Employment Law UV

C H A P T E R 12

The Rise of Organized Labor and Its Regulatory Framework

The Industrial Revolution brought about the rise of centralized manufacturing, with facto- ries replacing the cottage industry in which craftsmen produced their own goods. These factories required laborers, who were subjected to harsh conditions and long hours. Despite the hardships that the new Industrial Age presented, it also carried the promise of a vast increase both in wealth and in mass-produced consumer goods. That increase would be sufficient to make possible a greatly improved standard of living for all classes, including the factory workers. It would be necessary, however, for laborers to join together to ensure that they would get their share of the increasing wealth of the nation. Employers reacted to the collective action of the workers by turning to the courts in an attempt to prevent the laborers from improving their lot in life at the expense of the landed class or the employers. Although labor’s initial attempts at joining together were held illegal as combinations or conspiracies, the ruling class and public opinion gradually came to recognize the legitimacy of joint action by workers.

12-1 Labor Development in America

The craftsmen and journeymen of late 18th- and early 19th-century America recognized the importance of organized activity to resist employer attempts to reduce wages. The American courts initially reacted to these activities with hostility. One of the earliest recorded American labor cases is the Philadelphia Cordwainers case, decided in 1806. The cordwainers, or shoemakers, formed a club and presented the master cordwainers, their employers, with a rate schedule for production of various types of shoes. The wage increases they demanded ranged from 25 to 75 cents per pair. The employers, however, who were attempting to compete with shoe producers in other cities, sought to lower prices to compete more effectively. The employers took their complaint to the public prosecutor, and the workers were charged with “contriving and intending unjustly and oppressively, to increase and augment the prices and rates usually paid to them” and with preventing, by “threats, menaces, and other unlawful means,” other journeymen from working for lower wages. They were also accused of conspiring to refuse to work for any master who employed workers who did not abide by the club’s rules.

In directing the jury to consider the case, the judge noted that “... a combination of workmen to raise their wages may be considered in a two-fold point of view: one is to benefit themselves ... the other is to injure those who do not join their society. The rule of law condemns both....” The jury found the defendants guilty of conspiracy to raise their wages. The effect of the decision was to render combinations of workers for the purpose of raising wages illegal. The case produced a public outcry by the Jeffersonians and in the press. Not all of labors activities were held illegal. For example, in People v. Melvin,1 a New York cordwainers’ case decided in 1809, the charge of an illegal combination to raise wages was dismissed. The court declared that the journeymen were free to join together, but they could not use means “of a nature too arbitrary and coercive, and which went to deprive their fellow citizens of rights as precious as any they contended for.” Although that language may have sounded promising, the law remained in a most unsettled state. In 1835, the New York Supreme Court in People v. Fisher2 found union- ized workers guilty of criminal conspiracy under a statute that vaguely stated, “If two or more persons shall conspire ... to commit any act injurious to the public health, to public morals, or to trade or commerce; or for the perversion or obstruction of justice or the due administration of the laws—they shall be deemed guilty of a misdemeanor.” The workers— again shoemakers organized into a club—had struck to force the discharge of a coworker who had accepted wages below the minimum set by the club. The defendants were guilty of conspiring to commit an act “injurious to trade or commerce,” the court reasoned. Artificially high wages meant correspondingly higher prices for boots, which prevented local manufacturers from selling as cheaply as their competitors elsewhere. Furthermore, the court observed, the community was deprived of the services of the worker whose discharge was procured by the shoemakers’ union. Such decisions provoked outrage among workers in the eastern states. In the wake of these trials, mobs of workers sometimes held their own mock trials and hanged unpopular judges in effigy. Despite such popular sentiments, the courts and the law remained major obstacles to organized labor achieving a legitimate place in society. The first step toward that achievement was the law’s recognition that a labor organiza- tion was not per se an illegal conspiracy. That legal development came in the landmark decision of the Massachusetts Supreme Court in 1842 in the case of Commonwealth v. Hunt,3 which held that union activities were not illegal conspiracies as long as the objectives of those activities, and the means employed to achieve those objectives, were not illegal. Although Commonwealth v. Hunt did not abolish the doctrine of criminal conspiracy with regard to unions, it did make it extremely difficult to apply the doctrine to labor activ- ities. After 1842, the legality of labor unions was accepted by mainstream judicial opinion. Furthermore, in the post–Civil War period, most state appellate courts accepted the legality of peaceful strikes, provided that the purpose of the work stoppage was determined by the court to be legal.

12-1a The Post–Civil War Period After Commonwealth v. Hunt, the courts grudgingly accorded labor unions a measure of legitimacy, but the labor movement was forced to struggle—sometimes violently—with employers for recognition. The years following the Civil War were a turbulent period for the American labor movement. Those years saw not only a great increase in the growth and development of unions, but they were also marked by violent strikes in several industries. The last decades of the 19th century saw three centers of labor activity: the Knights of Labor, the socialists, and the American Federation of Labor. Each group sought to rejuve- nate organized labor after the declines suffered during the 1870s. The Knights of Labor The Noble Order of the Knights of Labor, first developed in Philadelphia in 1869, sought to organize both skilled and unskilled workers. Following the violent railway strike of 1877, workers rushed to join the Knights, which became a national organization. From 1878 to 1884, they conducted a large number of strikes, but their focus on industry-wide organiza- tions rather than craft unions posed problems because the unskilled workers could easily be replaced during a strike. Membership in the Knights grew, but turnover was high, as members were suspended for nonpayment of dues, usually in the wake of unsuccessful strikes. Some locals disbanded when employers, following unsuccessful strikes, forced workers to sign yellow-dog contracts (in which they agreed not to join any union). After suffering defeats in a number of strikes, by 1886 the Knights sought to form a political alliance with the agrarian reform movement and the socialists. This turn to political action had only moderate success. The skilled trade unions within the Knights came to believe that they could more effectively achieve their goals through narrowly based organizations emphasizing labor actions rather than political efforts. Those unions pulled out of the Knights of Labor, causing its decline. The Socialists The establishment of the International Workingmen’s Association (the First International) by Karl Marx in London in 1864 stirred interest in socialism in the United States. In 1865, the German Workingmen’s Union was formed in New York City.4 The socialist movement initially sought to organize unions, but it turned to political activities in the aftermath of the railway strike of 1877, with its political arm becoming the Socialist Labor Party. The public outcry following the Haymarket Riot in 1886, during which a bomb killed 11 persons, served to undercut the public acceptance and legitimacy of the socialist movement. The labor activities of the socialist movement came to be represented by the Industrial Workers of the World (the IWW, or “Wobblies”) during the early decades of the 20th century. The Wobblies were a radical union that engaged in a number of violent strikes. Their counterpart in the western United States was the Western Federation of Miners, led by William “Big Bill” Haywood, a socialist labor leader. Following the Russian Revolution in 1917, the Wobblies were eclipsed by the American Communist Party, which empha- sized political activities. The influence of the Communist Party in labor activities, although important during the Depression, declined during World War II and the late 1940s; the Cold War and the McCarthy “red hunts” in the late 1940s and early 1950s effectively brought an end to organized labor’s links to the American Communist Party.

The American Federation of Labor The American Federation of Labor (AFL), which ultimately became the dominant organi- zation of the American labor movement, was the rival of both the socialists and the Knights of Labor. The AFL emphasized union activities in contrast to the political activities of the Knights and the socialists. This “pure and simple” trade union movement was started by Samuel Gompers and Adolph Strasser of the Cigarmakers’ Union. The AFL adopted a pattern of union organization based on the British trade union system: • local unions were to be organized under the authority of a national association; • dues were to be raised to create a large financial reserve; and • sick and death benefits were to be provided to members. The national organization’s focus was on wages and practical, immediate goals rather than on the ideological and political aims of the Knights of Labor and the Socialists. A feder- ation of trade unions developed. Although the federation was open to unskilled workers, it was dominated by unions representing the skilled trades or crafts. The federation’s unions initially faced stiff rivalry from the Knights of Labor, but as the Knights declined, the AFL grew in size and importance. By 1900, organized labor was largely composed of the 500,000 skilled workers in AFL-affiliated unions. For the next few decades, the AFL and its affiliated craft unions dominated the organized labor movement in America. The Congress of Industrial Organizations The Congress of Industrial Organizations (CIO) was a federation of unions that sought to organize the unskilled production workers largely ignored by the AFL. It grew out of a renewed interest in industry-wide organizing activity led by the autoworkers, steel workers, and mine workers under John L. Lewis. The AFL opposed the new organization and in 1938 expelled all unions associated with the CIO. The CIO, which emphasized political activity as well as organizing activity, had spectacular success in organizing the workers of the steel, automobile, rubber, electrical, manufacturing, and machinery industries. After years of bitter rivalry, the AFL was finally forced to recognize the CIO; the AFL (with 10.5 million members) merged with the CIO (with 4.5 million members) in 1955. The resulting organization, the AFL-CIO, was the dominant body in the American labor movement. The Change to Win Coalition In 2005, seven major unions accounting for nearly six million members broke away from the AFL-CIO to form the Change to Win Coalition: • The International Brotherhood of Teamsters • The Service Employees International Union • The Laborers’ International Union of North America • The United Brotherhood of Carpenters and Joiners of America • The United Farm Workers of America • The United Food and Commercial Workers International Union • Unite Here The coalition seeks to revitalize the labor movement by putting greater efforts into orga- nizing and adapting to the changing attitudes of 21st-century American workers.

12-1b Recent Trends in the Labor Movement The years following World War II were boom years for the labor movement. Unions grew in strength in the manufacturing industries until approximately one-third of the American labor force was unionized. Union membership in the private sector reached a peak in the early 1950s and has been slowly declining since then; by 2009, only about 12 percent of the workforce (public and private sector) were unionized. Since the 1960s, unionized employers have faced increasing competition from domestic non-union firms and foreign competitors. The “oil-induced” inflation of the 1970s also increased the economic pressures on manu- facturers and employers, making them very sensitive to production costs—of which labor costs are a significant component. The manufacturing sector of the U.S. economy, in which the labor movement’s strength was concentrated, has been hit hardest by the changing economic conditions and global competition. The late 1970s and the 1980s were marked by the “restructuring” of American industry. Mergers, takeovers, plant relocations to the mostly non-union Sun Belt and overseas, and plant closings all became common occurrences, as did collective bargaining, where the employer asked the union for “give backs”—reductions in wages and benefits and relaxation of restrictive work rules. The mid-1980s were characterized by the decline of the manufacturing sector and the rise of the service economy, the indifference (or hostility) of the Reagan administration toward organized labor, and an aggressiveness toward unions on the part of management. The decline of manufacturing in the United States and the outsourcing of jobs to low-wage countries continued through the 1990s and into the first decade of the 21st century, and the economic recession that began in late 2007 resulted in the loss of huge numbers of jobs. The dramatic decline of the U.S. auto industry, marked by General Motors and Chrysler filing for bankruptcy, and the drastic wage and benefits cuts forced upon the United Auto Workers were stark evidence of the decline of organized labor. As of 2009, less than 8 percent of U.S. private sector workers were union members.

While private sector unions have been in decline, unions in the public sector have been growing since the 1960s; by 2009, about 36 percent of government employees were union members. The 1980s were difficult for public sector unions—the “tax revolts” by American voters and the antigovernment attitude of the Reagan and George H. W. Bush administrations put limits on the ability of government employers to improve wages and benefits for public sector employees. The Clinton administration provided unions with a sympathetic ear at the White House, but the Republican-controlled Congress blocked Clinton’s ability to make legislative changes and limited the extent to which organized labor could take advantage of the Democratic president’s years in office. Any political influence labor enjoyed during the Clinton administration vanished during the eight years of the George W. Bush administration. The election of Barack Obama, and the control of both houses of Congress by the Democrats, brought a renewed hope to the U.S. labor movement, and union officials looked forward to more political influence. However, the Republicans in Congress made it clear that they would oppose any worker- friendly legislation, and filibuster threats in the Senate forced President Obama to resort to using recess appointments to fill vacancies on the National Labor Relations Board. Those recess appointments, which were made during a three-day recess between pro forma sessions of the Senate in 2012, were held to be unconstitutional by the Supreme Court in National Labor Relations Board v. Noel Canning.5 That decision meant that the NLRB lacked a legal quorum from January 4, 2012, until July 30, 2013, and that decisions issued by the NLRB during that period were invalid. A political compromise was reached, and the president subsequently appointed a full complement of members to the NLRB.

12-2 Legal Responses to the Labor Movement

While judicial hostility against union formation decreased over time, employers facing threats of strikes or boycotts by unions sought new legal weapons to use against labor activ- ists. The development of the labor injunction in the late 1880s provided a powerful weapon for use against the activities of organized labor. 12-2a Injunctions An injunction is a court order directing a person to do, or to refrain from doing, specific actions. Injunctions are available whenever monetary damages alone are inadequate and when the plaintiff’s interests are facing irreparable harm from the defendant’s actions. A defendant who violates the court order is subject to fines and can be jailed for contempt of the court. Throughout the last decade of the 19th century and the first two decades of the 20th century, the courts willingly granted injunctions against actual or threatened strikes or boycotts by unions. The courts did not require any showing that the strike or boycott

actually harmed the employer’s business. The courts were also willing to assume that legal remedies such as damage awards were inadequate. Generally, the injunctions granted were written in very broad terms and directed against unnamed persons. The injunctions were often granted in ex parte proceedings, so called because they occurred without any representative of the union present. Once an injunction had been granted, court officers would enforce it against the union. Union members who resisted risked jail terms and/or fines for being in contempt of the court order. In the face of such threatened sanctions, union leaders generally had to comply by stopping the strike or boycott. Therefore, the labor injunction became a potent weapon for management to use against any union pressure tactics. 12-2b Yellow-Dog Contracts In addition to securing labor injunctions against union activities, employers were able to use the courts to enforce yellow-dog contracts, or contracts of employment that required employees to agree not to join a union. By incorporating the antiunion promise in the contract, employers could legally make nonmembership in unions a condition of employ- ment. Employees who joined a union could be fired for breach of their employment contract. In the 1917 case of Hitchman Coal Co. v. Mitchell,6 the Supreme Court upheld an injunction against a strike that was intended to force the employer to abandon the yellow- dog contracts. The majority of the Court held that the union, by inducing the workers to break their contracts, was guilty of wrongly interfering with contractual relations. The Court’s decision confirmed the importance of the yellow-dog contract as another weapon in the employers’ legal arsenal against unions. 12-2c Antitrust Laws In addition to labor injunctions and yellow-dog contracts, antitrust laws provided yet another legal weapon for employers. Congress passed the Sherman Antitrust Act in 1890 in response to public agitation against such giant business monopolies as the Standard Oil Company and the American Tobacco Company. The act outlawed restraints of trade and monopolizing of trade. Section 1 stated: “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states, or with foreign nations, is hereby declared to be illegal.” It provided for criminal penalties— fines and imprisonment—for violations. Other provisions of the act allowed private parties to sue for damages if they were injured by restraints of trade, and gave the federal courts power to issue injunctions against violators of the act. Most observers assumed the act was limited to business trusts and predatory corporate behavior. Loewe v. Lawlor, known as the Danbury Hatters’ case, however, made it clear that organized labor activities were also subject to the Sherman Act.

CASE 12.1 Loewe v. LawLor 208 U.S. 274 (1908)

Facts: The Danbury Hatters’ case grew out of an AFL boycott of the D. E. Loewe Company of Danbury, Connecticut, that was called to assist efforts by the United Hatters’ Union to organize the Loewe workers. The company responded by filing a suit under the Sherman Act in 1903. The company alleged that the boycott was a conspiracy to restrain trade, and it sought damages totaling $240,000 against the individual union members. The district court, rejecting the union’s argument that the boycott did not interfere with “trade or commerce among the states,” found the defendants liable for damages. The union appealed to the U.S. Supreme Court. Issue: Are union boycotts attempts to restrain or interfere with trade in violation of the Sherman Act? Decision: The Supreme Court held that the boycott was a combination in restraint of trade within the meaning of the Sherman Act. The Court refused to read into the act an exemption for labor activities, citing the words of Section 1 that “every... combination or conspiracy in restraint of trade” was illegal.

After the Supreme Court’s decision in the Danbury Hatters’ case, other employers also successfully attacked union boycotts under the Sherman Act. In the face of such actions, the AFL lobbied Congress for legislative relief. The passage of the Clayton Act in 1914 appeared to provide the relief sought by labor. The key provisions of the Clayton Act, which also amended the Sherman Act, were Sections 6 and 20. Section 6 stated: the labor of a human being is not a commodity or article of commerce. Nothing contained in the antitrust laws shall be construed to forbid the existence and operation of labor ... organizations, ... nor shall such organizations, or the members thereof, be held or construed to be illegal combinations or conspiracies in restraint of trade, under the antitrust laws. Section 20 restricted the issuance of labor injunctions. It provided that no injunction could be issued against employees unless irreparable harm to the employer’s property or property rights was threatened and the legal remedy of monetary damages would be inadequate. Samuel Gompers of the AFL declared those sections to be “labor’s Magna Carta.” The effect of those sections was the subject of the following 1921 Supreme Court decision.

CASE 12.2 DupLex printing press Company v. Deering 254 U.S. 443 (1921)

Facts: The Machinists’ Union at the Duplex Printing Press Company organized a strike to force the employer to agree to a closed-shop provision, to accept an eight-hour workday, and to adopt a union-proposed wage scale. When the strike proved unsuccessful, the union called for a national boycott of Duplex products. Duplex responded by filing suit for an injunction under the Clayton Act against the officers of the New York City Local of the Machinists’ Union. The union argued that Sections 6 and 20 of the Clayton Act prevented the issuance of an injunction against the union and its officers. Issue: Do Sections 6 and 20 of the Clayton Act exempt labor union activities from the prohibitions of the Sherman Act?

Decision: A majority of the Supreme Court held that Section 6: assumes the normal objects of a labor organization to be legitimate, and declares that nothing in the antitrust laws shall be construed to forbid the existence and operation of such organizations or to forbid their members from lawfully carrying out their legitimate objects.... But there is nothing in the section to exempt such an organization or its members from accountability where it or they depart from its normal and legitimate objects and engage in actual combination of conspiracy in restraint of trade. And by no fair or permissible construction can it be taken as authorizing any activity otherwise unlawful, or enabling a normally lawful organization to become a cloak for an illegal combination or conspiracy in restraint of trade as defined by the antitrust laws. The Court found that Congress did not intend for Section 6 or Section 20 to be a general grant of immunity for conduct that would otherwise violate the antitrust laws and upheld the injunction against the union and its officers. The Court’s decision effectively gutted the Clayton Act provisions that had been hailed by Gompers.

12-3 The Development of the National Labor Relations Act

Organized labor reacted to the judicial endorsement of employer antiunion tactics by engaging in coordinated political pressure for legislative controls on judicial involvement in labor disputes. This political activity yielded results in 1932 when a federal anti-injunction act, sponsored by Senator Norris and Congressman La Guardia, was enacted. 12-3a The Norris–La Guardia Act The Norris–La Guardia Act, in effect, was a legislative reversal of the prevailing view of the judiciary that economic injury inflicted by unions pursuing their economic self-interest was unlawful both at common law and under antitrust laws. The act created a laissez-faire environment for organized labor’s self-help activities. Provisions Section 1 of the Norris–La Guardia Act prohibits the federal courts from issuing injunc- tions in labor disputes except in strict conformity with the provisions set out in the act. Those provisions, contained in Section 7, require the following: • The court must hold an open-court hearing, with opportunity for cross-examination of all witnesses and participation by representatives of both sides to the controversy. • The court can issue an injunction only if the hearing has established that unlawful acts have actually been threatened or committed and will be committed or continue to be committed unless restraints were ordered. • The party seeking the injunction has to establish that substantial and irreparable injury to its property will follow and that it has no adequate remedy at law. • The court has to be convinced that the public officials charged with the duty to protect the threatened property are unable or unwilling to provide adequate protection. Only after complying with this procedure and making such findings can the court issue an injunction in a labor dispute. Section 4 of the act sets out a list of activities that are protected from injunctions, even when the foregoing safeguards might be observed. The section states that: No court of the United States shall have jurisdiction to issue any restraining order or temporary or permanent injunction in any case involving or growing out of any labor dispute to prohibit any person or persons participating or interested in such dispute (as these terms are herein defined) from doing, whether singly or in concert, any of the following acts: (a) Ceasing or refusing to perform any work or to remain in any relation of employment; (b) Becoming or remaining a member of any labor organization or of any employer organization, regardless of any such undertaking or promise as is described in Section 3 of this act; (c) Paying or giving to, or withholding from, any person participating or interested in such labor dispute, any strike or unemployment benefits or insurance, or other moneys or things of value; (d) By all lawful means aiding any person participating or interested in any labor dispute who is being proceeded against in, or is prosecuting, any action or suit in any court of the United States or of any State; (e) Giving publicity to the existence of, or the facts involved in, any labor dispute, whether by advertising, speaking, patrolling, or by any other method not involving fraud or violence; (f) Assembling peaceably to act or to organize to act in promotion of their interests in a labor dispute; (g) Advising or notifying any person of an intention to do any of the acts heretofore specified; (h) Agreeing with other persons to do or not to do any of the acts heretofore specified; and (i) Advising, urging, or otherwise causing or inducing without fraud or violence the acts heretofore specified, regardless of any such undertaking or promise as is described in Section 3 of this act.

The term labor dispute is defined in Section 13(c) of the act, which states: The term “labor dispute” includes any controversy concerning the terms or conditions of employment, or concerning the association or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of employment, regardless of whether or not the disputants stand in the proximate relation of employer and employee. Finally, Section 3 of the act declares that yellow-dog contracts are contrary to public policy of the United States and are not enforceable by any federal court. Nor can the courts use such contracts as the basis for granting any legal or equitable remedies (such as injunctions). State Anti-injunction Laws Although the Norris–La Guardia Act applies only to the federal courts, a number of states passed similar legislation restricting their court systems in issuing labor injunctions. These acts are known as “little Norris–La Guardia Acts.” The Supreme Court upheld the consti- tutionality of Wisconsin’s little Norris–La Guardia Act in the 1937 decision of Senn v. Tile Layers’ Protective Union.7 Although the case did not involve the federal act, it did raise the same legal issues as would an attack on the constitutionality of the federal act; the decision in Senn was regarded as settling the question of the federal act’s constitutionality. Validity and Scope of the Norris–La Guardia Act The following case illustrates the broad scope of the definition of labor dispute under the Norris–La Guardia Act, and the procedural requirements for seeking an injunction.

CASE 12.3 Pulte Homes, inC. v. Laborers’ international union of north America 648 F.3d 295 (6th Cir. 2011)

Facts: Pulte Homes, Inc., a successful home builder, sued a national labor union for orchestrating an attack on the company’s phone and e-mail systems. The complaint stems from an employment dispute. In September 2009, Pulte fired a construction crew member, Roberto Baltierra, for misconduct and poor performance. Shortly thereafter, the Laborers’ International Union of North America [LIUNA] began mounting a national corporate campaign against Pulte—using both legal and allegedly illegal tactics—in order to damage Pulte’s goodwill and relationships with its employees, customers, and vendors. LIUNA filed an unfair- labor-practice charge with the National Labor Relations Board [NLRB]. LIUNA claimed that Pulte actually fired Baltierra because he wore a LIUNA t-shirt to work, and that Pulte also terminated seven other crew members in retaliation for their supporting the union. Pulte maintains that it never terminated any of these seven additional employees. LIUNA also began bombarding Pulte’s sales offices and three of its executives with thousands of phone calls and e-mails. To generate a high volume of calls, LIUNA both hired an auto-dialing service and requested its members to call Pulte. It also encouraged its members, through postings on its website, to “fight back” by using LIUNA’s server to send e-mails to specific Pulte executives. Most of the calls and e-mails concerned Pulte’s purported unfair labor practices, though some communications included threats and obscene language. The calls clogged access to Pulte’s voicemail system, prevented its customers from reaching its sales offices and representatives, and even forced one Pulte employee to turn off her business cell phone. The e-mails also overloaded Pulte’s system, which limits the number of e-mails in an inbox; and this, in turn, stalled normal business operations because Pulte’s employees could not access business-related e-mails or send e-mails to customers and vendors. Four days after LIUNA started its phone and e-mail blitz, Pulte’s general counsel contacted LIUNA and requested that LIUNA stop the attack because it prevented Pulte’s employees from doing their jobs. When the calls and e-mails continued, Pulte filed this suit alleging several state-law torts and violations of the Federal Computer Fraud and Abuse Act [CFAA, a statute that both criminal- izes certain computer-fraud crimes and allows for civil suit.] Pulte asked the court to issue a preliminary injunc- tion stopping LIUNA’s phone and e-mail campaign. The district court denied Pulte’s motion, holding that it lacked jurisdiction under the Norris–LaGuardia Act [NLGA] to issue a preliminary injunction because the suit involves a labor dispute and LIUNA’s campaign attempts to publicize that dispute. Pulte appealed to the U.S. Court of Appeals for the Sixth Circuit. Issue: Is the phone and email campaign by LIUNA within the definition of a labor dispute under the NLGA, so that the court is unable to issue an injunction prohibiting the conduct? Decision: If a lawsuit involves or grows out of a “labor dispute,” the NLGA deprives a court of jurisdiction to issue a preliminary injunction “except in a strict conformity with the provisions” of the NLGA. Among the NLGA’s rigid rules are several procedural safeguards. For example, before a court can issue a preliminary injunction, it must hold an evidentiary hearing and make findings of fact, and the plaintiff must post a bond. Because the district court here held that Pulte’s complaint springs from a labor dispute, NLGA’s procedural requirements apply. Pulte, however, failed to comply with one of these safeguards: Section 8 of the NLGA. Section 8 prohibits a court from granting an injunction “to any complainant ... who has failed to make every reasonable effort to settle [a labor] dispute ... by negotiation.” The court must determine whether the plaintiff’s attempts to settle the dispute constitute “every reasonable effort.” Pulte’s settlement efforts here, because they did not include any attempt to confer with LIUNA’s attorneys before filing suit, do not pass the every-reasonable-effort test, and thus prevent the court from issuing an injunction. Pulte fired Baltierra on September 4th, prompting the onset of LIUNA’s communications attack on September 9th. Four days later, on Sunday, September 13th, Pulte’s general counsel faxed and overnighted a cease-and-desist letter to LIUNA, in which Pulte demanded that LIUNA stop encouraging the calls and e-mails and that it “use every means available to [it] to put an end to this activity.” The letter cautioned that Pulte intended to seek injunctive relief unless LIUNA “promptly provide[d] ... adequate assur- ances that this conduct will cease immediately.” When the calls and e-mails did not stop by the morning of Tuesday, September 15, Pulte filed this suit. Pulte made little to no effort to settle. It transmitted the cease-and-desist letter on a Sunday, did not specify a time to respond, did not offer LIUNA an opportunity to negotiate, and filed suit less than forty-eight hours after sending the letter without even confirming that LIUNA received the letter. This is not “every reasonable effort” to settle the dispute. Because Pulte failed to comply with Section 8 of the NLGA, the district court lacked jurisdic- tion to issue the injunction. The court of appeals affirmed the district court’s denial of a preliminary injunction.

