Pennsylvania Labor and Employment Blog : Pennsylvania Labor and Employment Lawyer & Attorney : McNees Wallace & Nurick Law Firm : Human Resources, Workplace and Business Law : Harrisburg, Lancaster, Allentown, Lehigh

In the recent case of Anderson Equip. Co. v. Unemployment Comp. Bd. of Review, 994 A.2d 1192 (Pa. Commw. Ct. 2010) (pdf), the Commonwealth Court of Pennsylvania examined whether an employee engages in willful misconduct when he fails to pay union fees and dues in violation of his employer's collective bargaining agreement (CBA).  The court held that the employee engaged in willful misconduct by failing to pay his union dues and that the employee did not have good cause for his misconduct.  Thus, the court found that the employee was not entitled to unemployment benefits.

The CBA between the employer and the union required all employees to be members of the union, and prohibited the employer from employing non-union members for more than 90 days. The employee in Anderson Equip. Co. failed to join the union because he claimed he did not have the money to pay the union initiation fees and union dues. The employee attempted to work with the union to establish a payment plan, but was unsuccessful. After several months and several warnings, the employer fired the employee for his failure to secure his union membership.

Under the Pennsylvania Unemployment Compensation Law, an employee is not eligible for unemployment compensation benefits if he or she is discharged for willful misconduct. Willful misconduct includes a disregard for the employer's interest, a deliberate violation of work rules, the disregard of standards of behavior expected of employees, or a substantial and intentional disregard for the employer's interest or the employee's duties and responsibilities. If the employer proves that the employee engaged in willful misconduct by deliberately violating a work rule, the employee can attempt to establish good cause for the violation. Good cause is established if the employee acted justifiably and reasonably under the circumstances.

In Anderson Equip. Co., the primary issue was whether the employee's inability to pay the fees and dues was good cause for violating the work rule. The court found that the employee's inability to pay the fees did not constitute good cause because the former employee could have saved the necessary money during his 90 day probationary period. The court held that the employee had advanced notice of the need to pay the fees and dues, but he decided instead to violate the rule by not paying to join union. Because his inability to pay the fees was not justification for his violation of the rule, the employee was not eligible for unemployment benefits.

This case provides a good summary of the rules associated with willful misconduct under the Pennsylvania Unemployment Compensation Law in conjunction with union membership issues. The case also provides some positive news for employers who may find themselves between a rock and a hard place when forced to discharge employees who fail to pay their union fees and dues.
 

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Veteran Republican Senator Arlen Specter disclosed plans Tuesday to switch parties, a defection that will move Democrats closer to total control of the U.S. Senate. The switch may also revive EFCA in its original form despite Senator Specter's withdraw of support for the pro-union legislation last month. Senator Specter faces a difficult primary in Pennsylvania. 

Senator Specter was a co-sponsor of EFCA last year but withdrew his support.  In an announcement made on March 24, 2009, he proposed alternative amendments to the NLRA addressing his perceived issues in delays and problems with the unionization process.  His floor comments on his change of heart about EFCA will require some political backtracking, if he is now to support the measure consistent with his new party's position:

On the merits, the issue which has emerged at the top of the list for me is the elimination of the secret ballot which is the cornerstone of how contests are decided in a democratic society. The bill’s requirement for compulsory arbitration if an agreement is not reached within 120 days may subject the employer to a deal he or she cannot live with. Such arbitration runs contrary to the basic tenet of the Wagner Act for collective bargaining which makes the employer liable only for a deal he or she agrees to. The arbitration provision could be substantially improved by the last best offer procedure which would limit the arbitrator’s discretion and prompt the parties to move to more reasonable positions. 

For now, EFCA in its original form, may have been given new life in the Senate.

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The United States Supreme Court upheld a provision in a collective-bargaining agreement that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable as a matter of federal law. Accordingly, there is no legal basis for the Court to strike down an arbitration clause in a collective bargaining agreement, which was freely negotiated by a union and company, and which clearly and unmistakably requires employees to arbitrate the age-discrimination claims. However, the Court declined to rule on specific factual issued related to whether the waiver of discrimination claims under the contract by employees' in this case was clear and unmistakable. It also would not rule on whether the contract waived substantive rights protected by federal law which could not be vindicated in an arbitration. These issues were not properly before the Court.

The decision in 14 Penn Plaza LLC v. Pyett has important implications for unionized employers who face employment discrimination charges and lawsuits. These claims may be forced into the arbitration forum and out of court depending on the language in the contract. The scope of the arbitration clause including any limitations will be an important focus of future litigation.

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Andy Stern, President of the Service Employees International Union (SEIU), was recently interviewed by USA Today where he predicted the passage of the Employee Free Choice Act (EFCA) by August. 

