Significant Foreseeable Changes In United States Labor Relations Laws, Management Perspective

There have been substantial changes in the political landscape since the 2006 Congressional elections in the United States. This is evidenced by discontent in a substantial majority of the American people with the Bush administration, the fragile health of the debt burdened economy and its consequential adverse impact on the middle and blue collar segments of U.S. society. This paper will address potential amendments to the National Labor Relations Act (the “NLRA”)designed to facilitate union organizing and collective bargaining. 1 (29 U.S.C. §§151-169. )

I. Historical Background Of The National Labor Relations Act

Before the enactment of the NLRA, employee participants in strikes were often prosecuted as criminal conspirators; or the strike was enjoined as an unlawful attempt to fix the price of labor. Employees who complained about wages or other terms or conditions of employment could, and were routinely lawfullydischarged. Employees had no legal recourse. No law existed which prohibited retaliation by employers because of concerted action by employees to pressure their employer to improve conditions of employment.

With the enactment of the NLRA, the unbridled power of employers to resist union organizing or concerted activity, came to an end. The original NLRA provided the blueprint for collective bargaining. The law’s central theme. Section 7,2 protects non-supervisory employees from discrimination because of concerted activity attempting to improve wages and other terms and conditions of employment.

The law governing the conduct of Management and Labor (the first National Labor Relations Act) has been amended several times since its enactment in 1935, to address abuses by employers and unions. However, the amendments did not undermine the NLRA’s cardinal principles (29 U.S.C. §141-144; 167; 172-187): the protection of employees’ rights to engage in concerted (union) activity and strike or otherwise withhold their services; and employers’ corresponding legal obligation to refrain from interfering with those rights. Once a union attains status as the exclusive representative of an appropriate group (unit) of employees, the employer is required by the NLRA to bargain in good faith with that Union. (29 U.S.C. §158(d))

Employer and Union power has experienced peaks and valleys, with union representation surging when the economy is strong and faltering during periods of recession. However, the past twenty-five years has seen a precipitous decline in union membership as foreign companies have made major incursions into U.S. domestic industries. Steel, automobiles, heavy equipment, apparel, appliances and a broad range of commodities have been adversely affected by lower overseas labor cost resulting in increased outsourcing and direct purchase by U.S. consumers of foreign made products.

Additional but more subtle factors are disagreements in policies among U.S. unions at their highest level (the AFL-CIO Split), and their inability to successfully organize at the local union level. Reasons include inadequate financial support and the fact that despite reforms in the substantive law dealing with unfair labor practice proceedings, virtually no changes have been made in the NLRA’s procedural or substantive provisions dealing with the representation arena. Major complaints by Unions with the current NLRA focus on minimal remedies for violation of employee rights to engage in protected concerted activity in the representation context. Another issue which has drawn union criticism is the protracted time the processing of representation cases can consume, from initial organizing efforts to final enforceable decisions by federal appellate courts.

Today, the process by which a union seeks certification by the NLRB as the exclusive representative of employees in an appropriate bargaining unit, is essentially unchanged from the original text of the 1935 NLRA.

II. Current NLRB Procedures.

The “changes” discussed later in this presentation will be more meaningful to the reader if preceded by a brief journey over the “representation” road traveled by unions these past seventy-two (72) years.

The authority and responsibilities of the NLRB break down as follows:

A) The NLRA provides broad jurisdiction to the NLRB to regulate relations between unions and employers, preempting virtually all state laws on that subject;

B) The five members of the NLRB3 have staggered five (5) year terms. The NLRB generally makes its decisions through panels of three (3) In view of the “staggered terms” the usual line-up of NLRB members results in a majority of Members whose background and experience are as Union or Employer representatives, usually as attorneys. The practical reality is that 2 to 1 or 3 to 2 decisions tend to reflect the political philosophy of the President whose appointees comprise the majority. Cases involving extremely significant issues, or ones that may change existing law or policy, are usually considered by all five (5) Members.

C) The NLRB has three principal functions: Promulgate Rules and Regulations’1; Oversee the representation process; and, in its administrative appellate capacity, adjudicate both representation and unfair labor practice cases.

D) Another powerful position appointed by the President subject to confirmation by the Senate is that of General Counsel, who serves for a term of four (4) years. (29 U.S.C. §153(d)) The General Counsel’s primary responsibilities are the prosecution of unfair labor practice cases and providing advice and opinions to the NLRB’s Regional Offices.

E) The NLRB’s Representation Function.

The procedure prerequisite to “Certification” of a Union as exclusive collective bargaining representative of an appropriate unit of employees, requires filing a Petition with a Regional NLRB Office, supported in writing by at least thirty percent(30%)of persons working in that unit.Absent agreement by the employer to recognize and bargain with the Union, a hearing may be conducted.5 A secret ballot election supervised by a NLRB agent, will be held expeditiously within 30-45 days, supervised by a NLRB agent.

There is no provision for direct judicial review from a decision made by a Regional Director certifying the union following an election. The process requires refusal by the employer to honor the certification, the filing by the Union of an unfair labor practice charge, a Motion for Summary Judgment by the General Counsel, a second review by the Board, a predictable decision affirming the certification and an Order to the Employer to bargain in good faith. At that juncture the entire record is subject to judicial review by a U.S. Circuit Court of Appeals.

This procedure is the mechanism used by employers to delay meaningful collective bargaining for as long as several years, during which employee support for the Union generally dissipates.

III. Political Considerations/Foreseeable Changes In The NLRA

The following assumptions should be considered by counsel when advising clients contemplating investment, management or operation of labor intensive businesses in the U.S.6

A) The 2008 federal elections may result in control by the Democratic Party of both Houses of the U.S. Congress and the Presidency.

