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Labor Law
University of Kentucky School of Law
Thompson, Linda A.

Labor Law – Outline

I. The Origins and Structure of a National Labor Law
a. NLRA places reliance on an administrative agency, the NLRB. This is because courts usually have a bad track record on this topic.
b. Philadelphia Cordwainers (Commonwealth v. Pullis) (1906) – p. 19
i. Crt. held that defendants were guilty of criminal conspiracy when they tried to prevent other workers from working for lower wages. The benefit was to the defendants and it injured the other workers and society.
ii. Issue continues: Is it wrong for unions to regulate the wages of others? To what extent should the law restrict the majority to prevent the freedom of individual workers? Who speaks for the individual workers who are not part of the union? What if the individual workers don’t want collective bargaining? Who speaks for the public?
c. Commonwealth v. Hunt – p. 22
i. Moves the law away from the view that unions are per se illegal. Although criminal law was no longer used as much to punish unions, civil injections became the norm.
d. Unlawful Activity
i. Certain actions that are unrelated to collective bargaining remain illegal today.
e. Vegelahn v. Gunter (1896) – p. 23
i. Crt. upheld injunction against picketing. Crt. held that picketing is inherently intimidating and is therefore illegal.
f. Summary of Legislation
i. Railway Labor Act of 1926 – p. 31
1. Yellow dog contract – employee agrees not to join a union; upheld by USSC in 1908 and 1915.
ii. Norris-LaGuardia Act of 1932
1. Response to the use of injunctions against unions. Congress limited the ability of federal crts. to enjoin unions. Designed to create neutrality.
iii. National Industrial Recovery Act
iv. Wagner Act of 1935
1. This is the fundamental law of labor today.
2. Protects right to collective bargaining.
3. Creates NLRB.
4. Dramatic growth of unions.
5. ** Reduce inequalities in bargaining power and there will be less need for state intervention. Encourage industrial peace. This remains the goal of collective bargaining.**
v. Taft- Hartley Act of 1947
1. Addressed claim that unions were too strong.
2. Held that unions can be liable for Unfair Labor Practices (ULP).
vi. Labor-Management Reporting and Disclosure Act of 1959
1. Regulates internal affairs of unions.
g. NLRB Jurisdiction
i. Applies to all things affecting commerce; very broad grant.
ii. 14(c) of NLRA allows NLRB the discretionary authority to decide which cases to hear. It cannot grant power to states to hear cases it declines.
iii. Jurisdiction is critical, e.g., comp. has no protection if NLRB declines to hear a case regarding secondary boycotts.
iv. Only applies to persons defined as employees. NLRA expressly names 2.5 m agricultural workers who are not included under the act.
v. Boston Med. Ctr. (1999) – p. 60 – Crt. found that students are employees and covered under the act; but this may have been overruled.
vi. Control test – p. 61 – excludes supervisors from being defined as employees/covered under the act b/c of inherent conflict with employees.
vii. NLRB v. Yeshiva University – p. 64 – full time faculty members of a private university who are shown to have substantial, independent decision-making authority on policy and operations issues are excluded from protection. This case demonstrates how difficult it is to apply the managerial exception.
Summary of Employees under NLRA

Covered

Not Covered

-Workers on strike
– Hospital house staff
– Job applicants (including union organizers)
– Illegal aliens

– Supervisors/managerial workers
– Workers in confidential positions (e.g., secretaries)
– Retirees
-Domestics
– Independent contractors

