NLRB Approves Certain Pre-Recognition Agreements

The National Labor Relations Board (NLRB) issued its long-awaited decision in Dana Corporation, 356 NLRB No. 49 (2010), finding that certain agreements with a union prior to that union’s recognition as bargaining representative are lawful under certain circumstances.

In its December 6, 2010 decision, the NLRB dismissed a complaint that alleged that the employer and the United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) violated the National Labor Relations Act (NLRA) with a Letter of Agreement (LOA) setting forth ground rules that would be applicable to both parties in any organizing campaign.  The rules included an employer commitment to “neutrality” during organizing, to provide employee information to the union and to provide access to employer property upon union request. Importantly, if the UAW was successful in its organizing efforts, the LOA created certain requirements for future bargaining on critical issues such as contract duration, healthcare cost sharing, attendance and mandatory overtime.

In 2004, following an unfair labor practice charge filed by a number of the affected employees, the NLRB’s General Counsel issued a complaint alleging that the LOA provided unlawful assistance to the union in violation of Section 8(a)(2) and (1) of the NLRA and that the union coerced employees in violation of Section 8(b)(1)(A).  In 2005, an Administrative Law Judge (ALJ) dismissed the complaint on both procedural and substantive grounds.  The NLRB General Counsel and the charging parties appealed the ALJ’s decision to the full NLRB.  On March 30, 2006 the NLRB invited interested parties to file amicus briefs.  A number of amicus briefs were filed, including one by certain members of the U.S. House of Representatives.

The NLRB’s decision by a 2-1 vote upheld the dismissal of the complaint. Interestingly and importantly, Member Becker recused himself from participation in this matter.  Member Becker’s recusal is notable because the NLRB, by historical practice, will not overrule a Board precedent with less that a three member majority for so doing.  See Hacienda Resort Hotel & Casino, 355 NLRB No. 154 (2010) (concurring opinion of Chairman Liebman and Member Pearce).  In approving the pre-recognition agreement in this case, Chairman Liebman and Member Pearce, by carefully parsing earlier contrary NLRB decisions, held that their decision is consistent with existing NLRB case law.  The majority also explained that to the extent there are contrary decisions, those decisions are legally or factually distinguishable.  Thus, Chairman Liebman and Pearce were able to conclude that they are not overruling any previous NLRB decisions on the subject.

It is significant that Chairman Liebman and Member Pearce stated that they are leaving “for another day the adoption of a general standard for regulating pre-recognition negotiations between unions and employer,” thereby suggesting that they are prepared to go even further in cases in which Member Becker is not recused.

Member Hayes in his dissent argues that notwithstanding the majority’s assertions, this case cannot be distinguished from prior cases and the majority is, in fact, overruling precedent of more than 40 years, which they do not have the authority to do.  More substantively, he notes that the majority’s holding will facilitate top-down organizing of employers, as well as threaten the statutory right of employees to choose by secret ballot elections whether they wish to be represented, and to have input regarding their desired terms and conditions of employment.

As a result of the majority’s opinion, employers can expect significantly increased pressure from labor unions to enter into pre-recognition agreements.

This Dana decision should not be confused with the NLRB’s consideration of the ALJ’s decision in Lamon Gasket Co.  In that case, the NLRB is expected to revisit its 2007 Dana Corp. decision, 351 NLRB No. 434, which created a 45 day window during which employees may file a petition for an election to decertify the union or to support a rival union if the initial recognition was the result of a voluntary recognition agreement rather than a secret ballot election.  The NLRB has requested interested parties to file amicus briefs in this case and a decision is expected in the next few months.

For more information, please contact the Seyfarth attorney with whom you work, or any Labor and Employment attorney on our website.