Washington D.C. Employment Law Update : Washington D.C. Employment Lawyer & Attorney : Littler Mendelson Law Firm : Virginia, Tyson's Corner

H.R. 3094

As previously discussed, the Workforce Democracy and Fairness Act would set forth eight separate factors that the Board would use to assess whether a group of employees share the requisite “community of interest” to be considered an appropriate bargaining unit. The Board would be required to make this determination before an election takes place. These eight factors are: (1) similarity of wages, benefits, and working conditions; (2) similarity of skills and training; (3) centrality of management and common supervision; (4) extent of interchange and frequency of contact between employees; (5) integration of the work flow and interrelationship of the production process; (6) the consistency of the unit with the employer's organizational structure; (7) similarity of job functions and work; and (8) the bargaining history in the particular unit and the industry. If an employer seeks to add or “accrete” additional employees to an existing bargaining unit, it would need to prove that there exists an “overwhelming” community of interest between the additional employees and those in the existing unit, and that the additional employees “have little or no separate identity” from the established unit. The Act seeks to avoid the proliferation of “micro” bargaining units by stipulating that “employees shall not be excluded from the unit unless the interests of the group sought are sufficiently distinct from those of other employees to warrant the establishment of a separate unit.”

The purpose of these provisions is to overturn the Board’s decision in Specialty Healthcare, in which the Board held that a union’s petitioned-for bargaining unit shall be deemed appropriate so long as that unit consists of a clearly identifiable group of employees, thus making it significantly easier for smaller, more fragmented units to be certified.

In addition, the bill would codify the following election procedures:

• Following the filing of a representation petition, employers would have at least 14 days to prepare for a pre-election hearing.
• Parties would be permitted to raise relevant and material pre-election issues as the pre-election hearing record is developed. Such pre-election issues “shall include, in addition to unit appropriateness, the Board’s jurisdiction and any other issue the resolution of which may make an election unnecessary or which may reasonably be expected to impact the election’s outcome.”
• Parties would be entitled to raise independently any issue or assert any position at any time prior to the close of the hearing.
• The date for an election would be set no sooner than 35 days after the petition is filed.
• An employer would provide the union with a list of eligible voters (the “Excelsior” list) no sooner than 7 days after the Board determines the appropriate bargaining unit.
• Employees would be allowed to decide in writing which one form of personal contact information is to be provided to the union.

The House rejected the four amendments offered by Democratic lawmakers.

While the bill was readily approved in the House, it is unlikely to advance in the Democrat-controlled Senate.

Bill an Effort to Block Rulemaking

Many of these provisions would serve as a preemptive strike against the NLRB’s rulemaking efforts to alter the representation election process. The NLRB is expected to issue a final rule that while less sweeping than the original proposal, would still serve to expedite the election process and deprive employers of certain procedural rights. Namely, the resolution discussed during the Nov. 30 meeting would limit the matters that would be resolved at a pre-election hearing; limit the filing of post-hearing briefs; delay Board review and resolution of pre-election issues – including questions of voter eligibility – until after an election is already conducted; and significantly narrow the circumstances under which a request for special permission to appeal to the Board would be granted, among other changes. Anticipating that the Board will lose its quorum at the end of the year when Board Member Craig Becker’s recess appointment ends, Chairman Mark Pearce announced that he was “putting forward a more limited resolution at this time,” although “other portions of the original rule will remain under consideration by the Board for possible future action.”

The Board approved by a 2-1 vote Chairman Mark Pearce’s resolution to amend the election procedures. According to Pearce, this approval is an “interim step” and a final version will be presented to the Board to consider. During the public meeting, dissenting Board Member Brian Hayes – who stated at the meeting today that he was not going to resign his position on the Board – claimed that under the proposal, the time period between the filing of a petition and an election would be shortened. In addition, Hayes argued that the rule would deprive employers of the opportunity to present their position regarding union representation. Another criticism Hayes raised is the fact that the Board has advanced this rule in a “far, far too truncated a procedural manner.”

Photo credit: MBPHOTO, INC.

