Company’s Preference to Hire Non-Union Employees Withstands NLRB Scrutiny

A union hospital had a collective bargaining agreement that gave preference to bargaining unit members for hiring or transferring into positions covered by the CBA. Stated differently, union-represented employees at that hospital received preference over non-union employees for open positions at that facility.

To level the playing field, the employer instituted a policy giving non-union employees preference over “external applicants” for hiring or transferring into open positions at its non-union facilities. Employees from the union sites were, of course, considered external applicants.

The union challenged this policy by alleging that it unlawfully discriminated against union employees based on union affiliation. Agreeing with the union (naturally), the NLRB sued the employer. The NLRB argued that the policy tilted the playing field too far in favor of nonunion employees, claiming the number of nonunion positions “pales in comparison” to the number of positions covered by the union hiring policy and that nonunion hiring preference covered two facilities, as opposed to the single facility by the union policy.

The hospital correctly countered that it merely was leveling the playing field in light of the fact union employees received a preference at the unionized facility over its nonunion employees.

The First Circuit Court of Appeals agreed with the employer. The court found that the employer’s desire to treat its union and non-union employees “even-handedly” negated an inference that the policy was motivated by union animus. While the court acknowledged that the nonunion policy covered more positions than the union hiring policy, union workers were not disproportionately harmed, given that the ratio of covered positions to covered employees was substantially the same under both policies. Likewise, nonunion employees had to compete with workers from two hospitals, as opposed to union workers’ need to compete only with workers from one hospital.

The court also noted that the Board ignored other aspects of the hiring policies that still leave union members at a comparative advantage, namely that union seniority trumps qualifications for open union positions, while the employer is required to choose “the best qualified” candidate for a nonunion position, regardless of seniority.

Employers should be cautious when implementing a hiring preference policy similar to the one at issue here. In order to justify such a policy, facts similar to those in this case likely need to be present.

Matt Austin who owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 285-5342 or email him at Matt@MattAustinLaborLaw.com.

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