What Non-Union Employers Should Know About the National Labor Relations Act 04-28-2005

I. INTRODUCTION

You own or manage a non-union company, so you don't need to know anything about labor law, right? Wrong. A recent decision by the National Labor Relations Board ("NLRB") providing non-union employees with the same right to representation at an investigatory interview previously available only to unionized workers serves as an important reminder that the nation's primary labor law applies at least in part to both union and non-union companies.

This article, in a summary fashion, seeks to introduce owners and managers of non-union companies to the National Labor Relations Act ("NLRA"), to identify its provisions bearing on non-union companies and to review appropriate conduct to maintain compliance. The article first reviews the NLRA and its general applicability to non-union companies. It then focuses on its application in two separate non-union circumstances: (1) where union representation is not being sought; and (2) where union representation is being sought.

Non-union employers need to know and understand their rights and obligations under the NLRA. Non-compliance, whether intentional or arising from ignorance, can expose a company to the costs of defending against and potentially having to remedy an unfair labor practice charge.

II. NATIONAL LABOR RELATIONS ACT

Basic Provisions

Introduction
The basic law of labor relations in the United States is contained in the National Labor Relations Act. The law was first enacted in 1935 and has been amended several times. As amended, it is sometimes also referred to as the Labor Management Relations Act.

Objectives

To provide employees with a process of choosing a collective bargaining representative.
To provide employees a means of engaging in mutual aid and protection.
To protect employees in their exercise of those rights.

Creation of the NLRB
The NLRA established the National Labor Relations Board, which has the responsibility of administering the NLRA.

NLRA Sections Important To Non-Union Companies
The NLRA consists of numerous provisions, with Sections 7, 8(a), 9 and 10 being the most applicable to this discussion. Section 7 contains the basic rights of employees:

Employees shall have the right to self-organization, to form, join or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection and shall have the right to refrain from any or all such activities….

In sum, Section 7 provides that employees shall be protected in their right to collectively bargain, to engage in mutual aid or protection, or to refrain from such activity.

Section 8 of the NLRA sets forth conduct that constitutes an unfair labor practice. Section 8(a) describes conduct forbidden by employers; Section 8(b) describes conduct forbidden by unions. Only Section 8(a) is addressed here.

Pursuant to Section 8(a), employer unfair labor practices may be found where managers or supervisors:

Interfere with, restrain or coerce employers in the exercise of their rights to organize, bargain collectively, and engage in other concerted activities for their mutual aid or protection. Section 8(a)(1).
Dominate or interfere with the formation or administration of any labor organization or contribute financial or other support of it. Section 8(a)(2).
Encourage or discourage membership in any labor organization by discrimination with regard to hiring or tenure or conditions of employment, subject to an exception for a valid union security agreement. Section 8(a)(3).
Discharge or otherwise discriminate against an employee because he or she has filed charges or given testimony under the Act. Section 8(a)(4).
Refuse to bargain collectively with the majority representative of its employees. Section 8(a)(5).
Enter into a hot cargo agreement with the union in which the employer promises not to do business with, or not to handle or otherwise deal in any of the products of any other person. Section 8(e).

Section 9 of the NLRA:

Governs election procedures.
Governs representation cases.
Provides that the certified representative bargaining agent of an appropriate unit of employees is their exclusive representative.

Section 10 of the NLRA:

Grants the NLRB the authority to enforce the unfair labor practice provisions found in Section 8.
Establishes trial procedures in unfair labor practice cases.
Provides for certain injunctive relief through the courts.

Does the NLRA Apply to You?

General Applicability
The NLRA does not extend to all employers, employees and unions. However, the likelihood is that unless an employer is in the airline, railroad or agricultural industry, it will be subject to the NLRA.

