The use of the “Segal Blend” to calculate a company’s withdrawal liability when it withdrew from a multiemployer pension plan violated the Employee Retirement Income Security Act, as amended by the Multiemployer Pension Plan Amendments Act, because it was not the actuary’s best estimate, the federal appeals court in Cincinnati has held in a milestone decision for employers with withdrawal liability exposure.

Read more about this important 6th Circuit decision.

 

As we discussed in our recent report on National Labor Relations Board General Counsel (“GC”) Jennifer Abruzzo’s August 12th agenda for the direction of NLRB case law, employers should be ready for an aggressive expansion of remedies that the NLRB will seek. In the short time since the GC’s memorandum was published, NLRB Chairman McFerran expressly stated her willingness to explore new remedies for unfair labor practice violations.

If there were any doubts about how quickly the GC would act to expand penalties that employers may face, they were put to rest with the issuance of the GC’s newest memorandum published on September 8, 2021 (NLRB GC Memo 21-06).  GC Abruzzo  instructs NLRB regions to immediately seek expanded remedies in a wide array of cases. The memorandum directs regions to take aggressive positions on remedies to prepare cases for NLRB consideration regarding expansion of the scope of damages.

The GC instructs regions to seek the following types of remedies that would significantly increase the risks faced in any alleged unfair labor practice (“ULP”) litigation:

  • Consequential damages, front pay, and for discharged employees. The GC previously advised regions to refer cases involving these potential remedies to the Division of Advice. Now, the GC has instructed regions to affirmatively seek these expanded remedies in discharge cases.
  • Expanded union access. In cases involving employer ULPs during union organizing, the GC requires remedies such as providing unions with employee contact information and allowing unions to hold “captive audience” employee meetings on company property.
  • Reimbursement of union organizing costs. New cases may seek to require employers pay business agent wages, attorney fees, travel costs, and other costs unions incur where an employer’s objectionable conduct causes an election to be re-run.
  • Damages based on speculative contract terms. In refusal to bargain cases, the GC is considering an extraordinary remedy enabling the Board to premise a monetary damages on what the employer speculatively would have agreed to in bargaining, had it bargained in good faith. As this is the GC’s second explicit reference to this novel theory in the matter of weeks, this will likely by a significant objective for the GC and the Board.
  • Public publishing of remedial notices in newspapers, websites, and on social media. Posting notices regarding resolution of ULP charges has long been standard practice. Now, the GC is encouraging mandates to publish these notices in local newspapers, company websites, or social media pages, reaching audiences far beyond those employees who may have been impacted by any alleged violation.
  • Hiring individuals selected by the union. In the event an unlawfully discharged employee chooses not to return to work, the GC wants regions to require the company hire a qualified applicant selected by the union.
  • Regional oversight of bargaining. Bad faith bargaining claims should be remedied by (among other things)
    • a rigorous bargaining schedule imposed by the region,
    • employer-submitted progress reports,
    • compelled mediation,
    • managerial training,
    • reinstatement of unlawfully withdrawn bargaining proposals,
    • reimbursement of a union’s negotiation expenses, and
    • regions should seek a ban on challenges to a union’s majority status (such as decertification or withdrawal of recognition) for at least one year.
  • Increased remedies and protections for undocumented workers. In cases involving undocumented workers, regions may seek U or T visas or deferred immigration actions to permit those workers to remain employed, and employer sponsorship for work authorizations to remain in the United States. Regions could also seek additional make whole damages, such as the establishment of a fund that employers must pay to ensure employers are not “unjustly enriched” due to the status of undocumented workers.

The GC also instructs regions to secure visits for inspections and discovery rights to monitor compliance, longer posting periods, NLRA training for all employees, broader cease and desist orders, and public reading of notices by management officials to all employees. The GC promised that she will issue another memorandum on settlements that could modify litigation strategies as well.

Over the next four years, it appears inevitable that the NLRB will expand its view of what constitutes an unfair labor practice and simultaneously increase penalties on employers based on those new precedents. It is important for  employers to carefully assess their labor relations strategies.  If you have any questions about these topics, potential risks before the Biden Board, or your workplace rules and policies, please contact a Jackson Lewis attorney.

