Whitesell Corporation

In the first edition of NLRB Insight, we identified one question raised by the Supreme Court’s decision in New Process Steel is what would happen to the now rogue decisions of the two-Member Board that were appealed to the circuit courts but that were not remanded to the Board. The Board has now provided its answer in Whitesell Corporation, 355 NLRB No. 134 (Aug. 26, 2010).

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Wheeling Island Gaming

 In Wheeling Island Gaming, Inc., 355 NLRB No. 127 (Aug. 27, 2010), the Board addressed the appropriateness of a bargaining unit of 60 poker dealers at a casino. The Board majority of Chairman Liebman and Member Schaumber agreed with the Regional Director that the bargaining unit was not appropriate, finding only minor differences between the job duties of the poker dealers and those of other table games dealers, resulting in an election in a unit of some 240 table games dealers. Member Becker’s dissent, on the other hand, makes it clear that he believes the Board should grant considerably more discretion to petitioning labor unions in establishment of an appropriate bargaining unit. Member Becker would have found the unit of poker dealers appropriate since they perform the same duties. In his dissent he noted that too often protracted litigation over the scope of the bargaining unit occurs and that the Board could “do better.” Interestingly, he included a footnote on this point simply saying “But see 29 CFR §§103.30 et seq. (establishing ap¬propriate units in acute care hospitals).”

 Significance: Member Becker’s dissent makes it clear that he will be much more receptive to accept the union’s proposed bargaining unit. The interesting footnote he included referencing the Board’s rules for units for acute care hospitals could indicate that Member Becker would be supportive of rulemaking to establish bargaining units in other industries. Only time will tell.
Updated 2/9/2011 to correct a typeographical error with the case citation.
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Mandalay Bay Resort & Casino

In Mandalay Bay Resort & Casino, 355 NLRB No. 92 (Aug. 17, 2010) the Board majority ruled that during the critical period preceding a representation election the employer engaged in objectionable conduct by soliciting employees grievances which was grievous enough for the Board to overturn the results of the election and order a re-run election.

The facts were that shortly before the union representation election for security employees, the employer, which operates a resort and casino in Las Vegas, Nevada, conducted a series of meetings with the security officers where the employer’s high-ranking representatives discussed the union campaign and asked the officers about their work-related concerns, including the company’s overtime policy. Thereafter, the election was held in which the security employees voted 110 for and 123 against the union, with 4 challenged ballots, an insufficient number to affect the results. Upon the union’s filing of an objection, an administrative law judge recommended overruling the objection, finding that the employer’s statements did not amount to an implied promise to restore overtime in order to influence the election outcome.
The Board majority disagreed. In finding the employer’s conduct to be objectionable, the Board stated the general rule that “in the absence of a previous practice of doing so, an employer’s solicitation of grievances during an organizational campaign is objectionable when the employer expressly or impliedly promises to remedy … grievances.” The exception to that rule is where the employer can show that “it had a past practice of soliciting grievances in a like manner prior to the critical period, or by clearly establishing that the statements at issue were not promises.”
The critical element in the Board’s determination was whether the “focus group” meetings in question differed from the employer’s regularly scheduled pre-shift briefings, which pre-dated the union’s petition, where shift managers met with security employees. The Board majority found that unlike the pre-shift briefings, the Employer’s top officials convened the focus meetings for the purpose of answering employee concerns, soliciting complaints, and addressing issues pertaining to the union’s campaign.
Member Schaumber vigorously dissented, arguing that the union “failed to prove that certain indefinite and ambiguous remarks about overtime policy made to employees at two meetings on indetermi-nate dates constituted objectionable solicitations and implied promises to remedy grievances.”
Member Schaumber noted that the employer had an established past practice that pre-dated the filing of the election petition of conducting regular shift meetings with employees where the employees could, and in fact did, raise concerns relating to their employment.
Significance: While it is still too early to deduce many trends from the new Board, taken together with the decisions in First Student, Inc. and Transcare New York, Inc. (both discussed above) there seems to be a pattern of overturning union election losses and rescheduling new elections based on disputed facts and hyper-strict application of Board rules. It will be interesting to monitor how many union election losses are overturned in future decisions.
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St. Georges Warehouse