Excluded Employers
The NLRA specifically excludes certain employers from its coverage and from NLRB jurisdiction. Those excluded are:

Federal and state governments, their agencies and political subdivisions;
Wholly-owned government corporations;
Federal Reserve banks; and
Employees covered by the Railway Labor Act (including railroads and airlines).
Excluded Employees

The NLRA excludes certain employees from its coverage and NLRB jurisdiction. Those employees are:

Agricultural employees;

Independent contractors;

Domestic servants;

Supervisors;

Individuals employed by parents or spouses; and

Individuals employed by employers exempt from the NLRA.
Volume of Business Standards
Other than those entities statutorily excluded from the NLRA, the NLRB may enforce the NLRA against any private sector enterprise whose operations affect commerce. However, the NLRB has determined it would be too burdensome to extend its jurisdiction to all small businesses and has, through its rulemaking powers, established monetary jurisdictional standards that an employer must meet in order for the NLRB to assert jurisdiction. Some of those limits are noted below:

Nonretail Enterprises – Sales or purchases of goods or services directly or indirectly affecting interstate commerce in excess of $50,000 per year.
Retail Enterprises – Gross sales in excess of $500,000 per year.
Combined Retail and Nonretail Enterprises – Least restrictive of the foregoing standards.
Combined Retail and Wholesale Enterprises – The nonretail standard.
Instrumentalities of Commerce - $50,000 per year.
National Defense Industries – No minimum.
Multi-employer Bargaining Associations – Regarded as a single entity for jurisdictional purposes.
Multiple Locations of a Single Employer – Regarded as a single entity for jurisdictional purposes.
Nonprofit Organizations – Normal industry standards apply.
Office Buildings, Shopping Centers, Parking Lots -- $100,000 per year in gross revenue of which $25,000 derives from businesses which themselves satisfy jurisdictional requirements.
Apartment Houses -- $500,000 per year in gross revenues.
Public Utilities -- $250,000 per year in gross revenues.
Newspapers -- $200,000 per year in gross revenues and participates in interstate news services or advertises nationally sold goods or services.
Radio, Television and Telephone Companies -- $200,000 per year in gross business volume.
Colleges, Universities and Secondary Schools -- $1,000,000 in gross revenues.
Daycare Centers -- $250,000 per year in gross revenues.
Entertainment and Amusement – Treated as retail concern.
Federal Credit Union -- $500,000 per year gross revenues.
Health Care Institutions -- $250,000 per year in gross revenues unless nursing home or nursing service, in which case $100,000 in gross revenues.
Law Firms -- $250,000 in gross annual revenues.
Transit Companies -- $250,000 in gross revenues and effect on interstate commerce.
Union Employers – No minimum has been established, but jurisdiction assumed if affiliated with national organization.

Other Labor Laws
Even if a company escapes the monetary jurisdictional prerequisites of the NLRB, Minnesota has its own state labor laws administered by the Bureau of Mediation Services which apply to most companies not meeting the NLRB jurisdictional requirements. See Minn. Stat. Chapters 179 and 179A.

The NLRB

Basic Functions
The National Labor Relations Board enforces the NLRA. It performs two basic functions:

Conducting secret ballot elections to determine the representational status of labor organizations; and
Preventing and remedying unfair labor practices.

The NLRB operates through two offices: the Board; and the Office of General Counsel.

Board

The Board has five members, each appointed for five-year terms by the President with Senate approval.
The Board serves an adjudicative function, deciding appeals from decisions of NLRB administrative law judges on issues raised by way of unfair labor practice charges filed by employees, employers or unions.
The Board is also formally responsible for all representational matters, but has delegated this responsibility to the regional directors who supervise the regional offices located throughout the United States. Those offices are staffed with attorneys, field examiners and other personnel.

General Counsel

The General Counsel is appointed for a four-year term by the President with Senate approval.
The General Counsel, among other duties, has final authority to investigate unfair labor practice charges, issue and prosecute complaints, handle appeals, seek 10(j) injunctions, and supervise the investigation and processing of representation petitions.