The National Labor Relations Board (NLRB) must reconsider its newest ruling on the rights of certain employees to access private property to engage in activity on behalf of a union, the U.S. Court of Appeals for the District of Columbia has directed in an August 31, 2021, decision remanding NLRB v. Local 23, American Federation of Musicians. If the Board changes its holding on remand it will be the third time the rule on access to private property has changed in the last 10 years. This case comes to the NLRB at a time opportune for change.

The Court recognized that rights of access to private property to engage in union-related activities have traditionally depended on the connection of the person to the property. Traditional employees who work on the employer’s property have the greatest access rights and generally cannot be prohibited from engaging in union activity on the employer’s property during non-work time and in non-work areas of the property.  On the other hand, a property owner can generally deny non-employees, such as union organizers, access to its premises.

Local 23 dealt with a third category: employees of a contractor who work on premises owned by a third party. Musicians represented by Local 23 were employed by the San Antonio Symphony, which had a contract to provide 22 weeks of performances at a facility owned by the Bexar Performing Arts Center Foundation, known as the Tobin Center. The musicians also performed for the Ballet San Antonio at the Tobin Center. To cut costs, the Ballet switched from live to recorded music, which reduced the number of paid performances for the musicians.

To protest the use of recorded music, the musicians distributed leaflets at the Tobin Center criticizing the Ballet and urging patrons to insist upon live music. The Tobin Center informed the leafleteers that they were not permitted on Center property and should move to the public sidewalk. They complied, but Local 23 filed an unfair labor practice charge.

The rule that existed at the time of the charge was filed was that a third party property owner could not deny access to contractor employees who are “regularly employed on the property” unless the property owner could establish that the activity substantially interfered with its use of the property. Applying that rule, and administrative law judge found the musicians had a right to engage in leafleting on Tobin Center property.

The NLRB reversed the judge. The Board held  a property owner could exclude contractor employees from its property unless they work “regularly and exclusively on the property” and the property owner could not show they had “one or more reasonable alternative means to communicate their message.” Applying its new rule, the Board found the contractor musicians had no right of access.

Local 23 sought review at the Court of Appeals. The Court found the NLRB had acted arbitrarily in drafting its new rule. The terms “regularly” and “exclusively” were poorly defined – indeed, the NLRB’s examples were in conflict with the very words themselves. The Court remanded the case to the Board “to proceed with a version of the test it announced … or develop a new test altogether.”

The Board’s newly constituted Democrat majority and current General Counsel Jennifer Abruzzo have articulated a desire to expand access rights for unions and employees. Because the case has been remanded to a Board with a Democratic majority, we think the likelihood is that the Board will develop a new test which will expand the rights of employees to access private property for the purpose engage in union activity. Employers should stay tuned.

The Senate confirmed two union lawyers – David Prouty and Gwynne Wilcox – to seats on the National Labor Relations Board (NLRB) on July 28, 2021, ensuring a Democratic majority for the first time in almost four years.

This follows the Senate’s confirmation of Jennifer A. Abruzzo, President Joe Biden’s nominee for General Counsel of the NLRB.

With these key nominees in place, expect the Board to continue its shift to a pro-union view.

The Senate voted 52-47 to confirm Wilcox’s nomination. Prior to her appointment to the Board, Wilcox was a partner at Levy Ratner P.C., a union-side law firm in New York, and served as associate general counsel for 1199SEIU United Healthcare Workers East, the largest health care union in the United States. She fills the seat that has been vacant since former Chair Mark Pearce’s term expired in 2018.

Prouty was confirmed by a slightly higher 53-46 margin. Like Wilcox, Prouty has a long background serving unions – he most recently was General Counsel of SEIU 32BJ, the largest union of property service workers in the United States.

Both Prouty and Wilcox will serve five-year terms, though Prouty will not be seated until Republican member William Emanuel’s term expires on August 27, 2021. Once Prouty is seated, the Board will have a 3-2 Democratic majority.

