NLRB Suspends Implementation of New Election Rule

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On the heels of yesterday's federal court decision invalidating the NLRB's new election rule that had taken effect April 30, the NLRB announced today that it is suspending implementation of the rule as a result of the court decision.  The NLRB stated that it is reviewing the court decision and considering how it will respond.  The NLRB's announcement is available here.  Stay tuned for further developments. 

Federal Court Invalidates NLRB’s New Election Rule

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The United States District Court for the District of Columbia issued a ruling yesterday invalidating the NLRB's new election rule.   The court held that the rule was not properly adopted because the NLRB lacked a quorum when it voted to adopt the rule.  Only two NLRB members voted on the rule.  A third had voiced opposition to the rule and made clear that his position was to oppose the rule's adoption.  However, he did not actually participate in the vote.  According to the court, this resulted in the lack of a quorum and rendered the rule's adoption ineffective.  As a result of the court's holding, for now the new election rule is invalid and representative elections will proceed under the old rules.  It is of course possible that the NLRB will simply hold a new vote on the election rule, and employers will be back in the same position shortly only to await legal rulings on substantive challenges to the election rule.  We'll keep you posted on further developments here.

NLRB Takes Aim at Class Waiver in 24 Hour Fitness’ Arbitration Policy

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The NLRB filed a complaint today against 24 Hour Fitness, alleging the company's arbitration policy violates the NLRA.  According to the NLRB, the action was prompted by a complaint lodged with the NLRB by a 24 Hour Fitness employee in California.  24 Hour Fitness' arbitration policy, like those of many companies, contains a class action waiver provision that effectively requires employment disputes to be resolved individually.  As employers may recall, the NLRB recently issued a decision in a case called D.R. Horton, holding that class waiver provisions violate employees' section 7 rights to engage in concerted activity.  D.R. Horton has been appealed and it was not clear how active the NLRB was going to be in enforcing its position declaring class waiver provisions unlawful.  Well, the NLRB's complaint against 24 Hour Fitness may be a sign of  more to come.  Stay tuned.  For the NLRB's press release on the 24 Hour Fitness matter, click here.

Acting NLRB General Counsel Provides Guidelines for Expedited Union Elections

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Legislative and legal efforts challenging the NLRB's expedited election procedures have thus far failed, and today is the effective date for these new procedures.  The new NLRB expedited election procedures will likely make it easier for unions to win elections in many cases.  All NLRB union elections will now be conducted under the new expedited procedures.  Last week, NLRB General Counsel, Lafe Solomon, publicized a memorandum explaining how NLRB Regional Offices will implement these new procedures.  In addition, Solomon's office also published a list of Frequently Asked Questions about the new procedures.  For more details on the new NLRB union election procedures that became effective today, please click here. 

NLRB Indefinitely Postpones Posting Requirement

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As we reported earlier this week, the DC Circuit temporarily enjoined the NLRB's rule requiring employers to post its Employee Rights Poster.  In response to the DC Circuit's order, the NLRB has announced that is postponing its mandate until the courts finally rule on the legality of the posting requirement.  The NLRB's Chairperson announced:  "In view of the DC Circuit's order, and in light of the strong interest in the uniform implementation and administration of agency rules, regional offices will not implement the rule pending the resolution of the issues before the court."  For a copy of the NLRB announcement, click here.

Based on this development, employers are not required to post the NLRB poster on or before April 30.  We will continue to keep you updated.

D.C. Circuit Temporarily Enjoins NLRB From Requiring Employee Rights Poster

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As we reported yesterday, a South Carolina District Court ruled that the NLRB did not have authority to mandate the Employee Rights Poster.  The ruling is in conflict with the only other court to rule on the issue thus far--the District Court for the District of Columbia--and that decision is on appeal.  Well, this morning the D.C. Circuit Court of Appeal granted the National Association of Manufacturers' request for a temporary injunction enjoining the NLRB's posting requirement pending appeal.  The court reasoned that the uncertainty regarding enforceability of the posting requirement counsels in favor of temporarily preserving the status quo pending appeal.  The NLRB has not yet affirmatively postponed its April 30 effective date for employer compliance, but with this ruling it appears employers will not need to comply effective April 30 and will instead need to stay tuned for developments in the ongoing legislation.  The D.C. Circuit Court of Appeal's decision is here.