h. NLRB Procedure – p. 66-70 (see notes for greater detail).
i. Not sua sponte.
ii. NLRB – 2 functions
1. Determine employee representatives.
2. Decide whether a particular challenged activity constitutes an ULP.
iii. NLRB – composed of 5 members appointed by the President for 5 year terms.
iv. In representation cases, the NLRB has final authority; usually delegated to field officials.
v. ULP cases
1. Determines whether to act on claim; look to see if prosecution will effectuate the policies of the Act.
2. Administrative law judge (ALJ) holds a hearing and issues a report; rules of evidence apply; other party can intervene.
3. Effect of report – receives same weight as Bd. decision if neither party files exception. If accepted, the Bd. has complete authority over the action (but usually gives credibility issue deference to ALJ).
4. Party may appeal Bd. decision to Fed. Crt. of Appeals
5. Appellate Review and Degree of Proof
a. Universal Camera – p. 72 – Reviewing courts should consider all the evidence, supporting and rejecting the decision. Look at all the facts, including those that the NLRB doesn’t cite. Crt. should uphold decision by the Bd. if the decision is supported by “substantial evidence contained in the record as a whole.” USSC cites § 10(e).
b. Chevron v. Natural Resources Defense Council – Statutory interpretation test – p. 73
i. Has Congress spoken precisely to the issue in question? If yes, then must give affect to the unambiguous intent of Congress.
ii. If statute is silent or ambiguous, ask whether agency’s action is based on a permissible interpretation of the statute. If yes, then crt. must accept the agency’s interpretation, if the agency governs. If it is an act outside the scope of the agency, then no deference is owed.
II. The Collective Structure: An Overview
a. The Union’s Control Over the Individual – p. 75
i. J.I. Case Co. v. NLRB (1944) – p. 75
1. Issue: Are already existing individual k w/ employees a bar to a duly elected union from representing all employees?
2. Crt. holds that individual k is not a bar to unionization.
3. Important – Majority rules and the union is the exclusive bargaining agent for the employees.
4. Direct dealing is objectionable b/c it undercuts the majority.
ii. Caterpillar v. Williams – p. 78 n. 1
1. Employer and employee can individually contract over matters that are not inconsistent w/ and not covered by the collective k. (J.I. also holds this.) They can give rise to state law (contract) claims if the k is allowed. Also, employer cannot over better deal w/ ind. k.
2. However, not allowed to negotiate privately w/ employee to create greater/less obligations that what is in the collective k.
iii. International Ladies’ Garment Wkrs. Union v. NLRB (1961) – p. 79
1. The employer does not have to bargain unless the union has a majority.
2. Comp. can bargain w/ minority union if it does not claim it is a majority. Collective k w/ minority is ok as long as it doesn’t affect rights of majority.
3. Good faith and due care are not defenses to recognizing minority union as majority.
4. 8(a)(2) – p.31 – Prevents use of company unions that were used to block organization of outside unions. Employees cannot consent to comp. union b/c of fear of company domination.
iv. Emporium Capwell Co. v. Western Addition Cmty. Org. (1975) – p. 84
1. 5 employees decided to bypass the grievance process and go directly to the comp. about racial discrimination. They then picketed the store and were fired and alleged ULP.
2. Crt. holds that employees must go through union grievance process even if there was actual discrimination.
3. § 9(a) – p. 38 – the union is the exclusive bargaining agent.
a. Employee can file ind. grievance if not inconsistent w/ k.
b. This section tries to resolve the tension between union exclusivity and employee rights. But union power trumps.
v. Republic Steel Corp. v. Maddox (1965) – p. 93
1. Crt. held that employer could not bring state breach of k action against comp. unless the collective k allowed.
2. This furthers the national policy that favors arbitration.
b. The Requirement of a Shared Process
i. § 8(a)(5) – ULP for employer to refuse to bargain collectively w/ labor union.
1. Puts mandatory duty on comp. to disclose to union any relevant info. Standard is “presumptively relevant” which is very low. Duty to disclose goes to bargaining and administration of the k.
ii. § 8(b)(3) – ULP for labor union to refuse to bargain.
iii. § 8(d) – parties have an affirmative duty to bargain in good faith. NLRB enforces this. List classes of things that must be bargained over. However, either party can waive this requirement if both agree. See next case.
iv. NLRB v. American National Ins. Co. (1952) – p. 99
