Earlier this week, Missouri’s Governor Eric Greitens signed legislation making Missouri the 28th state to pass Right to Work legislation. New Hampshire is considering legislation that, if passed, will be signed by its Republican governor, Chris Sununu, making it the 29th state. Right to Work is, of course, legislation permitted under the Labor Management Relations Act that prohibits unions from requiring bargaining unit employees to pay union dues or dues equivalents. Under current law, employees in states without right to work laws may be required either to join and remain members of the union representing them (paying the normal dues), or to pay the union what are called “Fair Share Fees”. These Fair Share Fees are calculated to be the union’s cost of representing employees in the bargaining unit, without inclusion of extraneous amounts included in the dues amount, such as political donations to candidates. Unions obviously prefer to have all employees contributing to their operations and political endeavors, and the number of employees opting out in non-RTW states is generally far less than the percentage opting out in RTW areas. Unions must represent all bargaining unit members fairly, even without receiving any payments from those in RTW states who chose not to pay. Employers generally support RTW efforts, since unions receive less funding and are weaker than otherwise. Employees prefer RTW since they have the choice of joining the union if they want, or staying out of it, even if there is a union present in the workplace. They can be “free-riders”—benefitting from any results of union bargaining but without paying anything to the union.

States have been the focus of RTW legislation in recent years, with Kentucky, Indiana, Michigan and Wisconsin all passing laws in the heartland. Wisconsin’s law has encountered still-pending challenges from unions on the basis that it forces unions into a position of involuntary servitude by having to represent dissenters. It survived a federal district court decision, now appealed to the U.S. Court of Appeals for the Seventh Circuit (which upheld Indiana’s RTW law), and was found unconstitutional under Wisconsin’s Constitution by a local county judge, whose decision is now on appeal at the district level.

An additional front is being opened in the RTW war. U.S. Representatives Joe Wilson (R-SC) and Steve King (R-IA) have introduced the National Right to Work Act, HR 785, which would make Right to Work the uniform law in the U.S. The law faces opposition from the labor movement, and would almost certainly encounter a filibuster in the Senate. Given the number of Democratic senators in states that have adopted RTW laws, it is likely that the House will pass the bill and send it to the Senate. This would force RTW state Democrats up for re-election in 2018 to take a position on the bill. Then, depending upon how the midterm elections turn out, the opportunity for Senate passage might increase, or passage could be foreclosed for at least another two years.

In a win for organized labor, the National Labor Relations Board (“NLRB”) reinstated a union-friendly standard under which both temporary and permanent employees may collectively bargain as a single unit without employer consent. On July 11, 2016, the NLRB’s 3-1 decision in Miller & Anderson, Inc., 364 NLRB No. 39 (2016), made it easier to combine workers who are temporarily employed by a staffing agency’s client company with workers permanently employed by that client company to form a union.

Under the new standard, if a staffing agency and its client company are deemed to be joint employers of the temporary workers, the temporary workers may join forces with the client company’s permanent workers, provided that they satisfy the “community of interest” factors demonstrating that it is appropriate to treat them as a single unit. Some of the factors used to determine whether a proposed unit of workers share a community of interest are whether the employees are subject to the same working conditions, are subject to common supervision, and have similar wages and benefit packages.

Click here to read the full client alert.

 

This post was coauthored by Inna Shelley.

The National Labor Relations Board decision in the Specialty Healthcare case has continued paving the way for the certification of increasingly fragmented micro bargaining units. On May 4th, the director of NLRB Region 2 approved a collective bargaining unit of full-time and part-time salespersons in the women’s shoe departments on the 2nd (Designer Shoes) and 5th (Contemporary Shoes) floors of a Bergdorf Goodman department store. The approved unit would likely consist of less than 12% of the store’s sales associates and an even lesser percentage of the store’s non-supervisory workers. The full text of this Neiman Marcus Group decision is available here.

Neiman Marcus Group continues the recent Board trend of allowing fragmented micro-units. Such units allow unions to gain a foothold by organizing only an increasingly small subset of employees. Unions no longer have to expend resources to organize the bulk of an employer’s workforce as long as they can identify any group of employees who share an alleged “community of interest” under the traditional criteria. This analysis is often quite subjective and considers whether employees (1) are organized into separate departments (2) have distinct skills and training (3) have distinct job functions or whether there is job overlap (4) are functionally integrated with other employees (5) have frequent contact with other employees (6) interchange with other employees, and (7) have distinct terms and conditions of employment.

Under Specialty Healthcare, if a unit is found appropriate under the above standard, it will be recognized even though a larger unit would be even more appropriate. To successfully challenge a smaller unit, the employer must demonstrate that employees in a petitioned-for, smaller unit share an “overwhelming community of interest” with other employees in a larger unit.

