Law Offices of Stanley E. Niew, P.C.

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LABOR & CONSTRUCTION LAW UPDATES

These Newsletters are not intended as legal advice since each situation depends specifically on the facts presented. Persons reading these Newsletters should seek competent legal advice with regard to the subjects contained herein before making any employment or other decisions.
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NOVEMBER 2022

Inside This Issue

1. Residential Real Property Disclosure Act Amended (“RRPDA”)

2. Illinois’ “Workers’ Rights” Amendment: What Is It?

3. NLRB Issues Notice of Proposed Rulemaking on Fair Choice and Employee Voice

4. Right to Strike by A Union Not Absolute

5. Employers Must Deduct Union Dues from Wages Even After Contract Expiration

Residential Real Property Disclosure Act Amended (“RRPDA”)

In May of 2022 Governor Pritzker signed HB4322 which is a major overhaul of RRPDA. The RRPDA is not a guarantee that a material defect in the physical condition of the premises does not exist. The RRPDA requires the seller to disclose what seller actually knows about material defects. Nor does it require seller to make a physical inspection of the property. The RRPDA’s purpose is the disclosure of “material defects” and minor defects are not included.

The definition of seller is the first major change since the beneficiary of a land trust is now listed as a seller. seller also includes the beneficiary pursuant to testate disposition or heir or transfer on death instrument (“TODI”). A section 15 amendment clarifies that a TODI is exempt from disclosure. Occupancy is irrelevant since seller definition is without regard to occupancy. Section 15 of RRPDA lists exempt transactions and makes it clear that seller transfers are exempt.

Section 15(9) of RRPDA was amended to make clear there is a new construction exemption, but it does not apply to rehabilitation.

Section 15(3) made a clarification that Illinois land trusts are included in the definition of the word “trust” so that title transfer by a trustee is also exempt. Under Section 5(1) includes a beneficiary of an Illinois land trust, thus such beneficiary must complete the disclosure report.

Revisions to Section 20 removes inconsistencies in language. For example, the terms “disclosure document” and “disclosure statement” is now referred to as “disclosure report.”

Under the new Section 30 it is now clear that seller has a continuing obligation to make supplemental disclosures whenever the seller becomes aware of any error, inconsistency, or omission in any disclosure reports. This is an ongoing obligation of the seller up until the time of closing.

Section 35 contains the form to be used for the Disclosure Report and reminds consumers that the report is to be provided before the Contract for Sale of Real Estate is signed.

The initial question on the Disclosure Report form was modified so that the seller discloses the seller’s relationship to the property if the seller has not occupied the premises within the preceding 12 months. The second question on the Disclosure Report form has been added so that persons may choose to obtain flood insurance regardless of where the property is located.

Section 20 now contains two admonishments: that seller not knowing of any material defect does not necessarily mean the defect does not exist and prospective Buyer may request an inspection.

Under the new Section 40(a) makes it clear that failure to provide disclosure report before signing the contract is a violation of RRPDA. Secondly, if the Disclosure Report is delivered late and disclose a material defect the prospective Buyer now has 5 business days to terminate the contract (up from 3 business days).

The changes are not drastic but can be characterized as updates or tweaks and not a total rewrite, but needed.

Illinois’ “Workers’ Rights” Amendment: What Is It?

Proposed Amendment 1 to the Illinois Constitution (the “Workers’ Rights Amendment”), on the November 2022 ballot, reads as follows:

"Employees shall have the fundamental right to organize and to bargain collectively through representatives of their own choosing for the purpose of negotiating wages, hours, and working conditions, and to protect their economic welfare and safety at work. No law shall be passed that interferes with, negates, or diminishes the right of employees to organize and bargain collectively over their wages, hours, and other terms and conditions of employment and work place safety, including any law or ordinance that prohibits the execution or application of agreements between employers and labor organizations that represent employees requiring membership in an organization as a condition of employment."

But, doesn’t the National Labor Relations Act already protect unions and private sector employees in their ability to organize and bargain collectively over wages, hours, working conditions and other issues in the workplace? The Illinois Public Labor Relations Act seems to accomplish the same goal.

The Workers’ Rights Amendment seems to apply to the public sector and not to private employers. The Amendment will not be certificated as passed until the first week in December 2022. Pro-union groups are asserting that the Workers’ Rights Amendment applies to all employers. However, if union groups attempt to apply the Workers’ Rights Amendment to private employers it is likely to be challenged in the courts. The question is how can the Amendment preempt or usurp the National Labor Relations Act? It is likely that it cannot.

