NLRB Orders New Union Election Based on Wage Hike Planned and Implemented before Union Petition | Practical Law

NLRB Orders New Union Election Based on Wage Hike Planned and Implemented before Union Petition | Practical Law

In Manor Care-Ruxton, Md, LLC d/b/a Manorcare Health Servs., the National Labor Relations Board (NLRB) found that although an employer decided a wage increase before the union filed its election petition, notifying some employees of the increase and the increase amount during the "critical period" constituted objectionable conduct that warranted the setting aside of the subsequent election's results.

NLRB Orders New Union Election Based on Wage Hike Planned and Implemented before Union Petition

by Practical Law Labor & Employment
Published on 12 May 2015 • USA (National/Federal)
In Manor Care-Ruxton, Md, LLC d/b/a Manorcare Health Servs., the National Labor Relations Board (NLRB) found that although an employer decided a wage increase before the union filed its election petition, notifying some employees of the increase and the increase amount during the "critical period" constituted objectionable conduct that warranted the setting aside of the subsequent election's results.
On April 30, 2015, in Manor Care-Ruxton, Md, LLC, a three-member delegation of the panel (Board) heading the NLRB's judicial functions found that although an employer decided on a wage increase before the union filed its election petition, notifying the employees of the increase and the increase amount during the "critical period" constituted objectionable conduct that warranted the setting aside of the subsequent election's results (362 N.L.R.B. slip op. 68 (Apr. 30, 2015)).

Background

On June 24, 2013, Ruxton, MD, LLC (ManorCare) approved a market adjustment wage increase for 65 geriatric nursing assistants (GNA). By June 26, when a union officially petitioned to represent the group of GNAs, ManorCare had informed many of the GNAs that they would receive a wage increase, but did not specify the increase amount. In early July, ManorCare sent a letter to each GNA notifying them of their individual wage increase and told 11 GNAs that they would receive a lump-sum bonus rather than an hourly wage increase. On July 10, ManorCare paid the increased wage amount in the GNAs' paychecks based on changes to wages it made effective in the pay period before the petition was filed.
The union, which was outvoted 33-28 in the August 7, 2013 election, filed election objections, contending that the employer interfered with employees' freedom of choice in the election because many GNAs were notified of the actual dollar amounts for the wage increase after the union had already filed its petition and the "critical period" had begun.
The NLRB hearing officer found that:
  • ManorCare's announcement of the wage increase was not objectionable because it was made before the critical period.
  • ManorCare's payment of the wage increase during the critical period was not objectionable because its announcement came before the union's petition.

Outcome

The panel (Board) heading the NLRB's judicial and election functions considered the union's objections and the hearing officer's report. The Board majority (Chairman Pearce and Member Hirozawa) disagreed with the hearing officer and:
The majority noted that:
  • The timing of the announcements and issuance during the critical period had a reasonable tendency to interfere with the employees' freedom of choice in the upcoming election.
  • Kokomo Tube Co. is distinguishable because in that case all wage changes were announced and became effective before the critical period, while in Manor Care-Ruxton, while both of those things were true, the employer provided more particular information during the critical period about the wage increases and how they would be paid out than it did before the critical period (280 N.L.R.B. 357, 358 (1986)).
  • The timing of an employer's announcement of a wage increase is not immaterial.
  • In Catalina Yachts, the Board set aside an election because:
    • a pre-announced wage increase first appeared in paychecks during, rather than prior to, the critical period; and
    • the amount of the wage increase was not announced before the critical period.
  • In Desert Aggregates, an employee wage increase was objectionable because the pay increase issued during the critical period was larger than had been announced before the union filing of the petition.
Member Miscimarra dissenting in relevant part, argued that:
  • Long-standing Board precedent holds that an employer's actions before the filing of an election petition do not warrant the overturning of the election. The critical period does not start until the petition is filed. (Ideal Electric & Mfg. Co., 134 N.L.R.B. 1275 (1961).)
  • The increases in this case were announced and took effect before the critical period; so they should not result in the overturning of the election.
  • Although the amount of the increase was announced during the critical period, the amounts matched what was decided and implemented in the pay period beginning before the critical period. The fact that the employees learned the amounts during the critical period did not turn the increases into critical period conduct (Kokomo Tube at 358).
  • The hearing officer was correct in finding that ManorCare failed to provide sufficient evidence that the wage increase was for a legitimate business reason unrelated to union activity.
  • Desert Aggregates did not a call for a second election, but involved an unfair labor practice (ULP) claim, which does not depend on the timing of the increase; since:
    • that timing issue was not raised to the Board;
    • it was non-precedential; and
    • remarks on that issue were dicta.
  • In Catalina Yachts:
    • other objectionable conduct aside from the wage increase led to the setting aside of the election results; and
    • the judge did not even address when the employer conveyed the amount of the increase.
  • Potential interference with an election could not be determined by the announcement of the amount of a wage increase because each individual employee's wage expectation is unknown. Some GNAs may have received more than expected while others received less than expected. Board precedent requires an objective test of whether and when a particular increase is communicated.
  • The employer did commit objectionable conduct when, during the critical period, it gave its employees a comparison of wages between their own facility and other facilitiies nearby.

Practical Implications

The Board's decision in Manor Care-Ruxton suggests that employers should carefully track what information they provide to employees about wage increases and to whom they provide that information. If employers fail to do so, the majority will find the pre-determined hike in a pay period beginning before the petition and granted during the lead-up to an election, objectionable because of insufficient evidence that the employer shared information of the hike prior to the union's election petition. This decision also highlights how NLRA compliance around elections may be difficult and technical. If the employer failed to grant a predetermined, pre-announced wage hike after learning of the union petition, that would have constituted objectionable conduct and a ULP (withholding benefits in the critical period because of union activity). Employers need to document their communications with employees and expect that deviations from, or additions to, the script for planned adjustments to employment terms and conditions will trigger NLRB scrutiny.