Processing Unfair Labor Practice Charges

Employees, whether unionized or not, who think their employer has engaged in an unfair labor practice can file an unfair labor practice charge with the NLRB regional office.
The regional office will investigate whether there is reasonable cause to believe the employer has violated the NLRA.
If reasonable cause is found and the matter is not voluntarily resolved, the NLRB can issue a complaint against the employer, alleging that it committed an unfair labor practice.
The Office the General Counsel then prosecutes the case against the employer in a hearing before an NLRB administrative law judge ("ALJ").
After hearing the case, the ALJ recommends to the Board a decision and a case disposition.
If a party files an exception to the ALJ's decision, the matter is then decided by the Board (often on the factual record established by the ALJ).
The Board has no authority to enforce its decision against an employer. Therefore, in the absence of voluntary compliance, the Board must petition a Federal Court of Appeals to order enforcement.
Similarly, an employer has a right to appeal the Board's decision to the Court of Appeals.
Both the Board and employer may seek Supreme Court review of the Court of Appeals decision.

NLRB Remedial Powers
The NLRA grants the NLRB broad remedial powers. In addition to its power to nullify an election and order a new one, the NLRB has the power to:

Issue cease and desist orders;
Order employee reinstatement;
Order back pay; and
Issue a bargaining order requiring an employer to recognize a union as the exclusive bargaining representative of its employees.

III. PROTECTED EMPLOYEE CONDUCT OUTSIDE THE CONTEXT OF AN ORGANIZATIONAL EFFORT

A. Section 7 Protections

Section 7 of the NLRA protects employees who seek union representation. However, its protections extend beyond those circumstances. Section 7 also protects employees who are not engaged in a union organizational effort, but who "engage in other concerted activity for the purpose of … other mutual aid or protection."

An employer (union or non-union) who takes adverse action against an employee based on his or her exercise of Section 7 rights violates the NLRA and is subject to NLRB enforcement action and remedies.

Section 7 thus insulates employees (union or non-union) from adverse employer actions such as discipline or discharge for exercising those rights.

Elements for Protection
To be protected, an employee's action must be:

Concerted,
Directed toward an appropriate end, i.e. mutual aid and protection, and
An appropriate means of action.

Concerted Action
Section 7 does not protect individual action. It protects only employees whose actions are concerted. For example, if an employee in a non-union company acting alone complains to a supervisor about the long hours he or she is working, the employer can lawfully fire the employee based specifically on the fact that he or she made the complaint. This is so even if other employees share the worker's attitude toward long hours.

In contrast, if the worker had joined with one or more coworkers in making the complaint, the complaint would meet the concerted activity requirement of Section 7 and constitute protected conduct. In that case, the employer could not legally fire the employees for the act of making the complaint. The termination would violate the NLRA.

Mutual Aid and Protection
Section 7 protection also extends only to concerted action taken to achieve the end of employee mutual aid and protection. Thus, a mutual complaint about wages would be protected activity because wages clearly relate to a worker's interest as an employee. But worker action, concerted or not, that does not relate to employee interests is not protected. For example, worker action taken to promote an employee buyout of a company (distribution of a proposal for an employee-leveraged buyout) has been held to be unprotected activity because the action taken related to workers' interests as potential owners, not as employees.

Proper Means
Finally, otherwise protected concerted action to achieve a legitimate end of employee mutual aid and protection can lose Section 7 protection if taken by way of improper means. While the law has not clearly defined what constitutes improper means in all cases, illegal activity and action that unreasonably threatens the long-term viability of a company would likely qualify.

B. Investigatory Interviews: Beware!

An informed non-union employer, aware that it cannot take adverse action against its employees for concerted activity, would probably believe that conducting an investigatory interview of a sole employee would not place the employer in danger of trampling on employee Section 7 rights. But a recent NLRB decision constituting a major reversal of precedent holds otherwise.

In Epilepsy Foundation of Northeast Ohio, 331 NLRB No. 92, July 10, 2000, the NLRB held that employees in a non-union setting have a statutory right to request representation by a fellow employee during an "investigatory interview" if the employee reasonably believes the interview could result in discipline.

Two employees wrote memos criticizing their supervisor. The executive asked one of the employees to meet with her and the supervisor. Realizing he was in trouble, the employee demanded to bring his co-author to the meeting. The executive said no and fired the employee for refusing to attend the meeting alone.

