It is a common tactic, during union organizing drives or strikes, for a union to file lawsuits against the employer. Filing a wage and hour suit against the employer during a union-organizing campaign allows the union to create the impression it is the “champion” of the employees and the union hopes the filing of that suit will result in more union votes during an NLRB-supervised election. Similarly, the filing of lawsuits against an employer during a labor dispute such as a strike puts additional pressure on the employer to concede to the union’s demands.
For quite some time, the NLRB has held that it is not unlawful for a union to not only file, but to also fund lawsuits on behalf of employees. In 1999, the United States Court of Appeals for the District of Columbia Circuit disagreed with the NLRB and found that the providing of free legal services during the critical period between the filing of an election petition and the actual date of the election constituted an objectionable grant of benefits to employees that improperly influenced employees’ free choice.
On August 23, the NLRB issued its decision in Stericycle, Inc., 357 NLRB No. 61, declaring a “new approach” to determining whether the filing of lawsuits, prior to a representation election, interferes with that election and constitutes objectionable conduct. In Stericycle, the Teamsters sought to represent a unit of drivers. Apparently, in the early stages of organizing drive, some drivers complained that they were not being paid for meal times, break times or overtime work. During an organizational meeting, the union introduced the drivers to its outside attorney who discussed employee rights under both state and federal law on the subject of overtime compensation. Copies of an attorney-client representation agreement were distributed, and the union stated it would pay all the fees, costs, disbursements and litigation expenses. Not surprisingly, 16 employees signed the agreement.
Shortly after filing a petition seeking to represent the drivers of Stericycle, the union’s attorneys filed their lawsuit in federal court in the Northern District of California on behalf of the 16 employees. The union subsequently won the election, after which the employer filed its objection.
The NLRB restated its belief that the unions play an important role in protecting the rights of employees, and that there was generally nothing wrong with the union financing litigation against an employer on behalf of those employees. However, the Board went on to note that the filing of employment-based lawsuits on behalf of employees, as well as picking up the related costs during the period of time after an election petition has been filed, and before the election has been held, can certainly appear to be the conferring of a benefit and may improperly influence employees to vote for the union. Indeed, such action would not be dissimilar from an employer granting a wage increase to employees during that same “critical period” an act which clearly is objectionable.
Accordingly, the NLRB in Stericycle declared that it does constitute objectionable conduct for a union to file a lawsuit on behalf of employees its seeks to represent under various employment laws after a petition has been filed, but before the election has been held. Here is the kicker and the road map. . . The Board went on to hold that such a lawsuit, filed the day before the petition for an election is filed is not objectionable!