Will NLRB Rulemaking Turn Labor Law on its Head?

By Michael Grubbs

The National Labor Relations Board (the "NLRB" or "Board"), like other federal government agencies, has the authority to engage in administrative "rulemaking." However, the NLRB has used this authority only rarely in the past. Historically, the Board has instead used decision-making, on a case-by-case basis, to shape the interpretation of the National Labor Relations Act (the "NLRA" or "Act"). With a new union-friendly NLRB, however, the Board's hesitance to engage in rulemaking may be at an end.

Due to the new makeup of the NLRB - with Members Wilma Liebman, a longtime friend to unions and consistent dissenter on pro-employer Board decisions, and Craig Becker and Mark Pearce, discussed above, sitting as a majority on the Board - there is speculation that the agency will utilize rulemaking as a method for interpreting the Act. Member Liebman, in particular, recently stated her belief that the Board could engage in rulemaking as a more "coherent" way to make policy changes, rather than through its traditional method of decision-making. She has also publicly stated her view that recent policy changes resulting from decisions by the "Bush" Board have impeded collective bargaining and created obstacles to union organization and representation of employees. Further, notably, a 1993 Minnesota Law Review article by Member Becker emphasized his belief that the Board has wide, discretionary authority to establish policy and procedures for elections through rulemaking.

While it is not entirely clear what this means for employers, one thing is clear - change is coming, and those changes are not likely to benefit employers, at least in the near term. One particularly troubling issue for employers is a pending rulemaking petition that would require employers to bargain with unions that represent a minority of employees. On June 14, 2010, a group of law professors sent an amicus brief to the NLRB asking the Board to utilize its rulemaking authority to require employers to bargain with minority unions. The professors contended that the plain language of Sections 7 and 8(a) (1) of the NLRA requires employers to bargain collectively with members-only, minority unions.

The law professors added their support to previously filed petitions for rulemaking on the issue, including one filed by seven unions in August 2007. The professors urged that the NLRB adopt the following rule:

Pursuant to Sections 7, 8(a) (1), and 8(a) (5) of the Act, in workplaces where employees are not currently represented by a certified or recognized Section 9(a) majority/exclusive collective-bargaining representative in an appropriate bargaining unit, the employer, upon request, has a duty to bargain collectively with a labor organization that represents less than an employee-majority with regard to the employees who are its members, but not for any other employees.

The professors contended that Section 7 of the NLRA provides that, "Employees shall have the right . . . to bargain collectively through representatives of their own choosing." It follows, argued the professors, that because there is no limitation placed on which employees "shall have the right . . . to bargain collectively" and because that right is guaranteed by the NLRA, an employer's refusal to collectively bargain with a members-only, minority union is a violation of the Act.

If the NLRB elects to use its rulemaking authority to adopt the proposed rule, unions would be free to organize a minority of employees. The agency would be required to certify a union as the representative of that particular group of employees, even though most of the workers within the bargaining unit have not chosen to be represented by the union.

If the NLRB chooses to use its rulemaking authority in this way, the effects on employers could be disastrous. Majority rule has been the fundamental basis of the NLRA. As Senator Wagner declared, in 1935, in his support of the bill that ultimately became the foundation of the Act: "[C]ollective bargaining can be really effective only when workers are sufficiently solidified in their interests to make an agreement covering all. This is possible only by means of majority rule."[1] If the NLRB were to utilize rulemaking in this fashion, companies would then be required to recognize and bargain with minority bargaining units within a single worksite. There would likely be different standards for employees, even if those employees all did the exact same job. Those that belonged to a minority union would have different terms and conditions of employment as outlined in their respective collective bargaining units. Equally troubling is the fact that because unions would no longer need the support of a majority of employees to earn recognition, the proposed rule would likely lead to a significant increase in unionization.

It is difficult to predict whether the Board will use its rulemaking authority in this manner. Given the traditional American value of majority rule, there would likely be serious backlash against such a rule, both from employers and workers nationwide. However, with the pro-labor leanings of the new Board, such rulemaking is not inconceivable.

The new NLRB could also use rulemaking to achieve some of the goals that unions have sought through the Employee Free Choice Act (or "EFCA"), including streamlined union election procedures and severe penalties for employer unfair labor practices in initial organizing and first contract situations.

Additionally, the NLRB recently sought input on the expansion of voting access through electronic or absentee balloting and enhanced special remedies. The Board invited "all interested parties" to file amicus briefs in pending cases involving whether employers should be required to electronically post Board-ordered remedial notices, and whether the Board should routinely order compound interest on back pay and other monetary awards in unfair labor practice cases. The NLRB considers these issues to be "significant" for employees, employers and unions.

