Seyfarth Synopsis: The NLRB's Office of General Counsel has issued an Advice Memorandum stating that an employer lawfully refused a union's information request regarding its tax cut savings during bargaining.
During collective bargaining, employers often deal with an uncomfortable dilemma — comply with invasive and overbroad information requests from unions or withhold information, and risk Board litigation. However, in a recent Advice Memorandum, the NLRB's Office of the General Counsel channeled its inner Mick Jagger, and told the union, no, you can't always get what you want ... you get what you need. Specifically, the GC's office concluded that an employer did not violate Section 8(a)(5) of the NLRA by refusing to provide the union with information concerning the its tax cut savings because the information was neither relevant nor necessary to the union's performance of its statutory functions.
On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act of 2017 (TCJA). Among other features, the law cut corporate tax rates from 35% to 21%. In response to the new law, Nexstar Media Group, Inc. sent a memo to its employees announcing that the that the company wants to extend its benefits from the TCJA to its employees via a one-time bonus, and increase to the employees' 401k plan company match. This benefit, however, was not extended to Nexstar's unionized employees whose collective bargaining agreements were open for negotiation.
While the parties were bargaining for successor contracts, the union sent Nexstar a broad information request regarding the company's financial gains from the TCJA. The union prefaced its request by stating that Congress intended the TCJA's corporate tax cut to trickle down to workers' paychecks and return jobs to the USA, and invited Nexstar to "join it" in implementing Congress' goals through bargaining. The union then proceeded to request a deluge of information regarding Nexstar's financial information, employment of foreign employees, political contributions, etc. Nexstar refused to provide the information, and the union responded by filing a charge under Section 8(a)(5) of the NLRA. (The Regional Director then sent the issue to the Division of Advice for a recommendation.)
The GC's office was unpersuaded by the union's argument that the information was necessary to: (1) ensure, through bargaining, that Nexstar's benefits from the TCJA went to workers' paychecks and returning jobs to the United States; and (2) to aid the union in bargaining about bonus payments and increased 401(k) contributions. The GC's office rejected the union's first argument because the goals of the TCJA are not sufficiently related to the union's collective bargaining relationship with Nexstar — the union could not identify any provision of the TCJA either requiring Nexstar to spend its tax savings towards the union's preferred objectives or giving the union a right to enforce the statute. Next, the GC's office rejected the union's second argument because the requested information is not necessary to either frame the union's proposals, evaluate and respond to the Nexstar's proposals, or verify any of Nexstar's factual assertions in support of its bargaining positions. The GC's office reasoned that Nexstar's memorandum to its employees did not contend that Nexstar's ability to grant benefits to union employees was impacted by its tax savings in any way. Accordingly, the GC's office concluded that Nexstar did not commit a violation of Section 8(a)(5).
This Advice Memorandum is encouraging for unionized employers. If the GC's office had found Nexstar's conduct to be unlawful, it could have opened a floodgate of invasive requests from union's regarding employers' tax cut savings information during collective bargaining. However, employers should take this decision with a grain of salt and continue to evaluate each union information request carefully. Employers are reminded to consult experienced labor counsel during collective bargaining.
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