End In Sight For The Micro-Unit Nightmare Spawned By NLRB’s Specialty Healthcare Decision? Maybe…
Barnes & Thornburg LLP – David Pryzbylski
USA May 22 2017
There appears to be light at the end of the micro-unit tunnel. Anyone following National Labor Relations Board (NLRB) developments knows that few decisions have had as much impact on U.S. labor law as the agency’s decision in Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011). Now, NLRB Chairman Philip Miscimarra just offered hope, saying that the Specialty Healthcare decision may have been off-base. That decision paved the way for a slew of micro-units being certified by the NLRB over the last 5-plus years (despite the NLRB’s assurances back in 2011 that its holding in Specialty Healthcare would only apply to healthcare bargaining units).
For those unfamiliar with micro-units, when filing an election petition with the NLRB, a union must identify a legally appropriate group of employees (i.e., the “bargaining unit”) it seeks to organize. Historically, all-inclusive “wall-to-wall units” (e.g., production and maintenance employee units) were favored by the NLRB. In contrast, micro-units are fractional. Generally, they seek to decrease the size of the unit and make organizing easier. For example, a union could believe it has ample support in a manufacturing plant among maintenance employees, but not production employees, so it could seek to only represent the maintenance workers – in which case the employer would be left dealing with a labor agreement only applying to half of the workforce and likely resulting in inequities among its employees. The NLRB previously often disapproved of micro-units, but Specialty Healthcare altered the NLRB’s legal standard regarding bargaining units and made it easier for unions to seek such units.
Fast forward to now. On May 10, the NLRB declined to review and reverse a bargaining unit determination in Cristal USA, Inc., 365 NLRB No. 74 (2017), that utilized the Specialty Healthcare standard in certifying a micro-unit. Notably, however, Miscimarra issued a dissent in which he explicitly stated that he believes “Specialty Healthcare was wrongly decided.” He went on to note that the micro-unit in the Cristal case was concerning to him because it “promotes insatiability by creating a fractured or fragmented unit.” All told, he seems prone to overturn Specialty Healthcare once two pro-management members join him on the NLRB and give him a majority, which is anticipated to occur in the coming months. This would be a huge win for companies nationwide.
Want to Limit an Arbitrator’s Ability to Modify a Disciplinary Decision? Bargaining For It is the Best Bet!
Vorys Sater Seymour and Pease LLP – Nelson D. Cary and Jesse Meade
USA May 24 2017
Last week, the Ohio Supreme Court issued a decision emphasizing the power of an arbitrator to amend an employer’s disciplinary decision where the CBA lacks an express provision limiting the arbitrator’s authority to do so.
At issue in the case was the termination of a police officer for the violation of several police department rules, the most serious being the department’s sexual harassment policy. The chief of police determined that the Grievant should be discharged. In doing so, he applied a “discipline matrix” the department had adopted pursuant to authority granted it in the CBA. The matrix was a system for determining proper employee discipline. The matrix gave the chief of police “sole discretion” to choose among the options for discipline suggested by the matrix.
At arbitration, however, the arbitrator found that the City did not clearly establish that the Grievant violated the department’s sexual harassment policy, leaving the department without just cause to terminate the Grievant. The arbitrator found that instead, the evidence only established conduct unbecoming an officer. Looking at the matrix, the arbitrator noted that it specified two possible options for discipline for conduct unbecoming — a 3-10 day suspension or termination. But, the arbitrator didn’t pick either. Instead, he ordered a “lengthy disciplinary suspension” and reinstated the Grievant without back pay. He did not give the chief of police the discretion to pick between the two options.
The lower courts both held that the arbitrator had exceeded his power by departing from the language of the matrix, which gave sole discretion to the chief of police in deciding between the 3-10 day suspension or termination. Because the chief had picked one of those for the conduct the chief found to have occurred, the arbitrator lacked authority to modify that discipline. The Ohio Supreme Court reversed, focusing entirely on the express language of the CBA.
The key issue in the majority’s view was not whether the CBA empowered the department to create a punishment matrix, but rather whether the CBA contained language allowing a punishment matrix to override the “just cause” language for punishment. The Court found that it did not. Importantly, the Court held that “the city’s right to develop rules is not a right to determine what particular form of discipline it has just cause to impose for a violation of those rules.”