These potential changes are not all that is in store for employers under the new Board's watch. The following employer-friendly decisions are in jeopardy, either through the traditional decision-making process, or through the rulemaking procedures described above. Some of the issues that the Board likely will revisit are found in the following employer-friendly decisions:

Dana Corp., 351 NLRB No. 28 (Sept. 29, 2007). An employer's voluntary recognition of a union bargaining representative does not bar the processing of a decertification petition filed during the first 45 days of such voluntary recognition.
BE&K Construction Co., 351 NLRB No. 29 (Sept. 29, 2007). An employer does not violate the NLRA by filing a reasonably based lawsuit against a union, even if the employer's motive for bringing the suit is to retaliate against a union, and even if the suit is ultimately dismissed.
Guard Publishing Company, d/b/a The Register-Guard, 351 NLRB No. 70 (December 16, 2007). An employer does not violate the NLRA by maintaining a policy that prohibits use of its e-mail system for any "non-job-related solicitations."
IBM Corp., 341 NLRB 1288 (June 9, 2004). Non-union employees have no right to be accompanied by a co-worker representative during investigatory interviews.
Toering Electric Co., 351 NLRB No. 18 (Sept. 29, 2007). "Salts" (when a union organizer applies for work at an employer in order to organize employees and obtain recognition of the union at that facility) do not qualify as employees, and are thus not protected by the NLRA, because they do not genuinely seek an employment relationship.
Oakwood Care Center, 343 NLRB 659 (November 19, 2004). In Oakwood, the Board returned to its previous rule, which prohibited the certification of "multi-employer bargaining units" without the consent of the employers.

Change under the new Board is inevitable. In order to comply with the Act, employers must be aware of the changes, and when necessary, implement new policies, practices and measures.

[1] Hearings on S. 1958 before the Senate Comm. on Education and Labor, 74^th Cong., 1^st Sess. (1935), reprinted in 1 Leg. Hist. of the National Labor Relations Act, 1935, at 1419 (1949).

Sherman & Howard has prepared this advisory to provide general information on recent legal developments that may be of interest. This advisory does not provide legal advice for any specific situation. This does not create an attorney-client relationship between any reader and the Firm. If you want legal advice on a specific situation, you must speak with one of our lawyers and reach an express agreement for legal representation.

