Withholding Service Contracts Not Unlawful

Originally published by Douglas A. Darch and Christina Taylor.

In a significant decision for the service provider community, this month the National Labor Relations Board dismissed a claim that an employer was required to provide its employees’ union the service contracts it had with its customer. G4S Security Solutions USA, Inc. 369 NLRB No. 7 (2020). The panel decision was unanimous. Notably, however, the decision left open the possibility that a union could require the production of a service agreement if it could demonstrate the agreement was relevant to bargaining.

 

The case arose at a Bechtel worksite (a waste water treatment plant) that had initially engaged Securitas Security Services to provide security services at the location. During an unfair labor practice charge investigation involving Bechtel and Securitas, the NLRB’s General Counsel determined that Bechtel and Securitas were joint employers. That charge was later settled. Bechtel subsequently engaged G4S Security to provide security services at this location. After G4S recognized the union as a Burns’ successor, the union demanded G4S provide a copy of its services agreement with Bechtel. In response to G4S’s request that the union explain the basis for its demand, the union provided documents from the previous unfair labor practice charge. G4S refused to provide the services agreement and the unfair labor practice case followed.

The General Counsel alleged the employer had violated its duty to bargain by failing to provide the information necessary for the union to bargain, based on the Acme Steel decision. Under Acme Steel, information is either presumptively relevant, in which case it must be disclosed absent confidentiality concerns, or can be proven to be relevant based on circumstances. The NLRB noted that the services agreement was not presumptively relevant. Turning to the circumstantial analysis, the NLRB stated the union had to demonstrate a “good faith belief supported by objective evidence” that the information sought was relevant to its bargaining obligations. “Mere suspicion,” the NLRB reiterated, is not sufficient. Applying this test, the NLRB found the Administrative Law Judge’s explanation for ordering disclosure — the union wanted to review the document to determine whether it contained terms that affected employees — did not meet this standard.

Employer Takeaways

Employers who provide services to customers are well-advised to follow the process of engagement the employer in G4S Security adopted. By requesting an explanation from the union, it put the union to the test and locked it into a position it was forced to defend. Employers who do not follow this process are susceptible to facing creative and post-hire explanations drummed up by litigation counsel or suggested by the General Counsel when they appear before an Administrative Law Judge. For now, though, the reiteration of the standard that mere suspicion is not sufficient should provide solace to employers facing union fishing expeditions.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.

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