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Complying with U.S. Labor Relations Laws in Non-Union Settings

December 15, 2023



Overview

Employers in nonunionized organizations—especially small businesses—often are surprised to learn they may be subject to U.S. labor relations laws. Employers that are unaware they may be covered by labor laws even though they have nonunionized employees are at great risk of violating those laws. It is critical for human resource professionals to have an understanding of the fundamentals of federal labor relations laws as they apply to the nonunionized workplace.

This article discusses U.S. labor relations laws and their application to nonunionized employers, primarily the National Labor Relations Act (NLRA) and its enforcing agency the National Labor Relations Board (NLRB). The article explores typical situations in which employees of nonunion organizations may be protected by federal law and specific actions employers should avoid. In addition, the article provides examples of unfair labor practices and their consequences, as well as ways employers can lawfully preserve management rights and remain union free. It briefly discusses the business case for management's understanding of the application of labor relations law to nonunionized organizations, the importance of complying with those laws and the role of human resource management in doing so. Global labor relations are briefly summarized. 

Background

Historically, workers have joined together to achieve mutual workplace goals in areas such as wages, benefits and working conditions. Such common interests have been promoted through workers' collective actions in bringing their demands to the attention of their employers.

In the United States, workers and employers experienced labor struggles during the 18th, 19th and 20th centuries. Escalating labor strife that followed World War I in the 1920s often resulted in strikes, lockouts and injunctions, creating disruption and instability in the flow of commerce and animosity and violence within workplaces. In reaction to these events, the passage of the Railway Labor Act in 1925 and in 1935, the NLRA, marked the beginning of the national labor policy that exists today. See 80 Years of Protecting Employee Rights (PDF).

Basic Rights Under Federal Law

The NLRA gave employees the right, under Section 7, to form and join unions, and it obligated employers to bargain collectively with unions selected by a majority of the employees in an appropriate bargaining unit. The measure endorsed the principles of exclusive representation and majority rule and covered most workers in industries whose operations affected interstate commerce. It also created the NLRB. In response to criticism that the new law was pro-union and contributed to continued labor unrest, the NLRA was amended in 1947 to add union unfair labor practices to the list of unfair management practices contained in the original law. See 1947 Taft-Hartley Substantive Provisions.

Today, as a general rule, nonunionized employers prefer to stay nonunionized, and so do their employees. However, mutual recognition and respect for the benefits of a nonunionized workplace do not alleviate the necessity for employers to understand their responsibilities and rights under the law as it applies to all workers regardless of their membership in a union. Employers in nonunionized workplaces need to understand the legitimate concerns of employees and work with employees to address their concerns to avoid unrest and disruption in the workplace. See How can we prevent a union from organizing in our company?

Commerce Clause extends protection to most employees

Initially, the laws regulating labor relations were limited to railway workers, because the railway industry was clearly within the purview of Congress under Article I, Section 8, of the U.S. Constitution, known as the Commerce Clause. The Commerce Clause states, in pertinent part:

"The Congress shall have power to . . . regulate commerce with foreign nations, and among the several states, and with the Indian tribes."

Over time, Congress, with the approval of the federal courts, expanded legislation into other areas. Today, the federal courts have a broad interpretation of what Congress can regulate under the Commerce Clause. If an employer's business involves crossing state lines or communicating across state lines, federal labor laws likely apply. Additionally, if an employer does business with any branch of the federal government, a foreign country or an American Indian tribe, there is a good chance federal labor laws apply.

The most basic right under those laws is the right of employees to form a labor union, and the actions necessary to doing so—communication and cooperation among employees—are protected activities under the law. Thus, employers are at risk of violating the law whenever they attempt to prohibit communication or cooperation among employees concerning the terms and conditions of employment. Labor law violations can take many forms, and it is important for employers to have a general knowledge of those laws and the factual circumstances that may trigger their application to protect employees from employer discrimination and retaliation.

