NLRB Approves Late-stage ULP Settlement Over ALJ and GC's Disapproval | Practical Law

NLRB Approves Late-stage ULP Settlement Over ALJ and GC's Disapproval | Practical Law

In McKenzie-Willamette Regional Medical Center Associates, LLC, the National Labor Relations Board (NLRB) approved a late-stage privately negotiated settlement agreement between an employer and a union that had no notice-posting requirement provision, despite the disapproval of the General Counsel.

NLRB Approves Late-stage ULP Settlement Over ALJ and GC's Disapproval

Practical Law Legal Update 4-577-2185 (Approx. 7 pages)

NLRB Approves Late-stage ULP Settlement Over ALJ and GC's Disapproval

by Practical Law Labor & Employment
Published on 06 Aug 2014 • USA (National/Federal)
In McKenzie-Willamette Regional Medical Center Associates, LLC, the National Labor Relations Board (NLRB) approved a late-stage privately negotiated settlement agreement between an employer and a union that had no notice-posting requirement provision, despite the disapproval of the General Counsel.
On July 29, 2014, in McKenzie-Willamette Regional Medical Center Associates, LLC, the panel (Board) heading the NLRB's judicial functions approved a late-stage privately negotiated unfair labor practice (ULP) settlement agreement between an employer and a union that did not include a notice-posting requirement provision, despite the disapproval of an NLRB Administrative Law Judge (ALJ) and the General Counsel (361 N.L.R.B. slip op. 7 (July 29, 2014)).

Background

The NLRB issued a ULP complaint on February 19, 2013, based on the union's ULP charges alleging that McKenzie-Willamette violated Section 8(a)(5) and (1) of the NLRA by:
  • Unreasonably delaying the providing requested information to the union related to its processing of a grievance.
  • Failing to provide requested information about health-insurance changes affecting unit employees.
On March 12, 2013, there was a hearing before an NLRB ALJ.
About two months after the hearing closed, McKenzie-Willamette and the union reached a private settlement in which McKenzie-Willamette agreed:
  • That as a quid-pro-quo for the withdrawal by the union of the Board charges, McKenzie-Willamette would respond to the union's future information requests in a timely fashion.
  • Not to propose any modifications to the current health benefits or contribution rates of bargaining unit employees until the parties begin negotiating for a successor collective bargaining agreement.
  • Not to implement changes until it reaches an agreement with the union or the parties reach an impasse.
The settlement agreement did not require McKenzie-Willamette to turn over the previously requested healthcare benefits information or to post any remedial notice.
McKenzie-Willamette and the union filed a joint motion in requesting that the ALJ:
  • Approve the settlement, including the withdrawal of the ULP charges.
  • Dismiss the complaint.
The General Counsel opposed the motion and the settlement, arguing that it should not be approved due to:
  • The late stage of the litigation.
  • The vagueness of the settlement's language.
  • The lack of a Board-approved remedy and enforcement mechanism.
  • The fact that McKenzie-Willamette is a recidivist.
The ALJ:
McKenzie-Willamette filed exceptions with the Board, appealing the ALJ's:
  • Disapproval of the settlement agreement.
  • Decision on the merits of the allegations.

