NLRB Issues Three Important Decisions Overturning Existing Law

September 7, 2011

On August 26, 2011, the National Labor Relations Board (NLRB) issued three important decisions changing existing law in important ways. The NLRB made these decisions public last week.

In the most wide reaching decision of the three, the NLRB’s ruling in Specialty Healthcare & Rehabilitation Center of Mobile overturned a 20-year old standard for determining appropriate bargaining units in non-acute healthcare facilities. In the process, the Board also changed the NLRB standard for determining appropriate bargaining units outside the healthcare industry. The other two decisions returned to standards that had been changed during the Bush Administration:

  • Lamons Gasket Co. reinstated the “recognition bar,” which limits challenges to a union’s status as a bargaining unit’s representative for a reasonable period of time after an employer voluntarily recognizes a union.
  • UGL-UNICCO Service Company reinstated the “successor bar,” which prohibits challenges to a union’s status as a bargaining unit’s representative for a reasonable period of time after an acquisition.

These decisions create significant ramifications for employers. Further, the three decisions along with the recent implementation of the NLRB’s new “posting rule” could signal the beginning of a period of important NLRB activity.

Over the next four months, we expect the NLRB to issue an increasing number of decisions that overturn existing NLRB standards with the goal of making it easier for unions to obtain and maintain membership. The NLRB already has indicated that it is considering altering its long-established election standards (e.g., drastically shortening election periods, effectively eliminating review of Regional Director unit determinations). Given the likelihood of these changes, both unionized and non-unionized employers should closely monitor NLRB developments.

Appropriate Bargaining Units

On its face, the Specialty Healthcare decision addresses a unit determination issue unique to non-acute healthcare facilities, such as nursing homes. Prior to its recent rule-making requiring that employers post National Labor Relations Act (NLRA) notices, the NLRB engaged in rulemaking in only rare occasions in its more than 70-year history. The most recent example was in 1989, when the Board propounded a rule that limited the types of permissible bargaining units in acute healthcare facilities to eight appropriate units. Smaller units – for example, a unit of certified nursing assistants (CNAs) only – were deemed inappropriate.

In Park Manor Care Center, the NLRB determined that the same standard applied to non-acute healthcare facilities. In Specialty Healthcare, the NLRB overruled its Park Manor decision.

The union in Specialty Healthcare petitioned for a union election among CNAs at a nursing home. Under the existing Park Manor standard, the smallest appropriate unit containing CNAs was an overall “service and maintenance” unit. The employer, therefore, challenged the petitioned-for unit. With its recent August 26 decision, the NLRB expressly held that the NLRB’s appropriate unit limitations for acute healthcare facilities no longer apply to non-acute healthcare facilities. Consequently, the NLRB held that a smaller CNA-only unit at a non-acute facility was appropriate.

The Specialty Healthcare majority’s decision did more than just overturn a healthcare specific standard. After overturning Park Manor, the majority addressed the appropriate standard for unit determinations across all industries. In the process, the Board altered significantly the existing standard. Specifically, the majority announced that a petitioned-for unit containing employees readily identifiable as a group who share a “community of interests” could only be found inappropriate for omitting other employees sharing the same community of interests if the party seeking to expand the unit could demonstrate that the excluded employees shared “an overwhelming community of interests.” Although the majority couched its decision as a clarification of the existing standard, Member Hayes, in dissent, details at length how the majority made material alterations to it.

As Member Hayes’ dissent states, “[m]ake no mistake. Today’s decision fundamentally changes the standard for determining whether a petitioned-for unit is appropriate in any industry subject to the Board’s jurisdiction.”

  • As a practical matter, the NLRB’s new “overwhelming interest” burden permits unions to seek elections in ever smaller groups of employees.
  • Strategically, this new rule encourages unions to engage in incremental organizing in the smallest units possible.

Thus, the Specialty Healthcare decision likely will result in employers being confronted with increased union petitions for Board conducted elections, particularly among very small units that unions think they can win.