12-3b The Railway Labor Act The Railway Labor Act, passed in 1926, allowed railroad employees to designate bargaining representatives of their own choosing, free from employer interference. This legislation introduced some of the ideas and approaches later incorporated in the National Labor Relations Act (NLRA). The railroads were one of the earliest industries in which employees were unionized. As noted earlier, the railroads were the target of several violent strikes during the late 19th century. The importance of the railroads for the nation’s economic development and the railroads’ position as essentially being public utilities made the disruptive effects of labor disputes involving the railroads a subject for government concern. Congress passed several laws aimed at minimizing or avoiding labor strife in the railroad industry. The Railway Labor Act established a three-step procedure for settling disputes. • The first step involved using a federal mediation board to attempt to facilitate negotia- tion of the parties’ differences. • If that failed, the board would then try to induce the parties to arbitrate the dispute. Although not compelled to submit the dispute to arbitration, the parties would be legally bound by the results if they agreed to arbitration. • Finally, if arbitration was refused, the board could recommend to the president that an emergency board of investigation be created. If the president created the emergency board, the parties in dispute were required to maintain the status quo for 30 days while the investigation proceeded. Even if an emergency board was not appointed, the parties were still required to maintain the status quo for 30 days. This mandatory cooling-off period was designed to allow the dispute to be settled through negotiation. The union retained its right to strike, and the employer could lock out once the cooling-off period expired. The act also provided that both labor and management had the right to designate bargaining representatives without the “interference, influence or coercion” of the other party. That provision was the subject of the Supreme Court’s 1930 decision of Texas & New Orleans Railroad v. Brotherhood of Railway Clerks.8 The union had sought, and was granted, an injunc- tion against employer interference with the employees’ designation of a bargaining representa- tive under the act. The railroad argued that the act did not create any legally enforceable right of free choice for employees and that the act’s provisions were an unconstitutional interfer- ence with management’s right to operate the railroad. The Supreme Court upheld the injunc- tion and the constitutionality of the Railway Labor Act, rejecting the railroad’s challenges. The Railway Labor Act was amended by Congress in 1934, 1936, 1951, and 1966. The act was extended to cover airline employees, and a duty to bargain with the duly designated representative of each side was spelled out. The amendments also provided that unions representing the airline or railway employees could bargain for a union shop provi- sion. The National Railroad Adjustment Board was created to arbitrate disputes involving the railroads and unions; its awards are final and binding upon the parties. The amend- ments also created sanctions for enforcement of the act by declaring violations to be misde- meanors. Such violations included the interference with the designation of representatives by either party, the use of yellow-dog contracts, and the changing of any terms or condi- tions of employment without complying with the provisions of a collective agreement. The amendments creating the duty to bargain with representatives of the employees were the subject of a challenge in the 1937 Supreme Court case of Virginia Railway Co. v. System Federation No. 40.9 The Supreme Court held that the act created a mandatory requirement of recognizing and negotiating with the bargaining representatives duly desig- nated by the parties and that this requirement could be enforced by court order. 12-3c The National Industrial Recovery Act The other statutory predecessor of the NLRA was the National Industrial Recovery Act (NIRA), the centerpiece of President Franklin D. Roosevelt’s New Deal. Roosevelt took office in 1933, the fourth year of the Great Depression. Some 15 million people were unemployed, and there was a widespread belief that the nation’s economic growth had come to a permanent halt. Roosevelt proposed his New Deal program to pull the nation out of the Depression. It involved government working closely and actively with business to revive the economy. The NIRA set up a system in which major industries would operate under codes of fair competition, which would be developed by trade associations for each industry. These associations would be under the supervision and guidance of the National Recovery Administration (NRA). The NIRA, in Section 7(a), also provided that the codes of fair competition contain the following conditions: (1) That employees shall have the right to organize and bargain collectively through representatives of their own choosing, and shall be free from interference, restraint, or coercion of employers of labor, or their agents, in the designation of such representatives or in self-organization or in other concerted activities for the purpose of collective bargaining or other mutual aid or protection; (2) that no employee ... shall be required as a condition of employment to join any company union or to refrain from joining, organizing, or assisting a labor organization of his own choosing; and (3) that employers shall comply with the maximum hours of labor, minimum rates of pay, and other conditions of employment, approved or prescribed by the President. The NRA, responsible for administering the codes of fair competition under the NIRA, had to rely on voluntary cooperation from the industries being regulated. The NRA announced that codes containing provisions concerning hours, rates of pay, and other conditions of employment would be subject to NRA approval, although such conditions had not been arrived at through collective bargaining. The practical effect of this announce- ment was to allow industry to develop such codes unilaterally, without input from orga- nized labor. While employees rushed to join unions, employers refused to recognize and bargain with the unions. A wave of strikes resulted. President Roosevelt issued a plea for industrial peace and created the National Labor Board (NLB) to “consider, adjust and settle differences and controversies that may arise through differing interpretations” of the NIRA provisions. 12-3d The National Labor Board The NLB was created in August 1933. It was composed of seven members; three represen- tatives each would be chosen by the NRA’s Industrial Advisory Board and Labor Advisory Board. The seventh member was Senator Robert Wagner of New York, who was chairman. The NLB initially functioned as a mediation board, seeking to persuade the parties to settle their differences peacefully. The weakness of enforcement powers given to the NLB was its most serious drawback. The NLB relied mainly on the power of persuasion, which was effective only as long as an employer was not overtly antagonistic to organized labor. When, in 1934, the nation’s auto- mobile manufacturers all refused to recognize the United Automobile Workers Union or to allow the NLB to conduct a representative election, President Roosevelt had General Hugh Johnson, head of the NRA, negotiate a settlement rather than stand behind the NLB order. That decision destroyed what little effectiveness the NLB retained. Despite its short tenure, the NLB did make several contributions to modern labor law. It evolved from a mediation service into an adjudicative body akin to the present National Labor Relations Board (NLRB). It also established the principles of majority rule and exclu- sive representation of the employees in a particular bargaining unit. In addition, the NLB developed other rules that have come to be basic principles of labor relations law, among them the following: • An employer was obligated to bargain with a union that had been chosen as representa- tive by a majority of employees; • Employers had no right to know of an employee’s membership in, or vote for, a union when a secret ballot representation election was held; and • Strikers remained employees while on strike and were entitled to displace any replace- ments hired if the strike was the result of employer violations of the NIRA. 12-3e The “Old” National Labor Relations Board In June 1934, President Roosevelt formulated Public Resolution No. 44. This resolu- tion, which was then passed by Congress, authorized the president to establish a “board or boards” empowered to investigate disputes arising under Section 7(a) of the NIRA and to conduct secret ballot representation elections among employees. Enforcement of Board decisions would remain with the NRA and the Department of Justice. Roosevelt then abolished the NLB and transferred its funds, personnel, and pending cases to the National Labor Relations Board (the “old” NLRB). The NLRB was denied all jurisdiction over disputes in the steel and auto industries. The NLRB reaffirmed the key rulings of the NLB; it also issued guidelines to assist regional offices in handling common types of cases and began organizing its decisions into a body of precedents guiding future action. When the Supreme Court declared the NIRA to be unconstitutional in its 1935 Schechter Poultry Corp. v. U.S.10 decision, it also destroyed the “old” NLRB.

12-4 The National Labor Relations Act

Senator Wagner introduced a proposed National Labor Relations Act (NLRA) in the Senate in 1935. Despite initial stiff opposition, the NLRA was passed by Congress and enacted into law in 1935. Because of the doubts over the NLRA’s constitutionality, President Roosevelt had difficulty finding qualified people willing to be appointed to the NLRB established under the NLRA. The main concern over the constitutionality of the NLRA was whether it was a valid exercise of the interstate commerce power given to Congress under the commerce clause of the Constitution. In Schechter Poultry, the Supreme Court had held that the NIRA was not within the federal government power to regulate interstate commerce. In passing the NLRA, Congress had relied on the power to regulate commerce among the states given to it under the commerce clause. The findings of fact incorporated in Section 1 of the NLRA contained the following statement: The denial by employers of the right of employees to organize and the refusal by employers to accept the procedure of collective bargaining lead to strikes and other forms of industrial strife or unrest, which have the intent or the necessary effect of burdening or obstructing commerce.... For more than a year after the passage of the NLRA, there was only limited activity by the NLRB. The Board set out to develop economic data supporting the findings of fact in Section 1 of the NLRA. It also sought the best possible case to take to the Supreme Court to settle the constitutionality issue. Finally, the NLRB brought five cases to the federal courts of appeals. The cases involved an interstate bus company, the Associated Press news service, and three manufacturing firms. The Board lost all three of the manufacturing company cases in the courts of appeals on the interstate commerce issue. All five of the cases were taken to the Supreme Court and were heard by the Court in February 1937. The NLRB developed its arguments in the Jones & Laughlin Steel case, one of the manufacturing cases, almost entirely on the interstate commerce issue. That case became the crucial litigation in the test of the NLRA’s constitutionality. The Supreme Court in its 1937 decision in NLRB v. Jones & Laughlin Steel Corp.11 upheld the constitutionality of the NLRA by a 5–4 vote. The majority opinion, by Chief Justice Hughes, held that the disruption of operations of Jones & Laughlin due to industrial strife would have a serious and direct effect on interstate commerce. In the words of the Court, When industries organize themselves on a national scale, making their relation to interstate commerce the dominant factor in their activities, how can it be maintained that their industrial labor relations constitute a forbidden field into which Congress may not enter when it is necessary to protect interstate commerce from the paralyzing consequences of industrial war? By the slimmest of margins, the Supreme Court had upheld the validity of the National Labor Relations Act. The decision also meant that a labor relations board effectively empow- ered to deal with disputes between labor and management had finally been established. 12-4a Overview of the National Labor Relations Act The passage of the National Labor Relations Act, or the Wagner Act, constituted a revolutionary change in national labor policy. Workers were now legally protected by the federal government in their rights to organize for mutual aid and security and to bargain collec- tively through representatives of their own choice. The purpose of the act, as stated in Section 1, was to: eliminate the causes of certain substantial obstructions to the free flow of commerce ... by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection. The basis of the act was the protection of the rights of employees, defined by Section 7: Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection. To protect these basic rights of employees, the act prohibited certain practices of employers that would interfere with or prevent the exercise of such rights. Those practices were designated unfair labor practices, and the act listed five of them: 1. interference with, or restraint or coercion of, employees in the exercise of their Section 7 rights; 2. domination of, or interference with, a labor organization (including financial or other contributions to it); 3. discrimination in terms or conditions of employment of employees for the purpose of encouraging or discouraging union membership; 4. discrimination against an employee for filing a charge or testifying in a proceeding under the act and; 5. refusal to bargain collectively with the employees’ legal bargaining representative. The act reconstituted the NLRB to enforce and administer the statute. The Board created a nationwide organization, developed a body of legal precedents (drawing heavily upon decisions of its predecessors), and developed and refined its procedures. In its efforts to carry out the policies of the legislation, the Board was frequently criticized for being too pro-union. At the same time, unions were accused of abusing their newly gained power under the act. A 1946 strike by the United Mine Workers, in defiance of a Supreme Court order to remain on the job, seemed to crystallize public opinion that unions had grown too powerful. This public concern was reflected in congressional action to limit unions’ abuse of their powers. Congressional critics were especially concerned over jurisdictional disputes, in which two unions claimed the right to represent the workers of an employer, leaving the employer “trapped” between them, and recognitional picketing, which was aimed at forcing an employer to recognize the union regardless of the sentiments of the employees. These kinds of congressional concerns resulted in the passage of the Taft-Hartley Act in 1947. The Taft-Hartley Act outlawed the closed shop, a term describing an employer who agrees to hire only employees who are already union members. It also added a list of unfair labor practices by unions and emphasized that employees had the right, under Section 7, to refrain from collective activity as well as engage in it. The purpose and effect of the Taft-Hartley Act were to balance the rights and duties of both unions and employers. After Taft-Hartley, the National Labor Relations Act12 was amended several times, the most significant version being the Landrum-Griffin Act of 1959. Landrum-Griffin was passed in response to concerns about union racketeering and abusive practices aimed at union members. The act set out specific rights for individual union members against the union, and it proscribed certain kinds of conduct by union officials, such as financial abuse, racketeering, and manipulation of union-election procedures.

12-5 The National Labor Relations Board

Unless otherwise specified, the discussion throughout this and subsequent chapters will focus on the current National Labor Relations Act and the present National Labor Relations Board’s organization, jurisdiction, and procedure. 12-5a Organization Because the Wagner Act gave little guidance concerning the administrative structure of the newly created agency, the NLRB adopted an administrative organization that made it pros- ecutor, judge, and jury with regard to complaints under the act. The Board investigated charges of unfair labor practices, prosecuted complaints, conducted hearings, and rendered decisions. Pursuant to its statutory authority, the Board did appoint a general counsel to serve as legal adviser and direct litigation, but the general counsel was subordinate to the Board in virtually all matters. The combination of prosecutorial and judicial functions was one of the major criti- cisms leveled by commentators and attorneys against the Board in the years prior to the passage of the Taft-Hartley Act. This issue, not surprisingly, was addressed by Taft-Hartley in 1947. Although Taft-Hartley retained the concept of a single enforcement agency, it made the Office of the General Counsel an independent unit to direct the administrative and enforcement efforts of the NLRB regional offices. The Board itself was expanded from three to five members. It continued to exercise the judicial function of deciding complaints filed under the act. The newly organized NLRB represented a unique type of administrative agency struc- ture in that it was bifurcated into two independent authorities within the single agency: the five-member Board and the general counsel. Exhibit 12.1 depicts the organization of the two authorities of the bifurcated agency.

The Board The Board itself is the judicial branch of the agency. The five members of the Board are nominated by the U.S. president and must be confirmed by the Senate. They serve five- year terms. Members of the Board can be removed from office by the president only for neglect of duty or malfeasance in office. One member is to be designated by the president as chairperson. Members have a staff of about 25 legal clerks and assistants to help in deciding the numerous cases that come before them. The executive secretary of the Board is the chief administrative officer, charged with ruling on procedural questions, assigning cases to members, setting priorities in case handling, and conferring with parties to cases that come before the Board. There is also a solicitor, whose function is to advise members on ques- tions of law and policy. Finally, an information director assists the Board on public relations issues.

The NLRB also has a branch called the Division of Judges. These administrative law judges (ALJs), formerly called trial examiners, are independent of both the Board and the general counsel. Appointed for life, they are subject to the federal Civil Service Commission rules governing appointment and tenure. This organizational independence is neces- sary because the ALJs conduct hearings and issue initial decisions on unfair labor practice complaints issued by regional offices throughout the United States, under the authority delegated to these offices by the general counsel. The Board is prohibited by law from reviewing an ALJ’s findings or recommendations before the issuance of the ALJ’s formal report. The ALJ’s function is that of a specialized trial court judge: to decide unfair labor practice complaints. ALJ decisions may be appealed to the Board, which functions as a specialized court of appeal. After rendering their initial decisions, ALJs (like trial court judges) have nothing to do with the disposition of the case if it is appealed to the Board.

current members of the nLrb The current (January 2015) members of the NLRB are as follows: • Mark Gaston Pearce was named Chairman of the National Labor Relations Board by President Obama on August 27, 2011. He was sworn in as a Board member on April 7, 2010, following his recess appointment, and was confirmed by the Senate on June 22, 2010, to a term ending on August 27, 2013; he was then reappointed for a second term that expires August 27, 2018. He was a found- ing partner of the Buffalo, New York, law firm of Creighton, Pearce, Johnsen & Giroux, where he practiced union and plaintiff-side labor and employment law. Prior to entering private practice, he was an attorney and District Trial Specialist in the Buffalo regional office of the NLRB. Pearce received his Juris Doctor from University at Buffalo Law School of the State University of New York, and his bach- elor degree from Cornell University. • Kent Y. Hirozawa was appointed and confirmed by the Senate on July 30, 2013, for a term that expires on August 27, 2016. He was chief counsel to Chairman Pierce until his appointment to the NLRB. He received a B.A. from Yale University and a J.D. from New York University School of Law. • Harry I. Johnson, III, was appointed to the Board and confirmed by the Senate on August 12, 2013, and his term expires August 27, 2015. He was a partner at the law firm Arent Fox LLP prior to his appointment. He has a B.A. from Johns Hopkins University, an M.A.L.D. from Tufts University’s Fletcher School of Law and Diplomacy, and a J.D. from Harvard Law School. • Lauren McFerran was sworn in on December 17, 2014, for a term ending Decem- ber 16, 2019. Prior to her appointment to the Board, she served as chief labor counsel for the Senate Committee on Health, Education, Labor and Pensions. She received a B.A. from Rice University and a J.D. from Yale Law School. • Phillip A. Miscimarra was sworn in as a member of the Board on August 7, 2013, for a term that expires on December 16, 2017. Prior to his appointment, he was a partner with the law firm Morgan Lewis & Bockius LLP, and a senior fellow in the Center for Human Resources at the Wharton Business School of the University of Pennsylvania. He received a B.A. from Duquesne University, an M.B.A. from the Wharton Business School, and a J.D. from the University of Pennsylvania Law School. • The current general counsel of the NLRB is Richard F. Griffin, Jr., who was sworn in on November 4, 2013, for a four-year term. He had served as a member of the Board prior to becoming General Counsel. He has a B.A. from Yale University and a J.D. from Northeastern University School of Law. Source: NLRB, http://www.nlrb.gov/who-we-are. The General Counsel The Office of the General Counsel is the prosecutorial branch of the NLRB and is also in charge of the day-to-day administration of the NLRB regional offices. The general counsel is nominated by the president, with Senate confirmation for a four-year term. The NLRB has 32 regional offices and a number of subregional offices. The staff of each regional office consists of a regional director, regional attorney, field examiners, and field attorneys. Although Section 3(d) of the act gives the general counsel “final authority, on behalf of the Board, in respect of investigation of charges and issuance of complaints ... and in respect of the prosecution of such complaints before the Board,” the Office of General Counsel has exercised its statutory right to delegate this power to the regional directors, who make most of the day-to-day decisions affecting enforcement of the act. Procedures The NLRB handles two kinds of legal questions: • those alleging that an unfair labor practice has taken place in violation of the act and • representation questions concerning whether, and if so how, employees will be repre- sented for collective bargaining. In either type of case, the NLRB does not initiate the proceeding; rather, it responds to a complaint of unfair practice or a petition for an election filed by a party to the case. (The Board refers to unfair practice cases as C cases and to representation cases as R cases.) Unfair Labor Practice Charges The filing of an unfair practice charge initiates NLRB proceedings in unfair labor practice cases. The act does not restrict who can file a charge; the most common charging parties are employees, unions, and employers. However, in NLRB v. Indiana & Michigan Electric Co.,13 the Supreme Court held that an individual who was a “stranger” to the dispute could file an unfair labor practice charge. The NLRB has adopted a special form for the filing of unfair practice charges (see Exhibit 12.2). In its fiscal year 2008, there were 22,501 unfair labor practice charges filed with the NLRB.

Section 10(b) of the act requires that unfair practice charges must be filed within six months of the occurrence of the alleged unfair practice. Once a charge has been timely filed, the procedure is as follows: • The charge is investigated by a field examiner. A charge can be resolved at this stage through mutual adjustment, voluntary withdrawal, or agency dismissal for lack of merit. • If the charge is found to have merit and the case has not been settled by adjustment, a formal complaint is issued by the regional director. (In recent years, approximately one- third of all charges filed were voluntarily withdrawn, another one-third were dismissed as having no merit, and approximately one-third were found to have merit. Of the charges having merit, approximately 60 percent were settled with no formal complaint being issued. Thus, approximately 86 percent of all charges filed were disposed of before reaching the hearing stage in the procedure.) • A public hearing on the complaint is held in front of an ALJ. (The Taft-Hartley amend- ments added the requirement that “so far as practicable” this hearing shall be conducted in accordance with the rules of evidence applicable to federal district courts.) At the conclusion of the hearing, the ALJ issues a report with findings of fact and recommen- dations of law. • The ALJ’s report is served on the parties and forwarded to the Board in Washington, DC. Each party then has 20 days to file exceptions to the report. These exceptions are in effect an appeal to the Board. If no exceptions are taken, the ALJ’s report is automati- cally accepted by the Board as a final order. • If exceptions have been filed to the ALJ’s report by one or more parties, the Board reviews the case and issues a decision and remedial order. The parties will normally have filed briefs with the Board, explaining their respective positions on the exceptions. Sometimes (although rarely) a party will also request and be granted the opportunity to make oral arguments before the Board. Normally, a three-member panel of the Board handles any single case at this stage. (In 40 percent of all the “appeals,” the Board ap- proves the ALJ’s report in its entirety.) See Exhibit 12.3 for a summary of unfair labor practice procedures. Orders of the Board are not self-enforcing; if a party against whom an order is issued refuses to comply, the NLRB must ask the appropriate federal circuit court of appeals for a judgment enforcing the order. In addition, any party to the case may seek review of the Board’s decision in the appropriate federal court of appeal. The scope of this judicial review of the Board’s order is not the same as an appeal from the verdict of a federal trial court; the appeals court is required to accept the Board’s findings of fact provided that the findings are supported by substantial evidence in the case record. Any party to the case decided by the federal circuit court of appeals may petition the U.S. Supreme Court to grant certiorari to review the appellate court’s decision. The Supreme Court generally restricts its review to cases in which a novel legal issue is raised or in which there is a conflict among the courts of appeal. (Only a minuscule percentage of labor cases reach this final step of the procedure.) If the regional director refuses to issue a complaint after investigating a charge, that decision can be appealed to the Office of Appeals of the General Counsel in Washington, D.C. Approximately 30 percent of the charges dismissed by the regional offices are appealed to the Office of Appeals of the General Counsel. The Office of Appeals reverses the dismissal by the regional offices only rarely—in less than 10 percent of the cases appealed. The courts have upheld the general counsel’s absolute discretion in these decisions; a conclusion that

the charge lacks significant merit to issue a complaint cannot be appealed beyond the General Counsel’s Office of Appeals. As such, the charging party’s statutory rights have been procedurally exhausted and terminated without any hearing or judicial review. Representation Elections The other type of cases coming before the NLRB involves representation questions— employees choosing whether or not to be represented by a labor union as their exclusive bargaining agent. In fiscal year 2008, 3,400 representation cases were filed with the NLRB. Although the issues and procedures involved in representation questions are discussed in detail in Chapter 13, a few points are highlighted in this discussion of NLRB procedures. Representation proceedings are at the very heart of the NLRA because the acceptance or rejection of a union as bargaining agent by a group of employees is the essence of the exercise of the rights guaranteed by Section 7 of the act—to engage in, or refrain from, concerted activity for purposes of collective bargaining or mutual aid or protection. Section 9 of the act outlines the procedures available to employees for exercising their rights under Section 7. For nearly 25 years, the Board had primary responsibility for the conduct of all representation elections. Then, in 1959, Congress decided that election procedures were sufficiently settled that the Board could delegate its duties in this area to the regional directors. The Board did so in 1961. Specifically, the regional directors are authorized by the Board to • decide whether a question concerning representation exists; • determine the appropriate collective bargaining unit; • order and conduct an election; • certify the election’s results; and • resolve challenges to ballots by making findings of fact and issuing rulings. The Board has retained limited review, as the statute suggests, to ensure uniform and consistent application of its interpretation of law and policy. There are four grounds on which the Board will review an election: • if a significant issue of law or policy is raised due to an absence of or departure from reported Board precedent; • if the regional director has made a clear error regarding some factual issue and this error is prejudicial to the rights of one of the parties; • if the procedure involved some error that prejudiced a party; and • if the Board believes that one of its rules or policies is due for a reconsideration. Ordinarily, once the regional director has decided that a representation election should be held involving a particular unit of employees, a Notice and a Direction of Election are issued by the regional office, even though one of the parties has appealed some aspect of the director’s decision to the Board in Washington. However, unless the parties have waived their right to request Board review, the director will set the election date no earlier than 25 days from the notices. On the other hand, the date will usually not be set any later than 30 days after the director’s decision to proceed.

In December 2014, the NLRB adopted a final rule amending the representation elec- tion process.14 The amended procedures are intended to provide for electronic filing of peti- tions and other documents and to make the process more transparent and uniform across NLRB regional offices. The rules are scheduled to go into effect on April 14, 2015, but several lawsuits challenging the rules change have been filed and are pending in the federal courts. 12-5b Jurisdiction Under the NLRA, the NLRB is given authority to deal with labor disputes occurring “in commerce” or “affecting commerce” [as defined in Section 2(7) of the act]. Consistent with the federal courts’ traditional view of the scope of federal commerce clause powers, the Supreme Court has held that the NLRB can regulate labor disputes in virtually any company, unless the firm’s contact with interstate commerce is de minimus (minuscule and merely incidental). Rather than exercise its jurisdiction to the full extent of the federal commerce power, the NLRB has chosen to set certain minimum jurisdictional standards. These standards specify the limits beyond which the NLRB will decline jurisdiction over any labor dispute. The Landrum-Griffin Act recognized this policy by providing that the NLRB may decline jurisdiction over any labor dispute that would have been outside the NLRB’s minimum jurisdictional standards as of August 1, 1959. The NLRB may expand its jurisdictional standards, but it cannot contract them beyond their position as of August 1, 1959. The 1959 amendments to the act also provide that the states under certain circumstances may assert jurisdiction over labor disputes on which the NLRB declines to assert jurisdiction. General Jurisdictional Standards The NLRB jurisdictional standards are set in terms of the dollar volume of business that a firm does annually. The current NLRB jurisdictional standards are as follows: • General Nonretail Firms. Sales of goods to consumers in other states, directly or indi- rectly (termed outflow) or purchases of goods from suppliers in other states, directly or indirectly (termed inflow) of at least $50,000 per year. • Retail Businesses. Annual volume of business of at least $500,000, including sales and excise taxes. • Combined Manufacturing and Retail Enterprises. When an integrated enterprise manu- factures a product and sells it directly to the public, either the retail or the nonretail standard can be applied. • Combined Wholesale and Retail Companies. When a company is involved in both whole- sale and retail sales, the nonretail standard is applicable. • Instrumentalities, Channels, and Links of Interstate Commerce. Annual income of at least $50,000 from interstate transportation services or the performing of $50,000 or more in services for firms that meet any of the other standards, except indirect inflow and outflow established for nonretail businesses.

