Union's Interest in Investigating Workplace Fatality Outweighed Employer's Confidentiality Interest: NLRB | Practical Law

Union's Interest in Investigating Workplace Fatality Outweighed Employer's Confidentiality Interest: NLRB | Practical Law

In Caterpillar, Inc., the National Labor Relations Board (NLRB) affirmed the findings of an administrative law judge (ALJ) that the employer violated Section 8(a)(5) and (1) of the National Labor Relations Act (NLRA) by refusing to allow a non-employee union representative access to its facility to conduct a health and safety inspection after a fatal accident. The NLRB also affirmed that under the Holyoke Water Power Company balancing test, the employer's property rights must yield to permit the union access to responsibly represent bargaining employees.

Union's Interest in Investigating Workplace Fatality Outweighed Employer's Confidentiality Interest: NLRB

by Practical Law Labor & Employment
Published on 12 Nov 2014 • USA (National/Federal)
In Caterpillar, Inc., the National Labor Relations Board (NLRB) affirmed the findings of an administrative law judge (ALJ) that the employer violated Section 8(a)(5) and (1) of the National Labor Relations Act (NLRA) by refusing to allow a non-employee union representative access to its facility to conduct a health and safety inspection after a fatal accident. The NLRB also affirmed that under the Holyoke Water Power Company balancing test, the employer's property rights must yield to permit the union access to responsibly represent bargaining employees.
On October 30, 2014, in Caterpillar, Inc., a three-member delegation of the panel (Board) heading the NLRB's judicial functions affirmed the findings of an NLRB administrative law judge (ALJ) that the employer violated Sections 8(a)(5) and (1) of the NLRA by refusing to allow a non-employee union representative access to its facility to conduct a health and safety inspection after a fatal accident. The Board also concluded that the ALJ properly applied the Holyoke Water Power Company (Holyoke) test, which balances the employer's property rights against the bargaining unit employees' rights to responsible union representation that may necessitate union access to the employer's premises. The Board affirmed the ALJ's conclusion that the union's need for access to represent its constituents outweighed Caterpillar's property rights, given the considerable health and safety concerns present in this case. A majority of the Board panel modified the ALJ's proposed order that required the parties to bargain over and have in place a written confidentiality agreement prior to Caterpillar granting the union access to its facility. The majority ordered the employer to grant the union access immediately finding that Caterpillar waived potential arguments that a confidentiality agreement was necessary by historically granting visitors access to its facility without requiring written confidentiality agreements. (361 N.L.R.B. slip op. 77 (Oct. 30, 2014).)

Background

Local 1343 has been the collective bargaining representative for a Caterpillar facility in Milwaukee for many years. On September 8, 2011, a unit employee was crushed to death while working in the facility. The fatality was reported to the police, the U.S. Department of Labor and the Occupational Safety and Health Administration (OSHA). Later that evening, Caterpillar conducted a reenactment of the incident witnessed by corporate officials, OSHA, the police and the County Medical Examiner. The union's highest officials, however, were not informed and were therefore absent.
On September 9, 2011, a member of the union's Emergency Response Team (ERT) visited the facility to conduct an onsite investigation into the fatality, but was denied access by Caterpillar officials.
After the union's September 9, 2011 visit, the union and Caterpillar corresponded about union access to the facility to investigate the fatality. Ultimately, Caterpillar advised the union that the facility considered its manufacturing and operational process to be proprietary and confidential business information. The union agreed to enter into a confidentiality agreement and the parties agreed on the production of a DVD.
On September 11, 2011, the union filed an unfair labor practice charge with the NLRB alleging that:
  • Caterpillar violated Sections 8(a)(5) and (1) of the NLRA by refusing to allow a non-employee union representative access to its facility to conduct a health and safety inspection.
  • The union was unable to complete an adequate investigation of the fatality due to Caterpillar's refusal to grant access to the facility.
  • The limited information (DVD and other documents) provided by Caterpillar about the fatality was deficient and paled in comparison to the information that it would have collected during an onsite observation because:
    • the materials provided did not adequately cover many other vantage points or other factors that could only be observed through an onsite visit;
    • the police report did not identify the cause of the fatality; and
    • ERT members, and not union staff members, are qualified to perform independent accident investigations.
On January 19, 2012, a union representative requested additional information from Caterpillar. This information was later produced after the union agreed to a second confidentiality agreement.
Where a union seeks access to an employer's facility, under Holyoke, the NLRB balances:
  • the right of employees to be responsibly represented by their union; and
  • the right of the employer to control its property and ensure that its operations are unhindered.
    (273 N.L.R.B. 1369, 1370 (1985).)
When applying the Holyoke balancing test, the ALJ found that Caterpillar violated Section 8(a)(5) and (1) when it did not allow the union access to the facility to investigate the September 8 fatality.
Specifically, the ALJ found that under Holyoke, the union's interest in investigating the workplace fatality outweighed the employer's property interest because:
  • Caterpillar failed to carry its burden of showing that there were alternative means available to the union, which would have permitted it to effectively represent the unit on this key safety issue.
  • A union representative credibly testified that she would not have interfered with production if permitted to conduct a workplace safety survey.
  • The Caterpillar's property interest was lessened to a degree by its history of permitting non-employee visitors, such as politicians, civic groups, high school students and customers, to access the facility.
  • The employer had a valid interest in protecting its confidential manufacturing procedures and that could be addressed by the parties negotiating a separate confidentiality agreement concerning the inspection.
Caterpillar filed exceptions to the ALJ's findings, to the Board.
On April 23, 2013, the Board issued a Decision and Order affirming the ALJ's findings but modifying the remedy (359 N.L.R.B. slip op. 97 (Apr. 23, 2013)). Thereafter, Caterpillar filed a petition for review in the District of Columbia Circuit. The Board's decision and order was invalidated by the US Supreme Court's decision in NLRB v. Noel Canning, 134 S.Ct. 2550 (2014). The Board regained jurisdiction over this case, vacated the earlier decision and a new Board panel reviewed the case.

Outcome

The Board (Members Miscimarra, Johnson and Schiffer) noted that:
  • Under Holyoke, in cases where a union seeks access to an employer’s plant, the Board employs a two-part balancing test, which balances:
    • the right of employees to be responsibly represented by their union; and
    • the right of the employer to control its property and ensure that its operations are unhindered.
    (273 N.L.R.B. 1369, 1370 (1985).)
The Board:
The Board majority (Members Johnson and Schiffer):
  • Declined to adopt the ALJ's findings that the employer had shown:
    • a significant interest in protecting against the potential dissemination of its confidential manufacturing procedures; and
    • an interest in preventing visitors from interfering with its operations.
  • Amended the ALJ's recommended order that required the employer to bargain regarding union access in light of concerns about the disclosure of confidential production information.
  • Ordered the employer to grant the union immediate access to its facility without requiring the union to bargain about a confidentiality agreement, as if the employer had failed to prove any bona fide confidential information concerns.
Member Miscimarra, in partial dissent, noted that:
  • The majority improperly ignored the ALJ's findings regarding:
    • the employer's interests in protecting confidential information; and
    • the parties' past success in negotiating confidentiality agreements.
  • He would have affirmed the ALJ's proposed remedial order.

Practical Implications

This decision will likely support increased union access rights as it subordinates employers' concerns for disclosures of confidential manufacturing process information, at least when weighed against health and safety issues.
UPDATE:
The Seventh Circuit granted enforcement of the Board’s order in Caterpillar Inc. v. NLRB (No. 14-3528, (7th Cir. Oct. 2, 2015)).