organizing - Horton Management Law

On September 23, 2019, the National Labor Relations Board (NLRB) issued a proposed rule that would address whether college and university students who work for their schools can join unions. This rulemaking is a new approach to resolving a labor law question that has not had a consistent answer in recent decades. The proposed rule would enable institutions of higher education to keep their students out of unions.

Are Students Employees?

Many students hold jobs with their schools. For example, many graduate students serve as teaching assistants. The students often receive compensation for this work, whether direct compensation or credit toward their education costs.

The question of interest under the National Labor Relations Act (NLRA) is whether these students qualify as “employees” who have the right to form or join a union. Specifically, that is, a union that would negotiate on their behalf with the school over the terms and conditions of their employment.

This question has even come up in recent years regarding college football players. Should they be able to unionize because they receive a scholarship to play football?

(Note: The NLRB only has jurisdiction over private, non-governmental employers. Accordingly, public colleges and universities are outside its jurisdiction. However, the many private schools in the country are within its purview.)

Historical Approach

For many years, the NLRB has interpreted the NLRA primarily through adjudicating cases. It rarely used formal rulemaking to establish legally binding interpretations of the law. The Board’s adjudicative approach has increasingly produced a back-and-forth pendulum on many contentious issues. As a result, the labor law’s protections depend more and more on which party controls the NLRB.

In 1974, the NLRB ruled in a case involving Stanford University that graduate student research assistants are not “employees”. Instead, the Board ruled, they were “primarily students”. This decision kept college students out of unions for more than 25 years.

Then, in 2000, the NLRB held for the first time that certain New York University graduate students were employees under the NLRA. That conclusion was reversed, however, just 4 years later in a case involving Brown University.

Most recently, the NLRB went back in the direction of its NYU decision, and beyond. In 2016, the Board ruled that both graduate and undergraduate students at Columbia University could qualify for the NLRA’s protections as employees, even if their positions were externally funded.

Proposed Rule to Exclude Students from Unions

Seeking to stop the bouncing ball, the current NLRB has shifted toward rulemaking on significant labor policy issues. On the student-employee issue, the Republican Board majority takes a position that would keep students out of unions. In other words, the NLRB would not assert jurisdiction over them under the NLRA.

As an exception to standard jurisdiction over private colleges and universities, the proposed rule provides:

“Students who perform any services, including, but not limited to, teaching or research assistance, at a private college or university in connection with their undergraduate or graduate studies are not employees within the meaning of Section 2(3) of the [NLRA].”

Comment Period

As required under federal law, the NLRB has allowed time for the public to comment on the proposed rule.

Interested parties can file comments up until December 16, 2019. In addition, comments responding to other comments can be filed until December 30, 2019.

Given these deadlines, the NLRB will not be able to issue a final rule this year. However, it is likely there will be a final rule that will keep college and university students out of unions beginning in 2020.

What This Means for Employers

If you work for a private college or university, the potential impact is somewhat apparent . . . at least in the short term. With this change, students who work for the school will not have rights under the NLRA to engage in collective activity for their mutual aid and protection. They will not be able to join unions if the employer objects. But, if the political tides shift in Washington, the rule could be eliminated or revised in the future.

For other private employers, this signals a trend toward pro-employer rulemaking by the NLRB. Generally, this is a positive sign of greater leeway to run your business. But, again, the trend could be shortlived. Employers will continue to be at the mercy of the party that controls the NLRB–generally, the one that holds the Presidency. So, you can never get too comfortable in your understanding of the NLRA’s impact on your workplace.

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Keeping in mind that this is a management law blog, I’m obviously coming at this from the perspective of employers, not unions. And the short answer to this question is that most companies don’t want their employees to organize a union in their workplace. Fundamentally, unions tend to increase costs and reduce management flexibility.

Here’s how unions can mean more time at the table and less time getting the work done.

Unions Are Businesses Too

Like your company, a union is a business. Most unions have employees. Employees who work for unions can even form their own unions. But we’re focusing on the situation where unions represent employees of an employer other than a union. Like a manufacturing facility or a construction company.

Unions make money by collecting dues from your employees. Often you as the employer are withholding the dues from your employees’ pay and transferring the money over to the union. This is money out of the pocket of your employees. Beyond dues, unions can also levy initiation fees, assessments, and fines on its members. Unions use this money to pay for their employees and other business expenses.

Union business is somewhat circular in some respects. Union organizers work to get their unions into your workplace. Then your employees pay dues to the union. The union uses the dues money to pay the organizers. So if you look at it this way, union organizers are salespeople who make money by selling a product: union representation.

To be sure, unions perform other services beyond unionizing. They also engage in lobbying, represent bargaining units in negotiations, and deal with day-to-day workplace disputes, including grievances and arbitrations. Employee dues pay for these functions as well. On one hand if unions have to work hard to earn this money, this means there are a lot of problems in the workplace. On the other hand, if there aren’t problems, then employees may feel like they’re not getting much for their money from the union.

