Today’s Labor Updates:

NLRB General Counsel Issues Guidance on Employee Electronic Signatures to Support Representation Petitions

Recent IRS guidance prohibits lump-sum windows for pension retirees, updates pension mortality tables for 2016

Summary of NLRB Decisions for Week of August 17 – 21, 2015

 

NLRB General Counsel Issues Guidance on Employee Electronic Signatures to Support Representation Petitions

By Seth Borden on September 3, 2015 Posted in Expedited Elections, NLRB Administration, NLRB Rule-Making, Representation Elections, Social Media

A lesser discussed provision of the Board’s new “quickie” election procedures, effective April 14, 2015, asserted that the Board may accept employee electronic signatures as proof of the “showing of interest” filed with a representation petition.  This week, the General Counsel issued a guidance memorandum outlining the way the Board will treat such filings.

Memorandum GC 15-08, issued September 1, 2015, reviews the Board’s standards for reviewing and confirming signatures to support the required “showing of interest”; explains why the Board will apply similar standards to electronic signatures; and, provides guidance on how those standards will be implemented.  Representation petitions filed with the Board require proof that at least thirty percent (30%) of the employees in an appropriate unit support the effort.

In sum, the General Counsel concludes:

… Regional Directors should accept electronic signatures as a means to support a showing of interest where, as with handwritten signatures, the electronic signature method chosen by the party provides the Regional Director with prima facie evidence (1) that an employee has electronically signed a document purporting to state the employee’s views regarding union representation and (2) that the petitioner has accurately transmitted that document to the Region. As is the law now with respect to handwritten signatures, the documents submitted by the parties are presumed to be valid.

Per the specific guidance outlined in the memo, e-signatures submitted to establish the showing must include: the signer’s name; email address or social media account; the signer’s telephone number; the language to which the signer agrees; the date; and the employer’s name.  The party submitting the signatures must submit a “declaration” confirming that the electronic signature is that of and by the signatory employee, and the content of the statement which the employee signed.  Finally, if digital signature technology is unavailable, the party must submit evidence that all of the required information was confirmed in a return electronic transmission to a personal address provided by the signatory employee. The memo suggests in footnotes – but does not require – that all of this information can be confirmed by more sophisticated systems like digital signature verification or IP address logging via dedicated website.

While the General Counsel claims these guidelines represent more stringent requirements than are currently enforced regarding paper signatures, it is hard to see how this system will not be more susceptible to fraud and abuse.  A fraudulent paper signature requires the relatively more difficult task of actual physical forgery. Any such forgeries can be challenged by review of employee handwriting and signature samples – which nearly all employers have in personnel files. With the widespread availability of free email and social media accounts, the practices of “catfishing” (i.e., creating phony online personas) or simply opening phony accounts in employee names can be done relatively quickly and at no cost.  To be sure, a diligent investigation could uncover evidence of this kind of fraud, but the General Counsel also explains:

As is now the case with handwritten signatures, an electronic signature submitted in support of a showing of interest that meets the requirements set forth herein will be presumed to be valid absent sufficient probative evidence warranting an investigation of possible fraud. Mere speculation or assertions of fraud are not now, and will not in the future, be sufficient to cause the Agency to investigate.

In any event, all these concerns were addressed in comments to the Board in response to its proposed rulemaking – and summarily dismissed in the final rule’s publication.  It is unfortunate that the memo’s footnotes demonstrate the Board’s apparent familiarity with the types of technology available to mitigate the prospect of fraud, yet the loose parameters sketched out in the body of the guidance will do little, if anything, to ensure the trust and security the system should require.

Finally, while there are appeals pending to two lower court affirmations of the Board’s election rules, the Board and the General Counsel have taken pains to lay out that this development simply reflects application of longstanding rules to evolving technology. As such, the pending litigation may have little impact on the Board’s enforcement of these “new” guidelines.

Recent IRS guidance prohibits lump-sum windows for pension retirees, updates pension mortality tables for 2016

USA September 2 2015

The Internal Revenue Service (IRS) recently issued two significant notices for employers that sponsor defined benefit pension plans, particularly those considering lump-sum windows as a “de-risking” option for their plans.

In Notice 2015-49, the IRS notified plan sponsors that they are no longer permitted to offer retirees in pay status the option to take a lump-sum payment in lieu of ongoing annuity payments. Plan sponsors may, however, continue to offer a lump-sum payment option to deferred vested participants not in pay status.

In Notice 2015-53, the IRS released updated mortality tables for 2016 and delayed the issuance of new regulations, which could incorporate new mortality assumptions recommended by the Society of Actuaries that many believe would increase pension funding liabilities and minimum lump-sum payments.

The following provides an overview of these two notices and their impact on defined benefit pension plans, particularly their impact on plan sponsors considering a lump-sum window.

IRS Prohibits Lump-Sum Windows for Pension Retirees

Background

Over the past several years, many plan sponsors have considered “de-risking” their defined benefit pension plans due to concerns about market volatility, changes in accounting and funding rules, increasing Pension Benefit Guaranty Corporation (PBGC) premiums, prospective mortality table changes, and a host of other reasons. One common “de-risking” approach is to offer a lump-sum window in which a participant may elect to receive payment of his or her entire (remaining) plan benefit in a single lump sum. Paying the lump sum removes liabilities from the plan and may potentially take advantage of favorable interest rates and/or mortality assumptions.

