Unions Won’t Like Having to Tell Objectors All this Detail about Where Union Dues Go

In March 2017 the National Labor Relations Board found that a Teamsters local violated the National Labor Relations Act by failing to provide sufficient information about the financial expenditures of the local and its affiliates to workers who exercised their rights to object to paying union dues and fees.

Specifically, the Board ruled that the Union failed to provide adequate and detailed financial disclosures because, in addition to providing the details about the local’s own expenditures of employees’ dues, the Board ruled the local must also provide details about its affiliates’ financials resulting from the local’s “per capita tax” expenditure – that is the portion of dues money that the local shares with its affiliates. For the Teamsters, the “per capita tax” is the amount that a local of the Teamsters union pays, using a portion of each employee members’ dues money, to three affiliated entities – the Teamsters International, the Conference of Teamsters, and the Teamsters Joint Council.

Unions are now required to provide Beck objectors with the following detailed expenditure information:

The major categories of its expenditures, the percentage of each category that it considers chargeable and nonchargeable, and a detailed explanation of how it calculates its allocation of expenditures; the names of its affiliates and other entities with which it shares income from dues and fees, the amounts of income shared, the major categories of expenditures of each affiliate or other entity and the percentages of each category those affiliates and other entities consider chargeable and nonchargeable, and a detailed explanation of how the affiliates and other entities calculated their expenditure allocation.

This holding essentially means that unions will have to disclose much more detailed financial information when employees exercise their Beck rights – information that unions will likely be far more resistant and hesitant to provide. With affiliates’ expenditures coming under greater scrutiny, it also makes it more likely that Beck dues objectors will seek to have less of their money going to the unions (and their affiliates) activities. With more Americans than ever choosing to be union-free and/or choosing not to be union members, this decision places much more power with individual employees, and emboldens their protected right to refrain from union activity, a right already afforded under the Act but often glossed over by unions.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 285-5342 or email him at Matt@MattAustinLaborLaw.com.

NLRB General Counsel and Company Seek Detailed Financial Accounting in Beck Disclosure, NLRB Members Say No

Kroger employee Laura Sands, pursuant to CWA v. Beck, notified her union, UFCW Local 700 in Indiana, that she objected to paying the full equivalent of member dues and fees. The union said her financial obligation would be reduced by about 14%. Sands did not challenge the reduction; rather, she filed an unfair labor practice charge alleging that she was entitled to additional, specific information regarding how union dues are spent at an earlier stage in the Beck objector process.

Beck objectors are employees who are members of a union but opt to only pay union dues covering collective bargaining and contract administration, not political activity or for lobbying efforts. Unions must inform employees before they collect money from them under a union security clause that they have the right to pay this reduced dues rate. Workers also have the right to receive information sufficient to make an intelligent decision on whether and how to object. Further, employees must be apprised of the percentage of their dues reduction, the basis for that determination, and their right to challenge those figures.

In a surprise move, the NLRB General Counsel sided with Kroger, a Kroger employee Beck objector, and the two management-side Board Members in urging the pro-union Board majority to require unions to inform workers of the specific details of the potentially reduced fees and dues if they were to become objectors in the initial Beck notice. The pro-union Board majority was not persuaded. Specifically, the Board majority held that the D.C. Circuit Court erred when it concluded that unions must provide specific reduced payment information when initially notifying employees of their obligations under a union security clause. Further, the Board rebuffed having unions provide additional payment information earlier because of the “risks of saddling unions with administrative and financial burdens that many unions might find impossible or impractical to meet” – now isn’t that the pot calling the kettle black?

HRACO Labor Relations SIG Preview

As appearing in the Human Resources of Central Ohio (HRACO) monthly newsletter 

 

Are You Coming to the HRACO Labor Relations SIG to Learn About These Important Changes From the National Labor Relations Board? 

Thank you for such great feedback and enthusiasm for HRACO’s first Special Interest Group dedicated exclusively for traditional labor matters. A time, date, and location have been set! The first meeting will be held on Tuesday, February 19th at Trustaff from 8:30 – 9:30. The address for Trustaff is: 470 Olde Worthington Rd., Suite 200, Columbus, OH 43082. Thank you to HRACO’s President Nicole Smith for hosting this first meeting.

