United States: NLRB's Proposed Rule Change Expands Employee Free Choice In The Construction Industry

Under the National Labor Relations Act (NLRA), employees have the right to determine whether union representation is in their best interests. The freedom of employees to make this critical choice in an atmosphere free of coercion or intimidation is one of the Act's bedrock principles. Due to a unique provision in the NLRA, however, employees in the construction industry do not always have a choice on the "union issue." On August 12, 2019, the National Labor Relations Board proposed an important rule change that returns free choice to employees. To understand the proposed rule change we first provide a brief overview of construction labor law concepts.

The NLRA's Construction Industry Exception to the Majority Rule

Since 1959, under Section 8(f) of the NLRA, construction industry employees have been able to lawfully become "unionized" automatically when a labor union and employer sign a collective bargaining agreement, often referred to as a "pre-hire" agreement. In such cases, employees do not have a say in whether to be represented by a union or covered by a union contract. This exception to the NLRA's general rule of employee free choice was developed to address certain perceived needs for skilled workers that union hiring halls referred to employers for specific jobs as well as for some degree of certainty over the cost of labor.

In other words, what would constitute a serious unfair labor practice in other business sectors is specifically permitted in the construction industry. Section 8(f), however, does not distinguish between employers that already have existing employees and those seeking employees from union halls. Regardless, union contracts implemented under Section 8(f) do not bar the processing of a representation petition filed by another union. In addition, union contracts implemented under Section 8(f) along with the union relationship (and the union's representation rights) may be lawfully terminated when the agreement ends.

Conversion of Section 8(f) Contracts to Section 9(a) Contracts

In order to obtain representation rights over employees outside the construction industry, unions must demonstrate the support of a majority of employees either through an NLRB secret ballot election or, if the employer agrees, a "card check" procedure. Section 9(a) of the Act protects representation rights obtained in this traditional fashion. That section bars a representation petition from a rival union or decertification election except during very narrow windows of time. Employees who no longer want union representation must wait for a prescribed period to open up, generally once every three years. In practice, it is not easy for employees to decertify an incumbent union in possession of representation rights under section 9(a).

The Board's Staunton Fuel Decision

In the National Labor Relations Board's (NLRB) 2001 Staunton Fuel decision the Board found lawful efforts by construction unions to "convert" a Section 8(f) contract into a "full" Section 9(a) agreement, with its significant attendant protections of the union's representational rights, by relying upon contract language alone without any evidence that the affected employees ever supported the union. This decision by the Board eliminated employee free choice of their representatives and also significantly extended construction industry employers' bargaining obligations with unions.

Following Staunton Fuel, unions adjusted their contracts to meet the low bar set by the Board. Notably, in 2003 the U.S. Court of Appeals for the District of Columbia Circuit rejected Staunton Fuel in the Nova Plumbing case and, more recently, in the 2018 Colorado Fire Sprinklers decision. Despite this judicial rebuke, the NLRB has continued to apply the Staunton Fuel doctrine and unions have, for the most part, continued to enjoy the protections of the Board's "by contract language only" conversion doctrine.

The NLRB's Proposed Change to its Representation Case Rules

The Board's proposed rulemaking would effectively overrule Staunton Fuel. If a construction union wants to bar employees from participating in a secret ballot election based upon its alleged 9(a) representative status, the Board's proposal requires unions to come forward with "positive evidence" to prove that status. Specifically, that: 1) the "union unequivocally demanded recognition as the employees' Section 9(a) representative," and 2) "that the employer unequivocally accepted" the union as the representative of employees based on a contemporaneous showing of support from a majority of employees in an appropriate bargaining unit. Under the proposed rule, "contract language, standing alone, will not be sufficient to prove the showing of majority support." [Emphasis added.] The types of evidence that might pass muster under the Board's proposal could include written documentation such as employee petitions or signed authorization cards.

Key Takeaways

Construction unions have benefited greatly from Section 8(f) and the Board's Staunton Fuel decision. Ironically, the combination of this statutory and regulatory special treatment has resulted in very little traditional organizing in the construction industry. For decades, many unions have relied almost entirely upon contractors who voluntarily sign union agreements. Unions collect millions of dollars of dues from employees who have never had the opportunity to cast a ballot for, or against, union representation.

Lack of input by employees is exacerbated by the increasing use of "short form" and industry wide contracts or "books." Small contractors, which comprise the bulk of the industry, are generally at a severe disadvantage. In addition, unions have exploited the relaxation of certain labor law protections for employers that allow heightened degrees of picketing, bannering and similar pressures to force contractors to "sign up" with unions.

A core protection of the NLRA is employee choice of bargaining representative. Enhancing employee free choice in the construction industry is a worthwhile and long overdue objective. The Board's proposal requires unions to be more transparent with employees and employers and will provide greater opportunity for employees to have a voice in whether to join and remain members of construction unions. The comment period for the proposed rule change runs through October 11, 2019. We will continue to cover this important development for the construction industry.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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