NLRB Moves Forward with Bulk of Final Election Rule Changes Despite Blow Dealt by Federal Court

On Saturday, May 30, 2020, one day before the effective date of the National Labor Relations Board’s Final Rule on Representation Case Procedures, a judge on the U.S. District Court for the District of Columbia issued a much-anticipated ruling (the “Order”) that vacates major portions of the Rule, but leaves several important adjustments to timelines and pre-election submissions intact.  The Rule would have significantly changed the 2014 “quickie election” rules, including balancing pre-election burdens between employers and unions and conclusively resolving disputes over issues like voter eligibility, before conducting an election. 

The Order will not be appealable until the court issues a complete Memorandum Opinion, and although the court remanded the matter to the Board to reconsider the remaining portions in light of its ruling, the Board announced on Monday, June 1, 2020, that it will appeal the Order and will implement all surviving portions of the Rule.  The NLRB General Counsel contemporaneously issued a guidance memo.

The Rule Would Have Made Several Significant Changes to Election Procedures

The Rule contained several significant changes to the 2014 amendments concerning pre-election proceedings before the Board, scheduling elections, and certification of election results.  Among the changes was a return to the pre-2014 procedure that allowed disputes including unit scope and voter eligibility to be determined before directing an election.  The 2014 amendments allow elections to proceed, and to litigate scope and eligibility issues after ballots are counted.  The Rule would have required those issues to be litigated before the Board could direct an election, unless the parties agreed to allow contested voters to cast their ballots subject to challenge.

The timing of elections was also impacted by the Rule.  The 2014 amendments require the Board to order an election on “the earliest date practicable.” The Rule, however, would have inserted a floor, requiring no election to be scheduled “before the 20th business day after the date of the direction of election.”

The Rule also altered the timing for unions to receive voter information.  The 2014 amendments require an employer to provide a complete list of all eligible voters, including their personal contact information such as home address, telephone numbers, and email addresses, within two business days after a stipulated election agreement is reached, or after the Board issues a decision and direction of election.  The Rule would have extended that time period to five business days.

Parties would also have been restricted in who could be selected as an election “observer” under the Rule, which allowed only current members of the voting unit to serve as observers “whenever possible.”  In comparison, the 2014 amendments and extant Board law allow non-employees to serve as observers.

Finally, the Rule would have restricted the Board’s right to certify election results until after the period for a party to file a request for review had passed, or until after the Board ruled on such a request for review, if filed.

The Order Sets Aside Many Significant Changes

The Board published the Rule in December 2019, after initially issuing a Request for Information regarding the 2014 amendments in 2017.  The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) challenged the Rule in March 2020 by seeking a Declaratory Judgment that the Rule violated the Administrative Procedure Act (APA).  The AFL-CIO contended the changes outlined above were substantive, rather than procedural, changes to Board rules, and the Board provided no notice or comment period before it adopted the Rule, thereby violating the APA, which requires notice and a comment period to implement substantive changes.  The AFL-CIO argued also that the Board’s decision to adopt the Rule was arbitrary, capricious, and/or an abuse of discretion, because some responses to the 2017 Request for Information demonstrated the 2014 amendments were working well.

The district court agreed with the AFL-CIO that the Board violated the APA by promulgating the Rule without notice-and-comment rulemaking, and set aside the five “challenged portions of the regulation,” discussed above.

The Board will Implement the Surviving Procedural Adjustments to Timelines and Submission Requirements

The court remanded the matter to the Board to reconsider whether to implement the remaining portions of the Rule that the court did not address or discuss.  The Board announced on Monday, June 1, 2020, that it will implement each of the changes unaffected by the Order for all petitions filed on or after May 31, 2020.  Among the changes are adjustments to several critical timelines and submissions, including that the initial Notice of Petition for Election need not be posted until five “business days” after the Notice of Hearing, rather than two “calendar days,” and employers need only distribute the Notice electronically to those members of the petitioned-for unit that it typically communicates with electronically.

The pre-election hearing itself will now be set 14 business days from the Notice of Hearing, rather than eight calendar days under the 2014 amendments, and a Region may now postpone the pre-election hearing for “good cause,” rather than the heightened “special” or “extraordinary” circumstances required by the 2014 amendments.

Another important procedural change is that non-petitioning parties now must file their Statement of Position by noon eight business days after the date of the Notice of Hearing, rather than by noon the business day preceding the pre-election hearing.  The Board will also require petitioning parties to file a Responsive Statement of Position, which will be due three business days before the pre-election hearing.  The Board reasons that requiring both petitioning and non-petitioning parties to submit written Statements of Position several days prior to the start of the pre-election hearing will allow Regions to work with parties to narrow the issues for hearing through pre-hearing conferences that were difficult to achieve under the 2014 amendments.  As with the pre-election hearing itself, either party may seek to postpone the due date for their Statement of Position, which the Board will grant for “good cause.”

While the 2014 amendments allowed parties to file post-hearing briefs only with special permission from the Regional Director, parties are now entitled to file post-hearing briefs within five business days after the close of hearing, and the Hearing Officer may grant up to an additional 10 days for good cause.

If a party files a Request for Review of the Decision & Direction of Election within 10 business days after issuance, ballots at issue must now be segregated, and all ballots must be impounded.  Parties are still free to file a Request for Review after the election until 10 business days after final disposition, but in such cases there will be no automatic impoundment.

The Rule also grants Regional Directors discretion to specify dates and times for elections in a Notice of Election separate from the Decision and Direction of Election where it is necessary to further investigate parties’ preferences after a pre-election hearing.  The Rule anticipates, however, that in most instances the Decision and Direction of Election will include the Notice of Election, as was the case with the 2014 amendments.

The Rule will make additional changes to the timeline for existing procedural requirements. Many calculations, however, will simply be changed from using a specified number of days to using a specified number of “business days,” which will result in comparable due dates.

What Lies Ahead?

The court is expected to issue a complete Memorandum Opinion in the near future, which the Board made clear it will appeal.  It is uncertain whether, or when, an appellate decision might affirm the Order, or alternatively, overturn the Order and allow full implementation of the challenged portions of the Rule.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.