The National Labor Relations Board Changes the Legal Standard for Employers

Title:
The National Labor Relations Board Changes the Legal Standard for Employers
Practice:

Since 1951, an employer has been permitted to unilaterally withdraw its recognition of an incumbent union, as the exclusive collective bargaining representative of its employees, if the employer has a good faith doubt as to whether the union is supported by a majority of its employees in the bargaining unit. In Celanese Corp., 95 N.L.R.B. 664 (1951), the National Labor Relations Board ("NLRB" or "Board") held that an employer was legally permitted to withdraw its recognition of a union provided that the employer had some reasonable grounds for believing that the union had lost majority status, and provided further that the employer was not acting in the context of illegal activities aimed at causing disaffection from the union or playing for time in which to undermine the union. However, on March 29, 2001, in Levitz Furniture Co. of the Pacific, 333 N.L.R.B. No. 105 (2001), the Board overruled Celanese, and its good faith standard, and held that an employer may unilaterally withdraw recognition of an incumbent union only where the union has actually lost the support of a majority of the bargaining unit employees.

The Board's abandonment of the Celanese good faith standard, and the ramifications of Levitz Furniture, can only be fully understood against the backdrop of the United States Supreme Court's recent examination of the Board's good faith standard in 1998. In Allentown Mack Sales & Service, 522 U.S. 359 (1998), the Supreme Courta held that the Board's "good faith doubt" standard must be interpreted so as to permit an employer to act where it has a "reasonable uncertainty" of the union's majority status rather than a "good faith disbelief" of the union's majority status. The Board had employed the more stringent "good faith disbelief" standard until the Supreme Court rejected it and opted, instead, for a more lenient "reasonable uncertainty" standard. Notably, the Supreme Court was only considering the "good faith" standard as it applied to the question of an employer's unilateral withdrawal of union recognition. However, it is important to understand that, at the time of the Supreme Court's decision, the Board also applied the same "good faith" standard when deciding questions concerning an employer's filing of an RM petition (an employer-filed petition which seeks a representation election conducted by the Board) or an employer's polling of its employees. Like an employer's withdrawal of recognition, RM petitions and employee polling are devices by which an employer can question the representative status of an incumbent union. In reaching its conclusions with respect to the proper interpretation of the "good faith" standard as it applied to withdrawals of recognition, the Supreme Court stated that the Board was not bound to a unitary standard for all three devices. Rather, it could rationally adopt a nonunitary standard for unilateral withdrawals, RM petitions and employee polling which, theoretically, could result in a more stringent standard for unilateral withdrawals of recognition.

The Board, in Levitz Furniture, accepted the Supreme Court's invitation in Allentown Mack Sales and adopted different standards for unilateral withdrawals of union recognition and the filing of RM petitions. (The Board left for a later case whether the "good faith" standard for polling employees would be changed). Arguably, the Board was uncomfortable with the more lenient standard for withdrawals of recognition (e.g., "reasonable uncertainty") with which the Supreme Court had left it following the Supreme Court's decision in Allentown Mack Sales. Declaring that Board-conducted elections are the preferred way to resolve questions regarding employees' support for unions, the Board held that, while it was adopting a more stringent standard for withdrawals of recognition, it was adopting a more lenient standard for obtaining RM elections. Board law now, with respect to withdrawals of recognition and RM elections, is as follows.

Withdrawals of recognition: An employer will only be allowed to unilaterally withdraw recognition of an incumbent union if it can prove that an incumbent union has, in fact, lost majority support. The Board emphasized, however, that an employer with objective evidence that an incumbent union has lost majority support - for example, a petition signed by a majority of the employees in the bargaining unit - withdraws recognition at its peril. For example, if the union contests the employer's withdrawal of recognition in an unfair labor practice proceeding - as can be expected - the employer would have to prove by a preponderance of the evidence that the union had, in fact, lost majority support at the time the employer withdrew recognition.

Faced with other "evidence" of union support, the employer may not necessarily prove its case even with the petition. If the employer fails to prove its case, the withdrawal of recognition will constitute a "failure to bargain in good faith" unfair labor practice. Thus, an employer who withdraws recognition of an incumbent union, in the honest but mistaken belief that the union has lost majority support, will be found to violate the Labor-Management Relations Act. The employer's good faith will no longer be a defense.

RM Elections: Historically, the Board has permitted employers to petition (RM petition) for a representation election if the employer harbors a good faith reasonable doubt, based on objective evidence, of the union's continued majority status. Prior to the Supreme Court's opinion in Allentown Mack Sales, the Board had interpreted "good faith reasonable doubt" as requiring the higher threshold of "disbelief"; however, in Allentown Mack Sales, the Supreme Court held that "doubt" can only mean the lower threshold of "uncertainty." In Levitz Furniture, the Board formally adopted the "uncertainty" standard as applicable to RM petitions. The Board also opined as to the kinds of evidence that employers may present to establish good faith reasonable uncertainty including antiunion petitions signed by unit employees; firsthand statements of employees concerning personal opposition to an incumbent union; employees' unverified statements regarding other employees' antiunion sentiments; and, employees' statements expressing dissatisfaction with the union's performance as the bargaining representative.

The clear message of the Board in Levitz Furniture is that employers having doubts about the majority status of an incumbent union should not engage in "self help" by unilaterally withdrawing recognition of those unions but, rather, should beat a path to the Board and file a petition for an RM election.1 While evidence of employee dissatisfaction with their collective bargaining representative may not be sufficient for an employer to meet its burden of proof in an unfair labor practice proceeding challenging the employer's withdrawal of recognition, it undoubtedly will demonstrate that the employer had reasonable uncertainty of the union's majority status when it filed its RM petition.

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1. The question of whether a union has lost the support of a majority of the employees in the bargaining unit is not merely philosophical. Under NLRB law, if a union actually has lost majority support, the employer must cease recognizing it, both to give effect to the employees' free choice of bargaining representative and to avoid violating Section 8(a)(2) of the Labor-Management Relations Act by continuing to recognize a minority union.