Supreme Court to Rule on Authority of Two-Member NLRB
This week the U.S. Supreme Court agreed to hear an appeal in New Process Steel v. NLRB and determine whether the National Labor Relations Board (NLRB or "the Board") has the authority to decide cases with only two sitting members.
The NLRB is the independent federal agency that administers the National Labor Relations Act, the primary law governing relations between unions and employers in the private sector. Typically, the NLRB is made up of five members, appointed by the President. There are currently three vacancies on the Board, leaving only two sitting members. The statute governing the NLRB's powers (29 U.S.C. § 153(b), if you really care) provides that "three members of the Board shall, at all times, constitute a quorum of the Board." Nevertheless, the two remaining Board members have decided a number of cases, under the theory that as long as those two members agree, they would have formed the majority of any three-member quorum anyway.
The Court will resolve a split between the federal appellate courts. In New Process Steel v. NLRB, (the case on appeal) the Seventh Circuit held that the current two-member NLRB does have the power to decide cases. The First Circuit agreed in in Northeastern Land Services v. NLRB. However, the D.C. Circuit disagreed in Laurel Baye Healthcare of Lake Lanier v. NLRB and rejected the power of a two-member Board to do anything. If you want to read more about this dispute, click here to read New Process Steel's Petition for Writ of Certiorari to the Court.
For most employers, New Process Steel will have little relevance--none of the cases decided by the two-member Board were particularly controversial, and none represented a significant departure from existing NLRB law. The only employers with a significant stake in the outcome of New Process Steel will be those employers whose cases were ruled on by the two-member Board. If the Court reverses New Process Steel, those cases will be reheard by a future three-member panel, and will likely be upheld.
9th Circuit Orders Damages, but Not Reinstatement for Unauthorized Alien Workers
What's an employer to do when it is ordered to reinstate former employees, but those employees are not legally authorized to work in the United States? Pay liquidated damages instead, according to the Ninth Circuit's recent decision in NLRB v. C&C Roofing Supply Inc.
In C&C, the National Labor Relations Board (NLRB) alleged that the employer unlawfully fired 20 workers for engaging in union activity. The parties reached a formal settlement that called for reinstatement of the illegally fired workers and payment of specific amounts of liquidated damages to each. However, the employer then refused to reinstate the employees because many of them were unauthorized aliens and rehiring them would violate the Immigration Reform and Control Act (IRCA) and the Legal Arizona Workers Act, which both prohibit hiring unauthorized aliens.
The Ninth Circuit solved the dilemma by ordering the employer to pay the agreed-upon liquidated damages, but did not require the employer to reinstate the unauthorized employees. But how does this case square with Hoffman Plastic Compounds Inc. v. NLRB? There, the U.S. Supreme Court held 5-4 that the board may not order back pay for unauthorized aliens, despite their firing in violation of federal labor law, because doing so would violate immigration policy expressed in IRCA. In C&C, the Ninth Circuit dodged that issue by ruling that agreed-upon liquidated damages as part of a settlement do not raise the same issues as back pay ordered by the court, as the employees need not be "available to work" in order to receive liquidated damages. Don't be surprised if this one gets appealed up to the Supreme Court for a determination if it really does square with Hoffman.
Proposed Legislation Would Allow Employers to Fire Union Salts
The Truth in Employment Act of 2009 (TEA) would allow employers to lawfully fire employees who are suspected of “salting,” or attempting to organize the contractor's workforce from within on behalf of a labor union. The bill was introduced in the Senate by Sen. Jim DeMint (R-S.C.) and in the House by Rep. Steve King (R-Iowa).
TEA would amend the National Labor Relations Act to protect the employer from being required to hire any person who is seeking a job in order to promote interests unrelated to those of the employer. “Small businesses should never be forced to hire undercover union organizers who seek to bully workers and harm companies,” said Senator DeMint. “We must pass the Truth in Employment Act or successful small businesses will remain vulnerable to union salting tactics that threaten jobs." Click here to read Senator DeMint's press release on TEA.
Does TEA have a realistic chance of becoming law? Not really. The Republicans unsuccessfully tried to pass TEA in 2005 and 2007, and that was when they had a fellow Rebpublican in the White House and much better numbers in both houses. Expect this one to die on the vine.
