In a much anticipated decision, the Board, in a 3-2 ruling, modified its recognition and contract bar doctrines as they relate to voluntary recognition by employers of labor unions. Given the diametrically opposed views expressed by the majority and the dissent, as well as current legislative efforts involving card-check and neutrality agreements, this decision will certainly be subject to intense scrutiny and debate in the coming months.

The cases arose after Metaldyne Corporation and Dana Corporation independently entered into card-check and neutrality agreements with the United Auto Workers. The UAW then gathered the requisite majority showing of support and each corporation voluntarily recognized the UAW.  However, before bargaining commenced, employees at both companies presented petitions requesting a decertification election. 

The petitions were dismissed by NLRB Regional Offices because of the Board's recognition bar doctrine. First announced by the Board in its decision in Keller Plastics Eastern, Inc., 157 NLRB 583 (1966), that doctrine holds that when an employer voluntarily recognizes a union, an employee or rival union is barred from filing a decertification or election petition for a reasonable period of time. In support of its holding in Keller Plastics, the Board relied on the existence of other election bar doctrines that arise following: (a) the certification of an election (the “certification” bar); (b) the settlement of unfair labor practices where an employer agrees to bargain (the “settlement” bar); and (c) Board-imposed bargaining orders (the “unfair labor practice” bar). 

The Petitioners appealed and argued that the Board should either abolish the recognition bar doctrine entirely or provide dissenting employees with a window period within which to challenge union certification. The Board granted review, noting that the issue presented by these cases required it to balance the competing interests of protecting and giving force to an employee's freedom to choose representation, on the one hand, and promoting stability in bargaining relationships, on the other hand.  

After considering the parties’ and amici’s submissions, the Board majority concluded that “the current recognition doctrine should be modified to provide greater protection for employees' statutory right of free choice and to give proper effect to court- and Board-recognized statutory preference for resolving questions concerning representation through a Board secret-ballot election.” Accordingly, the Board announced that the recognition bar would only apply after a voluntary recognition if: (a) employees are notified of the recognition and their right to file a decertification petition or support a rival union's petition; and (b) 45 days pass without the filing of a valid petition. These procedures will apply, the Board held, regardless of whether the recognition was preceded by a card-check or neutrality agreement. The Board also modified the contact bar doctrine, which normally prohibits decertification or rival petitions for up to 3 years after a labor contract’s effective date. Under the Board’s new rule, such contracts will not bar such petitions until the 45-day notice period has passed. 

The Board majority recognized that the Act permits employees to exercise free choice through voluntary recognition. However, the majority concluded that it was not obligated to treat such recognitions the same as employee choice expressed through Board elections, which it found to be the most “satisfactory” and “preferred” method of determining majority support. The Board therefore opined that its administration of the Act should reflect that preference by encouraging use of Board elections to resolve questions concerning employee representation. 

The Board identified several reasons that supported the balance it struck between employee free choice and the stability of bargaining relationships. First, it explained that the current recognition bar doctrine did not properly account for the substantial differences between a Board certified election and union solicitation of authorization cards as indicators of employee free choice. The Board concluded that the lack of privacy, the absence of procedural controls on information and misinformation, the inability to capture a single temporal snapshot of employee support, and the lack of safeguards to prevent undue influence, all inherent in card checks counseled strongly in favor of granting greater protection to Board elections.  

Second, the Board identified what it viewed as significant differences between voluntary recognition and the other election-bar situations it had noted in Keller Plastics. The Board stated that, while the certification bar is codified in the Act and the unfair labor practice bar has been recognized by the Supreme Court to be an important part of the remedial purpose of the statute, the recognition bar stands on much less solid legal footing and does not serve the same important statutory purposes, rendering it more susceptible to modification. Finally, the Board noted that as employee free choice is a fundamental premise of the Act, its modification of the recognition bar doctrine will not hamper the growing use of voluntary recognition, but improve it to ensure such recognition truly represents employees' free choice. 

Despite announcing these modifications, the Board decided to apply them prospectively and, therefore, affirmed the Regional Directors’ dismissal of the petitions in both cases. The Board explained that it took this approach in order to avoid what it termed an “inequitable disruption of bargaining relationships” established based on the prior recognition bar.  

The dissent argued that the long-standing recognition bar served the important statutory goal of preserving industrial peace by striking an appropriate balance between ensuring free choice for employees and promoting collective bargaining and that the Board's modification would severely undermine that balance. The dissent argued that by modifying the recognition bar, the Board undercut any incentive an employer may have for voluntarily recognizing a union, removed the protections necessary to foster collective bargaining within the newly formed bargaining relationship, created pressure for the new union to produce quick results or face decertification, and enabled a minority of employees to undo the majority's freedom of choice. The dissent also took issue with the majority's characterization of voluntary recognition, noting that: (a) voluntary recognition is a favored part of the national labor policy; (b) the majority's concerns about coercion apply equally to antiunion petitions and elections; (c) the Act already prohibits coercion and minority recognition; and (d) the period for discussion contemplated by the 45-day window already exists in the period during which employees collect authorization cards.

