Court vacates union representation, citing unclear deciding vote

June 21, 2017

The regional director of the National Labor Relations Board erroneously counted a ballot in favor of union representation of a northern Indiana company and impacted the outcome of an election to determine whether the union would represent the company, the 7th Circuit Court of Appeals held Tuesday.

Hanson Logistics, an Indiana-based public-refrigerated warehousing and transportation company, held an election at its Hobart facility in February 2016 to decide if the International Brotherhood of Teamsters Union Local No. 142 would become the exclusive collective-bargaining representation for Hanson’s Hobart employees. Thirty-seven employees chose to cast a ballot, which instructed voters to “mark an ‘X’ in the square of your choice.’”

When the votes were counted, 18 were in favor of Local 142, while 17 were against. The remaining two votes, however, were contested, with Hanson challenging one vote in which the intent of the voter was unclear, and the Local 142 contesting a vote by Lawrence Kelly, who it claimed was not a Hanson employee at the time of the vote. Specifically, the unclear vote contained an “X” that touched the “Yes” box, but also extended beyond the box and contained “indecipherable scribbling.”

The issue went to the National Labor Relations Board’s action regional director, which chose to count the unknown ballot in favor of Local 142’s representation and dismissed the union’s challenge to Kelly’s vote, finding it was moot as the vote was no longer determinative of the outcome of the election. Local 142 was then certified as the exclusive collective-bargaining representative for Hanson’s Hobart employees.

Hanson requested a review by the board, which summarily denied the request, finding the company raised “no substantial issues warranting review.” As a result, Hanson refused to recognize Local 142 as its representative, and the regional director filed a complaint against Hanson for violations of sections 8(a)(1) and (5) of the National Labor Relations Act.

The proceedings were transferred to the board and counsel for the board moved for summary judgment. In September 2016, the board affirmed the certification of Local 142 as Hanson’s exclusive collective-bargaining representative.

Hanson moved for review in the 7th Circuit Court of Appeals, and the board filed a cross-application for enforcement of its order. Specifically, Hanson argued the board erred by counting the unknown ballot in favor of Local 142 and by dismissing as moot Local 142’s challenge to the Kelly ballot.

In a Tuesday opinion, 7th Circuit Judge Michael Kanne wrote that unlike the decision in Kaufman’s Bakery, 264 N.L.R.B. at 225 – which held that an “X” “almost entirely within” either the “Yes” or “No” box must be counted toward that box – the “X” in the “Yes” box of the unknown ballot was not clear or “almost entirely within” the “Yes” box.

“Simply put, the Kaufman’s Bakery presumption is ill-suited to deal with situations like these, where voter intent absolutely cannot be inferred from the marks on the ballot,” the judge said. “In sum, we think it is impossible…to determine the intent of the unknown voter in this case.”

Thus, the board should have treated the unknown ballot as void, Kanne said, and the failure to do so was an abuse of discretion. Therefore, the Kelly ballot remained determinative of the outcome of the election, so dismissing it as moot was erroneous.

The 7th Circuit vacated the board’s certification and denied its cross-application for enforcement. The case of Hanson Cold Storage Company of Indiana d/b/a Hanson Logistics v. National Labor Relations Board, 16-3617 and 16-3671, was remanded for further proceedings.


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