In a statement released on July 29, the AFSCME praised Wilcox as a “preeminent labor rights attorney” and noted she “will be instrumental in guiding the development of federal labor law and upholding workers’ freedom to form unions.” SEIU 32BJ’s statement noted it was “excited to see how [Prouty’s] righteous advocacy for workers will help build back up the NLRB as a robust defender of the rights of workers in our country,”

These confirmations come only a week after the Senate’s razor-thin 51-50 confirmation of Abruzzo to the General Counsel position. Abruzzo will serve a four-year term overseeing the investigation and prosecution of unfair labor practice cases and supervising NLRB field offices in their processing of cases. As General Counsel, Abruzzo will have the power to shape the interpretation and application of the National Labor Relations Act (NLRA) by determining which cases to bring to trial and which legal theories to present. It is expected this will pose challenges for employers, given her public statements that she believes “vigorous enforcement of the [NLRA] will help level the playing field for workers and their freely chosen representatives.”

Abruzzo worked for the NLRB for over two decades in various capacities, including as Deputy General Counsel and Acting General Counsel under President Barack Obama. Abruzzo also served as Special Counsel for Strategic Initiatives for the Communications Workers of America (CWA). Abruzzo is likely to push for pro-union policies and interpretations of the NLRA, aligning with President Biden, who has been on record stating he will be “the most pro-union president you’ve ever seen.”

Following her confirmation as General Counsel, Abruzzo appointed Peter Sung Ohr to serve as Deputy General Counsel. Ohr previously served as Acting General Counsel under President Biden following the early firing of former General Counsel Peter Robb (by President Biden), who had nearly 10 months left in his four-year term. Due to legal challenges to his authority arising from Ohr’s sudden appointment as Acting General Counsel (following Robb’s arguably premature dismissal), Abruzzo is expected to ratify the General Counsel actions taken by Ohr to resolve any open questions on his authority.

This pro-union shift will present challenges to employers that just began embracing Division of Advice opinions, General Counsel memoranda, and Board case law decisions under the President Donald Trump administration. Under President Biden, along with a General Counsel that previously worked for the CWA (and the NLRB) and a Democratic majority on the Board, employers can expect to see pro-union and pro-employee opinions, memoranda, and decisions that will further promote employee Section 7 rights, the rights for employees attempting to organize in the workplace, and more.

Please contact a Jackson Lewis attorney with any questions.

A union’s use of Scabby the Rat (an inflatable rat “approximately 12 feet in height with red eyes, fangs, and claws”) and inflammatory banners targeting a neutral employer, without more, does not violate the National Labor Relations Act (NLRA), the National Labor Relations Board (NLRB) has ruled. Lippert Components Inc., 371 NLRB No. 8 (July 21, 2021).

For more than three decades, unions have displayed Scabby (or other inflatable animals, including gorillas) on public property to protest companies for reasons including doing business with employers the union finds objectionable. Whether Scabby is akin to lawful handbilling or unlawful picketing directed at a neutral employer is the subject of much debate. (See our article, Why Is ‘Scabby the Rat’ a Legal Dilemma?, for legal background on Scabby.)

Republican-appointed NLRB General Counsels have tried to eradicate Scabby when deployed against neutral employers. In the early 2000s, General Counsel Arthur Rosenfeld (a Republican appointee) issued complaints over the use of Scabby, arguing it was inherently a symbol of a labor dispute and its display constituted signal picketing or otherwise coercive conduct in violation of NLRA Section 8(b)(4). The Republican-appointed majority NLRB at that time avoided ruling on the issue, finding it unnecessary to address Scabby due to the other union misconduct. See, e.g., Ranches at Mt. Sinai, 346 NLRB 1251 (2006); Brandon Regional Med. Ctr., 346 NLRB 199, 200 n.3 (2006). Scabby continued to make appearances at union demonstrations.

In Lippert Components, a union displayed Scabby and two large banners near the public entrance of a large trade show in Indiana for a four-day period in 2018. One banner criticized a manufacturer for alleged safety violations. The other criticized a neutral supply company for doing business with that manufacturer. The supply company filed an unfair labor practice charge alleging, among other things, the rat-and-banner display violated NLRA Section 8(b)(4)(ii)(B).

