Executive Summary: In a pair of 3-1 decisions, the National Labor Relations Board (NLRB) recently overruled two prior Board decisions and reinstated and refined Board's "recognition bar" and "successor bar" doctrines.
RECOGNITION BAR REINSTATED
In Lamons Gasket Company, 357 NLRB No. 72 (August 26, 2011), the Board overruled its 2007 decision in Dana Corp., 351 N.L.R.B. 434, and returned to the rule that an employer's voluntary recognition of a union, based on a showing of the union's majority status, bars an election petition for a reasonable period of time. The Board also defined, for the first time, benchmarks determining a "reasonable period of time."
Recognition Bar and Dana Corp.'s 45-Day Notice Period
Prior to Dana Corp., when an employer voluntarily recognized a union based on signed authorization cards from a majority of employees, usually pursuant to a "card-check neutrality agreement," neither decertification nor rival union petitions challenging this representation could be filed "for a reasonable time." In Dana Corp., the NLRB modified this doctrine and held that a decertification petition or rival union petition could be filed within 45 days of a company's voluntary recognition of a union. During this 45-day period, the employer was also required to post a Notice informing the employees of their right to either file a decertification petition or a petition in favor of another union. If the notice was posted and no petition was filed within 45 days, no decertification or rival union petitions could thereafter be filed "for a reasonable time."
Rejection of Dana Corp. and Parameters of a "Reasonable Period of Time"
In Lamons Gasket, the Board overruled Dana Corp. and eliminated the 45-day window period and Notice requirement. The Board also defined a "reasonable period of bargaining," during which the recognition bar will apply, to be no less than six months after the parties' first bargaining session and no more than one year. In determining whether a reasonable period has elapsed, the Board will apply a multifactor test. The General Counsel bears the burden of proof to show that further bargaining should be required.
Under this test, the determination of whether a reasonable period of bargaining has elapsed after six months depends on multiple factors, including:
- Whether the parties are bargaining for an initial contract;
- The complexity of the issues being negotiated and of the parties' bargaining processes;
- The amount of time elapsed since bargaining commenced and the number of bargaining sessions;
- The amount of progress made in negotiations and how near the parties are to concluding an agreement; and
- Whether the parties are at impasse.
The Board will apply this rule retroactively in all pending cases, except those in which an election was held and the ballots have been opened and counted.
SUCCESSOR BAR DOCTRINE REINSTATED
The Board also overturned its 2002 decision in MV Transportation and reinstated the "successor bar" doctrine, which requires a successor employer to recognize the previously chosen representative of its employees for reasonable period of time, without challenge to its representative status. See In re UGL-UNICCO, 357 NLRB No. 76 (August 26, 2011). As in Lamons Gasket, discussed above, the Board also set forth parameters for determining a "reasonable period of time."
Background of Successor Bar Doctrine
Generally, an asset purchaser must recognize and bargain with the seller's union where the seller's unionized employees comprise a majority of the purchaser's workforce in an appropriate bargaining unit and similarities between the two operations show a "substantial continuity" between the enterprises. However, the purchaser typically is not required to assume the seller's collective bargaining agreement. Thus, in an asset purchase, there often is not a contract in place that prevents challenges to a union's continuing status as the desired representative of a majority of the employees. In St. Elizabeth Manor, 329 N.L.R.B. 341 (1999), the Board held that a purchaser had to recognize and bargain with the seller's union for a "reasonable period" of time, even though it might have suspected or even known that most of its employees no longer desired union representation. Under the NLRB's "successor bar" rule, employers acted at their peril by challenging whether such a union continued to enjoy majority support because the "reasonable period" standard was so imprecise.
In MV Transportation, 337 N.L.R.B. 770 (2002), the Board overturned St. Elizabeth Manor and held that an incumbent union in a successor employer situation is entitled only to a rebuttable presumption of continuing majority status, which may be overcome at any time, permitting an employer to withdraw recognition from the union unilaterally, a rival union to file a representation petition, or employees to file a decertification petition.
Board Changes Position Again
In UGL-UNICCO, the Board overturned MV Transportation, stating that reinstituting the successor bar doctrine, with appropriate modifications, "best serves the policies of the National Labor Relations Act." Under UGL-UNICCO, the successor bar will apply in those situations where the successor has abided by its legal obligation to recognize an incumbent union, but where the "contract bar" doctrine is inapplicable, either because the successor has not adopted the predecessor's CBA or because an agreement between the union and the successor does not serve as a bar under existing rules (such as where there has been an agreement for fewer than 90 days or there is an interim agreement that is intended to be superseded by a permanent agreement). According to the Board, in such cases, the union is entitled to a reasonable period of bargaining, during which no question concerning representation that challenges its majority status may be raised through a petition for an election filed by employees, by the employer, or by a rival union; nor, during this period, may the employer unilaterally withdraw recognition from the union based on a claimed loss of majority support, whether arising before or during the period.
The Board also defined "reasonable period." Where the successor employer has expressly adopted existing terms and conditions of employment as the starting point for bargaining, without making unilateral changes, the "reasonable period of bargaining" will be six months, measured from the date of the first bargaining meeting between the union and the successor employer.
In situations in which the successor employer recognizes the union, but unilaterally announces and establishes initial terms and conditions of employment before proceeding to bargain, the "reasonable period of bargaining" will be a minimum of six months and a maximum of one year, measured from the date of the first bargaining meeting between the union and the employer. The Board will apply a multi-factor test to determine whether the period has elapsed. The burden of proof will be on the party who invokes the "successor bar" to establish that a reasonable period of bargaining has not elapsed.
Additionally, the Board held that where (1) a first contract is reached by the successor employer and the incumbent union within the reasonable period of bargaining during which the successor bar applied, and (2) there was no open period permitting the filing of a petition during the final year of the predecessor employer's bargaining relationship with the union, the contract bar period applicable to election petitions filed by employees or by rival unions will be a maximum of 2 years, instead of 3.
As with the recognition bar discussed above, the Board will apply this rule retroactively. •