Faster Votes, But Few More Union Wins - A Surprising Look at ‘Quickie Election’ Rules at Year-End
After several years of drafting, handwringing, and litigation, in April 2015, the National Labor Relations Board’s new expedited election rules became effective. The employer community held its collective breath as they were rolled out. These rules substantially shortened the pre-election period and imposed significant information disclosure obligations on employers. (For more on the rules, see our article, Preparing for Labor Board’s Quickie Election Rules.) Now, after several months’ experience, what have we learned?
We have learned that some things have changed and some have not. There have been a number of surprises, but the bottom line for employers is that once a petition is filed, although companies face hurdles like never before, they still can prevail, even in a secret ballot election. Moreover, the new rules underscore the benefit employers continue to reap from traditional preventive tools. With some planning, companies can continue to maintain a union-free workplace. More about that below. First, here is what we found:
1. The Anticipated Tidal Wave of NLRB Election Petitions Has Not Materialized Yet
Many predicted that once the “quickie” election rules took effect, unions would jam the NLRB’s docket with election petitions. In advance of implementation of the rules, Board personnel expressed concerns that they would be unable to deal with the increased workload considering the tight timeframes contained in the new rules. No wave has materialized.
Despite evidence of a marked uptick in petitions in the first few months after issuance of the new rules, any increase dissipated as the year went on. From the effective date of the rule change (April 14, 2015) through the end of 2015, 1,931 representation case petitions were filed with the NLRB. Remarkably, during the same period in 2014, 1,964 petitions were filed – meaning an approximately 2% decrease in petitions filed in 2015 after the new rules became effective.
Conventional wisdom, which held that during the period prior to issuance of the new rules, the rate of election petition filings would slow down (while unions awaited implementation of the new labor-friendly rules), did not play out. In fact, the opposite happened. Moreover, a comparison of the same period in 2013 and 2014 revealed that filings increased by almost 10% in 2014.
Why more petitions were not filed during the initial nine months under the new rules? It is too soon to say. A 2% difference from 2014 to 2015 is not significant, especially since an unusually high number of petitions seemed to have been filed in 2014. The bottom line is that the number of election petitions filed post-implementation of the new rules generally appears consistent with prior years — so far — when viewed over time.
The takeaway for employers is that the sky is notfalling. Nevertheless, so far, we can say union organizing generally remains as active as it has been — no more, no less.
2. There Has Been a Decrease in Pre- and Post-Election Litigation
To assess the level of NLRB election case litigation, we looked at the NLRB’s statistics. While full NLRB records are not published in real time, comprehensive figures are available at the end of each fiscal year, which runs from October 1 to September 30.
The NLRB’s fiscal year-end listing shows three types of closed “R” cases:
The most common is a petition filed by a labor organization to become the certified bargaining representative of a group (unit) of employees (identified as an “RC” proceeding in Board parlance);
Less common are petitions filed by employees to decertify their union (called “RD” cases); and
Infrequently, petitions seeking an election may be filed by an employer (called “RM” cases).
Cases are “closed” after an election when there are no unresolved objections, voter challenges or requests for review (appeals) to the Board; that is, once the results are final.
We looked at all listed cases in which elections were conducted following the April 14, 2015, implementation of the new rules, from May 1 to the end of the fiscal year, September 30, and compared the records to the same period in fiscal years 2013 and 2014.
For the period in 2015, the NLRB conducted elections, certified the outcome, and closed the case in connection with 667 petitions. For the same period in 2014, only 559 cases were closed at the end of the fiscal year (even though more petitions had been filed in 2014). In 2013, there were 589 closed cases, also a lower petition-case ratio than 2015.
Why? The Board’s new rules were intended to speed up elections, not only by scheduling them sooner, but also by imposing limitations on pre-election litigation. The rules are partially a response to union criticism that pre-election hearings delay elections. The Board now refuses to conduct a hearing and issue a decision unless the case involves a “question concerning representation” — a very limited basis. Issues of unit composition (that is, which job classifications should be included in the unit), long a staple of Board hearings, are routinely deferred until after the election, if they are heard at all. Although expressly rejected by the Board in its formal rulemaking, it is apparent that NLRB Regional Directors (with the tacit approval of the NLRB’s General Counsel) are refusing to hold pre-election hearings on unit issues unless they would affect the eligibility of at least 20% of the petitioned-for unit.
As a result, today, pre-election hearings are practically extinct.
Further, the new rules promote election agreements, commonly referred to as stipulations or “stips.” In fact, the rules encourage participation in stips with the express reservation of litigation of issues after the election. This is not new. R cases have trended toward stips (as opposed to pre-election hearings) for years. During the May-September period in 2015, almost 94% of all closed cases were “stipped.” In 2014, stips occurred 90% of the time and in 2013, 92%.
Prior to the new rules, employers expressed concerns that deferring determination of unit issues such as voter eligibility and supervisory status not only leaves employees uncertain of the unit in which they are voting, but also denies employers certainty as to the identity of their statutory “supervisors” (within the meaning of the National Labor Relations Act). The Board countered with the assurance that these issues will be litigated eventually after the election. That has not necessarily been the case. If the employer prevails in the vote or if the number of employees at issue is insufficient to change the outcome of the vote, the issues will not be litigated (leaving them unresolved) and leaving important legal issues clouding employers’ operations.
