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Employer’s Campaign Prediction That Employees Would Have To Join Union And Pay Dues As Condition Of Employment Not Coercive, NLRB Majority Rules

The NLRB currently is churning out cases and Advice Memoranda at a fairly regular pace.  We recently discussed NLRB decisions addressing information requestshandbook statements, and confidential informants.

An interesting area of NLRB case law concerns campaign statements,–statements made by employer representatives during an organizing campaign.  When there is an allegation of wrongdoing, the Board evaluates such employer statements on two levels:  whether they are unlawful (in which case they constitute an unfair labor practice) or “objectionable” in which case they do not necessarily violate the law, but are of such a nature that they had a tendency to interfere with employee free choice during the election.  Both types of statements can overturn an election win for an employer.  An unlawful statement must be remedied before an election is rerun, usually by a public notice posting.  An objectionable statement overturns the election and the rerun is held shortly thereafter; the remedy is the rerun election.

One type of objectionable statement is in the area of “misstatements of law.”  The allegation is that the employer’s statement of the law surrounding unionization was incorrect.  It is the NLRB’s job to evaluate whether an incorrect statement of the law was objectionable.

In Didlake, Inc., 367 NLRB No. 125 (May 10, 2019), the Board was faced with an employer’s incorrect statement of law in the form of a prediction about what would happen to the employee if the union were to win the election.  The employer provided janitorial services for an Army National Guard Readiness Center.  There were 20 employees, approximately 15 of whom were severely disabled.

Employer Makes Pitch About Employment Being Conditioned on Union Membership and Dues Payment

During the course of the election, the employer’s Vice President had a number of conversations with employees about the consequences of having a union.  A conversation which was recorded provided the example for the subsequent objection:

Vice President:  So if the Union wins, I want to let you know a few things that will probably happen, okay, because we have the same Union at the Pentagon, okay.

Employee:  Ok

Vice President:  First thing they will require you to do is join the Union.

Employee:  Yes.

Vice President:  And if you don’t, you will not be able to work here.  Have they told you that?

Employee:  No.

Vice President:  Okay, so if you don’t join, you can’t work here.  Part of that agreement, then, is we will take $37 a month out of your paycheck, and we will give it to the Union on your behalf.  They will require us to do that.  They will also take 5 cents an hour for every hour that you work, and we will pay that to them as well, okay?  So if they win, then we have what’s called a collective bargaining agreement.  The Union and [the Employer] will sit down and negotiate the terms and conditions of that contract.

Employee:  Yes.

Vice President:  And those terms and conditions are wages, benefits, work rules for the workplace, and those sorts of things, so all of that is an unknown.  It will have to be negotiated, okay?

Employee:  Okay.

Vice President:  Everything may just stay the same, they may go up, or they may go down.  It’s a gamble.  We don’t know where all that goes until we sit down and negotiate with the Union, so we want to make sure that you’re aware of it.  If they win, you have to join as a condition of your employment to be here, and you will be paying the union dues.  Those are three things that we know for sure.  All the other things will become negotiation.

Employee:  Okay.

The election was held and the union lost by a slim margin.  The union received 9 votes, the employer received 10 votes and there was 1 void ballot.  The union filed objections and the NLRB Region conducted a hearing.  While there were other objections, the main issue in the case was whether the exchange between the Vice President and the employees was objectionable.  The Regional Director ruled that the employer’s prediction as to the effects of unionization was a misstatement of the law and that the statement was objectionable.  The Regional Director ruled that the employer’s statement about “having” to join the union and pay dues was a misstatement of the law that was objectionable.  The Regional Director ordered a rerun election. The employer appealed this decision.  Under the new election regulations, the rerun election was held while the employer’s appeal was pending.  The union won the second election.

NLRB Majority Holds Statement is a Misrepresentation of Law but Harmless

An NLRB majority (Chairman Ring and Member Emanuel) reversed the Regional Director’s ruling and vacated the results of the second election.  The Board began by noting that the employer “misstated the law when they characterized union membership and the payment of dues as a ‘condition of employment’ if the Union won the election.”  Although not discussed in the Board’s decision, the employer’s statements constituted a misstatement of the law because union membership becomes a condition of employment through a union security clause which must be negotiated into a collective bargaining agreement.  It is possible that the parties do not agree to include a union security clause in the labor contract.

The Board then reviewed the law in this area: that “unless a party has acted in a ‘deceptive manner’ that renders employees unable to recognize campaign propaganda, the Board will not ‘probe into the truth or falsity of the parties’ campaign statements’ and ‘will not set elections aside on the basis of misleading campaign statements.'”  Midland Life Insurance Co., 263 NLRB at 133.

Applying this standard, the Board held that the conversations were held in a “straightforward manner” and no deception by the employer was alleged.  The Board held the employer’s “mere misrepresentations regarding the Union’s ability to compel membership or enforce the payment of dues do not rise to the level of objectionable conduct.”  The Board held that the Regional Director and dissenting Board member “did not give due weight both to the conditional nature of the Employer’s statements and the context in which they occurred.”  Thus, although the Vice President “predicted that employees would have to join the Union as a condition of their employment and would be paying the union dues, these comments were preceded by and implicitly based on [the Vice President’s] references to the Employer’s experience with the Union at a nearby facility.”

Dissent Sees Coercion In Statement

Member McFerran saw the employer’s statements about employees “having” to join the union and pay dues as tantamount to a threat of job loss.  McFerran interpreted the statement not only as misrepresentative of the law but coercive:

The Employer warned employees in no uncertain terms that union representation necessarily would result in union-membership and dues obligations that the Employer would have no choice but to enforce by discharging employees who wanted to refrain from joining the union and paying dues (even though they might well have wanted union representation).  That warning was not just a clear misstatement of a basic principle of modern labor law, it was a threat equating a vote for representation by the Union with the risk of job loss.

Takeaways

This is an interesting case because it demonstrates how the statements evaluated by the Board can be interpreted in vastly different ways.  The Board majority saw a misrepresentation but, in context, ruled that the employee likely was able to see the statement against the backdrop of bargaining:  the employer was talking from experience with the same union about the risks of bargaining and the potential outcome.  The Board majority might have ruled differently were it not for the employer’s statement about its experience with the same union at another location.  We do not know the history of that relationship but it is likely that the parties had a valid union security clause in the contract and that it would be reasonable to assume that the union would seek the same thing at any newly organized location.

The NLRB has the difficult job of judging how employees might interpret statements from the employer.  As we have discussed previously, the outcome of a case like this very much depends on the make-up of the Board.  Employers wanting to avoid that kind of uncertainty would do well to just not make absolute statements in campaign context.  It’s better to preface a statement with, “I don’t have a crystal ball but . . .” than to talk about certain outcomes.

© 2019 Proskauer Rose LLP.

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About this Author

Mark Theodore, Employment Attorney, Proskauer Rose
Partner

Mark Theodore is a partner in the Labor & Employment Law Department. He has devoted his practice almost exclusively to representing management in all aspects of traditional labor law matters throughout the U.S. 

Some highlights of his career include:

  • Successfully negotiated the first contract for a shipping agency during constant threat by union to shut down Port of Los Angeles

  • Successfully defended a major theme park when the NLRB sought bargaining order after the union...

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