April 2012

It should come as no surprise that unions have refined their approaches over the years when dealing with companies to ensure their maximum advantage. This is particularly a problem in the construction industry. Typically, non-union employers will often sign site-specific agreements with unions for the duration of a job because the general contractor requires sub-contractors to be union. Other times construction industry companies will sign contracts with a union believing they can jump in and out with relative ease, because federal law allows as much under Section 8(f) of the National Labor Relations Act (NLRA).

Employers outside the construction industry are not entitled to such flexibility. The union’s relationship with these companies is governed not by Section 8(f), but Section 9(a) of the NLRA. Under 9(a) unions cannot be disregarded by employers at their leisure. Rather, cessation of a 9(a) relationship may only be done by limited means such as: shrinking the unit of employees below two; unambiguous communication from a majority of union represented employees that they no longer want the union to represent them; or a vote demonstrating the same. In contrast, Section 8(f) allows construction industry companies to timely notify the union of the end of their employee representation upon the termination of the contract between the two.

Because of the relative ease to which companies can get rid of the construction industry union under Section 8(f), unions have looked for ways to artificially create a 9(a) relationship without subjecting themselves to a vote by the employees. Enter the stealth union contract. In these agreements the unions insert language which states something along the lines of the following:

“… The Union represents a non-coerced majority of the Employer’s ___[description of the bargaining unit]___. The company acknowledges that the Union represents a majority of the bargaining unit employees, which have authorized the Union to represent them. The Union has presented or offered to present to the company proof that a majority of the employees support the Union’s representation. Therefore, the company recognizes the Union as the exclusive bargaining representative of these employees pursuant to Section 9(a) of the National Labor Relations Act.“

Commonly what happens is that unions do not actually present the employer with proof of majority employee support for the union. However, courts have routinely held that where a contract unequivocally states, “the union requested recognition as the 9(a) representative, the employer has recognized the union as the 9(a) representative, and the company’s recognition was based on the union’s having shown employee support or having offered to show evidence of majority employee support,” a 9(a) relationship is formed. Thus, even where the employees have not actually demonstrated their majority support for a union the union’s “offer” to show an employer the employees’ support could lead to the employees being represented by a union (they never wanted).

In practice, this means employers in the construction industry should be ever wary of union contracts. If a union misrepresents what is in the contract, but an employer signs it, the language will often win out. This means, always read and have your attorneys review union contracts before signing them regardless of what the union’s representative tells you. Companies have defenses to these unsuspecting attacks by unions, but they are limited. Wessels Sherman has been very successful in getting construction industry clients out of these contracts and getting rid of unions, but employers are advised that diligence in reviewing these contracts on the front-end before signing them on the hood of the pick-up at the construction site is important.

If you are looking to take a union job and need a review of the contract, or if you are wondering how your business can get rid of a union, please contact us to discuss your options and opportunities.