I write to update you on recent activities, including providing details on the National Labor Relations Board’s (NLRB) release of the final “ambush elections” rule and CDW’s planned legal challenge to the rule. In addition, I am requesting again that you contribute to CDW if possible, without your support we cannot continue our efforts to combat the NLRB’s and US Department of Labor’s (DOL) harmful attacks on employers and employees. For your convenience, I have attached 2014 and 2015 invoices for CDW dues.
Details on CDW’s activities are set below. We plan on having a meeting here in DC in mid-January, where we can provide a more in-depth analysis. We will send you more details on that meeting early next year.
Funding & Contributions
The NLRB and DOL are releasing an unprecedented number of decisions and rules that will harm employees, employers and our economy. We need your continued support to combat these efforts, including:
· Upcoming legal challenges to the ambush elections and persuader final rules;
· Stopping the NLRB’s attempted rewrite of its standards for determining joint employers and independent contractors (see below), which threatens to disrupt decades of established law that has allowed small businesses to flourish as franchisees and subcontractors;
· Fighting against Specialty Healthcare and micro-unions, which have already begun to pick apart employers in the retail, manufacturing and transportation industries; and
· For the various amicus briefs and regulatory comments CDW intends to file in the next year.
Board Issues Final Ambush Rule – CDW to Challenge Rule in Court
On Friday, December 12, the NLRB issued a final rule (the “ambush elections” rule) that will dramatically change union representation elections in the workplace. The rule will shorten the election process to as few as 15 days from the current median time of 38 days and deprive employers of due process. It will effectively restrict communication between employers and employees prior to a union election, leaving employees without access to important information before they vote.
Some of the key changes in the final rule are the following:
- Requires that all pre-election hearings be set to begin within 8 days after a hearing notice is issued.
- Mandates that employers file a “Statement of Position” by noon on the day before the hearing begins. The Statement of Position must include a list of prospective voters with their names, job classifications, work shifts, and work locations.
- Provides Regional Directors with discretion to limit the scope of pre-election hearings, by excluding evidence on voter eligibility and delaying the resolution of those issues until after the election.
- Requires an employer to provide, within 2 business days of the election agreement or decision directing an election, employee personal telephone numbers and personal email addresses.
This rule is more sweeping in scope than the original “ambush” rule the Board issued on April 30, 2012. The 2012 rule was eventually withdrawn by the NLRB after the rule was struck down on procedural grounds by a U.S. District Court in Washington, D.C., on May 15, 2012, as part of a legal challenge to the rule by CDW and the US Chamber of Commerce.
CDW, the National Association of Manufacturers, the National Retail Federation and several other national associations are planning on filing suit in early January to challenge the new ambush rule. National Federation of Independent Business, Associated Builders and Contractors and several local associations will file a separate suit.
We will keep you posted as we move forward with our litigation plans.
NLRB Issues Decision in Purple Communications, Inc.
On December 11, the Board issued a decision in Purple Communications finding that employees have a right under the National Labor Relations Act to use their employer’s email system for organizing purposes absent a showing by the employer of special circumstances. The decision overruled the 2007 Registered Guard case, which said employers could prohibit use of email systems as long as they did not do so in a discriminatory manner. The Purple Communications case is a pivotal decision on organizing and employer property rights. The Board’s two Republican members dissented, finding that employees have ample opportunity to act collectively without violating employer property rights. CDW submitted a brief drafted by Maury Baskin from Littler. It’s unclear at this point whether Purple Communications will appeal the case to a US Court of Appeals. If they do so, CDW will file an amicus brief.
NLRB Decision on Joint Employer Expected Any Day
Concerns over possible changes to the joint employer standard began to surface on May 12, 2014, when the NLRB issued an invitation to the public to file amicus briefs in Browning-Ferris Industries on whether the Board should revisit its 30-year-old joint employer standards. CDW filed a brief in the case. We expect a decision in the Browning-Ferris case any day now.
On July 29, the NLRB general counsel announced it will issue multiple complaints against McDonald’s USA related to employment decisions made by some of its franchisees. The impact of this action is that parent franchisors may be held liable for the labor practices of franchisees.
The changes the Board is considering making to the joint employer standard threaten to disrupt decades of established law that has paved the way for franchisors, franchisees, contractors, and subcontractors to create millions of jobs and allowed hundreds of thousands to achieve the American dream of owning their own small business. The Board’s actions could severely and negatively impact entrepreneurial opportunities and job creation and threaten economy.