In approving a unit of women’s shoe sales associates on two store floors, Neiman Marcus Group emphasized that salespersons in the shoe departments were paid on a different wage scale than salespersons in other departments. It also distinguished the sale of shoes from that of other merchandise, claiming that shoe salespersons needed different skills and training and that many of them had significant prior experience selling shoes before their hire. Shoe salespersons also made minimal sales of other merchandise and transfers of salespersons from other departments to shoes were uncommon.

It did not matter that sales employees across all departments were subject to the same personnel policies, including health benefits, vacation and holiday policies, evaluations, probation, or use of a common cafeteria. Interestingly, the regional director concluded that salespersons of men’s shoes should not be in the unit because men’s shoes were sold in the men’s section of the department store located across the street and there was allegedly little association between the men’s and women’s shoe salespersons despite access to a common cafeteria.

The decision also analyzed Specialty Healthcare’s Footnote 29, which stated that Specialty Healthcare was not meant to disturb special industry presumptions and occupational rules. There is, of course, a longstanding presumption in the retail industry that the appropriate unit is store-wide. While recognizing that industry presumptions must still be followed after Specialty Healthcare, the regional director rejected the retail industry presumption. Instead, the director relied upon isolated retail cases, including those with stipulated units and those finding that appropriate units consisted of all salespersons, as opposed to only those who sell particular merchandise. Thus, as long as an exception allowing a smaller unit can be identified in a particular industry, even via voluntary approval, employers may not be able to successfully rely on long-established industry practice to challenge a proposed fragmented unit.

Neiman Marcus Group also affirms that in the post Specialty Healthcare world, it is now increasingly difficult for employers to challenge a proposed micro-unit by claiming that there is an “overwhelming community of interest” with a larger employee group. Such an “overwhelming community of interest” exists only where almost every community of interest factor overlaps almost completely. Any perceived difference in job functions or other terms or conditions of employment may justify a bargaining unit of a small employee group.

As a result, employers may find themselves under the obligation to engage in collective bargaining with a multitude of splintered employee groups, in spite of vastly overlapping interests that do not quite rise to “overwhelming” by the Board’s assessment. Cases like Neiman Marcus Group demonstrate that when the Board said in Specialty Healthcare that its decision did not presage any major changes, it wasn’t quite telling the truth, the whole truth and nothing but the truth.

Mary Schmitt Boyer, the basketball writer for the Cleveland Plain Dealer, has written an article about the impact of the Players Union’s disclaimer of interest months after the start of the lockout.  Plain Dealer Article 11-15-2011.pdf  In it, she quotes me on certain aspects of the labor exception to the antitrust laws.  She did not elaborate on the differences I noted between sports unions and conventional unions.  Two of those are 1. the perpetuation of the role of “stars” in sports unions, compared with most unions, where all employees are placed on the same pay schedule (there are not “Star butchers” who get paid many times what less skilled butchers are paid; and 2. the institution of agents, who actually do the negotiations on wages for their clients–something most unions do themselves, and which is the assigned role of unions under the Labor Management Relations Act: to negotiate over wages, hours and terms and conditions of employment.

For those readers interested in Ohio’s election campaign on the effort to improve its public employee collective bargaining law, here is a link to a debate in which I participated as an advocate for the reforms contained in Senate Bill 5 and Issue 2.

The Los Angeles Times reported today that a mob of hundreds of International Longshore and Warehouse Union members, alerted by a posting on the Union’s Facebook page, overpowered police and attacked a train carrying grain to a new storage facility in Longview, Washington.  According to the article, the union members cut brake lines on the train, dumped cargo and held the outnumbered law enforcement personnel at bay while they attacked the grain terminal.  The Union had already been subject to a temporary restraining order after the NLRB found that it had engaged in illegal activities, including dumping a bag of manure on the site from an airplane. The work at the grain terminal had been assigned by the operator to the General Construction and Operating Engineers Local 701, which has been criticized by the local branch of the AFL-CIO for accepting the work. The ILWU claimed to have been unaware of what had occurred at the terminal, saying it was looking into the matter.  Union violence is apparently not a thing of the past, at least in the Northwest.  Whether this incident will have any effect on the NLRB’s case against Boeing for electing to expand in another area of the country rather than Washington State remains to be seen.

In 1987, the NLRB held that a newspaper did not have to bargain with a union over its ethics policy, on the grounds that ensuring public confidence in its news reporting was a “core function” of the paper. Peerless Publications, 283 NLRB 334 (1987).  In 2006, Virginia Mason Hospital in Seattle unilaterally implemented an infection control policy designed to prevent the spread of the flu.  Among other things, it required nurses who had not been vaccinated to wear a surgical mask or take antiviral medications.  The union filed an unfair labor practice charge and the Board’s General Counsel issued a complaint.

