A new ruling favorable to companies held that successor employers that discriminate in hiring to avoid bargaining duties are free to set their own initial terms of employment so long as they did not say they would keep all the predecessor’s workers or if their hiring scheme did not unlawfully target union workers.
In that case, the employer hired some former workers represented by the USW but not so many that they wound up a majority. The employer then changed employment terms, refused to bargain with the USW, and took increasing anti-union positions.
The NLRB ruled that the employer violated the law by refusing to hire some of the workers based on anti-union animus. The NLRB held the employer was a successor and must bargain with the union, because it would have had a majority of the previous company’s workers but for its discriminatory hiring scheme. This line of reasoning has been refined for over 40 years and will likely change again once the Trump Board is replaced.
Under the U.S. Supreme Court’s 1972 Burns ruling, the successor to a unionized company was obligated to recognize and bargain with the union, but it could unilaterally set initial terms and conditions of employment. But, Burns also said that if the company makes it “perfectly clear” it plans to retain all of the employees in the bargaining unit, then it must consult with the union before setting the terms of employment. The NLRB said in its 1974 ruling in Spruce Up, that a successor employer cannot unilaterally set initial terms if it expressed a desire to keep a predecessor’s employees without making it clear their employment will be conditioned on their accepting new employment terms.
In Love’s Barbeque (1979) the Board held that companies are effectively “perfectly clear” successors if they try to avoid bargaining obligations by discriminating against all of the predecessor’s workers. Thus, they cannot unilaterally set employment terms.
In 1996 The NLRB ruled in Galloway School Lines that the Love’s Barbeque remedy applies to successor companies that discriminate in hiring any of the predecessor’s workers.
It is Galloway that the current Board overruled. According to the Trump Board, “The majority there impermissibly tore the Love’s Barbeque remedy from its doctrinal roots and, in doing so, went far beyond the limits of the narrow “perfectly clear successor” exception contemplated by the court in Burns.”
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.