By Geoffrey S. Lohman, Fillenwarth Dennerline Groth & Towe LLP
The National Labor Relations Board issued several significant decisions in late 2012, which have overruled long-established precedent regarding application of the National Labor Relations Act. These decisions are generally reflective of the trend of the current Board toward interpretation and application of the Act in a manner that is more favorable to employee rights.
In WKYC-TV, 359 NLRB No. 30 (December 12, 2012), the Board overturned its 1962 decision in Bethlehem Steel, 136 NLRB 1500 (1962), which had held that an employer’s obligation to withhold union dues from employees’ wages and remit them to the union expired with any collective bargaining agreement establishing that obligation. Prior to its decision in WKYC-TV, the Board for fifty years had carved out union dues check off provisions from its ordinary rule barring, absent impasse, unilateral changes in terms and conditions of employment by employers following the expiration of collective bargaining agreements. The Board in WKYC-TV concluded that the Bethlehem Steel decision lacked a coherent explanation for its rationale. This decision may have particular significance in states like Indiana, since dues check off provisions remain lawful under the new right-to-work law and serve as the primary mechanism for the collection of dues by labor organizations. Given the historical reliance by employers on the Bethlehem Steel rule, the Board decided against applying the new rule retroactively.
In American Baptist Homes of the West d/b/a Piedmont Gardens, 359 NLRB No. 46 (December 15, 2012), the Board issued a decision relating to the duty of employers to furnish information in connection with union grievances over employee discipline. In Piedmont Gardens, the Board overruled its 1978 decision in Anheuser-Busch, Inc. relating to the duty of employers to provide a union with witness statements the employer obtained in connection with its investigation of employee misconduct. Under the old Anheuser-Busch rule, employers were not obligated under any circumstance to turn over such witness statements as part of their ordinary duty to furnish information to unions. There were some previous limitations to the Anheuser-Busch rule, in that the Board had held in New Jersey Bell Telephone, Inc., 300 NLRB 42 (1990), that employer investigative reports that included evidence gathered from witnesses generally must be turned over to a union upon request. However, the Board has now overruled any remnant of Anheuser-Busch and holds in Piedmont Gardens that if witness statements obtained by the employer are relevant to the processing of a grievance, the employer may only refuse to disclose the statements if it proves that it has a legitimate and substantial confidentiality interest in not disclosing them, and if it shows that this interest outweighs the union’s need for the information. The Board decided not to apply this rule retroactively to pending cases.
In Alan Ritchey, Inc., 359 NLRB No. 40 (December 14, 2012), the Board held for the first time that an employer whose employees are represented by a union – but which has not yet entered into a first collective bargaining agreement with the union – must bargain with the union over discretionary discipline issued to represented employees before imposing discipline. The Board concluded that application of an employer’s disciplinary system represents a mandatory subject of bargaining. Accordingly, the Board held that an employer in this circumstance must notify the Union and provide it with an opportunity to bargain before it imposes discipline on an employee. The purpose is to permit the Union an opportunity to effectively represent employees by convincing the employer that there are mitigating circumstances, alternative courses of action, or other factors that should cause the employer not to issue discipline or to issue less harsh discipline. The Board clarified that this duty does not obligate the employer to await impasse before imposing discipline, so long as the discipline is consistent with past practice or policy. Furthermore, the Board indicated that if there are exigent circumstances – meaning that the employer has a reasonable, good-faith belief that an employee’s continued presence presents a serious and imminent danger to the employer’s business or personnel – it may act to remove the employee (although not necessarily impose final discipline) before notifying the union and providing an opportunity to bargain. The Board also decided not to apply this holding retroactively.
In Latino Express, Inc., 359 NLRB No. 44 (December 18, 2012), the Board issued a decision relating to steps that employers must take in connection with backpay remedies for employees who have been discriminated against in violation of the Act. The Board held that employers who have been ordered to pay backpay are now required as part of the remedy to submit documentation to the Social Security Administration so that any backpay may be allocated to the appropriate calendar quarters. The Board also held that employers are required to reimburse such employees for any additional state or federal income taxes they incur as a consequence of receiving lump-sum backpay that covers more than 1 year. The Board’s decision as to reimbursement of additional taxes overturns prior Board precedent. See Laborers Local 282 (Austin Co.), 271 NLRB 878 (1984). The Board’s reasoning is that these steps are necessary in order to make employees who have been discriminated against truly whole, since the failure to report information to the SSA may result in denial of appropriate benefits and since the payment of backpay in a lump-sum in a single year may result in negative tax consequences for employees under a progressive income tax system. The Board held that these rules would be applied retroactively to all pending cases.
Finally, aside from the fact that each of these decisions may be appealed, it is worth noting that there is some possibility that each of these decisions may be invalidated on the theory that the Board currently lacks power to act at all. The United States Court of Appeals for the District of Columbia issued a decision on January 25, 2013, concluding that the Board lacked a quorum during 2012 because President Obama lacked the constitutional authority to make recess appointments to the Board in January of 2012.