Most lump-sum windows are opened to participants who have terminated employment, but have not yet commenced payment of their plan benefits (e.g., deferred vested participants). Certain plan sponsors also sought to extend these windows to participants who had previously commenced payment and remained in pay status. However, there was significant uncertainty about the ability of plan sponsors to offer lump sums to retirees in pay status. Regulations issued under Section 401(a)(9) of the Internal Revenue Code (Code) provide that annuity payments generally may not be changed after they have begun. An exception to this rule permits acceleration of payments as a result of an increase in benefits. A number of plan sponsors argued that this exception should apply to the replacement of ongoing, annuity payments with a lump-sum payment. In several cases (e.g., Ford and General Motors) plan sponsors received private letter rulings (PLRs) in which the IRS agreed with this position and permitted the specific plan sponsors who requested rulings to offer lump sums to retirees in pay status.

Notice 2015-49

Notice 2015-49 announces the IRS’ view that the replacement of ongoing annuity payments with a single lump-sum payment is prohibited. Effective immediately upon the issuance of the notice, the IRS will no longer issue PLRs or determination letters approving plan amendments that permit participants in pay status to elect lump-sum distributions. In addition, the U.S. Department of the Treasury and IRS intend to amend the required minimum distribution regulations under Section 401(a)(9) of the Code to clarify that an acceleration of ongoing annuity payments is not a permissible increase in benefits and is prohibited under the regulations. The IRS expects these amendments to be effective retroactive to July 9, 2015.

The IRS did provide four limited exceptions under which plan sponsors who took significant steps toward offering lump-sum cashouts to retirees in pay status may still offer a lump-sum window. Specifically, plan sponsors may offer a lump-sum option to retirees in pay status if:

• An amendment providing for the lump-sum window was adopted (or authorized by a board, committee, or other entity with authority to amend the plan) prior to July 9, 2015;
• The lump-sum window was covered by a private letter ruling or determination letter issued by the IRS prior to July 9, 2015;
• A written communication to affected participants stating an explicit and definite intent to implement the lump-sum window was received by participants prior to July 9, 2015; or
• The plan sponsor entered into a binding agreement with a collective bargaining representative prior to July 9, 2015, which provided for the implementation of a lump-sum window.

Considerations for Plan Sponsors

Plan sponsors are now clearly prohibited from offering lump-sum cashouts to retirees in pay status in most cases. Presumably, future regulations will continue to permit annuitants to commute annuity payments to a lump sum in the case of a plan termination, but the notice is not clear on this point.

Plan sponsors may still offer lump-sum windows to deferred vested participants who have not yet commenced benefits. However, plan sponsors should take care when designing a lump-sum window to avoid offering lump sums to those participants who recently commenced benefits. Previously, some plan sponsors permitted participants who commenced payment during a limited period before the window was opened to “re-elect” a lump sum because the window was under serious consideration by the plan sponsor at the time such participants elected their benefits. The “serious consideration” doctrine generally requires plan sponsors to notify participants if a plan enhancement is under serious consideration by the authorized decision-maker so that participants may evaluate their options. To reduce the risk of participant claims, plan sponsors should carefully coordinate the timing of any lump-sum window with the timing of substantive discussions and decisions by those with decision-making authority, and consider how to explain to participants who might soon be commencing benefits that a lump-sum payment option may be available.

Another complication is whether plan sponsors should offer lump sums to participants after they have reached normal retirement age. Some plan sponsors have considered excluding deferred vested participants older than the plan’s normal retirement age because they interpret the notice to prohibit offering lump sums to “retirees” entitled to actuarial increases after normal retirement age. However, this interpretation is not clearly supported by Notice 2015-49, and excluding participants above a certain age who otherwise are in similar circumstances (e.g., not in pay status) could raise age discrimination concerns.

IRS Updates Mortality Tables for 2016, Delays Potential Updates to Base Mortality Rates and Projection Factors Until 2017

Background

The IRS issues mortality tables for the determination of minimum funding requirements for defined benefit pension plans. These mortality tables are also used to determine minimum present value requirements for lump-sum calculations.In October of 2014, the Society of Actuaries released the RP-2014 Mortality Tables Report and the Mortality Improvement Scale MP-2014 Report, which contain new mortality assumptions recommended for valuing private-sector pension liabilities. These assumptions are controversial. Many believe that applying these assumptions to set the base mortality rates and projection factors used by the IRS will result in mortality tables that cause significant increases to pension funding liabilities, PBGC premiums and minimum lump-sum payments.

Notice 2015-53

Notice 2015-53 sets forth the static mortality tables for minimum funding and present value requirements for 2016. These mortality tables apply for valuation dates occurring in 2016 and for lump-sum distributions with annuity starting dates occurring during stability periods beginning in 2016. The notice also states that the Treasury Department and IRS are considering comments received on the Society of Actuaries’ 2014 mortality reports and expect to issue new regulations revising the base mortality rates and projection factors used to determine the static mortality tables. However, new regulations will not apply until 2017 at the earliest.