The Court went on to state that while “nothing in the CBA precludes the city from using the matrix as a guide in imposing discipline, treating the matrix as binding on the arbitrator would conflict with the just cause requirement for discipline….” Therefore, because the matrix itself was not bargained for by the parties, and no other language limited the arbitrator’s authority to amend discipline decisions, the arbitrator had authority to review the appropriateness of the discipline and fashion a remedy consistent with the evidence.
Chief Justice O’Connor dissented, finding the majority’s decision “overbroad,” and likely to have “unintended consequences” for parties to union agreements, among other issues. O’Connor noted that an arbitrator’s source of law is found not only within the four corners of the CBA, but also in the practices of the parties and industry. By requiring specific bargaining to limit the arbitrator, O’Connor stated that “the majority opinion may prevent an employer from relying on past practice as the basis for disciplinary action.” Under the majority’s holding, if an employer disciplines an employee based on an “uncontested practice of imposing the same disciplinary action for a similar violation” for years, the arbitrator may ignore years of precedent and impose the arbitrator’s own level of discipline.
For the labor professional, the decision is a good reminder that the best defense is clear contract language. The opinion provides strong authority for arbitrators to fashion their own discipline, in lieu of management’s judgment, in the absence of such language. Prudent employers should review their agreements and determine whether or not this issue should be a focus area in upcoming negotiations.
In addition, labor professionals may note that this decision involved a public employer in Ohio. However, the court construed language generally applicable to enforcing (or vacating) arbitration awards, both in the public and the private sector.
May 18, 2017
NLRB Counsel Has Significant Authority but Little Time
From Labor & Employment on Bloomberg Law
National Labor Relations Board General Counsel Richard Griffin (D) could be a thorn in the side of Republicans who want to undo various Obama-era worker-friendly decisions and policies, but only for a few more months.
Griffin “essentially functions as the prosecutor” in the sense that he decides whether to issue an unfair labor practice charge against an employer, Celine McNicholas, labor counsel for the Economic Policy Institute and former congressional affairs director at the NLRB, told Bloomberg BNA. “He’s selecting the cases that move forward, so that position does have significant power to determine which cases get to the board.”
However, Griffin is unlikely to take actions that would have a substantial influence on labor policy past Oct. 31, the end of his term, even if he were so inclined. There’s an informal understanding at the agency that the five-seat board shouldn’t overrule precedent without at least three members agreeing. Two open seats are likely to be filled with Republican nominees, and the board currently has one sitting Republican and two Democrats. The transitional state of affairs means it’s unlikely Griffin would bring any controversial cases over the next few months.
Griffin is further constrained because he only has five months remaining in his term. Maybe more importantly, the general counsel’s ability to bring an issue to the board for a decision depends on the types of charges that employers, employees and their unions file.
“If you want to change policy decision X, you can’t just make a pronouncement,” Brian Hayes, a former Republican board member, told Bloomberg BNA. “You have to have a case in which that issue has been raised and is properly before the board. Sometimes it’s as simple as what happens to be in the decisional inventory at a particular time,” said Hayes, a shareholder at Ogletree Deakins.
The NLRB declined a request to provide comment for this story.
Republicans Want Substantial Policy Changes
Republicans and the employer community have long complained that the NLRB aggressively pursued pro-worker initiatives under former President Barack Obama. They argued that many of those policies were intended to make union organizing easier.
President Donald Trump has also joined the chorus of criticism. Republicans now have a chance to undo many of those moves, thanks to GOP control of the White House and Congress.
Trump has already replaced the former chairman of the board with a Republican, Philip Miscimarra, and he is expected to give the NLRB a Republican majority by filling the two openings with lawyers William Emanuel and Marvin Kaplan. That would allow the board to potentially reconsider controversial decisions, such as those expanding joint employer liability and recognizing “micro units” of workers for collective bargaining purposes.
Griffin Could Be Roadblock
Griffin isn’t likely to support moves to undo those and other decisions, but his ability to stop them and willingness to exercise that power isn’t clear. The general counsel has broad discretion to dictate which cases get to the board, which in turn helps determine which legal issues the panel considers.