The Board’s recent attempt to reaffirm as many of the two-Member decisions issued over the past two years as possible includes this noteworthy case: St. George Warehouse, 355 NLRB No. 81 (Aug. 10, 2010).
By way of background, it is important to note that in 2007 the Board, then chaired by Robert Battista, issued two mitigation of damages decisions. In the first of these decisions, Grosvenor Resort, 350 NLRB 1197 (2007), the Board denied full back pay to terminated employees in an unfair labor practice proceeding because they: (1) commenced searching for work more than two weeks after their discharge; (2) voluntarily quit interim employment; and/or (3) conducted an inadequate search for work.
Then in St. George Warehouse I, 351 NLRB 961 (2007), the Board announced that it was modifying Board law with respect to the burden of production in back pay cases. Specifically, the Board held that while an employer will continue to bear the burden of persuasion as to its contention that a discharged employee (discriminatee) has failed to make a reasonable search for work, once the employer demonstrates there were substantially equivalent jobs within the relevant geographic area the burden of production shifts to the discriminatee and General Counsel to show that the discriminatee took reasonable steps to seek those jobs. In the first two sentences of her scathing dissent in St. George Warehouse I, then Member (now Chairman) Liebman wrote:
Departing from more than 45 years of established precedent, the majority relieves wrongdoers of their burden to produce all of the facts to substantiate the affirmative defense that a discriminatee unreasonably failed to mitigate damages and, instead, requires the General Counsel to produce facts to negate it. The result is to place a stumbling block before discriminatees and, ultimately, to frustrate enforcement of the National Labor Relations Act.
Although the holding in Grosvenor Resort and St. George Warehouse I remain intact following remand of the latter under the Supreme Court’s mandate in New Process Steel, it is worth noting that a footnote to the recently released St. George Warehouse decision contains this observation: “[i] n incorporating the prior decision, Member Becker notes that no exceptions were filed to the judge’s application of the job search requirements set forth in Grosvenor Resort, 350 NLRB 1197 (2007)… In addition, Member Becker notes that, like then Chairman Schaumber, he does not rely on the [administrative law] judge’s articulated ‘assumptions’ in adopting the judge’s findings.”
It is not a stretch to infer from this footnote in conjunction with Chairman Liebman’s strongly-worded dissent in the earlier decision that when presented with the “right” case, the new Board will likely re-define what constitutes a discriminatee’s reasonable search for work (Grosvenor Resort) as well as the discriminatee’s and General Counsel’s burden of production in a back pay case (St. George Warehouse I).
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First Student, Inc.

First Student, Inc., 355 NLRB No. 78 (Aug. 9, 2010), addresses the issue of management election observers. In this decision, a Board majority consisting of Chairman Liebman and Member Pearce set aside a union representation election that the union had lost and scheduled a new election due to what the majority held was a management election observer who was “closely aligned with management.” Member Schaumber dissented.
This decision is necessarily one that is fact intensive and closely examines the duties of the election observer and the extent to which the observer was viewed as being closely aligned with management. The Board found that the election observer was employed by the company as a trainer and substitute bus driver. Among the facts that led the Board to conclude that the observer was inappropriate were the fact that she was the only employee to sit in an enclosed office that she shared with a supervisor and that in some instances she is “the only representative of the employer with whom some applicants deal during the application and training process, and therefore they could reasonably believe that she plays a role in deciding whether they are ultimately hired as drivers once they complete the … program.” These and other duties recounted in the majority opinion were enough for the Board to conclude that the observer “could reasonably be viewed by employees as closely aligned with management” and therefore interfered with the election significantly enough that a new election should be ordered.
Member Schaumber, in dissent, recounted the Board’s original rule excluding only supervisors and those “inextricably linked to the employer” as well as observing that since this time “The Board has proceeded down a slippery slope, setting aside elections while incrementally restricting the employer’s selection of its observers and the Section 7 rights of employees who would serve in that capacity.” He also observed that the Board has not similarly prohibited employees who are closely aligned with a union from serving as observers stating that “the Board routinely permits employee union officials to serve as observers … and has also found unobjectionable the service of non-employee officials, including union officers …who could have actively participated in the union’s organizational campaign.”
In its attempts to discredit the dissenting opinion, the Board majority said that “[t]he Board’s principal goal in conducting representation elections is to guarantee employees’ freedom in exercising their choice with respect to union representation. … In pursuing that goal, the Board considers, among other things, the employees’ awareness that the employer wields substantial and direct control over their livelihoods and day-to-day working conditions, power that a petitioning union does not possess in any degree.”
Significance: In terms of the law related to election observers, the majority’s decision in this case reflects its disfavor of management observers at union representation elections, even though their presence is important to prevent voter fraud and improper electioneering at the polls. However, the broader issue here is the double standard that the Board appears to be authorizing with greater restrictions on management because of the “substantial and direct control” that employers wield over the employment relationship. We think it is reasonable to expect this principle relied upon repeatedly in future cases to further double standards favoring organized labor.
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Service Employees International Union, Local 715 (Stanford Hospital)

In a somewhat unexpected decision, a unanimous Board panel consisting of Chairman Liebman and Members Schaumber and Pearce ruled in Service Employees International Union, Local 715 (Stanford Hospital), 355 NLRB No. 65 (Aug. 6, 2010), that the SEIU improperly failed to respond to information requests from Stanford Hospital and Clinics/Lucile Packard Children’s Hospital that were necessary for bargaining. 

