Employers working for foreign-based automotive manufacturers in
the 13 right-to-work states throughout the South should consider
preparing for what may become a protracted battle over industry
unionization. Volkswagen AG may have unwittingly shifted the
paradigm last November when it became the first foreign-based
automotive manufacturer to open its doors (in a manner of speaking)
to organized labor at a domestic plant that is not jointly owned by
an American-based manufacturer. A new policy at Volkswagen's
Chattanooga, Tennessee, plant — entitled the Community
Organization Engagement policy — allows labor organizations
to be involved in employee-related discussions if it can be
established by an outside auditor that the labor organization has
enrolled at least 15 percent of the plant's workers in a
relevant employee group.
This development may signal a pathway to future, formal collective
bargaining between Volkswagen and labor organizations, such as the
United Auto Workers. This pact, coupled with significant recent
cases and other initiatives by the National Labor Relations Board,
give unions a potent new arsenal of weapons in the ongoing battle
to organize the auto industry. Knowing how to navigate this new
landscape will undoubtedly be significant to the future of the auto
industry in the U.S.
Volkswagen Opens the Door to Organized Labor — But
Not All the Way
Volkswagen's new Community Organization Engagement policy does
not specifically recognize the UAW (or any other labor
organization) as an official bargaining representative for its
employees under federal law. According to a November 2014 press
release, Volkswagen's policy describes three levels at which a
labor organization can obtain "engagement access" to the
employer and its facilities. The level and nature of the engagement
access is determined by the percentage of worker membership in the
labor organization for each relevant employee group whose members
support the organization's interaction with Volkswagen.
The first tier provides specified engagement opportunities to
labor organizations who obtain no less than a 15 percent enrolled
union membership of workers in the relevant employee population
(likely intended to correlate with the concept of the bargaining
unit in NLRB parlance). The level of access to company management
and resources increases as the percentage of union-enrolled members
increases. Tiers two and three are for operational units that have
worker-enrolled union memberships of 30 percent and 45 percent
respectively.
Accompanying the policy were examples of benefits including the
ability to use company space for group meetings, the ability to
post union information and announcements on the employer's
premises and the ability to have union officials meet regularly
with Volkswagen management representatives. The membership support
requirements are audited and confirmed by an external auditor and
not by Volkswagen when necessary to determine whether and when
membership percentage milestones have been reached so as to trigger
increased union access/engagement rights.
The new policy came shortly after Volkswagen employees rejected
the UAW's bid to become the certified collective bargaining
representative of employees at the Chattanooga plant in a February
NLRB-conducted election. The union lost that election by a vote of
712 to 626. Nonetheless, the UAW formed a local chapter (Local 42)
in July for the benefit of workers at the Chattanooga plant. Though
optional, many Volkswagen employees have joined that chapter, and
it is likely the UAW will in the future seek official recognition
by the NLRB for collective bargaining representative status if it
is successful in obtaining greater employee interest than was
present during the first election.
Though Volkswagen management publicly expressed support for
organized labor, many foreign-based employers within the industry
do not share such views. Costs attendant to union-represented units
of employees in the auto industry can be significantly higher than
their union-free counterparts.
Auto Industry Employees Can Now Use Employer Email for
Union Organizing
In a significant departure from prior precedent, the NLRB ruled in
December that employers cannot prohibit employees from using their
employer's email systems during nonworking time to communicate
about topics such as wages, hours and working conditions (Purple
Communications, 361 NLRB No. 126). In particular, this means that
employees cannot generally be prohibited from using employer email
for union organizing. Communications about such matters are part of
protection associated with "protected concerted
activities" by employees, which are guaranteed by the National
Labor Relations Act. The NLRB's 3-2 decision in Purple
Communications overturned its very different 2007 decision in
Register Guard (357 NLRB No. 27), which held that employees have no
right to use their employers' email systems other than as
allowed by the employer.
To get a sense about how this can become an issue for auto
industry employers, consider the facts that produced this recent
decision. Like most employers, Purple Communications Inc. had a
policy prohibiting personal use of the company's computers and
email systems. But in 2012, a labor union sought to represent
Purple Communications employees at several locations. The NLRB
conducted an election among affected employees, but the union lost.
The union then appealed that decision — first to an
administrative law judge, and then to the full five-member NLRB in
Washington, D.C., arguing that employee use of company email for
union organizing was within the rights protected by the NLRA.
Ultimately, the NLRB rejected the reasoning of Register Guard and
its progeny, and decided that employees do in fact have the right
to use employer email for union organizing.
The email focus of Purple Communications is not the first time the
NLRB has made incursions into employer rights associated with the
advance of computer technology. For example, it has previously
placed significant restrictions on employer use of social media.
And in Purple Communications, the NLRB also signaled willingness to
displace historical employer rights to control its own property, by
overruling its own 2005 decision in Johnson Technology, a case in
which the employer had been allowed to prohibit employees from
using previously used copy paper to make flyers notifying workers
about union organizing meetings.
NLRB's "Quickie Election Rule" May Catch
Auto Industry Employers Unprepared
On the heels of deciding the Purple Communications case, the NLRB
announced its "Quickie Election Rule" — scheduled
to go into effect on April 14. Historically, a union is not
certified as the collective bargaining representative for an
appropriate bargaining unit of employees unless it wins a secret
ballot election. These elections typically take place up to 42 days
after the union first files official paperwork with the NLRB asking
to represent a unit of employees. During the intervening time,
employers usually communicate with their employees about the
benefits of remaining nonunion.
But under the Quickie Election Rule, the NLRB has significantly
shortened the pre-election time to as little as 10 days. Many
employers — certainly including those in the auto industry
— are understandably concerned that this shortened
pre-election time will present significant challenges in their
ability to communicate with their employees when unions seek to
organize them after April 14, 2015. Industry observers predict that
there will be a surge in union organization activity after that
date in order, among other things, to catch unwary employers by
surprise.
Where Is Unionization of the U.S. Auto Industry
Headed?
Since the early 1980s when Japan's American Honda Motor Co.
decided to build cars in the U.S., foreign-based manufacturers have
opened more than 15 major manufacturing plants, with more than 10
of them located in the South. That region has become a magnet for
"transplant companies" in part because of favorable
economic conditions, and relatively union-free operating
conditions. It is not coincidental that a significant number of our
country's 24 right-to-work states — those where
compulsory union membership is prohibited by statute or the
state's constitution — are concentrated in Southern
states. Many fear that if unions move into the automotive
manufacturing plants of the South, those companies may begin
looking at doing business in lower-cost regions such as
Mexico.
If organized labor gains strength in the South's auto
industry, these employers will necessarily find themselves having
to consider new strategies for maintaining union-free work
environments. At the end of the day, it is critical that employers
openly and genuinely communicate with their employees on a regular
basis about the value of their wages, hours and working conditions
in a union-free environment, rather than sitting back and waiting
to do so 10 days before a union vote is scheduled to take
place.
This article originally appeared on Law 360 on January 20, 2015.
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