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NLRB bargaining order vacated; it handcuffed employees to union for no good reason

By Ronald Miller, J.D.

Although the D.C. Circuit did not disturb the NLRB’s finding that an employer unlawfully withdrew recognition from a union at a time when it enjoyed the majority support of bargaining unit employees, it refused to enforce the Board’s bargaining order barring the raising of a question concerning the union’s continuing majority status for a reasonable time. On the facts of this case, the appeals court determined that a bargaining order was out of keeping with the purposes of the NLRA. It rewarded the union for sitting on its hands, punished the employer for acting unwarily but in good faith, and it “give[s] no credence whatsoever to employee free choice.” Judge Henderson wrote a separate concurring opinion (Scomas of Sausalito, LLC v. NLRB, March 7, 2017, Henderson, K.).

Decertification petition. The operator of a seafood restaurant recognized the union as the exclusive collective bargaining representative of its bartenders, bussers, cooks, dishwashers, hostesses and servers. In 2013, 29 of the bargaining unit’s 54 employees signed a decertification petition asking the employer to “withdraw recognition from [the Union] immediately” if the petitioners “make up 50% or more of the bargaining unit.” One employee filed a petition with the NLRB asking it to conduct a decertification election. Meanwhile, the union persuaded six employees to revoke their signatures. Two days later, the employer withdrew recognition, unaware that six employees had a change of heart. The remaining employees, apparently believing they were free of the union, withdrew the decertification petition from the Board.

The union filed an unfair labor practice charge, claiming that the employer unlawfully withdrew recognition when it in fact had majority support. The Board sided with the union and ordered the employer to recognize and bargain with it. The bargaining order included a “bar to raising a question concerning the Union’s continuing majority status for a reasonable time.” The employer petitioned for review of the Board’s order on two grounds: (1) it did not violate the Act; and (2) even if it did, an affirmative bargaining order was too extreme a remedy. The D.C. Circuit rejected the first ground but agreed with the second. Accordingly, it vacated the bargaining order and remanded the matter to the Board for further proceedings.

Withdrawal of recognition. When presented with evidence that the union no longer has majority backing, the employer “has three options: to request a formal, Board-supervised election, to withdraw recognition from the union and refuse to bargain, or to conduct an internal poll of employee support for the union.” Under Levitz Furniture Co., “an employer may rebut the continuing presumption of an incumbent union’s majority status, and unilaterally withdraw recognition, only on a showing that the union has, in fact, lost the support of a majority of the employees in the bargaining unit.” An employer acts “at its peril” when it withdraws recognition, even when presented with “a petition signed by a majority of the employees in the bargaining unit.”

The employer contended that because it relied with good-faith certainty on a petition signed by a majority of employees in the bargaining unit, it did not violate the Act by withdrawing recognition. In such a circumstance, the employer argued, it did not have to satisfy Levitz. The appeals court disagreed, finding that Levitz squarely foreclosed that contention, holding that a decertification “petition signed by a majority of the employees in the bargaining unit” does not shield an employer from the “peril” of a ULP charge unless the employer shows that the union “actually” lacked majority support when the employer withdrew recognition.

Bargaining order. However, the appeals court concluded that the Board abused its discretion in imposing a bargaining order. The appeals court saw no indication that the Board considered why a bargaining order was necessary in this case, when the union withheld information about its restored majority status. A decertification bar “touch[es] at the very heart of employees’ rights” by preventing them from “dislodg[ing] the union” no matter “their sentiments about it,” the court observed. Thus, the Board was required to undertake a reasoned analysis that includes an explicit balancing of (1) the employees’ Section 7 rights; (2) whether other purposes of the Act override the rights of employees to choose their bargaining representatives; and (3) whether alternative remedies are adequate to remedy the violations.

In this instance, the employer’s violation was unintentional, not deliberate or calculated. It acted in good faith on a facially valid decertification petition. It verified the employees’ signatures. Thus, nothing about its conduct was “flagrant.” Accordingly, this was not a case in which, absent a bargaining order, the employer would benefit by its own wrongs. Rather, the record reflected that the genesis of the employees’ discontent was not the employer’s conduct but an extended period of neglect by the union. In short, the bargaining order did not further the NLRA’s policy of protecting the exercise by workers of full freedom of association and designation of representatives of their own choosing—it handcuffed the employees to the union for no good reason.

Concurrence. Judge Henderson argued that an employer does not violate the NLRA when, in good faith, it withdraws recognition from a union as a result of the union’s intentional nondisclosure of its restored majority status. The employer’s conduct in this case would fit that description had it established that, fully informed, it would not have withdrawn recognition. However, the employer offered no direct evidence on that score. Thus, Judge Henderson found no way around the unsatisfying conclusion that the employer violated the Act.