Executive Labor Summary - September / October 2015

Constangy, Brooks, Smith & Prophete, LLP


Back to the Past at VW Chattanooga? - On October 23, the United Auto Workers' Local 42 filed a petition with the National Labor Relations Board to represent a bargaining unit of skilled trades workers at Volkswagen's Chattanooga production facility. After the UAW lost an election in a wall-to-wall unit last year, it established Local 42 and under a policy announced by VW last year sought certain discussion and access rights at the facility. The attempt at organizing the skilled trades bargaining unit, what some might call an example of a "micro-unit" now permitted under the NLRB’s Specialty Healthcare decision, may allow the UAW to gain a beachhead in the plant. The UAW has asserted that it wants to have a European-style works council, with workers and management determining corporate policies. How VW responds to the UAW campaign will be worth watching, as there has been a shakeup at the top of VW and its North American management as a result of the diesel engine scandal, which some commentators say threatens VW’s future as an independent car manufacturer.

NLRB’s new "joint employer" standard goes to next stage. – Now that Browning-Ferris Industries of California, Inc. (apparently now owned by Republic Services, Inc.), has been found to be a “joint employer” with its provider of temporary employees, the Teamsters local involved in the case has filed an unfair labor practice charge against the company, alleging refusal to bargain. Browning-Ferris is engaged in a “technical refusal to bargain” so that it can test the Board’s certification of the election and potentially take the joint employer issue to a U.S. Court of Appeals, where it has a chance of not being enforced. Assuming the Board and Browning-Ferris don’t resolve this dispute, the process would be for the General Counsel of the NLRB to issue a Board complaint and (in all likelihood) win before the Board. Then the NLRB could seek enforcement by, and Browning-Ferris would be able to seek review in, a federal appeals court. 

Hospital’s failure to give union all employee contact information results in new election. The Regional Director of Region 1 of the NLRB (covering most of New England) has ordered a new election among employees of the Danbury (Connecticut) Hospital because of the hospital’s alleged failure to comply with the new “contact information” requirement under the NLRB’s new election rules. The union lost the first election 390-346, and filed objections. According to the Regional Director’s ruling, the hospital failed to satisfy the requirement under Board rules that it act in good faith to supply a voter list containing contact information for eligible voters, including available email addresses and home and cell telephone numbers. (Under the rules, this information must be provided within two days of the direction of election.)

The hospital timely supplied a list, but it provided only what was in its human resources information system, which consisted of telephone numbers for 94 percent of the eligible voters and email addresses. The hospital did not check or supply contact information from other lists, including a “unit staff” phone list, an emergency department list of email addresses, or its applicant tracking system. The hospital argued that it substantially complied and that the union failed to show that any other information was available, but to no avail. The Regional Director found that a single database search did not satisfy the new NLRB rules and that the union could not be expected to produce evidence regarding information that was available but missing.

The moral of the story – employers need to do their best to provide all contact information that they can reasonably gather from all sources. The NLRB in Washington, D.C., may ultimately review the decision, but it is unlikely to give an employer a break when it comes to list preparation.

Buyer beware! Successor employers covered by “worker retention” laws may also “succeed” to predecessor’s NLRA obligations. - Several big cities - including New York City, Los Angeles, Philadelphia, Providence, San Francisco, and Washington D.C. - have “worker retention” laws or regulations, which apply to private employers in various industries. The laws generally require that a new owner of a business retain the predecessor’s employees for some specified period of time or indefinitely. (President Obama’s Executive Order 13459, applicable to certain federal government contractors, imposes similar retention obligations by means of non-displacement regulations.) The NYC Displaced Building Service Workers Protection Act applies to cleaning workers in buildings.

Under the National Labor Relations Act, a successor can normally establish its own initial terms and conditions of employment unilaterally without bargaining with an established union unless it is a “perfectly clear” successor. Status as a “perfectly clear” successor, at the risk of over-simplification, may arise when it is “perfectly clear,” before the successor announces new terms and conditions of employment, that a majority of the new operator’s workforce will be former employees of the predessessor’s bargaining unit. A “perfectly clear” successor must generally bargain over initial terms and conditions of employment.

In GVS Properties, LLC, the NLRB indicated that the NYC law imposes successorship status on buyers of operations with employees covered by worker retention laws, and may, in the right circumstances, impose the obligations of “perfectly clear” successorhip.

GVS purchased buildings from another company and was required under New York City law to retain the predecessor’s custodial staff for an initial 90-day probationary period. The majority of an NLRB panel (Mark Gaston Pearce and Kent Hirozawa) found that GVS, by complying with NYC’s “worker retention” law, became a “perfectly clear” successor, with a duty to bargain. The Board found that GVS made a “conscious decision” to hire the workers when it took over the buildings, rejecting the employer’s argument that it retained the predecessor’s employees only on force of the NYC law. The Board, in dicta, indicated that a buyer-employer operating under such a law could avoid “perfectly clear” successorship by announcing its intent to establish new terms and conditions of employment before or simultaneously with its expression of intent to retain the workers.

