Employer's Parent and UAW Lawfully Drove Organizing at Tennessee Volkswagen Plant: NLRB General Counsel's Office | Practical Law

Employer's Parent and UAW Lawfully Drove Organizing at Tennessee Volkswagen Plant: NLRB General Counsel's Office | Practical Law

The Office of the General Counsel at the National Labor Relations Board (NLRB) recently released two advice memoranda on employees' unfair labor practice (ULP) charges against the employer and union concerning historic unionization efforts at Volkswagen Group of America's Chattanooga, Tennessee plant. The Office of the General Counsel recommended dismissal of all of the alleged ULPs under the National Labor Relations Act (NLRA).

Employer's Parent and UAW Lawfully Drove Organizing at Tennessee Volkswagen Plant: NLRB General Counsel's Office

by Practical Law Labor & Employment
Published on 05 Feb 2014 • USA (National/Federal)
The Office of the General Counsel at the National Labor Relations Board (NLRB) recently released two advice memoranda on employees' unfair labor practice (ULP) charges against the employer and union concerning historic unionization efforts at Volkswagen Group of America's Chattanooga, Tennessee plant. The Office of the General Counsel recommended dismissal of all of the alleged ULPs under the National Labor Relations Act (NLRA).

Background

On January 23, 2014, the Division of Advice at the NLRB's Office of the General Counsel released two advice memoranda dated January 17, 2014, recommending the dismissal of employees' unfair labor practice (ULP) charges against:
  • Volkswagen Group of America, Inc. (VGA), the operator of a car manufacturing plant in Chattanooga, Tennessee and a wholly-owned subsidiary of the German corporation, Volkswagen Aktiengesellschaft Group (VAG).
  • The United Automobile Workers (UAW), the union attempting to organize VGA's Chattanooga workers.
Since approximately March 2012, the UAW has maintained an organizing campaign at VGA's Chattanooga facility. At unspecified times, the UAW spoke with VAG executives, including VAG supervisory board member and president of the German union IG Metall, which represents the majority VAG's autoworkers, about being the vessel through which VAG could implement a German-style "works council" for Chattanooga VGA workers.
In Germany, employees elect representatives to works councils to negotiate with their employers about working conditions, such as plant rules and work hours. German labor unions negotiate collective bargaining agreements with multi-employer groups, generally setting minimum standards such as for wages and benefits. Leaders of local works councils and leaders of unions that represent large shares of a German corporation's employees often have seats on executive boards of German corporations. Apparently, to work around NLRA prohibitions on "company unions," (which traditional German works councils would likely be found to be) (29 U.S.C. § 158(a)(2)) the employee-selected union at Chattanooga would negotiate about the same topics that a German-style works council and union would, but would not necessarily be part of the corporate structure, as the German works councils and unions are.
At various times in 2013, VAG representatives recommended that VGA employees explore the prospective benefits of getting a seat on the VAG global works council, which would be possible only if they joined a union, preferably the UAW.
The charging parties, employees who do not support the union organizing efforts, allege that:
  • The employer, VGA, unlawfully:
    • recognized the UAW as the representative of its employees without a bona fide showing of majority support; or
    • paired opinions supporting the UAW with both threats that VAG production contracts would not be extended unless employees joined the UAW, facilitating the forming of a works council at the Chattanooga plant and promises that VAG would consider expanding the Chattanooga plant to produce another type of vehicle if employees joined the UAW.
  • The UAW unlawfully:
    • demanded recognition from the employer without having a valid showing of majority support;
    • made misrepresentations about union authorization cards; and
    • told employees who want to revoke their authorization cards that they must contact the UAW local office and meet with a union representative to destroy the cards in their presence.

Employer's Alleged Violations

In its advice memorandum on the charges against VGA, the Division of Advice noted that:
The Division of Advice found that regardless of whether the activity or speech was ascribed to VGA or VAG, there was no unlawful support of the union or unlawful speech where:
  • A VAG management board member stated at a meeting covered by the press that:
    • VAG executives were confident that a works council plan would work at Chattanooga;
    • VAG executives might release a works council plan for VGA in Chattanooga in a few months;
    • if the works council proposal won the support of the VAG managing board, VAG might start formal negotiations with a US labor union within the year; and
    • Volkswagen wants a works council and the "UAW would be a natural partner".
  • IG Metall president and VAG supervisory board member, in a booklet that the UAW distributed to Chattanooga employees:
    • promoted works councils as "essential to guarantee good working conditions";
    • noted that it was necessary to join a union to gain representation at VAG's global works council; and
    • endorsed joining the UAW.
  • VGA invited three VAG board members to Chattanooga to promote the global works council system. Each of these speakers noted that joining a union was a prerequisite for Chattanooga employees to get a seat at the global works council but noted that it was up to the employees to decide whether to join a union.
  • One of the VAG board members invited to Chattanooga explained that economics rather than union affiliation would decide whether VAG selected the facilities at Chattanooga or Mexico would produce a new automobile model (without addressing his comments to the press in Germany one month earlier that:
    • it was important to VAG that Chattanooga form a works council;
    • he would continue talks with the UAW about forming a works council in Chattanooga; and
    • VAG recognizes how important it would be for Chattanooga to get a contract to produce a second vehicle for VAG).
The Division of Advice also considered statements by VAG board members in Germany that would have violated the NLRA (because employees could understand them to mean VAG would eliminate or expand contracted work with VGA based on their decision to select union representation). The Division of Advice found that these statements could not be attributed to VGA because:
  • The charging parties failed to prove that those executives were agents of VGA (even though it invited one of the executives to speak at Chattanooga about works councils).
  • VAG and VGA were not, collectively, a single employer (even though VAG appeared to be planning to form a works council using the UAW to negotiate about at least some employment terms and conditions for VGA's employees in Chattanooga, and therefore a more centralized control over labor relations).
  • VGA effectively disavowed the statements by distributing newsletters that stated that:
    • the employees would not be coerced when deciding whether or not to join a union; and
    • VAG would base decisions to order vehicles from the Chattanooga base on economics.
Finally, the Division of Advice concluded that VGA did not unlawfully support the UAW or provide opinions about the UAW that were connected to threats of reprisal or promises of benefits.