	Contact Us Services Attorneys News and Events Publications About the Firm Inclusiveness Careers Blog In the Media Events and Registration Press Releases Speaking Engagements Articles Client Advisories Subscriptions History Offices Pro Bono Interlaw Contact Us Culture Legal Opportunities Support Staff Publications Client Advisories Home > Publications > Client Advisories > View Will NLRB Rulemaking Turn Labor Law on its Head? By Michael Grubbs The National Labor Relations Board (the "NLRB" or "Board"), like other federal government agencies, has the authority to engage in administrative "rulemaking." However, the NLRB has used this authority only rarely in the past. Historically, the Board has instead used decision-making, on a case-by-case basis, to shape the interpretation of the National Labor Relations Act (the "NLRA" or "Act"). With a new union-friendly NLRB, however, the Board's hesitance to engage in rulemaking may be at an end. Due to the new makeup of the NLRB - with Members Wilma Liebman, a longtime friend to unions and consistent dissenter on pro-employer Board decisions, and Craig Becker and Mark Pearce, discussed above, sitting as a majority on the Board - there is speculation that the agency will utilize rulemaking as a method for interpreting the Act. Member Liebman, in particular, recently stated her belief that the Board could engage in rulemaking as a more "coherent" way to make policy changes, rather than through its traditional method of decision-making. She has also publicly stated her view that recent policy changes resulting from decisions by the "Bush" Board have impeded collective bargaining and created obstacles to union organization and representation of employees. Further, notably, a 1993 Minnesota Law Review article by Member Becker emphasized his belief that the Board has wide, discretionary authority to establish policy and procedures for elections through rulemaking. While it is not entirely clear what this means for employers, one thing is clear - change is coming, and those changes are not likely to benefit employers, at least in the near term. One particularly troubling issue for employers is a pending rulemaking petition that would require employers to bargain with unions that represent a minority of employees. On June 14, 2010, a group of law professors sent an amicus brief to the NLRB asking the Board to utilize its rulemaking authority to require employers to bargain with minority unions. The professors contended that the plain language of Sections 7 and 8(a) (1) of the NLRA requires employers to bargain collectively with members-only, minority unions. The law professors added their support to previously filed petitions for rulemaking on the issue, including one filed by seven unions in August 2007. The professors urged that the NLRB adopt the following rule: Pursuant to Sections 7, 8(a) (1), and 8(a) (5) of the Act, in workplaces where employees are not currently represented by a certified or recognized Section 9(a) majority/exclusive collective-bargaining representative in an appropriate bargaining unit, the employer, upon request, has a duty to bargain collectively with a labor organization that represents less than an employee-majority with regard to the employees who are its members, but not for any other employees. The professors contended that Section 7 of the NLRA provides that, "Employees shall have the right . . . to bargain collectively through representatives of their own choosing." It follows, argued the professors, that because there is no limitation placed on which employees "shall have the right . . . to bargain collectively" and because that right is guaranteed by the NLRA, an employer's refusal to collectively bargain with a members-only, minority union is a violation of the Act. If the NLRB elects to use its rulemaking authority to adopt the proposed rule, unions would be free to organize a minority of employees. The agency would be required to certify a union as the representative of that particular group of employees, even though most of the workers within the bargaining unit have not chosen to be represented by the union. If the NLRB chooses to use its rulemaking authority in this way, the effects on employers could be disastrous. Majority rule has been the fundamental basis of the NLRA. As Senator Wagner declared, in 1935, in his support of the bill that ultimately became the foundation of the Act: "[C]ollective bargaining can be really effective only when workers are sufficiently solidified in their interests to make an agreement covering all. This is possible only by means of majority rule."[1] If the NLRB were to utilize rulemaking in this fashion, companies would then be required to recognize and bargain with minority bargaining units within a single worksite. There would likely be different standards for employees, even if those employees all did the exact same job. Those that belonged to a minority union would have different terms and conditions of employment as outlined in their respective collective bargaining units. Equally troubling is the fact that because unions would no longer need the support of a majority of employees to earn recognition, the proposed rule would likely lead to a significant increase in unionization. It is difficult to predict whether the Board will use its rulemaking authority in this manner. Given the traditional American value of majority rule, there would likely be serious backlash against such a rule, both from employers and workers nationwide. However, with the pro-labor leanings of the new Board, such rulemaking is not inconceivable. The new NLRB could also use rulemaking to achieve some of the goals that unions have sought through the Employee Free Choice Act (or "EFCA"), including streamlined union election procedures and severe penalties for employer unfair labor practices in initial organizing and first contract situations. Additionally, the NLRB recently sought input on the expansion of voting access through electronic or absentee balloting and enhanced special remedies. The Board invited "all interested parties" to file amicus briefs in pending cases involving whether employers should be required to electronically post Board-ordered remedial notices, and whether the Board should routinely order compound interest on back pay and other monetary awards in unfair labor practice cases. The NLRB considers these issues to be "significant" for employees, employers and unions. These potential changes are not all that is in store for employers under the new Board's watch. The following employer-friendly decisions are in jeopardy, either through the traditional decision-making process, or through the rulemaking procedures described above. Some of the issues that the Board likely will revisit are found in the following employer-friendly decisions: Dana Corp., 351 NLRB No. 28 (Sept. 29, 2007). An employer's voluntary recognition of a union bargaining representative does not bar the processing of a decertification petition filed during the first 45 days of such voluntary recognition. BE&K Construction Co., 351 NLRB No. 29 (Sept. 29, 2007). An employer does not violate the NLRA by filing a reasonably based lawsuit against a union, even if the employer's motive for bringing the suit is to retaliate against a union, and even if the suit is ultimately dismissed. Guard Publishing Company, d/b/a The Register-Guard, 351 NLRB No. 70 (December 16, 2007). An employer does not violate the NLRA by maintaining a policy that prohibits use of its e-mail system for any "non-job-related solicitations." IBM Corp., 341 NLRB 1288 (June 9, 2004). Non-union employees have no right to be accompanied by a co-worker representative during investigatory interviews. Toering Electric Co., 351 NLRB No. 18 (Sept. 29, 2007). "Salts" (when a union organizer applies for work at an employer in order to organize employees and obtain recognition of the union at that facility) do not qualify as employees, and are thus not protected by the NLRA, because they do not genuinely seek an employment relationship. Oakwood Care Center, 343 NLRB 659 (November 19, 2004). In Oakwood, the Board returned to its previous rule, which prohibited the certification of "multi-employer bargaining units" without the consent of the employers. Change under the new Board is inevitable. In order to comply with the Act, employers must be aware of the changes, and when necessary, implement new policies, practices and measures. [1] Hearings on S. 1958 before the Senate Comm. on Education and Labor, 74^th Cong., 1^st Sess. (1935), reprinted in 1 Leg. Hist. of the National Labor Relations Act, 1935, at 1419 (1949). Sherman & Howard has prepared this advisory to provide general information on recent legal developments that may be of interest. This advisory does not provide legal advice for any specific situation. This does not create an attorney-client relationship between any reader and the Firm. If you want legal advice on a specific situation, you must speak with one of our lawyers and reach an express agreement for legal representation. ©2010 Sherman & Howard L.L.C. July 7, 2010 Copyright 2000-2013 Sherman & Howard L.L.C. All rights reserved. Privacy Policy \| Terms of Use