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Recent NLRB Decisions Expand Employer Obligations

The National Labor Relations Board ("NLRB" or "Board") continues to expand employer obligations under the National Labor Relations Act ("Act"). Below are summaries of four cases recently decided by the NLRB consistent with this trend:

In July 2012, a divided Board ruled in Banner Health System, 358 NLRB 1 (2012), that an employer violated the Act by routinely asking employees who made a complaint to human resources not to discuss their complaint with their coworkers while the investigation was ongoing. The Board ruled that the employer's request unlawfully intruded on employees' right to discuss discipline and disciplinary investigations, a right that is protected by the Act. According to the Board, an employer's "generalized concern with protecting the integrity of its investigations is insufficient to outweigh employees' Section 7 rights." Banner explains that a request for confidentiality might be lawful under some circumstances, such as when the employer determines that witnesses need protection, evidence is in danger of being destroyed, testimony is in danger of being fabricated, or there is a need to prevent a cover-up. But, according to the Board, unless an investigation poses those types of dangers, an employer cannot require or even request confidentiality from its employees while the investigation is ongoing.

In two other recent cases, the Board expanded an employer's obligation to respond to a union's request for information. The first is IronTiger Logistics, Inc., 359 NLRB No. 13, decided in October 2012, by a 2-1 majority. Under well-established Board law, a unionized employer must provide, upon the union's request, information that is relevant and necessary to the union's performance of its duties as the exclusive collective bargaining representative. In this case, however, the union sought information that the employer believed to be irrelevant. The Board ultimately agreed with the employer, ruling that the information sought by the union was indeed irrelevant to the union's representational role. Nevertheless, the Board ruled that the employer violated Section 8(a)(5) of the Act by waiting more than four months before responding to the union's request. According to the Board, the employer's failure to respond in a more timely fashion to the union's request for information violated the employer's duty to bargain in good faith.

Similarly, in early December 2012, the Court of Appeals for the D.C. Circuit upheld another 2-1 NLRB decision that forced a manufacturer to give a union pricing and customer information after the employer maintained during negotiations that it was seeking wage reductions or freezes due to "competitive pressures." KLB Indus., Inc. v. NLRB, 700 F.3d 551 (D.C. Cir. 2012). It has long been settled law that when an employer claims during negotiations that it is unable to pay increased wages, a refusal to provide relevant financial information to substantiate that claim is a violation of the Act. In this case, the employer did not claim it was financially unable to pay increased wages, but only referred to competitive pressures in seeking to reduce or freeze wages. Nonetheless, the Board found, and the D.C. Circuit affirmed, that the employer's refusal to provide information about price quotes, lost customers and marketing strategies under these circumstances violated Section 8(a)(5) of the Act.

Finally, on December 12, 2012, a 3-1 majority of the NLRB overruled a 50-year-old policy relating to an employer's obligation to deduct union dues pursuant to a check-off provision after expiration of a collective bargaining agreement in WKYC-TV, Inc., 359 NLRB No. 30. Generally, upon expiration of a collective bargaining agreement, an employer is obligated to maintain the status quo and continue terms and conditions of employment until the parties reach either an agreement or impasse. However, certain provisions of the labor agreement such as union security clauses, arbitration procedures and no-strike provisions are extinguished when the labor contract expires. For more than 50 years, the NLRB has held that check-off provisions also were extinguished upon the expiration of the labor agreement, and therefore, employers were not obligated post-expiration to deduct union dues and remit them to the union. This provided economic leverage to employers during negotiations. The current Board, however, found that there was no cogent reason why an employer's obligation to collect and remit dues should not be subject to the status quo rule. Thus, on a prospective basis, check-off provisions will survive the expiration of the labor agreement, and an employer's obligation to deduct and remit them to the union will remain in force even after expiration.

These cases demonstrate the current Board's willingness to change certain fundamental ground rules, with potentially significant impact on employers' day-to-day operations. In this challenging environment, Schiff Hardin's Labor and Employment attorneys stand ready to provide you with advice, training and policy reviews to help you to try to minimize NLRB-related risk.

© 2014 Schiff Hardin LLP

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Partner

Henry W. Sledz Jr. concentrates his practice in representing management, encompassing all aspects of employment law, from labor agreement negotiations and arbitrations to litigation before numerous state and federal courts and agencies. This includes a particular emphasis on food and dairy industry clients.

Mr. Sledz also has significant experience in public sector labor law, representing villages, school districts, colleges and universities in labor negotiations, arbitrations and general counseling.

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Lisa Carey-Davis concentrates her practice in litigation. She has trial and appellate experience across the full spectrum of commercial litigation, including class actions, business torts, contract disputes, and employment discrimination matters. She also has experience in ERISA and employee benefit litigation.

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