Employer's Campaign Speech and "Job Abandonment" Discharge Were Unlawful: NLRB | Practical Law

Employer's Campaign Speech and "Job Abandonment" Discharge Were Unlawful: NLRB | Practical Law

In Auto Nation, Inc. & Village Motors, LLC, the National Labor Relations Board (NLRB) held that the employer violated Section 8(a)(1) of the National Labor Relations Act (NLRA) through anti-union statements and promises of benefits made to employees at a meeting and violated Sections 8(a)(1) and 8(a)(3) of the NLRA by unlawfully discharging a union supporter and using "job abandonment" as pretext for that discriminatory act.

Employer's Campaign Speech and "Job Abandonment" Discharge Were Unlawful: NLRB

Practical Law Legal Update 4-574-4946 (Approx. 7 pages)

Employer's Campaign Speech and "Job Abandonment" Discharge Were Unlawful: NLRB

by Practical Law Labor & Employment
Published on 16 Jul 2014 • USA (National/Federal)
In Auto Nation, Inc. & Village Motors, LLC, the National Labor Relations Board (NLRB) held that the employer violated Section 8(a)(1) of the National Labor Relations Act (NLRA) through anti-union statements and promises of benefits made to employees at a meeting and violated Sections 8(a)(1) and 8(a)(3) of the NLRA by unlawfully discharging a union supporter and using "job abandonment" as pretext for that discriminatory act.
On July 9, 2014, in Auto Nation, Inc. & Village Motors, LLC, the panel (Board) heading the NLRB's judicial functions held that the employer violated Section 8(a)(1) of the NLRA when at an employee meeting it made threats and anti-union statements suggesting that electing the union would be futile. The majority of the three-member Board panel also held that the employer violated Section 8(a)(1) by promising future benefits to employees for not voting for the union in the pending election and violated Sections 8(a)(1) and 8(a)(3) of the NLRA by unlawfully discharging a union supporter and using "job abandonment" as pretext for that discriminatory act. (360 N.L.R.B. slip op. 141 (July 9, 2014).)

Background

Liberty Toyota (Liberty) is a wholly-owned subsidiary corporation of Auto Nation. The dealership employs about 140 employees, 80 of which are assigned primarily to the service department. A union attempted to organize these service department employees in previous years. However, mainly through Auto Nation, Liberty has always resisted the union's organizing efforts and has developed opposition strategies and materials.
In August 2011, the union attempted another organizing effort. In opposition, Liberty held several informal meetings with the service employees. On August 23, Auto Nation representatives and lead dealership management convened another meeting with the service department employees, expressing their opposition to the union. This meeting was surreptitiously tape recorded by a tech who was also a lead union supporter.
Later on August 23, Liberty's general manager received an anonymous phone call identifying another tech, Jose Huerta, as:
  • A union supporter.
  • An employee whose driver's license had been suspended by the state.
Liberty suspended Huerta and later terminated him.
The NLRB's General Counsel issued a complaint alleging that Liberty:
  • At the August 23 meeting, violated Section 8(a)(1) of the NLRA by:
    • telling service employees it would be futile to select the union as their bargaining representative because it will take years of negotiations;
    • threatening employees with demotions if they selected the union as their bargaining representative;
    • threatening employees with blacklisting them to future employers if they supported the union; and
    • making an implied promise of raises.
  • On August 24 and 25, violated Section 8(a)(3) and (1) of the NLRA by:
    • suspending Huerta; and
    • discharging Huerta because he attempted to union organize and engage in protected activities and to discourage (other) employees from engaging in these activities.
An NLRB Administrative Law Judge (ALJ):
  • Found that Liberty, through Auto Nation's Vice President and Human Resources Director, committed numerous violations of Section 8(a)(1) of the NLRA through the statements it made at the August 23 meeting with service employees.
  • Dismissed allegations that Liberty unlawfully suspended and discharged Huerta because of his union activity.

