In a 2-1 decision, the National Labor Relations Board has held that Dana Corp. and the United Auto Workers lawfully entered into an agreement governing a framework for collective bargaining and providing that the employer would recognize the UAW as its employees’ bargaining representative at a previously unrepresented facility if the UAW established majority support through a card check. Dana Corp., 356 NLRB No. 49. The Board in its December 6, 2010, decision also ruled, however, that it would “leave for another day the adoption of a general standard for regulating pre-recognition negotiations between unions and employer[s].”
Member Brian Hayes dissented, arguing that “[w]hether or not there would have to be more bargaining, the [parties] conclusion of the [agreement] impermissibly signaled that the UAW already had a say in the determination of substantive terms and conditions of employment for the…employees, among whom the UAW did not have majority support….”
Chairman Wilma Liebman and Member Mark Pearce signed the majority opinion; Member Craig Becker did not participate in the decision.
Although nine of Dana’s plants were already organized by the UAW, the St. Johns, Michigan, plant, where 305 unrepresented employees worked, was not. In the summer of 2003, Dana and the UAW entered into a letter of agreement (“LOA”) regarding the St. Johns plant.
The LOA noted the potential for a non-adversarial and positive partnership between Dana and the UAW. It also specified that Dana promised to remain neutral regarding organizing and would recognize the UAW if a third-party card check revealed a majority of employees were in favor of the UAW representing them for purposes of collective bargaining. The parties also agreed there would be no strikes or lockouts until a first contract was reached, that the minimum duration of any collective-bargaining agreement would be four years, and that the collective-bargaining agreement would address topics such as healthcare costs, flexible compensation, and mandatory overtime. In order to initiate the card check procedure, the UAW requested a roster of employees working at the St. Johns plant. Subsequently, however, three employees (“Charging Parties”) filed unfair labor practices charges with the Board.
The NLRB General Counsel issued a complaint asserting that by entering into the LOA, “Dana rendered unlawful assistance to the UAW in violation of Section 8(a)(2) and (1) of the [National Labor Relations] Act and the UAW restrained and coerced employees in the exercise of their Section 7 rights in violation of Section 8(b)(1)(A).” The General Counsel asserted that it was illegal per se for an employer to negotiate with a union “‘over substantive terms and conditions of employment’…if [bargaining] occurs before the union has attained majority support.” The General Counsel argued that such negotiations “grant the union ‘privileged’ status in the eyes of employees and present the sort of ‘fait accompli’ prohibited by the Board in Majestic Weaving, 147 NLRB 859 (1964), because ‘give and take negotiations’ resulting in an agreement like the one involved here amount to ‘tacit recognition’ of the union.”
An ALJ dismissed the complaint. The General Counsel and Charging Parties filed separate exceptions.
The Board’s Decision
The Board affirmed the ALJ’s dismissal of the complaint, noting that pursuant to precedent “various types of agreements and understandings between employers and unrecognized unions fall within the framework of permissible cooperation.” The Board also pointed to the fact that its previous rulings have upheld the legality of card check/neutrality agreements. The Board explained, “[A]n employer [only] crosses the line between cooperation and support, and violates Section 8(a)(2), when it recognizes a minority union as the exclusive bargaining representative.”
Rejecting the General Counsel’s arguments, the Board stated that the LOA in Dana Corp. “did no more than create a framework for future collective bargaining, if…the UAW were first able to provide proof of majority status by means of a card-check conducted by a neutral third party.” The letter of agreement contained no exclusive-representation language. The Board also noted that even though the letter of agreement “set forth certain principles that would inform future bargaining on particular topics…., the UAW did not purport to speak for a majority of Dana’s employees nor was it treated as if it did.” As such, the Board found that “[n]othing in the [letter of agreement], its context, or the parties’ conduct would reasonably have led employees to believe that recognition of the UAW was a foregone conclusion or, by the same token, that rejection of UAW representation by employees was futile.” Accordingly, the Board concluded that neither Dana nor the UAW engaged in unlawful conduct and affirmed the dismissal of the complaint.
Nonetheless, the Board specifically noted it does “not hold…that every prerecognition agreement, regardless of the context it [sic] in which it was adopted or the conduct that accompanies it, will always be lawful. Each case, rather, will depend upon its own facts.”
The Board’s ruling in Dana Corp. establishes that employers and yet-to-be recognized unions may enter into agreements which contemplate future bargaining regarding employees’ specific terms and conditions of employment. However, such agreements should not give either the impression to employees, explicitly or implicitly, that a union’s recognition is nothing more than a foregone conclusion or the agreement amounts to a collective bargaining agreement in and of itself. Further, any such agreement should contain provisions for proof of majority status.
It is likely that this decision will encourage unions and employers to enter into pre-recognition agreements, especially where an organizing campaign may not be beneficial to either side. However, given the absence of a bright-line standard and the resulting fact-intensive analysis that will determine the legality of such an agreement, employers should analyze carefully any discussions, negotiations and agreements that may be affected by this decision.
Jackson Lewis attorneys are available to discuss the effects of this decision as well as other labor and employment law topics. Please contact the Jackson Lewis attorney with whom you regularly work for further information.