1. Crt. held that the comp.’s demand for a management function clause (management exclusively determines certain matters) is not a per se violation of the act. It is not bad faith b/c it furthers the acts underlying goal of promoting industrial peace.
2. As long as the side making the demand is willing to discuss it, there is usually no finding of bad faith.
v. Borg-Warner Controls (NLRB) (1972)
1. Surface bargaining – management appears to bargain but really is not. NLRB can usually only prevail in these cases if they show outside evidence of bad faith.
2. NLRB’s role is to look at process of reaching k, not substance.
3. Key question: Is conduct being used to avoid an agreement? If comp. has a legit position, strongly held, NLRB cannot interfere, even if comp. has overwhelming bargaining power.
vi. NLRB v. Katz (1962) – p. 110
1. Comp. NOT allowed to offer something substantially better to employees b/c it undermines the union. Substantially better is something like better wages.
2. 5 Principles of Katz
a. Employers cannot make changes in wages and working conditions without first reaching an impasse in negotiations w/ union. Cannot not make improvements or decreases.
b. Cannot prematurely declare an impasse b/c bargaining may still be fruitful. Most reach impasse w/o some other violation.
c. Once impasse is reached, employer can make changes that are reasonably comprehended in the final negotiation offer.
d. Employer can lock out union members.
e. Impasse connotes temporary suspension of duty to bargain until there is a change in circumstances.
3. The NLRB can be in a tough place here b/c they may find bad faith but don’t want to strip the employees of new rights. NLRB has power to force comp. to return things to status quo.
vii. Three Areas of Bargaining
1. Mandatory Subject of Bargaining – § 8(d) requires parties to bargain over: wages, hours, and terms and conditions of employment. Union and comp. are required to discuss them. Refusal is a violation of 8(a) for comp. or 8(b) for union. However, concession is not required.
2. Permissive Subjects of Bargaining – all other things that can be bargained about. Comp. or union can refuse to bargain over these issues. You can propose bargaining over the issue but insistence is an ULP.
a. A party cannot refuse to enter into a k only b/c it doesn’t include a permissive subject.
3. Illegal Subjects of Bargaining
4. 5 Consequences of Mandatory Subject of Bargaining
a. Party must bargain over subject in good faith.
b. Non-controlling party may use economic leverage to get compromise.
c. If employees strike when comp. fails to bargain on mandatory area, strikers are guaranteed job back. They are ULP strikers.
d. Midterm modifications that deal w/ mandatory provisions are unlawful unless consent by other party. Unilateral change of mandatory area is NOT allowed.
e. Controlling party must bargain to impasses before it can take unilateral action on mandatory subjects. This applies before/after (not during) k.
viii. NLRB v. Wooster Div. of Borg-Warner Corp. (1958) – p. 117
1. Bargaining over permissive subjects of bargaining is only allowed if both sides agree to it. Pressuring bargaining on permissive area is an ULP. The creation of an impasse on those subjects doesn’t allow bargaining over mandatory areas.
2. Ballot recognition clause is an area of permissive bargaining.
ix. Fireboard Paper Products Corp. v. NLRB (1964) – p. 124
1. Agreement is expiring and negotiations about to begin. Comp. decides to fire certain employees b/c contracting out will be cheaper; no negotiations.
2. Crt. holds employer guilty of ULP. Contracting out is a mandatory subject of bargaining. However, decision isn’t as broad as it seems. Certain decisions are made by management and are not subject to mandatory bargaining:
a. Volume and kind of advertising; product design; manner of financing; sales are not subject to mandatory bargaining even though they bear on the conditions of employment.
b. Decisions that lie at the core of “entrepreneurial control” are not mandatory areas of bargaining.
x. First National Maintenance Corp. v. NLRB (1981) – p. 133 – * Now leading case on mandatory bargaining; backlash to Fireboard.
1. Issue: Must an employer, under §§ 8(d) and 8(a)(5) negotiate w/ union over closing part of the business?
2. Crt. holds that decision to close part of the business is not part of mandatory part bargaining. This is because it involved a change in scope or direction of the enterprise “akin to the decision of whether to be in business at all.”
3. Crt. uses a balancing test: interest of management’s need for unencumbered decision-making v. benefit to labor-management relations and the bargaining process. Benefit for union must outweigh burden on comp. – p. 136.
xi. Relocation Issue – Test – p. 143.
c. The Union’s Duty of Fair Representation
i.

