NLRB Overrules 30 Years of Precedent Regarding Withdrawal of Recognition of Mixed-Guard Unions | Practical Law

NLRB Overrules 30 Years of Precedent Regarding Withdrawal of Recognition of Mixed-Guard Unions | Practical Law

In Loomis Armored US, Inc., the National Labor Relations Board (NLRB) held that an employer of security guards violates the National Labor Relations Act (NLRA) if it withdraws its recognition of a "mixed-guard union" that has not lost the support of a majority of employees.

NLRB Overrules 30 Years of Precedent Regarding Withdrawal of Recognition of Mixed-Guard Unions

by Practical Law Labor & Employment
Published on 15 Jun 2016 • USA (National/Federal)
In Loomis Armored US, Inc., the National Labor Relations Board (NLRB) held that an employer of security guards violates the National Labor Relations Act (NLRA) if it withdraws its recognition of a "mixed-guard union" that has not lost the support of a majority of employees.
On June 9, 2016, in Loomis Armored US, Inc., the majority of the panel (Board) heading the NLRB's judicial functions held that an employer of security guards violates Sections 8(a)(5) and 8(a)(1) of the NLRA if it withdraws its recognition of a "mixed-guard union" comprised of both guards and non-guards that has not lost the support of a majority of employees, and that the employer remains bound by the terms of its collective bargaining agreement (CBA) with that union unless and until the union actually loses majority support among the unit employees. The Board overruled its 1984 decision in Wells Fargo Corp. but did not apply its decision to this case because the employer had relied on Wells Fargo, and the Board found that retroactive application would cause manifest injustice. (364 N.L.R.B. No. 23 (Jun. 9, 2016).)

Background

Loomis Armored US, Inc. (Loomis) voluntarily recognized several local mixed-guard unions (unions that admit both guards and non-guards as members) affiliated with the International Brotherhood of Teamsters. Loomis had CBAs with the unions that covered a unit of security guard employees in multiple California locations. In 2010, Loomis withdrew recognition of some of the local unions to be effective on expiration of the applicable CBA. Shortly after that, Loomis withdrew recognition of the remaining local unions and:
  • Refused to bargain with the unions.
  • Did not claim that the unions had lost majority support among the bargaining unit employees.
  • Cited the Board's 1984 decision in Wells Fargo interpreting NLRA Section 9(b)(3) as its sole basis for being permitted to withdraw recognition of the union.
The local unions filed charges with the NLRB. NLRB regional directors issued complaints alleging that Loomis violated Section 8(a)(5) and 8(a)(1) of the NLRA by withdrawing recognition of the local unions. The cases were consolidated for trial, where an Administrative Law Judge (ALJ):
  • Ruled that Loomis did not engage in unfair labor practices (ULPs) under the NLRA when it withdrew its recognition of the mixed-guard unions.
  • Dismissed the complaints.
The NLRB General Counsel and the local unions excepted to the ALJ's decision.

