The NLRB Flexes its Muscles

Critics contend that the National Labor Relations Board has boosted its support of unions at the expense of the business community.

By Robert J. Grossman Aug 1, 2012

August CoverThe labor-management divide has become a key battleground in today's polarized political climate.

As Election Day 2012 looms, the political divisions within Congress and between employers and organized labor are widening, and not just in Wisconsin, where labor helped organize an unsuccessful recall election June 5 of Republican Gov. Scott Walker. Some legislators even argue that the 1935 National Labor Relations Act (NLRA), which gives workers the right to decide if they want union representation, should be repealed.

Others favor keeping the law but defunding the National Labor Relations Board (NLRB), the agency charged with administering it. They claim board members have gone rogue in their support for workers at the expense of the business community.

Union advocates argue that the NLRA has been watered down and become ineffective at protecting workers. They support the board's recent rule changes and decisions they say help level the playing field.

"We are at an incredibly acrimonious time," says Michael J. Eastman, executive director of labor law policy at the U.S. Chamber of Commerce in Washington, D.C. "Normally, the pendulum swings from one administration to the next. This time, it's swung further toward unions than it usually does, leading to the atmosphere we have now."

It's no secret that union supporters view the NLRA as inadequate protection for workers, says Laurence M. Goodman, partner with Willig, Williams & Davidson in Philadelphia, who represents organized labor. "To have meaningful changes, I'd pass something like the Employee Free Choice Act," he says.

President Barack Obama supported the Employee Free Choice Act, a measure labor viewed as a game changer. If the bill is enacted, a union that could obtain signed authorization cards from a majority of workers in a bargaining unit would be certified as the bargaining agent without lengthy campaigns and secret-ballot elections. But the bill has languished in Congress with little prospect of passage.

And so it goes. NLRB rule changes, like those speeding up elections and requiring posting of workers' rights, have been challenged in federal courts. Board decisions, such as one making it easier for unions to handpick the bargaining unit to organize within a workforce, await final word from the courts. In addition, the outcome of a legal challenge to the legitimacy of Obama's Jan. 4 recess appointments of board members is pending.

​Micro-Bargaining Units

One of the most divisive decisions came in Specialty Healthcare and Rehabilitation Center of Mobile, 357 NLRB No. 83 (2011), in which United Steelworkers sought to organize only certified nursing assistants at a health care facility, instead of a broader group of workers.

Reversing previous boards' precedents, the NLRB voted 3-1 to permit a union to determine the composition of the bargaining unit it is seeking to organize within an employer's workforce. It's the union's call to decide whether the unit will consist of all or a smaller group of workers who share a "community of interest." In effect, the decision allows unions to cherry-pick workplace supporters and discount those in opposition.

"It is the gift of all time for unions," says Michael J. Lotito, a Littler Mendelson partner in San Francisco. "It gives them the opportunity to determine the classification they can win with."

Under Specialty Healthcare, a union could designate two tuba players in an orchestra and organize just them. To challenge designation of this tiny bargaining unit and change it to cover the entire orchestra, the employer would have to demonstrate an "overwhelming community of interest shared by employees" in the larger group. It subjects the business to proliferation of many costly and unwieldy bargaining units.

"It gives the union a toehold and the opportunity to demonstrate to other employees who may be skeptical what kind of value proposition they provide," states Mark Theodore, a partner with Proskauer Rose LLP in Los Angeles.

Employee Protections

Section 7 of the National Labor Relations Act gives employees the right to organize for purposes of collective bargaining or the right to choose not to do so. The National Labor Relations Board (NLRB) administers the statute. The board has investigative, prosecutorial and adjudicative functions.

Five members appointed by the U.S. president with consent of the U.S. Senate serve five-year terms. Traditionally, presidents maintain a proportion on the board of three members from their party and two from the opposing party. As a result, NLRB priorities and decisions fluctuate depending on who is in power.

Independent of the board, the prosecutorial function operates under the general counsel, who is appointed by the president with Senate consent for a four-year term. In 34 regions, the general counsel oversees elections, investigates unfair labor practice charges and, where appropriate, prosecutes such charges. Administrative law judges conduct hearings and make determinations that can be appealed to the NLRB. Board decisions can be challenged in courts.

