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A recent law firm post has highlighted a new enforcement campaign by the National Labor Relations Board (NLRB) targeted at employment at-will disclaimers in employee handbooks. The employment at-will doctrine is a widely accepted feature of our economic system and simply means that workers do not have a presumptive employment contract unless stipulated otherwise. Employment at-will disclaimers, informing workers of this fact, are a staple of employee handbooks, and are meant to head off needless litigation.
Now the NLRB has decided that providing this information to workers may be a violation of the National Labor Relations Act (NLRA). The agency’s theory seems to be that by informing workers of their at-will status, an employer will “chill” potential union organizing or concerted activity.
In two recent cases, one against the American Red Cross and the second against Hyatt Hotels, the NLRB decided that the at-will disclaimers in their employee handbooks were overly broad, and could unlawfully limit workers’ rights to engage in concerted activity.
Why the NLRB would launch a campaign against a bedrock of American employment law leads one to wonder: is the agency simply looking for ways to keep itself busy? Surprisingly, the answer seems to be yes.
One of the primary responsibilities of the NLRB is conducting union representation elections. Over the years, this business has fallen off sharply. In fact, from 2001 to 2010, the number of representation elections held fell by 40 percent, from 2,645 to 1,571.
Another core function of the NLRB is processing unfair labor practice (ULP) charges. This line of work has also slowed down. In 2001, there were 28,124 ULP charges. In 2011, this figure stood at 22,177, a decline of more than 21 percent. Complaints actually issued fell from 2,247 in 2001 to 1,342 in 2011 — a drop of just over 40 percent.
A key vehicle for setting policy at the NLRB is through decisions issued by the actual five-member Board. The decline in this area is dramatic, with a drop of more than 57 percent. There were 748 cases decided in 2001 and just 316 in 2010. (Given the current Board’s proclivities, this drop is probably for the best.)
These numbers don’t tell the complete story. In fact, the NLRB’s staff spent more than 11,000 hours of time in 2010 not working on agency business. Instead, these hours were spent working on behalf of the NLRB’s internal staff union. This use of what is called “official time” cost taxpayers nearly $700,000 that year alone. In fact, the NLRB’s usage rate of official time was the highest in the entire federal government — more than quadruple the overall average. A December 2009 report by the NLRB’s Office of Inspector General stated: “Given the cost of the official time, the lack of oversight, and the disparity with the Governmentwide average, we question whether the amount of time used by these officials meets the statutory test of reasonableness, necessity, and public interest.”
Despite the seeming lack of actual work being performed, the NLRB’s budget has stubbornly held fast. In FY 2001, the agency’s appropriation was $216.4 million. Adjusted for inflation, that equals $280.4 million in 2012. For FY 2012, the NLRB’s appropriation was $278.8 million — virtually unchanged.
Incredibly, the Senate Appropriations Committee decided that the agency actually needs more money, and in its FY 2013 Labor/HHS funding bill seeks to provide it with an additional $10 million. The House, by contrast, has called for a reduction in the NLRB’s budget of $20 million.
The NLRB is certainly not shy about speaking out whenever there is a threat to its budget. In February 2011, the agency actually pleaded poverty, warning that a potential 18 percent budget cut would result in an immediate three-month furlough of every one of its employees. The reduction, the agency warned darkly, “could force the NLRB to curtail all agency operations” because there were “no programs to eliminate or postpone.”
Rather than continue funding the NLRB at the levels of a decade ago, when its workload was significantly higher, Congress should consider whether some rebalancing is needed to reflect the new reality. Otherwise, the NLRB will continue nosing around for things to do, and employers will continue looking over their shoulders instead of looking at new hires.
1- The Board currently consists of four members with one vacancy. Two of the current members received dubious recess appointments that are being challenged in court.