Manufacturers In The Courts: July 2011

A Publication of the National Association of Manufacturers

August 2011

The National Labor Relations Board made big news for manufacturers yesterday when it released several case decisions involving card-check union recognition procedures and defining the universe of employees that can be counted as a bargaining unit.

Unfortunately, the news was not good. By 3-1 majorities (including the participation of the former chairman of the NLRB, whose term expired the day after these decisions were finalized), the Board's decisions (1) encourage unions to organize small units within a workplace, (2) make it extremely difficult for employers to include other workers with similar jobs in those units, (3) prohibit employees from challenging a union that is recognized pursuant to card-check authorizations for a minimum of 6 months and a maximum of 4 years, and (4) eliminate official Board notices to employees of their right to change their minds about union representation.

Summaries of these and other cases in which the NAM is participating follow.

Decided Cases

Labor Law

Secret ballot elections rejected after card-check union certification. On August 30, the NLRB released a 3-1 opinion reversing its previous ruling in the Dana case, involving the ability of employees to challenge the majority status of a union under voluntary recognition procedures based on authorization cards (card check). Once a union is voluntarily recognized pursuant to a majority of employees in a bargaining unit signing authorization cards, the union is afforded a "reasonable time" to negotiate a collective bargaining agreement with the employer. The NAM filed a brief arguing for the previous rule in the Dana case, that employees should have 45 days after their employer recognizes a union based on card-check authorizations to file a petition to decertify the union or to support an election petition from another union. We argued that this important 45-day window assures individual free choice regarding whether to be represented at all by a third party, and card-check union certification is far inferior to a secret ballot election. Lamons Gasket Co. (NLRB).

Bargaining units may be very small. The NLRB has ruled that defining a bargaining unit for purposes of organizing employees for union representation is appropriately done by the affected employees, and their choice will be upheld by the Board if the unit consists of a clearly identifiable group and that group is "appropriate." Enlarging the size of a bargaining unit requires that employers show that the larger group shares a community of interest that overlaps "almost completely." The ruling will allow for very small bargaining units during union organizing efforts. The Coalition for a Democratic Workplace, of which the NAM is a member, filed an amicus brief earlier this year opposing the idea that employees performing the "same job at a single facility is presumptively appropriate" as the bargaining unit. The Board's ruling subjects employers to increasingly complex labor-management compliance issues, such as managing multiple unions on the same shop floor. In re Specialty Healthcare and Rehabilitation Center (NLRB).

Testimony

Court declines to compel testimony from out-of-state corporate officials. On July 27, the California Court of Appeal overturned a decision by a California trial judge that required a company to bring executives in from out-of-state -- and in this case from Japan to answer questions relating to the case. Normally such discovery occurs where the witnesses are located, helping to restrain the disruption and costs that arise from litigation. The NAM filed an amicus brief urging the appeals court to require standard procedures and to consider the impact that an exception would have on costs, party leverage and international relations. Depositions may still occur in the states or countries where the required witnesses are located. Toyota Motor Corp. v. Superior Court (Cal. Ct. App.).

Pending Cases

Environmental

NAM supports EPA's delay of boiler and incinerator rules. When EPA issued its controversial boiler and incinerator rules in March, the NAM and other groups challenged them in court. In May, EPA found that the public did not have a sufficient opportunity to comment on certain parts of the rules, and that multiple, diverse industries would need to begin to make irreversible compliance investments soon. It therefore postponed the effective date of the rules until it completes a reconsideration process, or until judicial review is complete. The Sierra Club sued EPA over this decision in July, and the NAM and other business groups moved to intervene in the suit to defend EPA's delay during the reconsideration process. Changes to the incinerator rule will be proposed in September and changes to the boiler rule will be proposed in November. Sierra Club v. EPA (D.C. Cir.).

Ozone challenge on hold. Despite efforts by an NAM coalition to resolve our legal challenge of EPA's 2008 ozone regulation, the U.S. Court of Appeals for the District of Columbia ruled this month that the case will continue to be held in abeyance while EPA is reconsidering the regulation. The NAM filed comments last year on the new proposal, and EPA said it planned to act "shortly." Expect further litigation on the old limit, the new limit, or both. On August 10, the NAM filed an Opposition to the Motion for Order Directing EPA to Complete Reconsideration. Mississippi v. EPA (D.C. Cir.).

Challenging EPA's disapproval of Texas State Implementation Plan (SIP) because of greenhouse gases. The NAM is part of the SIP/FIP Advocacy Group, which comprises various national trade associations challenging EPA's efforts to require states to implement its greenhouse gas stationary source regulatory requirements. This suit was filed July 5 in response to EPA's decision, published May 3, 2011, partially disapproving Texas' implementation plan for regulating pollution. EPA rejected part of the Texas plan because it did not address how it would apply to pollutants that become "subject to regulation" in the future, such as greenhouse gases. Because it rejected the Texas plan, EPA moved to implement federal regulation of greenhouse gas emissions in Texas. The State of Texas and other parties also filed suit against EPA, and our case has been consolidated with those. Preliminary proceedings are under way. SIP/FIP Advocacy Group v. EPA (D.C. Cir.).

Labor Law

Does the time clock start in the locker room? That's the issue in a case now on appeal to the Seventh Circuit in the context of a collective bargaining agreement that excluded clothes-changing activities from the work day. Unfortunately, the trial judge left open the possibility that clothes changing could be a principal activity that starts the compensable work day. The NAM filed an amicus brief on August 29 showing how Congress has repeatedly emphasized the sanctity of the collective bargaining process, and that it adopted the Portal-to-Portal Act to rein in litigation that was forcing employers to pay for unbargained-for wages relating to clothes-changing activities. The Act was enacted in part to keep the Department of Labor from stepping in and changing expectations, potentially resulting in the award of many years of back pay. We concluded that, in a time of economic crisis, courts should not be making it more expensive for employers to maintain their present workforces. Sandifer v. United States Steel Corp. (7th Cir.).

Annual Fund Drive

If you recognize the value of the NAM's work in the courts for your company or your industry, please consider making a contribution to our Appellate Litigation Program. In today's economy, voluntary contributions are needed more than ever. A contribution form for your convenience may be found here. Thank you.

Quentin Riegel
Vice President, Litigation & Deputy General Counsel
(202) 637-3058 • qriegel@nam.org

Check out the NAM's Manufacturing Law Center at www.nam.org/law