Labor Relations and NLRB Decisions: 1996 - Present, THE RUPRECHT COMPANY and UNITE HERE LOCAL 1., 2018-19 CCH NLRB ¶16,469, National Labor Relations Board, (Aug 27, 2018)

From Text of Board's Decision

On May 13, 2016, Administrative Law Judge Joel P. Biblowitz issued the attached decision. The Respondent filed exceptions and a supporting brief. The General Counsel and the Charging Party each filed an answering brief, cross-exceptions, and a supporting brief. The Respondent filed reply briefs.

The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel.

The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings, [1] and conclusions and to adopt the recommended Order as modified and set forth in full below. [2]

I.

The Respondent is a meat processing company with a facility in Mundelein, Illinois. At all relevant times, the Union represented certain of the Respondent's production line employees at that facility for purposes of collective bargaining. The present case concerns the Respondent's alleged violations of Section 8(a)(5) and (1) of the National Labor Relations Act. Specifically, the judge found, and we agree, that the Respondent violated the Act by unilaterally transferring bargaining unit work to temporary employment agency employees, unilaterally enrolling in E-Verify, [3] dealing directly with bargaining-unit employees over severance pay and a general release of claims against the Respondent, and refusing to provide the Union with unredacted copies of letters from the U.S. Immigration and Custom Enforcement Agency, Homeland Security Investigations (HSI) identifying individual bargaining-unit employees with suspect employment documents.

Our colleague dissents from those findings in two respects. First, although he agrees that the Respondent violated the Act by unilaterally enrolling in E-Verify, he disagrees that the appropriate remedy for that violation is to require the Respondent, at the Union's request, to rescind its participation in E-Verify. Second, he disagrees that the Respondent unlawfully refused to provide the Union with unredacted copies of HSI letters concerning bargaining unit employees. We address each of these points below.

II.

Having found that the Respondent violated the Act by unilaterally enrolling in E-Verify, the judge ordered the Respondent to rescind its participation in that program at the Union's request. This recommended Order is fully consistent with Section 10(c) of the Act, [4] as well as Supreme Court precedent. [5]

Our dissenting colleague nevertheless maintains that a rescission remedy is unwarranted in this case because the Union subsequently executed a collective-bargaining agreement that included enrollment in E-Verify for new hires. [6] But the simple fact that the Union later agreed to E-Verify for new hires does not mean the Respondent's prior unilateral action caused no harm to the Union in negotiating this issue or to the collective-bargaining process overall. To the contrary, the Board has consistently recognized that an employer's unilateral action can seriously undermine a union's position with respect to the relevant issue, and that restoration of the status quo is necessary to ensure meaningful bargaining. [7] More specifically, the Board has recognized that, in the give-and-take of bargaining, a party presumably will make concessions in certain terms and conditions to achieve its objectives with respect to others, and that unilateral action can undermine that dynamic by disrupting the parties' natural incentives. [8]

The present case illustrates the point. The Respondent's unilateral action compromised the Union's ability, and the Respondent's incentive, to engage in that give-and-take process with respect to E-Verify by changing the starting point for bargaining. Once the Respondent enrolled in the program, it had the greater leverage. The Union was placed in the position of offering concessions to persuade the Respondent to restore the status quo and quit the program. The Union thus had far less bargaining leverage than it would have enjoyed had the Respondent sought the Union's agreement to enroll initially. Accordingly, we find it appropriate to exercise our remedial discretion to afford the Union an opportunity to revisit this issue, if it so desires.

Contrary to our dissenting colleague, we do not find that Essex Valley Visiting Nurses Assn., 343 NLRB 817 (2004), enfd. [ 127 LC ¶10,991] 14 F.3d 1258 (8th Cir. 1994), warrants a different result. In Essex Valley, the employer notified the union, approximately one month beforehand, that it was planning to transfer several registered nurses from in-house administrative positions to field nurse positions. Id. at 817. The parties bargained over the transfers, but the employer implemented them unilaterally, as planned. Id. at 817–818. Two months later, the union again requested to bargain over the transfers but the employer refused. Id. at 818–819. The Board found that the employer violated Section 8(a)(5) and (1) by unilaterally transferring the affected nurses. The Board acknowledged that the standard remedy for that violation would be to order the employer to rescind the unlawful transfers. Id. at 821. But the Board did not order rescission in “the particular circumstances” of the case—explaining that the parties had bargained over the matter and subsequently entered into a collective-bargaining agreement containing a management rights clause, privileging the employer to make the nurse transfers. Id.