Courts Finds NLRB Employee Rights Poster Unlawful

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Last week, a federal District Court in South Carolina ruled that the NLRB does not have the authority to require employers to post its Employee Rights Poster.  The ruling was issued in a lawsuit brought by the U.S. Chamber of Commerce challenging the validity of the posting requirement.  The judge held that the NLRA does not require any type of notice posting and that the NLRB's actions in requiring the posting were, therefore, not necessary to carry out the Act.  The judge also reasoned that the NLRB's role is intended to be a "reactive" one, responding to unfair labor practice charges, petitions and the like.  In requiring employers to post an employee rights notice, the NLRB is attempting to act in a "proactive" role and not in its intended reactive role.  While this ruling is good news for employers, it is not the final word on the validity of the notice.  Employers may recall that recently, another federal district court judge (District of Columbia) ruled that the notice was lawful.  That decision is currently on appeal before the Eleventh Circuit Court of Appeals, and it is likely that the NLRB will appeal the South Carolina District Court's adverse ruling.  With the newly issued adverse ruling, it is possible that the NLRB will again delay the effective date for the posting--which is currently April 30.  Employers should stay tuned for further developments on this issue.

NLRB Poster Must Be Up by End of This Month

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This is a reminder that all employers covered by the National Labor Relations Act, which includes union and non-union employers, must post the 11" x 17" National Labor Relations Board's Employee Rights Poster at their workplace on or before April 30, 2012.  If you have questions about the poster and the posting requirements, the NLRB has a wealth of information available on its website (including copies of the poster in multiple languages) here.  There are still lawsuits pending trying to stop the implementation of the rules related to this poster, but the NLRB has stated that it is not going to further delay implementation.

Federal Court Upholds NLRB Employee Rights Poster

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On March 2, the United States District Court for the District of Columbia issued a ruling upholding the NLRB’s employee rights poster.  The ruling was issued in a lawsuit brought by the National Association of Manufacturers (NAM) to challenge the NLRB’s authority to mandate such a poster.  In its ruling, the court held that the NLRB was within its authority to issue a rule requiring employers to post the employee rights notice.  The court rejected NAM’s argument that the posting requirement violates employers’ free speech rights. 

Although the court upheld the posting requirement, it did place some limits on the NLRB’s enforcement efforts.  The court held that an employer’s failure to post the notice, in and of itself, may not be automatically deemed an unfair labor practice by the NLRB.  However, an employer’s “knowing and willful” failure to post the notice may be considered as evidence supporting a finding of an unlawful motive on the part of the employer in a case alleging some other unfair labor practice by the employer.

The court also invalidated a portion of the NLRB rule providing that the statute of limitations would be tolled in unfair labor practice actions against employers who failed to post the notice.  The court held that the NLRB’s effort to extend the clear six-month statute of limitations provided for in the NLRA exceeded the NLRB’s authority.

The court’s ruling in the case brought by NAM is the first ruling in one of several cases challenging the validity of the NLRB’s employee rights poster.  Another ruling is expected in the near future in a lawsuit brought by the Chamber of Commerce in South Carolina.  It may well be that the ruling in the NAM case will be appealed as well.  Employers should stay tuned for further legal developments with respect to the notice.  In the meantime, the current effective date for employer compliance is April 30, 2012.  No court has halted or invalidated that posting deadline.  As such, employers are advised to begin posting the employee rights notice effective April 30 barring contrary legal developments before that time.  The poster is available on the NLRB's website here.