The changes made by the Workforce Democracy and Fairness Act would reverse Specialty Healthcare, the case in which the Board held that a union’s petitioned-for bargaining unit shall be deemed appropriate so long as that unit consists of a clearly identifiable group of employees. The Board further established that if an employer believes that the unit should include additional employees, it is incumbent upon the employer to show that the employees in a larger unit share an "overwhelming" community of interest with those in the petitioned-for unit.

Critics of this decision have argued that the change in standards for unit determination will result in much smaller “micro” bargaining units that are easier to organize and more difficult to handle administratively. According to the House Report on this bill, Specialty Healthcare “limits employee free choice and employer free speech, and will fracture the workforce.”

The proposed representation election procedure changes – which have generated thousands of critical written comments and instigated several congressional and NLRB hearings – would, among other significant changes, require that pre-election hearings be held within seven calendar days after a petition is filed; provide employees with as few as 10 days to make a decision regarding whether they want to join a union; dramatically reduce pre-election evidentiary hearings, including those concerning voter eligibility/appropriate bargaining units; mandate that employers complete their statement of position before evidence is heard at a pre-election hearing; eliminate any automatic right to post-election Board review of contested issues; and require employers to provide the union a preliminary voter list before the pre-election hearing, and a final voter list within two days after the election is scheduled. On November 18, the Board announced that on November 30, 2011, it intends to vote on “portions” of this proposed election rule.

To address these issues, the instant bill would, as summarized in the House Report:

codify the traditional standard for determining an appropriate bargaining unit and the traditional standard used to challenge a petitioned-for bargaining unit, require the Board to rule on challenges to composition of the bargaining unit prior to the election, ensure employers have at least 14 days to prepare for a pre-election hearing, allow parties to raise relevant and material pre-election issues as the pre-election hearing record is developed, ensure parties may request pre-election Board review of regional director's decisions, provide employees with at least 35 days to consider whether they wish to be represented by a union, and permit employees to choose what personal information is provided to the union.

With respect to the proper bargaining unit standard, the bill would require that the Board determine the appropriate bargaining unit prior to an election. Employees in the unit would be required to share a “community of interest,” as evidenced by the following factors: (1) similarity of wages, benefits, and working conditions; (2) similarity of skills and training; (3) centrality of management and common supervision; (4) extent of interchange and frequency of contact between employees; (5) integration of the work flow and interrelationship of the production process; (6) the consistency of the unit with the employer's organizational structure; (7) similarity of job functions and work; and (8) the bargaining history in the particular unit and the industry.

The act further emphasizes that to avoid the proliferation of micro units, “employees shall not be excluded from the unit unless the interests of the group sought are sufficiently distinct from those of other employees to warrant the establishment of a separate unit.” In situations where it is proposed that more employees be added to an existing unit, however, the employer would be required to show that there exists an “overwhelming” community of interest between the additional employees and those in the existing unit, and that the additional employees “have little or no separate identity” from the established unit.

The rule provides for brief 10-minute debates and a vote on four amendments offered by Democratic members of Congress. The first of the four amendments – none of which are expected to pass – would permit the Board to impose sanctions on a party that presents “a frivolous or vexatious filing during pre-election proceedings.” This amendment was offered by Rep. Tim Bishop (D-NY).

Rep. Leonard Boswell’s (D-IA) amendment would apply the Board’s proposed election rule to any employer that has “paid any executive compensation bonuses in excess of 10,000% of the annual compensation of the average employee” to prevent them “from engaging in open-ended litigation.” According to Boswell, this amendment would require such employers to “state their issues or positions at the outset of pre-election hearings,” and prohibit them “from raising new, frivolous issues as a dilatory tactic.”

Rep. Tim Walz (D-MN) offered an amendment that would prevent H.R. 3094 from applying to businesses that have been cited for violating labor laws in the past year against employees who are veterans of the Armed Forces.

Finally, Rep. Sheila Jackson Lee’s (D-TX) amendment would strike a portion of the bill “to ensure that employers would not be able to unnecessarily delay an election.”

