Court Rejects Employer Challenge to ‘Ambush Election’ Rule, Rewards Unions

The Obama-era National Labor Relations Board, with its built-in pro-union majority, gave organized labor plenty of organizing and bargaining advantages, but none perhaps as far-reaching as the “quickie” or “ambush” election rule. Now an appeals court has upheld it. On April 19, a three-judge panel for the District of Columbia federal circuit court, in UPS Ground Freight Inc. v. NLRB, rejected an employer challenge to the rule, which, when put in place in April 2015, dramatically shortened the time available for employers to convey to employees their objections to potential union representation. Plaintiffs’ lawyers argued that the board’s directive to UPS to bargain with a Teamsters local lay outside the scope of its authority and that the rule “values speed at all costs.” And they were right.

Unions, like all organizations, seek to maximize membership. And that requires on some level persuading workers at nonunion sites to see the benefits of belonging. Labor organizers do not want workers to hear “both sides of the story.” They will convey only the upside of membership. Conveying the downside is for the employer to worry about. And unions have every interest in making that latter task as difficult as possible. One way they have gone about this is minimizing the opportunities for an employer to explain its position to its workers. In this way, a union is better positioned to win over undecided workers during a representation election campaign. That’s why union leaders pushed for the ambush election rule in the first place. Indeed, a study released in December 2014 by the Oklahoma-based Labor Relations Institute Inc. concluded that the union win rate is nearly 90 percent in cases where an election campaign lasts two weeks or less. By contrast, the overall union win rate was roughly two-thirds.

The election of Barack Obama, an avowed union partisan, as president in 2008 opened the door for unions to make the rule happen. As president, Obama’s appointments to the normally five-member National Labor Relations Board would ensure that the board, as custom long has had it, would consist of three members of the president’s party and two members of the opposition party. Unions effectively would enjoy a virtually automatic 3-2 majority vote in their favor. In June 2011, the NLRB, though short-handed by one member, published a preliminary rule in the Federal Register that would reduce the maximum time for a private-sector employer to respond to a union filing of an election petition from 42 days to between 14 and 21 days, and in certain cases, only 10 days. The median employer response period had been 38 days. The board justified the rule change as necessary to streamlining an overburdened election process. Following a heated comment period, the board, by now short-handed by two members, adopted a scaled-down version that December. Immediately afterward, the U.S. Chamber of Commerce and an allied ad hoc nonprofit group, the Coalition for a Democratic Workplace, filed a court challenge, arguing that with only three active members, the board lacked a quorum to put this or any other rule into place. A District of Columbia federal district court agreed, and struck down the rule in May 2012.

As this was a procedural victory, a reintroduction of the ambush election regulation was inevitable with the National Labor Relations Board back at full strength. Soon enough, in February 2014, the NLRB republished the rule, which was highly similar to the original one. Among its many features, the regulation would: require a pre-election hearing within eight days of an election petition; force an employer to submit a Statement of Position within seven days of receiving an election petition; limit issues and evidence that an employer may present at a pre-election hearing; eliminate an employer’s right to appeal pre-election decisions to the NLRB regional director; eliminate the 25-day grace period between the end of a hearing and the holding of an election; and, arguably most disturbing, require an employer to give union organizers personal information about employees such as home addresses, telephone numbers, email addresses, shift schedules and work stations. Organized labor was over the moon. AFL-CIO President Richard Trumka, for one, was grateful. “We applaud the National Labor Relations Board for proposing these commonsense rules to reduce delay in the NLRB election process,” he said.

The NLRB published the final rule that December. Almost immediately, in January 2015, five business groups sued the board, arguing that the move violated the First and Fifth Amendments, and exceeded the board’s statutory authority under the National Labor Relations Act (NLRA). The plaintiffs asked the U.S. District Court for the District of Columbia to vacate and set aside the rule. The court gave them standing, but did not enjoin enforcement either. The board finalized the rule three months later on April 14. And that July, in U.S. Chamber of Commerce et al. v. National Labor Relations Board, the court upheld it. Another federal district court – this one in Texas – also upheld it. The plaintiffs appealed the Texas decision, but the U.S. Appeals Court for the Fifth Circuit upheld it in June 2016. The rule, concluded the court, neither “precludes” nor “prevents” the presentation of voter eligibility evidence, and had ample NLRA authority.

