A Tour Of NLRB Developments With Mark Theodore

Thursday, September 1, 2011 - 01:00

The Editor interviews Mark Theodore , Co-head of the Labor-Management Relations Group and a Partner in the Labor & Employment Law Department at Proskauer, resident in the firm's Los Angeles office.

Editor: Please describe your practice.

Theodore: I handle everything that falls under the umbrella of traditional labor relations law including National Labor Relations Board (NLRB) proceedings and practice to counseling employers about issues they may face to bargaining with unions and conducting arbitrations and any sort of related court proceedings.

Editor: NLRB Chairman Liebman's appointment is set to expire on August 27. What impact has this had on the NLRB's decisions so far this year and what kind of impact will it have on upcoming decisions?

Theodore: At this time of year there is a natural increase in activity because the Board's fiscal year is going to end in September. Chairman Liebman has been on the Board since 1997 and became chairman in 2009, so her tenure in the leadership role has been brief. Despite this, there is no doubt her impact will be great.

We will see new developments in the form of case law, as well as sweeping regulatory change.

After the chairman leaves, the Board will be made up of three members, two of whom largely share the chairman's views, so the Board will have a small window of three months to act. In December, Member Becker's term expires, and if the membership goes down to two members, it can't act. So, we may end up in another deadlock situation, but right now, even after she leaves, we can reasonably predict the Board will continue on its course of change.

Besides the case law changes we can expect, the chairman has initiated rulemaking at the agency for the first time in over 30 years. The proposed rules would vastly upend the entire representation election process. In fact, it would probably be the most fundamental change in labor relations in 40 or 50 years, which, if it occurs, will be a legacy of this chairman.

Essentially what the chairman would like to do is to drastically shorten the timelines during which a secret ballot election must be held - again, the view being that the current process is somehow broken. Another point that is debatable: when you look at the Board's own statistics on this issue, the Board is attempting to fix something that is simply not broken. The Board has been very successful for years in holding employers and unions to the same time targets, with minimal litigation, so there is no reason to change the entire process.

Shortening the election time frames will allow the employer a vastly reduced opportunity to provide its views. There are zero time restrictions on union organizing and for gathering the support to have an election. I have been involved in cases where the union spent years collecting cards before filing a petition. Under the current system, the few weeks allotted for a campaign allow both sides to communicate with the employees. If the proposed rules are adopted, an employer likely will be caught unaware, and may only have a few short days to give its view, while the union has had months to frame its message. The proposed regulations really will interfere with the employer's statutory right to free speech.

The proposed rules also would reduce the ability of the employer to have meaningful input into who will be in the voting unit. In fact, the proposed rules enhance the possibility of having several different bargaining units and even several different unions in the same workplace because they seem designed to go to the lowest common denominator. This is a result Congress clearly and expressly sought to avoid when it passed the NLRA. The proposed rules include many presumptions that would make it much more difficult for the employer to have a say in the process.

I see the proposed rules as a back door effort to accomplish through regulation the objectives of the proposed card check legislation, the passage of which is not now politically possible.While it preserves at least the secret ballot election, which I think is important (I don't think even this NLRB could have done away with that), this comes pretty close to it because it drastically reduces the employer's opportunity to state its side and imposes even less time for the employer to provide information.

Editor: The persuader rules are also moving along. Tell us about these.

Theodore: The persuader rules arerunning on pretty much the same time track as thequickie election rules. Companies big and small rely on lawyers to guide them through the process to make sure they are compliant. The proposed change would effectively eliminate the attorney/client privilege by requiring the reporting of all discussions and work performed growing out of the relationship between an employer and its attorney on a labor matter. Some lawyers won't want to report and will simply get out of that part of their practices, which may have been what the government intended by this rule. Some employers don't want to report a detailed portion of their strategy and so they may not seek guidance. By the way, the union's internal strategy is not reportable, but it should be given some of the tactics you see out there today.

I think if you look at the premises on which this rule is based, they are simply incorrect. I would say that employers are now much more sympathetic, sensitive and empathetic to employee needs, and they spend substantial resources in making sure that not only are they legally compliant, but that they do what is best for their employees, which in the end is best for their business.

