A Legal Guide for Employers After Virus-Driven Union Layoffs

Bloomberg report..

The breakneck pace of layoffs during the Covid-19 pandemic will test how employers navigate the rules of the road for letting go of union workforces and rehiring them when economic conditions permit.

While the scope of pandemic-induced layoffs is unprecedented—some 22 million people have filed unemployment claims over the last month—the National Labor Relations Board and courts have grappled with labor law issues related to mass dismissals in the past.

Labor lawyers and law professors spoke with Bloomberg Law about about how that body of law informs what companies should know about union obligations related to mass layoffs, hiatus periods, and ramping operations back up in the future. Here are some answers to crucial questions from an employer’s perspective:

When a company let go of its union workers after it became clear that shelter-in-place directives made business untenable, it didn’t bargain with the union over the layoffs. Does that leave the company exposed to an unfair labor practice charge from the union?

Probably not. The NLRB general counsel recently released a memo highlighting case law that suggests employers may be able to unilaterally lay off union workers due to the pandemic.

But even if the coronavirus created an exigent circumstance that required a company to take immediate action, it may still have an obligation to give a union notice of the layoffs and a chance to bargain afterward, former NLRB Chairman Philip Miscimarra said.

Moreover, an employer would likely have to negotiate over the effects of the layoffs if the union makes such a request, said Miscimarra, co-leader of the workforce restructuring practice group at management-side firm Morgan Lewis & Bockius. So, unless the collective-bargaining agreement has a related waiver, the company could have a duty to bargain over the length of the layoffs, how workers are recalled, and other issues, he said.

Could an employer be required to bargain with a union even if it no longer employs union workers following a round of layoffs?

Yes. The obligation to bargain with a union persists during a hiatus when workers are furloughed or laid off, labor law analysts said. It also continues even if a company brings in completely new employees to replace union workers that were let go, analysts said.

After laying off union labor, can a company rehire a new workforce made up of people who have no relationship with the union?

Theoretically, yes—in some situations—however, there are always practical hurdles. Employers have the freedom to bring in new employees unless the union negotiated a recall plan or the collective-bargaining agreement forbids it, labor law analysts said.

But even when an employer does have that discretion, it can’t discriminate against workers because of union affiliation, they said. That poses practical problems.

“If the employer has two job applications—one from somebody who knows the job and the other who doesn’t—then the employer might have a hard time proving why they chose the less experienced applicant,” said Michael Duff, a labor law professor at the University of Wyoming and former NLRB attorney.

Let’s say that many of a company’s laid-off workers find other jobs, don’t want to return, or are otherwise unavailable. When the company reopens, an overwhelming majority of the bargaining unit workers will be new. Can the company eject the union, because the lion’s share of the workers didn’t choose it for a bargaining representative?

No, generally speaking. Part of labor law’s promotion of stability is that it grants a union a presumption of continued majority support, labor law analysts said.

That presumption is irrefutable until a collective-bargaining agreement ends or goes past the three-year mark. There’s also a brief window when majority status can be challenged just prior to a labor deal’s expiration. Even if a union hasn’t reached an initial contract, it’s protected from ejection during the first year after it won an election, analysts said.

But if there’s objective evidence that the union no longer has majority support and it’s outside a period when that presumption of support is ironclad, then an employer has options, said Marshall Babson, a former NLRB member who represents employers for Seyfarth Shaw. The company can file for a decertification election if 30 percent of its workers sign cards or a petition to reject the union, or it can unilaterally withdraw recognition.

“The problem with unilateral withdrawal is that the employer had better be right,” Babson said. Pulling recognition from a union if it didn’t actually lose majority support violates federal labor law and can trigger an order to bargain, a remedy the NLRB reserves for the most egregious type of unlawful conduct.

Would the turnover of all or a very high percentage of workers be enough evidence to justify unilateral withdrawal, if it’s during a period when the union doesn’t have that bullet-proof presumption of majority support?

Most likely not, but there’s some uncertainty. Previously, before the NLRB was controlled by Trump administration nominees, mere turnover wouldn’t have been enough, said Anne Lofaso, a labor law professor at West Virginia University and former NLRB attorney. Some affirmative proof coming from the employees would have been necessary, she said.

But the current board made withdrawal easier in its 2019 ruling in Johnson Controls, signaling that this area of law is in flux, Lofaso said. That means the standard for what’s necessary to justify withdrawal might come down to who controls the NLRB majority after the next presidential election.

“If it’s the GOP, there’s a good chance that employers will have a lot more say,” Lofaso said. “But if it’s the Democrats, then support for withdrawal would have to come from the employees themselves.”

What if a company wants to change operations from, say, making vacuums to making ventilators? Could it simply hire non-union ventilator makers instead of bringing back its union workforce that made vacuums?

That’s complicated. Employers have broad discretion to take actions to conform to changing conditions, as long as those actions aren’t a pretext intended to mask anti-union discrimination, labor law analysts said. There could be a dispute, for example, over whether an employer would need different employees to make the new product, they said.

“The decision to change what you manufacture is not a mandatory subject of bargaining,” said Michael Harper, a labor law professor at Boston University. “But there is a duty to bargain over the effects of that change.”

And if a company rehires all of its previous union workers after layoffs, would the union need to get their signatures on new authorization forms for their dues to be automatically deducted from their paychecks, as they were before the layoffs?

Probably not, but it comes down to the language of the authorization forms. To determine whether a worker’s authorization survives the break in employment, the form’s language must establish a clear and unmistakable waiver by the employee to have dues deduction revived upon rehire, said Duff, the University of Wyoming professor.

Like many aspects of labor-management relations, it could be addressed through bargaining about the effects of the layoff.

“It could be part of something that’s like a settlement agreement after a massive strike,” Duff said. “I would imagine the employer and union negotiating over that.”