This bill was the focus of a congressional hearing held on October 12. Following this hearing, the House Committee on Education and the Workforce on October 26 held a markup session of this bill, and voted 23-16 along party lines to advance the measure. The House Rules Committee followed suit on November 17. Although a date has not yet been set, it is anticipated that the House floor will vote on the measure after the Thanksgiving recess.

At the markup session, Committee Chairman John Kline (R-MN) offered an amendment in the nature of a substitute bill that he claimed addresses the concerns raised at the October 12 hearing. Specifically, Kline explained that the revised bill clarifies that only “relevant and material” issues could be raised at a pre-election hearing. Accordingly, the language in the revised bill states that “parties may raise independently any relevant and material pre-election issue or assert any relevant and material position at any time prior to the close of the hearing.” The measure states that such issues “shall include, in addition to unit appropriateness, the Board’s jurisdiction and any other issue the resolution of which may make an election unnecessary or which may reasonably be expected to impact the election’s outcome.”

In addition, Kline noted that the amended bill reaffirms the Board’s ability to hear an appeal of a regional director’s decision and direction of an election following the hearing.

As expected, members of the committee were sharply divided on their support of or opposition to this measure. While Republican committee members spoke in favor of the bill and decried recent Board actions and decisions, Democratic members criticized the committee’s focus on this piece of legislation instead of other job-related bills, and claimed the amended version does not sufficiently address the bill’s perceived shortfalls. As Rep. Robert Andrews (D-NJ) claimed during the markup, the amended bill “suffers from the same fatal flaws” contained in the earlier version. Specifically, he noted that the inclusion of the provision allowing parties to raise “relevant and material” pre-election issues adds another layer of delay to the representation election process, thereby slowing it down. Some members also argued that the bill’s definition of “relevant and material” is too broadly defined, thereby inviting litigation and exacerbating any delay.

As for the Board’s ability to decide whether to hear a party’s appeal of a regional director’s decision, some committee members noted that it is likely that the Board will be operating with only two sitting members in 2012 once member Craig Becker’s term expires, thereby lacking a quorum to make decisions.

Several Democratic members offered their own amendments to the bill, including ones that would provide for electronic voting, impose sanctions for filing frivolous appeals, and delete all provisions relating to the appropriateness of a bargaining unit. None of these amendments were adopted.

The bill will next move to the House floor for consideration by the full House. Although the bill will likely be approved by the Republican-controlled House, it will presumably face stiff opposition in the Senate.

Photo credit: Pinewood Portrait Studios

Kline also found fault with the Board’s recent decision in Specialty Healthcare, which changed the criteria for assessing appropriate bargaining units. Under the new standard, employers have the burden of proving excluded employees share an “overwhelming community of interest” with the proposed unit – a new and uncertain standard. The decision essentially makes it easier for unions to create smaller “micro” units within a workplace.

The majority of panelists spoke in favor of the Workforce Democracy and Fairness Act, and criticized the proposed expedited election rule. Charles Cohen, a former member of the NLRB, testified that the bill represents a “measured response” to recent NLRB actions, and would “restore the critical role that Congress should play.” He claimed that the proposed rule – which would dramatically shorten the timeframe between filing a representation petition and holding an election – “eviscerates an employer’s legitimate right” to express its position on representation. According to this witness, the election process is relatively quick, with elections occurring within a median timeframe of 38 days after the petition is filed. In fiscal year 2010, he testified, the average timeframe was only 31 days.

Cohen, as well as other witnesses, claimed that the bill would restore the status quo of long-standing election procedures, and codify a reasonable framework for holding union elections.

Another witness claimed that the Board’s recent rulemaking efforts have ignored employees’ rights in favor of promoting greater union access. He pointed out that unions often begin their organizing efforts weeks or months prior to filing a petition for representation. Limiting employers’ chances to educate and express their own positions to employees in as little as 10 days infringes on their free speech rights, they argued. Moreover, witnesses explained that the bill’s allowance of 14 days for employers to prepare for a pre-election hearing is a “reasonable compromise” and not drastically longer than the 7-day timeframe established by the proposed rule, but sufficient for an employer to prepare for the hearing.