The NLRB, by a three to two decision, determined that the one employee's request to have the other employee present at the requested meeting was an exercise of his Section 7 rights and that the company's insistence that the employee meet without the coworker or be terminated restrained, interfered with, and coerced him in exercise of those rights.

The NLRB retroactively changed its interpretation of the law, found the employer guilty of an unfair labor practice charge based on its new interpretation of the law, reinstated the employee and awarded back pay. Wow!

In deciding Epilepsy Foundation, the NLRB overruled longstanding precedent. It had previously held that unrepresented employees do not have a right to representation by a coworker at an investigatory interview with an employer even if they have a reasonable belief that the interview will result in disciplinary action.

The issue of representation during investigatory interviews initially arose in a case involving a unionized work force in the 1975 United States Supreme Court decision of NLRB v. J. Weingarten, Inc. , 420 U.S. 251 (1975).

In Weingarten, the employer had called in an employee for questioning regarding allegations that she had taken money. During the course of the questioning, the employee asked that the union steward be present and the manager refused.

The court, in that unionized setting, ruled that the right of an employee to union representation upon request at an investigatory interview is grounded in the Section 7 guaranty of the right of employees to act in concert for mutual aid and protection. The court went on to explain that this right to representation would arise only when an employee actually requests representation and only when the employee has a reasonable belief that the investigation will result in some sort of disciplinary action.

The court further explained the employer safeguards built into the representational right: first, although an employer may not force an employee to take part in an interview without his or her union representative, the employer is free to refuse to conduct the interview with a union representative present and, instead, proceed with the investigation without interviewing the employee at all; and second, the employer is not under any duty to engage in bargaining with a union representative who attends an investigatory interview.

The dissenting NLRB members in the Epilepsy Foundation decision expressed numerous reasons for continuing to limit the Weingarten rights to a unionized setting.

A non-unionized employer is under no duty to recognize an employee representative until it has achieved recognitional status satisfactory to the employer or has been certified by the NLRB as the exclusive representative of the employees. Prior to such recognition or certification, a non-unionized employer may lawfully deal on an individual basis with its employees with regard to all terms and conditions of employment.
By finding that non-unionized employees have a Weingarten right to representation during investigatory interviews, the NLRB majority has carved out an area in which they forced non-unionized employers to deal collectively with employees; a result that is completely at odds with the intent and structure of the NLRA.
Limiting Weingarten rights to a unionized setting more properly balances the interests of labor and management than extending Weingarten rights to a non-union company.
A co-worker representative does not bring the same level of assistance to an investigatory interview as does a union representative who serves the interests of both the employee and the employer by eliciting facts and helping to avoid the filing of frivolous grievances.
Having a union representative present during an investigatory interview could help to safeguard the interests of the bargaining unit generally, but there is no similar guaranty in the non-union work place because a non-union coworker chosen as a representative by an employee for his or her own personal reasons may or may not have the interests of the rest of the work force in mind.

Until the NLRB changes its position once again on the scope of Weingarten rights or until a federal court refuses to enforce the NLRB's current interpretation, employers must deal with the NLRB majority decision in Epilepsy Foundation.

Rules for Investigatory Interviews
So how does a non-union employer comply with Epilepsy Foundation? It educates its supervisors to know that when the employer is conducting investigatory interviews (where questioning could lead to discipline) and an employee asks that a co-employee be present, the Epilepsy Foundation rules apply.

When a supervisor or manager wants to question an employee about a matter which could lead to that employee's discipline:

the employer does not have to offer the employee the right to be accompanied by a fellow employee,
but if the employee requests such assistance, the employee cannot be disciplined either for making the request or refusing to participate in the interview without the presence of the coworker.

Once an employee makes a request for representation, an employer has several options.

First, it can grant the request and allow the representation.
Second, it can offer the employee a choice between an interview without another worker present and no interview.
Third, it can cancel the interview and make its disciplinary decision based on other available information.