Unions have substantial political clout and this prediction should be respected. According to Department of Labor filings, the SEIU has almost 1.7 million members and spent $32.9 million on political activities and lobbying in 2007. The SEIU's 2008 report will likely show an increase in its political spending on the Presidential Election. Mr. Stern has also expressed his sentiments on organized labor's role in the election and its expectations in a Wall Street Journal Interview as follows:

"We just won an election. It's no secret." By "we," Andy Stern means "American workers." He also means Big Labor. Speaking on behalf of the fastest growing trade group in America, the Service Employees International Union -- and as one of labor's most powerful figures today -- Mr. Stern sets this simple bar for the Obama presidency: "I expect nothing less than what he said he was going to do, and we should hold him accountable."

Labor has its sights on EFCA and this pending legislation has enormous potential consequences for employers. Currently, employers cannot make significant workplace policy or other changes once a union files a petition for election. Under EFCA, there may not be an election, only a card check.  Employers may not be aware of organizing efforts or have insufficient time to react. Employers should be putting into place union avoidance programs before EFCA becomes law. Developing an action plan should include the following items:

• Assessing union eligibility of working supervisors under RESPECT Act.
• Educating supervisors on authorization cards and the Nuts and Bolts of EFCA.
• Adopting union-free policies on solicitation, bulletin boards, and use of e-mail.
• Initiating engagement surveys.

More information is contained in our prior posts as follows:

Nuts and Bolts of the Employee Free Choice Act (EFCA) and RESPECT

Bosses do not Deserve RESPECT

Why not Educate Employees on the Significance of Union Authorization Cards?

Employee Engagement Surveys may be Critical to Combating Union Organizing Efforts

NOW is the Time for Employers to Gear up for the Employee Free Choice Act (Unions Are)

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The Associated Press reports that "California Rep. Hilda Solis won confirmation Tuesday as President Barack Obama's labor secretary, giving the agency a decidedly pro-worker tilt after years of business-friendly leadership under the Bush administration…. The 80-17 vote ended more than a month of delays prompted by GOP concerns over Democrat Solis' work for a pro-union organization, and later, revelations about her husband's unpaid taxes."

Ms. Solis is a union proponent as described by John Phillips of The Word on Employment Law in his post Hilda Solis, Secretary of Labor Nominee — Say, “Union Yes”.  At her confirmation hearing, Secretary Solis avoided being drawn into a fight over matters such as the Employee Free Choice Act a/k/a the 'card check' bill, which she co-sponsored in the House. She received campaign contributions from several unions in her 2006 bid for Congress.  The new Secretary of Labor's Biography appears on the Department of Labor website.

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There is an elephant in the room.  Should we talk about it or ignore it and hope it goes away?

Many employers utilize this approach when the rumblings of a union organizing campaign are heard. When EFCA becomes law, by the time the rumblings are heard, it may be too late to educate your workforce on the significance of signing a union authorization card. Employees may have already signed a card based on the promises by a union business agent.

An authorization card is a very innocuous looking form. It resembles a magazine subscription renewal, but it is a legal power of attorney that authorizes a union to act as the collective bargaining agent for the employee in negotiations with the employer. It also provides the union with data about the employee including his or her home address and telephone number so the union representatives can contact the employee or pay them a visit at home. The card typically asks for information about salary, department and type of work the employee performs. The NLRB and courts have compared secret ballot elections to "card checks" and noted there problems:

"Card checks are less reliable because they lack secrecy and procedural safeguards… union card-solicitation campaigns have been accompanied by misinformation… workers sometimes sign union authorization cards…to get the person off their back.”

There is no special mechanism in EFCA for employers to challenge the validity of the cards presented to show the union's majority status. Traditionally, card challenges are unsuccessful unless an employer can show serious misconduct or intimidation.

Employees need to know the company's position on unionization, including at least the following about signing union authorization cards:

• Employees have a right under the NLRA not to sign a card, not to support a union and to oppose unionization.
• After EFCA, signing a card can result in the unionization of the company without an election.
• Once an employee signs a card, he or she may not be able to get it back.
• Signing a card gives a union personal information that may be used to contact the employee later.

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The Employee Free Choice Act stands to shortcut the process for certifying a union depriving an employer of its chance to conduct a campaign to educate its workforce on the downside of unionization, squelch union promises, and redress employee perceptions. The employer’s campaign occurs between the filing of a union petition and the schedule NLRB-supervised secret ballot election - a period of 30 to 45 days.

Elimination of the secret ballot and allowing union certification upon a card showing of greater that 50% will force employers to conduct employee education and assess vulnerabilities in advance of union organizing actions. Some businesses mistakenly believe that employee interest in unions revolves around promises of higher pay and better benefits. Quite to the contrary, most studies on employee motivation for union membership conclude that non-economic concerns are the chief motivators for union membership. Most workers think that unions can get them "a greater say in the workplace." The attitude translates to issues like job security, effectiveness of supervisors, and involvement in workplace decisions. Unionization is not all about the money; it is about workers being "engaged." Disengagement can mean unionization.