Cases in which McDonald’s USA could potentially be named are currently in mediation, but on Wednesday, October 22, an NLRB official said a complaint could be issued before the end of November. We are still waiting on action.
CDW to File Amicus Brief in Nestle-Dryer Micro-union case
In January, CDW plans to file an amicus brief to the US Court of Appeals for the 4th Circuit in Nestle-Dreyer, a case where the Board applied Specialty Healthcare (micro–unions) in the manufacturing setting. The Fourth Circuit is the only US Appeals Court that previously rejected an earlier attempt by the Board to impose the standard established in Specialty Healthcare (see 1995 case in Lundy Packing here: http://law.justia.com/cases/federal/appellate-courts/F3/68/1577/537100/).
If the case sounds familiar, that’s because CDW filed an amicus in it before – see here. The case went up to the Fourth Circuit back in 2012 but was remanded because the NLRB panel that issued the decision was invalid under Noel Canning. On remand, on November 5, 2014, the Board again found that Nestle-Dreyer violated the law for refusal to bargain with the unit, clearing the way for a second appeal to the US Court of Appeals for the Fourth Circuit.
Details on the case are as follows: On December 28, 2011, the Board found appropriate a unit comprised solely of maintenance employees. The employer argued the only appropriate unit included both production and maintenance employees. The union had attempted twice to organize a unit with both groups of employees in the past but failed. The union was successful in organizing a unit of just maintenance employees, however. The Board’s majority relied on Specialty Healthcare in upholding the Regional Director’s decision. The decisions by the Board and Regional Director as well as the briefs on the R-case are here: http://www.nlrb.gov/case/31-RC-066625.
Ron Meisburg of Proskauer will draft CDW’s brief.
Final Persuader Rule Delayed Again?
DOL’s Fall 2014 Regulatory Agenda states that the agency plans to issue the final persuader rule in July 2015 (see agenda notice here). DOL, however, has postponed the release of the final rule repeatedly.
The proposed rule, which was issued June 21, 2011, was designed to silence employer opposition to union organizing. If the final rule is similar to the proposal, it will substantially interfere with both employers’ access to legal advice on labor matters and attorney-client privilege.
Under existing law, if an employer hires an outside consultant, including an attorney, to persuade employees with respect to their rights under the National Labor Relations Act, both the employer and the consultant must file extensive reports with DOL under the Labor Management Reporting and Disclosing Act and related regulations. There is an exemption to the reporting requirement for advice, however, under which reports are not required if the consultant or attorney does not communicate directly with employees. This allows employers to seek routine legal and other advice without triggering the reporting requirements. DOL’s proposal would greatly narrow this advice exemption, which could have significant consequences for employers, as the net effect of the proposed rule changes would be to discourage employers – particularly smaller employers – from seeking legal representation in the course of a union campaign.
The persuader rule has been controversial since it was proposed in June 2011. More than 9,000 comments were filed on the proposal, including one from the American Bar Association saying the rule would violate attorney-client privilege.
CDW plans to challenge any final rule in court that is substantially similar in impact to the proposed rule. CDW’s comments on the proposed rule are available here. A fact sheet on the possible impact of the rule is available here and a more in depth policy paper here.
The Board has yet to issue a decision in Roundy’s, which has been pending since 2010. We expect a decision any day now. The ruling could set new standards for physical and electronic access to employer property (such as access to employer email systems) by non-employee union organizers. The case involves a grocery store that contracted with a nonunion construction company to make renovations. The union argued that the store must allow union agents access to the store’s private property for union-run boycotts, because the store had allowed charitable organizations (Salvation Army, Girl Scouts, etc.) access to the property. In other words, the union argued it would be unlawful discrimination for the store to bar the union access where it had granted access to other organizations. CDW filed a brief in Roundy’s on Jan. 7, 2011, arguing there is a fundamental difference between consumer boycotts intended to harm the business and the presence of organizations that benefit the business. Furthermore, CDW contended that the Board should not require employers to allow non-employee union agents to trespass on private property for the purpose of harming the employer’s business, under any circumstances. The brief is available here.
As always, feel free to contact me with any questions or concerns.
Vice President, Government Affairs