Under Section 8(b)(4)(ii)(B), it is unlawful for a union “to threaten, coerce, or restrain” a neutral employer where an objective is for the neutral employer to cease doing business with another entity. The NLRB’s prior General Counsel Peter Robb (a Republican appointee) issued a complaint against the union, alleging the rat-and-banner display was unlawfully coercive and constituted “signal picketing.”

An administrative law judge (ALJ) found the rat-and-banner display did not constitute picketing or otherwise coercive nonpicketing conduct in violation of Section 8(b)(4)(ii)(B). The ALJ relied on Eliason & Knuth of Arizona, 355 NLRB 797 (2010), and Brandon Regional Medical Center, 356 NLRB 1290 (2011) (“Brandon II”). These decisions, respectively, held displaying banners or an inflatable rat near the entrance of a neutral employer, without something more, does not “threaten, coerce, or restrain” a neutral employer in violation of Section 8(b)(4)(ii)(B). In Brandon II, the NLRB was comprised of three Democrat-appointees and one dissenting, Republican, appointee.

The ALJ’s decision regarding the rat-and-banner display was appealed to the present NLRB, which (currently) is comprised of three Republican-appointees and one Democrat-appointee. In a 3-1 decision, the NLRB dismissed the complaint, holding the display did not violate Section 8(b)(4)(ii)(B). The majority issued two concurring decisions. Chair Lauren McFerran, the only current Democrat-appointee to the NLRB, endorsed the rationale in Eliason & Knuth and Brandon II as the basis for dismissing the case. Members John Ring and Marvin Kaplan agreed that the rat-and-banner display did not violate Section 8(b)(4)(ii)(B), but took issue with Eliason & Knuth and Brandon II, which they believe interpreted Section 8(b)(4)(ii)(B) too narrowly. The majority also summarily agreed the display did not constitute “signal picketing.”

Member William J. Emanuel dissented, arguing that Eliason & Knuth and Brandon II should be overruled and that the rat-and-banner display was tantamount to picketing or, alternatively, was coercive nonpicketing conduct, which violated Section 8(b)(4)(ii)(B). Member Emanuel warned that by deeming lawful the “display of banners and giant, inflatable rats directed at neutral employers” such conduct will proliferate.

Unions likely will be emboldened by this decision in their use of large banners, inflatable rats, and other pressure tactics against neutral, as well as primary, employers. Jackson Lewis attorneys are available to discuss lawful responses to union tactics.

The National Labor Relations Board (NLRB) dismissed a union’s push to organize a micro unit of 87 employees at a Nissan assembly plant in Tennessee based on the traditional community-of-interest standards for determining whether a unit is appropriate. Nissan North America, Inc., 10-RC-273024 (June 11, 2021).

The International Association of Machinists and Aerospace Workers (UAW) filed a petition to represent a unit of Tool and Die Maintenance Technicians. However, the employer asserted the only appropriate unit had to include all production and maintenance employees — a total of about 4,300 employees. The Acting Regional Director agreed with the employer, finding the only  appropriate unit included all production and maintenance employees, not just the Tool and Die Maintenance Technicians.

The union argued that the Tool and Die Maintenance Technicians should stand alone as a craft unit because the employees had specialized skills that other plant employees could not perform. The employer maintained that these employees were not sufficiently distinct from other plant employees to warrant separate representation.

The Acting Regional Director agreed with the employer, finding the Tool and Die Maintenance Technicians were not journeyworker craftsmen and thus not a craft unit. Further, she found they share a community of interest sufficiently distinct from employees excluded from the proposed unit to warrant a separate appropriate unit. Relying on PCC Structurals, Inc., 365 NLRB No. 160 (2017), in which the NLRB returned to the traditional community-of-interest standards for determining whether a unit is appropriate, the Acting Regional Director found the Tool and Die Maintenance Technicians shared a community of interest with the remaining plant employees and the only appropriate unit was a plant-wide unit of production and maintenance employees. Under NLRB rules, a petition must be supported by employee signatures amounting to at least 30 percent of the unit. Once the unit was expanded to 495 times the originally requested size (in this instance), the union could not show adequate support and the petition was dismissed.

