unions – Workforce

February 7, 2020June 29, 2023

Labor issues when you acquire a company with a union

Spotify recently announced that it is acquiring The Ringer, one of the most prolific and popular podcasting networks.

Spotify also indicated that it intends to hire all of The Ringer’s 90 employees, most of whom work on theringer.com, which covers sports and culture and which Spotify indicates it will keep up and running.

Last summer, 66 of those 90 employees signed union-authorization cards stating their support for the Writers Guild of America East to represent them as their collective bargaining representative. Shortly thereafter, The Ringer management voluntarily recognized the Guild as the union representative for its employees.

What does this mean for Spotify? Is it acquiring a labor union as part of its purchase of The Ringer? Like most legal questions, the answer depends on a number of factors.
The primary question relates to the structure of the deal itself. Is it a stock purchase or an asset purchase?

If it’s a stock purchase — the buyer is acquiring all of the stock of the seller — this issue is much easier to solve. In a stock purchase, the buyer stands in the place of the seller and becomes responsible for all of the seller’s obligations, including its union-related obligations and any existing collective bargaining agreements. In other words, if Spotify purchased all of the stock of The Ringer, then Spotify is almost certainly acquiring its union and related obligations.

The fact that Spotify said that it intends to hire all of The Ringer’s employees, however, makes me think this deal is an asset purchase and not a stock purchase. And in an asset purchase, these issues are much more complex.

In an asset deal, the buyer assumes some, but not necessarily all, of the seller’s union-related obligations, but only if the buyer is a “successor employer.” A buyer is deemed to be a successor employer when it continues the predecessor’s business and hires a majority of its employees from the predecessor’s union employees.

A successor-buyer must recognize and bargain with the union, but it does not necessarily adopt the predecessor’s collective bargaining agreement. Instead, the buyer is usually free to set its own initial terms and conditions of employment before bargaining in good faith to a new collective bargaining agreement (as long as the buyer does not mislead employees into believing they will be re-hired without changes to their terms and conditions of employment, which will lock the buyer into the old agreement).

What I hope you take away from today’s post is the complexity of these issues. If you are involved in the sale or purchase of a business that has unionized employees, you absolutely need to involve labor counsel in the deal so that the parties understand what union-related rights are being bought and sold.

January 15, 2020June 29, 2023

Pro-Union Do’s and Don’ts

Four former Google employees claim that their ex-employer fired them Thanksgiving week in retaliation for their efforts to organize a labor union.

The NLRB is now investigating the firings. For its part, Google denies that anti-union animus played any role in the firings. “We dismissed four individuals who were engaged in intentional and often repeated violations of our longstanding data security policies, including systematically accessing and disseminating other employees’ materials and work. No one has been dismissed for raising concerns or debating the company’s activities.”

The NLRB will ultimately have the final word. Suffice it to say, however, an employer cannot terminate a pro-union employee if the employer’s anti-union animus is a substantial or motivating factor for the termination.

But that’s just the tip of the iceberg of an employer’s prohibited conduct when confronted with union organizing.

And my use of the idiom “tip of the iceberg” is no coincidence, as T.I.P.S. is the acronym commonly associated with the four main categories of employer prohibited conduct in a union organizing campaign.

Threaten: Employers cannot threaten employees, or, worse, carry out those threats against employees, because they support unions or unionizing. For example, a manager cannot tell employees he will lower their wages or demote them if they support the union. Or, in the Google example, fire employees.

Interrogate: Employers cannot ask employees about their own, or other employees’, support of unions or unionizing. For example, management cannot ask employees if they signed a union authorization card or how they intend to vote.

Promise: Employers cannot promise employees some reward for not supporting a union. For example, management cannot offer raises or bonus if the union loses.

Surveil: Employers cannot spy on union activity. For example, management cannot photograph or video record union activities or eavesdrop on employee conversations.

And, if it’s not already clear (Google), you cannot fire employees because they support the union.

Yet, just because an employer cannot engage in T.I.P.S. does not mean that an employer is powerless to oppose and fight a labor union that is trying to organize its employees. Indeed, an employer has its own legal rights under the National Labor Relations Act to a fair and balanced secret-ballot election prior to the NLRB certifying a labor union as the bargaining representative for its employees. An employer that does not take advantage of these rights is omitting valuable information and a valuable opportunity to communicate its beliefs.

What can an employer communicate to its employees?

What are your values as an employer?

What are the benefits of working for your company? Wages, benefits, steady work, responsive management, etc.