Stanford had a longstanding relationship with Local 715 and had entered into a new collective bargaining agreement with Local 715 in January, 2006. However, shortly thereafter, Stanford received conflicting information regarding whether Local 715 continued to exist, or the extent to which other labor organizations, including Service Employees International Union, Local 521 and United Healthcare Workers West, represented the employees.
Stanford made the requests due to its uncertainty whether Local 715 continued to be its employees’ bargaining representative.
In order not to be whipsawed between two competing unions each claiming union dues withheld from employees’ paychecks, Stanford requested information from Local 715 as to facts about the local including Local 715’s officers, agents, employees, and assets—and also sought a description of Local 521’s current assets and the identity of Local 521’s officers, directors, executives, and managerial employees. Local 715 did not provide the information that Stanford requested concerning Local 715’s status or the status of its legal representatives.
The NLRB adopted the ALJ’s findings that Local 715 violated Section 8(b)(3) by failing to provide Stanford with the requested information. Citing Iron Workers Local 207 (Steel Erecting Contractors), 319 NLRB 87 (1995), the Board ruled that a union has a corresponding duty to that of an employer to provide information that is reasonably necessary to the performance of its contractual obligations under a collective bargaining agreement. The Board drew the analogy to cases where a union seeks information about a suspected alter-ego relationship among employers and that where the “employer requests information pertaining to an outside union, it must have an objective, factual basis for believing that such information would be relevant in determining the union to which it has a collective-bargaining obligation.”
Thus, the Board adopted the recommended Order of the administrative law judge that SEIU cease and desist from refusing to bargain and that it provide the requested information to Stanford.
Significance: A union’s obligation under Section 8(b)(3) of the Act to provide information to man-agement reasonably necessary to collective bar-gaining and the performance of its contractual obligations is, of course, the counterpart of an employer’s obligation under Section 8(a)(5). Recent years have seen significantly increased battles among competing or break-away labor unions. More frequently, employers are trapped between competing demands for recognition, not to mention demands for the check-off and payment of union dues. This decision at least recognizes employers have a legitimate right to information relevant to de-termining which of competing unions the employer is obligated to bargain.
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Transcare New York, Inc.

In Transcare New York, Inc., 355 NLRB No. 56 (July 29, 2010), a Board majority consisting of Chairman Liebman and Member Becker granted a union’s request for a hearing on its objection to alleged employer surveillance close to the voting sites that the union (International Association of EMTs and Paramedics, National Association of Government Employees, SEIU Local 5000) maintained had affected the out-come of the union representation election.
The mixed manual ballot and mail ballot election was conducted at four hospital sites (Beth Israel, Mount Sinai, Montifore, and Brooklyn) in a unit of all full-time and regular part-time emergency medical technicians and paramedics employed in the Employer’s New York City 911/EMS Division. The tally of ballots showed 99 for and 127 against the union, with 14 challenged ballots, an insuf¬ficient number to affect the results of the election. The union asserted that the employees had to pass supervisors at all four sites in order to enter and leave the polling site. 
The Acting Regional Director agreed to hold a hearing related to the alleged surveillance at one site, Brooklyn, but not the others, determining that no substantial and material factual issues warranted a hearing. The Board disagreed and remanded the case to the Regional Director to conduct a hearing on the alleged surveillance at all four sites.
In dissent, Member Schaumber argued that even if credited, the allegations of the union would not be sufficient to constitute objectionable surveillance sufficient to overturn an election. Member Schaumber observed that the union’s “position statement alleges only that two identified witnesses observed various managers and supervisors standing on street corners approximately 150 feet from the facilities where voting was to occur. …There is no representation that the managers or supervisors stood in any designated no-electioneering zone, that they had direct views of the polling area, or that they were otherwise positioned to ascertain whether the employees entering the facility were doing so to vote rather than for job related or other purposes. Nor, at least in the sections of the position statement that recites facts as to which identified witnesses would testify, is there any representation that employees had to pass by any manager in order to vote; indeed that seems inherently implausible given the distance at which the managers were standing from the buildings where voting occurred.”
The majority clearly disagreed with Member Schaumber, and noted that the only issue in this case was whether there was sufficient evidence for a hearing, not whether there was evidence to resolve the matter on its merits.
Significance: The decision in this case is perhaps a sign of things to come at the Board, where employer conduct will be held to a higher standard of scrutiny and will be more likely to be found sufficiently objectionable to overturn the union’s loss of an election. Here the decision only requires a hearing on a petitioner’s election challenge, but the decision sends a clear message to the Board’s regional offices.
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Appointments and Nominations

