Hearing needed as to whether union steered jobs to employees in attempt to influence election

By Ronald Miller, J.D.

An employer’s allegations that a union steered higher-paying jobs to voting employees in the time period immediately preceding a representation election could plausibly be seen as an economic inducement to secure votes in favor of the union, and warrant an evidentiary hearing, ruled the Seventh Circuit. In this instance, the employer used its own employment records to compare the likelihood of nonunion members receiving union jobs before the critical period to what appeared to be a dramatic increase in the availability of union jobs during the critical period. It also identified three individuals who could provide further detail about how the referrals were given and which specific employees had received union work. Finding that the employer presented enough evidence to warrant a hearing on the validity of the election results, the appeals court denied enforcement and remanded for an evidentiary hearing (Jam Productions, Ltd. v. NLRB, June 28, 2018, Rovner, I.).

Jam Productions produces concerts, shows, and events at various venues around Chicago. It hired part-time and nonunion stagehands to unload lighting and sound equipment into venues, set it up, maintain it, take it down, and move it out of the venue after the show. Given the irregular schedule of shows, none of the stagehands were employed full time and their employment was generally sporadic.

In September 2015, the union filed an election petition to represent Jam’s employees. On September 30, the employer and union entered into a stipulated election agreement for a bargaining unit of stagehands. However, the day after the parties signed the election agreement, the representation petition was held in abeyance pending the investigation of an unfair labor practice charge filed by the union. The charge was based on the employer’s termination of a crew leader and the 53 employees he supervised. The charge was not resolved until April 6, 2016, when a regional director approved an agreement providing the employer would reinstate the employees by offering immediate and full participation on its “on-call list.”

Ballot challenges. Following resolution of the ULP charge, the election was held on May 16, 2016. Prior to the election, the employer asked the regional director to move the eligibility date of the election back two weeks on account of the seven-month election delay. The regional director did not respond, so the employer included on its voter eligibility list five stagehands hired in the two-week period after the agreed upon October 4, 2015 date. The union prevailed in the election by a vote of 22–10, with 21 ballots challenged. Eight challenges were uncontested, leaving 13 contested ballots. Five of those ballots were cast by employees hired in the two weeks following the stipulated eligibility date.

The employer also filed objections to the election results on the grounds that the union unlawfully provided economic benefits to employees during the critical period preceding the election. Specifically, the employer alleged that the union provided its employees premium, higher-paid work at union venues in the weeks before the election in an attempt to influence employees to vote union.

Refusal to bargain. Following an investigation, the regional director concluded that the employer’s offer of proof in support of its objection fell short of demonstrating “substantial and material factual issues” that would warrant setting aside the election. The NLRB declined the employer’s request for review and affirmed the regional director’s report certifying the union. Thereafter, the employer refused to bargain with the union, and the General Counsel filed an unfair labor practice charge. The Board rejected the employer’s affirmative defenses and found that the employer violated Section 8(a)(5) of the Act.

The employer petitioned for review of the Board’s order and the Board cross-applied for its enforcement. The central issue on appeal is whether the Board reasonably certified the union as bargaining representative.

Union certification. On appeal, the employer challenged the Board’s determination that union work given to employees preceding the election did not make the election unfair. According to the employer, the union engaged in a concerted effort to steer high-paying union jobs to the 21 voting members who had been recently reinstated (whose votes made up a majority of the counted votes). The employer submitted an offer of proof outlining multiple instances in the period before the election when the union chose a reinstated employee to work shows that would have ordinarily been staffed by other union members. It also offered its own records showing that when the union supplied stagehands outside the critical period, it did not hire nonunion employees.

The employer also sought employment records from the union for the 21 reinstated employees to demonstrate that it was unusual for them to have received union jobs. However, the union refused to provide any of the requested records and the regional director declined to interview any of the individuals identified by the employer. The Seventh Circuit concluded that the employer presented enough evidence to obtain an evidentiary hearing, and that the Board abused its discretion by failing to hold one.

Election fairness tainted. In considering whether a particular incentive taints the fairness of an election, the appeals court asks whether what was offered was “sufficiently valuable and desirable in the eyes of the person to whom they were offered, to have the potential to influence that person’s vote.” The financial benefit of the higher-paying jobs immediately preceding the election could plausibly be seen as an economic inducement to secure votes in favor of the union, concluded the court.

Here, the employer provided more than vague, unsubstantiated accusations. It used its own employment records to compare the likelihood of nonunion members receiving union jobs before the critical period to what appeared a dramatic increase in the availability of union jobs during the critical period. It also identified three individuals who could provide further detail about how the referrals were given and which specific employees had received union work. The whole purpose of the evidentiary hearing was to inquire into whether the employer’s allegations were meritorious. Because the regional director declined to interview individuals identified by the employer, it had no way of knowing if the nonunion employees ordinarily received union job offers outside the critical period. As a consequence, the appeals court granted the employer’s petition for review and remand for a hearing on its election objection, and denied the Board’s cross-application for enforcement.

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