Union organizing often creates employer awareness

Often, an employer first learns about federal labor relations law when it learns of union organizing activity among its workers. Typically, organizations are caught off-guard by a unionization effort, and must scramble to defeat such an effort. The employer's prospects for success are diminished when—because of a lack of knowledge of this topic—employers make mistakes that violate the law. The key to avoiding problems in this area is good human resource management through the implementation of lawful and effective practices complemented by fair and accessible procedures for dispute resolution.

Federal Labor Relations Laws Applicable in Nonunion Settings

In the U.S., federal law controls most of the field of labor relations. The NLRA of 1935 (also known as the Wagner Act), as amended by the Labor-Management Relations Act of 1947 (LMRA) (also known as the Taft-Hartley Act), applies to employees in most private-sector workplaces, including manufacturing plants, retail centers, private universities and health care facilities. Agricultural workers and domestic workers are not covered. Also exempted are supervisors and independent contractors. The Federal Labor Relations Authority protects the collective bargaining rights of federal employees, while the National Mediation Board does the same for railway and airline employees. State labor laws generally apply only to employers that are not covered under the federal laws and to public-sector employees.

Protection for nonunion employees under the NLRA, Section 7

The NLRA protects the right of employees to form and join unions and to bargain collectively with management concerning the terms and conditions of employment. The NLRA also guarantees employees the right to engage in concerted activities for mutual aid or protection. Of particular importance in this instance is Section 7 of the NLRA (as amended by the LMRA), which states:

Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 8(a)(3) [section 158(a)(3) of this title].

See National Labor Relations Act (NLRA) of 1947 and NLRB: Concerted Activity. 

Other federal labor statutes

To address specific cases and types of workers, other federal labor statutes were created, including the following:

  • Norris-LaGuardia Act of 1932. The act outlawed contracts in which workers promised not to join a labor union, and instituted many other reforms to address the ongoing conflict between labor and owners/managers.
  • Railway Labor Act (RLA). The RLA applies to airlines as well as to railroads. The RLA protects the right of covered workers to organize and bargain collectively, imposes a duty to make and maintain collective bargaining agreements, and mandates labor dispute resolution.
  • Service Contract Act (SCA). The SCA covers contracts entered into by federal and District of Columbia agencies when the principal purpose of the contract is to furnish services in the U.S. through the use of "service employees." Under this statute, covered employers must pay the "prevailing wage"—that is, the prevailing union wages and benefits in the locality as determined by the U.S. Department of Labor—to employees even though the workplace is nonunionized. The SCA takes away some of the competitive advantage nonunionized businesses have over unionized businesses.

Employers covered by federal labor laws

Employers should presume they are covered by federal labor laws in a number of situations:

  • The employer does business across state lines. This certainly includes trucks moving across state lines, but also may include having customers in other states that the employer communicates with by the Internet, telephone or U.S. mail.
  • The employer enters into contracts with railroads or airlines.
  • The employer provides goods or services—such as haircuts, hamburgers or soft drinks for a military base—to any branch of the federal government or the District of Columbia.
  • The employer does business internationally.
  • The employer does business with American Indian tribes.

There may be exceptions for "small" businesses with very low revenues. For example, the SCA does not apply to employers with less than $2,500 in otherwise covered business. However, in any of the above situations, most employers should start out by assuming they are covered by the U.S. labor relations laws. In such situations, employers are advised to seek the advice of attorneys who specialize in the law of labor-management (union) matters. See NLRB Jurisdictional Standards.

Exclusions from coverage of the NLRA

Despite the general statement above, the NLRA does not include coverage for workers employed:

  • As agricultural laborers.
  • In the domestic service of any person or family in a home.
  • By a parent or spouse.
  • As an independent contractor.
  • As a supervisor (supervisors who have been discriminated against for refusing to violate the NLRA may be covered).
  • By an employer subject to the Railway Labor Act, such as railroads and airlines.
  • By federal, state or local government.
  • By any other entity that is not an "employer" as defined in the NLRA.

See NLRB: Are You Covered?