“In the first instance, he gets to define and decide, am I going to find this particular act to be a violation of labor law and under what theory,” Hayes said.
In other words, Griffin has protection from the politics or ideologies of the board members, as well as a significant voice in what issues they are asked to decide. But Griffin “is not the sole gatekeeper,” Hayes said.
“Both parties have a right to review by the board of any decision adverse to them,” Hayes said. If an administrative law judge “decides that the GC’s theory prevails, and it’s contrary to the views of the employer, then the employer has a right to appeal the ALJ’s decision to the board.”
He also can’t keep the board from eventually getting to cases currently winding their way through the NLRB.
“There are already cases in the pipeline that would allow a board with a different composition to make changes in the law,” Zachary Fasman, an employment law partner at Proskauer Rose, told Bloomberg BNA.
A key example is a case involving unfair labor practice charges against McDonald’s USA LLC, alleging that the franchiser is liable as joint employer of workers at franchisee-operated restaurants. That case would allow the new members to modify the board’s expanded interpretation of joint employment.
“It’s not like Griffin can say, ‘I’m not going to continue litigating this case because it might result in a reversal of a policy I favor.’ He has an obligation to do so,” Fasman said.
Constrained by Time, Procedures
Griffin also doesn’t seem to have enough time to push any new or novel legal arguments. That’s because the process of getting cases to the board is a time-consuming one, McNicholas of the Economic Policy Institute said.
NLRB regional offices typically take several months to investigate a new unfair labor practice charge and issue a complaint. That means a new charge likely wouldn’t result in an administrative complaint until near the end of Griffin’s term.
Once Griffin’s term ends, Trump’s nominations will result in a consolidation of the general counsel’s authority as well as the board’s in Republican hands.
“Two new members coming in now can certainly make changes with the cases already before them, but the opportunity is much greater, of course, and the ability expands with a new” Republican general counsel, Fasman said.
Summary of NLRB Decisions for Week of May 1 – 5, 2017
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 the Executive Secretary at 202‑273‑1940.
Summarized Board Decisions
Voices for International Business and Education, Inc., d/b/a International High School of New Orleans (15-CA-182627; 365 NLRB No. 66) New Orleans, LA, May 5, 2017.
The Board granted the General Counsel’s motion for summary judgment in this test-of-certification case on the ground that the Respondent failed to raise any issues that were not, or could not have been, litigated in the underlying representation proceeding in which the Union was certified as the bargaining representative. Chairman Miscimarra would have granted review in the underlying representation proceeding but agrees that the Respondent has not raised any new matters that are properly litigable in this unfair labor practice proceeding.
Charge filed by United Teachers of New Orleans, Local 527, LFT, AFT. Chairman Miscimarra and Members Pearce and McFerran participated.
***
Mercedes-Benz U.S. International, Inc. (MBUSI) (10-CA-169466; 365 NLRB No. 67) Vance, AL, May 5, 2017.
The Board (Chairman Miscimarra and Member McFerran; Member Pearce, dissenting) denied the General Counsel’s motion for summary judgment, finding that the General Counsel failed to establish that there are no genuine issues of material fact warranting a hearing and that the General Counsel was entitled to judgment as a matter of law. The Board majority concluded that Respondent could present evidence at a hearing to defend its rule prohibiting the use of cameras and video recording devices in its auto plant. In dissent, Member Pearce would find that the General Counsel is entitled to summary judgment because there are no genuine issues of material fact warranting a hearing and it was “clearly established” that the recording rule was unlawful.
Charge filed by an individual. Chairman Miscimarra and Members Pearce and McFerran participated.
***
Unpublished Board Decisions in Representation and Unfair Labor Practice Cases
R Cases
North Shore Ambulance and Oxygen Service, Inc. (29-RC-185400) College Point, NY, May 3, 2017. The Board (Members Pearce and McFerran; Chairman Miscimarra, dissenting) denied the Employer’s Request for Review of the Regional Director’s Decision on Objections and Certification of Representative as it raised no substantial issues warranting review. Union – Local 726, International Union of Journeymen and Allied Trades. Chairman Miscimarra and Members Pearce and McFerran participated.