B) The NLRA may be amended to validate union authorization “Card Checks” as acceptable evidence from which to determine whether a Union is the exclusive representative of an appropriate bargaining unit of private sector employees.7

C) The “Secret Ballot” election supervised by the National Labor Relations Board may be eliminated. In addition, the Board may be given the authority to impose civil fines against employers who violate the rights of employees who are attempting to obtain union representation and a first contract. Proposed legislation introduced by Senators Kennedy (Democrat) and Spector (Republican); and Representatives Miller (Democrat) and King (Republican) would authorize the Board to assess triple backpay remedies for employees unlawfully discharged during an organizing campaign or negotiations for a first contract; and fines up to $20,000 per violation.8

D) The Board’s existing subpoena authority and discretion to apply to the U.S. District Courts to seek preliminary injunctions to cease and desist alleged unfair labor practices are likely to be used more aggressively during Unfair Labor Practice proceedings.

E) Administrative Law Judges (“ALJ”) will be encouraged to expedite proceedings and issue bench decisions in cases not designated “complex.”

F) The foregoing possible changes to the NLRA and NLRB procedures represent amendments Unions have sought without success for the better part of a generation. Today, with the exception of anomalies such as Nevada, Arizona and California, where tourism and steady population growth continue to require more hands-on service related employees, the outsourcing of manufacturing jobs to Asian, African, Indian and other low wage locations, have adversely affected union membership in the private sector. Union membership has declined from 20.1% in 1983 nationwide to 7.4% reported for 2006. (U.S. Bureau of Labor Statistics)

IV. The Strike

Historically the “Strike” has been Labor’s ultimate weapon; but has become ineffective, in part, due to the NLRA’s prohibitions on “Secondary Boycotts”9 (29 U.S.C. §158(b)(4)) and the employer’s ability to lawfully and permanently replace strikers (NLRB v. Mackay Radio & Telegraph Co., 304 U.S. 333(1938)). In construction, effective “common-situs” picketing is difficult to achieve because of the “Two Gate” system. In non-construction environments, non-union temporary or permanent replacements are often available to keep business operations going. In addition, strikers are less willing to trade a paycheck for a picket sign for prolonged periods of time. Contrary to the days when the children of a miner, steelworker, or truck driver would follow in a blue-collar parent’s footsteps, the children of today’s blue collar workers more often than not seek higher education and better paying careers. Today the strike to provide improved wages and benefits for future union workers, rarely provides the necessary incentive for its attendant hardships.

What has evolved in the United States is the tendency by management, particularly of companies whose stock is publicly traded, to avoid a strike and the short-term adverse affect on profit, by satisfying wage and benefit demands that may in the long-term become a significant burden. The emerging global competition, with comparatively lower than U.S. labor costs, is a timely example of the short-term strike avoidance strategy reaping unwanted long-term results. The U.S. automobile industry is but one example.

Union pressure through negotiated pension and health and welfare funds, banks, boards of directors of public corporations, City Council’s and County Commissioners, and influential politicians, also contribute to avoidance of strikes.
V. Alternative Dispute Resolution

Mandated Alternative Dispute Resolution (“ADR”), not presently proposed as an amendment to the NLRA, should be seriously considered as the required method to resolve impasse in collective bargaining by binding arbitration rather than resort to strikes or lockouts.

Since the U.S. Supreme Court decisions in three cases commonly referred to as the “Steelworkers Trilogy, “10 binding arbitration has evolved to reflect a public policy that favors arbitration as the preferred method to resolve labor disputes. Supreme Court cases that followed applied that public policy to enjoin strikes when arbitration required by a collective bargaining agreement has not been pursued by the union, and the dispute is covered by the grievance procedure of the labor agreement (Boy’s Market v. Retail Clerks, Local 770, 398 U.S. 235 (1970)).

Agreements between individual employees and employers are enforced by state and federal courts, in spite of provisions in such agreements that deprive the employee of a jury trial, even in discrimination cases. (Title VII, 42 U.S.C. §2000e, etseq.)11

Collective Bargaining Agreements in the Nevada unionized construction industry, i.e. NECA (Electrical) and SMACNA (Sheetmetal), have for many years been strike-free because of provisions which prohibit strikes even when the parties are unable to agree on terms to replace an expiring contract. There is little doubt as to the constitutionality of statutory mandates requiring the parties to submit all labor disputes, and impassed negotiations for a new or successor Agreement, to mediation and if successful, binding arbitration.

To date, such statutes exist at state and local levels in respect to public safety (Fire and Police),(with exceptions such as California where the California Supreme Court held the State Constitution extends the right to strike to public employees.)

VI. Conclusion

Having been a witness and participant during more than four decades of Management representation, it has become apparent the best of times for workers and employers are those during which a reasonable balance of power exists. Decisions based upon ideology should take a backseat to those arrived at pragmatically.

Today, employers can still avoid the duty to recognize and bargain with a union by retaining highly skilled lawyers and consultants. That ability has played a major role in the decline of union representation in the American private sector; but union avoidance has its own price and is likely to become more difficult and expensive if changes in the NLRA occur. No simple solutions exist. Neither strikes, lockouts or governmental pro¬active support for unions prevalent in many countries in Western Europe, provide an easy answer. A pro-management imbalance in the U.S. in 1935, was the catalyst for the NLRA. If the current imbalance favoring management continues, the adversarial relationship between management and labor will exacerbate a condition that can only damage the problematical economy of the United States, the world’s most avaricious consumer.

NORMAN H. KIRSHMAN
PEEL BRIMLEY LLP
3333 E. Serene Ave. Henderson, Nevada 89074
(702) 990-7272
nkirshman@peelbrimlev.com
Presentation: June 29, 2007