Considerations for Plan Sponsors

Notice 2015-53 should be good news for plan sponsors who were concerned about potentially significant increases to pension funding liabilities, PBGC premiums and minimum lump-sum payments in 2016. The fact that the IRS is requesting comments on the Society of Actuaries’ 2014 mortality reports suggests that the IRS may be inclined to scrutinize the use of the new mortality assumptions, which critics believe overstate mortality improvement, for future mortality tables.

Plan sponsors may also take this delay as an opportunity to further consider offering lump-sum windows in 2016 before new regulations may be issued that could change minimum present value requirements and cause significant increases in lump-sum payments.

Summary of NLRB Decisions for Week of August 17 – 21, 2015

The Summary of NLRB Decisions is provided for informational purposes only and is not intended to substitute for the opinions of the NLRB.  Inquiries should be directed to the Office of Public Affairs at Publicinfo@nlrb.gov (link sends e-mail) or 202‑273‑1991.

Summarized Board Decisions

Northwestern University  (13-RC-121359; 362 NLRB No. 167)  Evanston, IL, August 17, 2015.

On March 26, 2014, the Regional Director issued a Decision and Direction of Election in which he found that all football players receiving a grant-in-aid scholarship are employees within the meaning of Section 2(3) of the Act.  The Board granted review on April 24, 2014, and shortly thereafter issued a notice and invitation to file briefs inviting interested parties to address issues raised by the Regional Director’s decision.  Northwestern and several of its supporting amici contended, among other things, that the Board should exercise its discretion to decline jurisdiction over this case.  In this decision on review, the full Board agreed.  In explaining its decision, the Board first noted that even when it has the statutory authority to act, it can properly decline to do so when it concludes that asserting jurisdiction over a particular case would not effectuate the purposes of the Act.  The Board then stated that it had determined that, even if the scholarship players were statutory employees (an issue the Board emphasized it was not deciding), it would not effectuate the policies of the Act to assert jurisdiction.  Next, the Board emphasized that because the Board has never been asked to assert jurisdiction over any type of college athlete, and the scholarship football players do not fit neatly into any analytical framework that the Board has used in cases involving other types of students or athletes, the Board was not required to assert jurisdiction in this case and therefore it was appropriate to consider whether the Board should exercise its discretion to decline to assert jurisdiction (even assuming it was otherwise authorized to act).

In deciding that it should decline to assert jurisdiction, the Board principally focused on two factors.  First, the Board observed that NCAA Division I Football Bowl Subdivision (FBS) football resembles a professional sport, given that the individual institutions jointly stage football contests, have formed the NCAA to set common rules and standards, and have given the NCAA the authority to police and enforce rules and regulations governing player eligibility, practices, and competitions.  The Board explained that as in professional sports, there was a symbiotic relationship among the various teams, conferences, and the NCAA, and that accordingly labor issues directly involving an individual team and its players would also affect the NCAA, the Big Ten Conference (of which Northwestern is one of 14 members), and other member institutions.  On this count, the Board noted that in previous cases involving professional sports, it has stated that it would be difficult to imagine any degree of stability in labor relations if the Board were to assert jurisdiction over only one team, and that in practice all previous Board cases involving professional sports involve leaguewide bargaining units.  Second, the Board noted that the structure of FBS football itself also strongly suggested that asserting jurisdiction in this case would not promote stability in labor relations.  In this regard, the Board emphasized that of the approximately 125 colleges and universities that participate in FBS football, all but 17 are state-run institutions over which the Board cannot assert jurisdiction, and that Northwestern is the only private school that is a member of the Big Ten Conference.  The Board stated that in such a situation, asserting jurisdiction would not promote stability in labor relations due to the variety of state labor laws that would apply to football teams at state-run institutions.  As an additional consideration, the Board commented that the terms and conditions of Northwestern’s players have changed markedly in recent years, and that there have been calls for the NCAA to undertake further reforms that may result in additional changes to the circumstances of scholarship football players.  The Board stated, however, that subsequent changes in the treatment of scholarship players could outweigh the considerations that motivated its decision to decline jurisdiction in this case.

By way of conclusion, the Board emphasized that its decision did not concern other individuals associated with FBS football, but was limited to Northwestern’s scholarship football players.  The Board further emphasized that its decision applied only to football players at Northwestern University, and that it was not addressing what the Board’s approach might be to a petition for all FBS scholarship football players (or at least those at private universities.  And the Board noted that a decision to decline jurisdiction does not preclude a reconsideration of the issue in the future.

Petitioner—College Athletes Players Association (CAPA).  Chairman Pearce, and Members Miscimarra, Hirozawa, Johnson, and McFerran participated.

***

2015. Garofalo Carting, Inc. (29-CA-141798; 362 NLRB No. 170)  Brentwood, NY, August 17, 2015.

The Board granted the General Counsel’s Motion for Default Judgment because the Respondent failed to file a timely answer to the complaint.  The Board noted that the Respondent did not file an answer by either of the deadlines the Region provided, nor did it request an extension of time to file an answer.  When the Respondent filed an untimely answer, it did not comply with the relevant provisions of the Board’s Rules and Regulations for doing so.  Moreover, the Board found that the unsworn assertions the Respondent provided in its opposition to the Motion for Default Judgment did not demonstrate good cause for its failure to file a timely answer, rejecting arguments that:  counsel for the Respondent was “inordinately subdued [sic] in other matters,” the Region should have further delayed its filing of a motion for default judgment, the Respondent attempted to settle the case, and the Union was not prejudiced by the delay in filing an answer.

