Kline bill passage a victory for IFA and franchise businesses


Yesterday, the House voted 235 to 188 in favor of H.R. 3094, the Workforce Democracy and Fairness Act.   IFA will be working to ensure the bill receives some attention in the Senate, but is unlikely to come to a vote anytime soon.  

In addition, yesterday the NLRB held a hearing where they voted 2 to 1 in favor of a resolution offered by Chairman Mark Pearce to streamline the ambush election proposed rule.  Member Craig Becker and Chairman Pearce voted in favor of the proposal, while Member Brian Hayes dissented, criticizing the substance of the proposal as well as the Board’s failure to follow procedural rules. The Board will now move forward with drafting a final rule based on the Chairman’s resolution. 

Based on the resolution, we expect the final rule in the next few weeks.  The rule will not contain some of the more widely discussed aspects of the proposed rule, such as the 7 day period for a hearing and the requirement employers release employee phone numbers and email addresses.

The final rule, nonetheless, is still expected to significantly truncate the time period for elections and deprive employers of many due process rights.  In short, the streamlined rule would radically change election procedures in an effort to promote rapid, increased unionization at the expense of employees and employers.  

The Board’s information about the hearing, including a video archive that will be posted later today, is available here.

Posted by Jay Perron, IFA Vice President of Government Relations & Public Policy

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

NLRB Rulings Spark Debate at Small Business Committee Hearing


On a day packed with  Capitol Hill activity on the topic of labor regulations, the House Small Business Committee, chaired by IFA 2011 Legislator of the Year Rep. Sam Graves (R-Mo.), held a full committee hearing yesterday entitled “Adding to Uncertainty: the Impact of Dept. of Labor and NLRB Decisions and Proposed Rules on Small Businesses”. The afternoon hearing was followed by the introduction of the Workforce Democracy and Fairness Act by Rep. John Kline (R-Minn.) and the announcement that the effective date of the NLRB’s notice posting requirement will be delayed from November 14, 2011 to January 31, 2012.

A panel of witnesses included Ms. Elizabeth Milito, a representative from the Washington-based National Federation of Independent Businesses, who testified that NLRB has no statutory authority to impose the poster requirement.  Ms. Milito explained that government agencies such as OSHA and the EEOC have the statutory authority to require such postings on workplace safety and anti-discrimination policies, but that the National Labor Relations Act gives the Board no such authority because the poster contains unbalanced language and it does not fall within the Board’s mandate of promoting mutually beneficial relationships between employers and workers.

Another witness, Mr. Allen West, testified that his sheet metal shop is unionized and that the proposed notice requirement will not change his relationship with his workers.  Pressed by Rep. Mick Mulvaney (R-S.C.) on whether or not prohibited action by employees should be posted alongside prohibitions on employers, Mr. West replied that he had such a posting in his shop’s lunchroom.  Rep. Mulvaney simply responded by asking a rhetorical question: “Is it required by NLRB?”, implying the complete absence of balanced language in the poster.

IFA continues to support pro-growth policies that will allow job-creators to provide work for millions of unemployed Americans and drive the recovery of a stagnant economy.  IFA is taking action to protect small businesses from onerous regulations like those promulgated by NLRB, and applauds Rep. Kline for holding a similar hearing in the House Committee on Education and the Workforce, and for the introduction of an important bill that will allow franchise business owners to have sufficient time to talk to their employees and guarantees that employees have the chance to make an informed decision through a private-ballot process. 

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