It was not always thus. For several years, under Specialty Healthcare, 357 NLRB 934 (2011), employers seeking to challenge the scope of the proposed unit had to “demonstrate that the additional employees the proponent [sought] to include share[d] an overwhelming community of interest with the petitioned-for employees, such that there is no legitimate basis upon which to exclude certain employees from the petitioned-for unit because the traditional community-of-interest factors overlap[ped] almost completely.” In many cases this proved to be an insurmountable threshold and enabled unions to organize smaller groups of employees, giving rise to the term “micro units.”

Unions have argued against the traditional community of interest standard and seek a return to the standard under Specialty Healthcare. Here, the UAW has stated it will file a request for review with the NLRB.  If it does, the case might not come up for consideration until there is a more union-friendly Biden NLRB Board that may be willing to return to the Specialty Healthcare standard.

For more information about the appropriateness of bargaining units, please contact a Jackson Lewis attorney.

“Absent threats or promises, § 8(c) [of the National Labor Relations Act] unambiguously protects ‘any views, argument or opinion’ – even those that the agency finds misguided, flimsy, or daft,” the D.C. Circuit has held. Trinity Services Group, Inc. v. NLRB, No. 20-1014 (D.C. Cir. June 1, 2021)

The Court was asked to “decide whether employers are entitled to express opinions that the [National Labor Relations] Board considers baseless” under the National Labor Relations Act (NLRA). Known as its free-speech provision, Section 8(c) of the NLRA provides: “The expressing of any views, argument, or opinion, or the dissemination thereof, whether in written, printed, graphic, or visual form, shall not constitute or be evidence of an unfair labor practice …, if such expression contains no threat of reprisal or force or promise of benefit.”

In Trinity Services Group, Inc., 368 NLRB No. 115 (2019), a  Board panel majority (Members Lauren McFerran and Marvin Kaplan) held a manager’s “patently false” statement blaming the union for confusion over an employee’s paid time off (PTO) bank violated Section 8(a)(1). Then-Chairman John Ring dissented, reasoning the challenged “remarks were a lawful expression of his personal opinion, protected by Section 8(c).” The D.C. Circuit agreed with the Chairman Ring.

The employer maintains a standard PTO plan for its facilities across the country, except for a unionized facility in Arizona.  The company’s  centralized payroll processing sometimes caused confusion, indicating a union employee had PTO to use, but the local management believed they did not. In this a case, an employee requested three days of PTO, which the central payroll system indicated she had. However, the local  manager disagreed. He told her she did not have any PTO available, saying “that is a problem that the Union created regarding paid leave”; “You need to fix that with the Union”; and “that’s the problem with the Union.” Ultimately, the employer gave the employee one day of PTO. This conversation arose while a successor contract was being negotiated. There was a tentative agreement to align the PTO plan with the non-union plan, but no overall agreement had been reached. There were also several open grievances challenging the employer’s PTO calculations.

The Board panel majority held the manager’s statements violated the NLRA. They reasoned these “statements were patently false …. There was no objective basis to blame the Union” for its PTO calculations. Giving significant weight to the context of contract negotiations and outstanding grievances, the Board found this “misrepresentation … would undermine the Union’s status as bargaining representative and reasonably tend to cause an employee to lose faith in the Union’s representation on the PTO issue.”

The D.C. Circuit noted the NLRA does not contain “this misstatement rule” and that no NLRB precedent had created it. Accordingly, it found substantial evidence did not support a finding these statements of opinion violated the NLRA. The Court ended its decision recognizing that it is up to Congress to change the NLRA in such a fashion, expressing no opinion on whether change is warranted: “Perhaps a no-misstatement rule would be good labor policy. Or perhaps not.”

The Court’s holding is reminiscent of the NLRB’s controversial decisions between 1977 and 1982, in which it considered whether a false statement uttered during a pre-election campaign would be deemed “objectionable conduct.” Ultimately,  in Midland National, 263 NLRB 127 (1982), the Board held that it “will no longer probe into the truth or falsity of the parties’ campaign statements” and would not automatically set aside elections because of misrepresentations during the lead up to an election, with a limited exception for forged documents. This position has not changed for the past 39 years.