Accordingly, the Board found that the Respondent failed and refused to execute the collective-bargaining agreement negotiated with Local 339, United Service Workers Union, International Union of Journeymen and Allied Trades, and failed and refused to apply the terms of the parties’ agreement to the unit employees.

The Board ordered the Respondent to cease and desist from failing and refusing to execute and implement the parties’ collective-bargaining agreement and failing and refusing to bargain collectively with the Union.  The Board further ordered the Respondent to execute and implement the agreement with the Union and give retroactive effect to its terms to the effective date of the agreement, and to make unit employees whole for any loss of earnings and other benefits suffered as a result of the Respondent’s failure to sign and effectuate the agreement.

Charge filed by Local 339, United Service Workers Union, International Union of Journeymen and Allied Trades.  Members Miscimarra, Hirozawa, and McFerran participated.

***

Deer Creek Electric, Inc. and Black Hills Electric, Inc., alter egos  (19-CA-097260; 362 NLRB No. 171)  Tumwater, WA, August 17, 2015.

The General Counsel alleged that Respondent Black Hills Electric is a disguised continuance and alter ego of Respondent Deer Creek Electric.  A Board panel majority consisting of Members Miscimarra and Johnson adopted the administrative law judge’s finding that Respondent Black Hills Electric is not a disguised continuance of Respondent Deer Creek Electric.  In so finding, the Board majority relied on Deer Creek’s owner’s lack of financial control over Black Hills or its owner, the sister-in-law of Deer Creek’s owner.  Contrary to the judge, the majority found that the General Counsel met his burden of showing that the Respondents share substantially identical supervision and management.  However, because the Respondents lack substantially identical ownership, equipment, and customers, and because Respondent Black Hills was not formed to evade Respondent Deer Creek’s obligations under the Act, the Board majority found that the Respondents are not alter egos.  Dissenting, Member Hirozawa would have found that the Respondents shared substantially identical ownership and equipment, and that Respondent Black Hills was formed to evade Respondent Deer Creek’s responsibilities under the Act.

Charge filed by International Brotherhood of Electrical Workers, Local 76, AFL-CIO, CLC.  Administrative Law Judge Mary Miller Cracraft issued her decision on May 1, 2014.  Members Miscimarra, Hirozawa, and Johnson participated.

***

Paragon Systems, Inc.  (05-CA-116070; 362 NLRB No. 166)  Herndon, VA, August 18, 2015.

A Board panel majority consisting of Members Miscimarra and Johnson affirmed the Administrative Law Judge’s finding that the Respondent, a Burns successor, lawfully implemented a reduction in paid guard mount time as part of its initial terms and conditions of employment and, therefore, did not violate Section 8(a)(5) and (1).  The majority found that the Respondent’s statement to employees that “shift schedules [would] be determined in accordance with the operational needs of the contract, with consideration given to employee seniority” sufficiently informed employees that guard mount time, which is considered part of a shift, may change.  Relying on the seniority language, Member McFerran, dissenting, would find that the Respondent’s statement to employees is narrower than the majority’s reading and that the statement did not provide notice to employees that guard mount time would change.  Because of her view that the notice was insufficient, Member McFerran would find that the Respondent violated Section 8(a)(5) and (1) by unilaterally reducing the amount of paid guard mount time.  Charge filed by Federal Contract Guards of America (FCGOA) International Union.  Administrative Law Judge Arthur J. Amchan issued his decision on May 8, 2014.  Members Miscimarra, Johnson, and McFerran participated.

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Allied Aviation Service Company of New Jersey  (22-CA-127150; 362 NLRB No.173)  Elizabeth, NJ, August 19, 2015.

The Board granted the General Counsel’s motion for summary judgment in this unfair labor practice case on the ground that the Respondent did not raise any issues that were not, or could not have been, litigated in the underlying representation case in which the union was certified as the bargaining representative.

In granting the motion, the Board rejected the Respondent’s argument, based onNLRB v. Noel Canning, 573 U.S. ___,134 S.Ct. 2550 (2014), that the Board was not properly constituted and, therefore, lacked the requisite authority to render any decision or determination in the underlying representation proceeding.  The Board found that no quorum issue was raised in this unfair labor practice case because a panel of the current Board, which includes five Board Members who were confirmed by the United States Senate, issued the underlying Decision and Certification of Representative in Case 22-RC-077044.  The Board further found that to the extent that the Respondent was arguing that the Board lacked a quorum when it denied the Request for Review of the Regional Director’s Decision and Direction of Election, that issue was mooted by the intervening decision and certification.  In this regard, the Board noted that the Respondent had reiterated its arguments regarding the appropriateness of the unit both before the judge who conducted the hearing on the challenged ballots and in its exceptions to the judge’s recommended decision, and that a panel of the fully-confirmed Board considered and rejected these arguments when it certified the Union as the exclusive collective-bargaining representative of the unit found appropriate.  Finally, the Board observed that the absence of a Board quorum does not impair the Regional Director’s authority to process representation petitions, citing Durham School Services, LP, 361 NLRB No. 66 (2014).