. grounds?
2. Crt. holds that a flat rule against solicitation and distribution is invalid on its face b/c it burdens union organization. Motive is NOT impt. ULP will be found w/o anti-union motive. Right to organize trumps property rights.
3. Exemption for special circumstances:
a. There is a zoning off in hospitals and retail to protect patients and customers.
4. Usually allowed to wear union insignia to work unless special circumstances exist.
5. A rule that prohibits all solicitation during working hours will be upheld. Balance §7 right against § 8(a)(1) violation. Thus, Republic Aviation only prohibits a blanket ban; nondiscriminatory bans during working hours are ok.
ii. Policing Evenhandedness – p. 232
iii. NLRB v. Magnavox Co. (1974) – p. 234
1. USSC held that union is not allowed to negotiate away certain rights, such as right to object on total ban of distribution.
iv. NLRB v. Babcock & Wilcox Co. (1956) – p. 235 – The test for nonemployees.
1. Crt. held that nonemployees do not have the right to organize on company property; company can absolutely ban them b/c of property rights. The fact that nonemployees are creating no disruptions is not impt.
2. Exception – distribution of literature/solicitation allowed if union has no other alternative to reach workers.
v. Republic Aviation applies when employee is working at a different jobsite.
vi. NLRB v. United Steelworkers of America (1958) – p. 239
1. An employer may give antiunion speeches to employees on company time and property (i.e., to a captive audience), as long as the speech itself is not coercive. This is true even if the employer refuses to give the union an equal opportunity to reply on company property during work hours.
2. This is allowed unless there are no alternatives, then must allow union speech. Union alternatives include union hall and homes of employees. They can reach employees outside the workforce.
vii. Elections and Speech
1. Peerless Plywood Co. (1953) – p. 243
a. Employees and unions are prohibited from making election speeches on company time to massed assemblies of employees w/in 24 hrs. before an election b/c of captive audience.
b. However, sending messages (via e-mail) w/in 24 hrs. is ok b/c there is no captive audience issue. Same w/ posting messages and talking briefly w/ single employees.
2. May Dept. Stores Inc. – p. 244
a. If employer has meeting w/ captive audience, it must give this right to a meeting to the union if it would create glaring imbalance. Bd. will almost always find ULP in these cases. The fact that there are alternatives (handbills/housecalls) was not impt. to the bd.
3. Excelsior Underwear Inc. – p. 247
a. Employer must furnish name and address of employees to the union.
c. Insulating Representatives from Employer Control – p. 251
i. §8(a)(2) makes it an ULP for an employer to dominate or interfere w/ the formation or admin. of a labor organization (which is defined p. 27 (5)). §8(a)(2) specifically prevents company unions. See notes for long list of pros/cons – policy issues. (2/2/06 end). The issue becomes whether cooperation between the employees and comp. is enough to raise to the level of §2(5) union activity that is prevented under §8(a)(2).
ii. NLRB v. Streamway Div. (6th Cir. 1982) – p. 253 – bad decision
1. Between elections that union lost, comp. created committee w/ employees.
2. Crt. held not a labor organization; only a means of communication.
3. However, this decision is counter to most and NLRB. Most would find it is a labor org. b/c it runs counter to the act – it deals w/ terms and conditions of employment.
4. §8(a)(2) prevents domination of free choice. Prof. Thinks it should have been applicable here. The fact that the employers don’t see committee as union is not impt.
iii. Electromation, Inc. – p. 261 – 2 part test
1. Whether the entity satisfies the definitional elements of §2(5) as to (1) employee participation, (2) a purpose to deal w/ employers, (3) concerning itself w/ conditions of employment or other statutory subjects, and (4) if an employee representation committee or plan is involved, evidence that the committee is in some way representing the employees.
2. If the organization satisfies those criteria, we consider whether the employer has engaged in any of the three forms of conduct proscribed by §8(a)(2).
iv. Bd. will tolerate it even if it is acting like union if limited in time/scope.
IV. Protection Against Discrimination
This area deals with protecting the §7 rights of employees. If the activity in question is protected and the employee is discharged, there is an 8(a)(3) ULP.
§8(a)(3) elements
(1) Must be concerted though not necessarily connected to union activity.
(2) Must be for the purpose of collective bargaining, other mutual aid. Protection must got to work issue, not just gripping. It must pertain to employees as employees.
(3) It must be protected. It cannot be unlawful.
This area turns on employer motive – must show that it knew action was to keep them from §7 rights.
If activity is protected, employees are insulated from discharge and other action.
Threshold question – Is it a concerted activity?
a. Protected Activities: An Overview
i. NLRB v. City Disposal Systems, Inc. (1984) – p. 265
1. Brown refused to drive a truck he thought was dangerous and was fired. He, not union, filed ULP.
2. Issue: Was honest and reasonable assertion of his right not to drive a truck a concerted activity?
3.