Several witnesses also found fault with the Board’s decision in Specialty Healthcare. According to one witness, “if you control the electorate, you will have the key to winning an election.” The new “overwhelming community of interest” standard is an unknown and therefore hard to prove standard that will ultimately result in the organization of much smaller units within a company.

Testifying on behalf of the Retail Industry Leaders Association, Robert Sullivan explained that the practical result of these “micro” units will be devastating for retailers and other employers. He stated that unions will be able to organize employees within single shifts or departments, significantly limiting an employer’s flexibility and an employee’s opportunity for advancement. For example, he explained that flexibility in the retail industry is extremely important given the nature of the business and relatively high turnover. A manager will often move employees from one department or shift to another depending on business need. Doing so also enables employees to learn different functions within the organization. Organizing each department into separate units would greatly diminish this flexibility.

Another panelist echoed this position, claiming that the proliferation of micro bargaining units would amount to a “management nightmare” and limit an employee’s possibility of advancement. According to the witness, each unit would require the issuance of its own policies and benefit plans, among other administrative documents. This would not only be administratively burdensome, but expensive, they testified.

The bill garnered some critics, however. Ranking member George Miller (D-CA) claimed that the measure would enable employers to gerrymander the units. He also argued that the provision allowing parties to raise any issue prior to the pre-election hearing could encourage employers to bring up a number of issues in order to unduly delay a final election.

A union-side lawyer similarly argued that the bill “promotes neither fairness nor democracy” and is not aimed at helping the workforce. He also disputed the claim that employers would be given too little time to make their case against unionization to their employees. The witness and certain members of the Committee stated that employers have access to their employees from the date of hire. Therefore, they argued, the claim that the proposed rule limits their free speech rights is specious.

Kline concluded the hearing by promising to look into the bill’s language to see if any changes needed to be made to limit the potential for abuse.

A list of the panelists and links to their testimony and an archived web cast of the hearing can be found here.

Photo credit: webphotographeer

First, the measure would amend the National Labor Relations Act by requiring the Board to take into consideration eight separate factors when making a unit determination: (1) similarity of wages, benefits, and working conditions; (2) similarity of skills and training; (3) centrality of management and common supervision; (4) extent of interchange and frequency of contact between employees; (5) integration of the work flow and interrelationship of the production process; (6) consistency of the unit with the employer’s organizational structure; (7) similarity of job functions and work; and (8) bargaining history in the particular unit and the industry. Likely in reaction to the Specialty Healthcare decision – in which the Board made it more difficult for employers to successfully challenge the appropriateness of a bargaining unit – the bill includes the following provision:

To avoid the proliferation or fragmentation of bargaining units, employees shall not be excluded from the unit unless the interests of the group sought are sufficiently distinct from those of other employees to warrant the establishment of a separate unit. Whether additional employees should be included in a proposed unit shall be based on whether such additional employees and proposed unit members share a sufficient community of interest, with the sole exception of proposed accretions to an existing unit, in which the inclusion of additional employees shall be based on whether such additional employees and existing unit members share an overwhelming community of interest and the additional employees have little or no separate identity.

This amendment is designed to prevent the formation of so-called “micro” bargaining units that are easier to organize.

In response to the Board’s proposal to significantly shorten the time before an election occurs, the bill also would require that a hearing on any pre-election dispute – including those over the appropriateness of the bargaining unit itself – must be conducted within 14 days after petition for representation has been filed. The measure also would require that once a final bargaining unit has been determined, the employer would have at least seven days to provide the union with a list of eligible voters, which would include their names and one form of contact information of the employee’s choosing.

In a press release, Rep. Kline claimed that as a result of recent Board actions:

Employers will be forced to dedicate their limited resources to managing labor relations instead of expanding operations and hiring new workers. To make matters worse, the board’s agenda will create unnecessary strife within the workplace, pitting worker against coworker and opening the door to increased union pressure. The Workforce Democracy and Fairness Act is a responsible proposal that will protect employers’ free speech and workers’ free choice.

A full committee hearing on this bill is scheduled for Wednesday, October 12 at 10:00 a.m.