Company Requesting Specific Level of Production before Wage Increases Forced to Open Books to Union
A metal processing company and the United Steel Workers (USW) were engaged in protracted negotiations in an attempt to obtain their first contract. During bargaining, the Company stated that it had to retain a specific level of production to be profitable and to improve the employees’ wages and benefits. The Union then pressed management on whether the Company was profitable and whether it could afford a wage increase for employees. The Union followed up with a written request for financial statements, sales records, and tax returns, which the Company rejected.
The administrative law judge (ALJ) concluded that the Company’s specific claims and the positions they took in bargaining made the information requested by the Union relevant. The Company had a statutory obligation to produce the information based on its references to poor business conditions, lost business to competitors, and increased taxes.
Companies that attempt to bargain based on their specific economic conditions may find themselves in a similarly undesirable position. Even though the Company did not specifically claim an inability to pay (or “plead poverty”), it still had a duty to release the financial records that were relevant to the specific factual claims and counterproposals made during bargaining. Companies must be careful to avoid making specific claims regarding their financial situation or else risk having to release their financial records to a union that represents its employees.
NLRB Orders Hospital to Reimburse Employees for Health Insurance Premium Increase
Health insurance is one of the most contentious issues raised during bargaining. A health insurance provider terminated its contract with a unionized hospital. The hospital sought the consent of its union, the Michigan Association of Police, to change its members’ coverage at the end of the year. The Company and the Union could not reach an agreement, so the hospital unilaterally changed the employees’ contribution rate. The Union filed an unfair labor practice charge over the unilateral change.
The Board found that the collective bargaining agreement contained two relevant provisions. One gave the Company the right to select and change insurance carriers, as long as similar health coverage was maintained. The other gave the Company the right to amend the plan design of the health insurance benefits with notice to the Union, but required that employee premiums stay the same. The hospital relied on its right to change insurance carriers to argue that the language in the other provision regarding employee premiums was irrelevant, but the Board disagreed. Instead, the Board found that the language prohibiting changes to the premium payment schedule was unambiguous. The Board ordered the hospital to reimburse employees for any expenses they incurred resulting from the premium increases.
A consistent rise in health insurance premiums is a concern for union and non-union employers. Companies must be sure that their union contracts give them adequate flexibility to increase employee premiums based on market conditions and the ability to change the Company’s insurance carrier.
Employee Who Filed Lawsuit on Behalf of Other Employees Without Their Authorization Participated in “Concerted Activity”
A New York waiter filed a lawsuit against his employer alleging that the restaurant had underpaid its tipped employees in violation of the Fair Labor Standards Act (FLSA) and New York labor law. The waiter filed the action without the consent of any other employees, but he requested that the lawsuit be treated as a collective action under the FLSA on behalf of similarly-situated current and former employees. The restaurant’s general manager immediately took the employee off the restaurant’s work schedule after being served with the suit, effectively terminating him. The waiter filed an unfair labor practice charge.
The administrative law judge found that the lawsuit triggered the Company’s action in terminating the waiter. The question then became: Does a single employee filing a lawsuit constitute protected, concerted activity? The Board thought so, explaining that “the filing of an employment-related class or collective action by an individual employee is an attempt to initiate, to induce, or to prepare for group action and is therefore protected by Section 7.” Board Member Miscimarra dissented stating that while a group of two or more employees acting in concert on non-NLRA claims might be protected by the NLRA, this waiter’s individual act of filing a lawsuit was not concerted activity.
This case is reminiscent of a previous case we wrote about in which a teacher making a comment to himself was found to have engaged in concerted activity. [See, “Conversations You Have With Yourself When Alone May Be ‘Concerted Activity”. The Board has steadily expanded the scope of concerted activity such that employers should be concerned that even non-NLRA claims may be protected by the NLRA.
ALJs Inconsistent About Whether to Follow Case Invalidated by Noel Canning
We previously wrote about a case where an administrative law judge (ALJ) refused to rely on Alan Ritchey, a case invalidated by the Supreme Court’s decision in NLRB v. Noel Canning. [See, “ALJ Refuses to Follow Case Invalidated by Noel Canning”]. Alan Ritchey addressed whether a newly-elected union was entitled to notice and an opportunity to bargain before an employer disciplined union-represented employees. The ALJ in that decision recognized the limits of Noel Canning, and based his ruling on valid Board precedent rather than Alan Ritchey.
But not all ALJs are willing to play by the rules. A home healthcare company recently disciplined employees during the period between union certification and contract approval without first bargaining with the union. Five employees were either terminated, placed on administrative leave, or otherwise disciplined for various violations of the Company’s policies. In evaluating whether to uphold the discipline issued, the ALJ recognized that Alan Ritchey was not valid precedent but relied upon it anyway. The ALJ stated, “I have decided to place the “chips” so to speak, on the course of action I reasonably suspect the Board will ultimately adopt.” Really? Rather than follow the law, this ALJ openly disobeyed the law because he had a hunch that the Board would change the law at some point in the future?
This rogue ALJ ruled for the employer on the termination of an employee who had stolen and used a patient’s debit card, explaining that an employer has a right to exercise discipline without bargaining if there are “exigent circumstances” for doing so. However, he found that the same exigent circumstances did not exist for the disciplinary action taken against the other four employees who were disciplined for reasons such as failure to write client narratives, sleeping on the job, and missing work and refusing to work weekends. The Company had to notify and work with the Union when it disciplined these four employees.
We have become callous to not being able to rely on precedence when litigating cases before the NLRB. But, we used to find solace in knowing that an ALJ would follow the current state of the law. Not anymore. Here, it seems the ALJ carved out an exception for “exigent reasons” such as criminal activity, but it remains unclear how this will be interpreted. Unlike other decisions affected by Noel Canning, Alan Ritchey cannot simply be re-decided because it was closed after the employer voluntarily complied with the Board’s decision. It is likely that the Board will tackle this issue with another case given the varying interpretations.
Employee Warning Coworker of Impending Termination is Protected Concerted Activity
A non-supervisory parts inspector noticed that a fellow employee, a machine operator, had not shown up to work recently. The inspector asked the plant manager about the machine operator, and the plant manager responded that the machine operator “doesn’t work here anymore.” The inspector then used his cell phone to call the operator, who explained that he had been sick. The inspector informed the operator that he did not think he had a job with the Company anymore. The operator immediately called the Company and told the plant manager that he was upset to learn about his firing from another employee. Based on this report, the Company interviewed the inspector and then fired him for “misconduct.” The inspector filed an unfair labor practice charge with the National Labor Relations Board over his termination.
The administrative law judge (ALJ) explained that “the Board repeatedly has held that an employee’s warning to another employee that the latter’s job is at risk constitutes protected, concerted activity.” Accordingly, the ALJ found that the call from the inspector to the operator was protected concerted activity under the National Labor Relations Act. The ALJ ordered the inspector be reinstated and made whole for any loss of pay or benefits caused by his termination.
This case demonstrates the wide range of activity that the NLRA protects as concerted activity. Of course, this case would never have seen the light of day had the plant manager not prematurely shared an employment decision with the inspector before notifying the operator of his termination. As such, this case is a good reminder of not only the lengths the Board will go to protect activity but also that loose lips sink ships and supervisors should not universally discuss personnel matters.