National Defense. Any enterprise having a substantial impact on the national defense. • U.S. Territories and the District of Columbia. Same standards are applied to the territo- ries as to enterprises operating in the 50 states; plenary (total) jurisdiction is exercised in the District of Columbia. • Public Utilities. At least $250,000 total annual volume of business. • Newspapers. At least $200,000 total annual volume of business. • Radio, Telegraph, Telephone, and Television Companies. At least $100,000 total annual volume of business. • Hotels, Motels, and Residential Apartment Houses. At least $500,000 total annual volume of business. • Taxicab Companies. At least $500,000 total annual volume of business. • Transit Systems. At least $250,000 total annual volume of business. • Privately Operated Health-Care Institutions. Nursing homes, visiting nurses’ associations, and similar facilities and services, $100,000; all others, including hospitals, $250,000 total annual volume of business. • Nonprofit, Private Educational Institutions. $1 million annual operating expenditures. • Multiemployer Bargaining Associations. Regarded as a single employer for the purpose of totaling up annual business with relation to the above standards. • Multistate Establishments. Annual business of all branches is totaled with regard to the Board’s standards. • Unions as Employers. The appropriate nonretail standard. Exempted Employers Not all employers—or employees of such employers—meeting the NLRB jurisdictional standards are subject to the provisions of the NLRA. Certain kinds of employers have been excluded from coverage of the act by specific provisions in the act; other employers have been exempted as a result of judicial decisions interpreting the act. Section 2(2) of the act defines the term employer as “including any person acting as an agent of an employer, directly or indirectly,” but not including: • the federal government or any wholly owned government corporation; however, the Board was empowered to assert jurisdiction over the U.S. Postal Service under the Postal Reorganization Act of 1970; • any state or political subdivision thereof (county, local, or municipal governments); • railroads, airlines, or related companies that are subject to the Railway Labor Act (In 1996, Congress amended the Railway Labor Act to include Federal Express under its jurisdiction rather than under the NLRA; United Parcel Service, however, remains under the NLRA.); and • labor organizations in their representational capacity. (Unions are covered by the act in the hiring and treatment of their own employees.) In addition to these statutory exclusions, judicial decisions have created other exclu- sions. The NLRB will usually refuse to exercise jurisdiction over an employer that has a close relationship to a foreign government, even if such employers would otherwise come under its jurisdiction. In Incres S.S. v. Maritime Workers,15 the Supreme Court held that the act does not apply to labor disputes of foreign crews on foreign flag vessels tempo- rarily in U.S. ports, even if such ships deal primarily in American contracts. However, when the dispute involves American residents working while the vessel is in port, the dispute is subject to the act. In Int. Longshore Assoc. v. Allied International, Inc.,16 the Supreme Court held that a politically motivated refusal by American longshoremen to service American ships carrying Russian cargo, to protest the Soviet invasion of Afghanistan, was subject to the jurisdiction of the NLRB. The Supreme Court has also held in NLRB v. Catholic Bishop17 that the NLRB lacked jurisdiction over a parochial high school. The Court stated that its holding was necessary to avoid excessive government entanglement with religion, as prohibited by the First Amendment. The NLRB has taken the position that the Court’s decision exempts from NLRB jurisdiction only those organizations devoted principally to the promulgation of the faith of a religion. In December 2015, the NLRB adopted a new standard for determining whether to exert juris- diction over religious educational institutions in Pacific Lutheran University.18 The NLRB now requires educational institutions claiming that they should be exempted under the Catholic Bishop doctrine to first demonstrate that the institution holds itself out as providing a religious educational environment, and then must show that the faculty members that a union seeks to represent perform a specific role in creating or maintaining the institution’s religious educa- tional environment, as demonstrated by its representations to current or potential students and faculty members, and the community at large. In the Pacific Lutheran decision, the NLRB held that it could assert jurisdiction over the case because the university did not hold those faculty out as performing any religious function, nor did it expect those faculty to contribute anything special to the religious educational environment. For employers that are not educational institutions, but claim to be religiously affili- ated, the NLRB will exempt only those organizations devoted principally to the promulga- tion of the faith of a religion. The NLRB has refused jurisdiction over a television station owned by a church where more than 90 percent of the station’s broadcasts were religious in nature. However, hospitals operated by religious organizations, or religious charity services providing aid to the elderly, have been held subject to NLRB jurisdiction because they were not principally involved with promulgating the religion’s faith. Exempted Employees Just as with employers, not all employees employed by employers in or affecting commerce are subject to the provisions of the NLRA. These exclusions from coverage are the result of both statutory provisions and judicial decisions. Statutory Exemptions Section 2(3) of the NLRA, in its definition of “employee,” expressly excludes: • individuals employed as agricultural laborers; • individuals employed as domestics within a person’s home;

• individuals employed by a parent or spouse; • independent contractors; • supervisors; and • individuals employed by employers subject to the Railway Labor Act. Several of these statutory exclusions require some discussion. For example, the NLRA does not specifically define the term “agricultural laborer”; rather, Congress has directed the NLRB to consider the definition of agriculture found in Section 3(f ) of the Fair Labor Standards Act,19 which is very broad. It includes cultivating, tilling, growing, dairying, producing, or harvesting any agricultural commodity, raising livestock, or any operations or practices performed by a farmer or on a farm as incident to, or in conjunction with, such farming operations. The NLRB considers the facts of each case, looking to the specific duties and the time spent at the duties to determine whether persons are agricultural laborers within the meaning of the NLRA. In Holly Farms Corp. v. NLRB,20 the Supreme Court (by a 5–4 decision) held that the “live haul” crews of a poultry processor, who drive from the processor’s location to indepen- dent farms and there collect and cage chickens, lift the cages on a truck, and transport them back to the processor, were not agricultural laborers within the meaning of Section 2(3) and were therefore covered by the NLRA. Agricultural employees exempted from the NLRA may be covered by state legislation; several states, such as California and Arizona, have created agricultural labor relations boards to cover the labor disputes of agricultural laborers. An independent contractor is a person working as a separate business entity; these individuals are not subject to the direction and control of an employer. For example, a person who owns and operates a dump truck and who contracts to provide rubbish disposal service to a firm might be an independent contractor and not an employee of the firm. If the firm used its own truck and directed a worker to haul away its rubbish, the worker would be an employee and not an independent contractor. The NLRB looks to the degree of control and direction exercised by the firm over the worker to determine whether the worker is an employee or an independent contractor. The term supervisor is defined in Section 2(11) of the NLRA as someone who, in the interests of the employer, has the authority to direct, hire, fire, discipline, transfer, assign, reward, responsibly direct, suspend, or adjust the grievances of other employees and who uses independent judgment in the exercise of such authority. The NLRB, applying Section 2(11) to nurses in the health-care industry, held that nurses who directed other employees in patient care were not acting in the interests of their employer and therefore were not super- visors within the meaning of Section 2(11). The Supreme Court rejected the NLRB’s deci- sion in NLRB v. Health Care & Retirement Corporation of America.21 The NLRB then held that nurses did not exercise “independent judgment” within the meaning of Section 2(11) because the nurses were exercising “ordinary professional or technical judgment” in directing other employees to deliver patient care in accordance with employer-specified standards. The following case involves the Supreme Court’s consideration of the NLRB’s determi- nation that those nurses were not supervisors under the NLRA.

CASE 12.4 nationaL Labor reLations boarD v. KentuCKy river Community Care, inC. 532 U.S. 706 (2001)

[Kentucky River Community Care, Inc. (Kentucky River) operates a residential care facility for persons suffering from mental retardation and mental illness. The facility, Caney Creek, employs approximately 110 professional and nonpro- fessional employees and about 12 managerial or supervisory employees. In 1997, the Carpenters Union petitioned the NLRB to represent a single unit of all 110 potentially eligible employees at Caney Creek. At the hearing on the petition, Kentucky River objected to the inclusion of Caney Creek’s six registered nurses in the bargaining unit, arguing that they were supervisors under §2(11) of the Act and therefore were excluded from the class of employees covered by the NLRA and included in the bargaining unit. The Board’s regional director initially held that Kentucky River had the burden of proving supervisory status; the regional director then held that Kentucky River had not carried that burden and there- fore included the nurses in the bargaining unit. The regional director directed an election to determine whether the union would represent the unit; the union won the election and was certified as the representative of the Caney Creek employees. Kentucky River then refused to bargain with the union in order to get judicial review of the certification decision. The NLRB’s general counsel filed an unfair labor practice complaint under §§8(a)(1) and 8(a)(5) of the Act. The Board granted summary judgment to the general counsel, holding Kentucky River had violated the NLRA. Kentucky River then petitioned the U.S. Court of Appeals for the Sixth Circuit. The Sixth Circuit held that the Board had erred in placing the burden of proving supervisory status on respondent rather than on its general counsel, and it also rejected the Board’s determination that the registered nurses did not exercise “independent judgment.” The court stated that the Board had erred by classifying the nurses’ supervision of nurse’s aides in administering patient care as “routine” because the nurses have the ability to direct patient care by virtue of their training and expertise, not because of their connection with management. The NLRB then appealed to the U.S. Supreme Court.] Scalia, J. Under the National Labor Relations Act, employees are deemed to be “supervisors” and thereby excluded from the protections of the Act if, inter alia, they exercise “independent judgment” in “responsibly ... direct[ing]” other employees “in the interest of the employer.” This case presents two questions: which party in an unfair-labor-prac- tice proceeding bears the burden of proving or disproving an employee’s supervisory status; and whether judgment is not “ independent judgment” to the extent that it is informed by professional or technical training or experience... The Act expressly defines the term “supervisor” in §2(11) ... [but] does not, however, expressly allocate the burden of proving or disproving a challenged employee’s supervisory status. The Board therefore has filled the statu- tory gap with the consistent rule that the burden is borne by the party claiming that the employee is a supervisor.... The Board argues that the Court of Appeals for the Sixth Circuit erred in not deferring to its resolution of the statutory ambiguity, and we agree. The Board’s rule is supported by “the general rule of statutory construction that the burden of proving justification or exemption under a special exception to the prohibitions of a statute generally rests on one who claims its benefits. The burden of proving the applicability of the supervisory exception ... should thus fall on the party asserting it. In addition, it is easier to prove an employee’s authority to exercise 1 of the 12 listed super- visory functions than to disprove an employee’s authority to exercise any of those functions, and practicality therefore favors placing the burden on the party asserting supervi- sory status. We find that the Board’s rule for allocating the burden of proof is reasonable and consistent with the Act.... The text of §2(11) of the Act ... sets forth a three-part test for determining supervisory status. Employees are statu- tory supervisors if (1) they hold the authority to engage in any 1 of the 12 listed supervisory functions, (2) their “exer- cise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment,” and (3) their authority is held “in the interest of the employer.” [NLRB v. Health Care & Retirement Corp. of America] The only basis asserted by the Board, before the Court of Appeals and here, for rejecting respondent’s proof of super- visory status with respect to directing patient care was the Board’s interpretation of the second part of the test—to wit that employees do not use “independent judgment” when they exercise “ordinary professional or technical judgment in directing less-skilled employees to deliver services in accordance with employer-specified standards.” The Court of Appeals rejected that interpretation.... The Board ... argues further that the judgment even of employees who are permitted by their employer to exercise a sufficient degree of discretion is not “independent judgment” if it is a particular kind of judgment, namely, “ordinary professional or technical judgment in directing less-skilled employees to deliver services.”... The text, by focusing on the “clerical” or “routine” (as opposed to “independent”) nature of the judgment, introduces the question of degree of judgment. ... But the Board’s categorical exclusion turns on factors that have nothing to do with the degree of discre- tion an employee exercises. Let the judgment be significant and only loosely constrained by the employer; if it is “profes- sional or technical” it will nonetheless not be independent. The breadth of this exclusion is made all the more startling by virtue of the Board’s extension of it to judgment based on greater “ experience” as well as formal training. What super- visory judgment worth exercising, one must wonder, does not rest on “professional or technical skill or experience”? If the Board applied this aspect of its test to every exercise of a supervisory function, it would virtually eliminate “supervi- sors” from the Act. As it happens, though, only one class of supervisors would be eliminated in practice, because the Board limits its categorical exclusion with a qualifier: Only professional judgment that is applied “in directing less-skilled employees to deliver services” is excluded from the statutory category of “independent judgment.” This second rule is no less striking than the first, and is directly contrary to the text of the statute. Every supervisory function listed by the Act is accompanied by the statutory requirement that its exercise “ requir[e] the use of independent judgment” before supervi- sory status will obtain, but the Board would apply its restric- tion upon “independent judgment” to just 1 of the 12 listed functions: “responsibly to direct.” There is no apparent textual justification for this asymmetrical limitation, and the Board has offered none. Surely no conceptual justification can be found in the proposition that supervisors exercise professional, technical, or experienced judgment only when they direct other employees. Decisions “to hire, ... suspend, lay off, recall, promote, discharge, ... or discipline” other employees, must often depend upon that same judgment, which enables assessment of the employee’s proficiency in performing his job.... Yet in no opinion that we were able to discover has the Board held that a supervisor’s judgment in hiring, disciplining, or promoting another employee ceased to be “independent judgment” because it depended upon the supervisor’s professional or technical training or expe- rience. When an employee exercises one of these functions with judgment that possesses a sufficient degree of indepen- dence, the Board invariably finds supervisory status. The Board’s refusal to apply its limiting interpretation of “independent judgment” to any supervisory function other than responsibly directing other employees is particu- larly troubling because just seven years ago we rejected the Board’s interpretation of part three of the supervisory test that similarly was applied only to the same supervisory func- tion. [NLRB v. Health Care & Retirement Corp. of America] In Health Care, the Board argued that nurses did not exercise their authority “in the interest of the employer,” as §2(11) requires, when their “independent judgment [was] exercised incidental to professional or technical judgment” instead of for “disciplinary or other matters, i.e., in addition to treat- ment of patients.” It did not escape our notice that the target of this analysis was the supervisory function of responsible direction. “Under §2(11),” we noted, “an employee who in the course of employment uses independent judgment to engage in 1 of the 12 listed activities, including respon- sible direction of other employees, is a supervisor. Under the Board’s test, however, a nurse who in the course of employ- ment uses independent judgment to engage in responsible direction of other employees is not a supervisor.” We there- fore rejected the Board’s analysis as “inconsistent with ... the statutory language,” because it “rea[d] the responsible direc- tion portion of §2(11) out of the statute in nurse cases. “ It is impossible to avoid the conclusion that the Board’s inter- pretation of “independent judgment,” applied to nurses for the first time after our decision in Health Care, has precisely the same object. ... The Labor Management Relations Act, 1947 (Taft-Hartley Act) expressly excluded “supervi- sors” from the definition of “employees” and thereby from the protections of the Act. §2(3) ... The term “supervisor” means any individual having authority ... “to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances.” Moreover, the Act assuredly did not incorporate the Board’s current interpretation of the term “independent judgment” as applied to the function of responsible direction ... because it had limited the category of supervisors more directly, by requiring functions in addi- tion to responsible direction. ... What is at issue is the Board’s contention that the policy of covering professional employees under the Act justifies the categorical exclusion of professional judg- ments from a term, “independent judgment,” that naturally includes them. And further, that it justifies limiting this categorical exclusion to the supervisory function of respon- sibly directing other employees. These contentions contra- 1. dict both the text and structure of the statute, and they contradict as well the rule of Health Care that the test for supervisory status applies no differently to professionals than to other employees. We therefore find the Board’s interpretation unlawful.... ... the Board’s error in interpreting “independent judg- ment” precludes us from enforcing its order.... Our conclu- sion that the Court of Appeals was correct to find the Board’s test inconsistent with the statute ... suffices to resolve the case. The judgment of the Court of Appeals is affirmed. It is so ordered.

In light of the Supreme Court decision in NLRB v. Kentucky River Community Care, the NLRB again considered whether charge nurses were supervisors within the meaning of Section 2(11) in its decision in Oakwood Healthcare, Inc.22 The NLRB majority opinion defined the following terms: • Assign: “... the act designating an employee to a place (such as a location, department, or wing) appointing an employee to a time (such as a shift or overtime period), or giv- ing significant overall duties, i.e., tasks, to an employee.... In the health-care setting, the term ‘assign’ encompasses the charge nurses’ responsibility to assign nurses and aides to particular patients.” • Responsibly to direct: whether the “... ‘alleged supervisor is held fully accountable and responsible for the performance and work product of the employees’ he directs....” • Independent judgment: “professional or technical judgments involving the use of inde- pendent judgment are supervisory if they involve one of the 12 supervisory functions of Section 2(11).... Whether the registered nurse is a [Section] 2(11) supervisor will depend on whether his or her responsible direction is performed with the degree of discretion required to reflect independent judgment.... We find that a judgment is not independent if it is dictated or controlled by detailed instructions, whether set forth in company policies or rules, the verbal instructions of a higher authority or in the provi- sions of a collective bargaining agreement.” In the Oakwood Healthcare case, the majority held that employees who permanently served as charge nurses were supervisors under Section 2(11) and were excluded from the bargaining unit, but that the employees who only served as charge nurses when the perma- nent charge nurses were absent or on vacation were not supervisors under the NLRA and were not excluded from the bargaining unit. Judicial Exemptions In addition to the statutory exclusions of employees from NLRA coverage, the U.S. Supreme Court has created other exemptions. Managerial employees, persons whose positions involve the formulation or effectuation of management policies, were held to be excluded from NLRA coverage in NLRB v. Textron.23 In the 1980 decision in NLRB v. Yeshiva University,24 the Supreme Court held that faculty at a private university, who play a significant role in developing and implementing university academic policies, were managerial employees and thus excluded from the protection of the NLRA. Following Yeshiva, the U.S. Court of Appeals for the First Circuit held in Boston Univ. Chapter, AAUP v. NLRB25 that faculty at Boston University were managerial employees. However, where faculty do not have input in developing or implementing policy and exercise no supervisory duties, they have been held to be employees under the coverage of the NLRA, as in Stevens Inst. v. NLRB26 and Bradford College.27 Recently, in Pacific Lutheran University,28 the NLRB re-examined its approach to the application of the Yeshiva decision. The NLRB stated that it will “examine both the breadth and depth of the faculty’s authority at the university. In examining the breadth of the faculty’s authority, we will give more weight to those areas of policy making that affect the university as a whole, such as the product produced, the terms on which it is offered, and the customers served. In examining the depth of their authority, we seek to determine whether the faculty actually exercise control or make effective recommendations over those areas of policy; this inquiry will necessarily be informed by the administrative structure of the particular university, as well as the nature of the faculty’s employment with that university.” The NLRB will consider the degree of faculty control of academic programs, enrollment management policies, finances, academic policies, and personnel policies and decisions; the NLRB will put greater weight on the first three of those factors. In the Pacific Lutheran deci- sion, the NLRB ruled that adjunct or contingent faculty members did not exercise managerial authority on behalf of the employer and therefore were not exempted from NLRA coverage as managerial employees. Because the NLRA does not cover public sector employers, faculty and staff at public colleges and universities are not subject to NLRB jurisdiction. The NLRB recently reversed its position on the question of whether graduate students who teach classes and medical residents and interns are employees under the NLRA. In Brown University,29 the NLRB reversed its previous decisions in Boston Medical Center30 and New York University.31 Those decisions had held that medical residents and interns and university graduate teaching assistants were employees under the NLRA. The Brown University decision meant that medical residents and interns and graduate assistants are not protected by the NLRA in their efforts to unionize, and their employers are under no legal obligation to recognize and bargain with them if they do form a union. Employees excluded from the act’s coverage are not prevented from organizing and attempting to bargain collectively with their employer. There is nothing in the NLRA to prohibit such action. Exclusion means that those employees cannot invoke the act’s protection for the exercise of rights to organize and bargain. There is no requirement that their employer recognize or bargain with their union or even tolerate such activity. Because those employees are denied the act’s protections, the employer is free to discipline or discharge excluded employees who attempt to organize and bargain. Therefore, the faculty members in Boston University and the graduate assistants in New York University may attempt to organize and bargain with their employer, but the university need not recognize and bargain with them.

ethical dILEMMA

facuLty consuLtation rights at prestigious university? You are the vice president for faculty relations at Prestigious University, a private university in New Jersey. The major portion of your duties involves negotiation and communication with the Prestigious University chapter of the American Association of University Professors (AAUP). The Prestigious chapter of the AAUP has functioned as the representative of the faculty for discussions over salary, benefits, and working conditions for a number of years. Although there is no formal collective agreement between the university administration and the AAUP chapter, the administration has never instituted any policies or changes to benefits or working conditions without first getting the approval of the AAUP chapter. Because of declining enrollment, increased building maintenance costs, and the expenses of updating computer facilities all across the campus, the university is expe- riencing financial difficulties. The administration decides to freeze faculty salaries and reduce its contribution to the faculty’s medical insurance and pension plans. The AAUP chapter strongly objects to such actions and will not cooperate with the univer- sity administration to implement them. The great majority of the faculty at Prestigious University supports the AAUP’s position. Should the university administration continue to work with the AAUP in its capacity as faculty representative, or should the administration impose its financial proposals over the AAUP’s objections? The university president has asked you to prepare a memo that outlines the advantages and disadvantages of the two approaches and recommends a course of action. Which approach would you recommend? Why? Prepare the requested memo and explain your position.

Confidential employees are neither supervisors nor managerial employees, but those persons whose position involves access to confidential labor relations information. The following case discusses the scope of the confidential employee exemption. Although managerial employees are excluded from the act’s coverage, it is not clear whether “confidential” employees are excluded from the act’s coverage or are simply excluded from bargaining units with other employees. If confidential employees, like managers, are excluded from the act’s coverage, they are denied the protections of the act. If, however, they are excluded only from bargaining units, they remain employees under the act and are entitled to its statutory protection. The Supreme Court did not specifically address this question in Hendricks, nor did the court in Meenan Oil Co.

CASE 12.5 nLrb v. meenan oiL Co., L.p. 139 F.3d 311 (2d Cir. 1998)

Jacobs, Circuit Judge The National Labor Relations Board (the “Board”) peti- tions for enforcement of its order finding that Meenan Oil Co., L.P. (“Meenan” or the “Company”) violated Sections 8 (a) (1) and (5) of the National Labor Relations Act (the “NLRA”), by refusing to bargain with a properly certified union and requiring Meenan to bargain with the union on demand. Meenan contends that the two collective bargaining units at issue were improperly certified because they include employees who are outside the protection of the NLRA. Specifically, Meenan asserts that ... its adminis- trator for payroll and personnel matters is ... a confidential employee; and the executive secretary to its general manager is a confidential employee.... Rosemary Gould is [General Manager] Zaweski’s executive secretary. She sits outside his office and spends most of her time answering telephones, typing, filing, and performing other clerical tasks. She also opens Zaweski’s mail, including items marked “confidential.” Gould types documents dealing with employee discipline, including disciplinary notices, termination notices, minutes of union grievance meetings, and grievance settlement documents. Ordinarily, she prepares the documents after a decision has been made, and often after their contents have been disclosed to the relevant employees or union representa- tives, or discussed with them; copies are generally sent to the employees and union immediately after they are produced. Gould also types some internal memoranda dealing with various personnel issues. These memoranda give her access to intra-management communications that affect union employees generally, even if they do not specifically concern labor issues or strategies. Thus Gould is responsible for typing the Company’s annual profit plan, which forecasts the salary increase or decrease planned for every Meenan employee. Meenan asserts that her access to all of these materials makes Gould a confidential employee, and that it was error to include her in a collective bargaining unit. Angela Gabriel, the Company’s payroll/personnel administrator, had worked for the Company for about twelve years at the time of the election.... Gabriel reports to the Company’s accounting supervisor on most matters, but reports to Zaweski on issues of personnel. Her primary responsibility is to handle the paperwork for payroll and personnel matters. Specifically, she prepares the weekly payroll figures; collects personnel forms when new employees are hired; receives and files copies of insurance claims, disciplinary notices, and other notices; maintains a complete set of personnel files; calculates and fills out the forms for employees’ benefit fund contributions; helps managers keep track of employees’ absences and overtime, and is expected to point out any discrepancies she observes; fills out unemployment compensation forms using infor- mation provided by the Company’s managers; and occa- sionally copies documents from an employee’s file in order to assist a manager who is testifying at an unemployment hearing. ... Gabriel’s duties give her access to potentially sensitive information about the Company. Copies of all employees’ personnel files are filed in Gabriel’s office. She receives employees’ drug-test results, though she plays no role in deciding what to do about the results. Gabriel is privy to some union-related information (such as impending layoffs), but she generally acquires that information only when it is in the process of being forwarded to the union. Most important for present purposes, she assists Zaweski with the preparation of the Company’s annual profit plan, and in that way has access to the current salary as well as salary changes forecast by the Company for all employees and supervisors, and at least some managers. Because she has access to all of this information, Meenan contends that Gabriel, like Gould, is a confidential employee who for that reason must be excluded from any bargaining unit.... The Board excludes from collective bargaining units individuals who fit the definition of “confiden- tial employees.” NLRB v. Hendricks County Rural Elec. Membership Corp., 454 U.S. 170, 189 (1981).... The Supreme Court has identified two categories of confidential employees who are excluded from the NLRA’s protection: (i) employees who “assist and act in a confiden- tial capacity to persons who formulate, determine, and effec- tuate management policies in the field of labor relations,” and (ii) employees who “regularly have access to confiden- tial information concerning anticipated changes which may result from collective bargaining negotiations.” There are arguably some confidential aspects to many employment relationships, but the Board (for that reason) hews strictly to a narrow definition of a confidential employee.... In Hendricks County, the Supreme Court approved the Board’s use of this “labor nexus” test; so employees who have access to confidential business infor- mation are not for that reason excludible from collective bargaining units. The Board looks to “the confidentiality of the relationship between the employee and persons who exercise managerial functions in the field of labor relations.” Moreover, the confidential labor-related information avail- able to the employee must be information that is not already known to the union or in the process of being disclosed to it. The rationale for the exclusion of confidential employees (as so defined) is that management should not be forced to negotiate with a union that includes employees “who in the normal performance of their duties may obtain advance information of the [c]ompany’s position with regard to contract negotiations, the disposition of grievances, and other labor relations matters.” An individual who routinely sees data which would enable the union to predict, under- stand or evaluate the bargaining position of the employer is therefore excluded from union membership. We conclude that Angela Gabriel, the payroll/personnel administrator, and Rosemary Gould, the executive secretary to the general manager, are confidential employees. Both are in a confidential employment relationship with General Manager Zaweski, who is largely responsible for conducting Meenan’s labor relations. Both women fit neatly within the category of confidential employee, identified by the Supreme Court in Hendricks County, as those who “assist and act in a confiden- tial capacity to persons who formulate, determine, and effec- tuate management policies in the field of labor relations.” Zaweski has responsibility for preparing the Company’s annual profit plan. Gabriel assists him in that project by filling out forms that show the current salaries and most recent pay raises of the Company’s employees, including supervisors and at least some members of management. The forms containing this information, as prepared by Gabriel, are forwarded to the Company’s managers, who apply corporate salary increase guidelines to arrive at a recommen- dation for the timing and size of each employee’s next raise, and review these recommendations with Zaweski. A copy of the revised recommendations is then sent to the Company’s corporate department, and a copy is retained by Gabriel. If the corporate department revises the figures, Gabriel receives a copy of the updated document. Gabriel thus has knowledge of the proposed salary increase—or decrease—of every Meenan employee. Often she learns of these proposed changes six to seven months before they are implemented. Zaweski’s executive secretary, Rosemary Gould, types the initial draft of the annual profit plan, and in so doing she gets to see the proposed wage and salary figures before they are sent to the corporate department and to Gabriel. Gould testified that she, Gabriel and Zaweski are the only noncor- porate employees who see this document. Because Gabriel and Gould assist Zaweski with the preparation of the Company’s annual profit plan, they have access to projected wage and salary data for both union and non-union employees. This information, in the hands of the Union, would give it a significant strategic advan- tage in negotiations. The Union could predict the size of the raises that management already planned to give both union and non-union employees, prior to any collective bargaining session, and use that level of compensation as a floor for its demands. At the same time, information about the present and projected compensation of managers would afford leverage in bargaining for comparable raises for union members. Even if this information is never mentioned, it would enable the Union to anticipate and gauge manage- ment’s resistance to its demands. In summary, the projected wage and salary data contained in the profit plan influences and signals “the [c]ompany’s position with regard to contract negotiations.” Meenan is not required to bargain with a union whose members have this advantage. The Board’s finding that Gabriel and Gould are not confidential employees is unsupported by substantial evidence, and we therefore decline to enforce the Board’s order insofar as Gabriel and Gould are included in the Office Clerical collective bargaining unit.... For the foregoing reasons, we modify the Board’s order to remove Meenan’s “payroll/personnel administrator” and its “executive secretary” from the Office Clerical collective bargaining unit. The order as modified is enforced. Case Questions 1. What is the rationale for the exclusion of confidential employees? 2. Does the confidential employee exclusion apply to all employees who have access to the employer’s confiden- tial information? What is the “labor nexus” test? 3. What are the key features of Gould’s and Gabriel’s job duties for the purposes of the “labor nexus” test? Would including Gabriel and Gould in the bargaining unit place the employer at a disadvantage when dealing with the union? Explain

Unions in the construction industry often try to organize a contractor’s workforce by getting some of their organizers to be hired by the contractor. Can persons who are on the payroll of a union as organizers also be employees under the meaning of Section 2(3)? The following case involves that question in the context of the legality of an employer’s refusal to hire persons who are also on the union payroll as organizers.