The Management Perspective

Given some of the more extreme positions advocated by the Petitioners, the Board appears to have struck a reasonable balance between two equally important premises upon which the Act is founded: employee free choice and the stability of bargaining relationships. In that regard, the dissent’s objections are really reflective of a different view of where that balance should be struck, not any legal flaw with the majority’s reasoning. For example, the dissent posits that an employer will be reluctant to voluntarily recognize a union if that decision will be “second guessed” during the 45-day period. But there are existing risks to voluntary recognition, such as Section 8(a)(2) charges and later challenges after a “reasonable period” of time. Despite these risks, employers have been willing to voluntarily recognize. The fact that there may be some short-term uncertainty would not appear to seriously undermine the overall utility of voluntary recognition for interested employers and unions. 

Similarly, the dissent’s suggestion that employers will “drag their feet” during the 45-day period, thereby undermining the union’s support, ignores: (a) an employer’s duty to bargain in good faith and the risk of charges being filed; and (b) the reality of bargaining during the initial time period following recognition or certification, when information requests are made, meetings are scheduled and proposals are prepared. 

Finally, the notion that minority employee have been given some outsized role to thwart the will of the rest of the putative bargaining unit seems a bit too sweeping and over dramatic. If the supposed minority is able to the muster the same showing that is required for an election so soon after voluntary recognition has been extended, it would appear to be in the interests of both employers and unions to understand where, in fact, employees stand on the creation of the bargaining relationship. Vetting those issues sooner rather than later would seem to greatly aid the promotion of stable bargaining relationships. To the extent that may lead to some short-term instability, it would appear a small price to pay in order to maximize the protection of employee free choice. 

The Union Perspective

If we look candidly at the practical implications of the majority’s ruling, it is evident that the harm to the collective bargaining process will last far beyond 45 days.  As a threshold matter, the 45-day window for filing a decertification petition does not start until the employer posts a notice provided by the NLRB regional office. The union is thus at the mercy of bureaucratic sluggishness at the Region and careless or intentional delays by the employer, which may easily stretch 45 days into 60 or more. Then, if a decertification petition is filed within this period, the union’s representative status remains in limbo for months or years while the election process grinds away.

The majority’s statement that the employer remains obligated to bargain throughout this time is cold comfort. The prospect of an imminent decertification petition, or the pendency of election proceedings, will distort the bargaining process because it renders the union’s very status as bargaining representative uncertain, inevitably decreasing its bargaining power. Likewise, the pendency of collective bargaining negotiations will distort the NLRB election process: if negotiations appear to be making little or no progress in the weeks before the election – which is a foreseeable consequence of the Board’s ruling for the reasons just stated – then employees who once supported the union may well see it as a failure and abandon it. In effect, the Board majority’s decision puts the union in the anomalous situation of having to conduct a representation campaign and bargain for a first contract at the same time.

Despite the rhetoric about employee choice, the reality is that this decision “subjects the will of the majority to that of a 30 percent minority,” as the dissent ably points out.  The voluntary recognition bar has always required a majority of employees in the bargaining unit – a more exacting standard than NLRB elections which require only a majority of votes cast. Yet even though over 50 percent of the employees in the unit have designated the union in writing as their bargaining representative, under the Board’s decision a mere 30 percent may block that choice and force an election. (Notably, in so ruling the Board majority went beyond what General Counsel Rosenfeld proposed in his amicus brief: the General Counsel would have made an exception to the recognition bar only if the post-recognition decertification petition was supported by more than 50 percent of the unit.) The Board has thrown its institutional weight behind the vocal minority of anti-union employees who failed to dissuade a majority of their coworkers from signing union cards during the card-check campaign, giving the unsuccessful anti-union campaigners a second bite at the apple in the form of an NLRB election. And while the Board majority touts that “gold standard” election as a supposed boon to all employees, the ugly reality is that NLRB election campaigns are typically marred by coercion and abuses and are not a reliable measure of support for union representation.

One bright spot in the majority’s decision is that it applies prospectively only, meaning that existing voluntary recognitions, and contracts reached pursuant to them, will continue to act as a bar to election petitions.

N. Elizabeth Reynolds, Esq. is a shareholder with Allison, Slutsky & Kennedy, P.C. in Chicago, representing unions and employee benefit funds in arbitration, litigation, and administrative proceedings. She is a member of the Developing Labor Law Committee and a past member of the Board of Directors of the AFL-CIO.

Joseph J. Torres, Esq. is a partner with Winston & Strawn LLP in Chicago where he represents management in employment litigation and labor relations matters. He is the Program Chair for the Developing Labor Law Committee and an Associate Editor of The Developing Labor Law.

The authors would like to thank Jonathan Rosenmeyer, an associate at Winston & Strawn, for his assistance in preparing this alert.