The present case stands in marked contrast to Essex Valley. First, the Respondent here did not notify the Union about E-Verify or provide an opportunity to bargain until months after it had already enrolled in the program. Second, in Essex Valley the unlawful transfers were the only unfair labor practice found by the Board. By contrast, the Respondent here committed a series of Section 8(a)(5) violations that sidelined the Union and undermined its ability to represent employees during a critical time for all concerned—the inquiries from HSI and the prospect (ultimately realized) that many of the Respondent's workers would be discharged or forced to resign. In these circumstances, we are convinced that the policies of the Act are better served by requiring the Respondent to rescind its enrollment in E-Verify and bargain over that subject, if the Union so desires.

III.

Nor are we persuaded by our dissenting colleague's argument that the Respondent was entitled to withhold from the Union unredacted versions of correspondence from HSI regarding the employment status of unit employees. Instead, we find the Respondent's refusal to provide the Union with the unredacted correspondence was not justified under Board law, and further, directly prevented the Union from assisting unit employees.

The Respondent received a subpoena from HSI in January 2015, [9] requesting documents from its employment eligibility verification process. In May, the Respondent, without any notice to the Union, unilaterally started using temporary employees to do bargaining unit work and enrolled in E-Verify. After hearing concerns from unit employees about a potential HSI audit, the Union in June contacted the Respondent to discuss the issue. The Respondent later confirmed the HSI audit to the Union during a telephone call in early June.

On July 10, the Respondent received a letter from HSI that Immigration and Customs Enforcement (ICE) had apprehended eight of its employees whom it deemed unauthorized to work in the United States. When the Respondent notified the Union of the letter on July 13, the Union requested an unredacted copy, but the Respondent replied that it would discuss the Union's request at a previously scheduled July 16 bargaining session. In that same conversation, the Respondent informed the Union that discharges were imminent. [10]

During the July 16 bargaining session, the Respondent provided a copy of the July 10 letter with employees' names redacted. The Union again requested unredacted copies of the HSI correspondence, but the Respondent refused at least until it conferred with counsel. On July 17, the Respondent received another letter from HSI informing it that 194 of its employees did not appear to be authorized to work in the United States.

On July 21, the Union reiterated its demand for unredacted copies of letters from HSI. The Respondent informed the Union that the names of unit employees affected by the audit were confidential, and that it “need[ed] some assurances that this information w[ould] be treated with such confidentiality.” On July 22, before the Union had even replied to the Respondent's confidentiality request, the Respondent began discharging bargaining unit employees.

On July 23, the Union asked the Respondent what kind of confidentiality assurances it sought; on July 27, the Respondent requested that the Union sign a confidentiality agreement. However, it was not until August 5, two weeks after it began discharging employees, that the Respondent drafted a confidentiality agreement for the Union to review. The Union did not sign the confidentiality agreement and, to date, the Respondent has not provided the Union with unredacted copies of the letters.

The judge found, and we agree, that the Respondent violated Section 8(a)(5) and (1) of the Act by refusing to furnish the Union with unredacted copies of the requested correspondence from HSI. An employer has a statutory obligation to provide requested information that is potentially relevant to a union's fulfillment of its responsibilities as the employees' exclusive bargaining representative. NLRB v. Acme Industrial Co., [ 54 LC ¶11,639] 385 U.S. 432 (1967). Here, we agree with the judge that the names of those employees affected by the HSI investigation were relevant to the Union's representative duties. See, e.g., Mission Foods, 345 NLRB 788, 790 & 790 fn. 5 (2005) (finding presumptively relevant and ordering production of a list of employees disciplined, discharged, or laid off due to immigration status, among other things, to the extent not covered by the union's other requests). [11] Thus, the Respondent's refusal to provide the information requested by the Union was unlawful, unless the Respondent has established a valid defense.