CASE 12.6 nLrb v. town & Country eLeCtriC, inC. 516 U.S. 85 (1995)

Facts: Town & Country Electric, Inc., a non-union electrical contractor, advertised for job applicants, but it refused to interview 10 of 11 union applicants who responded to the ad. Its employment agency hired the one union applicant whom Town & Country interviewed, but he was dismissed after only a few days on the job. Those rejected applicants were members of the International Brotherhood of Electrical Workers, Locals 292 and 343; they filed a complaint with the National Labor Relations Board (NLRB), claiming that Town & Country and the employment agency had refused to interview (or retain) them because of their union membership, a violation of the National Labor Relations Act (NLRA). An administrative law judge ruled in favor of the union members, and the NLRB affirmed that ruling. The NLRB determined that all 11 job applicants were “employees,” as the Act defines that word. The Board recognized that under well-established law, it made no difference that the 10 applicants were never hired; nor did it matter that the union members intended to try to organize the company if they were hired, and that the union would pay them for their organizing. The NLRB held that the company had committed unfair labor practices by discriminating against them on the basis of union membership. The United States Court of Appeals for the Eighth Circuit reversed the NLRB. It held that the NLRB had incorrectly interpreted the word “employee,” and that term “employee” did not include those persons who work for a company while simultaneously being paid by a union to organize that company. The decision of the court of appeals meant that the applicants here were not protected by the NLRA from discrimination because of their union membership. The court refused to enforce the Board’s order, and the NLRB appealed to the U.S. Supreme Court. Issue: Does the definition of “employee” under the NLRA include persons working for a company and, at the same time, being paid by a union to help the union organize the company? Decision: The National Labor Relations Act definition of “employee” [Section 2(3)] is as follows: The term “employee” shall include any employee, and shall not be limited to the employees of a particular employer, unless this subchapter explicitly states otherwise, and shall include any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute or because of any unfair labor practice, and who has not obtained any other regular and substantially equivalent employment, but shall not include any individual employed as an agricultural laborer, or in the domestic service of any family or person at his home, or any individual employed by his parent or spouse, or any individual having the status of an independent contractor, or any individual employed as a supervisor, or any individual employed by an employer subject to the Railway Labor Act, as amended from time to time, or by any other person who is not an employer as herein defined. The NLRB interpretation of this language to include company workers who are also paid union organizers is consistent with the broad language of the act itself. That language is broad enough to include those company workers whom a union also pays for organizing. The ordi- nary dictionary definition of “employee” includes any “person who works for another in return for financial or other compensation.” The NLRB’s broad, literal interpreta- tion of the word “employee” is consistent with the NLRA’s purposes of protecting “the right of employees to organize for mutual aid without employer interference” and “encour- aging and protecting the collective bargaining process.” Town & Country argues that a worker also being paid as a union organizer is sometimes acting adversely to the company, and the organizer may stand ready to leave the company if so requested by the union. Town & Country claims that means that the union, not the company, would have “the right to control the conduct of the employee” and therefore the worker must be the employee of the union alone. Town & Country’s argument fails because the NLRB correctly found that it was not supported by common law. The NLRB concluded that service to the union for pay does not involve abandonment of service to the company. Common sense suggests that a worker going about the ordinary tasks during a working day is subject to the control of the company, whether or not the worker is also paid by the union. The fact that union and company inter- ests may sometimes differ does not matter. The union orga- nizers may limit their organizing to nonwork hours. If that is so, union organizing, when done for pay but during nonwork hours, would be equivalent to “moonlighting,” a practice wholly consistent with a company’s control over its workers as to their assigned duties. There are legal reme- dies for Town & Country’s concerns, other than excluding paid or unpaid union organizers from protection under the NLRA. If the company is concerned about employees quitting without notice, it can offer its employees fixed- term contracts rather than hiring them “at will,” or it can negotiate with its workers for a notice period. A company faced with unlawful activity by its workers can discipline or dismiss those workers, or file a complaint with the NLRB, or notify law enforcement authorities. The Supreme Court held the NLRB’s interpretation of the word “employee” was lawful, and that the statu- tory definition of the term does not exclude paid union organizers. The Supreme Court vacated the judgment of the court of appeals, and remanded the case for further proceedings consistent with its opinion.

In Toering Electric Co.,32 the NLRB held that when an employer is charged with discrim- inatorily failing to hire an applicant for employment, the NLRB General Counsel has the burden of proving that the applicant was genuinely interested in working for the employer. The employer can defend itself against the unfair labor practice charge by raising a reason- able question as to the applicant’s actual interest in working for the employer. If the employer puts forward such evidence, then the general counsel must establish, by a preponderance of evidence, that the applicant was interested in establishing an employment relationship with the employer. If the general counsel fails to make such a showing, then the employer’s refusal to hire the applicant is lawful. This approach has been criticized as not being consistent with the Supreme Court’s opinion in NLRB v. Town & Country Electric, Inc. ThE WORKING LAw Are College Athletes Employees? The College Athletics Players Association (CAPA) filed a petition with the NLRB to seek a representation election for the members of the football team at Northwestern Univer- sity. The NLRB regional director ruled that scholarship players on the team are employ- ees within the meaning of Section 2(3) of the National Labor Relations Act (NLRA).33 The players seeking union representation stated that their major concerns were ensuring that: (1) the university provided medical treatment for the athletes after their playing days are over, (2) they do not lose their scholarships if they are injured, (3) they are not subject to unnecessary brain trauma, and (4) they are given better opportunities to complete their de- grees. The university took the position that the players were students rather than employees.

The regional director’s decision that the players were employees under the NLRA was based on the following facts: (1) The players perform valuable services for the university and for which they receive compensation. Northwestern’s football program generated revenues of approximately $235 million during the nine year period 2003–2012 through ticket sales, tele- vision contracts, merchandise sales, and licensing agreements. (2) The scholarship players are under the strict control and direction of the university—they spend up to 60 hours per week on football-related activities, and the coaches have control over nearly every aspect of the players’ private lives by virtue of the fact that there are many rules that they must follow under threat of discipline and/or the loss of a scholarship. (3) The scholarship players are not primarily students because their athletic duties do not constitute a core element of their educational degree require- ments, and their athletic duties are not supervised by the university’s academic faculty. The regional director directed that a representation election be held to determine whether the players wish to be represented by CAPA. The bargaining unit was defined as including those football players who receive scholarships and who have not exhausted their playing eligibility at the conclusion of the 2013 football season. The representation election was held on April 25, 2014. However, prior to the election, the university petitioned the NLRB to review the regional director’s decision; the Board granted the petition for review on April 24, 2014.34 The representation election was held on April 25, but the ballots were impounded and will only be counted if the Board upholds the regional director’s decision. If the decision is upheld, then the regional director will then determine whether a majority of those voting have chosen to make CAPA their exclusive bargaining agent. The NLRB has not indicated when it will issue its decision, and the question may not finally be resolved for several years. Jurisdiction over Labor Organizations Section 2(5) of the NLRA defines “labor organization” as: any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work. NLRB and Supreme Court decisions have held that the words “dealing with” are broad enough to encompass relationships that fall short of collective bargaining. For example, in NLRB v. Cabot Carbon,35 the Supreme Court held that the act encompassed employee committees that functioned merely to discuss with management, but not bargain over, such matters of mutual interest as grievances, seniority, and working conditions. There is also case law to suggest that a single individual cannot be considered a labor organization “in any literal sense.”36 12-5c Preemption and the NRLA Because of the broad reach of NLRB jurisdiction under the federal commerce power, it is important to consider whether the states have any authority to legislate regarding labor rela- tions in the private sector. Although state laws that conflict with federal laws are void under the supremacy clause of Article VI of the Constitution, the Supreme Court has consistently held that states may regulate activities involving interstate commerce where such regulation is pursuant to a valid state purpose. In such situations, the states have concurrent jurisdic- tion with the federal government: The regulated firm or activity is subject to both the state and federal regulations. But where an activity is characterized by pervasive federal regula- tion, the Supreme Court has held that Congress has, under the supremacy clause powers, “occupied the field” so that the federal law preempts any state regulation. One example of such preemption is the regulation of radio and television broadcasting by the Federal Communications Commission. Has Congress, through the enactment of the NLRA, preempted state regulation of private sector labor disputes? The Supreme Court tried to answer this question in two leading decisions. In San Diego Building Trades Council v. Garmon,37 the Supreme Court held that state and federal district courts are deprived of jurisdiction over conduct that is “arguably subject” to Section 7 or Section 9 of the NLRA. In Sears Roebuck v. San Diego County District Council of Carpenters,38 the Supreme Court held that state courts may deal with matters arising out of a labor dispute when the issue presented to the state court is not the same as that which would be before the NLRB. The Court said it would consider the nature of the particular state interests being asserted and the effect on national labor policies of allowing the state court to proceed. Sears involved a trespassing charge filed against picketing by the carpenters; no unfair practice charges were filed with the NLRB by either party to the dispute. The Court upheld the right of the state court to order the picketers to stop trespassing on Sears’s property, recognizing that Congress did not preempt all state regulation of matters growing out of a labor dispute. In Wisconsin Dept. of Industry, Labor & Human Relations v. Gould,39 the Supreme Court held that the NLRA preempted a Wisconsin law that barred any firm violating the NLRA three times within five years from doing business with the state. The Court held that the law sought to supplement the sanctions for violations of the NLRA and so was in conflict with the NLRB’s comprehensive regulation of industrial relations. The Supreme Court summarized the principles of the preemption of state laws by federal labor relations law in the 1993 case of Building & Construction Trades Council of the Met. Dist. v. Assoc. Builders and Contractors of Mass.,40 which upheld a state regulation requiring contrac- tors working on public contracts to abide by the terms of a collective agreement. The Court noted that federal labor relations law preempts state regulation of activities that are protected by Section 7 or are defined as unfair labor practices by the NLRA (as in San Diego Building Trades v. Garmon), and state regulation of areas left to the control of market and economic forces (as in Wisconsin Dept. of Industry, Labor & Human Relations v. Gould). In Chamber of Commerce of U.S. v. Brown,41 the Supreme Court held that a California state law that prohib- ited employers that received state grants of more than $10,000 per year from using the funds “to assist, promote, or deter union organizing” was preempted by the NLRA. President Clinton’s Executive Order No. 12954 disqualified firms that hired perma- nent replacement workers during lawful strikes from federal contracts over $100,000. This order, however, was held to be preempted by the NRLA, which allows employers to hire permanent replacements in economic strikes, according to Chamber of Commerce v. Reich.42 Federal legislation may also expressly preserve the right of the states to regulate activi- ties. For example, Section 103 of the Labor-Management Reporting and Disclosure Act, dealing with internal union affairs, states that “Nothing contained in this title shall limit the rights and remedies of any member of a labor organization under any State ... law or before any court or other tribunal....” Because of this provision, states are free to legislate greater protection for union members vis-à-vis their unions, and state courts are free to hear suits that may arise under such laws.

Summary

Organized labor developed slowly in the United States, with the post–Civil War industrialization spurring the rise of the Knights of Labor, the social- ists, and the American Federation of Labor (AFL). The AFL ultimately developed into the domi- nant organization of the American labor move- ment; its merger with the CIO in 1955 marked the high point for organized labor in the United States. Since the mid-1950s, the percentage of the American workforce that is unionized has steadily dwindled, from around 35 percent to the current level of approximately 12 percent. Unions still exert political influence, but there has been no resur- gence of the labor movement since the mid-1950s. The U.S. legal system responded to organized labor by initially trying to suppress it through the use of the conspiracy doctrine, the labor injunction, and yellow-dog contracts. The antitrust laws, intended to attack anticompetitive business practices, were also used against union strikes and boycotts. • It was not until the Great Depression of the 1930s that organized labor received legislative protec- tion. The Norris–La Guardia Act, passed in 1932, greatly limited the use of labor injunctions by the • • federal courts. The National Industrial Recovery Act, the centerpiece of Franklin Roosevelt’s New Deal, provided protection for employees organizing unions and encouraged collective bargaining. The National Labor Board (NLB) was created in 1933 to mediate labor disputes, but it had to rely on persuasion rather than legal authority. The NLB was replaced by the “old” National Labor Relations Board in 1934. When the Supreme Court declared the National Industrial Recovery Act unconstitu- tional in 1935, it meant the end of the old NLRB. Congress passed the Wagner Act shortly thereafter; the NLRA, and the NLRB it created, survived a constitutional challenge in the 1937 decision of NLRB v. Jones & Laughlin Steel Corp. The Wagner Act became the foundation for the development of the current National Labor Relations Act, the legal framework for labor relations in the United States. The National Labor Relations Act (NRLA) regulates private sector labor relations; the NLRA is adminis- tered by the National Labor Relations Board (NLRB). The NLRA defines the basic rights of employees and prohibits actions by employers or unions that inter- fere with or restrict those rights—defined as unfair labor practices. The NLRB adjudicates complaints of unfair labor practices under the NLRA and conducts representation elections. • The NLRA excludes public sector employers, rail- roads, and airlines subject to the Railway Labor Act from its definition of employer; and the NLRB has adopted guidelines to define the scope of its juris- diction over private sector employers. The NRLA also excludes certain employees from the act’s coverage: agricultural laborers, persons employed as domestics in the homes of others, individuals employed by parents or spouses, independent contractors, supervisors, and employees of Railway Labor Act employers. In addition to the statutory exclusions, the courts have excluded managerial employees and confidential employees. • The NLRA preempts state laws that purport to regulate conduct protected by or prohibited by the NLRA and that seek to regulate areas left by the NLRA to the market and economic forces.

C H A P T E R 14

Unfair Labor Practices by Employers and Unions

The National Labor Relations Act (NLRA) defines a list of unfair labor practices (ULPs) by both employers and unions. Such unfair labor practices are various forms of conduct or activities that adversely affect employees in the exercise of their rights under Section 7 of the act. The unfair labor practices by employers in Section 8(a) were in the Wagner Act; the union unfair labor practices in Section 8(b) were added by the Taft-Hartley Act in 1947 and amended by the Landrum-Griffin Act of 1959. Section 8(a) makes it illegal for an employer to engage in the following conduct: • interfere with, restrain, or coerce employees in the exercise of rights guaranteed to them by Section 7 of the act; • dominate, interfere with, or contribute financial or other support to a labor organization; • discriminate in the hiring or terms or conditions of employment of employees in order to encourage or discourage membership in any labor organization; • discharge or discriminate against an employee for filing charges or giving testimony under the NLRA; and • refuse to bargain collectively with the bargaining representatives of the employees, as designated in Section 9(a). Section 8(b) makes it illegal for unions to engage in the following conduct: • restrain or coerce employees in the exercise of their rights under Section 7, or restrain or coerce an employer in the selection of a representative for collective bargaining purposes; • cause or attempt to cause an employer to discriminate against an employee in terms or conditions of employment in order to encourage (or discourage) union membership; • refuse to bargain collectively with an employer (when the union is the bargaining agent of the employees); • engage in secondary picketing or encourage secondary boycotts of certain employers; • require employees to pay excessive or discriminatory union dues or membership fees; • cause an employer to pay for services that are not performed (feather-bedding); and • picket an employer in order to force the employer to recognize the union as bargaining agent when the union is not entitled to recognition under the act (recognition picketing).

Because both employer and union unfair practices involve, for the most part, the same kinds of conduct, we examine them together in this chapter. The refusal to bargain by either employer or union will be discussed in Chapter 15, which deals with the duty to bargain in good faith. The union offenses of secondary picketing and recognition picketing will be discussed in Chapter 16, along with other forms of union pressure tactics.

14-1 Section 7: Rights of Employees

Because all unfair practices involve conduct that interferes with employees in the exercise of their rights under Section 7 of the NLRA, it is important to determine the exact rights granted employees by Section 7. Section 7 contains this statement: Employees shall have the right to self-organization, to form, join or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all such activities. . . . The rights under Section 7 are given to all employees covered by the NLRA; the employees need not be organized union members to enjoy such rights. In addition, because the statutory rights are given to the individual employee, they may not be waived by a union purporting to act on behalf of the employees. For conduct of employees to be protected under Section 7, it must be concerted, and it must be for the purpose of collective bargaining or other mutual aid or protection. A group of employees discussing the need for a union in order to improve working conditions is obviously under the protection of Section 7, as are employees who attempt to get their coworkers to join a union. But the protection of Section 7 also extends to activities not directly associated with formal unionization. For example, a group of nonunion employees who walked off the job to protest the extremely cold temperatures inside the shop were held to be exercising their Section 7 rights, as was an employee who circulated a petition about the management of the company’s credit union. An employee collecting signatures of coworkers on a letter to management protesting the selection of a new supervisor was held to be engaged in protected activity in Atlantic-Pacific Coast Inc. v. NLRB.1 In NLRB v. Caval Tool Div.,2 an employee who challenged a new break policy announced at a company meeting was held to be engaged in concerted activity because she was acting in the interests of all the production workers. Section 7 protects employees in these situations from disci- pline or discharge for their conduct. There are, of course, limits to the extent of Section 7 protection. Employees acting individually may not be protected; in addition, conduct not related to collective bargaining or mutual aid or protection purposes is not protected. For example, an employee seeking to have a foreman removed because of a personal “grudge” was held not protected by Section 7, nor was a group of employees striking to protest company sales to South Africa protected. Perhaps the most difficult aspect of determining whether conduct is protected under Section 7 deals with the “concerted action” requirement: When is an individual employee, acting alone, protected? The following Supreme Court decision addresses this question.

CASE 14.1 NLRB v. City DisposaL systems 465 U.S. 822 (1984)

Brennan, J. James Brown, a truck driver employed by respondent, was discharged when he refused to drive a truck that he honestly and reasonably believed to be unsafe because of faulty brakes. Article XXI of the collective-bargaining agreement between respondent and Local 247 of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, which covered Brown, provides: [T]he Employer shall not require employees to take out on the street or highways any vehicle that is not in safe operating condition or equipped with safety appliances prescribed by law. It shall not be a violation of the Agreement where employees refuse to operate such equipment unless such refusal is unjustified. The question to be decided is whether Brown’s honest and reasonable assertion of his right to be free of the obliga- tion to drive unsafe trucks constituted “concerted activit[y]” within the meaning of Section 7 of the NLRA. The National Labor Relations Board (NLRB) held that Brown’s refusal was concerted activity within Section 7, and that his discharge was, therefore, an unfair labor practice under Section 8(a)(1) of the Act. The Court of Appeals disagreed and declined enforcement. James Brown was assigned to truck No. 245. On Saturday, May 12, 1979, Brown observed that a fellow driver had difficulty with the brakes of another truck, truck No. 244. As a result of the brake problem, truck No. 244 nearly collided with Brown’s truck. After unloading their garbage at the landfill, Brown and the driver of truck No. 244 brought No. 244 to respondent’s truck-repair facility, where they were told that the brakes would be repaired either over the weekend or in the morning of Monday, May 14. Early in the morning of Monday, May 14, while trans- porting a load of garbage to the landfill, Brown experienced difficulty with one of the wheels of his own truck— No. 245—and brought that truck in for repair. At the repair facility, Brown was told that, because of a backlog at the facility, No. 245 could not be repaired that day. Brown reported the situation to his supervisor, Otto Jasmund, who ordered Brown to punch out and go home. Before Brown could leave, however, Jasmund changed his mind and asked Brown to drive truck No. 244 instead. Brown refused explaining that “there’s something wrong with that truck. . . . [S]omething was wrong with the brakes . . . there was a grease seal or something leaking causing it to be affecting the brakes.” Brown did not, however, explic- itly refer to Article XXI of the collective-bargaining agree- ment or to the agreement in general. In response to Brown’s refusal to drive truck No. 244, Jasmund angrily told Brown to go home. At that point, an argument ensued and Robert Madary, another supervisor, intervened, repeating Jasmund’s request that Brown drive truck No. 244. Again, Brown refused, explaining that No. 244 “has got problems and I don’t want to drive it.” Madary replied that half the trucks had problems and that if respondent tried to fix all of them it would be unable to do business. He went on to tell Brown that “[w]e’ve got all this garbage out here to haul and you tell me about you don’t want to drive.” Brown responded, “Bob, what are you going to do, put the garbage ahead of the safety of the men?” Finally, Madary went to his office and Brown went home. Later that day, Brown received word that he had been discharged. He immediately returned to work in an attempt to gain reinstatement but was unsuccessful. . . . Brown filed an unfair labor practice charge with the NLRB, challenging his discharge. The Administrative Law Judge (ALJ) found that Brown had been discharged for refusing to operate truck No. 244, that Brown’s refusal was covered by Section 7 of the NLRA, and that respondent had therefore committed an unfair labor practice under Section 8(a)(1) of the Act. The ALJ held that an employee who acts alone in asserting a contractual right can never- theless be engaged in concerted activity within the meaning of Section 7. . . . The NLRB adopted the findings and conclusions of the ALJ and ordered that Brown be reinstated with back pay. On a petition for enforcement of the Board’s order, the Court of Appeals disagreed with the ALJ and the Board. Finding that Brown’s refusal to drive truck No. 244 was an action taken solely on his own behalf, the Court of Appeals concluded that the refusal was not a concerted activity within the meaning of Section 7. Section 7 of the NLRA provides that “[e]mployees shall have the right to . . . join or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” The NLRB’s decision in this case applied the Board’s longstanding “Interboro doctrine,” under which an individual’s assertion of a right grounded in a collective- bargaining agreement is recognized as “concerted activit[y]” and therefore accorded the protection of Section 7. The Board has relied on two justifications for the doctrine: First, the assertion of a right contained in a collective-bargaining agreement is an extension of the concerted action that produced the agreement; and second, the assertion of such a right affects the rights of all employees covered by the collec- tive-bargaining agreement. Neither the Court of Appeals nor respondent appears to question that an employee’s invocation of a right derived from a collective-bargaining agreement meets Section 7’s requirement that an employee’s action be taken “for purposes of collective bargaining or other mutual aid or protection.” As the Board first explained in the Interboro case, a single employee’s invocation of such rights affects all the employees that are covered by the collective-bargaining agreement. This type of generalized effect, as our cases have demonstrated, is sufficient to bring the actions of an individual employee within the “mutual aid or protection” standard, regardless of whether the employee has his own interests most immediately in mind. The term “concerted activit[y]” is not defined in the Act but it clearly enough embraces the activities of employees who have joined together in order to achieve common goals. What is not self-evident from the language of the Act, however, and what we must elucidate, is the precise manner in which particular actions of an individual employee must be linked to the actions of fellow employees in order to permit it to be said that the individual is engaged in concerted activity. We now turn to consider the Board’s anal- ysis of that question as expressed in the Interboro doctrine. Although one could interpret the phrase, “to engage in concerted activities,” to refer to a situation in which two or more employees are working together at the same time and the same place toward a common goal, the language of Section 7 does not confine itself to such a narrow meaning. In fact, Section 7 itself defines both joining and assisting labor organizations—activities in which a single employee can engage—as concerted activities. Indeed, even the courts that have rejected the Interboro doctrine recognize the possibility that an individual employee may be engaged in concerted activity when he acts alone. They have limited their recognition of this type of concerted activity, however, to two situations: (1) that in which the lone employee intends to induce group activity, and (2) that in which the employee acts as a representative of at least one other employee. The disagreement over the Interboro doctrine, therefore, merely reflects differing views regarding the nature of the relationship that must exist between the action of the individual employee and the actions of the group in order for Section 7 to apply. We cannot say that the Board’s view of that relationship, as applied in the Interboro doctrine, is unreasonable. The invocation of a right rooted in a collective- bargaining agreement is unquestionably an integral part of the process that gave rise to the agreement. That process— beginning with the organization of a union, continuing into the negotiation of a collective-bargaining agreement, and extending through the enforcement of the agreement—is a single, collective activity. Obviously, an employee could not invoke a right grounded in a collective-bargaining agreement were it not for the prior negotiating activities of his fellow employees. Nor would it make sense for a union to negotiate a collective-bargaining agreement if individual employees could not invoke the rights thereby created against their employer. Moreover, when an employee invokes a right grounded in the collective-bargaining agreement, he does not stand alone. Instead, he brings to bear on his employer the power and resolve of all his fellow employees. When, for instance, James Brown refused to drive a truck he believed to be unsafe, he was in effect reminding his employer that he and his fellow employees, at the time their collective- bargaining agreement was signed, had extracted a promise from City Disposal that they would not be asked to drive unsafe trucks. He was also reminding his employer that if it persisted in ordering him to drive an unsafe truck, he could reharness the power of that group to ensure the enforcement of that promise. It was just as though James Brown was reas- sembling his fellow union members to reenact their decision not to drive unsafe trucks. A lone employee’s invocation of a right grounded in his collective-bargaining agreement is, therefore, a concerted activity in a very real sense. . . . . . . By applying Section 7 to the actions of indi- vidual employees invoking their rights under a collective- bargaining agreement, the Interboro doctrine preserves the integrity of the entire collective-bargaining process; for by invoking a right grounded in a collective-bargaining agreement, the employee makes that right a reality, and breathes life, not only into the promises contained in the choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” The NLRB’s decision in this case applied the Board’s longstanding “Interboro doctrine,” under which an individual’s assertion of a right grounded in a collective- bargaining agreement is recognized as “concerted activit[y]” and therefore accorded the protection of Section 7. The Board has relied on two justifications for the doctrine: First, the assertion of a right contained in a collective-bargaining agreement is an extension of the concerted action that produced the agreement; and second, the assertion of such a right affects the rights of all employees covered by the collec- tive-bargaining agreement. Neither the Court of Appeals nor respondent appears to question that an employee’s invocation of a right derived from a collective-bargaining agreement meets Section 7’s requirement that an employee’s action be taken “for purposes of collective bargaining or other mutual aid or protection.” As the Board first explained in the Interboro case, a single employee’s invocation of such rights affects all the employees that are covered by the collective-bargaining agreement. This type of generalized effect, as our cases have demonstrated, is sufficient to bring the actions of an individual employee within the “mutual aid or protection” standard, regardless of whether the employee has his own interests most immediately in mind. The term “concerted activit[y]” is not defined in the Act but it clearly enough embraces the activities of employees who have joined together in order to achieve common goals. What is not self-evident from the language of the Act, however, and what we must elucidate, is the precise manner in which particular actions of an individual employee must be linked to the actions of fellow employees in order to permit it to be said that the individual is engaged in concerted activity. We now turn to consider the Board’s anal- ysis of that question as expressed in the Interboro doctrine. Although one could interpret the phrase, “to engage in concerted activities,” to refer to a situation in which two or more employees are working together at the same time and the same place toward a common goal, the language of Section 7 does not confine itself to such a narrow meaning. In fact, Section 7 itself defines both joining and assisting labor organizations—activities in which a single employee can engage—as concerted activities. Indeed, even the courts that have rejected the Interboro doctrine recognize the possibility that an individual employee may be engaged in concerted activity when he acts alone. They have limited their recognition of this type of concerted activity, however, to two situations: (1) that in which the lone employee intends to induce group activity, and (2) that in which the employee acts as a representative of at least one other employee. The disagreement over the Interboro doctrine, therefore, merely reflects differing views regarding the nature of the relationship that must exist between the action of the individual employee and the actions of the group in order for Section 7 to apply. We cannot say that the Board’s view of that relationship, as applied in the Interboro doctrine, is unreasonable. The invocation of a right rooted in a collective- bargaining agreement is unquestionably an integral part of the process that gave rise to the agreement. That process— beginning with the organization of a union, continuing into the negotiation of a collective-bargaining agreement, and extending through the enforcement of the agreement—is a single, collective activity. Obviously, an employee could not invoke a right grounded in a collective-bargaining agreement were it not for the prior negotiating activities of his fellow employees. Nor would it make sense for a union to negotiate a collective-bargaining agreement if individual employees could not invoke the rights thereby created against their employer. Moreover, when an employee invokes a right grounded in the collective-bargaining agreement, he does not stand alone. Instead, he brings to bear on his employer the power and resolve of all his fellow employees. When, for instance, James Brown refused to drive a truck he believed to be unsafe, he was in effect reminding his employer that he and his fellow employees, at the time their collective- bargaining agreement was signed, had extracted a promise from City Disposal that they would not be asked to drive unsafe trucks. He was also reminding his employer that if it persisted in ordering him to drive an unsafe truck, he could reharness the power of that group to ensure the enforcement of that promise. It was just as though James Brown was reas- sembling his fellow union members to reenact their decision not to drive unsafe trucks. A lone employee’s invocation of a right grounded in his collective-bargaining agreement is, therefore, a concerted activity in a very real sense. . . . . . . By applying Section 7 to the actions of indi- vidual employees invoking their rights under a collective- bargaining agreement, the Interboro doctrine preserves the integrity of the entire collective-bargaining process; for by invoking a right grounded in a collective-bargaining agreement, the employee makes that right a reality, and breathes life, not only into the promises contained in the ollective-bargaining agreement, but also into the entire process envisioned by Congress as the means by which to achieve industrial peace. To be sure, the principal tool by which an employee invokes the rights granted him in a collective-bargaining agreement is the processing of a grievance according to whatever procedures his collective-bargaining agreement establishes. . . . Indeed, it would make little sense for Section 7 to cover an employee’s conduct while negotiating a collec- tive-bargaining agreement, including a grievance mechanism by which to protect the rights created by the agreement, but not to cover an employee’s attempt to utilize that mecha- nism to enforce the agreement. . . . As long as the employee’s statement or action is based on a reasonable and honest belief that he is being, or has been, asked to perform a task that he is not required to perform under his collective-bargaining agreement, and the statement or action is reason- ably directed toward the enforcement of a collectively bargained right, there is no justification for overturning the Board’s judgment that the employee is engaged in concerted activity, just as he would have been had he filed a formal grievance. . . . In this case, the Board found that James Brown’s refusal to drive truck No. 244 was based on an honest and reason- able belief that the brakes on the truck were faulty. Brown explained to each of his supervisors his reason for refusing to drive the truck. Although he did not refer to his collective- bargaining agreement in either of these confrontations, the agreement provided not only that “[t]he . . . employer shall not require employees to take out on the streets or highways any vehicle that is not in safe operating condition,” but also that “[i]t shall not be a violation of the Agreement where employees refuse to operate such equipment, unless such refusal is unjustified.” There is no doubt, therefore, nor could there have been any doubt during Brown’s confron- tations with his supervisors, that by refusing to drive truck No. 244, Brown was invoking the right granted him in his collective-bargaining agreement to be free of the obli- gation to drive unsafe trucks. . . . Accordingly, we accept the Board’s conclusion that James Brown was engaged in concerted activity when he refused to drive truck No. 244. We therefore reverse the judgment of the Court of Appeals and remand the case for further proceedings consistent with this opinion. . . . It is so ordered. Case Questions 1. What is the relationship of the collective bargaining process to the right to refuse to operate unsafe equip- ment that was invoked by Brown? Did Brown mention the collective agreement when he refused to operate the truck? 2. How was Brown’s individual refusal to operate the truck he felt was unsafe “concerted activity” within the meaning of Section 7 of the NLRA? Explain. 3. Under what other circumstances, if any, can individual action be regarded as concerted within the meaning of Section 7?