One of the things you may not know about my background is that I've been on all points of the spectrum in my career. I was with the NLRB, I was a union lawyer and now I'm a management lawyer, so I've seen it from every perspective that exists, and I will tell you that employers do not sit in a back room smoking cigars plotting about how they are going to oppress their employees.

Editor: The U.S. Chamber and the Business Roundtable were the petitioners in the successful effort to have the DC Circuit vacate the Proxy Access regulations, which they did very effectively. Do you see something similar taking place with respect to the proposed election and persuader rules?

Theodore: I don't know who the petitioners might be, but I believe there is a very high likelihood that both of these regulations as proposed will be challenged.

Editor: If there is a petition to the DC Circuit, if a stay is imposed, would it be likely that it would remain in place until 2012?

Theodore: That's the way it may play out. The way legal proceedings progress, they can take months if not years to resolve. If a stay is granted as in the Proxy Access case it would probably continue through the 2012 elections and a new administration.

Editor: Tell us a bit about the D.R. Horton case.

Theodore: We filed an amicus brief on behalf of the Retail Industry Leaders Association, so we were not directly involved in the case. Horton involves an employee who was asked in an employment document to waive the right to bring his or her claims to court (which would include a class action) and to submit them to arbitration. The NLRB judge ruled that merely agreeing not to bring a class action was not a violation of the NLRA, because such a waiver did not interfere with employees' rights to join a union or otherwise engage in concerted activity. The labor community is up in arms over it because class actions are a very powerful tool; they're costly to the employer and can be very lucrative to some. They would like the Board to find that class action waivers are unlawful so that the tool remains available.

Editor: My impression is that there is an increasing number of companies (and I don't know whether they are unionized or not) that find that arbitration of disputes with employees including those in connection with terminations has worked out very well.

Theodore: I believe so. Arbitration has a number of advantages and it has some disadvantages. One of the advantages of arbitration is that keeps a matter pretty much out of the spotlight. Litigation gets reported and can cause a negative impact on the employer-employee relationship. Also, unlike litigation, an arbitrator can be selected who is usually, not always, a very experienced practitioner. It is like having a jury of experts.

Editor: Are there other cases in which you have been personally involved that you see moving along that our readers should know about?

Theodore: Specialty Healthcare is of interest. I've been personally involved, again for the Retail Industry Leaders Association. The NLRB solicited input on whether it should have a rule that would presume that organizations providing healthcare (since they allegedly are similarly structured) should have specified bargaining units. The proposed rule is significant because it's contrary to the NLRA, which requires that bargaining units should be determined on a case-by-case basis.

Editor: I understand that you have quite a few healthcare clients.

Theodore: In another casethat is not on anybody's radar but that also involves the healthcare industry, a union printed on the back of the collective bargaining agreement without telling the employer the rights that employees have to a representative in a disciplinary hearing (the Weingarten Rights). The NLRB has issued a complaint in that case against the California Nurses Association saying not only can you not put something on the cover without the employer's agreement, but you can't misstate the language.

Editor: Your Labor Relations Update blog (www.laborrelationsupdate.com) is an important tool for corporate counsel. I found it extremely helpful because the content and the links were just tremendous. Are you getting the same kind of reaction from your clients and corporate counsel generally?

Theodore: Overwhelmingly. This was our first foray into blogging, and I really pushed for it as co-chair of our Labor-Management Relations Group. I've found that the feedback has been overwhelmingly positive even from some of the union folks in the community who subscribe to it. It seems as if every time we post a new item, we get a new inquiry because it's now searchable.

Editor: Your group is quite a force within the U.S. Chamber; I recently saw a piece on behalf of the Chamber by Ronald Meisburg. It must be great to have the recent former general counsel of the NLRB aboard in your firm.

Theodore: Not only is it great to have a guy with his wealth of experience and his former position in our firm who knows the people and the processes so well, but he's also a terrific person, partner and friend.

Please email the interviewee mtheodore@proskauer.com at with questions about this interview.