Labor Relations Weekly Recap #4

Welcome to The Labor Leader - a weekly recap of the most valuable content on labor relations from an employer's perspective. The National Labor Relations Act covers both union and non-union private-sector employers. This newsletter is a digest of my views on labor laws, the National Labor Relations Board, and unions.

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Employers can Make Unilateral Changes to Union Contracts

Employers usually commit an unfair labor practice when unilaterally changing terms of a collective bargaining agreement. But not always. I’ve unilaterally changed many terms of a CBA without acting unlawfully.

The safest way to unilaterally change terms of a collective bargaining agreement is to do so because of an emergency (labor law calls it an “exigent circumstance”).

Exigent circumstances are created by things like a hurricane, mandatory evacuation, the events of 9/11, an ice storm, the termination of a company’s line of credit, or shortages of raw materials.

The current nationwide labor shortage may be another situation that allows employers to unilaterally modify union contracts.

The NLRB seems OK with companies providing unilateral wage increases to combat the current labor shortages across the United States. Unilateral wage increases during Covid-19 were routinely found lawful.

A 2020 NLRB General Counsel Memorandum (GC 20-04) said “economic exigencies compel prompt action” especially when the events causing the exigency are unforeseen, have a major economic effect, or require immediate action.?

The inability to hire would seem to satisfy these criteria.?

Consider this: a manufacturer’s operations are threatened by its inability to hire. A shortage of workers will result in a curtailment of production or services being offered. Orders miss deadlines. New orders are rejected. Financial health of the company suffers.

During exigent circumstances, employers are relieved of their duty to bargain over the unilateral change. But, the Board may still want employers to negotiate over the “effects” of that change.?

If the unilateral change is increased wages, the effects are beneficial to the union and the employee: employees make more money, and the union plausibly receives additional dues revenue.

Union Got Court Order to Not have to Arbitrate Member's Grievance

Unions don’t always defend their members. They don’t always file grievances. They don't always arbitrate grievances.

For example, the IAM union, Kentucky Lodge No. 681 recently did not arbitrate the termination of union member Dylan Anderson.

Cook Compression, Inc. terminated Anderson after co-workers expressed fear because he had distributed Nazi literature containing caricatures of Jewish people and offensive slurs.

Since union employers need a reason to terminate someone (as if Mr. Anderson's actions weren’t enough), Cook Compression said he violated its code of business conduct and ethics.?

Mr. Anderson and IAM grieved the termination. The final step of the grievance procedure is arbitration. IAM did not want to arbitrate the grievance on behalf of Mr. Anderson.?

If neither the Company nor the Union wants to arbitrate, but the terminated employee / union member wants to arbitrate, what happens?

IAM filed a lawsuit in federal court to get the answer. And the answer is, since neither party wants to arbitrate, neither party has to arbitrate the grievance.

Mr. Anderson is not a party to the CBA. He relinquished the right to act on his own behalf when he joined the union. He is bound by the decisions of the union – and the union decided it did not want to arbitrate.

Case closed.

NLRB Changes Dress Code Law to Rule Against Tesla

Add “dress codes” to the laws that the current NLRB has changed. This list gets longer by the day.

Now, when an employer attempts to impose any restriction on a worker’s right to display union insignia, that restriction is presumptively unlawful unless the employer proves “special circumstances” to justify the restriction.

Tesla arguably met the previous “special circumstances” test. But the Board changed the law, applied it to Tesla’s case, and Tesla lost even though it followed the then current law.

Welcome to life with the NLRB.

Tesla’s dress code required black cotton pants and a certain color cotton T-shirt. Different departments wore different colors. This was a way of identifying which employees were in what department and to lower the risk of an employee’s clothing “causing a mutilation” to a vehicle.?

During a union organizing drive, pro-union employees who were in the department that wore black cotton T-shirts started wearing black cotton pro-union T-shirts. Tesla prohibited them from wearing the pro-union T-shirts.?

Employees were able to have pro-union insignia on other things at work. But that no longer mattered to the NLRB.?

At hearing, none of Tesla’s witnesses said they were aware of any situation where the pro-union T-shirts caused damage to a vehicle. Nor were they able to explain how that could even happen.

Tesla failed to prove that the black cotton pro-union T-shirts were more of a “mutilation” risk than black cotton T-shirts that did not have union insignia on them. Accordingly, Tesla failed to show “special circumstances” for the policy prohibiting union insignia on the T-shirts.?

Whenever a law changes (like this), unions are quick to file unfair labor practice charges to see just how far the Board will go with the new law. Review your dress code policies to make sure they comply with this new interpretation of the law.

Trump NLRB Held T-Mobile's Employee Feedback Group was Lawful, on Appeal, Biden NLRB Says Unlawful

Many companies encourage employee feedback. Some have a “suggestion box”. Some have an employee “hotline”. Others have open door policies that encourage employees to express themselves.

T-Mobile had an Employee Feedback Group called T-Voice that listened to the concerns of their customer service representative co-workers. Sometimes T-Voice made suggestions to management about the feedback it received.?

Employee feedback groups can be unlawful if they act as a quasi, in-house union. the Communication Workers of America filed an unfair labor practice charge alleging T-Voice was an unlawful.?

The Trump NLRB ruled that T-Voice was lawful because it did not have a pattern or practice of making suggestions to management. That decision was appealed.?

The appellate court remanded the case back to the now Biden NLRB.?

The Biden NLRB vacated the ruling by the Trump NLRB. The Biden NLRB held that T-Voice qualified as an unlawful company-run labor organization.