In Meyers Industries,3 a NLRB decision handed down before the Supreme Court decided City Disposal Systems, the Board held that in order for an individual employee’s action to be concerted, it would require “that the conduct be engaged in with or on the authority of other employees, and not solely by and on behalf of the employee himself.” The case involved an employee who was discharged after refusing to drive his truck and reporting safety problems with his truck to state transportation authorities; the employee had acted alone and the workers were not unionized. Is this holding consistent with the Supreme Court’s decision in City Disposal Systems? The U.S. Court of Appeals for the District of Columbia remanded the Board’s decision in Meyers Industries to the Board for reconsideration.4 On rehearing, the Board reaffirmed its decision that the employee had not been engaged in concerted activity. When the case again came before the court of appeals in Prill v. NLRB,5 the D.C. Circuit Court upheld the Board’s decision, holding that it was a reasonable interpretation of the act. In Ewing v. NLRB,6 the court of appeals upheld the Board in a case similar to Meyers Industries on the Board’s third try at justifying the conclusion that the employee did not engage in concerted activity. Even though conduct may be concerted under Section 7, it may not be protected by the act. As noted in the City Disposal Systems decision, the employee may not act in an abusive manner. The Board has held that illegal, destructive, or unreasonable conduct is not protected, even if such conduct was concerted and for purposes of mutual aid or protec- tion. For example, workers who engaged in on-the-job slowdowns by refusing to process orders were not protected because they could not refuse to work yet continue to get paid. Threats or physical violence by employees are not protected, nor is the public disparage- ment of the employer’s product by employees or the referral of customers to competitors of the employer. The rights of employees under Section 7 are at the heart of the act; they are enforced and protected through ULP proceedings under Sections 8(a) and 8(b).

14-2 Sections 8(a)(1) and 8(b)(1): Violation of Employee Rights by Employers or Unions

Interference with, coercion, or restraint of employees in the exercise of their Section 7 rights by employers or unions are prohibited by Section 8(a)(1) and Section8(b)(1), respectively. While violations of other specific unfair labor practice provisions may also violate Sections 8(a)(1) or 8(b)(1), certain kinds of conduct involve violations of Sections 8(a)(1) or 8(b)(1) only. This section discusses conduct that violates those specific sections only. The NLRB has held that any conduct that has the natural tendency to restrain or coerce employees in the exercise of their Section 7 rights is a violation; actual coercion or restraint of the employees need not be shown. Intention is not a requirement for a violation of Sections 8(a)(1) and 8(b)(1); the employer or union need not have intended to coerce or restrain employees. All that is necessary is that they engage in conduct that the Board believes has the natural tendency to restrain employees in the exercise of their Section 7 rights. Many employer violations of Section 8(a)(1) occur in the context of union orga- nizing campaigns. Such violations usually involve restrictions on the soliciting activities of employees or coercive or threatening remarks made by the employer. The employer’s ability to make antiunion remarks is discussed first. 14-2a Antiunion Remarks by Employer During a union organizing campaign, the employer might attempt to persuade employees not to support the union. Such attempts may involve statements of opinion regarding the prospects of unionization and may also involve implicit promises or threats of reprisal. The extent to which the employer may communicate its position has been the subject of numerous Board and court decisions. Section 8(c) of the act states that: The expressing of any views, argument or opinion . . . shall not constitute or be evidence of an unfair labor practice under any of the provisions of this Act, if such expression contains no threat of reprisal or force or promise of benefit. It should be clear from the wording of Section 8(c) that explicit threats to fire union sympathizers are not protected by Section 8(c) and are therefore violations of Section 8(a)(1). The Board believes that because employees are economically dependent on the employer for their livelihood, they will be especially sensitive to the views explicitly or implicitly expressed by the employer. The Board will therefore examine closely the “totality of circumstances” of any employer’s antiunion remarks to determine if they go beyond the protections of Section 8(c) and thus violate Section 8(a)(1). In the Gissel Packing decision, mentioned in Chapter 13, the Supreme Court defined the limits to which an employer may predict the consequences of unionization. The employer may make a prediction based on objective facts to convey the employer’s reason- able belief as to demonstrably probable effects or consequences, provided that such factors are beyond the employer’s control. If the employer makes predictions about matters within the control of the employer, the Board is likely to view such statements as implicit threats because the employer is in a position to make those predictions come true. Statements such as, “The union almost put us out of business last time and the new management wouldn’t hesitate to close this plant,” have been held to be violations of Section 8(a)(1), whereas comments such as, “If the union gets in, it will have to bargain from scratch for everything it gets,” have been held to be within Section 8(c)’s protection. In American Spring Wire Co.,7 the company’s president made the following speech to employees in response to rumors that a union was trying to organize the workers: . . . We have beaten the Union on two occasions in this plant by overwhelming majorities and I know the majority of us are tired of such activity. The majority of us do not deserve such continuing harassment. We have set up in this Company all the means of communication possible, and to those of you who still think you can win more with the Union than you have with us in the past nine years, well—you are dead wrong—leave us alone—get the hell out of our plant. . . . I want to say something to you as clearly as I possibly can. Whether or not ASW has a union is really not significant to the Corporation’s future, or to myself, Dave Carruthers, or other major employees of this Company. As far as I am concerned those of us who are loyal to each other as a group can make valve spring wire, music wire, alloy wire, in Moline, Illinois; Saskatchewan, Canada; Puerto Rico; or Hawaii. We don’t need Cleveland, Ohio, or all this beautiful property. Remember nine years ago we had nothing. Today our Company has developed a certain amount of wealth and goodwill at the banks, a fantastic organization of people and friends who supply us goods, and above all a long and growing list of customers. These people do business with us, not with this building or this land. We do not intend to have this statement appear as a threat because it is not. It is a statement of fact. Facts are that our real concern regarding a union is with the majority of you who have opposed it in the past, and who would be locked into it should it come to this plant. With that in mind, I want to tell you that those of us in management do not wish to become involved in another election. We need the time to do the things that will continue to promote our Company, ourselves, and hopefully, you. I am asking you as your friend not to sign union cards, as we don’t have the patience to put up with it again. This next battle is yours, not ours. It is up to each one of you who is against the union to stop the card signing before it gets started. I don’t care how you do it. Organize yourselves and get it done. . . . The NLRB held that the statement directing union supporters to “. . . get the hell out of our plant” and telling those employees who opposed the union to “. . . stop the card signing before it gets started. I don’t care how you do it. . . .” were threatening and coer- cive. The statement “We don’t need Cleveland, Ohio. . . .” was held to be a clear threat to close the plant if the employees joined a union. The remarks were held to be a violation of Section 8(a)(1). In NLRB v. Exchange Parts,8 the Supreme Court held that the announce- ment of improved vacation pay and salary benefits during a union organizing campaign violated Section 8(a)(1). The Court reasoned that The danger inherent in the well-timed increases in benefits is the suggestion of the fist inside the velvet glove. Employees are not likely to miss the inference that the source of benefits now conferred is also the source from which future benefits must flow and which may dry up if it is not obliged. Why is the promise of benefits not protected under Section 8(c)? How does it interfere with the employees’ exercise of Section 7 rights? In Heck’s, Inc.,9 the Board declared that an employer did not commit an unfair labor practice by informing its unionized employees that it was opposed to their union and to unionization in general. However, the employer did commit an unfair labor practice by including its antiunion policy in its employee handbook and unilaterally requesting that all employees sign a statement agreeing to be bound by that policy. 14-2b Employer Limitations on Soliciting and Organizing For employees to exercise their right, under Section 7, to choose their bargaining represen- tative free from coercion, the employees must have access to information that will enable. them to exercise this right intelligently. Such information may come from fellow employees who are active in union organizing attempts, or it may come from nonemployee union organizers. Although the union may attempt to reach the employees individually at their homes, it is more convenient and more effective to contact the employees at the work site when they are all assembled there. But organizing activities at the workplace may disrupt production and will certainly conflict with the employer’s right to control and direct the work force. The employer’s property rights at the workplace also include the right to control access to the premises. Clearly, then, the right of employees to organize is in conflict with the employer’s property rights over the enterprise. How is such a conflict to be reconciled? In NLRB v. Babcock & Wilcox,10 the Supreme Court upheld a series of NLRB rules for employer restrictions upon nonemployee access to the premises and soliciting activity of employees. In the following case, the Supreme Court reconsidered the issues raised in Babcock & Wilcox.

CASE 14.2 LeChmeRe, iNC. v. NLRB 502 U.S. 527 (1992)

Facts: Local 919 of the United Food and Commercial Workers Union was attempting to organize the employees at a Lechmere retail store in Newington, Connecticut. The store was located at the south end of the Lechmere Shopping Plaza, while the main parking lot was to its north. The main entrance to the plaza was on the east side, off of the Berlin Turnpike, a four-lane divided highway. The parking lot is separated from the highway by a forty-six- foot-wide grassy strip, broken only by the Plaza’s entrance. To begin the organizing campaign, the union ran a full- page advertisement in a local newspaper, but it drew little response. The union then sent nonemployee organizers into Lechmere’s parking lot to place handbills on the windshields of cars parked in a corner of the lot used mostly by employees. Lechmere’s manager immediately confronted the organizers, informed them that Lechmere prohibited solicitation or handbill distribution of any kind on its property, and asked them to leave. They left, and Lechmere personnel removed the handbills. The union organizers repeated the handbilling in the parking lot on several other occasions; each time they were asked to leave and the handbills were removed. The organizers then relocated to the public grassy strip, from where they attempted to pass out handbills to cars entering the lot during hours (before opening and after closing) when the drivers were assumed to be primarily store employees. For one month, the union organizers returned daily to the grassy strip to picket Lechmere; after that, they picketed off and on for another six months. They also recorded the license plate numbers of cars parked in the employee parking area; with the cooperation of the Connecticut Department of Motor Vehicles, and managed to secure the names and addresses of some 41 nonsupervisory employees. The union sent four mailings to these employees and made some attempts to contact them by phone or home visits. These mailings and visits resulted in one signed union authorization card. The union then filed an unfair labor practice charge with the NRLB, alleging that Lechmere violated the Section 8(a) (1) of NLRA by barring the nonemployee organizers from its property. An administrative law judge (ALJ) ruled in the union’s favor, recommending that Lechmere be ordered to cease and desist from barring the union organizers from the parking lot. On review the NLRB affirmed the ALJ’s judgment and adopted the recommended order. Lechmere then sought judicial review, but the U.S. Court of Appeals for the First Circuit denied Lechmere’s petition for review and enforced the Board’s order. Lechmere then appealed to the U.S. Supreme Court.

Issue: Was Lechmere’s refusal to allow nonemployee union organizers onto its property to attempt to organize the store’s employees an unfair labor practice? Decision: The NLRA confers rights on employees, not on unions or their nonemployee organizers; however, in NLRB v. Babcock & Wilcox Co., the Supreme Court recognized that the employees’ “right of self-organization depends in some measure on [their] ability . . . to learn the advantages of self-organization from others.” In that case, the Court held that Section 7 of the NLRA may, in certain circumstances, restrict an employer’s right to exclude nonemployee union organizers from its property. As a rule, employers cannot be compelled to allow distribution of union literature by nonemployee organizers on their property. However, there are exceptions to that rule, such as where the location of a plant and the living quarters of the employees place the employees beyond the reach of reasonable union efforts to communicate with them; in such cases, employers’ property rights may be “required to yield to the extent needed to permit communication of information on the right to organize.” Under the Babcock & Wilcox Co. doctrine, the NLRB must accommodate the employees’ Section 7 rights and the employer’s property rights with as little destruction of the one as is consistent with the maintenance of the other. In Babcock, the Court distinguished between the union activities of employees and of nonemployees. In cases involving employee activities, the NLRB allows the employees to receive information on self-organization on the company’s property from fellow employees during nonworking time; but Section 7 does not require that nonemployee organizers be granted access to the employer’s property except in the rare case where “the inaccessibility of employees makes ineffective the reasonable attempts by nonemployees to communicate with them through the usual channels.” Where reasonable alternative means of access exist, the employer does not have to allow the nonemployee organizers on its property. In the case here, the ALJ held that reasonable alterna- tive means of communicating with the Lechmere employees were available to the union. The NLRB, reviewing the ALJ’s decision, however, held that there “was no reasonable, effec- tive alternative means available for the Union to communi- cate its message” to the employees. The Supreme Court held that the NLRB decision was in error, because the exception to the Babcock rule is a narrow one. The employer does not have to allow nonemployees on its property whenever other means of access to employees may be cumbersome or less- than-ideally effective; the employer is required to allow the nonemployee organizers on its property only when “the loca- tion of a plant and the living quarters of the employees place the employees beyond the reach of reasonable union efforts to communicate with them.” Classic examples include logging camps, mining camps, and mountain resort hotels. The union has the burden of establishing that the employees are inaccessible. Here, because the employees do not reside on Lechmere’s property, they are presumed not to be beyond the reach of the union’s message. The fact that the employees live in a large metropolitan area does not in itself render them “inaccessible” in the meaning of Babcock. The union tried advertising in local newspapers; the NLRB held that this was not reasonably effective because it was expensive and might not reach the employees. Whatever the merits of that conclusion, other alternative means of communication were readily available; access to employees, not success in winning them over, is the critical issue. The union here failed to establish the existence of any unique obstacles that frustrated its access to Lechmere’s employees, and the NLRB erred in concluding that Lechmere committed an unfair labor prac- tice by barring the nonemployee organizers from its prop- erty. The Supreme Court reversed the decision of the court of appeals, and denied enforcement of the NLRB order.

As the Supreme Court noted in Lechmere, under certain circumstances the employer may be required to allow union organizers access to its property when there are no other reasonable alternative means of access available. In Thunder Basin Coal v. Reich,11 the Supreme Court stated that the employer’s right to exclude union organizers comes from state property law, not from the NLRA; nothing in the NLRA requires that employers exclude organizers. Where the employer has no state law property right to exclude union organizers, Lechmere does not apply, and the employer may not prohibit access by the union, according to NLRB v. Calkins.12 In United Food and Commercial Workers v. NLRB,13 the U.S. Court of Appeals for the D.C. Circuit held that an employer leasing the property had no right, under state law, to deny access to union organizers. An employer’s attempts to deny unions access to a temporary sidewalk in front of the employer’s hotel and casino violated Section 8(a)(1) of the NLRA because the employer had no property rights to the sidewalk to allow it to exclude people from demonstrating on that sidewalk, as in Venetian Casino Resort, L.L.C. v. NLRB.14 Restrictions on Employees Although nonemployees may be barred completely, an employer may place only “reason- able restrictions” on the soliciting activities of employees. Employer rules limiting soliciting activities must have a valid workplace purpose, such as ensuring worker safety or main- taining the efficient operation of the business, and must be applied uniformly to all solic- iting, not just to union activities. The employer may limit the distribution of literature where it poses a litter problem. Employee soliciting activity may be limited to nonworking areas such as cafeterias, restrooms, or parking lots. Such activities may also be restricted to “nonworking times” such as coffee breaks and lunch breaks. However, an employer may not completely prohibit such activities. When the workplace is a department store or hospital, “no-solicitation” rules may present particular problems. An employer will attempt to ensure that soliciting activity does not interfere with customer access or patient care, yet the Board will ensure that the employees are still able to exercise their Section 7 rights. In Beth Israel Hospital v. NLRB,15 the U.S. Supreme Court upheld the Board order allowing a hospital to prohibit soliciting by employees in patient-care areas, but prohibiting the hospital from denying employees the right to solicit in the hospital cafeteria. In American Baptist Homes of the West d/b/a/ Piedmont Gardens,16 the NLRB held that a retirement facility had violated Section 8(a)(1) by posting a sign that prohibited union meetings in an employee break room, by maintaining a policy that prohibited employees from remaining on the premises after their shift unless they were previously authorized by a supervisor, and by enforcing that policy against two employees who sought access to the employer’s premises to communicate complaints to management. In the absence of exceptional circumstances, blanket prohibitions on soliciting have been held unreasonable and in violation of Section 8(a)(1). In Martin Luther Mem. Home, Inc.,17 the Board set out a framework for determining whether an employer’s restrictive work rule is in violation of Section 8(a)(1): • • 12 13 14 15 16 17 if the work rule explicitly restricts protected activity under Section 7, it is a violation; if the rule does not explicitly restrict protected activity, it is still a violation of Section 8(a)(1) if the employees would reasonably construe the language of the rule to prohibit protected activity, or if the rule was promulgated in response to union activity, or if the rule has been applied to restrict the exercise of protected activity. Employers may not restrict “visual-only” solicitations such as wearing hats, buttons, and so forth in the absence of exceptional circumstances. The U.S. Court of Appeals for the Second Circuit held that a rule by Starbucks Corp allowing employees to wear only one union button did not violate Section 8(a)(1). The court there held that the rule allowed an opportunity for employees to express their pro-union sentiment, while protecting a legiti- mate managerial interest in displaying a particular public image.18 Employer rules requiring that employees get prior approval from the employer for solicitation are overly restrictive and violate Section 8(a)(1) according to Opryland Hotel19 and Gallup, Inc. v. United Steelworkers of America.20 Employers have the right to restrict the use of company bulletin boards and telephones during working time and company email systems, but the employer may not enforce such rules in a discriminatory manner to exclude or restrict union activities. Employer Social Media Policies and Limitations on Employees’ Communications The Board has generally taken a negative view of employer rules prohibiting employees from discussing work-related matters with fellow workers, holding that they are overly restrictive of protected activity. In Northeastern Land Services, Inc. v. NLRB,21 the U.S. Court of Appeals for the First Circuit upheld the NLRB decision that an employer rule prohibiting employees from discussing terms of employment, including compensation, under penalty of dismissal was a violation of Section 8(a)(1). The U.S. Court of Appeals for the Fifth Circuit upheld that Board’s decision that an employer confidentiality policy that prohibited employees from divulging or discussing “financial information, including costs” could be construed as including discussion of wages, in violation of Section 7 rights, because the policy did not indicate that some personnel information, such as wages, was not covered by the policy.22 An employer that specifically warned an employee not to discuss wages with anyone else, and who fired the employee because the employer believed that the employee had discussed wages with other employees, violated Section 8(a)(1).23 An employer’s informal policy that prohib- ited employees from discussing disciplinary decisions was held to violate Section 8(a)(1) because employees must be Permitted “to communicate the circumstances of their discipline ... so that their colleagues are aware of the nature of discipline being imposed, how they might avoid such discipline, and matters which could be raised in their own defense.”24 In Costco Wholesale Corp.,25 the Board ruled that an employer’s policy that prohibited employees from: • discussing “private matters of members and other employees . . . includ[ing] topics such as, but not limited to, sick calls, leaves of absence, FMLA call-outs, ADA accom- modations, workers’ compensation injuries, personal health information, etc.”;

sharing, transmitting, or storing for personal or public use, without prior management approval “[s]ensitive information such as membership, payroll, confidential financial, cred- it card numbers, social security number or employee personal health information”; and • sharing “confidential” information such as employees’ names, addresses, telephone numbers, and email addresses; was a violation of Section 8(a)(1) because the broad prohibition clearly encompassed concerted communications protesting working conditions or the employer’s treatment of its employees. Similarly, an employer rule requiring employees to “be courteous, polite and friendly to . . . their fellow employees. No one should be disrespectful or use profanity or any other language which injures the image or reputation of the [employer]” was held to violate Section 8(a)(1) because employees could reasonably construe it as encompassing Section 7 activity such as statements objecting to working conditions and seeking the support of others in improving them.26 There was no language in the employer’s handbook to suggest that communications protected by Section 7 were excluded from the broad reach of the rule. An employer’s directive to employees not to discuss matters that were under an internal investigation by the employer was also held to violate Section 8(a)(1) because the employer had not shown a legitimate busi- ness justification for the requirement that would outweigh the employees’ Section 7 rights.27 An employer who discharged two employees for their participation in a Facebook discussion complaining that they owed additional income taxes because the employer made mistakes in withholding deductions from their pay; the Board held that employees have a right under Section 7 to act together to improve their terms and conditions of employment, including the use of social media to communicate with each other and with the public.28 Can the employer prohibit employees who have access to the company email system in the course of their work from using that email system to engage in workplace communica- tions protected under Section 7 during nonworking time? That question is addressed in the following case.

CASE 14.3 puRpLe CommuNiCatioNs, iNC. aND CommuNiCatioNs WoRkeRs of ameRiCa, afL-Cio 361 NLRB No. 126 (N.L.R.B. December 11, 2014)

Facts: Purple Communications, Inc. [the employer] provides sign-language interpretation services. Its employees, known as video relay interpreters, provide two- way, real-time interpretation of telephone communications between deaf or hard-of-hearing individuals and hearing individuals. The interpreters typically use an audio headset to communicate orally with the hearing participant on a call, leaving their hands free to communicate in sign language, via video, with the deaf participant. The interpreters work at 16 call centers that process calls on a nationwide, around-the-clock, “first come, first served” basis. Since June 2012, the company has maintained an employee handbook that contains its electronic communications policy. That policy states: Computers, laptops, internet access, voicemail, electronic mail (email), Blackberry, cellular telephones and/or other Company equipment is provided and maintained by the [sic] Purple to facilitate Company business. All information and messages stored, sent, and received on these systems are the sole and exclusive property of the Company, regardless of the author or recipient. All such equipment and access should be used for business purposes only. . . . Prohibited activities Employees are strictly prohibited from using the computer, internet, voicemail and email systems, and other Company equipment in connection with any of the following activities: ... . 2. Engaging in activities on behalf of organizations or persons with no professional or business affiliation with the Company. ... . 5. Sending uninvited email of a personal nature. The interpreters are assigned individual email accounts on the company’s email system, and they use those accounts every day that they are at work. They are able to access their company email accounts on the computers at their work- stations, as well as on computers in the call centers’ break areas and on their personal computers and smartphones. The interpreters have access to the Internet on the break- area computers but very limited access at their worksta- tions. The Communications Workers of America Union [CWA] filed petitions to represent the interpreters, and the Board held elections at seven of the Respondent’s call centers. The CWA filed objections to the election results at Purple Communications’ Corona and Long Beach facili- ties; the objections included a charge that the employer’s electronic communications policy interfered with the inter- preters’ freedom of choice in the election. The CWA also filed an unfair labor practice charge regarding the policy. The ALJ hearing the unfair practice complaint ruled that the electronic communications policy was lawful under the NLRB decision in Register Guard [351 NLRB 1110 (2007), enf’d. in relevant part and remanded sub nom. Guard Publishing v. NLRB, 571 F.3d 53 (D.C. Cir. 2009)]. The ALJ dismissed the General Counsel’s unfair labor practice charge that was based on the electronic communications policy and overruled the CWA’s objection to the election results. The General Counsel and CWA filed exceptions to that decision. The National Labor Relations Board granted review of the ALJ decision to address the question concerning employees’ use of their employer’s email and other electronic communications systems for the purpose of communicating with other employees about union or other Section 7 matters. Issue: Do employees have a statutory right to use an employer’s email system for Section 7 purposes? Decision: A majority of the NLRB [Chairman Pearce and Members Hirozawa and Schiffer] overruled the Board’s decision in Register Guard to the extent it holds that employees can have no statutory right to use their employer’s email systems for Section 7 purposes. The majority concluded that Register Guard had focused too much on an employers’ property rights and too little on the importance of email as a means of workplace communication for the employees. Section 7 of the National Labor Relations Act allows employees to effectively communicate with one another at work regarding self-organization and other terms and conditions of employment. The workplace is “uniquely appropriate” and “the natural gathering place” for such communications, and the use of email as a common form of workplace communication has expanded dramatically in recent years. The majority held that, consistent with the purposes and policies of the Act and the obligation to accommodate the competing rights of employers and employees, employee use of email for statutorily protected communications on nonworking time must presumptively be permitted by employers who have chosen to give employees access to their email systems. The Register Guard decision failed to adequately protect employees’ rights under the Act and avoided the Board’s responsibility “to adapt the Act to the changing patterns of industrial life.” Based on Board and Supreme Court precedents, the majority rejected arguments that the presumption that employees have a statutory right to use the email system for Section 7 purposes should apply only if employees would otherwise be entirely deprived of their statutory right to communicate and that employees’ alternative means of communication (such as by personal email or social media accounts) made the presumption inappropriate.