The Respondent, now joined by our dissenting colleague, argues that confidentiality concerns privileged its redaction of employee names in the HSI letters, and that it met its statutory obligations by presenting the Union with a proposed confidentiality agreement. We disagree.

A party asserting confidentiality as a reason for withholding information bears the initial burden of establishing that the requested information is confidential. Menorah Medical Center, 362 NLRB No. 193 (2015), enfd. in relevant part 867 F.3d 1288, 1300 (D.C. Cir. 2017). Information will not be found “confidential” merely because a party has labeled it as such. Bud Antle Inc., 359 NLRB 1257, 1265 (2013) (claim of confidentiality rejected when no evidence offered in support), reaffirmed and incorporated by reference, 361 NLRB 873 (2014). Rather, the Board has limited “confidential information” to a few general categories. See generally Detroit Newspaper Agency, 317 NLRB 1071, 1073 (1995) (e.g., highly personal information, such as individual medical records; proprietary information, such as trade secrets; information that traditionally is privileged, such as attorney work product).

In the present case, we assume without deciding that the Respondent had a legitimate interest in keeping the names of individual employees with suspect employment documents confidential. [12] In the particular circumstances here, however, we find that the Respondent waived its confidentiality defense because it did not timely assert a confidentiality interest or propose a reasonable accommodation and engage in accommodation bargaining . Postal Service, 364 NLRB No. 27, slip op. at 2 (2016).

The sequence and timing of events demonstrate that the Respondent's assertion of confidentiality and proposal for a confidentiality agreement were too little, too late. The Respondent received HSI letters on July 10, 14, and 17, but did not assert that the information was confidential until July 21, despite the Union's multiple intervening requests for unredacted copies of the letters. The very next day—only one day after first demanding assurances of confidentiality from the Union—the Respondent began informing affected employees that they were being discharged. The Respondent thereby frustrated any opportunity the Union may have had to assist affected employees before the Respondent discharged them. Further, the Respondent did not deliver its actual confidentiality proposal to the Union until two weeks after it had discharged those employees. This delay only further hampered any ability the Union may have had to timely assist adversely affected employees. That sequence of events highlights both the time-sensitive nature of the Union's request and the untimeliness of the Respondent's actions. See, e.g., The Finley Hospital, [ 2014-15 CCH NLRB ¶15,988] 362 NLRB No. 102, slip op. at 8 (2015) (where union requested information bearing on employee's discharge, observing that “Time was of the essence,” and finding that employer's proposed accommodation was untimely where it was offered months after union's initial request and when union already was in midst of trying to assist employee achieve a resolution of her discharge), summarily enforced in relevant part 827 F.3d 720 (8th Cir. 2016).

Finally, we observe that the Board has long held that the party asserting confidentiality has the burden of proposing the accommodation. Postal Service, 364 NLRB No. 27, slip op. at 2 (2016), citing Borgess Medical Center, 342 NLRB 1105, 1106 (2014). Therefore, our dissenting colleague improperly shifts this burden by suggesting that the Union, if it really wanted the unredacted letters, “could have offered a confidentiality agreement to the Respondent any time after July 21, 2015.” As the party asserting the confidentiality interest, the Respondent had the responsibility to timely propose an accommodation, which it failed to do.

Amended Remedy

In addition to the remedies recommended by the judge, we shall order the Respondent to take the following affirmative action designed to effectuate the policies of the Act.

Having found that the Respondent violated Section 8(a)(5) and (1) of the Act by unilaterally transferring bargaining unit work to temporary employment agency employees on May 15, 2015, without prior notice to the Union or affording it an opportunity to bargain, we shall order the Respondent to make unit employees whole for any loss of earnings and other benefits suffered as a result of the unlawful unilateral transfer. Backpay shall be computed as in Ogle Protection Service, [ 1970 CCH NLRB ¶22,068] 183 NLRB 682 (1970), enfd. 444 F.2d 502 (6th Cir. 1971), plus interest as prescribed in New Horizons, [ 1986-87 CCH NLRB ¶18,750] 283 NLRB 1173 (1987), compounded daily as prescribed in Kentucky River Medical Center, [ 1950 CCH NLRB ¶2791.801] 356 NLRB 6 (2010). In addition, we shall order the Respondent to compensate unit employees for any adverse tax consequences of receiving a lump-sum backpay award and to file, within 21 days of the date the amount of backpay is fixed, either by agreement or Board order, a report with the Regional Director for Region 13 allocating the backpay awards to the appropriate calendar years for each employee. AdvoServ of New Jersey, Inc., [ 2016-17 CCH NLRB ¶16,120] 363 NLRB No. 143 (2016).

