In its recent decision in Jones Plastic & Engineering Co., the National Labor Relations Board ("NLRB") confirmed that designating an employee as "at-will" does not change his status as a permanent replacement for a striking union worker.

Employers May Permanently Replace Economic Strikers

It is well established law that economic strikers (those on strike over terms and conditions of employment — rather than over unfair labor practices) who offer to return to work without conditions are entitled to immediate reinstatement, unless the employer can show a legitimate and substantial business justification for refusing to reinstate the former strikers. One acceptable business justification is where an employer has permanently replaced the former striker so it can continue its operations during a strike. The employer bears the burden of proving that the replacement worker is "permanent."

An At-Will Relationship Does Not Impact Replacement Status

The NLRB found that Jones Plastic's at-will disclaimers in its standard application form and handbook did not undermine the replacements' permanent nature. Even though the standard application form specified that "employment is for no definite period and may ... be terminated at any time without any previous notice," and the employee handbook and a form signed by replacement workers contained similar disclosures, they could still be "permanent."

The NLRB reiterated that "'permanent replacement' connotes a replacement who will not be displaced by returning strikers when the strike is over." In contrast, an at-will disclaimer "merely serves as a reminder to the replacement employees of the existing right under state law to terminate any employee with or without cause." Such disclaimers are not inconsistent with, nor do they detract from, an otherwise valid showing of permanent replacement status. The NLRB went on to find that the Jones Plastic workers were permanent replacements because: (1) the employer issued forms stating that the workers were permanent replacements (albeit at-will) for the striking employees, and many of the forms identified the specific striker that the new hire was replacing, (2) the employer sent a notice to the strikers that it had begun hiring permanent replacements, and that they risked permanent replacement if they did not return to work, and (3) the human resources manager told at least one replacement that he was a permanent employee.

The Impact of the Jones Plastic Decision

The NLRB's ruling supports employers' use of standard at-will disclaimers with replacement workers, without jeopardizing the permanent status of the replacements. As always, even where an employer hires permanent replacements, it is still required to put the replaced strikers who offer to return without conditions on a preferential recall list.

In a highly anticipated ruling, in Dana Corporation, the National Labor Relations Board ("NLRB") altered its rules regarding an employer's voluntary recognition of a union based on a card check majority. In the past, such voluntary recognition precluded employees and rival unions from filing decertification petitions for a "reasonable time" — sometimes up to a year. Under the new rule set forth in Dana, a decertification petition may be filed within 45 days of the employer's voluntary recognition, provided the petition is supported by at least 30% of the employees in the bargaining unit.

The Voluntary Recognition Bar Had Applied Immediately

The basic premise of voluntary recognition has not changed — an employer is permitted to voluntarily recognize a union that has secured signed authorization cards from more than 50% of the employees in the proposed bargaining unit. However, the Dana decision changes the effect of this voluntary recognition.

Prior to the NLRB's ruling in Dana, an employer's voluntary recognition of a union (upon a proper showing of authorization cards) immediately prohibited rival unions or members of the bargaining unit from attempting to remove the union — through the filing of a decertification petition — for a "reasonable time." This was known as the "voluntary recognition bar." Although the definition of a "reasonable time" varied depending of the circumstances of a case, the NLRB had found a period of about a year to be reasonable. The voluntary recognition bar took effect immediately upon the employer's agreement to voluntarily recognize the union. Moreover, if the employer and the union executed a collective bargaining agreement during that "reasonable time," a rival union or bargaining unit member could not file a decertification petition for three years — known as the "contract bar."

The Impact of the Voluntary Recognition Bar is Delayed by Forty-Five Days

As a result of the NLRB's recent ruling, the voluntary recognition bar now does not take effect until 45 days after the bargaining unit employees receive notice of the union recognition. The employer and/or the union are required to provide notice to all bargaining unit employees of the recognition and of their right to file a decertification petition or to support a rival union's decertification petition within the 45-day period. If such a decertification petition is filed within the 45 days, and the petition has the support of at least 30% of the unit members, the decertification petition will be processed. If no decertification petition is filed during the 45 days, the voluntary recognition bar will then take effect.

Similarly, the three year contract bar doctrine will not take effect until after the same 45-day period, so that any collective bargaining agreement reached during the 45-day period will not preclude a decertification petition until after the 45 days has passed.

Elections are the More Favored Method for Resolving Representation Issues

In explaining its modification of the voluntary recognition bar, the NLRB reiterated that Board-sponsored elections are the preferred method for resolving questions concerning employee representation. The NLRB outlined four primary reasons why authorization cards are "inferior to the election process": (1) unlike secret ballot elections, authorization cards are typically signed in front of others — including union organizers — and are therefore less reliable because the employee's decision is subject to group pressures, (2) union card-check campaigns have been accompanied by misinformation and/or a lack of information about employees' options, (3) unlike Board-sponsored elections which provide employee preference at a moment in time, authorization cards are signed over an extended period, sometimes over a year, "and employees can and do change their minds about union representation," and (4) the NLRB is authorized to invalidate elections that are conducted under improper conditions.

The Impact of the NLRB's Ruling

As a result of the NLRB's decision in Dana, employers who wish to voluntarily recognize a union upon receipt of a majority of signed authorization cards need to provide proper notice to the potential bargaining unit members (and to the NLRB). However, the advantages of doing so (most notably the ability to avoid the time and expense of a Board-sponsored election) might be diminished if a proper decertification petition is filed during the 45 day period — resulting in a Board-sponsored election.

As of January 1, 2008, Illinois employees will have the option of proceeding in state court following a complaint to the Illinois Department of Human Rights ("IDHR"). Prior to recent amendments to the Illinois Human Rights Act ("IHRA"), employees had no right to a private action alleging a violation of the IHRA. Instead, they were limited to administrative remedies before the Illinois Human Rights Commission ("IHRC"). However, as of January 1, 2008, once the IDHR issues its determination, or if the IDHR fails to issue a determination within a year, the complaining employee will have the option of proceeding before the IHRC or filing a complaint in state court. If the employee does so, the IDHR will be required to immediately stop its investigation and dismiss the charge. If the employee opts to proceed in court, the amendments provide for a jury trial. These changes apply to charges filed with the IDHR on or after January 1, 2008; currently pending charges are not affected.