Subsequent Unfair Labor Practices Can Shed Light on Employer's Discriminatory Motive for Lockout: NLRB | Practical Law

Subsequent Unfair Labor Practices Can Shed Light on Employer's Discriminatory Motive for Lockout: NLRB | Practical Law

In Dresser-Rand Co., the National Labor Relations Board (NLRB) adopted the reasoning and conclusions from an earlier decision that was vacated in light of the Supreme Court's Noel Canning decision. The NLRB again found that unfair labor practices (ULPs) an employer committed after ending an otherwise lawful lockout supported an inference that the lockout was unlawfully motivated by anti-union animus.

Subsequent Unfair Labor Practices Can Shed Light on Employer's Discriminatory Motive for Lockout: NLRB

by Practical Law Labor & Employment
Published on 07 Jul 2015 • USA (National/Federal)
In Dresser-Rand Co., the National Labor Relations Board (NLRB) adopted the reasoning and conclusions from an earlier decision that was vacated in light of the Supreme Court's Noel Canning decision. The NLRB again found that unfair labor practices (ULPs) an employer committed after ending an otherwise lawful lockout supported an inference that the lockout was unlawfully motivated by anti-union animus.
In Dresser-Rand Co., the panel (Board) heading the NLRB's judicial functions issued a decision and order in which it adopted the reasoning and conclusions of an earlier invalid Board panel (Dresser-Rand Co., 358 NLRB No. 97, (Aug. 6, 2012); also see Legal Update, Unfair Labor Practices Occurring After Lockout Ended Show Unlawful Intent Behind Lockout: NLRB).
The August 6, 2012 decision and order was invalidated because the Board then was composed of two persons whose appointments the Supreme Court held constitutionally infirm in Noel Canning (134 S.Ct. 2550 (2014)). For more information on Noel Canning, see Article, Expert Q&A on Noel Canning and Its Aftermath and Legal Update, Supreme Court Holds 2012 Recess Appointments to the NLRB Were Invalid, Effectively Invalidates 20-Months of NLRB Decisions.
A Board majority (Chairman Pearce and Member Hirozawa, Member Johnson dissented in part) reviewing the Administrative Law Judge 's (ALJ) decision held that unfair labor practices (ULPs) committed by employer Dresser-Rand 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. (362 N.L.R.B. slip op. 136 (June 26, 2015).)
The Board affirmed the ALJ's decision and found that:
  • To determine whether a charged party's conduct is unlawful, it examines the context of the conduct, including the preceding, contemporaneous and subsequent words and deeds (see, for example, SCA Tissue North America LLC v. NLRB, 371 F.3d 983, 990 (7th Cir. 2004), enfg. 338 N.L.R.B. 1130 (2003)).
  • Although the ultimate question is the employer's motive at the time it instituted the lockout, Dresser-Rand's subsequent conduct, just days after it conducted the lockout, sheds light on its motive. This discriminatory conduct that showed anti-union animus included:
    • recalling crossovers employees (those who returned to work during the strike) before recalling full-term strikers; and
    • denying strikers their accrued vacation benefits.
  • The ALJ properly rejected Dresser-Rand's reasons for deciding to lock out the strikers and recall the crossovers before the strikers, including Dresser-Rand's assertions that it:
    • did not think the union's offer to return to work after the strike was "unconditional"; and
    • feared that returning strikers would sabotage the company and disrupt production by all using their accrued vacation time as soon as they were recalled.
Member Johnson dissented in part, finding that the lockout was lawful because:
  • Dresser-Rand had a legitimate and substantial business justification for locking out employees (the use of economic pressure to induce the union to agree to its proposals).
  • The subsequent ULPs relied upon by the majority failed to shed any light on Dresser-Rand's contemporaneous motive for the lockout, as:
    • a party's intent may change over time; and
    • there was no evidence that Dresser-Rand acted with anti-union motivation at the time it made the decision to institute the lockout.

Practical Implications

Employers that institute a lockout must ensure that their post-lockout activities are lawful under the NLRA. In light of this decision, the Board may find an otherwise lawful lockout to be unlawfully motivated based on subsequent ULPs committed by the employer, particularly if the unlawful conduct occurs shortly after the lockout.
UPDATE: On September 23, 2016, in Dresser-Rand Co. v. NLRB, the US Court of Appeals for the Fifth Circuit held that substantial evidence did not support the NLRB’s findings that Dresser-Rand unlawfully:
  • Treated crossovers more favorably than strikers.
  • Failed to negotiate a recall procedure.
  • Failed to recall Brown, a worker that engaged in strike misconduct.
  • Modified a lunch break practice after the CBA expired though post impasse implementation rules it imposed.
The Fifth Circuit further held that the NLRB erred by holding that a lockout was unlawful. Without addressing the legal principle of whether the NLRB could use post-lockout misconduct as a basis for finding that an otherwise lawful lockout was unlawfully motivated by union animus, the court held that the only unfair labor practice, an improper suspension, was not motivated by union animus, and on the facts of this case, there no basis for holding post-lockout animus could be attributed to the lockout, or render it unlawful. ( (5th Cir. 2016).)