Having found that the Respondent violated Section 8(a)(5) and (1) of the Act by bypassing the Union and dealing directly with employees about the terms of the discharge and the severance pay to be paid to terminated employees, we shall order that, at the request of the Union, the Respondent negotiate over the terms of severance from employment.

Finally, in ordering the Respondent to provide the Union with unredacted copies of the letters the Respondent received from HSI, we observe that the Respondent does not contend in its exceptions or reply briefs that the Union has no present need for those unredacted letters.

ORDER

The National Labor Relations Board orders that the Respondent, The Ruprecht Company, Mundelein, Illinois, its officers, agents, successors, and assigns, shall:

1. Cease and desist from

(a) Failing and refusing to bargain with the Union, UNITE HERE Local 1, over its use of temporary employment agency employees without first notifying the Union and giving it an opportunity to bargain.

(b) Unilaterally changing the terms and conditions of its employees by enrolling in the E-Verify program without first notifying the Union and giving it an opportunity to bargain.

(c) Bypassing the Union and dealing directly with its employees over the terms of severance from employment.

(d) Failing and refusing to furnish the Union with requested information that is relevant to it as the collective-bargaining representative of certain of Respondent's employees.

(e) In any like or related manner, interfering with, restraining, or coercing employees in the exercise of their rights guaranteed by Section 7 of the Act.

2. Take the following affirmative action necessary to effectuate the policies of the Act.

(a) Before implementing any changes in wages, hours, or other terms and conditions of employment of unit employees, notify and, on request, bargain with the Union as the exclusive collective-bargaining representative of employees in the following bargaining unit:

All full-time and regular part-time Foreman, Head Processors, LineMen 1, LineMen 2, and Housemen but excluding office clerical employees, guards, professional employees and supervisors as defined in the Act.

(b) Make whole unit employees for any lost wages they may have suffered as a result of the Respondent's use of temporary employment agency employees, with interest, in the manner set forth in the remedy section of the judge's decision as amended in this decision.

(c) Preserve and, within 14 days of a request, or such additional time as the Regional Director may allow for good cause shown, provide at a reasonable place designated by the Board or its agents, all payroll records, social security payment records, timecards, personnel records and reports, and all other records, including an electronic copy of such records if stored in electronic form, necessary to analyze the amount of backpay due under the terms of this Order.

(d) Compensate employees for the adverse tax consequences, if any, of receiving a lump-sum backpay award, and file with the Regional Director for Region 13, within 21 days of the date the amount of backpay is fixed, either by agreement or Board order, a report allocating the backpay award to the appropriate calendar years for each employee.

(e) Upon request of the Union, rescind its participation in the E-Verify program and bargain in good faith with the Union regarding its participation in the program.

(f) Upon request of the Union, bargain in good faith with the Union regarding severance pay to be paid to terminated employees and any corresponding release of claims or confidentiality requirements.

(g) In a timely manner, furnish the Union with copies of the letters it received from United States Immigration and Customs Enforcement, Homeland Security Investigations (HSI), containing the names of unit employees whom HSI identified as having suspect employment documents or not being authorized to work in the United States, requested on July 13, 16, and 21, 2015.

(h) Within 14 days after service by the Region, post at its facility in Mundelein, Illinois, copies of the attached notice marked “Appendix.” [13] Copies of the notice, on forms provided by the Regional Director for Region 13, after being signed by the Respondent's authorized representative, shall be posted by the Respondent and maintained for 60 consecutive days in conspicuous places including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. If the Respondent has gone out of business or closed the facility involved in these proceedings, the Respondent shall duplicate and mail, at its own expense, a copy of the notice to all current employees and former employees employed by the Respondent at any time since May 13, 2015.

