In September 2018, the National Labor Relations Board (NLRB or Board) issued a notice in Loshaw Thermal Tech.,1 inviting interested persons to file briefs concerning whether it should revisit its holding in Staunton Fuel & Material, Inc. dba Cent. Illinois Constr.2
The NLRB essentially asked whether the Staunton decision – which made it easier for unions to establish a Section 9(a) relationship under the National Labor Relations Act (Act) – should be reconsidered.
On Oct. 5, 2018, however, the Board suspended its invitation to submit briefs, based on the charging union in the Loshaw case withdrawing the underlying charge in the matter. In the days since, the Board has not indicated what it intends to do with the Loshaw case, much less how (if at all) it intends to deal with the Staunton precedent.
But with the case in the news, a brief primer remains in order to explain Staunton’s significance.
The Act, the Construction Industry Exception, and the Staunton Holding
Bargaining relationships are generally governed by Section 9(a) of the Act, which requires a union to have the support of a majority of the employees in the bargaining unit.
This support is demonstrated by a NLRB-certified election or an employer’s voluntary grant of union recognition based on the union’s demonstration of support by a majority of employees in the bargaining unit (e.g., by presenting the employer with a certain number of authorization cards). In most industries, it is an unfair labor practice for an employer and a union to enter into a collective bargaining agreement (CBA) without such a showing of majority support.
There is an exception when it comes to the construction industry, however. There, bargaining relationships are presumed to be governed by Section 8(f) of the Act, not by Section 9(a). Section 8(f) permits an employer and a union to enter a pre-hire agreement – i.e., a CBA signed without the union having been certified through an NLRB election or demonstrating majority support.
In other words, Section 8(f) does not require the union to have the support of a majority of the bargaining unit employees before entering a CBA with an employer.
Announced in 1959, this “construction industry exception” recognizes that construction industry employers often work in various different locations at the same time, with constantly fluctuating workforce sizes. In such settings, it is all but impossible to gauge an employer’s number of employees, much less whether a majority of them supports representation by a union.
Accordingly, the construction industry exception deals with this problem. Unlike a Section 9(a) agreement, a construction contractor can sign a Section 8(f) pre-hire agreement even before it actually employs anyone.
In 2001, the Staunton decision announced an exception to the construction industry exception. There, the NLRB ruled that the construction industry’s Section 8(f) presumption can be overcome – and a Section 9(a) relationship can be established – simply via language in a CBA.
Specifically, a Section 9(a) relationship will be recognized where a CBA’s language explicitly states three things:
1) that the union requested recognition as the majority representative of the bargaining unit employees;
2) that the employer granted that recognition; and
3) that the employer’s recognition was based on the union having shown, or having offered to show, evidence of its majority support.
In summary, a CBA in the construction industry is presumed to be a Section 8(f) pre-hire relationship. But if the union and the employer want to establish a Section 9(a) relationship, then they can do so by commemorating it in the CBA.
Why 9(a) versus 8(f) Matters
There are a couple big reasons why the Section 9(a) versus Section 8(f) distinction matters.
First, there is no duty to renegotiate a Section 8(f) pre-hire agreement upon its expiration. In other words, either the union or the employer can simply walk away once the agreement expires. If an employer chooses to do so, it simply becomes a non-union contractor. Or, it can sign a Section 8(f) agreement with another union.
On the other hand, a Section 9(a) agreement imposes a duty on both parties to renegotiate the CBA upon its expiration. The employer must continue to recognize the union, and the union must continue to represent the employees.
Second, a Section 8(f) agreement does not bar a petition for representation by a rival union. A Section 9(a) agreement does. As a result, a rival union could file a petition for an election at any time during the term of the Section 8(f) CBA. If the rival union wins, the employer can no longer give effect to its Section 8(f) agreement. For a union seeking to overtake jurisdiction for work being done by a rival union covered by a Section 8(f) agreement, this could be advantageous.
What Is at Stake if Staunton is Overturned
By inviting people to weigh in on whether Staunton should be revisited, the NLRB seems to be indicating that it’s mulling a reversal of its past precedent. If the NLRB goes so far as to get rid of Staunton’s “exception to the exception,” this could have a few impacts on the world of collective bargaining in the construction industry.
For one, new construction industry CBAs will almost always be governed by Section 8(f), as voluntary Section 9(a) recognitions will not be available. And for those existing CBAs that were granted Section 9(a) status by the Staunton exception, plenty of litigation (and elections) will follow, should the NLRB announce that such previous grants will not be recognized going forward.
Second, there could be an uptick in unions attempting to “raid” rival unions. Simply put, if more CBAs are Section 8(f) agreements, then there will be nothing to stop rival unions from filing petitions for elections in those areas. An uptick in union-on-union competition would almost certainly occur.
Third, there will likely be an increase in employers simply walking away from unions at the expiration of these Section 8(f) agreements. While there are other considerations that employers must make when determining whether to go non-union (e.g., how much withdrawal liability will they incur from the union pension fund, where will they get their manpower, etc.), the duty to renegotiate a CBA will not be one of them.
More to Come
Briefs concerning the Staunton holding were originally due to the NLRB on Oct. 26.
On Oct. 5, as those briefs were beginning to trickle in, the union in the Loshaw case withdrew its underlying charge. This prompted the NLRB to suspend the submittal of Staunton briefs.
It will be interesting to see how this matter develops, and what the Board’s ultimate determination – if any – means for the industry.
1 LLC 05-CA-158650
2 335 NLRB 717 (2001)