Outcome

The three-member Board panel (Members Hirozawa, Miscimarra and Schiffer) unanimously:
  • Affirmed the ALJ's findings that Liberty, through Auto Nation's Vice President and Human Resources Director, violated Section 8(a)(1) of the NLRA by making threatening statements and statements about the futility of selecting union representation to service employees at the August 23 meeting.
  • Affirmed the ALJ's finding that Liberty's suspension of Huerta did not violate Sections 8(a)(1) and 8(a)(3) of the NLRA.
In affirming the ALJ's finding that Liberty violated Section 8(a)(1) of the NLRA through statements made to service employees at the August 23 meeting, the Board agreed in particular that Liberty:
  • Implicitly threatened employees that it would be futile to select the union as their bargaining representative. The Board agreed that Liberty conveyed the message to employees that selecting the union was futile because:
    • Liberty's comments effectively communicated that the selection of the union would inevitably lead to years of delay and years of frozen benefits while negotiations were proceeding; and
    • by introducing the example of employees at Liberty's Orlando dealership who had voted for union representation in 2008, and who in three years had not had any bargaining sessions or contract negotiations, the vice president was suggesting that bargaining might never begin.
  • Threatened demotions. The Board agreed with the ALJ's finding that Liberty threatened to demote employees because of their union activities, therefore violating Section 8(a)(1) because:
    • the vice president's remarks concerning demotion contrasted sharply with his comments concerning gains the employees might achieve through organizing; and
    • taken as a whole, Liberty's comments about reclassification and demotion of employees were unlawful.
Regarding Huerta's suspension, the Board found that:
  • Analysis of Huerta's suspension is governed by Wright Line, 251 N.L.R.B. 1083 (1980).
  • Liberty established a Wright Line defense.
  • The key question is whether Liberty's treatment of Huerta was consistent with their treatment of other driving employees who had lost their driver's licenses.
  • The General Counsel contended that in the past seven years, one in four employees lost their licenses but were allowed to continue working without suspension. However, the record did not show that Liberty in the past suspended employees who lost their licenses. It is possible that employees were suspended for a time and then reinstated or took on a nondriver position. Testimony of one employee about events that occurred ten years ago (that when his license was suspended he was allowed to keep working as long as he did not drive) did not provide sufficient grounds for reversing the ALJ.
  • The General Counsel therefore did not establish sufficient grounds to reject Liberty's testimony that it would have suspended Huerta for losing his license as it did for all other similarly situated employees.
The Board majority (Members Hirozawa and Schiffer):
  • Reversed the ALJ's dismissal of allegations that Liberty unlawfully discharged Huerta because of his union activity in violation of Sections 8(a)(1) and 8(a)(3) of the NLRA.
  • Affirmed the ALJ's conclusion that Liberty violated Section 8(a)(1) by making an implied promise of wage increases to employees to discourage them from supporting the union because:
    • statements about Liberty's future actions, that a wage increase was absolutely possible and something Liberty was definitely willing to consider, were especially meaningful because they contrasted with Liberty's negative statements about union representation, that wages and other employment terms would remain frozen potentially for years if the employees selected union representation; and
    • the vice president's statement that "we want a chance to address [those issues] before you pay someone else to address them," directly links the remedying of employees' grievances with their rejection of union representation.
Regarding Huerta's discharge, the Board majority found that:
  • Analysis of Huerta's discharge is governed by Wright Line.
  • It is undisputed that Huerta was an active union supporter and that Liberty was aware of this.
  • Liberty's unlawful statements made at the August 23 meeting showed its anti-union animus.
  • The General Counsel met its burden to show that Huerta's union activity was a motivating factor in his discharge.
  • Liberty used "job abandonment" as a pretext for discharging Huerta because of his union activities. The pretextual nature of Liberty's claim that it fired Huerta for job abandonment prevents Liberty from asserting a Wright Line affirmative defense because it is unable to assert any other basis for the termination.
  • There is nothing illogical or unwise about Huerta's assumption that he had been terminated after he received two letters to this effect from Liberty. Furthermore, whether his actions were logical or wise is not the issue. What is important is whether Liberty discharged Huerta because of his union activity.
  • Liberty knew that Huerta believed he had been terminated because they heard from the state unemployment agency. However, Liberty made no attempt to explain to Huerta that he had only been suspended not terminated. Instead, Liberty allowed Huerta to think he had been terminated. Then, when he did not return to work for this reason, terminated him for job abandonment.
  • Liberty's claim of job abandonment was a thinly-veiled pretext for dispatching a prominent union supporter.
Member Miscimarra wrote separately, concurring in part and dissenting in part, concluding that:
  • The ALJ correctly determined that Liberty would have discharged Huerta for job abandonment regardless of his prior union activity and dismissed the Section 8(a)(3) discharge allegation. The majority erred by:
    • deviating from Wright Line and finding that evidence of Liberty's generalized union animus (in threatening statements to employees) was sufficient proof that union animus was a motivating factor for the termination;
    • discounted record evidence and the ALJ's findings that the manager who decided to terminate Huerta for job abandonment had no specific animus against Huerta for his union activities when he terminated him for job abandonment after Huerta did not return to work after a suspension and applied for unemployment insurance;
    • imposed a burden on the employer to tell an employee who failed to return to work after a suspension and applied for unemployment insurance benefits or else forfeit the defense that the employer discharged the employee with the legitimate understanding that the employee abandoned his job; and
    • held that there was no legitimate reason for Huerta's discharge in these circumstances.
  • The ALJ and majority erred by finding that Liberty impliedly promised wage increases for employees if they voted against union representation. Board precedent holds that employers' hopeful statements akin to "give us a chance to improve" and vague suggestions that they might in the future consider making changes are not unlawful promises of future benefits (for example see Noah's New York Bagels, Inc. (324 N.L.R.B. 266, 272 (1997)) (Noah's Bagels)).

Practical Implications

This case signals the majority’s departure from the traditional Wright Line standard under which the counsel for the NLRB's General Counsel has the burden of showing that a particularized animus motivated in part an employer's decision to take an adverse employment action against an employee.
The majority also appears to impose a new obligation on employers to clear up any potential employee misunderstandings about discipline or else forfeit rights to reasonably interpret and react to the employee's actions following that discipline.
Finally, the majority's broad interpretation of what constitutes unlawful implied promises of future benefits contradicts Board precedent including Noah's Bagel's, holding that employers may lawfully make hypothetical or wishful statements akin to "give us a chance to improve" in campaign speeches because they are neither express nor implied promises of future benefits conditioned on employees' rejections of union representation.