In a forceful and potentially controversial decision, the National Labor Relations Board (NLRB or Board) ruled that employer agreements with a union prior to that union’s recognition as bargaining representative are lawful under certain circumstances.

In Dana Corporation, 356 NLRB No. 49 (December 6, 2010), the NLRB found that the employer, Dana Corporation, did not render unlawful support to a union, in violation of the National Labor Relations Act (Act), when it negotiated a prerecognition agreement with the United Automobile, Aerospace and Agricultural Workers of America (UAW). Likewise, the Board held that the UAW did not accept support from the employer in violation of the Act.

The ruling should put employers on alert if they are negotiating similar union agreements or are approached by a union with a proposal for a neutrality agreement.

The case arose when the UAW began an organizing campaign at one of Dana's Michigan facilities in 2002. In 2003, Dana and the UAW entered into a Letter of Agreement (LOA) that included, among other things, the following terms:

  • Dana would remain "totally neutral" regarding possible unionization by the UAW.
  • Dana would provide the UAW, upon request, with the names and addresses of employees.
  • The Employer would permit the UAW to meet with its employees at Dana sites in non-work areas.
  • Dana agreed to recognize and bargain with the UAW, if the UAW provided proof of majority status as determined by a card check conducted by a neutral third party.
  • The parties agreed on certain principles that would "inform future bargaining on particular topics" at the point when the UAW was recognized. Those principles included matters relating to: health care costs, attendance issues, mandatory overtime, and compensation.
  • If six months passed without a contract, the parties would be bound to submit unresolved issues to a neutral party for interest arbitration.

Three employees at Dana's Michigan facility filed unfair labor practice charges and in 2004 the NLRB General Counsel issued a complaint against both Dana and the UAW. The General Counsel alleged that Dana had rendered unlawful assistance to the UAW and that the UAW, in turn, had violated employees' rights by accepting the assistance. After the Administrative Law Judge dismissed the complaint, it was appealed to the Board.

The NLRB, stating that card check/neutrality agreements have been "long upheld by the Board and the courts," rejected the General Counsel's argument that a per se violation of the Act occurs when an employer and an unrecognized union engage in negotiations "over substantive terms and conditions of employment" if such discussions occur prior to the union attaining majority status. The Board distinguished the prior major cases in this area by noting that in those cases the employers had unlawfully granted recognition to the unions prior to a showing of majority support.  See Majestic Weaving Co., 147 NLRB 859 (1964), enf. denied. 355 F.2d 854 (2nd Cir. 1966); International Ladies' Garment Workers Union v. NLRB (Bernhard-Altmann), 366 U.S. 731 (1961).

The NLRB said that in the Dana case, the LOA specifically disclaimed exclusive recognition by setting forth the process by which the UAW would have to achieve majority status. According to the NLRB, the LOA in Dana "did no more than create a framework for future collective bargaining" if the UAW first provided proof of majority status.

The Board in Dana expounds upon its view of labor policy in our contemporary society, stating that the "ultimate object" of the Act is "industrial peace" and that this goal is to be achieved by encouraging collective bargaining. The Board cautioned against the creation of new obstacles to voluntary recognition, which it believed would occur by adopting the General Counsel’s position.

 

In sum, the NLRB refused to categorically prohibit an employer from engaging in negotiations with a union over substantive issues before the union has attained majority status. Since Dana had not yet recognized the UAW, the NLRB found that it did not cross the line from lawful cooperation with a union to unlawful support of that union. Similarly, the Board held that the UAW had not accepted unlawful support from the Employer. The NLRB did note in its decision that not every prerecognition agreement would be found lawful and that each case would be evaluated on its own facts.

Employers should be on the alert for unions approaching them with renewed and expanded proposals for neutrality agreements, along with requests to engage in negotiations over substantive issues to be dealt with in future collective bargaining if, and when, the union achieves majority status.

Ballard Spahr's Labor and Employment attorneys have extensive experience in assisting both public and private employers with union and non-union employees. If you have any questions or concerns regarding the Dana decision or about labor relations in general, please contact any member of Ballard Spahr's Labor and Employment Group. A full copy of the NLRB's December 6, 2010, decision may be reached via this link.

 


 

 

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