On June 8, 2018, a D.C. Circuit Court of Appeals panel unanimously vacated the National Labor Relations Board’s decision in Colorado Fire Sprinkler Inc. and Road Sprinkler Fitters Local Union No. 669, 364 NLRB No. 55 (2016), finding the Board’s decision arbitrary and capricious.  (DC. Cir. Case No. 16-1261). National Right to Work Legal Defense Foundation attorneys filed an amicus brief on behalf of a Colorado Fire Sprinkler employee, Robert Blackwell, who opposed the union’s effort to force its representation on the workforce.

Section 8(f) of the National Labor Relations Act, acknowledging the uniqueness of the construction industry, allows unions to enter into “pre-hire” agreements with employers setting terms and conditions of employment, even before any employees are hired. These pre-hire agreements are meant to be temporary in nature, and can be repudiated by either party at the end of the agreement’s term. Such pre-hire relationships can be converted to traditional Section 9(a) arrangements if the union wins an NLRB-conducted secret ballot election or produces proof of majority employee support and convinces the employer to recognize it on that basis. In contrast, parties to a Section 9(a) relationship cannot simply repudiate the agreement at the end of its term, and the union is presumed to represent the employees in perpetuity, until displaced.

In 1991, before hiring any employees, Colorado Fire Sprinkler’s (“Company”) sole owner signed a Section 8(f) pre-hire agreement with Local 669.  The agreement required the Company to recognize the union as the representative of its employees, comply with the agreement’s terms and conditions (including compulsory union dues), and make monthly payments to the union’s health and welfare, pension, and training funds.  It wasn’t until several years later that the Company hired its first employee. 

This pre-hire arrangement was repeated for many contract cycles, though a subsequent agreement added language stating “that the Union has offered to provide the Employer with confirmation of its support by a majority of such employees.” 

In time, as a result of increased competition, the Company faced financial difficulties and informed the Union that it would make changes in the benefits provided to employees.  The Union filed unfair labor practice charges with the Board claiming the Company made unilateral changes to terms and conditions of work without negotiating with the Union as a Section 9(a) representative. The Company defended by asserting that the Union was not a Section 9(a) representative with continuing representation power, but was instead a Section 8(f) union whose status did not necessarily continue at the expiration of the contract.

The Board, in a 2-1 vote [Members Hirozawa and McFerran; Member Miscimarra dissenting], found the Union’s relationship with the Company had morphed into a Section 9(a) relationship based merely on the contractual verbiage that the Union had “offered” proof of majority support and, therefore, the Company was required to bargain with the Union regarding changes to the benefit package.  Member Miscimarra, citing Board precedent in John Deklewa & Sons, 282 NLRB 1375 (1987), enfd. sub nom. Iron Workers Local 3 v. NLRB, 843 F.2d 770 (3d. Cir. 1988) and his dissent in King’s Fire Protection, Inc., 362 NLRB No. 129 (2015), argued that actual evidence of majority support, not mere contractual verbiage, is necessary to create a Section 9(a) relationship.

In Colorado Fire Sprinkler, the D.C. Circuit Court unanimously overturned the Board majority’s decision, making it clear that:

[U]nder Section 9(a), the rule is that the employees pick the union; the union does not pick the employees.  [T]he Board must demand clear evidence that the employees—not the union and not the employer—have independently chosen to transition away from a Section 8(f) pre-hire arrangement by affirmatively choosing a union as their Section 9(a) representative.  [T]he ‘proposition that contract language alone can establish the existence of a section 9(a) relationship runs roughshod over the principles’ of employee choice ‘established in’ Supreme Court precedent. Nova Plumbing, 330 F.3d at 536-537 (citing Garment Workers’ Union, 366 U.S. at 738-739).

The Court reasoned that:

[T]he Board’s reliance in this case on a mere offer of evidence in a form contract…would reduce the requirement of affirmative employee support to a word game controlled entirely by the union and employer.  Which is precisely what the law forbids.  [W]hile an employer and a union can get together to create a Section 8(f) pre-hire agreement, only the employees, through majority choice, can confer Section 9(a) status on a union….[T]he Board must identify something more than truth-challenged form language before it can confer exclusive bargaining rights on a union under Section 9(a).

Finally, the Court slapped the Board majority, finding the decision “arbitrary and capricious.”

By making demonstrably untrustworthy contractual language the be-all and end-all of Section 9(a) status, the Board adopted a rule of law that would leave in potentially ‘careless employer and union hands the power to completely frustrate employee realization of…freedom of choice and majority rule in employee selection of representatives.’  Garment Workers’ Union, 366 U.S. at 738-739.

While unions are certainly unhappy with this outcome, all true employee advocates should be thrilled. The decision forcefully reiterates that the central purpose of the NLRA is employee free choice, not entrenching incumbent unions lacking popular support among the employees they purport to represent. The decision is a judicial slap at the Obama Board’s repeated efforts to entrench unions at the expense of employee free choice. The decision will ensure that “the employees pick the union; the union does not pick the employees.”