On December 14, 2011, the NLRB issued a decision in Manhattan Center Studios, Inc., where it set its standard for determining whether to accept untimely election objections based on newly discovered evidence.

In 2003, employees of Manhattan Center Studios, Inc. (MCS) voted for union representation in an NLRB election. MCS did not file objections to the election, and the NLRB certified the election results and the union as the employees' collective bargaining representative. MCS later refused to bargain with the union, purportedly because of new evidence that one of its supervisors influenced the election results by encouraging employees to join and vote for the union. A supervisor's coercing employees to vote for a union is objectionable conduct for which the NLRB can overturn and rerun an election (Harborside Healthcare, Inc.).

The union filed an unfair labor practice (ULP) charge, and the NLRB filed a ULP complaint and motion for summary judgment against MCS for violating the NLRA by refusing to bargain. Several months later, in response to the motion for summary judgment, MCS sought to introduce new evidence purporting to show the improper pro-union conduct by a supervisor. The five-member panel (Board) heading the NLRB's judicial functions declined to receive the evidence and granted summary judgment against MCS. MCS appealed the Board's decision and order to the DC Circuit.

The DC Circuit held that the NLRB had misapplied the due diligence standard for acceptance of untimely election objections based on new evidence. The court noted that the Board has used at least two different kinds of due diligence tests and remanded the case to the NLRB to set its standard for allowing new evidence. Specifically, the DC Circuit asked the NLRB to distinguish between the:

The court also asked:

On remand, the NLRB stated that after the record of a representation proceeding has been closed, a party seeking to introduce new evidence must show that:

To establish that evidence was unavailable, the moving party must prove that it was "excusably ignorant" of the evidence. To show excusable ignorance, the party must show that, "with reasonable diligence, the evidence could not have been discovered in time to take appropriate and timely action in the representation proceeding."

The Board clarified that the two standards that the DC Circuit understood as alternatives, were instead separate steps within a single test. The "hypothetical investigation" test is the first step and the "conducted investigation" test applies when a party shows evidence of an actual, but unsuccessful, search for evidence.

The Board did not explain whether an employer must ask specific questions to show that it has reasonably conducted an investigation. Instead, the Board simply stated that an employer need not ask questions that might interfere with employees' rights under the NLRA to show its reasonable diligence.

Similarly, the Board did not explain how an employer can show that the new information sought to be admitted could not have been discovered in the exercise of due diligence. Instead it suggested that this is a fact-specific inquiry for which the Board considers many factors including the:

Applying its two-step standard, the Board affirmed its prior decision, concluding that MCS failed to show that it:

In light of this decision, it is important that parties both:

Employers should interview supervisors about any obvious union organizing activities, including whether other supervisors are participating. Employers should also always have election observers that are trained about what election conduct is objectionable.

For more information, see Union Representation Process Checklist and NLRB Union Representation Process Flowchart and Companion Analysis. Also see Practice Notes: