In a significant ruling by the Third Circuit Court of Appeals, New Concepts for Living Inc. successfully contested the National Labor Relations Board’s (NLRB) finding of unfair labor practices related to efforts to decertify its employees’ union. The court found that the NLRB lacked evidence that New Concepts illegally solicited employees to resign from the union, bargained in bad faith, improperly polled its workforce on union support, and wrongly withdrew recognition of the union.
This all started over a decertification effort at New Concepts, a company that provides services for people with disabilities. The company sent a memo to workers in December 2016 about their rights to resign from the union after they failed to reach a successor collective bargaining agreement for two years after the previous deal expired.
The memo was distributed to employees along with a form letter entitled “RESIGNATION/DUES REVOCATION LETTER.” The memorandum warned employees:
You have the right to resign from membership in the Union and paying dues at any time, BUT the Union may take the position that you can only revoke your Union Dues payroll deduction authorizations twice a year: By December 31st and June 30th. If you do not revoke by December 30th, you may be forced to pay Union Dues for another 6 months.
The accompanying form letter was addressed to the Union and stated:
“I resign from membership in CWA Local 1040” and directed the Union to “immediately cease enforcing the dues-checkoff authorization agreement that I signed.” The memorandum added that “[t]here is no reward for stopping Union Dues or punishment for continuing to pay Union Dues.”
Approximately 90% of the employees signed and returned the form letter to the Respondent. The Respondent then forwarded the completed forms to the Union. On December 31, when Setteducati sent the last form to the Union, his cover letter stated that “[t]his brings the total number of [completed forms] to 80.”
The Third Circuit also rejected the NLRB’s argument that New Concepts forfeited arguments by not raising them earlier in the case, giving a view of how some judges view that jurisdictional exhaustion requirement.
The court’s decision, underscored by Judge D. Brooks Smith’s poignant observation that “almost no one wants to pay something and receive nothing in return,” serves as a critical analysis of union representation and worker support. The case revealed that the union’s prolonged absence significantly contributed to its declining support among workers, leading employees (and the court) to give a critical examination of union accountability and representation effectiveness.
The court meticulously dissected allegations surrounding the December and August Memos distributed by New Concepts, finding no substantial evidence of coercion or solicitation to resign from the union.
Moreover, the bargaining tactics employed by New Concepts were deemed hard bargaining rather than bad faith, reflecting the challenging dynamics of labor negotiations. Notably, the court validated New Concepts’ decision to conduct a poll to ascertain union support, which was crucial in demonstrating a legitimate doubt about the union’s majority status due to overwhelming employee disengagement.
The court’s flexible approach to procedural requirements suggests a reconsideration of the NLRB’s exhaustion requirement for raising arguments. This ruling emphasizes the importance of evidentiary support in NLRB rulings and the potential for legal challenges based on procedural and substantive grounds.
Labor lawyers and labor relations practitioners will find reading this case valuable for its implications on union representation, employer communication strategies, and the legal thresholds for proving bad faith bargaining and coercion.