The applicability of federal labor laws to American Indian tribes and organizations doing business with them is a complex issue, about which employers should seek specialized legal guidance. According to the NLRB website, "The Board asserts jurisdiction over the commercial enterprises owned and operated by Indian tribes, even if they are located on a tribal reservation.  But the Board does not assert jurisdiction over tribal enterprises that carry out traditional tribal or governmental functions." See Jurisdictional Standards.

Unfair Labor Practices

Nonunion employers that otherwise are accustomed to complying with employment laws and regulations nonetheless may be vulnerable in the area of employee rights under labor relation laws. The following actions may result in charges of unfair labor practices by management to the unwary employer:

  • Threatening employees with loss of jobs or benefits if they join or vote for a union or engage in protected concerted activities.
  • Threatening to close the plant if employees select a union to represent them.
  • Questioning employees about their union sympathies or activities in circumstances that tend to interfere with, restrain or coerce employees in the exercise of their rights under the NLRA.
  • Promising benefits to employees to discourage their union support.
  • Transferring, laying off, terminating, assigning employees more difficult work tasks or otherwise punishing employees because they engaged in union or protected concerted activities.
  • Prohibiting employees from wearing union hats, buttons, T-shirts and pins in the workplace.
  • Making inquiries of job applicants about their union affiliations or their beliefs about labor unions.
  • Prohibiting employee use of company premises or resources (such as e-mail and bulletin boards) for protected concerted activities concerning employee wages, benefits or work conditions, but simultaneously permitting employees to use company premises or resources to solicit charitable contributions (for example, for the United Way) or engage in fundraising (for example, for the high school band).
  • Making statements in employee handbooks to the effect that employees are prohibited from disclosing their pay (or other terms and conditions of employment) with fellow employees.
  • Spying on employees to see whether they are engaging in protected concerted activities.

While the right to engage in protected concerted activities under the NLRA applies at all times to covered employees, employers are particularly vulnerable to inadvertent unlawful conduct when employees are engaging in union organizing. Human resource professionals must be especially alert to the signs of organizing and the elevated risk that supervisors and managers may present if they are not trained to recognize the early signs of union activity. HR practitioners must also understand how they can and cannot respond to employees during this sensitive period. See Preparing for the Possibility of Union Organizing.

Unlawful activities that employers should avoid at all times, but especially during periods of potential organizing activity, can be summarized by the acronym TIPS. Employers should not:

  • Taunt or threaten.
  • Inquire or interrogate.
  • Promise or punish.
  • Spy.
Don'ts Examples of Unfair Labor Practices
Taunt "Jim, I thought you were smarter. But here you are, meeting with those boneheaded union types."
Threaten "Jim, if we allow the union to get in here, there will be no more perks like the free donuts and coffee."
Interfere Management changes the employee lunch time to prevent large groups meeting for organizing activities.
Interrogate "Hey, Jim, we have always had a good relationship. So tell me, what did you guys talk about at the organizing meeting?"
Promise "Vote against the union, and I will recommend you to fill the next management opening."
Punish "We don't promote union organizers into management positions."
Spy "Jim, I want you to keep an eye on Mary. I think she is trying to organize the workers." "Jim, I need you to keep me in the loop on all union activities and publications."

 

Nonunionized employers may look at the above list of prohibited activities and wonder what they can legally do to oppose a unionization effort. The best way for employers to avoid a unionization effort is to ensure that employees do not feel the need to look to a labor union as the way to obtain better working conditions. Employers should be proactive—as a matter of competitiveness—in addressing the needs of their human resources. The supply of human resources is just as important to an organization as the supply of raw materials, machines and energy. The simplest approach is to treat employees so well that they have no need to seek outside representation.  See Union Free Policy.

No-solicitation/no-distribution policies

Many employers have a written "no-solicitation" policy for the purpose of restricting employees and nonemployees from soliciting or distributing literature on behalf of another organization. Employers that do not have such a policy run the risk of being unable to prevent solicitation or distribution that interferes with employees' work. These issues are often raised when a union begins an organizing drive or during labor disputes with employees.

