FAA Modernization and Reform Act of 2012

In 2010, the National Mediation Board ("NMB") changed its long-standing rules governing union representation elections in the rail and air industries. In particular, the Board abandoned the requirement that a representative win a majority of votes from the entire craft or class, allowing a representative to prevail by obtaining just a simple majority of votes cast. Since that change—which has recently been upheld in court—Congress has been debating legislation to reverse or amend the NMB's controversial new rule.

On February 14, 2012, President Obama signed a new law, the FAA Modernization and Reform Act of 2012, to authorize long-term funding for the Federal Aviation Administration. As part of a compromise between the House and Senate versions of the legislation, the new law abandons efforts to overturn the NMB's election rule in its entirety, but nevertheless provides for several revisions to Title I of the Railway Labor Act ("RLA"), 45 U.S.C. § 151 et seq., that will alter, at least to some extent, the NMB's rulemaking and oversight of representation elections in the rail and air industries. It is unclear, however, whether these changes will have the sort of dramatic impact forecast in some recent labor union statements criticizing the compromise legislation.

First, the legislation provides for increased oversight and transparency in Board rulemaking and operations. For the first time, it subjects NMB rulemaking to the requirements of the Administrative Procedures Act ("APA"), 5 U.S.C. § 553. It also requires the U.S. Comptroller General to "evaluate and audit" the Board's "programs and expenditures" at least every two years. And it requires the Comptroller General to undertake an immediate review of "the processes applied by the Mediation Board to certify or decertify" labor union representatives, and to make recommendations to ensure that "the processes are fair and reasonable for all parties." These requirements may or may not have any practical significance for the NMB and its conduct of representation elections. Although it has not been subject to the APA, the NMB has generally followed APA procedures for rulemaking, including notice and comment, and so the formal application of the APA may not make much difference. Nor does it seem that regular audits of the Board by the Comptroller General should have much, if any, influence on the substantive rules applied by the NMB. Whether the "immediate review" by the Comptroller General will prove to be significant will depend, in large part, on the nature of the Comptroller General's findings. It would not be surprising, for example, to see a recommendation that the Board adopt a clearer rule for decertification of existing representatives. But we do not expect the Comptroller General to recommend a return to the previous election rules.

Second, the legislation corrects an oddity in the NMB's run-off election rules. Under the changes imposed by the NMB in 2010, in order for a group of employees to remain unrepresented, the "no union" option must receive more than 50 percent of the vote. But in circumstances where more than one union was in the election, the Board aggregated the votes for all unions and would hold a run-off election even if the "no union" option had won a plurality of votes. For example, if "no union" received 49 percent of the vote, Union A received 48 percent, and Union B received 3 percent, the Board would hold a run-off between Unions A and B. The new legislation provides that in the event no option receives a majority, the run-off election shall be between the options receiving the largest and second-largest number of votes. This change should ensure that the "no union" option receives a fair opportunity to prevail in a run-off. However, run-off elections between a union and a "no union" option may be relatively rare. Thus, again, it is unclear how much practical significance this change will have.

Third, the new law raises the "showing of interest" threshold for an election among any unrepresented group of employees from 35 percent to 50 percent. Under the old rules, the 35 percent showing of interest—the threshold demonstration of potential desire for representation necessary to order an election—made it nominally easier for unions to initiate election proceedings among unrepresented groups. So in theory, the new rule could make it more difficult for unions seeking to organize an unrepresented workforce. But again, it is arguable that the change will have little real impact. Because representation elections can be costly, unions have often sought a high showing of interest—even when the threshold was only 35 percent—before filing for an election. As the president of the Transport Workers Union, James C. Little, acknowledged, "[e]very union organizer knows you need majority support when you file." Compromise on NMB Election Rules Draws Lukewarm Reviews From Unions, 14 Daily Lab. Rep. (BNA) A-4 (Jan. 23, 2012). If unions have already been using 50 percent or higher as a de facto threshold for a showing of interest, then the new rule should not make much difference.

The election rules adopted by the NMB in 2010 represented a substantial and highly controversial departure from the old rules, imposing standards that at least some on the management side strongly opposed. Union complaints about the new legislation demonstrate that the controversy over these issues is likely to persist, and that we may see further efforts to use legislative and regulatory mechanisms—rather than consensus-based bargaining—to alter the RLA and the rules governing representation elections.

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Donald J. Munro

Ronald M. Johnson

Tom Jerman

Aparna B. Joshi

Heidi L. Gunst

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