Now onto some of the topics up for discussion at the HRACO Labor SIGs. 

How the Pro-Union NLRB Impacts Every Company

The Board is made up of five Members who are usually appointed by the President and confirmed by the Senate. The political affiliation of the Board is supposed to include two Republicans, two Democrats, plus one person from the President’s party. Under President Bush, there were usually three Republicans and two Democrats. Under President Obama, there are currently just three Democrats (zero Republicans) including a former union attorney who had long represented the Teamsters, SEIU and the CWA and the former General Counsel of the International Union of Operating Engineers – although he was recently named as a defendant in a RICO lawsuit for allegedly firing an employee who blew the whistle on the union’s embezzlement scheme. Together these individuals have and will continue to create union-friendly laws such as:

  • Micro Bargaining Units  Unions can now organize employees by job titles instead of the traditional “community of interest” standard. Employers face the likelihood of several small bargaining units that are easier to organize and several union contracts that are more difficult to administer. For example, just the ladies’ shoe department of a major department store was recently permitted to unionize paving the way for the men’s department, perfume counter, children’s section, housewares, men’s suits, and handbag departments (17 different departments for 382 employees) to all be represented by different unions.
  • Persuader Rules  This rule, which is anticipated to take effect in April 2013, seeks to force companies to disclose to the federal government where and from whom they receive labor relations advice and how much they paid for that advice, whether spending $20 at a luncheon listening to a speaker or several thousand dollars defending a union organizing drive. Labor lawyers, like me, believe this rule violates the attorney-client privilege.
  • Social Media  Tweets, Facebook posts, and the like can be considered “protected concerted activity,” and employers are not allowed to discipline or discharge employees for engaging in such conduct. Protected concerted activity is when an employee acts on behalf of a group of employees regarding a term or condition of employment. For example, a tweet like: “I hate my job. My boss plays favorites, and I don’t make enough #&@^$ money to put up with him” is probably protected concerted activity, and that employee – regardless whether she is in a union – cannot be disciplined or discharged despite possibly breaking several employment-related policies. Further, the Board’s strict rules of acceptable social media policies results in the vast majority of policies violating the Act. Seeking legal advice before implementing a social media policy is prudent.
  • Arbitration Agreements  The NLRB prohibits all employees from signing arbitration agreements that prevent them from joining other workers in class-action arbitration proceedings or lawsuits.
  • End of Confidential Workplace Investigations  The hallmark of a workplace investigation is that the information provided remains confidential until all the facts are uncovered and a decision is made. While human resources cannot promise anonymity in investigations, most policies ensure as much confidentiality as possible. These policies are now unlawful according to the NLRB. Subject to certain limitations, employers cannot require confidentiality during ongoing workplace investigations. Specifically, discussing an investigation with co-workers is considered “collective activity” under the Act and trumps workplace policies of confidentiality during investigations.
  • Open Door Policies  The following policy from a handbook violated the NLRA: “Voice your complaints directly to your immediate supervisor or to human resources through our ‘open door’ policy. . . Complaining to your fellow employees will not resolve problems” because it allegedly prohibited employees from speaking to co-workers about terms and conditions of employment.
  • At-Will Disclosures  A handbook clause that states an employee’s at-will status can be changed only by a corporate executive may lead an employee to believe that being represented by a union or having a collective bargaining agreement would be futile because neither of those could alter the at-will status. As such, the Board has forced non-union companies to change the at-will language in their handbooks.
  • Moonlighting Policy  A moonlighting clause banning employees from outside employment without prior written consent from the employer may now violate the NLRA if it has an unlawful motive or was implemented with anti-union animus, i.e. to prohibit union organizers from obtaining employment at non-union companies.
  • Limiting Off-Duty Employees’ Access to Company Property  Limiting off-duty access to the workplace except with management approval or when employees are engaging in employer-related business is unlawful because the limitation could prevent employees from engaging in Section 7 rights, such as union organizing, without management’s approval.
  • Work During Working Hours  A company rule requiring employees to only perform work during working hours violates the Act because such rule could confuse employees into believing that they cannot engage in union solicitation during breaks and lunches. According to the NLRB, “working hours” now means time when you are at work, not time spent actually working.

