The NLRB properly found a non-union employer unlawfully retaliated against striking employees and violated the National Labor Relations Act by transferring work from Illinois to Mexico, the federal appeals court in Chicago has ruled. Amglo Kemlite Labs., Inc. v. NLRB, 2016 U.S. App. LEXIS 15100 (7th Cir. Aug. 17, 2016). The Court enforced the Board’s order requiring the employer to return the transferred work to Illinois, among other things.

Amglo, a non-union company, makes specialty lights, such as those on airplane wings. In 2011, several employees complained to their supervisor about low wages. Thereafter, during a visit to the plant, Amglo’s president informed employees that Amglo would not raise wages.

Nearly all of the plant’s 94 employees went on strike the next day. The president and the plant manager reaffirmed that Amglo would not raise wages and directed employees to return to work or get off the company’s property. When the striking employees asked to speak to Amglo’s owner, the plant manager told the employees, “I’ll tell you what he’s going to say. He will tell us to get rid of half of you. And you’re not going to do anything. You’re not going to scare him. You’re not going to threaten him. You’re going to lose.” Holding resignation forms, the plant manager told employees that if they did not like their wages, “they could quit.” The president also pointedly talked about globalization and observed that companies can move production to China and Mexico (two places where Amglo had plants).

Over the next week, some workers returned without raises, and, eventually, the remaining striking employees, more than 50, signed an unconditional offer to return to work without a raise. The president told them that she was uncertain about recalls because Amglo was transferring some work from Illinois to Mexico “because of the situation.” Amglo finally recalled all but 22 employees. These employees were told that, partly because of the transfer of work to Mexico, there were no jobs available for them, but they would be rehired on a preferential basis as jobs became available.

The employees filed an unfair labor practice charge with the NLRB. The NLRB concluded Amglo had engaged in unfair labor practices by: (1) threatening to fire employees for striking; and (2) transferring work from Illinois in retaliation for the strike. The Board ordered Amglo not to take such actions in the future, to bring the work transferred to Mexico back to Illinois, to offer full reinstatement to any employee who lost his or her job as a result of the transfer, and to make employees whole for earnings and benefits lost as a result of the transfer.

Amglo petitioned the Court of Appeals to set aside the part of the order concluding that it violated the Act by transferring work from Illinois to Mexico for the unlawful purpose of retaliating against striking employees and the Board moved to enforce it. (Amglo did not challenge the Board’s findings that the strike was protected activity under the Act or that it threatened to fire workers for striking.)

Noting that an “employer cannot punish a man by discharging him for engaging in concerted activities which § 7 of the Act protects,” the Court held “that substantial evidence supports the Board’s finding that the strike was a motivating factor in Amglo’s transfer of some work to Mexico,” including the following:

  • The president’s discussion of globalization implicitly warned employees that if they continued striking, Amglo would transfer work to a foreign plant.
  • Amglo showed hostility to the strike, including threatening to fire half of the employees the first day.
  • The president told striking employees that Amglo was moving work to Mexico “because of the situation.”
  • During the NLRB’s investigation, the supervisor admitted that Amglo “accelerated” existing plans to transfer work “because of the strike.”
  • Amglo had increased its workforce, from 85 to 94 employees, in the nine months prior to the strike, weakening its argument that the post-strike reduction was for economic reasons.
  • The timing of the transfer, so soon after the strike began, was suspicious.  Employees of non-union employers are protected by the NLRA and are legally entitled to engage in protected, concerted activity, including strikes. Once the protections of the Act are triggered, employers must be careful about what they do and say in response to the protected, concerted activity and must avoid conduct that can be characterized by the NLRB as retaliation or other unfair labor practices. Federal courts will support the Board’s authority to issue broad orders to remedy unfair labor practices – even, as here, ordering an employer to undo the transfer of work to another country.

The Court denied Amglo’s petition for review and enforced the Board’s order to move the transferred work back to Illinois.