Outcome

A majority of the Board (Chairman Pearce and Members Hirozawa and McFerran):
  • Held that an employer of security guards:
    • violates Section 8(a)(5) and 8(a)(1) of the NLRA when it withdraws recognition of a mixed-guard union that has not lost the support of a majority of the unit employees; and
    • remains bound by the terms of a CBA it entered into with the union unless and until the union is shown to have actually lost majority support among unit employees.
  • Overruled its 1984 decision in Wells Fargo (270 N.L.R.B. 787 (1984)).
  • Did not apply its decision retroactively because Loomis had relied on Wells Fargo when it withdrew recognition of the union, and retroactive application would result in manifest injustice under the Board's retroactivity precedent.
  • Dismissed the unions' complaints in this case.
The Board majority noted that:
  • Section 9(b)(3) bars the Board from certifying a mixed-guard union as the representative of a guards bargaining unit (29 U.S.C. §159(b)(3)).
  • In Wells Fargo, the Board held in a divided decision that an employer of security guards could lawfully (without violating Section 9(b)(3)) withdraw recognition of a mixed-guard union as its guards' representative if no CBA is in place, even if the union has not lost majority support for the union (270 N.L.R.B. 787, at 790).
  • The Board's rationale in Wells Fargo was that:
    • Congress intended Section 9(b)(3) to protect employers from having to recognize and bargain with unions in circumstances where there could be a conflict of loyalties involving the guard employees, given that guards may be expected to enforce the employer's property rights against non-guard employees who are in the same union;
    • if an employer of security guards has withdrawn recognition of a mixed-guard union, the Board cannot order the employer to continue recognizing and bargaining with the union because that would give the union indirectly (a bargaining order) what it could not obtain directly (by certification); and
    • there was no basis for the Board to distinguish between initial certification and compelling maintenance of a bargaining relationship with a bargaining order because either way, an employer must still face the same problems and potential conflict of loyalties that Section 9(b)(3) was intended to prevent.
    (270 N.L.R.B. 787, at 787-89.)
  • The Board majority's decision in Wells Fargo elicited a strong dissent and mixed response from US circuit courts, with the Seventh Circuit disagreeing with the Board's interpretation of Section 9(b)(3) (General Services Employees, Local 73 v. NLRB, 230 F.3d 909, 914-15 (7th Cir. 2000)).
  • Subsequent Board decisions reaffirming Wells Fargo:
    • did not attempt to strengthen the majority's rationale from that decision; and
    • included dissents similar to Member Zimmerman's dissent in Wells Fargo.
    (See Temple Security, 328 N.L.R.B. 663 (1999) ("Temple I"); Northwest Protective Service, Inc., 342 N.L.R.B. 1201 (2004).)
The Board majority overruled Wells Fargo because:
  • Section 9(b)(3):
    • reflects Congress resolving the potential conflict with mixed-guard unions by preventing the Board only from certifying a mixed-guard union as a guard unit's representative;
    • does not limit an employer's discretion to voluntarily recognize a mixed-guard union and to determine that the potential conflict is either not present or is outweighed by potential advantages of entering into a collective bargaining relationship with a mixed-guard union;
    • does not address termination of collective bargaining relationships between employers and mixed-guard unions, including situations in which an employer that has voluntarily recognized a mixed-guard union then seeks to withdraw its recognition of that union; and
    • permits a rule where an employer is prohibited under the NLRA (and therefore commits a ULP) if it withdraws support from a voluntarily-recognized mixed-guard union that still enjoys majority support among the union employees.
  • Congress could have prevented mixed-guard unions from having protections under the NLRA, including Section 8(a)(5), but Congress did not do that. Therefore, contrary to Wells Fargo, Section 9(b)(3) does not require the Board to deny a voluntarily-recognized mixed-guard union the same protections that all other unions have under Section 8(a)(5).
  • The Board's new "narrower reading" of Section 9(b)(3) is consistent with the legislative history of that provision.
  • Prohibiting employers from withdrawing recognition from a mixed-guard union does not interfere with the policy goal of protecting employers from being required to enter into collective bargaining relationships with mixed-guard unions and allowing employers to decide for themselves whether to recognize and bargain with the union.
  • Ordering an employer to bargain with a mixed-guard union simply restores the status quo of voluntary recognition, not certification. Allowing an employer to withdraw from a "stable relationship" with a mixed-guard union would undermine the NLRA's central purpose of "fostering stable labor-management relationships, including those established through voluntary recognition."
The Board majority did not apply this decision retroactively because:
Member Miscimarra dissented, noting that:
  • The Board's interpretation of Section 9(b)(3) in Wells Fargo was:
    • the most reasonable among multiple possible interpretations;
    • the most consistent with Congress' goal of restricting mixed-guard unions' representation of security guards; and
    • "less protective of the Board’s interest in fostering stable bargaining relationships" than the new interpretation by the Board majority in this case, but it served the goal of avoiding the potential conflict that can arise from a mixed-guard union's representation of non-guard employees.
  • There is no evidence that when Congress enacted Section 9(b)(3), it focused on technical distinctions between Board certification of a mixed-guard union and an employer's voluntarily recognition of a mixed-guard union.
  • The majority's holding contradicted:
    • Section 9(b)(3)’s language;
    • Board precedent; and
    • established labor policy.