Please contact a Jackson Lewis attorney with any questions as we continue to monitor NLRB decisions and all proposed legislation.

Complying with statutory workplace requirements does not necessarily excuse an employer from its bargaining obligations. A panel of the National Labor Relations Board (NLRB) upheld an Administrative Law Judge’s (ALJ) finding that an employer violated the National Labor Relations Act (NLRA) when it refused to bargain over the effects of requiring  employees to submit new I-9 forms. Frontier Communications Corp., 370 NLRB No. 131 (May 26, 2021).

The Board’s affirmation highlights the sensitive interaction between mandatory compliance with federal statutes and an employer’s obligations under the NLRA.

In late-2018 or early-2019, the employer conducted an I-9 audit and uncovered extensive noncompliance with the I-9 forms it had on file. To resolve the issues, the employer determined that it would need to obtain new I-9 forms from approximately 95% of its workforce hired after November 6, 1986, and before March 31, 2018. On July 19, 2019, the employer notified its employees by email that they would need to submit new I-9 forms. Soon thereafter, the union  complained that it did not receive prior notice of the communication or of the announced I-9 requirement and demanded bargaining on the issue. Ultimately, the employer refused to bargain on the issue, arguing it was not obligated or permitted to bargain over its efforts to comply with federal immigration laws. In response, the union filed an unfair labor practice charge.

The ALJ held, and the NLRB affirmed, that the employer’s directive that employees submit new I-9 forms was a mandatory subject of bargaining because the requirement affects terms and conditions of employment. The ALJ explained that the I-9 forms “clearly affects the terms and conditions of employment, as employees who (for whatever reason) have difficulty completing the I-9 forms risk losing their jobs, among other potential consequences.” The ALJ flatly rejected the employer’s argument that I-9 compliance was not subject to mandatory bargaining because the employer is required to comply with the Immigration Reform and Control Act of 1986 (IRCA). The ALJ explained that IRCA compliance was subject to mandatory bargaining because the employer had discretion over how to comply with IRCA. For example, the ALJ asserts that the employer had discretion on “the amount of time [employer] would give an employee to obtain and present documents that establish the employee’s identity.” Accordingly, the ALJ found the employer violated the NLRA when it refused to bargain with the union concerning how to complete the I-9 forms.

The ruling in this case is not that an employer must bargain over whether to comply with the law, but it must bargain over the impact compliance with the law could have on employees’ terms and conditions of employment.

The NLRB’s affirmation of the ALJ’s findings illustrates the fine line between federal compliance and NLRA obligations. Employers must be cautious of how federal or state compliance affects the NLRA obligation to bargain. When  an employer is considering updating its personnel files or changing its onboarding process, it should consider whether it implicates any NLRA obligations. Please contact a Jackson Lewis attorney with any questions.

President Joe Biden has nominated Gwynne Wilcox, a partner in a New York law firm specializing in employee rights, to the National Labor Relations Board (NLRB).

Three of the five members of the NLRB are traditionally members of the president’s party. At present, there are four members seated, three of whom are Republican because of the staggering of terms. The term of Republican member William J. Emanuel will expire on August 27, 2021, enabling the Biden Administration to nominate another member, presumably, establishing a 3-2 Democrat majority. If the Senate approves Wilcox, she will take her position immediately.

Wilcox has had a distinguished labor career, including (among other roles) working as a field attorney in NLRB Region 2 in New York and as counsel for 1199SEIU United Healthcare Workers East. She is a board member of the Brandworkers, a group working with the International Workers of the World to organize food workers. She is also on the national board of the Workers Defense League. Wilcox has been accorded numerous accolades for her work.

