Successor Companies Mustn’t Forget About Six-Month Mandatory Bargaining Obligation

DCX-CHOL purchased the assets of Stuart Manufacturing. At the time of sale, DCX-CHOL acknowledged in a letter sent to the union representing the Stuart employees that DCX-CHOL was a successor to Stuart. This obligated DCX-CHOL and the union to negotiate a new collective bargaining agreement. A few weeks after the sale, though, employees signed a petition to decertify the union as their bargaining agent, which would render DCX-CHOL union free. Since more than half of the employees signed the petition, DCX-CHOL unilaterally withdrew recognition of the union and refused to bargain for a new collective bargaining agreement. This withdrawal of recognition was unlawful.

Since 2011, the National Labor Relations Board requires employers to provide an incumbent union with “a reasonable period of bargaining” without challenging the union’s majority status as the representative of its employees. This reasonable period of time has been defined as six months. DCX-CHOL’s withdrawal of recognition before the arbitrary six-month deadline killed its chance of becoming union free. Instead, the company was required to resume negotiating for a new collective bargaining agreement. Whether it can successfully bargain in good faith for the remaining months and hope that employees will then circulate another petition – without employer involvement – will be difficult.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

Increased Merger and Acquisition Activity Means Time to Refresh on Union Successor Laws

As the economy improves, companies are becoming more active in the merger and acquisition space. I can personally attest that the M&A lawyers in my firm are busy. With all the other areas of concern to focus on, deal lawyers and business managers oftentimes forget to include labor attorneys on deals involving unionized companies. To be sure, some know the law cold and don’t need my involvement. For others, I ask: Did you know the law changed in Q4 last year?

The old law, Planned Building Services (PBS), held that a successor could reduce its liability for unlawfully failing to hire former employees by proving that it would have bargained in good faith to an agreement or impasse with the union on less generous monetary terms than what existed under the predecessor’s contract. This effectively reduced any potential back pay award that an employer might owe for unlawfully failing to hire a majority of the predecessor’s employees.

The new law, Pressman Cleaners, requires employers to: 1) recognize and bargain with the union; 2) restore the “status quo” by putting in place the employment terms of its predecessor until it bargains to an agreement or impasse with the union; and 3) pay the former employees back pay and benefits under the monetary terms of the predecessor’s contract until such time as a new agreement or impasse was reached by the parties.

One of the major differences between PBS and Pressman Cleaners is the harsh monetary penalty imposed under Pressman Cleaners for non-compliance. The 2006 Board in PBS specifically held that 1) it did not have authority to issue punitive remedies; 2) it could not impose substantive contract terms on parties; and 3) it could not require a successor employer to adopt the contract terms set forth in its predecessor’s contract. According to the 2014 Pressman Cleaners Board, PBS was “based upon a misunderstanding of the NLRB’s traditional remedy in successorship avoidance cases, inconsistent with other Board precedent, and flawed as a matter of policy.” Harsh words from the current NLRB.

While Pressman Cleaners is, on its own, a bad case for companies, I believe it is the precursor for the Board to overrule Spruce Up, which only requires successor employers to bargain with a union before setting the initial terms and conditions of employment under very limited and narrow circumstances. It also reconfirms the current Board’s commitment to finding a new “perfectly clear successor test” to entrap any successor that commits to hire a majority of the predecessor’s workforce early in the process of taking over the predecessor’s operations.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

Organized Labor Stakes Future Success on Non-Traditional Measures

As followers of Roetzel Recap: Labor Relations know, the labor movement is slowly shifting away from traditional boots on the ground union organizing to a more holistic approach of worker centers and getting municipalities to change ordinances to benefit unions, to name a few. At a recent conference geared toward union organizers, it was noted that if the labor movement is to survive, its leaders and members must expand their notion of what “bargaining” means beyond negotiating contracts to secure wage increases and better benefits. According to Sarita Gupta, executive director of Jobs With Justice, who spoke at the Building Community-Labor Alliances conference, “we have to figure out how workplace fights are part of the broader community struggles.”

For support in how the labor movement should evolve, she cited Fight for $15, a national push by fast food workers for higher wages and protests spearheaded in recent years by nonunion workers at big box stores. Neither of these examples ended well for labor unions. Not a single fast food company has become union since the Fight for $15 campaign started a few years ago, and one company successfully obtained an injunction against unions from coming onto its property to engage in boisterous Black Friday protests – and that company, also, remains non-union.

Union-front groups have made some impact over the years, i.e. increased minimum wage in Seattle, and minimum wage increases with carve outs for unions in Los Angeles, but neither of these increased the number of people paying union dues. I’m sure there are other successes, too, but for unknown reasons Ms. Gupta chose to focus on two of the biggest non-factors, or failures, of the past few years.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

Companies Unprepared to Administer ObamaCare; Face “Cadillac” Tax

Collective bargaining agreements generally run in 3-year cycles; every three years they expire, at which time companies and unions re-negotiate a contract to govern labor relations for the next three years. That means contracts that are negotiated in 2015 must take into account the Affordable Care Act’s “Cadillac” tax for most union health care plans, which takes effect in 2018. Virtually every employer I have talked to – and statistics echo – are laying the groundwork to make sure they don’t have to pay the 40% surcharge on the portion of annual health insurance spending that exceeds $27,500 for a family or $10,200 for an individual.