An employee's representation right cannot unduly deny an employer the right to conduct a meaningful investigation. An employer has a legitimate right to investigate potential misconduct.

The role of an employee representative at an investigatory interview is to provide assistance and counsel to the interviewee.

The representative can contribute to the discussion.
The company need not allow him or her to disrupt the interview.
An employee representative cannot engage in threats, violence or disruptive behavior which deprives an employer of its right to question the employee.

The right to representation exists only at investigatory (fact-gathering) interviews.

It does not apply to run-of-the-mill shop floor exchanges, instruction, training or assistance on how an employee is to perform work.
It further does not apply to an employer issuing or administering discipline already decided upon.

An employer need not postpone or reschedule an investigatory interview simply because an employee's chosen representative is not immediately available, as long as there is another reasonable choice available at the time scheduled for the interview.

If an employer ultimately disciplines an employee and does so solely based on conduct unrelated to the employee's request for an employee representative or an employee's refusal to meet with the employer without a representative, i.e, based on substantive performance factors, then the discipline should not be affected by an employer's unlawful refusal to allow representation. However, an employee asserting a claim will no doubt argue that the discipline was imposed, at least in part, due to the employee's request for representation.

C. Rules Restricting Section 7 Rights – No Walk Off And Others
Employers should avoid publishing work rules that impinge on employee Section 7 rights to engage in mutual aid and protection. No walk off rules and rules prohibiting employees from discussing wages are two examples.

No Walk Off Rules
The NLRB has recently held that an employer "no walk off" rule constitutes interference with employees' rights to engage in protected concerted activity under Section 7 of the NLRA. The NLRB decided that such a rule was in violation of the NLRA because it restricted employees from being able to engage in strikes, which are legally protected activity.

Case Facts
In that case, an employee temp service assigned four workers to work at a company, assigning one of the workers to a foreman position.

The foreman and one of the non-foremen argued, resulting in the foreman firing the non-foreman.

The other two workers, believing that the termination had been unfair because it arose from the worker's refusal to buy some beer for the foreman, left the work site and went to the temp service offices to protest the termination.

The temp service then terminated the two complaining workers for violating their rule mandating that employees who "walk off the job" will be terminated.

Decision
The NLRB explained that two or more employees have the right under the NLRA to jointly participate in withholding their services to pressure their employer into favorably resolving their complaints about basic employee interests such as pay, benefits and hours, and their act of withholding their services, i.e. striking, cannot be the basis for discipline.

Practice Tip
It seems that any no walk off rule, to be lawful, must also inform employees that they are free to walk off the job if they are engaged in protected concerted activity under Section 7 of the NLRA.

Of course, a rule advising employees of these rights more likely does more harm to the company than good by planting ideas in the employees' minds. Therefore, an employer may be better off deleting any no walk off the job rule from its written rules and relying on basic employment principles in disciplining or terminating employees if they do indeed leave the job site.

No Wage Discussion Rules
In Epilepsy Foundation, the NLRB ordered the employer to cease and desist from maintaining a rule prohibiting employees from disclosing or discussing their wages with other employees. Such a rule could prevent employees from engaging in concerted activities for the purpose of mutual aid and protection.

D. Discriminatory Hiring Practices.
A non-union employer violates the NLRA by discriminating in its hiring or personnel practices against applicants or employees based on their union affiliation.

Applicants.

Refusal to hire an applicant based on his or her union affiliation or stated intention to organize is unlawful. NLRB v. Town & Country Electric.
Even union organizers who apply for employment with the sole objective of organizing the company are protected as employees under the NLRA.

Employees.

Discriminatory treatment of employees based on union affiliation is unlawful.
Cannot lawfully promote a union organizer to a management position based on his union affiliation.
Cannot lawfully terminate an employee based on his union affiliation.

IV. PROTECTED CONDUCT AS PART OF ORGANIZATIONAL EFFORTS
The NLRA imposes obligations on a non-union company faced with a union organizational effort, with those obligations primarily arising from an employee's Section 7 rights. Violation of those management obligations may lead to the invalidation of an election that was favorable to the employer, may result in unfair labor practice charges or may even compel the NLRB to issue a bargaining order requiring the company to recognize the petitioning union as the exclusive representative of its employees.