In 2011, the NLRB issued 368 decisions in contested cases. Union officials say redress from employers' unfair labor practices usually ends up with the companies posting notices that they have erred, a tepid remedy at best.

In many cases, however, remedial action becomes significant. Last year, the board recovered almost $23 million on behalf of employees as back pay or reimbursement of fees, dues and fines; 3,591 employees were offered reinstatement.

The Case Against Complacency

By most measures, unions have not been much of a threat to the private sector. In 2010-11, with membership at 6.9 percent of the eligible, private-sector workforce, the percentage was the lowest ever, continuing a relentless downturn from 1973, when almost one-fourth of private-sector workers were organized.

And there are indications that union organizers have grown weary. A total of 1,720 representation elections were held in 2011. Unions prevailed in 1,189, organizing 30 percent fewer companies than in 2010. In 2011, they added only 50,828 workers to a private-sector U.S. workforce of 103 million. Union elections conducted by the NLRB declined by 60 percent from 1997 to 2009.

Still, total union participation reaches almost 15 million when the public sector is included—11.8 percent of the U.S. workforce. Thirty-seven percent of the nation's public-sector workers—teachers, firefighters, police and the like—belong to unions.

Even as employers argue that unions provide limited value in return for required dues, unions' value proposition suggests otherwise. Union members fare better than their counterparts. Last year, full-time wage and salary union workers' median weekly earnings were $938 compared with $729 for nonunion workers, according to the U.S. Bureau of Labor Statistics report on union members in 2011.

Employers' record in keeping union growth in check is even more remarkable in light of what workers tell researchers. Richard B. Freeman, faculty co-director of the Labor and Worklife Program at Harvard Law School and co-author of What Workers Say (Cornell University Press, 2007), reports that workers want some kind of representation, either through unions or workplace committees, and that they see management opposition as a major reason for their inability to obtain these objectives.

Now, thanks to high unemployment, the Occupy Wall Street movement, and the growing economic divide among the "haves" and the "have-nots," the pro-union proposition may find a more receptive audience. With labor-friendly actions by what many see as a pro-worker NLRB, the table is set for organized labor.

How to Avoid Workplace Disruptions

The central issue: Will union officials take advantage of the more inviting climate and throw themselves into organizing? Labor officials are "going to have to come to grips with the fact that they should not be preoccupied with politics and political action," Lotito says. "They exist to organize employees, negotiate contracts and represent their members."

For HR professionals, uncertainty surrounding the NLRB's composition and actions compounds the potential for disruption. "The increased pendulum shifts have compromised the ability of HR and lawyers to provide guidance to their clients," says Steven M. Bernstein, a partner with Fisher & Phillips LLP in Tampa, Fla. Here are a few tips for HR professionals to help navigate turbulent waters:

Ignore directives from the NLRB and U.S. Department of Labor at your peril. "Until the high court strikes them down, they will be enforced," Bernstein says. "We tell clients to prepare as if all the new rules and decisions will remain in effect."

Get help before you need it. Government regulation makes labor relations increasingly complicated, creating greater need for businesses to hire consultants.

Move quickly to evaluate your business and assess vulnerabilities. "Even if you haven't had a whiff of organizing, it could happen to you so much faster now," Theodore cautions. "Your ability to put out your side of the story has been whittled down."

Prepare for the worst. "If you've done your own assessment and plan, and these actions are reversed by the courts, the only thing you've done is increase your value proposition," Lotito says.

Be a good communicator. Experts on the employer side say dignity and respect are the real issues among employees. "Make sure your door is open," Bernstein advises.

Keep your eye on the ball. Too much of the discussion has been about companies vs. unions, says Jim Gray, a labor management consultant in Charleston, S.C. "The fundamental issue is whether workers believe they need representation. Do they trust you, or do they have to turn to a third party for representation? The climate you create and practices you set up will determine what employees decide."

If you don't want a union, "create an environment with engaged, excited employees," he advises.

The author, a contributing editor of HR Magazine, is a lawyer and a professor of management studies at Marist College in Poughkeepsie, N.Y.

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