Employers have been privileged to withdraw recognition of a union when presented with objective evidence that the union has lost majority support of employees, but have faced significant legal risks in doing so under NLRB precedent.  Some of this legal risk has been mitigated by the NLRB’s decision in Johnson Controls, Inc., 368 NLRB No. 20 (July 3, 2019).  This decision not only clarifies some aspects of the law in this area, but also presents a new framework for addressing the issue of “anticipatory withdrawal” of recognition by an employer.Management & Labor Report - A Fox Rothschild Blog

The law surrounding withdrawal of recognition can be highly fact dependent.  One major issue of concern is whether the employees who are expressing discontent against their union are covered by a current collective bargaining agreement (“CBA”).  The law for decades has been that an employer cannot withdraw recognition of a union during the term of a CBA because, while a CBA is in effect, the union enjoys an irrebuttable presumption of majority support.  This means that even if a majority of employees do not actually support the union, their employer cannot cease recognizing the union as their bargaining agent.  While this rule is supported by lofty goal of maintaining stability in economic relations, it can thwart the will of employees who, for various reasons, desire to oust their union.  It also places employers in the precarious position of recognizing a union that may not enjoy the support of a majority of employees.

The tension between stable economic relationships and majority will of employees was eased to some extent by the NLRB’s “anticipatory withdrawal” doctrine.  This rule allows an employer to announce, near the time of contract expiration, that it would withdraw recognition at the end of an existing CBA if it received objective evidence, usually in the form of a petition from employees, that they no longer supported the union.  Before the decision in Johnson Controls, Inc., anticipatory withdrawal allowed the employer to continue to recognize the union and honor the CBA until the term ran out, while making it clear that it will no longer do so after the CBA expired, therefore supporting the twin goals of stability and employee majority will.

The “anticipatory withdrawal” doctrine, however, had its faults.  One major fault was that, after employees presented the employer with evidence of lack of majority support, the union could “re-organize” the employees and regain the support of a majority of employees.  Once the union regained a majority, which was often done without employer knowledge, the employer would be facing legal risk by carrying out its plan to withdraw recognition.  For example, if there was an employee petition expressing lack of majority support, those who had signed the petition given to the employer could, in secret, sign a new union authorization card and renege on their expression of lack of union support.  The NLRB had held that the “last in time” rule governed this process, so that the employer acted at its peril in withdrawing recognition from the union without specific knowledge that some employees may have changed their minds.

Johnson Controls remedies the “last in time” problem by allowing an employer to anticipatorily withdraw recognition based on objective evidence that the union has lost majority support of employees without worrying about whether the union will reacquire majority support.  Once the employer anticipatorily withdraws, the union must file an election petition to formally regain authorization from the employees.  The ruling sets a 45-day deadline for the union to file the election petition, which begins on the date on which the employer announces anticipatory withdrawal of recognition.

Johnson Controls also clarified the rule by defining the “reasonable” time period to announce anticipatory withdrawal.  Prior to this ruling, NLRB precedent allowed for anticipatory withdrawal if the employer received evidence of loss of majority support within a “reasonable time” before the expiration of a CBA.  The decision expressly marks the timeline as 90 days before expiration.  The NLRB noted that this timeline aligns with the usual time period for filing decertification and rival union election petition between 90 and 60 days prior to contract expiration.

Finally, the NLRB provided several clear explanations for some implications of its ruling.  First, it reiterated, based on precedent, that the employer’s anticipatory withdrawal must be based on objective and untainted (no employer support) evidence that actually demonstrates loss of majority support.  If the union did not actually lose majority support, the employer cannot rely on a reasonable or good faith belief that the union lost the support of employees.  Johnson Controls does not change this rule.  Second, the NLRB warned employers that making unilateral changes to working conditions following anticipatory withdrawal and contract expiration may have consequences, depending on the circumstances.  Essentially, unilateral changes may constitute objectionable conduct for purpose of an election, if the union files a petition to regain support within 45 days of the anticipatory withdrawal, or could constitute unlawful unilateral changes if the union prevails in such an election.  If the union does prevail in the election, then the changes would only be unlawful from the date of “re-certification” on the election date, but not for any time between the proper withdrawal upon expiration of the agreement and the date of the election.

As should be apparent from these warnings from the Board, anticipatory withdrawal, or withdrawal of recognition of any kind for that matter, presents certain legal risk, regardless of the note of clarity struck by the Johnson Controls decision.  Employer’s must, therefore, think critically, and carefully evaluate the risks when considering anticipatory withdrawal.  Consultation with experienced labor Counsel is recommended to fully appreciate all relevant concerns.

George J. “Jerry” Oliver is a partner in the firm’s Labor and Employment Department, resident in its Raleigh office.

Andrew MacDonald is an associate in the firm’s Labor and Employment Department, resident in its Philadelphia office.