How the NLRB’s Pro-Union Agenda Impacts Unionized Employers, Specifically

The Board’s pro-union agenda does not just focus on non-union employers. Companies that deal with labor unions on a daily basis must also be cognizant of several major changes in the law, some of which are:

  • Discipline  Employers must now bargain with a union over discretionary discipline during negotiations for a first collective bargaining agreement.
  • Dues Deduction  In overturning a 50-year law, employers must now continue automatic dues deduction after the expiration of a union contract.
  • Beck Objectors  The Board believes that lobbying expenses are germane to the union’s duties as bargaining agent and thus chargeable back to Beck objectors.
  • Witness Statements  In overturning a law from 1978, witness statements from employees to employers are no longer exempt from disclosure to unions absent assurance of confidentiality to employees, nor do they qualify as privileged under the attorney work-product doctrine unless “specifically created in anticipation of foreseeable litigation.”
  • Backpay  In most cases where backpay is awarded as a remedy, the losing employer not only has to pay the backpay (and interest), it must also pay the employee’s taxes associated with the backpay, i.e. social security and income taxes.

NLRB’s Pro-Union Agenda’s Forecast for the Future

While much of what the Board will do in 2013 is obviously not yet determined, below are some educated estimates of future changes.

  • Shorter Election Cycles  Currently, the time between when a union files a petition to represent employees and the representation election averages around 45 days. Statistically, the shorter the time period, the likelier employees will vote in favor of union representation. The Board has opined that this period should be “as short as possible” and “quickie elections” with time periods as short as 5-7 days is likely. Employers should actively engage in union-avoidance and pro-employee relations now, as waiting to campaign against unionization until after a representation petition is filed is too late.
  • Hang the Poster  Employers will be required to hang a poster throughout the workplace that specifically informs workers of their right to organize a union and how to learn more about the process of organizing a union.
  • Unions Granted Equal Access  Currently, an employer’s property is its private property and unions, for the most part, are not allowed to trespass. Unions will likely receive greater (if not equal) access to an employer’s property to engage in union organizing activity.
  • Email for Union Organizing  Currently, an employer can place restrictions on how its employees utilize company-furnished email accounts and electronic devices. This will probably change. For example, organizers will be permitted to solicit employees to attend the next organizing meeting, and pro-union employees will be allowed to openly campaign in favor of unionization through company provided technology.
  • Card Check  Richard Tumka, head of the AFL-CIO who claims he talks to the White House every day and visits a few times each week, promised that if Obama won a second term as President, that card check will be a reality. The only thing standing in way of card check is a Republican controlled Senate. If Democrats regain control of the Senate in 2014, card check will be a reality.
  • Temporary Workers  Currently temporary workers do not pay union dues and do not work under the confines of a union contract. It is anticipated that temporary workers – who are not employed by the unionized employer – will have the right to organize and belong to a union alongside the employer’s regular, full time employees. 

What Should HRACO Members Do

HRACO members should continually educate themselves about the onslaught of grave labor law changes from the NLRB. Employers must train supervisors on compliance matters as well as union-avoidance strategies to diminish the Board’s governance of your company as much as possible. Since the above was written for informational purposes and not legal advice, companies are encouraged to seek legal counsel to ensure they are complying with the law as even the smallest form of non-compliance can result in significant detriment to your company. Attendance at HRACO Labor SIGs – held on the third Tuesday of every month from 8:30 to 9:30 – will provide education and guidance on many of these issues.


Matt Austin is a Columbus, Ohio labor lawyer who owns Austin Legal, LLC, a boutique law firm that limits its representation to employers dealing with labor, employment, and OSHA matters. Matt can be reached by email at
Matt.Austin@Austin-Legal.com or by phone at 614.285.5342.