The majority emphasized that its decision was limited: (1) it applies only to employees who have already been granted access to the employer’s email system in the course of their work and does not require employers to provide such access; (2) an employer may justify a total ban on non-work use of email, including Section 7 use on nonworking time, by demonstrating that special circumstances make the ban necessary to maintain production or discipline; (3) absent justification for a total ban, the employer may apply uniform and consistently-enforced controls over its email system to the extent such controls are necessary to maintain produc- tion and discipline; and (4) the decision does not address email access by nonemployees and does not address access to any other type of electronic communications systems. In separate dissents, Members Miscimarra and Johnson contended that Register Guard was correctly decided and should not be overruled. Member Miscimarra argued that the majority’s decision improperly presumed that employees need to use employer email systems to engage in protected conduct, and did not properly balance employees’ statutory rights against employers’ property rights. Member Johnson argued that the majority undermined employers’ rights to own and operate email networks; wrongly rejected precedents stating that employees have no right to use employer equipment; wrongly disregarded employees’ alternative means of communication; and violated employers’ First Amendment rights by forcing them to subsidize hostile speech.

The rise of email and social media such as Facebook and Twitter poses new questions about whether employee use of such media are protected under Section 7, and if so, to what degree. Employers concerned about their public image are adopting social media policies restricting the posting of negative information about the employer or its policies. The next case involves the legality of a social media policy that prohibited the posting of any infor- mation that could “damage the Company . . . or damage any person’s reputation.”

CASE 14.4 CostCo WhoLesaLe CoRpoRatioN aND uNiteD fooD aND CommeRCiaL WoRkeRs uNioN, LoCaL 371 358 NLRB No. 106 (Sept. 7, 2012)

Facts: The employer, Costco Wholesale Corp., included a number of restrictions on employee activity as part of its employee handbook [known as the Costco Employee Agreement]. One rule, section 11.9 of the employee handbook, stated: “Any communication transmitted, stored or displayed electronically must comply with the policies outlined in the Costco Employee Agreement. Employees should be aware that statements posted electronically (such as [to]online message boards or discussion groups) that damage the Company, defame any individual or damage any person’s reputation, or violate the policies outlined in the Costco Employee Agreement, may be subject to discipline, up to and including termination of employment.” The union representing Costco employees filed an unfair labor practice complaint, and a hearing before an Administrative Law Judge [ALJ]. The ALJ found that the rule did not violate Section 8(a)(1), stating that employees would not reasonably construe this rule as regulating, and thereby inhibiting, Section 7 conduct. The NLRB General Counsel then sought review of that decision with the NLRB. Issue: Does the employer’s restrictions on what employees may post on social media interfere with, restrain, or coerce the employees’ exercise of their Section 7 rights? Decision: The Board stated that the appropriate inquiry as to whether an employer’s work rule violates Section 8(a)(1), the appropriate inquiry is whether the rule would reasonably tend to chill employees in the exercise of their Section 7 rights. If the rule explicitly restricts Section 7 rights, it is unlawful. If it does not impose explicit restrictions on protected activity, the violation is dependent upon a showing of one of the following: (1) that employees would reasonably construe the language to prohibit Section 7 activity; (2) that the rule was promulgated in response to union activity; or (3) that the rule has been applied to restrict the exercise of Section 7 rights. The Costco at issue here does not explicitly refer- ence Section 7 activity. However, by its terms, the broad prohibition against making statements that “damage the Company, defame any individual or damage any person’s reputation” clearly encompasses concerted communications protesting the Respondent’s treatment of its employees. There is nothing in the rule that even arguably suggests that protected communications are excluded from the broad scope of the rule. In these circumstances, employees would reasonably conclude that the rule requires them to refrain from engaging in certain protected communications, such as those that are critical of the employer or its agents. The rule here does not present accompanying language that would tend to restrict its application. It therefore allows employees to reasonably assume that it pertains to, among other things, certain protected concerted activities, such as communica- tions that are critical of Costco’s treatment of its employees. The employer’s rule thus has a reasonable tendency to inhibit employees’ protected activity and violates Section 8(a)(1).

The NLRB General Counsel has issued a memorandum providing guidance for employers in crafting social media policies.29 14-2c Other Section 8(a)(1) Violations As noted earlier, any conduct by an employer that has the natural tendency to interfere, restrain, or coerce employees in the exercise of their Section 7 rights is a violation of Section 8(a)(1). In D.R. Horton, Inc.,30 the NLRB held that the employer violated Section 8(a)(1) of the act by requiring its employees to sign, as a condition of employment, a manda- tory arbitration agreement that did not allow its employees to file joint, class, or collective employment-related claims in any forum, arbitral or judicial. Based on the agreement, the employer had rejected employees’ requests for class arbitration of claims under the Fair Labor Standards Act. The Board found that by requiring only individual arbitration of employ- ment-related claims and excluding access to any forum for collective claims, the employer interfered with employees’ Section 7 right to engage in “concerted activities for the purpose of collective bargaining or other mutual aid or protection.” The collective pursuit of work- place grievances through litigation or arbitration is conduct protected by Section 7 and the right under the NLRA to freedom of association. However, the U.S. Court of Appeals for the Fifth Circuit held that the NLRB’s decision did not give proper weight to the Federal Arbitration Act (FAA), and the arbitration agreement had to be enforced according to its terms; however, the court also held that the NLRB properly required employer to clarify with its employees that the arbitration agreement did not eliminate their ability to file unfair labor practice complaints with the NLRB.31 Despite judicial rejection of the Board’s posi- tion that mandatory arbitration agreements requiring arbitration of all employment-related claims violated Section 8(a)(1), a majority of the Board reaffirmed that position in Murphy Oil USA,32 holding that the employer violated Section 8(a) (1) of the act by requiring its employees to agree to resolve all employment-related claims through individual arbitra- tion. The Board found that mandatory arbitration agreements that bar employees from bringing joint, class, or collective workplace claims in any forum restrict employees’ right under Section 7 of the NLRA to improve their working conditions through administra- tive and judicial forums. The Board majority also found that finding a mandatory arbitra- tion agreement unlawful under the NLRA did not conflict with the FAA because: (1) such agreements extinguish rights guaranteed by Section 7; (2) Section 7 amounts to a “contrary congressional command” overriding the FAA; and (3) the Norris-LaGuardia Act, which prevents enforcement of private agreements that prohibit individuals from participating in lawsuits arising out of labor disputes, indicates that the FAA should yield to accommodate Section 7 rights. The Board majority stated that Section 7 did not guarantee a right to class certification or the equivalent but did create a right to pursue joint, class, or collec- tive claims if and as available, without the interference of an employer-imposed restraint. The Board majority found that the employer also violated Section 8(a)(1) when it sought to compel arbitration under the mandatory individual arbitration agreements of an FLSA claim filed by several employees in federal court. The NLRB has recently expressed concerns that employers insisting that employees acknowledge broad at-will employment policies may run afoul of Section 8(a)(1).33 An employer filing an ultimately unsuccessful suit against unions engaged in protected activity is not automatically in violation of Section 8(a)(1) when there were reasonable grounds for the suit, BE&K Construction Co. v. NLRB.34 Other employer practices likely to produce Section 8(a)(1) complaints may involve interrogation of employees regarding union sympathies and the denial of employee requests to have a representative present during disciplinary proceedings. Polling and Interrogation An employer approached by a union claiming to have the support of a majority of employees may wish to get some independent verification of the union’s claim. In Struknes Construction,35 the NLRB set out guidelines to reconcile the legitimate interests of an employer in polling employees regarding union support with the tendency of such a poll to restrain employees in the free exercise of their Section 7 rights. The NLRB requires that the employer have a “good faith reasonable doubt” about a union’s claim of majority support in order to conduct a poll of employees regarding their support of a union. The Supreme Court upheld the Board’s “good faith reasonable doubt” requirement in Allentown Mack Sales and Service, Inc. v. NLRB.36 If the employer chooses to poll its employees, the poll must be conducted according to the following guidelines: • • • • It must be done in response to a union claim of majority support. The employees must be informed of the purpose of the poll. The employees must be given assurances that no reprisals will result from their choice. The poll must be by secret ballot. In addition, the employer must not have created a coercive atmosphere through unfair labor practices or other behavior; and the poll must not be taken if a representation elec- tion is pending. Why should the Board preclude such a poll when an election is pending? In light of Linden Lumber (in Chapter 13), what happens when the poll by the employer discloses that the union has majority support? The employer polling pursuant to the Struknes rules needs to be distinguished from the interrogation of employees regarding their union sympathies. Polling is to be done by secret ballot and only in response to a union claim for voluntary recognition. Interrogation may involve confronting individual employees and questioning them about their union sympa- thies. Such interrogation may be in response to a union organizing campaign or a request for voluntary recognition, and, according to Johnnie’s Poultry Co.37 and Wisconsin Porcelain Co.,38 must include reassurances that participation in the interrogation is voluntary and that there will be no reprisals taken against the employees. The NLRB has held that interrogation of individual employees, even known union adherents, is not an unfair labor practice if it is done without threats or the promise of benefits by the employer in Rossmore House.39 If the interrogation is accompanied by threats against the employees or other unfair labor practices by the employer, however, it may be a violation of Section 8(a)(1). In Alliance Rubber,40 the Board, in a 2–1 decision, held that two polygraph examiners, hired by the employer to help in an investigation of suspected plant sabotage and drug use, were acting as agents of the employer when they interrogated employees about union activities in the course of administering polygraph exams to the employees. The Board held that the questioning was made even more stressful because of its connection with the inves- tigation into drug use and sabotage, and it implicitly gave the employees the message that engaging in union activity might result in their being suspected of engaging in unlawful activity in the plant. The company vice president’s conduct reasonably led employees to believe that the examiners asked the questions about union activities on behalf of the employer; therefore, the employer and the polygraph operators were held to have violated Section 8(a)(1). Weingarten Rights In NLRB v. Weingarten,41 an employer refused to allow an employee to have a union repre- sentative present during the questioning of the employee about thefts from the employer. The Supreme Court upheld the NLRB ruling that such a refusal violated Section 8(a)(1). The Court reasoned “the action of an employee in seeking to have the assistance of his union representative at a confrontation with his employer clearly falls within the literal wording of Section 7 that ‘[e]mployees shall have the right . . . to engage in concerted activities for the purpose of . . . mutual aid or protection.’” Shortly after its decision in Weingarten, the Board extended Weingarten rights to nonunion employees as well, as in Materials Research Corp.42 However, in E. I. DuPont & Co.,43 the NLRB decided to restrict such rights to unionized employees only. In 2000, the NLRB again reversed that position and again held that nonunion employees are also entitled to have a representative present during investiga- tory interviews in Epilepsy Foundation of Northeast Ohio.44 That decision was enforced by the U.S. Court of Appeals for the District of Columbia in Epilepsy Foundation of Northeast Ohio v. NLRB.45 However, the NLRB once again reversed its position on the question of whether nonunion employees are entitled to Weingarten rights in IBM Corp.,46 where the NLRB held that Weingarten rights are not available to nonunion workers. Under present NLRB doctrine, unionized employees have a right to have a representa- tive present applies whenever the meeting with management will have the “probable” result of the imposition of discipline or where such a result is “seriously considered.” The NLRB also held that, absent extenuating circumstances, the employee is entitled to the union representa- tive of his or her choice in Anheuser-Busch v. NLRB.47 The Board has set the following two requirements on the exercise of Weingarten rights by employees: The employee must actually request the presence of a representative to have the right (see Montgomery Ward & Co.48) and an employer who violates an employee’s Weingarten rights is not prevented from disciplining the employee, provided that the employer has independent evidence, not resulting from the “tainted” interview, to justify the discipline (see ITT Lighting Fixtures, Div. of ITT).49 Violence and Surveillance One last area of employer violations of Section 8(a)(1) involves violence and surveillance of employees. It should be clear from the wording of Section 8(a)(1) that violence or threats of violence directed against employees by the employer (or agents of the employer) violate Section 8(a)(1) because they interfere with the free exercise of the employees’ Section 7 rights. Employer surveillance of employee activities, or even creating the impression that the employees are under surveillance, also violates Section 8(a)(1) because such a practice has the natural tendency to restrict the free exercise of the employees’ Section 7 rights. An employer photographing or videotaping employees who are engaging in protected activity is a violation of Section 8(a)(1), according to F. W. Woolworth Co.50 In Allegheny Ludlum Corp. v. NLRB,51 an employer asking employees to agree to be filmed for use in an anti- union video was also in violation of Section 8(a)(1). 14-2d Union Coercion of Employees and Employers Whereas Section 8(a)(1) prohibits employer interference with employees’ Section 7 rights, Section 8(b)(1)(A) prohibits union restraint or coercion of the exercise of Section 7 rights by the employee. It is important to remember that Section 7 also gives employees the right to refrain from concerted activity. (There is an important qualification on the employees’ right to refrain from union activities; Section 7 recognizes that a union shop or agency shop provision requiring employees to join the union or to pay union dues may be valid. We discuss these provisions later in this chapter.) Section 8(b)(1)(A) In Radio Officers Union v. NLRB,52 the Supreme Court stated that the policy behind Section 7 and Section 8(b) was “to allow employees to freely exercise their right to join unions, be good, bad or indifferent members, or to abstain from joining any union, without imperiling their livelihood.” Union threats or violence directed at employees are clear violations of Section 8(b)(1)(A), as in United Food and Commercial Workers, Local 7R (ConAgra Foods, Inc.),53 because such actions tend to coerce or interfere with the employees’ free choice of whether or not to support the union. But just as with employer actions under Section 8(a)(1), less blatant conduct may also be an unfair labor practice. Where the union has waived its initiation fees for employees who join prior to a representation election, the Board has found a Section 8(b)(1)(A) violation. By the same reasoning, union statements such as, “Things will be tough for employees who don’t join the union before the election,” were also held to violate Section 8(b)(1)(A). In Local 466, Int. Brotherhood of Painters and Allied Trades (Skidmore College),54 a union business agent’s statement, in response to an internal union investigation into alleged financial improprieties initiated by other union members, which said, “when this is over with, someone’s going to get hurt” was held to be a threat of reprisal violating Section 8(b)(1)(A). Union officers photographing or videotaping the license plates and the occupants of vehicles crossing a picket line, when coupled with abusive remarks or other conduct having a reasonable tendency to instill fear of retribution in the minds of replace- ment employees, violates Section 8(b)(1)(A).55 Section 8(b)(1)(A) does recognize the need for unions to make rules regarding member- ship qualifications. A proviso to the section declares “[t]his paragraph shall not impair the right of a labor organization to prescribe its own rules with respect to the acquisition or retention of membership therein.” The courts have tended to construe this provision liber- ally, provided that the union action does not affect the job tenure of an employee. The courts have allowed unions to fine members who refused to go on strike; they have also upheld the right of unions to file suit in state court to collect such fines. However, when a union has expelled a member for filing an unfair labor practice charge with the NLRB without exhausting available internal union remedies, the Supreme Court has found the union in violation of Section 8(b)(1)(A), as in NLRB v. Industrial Union of Marine and Shipbuilding Workers.56 The Court reasoned, “Any coercion used to discourage, retard or defeat that access [to the NLRB] is beyond the legitimate interests of a labor organization.” Section 8(b)(1)(B) Section 8(b)(1)(B) protects employers from union coercion in their choice of a representa- tive for purposes of collective bargaining or the adjustment of grievances. The legislative history of this section suggests that it was intended to prevent unions from coercing firms into multiemployer bargaining units. In a number of industries, employers bargain with a union on a multiemployer basis. This is particularly true in industries characterized by a number of small firms and a single large union. Examples are: • Coal mining • The trucking industry • Construction • The longshoring industry To offset the power of the large union, the employers join together and bargain through an employers’ association or multiemployer bargaining unit. This joint bargaining by employers prevents the union from engaging in whipsaw strikes—that is, strikes in which the union selectively strikes one firm in the industry. Because that firm’s competitors are not struck, they can continue to operate and draw business from the struck firm. The struck firm is under great pressure to concede to union demands to regain lost business. When the firm capitulates, the union repeats the process against other firms. Multiemployer bargaining resists such efforts because all firms bargain together; if the union strikes one firm, the others can lock out their employees to undermine the union’s pressure. In addition to preventing whipsaw strikes, other reasons for engaging in multiemployer bargaining include the following: • It eases each company’s administrative burden by reducing the number of negotiating sessions and aiding information exchange When one large company is the pacesetter in the industry and the union is likely to insist that other firms adopt approximately the same contract terms, smaller employers may have more input into the bargaining process by joining the leader in a multiem- ployer bargaining arrangement. Establishment of uniform wages, hours, and working conditions among the members of the bargaining group means firms will not have to engage in economic competition in the labor market. Despite the legislative history of Section 8(b)(1)(B), the section does not mention multiemployer bargaining. The Board and the courts have taken the position that multi- employer bargaining cannot be demanded by the interested employers or by the relevant union; rather, it must be consented to by both sides.57 The union need not agree to bargain with the employers’ association, nor can it insist that any company or companies form or join such a bargaining group. However, once the parties have agreed to multiemployer bargaining and negotiations have begun, neither an employer nor the union may withdraw without the consent of the other side, except in the event of “unusual circumstances.” This rule prevents one side from pulling out just because the bargaining has taken an undesirable turn. (The Board has held that an impasse, or deadlock in negotiations, does not constitute “unusual circumstances.”) Unions have been found guilty of violating Section 8(b)(1)(B) when they struck to force a company to accept a multiemployer association for bargaining purposes and when they tried to force a firm to enter an individual contract in conflict with the established multiemployer unit. In addition, unions that have insisted on bargaining with company executives rather than an attorney hired by management have been held to violate Section 8(b)(1)(B). 14-2e Section 8(a)(2): Employer Domination of Labor Unions In the years just prior to and shortly after the passage of the Wagner Act in 1935, employer- formed and dominated unions were common. Firms that decided they could no longer completely resist worker demands for collective action created in-house unions, or captive unions. Such unions or employee associations created an impression of collective bargaining while allowing management to retain complete control. This type of employer domina- tion is outlawed by Section 8(a)(2). That section also outlaws employer interference in the formation or administration of a labor organization, as well as employer support (financial or otherwise) of the same. As remedies for Section 8(a)(2) violations, the Board may order the employer to cease recognizing the union, to cancel any agreements reached with the union, to cease giving support or assistance to the union, or to disband an in-house or captive union. Although in-house unions are not a common problem today, the problem of employer support is of continuing interest. Support such as secretarial help, office equipment, or financial aid is prohibited. An employer is permitted by Section 8(a)(2) to allow “employees to confer with him during working hours without loss of time or pay.” An employer who agrees to recognize a union that does not have the support of a majority of employees violates Section 8(a)(2); such recognition is a violation even if the employer acted on a good-faith belief that the union had majority support. An employer is also prohibited from recognizing one union while another union has a petition for a repre- sentation election pending before the NLRB. However, in RCA del Caribe,58 the Board held that an employer may continue negotiations with an incumbent union even though a rival union had filed a petition for a representation election. Are these two positions consistent? How can they be reconciled? In addition to being prohibited from recognizing a nonmajority union, the employer is forbidden from helping a union solicit membership or dues checkoff cards and from allowing a supervisor to serve as a union officer. One area of interest under Section 8(a)(2) has developed recently as many employers initiated innovative work arrangements among employees. To improve productivity and worker morale, some employers have created autonomous work groups, quality circles, or work teams in which groups of employees are given greater responsibility for determining work schedules, methods, and so forth. When these work groups or teams discuss working conditions, pay, or worker grievances with representatives of the employer, they could be clas- sified as labor organizations under the NLRA. Section 2(5) defines a labor organization as: any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work. The following case deals with the question of whether employer-created “employee action committees” were employer dominated or controlled labor organizations in violation of Section 8(a)(2).

CASE 14.5 eLeCtRomatioN, iNC. v. NLRB 35 F.3d 1148 (7th Cir. 1994)

[Electromation, a manufacturer of small electrical compo- nents, employed approximately 200 employees; the employees were not represented by a union. In response to financial losses, the company decided to cut expenses by revising its employee attendance policy and replacing the scheduled wage increases with lump-sum payments based on the length of each employee’s service at the company. When Electromation informed its employees of these changes, a number of employees signed a letter to the company expressing their dissatisfaction with the changes and asking the company to reconsider. The company president met with randomly selected employees to discuss wages, bonuses, incentive pay, tardiness, attendance programs, and bereave- ment and sick leave policy. Following this meeting, the pres- ident and supervisors concluded that the company would involve the employees to come up with solutions to these issues through the use of “action committees” of employees and management. At a meeting to explain the action committees, the employees initially reacted negatively to the concept. They reluctantly agreed to the proposed committees and suggestedthat they be allowed to sign up for specific committees. The next day, the company informed the employees of the formation of five action committees and posted sign-up sheets for the following committees: (1) Absenteeism/ Infractions; (2) No Smoking Policy; (3) Communication Network; (4) Pay Progression for Premium Positions; and (5) Attendance Bonus Program. Each committee was to consist of employees and one or two members of manage- ment, as well as the company’s Employee Benefits Manager, Loretta Dickey, who was in charge of the coordination of all the committees. No employees were involved in the drafting of any aspect of the memorandum or the state- ment of subjects that the committees were to consider. The company then posted a memo announcing the members of each committee and dates of the initial committee meetings. The company’s Employee Benefits Manager had determined which employees would participate on each committee. In late January and early February 1989, four of the action committees began to meet, but the No Smoking Policy Committee was never organized. At the first meeting of the Attendance Bonus Program Committee, management officials solicited employee ideas regarding a good attendance award program. Through the discussions, the committee developed a proposal, but management declared it was too costly and it was not pursued further. On February 13, 1989, the International Brotherhood of Teamsters, Local Union No. 1049 (the “union”) demanded recognition from the company; the company had been unaware that any organizing efforts had occurred. In late February, the president informed Employee Benefits Manager Dickey of the union’s demand. Upon the advice of counsel, Dickey announced at the next meeting of each committee that, due to the union demand, the company could no longer participate in the committees, but that the employee members could continue to meet if they so desired. Finally, on March 15, 1989, the president formally announced to the employees that “due to the Union’s campaign, the Company would be unable to participate in the committee meetings and could not continue to work with the committees until after the union election.” The election was held on March 31, 1989; the employees voted 95-82 against union representation. On April 24, 1989, a regional director of the Board issued a complaint alleging that Electromation had violated the Act; the NLRB ultimately found that Electromation violated Sections 8(a)(2) and (1) of the NLRA through its establishment and administration of “action committees” consisting of employees and management. Electromation sought judicial review of the NLRB order.] Will, J. . . . In this appeal, we consider a petition to set aside and a cross-petition to enforce an order of the National Labor Relations Board. . . . An allegation that Electromation has violated Section 8(a)(2) and (1) of the Act raises two distinct issues: first, whether the action committees in this case constituted “labor organizations” within the meaning of Section 2(5); and second, whether the employer dominated, influenced, or interfered with the formation or administration of the organization or contributed financial or other support to it, in violation of Section 8(a)(2) and (1) of the Act. . . . . . . Under [the] statutory definition [of labor organiza- tion, §2(5)] the action committees would constitute labor organizations if: (1) the Electromation employees participated in the committees; (2) the committees existed, at least in part, for the purpose of “dealing with” the employer; and (3) these dealings concerned “grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work.” In reaching its decision in this case, the Board also noted that “if the organization has as a purpose the representation of employees, it meets the statutory definition of ‘employee representation committee or plan’ under Section 2(5) and will constitute a labor organization if it also meets the criteria of employee participation and dealing with condi- tions of work or other statutory subjects.” Because the Board found that the employee members of the action committees had acted in a representational capacity, it did not decide whether an employee group could ever be found to consti- tute a labor organization in the absence of a finding that it acted as a representative of the other employees. . . . With respect to the first factor, there is no question that the Electromation employees participated in the action committees. Turning to the second factor, which is the most seriously contested on appeal, the Board found that the activities of the action committees constituted “dealing with” the employer. . . . even if the committees are considered individually, there exists substantial evidence that each was formed and existed for the purpose of “dealing with” the company. It is in fact the shared similarities among the committee struc- tures which compels unitary treatment of them for the purposes of the issues raised in this appeal. . . . We have previously noted that the broad construction of [the definition of] labor organization applies not onlywith regard to the “absence of formal organization, [but also to] the type of interchange between parties which may be deemed ‘dealing’” with employers. Moreover, an organiza- tion may satisfy the statutory requirement that it exists for the purpose in whole or in part of dealing with employers even if it has not engaged in actual bargaining or concluded a bargaining agreement. . . . the Board here explained that “dealing with” is a bilateral mechanism involving proposals from the employee organization concerning the subjects listed in Section 2(5), coupled with real or apparent consideration of those proposals by management. . . . . . . the Board did not err in determining that the Electromation action committees constituted labor organi- zations within the meaning of Sections 2(5) and 8(a)(2) of the Act. Although it is true that [the company] . . . made no guarantees as to the results regarding the employee recommendations, the activities of the action commit- tees nonetheless constituted “dealing with” the employer. Finally, with respect to the third factor, the subject matter of that dealing—for example, the treatment of employee absenteeism and employee bonuses—obviously concerned conditions of employment. We further agree with the Board that the purpose of the action committees was not limited to the improvement of company efficiency or product quality, but rather that they were designed to func- tion and in fact functioned in an essentially representative capacity. Accordingly, given the statute’s traditionally broad construction, there is substantial evidence to support the Board’s finding that the action committees constituted labor organizations. . . . . . . [W]e must next consider whether, through their creation and administration of the action committees, the company acted unlawfully in violation of Section 8(a)(2) and (1) of the Act. . . . the Board focused its analysis on the relationship between Electromation’s actions in creating and adminis- tering the action committees and the resulting effect upon its employees’ rights under the Act. . . . The Board correctly focused on management’s participation in the action committees and its effect on the employees and found domi- nation in that the company defined the committee struc- tures and committee subject matters, appointed a manager to coordinate and monitor the committee meetings, struc- tured each committee to include one or two management representatives, and permitted those managers to review and reject committee proposals before they could be presented to upper level management. The Board’s interpretation of Section 8(a)(2) simply does not contravene the statutory language. . . . As the Board found, substantial evidence supports the finding of company domination of the action committees. First, the company proposed and essentially imposed the action committees upon its employees as the only acceptable mechanism for resolution of their acknowledged grievances regarding the newly announced attendance bonus policies. .. . The record also clearly shows that the employees were initially reluctant to accept the company’s proposal of the action committees as a means to address their concerns; their reaction was “not positive.” Nonetheless, the company continued to press the idea until the employees eventually accepted. . . . The company played a pivotal role in estab- lishing both the framework and the agenda for the action committees. Electromation unilaterally selected the size, structure, and procedural functioning of the committees; it decided the number of committees and the topic(s) to be addressed by each. The company unilaterally drafted the action committees’ purposes and goal statements, which identified from the start the focus of each committee’s work. . . . Electromation actually controlled which issues received attention by the committees and which did not. ... Although the company acceded to the employees’ request that volunteers form the committees, it unilat- erally determined how many could serve on each committee, decided that an employee could serve on only one committee at a time, and determined which committee certain employees would serve on, thus exer- cising significant control over the employees’ participa- tion and voice at the committee meetings. . . . Also, the company designated management representatives to serve on the committees . . . the management representative[s] . . . reviewed employee proposals, determined whether they were economically feasible, and further decided whether they would be presented to higher management. This role of the management committee members effectively put the employer on both sides of the bargaining table, an avowed proscription of the Act. Finally, the company paid the employees for their time spent on committee activi- ties, provided meeting space, and furnished all necessary supplies for the committees’ activities. While such finan- cial support is clearly not a violation of Section 8(a)(2) by itself, . . . in the totality of the circumstances in this case such support may reasonably be characterized to be in furtherance of the company’s domination of the action committees. We therefore conclude that there is substan- tial evidence to support the Board’s finding of unlawful employer domination and interference in violation of Section 8(a)(2) and (1). . . . Accordingly, because we find that substantial evidence supports the Board’s factual findings and that its legal conclusions have a reasonable basis in the law, we affirm the Board’s findings and enforce the Board’s order. Enforced. Case Questions 1. What was the purpose of the action committees cre- ated by Electromation? Did the committees constitute labor organizations within the meaning of Section 2(5) of the NLRA? Explain your answer. 2. When does a labor organization “deal with” an em- ployer within the meaning of Section 2(5)? Did Elec- tromation “deal with” the action committees? Explain. 3. On what basis did the NLRB and the court determine that Electromation dominated and controlled the ac- tion committees?