(i) Within 21 days after service by the Region, file with the Regional Director for Region 13 a sworn certification of a responsible official on a form provided by the Region attesting to the steps that the Respondent has taken to comply.

Dated, Washington, D.C. August 27, 2018

(Seal) National Labor Relations Board

Member Emanuel, concurring in part and dissenting in part.

I agree with my colleagues that the Respondent violated Section 8(a)(5) and (1) of the National Labor Relations Act (NLRA or Act) by transferring bargaining-unit work to temporary employees without giving the Union notice and an opportunity to request bargaining [14] and by dealing directly with employees regarding severance pay. I also agree with my colleagues that the Respondent violated Section 8(a)(5) and (1) of the Act by unilaterally enrolling in E-Verify. However, for the reasons stated below, I disagree with the remedies my colleagues order for that violation. Finally, I disagree with my colleagues that the Respondent violated Section 8(a)(5) and (1) of the Act by refusing, absent a confidentiality agreement, to provide the Union with unredacted copies of letters that the Respondent received from U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI) listing the names of employees who “appear, at the present time, not to be authorized to work in the United States.”

1. E-Verify. My colleagues require the Respondent to “rescind its participation in the E-Verify program and bargain in good faith with the Union regarding its participation in the program.” However, after the Respondent unilaterally enrolled in E-Verify, it bargained with the Union regarding E-Verify during negotiations for a new collective-bargaining agreement. On October 22, 2015, the Union agreed to the Respondent's proposal giving the Respondent the right to use E-Verify for new hires, and the collective-bargaining agreement that the Union ratified on February 24, 2016, gives the Respondent this right. Although rescission and bargaining are typical remedies when an employer has changed an employment term without giving the union notice and opportunity to request bargaining, these are not appropriate remedies when the parties subsequently bargain over and come to an agreement regarding the subject of the unilateral change. See Essex Valley Visiting Nurses Assn., 343 NLRB 817, 821, 843–844 (2004) (finding that the standard remedies of rescission and bargaining were inappropriate where, after the employer unilaterally transferred nurses in violation of Section 8(a)(5), the parties entered into a collective-bargaining agreement containing a management-rights clause that privileged the employer to transfer nurses unilaterally), enfd. [ 127 LC ¶10,991] 14 F.3d 1258 (8th Cir. 1994). [15]

2. Redacted HSI Letters. I also disagree that the Respondent violated the Act by failing to provide the Union with unredacted letters from HSI. In mid-July 2015, the Respondent received letters from HSI listing employees who had suspect work-authorization documents, informing the Respondent that HSI will consider the listed employees to be unauthorized to work in the United States unless the employees present valid documents, and warning the Respondent that continuing to employ “unauthorized aliens” would result in fines and other penalties. The Union requested copies of the letters, and the Respondent provided them with employees' names redacted. The Union objected to the redaction. In response, the Respondent agreed to provide the unredacted letters if the Union signed a confidentiality agreement. At the Union's request, the Respondent drafted a confidentiality agreement and gave it to the Union for its review. The Union never signed a confidentiality agreement.

Contrary to my colleagues, I believe that the Respondent acted lawfully when it refused to furnish unredacted copies of the letters unless the Union signed a confidentiality agreement. The HSI letters named employees who “appear, at the present time, not to be authorized to work in the United States.” The Respondent's interest in protecting the confidentiality of such sensitive information is apparent, and its actions appear to be taken on behalf of employees' privacy rather than self-interest or obstruction of the Union's bargaining duties.

