Seyfarth Synopsis: Board panel found that long-term care facility acted for an “independent unlawful purpose” when it permanently replaced striking workers allegedly in order to teach the union and strikers a lesson and to avoid future strikes.

Ever since the Board’s decision in Hot Shoppes, Inc., 146 NLRB 802 (1964), employers have been permitted to hire permanent replacement workers for economic strikers almost at will, unless the union can put forth evidence that the employer was motivated by an “independent unlawful purpose.” An “independent unlawful purpose” was understood to exist when an employer’s hiring of replacement workers was “unrelated or extraneous to the strike itself.” Last week, the Board’s decision in American Baptist Homes d/b/a Piedmont Gardens, 364 NLRB No. 13 (2016) extended the Hot Shoppes’ “independent unlawful purpose” standard to apply to situations where the alleged unlawful purpose was allegedly related to a desire to avoid future strikes.

Background

In the midst of collective bargaining negotiations, the union sent the employer two letters; the first letter notified the employer that the union would be commencing a strike on the following Monday, while the second letter indicated that the striking employees “unconditionally offer to return to work” the following Saturday. In order to avoid any disruption in business, the employer engaged a staffing agency at a cost of $300,000 to hire temporary workers. However, rather than waiting for the striking workers to return to work, the employer began offering permanent employment offers to the temporary workers. According to the employer, the primary motivation for permanently replacing striking workers was that “replacements would come to work if there was another work stoppage.” On the other hand, the employer’s attorney allegedly told the union’s attorney that the employer “wanted to teach the strikers and the Union a lesson. [The employer] wanted to avoid any future strikes and this was the lesson they were going to be taught.”

The General Counsel alleged that the employer committed an 8(a)(3) and (1) violation by failing to reinstate striking employees, and that the employer was motivated to permanently replace striking workers by an “independent unlawful purpose.” An ALJ initially held that the replacements were permissible, however, the General Counsel appealed that decision to the Board.

Decision

According to the Board, an employer is motivated by an “independent unlawful purpose” when they intend “to discriminate or to encourage or discourage union membership.” As such, “it is axiomatic that an employer violates the Act when it retaliates against employees for engaging in union or other protected activity, and that the right to strike is fundamental.” Thus, contrary to the ALJ’s interpretation, “the phrase ‘independent unlawful purpose’ does not require that the unlawful purpose be unrelated or extrinsic to the parties’ bargaining relationship.”

According to the Board, when the employer’s attorney told the union’s attorney that he wanted to “teach the strikers and the Union a lesson,” he revealed the employer’s intent to punish union employees in retaliation for participating in protected activity. As a result, the Board ordered the employer to offer full reinstatement to striking workers and pay compensatory damages.

Dissenting, Member Miscimarra attacked the majority’s decision as rendering prior Board law on this issue a nullity and disrupting the balance of power between employers and unions with respect to the use of economic weapons. Member Miscimarra noted that under the majority’s decision, if an employer hires permanent replacements, any stray comment made by an executive, manager, attorney, persuader, or supervisor indicating anti-strike animus could render unlawful the employer’s actions, resulting in potentially devastating back-pay liability.

Outlook for Employers

Following this decision, employers considering whether to replace workers permanently during an economic strike must proceed with caution to avoid the appearance of anti-union animus. As Member Miscimarra predicts in his dissent, this decision will likely result in many employers choosing to rely solely on temporary replacements during a work stoppage and significantly limit the effectiveness of permanent replacements as a legitimate economic weapon. Employers should expect unions emboldened by this decision to adopt more aggressive positions at the bargaining table and be more willing to call a strike.