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

Lawsuit would block pro-union poster requirement in franchise businesses


A new lawsuit filed this week would block an ill-advised rule by the National Labor Relations Board (NLRB) requiring employers to post so-called “employee rights” posters in their workplace.

The lawsuit, originally filed by the National Association of Manufacturers and joined this week by the Coalition for a Democratic Workplace (CDW), of which IFA is a member, involves the National Labor Relations Board’s recently published rule, which would force employers in approximately 6 million workplaces in multiple industries, including franchising, to post “notices” that are little more than government-mandated advertisements for unions. The suit asserts that the Board does not have authority under the National Labor Relations Act to promulgate such a rule.

 “These rules will only hinder the ability for franchise business owners to continue to be job creators in their local communities,” said IFA President & CEO Steve Caldeira. “Over 825,000 franchise businesses account for 18 million jobs across the U.S. and these requirements will only distract from their ability to create jobs if employees are only allowed to hear from labor unions and not their employers.”

The rule prompting the lawsuit by CDW and the NAM is scheduled to go into effect on Nov. 14. Rep. Scott DesJarlais, R-Tenn., introduced the Employer Free Choice Act that would repeal the new NLRB mandate issued in August.

To view a copy of the complaint, click here.

Posted by Matt Haller, IFA Director of Communications

House Committee Holds Hearing on Back-Door NLRB Regulations


Reaffirming the need to reign in an activist NLRB that is legislating through regulation, the House Committee on Education and the Workforce held a full committee hearing last week titled “A Culture of Union Favoritism: Recent Actions of the National Labor Relations Board.”  The hearing sought to address recent actions by the NLRB, including “card check” regulation that Congress refused to put into law, a decision altering the makeup of bargaining units to allow for “micro-unions”, and a rule requiring employers to display a poster notifying employees of their rights under the National Labor Relations Act.

Chairman John Kline (R-Minn.), in his opening remarks, set the tone for the hearing:

“Through three decisions handed down in one afternoon, the board restricted workers’ right to a secret ballot election, undermined employers’ ability to maintain unity in the workplace, and created new barriers for those who wish to challenge union representation.”  

Among the witnesses was Mr. Curtis Mack, a former NLRB regional director in Atlanta.  Mr. Mack, a self-proclaimed supporter of the Democratic Party and the Obama administration, commented that he did not see any merit in the “card check lite” ruling because it forced parties into a relationship with a union that neither the employer nor the workers desired.

Another witness, Mr. Roger King, an attorney with years of experience practicing labor law, stated “the direction of the current Board, however, is troubling.” King went on to say that “the current Board, through adjudication, rulemaking, and proposed rulemaking, has implemented one of the most active agendas pursued by any Board in the history of the Agency.”

Rep. Trey Gowdy (R-SC) pointed to the testimony of  Mr. King that very few of the Board’s decisions are unanimous, which further points to the partisan nature of the Board. 

IFA continues to advocate for pro-growth policies and repeal of regulations that stifle small business growth.  An activist NLRB threatens to disrupt the relationship between workers and employers and derail any plans for new hiring.  Such egregious pro-union decisions, including the Board’s rulings and the Dept. of Labor’s recent “gag rule” requiring employers disclose all advice received from legal counsel, will threaten the ability of employers to create jobs and drive the recovery of our nation’s economy. 

Posted by Kevin Serafino, IFA Government Relations & Public Policy

House bill will prevent overzealous government agency from stifling job creation


Despite the fact that job creation is vital to the economic recovery, recent regulatory action by the National Labor Relations Board (NLRB) and the Department of Labor (DOL) could have a chilling effect on the nation’s businesses and discourage job creation. As The Wall Street Journal editorialized on July 28, the inability to rein in the NLRB would have a calamitous effect on the business environment in this country.NLRB Logo

Recognizing the potentially disastrous economic consequences of the actions by an activist NLRB, the IFA-supported Protecting Jobs from Government Interference Act is being considered in Congress this week would guarantee entrepreneurs have the ability to decide where to conduct their business and encourage investment in our nation and its workforce.

Regulators at NLRB and DOL have promoted these rules as essential measures to secure workers’ rights, but in reality they will only empower big labor while crushing job creation and sustaining high unemployment.  Changes made by the NLRB to card-check union rules would allow for “ambush elections” that would give employers little time to secure legal counsel or provide information to employees leading up to the election of new labor union representation.  In another proposal, a “gag rule” proposed by the DOL would overturn 50 years of established law by revising the “advice exemption”, requiring employers to disclose confidential information or counsel received from lawyers or consultants in regards to union elections.

Even though the Obama Administration has told agencies not to adopt regulations that stifle job creation, the new NLRB and DOL rules will have a chilling effect on the hiring practices of American businesses.   Recognizing that there are over 14 million unemployed American workers, the Protecting Jobs from Government Interference Act will prevent the NLRB from imposing “card check” by regulation and hurting the ability of businesses to hire and drive the economic recovery.

Posted by IFA Government Relations Staff