Recognition Processes
Employees may obtain union representation through:

Voluntary recognition;
A bargaining order; or
A representation election.

Voluntary Recognition

An employer may voluntarily recognize a union that represents a majority of its employees.
If more than one union seeks recognition, an employer ma y only recognize a union that produces evidence of majority support, evidence that is usually presented through signed union authorization cards.
An employer's voluntary recognition of a union as its employees' exclusive representative takes away the employees' right to a secret ballot election to determine their representative. An employer should understand and assess this factor prior to deciding to voluntarily recognize any union.
An employer that chooses to have an election determine whether its employees will be represented by a union should be careful to, upon a union's request for voluntary recognition, decline the invitation and decline to review any union authorization cards presented by the union.
An employer's review of those cards may result in the union being deemed the employees' exclusive representative.
Those employers who wish to safeguard their employees' right to an election should, when presented with such a request, merely decline and state that such an important employee issue should be determined by the employees pursuant to a secret ballot election.

Bargaining Order
The NLRB may order an employer to recognize and bargain with a union where the employer has committed unfair labor practices that have made a fair election unlikely or that have undermined the union's majority and caused an election to be set aside.

Representation Election

A representation election is conducted and supervised by the NLRB and allows a company's employees, by secret ballot, to determine whether they wish to have an exclusive representative and who that representative should be.
The election is usually held by the NLRB within 42 days of an employee, employer or union filing an election petition with the NLRB.
An employer has both rights and responsibilities arising from the NLRA during the period leading up to an election.
The NLRA's free speech provision permits an employer to engage in free debate on labor issues as long as statements contain no threats of reprisal, promise or benefit. In exercising such rights, an employer must assure that it does not interfere with its employees' Section 7 rights to participate in union activities.

What an Employer Should Not Do or Say

The period of a union organizational campaign is fertile ground for unfair labor practice charges. An employer faced with such a campaign should obtain counsel to assist in advising what is and what is not lawful. While an employer does have the right to inform employees of their rights (including their right to refrain from union activities), of their current benefits and of unionization potential disadvantages, such factually-laden topics are best addressed with counsel. This article identifies those activities that in general should be avoided to avoid unfair labor practice charges.

A. Do Not Threaten Change Or Promise Benefits To Influence Votes

Do not threaten job loss for union vote.
Do not promise benefits for anti-union vote.
Do not threaten to withdraw existing benefits if union wins.
Do not threaten to sell, close, or cut back operations if union wins.
Do not predict that the company will fail if union wins.
Do not discipline or penalize employees supporting the union for any infraction which would not be subject to discipline or penalty if there had been no union organizational campaign.
Do not punish or threaten to punish employees for being in favor of the union or if the union wins the election.
Do not discharge, lay off or transfer anyone because they engage in union activity or because they favor the union.
Do not give employees special treatment because they oppose the union.

B. Do Not Inquire Into Employee Union Sympathies

Do not interrogate employees about union-related matters.
Do not ask if employees signed union authorization cards.
Do not ask whether an employee will vote for the union.
Do not ask whether an employee attended union meetings.
Do not ask applicants their views of unions.
Do not ask an employee to be an informer or spy.
Do not ask an anti-union employee to go out and encourage others to reject the union.
Do not ask an employee whether he has spoken to an NLRB representative or what was said.
Do not allow supervisors to attend union meetings.
Do not spy on union activities.
Do not watch hand billing by union organizers (risk allegation of retaliation).

C. Do Not Disrupt The Status Quo

It is the employer's obligation to maintain the status quo during a unionization campaign; an employer must generally do what the employer would have done if there were no unionization campaign.
Changes may not be made unless the change had previously been announced and its timing is not affected by the unionization campaign.

CONCLUSION

The NLRA reaches beyond the union setting. It imposes obligations on non-union employers and imposes sanctions for noncompliance. All companies should establish a basic familiarity with those obligations.