Same facts. Different NLRB. Different outcome. T-Voice was lawful 3 years ago. T-Voice is now unlawful.

It is hard to keep up with what is lawful and unlawful when the laws keep changing. But that’s life at the NLRB.?

Courts generally follow precedent. But, the NLRB flip flops depending on which political party is in the White House.

Do you have an employee feedback group? A hotline? A suggestion box? Make sure it doesn't violate the current state of the law.

UAW Organized First EV Battery Plant, Others on Horizon

The United Auto Workers union recently won an election to represent employees at an electric car battery plant near Youngstown, Ohio. This is the first win in the electric car market for the UAW.?

Conventional vehicles that run on fuel are being phased out. So, too, are the engines, transmissions, and other parts that are made by UAW members.?

The union has identified about 135,000 jobs that are at risk of going away in favor of EV batteries and parts.

To stay viable, the UAW needs to organize factories making EV parts.

The workers at the newly organized electric battery factory earn about $16/hour. Half of what their counterparts make at GM’s auto assembly plants.?

The UAW promised significant wage increases in exchange for a pro-union vote. It will do so at the battery plants under construction in Tennessee and Michigan, too.

These battery plants are jointly owned by the Big 3 automakers.

GM plans to build 1 million EVs in 2025. Ford wants to sell the same amount in 2026. Both automakers will need a supply of batteries to do so.

The push for electric vehicles is interesting to me. Automakers have vowed to phase out combustible engines. Yet consumers have not fully embraced electric vehicles, and the U.S. does not have the infrastructure to support widespread use of EVs.

Regardless, the UAW is trying to do something most unions don't do well: adapt and modernize.

NLRB Requires Same Treatment of Employees for Same Actions

There is a reason that lawyers and HR professionals always want management to treat similar people similarly.?

If you overlook disciplining someone for one thing, you should overlook disciplining another person for doing the same thing.?

Even if you don't like that person.

A New York hospital violated the National Labor Relations Act by firing a nurse who left the operating room for 28 minutes during spinal surgery to participate in a union action.?

Frankly, I didn't know someone could leave the operating room during surgery. Seems like their attendance and participation is pretty important at that time.

But, the hospital did not discipline - or even investigate - another nurse who left a similarly complex surgery for a longer period of time.?

The National Labor Relations Board easily found that the hospital discriminated against the nurse for engaging in union activity.?

Be consistent.?

If you allow employees to talk about sports or the weather or the news while working, allow them to talk about unions.?

If you allow employees to solicit each other to buy Girl Scout Cookies, you must allow them to solicit each other to sign union authorization cards.

If you allow them to periodically leave work for whatever reasons, they can leave work for a union-related reason.

While there are limits to what employees can do, enforce your workplace rules consistently without regard to whether the activity relates to unions.?

You'll be safer that way.?

Some Politics behind the National Labor Relations Board and Why it is Now Making So Many Pro-Union Rules and Decisions?

The Board consists of 5 Members appointed by the President of the United States and confirmed by the U.S. Senate.?

The 5 Members are generally divided as: 2 pro-business Republicans; 2 pro-union Democrats; and 1 Member who aligns with the political party of the sitting president.

In a perfect world, when a Republican is in the White House, the Board is 3-2 pro-business. When a Democrat is in the White House, the Board is 3-2 pro-union.

We don’t live in a perfect world.

Member’s seats expire at different times and the clock runs continuously regardless of whether the seat is filled or not.?

This results in Members coming onto the Board and rolling off the Board at staggard times. This also results in some Members having abbreviated tenures on the Board depending on when they are confirmed by the Senate.?

When cases are appealed to the Board, they are ruled on by a panel of 3 Members. With a 3-2 pro-union bent, there is a small chance that the panel will be 2 pro-business Members and 1 pro-union Member.?

But today pro-union Democrats have a 3-1 edge on the Board because pro-business Republican Member John Ring’s term expired in December 2022.?

With a 3-1 edge, it is impossible for pro-business Members to make up a majority of the 3-Member panel that rules on a case.?

I don’t expect that seat to be filled anytime soon.?

Both political parties leave seats unfilled to gain a greater advantage. The system discourages the majority party from filling vacancies.?

Like the team that is winning in football or basketball that runs down the clock to preserve its advantage.

In August 2023 Member Wilcox’s term will expire. She will likely be renominated. Her nomination will probably be packaged with a pro-business Republican nominee to fill John Ring’s seat, but there is no guarantee that will happen. And there is no telling if or when the Senate will approve the nominations.?

Until then, the pro-union NLRB will continue to feverishly issue pro-union decisions and change the landscape of labor laws.

#MattAustinLaborLaw?#LaborRelations?#LaborLaw

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Matt Austin?is a nationwide management labor lawyer. Labor laws govern virtually all private-sector employees regardless of union membership. Proactive management of labor relations is critical to maintaining flexibility and increasing profit.

Matt also runs Austin Legal's?HR Legal Compliance Program?that, for a small monthly fee, ensures HR decisions are protected by the attorney-client privilege.?

Matt's experience is deeply rooted in helping manage many aspects of his clients' businesses. To effectively manage labor relations, he must also manage budgets, forecasts, new growth areas, and projected market corrections. High emotional intelligence is also critical to negotiating union contracts and to properly advise HR Legal Compliance members through the nuances of the law, its application to their companies, and how it will be received by employees.

You can reach Matt via email at [email protected].?