Old Law, Partisanship Pose Challenges for NLRB

The board, for example, has announced it will reconsider three major rulings by the prior Republican-led board. The rulings include one that held that graduate students are excluded from the definition of “employee” under the act. Another held that, when a new employer takes over a company that has a union, the union's majority support can be challenged by employees, the employer or a rival union. The third ruling found that an employer's voluntary recognition of a union, based on the union's showing of majority status, does not bar a rival union's decertification petition. The petition must be filed within 45 days of employees getting notice of the employer's voluntary recognition. The finding applies even if the employer and the union have signed a collective-bargaining agreement.

Protecting Core Rights

NLRB Chairwoman Wilma Liebman, a Clinton appointee in 1997, said the nation's labor law, while dated in some respects, still protects core rights that are vital. She also rejected the dire forecast of the business community that the board is on the verge of radical change. However, “in terms of decision-making itself, there will definitely be a different approach to this law than existed during the Battista board,” she emphasized, referring to former chairman Robert Battista, appointed by former President George W. Bush.

Partisan Divide

President Obama's three appointments to the board last spring ended a 27-month period in which Liebman and Peter Schaumber, whose term expired in August, were the only board members. The partisan stalemate in the Senate over filling the board's vacancies is just one example of a system “beyond broken,” said John Raudabaugh, counsel to Nixon Peabody and a former George H.W. Bush appointee to the board. “It is moribund at this point. We're not pointing fingers at any individual or political parties. It's just not meaningful.”

Changes to the NLRA are just as politically divisive as changes in board membership and always have been, said Charles Craver of George Washington University Law School. “I think the statute really is broken and it does have to be changed,” he added, but changes are always “left wing and right wing,” and labor versus management.

The Act, he said, was designed for an industrial economy in which big unions went into the steel and auto industries. “I don't think it takes into account a 21st-century economy, which is global and more service and white-collar.”

The Act also is somewhat at war with itself. When it was enacted, the statute encouraged collective bargaining and established unfair labor practices by employers. The last major change to the act ' the Taft-Hartley amendments of 1947 ' was a response to a series of strikes. The amendments established unfair labor practices by unions and protection of a right to refrain from joining a union equal to protection of the right to join one.

“Is the board to be totally neutral or to encourage collective bargaining?” Liebman asked. “The Battista board said the free choice, the right to refrain, has statutory pre-eminence over the general policy to encourage collective bargaining. I took pretty strong issue with that. In my view, you have to balance both.”

The tension exists in many of the board's cases. How it is resolved often appears to depend on whether the board's majority has a labor or a management bent. Frequent turnover on the board as each new president gets to fill vacancies creates the flip-flopping on precedent that bedevils both unions and management.

Flip-Flops

The tension Liebman described is present in one of the board's recent and most controversial actions: calling for reconsideration of a 2007 decision known as Dana Corp. A divided board in Dana drastically reduced the window in which a union, voluntarily recognized by an employer based on signed authorization cards, can negotiate a contract before there is an election to decertify the union or support a rival union.

“Dana is a set of rules the Battista board created, and the rules were completely novel,” said Liebman. “Dana itself overturned a 40-year-old precedent. I dissented in the Dana case. We're asking for briefing. Who knows what we'll do with it.”

But the flip-flopping is also because the nature of board appointments has changed in the past 40 years, according to Gould, Craver and others. “It's a political agency,” Craver said. “Always when you have a new administration, the president will name three people. Richard Nixon started appointing advocates for management. Prior to that time, they tried to have more neutral appointees. Now it goes back and forth between labor and management.”

Gould added: “These kinds of appointments have produced more polarization. The fundamental problem is the political parties themselves have become more polarized, and labor and management have become more polarized as labor's influence in the economy has so precipitously declined.”

But it is “the nature of the beast,” Liebman said. “For better or worse, the statute created a structure in which one board member's term expires every year. Whoever the president is gets the chance to appoint a majority of board members. Both sides would probably acknowledge it's not the ideal situation. Neither side wants to be the one to call a truce.”

Time for Change?

