June 18, 2014

Construction Industry Unions Don’t Always Have to Show Proof of Majority Support


Before this past December, when a client asked a construction labor lawyer for advice because a union asked for voluntary recognition of Section 9(a) status, the lawyer could advise his or her client that it did not have to recognize the union as a Section 9(a) representative until the union presented actual proof of majority support. But, a new case confirms that construction lawyers need to be careful when giving such advice.

The construction industry holds a unique position under the National Labor Relations Act (the "Act"). In other industries, an employer is guilty of an unfair labor practice if it recognizes a union that has not demonstrated that it is supported by a majority of the employer's employees. In the construction industry, however, it is perfectly lawful for an employer to do just that. Such relationships are typically governed by "pre-hire" agreements — whereby an employer agrees not to hire employees who are not members of the union.

Even before Congress statutorily authorized pre-hire agreements under Section 8(f) of the Act, they were common in the construction industry. The industry established pre-hire agreements because, unlike companies in other industries, construction companies need to know their labor costs up front in order to generate accurate bids and need to draw on a pool of skilled workers on short notice. Additionally, construction employees frequently work for multiple companies over short periods because whether a particular trade is needed depends on the stage of a project. Thus, typical representation elections are often not feasible.

But, construction companies are not precluded from establishing a collective bargaining agreement by demonstrating majority support, and there are advantages to doing so. If a union demonstrates that it has majority support, Section 9(a) of the Act provides that subsequent elections are barred for the following twelve months, that the union is irrebuttably presumed to retain majority support for the term of any collective bargaining agreement (for up to three years), and that upon expiration of a collective bargaining agreement or three years, whichever comes first, the union retains a rebuttable presumption of majority support. Conversely, under Section 8(f), during the term of a pre-hire agreement, either party may repudiate the agreement and petition the Board for an election, and upon expiration of the agreement there is no presumption of majority support for the union. Thus, Section 9(a) agreements are considerably more secure.

A union may convert a Section 8(f) agreement to a Section 9(a) agreement by establishing that it is supported by a majority of the employer's bargaining unit employees. This past December, the D.C. Circuit decided a case that clarifies whether a union has sufficiently demonstrated majority support. In M & M Backhoe Service, Inc. v. NLRB, 469 F.3d 1047 (D.C. Cir. 2006), the owner of a small construction company signed a pre-hire agreement that permitted either party to terminate the agreement by notifying the other party at least sixty days before a certain date. A few months before that date, M & M's owner notified the union of his intent to terminate the agreement.

Before the agreement expired, the union collected signed authorization cards from all of M & M's employees and sent M & M a letter notifying it that the union had majority support and requesting "voluntary recognition from your firm and 9(a) status under the National Labor Relations Act." The union asked M & M's owner to sign a recognition agreement, which was attached to the letter, stating that M & M "acknowledges and agrees, based on a showing of signed authorization cards, that a majority of its employees have authorized the Union to represent them in collective bargaining" and that M & M "hereby recognizes the Union as the exclusive bargaining agent under Section 9(a) of the National Labor Relations Act."

Without ever seeing the signed authorization cards, M & M's owner signed the recognition agreement and met with the union to negotiate a Section 9(a) agreement. The parties, however, did not reach an agreement and after the pre-hire agreement's expiration, M & M began operating with a nonunion workforce.

The union filed an unfair labor practice charge with the National Labor Relations Board (the "Board") alleging, among other things, that it was the employees' Section 9(a) representative and that M & M had violated the Act by withdrawing recognition of the union. M & M argued that under established Board precedent, an offer of proof cannot substitute for actual proof and that therefore the union had never obtained Section 9(a) status because it never gave M & M actual proof that a majority of M & M's employees supported the union.

In finding for the union, the Board distinguished the prior case law cited by M & M. It found that in the cases holding that an offer of proof could not substitute for actual proof, the unions never presented evidence that they conclusively established majority support, whereas, in the M & M situation, the record established that the union had obtained signed authorization cards from all of M & M's employees. The D.C. Circuit upheld the Board's decision, reasoning that to hold otherwise would allow an employer to frustrate employees' rights under the Act by turning its back on a union's evidence.

Therefore, as long as a union actually has proof of majority support, an employer who recognizes a union's Section 9(a) status after the union offers to provide evidence of its majority support cannot revoke that recognition solely because the employer never took the union up on its offer. Notably, M & M never asked to see the union's proof. Thus, construction industry employers wishing to avoid Section 9(a) agreements may probably still successfully argue that actual proof is necessary as long as they demand to see the proof and the union fails to respond accordingly.

For more information on this topic, please contact marketing@jordanramis.com or call (888) 598-7070.


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