However, the activism of attorney Wilcox and her firm raises some interesting questions. In 2018, Board member William Emanuel was criticized for participating in a case regarding the NLRB’s definition of “joint employer” – a hot issue for both employers and labor – because of his former law firm’s representation of clients in related cases. Ultimately, due to the controversy, the NLRB withdrew a decision and later issued a formal rule defining “joint employer.” It is widely expected that once the NLRB majority shifts, Board decisions will take a pro-labor turn. It is believed that the joint employer issue will be revived, possibly by issuance of a new rule. Wilcox and her firm represented litigants arguing for a broader interpretation of “joint employer.” Senate confirmation hearings reportedly are expected to focus on the potential recusal of Wilcox from this and other issues if seated.

For more information, contact the Jackson Lewis attorney with whom you work.

The NLRB has the authority to order an employer to reopen a business it finds was closed for discriminatorily anti-union reasons. In RAV Truck & Trailer Repairs, Inc., 369 NLRB No. 36 (Mar. 3, 2020), the NLRB did just that. However, upon review, the D.C. Circuit held that it “cannot decipher how the Board determined that the closure of [the business] constituted an unfair labor practice,” that the NLRB did “not purport to explain how restoration [of the operation] is even factually possible,” and remanded the case. RAV v. NLRB, No. 20-01090 (D.C. Cir. May 11, 2021).

RAV Truck and Trailer Repairs and Concrete Express of NY (a concrete supplier), although two separate entities, were found to constitute a single employer.   RAV operated from a large garage but in  February 2018 the building owner terminated RAV’s lease. RAV temporarily leased a much smaller space for a brief period to complete unfinished work projects but this space lacked state-mandated safety and environmental features.  That lease ended on May 31, 2018.

During this same period, the Teamsters Local 456, International Brotherhood of Teamsters was attempting to organize workers at both Concrete Express and RAV.

  • Concrete Express. On April 19, 2018, the Union filed a petition to represent Concrete Express drivers and mechanics. The NLRB held an election on May 10, 2018, which the Union lost. Subsequently, the Board found the employer committed multiple unfair labor practices leading up to the election and ordered a re-run election (in which the Union was again defeated).
  • On May 14, 2018, the Union filed a petition to represent the two mechanics who worked for RAV, but incorrectly listed “RAV Trucking Corporation” (a different entity) as the employer. The next day, RAV told its mechanics that ICE agents were in the area, and asked if they had papers authorizing them to work. RAV discharged the mechanic who said no, and later laid off the remaining mechanic for lack of work. The Union filed an unfair-labor-practice charge regarding the discharges. The Union then filed a corrected petition. However, that  same day, the employer informed the NLRB and the Union that RAV “will be shutting its doors …. It is now officially out of business.”

Eventually, the NLRB determined the employer’s discharge of the undocumented mechanic, the layoff of the other mechanic, and the closure of RAV were in retaliation for organizing or to chill remaining employees from engaging in union activity. In addition to other remedies, the Board ordered the employer to “reopen and restore the business operation of [RAV] as it existed on May 14, 2018.”

On review, the D.C. Circuit upheld the main thrust of the decision that the “discharge and layoff of these employees reflected impermissible retaliation for their pro-union activities.” However, it held “the record indicates that the Company closed the RAV operation because it could not exist without the leased space, not because of the Union activities.” The Court noted that while the Board could find the employer closed RAV to chill employees’ union activity at both RAV and Concrete Express, its conclusion was based only on the proximity of events. “Without a better explanation from the Board, we are constrained to remand.” As to the order to reopen, the Court found, “The Board’s decision fails to properly consider whether its restoration order is legally permissible, feasible, necessary, or unduly burdensome, as the law requires.” Even if it was unlawful to close RAV, it said, “the Company had no lawful, suitable location in which to house the RAV operation on May 14. And the Board has failed to cite any authority to support the legal legitimacy of an order that purports to compel a company to ‘reopen’ an operation that no longer exists due the loss of a lease and for which there is no adequate space to house the operation within the existing company facilities.” The D.C. Circuit remanded with the instruction, “as with any remedial order, the Board must justify its action.”

While the D.C. Circuit refused to enforce the Board’s order to reopen, in an appropriate case, the NLRB has the authority to take the extreme action of directing an employer to reopen. Such instances are relatively rare, and the facts in this case are unusual. For more information about NLRB remedies, contact the Jackson Lewis attorney with whom you work.