August 2005
Noteworthy NLRB Decisions
and Business Property Tax Incentives

Noteworthy NLRB Decisions
By: Jacob R. Fulcher

While it may not be at the forefront of the news, the National Labor Relations Board (NLRB) still issues important decisions affecting the way many employers deal with their employees.

Temporary Employees
In Oakwood Care Center, 343 NLRB No. 76 (2004), the NLRB reversed itself and ruled that temporary employees supplied by an employment agency cannot be included in the same bargaining unit as regular employees unless both parties consent. This decision overruled its prior [Clinton Board] ruling in M.B. Sturgis, Inc., issued in 2000.

Financial Distress Comments
In AMF Trucking & Warehousing, Inc., 342 NLRB No. 116 (2004), the NLRB addressed when an employer must “open the books.” During negotiations for a new collective bargaining agreement, company negotiators told the union that AMF Trucking was in “distress” and was “fighting to stay alive.” Based on those statements, the union requested the employer produce its financial records, but the employer refused. In a strange decision, even for a Republican-controlled Board, the NLRB ruled that the employer did not have to open its books because it was not specifically claiming a financial inability to meet the union’s demands.

Protected & Concerted Activity Cases
Employers, especially non-union employers, may not recognize the issue and thus become embroiled in a protected-concerted activity case. Two recent NLRB decisions provide a good example of what may or may not be protected and concerted activity.

In Stanford New York LLC d/b/a Stanford Hotel, 344 NLRB No. 69 (2005), the NLRB found that an employee’s cursing at his supervisor was concerted activity and did not lose the protection of federal labor law. Specifically, during an election campaign, an employee was told by his manager that he could not join the union because he was a supervisor. The manager wanted the employee to tell the union organizer that he was ineligible to vote because of his supervisory status. The manager told the employee he would be terminated if he did not cooperate. The employee refused, yelled and cursed at the supervisor in front of other employees. The supervisor terminated the employee for insubordination. While not explicitly condoning the employee’s outburst, the NLRB found that the employee’s expression of a desire to join the union was protected activity. Therefore, the termination was unlawful.

But, in Aramark Services, Inc., 344 NLRB 68 (2005), an employee was found not to have engaged in protected activity when she harassed and intimidated several of her fellow employees. In the midst of negotiations, one employee circulated a petition to replace the current union steward. The aggrieved employee circulated a petition to keep the current steward. Soliciting signatures for her petition to keep the current steward, the aggrieved employee harassed and intimidated employees until they signed the petition. Shortly after the harassment began, management learned about the actions and terminated the employee for violating the company’s harassment policy. The NLRB found that the aggrieved employee’s harassment and intimidation was not protected conduct. As such, the termination was lawful.

Both Stanford Hotel and Aramark remind employers that in various ways employees’ conduct may be protected by federal labor law. It is prudent to be alert to situations that may be protected concerted activity. The best practice is to have a strong policy addressing insubordination and harassment, follow your past practice and consult with an attorney before making any decision that may involve discipline for conduct that might be construed as protected.

Wage Deductions and Assignments
Check out next month’s issue of the KDDK Advantage. The topic will be Wage Deductions and Assignments under Federal and Indiana law.

Are New Automatic Property Tax Incentives Good For Your Business
By: G. Michael Schopmeyer

Indiana’s property tax phase-in statute (a/k/a “tax abatement”) was just amended to provide an alternative automatic property tax incentive for real estate and equipment investments up to $2 million.

Prior to this new amendment, it was sometimes questionable whether, at this level of investment, the time, fees and political capital expended to seek a locally granted tax phase-in was worth it.

Now, some businesses may elect to file only a certified deduction schedule (CDS) with their property tax returns for the property tax period following the assessment date after their investment.

Many business taxpayers will, however, be better served foregoing such automatic incentives and electing instead the traditional, and more generous, local legislatively-granted property tax phase-in. Here are the principal differences between the automatic and legislatively granted incentives:

New Automatic CDS Phase-In

• Eligible only for 3-year phase-in

• Percentage phase-ins are less generous

Legislatively Granted Phase-In

• Eligible for 10-year phase-in

• Percentage phase-ins are more generous

For example, if someone were to make a $1 million investment in new manufacturing equipment along with a $1 million improvement in the real estate to house this new equipment investment, assuming a .05 property tax rate, the difference in potential benefits (disregarding depreciation) could be as follows:

The automatic tax phase-in is certainly beneficial for businesses unwilling to apply for and pursue a city or county process, yet it may be economically better for many businesses to continue pursuing property tax incentives.

If your business is considering an expansion, for the best results, you should analyze these alternatives in the early planning stages of such a project. We can help in your planning process and counsel you about the law, the legislation process, and the politics involved. We can also help you with the CDS process.