Employers can take some solace, however; last year, the National Labor Relations Board held in Toering Electric Company that an employer is not required to hire an employee who is not "genuinely interested in seeking to establish an employment relationship with the employer," thus significantly restricting the amount of salt in unions' diets. If you have concerns about union salting in your workplace, you might want to read the NLRB's Guideline Memorandum Concerning Toering Electric Company.
Major Budget Increases for Federal Labor and Employment Enforcment Agencies
The Obama Administration has released its fiscal year 2010 budget request. Among the items are several increases for the federal agencies that oversee labor and employment matters. Here are some highlights:
- $104.5 billion to the Department of Labor, an increase of 10 percent, to increase its staff and enforcement activity.
- $283 million for the National Labor Relations Board, an increase of 7.9 percent.
- $267 million for the Equal Employment Opportunity Commission, an increase of 6.6 percent, to increase staffing.
- $145 million of the Justice Department's Civil Rights Division, an increase of 18 percent.
- $112 million to the Department of Homeland Security for the E-Verify program.
Assuming they are passed by Congress, these increases reverse a long trend under the Bush Administration to cut funding to the federal agencies that enforce labor and employment laws. Employers can expect increased enforcement of those laws by the federal government in the years to come.
President Obama Announces NLRB Nominations
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Last Friday, President Obama announced his intention to nominate Craig Becker and Mark Pearce as Members to the National Labor Relations Board (NLRB), the government agency that administers the National Labor Relations Act, the primary law governing relations between unions and employers in the private sector. Click Here to read the White House Press release.
Normally the Board has five members, three from the President's party and two from the other, but right now the Board has only two members, one Democrat and one Republican. Both of these nominees are Democrats, meaning the next will be a Republican. Here's what the White House has to say about each:
- Craig Becker currently serves as Associate General Counsel to both the Service Employees International Union and the American Federation of Labor & Congress of Industrial Organizations. He graduated summa cum laude from Yale College in 1978 and received his J.D. in 1981 from Yale Law School where he was an Editor of the Yale Law Journal. After law school he clerked for the Honorable Donald P. Lay, Chief Judge of the United States Court of Appeals for the Eighth Circuit. For the past 27 years, he has practiced and taught labor law. He was a Professor of Law at the UCLA School of Law between 1989 and 1994 and has also taught at the University of Chicago and Georgetown Law Schools. He has published numerous articles on labor and employment law in scholarly journals, including the Harvard Law Review and Chicago Law Review, and has argued labor and employment cases in virtually every federal court of appeals and before the United States Supreme Court.
- Mark Gaston Pearce has been a labor lawyer for his entire career. He is one of the founding partners of the Buffalo, New York law firm of Creighton, Pearce, Johnsen & Giroux where he practices union side labor and employment law before state and federal courts and agencies including the N.Y.S. Public Employment Relations Board, Equal Employment Opportunity Commission, the U.S. Department of Labor, and the National Labor Relations Board. Pearce in 2008 was appointed by the NYS Governor to serve as a Board Member on the New York State Industrial Board of Appeals, an independent quasi-judicial agency responsible for review of certain rulings and compliance orders of the NYS Department of Labor in matters including wage and hour law. Pearce has taught several courses in the labor studies program at Cornell University’s School of Industrial Labor Relations Extension. He is a Fellow in the College of Labor and Employment Lawyers. Prior to 2002, Pearce practiced union side labor law and employment law at Lipsitz, Green, Fahringer, Roll, Salisbury & Cambria LLP. From 1979 to 1994, he was an attorney and District Trial Specialist for the NLRB in Buffalo, NY. Pearce received his J.D. from State University of New York, and his B.A. from Cornell University.
If affirmed by the Senate, these appointments, along with NLRB Chair Wilma Liebman, will give the NLRB a solid pro-labor majority for the next four years. Regardless of what happens with the Employee Free Choice Act, you can safely expect major changes in labor law, as the Obama Board likely charts a much different course than the Board did during the Bush years.