Acting General Counsel: President Obama appointed career NLRB lawyer Lafe Solomon as Acting General Counsel to the National Labor Relations Board on June 21, 2010 under the Federal Vacancies Reform Act of 1998 (see 5 U.S.C. §3 345 et seq.). Immediately prior to his appointment, Mr. Solomon had served for ten years as Director of the Office of Representation Appeals, a Board-side division, which has led some to question whether his appointment violated the requirement under Section 3(d) of the NLRA for separation of employees from the Board-side from those of the General Counsel. In the past, Mr. Solomon served as a staff attorney for ten different Board members.

It is important to note that the President chose not to utilize the provisions for appointing an acting General Counsel in section 3(d) of the NLRA, but instead chose to appoint Mr. Solomon under the Vacancies Reform Act. The most obvious distinction here is that Vacancies Reform Act generally provides for a longer time period than the NLRA for an individual to serve in an acting capacity. Mr. Solomon can serve in this capacity for a minimum of 210 days, a time period that is suspended during the first or second nomination of an individual to the position. The temporary appointment may continue for an additional 210 days if the Senate rejects or returns such a nomination or if the individual withdraws.
General Counsel Candidates: There is considerable chatter among labor lawyers about a letter the AFL-CIO purportedly sent to the White House containing a list of five names for consideration to fill the position of NLRB General Counsel. It is important to note that we have not seen this letter and cannot independently verify its contents. However, we have heard from multiple independent sources that the letter exists and includes the names of the following five union-side labor lawyers:
Nancy Schiffer, Associate General Counsel, AFL-CIO;
Richard Griffin, General Counsel, International Union of Operating Engineers;
Anton Hajjar, O’Donnell, Schwartz and Anderson (based in Washington, DC; representing, among other unions, the American Postal Workers Union);
Richard Rosenblatt, Rosenblatt & Associates (based in the Denver, CO area; representing,among other unions, the Communications Workers of America); and
• Nora Macey, Macey, Swanson and Allman (based in the Indianapolis, IN area; repre-senting, among other unions, the United Auto Workers and active in the leadership of the Labor and Employment Law Section of the American Bar Association).
We do not know the extent to which the White House is actively considering these candidates or others for this important position.
Schaumber Vacancy: Republican Board Member Peter Schaumber stepped down from the NLRB when his term expired on August 27, 2010. Member Schaumber had served since January 17, 2002 and was the Chairman from March 2008 until January 2009. His successor has not yet been nominated. It is anticipated, however, that his successor will be nominated as part of a political “package” with the White House nominee for General Counsel.
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NLRB Decisions of the Month: September 2010

And so it begins. Since the inaugural issue of NLRB Insight, the Board has issued well over 100 decisions. In this edition, we discuss the 22 most important of these issued through August 27, 2010. Perhaps the two most significant are the reconsideration of Dana Corp., one of the decisions of the 2007 Board that organized labor most wants to overturn, and MV Transportation, involving the controversial issue of the successor bar.

Rite Aid Store #6473 (voluntary recognition)  

