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

In a recent decision, a 2-1 Board panel (Pearce, Hirozawa) ordered a long-term care facility, Piedmont Gardens, to offer to rehire union workers it replaced during a strike, finding that Piedmont Gardens replaced the striking workers out of an unlawful desire to retaliate and to discourage future protected activity. American Baptist Homes of the West d/b/a Piedmont Gardens, 364 NLRB No. 13 (May 31, 2016). The long-term care facility provides independent living, assisted living, and skilled nursing services. The dispute at issue followed a strike in 2010 by eighty non-professional workers over collective bargaining disputes. The striking workers made unconditional offers to return to work after five days but the employer had permanently replaced approximately twenty of the strikers.

The General Counsel alleged that Piedmont Gardens’ decision to permanently replace the strikers was motivated by an “independent unlawful purpose” as set forth in the Board’s decision in Hot Shoppes, Inc., 146 NLRB 802 (1964). The administrative law judge rejected this argument, finding that Piedmont Gardens’ motive for replacing the workers–to teach the strikers a lesson and to discourage future strikes–was related to the underlying strike and did not constitute an independent unlawful purpose under the Board’s Hot Shoppes standard. In so holding, the administrative law judge held that an independent unlawful purpose for replacing striking workers is established only when an employer’s hiring of permanent replacements is “unrelated to or extraneous to the strike itself.”

The Board panel reversed the administrative law judge and extended the Hot Shoppes’ “independent unlawful purpose” standard to apply to situations where the alleged unlawful purpose is related to the parties’ bargaining relationship or underlying strike. Acting on this theory, the Board held that Piedmont Gardens’ decision to replace striking workers was rooted in anti-strike animus and therefore unlawful. The Board panel ordered Piedmont Gardens to offer re-employment to the striking workers and issue back pay going back to August 7, 2010 (the date the strikers pledged to return to work).

Dissenting, Member Miscimarra attacked the majority’s decision as rendering Hot Shoppes 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, or supervisor indicating anti-strike animus could render unlawful the employer’s actions, resulting in potentially devastating back pay liability.

Following this decision, long-term care facilities and other healthcare 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.