Nor did the Respondent waive its confidentiality defense, as my colleagues assert. The Respondent's assertion of confidentiality came only 8 days after the Union's initial request for the names of affected employees in the first HSI letter the Respondent received. In the meantime, the Respondent informed the Union that it wanted an opportunity to confer with its counsel, and it received two more HSI letters naming almost 200 additional employees. Given the seriousness and scope of the issue and the extremely condensed timeframe in this case, the Respondent's assertion of confidentiality was timely. Furthermore, the Respondent timely proposed a reasonable accommodation by requesting that the Union sign a confidentiality agreement. The agreement would have resulted in the Union obtaining the information while also fully addressing the Respondent's confidentiality concerns. Although the Respondent did not deliver its confidentiality agreement until 2 weeks after discharging the affected employees, I disagree with my colleagues' finding that the Respondent's offer was untimely. In my view, a 2-week delay is not so great that it would have prevented the Union from assisting employees who were eligible for official work authorization documents. Further, once the Respondent supplied the draft confidentiality agreement, the Union never signed it, and the stipulated record does not indicate that the Union ever engaged in further bargaining regarding the proposed agreement. Finally, although not required by Board law, if the Union wanted the unredacted letters sooner, it could have offered a confidentiality agreement to the Respondent any time after July 21, 2015, when the Respondent first asked for assurances of confidentiality. [16] Accordingly, I would reverse the judge's finding that the Respondent violated Section 8(a)(5) and (1) of the Act by declining to furnish the Union the unredacted letters absent an executed confidentiality agreement.

Accordingly, as set forth above, I respectfully concur in part and dissent in part.

Dated, Washington, D.C. August 27, 2018

National Labor Relations Board

APPENDIX

Notice to Employees Posted by Order of the National Labor Relations Board

An Agency of the United States Government

The National Labor Relations Board has found that we violated Federal labor law and has ordered us to post and obey this notice.

FEDERAL LAW GIVES YOU THE RIGHT TO

Form, join, or assist a union

Choose representatives to bargain with us on your behalf

Act together with other employees for your benefit and protection

Choose not to engage in any of these protected activities.

We Will Not fail or refuse to bargain with the Union, UNITE HERE Local 1, over our use of temporary employment agency employees without first notifying the Union and giving it an opportunity to bargain.

We Will Not unilaterally change the terms and conditions of our employees without first notifying the Union and giving it an opportunity to bargain.

We Will Not bypass the Union or deal directly with our employees over the terms of severance from employment.

We Will Not fail or refuse to furnish the Union with requested information that is relevant to it as your collective-bargaining representative.

We Will Not in any like or related manner, interfere with, restrain, or coerce you in the exercise of the rights listed above.

We Will, before implementing any changes in wages, hours, or other terms and conditions of employment of unit employees, notify and, on request, bargain with the Union as the exclusive collective-bargaining representative of employees in the following bargaining unit:

All full-time and regular part-time Foreman, Head Processors, LineMen 1, LineMen 2, and Housemen but excluding office clerical employees, guards, professional employees and supervisors as defined in the Act.

We Will make you whole for any lost wages you may have suffered as a result of our use of temporary employment agency employees, with interest.

We Will compensate you, with interest, for the adverse tax consequences, if any, of receiving a lump-sum backpay award, and We Will file with the Regional Director for Region 13, within 21 days of the date the amount of backpay is fixed, either by agreement or Board order, a report allocating the backpay award to the appropriate calendar years for each of you.

We Will, upon the request of the Union, withdraw from participating in E-Verify and We Will bargain in good faith with the Union about participating in this program.

We Will, upon the request of the Union, bargain in good faith with the Union over severance pay to be paid to terminated employees.

We Will, in a timely manner, furnish the Union with copies of the letters we received from United States Immigration and Customs Enforcement, Homeland Security Investigations (HSI), containing the names of unit employees whom HSI identified as having suspect employment documents or not being authorized to work in the United States, requested on July 13, 16, and 21, 2015.

The Ruprecht Company

The Administrative Law Judge's decision can be found at www.nlrb.gov/case/13-CA-155048 or by using the QR code below. Alternatively, you can obtain a copy of the decision from the Executive Secretary, National Labor Relations Board, 1015 Half Street, S.E., Washington, D.C. 20570, or by calling (202) 273-1940.

Daniel Murphy, Esq. and Timothy Koch, Esq., for the General Counsel.

Ronald Mason, Esq. (Mason Law Firm Co., L.P.A.), counsel for the Respondent.

Kristin Martin, Esq. (Davis, Cowell & Bowe, LLP), counsel for the Charging Party.