Unifirst Corporation (06-RD-172983) New Kensington, PA, May 4, 2017. The Board denied the Union’s Request for Review of the Regional Director’s Supplemental Decision and Certification of Results of Election as it raised no substantial issues warranting review. Petitioner – an individual. Union – United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, Local 1324-15. Chairman Miscimarra and Members Pearce and McFerran participated.
Marywood University (04-RC-173160) Scranton, PA, May 5, 2017. The Board denied the Employer’s and Petitioner’s Requests for Review of the Acting Regional Director’s Decision and Order finding that the Board could assert jurisdiction over the Employer despite its status as a self-identified religious university, but dismissing the petition on the basis that the petitioned-for faculty employees are managerial employees and are therefore excluded from employee status under the Act. The Board majority found it unnecessary to pass on whether the Acting Regional Director properly asserted jurisdiction over the Employer under Pacific Lutheran University, 361 NLRB No. 157 (2014). Chairman Miscimarra concurred with the majority regarding the dismissal based on the employees’ managerial status. Relying on his dissent in Pacific Lutheran University, Chairman Miscimarra would also decline to assert jurisdiction over the petitioned-for faculty members because the University is exempt from the Board’s jurisdiction as a religiously-affiliated institution. Petitioner – Marywood University Faculty Association, affiliated with Pennsylvania State Education Association. Chairman Miscimarra and Members Pearce and McFerran participated.
C Cases
In Re: Request for Rulemaking Regarding Reconsideration of IBM Corp., 341 NLRB 1288 (2004)(11-CA-019324, 11-CA-019329 and 11-CA-019334) (SP-455) Bryn Mawr, PA, May 3, 2017. The Board denied a request that the Board use its rulemaking power to reverse the Board’s decision in IBM Corp., 341 NLRB 1288 (2004), and extend Weingarten rights to nonunion employees. The Board stated that it has decided not to exercise its discretionary authority to engage in rulemaking at this time with respect to this issue. Request for rulemaking filed by an individual. Chairman Miscimarra and Members Pearce and McFerran participated.
United States Postal Service (28-CA-175407 and 28-CA-178951) Albuquerque, NM, May 3, 2017. No exceptions having been filed to the March 22, 2017 decision of Administrative Law Judge John T. Giannopoulos’ finding that the Respondent had not engaged in certain unfair labor practices, the Board adopted the judge’s findings and conclusions, and dismissed the complaint. Charges filed by National Association of Letter Carriers, Sunshine Branch 504, affiliated with National Association of Letter Carriers, AFL-CIO.
International Brotherhood of Teamsters and its affiliated Local Union No. 776 (United Parcel Service, Inc.) (04-CB-166651 and 04-CB-170828) Harrisburg, PA, May 5, 2017. No exceptions having been filed to the March 23, 2017 decision of Administrative Law Judge Robert A. Giannasi’s finding that the Respondent had engaged in certain unfair labor practices, the Board adopted the judge’s findings and conclusions, and ordered the Respondent to take the action set forth in the recommended Order. Charges filed by individuals.
***
Appellate Court Decisions
Roemer Industries, Inc., Board Case No. 08-CA-124110 (reported at 362 NLRB No. 96) (6th Cir. decided May 4, 2017)
In an unpublished opinion, the Court enforced the Board’s order issued against this manufacturer of graphic industrial identification products operating a facility in Masury, Ohio, where its employees are represented by the United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied Industrial & Service Workers International Union. The Board (Members Hirozawa, Johnson, and McFerran) found that the Employer violated Section 8(a)(3) and (1) by suspending two employees who were acting in their union roles as “unit chair” and “unit griever,” for circumstances that arose while they were investigating a grievance. The Board found that their conversation with another employee and other comments, which the Employer claimed involved bullying, was protected activity that did not cause either employee to lose the Act’s protection.
On review, the Court summarized the Employer’s defense as “lay[ing] out facts that support its bullying theory and otherwise ask[ing] the court to re-characterize and re-weigh evidence.” The Court explained that, “when reviewing Board decisions, it is not our job to interpret which version of the facts is correct.” Rather, the Court stated, “we serve to determine whether there is substantial evidence in the record to support the Board’s findings.” Finding that support, the Court enforced.
The court’s unpublished opinion is here (link is external).
