NLRB Revises Standards For Employers to Withdraw Recognition From Unions

Date: October 18, 2001
An employer may unilaterally withdraw recognition from an incumbent union only when the union has actually lost the support of a majority of the bargaining-unit employees, the National Labor Relations Board decides, overruling a 50-year precedent. The Board also revises its standard for employer-requested elections, holding that an employer may obtain an RM election by demonstrating a good-faith reasonable uncertainty as to the union’s continuing majority status. (Levitz Furniture Co. of the Pacific Inc., 333 NLRB No. 105, 3/29/01.) Levitz Furniture Co. engaged in retail furniture sales. On or about December 1, 1994, Levitz received a petition bearing what it concluded to be the signatures of a majority of its bargaining-unit employees, stating that they no longer desired to be represented by their union, the UFCW. Notifying the union, Levitz said it would honor the collective-bargaining contract, but would withdraw recognition once the contract expired on January 31, 1995. The union responded that it had objective evidence showing that it continued to enjoy majority support. The employer reiterated its belief that a majority of employees no longer wanted union representation, and it withdrew recognition after the contract expired. After the UFCW filed a charge claiming that Levitz illegally withdrew recognition and refused to bargain in violation of Section 8(a)(5) of the National Labor Relations Act, the NLRB general counsel issued a complaint. All parties waived the right to a hearing before an administrative law judge, submitted the case directly to the Board, and filed a stipulation of facts in April 1997. Overruling Celanese Corp., 95 NLRB 664, (1951), the Board found that “there are compelling legal and policy reasons why employers should not be allowed to withdraw recognition merely because they harbor uncertainty or even disbelief concerning unions’ majority status.” Instead, “an employer may unilaterally withdraw recognition from an incumbent union only where the union has actually lost the support of the majority of the bargaining unit employees,” the Board majority held. The majority consisted of Chairman Truesdale and Members Liebman and Walsh. Member Hurtgen filed a concurring opinion. In addition, the Board, while making it harder for employers to withdraw recognition during the term of the collective-bargaining contract, made it easier for employers to obtain RM elections. These are elections held on the basis of a petition filed by an employer. Employers need only demonstrate “reasonable good faith uncertainty (rather than disbelief) as to incumbent unions’ continued majority status” to obtain an election, the Board ruled. Section 8(a)(5) requires an employer to bargain with the union that represents a majority of its employees, and an employer that withdraws recognition from a majority union, even in good faith, violates its employees’ rights under Section 7 of the Act every bit as much as an employer that unwittingly extends recognition to a minority union, according to the Board. Consequently, the Board stated, an employer that withdraws recognition from an incumbent union, in the honest but mistaken belief that the union has lost majority support, will be found to violate Section 8(a)(5). The Board emphasized that an employer with objective evidence that the union has lost majority support – for example due to a petition signed by a majority of employees – withdraws recognition at its peril. If the union contests the withdrawal of recognition in an unfair-labor-practice proceeding, the employer will have to prove by a preponderance of the evidence that the union had, in fact, lost majority support at the time the employer withdrew recognition. If it fails to do so, the Board noted it will not have rebutted the presumption of majority status, and the withdrawal of recognition will violate Section 8(a)(5). Turning to petitions for employer-requested elections, (RM petition), the majority noted that Board-conducted elections are the preferred way to resolve questions regarding employees’ support for unions. Processing RM petitions on a lower showing of good-faith uncertainty will provide a more attractive alternative to an employer’s unilateral action, the Board said. Were the Board to require employers to demonstrate a higher showing of good-faith belief of lost majority support in order to obtain an RM election, “we might encourage some employers instead to withdraw recognition rather than seeking an election,” the Board noted. The Board also discussed the kind of evidence that employers may present to establish good-faith reasonable uncertainty. Clearly, the Board states, antiunion petitions and firsthand statements by employees concerning personal opposition to an incumbent union could contribute to employer uncertainty. In RM cases, the Board stated, the regional offices should determine whether good faith uncertainty exists on the basis of evidence that is objective and that reliably indicates employee opposition to incumbent unions. The specific types of evidence that are probative of such uncertainty, the majority concluded, and the weight to be afforded each type under the circumstances, will be decided on a case-by-case basis. Finally, the Board turned to the merits of Levitz. It noted that the employer had a reasonable uncertainty that the union maintained majority support, due to the petition of a majority of the employees, but that the employer did not withdraw recognition until after the contract expired. Even though the union proffered evidence of its majority status, the employer had the right to be uncertain because of the other evidence it had received, the Board found. Therefore, Levitz did not violate the Act. Member Hurtgen concurred in the result that Levitz did not violate the Act. However, he disagreed with the new rule set down by the majority. There are no valid reasons for reversing the existing rule, he stated, and “the new rule is imprudent and unfair.” He notes that there are values that are inherent in the doctrine of stare decisis and in maintaining Celanese, supra, which represents principles that go back half-a-century. It would now appear to be easier for an employer that wishes to decertify a union to find grounds for filing an RM petition. It may be especially interesting to see how employees’ dissatisfaction with the union’s bargaining performance will be evaluated. Will a claim by employees that they are not happy because the union is not getting enough in bargaining be considered an assertion of lack of majority status? It may be argued that in some cases, it could be, in that the dissident employees would prefer a different, more militant union, while in other cases, it would not be, since these statements are made by people unhappy about bargaining but not intending to see their union disappear. In any event, the Board states that the regional directors will look at situations on a case-by-case basis, which may mean that the law on what evidence is required for an RM petition will be unsettled for quite a while. This decision was authored by an NLRB panel in transition. Chairman Truesdale is no longer in office and Member Walsh is expected to be gone by the end of November, 2001, as might concurring Member Hurtgen. Thus, with these imminent departures, and President Bush’s ability to appoint four new Board Members, the continued viability of the new Levitz rules is open to question, so stay tuned.