Executive Summary: In 2016, the National Labor Relations Board (NLRB) issued several significant decisions with legal and practical implications for employers acquiring unionized operations. Employers acquiring unionized operations must take extra precautions if they wish to set initial terms and conditions of employment for newly acquired/hired employees.
Articles Discussing Successorship Issues Under The NLRA.
In Paragon Systems, Inc., 364 NLRB No. 75 (2016), the National Labor Relations Board declined the General Counsel’s request to overturn its 42-year-old decision in Spruce Up Corp., 209 NLRB 194, 195 (1974), enfd. per curiam 529 F.2d 516 (4th Cir. 1975).
In HTH Corporation v. NLRB, the U.S. Court of Appeals for the D.C. Circuit rejected the National Labor Relations Board’s attempt to expand the remedies under the National Labor Relations Act for unfair labor practices to include an award of litigation expenses (attorneys’ fees and costs). In Camelot Terrace, Inc. and Galesburg Terrace, Inc. v. NLRB, decided June 10, 2016, the court again rejected the Board’s award of litigation expenses, relying on its decision in HTH Corp. However, the court affirmed the Board’s order that Camelot Terrace, Inc. and Galesburg Terrace, Inc. (the Companies) reimburse the bargaining expenses incurred by the Service Employees International Union (SEIU) as an appropriate remedial measure for having engaged in bad faith bargaining with the union, addressing the question directly for the first time.
In a previous post, we reported on Browning-Ferris Industries of California Inc., 362 NLRB No. 186 (2015), a landmark National Labor Relations Board decision that established a new “test” for the NLRB to apply when determining joint employer status under the National Labor Relations Act.
On August 21, 2015, the U.S. Court of Appeals for the D.C. Circuit upheld the U.S. Department of Labor’s (DOL) Home Care Rule and reversed the lower court’s decisions vacating the new rule. On October 6, 2015, the U.S. Supreme Court denied the home care industry coalition’s application to stay the effective date of the new rule pending its filing of a petition for certiorari. This means that the appeals court’s “mandate” will become effective on October 13.
On September 30, 2014, the National Labor Relations Board overruled established precedent once again. The Board’s decision enhanced the liability to which a successor employer is exposed when it fails to hire employees of its predecessor to avoid recognizing their union representative. In Pressroom Cleaners Inc., Decision and Order, Case No. 34-CA-071823 (Sept. 30, 2014), the Board held a successor found guilty of such a scheme, in addition to being required to recognize and bargain with the union, had to: (1) restore the “status quo” by putting in place the employment terms of its predecessor, i.e., those spelled out in their old labor agreement, until it bargained to an agreement or impasse with the union; and (2) pay the employees it unlawfully failed to hire back pay and benefits under the monetary terms under which they worked for the predecessor.