NLRB Finds Employer Implicitly Promised New Benefits if Employees Decertified Union

Practical Law Legal Update 5-511-5668 (Approx. 5 pages)

NLRB Finds Employer Implicitly Promised New Benefits if Employees Decertified Union

by PLC Labor & Employment

Key Litigated Issues

On November 7, 2011, the NLRB issued a decision in G&K Services, where it considered whether an employer's letter improperly promised new benefits to employees for decertifying a union, warranting an order:

Setting aside an election that decertified a union.
Directing a second election.

In particular, the Board evaluated whether a letter stating historical facts including that employees at one of its other facilities received greater health benefits after decertifying the same union was an objectionable implied promise of benefits.

Background

The union-sponsored health plan at the employer's Portsmouth, Virginia facility did not include family coverage. At a meeting held two weeks before a decertification election, the employer distributed a chart comparing the Portsmouth facility's benefits package with a benefits package with family coverage that the employer offered at a nonunion facility.

The employer later mailed a letter to the Portsmouth employees, which noted:

Employees at another facility with the same benefits package had recently voted to decertify that union.
While, by law, the employer could not promise what would happen if the Portsmouth employees voted to decertify, the employees at the other facility were able to sign up for family coverage "for the first time ever" shortly after decertifying the union.

The union did not object to the employer distributing its comparative chart. However, it objected to the letter, claiming that it implicitly promised to grant family coverage if the Portsmouth employees voted to decertify the union. An NLRB hearing officer disagreed, finding that the letter accurately reported the historical fact that the benefits offered at the employer's nonunion facility were different than those offered in Portsmouth. The hearing officer also noted that the letter:

Was factually accurate.
Expressly disclaimed making any promises.
Did not project the employees' future benefits if they voted to decertify.
Was in response to employee questions.
Did not tailor facts for each of the Portsmouth employees.
Was the only employer conduct surrounding the election that was allegedly objectionable.

In addition, the hearing officer found there was no evidence that options to enroll in a health plan providing family coverage was a special benefit tied to Portsmouth employees' decertifying the union. Rather, it was an opportunity the employer made available to employees in all of the employer's nonunion facilities.

The union appealed the election results by filing exceptions to the five-member panel (Board) that is primarily in charge of certifying NLRB election results.

Outcome

In a 2-1 decision (Member Hayes dissenting), a three-member panel of the Board:

Found that the letter conveyed an impermissible implied promise of benefits.
Set aside the election.
Directed that a second election be held.

Under the Viacom Cablevision standard, a comparison of wages may be objectionable if there is an employer promise of benefits that is either express or implied from the surrounding circumstances. In Viacom, the Board upheld election results after the employer sent similar letters:

Comparing wages at a union facility with those at nonunion facilities.
Demonstrating that employees at one facility who had voted to decertify a union had "done better" than those at another facility that had remained unionized.
Stating that wages were increased annually at nonunion locations, accompanied by a chart comparing the voting employees' wages to those of employees at nonunion locations.

The Board majority distinguished Viacom, finding that those letters:

Were limited to wage comparisons.
Responded to specific, identifiable employee requests for wage information, rather than a general employee concern expressed throughout the company.
Did not suggest that the employees that decertified the union received better wages shortly after decertifying the union.
Did not compare wages of the employees who recently decertified the union to those of the voting employees, but rather to employees at a third facility that chose not to decertify the union in a separate election.

The Board similarly distinguished TCI Cablevision. In TCI Cablevision, the Board found no objectionable conduct when the employer informed employees that they would receive a 401(k) plan if they decertified their union. The Board majority said that the TCI Cablevision conduct was acceptable because the employer was required to provide a 401(k) plan under the terms of the plan and under ERISA, and therefore the benefit was automatic. By contrast, the Board majority found that G&K Services controlled whether it would make family coverage available to the Portsmouth employees if they decertified the union.

Member Hayes found no differences between this case and Viacom or TCI Cablevision. According to Member Hayes, the employer lawfully:

Related a historical fact, that employees at the other facility had recently decertified their union.
Truthfully described the default benefits offered to employees at nonunion facilities:
- for which Portsmouth employees would be eligible after decertifying the union;
- that employees at a facility that recently decertified the union had the opportunity to accept; and
Disclaimed any promises of improved benefits.

Practical Implications

Employers must be careful how they present historical facts to voting employees during election campaigns. This decision suggests that the Board majority:

Gives little weight to an employer's disclaimer of a promise of benefit.
Is more likely to find an employer's conveyance of historical facts objectionable if the employer:
- does not supply the information in response to a specific, identifiable question by an employee;
- describes the temporal relation between a decertification election and an improvement in terms and conditions of employment for the employees that decertified a union; or
- compares terms and conditions of employment of voting employees to those of employees that recently decertified a union, rather than comparisons between union employees and nonunion employees.
Requires an employer to refrain from discussing potential benefit changes after a decertification, unless it would be required under the express terms of an employee benefit plan or law to grant those benefits to the voting employees in the absence of the union.

For more information on handling union organizing campaigns, see Practice Note, Responding to Union Organizing Campaigns.

For information on the union representation process, see Union Representation Process Checklist.

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