(Michael Chamberlain/Nevada Business Coalition) – Everybody likes a good David vs. Goliath story. But only when David wins.
It just so happens we have such a story in our own backyard. The good news is that David has truth and the law on his side. The bad news is Goliath may be able to wear him down and prevail. And that would be bad news for all of us.
The International Union of Painters and Affiliated Trades (IUPAT) Local 159 is suing a local business, J & R Flooring, to try to achieve through the courts what it couldn’t through negotiations with the company or the legitimate consent of the employees.
The union is asking the courts to recognize a method of organizing that denies companies their rights and was not approved by the union’s contract with J & R nor is it sanctioned by the National Labor Relations Board (NLRB). If it is allowed to stand, countless other businesses could be affected.
The IUPAT local, with access to the deep pockets of its international affiliate and the AFL-CIO, has pursued a war of attrition against J & R Flooring. The union has dragged this case out for nearly four years, losing at every turn yet continuing to file appeal after appeal, all the while draining the funds of the small, family-owned business. So far, J & R has spent more than a quarter-million dollars on this case, and each new appeal adds another six-figure tab.
If it is successful in wearing down J & R or weakening the company financially to the point where it is unable to defend itself, the union may be able to obtain legal sanction through the courts for a method of organizing through card check that has never been approved by law, by Congress, or by the NLRB. This could have a devastating effect on companies all across the country.
The National Labor Relations Act (NLRA) requires in most cases that for a union to represent the employees of a particular business it must show that it has the support of a majority of those employees. A union that obtains majority support is called a 9(a) representative after the section of the NLRA describing that process.
Normally this must be achieved through a secret-ballot election. In certain circumstances, majority support can also be demonstrated by obtaining the signatures of a majority of the company’s employees. This method is called “card check.” Under current law, card check can be used only if the company agrees to it beforehand.
In most industries, a company is prohibited from bargaining with a union that does not have majority support. Except, that is, in the construction industry.
Congress added a section to the NLRA, section 8(f), that applies only to construction companies, such as J & R. It permits them to sign an agreement with a union that has not obtained majority support allowing that union to represent the company’s employees. In this type of situation, the union is referred to as an 8(f) union.
There are important distinctions between 8(f) and 9(a) unions. An 8(f) union cannot picket or strike an employer to force it to extend an agreement ,and an employer is under no obligation to bargain on a new agreement with an 8(f) union after it expires.
Unless the union is able to demonstrate majority support and become a 9(a) representative, the company can simply let an 8(f) agreement expire and there’s little the union can do about it.
Normally 8(f) agreements contain provisions by which the union can become a 9(a) representative, including via card check. But the union must follow the procedures outlined in the contract or, if these are not spelled out, follow those accepted by the NLRB. These require them to adhere to certain guidelines for verifying signatures and that the third-party chosen to certify the card check is mutually agreeable to the union and the company.
The contract between the IUPAT local and the group of companies that included J & R contained a card check provision, without specifics, and also an arbitration clause requiring either party to use arbitration to settle contractual disputes.
J & R and a group of other flooring companies had been negotiating with the IUPAT to extend their 8(f) contract, but had not reached an agreement. On the day the contract was set to expire, the union declared it had enough signatures via card check to become a majority-support, 9(a), representative.
The union brought in its own third-party, who had not been approved by the companies, and used a method of verifying signatures that was not approved by either the companies or the NLRB. Not surprisingly, J & R and the other businesses refused to recognize the result.
When the companies did not agree to bargain, the union filed an unfair labor practice claim with the NLRB stating that the companies should be forced to accept the card check result and recognize the union. That claim was rejected.
Having lost at the NLRB, the union then filed a lawsuit against J & R to force them into arbitration over whether or not they must bargain with the union. This dispute hinges on whether the union is the legitimate representative of the company’s employees via the card check. This is precisely the claim that the NLRB, which labor law designates as the primary authority in such matters, rejected.
Since this dispute began, all the companies other than J & R have either gone out of business or been forced to settle, leaving J & R alone to fight the battle and bear the expense. An adverse decision, even one due to J & R being unable to withstand the financial burden, could result in many other unions successfully using this same end run around the law.
Even as the courts have also ruled against the IUPAT, it has continued to appeal. Each loss in court generates another appeal. With each round its case doesn’t get any stronger but its opponent’s ability to fight gets weaker.
It’s not a shock that the IUPAT has chosen this case to make such a stand. With its own deep pockets against a group of small companies in an industry that has been hit hard by the recession there is a good chance it can simply outlast the opposition.
The stakes are high but so is the cost. For the sake of businesses all across the nation, we must hope that J & R Flooring, like David, will prevail.
(Michael Chamberlain is Executive Director of Nevada Business Coalition.)