An Administrative Law Judge found that there was “little if anything more central to the Hospital’s ‘entrepreneurial purpose’ than its attempt to keep its patients free of the influenza virus” and threfore dismissed the complaint.  The Board, in a 2-1 decision by Chairman Liebman and Member Pearce, with a dissent by Member Hayes, found that Peerless depended upon the Constitutional principle of freedom of the press and there was no such principle involved in hospital infection control.  The majority said that the Peerless Board was “mindful of” and to some extent influenced by the First Amendment implications of limiting a newspaper’s control over ethical standards for journalists. It then converted that mindfulness into the basis for the Peerless decision and distinguished the Hospital’s concern over the health of its patients as having no Constitutional dimension.  Hence, there was no Constitutionally-based core purpose to influenza control that excused the hospital from having to bargain.  The Board remanded the case to the ALJ for consideration of other defenses raised by the hospital.

As noted in a previous post, Chairman Liebman’s term has expired and she is no longer on the Board.  Member Pearce has been named the Chairman.  The Board is now operating with three members–Chairman Pearce, Member Hayes and Member Becker.  Member Hayes is the sole Republican on the Board and is likely to be dissenting from more cases in the future.  In the meantime, unless reversed, the Virginia Mason case is likely to spell the effective end to the “core purpose” exception to the duty to bargain.

Acting NLRB General Counsel Lafe Solomon took the highly unusual step on May 9, 2011, of issuing a formal press release asserting that the Boeing Complaint was nothing unusual, and requesting interested parties to let the NLRB’s processes run their course and not to attempt to try the case in the media.  As noted in the original post, the filing of the Complaint was accompanied by a news release from Mr. Solomon, which generated mulitple responses from Boeing and from both business and labor interests.

Interesting play call.  As collective bargaining negotiations broke down yesterday between the National Football League and Players Association, the players took the unusual move of decertifying their union so that they could file an anti-trust lawsuit against the NFL in federal court in Minneapolis.  A copy of the lawsuit, which seeks an injunction, is attached.  Brady, et al v NFL – Complaint.pdf

This New York Times Article by Judy Battista summarizes the disputed issues.

This Q & A fact sheet from the NFL summarizes the key components of the collective bargaining agreement from the NFL’s perspective.   

Here is the actual collective bargaining agreement.

It will be interesting to see how this dispute plays out in the public, especially in light of the timing of these events. 

Governor John Kasich has announced his intention to push for a radical retrenchment of Ohio’s Public Employee Bargaining Law, Ohio Revised Code Chapter 4117.  Passed in 1983 during the first year of Governor Richard Celeste’s term, the bill gave unions representing state employees the right to bargain with the state, allowed unions representing state and local governments, including school districts, the right to bargain and gave the right to strike to non-safety unions.  Safety unions gained the right to arbitration (called “conciliation” under the Act) but not the right to strike. 

In the years since its passage, the Act has predictably resulted in a shift of governmental funding towards wages and benefits.  The dispute resolution processes in the Act have removed key fiscal decisions from the control of elected officials and placed them in the hands of private arbitrators, many of whom have primary locations outside of Ohio and certainly outside the boundaries of local governments.  Also unsurprisingly, the incidence of strikes by public sector unions has dropped.

All of these effects were predictable [and were predicted–see Bumpass & Ashmus, Public Sector Bargaining in a Democracy—An Assessment of the Ohio Public Employee Collective Bargaining Law, 33 Cleveland St. L. Rev. 593 (1984-85)], but there was little or no pressure, except from local officials, to do much about them.  The November 2010 elections, however, brought strong Republican majorities to both houses of the General Assembly along with a Republican Governor.  Coupled with a serious fiscal crisis for the state and many of its political subdivisions, there is a significant chance that the Act will be amended along the lines proposed by Gov. Kasich. 

While a detailed analysis of the potential changes is beyond the scope of this entry, the current bill (Sub. S. B. No. 5—Jones) would eliminate mandatory bargaining rights for state employees, remove many subjects (class size, for example) from the permissible scope of bargaining, remove safety supervisors from unions, outlaw strikes and eliminate mandatory arbitration of contract disputes.  Local government and school district employees would retain bargaining rights.  This would indeed be a major retrenchment of union power over Ohio’s public employee terms and conditions of employment.

An interesting element in the discussion is the extent to which the debate about public sector unionization’s adverse impact on state and local government operations is likely to fuel debate over unionization in the private sector, where at least one study (pdf) has shown that right-to-work states out-compete their mandatory union membership peers. There are already questions being asked at news conferences about the willingness of the Governor to support a Right to Work Law for Ohio.   Gov. Kasich has so far expressed his preference to see whether manufacturing sector unions will be a positive force in his attempts to recruit new businesses to Ohio.  The other shoe could well drop, though, if the unions seek to thwart the Governor’s ambitious development agenda.