National Labor Relations Board preserves employees’ right of free choice under neutrality and card check agreements

Issue Vol. 10 No. 1 January 2008 By Robert A. Fisher

A recent decision by the National Labor Relations Board (“the Board”), Dana Corporation, 351 NLRB No. 28 (Sept. 29, 2007), balances employees’ rights to free choice about unionization under the National Labor Relations Act (“the Act”) against the increasing use of voluntary recognition agreements in lieu of a Board-sponsored secret-ballot election. Altering its long-standing recognition bar doctrine, the Board concluded in Dana Corp. that employees have the right to file a decertification petition within 45 days after receiving notice of their employer’s grant of voluntary recognition to a union.

While the terms of voluntary recognition agreements vary, the common feature is that an employer and a union contractually agree to a private process to determine whether the union should be the exclusive bargaining representative of a group of employees. A typical provision is a card check, in which the employer agrees to voluntarily recognize the union upon a showing of signed authorization cards from at least a majority of employees. This provision often is combined with a “neutrality” clause, in which the employer waives its free speech rights under § 9(c) of the Act and agrees not to campaign against the union.

Neutrality and card check agreements have become the “bread and butter” of union organizing. A comparison of union success rates under the traditional Board election process and those under card check agreements demonstrates why. For the six month period ending in September 2007, unions were successful in about 59% of all Board-sponsored elections for new organizing efforts. While the Board does not maintain union success rates under voluntary recognition agreements, one study suggests that the union success rate under card check agreements is 78%. That rate increases to 86% when a card check is combined with employer neutrality.

Critics complain that those success rates reflect the fact that voluntary recognition agreements undermine employees’ rights under Section 7 of the Act to freely vote for or against unionization or choose a different union. Unlike a secret-ballot election, the card check process is not secret. Employees often are asked to sign authorization cards -- the “ballot” -- in the presence of both co-workers and union organizers, risking that employees will sign cards because of peer pressure or even coercion. Plus, employees may be given false or misleading information about unionization or the purpose of the cards, which may go uncorrected if the employer remains “neutral.” Employees who do not support the union can be cut out of the process altogether. Because the union needs only a majority of signed cards, it can ignore those employees in the unit who are against unionization, leaving those employees without any opportunity to have their voices heard. These concerns become magnified when the union obtains voluntary recognition, because -- at least until Dana Corp. -- the union becomes the beneficiary of the recognition bar. Under that doctrine, the union is insulated from a decertification petition for a reasonable period of time after voluntary recognition.

Although the Board has long recognized the legality of voluntary recognition agreements, including neutrality and card check agreements, Dana Corp. presented an opportunity for the Board to consider the impact of those agreements on employees’ Section 7 rights. The case involved two companion cases, one involving employees of Dana Corporation (“Dana”) and another involving employees of Metaldyne Corporation (“Metaldyne”). In both cases, the employers had entered into separate neutrality and card check agreements with the International Union, United Automobile, Aerospace and Agricultural Implement Workers (hereinafter “the Union”), and both employers voluntarily recognized the Union upon a showing of signed authorization cards from a majority of employees in each unit. In neither case was there a claim that the authorization cards were the product of coercion or that the grant of recognition constituted unlawful employer assistance.

Nonetheless, within weeks of the grant of recognition, employees in each unit filed petitions with the Board for elections to decertify the Union. Each of the decertification petitions were supported by the requisite 30% showing of interest among the unit employees. The Metaldyne petition was supported by over 50% of the unit employees, while the Dana petition was supported by 36% of the unit employees. The Regional Directors for Regions 6 & 8 dismissed the petitions pursuant to the recognition bar doctrine, and the petitioners requested Board review of those dismissals.

In 2004, the Board granted the petitioners’ requests for review. In its order granting review, a majority of the Board signaled an intent to question the increased use of voluntary recognition agreements. It explained, “[a]lthough no party here challenges the legality of voluntary recognition, the fact remains that the secret-ballot election remains the best method for determining whether employees desire union representation.” It thus concluded that “the increased usage of recognition agreements, the varying contexts in which a recognition agreement can be reached, the superiority of Board supervised secret-ballot elections, and the importance of Section 7 rights of employees, are all factors which warrant a critical look at the issues raised herein.” In response, the dissent argued that there was no reason for granting review and “casting a cloud” over voluntary recognition agreements.

On September 29, 2007, three years after granting review, a majority of the Board decided the merits of the requests for review. Although the Board had suggested that it might disallow neutrality and card check agreements altogether, it refused to do so. It held that “[w]e do not question the legality of voluntary recognition agreements based on a showing of majority support” and specifically noted that it was not addressing the legality of neutrality and card check agreements.

Instead, it decided the more limited issue of whether an employer’s voluntary recognition of a union based on a presumably valid majority showing should bar a decertification or rival union petition for some period of time thereafter under the recognition bar doctrine. As to this issue, the Board concluded that the recognition bar doctrine should be modified to provide greater protection to employees’ Section 7 right to free choice and to give proper effect to the statutory preference for a Board secret-ballot election. It thus concluded that no recognition bar will be imposed unless employees receive notice of the voluntary recognition and of their right to file a decertification petition or support a petition of a rival union within 45 days of their receipt of notice. The notice must be an official Board notice posted in conspicuous places at the employer. Upon the posting of this notice, employees will be free to file a decertification petition or support a petition by another union. If no petition is filed within the 45-day window, then the union will enjoy the benefit of the recognition bar doctrine for a reasonable period of time.

The majority justified its new rule on the grounds that employees’ Section 7 rights are better realized through a secret-ballot election than a card check. It explained that card signings are susceptible to group pressure, misinformation and present a murkier picture of employee voter preference. However, it refused to apply the new rule retroactively, affirming the Regional Directors’ dismissal of the decertification petitions.
The dissent criticized the new rule as failing to recognize that voluntary recognition “honors the free choice already exercised by a majority of unit employees.” It argued that the 45-day period serves only to undermine the bargaining relationship at its formative stage. While conceding that a secret-ballot election is preferable, the dissent disagreed with the majority’s concern that a card check is less reliable.

Since the issuance of the decision in Dana Corp., the Office of the General Counsel has issued a memorandum regarding the new notice requirements. Either the employer or the union must notify the appropriate Region of the grant of voluntary recognition. The Region is expected to obtain a copy of the voluntary recognition and then to prepare the notice form to be posted. This process should be expedited. At the end of the 45-day period, the employer will be required to file a certificate that the notice was in fact posted.

The Board’s new approach to neutrality and card check agreements strikes the appropriate balance between enforcing voluntary recognition agreements between an employer and a union and protecting employees’ Section 7 rights of free choice. Employees sign authorization cards for many reasons unrelated to a clear preference for unionization, and allowing them to file a decertification petition within 45 days of notice of recognition ensures that a union truly enjoys majority support. This is not to say that the Board will blindly enforce neutrality and card check agreements or grants of recognition pursuant to such agreements in the future. While the Board in Dana Corp. recognized the legality of these agreements, it will continue to police the card check process for unlawful coercion or for unlawful employer assistance to a union.