The Board also rejected the Respondent’s argument that the employees in the unit found appropriate are indirectly controlled by or under common control with a carrier or carriers to an extent sufficient to invoke the jurisdiction of the National Mediation Board (NMB) under the Railway Labor Act.  The Board noted that in recent cases assessing whether it has jurisdiction over employers who supply services to an airline carrier or carriers but are not themselves engaged in the transportation of freight or passengers, the NMB focused on whether the carrier or carriers exercise “meaningful control over personnel decisions.”  The Board observed that where the NMB has not found such “meaningful control,” it has emphasized in particular the absence of control over hiring, firing, and/or discipline.  The Board then noted that in this case, the Respondent did not argue that the airlines at issue exercise meaningful control over personnel decisions, and that the record contained no such evidence.  The Board found that the elements of control identified by the Respondent are no greater than that found in a typical subcontractor relationship, which the NMB has made clear is insufficient for assertion of its jurisdiction.  The Board additionally noted that the evidence of carrier control in the instant case also falls substantially short of the considerations relied upon in the dissents issued in recent NMB cases.

Charge filed by Local 553, International Brotherhood of Teamsters, AFL-CIO.  Members Miscimarra, Hirozawa, and Johnson participated.

***

Industrial Contractors Skanska, Inc. and Laborers International Union of North America, Local Union No. 561  (25-CA-130127 and 25-CB-130081; 362 NLRB No. 169)  Evansville, IN, August 20, 2015.

The Board reversed the Administrative Law Judge and found that the Union violated Section 8(b)(1)(A) and 8(b)(2) by failing to provide the Charging Party with adequate notice of his dues delinquency before informing the Employer that he was no longer a member in good standing and thus ineligible for hire, and that the Employer violated Section 8(a)(3) and (1) by refusing to employ the Charging Party pursuant to the Union’s communication.  The Board also found that the Employer independently violated Section 8(a)(1) by informing the Charging Party that it was refusing to employ him because of the Union’s communication.  Charges filed by an individual.  Administrative Law Judge Arthur J. Amchan issued his decision on February 20, 2015.  Members Hirozawa, Johnson, and McFerran participated.

***

International Union of Operating Engineers Local 18, AFL-CIO (Precision Pipeline, LLC)  (9-CB-109639 and 09-CB-118659; 362 NLRB No. 176)  Cincinnati, OH, August 20, 2015.

The Board adopted the Administrative Law Judge’s decision dismissing the complaint alleging that the Union violated Section 8(b)(1)(A) by failing to provide employees with requested copies of pre-job reports.  The reports were completed by Union officials and signatory employers during pre-job conferences prior to starting work on projects covered by the National Pipeline Agreement.  The Union did provide the employees with copies of the collective-bargaining agreement, which established their terms and conditions of employment, and the Board agreed with the judge that the Union had a rational basis for withholding the reports because they contained confidential bid information that would help competing contractors underbid the signatory employers on future work.  The process of sharing this information at pre-job conferences would be jeopardized if the reports were disseminated under these circumstances, the Board concluded.

Charges filed by individuals.  Administrative Law Judge David I. Goldman issued his decision on June 25, 2014.  Members Miscimarra, Hirozawa, and Johnson participated.

***

DPI Secuprint, Inc.  (03-RC-012019; 362 NLRB No. 172)  Rochester, NY, August 20, 2015.

In this Decision on Review and Order, a Board panel majority consisting of Chairman Pearce and Member Hirozawa affirmed the Acting Regional Director’s finding that the petitioned-for unit of hourly pre-press, digital press, offset bindery, digital bindery, and shipping and receiving employees was appropriate.   ApplyingSpecialty Healthcare and Rehabilitation Center of Mobile, 357 NLRB No. 83 (2011), enfd. sub nom. Kindred Nursing Centers East, LLC v. NLRB, 727 F.3d 552 (6th Cir. 2013), the Board majority first found that the petitioned-for employees were readily identifiable as a group based on departments and functions, in that they were all hourly employees in the pre-press, digital press, offset bindery, digital bindery, and shipping and receiving departments—in other words, all the hourly employees who did not work on the offset presses.  The majority next found that the petitioned-for employees shared a community of interest.  The Board majority then found that the petitioned-for employees did not share an “overwhelming community of interest” with the offset-press employees that the Employer contended must be included in the unit.  In this regard, the Board majority acknowledged that the offset-press employees shared some community-of-interest factors with the petitioned-for employees, including common supervision, functional integration, and similar pay and benefits.  The majority stated, however, that these commonalities did not establish an overwhelming community of interest.  Rather, Chairman Pearce and Member Hirozawa emphasized that the following factors demonstrate that the offset-press employees do not share an overwhelming community of interest with the petitioned-for employees: (1) the offset press employees worked in a separate department and their work required greater skill and lengthier training; (2) offset-press employees were the only employees who set up, operate, adjust, and maintain the offset printing presses; and (3) offset-press employees worked different hours with longer shifts, were the only employees who worked weekends, and were not sent home when work was slow.  The majority further found that the evidence of interchange and contact between the petitioned-for and offset-press employees was insufficient to establish an overwhelming community of interest, and that the petitioned-for unit was not “fractured.”  Finally, the Board majority found that Board precedent concerning the “traditional lithographic unit” did not require the inclusion of the offset-press employees in the petitioned-for unit.

