UNIVERSITY OF PUGET SOUND LAW REVIEWVolume 9, No. 3SPRING 1986
Should Representation Elections Be Governed By Principles Or Expediency?
Mary Ellen Krug and Michele A. Gammer(fn*) (fn**)
I. Introduction
Should the National Labor Relations Board(fn1) set aside representation elections because one or more parties has tried to influence the voting with misrepresentation of facts or law? Although the Board is responsible for ensuring fair elections, in Midland National Life Insurance Co. it embraced a rule inconsistent with this statutory responsibility,(fn2) rejecting the Hollywood Ceramics Co.(fn3) rule and narrowly limiting Board review of campaign misrepresentations.(fn4)
This Article examines the Midland standard in light of the Board's statutory duty to protect the right of employees to a free and fair choice of collective bargaining representatives. The Article reviews the historical development of the Board's approach to the regulation of election campaign misrepresentations, criticizes the Board's abnegation of its duty to ensure an employee's free choice by its adoption of the Midland rule, and suggests a more flexible standard to be used in the review of campaign misrepresentations that would protect the rights of employees without involving the Board in the minutiae of representative election campaigning.
II. Evolution of the Law on Pre-election Misrepresentation
A. Representation Elections Generally
Employees, labor organizations, and employers may file representation petitions to determine whether a labor organization is entitled to recognition for purposes of collective bargaining.(fn5) The Board has charged its regional directors with processing and investigating these petitions.(fn6) The regional director determines in the first instance whether the Board has jurisdiction over the representation matter,(fn7) whether the petitioner's showing of interest is sufficient, and whether the bargaining unit is appropriate.(fn8) When these determinations so indicate, the regional director directs that an election be conducted by secret ballot.(fn9)
Within five days after the election, a party may file postelection objections with the regional director.(fn10) When such objections are filed, the regional director investigates the circumstances of the election, usually without a hearing,(fn11) and issues a report and recommendation to the Board, which makes the final determination.(fn12) If the Board sustains an objection to an election, a new election is ordered. If the objections are overruled, the Board certifies the results of the election.(fn13)
Representation proceedings are not directly reviewable by the courts.(fn14) An employer may challenge the fairness of an election only by refusing to bargain with a victorious union and then contesting the election's validity in unfair labor practice proceedings.(fn15) The union also may challenge the validity of an election in unfair labor practice proceedings.(fn16)
B. The Board's Early Approach to Campaign Misrepresentations
After the passage of the National Labor Relations Act (NLRA),(fn17) the Board undertook a case-by-case adjudication of the effects of campaign misrepresentations on election results.(fn18) The Board generally left evaluation of propaganda to the good sense of employees; "[e]xaggerations, inaccuracies, partial truths, name-calling, and falsehoods, while not condoned, [were] excused as legitimate propaganda, provided they [were] not 'so misleading' as to prevent the exercise of a free choice by employees in selecting their bargaining representative."(fn19) When the challenged misrepresentations lowered campaign standards to such a degree that the uninhibited desires of the employees could not be determined in the election, the Board exercised its corrective authority and set aside the election.(fn20)
C. The Hollywood Ceramics Rule
In Hollywood Ceramics Co.,(fn21) on the afternoon before the election at issue, the union had distributed handbills printed in both English and Spanish. Approximately one-third of the employees could understand only Spanish. The handbills contained a table that purported to compare the employer's wage rates with wage rates at unionized plants. In its comparison, the union had failed to include the employer's incentive plan, while the hourly rates listed at union plants included at least a thirty percent incentive payment.(fn22) The only mention of incentive payments was a single sentence in English, at the end of the wage table, that read: "These rates are on Incentive System with an average employee making 20 percent or more wages."(fn23) The union won the election and the employer filed objections, arguing that the publication of the handbill containing false wage data immediately prior to the election warranted setting the election aside.(fn24) The regional director recommended that the objections be overruled.(fn25)
In reviewing the employer's objections, the Board weighed "the right of the employees to an untrammelled choice" against "the right of the parties to wage a free and vigorous campaign with all the normal, legitimate tools of electioneering."(fn26) The Board held that an election should be set aside when the misrepresentation:
1. is a substantial departure from the truth;
2. is made at a time which prevents the other party from making an effective reply;
3. whether deliberate or not, may reasonably be expected to have a significant impact on the election; and
4. has been made by a party who has intimate knowledge of the subject matter, so that the employees the party sought to persuade may be expected to attach added significance to its assertion.(fn27)
The mere fact that a statement has been
inartistically or vaguely worded and subject to different interpretations would
not suffice to establish misrepresentation.(fn28)
Applying this test to the facts before it, the Board concluded that the union handbill conveyed a substantially erroneous picture of the comparative wage situation, pertained to a matter of utmost concern to employees, and was timed so as to prevent any reply.(fn29) Consequently, the election had to be set aside.(fn30)
The Hollywood Ceramics rule recognizes that elections must allow the parties the opportunity to campaign vigorously.(fn31) In adopting the rule, the Board enunciated a realistic standard. It did not insist on absolute purity of word and deed; the rule's purpose was to maintain an atmosphere conducive to the exercise of employee free choice.(fn32)
Although the Hollywood Ceramics rule has been applied to a myriad of fact patterns, it has yielded consistent results with respect to campaign misrepresentations of wages and benefits. For example, in Thiem Industries, Inc. v. NLRB,(fn33) the Ninth Circuit employed the Hollywood Ceramics rule and set aside an election where at the last moment prior to the election, the union had distributed a bulletin containing false information about wage rates.(fn34) The bulletin represented the percentage of wage increases secured by the union through settlement in six other industries. It unequivocally asserted that the cited increases went to union members and that the union was responsible for achieving the increases.(fn35) As a matter of fact, the union's claim was false in five out of the six cited industry settlements.(fn36) Emphasizing that wage rate issues are of particular importance to employees and that the union reasonably is expected to have special knowledge about union benefits, the court found the misrepresentation to be substantial and to have been made at a time when no effective reply was possible.(fn37)
Similarly, in Graphic Arts Finishing Co. v. NLRB,(fn38) the Fourth Circuit set aside a close election(fn39) when the union grossly misrepresented the wages paid in unionized companies and the strike benefits paid to union members of another company.(fn40) Twenty-four hours prior to the election, the union issued two circulars that pointed out the many benefits that would attend unionization. One circular listed wage rates for various classifications but did not identify the companies paying such rates. The evidence later established that none of the unionized companies in the employer's locale paid these rates and benefits.(fn41) The second circular stated that $100,000 had been paid to union members who went on strike at another company and that "[n]ot one person lost a thing."(fn42) In fact, that company's employees had lost $600,000 in wages as a result of that strike.(fn43) Applying Hollywood Ceramics, the court held that both circulars constituted substantial misrepresentations about matters of paramount importance to employees, noting that the party making the statements was in the best position to know the truth.(fn44)
In NLRB v. Snokist Growers, Inc.,(fn45) the Ninth Circuit set aside a Board certification where the vote was 314 to 310 in favor of the union.(fn46) A substantial proportion of the employees in Snokist were seasonal workers. The most controversial issue in the election was the amount of past service due that seasonal workers could expect under the union's pension plan.(fn47) The union misrepresented the amount of past service credit to which seasonal employees would be entitled, and the employer was unable to reply both because of the shortness...