Explain to employees what union authorization cards, how the secret-ballot election process works, and that just because an employee signed an authorization card does not bind that employee to vote for the union in a secret election.

Remind employees that just as you will not retaliate against any employee who is pro-union, you will not tolerate any employee who retaliates against a co-worker for being pro-management.

Explain the meaning of “dues checkoff,” and let employees know that union dues will almost certainly be deducted from their paychecks whether or not they support the union or use its services.

Inform employees of the potential disadvantages of labor unions, such as the possibility of strikes and work stoppages, that in the event of a strike you might hire replacement workers to take their jobs, that a collective bargaining agreement might require promotions and raises to be granted on seniority and not merit, and that employees might lose direct access to management to adjust issues in favor of a formal grievance and arbitration process.

Tell employees of your prior experience with labor unions, and any facts you know about the particular union that it trying to organize them.

Remind employees of the advantages of your benefits package, especially as compared to union fringe benefits that they might have to accept in lieu of your traditional benefits (which will still be offered to anyone outside of the bargaining unit).

Finally, you are always free to express your hope that employees vote against this or any union.

These issues can be nuanced, and if handled incorrectly, can expose an employer to significant liability at the NLRB. When in doubt, there are professionals you can hire (labor lawyers or other consultants that specialized in union avoidance campaigns). The bottom line, however, is that you cannot ignore a union organizing drive, because if the only viewpoint your employees hear is that of the union, it’s not hard to guess how the election will turn out.

September 24, 2019June 29, 2023

Girl Scouts Good, Union Organizers Bad

What rights do you have to ban union organizers from your property?

A lot. Your property is your property.

What if, however, you allow your employee’s daughter’s Girl Scout troop to set up a table outside and sell cookies? Have you just opened yourself to an argument that allowing cookie sales unlawfully discriminates against the banned union organizers?

Historically, yes, but currently, no. Or at least not under the NLRB’s most recent pronouncement on the issue of employer property rights, in Kroger Mid-Atlantic.

To establish that a denial of access to nonemployee union agents violated the Act …, the General Counsel must prove that an employer denied access to nonemployee union agents while allowing access to other nonemployees for activities similar in nature to those in which the union agents sought to engage. Consistent with this standard, an employer may deny access to nonemployees seeking to engage in protest activities on its property while allowing nonemployee access for a wide range of charitable, civic, and commercial activities that are not similar in nature to protest activities. Additionally, an employer may ban nonemployee access for union organizational activities if it also bans comparable organizational activities by groups other than unions.

Since the Girl Scouts (or the Salvation Army, or the American Cancer Society, or any other charitable, civic, or commercial activity) is nowhere near “similar in nature” to union organizing activities, an employer should be safe permitting the former while banning the latter.

September 9, 2019June 29, 2023

NLRB Asks for Help to Overturn Some Foul-Mouthed Bad Decisions

Editor’s note: This post contains extremely graphic language in the context of the case described here.

“Bob is such a NASTY MOTHER FUCKER don’t know how to talk to people!!!!!! Fuck his mother and his entire fucking family!!!! What a LOSER!!!!”

“Hey, did you bring enough KFC for everyone?” “Go back to Africa, you bunch of fucking losers.” “Hey anybody smell that? I smell fried chicken and watermelon.”

You’d think that if any of your employees lobbed any of these bombs at a supervisor or coworker, you’d have no legal issue if you fired them. And you’d be right … usually.

Except, in the first example, the employee ended his obscene tirade with, “Vote YES for the UNION!!!!!!!”

The latter example was directed by striking workers walking a picket line to African-American replacement workers crossing that picket line. According to the National Labor Relations Board, the employees’ rights to engage in protected concerted activity trumps all.

The NLRB, however, might be changing its mind on these rules. Last week, the agency invited briefs on the issue of how far the law should go to protect profane or obscene workplace statements.

The National Labor Relations Board requests briefing on whether the Board should reconsider its standards for profane outbursts and offensive statements of a racial or sexual nature. In a notice issued today, the Board seeks public input on whether to adhere to, modify, or overrule the standard applied in previous cases in which extremely profane or racially offensive language was judged not to lose the protection of the National Labor Relations Act (NLRA).

In the specific case at issue, a union committeeperson, while arguing about employee cross-training, told a supervisor that he did not “give a fuck about [his] cross-training” and that he could “shove it up [his] fucking ass.”

