UPS Loses Court Challenge to Obama-Era Union Election Rules (1)

UPS Ground Freight Inc. lost its bid April 19 to get the D.C. Circuit to overturn a union election by delivery drivers at one of its Pennsylvania distribution facilities.

The federal appeals court’s ruling deals a small blow to ongoing lobbying efforts by the business community to roll back a series of policy changes for union election procedures—derided as the “ambush” or “quickie” election rules—that were enacted in 2014. The rules were meant to streamline and “remove unnecessary barriers to the fair and expeditious resolution” of union elections, National Labor Relations Board officials said at the time.

Agency heads in President Donald Trump’s administration have been working to reverse the policies in order to give employers more time and leeway to communicate with their employees during a unionization drive. The board could propose new rules as soon as this spring.

Democratic lawmakers and unions are likely to view the affirmation of the 2014 rules by a second court of appeals as lending support to questions they’ve raised about the appropriateness of the Trump board’s rulemaking. The board’s GOP leaders still have discretion, though, to make certain smaller modifications to the rules on-the-books, or with regard to how officials will apply them to particular cases.

The decision by the U.S. Court of Appeals for the District of Columbia Circuit comes as an April 28 vote on a national collective bargaining agreement between UPS and the Teamsters approaches. The Teamsters presently represent about 230,000 UPS employees.

UPS Ground and representatives at the AFL-CIO didn’t respond in time for publication. The NLRB’s lone Democratic member, Lauren McFerran, declined a request for comment; and Republican Chairman John Ring didn’t immediately respond to Bloomberg Law’s inquiry.

Significant Implications for Unionization

“Under current law, employers can compel attendance at meetings at which employees are often expressly urged to vote against representation,” known as “captive audience” meetings, a Democratic board majority said in 2014. The board’s subsequent rules—actually a series of roughly 25 distinct provisions—were partly aimed at protecting employees from coercion during employer-run campaigns against unionization.

The National Labor Relations Act allows informational and persuasive communications but draws a line at actions or communications that have a coercive effect.

Employers generally complain that union organizers often “ambush” or surprise them with a union petition, and that the time between a petition and an actual election is too short for them to adequately communicate their views to their employees.

A Bloomberg Law analysis concluded the existing election procedures haven’t had a substantial impact on the rates of successful organizing attempts.

7,000 Commenters

Policies on union rules do have significant implications, though, as illustrated by the nearly 7,000 workers, businesses, and employee advocacy groups and unions that have commented on the NLRB’s notice asking whether it should “retain, rescind or modify” the 2014 rules.

The Chamber of Commerce, the National Retail Federation, and the National Federation of Independent Business have all advocated for an updated rule that would give employers a stronger chance to ward off unionization. The AFL-CIO and the Service Employees international Union are among the large labor groups that have commented that the 2014 rules should remain in place.

In an unusual occurrence, the board’s general counsel and agency staffers took different positions regarding the proposal. Peter Robb generally supported the Republican board members’ initiative, while a group of senior career staff and a division that reports to Robb said the rules are generally working well.

UPS Loses ‘As-Applied’ Challenge

The U.S. Court of Appeals for the Fifth Circuit previously rejected a challenge to the 2014 rules brought by the Associated Builders and Contractors of Texas Inc. and other business groups.

That case alleged the Obama-era NLRB exceeded its authority under the NLRA when it enacted the series of policy changes—known as a “facial challenge” to a rule or regulation’s validity.

The UPS case in the D.C. Circuit, meanwhile, alleged an “as-applied” challenge, in other words, that the rules, while valid, were applied in an illegal way.

But UPS didn’t identify any particular flaw in the NLRB’s decision to certify the union after the 27-1 vote, according to Judge Padmanabhan Srikanth Srinivasan’s majority opinion. The court affirmed the NLRB’s finding that UPS committed unfair labor practices by refusing to bargain with the International Brotherhood of Teamsters after a successful election to unionize some of its drivers.

The judges shrugged off the procedural issues the company had with the election and said the appeal was firmly within the regional director’s discretion.

The company objected to some employees being allowed to vote, as their eligibility for representation in the bargaining unit was still in dispute at the time of the election. But it’s “common practice” to let some workers vote “under challenge,” so long as the voters are on notice that the criteria for inclusion in the bargaining unit could change, Srinivasan said.

And the court upheld the NLRB’s ruling that a particular employee wasn’t a supervisor as defined by the NLRA because he didn’t have the power to require work from his subordinates, nor was he held accountable for their work.

Hunton Andrews Kurth LLP represented UPS Ground. In-house counsel represented the NLRB.

The case is UPS Ground Freight, Inc. v. Nat’l Labor Relations Bd., D.C. Cir., No. 18-1161, 4/19/19.