The NLRB Continues to Level the Playing Field for Employers

By Lehr Middlebrooks Vreeland & Thompson, P.C.

October 1, 2019

The NLRB continues to level the playing field for employers, with recent decisions and initiatives. In particular:

1. The Board modified the standard for when a unionized employer may change working conditions and terms without bargaining with the union. E.I. du Pont de Nemours & Co. (Sept. 4, 2019). Under the National Labor Relations Act, an employer may not make a unilateral change without first providing the union with notice and an opportunity to bargain. The exception to this was if there was a “clear and unmistakable waiver” by the union of its right to bargain over the change. This standard was virtually insurmountable for employers. Even where language used the word “waiver,” in some situations that wasn’t “clear and unmistakable.” With the Du Pont decision, the NLRB will “apply ordinary principles of contract interpretation.” For example, the employer’s unilateral change will be covered by the contract if the contract has language supporting the employer’s right to act unilaterally. Thus, the Management Rights clause will mean more for employers. If there are not contract restrictions on rights enumerated in the Management Rights clause, the employer has a basis to consider unilateral action.

2. Although Boeing is facing global criticism (and significant liability) for issues surrounding its 737 MAX plane, the NLRB on September 9 ruled that a group of Flight-Line Readiness Technicians and Inspectors – 178 total at Boeing’s Charleston, SC facility – were not an appropriate bargaining unit.Rather, the appropriate bargaining unit was the total 2,700 production workforce.The Flight-Line Readiness Technicians and Inspectors voted overwhelmingly for representation by the International Association of Machinists. Two years earlier, the 2,700 employees overwhelmingly rejected the IAM. The Board announced a three-factor analysis to determine if a smaller unit should be permitted. If one factor is not met, the proposed smaller unit is inappropriate. The three factors are: First, what are the shared interests within the proposed smaller unit? If there are insufficient shared interests, then the unit is inappropriate. If there are shared interests within the proposed unit, then the second question is whether the interests of those outside of the proposed unit are so distinct that they supersede any similarities with the proposed unit that the proposed unit should remain. The final consideration is how are other units handled in the industry or facility. In this case, the Board determined that there is not sufficient common interested within the proposed unit, those outside the unit are not so distinct and the facility/process is one integrated production effort of 2,700 employees. Therefore, the unit failed all three factors and was inappropriate. Failing one factor alone would doom the unit.

3. Selling Girl Scout cookies is not the same as union organizing. On September 6, 2019, in the case of Kroger Limited Partnership, the NLRB ruled that non-employees soliciting on employer property for charitable purposes is not the same type of solicitation as a non-employee union representative who solicits employees, and thus banning the latter while allowing the former does not violate the NLRA. The Board determined that union organizing, boycotts or other protest activities are not equivalent to solicitations on employer property for charitable or commercial purposes. In the Kroger case, Kroger’s landlord authorized Kroger to remove anyone from its leased property who solicited Kroger customers or employees. However, the commercial landlord allowed Kroger to permit solicitation for Girl Scout cookies, the Lions Club, the Salvation Army, and organizations promoting breast cancer awareness. The union filed an unfair labor practice charge, and the Administrative Law Judge agreed that the employer discriminated against the union because it had permitted charitable and civic solicitations but not union solicitation. In reversing precedent, the Board held:

[A]n employer may deny access to nonemployees seeking to engage in protest activities on its property while allowing nonemployee access for a wide range of charitable, civic, and commercial activities that are not similar in nature to protest activities. Additionally, an employer may ban nonemployee access for union organizational activities if it also bans comparable organizational activities by groups other than unions.

Do note that the distinguishing feature is the nature of the activity, not the sponsor (i.e., an employer still cannot have a policy specifically prohibiting union solicitation).

4. A delicate issue in collective bargaining occurs when an employer asserts business conditions as limitations on the employer’s economic proposals. If an employer states that it cannot afford to pay, the union has the right to require the employer provide financial evidence of that position. Until September 13, 2019, Board decisions treated employer concerns about “competitive disadvantage” and “reduced market share” due to increased costs as a form of “inability to pay.” However, in Arlington Metals Corporation, the NLRB concluded that the following employer comments were not an “inability to pay” such that the employer need not produce financial information to support its bargaining position:

• “Economic conditions have not changed, but if anything, they were weaker...”
• The company was “doing the best it could and had kept everyone employed...”
• “Production volume was down”
• “The company faced increased costs, increased taxes, and downward pressure on pricing.”
• Competitors were “attempting to take business away.”
• “Both volume and price were down.”

The NLRB ruled that these comments (which occurred in the context of 35 bargaining sessions) were not claims of inability to pay, but rather amounted to an assertion of competitive disadvantage. The Board now has drawn a brighter line between when an employer must provide the union with company financial statements and when an employer may refuse to do so.