The election of Donald Trump as president that November threw a wrench into union hopes. Given his power of appointment, it was only a matter of time before the NLRB would have a 3-2 Republican majority – that is, a majority siding with employers. An employer challenge, in fact, already had been in the making. Back on December 10, 2015, International Brotherhood of Teamsters Local 773, based in Allentown, Pa., filed a petition with the National Labor Relations Board seeking a representation election on behalf of delivery drivers at the Kutztown, Pa. distribution center of the Richmond, Va.-based UPS Ground Freight Inc. With the Teamsters representing more than 200,000 UPS employees nationwide, the election seemed like an easy union win. The NLRB acting regional director scheduled a mail-ballot election for January 11-29, 2016. By a lopsided 27 to 1, the workers voted for Teamsters representation. Shortly afterward, the NLRB certified Local 773 as a bargaining agent for the Kutztown facility.

Despite the vote margin, UPS Ground Freight believed that the employees might well have voted against representation had they received more exposure to its viewpoint. The application of the quickie election rule, the company argued, made such exposure highly difficult. As such, UPS refused to bargain. In response, Teamsters Local 773 filed an unfair labor practices complaint with the NLRB acting regional director, who in turn ruled in favor of the union and ordered UPS to the bargaining table. The procedural issues raised by the employer, he concluded, were not convincing.

UPS Ground Freight was not about to throw in the towel just yet. In August 2017, it filed a petition with the U.S. Court of Appeals for the District of Columbia to overturn the election. This suit was modest in aim compared to the Fifth Circuit case in Texas decided in 2016. That earlier case, filed by a variety of business groups, was a “facial” challenge; i.e., a challenge to the ambush election rule on principle. The UPS suit, by contrast, was an “as-applied” challenge. That is, it accepted the rule on principle, but argued that it was applied illegally. Extensively citing the U.S. Supreme Court’s 1997 decision, Auer v. Robbins, the company alleged that the National Labor Relations Board had far exceeded its authority under NLRA statutes in developing the ambush rule, and as such, the election was invalid.

The U.S. Circuit Court for the District of Columbia, rather than show “Auer deference” to the NLRB regional director, didn’t see things that way. In a unanimous 3-0 decision, the court affirmed the NLRB’s decision to certify the union as a bargaining agent. Writing for the majority, Judge Sri Srinivasan, an Obama appointee, dismissed all of UPS’ allegations one by one, including the main procedural point that one of the voting employees actually was a supervisor and thus ineligible to join the union. His opinion was highly dismissive of the plaintiff’s claims. Perhaps that was not a surprise. Srinivasan was part of a three-judge appellate panel that on April 29 unanimously refused to review a challenge to the authority of Special Counsel Robert Mueller launched by National Legal and Policy Center on constitutional grounds. NLPC and the attorney it supported, Paul Kamenar, had alleged with good reason that the Justice Department’s appointment of Mueller in May 2017 violated the Appointments Clause. During the proceedings, Judge Srinivasan, in a somewhat snide tone, repeatedly interrupted Kamenar and the plaintiff, Andrew Miller.

Organized labor clearly won the day in UPS v. NLRB. But the issues that led to this case aren’t going away. Aside from the overwhelming margin of the vote in favor of Teamster representation, UPS did not have a have a very strong case given its focus on procedural rather than merit issues. Kurt Larkin, a partner at Hunton Andrews Kurth LLP and an attorney for UPS, rightly noted that his client did not have adequate time to prepare an argument against unionization. “The rule values speed at all costs,” he stated. “The only goal is to get the election done as quickly as possible – rushing through the process and denying the employer a fair shake.” In other words, even assuming the National Labor Relations Board had acted within the scope of its authority, the ambush rule has created a very real imbalance in workplace relations. Hopefully, the current board will restore the balance lost.