The Successor Bar

The other two NLRB decisions have less widespread effect. Nevertheless, employers should understand these important changes. They specifically address bargaining unit employees’ ability to seek a decertification election in two specific situations:

  1. When a successor situation exists (i.e., when a company buys a unionized company under certain conditions); and
  1. When an employer voluntarily recognizes a union.

In UGL-UNICCO Service Company, the NLRB restored the “successor bar” doctrine, which had been overruled approximately nine years earlier in MV Transportation. Prior to MV Transportation, the NLRB applied the successor bar doctrine in situations involving a change in the employing entity of unionized employees. If the new employer constituted a “successor” under NLRB law, then the existing union was entitled to a period of time in which its members would be “barred” from challenging its status as their collective bargaining representative. In short, the bargaining unit members were not permitted to seek a decertification election during this period. Likewise, the successor employer could not withdraw recognition of the union based on a claim that the union did not have the majority support of the unionized workers during that period.

With its decision in MV Transportation, the NLRB determined that the “recognition bar” was not warranted and harmed employees’ ability to choose whether they wanted to continue to be represented by a union. For approximately the last nine years, employees have been able to file for decertification elections immediately upon a successor employer’s commencement of good faith bargaining with the union.

The UGL-UNICCO Service Company decision overruled MV Transportation and reinstituted the successor bar doctrine. The length of the “bar” is highly fact-specific and depends on the relationship between the union and successor employer. If the successor employer expressly adopts the terms and conditions of employment in place at the time it acquired the unionized company as its initial bargaining position, the bar likely will be six months. If, however, a successor employer recognizes an existing union, but unilaterally establishes the terms and conditions of employment different than those in the collective bargaining agreement, the successor bar could last up to one year after the parties’ first bargaining session. Employers, therefore, should be aware of this change when considering corporate acquisitions where an existing union is in place.

The Recognition Bar

The NLRA permits employers to voluntarily recognize a union as the representative of a bargaining unit after the employer is presented with evidence that a majority of the employees in the bargaining unit want union representation. In Dana Corp., the NLRB held that there was a 45 day “window period” after an employer voluntarily recognized a union, during which time a minority of employees could file a decertification petition seeking to vote the union out upon a showing that at least 30% of the bargaining unit supported the request for a vote. The Dana Corp. decision overturned the NLRB’s earlier decision in Keller Plastics Eastern, which held that an employer’s voluntary recognition barred a decertification petition for a reasonable period of time after the voluntary recognition.

In the recent Lamons Gasket Co. decision, an NLRB majority overturned Dana Corp. and returned to the recognition bar doctrine defined in Keller Plastics Eastern. In so doing, the majority held that the Dana Corp. decision’s reliance on a concern that a union’s showing of employee support often is coerced was not supported by statistical evidence. Instead, the majority stated, also without any statistical evidence, that the Dana Corp. decision undermined employee free choice and compromised the NLRB’s position as a neutral arbiter of labor-management relations.

As a result of the Lamons Gasket decision, “an employer’s voluntary recognition of a union, based on a showing of the union’s majority status, bars an election petition for a reasonable period of time.” That “reasonable period of time” is no less than six months and no more than one year after the parties’ first bargaining session. In determining whether a reasonable period of time has elapsed, the NLRB will look at various factors first enunciated in Lee Lumber & Building Material Corp., including:

  • Whether the parties are bargaining over an initial contract;
  • The complexity of the bargaining process and the issues being negotiated;
  • The amount of time that has passed since bargaining began and how many bargaining sessions were held;
  • The level of progress made during the bargaining sessions; and
  • Whether there is an impasse between the parties.

Employer Take-Aways

The three August 26, 2011 NLRB decisions show that the Board intends to remain active in changing federal labor law in profound ways. We expect more changes of this magnitude in the near future. Existing standards – some established during Bush era and others in existence for decades – may be overturned outright or significantly altered.

We will keep you updated on any such changes. In the meantime, for further information regarding the impact of the new NLRB decisions or any other traditional labor questions or issues you may have, please contact the authors or any other members of the McGuireWoods Labor and Employment Group.