Proposed Rule Changes By NLRB And DOL Would Significantly Hinder Employers' Ability To Counter Union Organizing Efforts

Proposed Rule Changes By NLRB And DOL Would Significantly Hinder

Employers’ Ability To Counter Union Organizing Efforts

On June 21, 2011, the National Labor Relations Board (“NLRB”) and the Department of Labor (“DOL”) proposed new rules that would shorten union election periods and expand disclosure requirements for consultants hired by employers to provide advice during union elections. If passed, these rules will significantly hinder employers’ ability to effectively counter union organizing efforts.

Since President Obama’s election in 2008, unions have pressed for the passage of the Employee Free Choice Act (“EFCA”), which would replace union elections with card checks and require employers and unions to submit to interest arbitration should they prove unable to negotiate a first contract. However, the EFCA has bogged down in Congress and is unlikely to be reconsidered before the next election cycle in 2012. In the absence of the EFCA, it appears the NLRB and DOL are seeking to accomplish by administrative fiat what could not be accomplished legislatively.

To that end, the NLRB has proposed, among other changes, the following rule changes to the union election process: (1) shortening the period between the filing of the petition and the pre-election hearing from 14 days to 7 days; (2) postponing voter eligibility issues to post-election challenges rather than addressing them at the pre-election hearing; (3) requiring the parties to defer any appeals of pre-election hearing decisions until after the election is held; and (4) mandating that post-election disputes be heard within 14 days of the election. The purpose of these changes is to shorten the election process and limit the parties’ opportunity to raise challenges. However, the practical effect of the changes will be to steamroll employers and “grease the tracks” for unions, by undermining an employer’s ability to investigate issues fueling union interest; develop a strategy for addressing these issues; weigh in on the proper scope of the proposed bargaining unit; and challenge any unlawful labor practices or unfavorable Board rulings once the election is complete.

These new rules ostensibly are intended to “fix flaws in the Board’s current procedures that build in unnecessary delays, allow wasteful litigation, and fail to take advantage of modern communication technologies.” However, election statistics do not corroborate the need for any changes. Elections in 2010 were held within a median of 38 days after the filing of a petition, with post-election objections filed in less than 10% of cases. Nor can it be said that the election process was unfairly skewed in employers’ favor, as unions prevailed in more than two-thirds of all elections that year. As dissenting Member Brian Hayes noted, the true purpose of these rule changes is to facilitate union organizing:

Thus, by administrative fiat in lieu of Congressional action, the Board will impose organized labor’s much sought-after “quickie election” option, a procedure under which elections will be held in 10 to 21 days from the filing of the petition. Make no mistake, the principal purpose for this radical manipulation of our election process is to minimize, or rather, to effectively eviscerate an employer’s legitimate opportunity to express its views about collective bargaining.

In addition to the NLRB’s proposed rule changes, the DOL has proposed revisions to its interpretation of the term “advice” under the employer and labor relations consultant persuader reporting requirements of Section 203 of the Labor Management Reporting and Disclosure Act (“LMRDA”). The LMRDA requires the disclosure of agreements or arrangements between employers and labor relations consultants when the consultant seeks to directly or indirectly persuade employees concerning whether to exercise their right to organize and bargain collectively.

For years, the DOL has taken the position that it is not necessary to disclose arrangements in which a consultant merely gives advice to the employer and does not engage in any direct or indirect persuader activity. The DOL now proposes a more literal interpretation of “advice” – namely, “an oral or written recommendation regarding a decision or course of action.” This new interpretation would expand disclosure requirements to a number of activities not traditionally considered to be “persuader activity,” such as: drafting or revising written materials, speeches, or electronic materials; coordinating the activities of supervisors; developing policies and practices; and conducting training for supervisors if the supervisors are meant to use the substance of the training to persuade employees concerning their organizing and bargaining rights.

If an employer’s agreement with a consultant is subject to the LMRDA, the employer must file, within 90 days of the close of its fiscal year, a form reflecting all amounts paid to the consultant. Moreover, the consultant must disclose the services rendered to the employer and a list of all employees affected. Thus, the employer and consultant must, in effect, provide a blueprint of their efforts to counter union organizing activity.

The practical effect of the DOL’s proposed changes will be to dissuade employers from seeking legal advice regarding union organizing efforts. Taken together, the NLRB’s and DOL’s changes promise to have employers facing expedited union elections subject to unfavorable procedural rules, as well as draconian reporting requirements should they seek the assistance of counsel.

Employers are encouraged to voice their opposition to these proposed rules by electronically submitting comments at http://www.regulations.gov/. The deadline for submitting comments on the NLRB's proposed rule is August 22, 2011. The deadline for submitting comments on the DOL's proposed rule has been extended until September 21, 2011.