NLRB to Unionized Employers – Hiring Permanent Strike Replacements is Not Always Lawful and Motive Now Matters
By Ruder Ware Alumni
June 2, 2016
It is well settled that once a union exercises its weapon to engage in an economic strike, an employer is empowered to continue its business operations through hiring of permanent strike-replacement employees. Whether a strike-replacement employee is “permanent” for the purposes of the National Labor Relations Act involves a fairly technical analysis, and includes the consideration of factors such as whether the employer appropriately notified the strike-replacement employee that his/her employment is for the purpose of replacing a striking worker, and that he or she is not expected to be displaced at the end of the strike. Presently, the law also supports the use of at-will employment disclaimers in connection with the hiring of strike-replacement employees, and the use of disclaimer language suggesting that a settlement with the union could cause displacement, without precluding a finding of “permanency.” However, the National Labor Relations Board, in American Baptist Homes of the West d/b/a Piedmont Gardens, 364 NLRB No. 13 (2016), recently placed unionized companies on notice that motive now matters too, as explained below.
In American Baptist Homes of the West d/b/a Piedmont Gardens, the Board opined:
…[T]he permanent replacement of strikers is not always lawful. The Board will find a violation of the Act if it is shown that, in hiring the permanent replacements, the employer was motivated by an independent unlawful purpose.
Significantly, in this case, the Board rejected the administrative law judge’s ruling that an “independent unlawful purpose” sufficient to make the hiring of strike-replacement employees unlawful, must be “unrelated or extrinsic to the parties’ bargaining relationship or the underlying strike.” In other words, the administrative law judge took the position that an employer’s motives underlying the hiring of replacement workers was not outcome determinative. In American Baptist Homes of the West d/b/a Piedmont Gardens, however, the Board cited two pieces of evidence that supported a finding of unlawful motive, which made the hiring of replacement workers unlawful: (1) the company’s legal counsel told the union’s attorney that the decision to hire replacement workers was motivated by a desire to “teach the strikers and the union a lesson;” and (2) the company’s Executive Director admitted that the decision to hire replacement workers was motivated by a desire to “avoid any future strikes,” which the Board found to interfere with future protected activity. This decision, however, is a significant departure from decades old Board law, which previously stood for the proposition that “motive is immaterial” when scrutinizing an employer’s decision to hire strike-replacement employees [from Hot Shoppes, Inc., 146 NLRB 802, 805 (1964)].
The takeaway for unionized employers facing the prospect of an economic strike is that under the current regime, an employer’s motives for hiring strike-replacement employees will be closely scrutinized by the Board. This means extra care must be exercised in connection with internal and external communications, whether orally or in writing, related to the process of hiring replacement workers. Employers must take great care to ensure that internal and external job advertisements, employment application forms and other personnel intake forms are properly worded to avoid any suggestion of anti-union animus in connection with the hiring of strike-replacement workers.
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