By David D. Schein, President & General Counsel, 

Claremont Management Group

The National Labor Relations Board (“NLRB”) is an independent Federal agency that regulates the relationship between workers and employers with regard to union activities. Recently, a US Court of Appeals overturned President Obama’s appointment of three members of the five-member NLRB in January 2012. The Court ruled that the US Senate was in session and therefore the President was not authorized to make “recess appointments.” While this sounds like a minor technicality, if this decision is not reversed by the US Supreme Court, it could lead to the vacating of approximately 100 decisions made by the NLRB over the last year.

 Many small businesses do not regard the NLRB as a key concern. In general, this might be true. Unionization is at its lowest level in about 50 years in the United States. Unions often target large businesses since they obtain more members and dues from organizing a 500 employee plant than they would from organizing a 25 employee plant.

 The reason the Court decision is so significant to small business is that these Board members appointed in January 2012 are decidedly pro-union. Their aggressive approach expanded the reach of the NLRB. I note below two special concerns for small business.

 While unions have lost many members, they are not down and out. They have been energized by the recent national elections and the rulings of the NLRB over the last year. Small businesses are not immune from unionization. As an example, a wholesale distribution company with about 50 total employees, including about a dozen truck drivers and a dozen warehouse workers, faced a unionization effort. The workers were divided into two possible bargaining units and the employer lost one election and won the other. The union involved filed 10 Unfair Labor Practice (“ULP”) charges against the employer. Eventually, the NLRB ruled in favor of the union on most of the ULPs and the employer was facing another election in the unit which it had won. Ultimately, the union abandoned its efforts and there is no union at the company today. However, the cost was about two years of disruption and about $50,000 in legal fees and settlement costs.

 Employees do not need to belong to a union, or attempt to unionize, to be protected by the NLRB. Any “concerted action” is protected under the law. The reason this is a special concern is that suppose an employee posts on their Facebook page that they feel their employer is unfair and pays poorly? This employee is acting alone and can generally be disciplined for making inappropriate public comments about their employer. Suppose now that two or three fellow employees respond to the posts and agree with the first employee? This employee is now acting “in concert” with other employees regarding pay and other conditions of employment and may file a complaint with the NLRB if they are disciplined.

 For both reasons, small businesses must stay alert to the risks of unionization and concerted action.

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