predecessor employees' Union, and instead recognized the second union representing the Employer's smaller historical bargaining unit. The Employer and this second union applied their extant labor agreement to the new facility. The Employer also discharged 10 employees after they commenced an alleged unfair labor practice strike.

The Region concluded that there was reasonable cause to believe that the Employer was a Burns successor (406 U.S. 272) to the predecessor employer's bargaining obligation and had violated Section 8(a)(5) by failing to recognize and bargain with the Union in the merged unit. The Region also concluded that there was reasonable cause to believe that the Employer had violated Section 8(a)(2) by recognizing a minority union, and by applying its labor contract to the merged unit. Finally, the Region concluded that there was reasonable cause to believe that the Employer's mass discharge of the strikers violated 8(a)(3).

We concluded, and the Board agreed, that Section 10(j) relief was warranted in this case. The Region was directed to seek an injunction requiring the Employer, on an interim basis, to cease recognition of the minority union and cease application of its contract, in order to prevent the minority union's improper entrenchment in the merged unit. We also sought an interim bargaining order at the new facility and interim reinstatement to the discharged strikers. This injunctive relief was warranted pending Board adjudication to protect the parties' bona fide collective-bargaining relationship, prevent the likely erosion of the Union's employee support and preclude the permanent "scattering" of the discharged strikers to other jobs.

The District Court granted the requested injunctive relief.

The five cases authorized by the Board fell within the following categories as described in General Counsel Memoranda 01-03, 98-10, 89-4, 84-7 and 79-77:

Category Number of Cases In Category Results
1. Interference with organizational campaign (no majority) 1 Won case.
2. Interference with organizational campaign (majority) 12 Case withdrawn based upon changed circumstances.
3. Subcontracting or other change to avoid bargaining obligation 0 - - -
4. Withdrawal of recognition from incumbent 0 - - -
5. Undermining of bargaining representative 0 - - -
6. Minority union recognition 1 Case is pending.
7. Successor refusal to recognize and bargain 2 Won one case; one case is pending.
8. Conduct during bargaining negotiations 0 - - -
9. Mass picketing and violence 0 - - -
10. Notice requirements for strikes and picketing (8(d) and 8(g)) 0 - - -
11. Refusal to permit protected activity on property 0 - - -
12. Union coercion to achieve unlawful object 0 - - -
13. Interference with access to Board processes 0 - - -
14. Segregating assets 0 - - -
15. Miscellaneous 0 - - -

1 See also NLRB Section 10(j) Manual, Appendix A, "Training Monograph No. 7."

2 A majority of the Board in this case did not authorize seeking an interim bargaining order consistent with NLRB v. Gissel Packing Co., 395 U.S. 575 (1969).



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