Dissenting, Member Johnson would have found the petitioned-for unit was inappropriate.  In his view, Specialty Healthcare will destabilize labor relations because it removes clarity from the Board’s unit determination analysis and encourages routine approval of fractured units.  For this case, Member Johnson would have found that the petitioned-for unit was too narrow in scope and must include the offset-press employees.  Member Johnson also would have found that the petitioned-for employees are not readily identifiable as a group, do not share a community of interest distinct from the excluded offset-press employees, and in fact share an overwhelming community of interest with the offset-press employees.  Finally, Member Johnson stated that in approving the petitioned-for unit, the majority departed from precedent generally finding the “traditional lithographic unit” appropriate for bargaining.  Petitioner—Graphic Communications Conference/International Brotherhood of Teamsters, Local 503-M.  Chairman Pearce and Members Hirozawa and Johnson participated.

***

PJ Cheese, Inc.  (10-CA-113862; 362 NLRB No. 177)  Birmingham, AL, August 20, 2015.

Applying D. R. Horton, Inc., 357 NLRB No. 184 (2012), enf. denied in relevant part 727 F.3d 344 (5^th Cir. 2013), and Murphy Oil USA, Inc., No. 72 (2014), a majority panel of the Board, consisting of Chairman Pearce and Member McFerran, affirmed the judge’s finding that the Respondent violated 8(a)(1) by : (1) maintaining a mandatory arbitration agreement that employees would reasonably construe to prohibit the filing of unfair labor practice charges with the Board and ; (2) maintaining and enforcing the arbitration agreement that requires employees to waive their rights to pursue class or collective employment claims in all forums, arbitral and judicial.  With respect to the violations in (2), Member Johnson dissented for the reasons set forth in his dissent in Murphy Oil.  As to the violation in (1), Member Johnson found it unnecessary to pass on the merits of the violation because Respondent failed to raise any possible exception to it.  Charge filed by an individual.  Administrative Law Judge William Nelson Cates issued his decision on June 6, 2014.  Chairman Pearce and Members Johnson and McFerran participated.

***

Bellagio, LLC  (28-CA-106634 and 28-CA-107374; 362 NLRB No. 175)  Las Vegas, NV, August 20, 2015.

The Board adopted the Administrative Law Judge’s finding that the Respondent Section 8(a)(1) of the Act by engaging in surveillance of employees’ union or other protected concerted activity and by a supervisor’s instruction to an employee that he not talk about his suspension with other employee and, by creating the impression of surveillance by the supervisor’s following the employee out of the building.  The Board also adopted the judge’s dismissal of the allegation that the Respondent unlawfully retaliated against a different employee because of her protected concerted activity.   A Board panel majority consisting of Chairman Pearce and Member McFerran also found that the Respondent violated Section 8(a)(1) by suspending an employee because he requested a Weingartenrepresentative, explaining that the employee’s suspension and removal from the workplace because he requested representation constituted an “adverse action” under Wright Line.  In a dissenting opinion, Member Johnson would not find the suspension to be unlawful because it was an investigatory suspension that did not result in discipline or loss of pay.  Charges filed by two individuals.  Administrative Law Judge Robert A. Ringler issued his decision on March 20, 2014.  Chairman Pearce and Members Johnson and McFerran participated.

***

Scoma’s of Sausalito, LLC  (20-CA-116766; 362 NLRB No. 174)  Sausalito, CA, August 21, 2015.

The Board affirmed the Administrative Law Judge’s finding that the Respondent violated Section 8(a)(5) and (1) by withdrawing recognition from the Union because it failed to prove that the Union had actually lost majority support on the date of the withdrawal of recognition.  The bargaining unit consisted of 54 employees at the time of the withdrawal of recognition.  The Respondent relied on a petition signed by 29 unit employees to support its withdrawal.  There was no dispute that the signatures were valid and there was no evidence of supervisory taint.  However, unknown to the Respondent at the time of the withdrawal, six of the signatures it relied on in withdrawing recognition had been revoked.  The judge found that these revocations were not coerced, and therefore could not be relied upon by the Respondent to withdraw recognition.  The revocations reduced the valid signatures on the petition to 23, which did not constitute a majority of the unit employees.  Accordingly, the Board adopted the judge’s conclusion that the Union had not actually lost majority support at the time of the withdrawal of recognition.  Further, the Board agreed with the judge that an affirmative bargaining order was necessary to remedy the Respondent’s unlawful withdrawal of recognition.  In a footnote, Member Johnson observed that he would modify Levitz Furniture Co. of the Pacific to require that unions present evidence of reacquired majority support within a reasonable amount of time.  Charge filed by UNITE HERE, Local 2850.  Administrative Law Judge Mary Miller Cracraft issued her decision on February 23, 2015.  Members Hirozawa, Johnson, and McFerran participated.