NLRB Enters Fray on Non-Union Employment Arbitration Agreements

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Last week the increasingly controversial NLRB issued a decision holding that class action waivers in employment arbitration agreements (non-union) violate employees' rights to engage in protected concerted activity under the NLRA.  The case involved a national homebuilder, D.R. Horton, Inc.  Like many employers, D.R. Horton several years ago started requiring its employees, as a condition of employment, to agree to resolve any employment-related disputes by way of binding arbitration.  Also like most similar agreements, D.R. Horton's agreement contained a class action waiver provision--a provision that precludes arbitration of collective or class claims.  There has been much litigation both in California and on the federal level concerning the enforceability of class action waivers, the most recent important decision being that of the United States Supreme Court in AT&T Mobility v. Concepcion.  In the AT&T Mobility case, the Supreme Court upheld the validity of class action waivers in consumer arbitration agreements, holding that the Federal Arbitration Act (FAA) preempted a California state law invalidating such class action waivers in consumer agreements.  Although the AT&T Mobility case was not an employment case, its reasoning may be applied to similarly support the enforceability of class action waivers in employment arbitration agreements.  There have been numerous legislative efforts both in California and in the United States Congress to bar mandatory arbitration agreements in the employment context but none of these legislative efforts have succeeded to date.  With the NLRB's decision in D.R. Horton, it appears the NLRB is now presenting a new attack on the validity of such agreements, at least insofar as the agreements contain a class action waiver. 

In the D.R. Horton case, the employees were required to sign an agreement to arbitrate any and all employment disputes arising between them and the company.  The agreement included a provision indicating that arbitration proceedings had to be conducted individually and not on a collective or classwide basis.  Notwithstanding this provision, an employee by the name of Michael Cuda advised the company that he intended to initiate arbitration of a claim for unpaid overtime on behalf of himself and all similarly situated employees who were allegedly misclassified by the company.  D.R. Horton took the position that the demand for arbitration was invalid because the arbitration agreement precluded class claims and mandated that any claim in arbitration be pursued individually.  Cuda filed an unfair labor practices charge with the NLRB, alleging that the class action waiver provision violated the employees' rights under the NLRA.  The NLRB agreed.

The NLRB first held that the arbitration agreement violated the NLRA because its scope could be interpreted by employees as precluding them from filing unfair labor practice charges with the NLRB.  If this were the sole finding of the NLRB, it would not be much cause for alarm because employers with mandatory arbitration agreements could simply revise them to clarify that the agreement does not prohibit the filing of unfair labor practice charges with the NLRB.  Most administrative claims (for example, EEOC claims and claims filed with similar state agencies) are already exempted from the scope of arbitration agreements by virtue of applicable law.   The NLRB did not so limit its holding, however.   Instead, the NLRB went on to hold that the agreement's class action waiver further violated employees' rights to engage in concerted activity to improve the terms and conditions of employment on matters such as wages, hours and working conditions.  According to the NLRB, an individual pursuing a lawsuit on behalf of other employees is one such means of concerted activity:  "Clearly, an individual who files a class or collective action regarding wages, hours or working conditions, whether in court or before an arbitrator, seeks to initiate or induce group action and is engaged in conduct protected by Section 7."

The NLRB held that neither the FAA nor the Supreme Court's decision in AT&T Mobility compelled a different conclusion.  The Board held that the FAA does not require enforcement of arbitration agreements where a party is precluded from vindicating substantive rights protected by statute.  The NLRB reasoned that the class action waiver impairs employees' substantive right to band together to improve working conditions as set forth in Section 7 of the NLRA.  The NLRB similarly distinguished the AT&T Mobility case, reasoning that it did not involve the compatibility of two federal statutes (the FAA and the NLRA) and harmonizing their purposes.  Instead, the AT&T Mobility case involved the issue of federal law (the FAA) preempting a state law disfavoring enforceability of arbitration agreements. 

The NLRB did not go so far as to say that all employment arbitration agreements violate the NLRA.  The NLRB instead said that agreements prohibiting employees from pursuing collective or classwide relief in any forum violate the NLRA.  So long as the agreement allows employees to pursue collective/classwide relief in some forum--arbitral or judicial--it will not violate the NLRA.  This is of course of little practical utility to employers utilizing arbitration agreements. 

Does the NLRB's D.R. Horton decision mean that employers should stop including class action waivers in their arbitration agreements?  Not so fast.  It should be expected that the NLRB's decision will be appealed to the Eleventh Circuit Court of Appeals and possibly further reviewed by the United States Supreme Court.  This is amidst much other controversy surrounding the current NLRB and many of its other recent actions.  There is so much current uncertainty regarding the NLRB and the validity of its recent actions that employers should stay tuned and monitor continuing developments on this front.