Oak Harbor Freight Lines, Inc., Board No. 19-CA-031797 (reported at 361 NLRB No. 82) (D.C. Cir. decided May 2, 2017)
In a published opinion, the Court enforced the Board’s order issued against this business that transports freight by truck throughout the Northwest for violating Section 8(a)(5) and (1) by unilaterally ceasing contributions to an employee benefit trust, implementing a health care plan without reaching impasse, and refusing to bargain regarding health care benefits with the Unions, Teamsters Union Local Numbers 81, 174, 231, 252, 324, 483, 589, 690, 760, 763, 839, and 962, which represent various units of employees in California, Idaho, Oregon, and Washington. The Court also denied a petition for review in which the Unions challenged the Board’s dismissal of additional unilateral-change allegations involving contributions to three other benefit trusts.
The parties have a longstanding collective-bargaining relationship, in which the Unions bargain with the Employer for a single agreement which, among other terms, requires the Employer to make contributions to four employee benefit trusts. To implement that requirement, in 2005, the parties executed side agreements for three of the trusts (but apparently not for the fourth), which permitted the Employer to cease contributions upon five days’ notice, provided the underlying collective-bargaining agreement had expired. In August 2007, the parties began negotiations for a successor agreement. In September, the employees went on strike, after which some “crossover employees” returned to work. By October, the collective-bargaining agreement expired and the Employer gave notice that it planned to exercise its right to cease contributions and did so with regard to all four trusts. After the strike ended and the striking employees returned to work, the Employer unilaterally implemented its health care plan for all unit employees, which it had applied only to crossover employees during the strike.
The Board (then-Chairman Pearce, and Members Hirozawa and Johnson) found, under the language of the three executed side agreements, that the Unions waived their right to bargain over the Employer’s decision to cease contributions and dismissed the corresponding allegations. The Board found, however, that no similar waiver had been executed for the Oregon Welfare trust, and therefore that the Employer’s cessation of contributions to that trust was unlawful. Additionally, the Board found that the Employer violated Section 8(a)(5) and (1) by unilaterally implementing the new health care plan for unit employees without reaching impasse, and by refusing to bargain in good faith regarding health care benefits.
Addressing the Unions’ petition, the Court held that the Board properly concluded that the Unions waived their rights to bargain. Rejecting their contentions concerning the Board’s failure to consider certain extrinsic evidence, the Court stated that “the Board has explained that it will find a clear and unmistakable waiver of the right to bargain over the cancellation of trust payments only where there is explicit contract language authorizing an employer to cancel its obligations.” The Court noted that, although the Board applies its “clear and unmistakable waiver” standard, rather than the court’s “contract coverage” test, here no party raised a contract coverage issue. Regarding the Employer’s petition challenging the unfair labor practices, the Court held that the Board’s findings were supported by substantial evidence and the Employer’s contentions provided no basis to disturb them.
The court’s opinion is here (link is external).
***
Administrative Law Judge Decisions
Richfield Hospitality, Inc. as managing agent for Kahler Hotels, LLC (18-CA-176369; JD-28-17) Rochester, MN. Administrative Law Judge Keltner W. Locke issued his decision on May 4, 2017. Charge filed by Unite Here International Union Local 21.
New Vista Nursing and Rehabilitation Center (22-CA-179497; JD(NY)-10-17) Newark, NJ. Administrative Law Judge Kenneth W. Chu issued his decision on May 4, 2017. Charge filed by 1199 SEIU United Healthcare Workers East.
Burgerville, LLC (19-CA-182182 and 19-CA-182184; JD(SF)-19-17) Vancouver, WA. Administrative Law Judge Amita Baman Tracy issued her decision on May 4, 2017. Charges filed by Industrial Workers of the World.
International Association of Bridge, Structural, Ornamental, and Reinforcing Iron Workers, Local 229, AFL-CIO (21-CC-183510; JD(SF)-20-17) San Diego, CA. Administrative Law Judge Mary Miller Cracraft issued her decision on May 4, 2017. Charge filed by Commercial Metals Company dba CMC Rebar.
Burgerville, LLC (19-CA-182182 and 19-CA-182184; JD(SF)-19-17) Vancouver, WA, May 5, 2017. An Errata to Administrative Law Judge Amita Baman Tracy’s May 4, 2017 decision. Errata Amended Decision.