***

Unpublished Board Decisions in Representation and Unfair Labor Practice Cases

R Cases

Oregon Shakespeare Festival Association  (19-RC-150979)  Ashland, OR, August 20, 2015.  Order denying the Employer’s Request for Review of the Regional Director’s Decision and Direction of Election.  In agreeing that the petitioned-for unit was appropriate, the Board observed that although the Regional Director did not expressly apply Specialty Healthcare and Rehabilitation Center of Mobile, 357 NLRB No. 83 (2011), enfd. sub nom. Kindred Nursing Centers East, LLC v. NLRB, 727 F.3d 552 (6th Cir. 2013), in addressing the Employer’s contention that certain employees must be added to the petitioned-for unit, the Regional Director’s findings were consonant with that standard.  The Board noted that all excluded employees had separate primary work locations from the petitioned-for employees (and many of the excluded employees worked in a different city than the petitioned-for employees), the petitioned-for employees were for the most part separately supervised from the excluded employees, and the two groups had different primary functions and worked different monthly and weekly schedules.  The Board also commented that although there was some degree of contact and functional integration between the two groups, the Employer did not establish how frequently or regularly the contact occurs.  The Board further found that the Regional Director’s conclusions were consistent with Board precedent finding appropriate units of stagehands.  Member Miscimarra agreed with the denial of review, but stated that in so finding he would apply the Board’s traditional standard and not the “overwhelming community of interest” standard set forth inSpecialty Healthcare.  Petitioner—International Alliance of Theatrical Stage Employees, Moving Picture Technicians Artists and Allied Crafts of the United States, Its Territories and Canada, AFL-CIO, CLC.  Chairman Pearce and Members Miscimarra and Hirozawa participated.

155 Linden Blvd  (29-RM-144776)  Brooklyn, NY, August 20, 2015.  No exceptions having been filed to the Regional Director’s recommendation to overrule the Employer’s objection to an election held July 13, 2015, the Board adopted the Regional Director’s findings and recommendations, and certified the Union, Local 2 Building Service Employees and Factory Workers, United Service Workers Union, International Union of Journeymen and Allied Trades, as the exclusive collective-bargaining representative of the employees in the appropriate unit.

Media Theatre for the Performing Arts  (04-RC-149783)  Media, PA, August 21, 2015.  No exceptions having been filed to the hearing officer’s recommendation to sustain the challenge to a ballot cast in an election held May 13, 2015, the Board adopted the hearing officer’s findings and recommendations, and certified the Petitioner, International Alliance of Theatrical Stage Employees, Moving Picture Technicians, Artists, and Allied Crafts Local 8 as the exclusive collective-bargaining representative of the employees in the appropriate unit.

C Cases

United States Postal Service  (01-CA-132315)  Brookline, Massachusetts, August 17, 2015.  Order approving a formal settlement stipulation between the Respondent Employer, the Charging Party Union, and the General Counsel, and specifying the actions the Respondent must take to comply with the National Labor Relations Act.  Charge filed by American Postal Workers Union, AFL-CIO, Boston Metro Area Local 100.  Chairman Pearce and Members Miscimarra and Hirozawa participated.

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Appellate Court Decisions

Teamsters Local 509 (ABC Studios), Board Case No. 11-CB-004020 (reported at 357 NLRB No. 138) (D.C. Cir. Decided August 21, 2015)

In a published opinion, the court granted enforcement and upheld the Board’s findings that Local 509 violated Section 8(b)(1)(A) and (2) of the Act by refusing to place a non-member driver on its movie referral list for discriminatory, arbitrary, and invidious reasons, and thereby prevented Touchstone Television Productions, LLC, d/b/a ABC Studios from hiring him for Season Three of Army Wives.  Those findings turned on issues concerning Local 509’s operation of an exclusive hiring hall.

The Board (Chairman Pearce and Members Becker and Hayes) found that the Local 509 violated the Act by refusing to place the driver on its referral list because he was not a Local 509 member, and by preventing the employer from hiring him for Season Three because he was not on the referral list.  In doing so, the Board adopted the administrative law judge’s conclusion that Local 509 operated an exclusive hiring hall that excluded applicants, specifically this driver, on the basis of their non-membership.  The Board rejected Local 509’s asserted defense that the driver was not referred because it had closed the referral list to new applicants beforehand.  As the Board explained, closing the list “merely perpetuated the unlawful effect of its prior maintenance of a members-only, exclusive hiring hall,” and “regardless of whether the list was open or closed, [Local 509] would not have placed [the driver], a non-member, on the list or referred him for employment.”

Citing settled principles, the court (Judges Rogers and Griffith, and Senior Judge Ginsburg), explained that an exclusive hiring hall is lawful only if it is open to all potential workers, not just members of the sponsoring local, and that an exclusive hiring hall limited to only the local’s members is unlawful under the NLRA.  The court then rejected Local 509’s asserted defenses, finding that they were based on mistaken premises or a misreading of the Board’s decision, and concluded that the Board’s findings were supported by substantial evidence.

The court’s opinion is here (link is external).

HealthBridge Management, LLC, et al., Board Case No. 34-CA-012964 (reported at 360 NLRB No. 118) (D.C. Cir. decided August 18, 2015)

In a published opinion, the court granted enforcement and upheld the Board’s findings that this operator of six nursing homes in Connecticut violated Section 8(a)(1) of the Act during an ongoing labor dispute with New England Health Care Employees Union, District 1199, SEIU, AFL-CIO, when it took down flyers from union bulletin boards and ordered employees to remove union stickers while working in patient care areas.  Referencing an earlier complaint issued by Region 34, the flyers and stickers stated that the employer had been “busted” for “violating federal labor law.”