While the rules promote election agreements and deferral of litigation, there are slightly more stips than in previous years. The significant increase in closed cases during this time period strongly suggests that many cases that could be litigated post-election are not being litigated. We will keep a close eye on this, but it may be that employers are more often simply accepting the results of the election and foregoing post-election litigation. A company in that position should discuss options with counsel.
3. Unit Size: Down, But Only Slightly, So Far
The NLRB maintains statistics on the median size of bargaining units. While fiscal year 2015 data is not yet available, in the 10 years prior to the new rules’ implementation, the median unit size fluctuated between 23 and 28. Recent anecdotal reports suggest that, as of a few months ago, median unit size had settled at about 23.
For the post-new rules period, we reviewed theaverage number of employees per election and compared it to the average in elections in previous years. In our May-September 2015 sampling of closed cases, the average voting unit was 68 employees. In 2015, it fell to 61. However, employers should not read too much into this. In the apparently slow year of 2013, the average was only 58.
Again, it is too soon to tell, but the new rules appear not to have had a statistically significant impact on the size of units sought to be organized. This raises an important opportunity for employers to analyze their employee complement and take proactive steps to establish potential voting units beneficial to the company…but the time to do that is now, before organizing occurs.
4. Quickie Elections? No Doubt About It - A Dramatic Change
When the final rule was announced, the big question on every employer’s mind was how quickwill quickie elections be? We know the rules do not dictate any time targets. The General Counsel has hinted that he would issue election time expectations once the regions had amassed a body of experience. It was thought this would have occurred by the end of 2015, but it did not.
Nonetheless, the number of days from the filing of the petition to the date of an election has dropped dramatically. Until April 2015, the Board’s operative time target for an election in which there was no pre-election litigation was 42 days after the filing of the petition. Employers could rely on getting up to at least that many days. (The median number of days, according to Board statistics, was 37.)
Now, that number has dropped dramatically. Although official figures have not been released, in the last few months, several Regional Directors have reported a median in the neighborhood of 23 days. If correct, it is a 40% decrease in the time employers could previously count on to communicate their message after a petition is filed.
In the experience of Jackson Lewis attorneys, 23 days is emerging as a de facto limitation in many NLRB regions, and some Regional Directors appear determined to reduce it even further. There are reports of elections being held within 14 days after the filing of a petition (generally, with the consent of the employer). However, we have found in many cases employers may exercise their rights under the rules to contest problems with petition content and service (and, of course, traditional unit questions), adding days, a week, or more. This extra time to communicate with employees may mean the difference between winning or losing.
5. Unions Are Winning Slightly More Elections
The union election win rate generally has been edging upward for years. However, the number of elections has declined, indicating that labor organizations are being more selective about filing petitions. It was believed that the new election rules — with their severe limitation on employers’ time to share information with employees — would result in a dramatic increase in election victories. This, too, has not happened. Union win rates are up, but only slightly following the advent of the new rules.
An examination of the Board’s closed case records for May-September 2015 shows that unions were certified in 67.47% of elections held, an increase from 64.4% in 2014 and 63.88% for the same period in 2013. An increase, yes, but not unprecedented. In fiscal year 2009, long before the “quickie” election rules, the union win rate was 68.5%.
Here is an interesting breakdown. Looking at the union win rate in different types of elections, we see that for our reviewed period (May to September) in 2015, unions won 70.7% of RC cases (only one point or so more than in the same period in the previous two years). In RD and (rare) RM elections, unions prevailed in 41% of the cases in 2015 — about a 5% or 6 % increase over the last two years. Quicker elections seem to help unions somewhat in those cases.
To date, there is no evidence of a sea change in successful initial organizing elections.
What Have We Learned? Pro-Active Preventive Steps Are More Important Than Ever
First and foremost: do not panic.
Preventive steps that employers take are more important than ever. We have learned:
The rules may make more work for employers, but employers certainly can continue taking lawful proactive steps to address employee issues that may avoid organizing or help with winning NLRB elections.
There is no reason for employers to think these rules make unions inevitable. Union organizing continues as it did before, but employers continue to win about as many cases as they did before.
Despite quickie elections, the ability to cherry-pick units to their advantage, and the rules’ discouragement of litigation, the union election win rate has not spiked.
Employers should scrutinize petitions for technical flaws and insufficiencies in service, sometimes gaining valuable additional pre-election time.
Employers should consider their options regarding pre- and post-election litigation. In some cases, judiciously contesting a regional R case decision can make all the difference.
More than ever, sound preventive practices and preparation will help employers avoid organizing or (if needed) win elections. These include:
Conducting an audit of employment policies and HR procedures to ensure legality and best practices.
Analyzing employee complements with an eye toward establishing supervisory status of all members of the management team and arranging departments to maximize a beneficial unit structure.
Establishing training protocols for management on the employer’s rights and responsibilities under the law.
Implementing employee educational programs on union awareness.