On January 13, 2011, National Labor Relations Board Chairman, Wilma Liebman, stated that “most people in the workplace don’t have a clue” that the National Labor Relations Act applies to non unionized employees and that “developing the message is the challenge” for the Obama Board. Rising to that challenge, the Board recently broadened protections for non-union employees who engaged in a work stoppage to force an employer to change its wage policies. See American Scaffolding, March 18, 2011.

In this case, the employer was a contractor for Exxon at a refinery scheduled for a “changeover.” During a changeover, the refinery is shutdown. Consequently, any delay in completing the work causes a significant loss revenue. Exxon estimated its loss during a changeover to be “millions of dollars a day.” American Scaffolding’s 200 employees were joined by 800 others, mostly from other contractors, in doing the changeover. The American Scaffolding employees were to assemble scaffolds necessary for the other contractor employees to perform their services.

At the shift change on one of the first days of the project, about 100 employees of American Scaffold refused to work, seeking to pressure the employer to change its new policy that a scheduled wage increase would become an incentive bonus, paid only to those employees who met various production and conduct standards.

The work stoppage began at a location within the refinery property. The employees presented their grievance to the project manager and waited for an answer. While waiting, the project manager urged them to go to work and, when they refused, asked the employees to leave the refinery area. The employees complied and moved to a parking lot owned by Exxon and adjacent to the refinery.

After approximately one hour, Exxon asked the employees to leave the parking lot. The employees complied and moved to a vacant lot across the street, also owned by Exxon. After approximately another hour, Exxon asked them to move completely off its premises and the employees moved to a nearby park.

While some of the employees heeded the requests of their employer and went to work, a significant number continued their concerted refusal. The employees who continued the stoppage were subsequently discharged from their employment. The entire work stoppage consumed 5.5 hours and the losses to Exxon were estimated as being in the millions of dollars.

The employees filed an unfair labor practice charge, asserting that they were engaged in activity protected by the NLRA and, therefore, their discharges violated the law, requiring reinstatement with full back pay.

In her decision, the Administrative Law Judge reviewed numerous Labor Board decisions and concluded that the Board has applied a balancing test to determine when the property rights of the employer would prevail over the statutory rights of non-union employees engaged in work stoppages. So long as the “in-plant work stoppage is peaceful, is focused on a specific job-related complaint, and causes little disruption of production by those employees who continue to work, employees are entitled to persist in their in-plant protest for a reasonable period of time” and their conduct would be protected by the NLRA.

Applying the law to the facts in this case, the ALJ gave particular weight to the fact that the job action lasted over five hours, impacted nearly 1000 workers’ ability to accomplish their work and idled hundreds of contractor employees in addition to those of the scaffolding contractor itself. Noting that in numerous prior cases, the Board had held that work stoppages lasting for less than an hour were found to be unreasonable, the ALJ held that, “at some time” during the five and half hour period, the employees had lost their statutory protections. Accordingly, she held that the discharges for refusing to return to work did not violate the NLRA.

In reversing the ALJ, the Board noted that the employees had exited Exxon’s property upon request and, therefore, the “in-plant work stoppage” rules did not apply because the striking employees were not denying their employer or Exxon the use of its property. Therefore, a balancing test was not warranted. Further, even if a balancing test were appropriate, the Board stated that the argument that the work stoppage lost its protection because of the economic harm was antithetical to the basic principles underlying the NLRA, “i.e., the right of employees to withhold their labor in seeking to improve their terms of employment and the use of economic weapons such as work stoppages as part of the ‘free play of economic forces’ that should control collective bargaining…The protected nature of the work stoppage in this case was not vitiated by the effectiveness of its timing.”

There are several take-aways from this case, apart from the fact that it underscores that non-union employees have rights protected by the NLRA, even when the exercise of those rights cause extraordinary damage. In assessing what to do when non-union employees engage in a work stoppage, an employer’s decision is impacted first by where the work stoppage is taking place. If the employees are on the property of the employer, a balancing test must be used to determine whether the employees are protected from discharge. The factors relevant to this test are (1) the reason the employees have stopped working (whether the protest is over a term or condition of employment), (2) whether the work stoppage is peaceful, (3) whether the work stoppage interferes with production (beyond the natural effect of the withholding of labor by the strikers) or deprives the employer of its use of its property, (4) whether the employees had an adequate opportunity and method for the presentation of grievances, (5) whether the employees were given a warning that they must leave the property or face discharge, (6) the length of the stoppage (stoppages as short as thirty minutes have been found to be too long), (7) whether the employees were represented, (8) whether the employees remained on the premises beyond their normal quitting time, (9) whether the employees attempted to seize the employer’s property. If, on balance, the factors favor the employees, the conduct is protected. If the balance tips toward the employer, the conduct loses its protection and the employees may be discharged without violating the NLRA. The balance test is at the employer’s risk, taking into account that the Board has the advantage of judgments based on hindsight. The stakes are huge, since, if the employer decides wrong and discharges the employees, the Board may order reinstatement with full back pay for each of the strikers. The American Scaffolding case took three years to be decided by the Board.

If the work stoppage by non-union employees takes place off the property of the employer, the current Board would likely find that the employees would be protected by the NLRA indefinitely, meaning that the employer may replace them but not terminate their employment, unless there is a clear indication from the conduct of the employees that they are abandoning their jobs.

American Scaffolding is clearly part of the Obama Board’s agenda to more aggressively apply the NLRA to non-union workplaces and unrepresented employees. We can expect the current Board to search out other opportunities to make its point, including a closer scrutiny of codes of conduct that may “chill” organizing activities, a narrowing of the definition of supervisor to increase the number of employees entitled to the protections of the NLRA, and permitting contractor and “temporary” employees to be part of a bargaining unit of regular employees