Specifically, the board is looking for input on five issues:

Under what circumstances should profane language or sexually or racially offensive speech lose the protection of the Act?
How much leeway should employees engaged in section 7 activity be given, when their language if profane or otherwise offensive to others on the basis of race or sex?
Should the Board continue to consider the norms of the workplace, particularly whether profanity is commonplace and tolerated, in judging the legality of these profane or obscene outbursts?
To what extent, if any, should the Board continue to consider context — e.g., picket-line setting — when determining whether racially or sexually offensive language loses the Act’s protection?
What relevance should the Board accord to anti-discrimination laws such as Title VII in determining whether an employee’s statements lose the protection of the Act?

I find all of the examples above to be abhorrent. The NLRB’s current rules require employers to suborn the worst degree of insubordination, or permit horrific racial or sexual harassment, all in the name of “protecting” employees section 7 rights under the NLRA.

These rules must change, and I am very optimistic that the board will craft a much fairer and equitable rule on this issue.

August 7, 2019June 29, 2023

NLRB Streamlines Process for Employers to Withdraw Union Recognition

The National Labor Relations Board has relaxed its test for determining the legality of an employer’s anticipatory withdrawal of union recognition prior to the expiration of the collective bargaining agreement.

In the July 3 Johnson Controls Inc. decision, the NLRB upheld an employer’s right to suspend bargaining and serve notice within 90 days prior to CBA expiration of its desire to withdraw recognition from an incumbent union thereafter, upon receiving objective evidence that the union has actually lost majority support.

The 3-1 decision found that such actions would not form the basis of unfair labor practice charges even if the union were to subsequently reestablish majority support through the filing of a new representation petition (within 45 days thereafter).

In so holding, the NLRB overruled conflicting aspects of prior precedent in 2001’s Levitz v. Furniture Co. of the Pacific, which evaluated an employer’s “anticipatory withdrawal” by application of a “last in time” rule that relied extensively on union evidence establishing that it had regained majority support. A NLRB majority also suggested that it remained open to reexamining other forms of existing precedent governing the decertification process.

The Levitz Standard for Anticipatory Withdrawal

Under Levitz, the receipt of objective evidence prior to CBA expiration that a majority of unit employees no longer desired union representation allowed an employer to withdraw recognition and refuse to bargain, but only “at its peril.” If the union subsequently produced evidence (typically in the form of recent signatures) that a majority had either changed their minds or otherwise wished to retain representation, however, then the employer was subject to unfair labor practice charges for refusing to bargain in the interim.

In the recent Johnson Controls Inc., decision, the NLRB found this back-and-forth test to be unworkable. It opined that the test failed to properly safeguard employee free choice, while undermining labor relations stability by subjecting employers to legal exposure for circumstances that arose after a good faith decision to withdraw.

The New Standard

Under the NLRB’s new test as articulated in Johnson Controls, you will now be privileged to withdraw recognition from an incumbent union and refuse to bargain commencing within 90 days of CBA expiration upon receiving evidence that the union has in fact lost majority support.

Although the union may still respond with unfair labor practice charges, the NLRB will no longer evaluate the merits of those charges by considering evidence that it has reacquired majority status. Instead, the union may present such evidence by filing for a new representation election within 45 days from the date on which you first gave notice of your anticipatory withdrawal.

Under those circumstances, you may lawfully continue recognizing the union without exposure to additional unfair labor practices charges in the absence of another representation petition from an intervening union. As the NLRB pointed out, “such issues will be resolved as they should be: through an election, the preferred method for determining employees’ representational preferences.”

What Does This Mean for Employers?

Johnson Controls provides employers with a road map for lawfully withdrawing union recognition before CBA expiration. While the NLRB has removed some impediments to the “at your peril” nature of the Levitz anticipatory withdrawal standard, you will want to at least take the following considerations into account if you are exploring such a strategy:

The NLRB left other aspects of the Levitz standard in place, including a requirement that employers rely upon objective evidence (as opposed to good faith subjective belief) that the union has actually lost majority support. Such evidence has traditionally derived from a proper disaffection petition containing validated signatures (and dates) from a majority of bargaining unit employees; although employee polls or other objective evidence may suffice in limited circumstances.
Unilateral changes in wages or working conditions implemented during the intervening period between CBA expiration and an ensuing representation election conducted under the Johnson Controlsstandard could still subject you to additional unfair labor practice exposure.

Any withdrawal of recognition implemented during the pendency of bad faith bargaining or other unfair labor practice charges deemed to have caused the underlying employee disaffection will likely taint (and therefore invalidate) the withdrawal itself.