Employee Surveys are one of the better ways to conduct systematic and regular assessment of employee attitudes about a whole host of important workplace matters.   Business may be skeptical about the benefits of Employee Surveys and what they can find out about a workplace. Today's Employee Survey are customized to the employer. They can assess an employee's attitudes on various subjects and correlate data by department. business location, etc. Often the survey can identify an issue or supervisory relationship that needs management attention. Survey results can also be benchmarked with comparable businesses.

Designing an effective survey requires collaboration with an expert to tailor the survey to the business and assistance in interpreting the survey data. Success Performance Solutions designs, conducts and evaluates employee surveys for companies in a wide variety of industries. I asked Dr. Ira S. Wolfe, for his thoughts on the EFCA and employee surveys. His comments are as follows:

At this point it is important to differentiate between employee satisfaction surveys and engagement surveys. The terms “employee engagement” and “employee satisfaction” means different things to different people. In its simplest form, satisfaction means employers are not doing anything to anger employees. That’s good information to know but not nearly enough to retain employees, no less head off any attempt to unionize employees.

Employee engagement, on the other hand, is a complex equation that reflects each individual’s unique, personal relationship with work. BlessingWhite, in its 2008 State of Employee Engagement study, describes the engaged employee as not just committed, not just passionate or proud, but having a line-of-sight on their own future AND on the organization’s mission and goals. “They are ‘enthused’ and ‘in gear’ using their talents and discretionary effort to make a difference in their employer’s quest for sustainable business success (The State of Employee Engagement 2008, p.1).

Unfortunately for North American employees, fewer than 1 in 3 employees (29%) are fully engaged. Nineteen percent are actually disengaged. Many managers think “yea, yea, yea. What’s the big deal?”

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Basic Provisions: EFCA amends the NLRA to change the procedures for union certification and first contract negotiation. The primary components of the act are as follows:

• Allows NLRB certification of a relevant bargaining unit upon authorization card showing from 50% plus one of employees bypassing the NLRB-supervised secret ballot election.
• Mandates initial collective bargaining contract be negotiated within 120 days of union certification. If no contract is reached, the first contract is produced by an arbitrator through an interest arbitration process. The first contract covers employees for 2 years.
• Imposes sanctions on employers who engage in unfair labor practices during a union representation drive including $20,000 per violation and double back pay awards for discharged employees.

The RESPECT Act changes the definition of supervisor under the NRLA to allow working supervisors to become union members. Working supervisors are those who don't spend a majority of there time in strictly management activities. Working Supervisors have there current status as supervisors as a result of assigning or directing the work of others.

Employment Implications: EFCA is a monumental change to the NLRA which eliminates the employer's campaign to rebut a union organizing drive following the filing of a petition with the NLRB. Authorization cards are an unreliable mechanism for determining employee union interest. Interestingly, there are no changes to the decertification process in EFCA. To get rid of a union, employees must file a petition with the NRLB and go through the traditional secret ballot election process.

Much has been made of the abrogation of the secret ballot election, but equally dramatic are the limitations placed on collective bargaining and contract determination by an arbitrator if no agreement is reached in 120 days of negotiations.  Reliance on arbitrators to craft a contract where none has existed before is ridiculous. The arbitrator will likely be unfamiliar with the business and the result will likely be a cookie cutter agreement that ignores important operational issues.

If enacted, EFCA will result in unprecedented organizing activity with employers losing their ability to demand a secret ballot election and engage in hard bargaining over a first contract. With the RESPECT Act, working supervisors will gain the right to organize and employers will lose one of their primary avenues to influence employees and obtain information.

Obama Administration Views: The Obama Administration's transition website (Change.gov) states that the Administration will "fight for the passage of the Employee Free Choice Act" and supports the passage of the RESPECT Act.

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President-Elect Obama told his hometown crowd that "Change has come to America." Through his election speeches, website and co-sponsorship of Senate Bills there is a road map of what changes will likely be coming to the American workplace.

Employers would be well served by examining the impact of likely legislation on their business and planning accordingly. The most significant changes will likely come from the Employee Free Choice Act  and RESPECT ACT which will reshape union organizing. The building trades, healthcare, and manufacturing will be the first to feel the effects, but so will business that were not traditionally union targets like financial services.  The balance of Senator Obama's legislative agenda involves expanding existing areas of employment protection through the Paycheck Fairness Act, Ledbetter Fair Pay Act, Employment Non-Discrimination Act.

Prior posts have summarized the content of these bills and their impact on the workplace. In the coming weeks, we will provide more extensive guidance on planning to meet the changes posed by these and other legislative initiatives.