Supreme Court Rejects Appeal on Aliens' Right to Vote in Union Elections
Earlier this month, the United States Supreme Court declined to review a ruling from the Court of Appeals for the District of Columbia Circuit holding that unauthorized aliens are "employees" under the National Labor Relations Act (NLRA) and therefore entitled to cast votes in a union election.
In Agri Processor Co. v. NLRB, the employees elected the United Food and Commercial Workers Union Local 342 as their bargaining agent in 2005 election; however, the employer refused to bargain with the union on the basis that 17 of the 21 employees who cast ballots were not legally authorized to work in the United States, and therefore not "employees" under the NLRA.
In a 2-1 decision that was affirmed by the D.C. Circuit, the National Labor Relations Board held that the certification of Local 342 was valid because the voters were employees under the NLRA even if they were hired in violation of the Immigration Reform and Control Act. That decision will stand now that the Supreme Court has passed on its opportunity to review the case. With the passage of the Employee Free Choice Act appearing all but certain, authorization cards signed by unauthorized alien employees will likely be held valid as well.
NLRB 2008 Report Shows Efficient, Aggressive Enforcement of Labor Law
Ronald Meisburg, General Counsel for the National Labor Relations Board (NLRB) issued his annual Summary of Operations memo on October 29, 2008. (The NLRB is the federal agency that enforces our country's labor laws and conducts union elections.) Mr. Meisburg's memo is full of interesting news and developments on all facets of the NLRB's operations. To read the complete memo, click here. If you want the Cliff's Notes version, here you go:
- Case intake is up: ULP cases are up 1.6%, from 22,147 in FY 2007 to 22,501 in FY 2008. New representation cases are up 2.3% from 3,324 to 3,400.
- Elections are being held sooner: the NLRB closed 83.5% of all representation cases within 100 days, exceeding its target of 80%. 93% of all initial union representation elections were conducted within 56 days of the filing of the petition, with a median of 39 days from filing.
- ULPs are being investigated faster: The Board closed 68.1 percent of all ULP cases within 120 days, meeting its target of 68%, and closed 75.2% of meritorious ULP cases within 365 days, meeting its target of 75%.
- The NLRB is winning a lot: Its Regional Offices won 90.8% of Board and Administrative Law Judge unfair labor practice decisions in whole or in part in FY 2008 (up 5% from 2007), and it recovered a total of $70,001,594 on behalf of employees as backpay or reimbursement of fees, dues, and fines. It obtained reinstatement for 1,564 terminated employees.
- The NLRB is using injunctions. The Board authorized a total of 28 Section 10(j) injunction cases in FY 2008, as compared to 25 in FY 2007. The “success rate” (the percentage of 10(j) cases in which the NLRB achieved either a satisfactory settlement or substantial victory in litigation) was 84%.
- The NLRB is more efficient: It met all three of its primary goals, closing 83.50% of all
representation cases within 100 days (target 80%), 68.10% of all unfair labor practice cases within 120 days (target 68%), and 75.22% of all meritorious unfair labor practice cases within 365 days (target 75%).
What does this mean for employers? The NLRB is more efficient and pushing cases to resolve more quickly, which may give employers less time to respond to petitions for election. Also, the Board continues to be more aggressive in litigation and in seeking injunctions, which is rarely good news for employers. In short, don't take the NLRB lightly.
Starbucks Settles NLRB Charge With Wobbly Organizer
The New York Times is reporting that Starbucks has settled with the National Labor Relations Board an unfair labor practice claim filed by a former employee who alleged he was terminated for attempting to organize his coworkers to join the Industrial Workers of the World, aka "the Wobblies."
Under the terms of the settlement, Starbucks will post a notice in the employee's store for 60 days informing workers they have a right to unionize under federal law. Starbucks will also remove from its files any reference to the employee's firing and will repay him for any loss of earnings. (Starbucks had already voluntarily reinstated the employee before he filed his charge with the NLRB). For more about the Starbucks Workers' Union (a branch of the IWW), click here.
This case is a reminder to employers that it is unlawful to discharge or take any other adverse action against an employee because of that employee's support for or activities on behalf of a labor union. Just because the employee supports a union does not require you to give him or her special treatment, nor does it make them immune for discipline unrelated to their union activities; however, if you terminate a union organizer, you proceed at your own (substantial) risk.
