Foley & Lardner Labor and Employment Law Weekly Update (Week of October 17, 2011)

Labor Board Ruling Gives Unions More Rights to Organize Smaller Subgroups of a Company's Workforce
Written by: Bernard J. Bobber

In our September 6, 2011 update, our article entitled, "The NLRB Continues Its March to the Left" made a short and general mention of a very recent Board ruling that bears some additional discussion.

The NLRB's ruling came in a case called Specialty Healthcare and Rehabilitation Center of Mobile, 357 NLRB No. 83. That case involved the issue of what particular group or subgroup of a company's employees is a proper group for purposes of being organized by a union, and what legal standard applies to any challenge by the employer to the appropriateness of that subgroup as a bargaining unit. In the past, if faced with a small proposed group in which it appears certain that the small group will vote in favor of union representation, employers typically have argued that the more appropriate group would be the larger group of its hourly employees at that facility. In those cases, the employer's expectation is that the union will not have majority support of the broader group.

However that approach is now very difficult. The Board's decision in Specialty Healthcare demonstrates great deference to the particular group - known as the "unit" - that is petitioned for by the union. Specifically, the Board concluded that if the employer argues that the unit should instead include a larger group of employees than those petitioned for, the Board will not expand the petitioned-for unit, even if the larger unit proposed by the employer would be more appropriate than the smaller petitioned-for unit. The only exception to this presumption in favor of the petitioned-for group is when the employer carries the burden to prove that the additional employees in the larger unit it proposes "share an overwhelming community of interest with those in the petitioned-for unit." The Board says that this means that to force expansion of the smaller, petitioned-for unit, the employer would have to prove that the common interests of those in the larger group "overlap almost completely" with the interests of the smaller group.

The Board's ruling in Specialty Healthcare was supported by four of the Board's five members. The dissenting member wrote emphatically about how, in his view, the majority implemented a significant shift in the law - in favor of piecemeal organizing. The dissenter wrote, "Today's decision fundamentally changes the standard for determining whether a petitioned-for unit is appropriate in any industry subject to the Board's jurisdiction." He further explained that by imposing an extremely difficult burden on an employer who challenges a proposed unit of a subgroup of its employees as inappropriate, the ruling makes it "virtually impossible for a party opposing [the petitioned-for] unit to prove that any excluded employees should be included." According to the dissenter, the upshot of the ruling is that, "This will in most instances encourage union organizing in units as small as possible..."

Employers beware. Most any large workforce has some subgroup of employees who feels more disenchanted or disenfranchised than others. These subgroups are the best targets for this piecemeal organizing strategy by unions. In some companies, it might be the warehouse employees in the shipping department. In other companies, it might be sanitation employees. But regardless of what subgroup it may be at any particular facility, the point is that the Board gave unions a strong tool to use to get a foot in the door to an entire facility by first organizing the most receptive subgroup. Once in the facility with representation rights over one group of the employees, the union will almost certainly pursue the rest from within.

The ruling in Specialty Healthcare confirms that it is more difficult than ever for an employer to successfully argue that the appropriate unit should be a larger group of its employees (that the employer would expect would vote "no" to the union). Thus, more than ever, employers wishing to avoid union organizing must be extra attentive to the concerns and needs of each of its apparently dissatisfied sub-groups. It is not enough to rest on the knowledge that most of the workforce would vote "no" in a union election, because savvy unions will not seek to represent the entire workforce in such circumstances. Obviously, a union better controls the outcome of an election when it can exercise greater control over defining the subgroup of persons who are allowed to vote.

Court Holds That Employer Meeting to Discuss Ideas for Retirement Packages Does Not Constitute Evidence of Discrimination
Written by: Robert S. Bressler

When an employer meets with an employee to solicit opinions from retirement-age employees as to ideas for retirement packages the meeting itself does not constitute evidence of age discrimination, a court recently held. In McWhorter v. Maynard, Inc. (W.D. Ark. July 19, 2011), the former employee alleged violations of the Age Discrimination in Employment Act (ADEA) and ADA against the defendant employer. As part of her ADEA claim, the employee alleged that her employer held a meeting with individuals over the age of 49 to discuss retirement options at the company. The company held a second meeting during which retirement-age employees shared ideas about possible retirement plan options.

The court ruled in favor of the company on both claims of discrimination. In analyzing the age discrimination claim, the court noted that the meetings with retirement-age employees to discuss possible retirement package ideas served the purpose of soliciting ideas "from the people he [president of the company] thought would be most interested in participating in those programs." The court added:

Plaintiff has cited to no case which holds that there is something inherently unlawful or discriminatory about an employer holding a meeting to discuss possible retirement packages with those employees who, based on their age and/or tenure with the company, might be interested in such a discussion.

In finding the meetings to discuss ideas for retirement packages permissible, the court recognized the usefulness of gaining retirement-age employees' input into possible retirement packages, and provided some protection for employers who hold such meetings. Of course, the language used by a company in these meetings should be scripted and clear. For example, the employee in McWhorter also alleged that the president of the company made discriminatory comments about the employees' ages at the meeting. While the McWhorter court rejected the alleged comments as "stray remarks," it at least indicated that questionable comments made during a meeting with retirement-age employees to discuss ideas for retirement packages may raise the sensitivity level for such comments. Even though such meetings are not a per se violation of age discrimination laws, they must be conducted carefully and with sensitivity to employees who attend.

Labor and Employment Trivia

Last week's question: What famous industrialist was the target of an assassination attempt in response to management's conduct during a labor strike? Name the labor strike and the perpetrator.

Answer: Henry Clay Frick was the chairman of the Carnegie Steel Company, predecessor to US Steel. On July 23, 1892, anarchist Alexander Berkman entered Mr. Frick's office in Pittsburgh and shot him at point blank range. Mr. Frick survived the attack. Mr. Berman's motive was revenge for the seven striking steel workers who were killed by Pinkerton security officers hired by Mr. Frick to break the Homestead Steel strike.

This week's question: What is the name of the secret society of Irish-American coal miners involved in the labor movement and what are they alleged to have done?

Please continue to send suggestions for trivia questions to mneuberger@foley.com.

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