In agreement with the administrative law judge, the Board (Members Miscimarra, Hirozawa, and Schiffer) found that the employer’s removal of the flyers from union bulletin boards was unlawful and that it had failed to show that the collective-bargaining agreements covering the employees at the six nursing homes permitted it to unilaterally interpret what was a proper notice or remove items it considered improper.  The Board (Member Miscimarra dissenting) found that the employer unlawfully prohibited employees from wearing the “busted” stickers in patient care areas, because the employer failed to show that the ban on stickers was necessary to avoid disrupting health-care operations or disturbing residents.  In doing so, the Board rejected the employer’s assertion that residents would be upset by the stickers because they referred to a labor dispute, because that claim did not square with the employer’s own contemporaneous letters sent to residents and families that raised concerns of potential union strikes and possible facility closure due to the labor dispute.

On review, the court (Judges Wilkins, Pillard, and Henderson) held that the Board’s finding that the employer unlawfully removed the flyers from union bulletin boards was supported by substantial evidence and noted that once the employer had “extended the right to post Union notices on designated bulletin boards, [it] was not free to remove them unilaterally.”  Regarding the union stickers, the majority (Judge Henderson dissenting) recognized the Board’s framework for assessing bans on union insignia in the healthcare context.  The majority noted that a prohibition against wearing union insignia in areas not devoted to immediate patient care is presumptively invalid, but such a ban is presumptively valid in patient-care areas.  However, as the majority recognized, the presumption of validity in patient-care areas does not apply when an employer selectively bans only certain union insignia.  In that situation it remains the employer’s burden to demonstrate a special circumstance justifying its decision to single out particular union insignia, as the Board held in Saint John’s Health Center, 357 NLRB No. 170 (2011).  The majority concluded that, here, the Board’s finding that the employer failed to demonstrate special circumstances in support of its ban was supported by substantial evidence.  Additionally, the court (Judge Henderson concurring) rejected the employer’s attempt to challenge the rule of Saint John’s Health Center, finding the issue jurisdictionally barred from review because the argument had not been raised to the Board.

The court’s opinion is here (link is external).

NSTAR Electric & Gas Company, Board Case No. 01-CA-122562 (reported at 360 NLRB No. 106) (1^st Cir. decided August 17, 2015)

In a published opinion, the Court enforced the Board’s order in a test-of-certification case requiring this public utility that provides electric and gas service in Massachusetts to bargain with the Utility Workers Union of America, AFL-CIO, Local 369.  The key findings the court upheld were the Acting Regional Director’s determinations in the representation case that a group of electrical workers, including transmission system supervisors (TSSs) and senior transmission outage coordinators (STOCs), were neither supervisors nor managerial employees excluded from the Act’s coverage.

In the representation case, the employer claimed that its TSSs and STOCs have supervisory authority under Section 2(11) of the Act because they assign work, responsibly direct employees, and hire or make effective hiring recommendations, all while exercising independent judgment.  Based on the weight of evidence presented, the Acting Regional Director found that, although the electrical workers are highly trained technical experts, they do not exercise those indicia of supervisory authority.  The Regional Director also determined that they were not managerial employees because they do not formulate management policy or make operative decisions.  Thereafter, on January 29, 2014, the employees voted unanimously in a self-determination election to join an existing bargaining unit represented by the union, and subsequently the Board certified the union as their representative.

On review, the court held that substantial evidence supported the Board’s finding that the employer failed to carry its burden of showing supervisory status.  In doing so, the court rejected the employer’s challenges to the Board’s standards for evaluating the supervisory status of electrical workers established in Entergy Mississippi, Inc., 357 NLRB No. 178 (2011), which incorporated standards ofOakwood Healthcare, Inc., 348 NLRB 686 (2006).  Specifically, the court rejected the employer’s reliance on pre-Oakwood circuit case law, and acceptedOakwood’s definition of independent judgment, as adopted in Entergy Mississippi, as well as the Board’s accountability definition for assessing responsible direction.  Applying those standards, the court upheld the Board’s findings that the TSSs and STOCs do not assign work, responsibly direct employees, or hire or make effective hiring recommendations using independent judgment.  On the issue of their managerial status, the court found the Board’s rejection of that claimed status was supported by substantial evidence.

The court’s opinion is here (link is external).

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Administrative Law Judge Decisions

Samsung Electronics America, Inc. f/k/a Samsung Telecommunications America, LLC  (12-CA-145083; JD(NY)-37-15)  Tampa, FL.  Administrative Law Judge Joel P. Biblowitz issued his decision on August 18, 2015.  Charge filed by an individual.

Laborers’ International Union of North America, Local 872  (28-CC-148007; JD(SF)-32-15)  Las Vegas, NV.  Administrative Law Judge Jeffrey D. Wedekind issued his decision on August 21, 2015.  Charge filed by NAV-LVH, LLC d/b/a Westgate Las Vegas Resort & Casino.