Nixon Peabody's Raudabaugh and others believe it is time for a new model in labor law that does not focus solely on third-party union representation. Some experts say labor law is dead and the focus should be on employment law. “We see in this country a 50- to 60-year decline in union density,” Raudabaugh said. “Not everyone wants a union. The question is: Are we, in this complicated world, only concerned about legitimatizing voices through this union representation system? Not that it's bad, but should it be 'it's this way or no way'?”

Raudabaugh has proposed replacing the NLRB with an Article III workplace court that also would hear wage-and-hour, equal employment opportunity and Occupational Safety and Health Administration (OSHA) claims.

Stanford's Gould noted that a number of workers and employers are turning to private “machinery,” such as neutrality agreements or card-check mechanisms for organizing, to circumvent the board. Gould himself has been serving as an independent monitor for a very large British multinational corporation that has about 100,000 employees in the United States. “Anytime a complaint comes up that would ordinarily go the NLRB, it comes to me, not as final arbiter, because the board is always there. But most complaints this company has had about union-organizing disputes have been resolved through this kind of mechanism.”

Liebman, whose term expires next August, is ready, if not to trade in the Packard, then to seriously consider a Prius. She and the new board have been holding a series of discussions across the country this year about the law and the board's future. “Business and labor have serious concerns,” she said. “This warrants a very serious policy discussion of how do you have a labor policy that protects workers in this competitive environment but doesn't strangle business' ability to operate, to compete.”

The discussion should take place in Congress, but is unlikely, she said, adding, “I think the climate today is probably as polarized as I've ever seen it, and probably as much as it was in 1947.”

Marcia Coyle is a reporter for the National Law Journal , an ALM sister publication of this newsletter. This article also appeared in The Legal Intelligencer.

The National Labor Relations Board (NLRB), in Democratic hands for the first time in almost a decade, is preparing to steer the nation's labor laws in a pro-union direction. But lawyers on both sides of the partisan divide say this NLRB is driving the labor law equivalent of a Packard ' at a time when it needs a Prius to cope with the fast-changing global economy. The National Labor Relations Act (NLRA), which the board administers, was 75-years-old last year, and has not been changed significantly in more than 60 years. The law and the board are in danger of becoming irrelevant as the world changes around them, labor law experts argue.

“I think the Act is badly tattered and in disarray as it is written today,” said former board Chairman William Gould IV of Stanford Law School, a Clinton appointee. “The board has fallen into disrepair. There isn't any doubt about the fact that the board has become kind of a sideshow in the labor law arena.”

Partisan battles over appointments to the five-member board, lengthy board vacancies, delays of five years or more in decisions, and flip-flopping of precedents are forcing workers to seek other avenues through which to deal with employers, he and others said. But Gould and some union supporters said the board is trying to breathe new life into the Act, which was designed in 1935 to encourage collective bargaining. That “new life” is evident, they said, in a series of rulings since last summer led by the board's three Democratic members and opposed by its now lone Republican member (a second Republican seat became vacant in August).

The board, for example, has announced it will reconsider three major rulings by the prior Republican-led board. The rulings include one that held that graduate students are excluded from the definition of “employee” under the act. Another held that, when a new employer takes over a company that has a union, the union's majority support can be challenged by employees, the employer or a rival union. The third ruling found that an employer's voluntary recognition of a union, based on the union's showing of majority status, does not bar a rival union's decertification petition. The petition must be filed within 45 days of employees getting notice of the employer's voluntary recognition. The finding applies even if the employer and the union have signed a collective-bargaining agreement.

Protecting Core Rights

NLRB Chairwoman Wilma Liebman, a Clinton appointee in 1997, said the nation's labor law, while dated in some respects, still protects core rights that are vital. She also rejected the dire forecast of the business community that the board is on the verge of radical change. However, “in terms of decision-making itself, there will definitely be a different approach to this law than existed during the Battista board,” she emphasized, referring to former chairman Robert Battista, appointed by former President George W. Bush.

Partisan Divide

President Obama's three appointments to the board last spring ended a 27-month period in which Liebman and Peter Schaumber, whose term expired in August, were the only board members. The partisan stalemate in the Senate over filling the board's vacancies is just one example of a system “beyond broken,” said John Raudabaugh, counsel to Nixon Peabody and a former George H.W. Bush appointee to the board. “It is moribund at this point. We're not pointing fingers at any individual or political parties. It's just not meaningful.”

