Dura-Line Corporation, a manufacturer, did not violate the National Labor Relations Act when it closed its only unionized plant and transferred work to its non-union locations. the National Labor Relations Board rejected an Administrative Law Judge’s conclusion that Dura-Line, closed its Kentucky, facility because the United Steelworkers represented employees there.
The Board said Dura-Line had “compelling economic reasons” for its actions that were unrelated to the union’s presence in Kentucky or labor-management relations at the Company’s only unionized plant.
While closing a company to avoid its obligations to a union is unlawful, it is not unlawful for a company to close or relocate due entirely to non-union related criteria. This case is welcome news for companies because it reiterates that even where there is some evidence of labor-management friction, the Board can be persuaded that a company acted lawfully in response to legitimate financial or operational concerns.
The Board agreed that managers at the unionized facility unlawfully coerced union members by telling them the Company was moving work away from Kentucky in response to union activities like the USW obtaining the reinstatement of two fired employees. However, the Board said that the Company showed it was reorganizing to permit expanded production and new technology that would not be possible at the outdated Kentucky plant. It was “implausible” that Dura-Line would undertaken a $20 million relocation and expansion program just to relieve itself of grievances or to undermine the union, the Board said.
I have been involved in many of these types of closures and relocations. Unions always cry foul. But if done appropriately, companies will prevail.
Matt Austin 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 reach Matt by calling him at (614) 843-3041 or emailing him at Matt@MattAustinLaborLaw.com.