Here’s the key lesson for employers (Tip #1): keep your workers happy and they won’t need to “hire” a union. Or if they already have one, they may decide to “fire” it if they perceive that they don’t need it any more.

Unions Prevent Dealing Directly with Employees

Once a union becomes the representative of a group of employees, the employer has to deal with the union directly regarding most terms and conditions of employment. This typically starts with negotiating a collective bargaining agreement. This is the contract that determines wages, benefits, discipline, and other matters affecting all employees in the represented bargaining unit.

It can take a long time–many months–to reach agreement on a contract with the union. In the meantime, employers’ hands are largely tied. They can’t unilaterally change wages, benefits, etc., unless the negotiations have reached an “impasse.” And, of course, the union doesn’t always agree that there is an impasse. So an employer often acts at its own risk by making a change without union consent.

This means that if Employee A wants a raise, the employer can’t give it to him without union approval. And unions typically insist on lockstep compensation. Most often seniority determines employees’ wages. So if a new employee is more skilled, he or she will usually still make less money than a longer tenured employee who is not as talented.

The collective bargaining agreement may also control many aspects of scheduling, include overtime assignments. It can be difficult to work with an individual employee to do what may be best for both him and the company because of the strict requirements of the contract.

Tip #2: if you do have a union, it’s usually best to have a good relationship with its leaders. Not every aspect of the union-employer relationship has to be a fight. Good labor relations fosters more flexibility from both sides and should make things run smoother in most cases.

Job Protection Isn’t Always Just

Without a union, the default is that employees are employed “at will.” This means they can resign or be let go for any reason with or without notice. But under union contracts, an employer usually can’t discipline an employee without “just cause.”

It may surprise you that no one really knows what “just cause” is. Ultimately, it’s whatever the arbitrator (or perhaps a court) says it is in a given case. If an employer disciplines an employee and the employee doesn’t like it, then the employee or the union can (and probably will) file a grievance. If the company doesn’t change the discipline to something the employee accepts, then the case may proceed to arbitration, requiring a hearing. Then the arbitrator hears both sides’ version of the situation and decides whether to uphold the discipline as imposed.

In my experience, employers don’t go around trying to find ways to get rid of good employees. (See my earlier post on getting rid of bad employees.) So, at least in cases of termination, grievances are most often serving one of two purposes: (1) contesting the supervisor’s motives or competence or (2) appeasing a bad employee. Sometimes the former has merit. But the latter seems to be more common.

The real problem is that grieving and arbitrating a bad employee’s discipline costs the union time and money. The money comes from the dues of all the employees. Most of them are good employees and will never grieve discipline. This is because either they aren’t disciplined or they recognize they deserved it. So, in other words, the good employees end up paying to support the bad employees.

Tip #3: hire good employees and hope they keep the bad ones in check. I know this tips seems overly simplistic. But the point is that it really pays to invest in good hiring methods. Including with respect to labor relations issues.

Employees Can Sue Unions

In case you’ve gotten this far and are wondering why unions spend good employees’ money to defend bad employees . . . see the heading above. Unions owe the employees they represent a “duty of fair representation.” That basically means they have to represent all of the employees fairly. (Well, I guess that was obvious.)

Actually, there is a pretty high standard for an employee to sue a union for breach of the duty of fair representation. The union has to have been pretty reckless in its treatment of a particular employee (or group of employees). But, like most everyone else, unions don’t really like to be sued. So they typically err on the side of caution and try to defend everyone who wants to contest their discipline.

Tip #4: in order to claim that the union has breached its duty of fair representation, an employee also has to allege that the employer has breached the collective bargaining agreement. Makes sense, right. The union didn’t have a duty to represent the employee if the company didn’t do something wrong. As a result, in these cases the union and employer essentially end up on the same side of the table opposite the employee. This is another of many reasons why, if you do have a union, you should try to maintain a professional working relationship, even if you won’t always agree.

Good Employers Don’t Need Unions

You’re a good employer right? If you took the time to read this, you probably are. There may be some flaws in your game, but you’re at least trying to do right by your employees.

Management and supervision is critical in rendering unions unnecessary. Unions can promise higher wages and better benefits, but only the employer can make those things a reality. So you always have the upper hand. But if your supervisors demean, ignore, or otherwise mistreat employees, they’ll look for someone else to protect them. That’s when union organizers get a foot in the door.

If you are a good employer that already has a union in your workplace, then your goal is improve your relationship with both the union and the employees to the point where it’s not so bad that the union is around. Then maybe at some point the employees will wonder why they are paying the union to be there at all. . . .

Tag: organizing

NLRB Proposes to Keep Students Out of Unions