There is one easy rule for nonunion employers to remember, but it may be the hardest for managers and supervisors to enforce. It is always unlawful to enforce a no-solicitation/distribution rule to stop union activity when the rule is not enforced to prevent other distributions and solicitations. If an employee bulletin board is covered with posters selling everything from Girl Scout cookies to used cars, an employer should make room for the union rally poster too. If employees are allowed to solicit for the bowling league, but not for the union, an organization will have a difficult or impossible time explaining its way out of an unfair labor practice charge alleging discriminatory enforcement of the policy in violation of Section 7 rights. 

Even employers that try to follow these rules sometimes run afoul of the federal labor laws due to the phraseology of the policy or delivery of the wrong verbal message from managers and supervisors. Although not always intuitive, certain buzzwords encourage the NLRB to find a violation. The following are a few of the more common examples:

Avoid These: Use These Instead: Why?
Prohibition of solicitation "anywhere on the premises" or "anywhere on company property""in working areas"Rules that prohibit solicitation in all areas, including break rooms and cafeterias, are presumptively unlawful.
Prohibition of solicitation "while on the clock""while on working time"If employees are allowed breaks without punching out, this phrase may suggest that solicitation during break time is (unlawfully) prohibited.
Solicitation is prohibited on "company time""working time" The NLRB says that "company time" is misleading because it could lead employees to believe that it includes break time or mealtime.
Prohibition of "union solicitation or distribution""solicitation or distribution"Rules that discriminate against only union solicitation or distribution are unlawful.

 

Social media policies

Under Section 8(a)(1), it is an unfair labor practice for an employer to interfere with, restrain or coerce employees in the exercise of their rights guaranteed in Section 7. Under Section 7, employees have the right to self-organize, to join unions and to engage in "other concerted activities for the purpose of collective bargaining or other mutual aid or protection." 

This protection extends to certain work-related conversations conducted on social media, such as Facebook and Twitter. Employers are prohibited from having overbroad policies that restrict employees' use of social media—or discharging or disciplining employees over contents of social media postings that include concerted activities.

See:

The NLRB and Social Media

Social Media Policy

Confidentiality requirements

The NLRB has gone back and forth on when employers may require confidentiality related to investigatory interviews. In August 2023, the National Labor Relations Board (NLRB) issued a decision in Stericycle finding that investigative-confidentiality rules are not automatically lawful, and are subject to whether the rule has a reasonable tendency to chill employees from exercising their NLRA rights. 

Employee handbooks

The NLRB has also gone back on certain employee handbook statements such as those pertaining to general civility, defamation, and behavior requirements. See, Handbooks Need Revision Following NLRB Ruling.

Employers can keep up with NLRB decisions and guidance by signing up for email notifications.

HR's Role

The role of HR professionals in nonunionized organizations with regard to labor-management relations can be tricky. Management has the right to communicate with its employees about its position on unions, for example, through lawfully drafted handbook statements, and managers and supervisors are within the law if they express their opinions on unionization. However, this is a tricky area, as it often is a thin line between lawful communications and unlawful threats, interrogation, promises and spying (see "TIPS" above).

HR professionals are important in assessing when the culture of an organization may be changing in a direction more favorable to unionization. When that happens, or if there are early warning signs of union activity, the HR function should advise upper management and immediately facilitate supervisory training on how lawfully to respond. The HR professional should:

  • Acquire knowledge about managing human resources in a unionized environment.
  • Alert upper management that the paradigm is changing.
  • Urge upper management to be careful to follow the law.
  • Consult with legal counsel specializing in maintaining positive employee relations and related issues.

Global Issues

European countries typically have laws that are more pro-union than U.S. laws. The laws of Asian and developing nations typically are more pro-owner/manager in comparison to U.S. laws. Organizations doing business in a foreign country must comply with the laws of that country in terms of employees in that country. Employers in the U.S. doing business internationally are likely required to comply with U.S. labor relations laws for the employees located in the U.S., but not for the employees located in another country.

 

Labor Relations

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