Austin Legal Labor Relations Newsletter #7

Welcome to The Labor Leader – a weekly recap of the most valuable content on labor relations from an employer’s perspective. The National Labor Relations Act covers both union and non-union private-sector employers. This newsletter is a digest of my views on labor laws, the National Labor Relations Board, and unions.

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Don’t Insist on Finalizing Non-Economic Items before Economic Bargaining

During labor negotiations, the Company and union usually bargain all non-economic items first. These are parts of the contract that do not have a financial impact to the Company.

After those items are tentatively agreed to, the parties move to economic items.

Some things are clearly non-economic, like dress codes. While wages, health care, paid time off are obviously economic. And some parts of collective bargaining agreements float between the two and the parties decide when to negotiate those items.

This is just how it’s done. Labor negotiators understand this process.

But, a New York real estate company learned the hard way that you cannot refuse to bargain economic items until all non-economic items are resolved. A refusal to bargain is a hallmark violation of the National Labor Relations Act.

There is very little either side to labor negotiations can insist on. The insistence by the real estate company on resolution of all non-economic items before moving to economic issues was an unfair labor practice.

If the parties agreed before negotiations that they could not move to economic issues before all non-economic issues were resolved, that could have had a different outcome.

But to refuse to bargain over items is not permitted.

 

Manufacturing Remains a Backbone to Ohio’s Economy

This article from is an excellent summary of how important manufacturing is in Ohio: Leads private sector with an annual GDP $130+ billion. Ohio is 3rd in U.S. for manufacturing employees (~700,000) and payroll ($44 billion).

Link to article in Crain’s Cleveland Business

Link to The Ohio Manufacturers’ Association comprehensive report discussed in in the article.

Well done Ryan Augsburger

 

The Perils of Relocating or Closing Facilities because of Union Organizing

Most people don’t realize that one of the remedies the NLRB can order is for a company to relocate and/or reopen.

Some companies faced with a union organizing drive relocate to avoid that drive. This is called a “runaway shop.”

Runaway shops risk being ordered to relocate back to their original location and offer to rehire the employees who lost their jobs. This gets expensive and complicated quickly.

Sometimes companies just close in response to union organizing. The law is a little trickier here. But, one of the remedies is to force the company to reopen and offer to rehire former employees (with backpay). The current NLRB will also order compensatory damages.

In 2018 a concrete company closed its truck repair operation and terminated two employees who tried to organize a union.

In 2020, the NLRB ordered the company to reopen its truck repair operation and rehire (with backpay) the two employees it terminated.

In 2021, the D.C. Circuit Court of Appeals remanded the case to the NLRB to determine if reopening a business that had been closed for 3 years was *really* warranted.

At end of 2022, the Biden NLRB held: “We find it inappropriate to order [the company] to reopen [when] there is no existing lease, where [the company’s] remaining facilities cannot adequately or lawfully house [the company], and where [the company] has not functioned as a business in over four years.”

This coming from the Biden NLRB may surprise you.

Not when you learn that the Biden NLRB’s 3-Member panel consisted of 2 Republican Members and 1 Democrat Member.

Member Pouty (D), of course, dissented to the ruling and would have required the company to reopen and rehire the workers.

The NLRB is now 3 Democrats and 1 Republican. And it will stay like this for at least the next 6 months.

Had the D.C. Circuit waited until today to remand the case, the company would have likely been ordered to reopen and rehire (with backpay) a company that had been closed for 4 years.

 

Union Denied the Right to Arbitrate No-Strike Clause, Required to Arbitrate

Lawyers stress over words. It’s our job. We don’t get to say, “you knew what I meant.” We must explicitly say what we mean.

When negotiating labor contracts, we sometimes take a lot longer than people expect us to when crafting language to go into a CBA. We look at all angles and stave off any potential ambiguity that can harm our client in the future.

Teamsters Local 414 did not do that when negotiating its CBA with United Natural Foods.

The union initiated two strikes against the company. The company sued the union in court alleging the strikes violated the CBA. The union argued it couldn’t be sued, rather the company had to arbitrate the issue outside of court.

Fatal to the Teamsters’ position was the language of the grievance and arbitration procedure; it was only meant to address “employee concerns and disputes.”

The Seventh Circuit said “Nowhere does the contract signal that the reach of the arbitration provision is meant to be broader than that of the grievance process and, if so, what types of additional issues the parties agreed to submit to arbitration.”

Basically, if you can’t grieve it, you can’t arbitrate it.

And grievances were only for employee disputes, not the no-strike clause. Company wins. The case avoids arbitration.

Words matter. Choose them carefully.

 

NLRB Says Simply Offering Severance Agreement with Confidentiality or Non-Disparagement Clause Violates the NLRA

This applies to all companies regardless of union status:

The NLRB just held that confidentiality and non-disparagement clauses in severance agreements violate Section 7 of the National Labor Relations Act.

Companies violate the Act simply by offering a severance agreement containing those clauses.

This only applies to employees who are not supervisors. The NLRA does not apply to management personnel. But that is little solace because non-management employees often possess confidential information about a company and its trade secrets.

The Board’s opinion gives some insight into how to tweak your severance agreements to comply with its ruling. Spoiler alert: you’re probably not going to like the suggestions.

I am not blindly telling clients to change their severance agreements. Companies should think critically before making changes.

Companies must evaluate the risk. Is violating the NLRA worth keeping your confidential information confidential and prohibiting disgruntled employees from speaking badly about you?

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Matt Austin is a nationwide management labor lawyer. Labor laws govern virtually all private-sector employees regardless of union membership. Proactive management of labor relations is critical to maintaining flexibility and increasing profit.

Matt also runs Austin Legal’s HR Legal Compliance Program that, for a small monthly fee, ensures HR decisions are protected by the attorney-client privilege.

Matt’s experience is deeply rooted in helping manage many aspects of his clients’ businesses. To effectively manage labor relations, he must also manage budgets, forecasts, new growth areas, and projected market corrections. High emotional intelligence is also critical to negotiating union contracts and to properly advise HR Legal Compliance members through the nuances of the law, its application to their companies, and how it will be received by employees.

You can reach Matt via email at Matt@MattAustinLaborLaw.com.