NLRB Issues Notice of Proposed Rulemaking on Fair Choice and Employee Voice

On November 3, 2022, the National Labor Relations Board (“Board”) released a Notice of Proposed Rulemaking (NPRM) inviting public comment on a proposed rule that would rescind a final rule adopted by the prior Board majority on April 1, 2020. That rule, now in effect:

(1) allows representation elections to proceed despite pending unfair labor practice charges alleging coercive conduct that would interfere with employee free choice and require a re-run election;

(2) allows challenges to the representative status of a union that has been voluntarily recognized based on a showing of majority support among employees before there has been a reasonable period for collective bargaining; and

(3) permits election challenges to the long settled representative status of unions representing construction industry employees, despite undisputed evidence of the union’s majority support in detailed language in a collective-bargaining agreement making clear that the employer voluntarily recognized the union based on a showing of majority support.

The proposed Fair Choice and Employee Voice rule would restore the Board’s prior law, including the longstanding principles reflected in the traditional “blocking charge” policy first adopted by the Board in 1937; the Board’s “voluntary recognition” bar doctrine first established in 1966 and refined in Lamons Gasket Co. (2011); and the Board’s approach to voluntary recognition in the construction industry as reflected in Casale Industries, 311 NLRB 951 (1993), and Staunton Fuel & Material, 335 NLRB 717 (2001).

“The Board believes, subject to comments, that these proposed changes will better protect workers’ ability to make a free choice regarding union representation, promote stability in labor relations, and more effectively encourage collective bargaining,” said Chairman Lauren McFerran.

The proposed rule has three parts, each rescinding a corresponding portion of the Board’s April 2020 final rule.

First, the proposed rule would return to the Board’s long-established “blocking charge” policy as most recently reflected in a 2014 rule. Under that approach, when unfair labor practice charges are filed while an election petition is pending, a Regional Director may delay the election if the conduct alleged threatens to interfere with employee free choice. The Board’s view, subject to public comments, is that the proposed rule promotes employee free choice and conserves the Board’s resources, and those of the parties, by ensuring that the Board does not conduct elections—that might well have to be re-run—in a tainted environment.

Second, the proposed rule would eliminate the required notice-and-election procedure triggered by an employer’s voluntary recognition of a union based on a showing of majority support among employees. In the NPRM, the Board explained its preliminary view that a voluntary-recognition bar, preventing challenges to the status of a newly recognized union until a reasonable period for collective bargaining has passed—and as reflected in the Lamons Gasket decision—better serves the policies of the National Labor Relations Act by vindicating employee free choice, encouraging collective bargaining, and preserving labor relations stability. The Board noted that under the 2020 rule, employees almost never file election petitions to oust recognized unions, suggesting that voluntary recognition almost always accurately reflects employee free choice.

Finally, the proposed rule would return to the Board’s prior approach to voluntary recognition in the construction industry, as reflected in its case law. This would include restoring a six-month limitations period for election petitions challenging a construction employer’s voluntary recognition of a union under Section 9(a) of the Act (as established in Casale Industries). It would also include the principle (established in Staunton Fuel) that sufficiently detailed language in a collective-bargaining agreement can serve as sufficient evidence that voluntary recognition was based on Section 9(a) of the Act. 9(a) determines who is exclusive bargaining representative. The Board explained its preliminary view, subject to comment, that the 2020 rule had injected uncertainty and unpredictability into construction-industry labor relations.

Public comments are invited on all aspects of the proposed rule and should be submitted either electronically to regulations.gov, or by mail or hand-delivery to Roxanne L. Rothschild, Executive Secretary, National Labor Relations Board, 1015 Half Street S.E., Washington, D.C. 20570-0001.

Comments on this proposed rule must be received by the NLRB on or before January 3, 2023. Comments replying to comments submitted during the initial comment period must be received by the Board on or before January 17, 2023.

Right to Strike by A Union Not Absolute

Section 7 of the National Labor Relation Act (“Act”) states in part, “Employees shall have the right. . . to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” Strikes are included among the concerted activities protected for employees by this section. Section 13 concerns the right to strike. It reads as follows: The lawfulness of a strike may depend on the object, or purpose, of the strike, on its timing, or on the conduct of the strikers. Such issues often have to be decided by the Board. The consequences can be reinstatement and backpay.

Employees who strike are either “economic strikers” or “unfair labor practice strikers.” In both cases employees, reinstatement to their jobs is usually a right.

