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Changing Course and Pressing the Outer Limits: Key NLRB Decisions in 2001

December 31, 2001

The year 2001 was marked by a number of significant decisions by the National Labor Relations Board (the "NLRB" or "Board") applying the National Labor Relations Act (the "NLRA"). In some cases, longstanding principles were overturned, and in others, this seventy-year old law was applied in a dramatically expansive manner.

Key developments at the NLRB this year included the following:

NLRB again facilitates unionization of temporary employees

Agencies providing temporary employees often tout their ability to take on most or all of the administrative costs and burdens that come with being the "employer," and employers often assume that when they engage an employment agency to provide temporary employees, labor problems will not follow. The NLRB's 2000 decision in M.B. Sturgis, 331 N.L.R.B. No. 173 (2000), overturned earlier precedent and showed that this assumption is not necessarily correct. In that case, the NLRB ruled that where a union seeks to organize employees of an employer that, in addition to its own workforce, engages an employment agency to provide temporary employees, employees on the payroll of the agency can properly be included in the bargaining unit as well.

In October 2001, in Gourmet Award Foods, 336 N.L.R.B. No. 77 (2001), the NLRB extended the rule of M.B. Sturgis and determined that an employer violated the NLRA when it refused to apply its collective bargaining agreement to temporary employees supplied by an agency and performing bargaining unit work. The Board found that the employer was a "joint employer" of the agency's employees because it assigned work to them, provided day-to-day supervision, determined their work schedules, and had the authority to discipline them. Consequently, the employer was bound to apply its collective bargaining agreement to the agency employees performing unit work just as if it had directly hired unit employees itself. As the use of temporary employees and other contingent workforce options continues to grow, the Board's decisions in M.B. Sturgis and Gourmet Award Foods will take on even more significance.

General Counsel issues new "three strike" rule on discriminatory enforcement of no-solicitation rules

Generally, an employer may make and enforce work rules that bar non-employees (including union representatives) from distributing literature or otherwise soliciting employees on the employer's private property. Employers also may prohibit employees from distributing literature or otherwise soliciting their co-workers while on working time and under certain other circumstances. However, discriminatory enforcement of these rules violates the NLRA. Specifically, it is unlawful to enforce such policies with regard to union activities but not to enforce them with regard to other activities, including charitable or civic activities like the United Way, the Red Cross, and Goodwill Industries.

At the same time, the NLRB often has held that employers may allow a small amount of isolated charitable solicitation activity as an exception to otherwise lawful no solicitation/no distribution policies. The problem is that there has never been a clearly defined rule as to where the lawful exception ends and unlawful discrimination begins. An employer that allowed its employees from time to time to collect charitable contributions could not be sure if it would commit an unfair labor practice by enforcing its no solicitation rule to ban union related solicitation.

In a memorandum to the NLRB's Regional Directors prompted by an increase in fundraising activities following the September 11 terrorist attacks, the NLRB General Counsel attempted to provide concrete guidance on this question. The General Counsel stated that an employer generally may permit as many as three incidents of charitable solicitation, while still enforcing its no-solicitation rule to prohibit union-related solicitation, without committing an unfair labor practice.

Employers should note, however, that the three incidents have to be isolated or sporadic in order to avoid tainting the employer's policy. For example, if three incidents of charitable solicitation all occur on the same day that the no-solicitation policy is enforced against union activity, or if there is other evidence suggesting that union activity is being targeted for prohibition under the policy, the employer will likely be found to have engaged in discriminatory application of its policy, in violation of the NLRA.

NLRB adopts new standard on withdrawal of recognition

In its March 2001 decision in Levitz Furniture Co. of the Pacific, 333 N.L.R.B. No. 105 (2001), the NLRB significantly changed its longstanding rule as to the circumstances under which an employer may lawfully withdraw recognition unilaterally from an incumbent union. For over 50 years, the Board ruled that an employer could lawfully withdraw recognition and refuse to continue dealing with the union if the employer had a good faith doubt, based on objective considerations, that the union no longer represented a majority of the bargaining unit employees. In its Levitz Furniture decision, the NLRB adopted a much more stringent standard, holding that an employer may lawfully withdraw recognition only where the union has actually lost the support of a majority of the unit employees. In short, it is no longer enough if the employer has good reason to believe that the union has lost majority support; to lawfully withdraw recognition, the employer must be correct in that belief.