NLRB Enforces Employer Association Membership Agreement

A recent National Labor Relations Board (“NLRB”) decision reflects the continued efforts of the Obama Board to support unions at the expense of employers. It also illustrates the critical need for employers, and construction contractors in particular, to read and understand all agreements both before they sign them, and at the time they wish to terminate those agreements, to insure that the terminations are effective.

In Carr Finishing Specialties, Inc., 358 NLRB No. 165 (2012), the employer Carr, a metal roofing, siding and architectural panel contractor, became a member of an association of upstate New York iron worker employers in 1997. The association represented its member-employers in negotiating and administering bargaining agreements with several Iron Workers local unions. At the time Carr joined the association, it signed an association membership application which designated the association as Carr’s exclusive representative for collective bargaining with the unions, and which also provided that members may not resign from the association within 90 days of the expiration date of a labor agreement.

Later, in 2006, Carr signed a letter of assent binding the company to a new labor agreement with one of the Iron Worker local unions. The labor agreement had an expiration date of April 30, 2009. Carr, however, stopped following the agreement in October 2008, and on February 17, 2009 (72 days prior to expiration) sent a notification to the association and the union that it was revoking the association’s authority to bargain on its behalf, and was terminating the labor agreement. The association subsequently negotiated a new 2009-2012 labor agreement with the union.

The union then filed an unfair labor practice charge, alleging Carr unlawfully terminated the labor agreement and refused to abide by the new agreement negotiated with the association. The Board found not only that Carr had unlawfully ceased following the 2006-2009 contract prior to its expiration, but also that the association continued to be Carr’s bargaining representative because Carr’s February 17, 2009 termination letter was sent less than 90 days prior to the contract expiration and was therefore ineffective. As such, the Board also found that Carr was bound to the 2009-2012 labor agreement as well.

In so holding, the Obama Board essentially reasoned that Carr’s membership agreement with the association had overridden the previously well established law that an employer may withdraw from multi-employer bargaining (by withdrawing an association’s authority to bargain on its behalf) any time prior to an association commencing negotiations with a union. However, the more concerning aspect of the case is that the Board essentially enforced the agreement between the association and its members as if it were part of the collective bargaining agreement with the union. This is concerning for employers because the union was not a party to the membership agreement (which was rather a contract strictly between the members and the association). There was no evidence that the requirement that members give notice of the termination of the association’s bargaining authority at least 90 days before expiration was ever bargained over with the union, or intended to benefit the union in any way.

The case illustrates the Obama Board’s willingness to invent rationales for side-stepping or negating current law in order to issue employer adverse decisions. Given the Obama Board’s track-record of such decisions, employers, and particularly construction contractor employers, must be vigilant in reading and understanding all collective bargaining related documents and agreements before signing such documents. These include not only agreements with unions, but also the authorizations and membership agreements with trade and employer associations. Further, employers should also review all such documents well in advance of contract expiration dates to insure that required procedures are followed, and that proper termination notices are timely sent, if they wish to terminate union agreements and remove themselves from multi-employer (association) bargaining.

If you have any questions about collective bargaining and union agreements, wish to have your agreements reviewed, or have any questions regarding this article, please contact Jon Olson or any attorney at Peters, Revnew, Kappenman & Anderson, P.A. at (952) 896-1700.