Outcome

The Board approved the settlement agreement and dismissed the complaint, finding that the settlement agreement adequately served:
  • The policies underlying the NLRA.
  • The Board's longstanding policy encouraging amicable resolutions of disputes.
The Board noted that:
  • Under Independent Stave, when deciding whether to approve a privately negotiated ULP settlement agreement, the Board assesses whether approving the agreement would effectuate the purposes and policies of the NLRA. In particular, the Board considers:
    • whether the charging party, the employer and any of the individual discriminatees have agreed to be bound and the position taken by the General Counsel regarding the settlement;
    • whether the settlement is reasonable in light of the violations alleged, the risks inherent in litigation, and the stage of the litigation;
    • whether there has been any fraud, coercion or duress by any of the parties in reaching the settlement; and
    • whether the employer has engaged in a history of violations of the NLRA or has breached previous settlement agreements.
    (287 N.L.R.B. at 743.)
  • The Independent Stave factors do not uniformly weigh in favor of approval or disapproval of the settlement agreement, making this a close case.
  • The following two factors weigh against approving the settlement agreement:
    • the General Counsel's opposition to the settlement agreement; and
    • the fact that the parties reached the settlement late in the ULP litigation process, two months after the ALJ hearing had closed and after the deadline for posthearing briefs had passed, as it does not lead to any significant conservation of NLRB resources. This is especially true where, as here, the case did not advance for the NLRB's consideration any novel or complex issues of law.
  • Neither of those two factors is determinative, and are outweighed by the countervailing factors that:
    • McKenzie-Willamette and the union both agreed to the settlement and neither party opposes McKenzie-Willamette's request for it to be approved;
    • there are no individual discriminatees in the case;
    • there are no allegations of fraud, coercion or duress in reaching the settlement; and
    • contrary to the General Counsel's assertion, there is no evidence in the record that McKenzie-Willamette has a history of violating the NLRA or breaching previous ULP settlement agreements.
  • The settlement is reasonable because:
    • McKenzie-Willamette has agreed to neither propose any modifications to the current health benefits or contribution rates of bargaining unit employees until the parties begin negotiating for a successor collective bargaining agreement, nor implement any changes until it reaches an agreement with the union or the parties reach an impasse in negotiations;
    • the union made its request for health benefits information in response to McKenzie-Willamette's apparent intent to make changes to those benefits, and it appears that McKenzie-Willamette's commitment to maintain those benefits appears to both be of substantial value to the union and obviate the union's immediate need for that information; and
    • McKenzie-Willamette has agreed to timely respond to future requests for information.
  • Although the settlement agreement does not provide all the remedies that would be included in a Board order, for example requiring McKenzie-Willamette to provide missing information and post an accessible cease and desist notice, the lack of a full Board remedy does not warrant rejecting the settlement because:
    • McKenzie-Willamette has made a number of commitments in return for the union withdrawing the ULP charges;
    • under Independent Stave, approval of settlements does not require that the remedies provided by the settlement be coextensive with the remedies that the Board would provide if the General Counsel prevailed on all the allegations;
    • although in this case McKenzie-Willamette is not immediately required to provide the requested information to the union, once the union begins preparing for successor negotiations it may request any information necessary to prepare its healthcare proposals or to evaluate McKenzie-Willamette's proposals on that subject (Kraft Foods N. Am., 355 N.L.R.B. 753 (2010));
    • although the settlement does not contain a provision requiring McKenzie-Willamette to cease and desist from failing to provide relevant information, McKenzie-Willamette has affirmatively agreed to timely respond to future requests; and
    • the union remains free to file a new ULP charge if McKenzie-Willamette does not.
  • The settlement agreement's failure to require McKenzie-Willamette to post a remedial notice is more problematic since those notices reassure employees of their rights under Section 7 of the NLRA and outline the actions the employer is taking in connection with the settlement. The absence of a notice-posting requirement, while a very important consideration when the Board is deciding whether to approve a settlement agreement, is not determinative (Flint Iceland Arenas, 325 N.L.R.B. 318, 319 n. 4 (1998)).
  • The lack of a notice posting here is not enough to overcome its well-established policy of encouraging settlements between the parties because the alleged violations:
    • did not result in any employee discipline or discharges;
    • did not involve any threats or coercion; and
    • had a limited impact on individual employees.
  • Although the settlement agreement lacks a separate enforcement mechanism (it does not explicitly address what will happen if McKenzie-Willamette fails to provide requested relevant information in a timely fashion), this does not preclude the NLRB from explicitly approving this particular settlement because of the safeguards the agreement has in place, for example:
    • no provision purports to waive the union's access to the Board;
    • the union may file a ULP over any subsequent unreasonable delays or outright refusals to provide requested relevant information;
    • future noncompliance with the agreement or new violations of the NLRA could also result in the revocation of the settlement agreement and the continuation of proceedings in this case; and
    • while outside the Board's province, the union could arguably pursue a breach of the settlement agreement claim in federal court under the Labor Management Relations Act (LMRA).

Practical Implications

It is rare for the Board to have an opportunity to evaluate and approve a private "Non-Board" ULP settlement agreement. It is even more rare for the Board to approve a private ULP settlement agreement:
  • Despite a General Counsel's objections.
  • At such a late stage in the NLRB proceedings that it comes after an ALJ has rejected it and ruled against the employer.
This case should be useful for any employer that seeks review by the Board of the refusal by the General Counsel to dismiss a complaint following a union's agreement to withdraw the underlying charges. Parties may also be interested in the language that the parties used to resolve their dispute outside of the Board's processes, yet with the Board's ultimate approval.