The Board’s decision conflicts with a prior decision issued by a federal judge in New York. In Paulsen v. GVS Properties, LLC, which denied Section 10(j) injunctive relief in the case, the federal court ruled that GVS could not have made a conscious decision to “hire” the employees because the NYC law forced it to retain the employees for only a 90-day period.

Member Harry Johnson, dissenting, noted that the NLRB’s decision, which has municipal law driving a result under federal labor law, raises serious preemption issues. Federal courts may not agree with the NLRB, or they may find that state and local worker retention laws are preempted by federal labor law.

For companies that are considering an asset purchase or a contract bid for operations with employees subject to a worker retention law or non-displacement rules, the importance of the Board’s decision probably cannot be overstated. “Would-be owners” and federal contractors taking on ongoing operations should be aware of the many obligations of NLRA successorship and the “perfectly clear successor” doctrine. Purchasers or bidders who want to adopt their own terms and conditions of employment should be sure to state their intent before or when they announce an acquisition or bid and their plans to retain the workers, whether the retention is required by law or not.

NLRB panel says that union dues checkoff continues post-contract, absent express provision. - A panel of the Board has found that an employer’s obligation to withhold union dues under a checkoff provision continues after expiration of collective bargaining agreement, unless there is an express provision that checkoff ends when the contract expires. Otherwise, the Board panel decided, the checkoff provision continues as part of the post-contract status quo. The Board’s decision, in Lincoln Lutheran of Racine, reaffirmed the rule stated in a previous decision that was invalidated by the U.S. Supreme Court decision in Noel Canning.

If the collective bargaining agreement does not specifically provide that dues checkoff ends upon contract expiration, the employer can lawfully stop checkoff only if the employee revokes the dues authorization, or if there are no wages to which checkoff can apply. For this reason, an employer may want to negotiate for a checkoff termination clause to include in its next contract. Expressly and clearly addressing whether a provision or practice continues or is stopped at expiration of the contract may help the employer avoid uncertainty and achieve more leverage in bargaining.

We “like” this contract! UAW’s social media campaign rescues Fiat Chrysler agreement after a first loss. - Reeling from a decisive defeat in a Fiat Chrysler contract ratification vote the first time around, the UAW saw that a social media strategy was needed to get the word out to the membership and get votes in favor of the second contract proposal. According to news reports, the UAW had lost control of the message after opponents among its membership criticized the initial proposal on social media, and as a result, more than 60 percent of the membership voted against it. On the second go-round, the union focused on Facebook more than membership meetings to convey its message, and approximately 77 percent of the membership voted in favor of the second proposal. Employers and unions alike should learn from the UAW’s experience.


“Boycott” messages flashed on walls of Taj Mahal casino get “trumped” – for now. Trump Entertainment Resorts, Inc., has obtained an injunction from a New Jersey state court ordering Local 54 of Unite Here to stop projecting “boycott” messages at night onto the exterior walls of the Trump Taj Mahal casino in Atlantic City. The casino operator is in a bankruptcy exit plan, and financier Carl Icahn plans to buy it, but only with sufficient guarantees that labor costs, including benefits, will make it a profitable venture. Mr. Icahn has said that he will not take ownership of the casino unless the labor contract is voided and the health plan eliminated. (A federal bankruptcy court has allowed the operator to void the current labor contract, but the union has appealed that decision.)

The union had been protesting Mr. Icahn’s plan for months, with protests and nighttime messages projected onto the casino walls that say “Boycott the Taj.” In response to the injunction, a spokesperson for Trump Entertainment Resorts said that the organization was gratified that the court put a stop to the union activities, which “harm the perception of Atlantic City and [the union’s] own members.” Will the union’s activities against the currently unprofitable casino, one of several in Atlantic City, be enough to put the casino lights out for good?

Literacy tests? Are you kidding? - U.S. Secretary of Labor Thomas Perez recently filed suit against Laborers International Union of North America Local 872 for disqualifying an “opposition” candidate for union office based on his failure to pass a literacy test and apparently his failure to establish proof of legal residency in the United States. The DOL says that the candidate, who is Latino, was required to read aloud a provision from the union’s constitution so that the election judges could determine whether he was literate. The judges then noted on his candidate questionnaire that he was disqualified because he was (allegedly) not literate and because he (allegedly) could not prove that he was legally in the United States. Then the union removed him from his position as shop steward, and then his employer fired him. Welcome to the Laborers’ union and its big tent.

Foreign fiascos. Sacre bleu! After Air France announced job cuts, six union activists attacked and assaulted members of the airline’s management who were meeting with the union, literally tearing the shirts off the managers’ backs. The managers, including the airline’s head of human resources, escaped only by climbing over a fence. Air France, which is losing money by operating, issued a statement saying that the violence was the act of “isolated individuals” and that negotiations have resumed.

Mates” or else. A labor tribunal of Australia’s Fair Work Commission recently ruled that “unfriending” a colleague on Facebook is an act of workplace bullying. Well, so much for open and frank dialogue in the workplace.

That does not compute. On second thought, it does. The Indian Economic Times headline says it all: “China sets up first unmanned factory; all processes are operated by robots.” Seems like one solution to successorship, joint employment, and dues checkoff obligations, voter list obligations, brawls and meetings, and workplace bullying. At least until the robots figure out that they have rights, too.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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