An employer-created group of managers and employees that discussed matters such as medical benefits, stock ownership plans, and termination policy was held to be an employer-dominated labor organization in violation of Section 8(a)(2) in Polaroid Corp.59 However, an employee committee that exists for the purpose of sharing information with the employer and simply gathers information and makes no proposals to the employer is not a labor organization, according to NLRB v. Peninsula General Hospital Medical Center.60

ethical DILEMMA

emPloyee involvement GroUP for WydGet?

You are the human resources manager of Wydget Corporation, a small manufactur- ing firm. The employees of Wydget are not unionized. Because of difficult business conditions, the workers’ wages have not increased in several years, and their medical insurance benefits have been reduced. As a result, morale among employees is low, and there has been high turnover in the work force. You are considering creating an employee involvement group to provide an opportunity for workers to share their con- cerns and ideas with management and to discuss production problems and working conditions. How can you structure the group to ensure that employees feel their role is effective, without running afoul of Section 8(a)(2)? What are the potential problems associated with the creation of such a group? Should you establish the employee involvement group? Explain the reasons for your opinion.

14-2f Sections 8(a)(3) and 8(b)(2): Discrimination in Terms or Conditions of Employment Under Section 8(a)(3) of the NLRA, employers are forbidden to discriminate “in regard to hire or tenure or employment or any term or condition of employment to encourage or discourage membership in any labor organization.” Unions, under Section 8(b)(2), are forbidden to: cause or attempt to cause an employer to discriminate against an employee in violation of Subsection 8(a)(3) or to discriminate against an employee with respect to whom membership in such organization has been denied or terminated on some ground other than . . . failure to tender the periodic dues and the initiation fees uniformly required as a condition of . . . membership. . . . The intent of these sections is to insulate an employee’s employment from conditions based on his or her union sympathies or lack thereof. If an employee is to have the free choice, under Section 7, to join or refrain from joining a union, then that employee must not be made to suffer economically for his or her choice. The wording of Sections 8(a)(3) and 8(b)(2) indicates that a violation of these sections has two elements. • First, there must be some discrimination in the terms or conditions of employment— either a refusal to hire, discharge, lay off, or discipline—or a union attempt to get the employer to so discriminate. • Second, the discrimination or attempt to cause discrimination must be for the purpose of encouraging or discouraging union membership. For example, in USF Red Star, Inc.,61 a union’s efforts to get the employer to discharge an employee because of his internal union activities violated Section 8(b)(2) and Section 8(b)(1)(A); when the employer discharged the employee because of the union’s demands, it violated Section 8(a)(3) and Section 8(a)(1). Because the discrimination (or attempt to cause it) must be for the purpose of encouraging or discouraging union membership, intention is a necessary part of a violation of these sections. If an employer (or union) states that an employee should be fired because of participation in union activities (or lack of participation), demonstrating the requisite intention for a violation is no problem. But most complaints involving Section 8(a)(3) or Section 8(b)(2) are not as clear- cut. For example, what happens if an employee who supports the union’s organizing campaign also has a poor work record? How should the Board and the courts handle a case in which the employer or union has mixed motives for its actions? That is the subject of the following case.

CASE 14.6 NLRB v. tRaNspoRtatioN maNagemeNt CoRp. 462 U.S. 393 (1983)

White, J. The National Labor Relations Act makes unlawful the discharge of workers because of union activity, but employers retain the right to discharge workers for any number of other reasons unrelated to the employee’s union activities. When the General Counsel of the National Labor Relations Board (Board) files a complaint alleging that an employee was discharged because of his union activities, the employer may assert legitimate motives for his decision. In Wright Line . . . the National Labor Relations Board refor- mulated the allocation of the burden of proof in such cases. It determined that the General Counsel carried the burden of persuading the Board that an anti-union animus contrib- uted to the employer’s decision to discharge an employee, a burden that does not shift, but that the employer, even if it failed to meet or neutralize the General Counsel’s showing, could avoid the finding that it violated the statute by demonstrating by a preponderance of the evidence that the worker would have been fired even if he had not been involved with the Union. The question presented in this case is whether the burden placed on the employer in Wright Line is consistent with Sections 8(a)(1) and 8(a)(3), as well as with Section 10(c) of the NLRA, which provides that the Board must prove an unlawful labor practice by a “prepon- derance of the evidence.” Prior to his discharge, Sam Santillo was a bus driver for respondent Transportation Management Corporation. On March 19, 1979, Santillo talked to officials of the Teamster’s Union about organizing the drivers who worked with him. Over the next four days Santillo discussed with his fellow drivers the possibility of joining the Teamsters and distrib- uted authorization cards. On the night of March 23, George Patterson, who supervised Santillo and the other drivers, told one of the drivers that he had heard of Santillo’s activi- ties. Patterson referred to Santillo as two-faced, and prom- ised to get even with him. Later that evening Patterson talked to Ed West who was also a bus driver for respondent. Patterson asked, “What’s with Sam and the Union?” Patterson said that he took Santillo’s actions personally, recounted several favors he had done for Santillo, and added that he would remember Santillo’s activities when Santillo again asked for a favor. On Monday, March 26, Santillo was discharged. Patterson told Santillo that he was being fired for leaving his keys in the bus and taking unauthorized breaks. Santillo filed a complaint with the Board alleging that he had been discharged because of his union activities, contrary to Sections 8(a)(1) and 8(a)(3) of the NLRA. The General Counsel issued a complaint. The administrative law judge (ALJ) determined by a preponderance of the evidence that Patterson clearly had an anti-union animus and that Santillo’s discharge was motivated by a desire to discourage union activities. The ALJ also found that the asserted reasons for the discharge could not withstand scrutiny. Patterson’s disapproval of Santillo’s practice of leaving his keys in the bus was clearly a pretext, for Patterson had not known about Santillo’s practice until after he had decided to discharge Santillo; moreover, the practice of leaving keys in buses was commonplace among respondent’s employees. Respondent identified two types of unauthorized breaks; coffee breaks and stops at home. With respect to both coffee breaks and stopping at home, the ALJ found that Santillo was never cautioned or admonished about such behavior, and that the employer had not followed its customary practice of issuing three written warnings before discharging a driver. The ALJ also found that the taking of coffee breaks during working hours was normal practice, and that respondent tolerated the practice unless the breaks interfered with the driver’s perfor- mance of his duties. In any event, said the ALJ, respondent had never taken any adverse personnel action against an employee because of such behavior. While acknowledging that Santillo had engaged in some unsatisfactory conduct, the ALJ was not persuaded that Santillo would have been fired had it not been for his union activities. The Board affirmed, adopting with some clarification the ALJ’s findings and conclusions and expressly applying its Wright Line decision. It stated that respondent had failed to carry its burden of persuading the Board that the discharge would have taken place had Santillo not engaged in activity protected by the Act. The First Circuit Court of Appeals, relying on its previous decision rejecting the Board’s Wright Line test . . . refused to enforce the Board’s order and remanded for consideration of whether the General Counsel had proved by a preponderance of the evidence that Santillo would not have been fired had it not been for his union activities. . . . As we understand the Board’s decisions, they have consistently held that the unfair labor practice consists of a discharge or other adverse action that is based in whole or in part on anti-union animus—or as the Board now puts it, that the employee’s protected conduct was a substantial or motivating factor in the adverse action. The General Counsel has the burden of proving these elements under Section 10(c). But the Board’s construction of the statute permits an employer to avoid being adjudicated a violator by showing what his actions would have been regardless of his forbidden motivation. It extends to the employer what the Board considers to be an affirmative defense but does not change or add to the elements of the unfair labor practice that the General Counsel has the burden of proving under Section 10(c). The Board has instead chosen to recognize, as it insists it has done for many years, what it designates as an affirmative defense that the employer has the burden of sustaining. We are unprepared to hold that this is an impermissible construc- tion of the Act. “[T]he Board’s construction here, while it may not be required by the Act, is at least permissible under it . . .” and in these circumstances its position is entitled to deference. The Board’s allocation of the burden of proof is clearly reasonable in this context. . . . The employer is a wrong- doer; he has acted out of a motive that is declared illegiti- mate by the statute. It is fair that he bear the risk that the influence of legal and illegal motives cannot be separated, because he knowingly created the risk and because the risk was created not by innocent activity but by his own wrongdoing. For these reasons, we conclude that the Court of Appeals erred in refusing to enforce the Board’s orders, which rested on the Board’s Wright Line decision. The Board was justified in this case in concluding that Santillo would not have been discharged had the employer not considered his efforts to establish a union. At least two of the transgressions that purportedly would have in any event prompted Santillo’s discharge were common- place, and yet no transgressor had ever before received any kind of discipline. Moreover, the employer departed from its usual practice in dealing with rules infractions; indeed, not only did the employer not warn Santillo that his actions would result in being subjected to discipline, it never even expressed its disapproval of his conduct. In addition, Patterson, the person who made the initial deci- sion to discharge Santillo, was obviously upset with Santillo for engaging in such protected activity. It is thus clear that the Board’s finding that Santillo would not have been fired even if the employer had not had an anti-union animus was “supported by substantial evidence on the record considered as a whole”. . . . Accordingly, the judgment is Reversed. Case Questions 1. What reasons did the employer offer to justify Santillo’s discharge? What, according to Santillo, prompted his discharge? 2. What evidence did the NLRB present to challenge the employer’s reasons for the discharge? 3. When does the NLRB’s Wright Line test apply? What does it require? Does the Supreme Court uphold the Wright Line test?

Can an employer refuse to hire an applicant whom the employer suspects is really a union organizer (known as a “salt” or “union salt”), or is such a refusal to hire a violation of Section 8(a)(3)? In Toering Electric Co.,62 the NLRB held that when an employer is charged with discriminatorily failing to hire an applicant for employment, the employer can defend itself against the unfair labor practice charge by raising a reasonable question as to the applicant’s actual interest in working for the employer. If the employer puts forward such evidence, then the general counsel must establish, by a preponderance of evidence, that the applicant was genuinely interested in establishing an employment relationship with the employer. If the general counsel fails to make such a showing, then the employer’s refusal to hire the applicant is lawful; if the general counsel succeeds in making such a showing, then the employer is in violation of Sections 8(a)(3) and 8(a)(1).

14-2g Discrimination in Employment to Encourage Union Membership and Union Security Agreements Although Section 8(a)(3) and Section 8(b)(2) prohibit discrimination to encourage or discourage union membership, there is an important exception regarding the “encourage- ment” of union membership. That exception deals with union security agreements—when an employer and union agree that employees must either join the union or at least pay union dues in order to remain employees. This exception requires some discussion. Prior to the Taft-Hartley Act of 1947, unions and employers could agree that an employer would hire only employees who were already union members. These agreements, called closed shop agreements, had the effect of encouraging (or requiring) workers to join unions if they wished to get a job. Such agreements clearly restrict the employee’s free exer- cise of Section 7 rights; for that reason, they were prohibited. But the Taft-Hartley amend- ments did not completely prohibit all “union security” arrangements. Section 8(a)(3), as amended by Taft-Hartley, contains the following provision: Provided, that nothing in this Act . . . shall preclude an employer from making an agreement with a labor organization . . . to require as a condition of employment membership therein on or after the thirtieth day following the beginning of such agreement, whichever is later. . . . Section 8(a)(3) also provides that an employer can justify discharging an employee for nonmembership in a union only if membership was denied or terminated because of the employee’s failure to pay the dues and initiation fees required of all members. The effect of these provisions is to allow an employer and union to agree to a union shop or agency shop provision. A union shop agreement requires that all employees hired by the employer must join the union after a certain period of time, not less than 30 days. Although employees need not be union members to be hired, they must become union members if they are to remain employed past the specified time period. An agency shop agreement does not require that employees actually join the union, but they must at least pay the dues and fees required of union members. Although Section 8(a)(3) states that an employer and a union can agree “to require as a condition of employment membership” in the union on or after 30 days of hiring, Section 8(b)(2) and the second proviso to Section 8(a)(3) state that an employee cannot be fired except for failure to pay dues and initiation fees. In effect, this latter language has the legal effect of reducing all union shops to the level of agency shops. Under an agency shop agree- ment, remember, employees need not become formal members of the union but must pay union dues. Under the language of Section 8(b)(2), formal union members cannot be fired for disobeying the union’s internal rules or failing to participate in union affairs. The only difference is that they may be fined by the union for these infractions, and the fines may be enforceable in a state court. Furthermore, the law is clear that an employee who pays dues but refuses to assume full union membership cannot be held to these rules and sanctions. Unions argue that union security provisions are needed to prevent “free riders”; because all members of the bargaining unit get the benefits of the union’s agreement, whether or not they are union members, they should be required to pay the costs of negotiating and administering the agreement—union dues. Only by paying the costs of such union repre- sentation can free riders be prevented. Although such agreements do prevent free riders, they are also coercive to the extent that they may override an employee’s free choice of whether or not to join a union. For that reason, the act permits states to outlaw such union security agreements. Section 14(b) states that Nothing in this Act shall be construed as authorizing the execution or application of agreements requiring membership in a labor organization as a condition of employment in any state or territory in which such execution or application is prohibited by State or Territorial law. urity agreements. In states that have passed such a law, the union shop and agency shop agreements are illegal. A number of states, mainly in the South and West (the Sun Belt), have passed such laws. It is also worth noting that Section 19 of the act was amended to allow employees with bona fide religious objections to joining unions or paying union dues to make arrangements to pay the required fees or dues to a charitable organization. When a union security agreement is in effect, the employer must discharge an employee, upon the union’s request, if the employee has been denied membership in or expelled from the union for failure to pay the required union dues or fees. Under Section 8(b)(2), the union cannot legally demand the discharge of an employee for refusing to pay “back dues” or “reinstatement fees” after a lapse of membership in a prior job. Other exam- ples of union violations of Section 8(b)(2) include: • Forcing an employer to agree to hire only applicants satisfactory to the union • Causing an employee to be discharged for opposition to the manner in which internal union affairs are conducted • Causing an employee to be discharged because the worker was disliked or considered a troublemaker by the union leadership Hiring Halls In some industries, employers rely on unions to refer prospective employees to the various employers. Such arrangements, known as hiring halls, are common in industries such as trucking, construction, and longshoring. Hiring halls and other job-referral mechanisms operated by unions may have the effect of encouraging membership in the union because an employee must go through the union to get a job. The NLRB and the Supreme Court have held such hiring halls or referral mechanisms to be legal as long as they meet the following conditions: • • • The union must not discriminate on grounds of union membership for job referrals. The employer may reject any applicant referred by the union. A notice of the nondiscriminatory operation of the referral service must be posted in the hiring hall. It is also legal for the union to set skill levels necessary for membership or for referral to employers through a hiring hall. Preferential Treatment for Union Officers: Super Seniority In some collective agreements, an employer will agree to give union officers or stewards pref- erential treatment in the event of layoffs or recall of employees. Such provisions, known as super seniority because layoff and recall are usually done on the basis of seniority, may have the effect of encouraging union membership. Yet they also serve to ensure that employees responsible for the enforcement and administration of the collective agreement remain on the job to ensure the protection of all employees’ rights under the contract. However, prefer- ential treatment that goes beyond layoff and recall rights is not so readily justified. For that reason, and because it clearly discriminates in employment conditions to encourage union activity, broad super seniority clauses may involve violations of Sections 8(a)(3) and 8(b)(2).

14-2h Discrimination in Employment to Discourage Union Membership Just as discrimination in terms or conditions of employment to encourage union member- ship violates Section 8(a)(3), so does discrimination that is intended to discourage union membership or activities. Most complaints alleging discrimination to discourage such activ- ities occur in the context of union organizing campaigns or strikes. Activity protected under Section 7 includes union organizing activity as well as strikes over economic issues or to protest unfair labor practices. The employer that refuses to hire, or discharges, lays off, or disciplines an employee for such activity is in violation of Section 8(a)(3). Although the employer must have acted with the intention of discouraging union membership, the Board has held that specific evidence of such an intention need not be shown if the employer’s conduct is inherently destructive of the employee’s Section 7 rights. As noted earlier, several reasons may be behind an employer’s action; antiunion motives may play a part, along with legitimate work-related reasons. Recall that in NLRB v. Transportation Management, the Supreme Court upheld the Board practice of requiring the employer to show that the discipline or discharge would have occurred even without the employee’s protected conduct. If the employer can meet that burden, then it is not a viola- tion of Section 8(a)(3). However, if there are no legitimate business reasons for the employ- er’s actions, then the conduct is a violation, according to Huck Store Fixture Co. v. NLRB.63 An employer who fires employees for engaging in a union organizing campaign is in violation of Section 8(a)(3). Firing employees for striking over economic demands is also a violation. Other examples of Section 8(a)(3) violations include: • layoffs that violate seniority rules and that fall mainly upon union supporters; • disproportionately severe discipline of union officers or supporters; • discharging a union supporter without the customary warning prior to discharge; • discharging a union supporter based on past misconduct that had previously been con- doned; and • selective enforcement of rules against union supporters.

14-2i Strikes as Protected Activity Strikes by employees are the essence of concerted activity; workers agree to withhold their labor from the employer in order to pressure the employer to accept their demands. A strike for collective bargaining purposes or for purposes of mutual aid and protection comes under the protection of Section 7. However, despite the purposes of the strike, if it violates the collective agreement or if workers are attempting to strike while still collecting their pay, the strike may not be protected. When discussing the rights of strikers under the NLRA and the employer’s response to the strike, the Board and the courts distinguish between economic strikes and unfair labor practice strikes. As discussed in Chapter 13, an economic strike is called to pressure the employer to accept the union’s negotiating demands. It occurs after the old collective unfair labor practice strike is called to protest an employer’s illegal actions. It does not involve contract demands or negotiations. The rights of strikers thus may depend on whether the strike is an unfair labor practice or economic strike. An economic strike may be converted into an unfair labor practice strike by an employer’s unfair practices that are committed during the strike, as in Ryan Iron Works, Inc.64 Unfair Labor Practice Strikes The Supreme Court has held, in Mastro Plastics v. NLRB,65 that unfair labor practice strikes are protected activity under the act. This means that unfair labor practice strikers may not be fired for going on strike, nor may they be permanently replaced. Strikes that begin as economic strikes may become unfair labor practice strikes if the employer commits serious unfair labor practices during the strike. For example, if the employer refused to bargain with the union over a new agreement and discharged the strikers, the strike would become an unfair labor practice strike. An employer may hire workers to replace the strikers during an unfair labor practice strike, but the strikers must be reinstated when the strike is over. In National Steel Supply, Inc.,66 an employer who terminated or permanently replaced workers striking to protest the illegal termination of an employee violated Section 8(a)(3). Although misconduct on the picket line may normally be a sufficient reason for an employer to discharge a striker, the Board has held in prior decisions that severe misconduct (such as physical assault) is needed to justify the discharge of an unfair labor practice striker. However, in Clear Pine Mouldings, Inc.,67 the Board held that the existence of an unfair labor practice strike: does not in any way privilege those employees [on strike] to engage in other than peaceful picketing and persuasion. . . . There is nothing in the statute to support the notion that striking employees are free to engage in or escalate violence or misconduct in proportion to their estimates of the degree of seriousness of an employer’s unfair labor practices. Economic Strikes Economic strikes, as previously noted, are work stoppages by the employees designed to force the employer to meet their bargaining demands for increased wages or other benefits. As with unfair labor practice strikes, economic strikes are protected activity; however, the protections afforded economic strikers are not as great as those given unfair labor prac- tice strikers. As mentioned earlier in the discussion of protected activity under Section 7, on-the-job slowdowns are not protected, and employees who engage in such conduct may be discharged. In addition, economic strikes in violation of the collective agreement are not protected. When the economic strike is protected, the striking employees may not be discharged for going on strike; however, the employer may hire permanent replacements for the striking employees. The right to hire permanent replacements was affirmed by the Supreme Court in 1938 in the case of NLRB v. MacKay Radio & Telegraph.68 Replacement workers hired on an at-will basis may be considered permanent replacements by the NLRB where the employer explicitly indicated to them that the employer intended to hire them as permanent replace- ments, according to Jones Plastic & Engineering Co.69 Although the striking employees may be permanently replaced, they still retain their status as “employees” under the act. [See the definition of employee in Section 2(3).] Because they retain their status as employees, the strikers are entitled to be reinstated if they make an unconditional application for reinstate- ment and if vacancies are available. If no positions are available at the time of their applica- tion, even if the lack of vacancies is due to the hiring of replacements, the employer need not reinstate the strikers. However, if the strikers continue to indicate an interest in reinstate- ment, the employer is required to rehire them as positions become available. This require- ment was upheld by the Supreme Court in NLRB v. Fleetwood Trailers Co.70 In Laidlaw Corp.,71 the NLRB held that economic strikers who had made an uncon- ditional application for reinstatement and who continued to make known their availability for employment were entitled to be recalled by the employer prior to the employer’s hiring of new employees. In David R. Webb Co., Inc. v. NLRB,72 the Court of Appeals held that the employer’s duty to reinstate strikers continues until the strikers have been reinstated to their former positions or to substantially equivalent positions. Reinstating them to lower positions does not satisfy the employer’s obligation. The following case discusses when, if ever, the employer may have a legitimate justification to refuse to reinstate strikers. The NLRB has held that a union may waive the right of strikers to be reinstated with full seniority in exchange for an end to a strike, as in Gem City Ready Mix73 and NLRB v. Harrison Ready Mix Concrete.74 The following case deals with an employer’s justification for refusing to reinstate strikers in their former positions or other available equivalent positions.

CASE 14.7 DiamoND WaLNut gRoWeRs, iNC. v. NLRB 113 F.3d 1259 (D.C. Cir. 1997) (en banc), cert. denied, 523 U.S. 1020 (1998

Facts: Following the expiration of their collective bargaining agreement, nearly 500 of Diamond Walnut Growers permanent and seasonal employees went on strike. Diamond hired replacement workers to continue operations. The strike was bitter, and the union encouraged a public boycott of Diamond’s products to exert economic pressure on Diamond. The boycott included a well-publicized national bus tour during which union members publicly distributed leaflets describing Diamond’s work force as “scabs” who packaged walnuts contaminated with “mold, dirt, oil, worms and debris.” One year into the strike, the NLRB held a representa- tion election. The union lost but filed objections with the NLRB, and the NLRB ordered that a new election be held in October 1993. Two weeks prior to the new election, four striking employees approached Diamond with an uncon- ditional offer to return to work. Because their former jobs and other substantially equivalent jobs were not available for three of the returning strikers at the time of their return, Diamond placed them in seasonal jobs. The union lost the rerun election. The NLRB General Counsel then filed a complaint alleging that Diamond had violated Sections 8(a)(3) and 8(a)(1) of the National Labor Relations Act by unlawfully discriminating against the three reinstated strikers by refusing to put them in certain seasonal position because of their protected activity. After a hearing, the ALJ recommended that the charges be dismissed because, while he found that Diamond had discriminated against the employees, the discrimination was not unlawful because no vacancies in their former jobs or in substantially equivalent jobs were available when they sought reinstatement. On review, the NLRB reversed the ALJ’s decision. The Board held that, while Diamond was under no legal obligation to reinstate the strikers, once it decided to reinstate them, it was required to act in a nondiscriminatory fashion toward them. The NLRB held that Diamond had discriminated against the three strikers because of their union status and/or because of certain protected activity they engaged in while on strike. The Board rejected Diamond’s justifications for placing the three returning strikers as it did: the employer’s concern that the replacement workers might instigate violence against the three and that the placements were justified by their participation in the boycott and the circulation of disparaging leaflets. The NLRB held that Diamond had failed to justify its discrimination and was guilty of unfair labor practices. Diamond sought judicial review of the NLRB decision in the U.S. Court of Appeals for the D.C. Circuit. Issue: Did the employer provide an adequate business justification for its refusal to reinstate the three strikers in their former, or equivalent, positions? Decision: The court held that this case was governed by Fleetwood Trailers. The general counsel must make out a prima facie case that the employer discriminated in its treatment of the returning strikers because of their protected activity. A struck employer faced with an unconditional offer to return to work is obliged to treat the returning employee like any other applicant for work, unless the employee’s former job or its substantial equivalent is available, in which case the employee is preferred to any other applicant. But here the returning strikers were not treated like any other applicants. Diamond admitted that it took into account the returnees’ protected activity in choosing to place them in jobs that were objectively less desirable than those for which they were qualified. Under Fleetwood Trailers, once discrimination is shown, the burden shifts to the employer to establish that its treat- ment of the employees has a legitimate and substantial busi- ness justification. Diamond declined to place the returnees in their former jobs or equivalent positions for which they were qualified because of two concerns: potential hostility against them by the replacements workers, and because the returnees had participated in the union boycott activities, they might be tempted to engage in sabotage or to let defective nuts get through inspection or to contaminate the packaged walnuts. The Board concluded that the possibility of the returnees engaging in future sabotage was simply not a sufficient risk to constitute a substantial business justification for their treat- ment. As for the employer’s concern for the safety of a few returning strikers, put in the midst of a majority of replace- ments in a strike marked by violence, it may be genuine; but the Board insisted that the employer provide evidence of a concrete threat to those strikers. Otherwise, an employer’s generalized concern could easily serve as a handy pretext for disfavoring returning strikers. If there were evidence of such a threat, the employer might well be obliged to take adequate preventative measures against those who threat- ened the violence, rather than against those who were threat- ened. Strikes tend to be hard struggles, and although this one may have been more bitter than most, there is always a potential danger that returning strikers may engage in some form of sabotage, especially while the strike is still in prog- ress. There is undeniably some risk in employing returning strikers during a strike, but an employer is forced to assume such risk of sabotage, because otherwise, the employer would not be required to take back strikers at all. There may well be situations in which an employer could produce compel- ling grounds for a relatively unfavorable assignment of a returning striker. The Board here implied that a serious threat of violence against the striker might suffice. The Board must consider whatever special circumstances are presented by an employer asserting the defense of substantial justification, and it may not summarily reject an employer’s specific and persuasive explanation. Other Strike-Related Issues Recall that under Section 7, employees have the right to refrain from concerted activity, which includes the right to remain working rather than go on strike. As noted in the discussion of Section 8(b)(2), a union may impose some disciplinary sanctions upon union members who refuse to go on strike, but they may not cause an employer to discriminate against such employees in terms or conditions of employment. Nor may the employer offer incentives or benefits to the replacements or those employees not going on strike when such benefits are not available to the strikers. In the case of NLRB v. Erie Resistor Co.,75 the Supreme Court held that the employer’s granting of 20 years’ seniority to all replacements violated Section 8(a)(3). The effect of such seniority was to insulate the replacements from layoff, while exposing employees who went on strike to layoff. This effect would continue long after the strike was over; it would place the former strikers at a disadvantage simply because they went on strike. Although Erie Resistor involved rather severe actions by the employer, the NLRB has held that any preferential treatment in terms or conditions of employment accorded to the nonstrikers or replacements, and not to the strikers, violates Section 8(a)(3). A 1983 Supreme Court decision involved the rights of the workers hired to replace economic strikers. In Belknap v. Hale,76 the Court held that replacements hired under the promise of permanent employment could sue the employer for breach of contract if they were laid off at the end of the strike. Does Belknap v. Hale undermine the rights of strikers to be reinstated? Employer Response to Strike Activity Just as employees are free to go on strike to promote their economic demands, employers are free to withdraw employment from employees to pressure them to accept the employ- er’s demands. This tactic, called a lockout, is the temporary withdrawal of employment to pressure employees to agree to the employer’s bargaining proposals. A lockout needs to be distinguished from a permanent closure of a plant to avoid unionization. When the employees have not gone on strike and are willing to continue working, the employer may be reluctant to “lock them out.” However, employers seeking to pressure unions to accept bargaining changes may resort to a lockout. The National Hockey League owners locked out the players for the entire 2004–2005 season in an attempt to force the players’ union to accept a proposal linking player salaries to league revenue. The NHL again resorted to a lockout at the beginning of the 2012–2013 season. In addition, when the threat of a “quickie strike” or unannounced walkout poses the prospect of damage to equipment or disruption of business, the employer may lock out the employees to avoid such problems. The Board has consistently held that such “defensive” lock- outs are not unfair labor practices. Lockouts by the employers in a multiemployer bargaining unit, to avoid a whipsaw strike by the union, have been held legal by the Board and the Supreme Court. What about the situation in which an employer locks out the unionized employees and hires replacements? This issue is addressed in the following Supreme Court decision. Whereas Brown dealt with a defensive lockout in response to a strike against one employer, the Supreme Court, in American Shipbuilding Co. v. NLRB,77 held that an.