The Union's Alleged Violations

In its advice memorandum regarding the union's alleged violations, the Division of Advice:
  • Noted that:
    • a union that does not have majority support in an appropriate bargaining unit does not violate section 8(b)(1)(A) of the NLRA unless it accepts recognition by an employer (Int'l Ladies' Garment Workers Union v. NLRB, 366 U.S. 731 (1961));
    • there is no precedent prohibiting a union from demanding recognition when it lacks majority support from an appropriate bargaining unit;
    • federal court and NLRB precedent prohibiting unions from blocking members from resigning from the union or prohibiting represented non-members from objecting to their dues payments being used for non-representational purposes do not apply to union-imposed processes for unrepresented workers to revoke union authorization cards' (see Practice Note, Employee Rights and Unfair Labor Practices under the National Labor Relations Act: Illegal Union-Security Agreements);
    • alleged misrepresentations in soliciting union authorization cards, alleged ambiguities in authorization card language and alleged improprieties in a union's handling of authorization cards do not implicate employees' rights to refrain from supporting the union. These issues go to the validity of the cards but are not ULPs; and
    • if a union upholds assurances to employees that it will not use their revoked authorization cards to support a demand for recognition by the employer, there is no precedent barring unions from imposing procedures for confirming that revoked cards are destroyed, like requiring employees to come to the union's offices to see their revoked cards shredded.
  • Concluded that the UAW would not violate Section 8(b)(1)(A) of the NLRA if it:
    • claimed it had obtained majority status and demanded recognition from the employer without having the purported majority support;
    • used ambiguous authorization cards; or
    • misinformed employees about the level of support it had from other employees.
  • Found that if the UAW engaged in any improprieties for soliciting, handling or revoking authorization cards at employees' requests, it compensated for them by:
    • informing employees that they could make arrangements to have a union representative destroy their cards in their presence; and
    • sending letters to all employees who signed authorization cards advising them of their right to revoke their authorization.

Practical Implications

These two memoranda confirm that the current NLRB General Counsel's office will rarely prosecute ULP charges against:
  • Employers that support unionization.
  • Unions that allegedly:
    • demand recognition from an employer without having support from a majority of an appropriate bargaining unit; or
    • mislead employees while soliciting authorization cards.
For international employers that support forming European-styled works councils in US subsidiary facilities, the first memorandum lays out a blue-print for endorsing a US union to serve as a quasi-works council. In particular, these employers should ensure that:
  • Corporate structures, management, labor relations and business transactions and operations are sufficiently separate to preclude the NLRB from finding the entities are a single employer.
  • Managers and supervisors in the US clearly and repeatedly emphasize in speeches and written materials that employees can support, or refrain from supporting, unions without fear of reprisal or the promise of future benefits.
  • Any statements arguably containing threats or promises of benefits related to employees' affiliations with unions should be made:
    • outside the US;
    • concerning arguably arms-length transactions between the parent and subsidiary rather than direct statements about human resources, labor relations or labor demand;
    • by executives not affiliated with the US subsidiary;
    • through the press, to preserve potential arguments that the speaker was misquoted or the statements were not official; press coverage will also increase the likelihood that the statements go viral and reach the US workers; and
    • preferably in another language, to preserve arguments that statements were lost in translation.
The advice memoranda does not address whether, VGA and VAG would constitute a single employer under the NLRB's analysis if Chattanooga ultimately employees select union representation and participate in VAG's global works council through that union, consistent VGA's noted plans.
International corporations that oppose unionization at US subsidiaries should not expect similar results if they use these processes to disseminate anti-union statements. The NLRB is generally more likely to find entities are single employers when the parent opposes rather than supports unionization (for example, see Legal Update, NLRB Sua Sponte Finds Parent Liable for Subsidiary's Unfair Labor Practices as a Single Employer).
The dismissal of ULP charges against VGA and the UAW related to the organizing of the Chattanooga facility also paved the way for the UAW to petition for and obtain an NLRB representation election. A news release on the UAW's website reports that the election will occur February 12-14, 2014. If the UAW wins the election, and is certified as the representative of the Chattanooga VGA employees, the representation would be historic. Chattanooga could become the first US plant manufacturing foreign cars to be unionized. That result could also mark the first time that:
  • A US labor union teamed-up with a European labor union to leverage cooperation from a European corporation to organize its US operations.
  • US employees form a European-style works council using a US labor union to circumvent NLRA prohibitions on "company unions".
It will be interesting to see whether opponents to the organizing in Chattanooga, or similar organizing efforts, will file claims under the Labor Management Relations Act against VGA and the UAW alleging that VGA's neutrality or support of the UAW constituted unlawful payments of things of value (see Practice Note, Labor Law: Beyond the NLRA and RLA: Section 302 and Legal Update, Employer's Organizing Assistance to Union Can Be a Prohibited Payment of a "Thing of Value": Eleventh Circuit).