Given the Democrats' loss of a filibuster-proof majority in the Senate and the recent midterm elections in which the Republicans made large gains in both chambers of Congress, the likelihood that the proposed Employee Free Choice Act (EFCA) will pass has virtually evaporated. But recent actions of the National Labor Relations Board (NLRB, or Board) suggest that employers haven't dodged the bullet. Indeed, despite the Republican takeover of the House of Representatives and their gains in the Senate, increased risks of unionization still abound. A majority of the Board's current membership are former union lawyers who have been aggressively acting to institute new policies that are highly favorable to unions - and dangerous for unionized and non-unionized employers alike.
II. Recent Pro-Union Decisions
In a speech on October 21, 2010, NLRB member Mark Gaston Pearce said the Board must seek to make the time period between the filing of a union petition and the holding of an election "as brief as possible" - as little as five to 70 days. He also said the NLRB was considering requiring compound interest on monetary remedies it orders in unfair labor practice cases, and requiring employers to post remedial notices in NLRB cases electronically.1
The very next day, Member Pearce's latter two recommendations were heeded. In Jackson Hospital Corp. d/b/a Ky. River Med. Ctr.,2 the Board unanimously ruled that all back pay and other monetary awards it issues will be subject to interest compounded daily rather than to the simple interest formula it has used for 50 years. And in a 3-1 decision, the Board ruled that it now will require employers and labor organizations who customarily distribute messages to employees electronically to post and/ or distribute remedial notices related to unfair labor practice findings electronically. J & R Flooring Inc. d/b/a J. Picini Flooring.3 One would not want to bet against his third recommendation coming true in the near future.
Standing alone, these decisions increase the risks for both unionized and non-unionized employees - non-union employers can be subject to unfair labor practices as well. The Board's aggressive efforts to change the law to favor unions, coupled with Member Pearce's statements, also require all employers to take seriously the possibility that the Board will significantly shorten the time before a union election, as he suggested. His proposal to reduce that time to five to 10 days would leave employers almost no time to campaign against a union.
Employers also should also be aware that the Board has recently adopted a policy to ask a federal court to order the reinstatement of any employee discharged during a union organizing campaign whom the NLRB believes was discharged because of union activity. All employers - again, unionized and non-unionized - need to audit their compliance with the federal labor laws to ensure that they have taken the steps necessary to protect themselves against union organizing.
III. Adoption of Daily Compound Interest for Monetary Penalties
When the NLRB determines that an individual has been discharged or denied work in violation of the National Labor Relations Act (NLRA), it orders that individual reinstated with back pay. Similarly, the Board orders monetary remedies when it determines that an employer has wrongfully changed or denied benefits in a way that hurts employees monetarily.
For nearly 50 years, the NLRB has imposed only simple interest on such monetary awards.4 But in May 2010, the Obama Board invited employers, business groups and unions to submit briefs about the appropriate interest rule.5 In the Kentucky River decision, the Board unanimously ruled that given that "[o]ur primary focus must be on making employees whole," the Board will require all monetary penalties it imposes to carry interest compounded on a daily basis. The new interest policy …