In a press release issued December 6, 2010, the National Labor Relations Board announced that it had found, in a 2-1 decision, that an auto parts manufacturer, Dana Corporation, and the United Auto Workers union did not violate the National Labor Relations Act law by agreeing to ground rules by which the UAW would be recognized if a majority of employees signed cards in favor of it, and by creating a framework for any future collective bargaining agreements. The UAW had a long relationship with Dana and already represented workers at 9 of some 30 facilities Dana has in the United States.  The letter agreement applied to all of its non-union plants in the U.S.

 The letter of agreement stated that “[w]e both believe that membership in a union is a matter of personal choice and acknowledge that if a majority of employees wish to be represented by a union, Dana will recognize that choice,” according to the NLRB’s press release. Dana and the UAW also agreed that any labor contracts that resulted from the letter of agreement would, among other things, be at least 4 years in duration, incorporate “team-based approaches,” maintain “health-care costs at competitive levels,” and permit mandatory overtime when necessary.

 This case stemmed from a 2004 UAW organizing drive involving some 300 employees at Dana’s St. Johns, Michigan facility. Per the agreement, the UAW began the process by requesting a list of employee addresses from Dana. Three employees at the facility filed unfair labor practice charges with the NLRB’s Detroit Regional Office, claiming that the pre-recognition agreement violated Section 8(a)(2) of the NLRA which prohibits companies from providing certain kinds of support to unions or creating their own company unions.

 In September 2004, the NLRB Regional Director found possible merit to the charge and issued a complaint alleging that, by entering into the agreement, Dana gave unlawful assistance to the UAW and the UAW coerced employees in the exercise of their statutory rights. After a hearing, NLRB Administrative Law Judge assigned to the case dismissed the complaint in April, 2005.  An appeal to the Board followed.

 Interestingly, in the end, the UAW failed to collect signatures from a majority of the employees involved and thus the UAW was never recognized by Dana and the plant remained non-union.

 In Dana Corporation, 356 NLRB No. 49 (2010), the NLRB majority of Chairman Wilma Liebman and Member Mark Pearce (with Member Craig Becker recusing himself) found the letter agreement to be lawful. They stated: “[t]he Board and courts have long recognized that various types of agreements and understandings between employers and unrecognized unions fall within the framework of permissible cooperation.” They added that not every pre-recognition agreement is lawful, “[e]ach case, rather, will depend upon its own facts.”

 The dissenting Member, Brian Hayes, found the letter agreement in question factually and legally similar to an earlier Board case, Majestic Weaving Co., 147 NLRB 859, (1964), in which the company and union were found to have acted unlawfully. Member Hayes stated, “[m]y colleagues’ approach threatens to reinstate the very practice that those statutory provisions were meant to prohibit, i.e., the establishment of collective-bargaining relationships based on self-interested union-employer agreements that preempt employee choice and input as to their representation and desired terms and conditions of employment.”