In Dana Corp. (commonly referred to as Dana/ Metaldyne), 351 NLRB 434 (2007), the Board modified its recognition bar principles and held that the recognition bar does not begin to run until the employer provides notice that it has recognized a union and a 45-day period runs that gives employees or a rival union an opportunity to petition for a secret ballot election. Prior to this decision, employees had no way to demand an election if the employer agreed to recognize a union based on authorization cards. See Keller Plastics Eastern, Inc., 157 NLRB 583 (1966).
On August 27, 2010, the Board, with Members Schaumber and Hayes dissenting, issued its decision in Rite Aid Store #6473, 355 NLRB No. 157, finding “substantial issues concerning voluntary recognition arising under the Board’s decision in Dana.” In conjunction with the decision, the Board issued a Notice and Invitation to File Briefs. 
In it, the Board stated:
Dana was decided nearly 3 years ago. To date, over 1,000 requests for voluntary recognition notices have been filed. As a result, the Board is now in a position to evaluate whether its decision in Dana and the procedures developed to implement that decision have furthered the principles and policies underlying the Act. In addition, parties to voluntary recognition and affected employees are now in a position to inform the Board whether Dana and the procedures implemented pursuant to Dana have advanced or hindered employees’ choice of whether to be represented and the process of collective bargaining that should take place if employees choose to be represented.
The Board has requested briefs to be filed by Nov. 1, 2010 addressing whether the Board should modify or overrule Dana. The Board also invited comments on several specific questions and invited the submission of empirical data and factual descriptions of experiences under Dana.
Members Schaumber and Hayes wrote a strong dissent defending the Dana decision and noting that it has not created uncertainties to destroy the incentives for voluntary recognition, as had been predicted by the dissent in Dana. The dissent recounts statistics showing that since the Dana case was issued, the regional offices have received “1111 requests for voluntary recognition notices, 85 election petitions were filed, 54 elections were conducted, and in 15 of those elections employees voted against the voluntarily recognized union, including 2 elections in which a petitioning union was selected over the recognized union.” The dissent concluded that these statistics show that “we already have empirical evidence showing that Dana has served its purpose of protecting employees’ free choice without discouraging voluntary recognition or the overall process of collective bargaining. There is not a scintilla of objective evidence to the contrary.”
In a concurrence, Member Liebman responded to the dissent stating that she was interested in what members of the labor-management community had to say about this data and its lessons. She noted that the data tell nothing about hypothetical labor agreements that were not reached due to the parties concerns over Dana. She also questioned whether the “asserted benefits of the Dana regime outweigh its costs” noting in a footnote that the recognized union was not rejected in 99 percent of cases and so “it is arguable that Dana did not serve any clear purpose.”

UGL-UNICCO Service Company (successor bar)

In 2002, the Board reversed the “successor bar” doctrine in MV Transportation, 337 NLRB 770. Under the successor bar doctrine, once a successor employer’s obligation to recognize an incumbent union attached, the union was entitled to a reasonable period of time for bargaining without challenge to its majority status. St. Elizabeth Manor, Inc., 329 NLRB 341 (1999). In MV Transportation, the Board overturned St. Elizabeth Manor and held that “an incumbent union in a successorship situation is entitled to—and only to—a rebuttable presumption of continuing majority status, which will not serve to bar an otherwise valid decertification, rival union, or employer petition, or other valid challenge to the union’s majority status.” On August 27, the Board issued its decision in UGL-UNICCO Service Company, 355 NLRB No. 155, with Members Schaumber and Hayes dissenting. The decision was also accompanied by an invitation to file briefs in order to address whether the Board should modify or overrule MV Transportation.
In its Notice and Invitation to File Briefs, the Board requested opinions on overturning or modifying MV Transportation and how the Board should treat the “perfectly clear” successor situation, as defined by NLRB v. Burns Security Services, 406 U.S. 272, 294-295 (1972), and subsequent Board precedent. The Board invites empirical and practical descriptions of experiences under MV Transportation. The briefs are due for filing on Nov. 1, 2010.
Significance: It is ironic that the first major case the Obama Board is moving toward reversing will actually result in deprivation of employee rights under labor laws. While the majority opinion in each of these cases goes out of its way to say that it has not made a determination on the merits of reversing Dana Corp. or MV Transportation, this is the first step in that process. The very active period that Board observers have long predicted has now begun. You can bet that organized labor will file briefs to ensure the record supports overturning these decisions. Employers and counsel would be wise to file briefs as well to provide balance to the record and ensure that it accurately reflects experiences under these decisions.
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Career Board-Side Lawyer Named Acting General Counsel


Effective Monday, June 21, veteran NLRB attorney Lafe Solomon was appointed by President Obama to serve as Acting General Counsel, the top investigative and prosecutorial position in the agency.
Ronald Meisburg, the previous General Counsel, resigned effective June 20 to join the law firm of Proskauer Rose. His term was due to expire in August, 2010. Mr. Solomon was appointed to the position under the Federal Vacancies Reform Act of 1998.
Mr. Solomon began his career at the NLRB as a field examiner in Seattle in 1972. For the past decade he directed the NLRB’s Office of Representation Appeals on the Board-side of the Agency. Before that he served in various positions on the Board side of the agency, including as staff attorney to 10 Board members: Members Don Zimmerman, Donald Dotson, Robert Hunter, John Higgins, James Stephens, Mary Cracraft, John Raudabaugh, William Gould, Sarah Fox and Wilma Liebman.
He earned a B.A. degree in Economics from Brown University and a J.D. from Tulane University.
When Board Member Peter Schaumber’s term expires in August, many expect a political “package” consisting of Schaumber’s Republican replacement and a candidate for the General Counsel position— most likely a union-side lawyer.
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