On August 6, 2012, the NLRB issued a decision in Dresser-Rand Co. A key litigated issue in the case was whether unfair labor practices (ULPs) committed by the employer, Dresser-Rand Company, after it ended a lockout allowed an inference that the lockout itself was motivated by unlawful anti-union animus, even though the employer articulated legitimate business justifications for the lockout.

After negotiations on a successor collective bargaining agreement (CBA) between Dresser-Rand and the union, IUE-CWA, AFL-CIO, Local 313, broke down, the union began an economic strike on August 4, 2007 to pressure Dresser-Rand to cede to its bargaining demands. Dresser-Rand continued operations at its Painted Post plant throughout the strike by hiring both temporary and permanent replacement workers. During the strike, 13 strikers crossed the picket line and returned to work at the plant.

On November 19, the union offered to return to work on behalf of the remaining strikers. Dresser-Rand rejected the union's offer and began a lockout on November 23. Dresser-Rand did not lock out the permanent replacement workers they hired during the strike, for economic reasons and because the company's agreements with the permanent replacements did not envision letting the permanent replacements go if a lockout occurred. However, Dresser-Rand did lock out both the current strikers and the strikers who crossed the picket line (crossovers), as it was concerned that allowing the crossovers to work during the lockout would give them an illegal discriminatory benefit for crossing the picket line in violation of the NLRA. Dresser-Rand ended the lockout on November 29, declared an impasse in bargaining and imposed its last offer on the union.

After the lockout ended, the union claimed Dresser-Rand violated the NLRA, in part by:

An NLRB administrative law judge (ALJ) found Dresser-Rand committed various unfair labor practices including discriminatory treatment of striking employees and unilateral changes to terms and conditions of employment. The ALJ also found that although the lockout itself was lawful, the number of ULPs Dresser-Rand committed after the lockout ended and their pervasive effect on the bargaining unit merited an inference that Dresser-Rand instituted the lockout for unlawful anti-union reasons.

Dresser-Rand appealed by filing exceptions with the panel (Board) heading the NLRB's judicial functions.

In a 2-1 decision, the Board upheld the ALJ's decision in its entirety, including the ALJ's conclusion that Dresser-Rand's post-lockout ULPs allowed an inference that the lockout itself was unlawfully motivated.

Initially, the ALJ held that:

The ALJ similarly upheld Dresser-Rand's decision not to lock out the permanent replacement workers, because:

However, the ALJ found and the Board agreed that although there was no direct evidence that the lockout was motivated by anti-union animus, ULPs committed by Dresser-Rand after the lockout which were related to the lockout supported an inference that Dresser-Rand's decision to impose the lockout was unlawfully motivated. The ALJ found that Dresser-Rand violated the NLRA by:

Given the number of these ULPs and their pervasive effect on the bargaining unit, the ALJ and the Board found the lockout was improperly motivated.

Member Hayes dissented, concluding that Dresser-Rand's motives in locking out employees must be measured at the time it decided to institute the lockout, not after the fact. Member Hayes also noted that some of the ULPs found by the ALJ were alleged as violations of Section 8(a)(5) of the NLRA, which does not require a showing of unlawful motive.

The Board's decision highlights that ULPs committed after a lockout may be used to infer that a company's decision to institute the lockout was unlawfully motivated. In light of this decision, employers that exert economic pressure on unions by conducting a lockout must ensure that their post-lockout activities are lawful. Otherwise, they risk the Board later determining that their otherwise lawful lockout is tainted with unlawful intent.

For more information on lockouts and the collective bargaining process, see Practice Note, Collective Bargaining under the National Labor Relations Act.