If the object of a strike is to obtain employer economic concessions such as higher wages, shorter hours, or better working conditions, the striking employees are called economic strikers. They remain as employees and cannot be discharged, but they can be replaced by the employer. If the employer has hired bona fide permanent replacements who are filling the jobs of the economic strikers when the strikers apply unconditionally to go back to work, the strikers are not entitled to reinstatement at that time. However, if the strikers do not obtain regular and substantially equivalent employment, they are entitled to be recalled to jobs for which they are qualified when openings in such jobs occur if they, or their bargaining representative, have made an unconditional request for their reinstatement.

Employees who strike to protest an unfair labor practice committed by their employer are called unfair labor practice strikers. They cannot be neither discharged nor permanently replaced. When strike ends, unfair labor practice strikers, are entitled to have their jobs back even if employees hired to do their work have to be discharged.

If an unconditional request for reinstatement has been unlawfully denied reinstatement by their employer, the Board may award such strikers backpay.

Can Make Strikes Unlawful

Section 8(b)(4) of the Act prohibits strikes for certain objects even though the objects are not necessarily unlawful if achieved by other means. An example of this would be a strike to compel Employer A to cease doing business with Employer B. It is not unlawful for Employer A voluntarily to stop doing business with Employer B, nor is it unlawful for a union merely to request that it do so. It is, however, unlawful for the union to strike with an object of forcing the employer to do so. These points will be covered in more detail in the explanation of Section 8(b)(4). In any event, employees who participate in an unlawful strike may be discharged and are not entitled to reinstatement.

A no-strike contract is not protected by the Act. A walkout because of danger to health, shop, has been held not to violate a no-strike provision.

Strikes at end of contract period under Section 8(d) of the Act provides that when either party desires to terminate or change an existing contract, it must comply with notice requirements. If these requirements are not met, a strike to terminate or change a contract is unlawful and strikers lose their status as employees. Unfair labor practice the strikers are classified as unfair labor practice striker employees and their status is not affected by failure to follow the procedures.

The U.S. Supreme Court has ruled that a “sitdown” strike, when employees simply stay in the plant and refuse to work, is not protected by the law. Other examples of serious misconduct:

- Strikers physically blocking persons from entering or leaving.
- Strikers threatening violence against nonstriking employees.Strikers attacking management representatives.

Employers Must Deduct Union Dues from Wages Even After Contract Expiration

The Board recently held that employers must continue deducting union dues from workers’ paychecks as agreed in their collective bargaining agreements (“CBAs”), even after those agreements expire. The decision reverses a 2019 ruling made under the Trump administration.

The NLRB’s 3-2 decision in Valley Hospital Medical Center, Inc., which was on remand from the Ninth Circuit, found that employers may not unilaterally stop dues checkoff upon the expiration of a CBA. The Board’s initial decision on dues checkoff goes back to 1962, where in Bethlehem Steel it held that an employer was free to end dues checkoff upon contract expiration. In 2015 in Lincoln Lutheran, the Board held dues checkoff to be subject to the general statutory rule requiring employers to maintain most terms and conditions of employment after contract expiration to facilitate bargaining for a new agreement. Later, in 2019, in Valley Hospital, the prior Board majority reversed Lincoln Lutheran, again permitting employers to stop dues checkoff when a contract expires. In 2020 the Ninth Circuit found the Board’s rationale in the original Valley Hospital to be arbitrary and against Board cases. Since NLRA prohibits employers from changing mandatory subjects of bargaining, such as wages and hours, without giving unions the opportunity to negotiate.

The Board’s new Valley Hospital decision reinstates the rule of Lincoln Lutheran: that an employer, following contract expiration, must continue to honor a dues checkoff impasse allows for unilateral action by the employer.

The Board found that a dues-checkoff provision is a mandatory subject of bargaining under Section 8(a)(5) than in the small handful of exceptions to the rule. Thus, the Board again rejected the Bethlehem Steel rule that Valley Hospital is reinstated. The Board found that dues checkoff does not involve a party giving up a legal right, unlike no-strike clauses—which do not extend past the expiration of a CBA. Instead, a dues checkoff provision reflects an employer’s agreement to set up a payroll deduction, like issues of insurance premiums. Such provisions should not be modified simply because the CBA has expired. Once again this is an “employer beware” decision by the Board that any company with a unionized workforce should be aware of. The NLRB is moving fast under the current administration and employers should stay up to date and current NLRB decisions and rulings.

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