Labor rulings and what they mean to franchise businesses

Over the course of the past year, the National Labor Relations Board (NLRB) has issued a series of final decisions and proposed rules that directly impact franchise businesses and which are highly favorable to unions and organized labor. IFA has fought back against these rulings through a variety of legislative, regulatory, and legal tactics in order to ensure franchise businesses can focus their energy on creating jobs amidst a continued challenging economic environment. It may be some time before these rules can be reversed, so franchise business owners need to be aware of the new and proposed rules.

IFA’s Government Relations & Public Policy Department held a webinar this week with Chuck Cohen, a former board member of the NLRB and Partner at the law firm of Morgan Lewis, to educate IFA members regarding compliance with the final NLRB rule regarding a posting requirement. The webinar also addressed the uncertainty regarding other proposed rules and the various legal and legislative challenges these rules face before they can be implemented.

1)    FINAL – NLRB Employee Rights posting

Beginning January 31, 2012, employers must post this 11×17 inch notice in the workplace informing employees of their right, among other things, to “organize a union,” “take action. . . to improve your working conditions by, among other means, raising work-related complaints directly with your employer or with the appropriate government entity, and seeking help from a union,” and to “strike and picket.”

 2)    PROPOSED – NLRB’s Union Election Changes-Faster Elections, More Employer Restrictions.

On June 22, the NLRB published a proposed rule that would significantly revamp union representation elections conducted by the NLRB and would cause union elections to take place much more quickly. (The Board’s sole Republican, Member Brian Hayes, dissented from the proposed election rule.) Among other things, the Board’s proposed rule would change representation elections by doing the following:

  • Requiring hearings to take place within seven days after any representation petition is filed;
  • Dispensing with any pre-election hearing unless disputed issues affected at least 20% of the proposed bargaining unit’s employees;
  • Giving employers seven days to submit a written Statement of Position regarding all unit issues, with all positions not expressed in the Statement of Position forever waived;
  • Requiring disclosure to the union of employee names, home addresses, phone numbers, and email addresses (to the extent available);
  • Accelerating the timing of elections so they occur within 10 to 21 days after the filing of a petition (compared to the Board’s current target of 45 days)

3)    PROPOSED – Permitting Unions to Organize Smaller Groups.

On August 26, the Board decided Specialty Healthcare and Rehabilitation Center of Mobile, 357 N.L.R.B. No. 83 (Aug. 26, 2011), holding that unions may organize a relatively small bargaining unit consisting of employees sharing a “sufficient community of interest” even if the targeted group excludes other employees who do similar work or have other things in common with the targeted group. Under the Board majority’s Specialty Healthcare decision, the bargaining unit will not be expanded to include additional employees unless the employer demonstrates the excluded employees have an “overwhelming community of interest” with the targeted subgroup. Predictably, the Specialty Healthcare decision will promote smaller bargaining units that can more easily be organized by unions, such as is the case in many franchise businesses like restaurants, hotels and service-based franchises.

These are uncertain times for employers confronting possible union organizing and labor relations issues. IFA recently voiced its support for new legislation, The Workforce Democracy and Fairness Act (H.R. 3094), introduced by House Education and the Workforce Committee Chairman John Kline, which would address some but not all of the NLRB’s controversial recent actions. Chuck Cohen testified in front of Chairman Kline’s Committee, on behalf of a broad coalition of business groups, of which IFA is a member, in support of this legislation. A copy of that testimony is available here.

Beyond the legislative battle, the NLRB itself is expected to be unable to issue decisions by the end of December. The board usually has five members, but it is widely expected to have only two members by year-end (after Member Craig Becker’s recess appointment expires), which would prevent the Board from issuing new decisions (The Board can only issue a decision if it has three members). With the Board unable to make decisions after 2011, all of the proposed rules above will become final by year-end. These issues are further complicated by the potential for unexpected developments during the 2012 congressional and presidential elections. IFA will be closely monitoring these developments for franchise businesses, and we encourage IFA members to contact us regarding these issues with questions. 

Posted by Judith Thorman, IFA Senior Vice President of Government Relations & Public Policy