Changes to the NLRA are just as politically divisive as changes in board membership and always have been, said Charles Craver of George Washington University Law School. “I think the statute really is broken and it does have to be changed,” he added, but changes are always “left wing and right wing,” and labor versus management.

The Act, he said, was designed for an industrial economy in which big unions went into the steel and auto industries. “I don't think it takes into account a 21st-century economy, which is global and more service and white-collar.”

The Act also is somewhat at war with itself. When it was enacted, the statute encouraged collective bargaining and established unfair labor practices by employers. The last major change to the act ' the Taft-Hartley amendments of 1947 ' was a response to a series of strikes. The amendments established unfair labor practices by unions and protection of a right to refrain from joining a union equal to protection of the right to join one.

“Is the board to be totally neutral or to encourage collective bargaining?” Liebman asked. “The Battista board said the free choice, the right to refrain, has statutory pre-eminence over the general policy to encourage collective bargaining. I took pretty strong issue with that. In my view, you have to balance both.”

The tension exists in many of the board's cases. How it is resolved often appears to depend on whether the board's majority has a labor or a management bent. Frequent turnover on the board as each new president gets to fill vacancies creates the flip-flopping on precedent that bedevils both unions and management.

Flip-Flops

The tension Liebman described is present in one of the board's recent and most controversial actions: calling for reconsideration of a 2007 decision known as Dana Corp. A divided board in Dana drastically reduced the window in which a union, voluntarily recognized by an employer based on signed authorization cards, can negotiate a contract before there is an election to decertify the union or support a rival union.

“Dana is a set of rules the Battista board created, and the rules were completely novel,” said Liebman. “Dana itself overturned a 40-year-old precedent. I dissented in the Dana case. We're asking for briefing. Who knows what we'll do with it.”

But the flip-flopping is also because the nature of board appointments has changed in the past 40 years, according to Gould, Craver and others. “It's a political agency,” Craver said. “Always when you have a new administration, the president will name three people. Richard Nixon started appointing advocates for management. Prior to that time, they tried to have more neutral appointees. Now it goes back and forth between labor and management.”

Gould added: “These kinds of appointments have produced more polarization. The fundamental problem is the political parties themselves have become more polarized, and labor and management have become more polarized as labor's influence in the economy has so precipitously declined.”

But it is “the nature of the beast,” Liebman said. “For better or worse, the statute created a structure in which one board member's term expires every year. Whoever the president is gets the chance to appoint a majority of board members. Both sides would probably acknowledge it's not the ideal situation. Neither side wants to be the one to call a truce.”

Time for Change?

Nixon Peabody's Raudabaugh and others believe it is time for a new model in labor law that does not focus solely on third-party union representation. Some experts say labor law is dead and the focus should be on employment law. “We see in this country a 50- to 60-year decline in union density,” Raudabaugh said. “Not everyone wants a union. The question is: Are we, in this complicated world, only concerned about legitimatizing voices through this union representation system? Not that it's bad, but should it be 'it's this way or no way'?”

Raudabaugh has proposed replacing the NLRB with an Article III workplace court that also would hear wage-and-hour, equal employment opportunity and Occupational Safety and Health Administration (OSHA) claims.

Stanford's Gould noted that a number of workers and employers are turning to private “machinery,” such as neutrality agreements or card-check mechanisms for organizing, to circumvent the board. Gould himself has been serving as an independent monitor for a very large British multinational corporation that has about 100,000 employees in the United States. “Anytime a complaint comes up that would ordinarily go the NLRB, it comes to me, not as final arbiter, because the board is always there. But most complaints this company has had about union-organizing disputes have been resolved through this kind of mechanism.”

Liebman, whose term expires next August, is ready, if not to trade in the Packard, then to seriously consider a Prius. She and the new board have been holding a series of discussions across the country this year about the law and the board's future. “Business and labor have serious concerns,” she said. “This warrants a very serious policy discussion of how do you have a labor policy that protects workers in this competitive environment but doesn't strangle business' ability to operate, to compete.”

The discussion should take place in Congress, but is unlikely, she said, adding, “I think the climate today is probably as polarized as I've ever seen it, and probably as much as it was in 1947.”

Marcia Coyle is a reporter for the National Law Journal , an ALM sister publication of this newsletter. This article also appeared in The Legal Intelligencer.