employer is free to lock out employees in anticipation of the union going on strike. That decision allows the employer to use a lockout as an offensive weapon to promote its bargaining position; the employer need not wait for the union to strike first. An employer may not engage in a lockout unless negotiations have reached an impasse, or deadlock, and exceptional circumstances are required by the Board to justify lockouts prior to a bargaining impasse. In Ancor Concepts, Inc.,78 the NLRB held that the use of permanent replacements after a lockout was a violation of Section 8(a)(3). How does that situation differ from NLRB v. Brown? The NLRB upheld the use of temporary replacements after an offensive lockout in Harter Equipment.79

CASE 14.8 NLRB v. BRoWN 380 U.S. 278 (1965)

Facts: Five employers operated six retail grocery stores. The employers were members of a multiemployer bargaining unit that was represented by Local 462 of the Retail Clerks International Association. When the negotiations to renew the collective agreement covering the multiemployer unit stalled, the union went on strike against Food Jet, one of the five employers. The other four employers immediately locked out all their employees represented by the union, telling them and the Local that they would be recalled to work when the strike against Food Jet ended. All the employers continued to operate their businesses using temporary replacement workers. The replacement employees were told that they were hired only as long as the union was on strike. A new agreement was reached and the strike ended, and the employers immediately released the temporary replacements and restored the strikers and the locked out employees to their jobs. The union filed a complaint with the NLRB over the lockout and hiring of replacement workers. The NLRB held that the employers violated Sections 8(a)(1) and (3) of the NLRA by locking out their regular employees and using temporary replacements to carry on business. The Court of Appeals for the Tenth Circuit disagreed and refused to enforce the Board’s order. The NLRB then appealed to the U.S. Supreme Court. Issue: Have the employers violated Sections 8(a)(1) and (3) of the NLRA by locking out their regular employees and hiring temporary replacements during the strike against one of the employers in the multiemployer bargaining unit? Decision: Under the NLRA, there are a number of economic weapons the parties can use in seeking to force acceptance of their bargaining demands. Absent proof of unlawful motivation, employers may resort to various economic weapons to blunt the effectiveness of an anticipated strike by stockpiling inventories, readjusting contract schedules, or transferring work from one plant to another. Employers are also able to use a lockout as a legitimate economic weapon in various circumstances. The Court here held that the employers’ continued operations and the use of temporary replacements did not demonstrate any hostile motivation, nor was it inherently more destructive of employee rights than the lockout itself. The lockout and use of temporary replacements was part of the employers’ defensive measure to preserve the multiemployer group in the face of the whipsaw strike. Because Food Jet legitimately continued business operations during the strike, it was only reasonable to regard the employers’ actions as an attempt to preserve the integrity of the multiemployer bargaining unit that was threatened unless they stayed open for business during the lockout. If Food Jet had been able to stay open for business while the other stores were closed, the whipsaw strike could succeed in breaking up the multiemployer bargaining unit. Given the very competitive nature of the retail grocery business, the employers’ use of temporary replacements during the lockout was consistent with a legitimate business purpose. In order to find that conduct violated Section 8(a)(3) there must be discrimination that would discourage union membership, but the added element of antiunion intent is also required. While the use of temporary replacement workers in preference to the locked-out union members was discriminatory, the Court here held that any resulting tendency to discourage union membership was compara- tively remote, and that the use of temporary workers was reasonably related to a legitimate business purpose. The use of replacement workers was temporary, only for the duration of the strike; the replacements did not threaten the jobs of the striking employees. The striking employees could end the strike and terminate the lockout at any time simply by agreeing to the employers’ contract terms and returning to work on a regular basis. As well, the new collective agree- ment contained a union-shop provision that had been carried forward from the prior agreement, so a union member would have nothing to gain and much to lose by quitting the union. Given those circumstances, the Court held that the employers’ actions here did not tend to discourage union membership. The employers’ attempt to remain open for business using temporary replacements was a measure reasonably related to the legitimate business purpose of preserving the integrity of the multiemployer bargaining unit. In the absence of any evidentiary findings of hostile motive, there is no support for the NLRB determination that the employers violated Section 8(a)(1) or 8(a)(3). The Supreme Court therefore affirmed the court of appeals’ refusal to enforce the NLRB decision.

Plant Closing to Avoid Unionization The preceding discussion dealt with an employer’s response to the economic demands of organized workers; the employer is free to lock out to avoid union bargaining demands. But what about the situation in which the employees are just in the process of forming a union? Can the employer shut down the plant to avoid unionization? Recall that Section 8(a)(1) prohibits threats of closure or layoff to dissuade employees from joining a union. Should it make any difference whether the shutdown to avoid unionization is complete (the entire operation) or partial (only part of the operation)? In Textile Workers Union v. Darlington Mfg. Co.,80 the Supreme Court held that a total shutdown of a business, even if done for antiunion motivation, was not an unfair labor practice, but that a partial shutdown, done with the intent to deter workers from forming a union, was a violation of Section 8(a)(3). The Court in Darlington noted that a complete shutdown to avoid unionization is different from a runaway shop, in which the employer closes in one location and opens in another to avoid unionization. Such runaway conduct is in violation of Section 8(a)(3). However, the motive requirement under Section 8(a)(3) may pose a problem in deter- mining whether the relocation of the operation violates the act. If the employer raises some legitimate business reasons for the relocation, the NLRB counsel must demonstrate that the runaway would not have happened except for the employees’ unionizing efforts. (See the Transportation Management case discussed earlier in this chapter.) As remedy for a runaway shop, the Board will order that the offending employer offer the old employees positions at the new location. The employer must also pay the employees’ moving or travel expenses. If the employer has shut down part of the operation, the Board may order the employer to reopen the closed portion or to reinstate the affected employees in the remaining parts of the operation. The employees will also be awarded back pay lost because of the employer’s violation. Remedies are discussed more fully later in this chapter.

ThE WORKING LAw NLRB Office of the General Counsel Issues Consolidated Complaints Against McDonald’s Franchisees and their Franchisor McDonald’s, USA, LLC as Joint Employers

The National Labor Relations Board Office of the General Counsel has issued complaints against McDonald’s franchisees and their franchisor, McDonald’s USA, LLC, as joint employers. The complaints allege that McDonald’s USA, LLC and certain franchisees violated the rights of employees working at McDonald’s res- taurants at various locations around the country by, among other things, making state- ments and taking actions against them for engaging in activities aimed at improving their wages and working conditions, including participating in nationwide fast food worker protests about their terms and conditions of employment during the past two years. The Office of the General Counsel informed McDonald’s franchisees and their fran- chisor, McDonald’s USA, LLC, that, of 291 charges filed since November 2012, 86 cases have been found meritorious, and therefore, complaints would issue regarding those meritorious cases, absent settlement. While representatives of the Office of the General Counsel have been engaged in efforts to settle the matter with the parties, thus far, those efforts have largely been unsuccessful. Therefore, the Regional Offices, where meritorious charges were filed and not settled, issued complaints against the alleged joint employers today. General Counsel representatives will continue efforts to settle the meritorious charges, notwithstanding issuance of the complaints. Additionally, of the 291 charges filed, 11 cases were resolved and 71 cases remain under investigation. 13 complaints involving 78 charges against McDonald’s USA, LLC, McDonald’s USA franchisees and/or McDonald’s franchisees and their franchisor, McDonald’s USA, LLC as joint employers issued in the below Regional offices.

Region 2 – Manhattan • Region 4 – Philadelphia • Region 7 – Detroit • Region 10 – Atlanta • Region 13 – Chicago • Region 14 – St. Louis • Subregion 17 – Kansas City • Region 15 – New Orleans • Region 18 – Minneapolis • Region 20 – San Francisco • Region 25 – Indianapolis • Region 28 – Phoenix • Region 31 – Los Angeles

Meritorious allegations of unlawful conduct committed by McDonald’s franchisees and/or their franchisor, McDonald’s USA, LLC, occurring in more than one, and often multiple, locations around the country include: discriminatory discipline, reductions in hours, discharges, and other coercive conduct directed at employees in response to union and protected concerted activity, including threats, surveillance, interrogations, promises of benefit, and overbroad restrictions on communicating with union representa- tives or with other employees about unions and the employees’ terms and conditions of employment. In the interest of conserving public and private resources and to avoid unnecessary delay, the NLRB has scheduled consolidated hearings in three Regional locations in the Northeast, Midwest and West to address violations that require remedial relief as soon as possible. Absent settlement, the initial litigation will commence on March 30, 2015, and will involve allegations of unlawful actions committed against employees at McDonald’s restaurants in the jurisdiction of six Regional Offices. Specifically, the hearing will begin in Region 2 – Manhattan to address allega- tions in the complaints of Region 2 and Region 4, then will move to Region 13 – Chicago to address allegations in the complaints of Region 13 and Region 25, and will conclude in Region 31 – Los Angeles to address allegations in the complaints of Region 20 and 31. It is anticipated that hearings involving the allegations in the complaints issued by the other seven Regional offices will be scheduled after the initial litigation before an Administrative Law Judge, if those allegations cannot be resolved through settlement.

14-3Other Unfair Labor Practices

In addition to the unfair labor practices already discussed, the NLRA prohibits several other kinds of conduct. Refusing to bargain in good faith, the subject of Section 8(a)(5) and Section 8(b)(3), will be discussed in Chapter 15, and union unfair practices involving pick- eting and secondary boycotts will be dealt with in Chapter 16. The remaining unfair labor practices are the focus of this section. 14-3a Employer Reprisals Against Employees Section 8(a)(4) prohibits an employer from discharging or otherwise discriminating against an employee who has filed charges or given testimony under the act. Because employees must be free to avail themselves of the act’s procedures to give effect to their Section 7 rights, reprisals against employees for exercising their rights must also infringe on those rights. Violations of Section 8(a)(4) include the discharge or disciplining of an employee filing unfair practice charges and the layoff of such employees. Refusing to consider an employee for promotion because that employee filed unfair practice charges is also a violation.

In BE&K Construction Co.,81 the NLRB held that it was not an unfair labor practice when an employer files a lawsuit against employees because they engaged in activity protected by the NLRA if the lawsuit had a reasonable basis in law, even if the employer’s motiva- tion for bringing the suit was a desire to retaliate against the employees. Section 8(a)(4) is directed only against employers; union reprisals against employees for exercising their statu- tory rights are dealt with under Section 8(b)(1)(A). 14-3b Excessive Union Dues or Membership Fees Section 8(b)(5) prohibits a union from requiring excessive dues or membership fees of employees covered by a union security agreement. Because a union security agreement requires that employees join the union (or at least pay all dues and fees) to retain their jobs, some protection against union abuse or extortion must be given to the affected employees. In deciding a complaint under Section 8(b)(5), the Board is directed by the act to consider “the practices and customs of labor organizations in the particular industry, and the wages currently paid to the employees affected.” 14-3c Featherbedding Section 8(b)(6) makes it unfair labor practice for a union “to cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or other thing of value, in the nature of an extraction, for services which are not performed or not to be performed.” The practice of getting paid for services not performed or not to be performed is known as featherbedding. Although this statutory prohibition may seem straightforward, it may not be easy to discern featherbedding from legal activities. For instance, a union steward may be employed to run a drill press. In reality, she may be spending much of her time assisting coworkers for the union’s benefit and may even draw additional compensation for this service from the union. If the collective bargaining agreement allows for this activity, then it is legal. In another situation, the employer may pay for work that is not really needed— because, for instance, of technological innovations in the industry—but through industrial custom and usage, the work is still performed by union members. This, too, is legal under the NLRA. In American Newspaper Publisher’s Assoc. v. NLRB,82 the Supreme Court held that Section 8(b)(6) is limited only to payment (or demanding of payment) for services not actually rendered. In that case, the payment by the employers for the setting of type that was not needed did not violate the act because the services, although not needed, were actu- ally performed. Because of increasing economic competition from nonunionized firms and because of labor-saving technological developments, complaints of union featherbedding under Section 8(b)(6) are relatively rare today.

14-3d Remedies for Unfair Labor Practices Under Section 10 of the NLRA, the NLRB is empowered to prevent any person from engaging in any unfair labor practice. Section 10(a) authorizes the Board to: • • • investigate charges; issue complaints; and order hearings in unfair labor practice cases. If the ALJ (or the Board on review) finds that an employer or union has been or is engaging in unfair labor practices, the NLRB will so state in its findings and issue a cease- and-desist order with regard to those practices. If the employer (or union) chooses not to comply with the order, the Board will petition the appropriate federal court of appeals for enforcement of its order as provided in Section 10(e). The Board may also order the offending party to take affirmative action in the wake of the unfair labor practices. For instance, when an employee has been discriminatorily discharged in violation of Section 8(a)(1), (3), or (4), the Board will commonly require that the employee be reinstated, usually with back pay. Finally, under Section 10(j) of the act, the Board in its discretion may seek an injunc- tion in a federal district court to put a halt to unfair labor practices while the parties to a dispute await its final resolution by the Board.83 The purpose is to preserve the status quo while the adjudicative process works itself out. The NLRB obtained an injunction against the Major League Baseball owners for their refusal to bargain in good faith with the Major League Baseball Players’ Association in 1995, in Silverman v. Major League Baseball Player Relations Committee, Inc.84 That injunction forced the owners back to the bargaining table with the players’ union and was instrumental in getting the parties to settle the baseball strike in April 1995. Section 10(l) requires the Board to seek a temporary restraining order from a court when a union is engaging in a secondary boycott, hot cargo agreements, recog- nitional picketing, or a jurisdictional dispute. (Those unfair practices will be discussed in Chapter 16.)

14-3e Reinstatement When an employee has been discharged or laid off in violation of the act, the Board is empowered by Section 10(c) to order reinstatement with back pay. However, Section 10(c) also states that the Board shall not order reinstatement of, or back pay for, an employee who has been discharged “for cause.” Therefore, an employee guilty of misconduct may not be entitled to reinstatement. This provision is of particular interest in strike situations. Employees on an economic strike may be discharged for misconduct such as violence, destruction of property, and so on. In a 1984 decision, the Board held that verbal threats alone may justify discharge when they “reason- ably tend to coerce or intimidate employees in the exercise of rights protected under the Act.” The Board had held that in the case of unfair practice strikers, more severe misconduct is required to justify discharge. But in Clear Pine Mouldings,85 the Board stated that unfair practice strikers are not given any privilege to engage in misconduct or violence just because they are on strike over employer unfair labor practices. In any situation, physical assaults or violence will not be tolerated by the Board. What should the NLRB do when an employee who was fired illegally by the employer has lied under oath in the NLRB hearing? Is the employee entitled to be rein- stated, or should the misconduct of lying justify dismissal? That is the question in the following case. While the NLRB generally seeks reinstatement for employees discharged illegally, there are some instances when it may seek front pay rather than reinstatement. Front pay is a monetary award for loss of anticipated future earnings because of the unfair labor practice. The Board’s general counsel86 has indicated that front pay may be appropriate where: • • • the unfair labor practice has impaired the ability of the employee to return to work; the employer or other employees remain hostile to the discharged employee; or the discharged employee is close to retirement. Front pay may also be used as a substitute for a “preferential hire” list.

CASE 14.9 aBf fReight system, iNC. v. NLRB 510 U.S. 317 (1994)

Stevens, J. . . . Michael Manso gave his employer a false excuse for being late to work and repeated that falsehood while testi- fying under oath before an Administrative Law Judge (ALJ). Notwithstanding Manso’s dishonesty, the National Labor Relations Board (Board) ordered Manso’s former employer to reinstate him with back pay. Our interest in preserving the integrity of administrative proceedings prompted us to grant certiorari to consider whether Manso’s misconduct should have precluded the Board from granting him that relief. Manso worked as a casual dockworker at petitioner ABF Freight’s (ABF’s) trucking terminal in Albuquerque, New Mexico, from the summer of 1987 to August 1989. He was fired three times. The first time, Manso was one of 12 employees discharged in June 1988 in a dispute over a contractual provision relating to so-called “preferential casual” dockworkers. The grievance Manso’s union filed eventually secured his reinstatement; Manso also filed an unfair labor practice charge against ABF over the incident. Manso’s return to work was short-lived. Three supervisors warned him of likely retaliation from top management— alerting him, for example, that ABF was “gunning” for him, and that “the higher echelon was after [him]”. . . . Within six weeks ABF discharged Manso for a second time on pretextual grounds—ostensibly for failing to respond to a call to work made under a stringent verification procedure ABF had recently imposed upon preferential casuals. Once again, a grievance panel ordered Manso reinstated. Manso’s third discharge came less than two months later. On August 11, 1989, Manso arrived four minutes late for the 5 a.m. shift. At the time, ABF had no policy regarding lateness. After Manso was late to work, however, ABF decided to discharge preferential casuals—though not other employees—who were late twice without good cause. Six days later Manso triggered the policy’s first application when he arrived at work nearly an hour late for the same shift. Manso telephoned at 5:25 a.m. to explain that he was having car trouble on the highway, and repeated that excuse when he arrived. ABF conducted a prompt investigation, ascertained that he was lying, and fired him for tardiness under its new policy on lateness. Manso filed a second unfair labor practice charge. In the hearing before the ALJ, Manso repeated his story about the car trouble that preceded his third discharge. The ALJ credited most of his testimony about events surrounding his dismissals, but expressly concluded that Manso lied when he told ABF that car trouble made him late to work. Accordingly, although the ALJ decided that ABF had ille- gally discharged Manso the second time because he was a party to the earlier union grievance, the ALJ denied Manso relief for the third discharge based on his finding that ABF had dismissed Manso for cause. The Board affirmed the ALJ’s finding that Manso’s second discharge was unlawful, but reversed with respect to the third discharge. Acknowledging that Manso lied to his employer and that ABF presumably could have discharged him for that dishonesty, the Board nevertheless emphasized that ABF did not in fact discharge him for lying and that the ALJ’s conclusion to the contrary was “a plainly erroneous factual statement of [ABF]’s asserted reasons.” Instead, Manso’s lie “established only that he did not have a legiti- mate excuse for the August 17 lateness.” The Board focused primarily on ABF’s retroactive application of its lateness policy to include Manso’s first time late to work, holding that ABF had “seized upon” Manso’s tardiness “as a pretext to discharge him again and for the same unlawful reasons it discharged him on June 19.” In addition, though the Board deemed Manso’s discharge unlawful even assuming the validity of ABF’s general disciplinary treatment of pref- erential casuals, it observed that ABF’s disciplinary approach and lack of uniform rules for all dockworkers “raise[d] more questions than they resolve[d].” The Board ordered ABF to reinstate Manso with back pay. The Court of Appeals enforced the Board’s order. Its review of the record revealed “abundant evidence of anti- union animus in ABF’s conduct towards Manso,” including “ample evidence” that Manso’s third discharge was not for cause. . . . . . . We assume that the Board correctly found that ABF discharged Manso unlawfully in August 1989. We also assume, more importantly, that the Board did not abuse its discretion in ordering reinstatement even though Manso gave ABF a false reason for being late to work. We are concerned only with the ramifications of Manso’s false testimony under oath in a formal proceeding before the ALJ. We recognize that the Board might have decided that such misconduct disqualified Manso from profiting from the proceeding, or it might even have adopted a flat rule precluding reinstatement when a former employee so testi- fies . . . however, the issue is not whether the Board might adopt such a rule, but whether it must do so. False testimony in a formal proceeding is intolerable. We must neither reward nor condone such a “flagrant affront” to the truth seeking function of adversary proceedings. ABF submits that the false testimony of a former employee who was the victim of an unfair labor practice should always preclude him from winning reinstatement with back pay. . . . The Act expressly authorizes the Board “to take such affirmative action including reinstatement of employees with or without back pay, as will effectuate the policies of [the Act].” Only in cases of discharge for cause does the statute restrict the Board’s authority to order rein- statement. This is not such a case. When Congress expressly delegates to an administrative agency the authority to make specific policy determinations, courts must give the agency’s decision controlling weight unless it is “arbitrary, capricious, or manifestly contrary to the statute.” Because this case involves that kind of express delega- tion, the Board’s views merit the greatest deference. This has been our consistent appraisal of the Board’s remedial authority throughout its long history of administering the Act. . . . Notwithstanding our concern about the seriousness of Manso’s ill-advised decision to repeat under oath his false excuse for tardiness, we cannot say that the Board’s remedial order in this case was an abuse of its broad discretion or that it was obligated to adopt a rigid rule that would foreclose relief in all comparable cases. Nor can we fault the Board’s conclusions that Manso’s reason for being late to work was ultimately irrelevant to whether anti-union animus actually motivated his discharge and that ordering effective relief in a case of this character promotes a vital public interest. Notably, the ALJ refused to credit the testimony of several ABF witnesses . . . and the Board affirmed those credibility findings. The unfairness of sanctioning Manso while indi- rectly rewarding those witnesses’ lack of candor is obvious. Moreover, the rule ABF advocates might force the Board to divert its attention from its primary mission and devote unnecessary time and energy to resolving collateral disputes about credibility. Its decision to rely on “other civil and criminal remedies” for false testimony rather than a categor- ical exception to the familiar remedy of reinstatement is well within its broad discretion. The judgment of the Court of Appeals is affirmed. It is so ordered. Case Questions 1. What was ABF’s justification for discharging Manso the third time? Did the ALJ find that discharge illegal under the NLRA? Did the ALJ order that Manso be reinstated? Why? 2. Did the NLRB agree with the ALJ’s decision as to what remedy Manso is entitled? Why? 3. Why does the Supreme Court uphold the NLRB’s decision? Does the Court’s decision encourage or reward lying under oath? Explain.

14-3f Back Pay When calculating back-pay awards due employees under Section 10(c), the Board requires that the affected employees mitigate their damages. The Board will deduct from the back-pay wages to reflect income that the employee earned or might have earned while the case was pending. (Welfare benefits and unemployment insurance payments are not deducted from back-pay awards by the Board.) When an employer challenges a proposed back-pay award on grounds that the affected employee had not made efforts to find other, equivalent, employment, the Board’s general counsel has the burden of introducing evidence of the employee’s job search efforts, according to the NLRB decision in St. George Warehouse.87 The Board also requires that interest (at a rate based on the Treasury bills index) be paid on back-pay awards under the act.

The Internal Revenue Service considers back-pay awards to be taxable income for the year in which the award is received. In some instances, an employee receiving a lump-sum back-pay award representing more than one year’s worth of pay may have increased income tax liability due to the award. In such cases, the NLRB has indicated that it will seek an additional monetary award to cover the additional income taxes owed by the employee because of the lump sum-award, plus interest.88 The NLRB is precluded by the Immigration Reform and Control Act of 1986 (discussed in Chapter 5) from awarding back pay to an undocumented alien who is not legally entitled to work in the United States, as in Hoffman Plastic Compounds, Inc. v. NLRB.89 The general wording of Section 10(c) allows the Board great flexibility in fashioning remedies in various unfair practice cases. Such flexibility is exemplified by the bargaining order remedy in Gissel Packing, considered in Chapter 13. Furthermore, the Board has required the guilty party to pay the legal fees of the complainant in cases involving severe or blatant violations. In one case involving an employer’s unfair practices that destroyed a union’s majority support, the Board ordered the employer to pay the union’s organizing expenses for those employees. 14-3g Extraordinary Remedies Where an employer that was found guilty of “egregious and pervasive violations” of the NLRA, over a period of 10 years, including two injunctions under Section 10(j) of the NLRA, and having been found guilty of contempt of court for violating a federal court injunction, still had not complied with the Board’s remedial orders, the Board imposed an array of enhanced remedies, including: (1) requiring the employer to pay the attor- neys’ fees and costs incurred by both the NLRB general counsel and the union involved; (2) ordering the employer to pay the union’s bargaining expenses to the extent that they exceeded “normal expenses” due to the employer’s violations; (3) requiring the employer to post the Board’s notice of violation, the Board’s decision in the case, and an explana- tion of the rights of employees under the NLRA for a period of three years, rather than the normal posting period of 60 days; (4) requiring the employer to mail the Board’s decision and order and the explanation of rights of employees to all employees, including managers and supervisors; (5) requiring the employer to give the Board’s notice and explanation of the rights of employees to all newly hired employees, supervisors, and managers for a period of three years; (6) requiring the employer to read the notice and explanation of the rights of employees to all employees, supervisors, managers, and senior executives at a series of meet- ings; and (7) requiring the employer to rescind all unlawful unilateral changes made by the employer to the terms and conditions of employment.90

14-3h Delay Problems in NLRB Remedies Although the NLRB has rather broad remedial powers under the NLRA, the delays involved in pursuing the Board’s remedial procedures limit somewhat the effectiveness of its powers. The increasing caseload of the Board has delayed the procedural process to the point at which a determined employer can dilute the effectiveness of any remedy in a particular case. Because unfair practice cases take so long to resolve, the affected employees may be left financially and emotionally exhausted by the process. Furthermore, the remedy, when it comes, may be too little, too late. One study found that when reinstatement was offered more than six months after the violation of the act occurred, only 5 percent of those discriminatorily discharged accepted their old jobs back. Indeed, the final resolution of the back-pay claims of the employees in the Darlington case (presented earlier) did not occur until 1980—24 years from the closing of their plant— to avoid the union! Obviously, a firm that can afford the litigation expenses may find it advantageous to delay a representation election by committing unfair practices or refusing to bargain with a certified union in violation of Section 8(a)(5), reasoning that the lawyers’ fees plus any back-pay awards will total less of a cost of doing business than will increased wages and fringes under a collective bargaining agreement.