Unfortunately, this tax will result in a higher out-of-pocket healthcare cost for workers. Most employers, according to the National Business Group on Health, “don’t think there is any employer that’s planning on paying that tax. It doesn’t help the company, it doesn’t help the employees, it doesn’t help the shareholders. It doesn’t really help anybody except the federal government.” In fact, ObamaCare, once lauded by labor unions, has become a thorn in their sides, as well, as fallout from the Cadillac tax directly affects their members.

Employers that have traditionally offered generous benefits to lure top professional talent, or who have conceded to demands from labor unions for better health benefits, are the most susceptible to the tax. Their responses thus far have been to impose new requirements on workers and to reduce their health benefits.

President Obama, who signed the Affordable Care Act, will not be in office in 2018 to collect revenue generated from the tax. Those thinking that the tax will be delayed or repealed could suffer the worst fate for sticking their proverbial ostrich heads in the sand. If repealed, Congress will need to come up with a way to replace the $111 billion that the tax is expected to generate, an amount that continues to grow as health care costs increase and more companies are taxed. Most companies are assuming that the tax will remain in effect and are planning ways to avoid falling victim to it.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

Two Labor-Related Nominations Leave Me Scratching My Head

The first head-scratcher is the appointment of Allison Beck to lead the Federal Mediation and Conciliation Services (FMCS). FMCS employs a lot of mediators and arbitrators that unions and companies use during labor negotiations and for conflict resolution. Many times over the years, I have relied upon the impartial advice and skills of FMCS personnel. I’m not so sure how impartial its personnel will remain under the leadership of Allison Beck. After having met Ms. Beck a few times over the years, I have nothing against her, personally. Rather, I question whether her pro-union background is suited to lead a team of nationally recognized neutrals – as I would question my own management-focused background to do the same. You see, for 20 years she served as the General Counsel of the International Association of Machinists and Aerospace Workers union. Will her subordinates and new hires have pro-union bias? I hope not, but only time will tell.

The other nomination involves former Miami University, Ohio graduate Jessica Kahanek. I do not know Ms. Kahanek, but she was appointed as Press Secretary for the National Labor Relations Board. If my memory is correct, she is the first press secretary for the Board, which leaves me wondering why does the NLRB believe it needs a press secretary? Is the Board preparing itself for an onslaught of media coverage? Does the Board know that it will make even more controversial decisions in the near future? According to the press release, Ms. Kahanek “joins the Congressional and Public Affairs Office where she will serve as the primary spokesperson for the Agency and work to implement the Agency’s communication and outreach policies and objectives.”

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

SEIU Continues to Win Adjunct Professor Elections Across the U.S.

Adjunct professors and other contingent faculty at three California colleges recently voted in favor of joining the Service Employees International Union (SEIU). In its campaign to garner support, the SEIU cited the workers’ low wages, lack of benefits, and poor job security. Now the SEIU, through its “Adjunct Action” campaign has successfully organized adjunct professors at several schools in 11 metropolitan areas across the United States. Its membership, already over 25,000 strong, shows no signs of slowing down, and as we mentioned in a previous Roetzel Recap: Labor Relations (click to link to the Jan. 27, 2015 issue), the National Labor Relations Board is aiding the union’s efforts. The SEIU’s growing effort to organize adjuncts comes at a time when colleges and universities are increasingly relying on contingent staff – hired on a semester by semester basis – to teach courses because of budgetary concerns associated with keeping tuition low in the face of rising benefits and healthcare costs.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

Calling the Police Over Handbilling in Front of Workplace Unlawful Because City Previously Designated Area as Public Right of Way

The United Food and Commercial Workers union tried to organize workers at a Hillshire Brands Co. facility in Texas. As part of its campaign, non-employees handed out pamphlets at the end of the company’s driveway. The organizers stood on a 10-foot wide corridor designated by the city as a public right of way. The Company’s human resource manager called the police and claimed the organizers were blocking traffic. The police responded, accused the organizers of trespassing, issued criminal trespass warnings, and shooed the organizers away.

The union filed an unfair labor practice charge over this incident. At trial, the National Labor Relations Board’s Administrative Law Judge determined that calling the police was unlawful – without regard to the fact that the police themselves issued the warnings and shooed the organizers away. Had the handbillers not been on a public corridor, police involvement would have been justified. This ruling now places the burden on companies to know whether union organizing activity, handbilling, picketing, a blown up rat, etc. is on property designated by the city as a public right of way before taking any action against the demonstrators.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.