As the NLRB regained its five-member status, it set to task at the back log of cases awaiting it. On August 27, 2010 it decided Independence Residences, Inc., 335 NLRB No. 153 (2010), a 2003 representation case that even Chairman Liebman noted has languished before the Board for “an unconscionably long time.” In 2003, the Union of Needletrades Industrial and Textile Employees (UNITE) began organizing at Independence Residences, Inc., a private nonprofit entity, and filed a representation petition with the Board. A majority of employees voted for the union in the subsequent election, and the employer filed objections seeking to set aside the election results, arguing that a New York state law barring the use of state funds for certain union campaign activities prevented a fair election. The heart of the issues in Independence Residences was whether New York State Labor Law Section 211-a interfered with the employer’s ability to communicate with employees during the election campaign, warranting the setting aside of the election results.

New York Labor Law Section 211-a provides:

no monies appropriated by the state for any purpose shall be used or made available to employers to: (a) train managers, supervisors or other administrative personnel regarding methods to encourage or discourage union organization, or to encourage or discourage an employee from participating in a union organizing drive; (b) hire or pay attorneys, consultants or other contractors to encourage or discourage union organization, or to encourage or discourage an employee from participating in a union organizing drive; or (c) hire employees or pay the salary and other compensation of employees whose principal job duties are to encourage or discourage union organization, or to encourage or discourage an employee from participating in a union organizing drive.

The Board noted the similarities between Section 211-a and a California law, Assembly Bill (AB) 1889. In a case challenging AB 1889, Chamber of Commerce v. Brown, 128 S.Ct. 2408 (2008), the U.S. Supreme Court found that the California law was preempted by federal labor law. Related but separate litigation as to whether New York’s Section 211-a is preempted is still pending in federal court. Therefore, although the Board left the ultimate resolution of preemption to the ongoing federal court litigation, it assumed for the purposes of its analysis that Section 211-a would be deemed preempted by the NLRA.

Even assuming that Section 211-a would be deemed preempted by the NLRA, the Board concluded that the election results should stand. The three democratic member majority opined that the Board has never set aside an election because a law influenced or limited the parties’ campaign activities and referenced property laws that allow employers exclusive access to their employees while excluding union organizers from the workplace. The Board drew the analogy that the New York law is a restriction on its property—revenue. It also analyzed the law in terms of Board law that establishes a standard for third-party conduct potentially affecting the outcome of an election. Its review of the facts led to the conclusion the law did not significantly interfere with the Board election in that it did not bar any form of campaign speech or conduct, did not place restriction on employers’ use of non-state funds for any purpose, and still permits employers to use state funds to urge employees to vote against the union. The Board ultimately concluded that the evidence demonstrated the employer was not prevented from, and did engage in, a vigorous campaign to discourage unionization, although it lost by a vote of 68 for representation to 32 against.

As Board Member Schaumber’s second term on the Board expired the same day as this decision, it seems no coincidence that his joint dissent with Member Hayes urged the Board to stay true to its historic aversion to state intrusions into the election process. In their dissent, Schaumber and Hayes argued that the majority deferred to the state legislation and defied the Supreme Court’s holding in Brown. They argued that it was the Board’s duty to ensure such laws did not impact the rights protected under the NLRA, including employer rights, and that the majority’s holding would invite other states and localities to “test the limits of federal supremacy” by enacting laws that further restrict employers in organizational campaigns as opposed to supporting the NLRA’s protection of noncoercive speech.

In the end, the majority seemed to use this case to balance inequities it perceives employers enjoy during election campaigns. With Schaumber’s departure, only time will tell whether his replacement continues the 3-2 splits or brings a more decisive 4-1 split, with Hayes left to champion the positions of employers.

This entry was written by Denise Barton Ward.

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