Related Posts:
Employer's Guide to the Election
Obama Victory may give rise to Unprecedented Unionization of the American Workplace
Bosses do not Deserve RESPECT
 

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Union membership and the public perception of the role of labor unions are relatively unchanged in recent years. Union membership was up only slightly in 2007 based on a report by the Bureau of Labor Statistics of the Department of Labor, which published the following statistics on union membership:

     Percentage of unionized workforce
     Total - 12.5%
     Public sector - 36.5%
     Private sector - 7.8%

Public perceptions of unions is also remained constant. An annually conducted Gallop Poll shows a relatively constant union approval rating hovering around 60%, with only 22% of those polled feeling that unions would be “stronger” in the future.

The 2008 Election may dramatically change the landscape of U.S. labor relations with a reinvigoration of organized labor. The following influence could align to compel unprecedented unionization:

• Payback to Union Supporters: Democratic candidates received substantial support from organized labor both financially and in getting out the vote. This support will garner political power, which will likely translate into a pro-union legislative agenda.
• Uncontested Legislative Agenda: Senator Obama is the cosponsor of the EFCA and RESPECT Act both of which are strongly supported by unions. A Democratic majority in the House and Senate will pave the way for an uncontested legislative agenda that will likely include these laws. Republicans could be unable to slow the process down using a “filibuster” if the Democrats secure a 60-seat majority in the Senate to invoke cloture on floor debates.
• Economic Woes: The economy downturn will continue to hurt businesses making necessary reductions in force, smaller paychecks and other cuts in benefits. The promises of job security and better wages are typical union themes. Nervous workers may turn to unions for help.  Traditionally, unions were forced to the bargaining table where strikes were their primary weapon to put economic pressure on an employer. The historic economic balance between unions and employers will be upset by passage of the EFCA, which mandates arbitrator-crafted contracts within 120 days after initial union recognition.
• Unprepared Employers: Passage or the RESPECT Act and the EFCA would be a one-two punch for which many employers will be grossly unprepared. RESPECT would make many working supervisors eligible to unionize and to assist a union in collecting cards and other organizing activities. Employers would be unable to use these working supervisors as advocates for their union-free message or to collect intelligence on organizing activities. The EFCA would eliminate the secret ballot and mandate first contracts through arbitration.

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Sometimes a wait and see approach is the right call when it comes to proposed legislation, but not for nonunion employers facing the possible passage of the Employee Free Choice Act (EFCA). EFCA will radically change the way unions organize employers by eliminating the “campaign” phase and secret ballot election that have been the hallmark of industrial relations since the inception of the NLRA in 1935.

Under EFCA, a union can organize an employer based simply on a majority card showing. The following actions will place an employer in much better position should EFCA become law:

• Educate your managers and supervisors now, not only on the card-signing process itself, but more broadly as to why unionization may be anachronistic in the 21st Century workplace.
• Audit your current HR practices and make improvements before the union is on the scene (as it may be an unfair labor practice to do so after the union begins contacting your employees).
• Make sure your employees have a recognized channel for bringing their concerns to management, a way they can "let off steam." (If not, your claim later that they don't need a union to represent them may fall on deaf ears.)
• Make sure your supervisors are consistently administering disciplinary policies in a non-discriminatory equitable fashion.
• Train your managers and supervisors on what they can and cannot say during an organizing campaign, and maybe more importantly, what they should be saying if the union shows up.
• Review your policies on solicitation, distribution of literature, bulletin board postings, and employee use of e-mail, while necessary changes can still be made. Again, if you wait until the union is on the scene to tweak, you will be committing an unfair labor practice.
• Review your wage and benefit structures. If you're not competitive in your industry or geographical area, the union will seek to exploit this in suggesting to your employees they need union representation.

Most experts believe EFCA is likely to be enacted in 2009.  Presidential candidate John McCain opposes EFCA and submitted a statement to the Congressional Record on June 26, 2007 in which he stated as follows:

I am strongly opposed to H.R. 800, the so-called “Employee Free Choice Act of 2007.” Not only is the bill’s title deceptive, the enactment of such an ill-conceived legislative measure would be a gross deception to the hard working Americans who would fall victim to it.

Barak Obama has repeatedly advocated its passage and has the following position statement on his website:

The current process for organizing a workplace denies too many workers the ability to exercise their right to do so. The Employee Free Choice Act will allow workers to form a union through majority sign up and card checks, and strengthen penalties for those employers who are in violation. The choice to organize should be left up to workers and workers alone. It should be their free choice.

Organized labor will be pushing hard for EFCA, and if there is a Democratic Administration and Congress, passage of EFCA would be a virtual certainty. As noted by Kris Dunn this is The Hidden Career Killer for HR Pros unless you act now.

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