Justice Delayed but at Least Not Justice Denied – Labor Law Violator Admits Wrongs and Settles

The spree of lawlessness undertaken by the three conservative appointees to the NLRB – popularly referred to as the “Bush Board” – is regularly being shown up for what it was: a failure to apply the law and a willingness to violate the norms of legal analysis. Court after court has overturned these decisions, and not just overturned them. The courts have scolded and mocked the majority and all but called them renegades. Here is an overview of one of those cases, a case which has now been resolved, with the good guys winning.

We did a bit of our own mocking when Bush renominated Chairman Robert Battista, including excerpts from the court of appeals decisions reversing him in the case of Joliff. Link

It was just announced that one of those very bad – OK, completely lawless – decisions that was reversed by the court of appeals has been settled. According to Labor Prof Blog,

BNA’s Daily Labor Report (subscription required) has noted that Midwest General and the IBEW has reached a $15.5 million settlement to resolve a dispute centered on the employer’s unlawful lockout. According to the DLR:

[T]he settlement provides approximately $10 million in back pay to 1,015 Midwest Generation employees affected by the seven-week lockout. The remainder of the settlement is designed to compensate the workers for giving up their rights with respect to an unresolved legal question: whether Midwest Generation used the lockout to coerce employees into ratifying management’s contract proposal.


While most of the public is not even aware that there is a partial lockout doctrine, it is easy to understand what the violation was in Midwestern Generation and Bunting Bearings, the other case. In each case the employer locked out the workers based on acts that are protected by the National Labor Relations Act. In other words, rather than protecting the employees’ NLRA rights by finding the employers violated the law, the Bush Board created new ways to find there were no rights and let the employers off.

These decisions were widely criticized

The House Education Committee issued this report: Workers’ Rights under Attack by Bush Administration: President Bush’s National Labor Relations Board Rolls Back Labor Protections (July 13, 2006)

A. Bush Board Allows Employer To Lock Out All Union Members And Let Inexperienced But Non-Union Probationary Employees Continue Working

In Bunting Bearings, during contract negotiations with a union, an employer locked out of the plant all non-probationary employees and allowed probationary employees to continue to work. The locked-out, non-probationary employees were union members. The probationary employees who continued to work were not yet union members. In other words, if you were a union member, you could not work. The employer could not claim legitimately that it was attempting merely to maintain operations during the lockout. The employees it chose to retain were its least knowledgeable and least experienced.

But, upon appeal, the D.C. Circuit reversed the Bush Board’s ruling. While the court pointed out that it usually defers to administrative decisions, it could not in this case, where the Board’s decision was “inconsistent with controlling precedent” from the U.S. Supreme Court.

B. Bush Board Allows Employer To Lock Out All Workers Loyal To A Strike And Let Picket-Line Crossers Continue Working

The same chain of events unrolled in another Bush Board decision, Midwest Generation. There, the union went on strike. During the strike, 47 strikers crossed the picket line and made unconditional offers to return to work. After two months, the union voted to end the strike and return to work – with no contract yet reached. The employer then instituted a partial lockout. The partial lockout was imposed only on those strikers who did not cross the picket line earlier and instead waited for the union vote to return to work. The Bush Board found the partial lockout to be lawful. The Seventh Circuit overturned the Board, finding the lockout to be unlawfully discriminatory. According to the court, employers cannot have “carte blanche to lock out employees of their own choosing . . .” The court explained: “Such an approach would allow employers acting under the guise of maintaining business operations to engage in exactly the type of action Midwest undertook: punishing those who stood with the Union and rewarding those who crossed picket lines.” The court pointed out that “the only distinction” between the employees whom Midwest allowed to work and the employees whom Midwest selectively locked out “was whether an individual worker had made his or her offer to return as part of the Union’s action or individually.” Such discrimination, which would tend to discourage participation in strikes or other concerted activity, reflects an employer’s anti-union animus and is unlawful.

The LERA LEL Newsletter carried stories on each of these cases as they developed.

Of the reversal of Midwest Generation, it said:

Partial Lockout Illegal

The November 2004 LEL Newsletter reported on two cases in which the employers had partially locked out workers: Bunting Bearings Corp., 343 NLRB No.64 (Oct. 29, 2004) and Midwest Generation, EME, LLC, 343 NLRB No.12 (Sept. 30, 2004). The Board found the partial lockouts were not violations in either case. The Seventh Circuit Court of Appeals has overturned Midwest Generation in a decision that strongly criticizes the Board majority for assuming facts the employer never submitted and, based on those assumed facts, finding that the employer committed no violation. Local 15, International Brotherhood of Electrical Workers v. NLRB, Case No.05-1058 (7th Cir. Oct. 31, 2005).

The court found that the employer had failed to carry its burden of demonstrating its affirmative defense of legitimate and substantial business justification. The opinion states: “Prior to the Board’s decision, Midwest offered no proof that its operational needs justified the partial lockout. Indeed, the record indicates that Midwest’s operational needs were being ‘successfully maintained … through the efforts of supervisory personnel, contractors, and some temporary replacement employees.’” The court noted that the Board majority has actually raised the employer’s defense of operational needs “sua sponte” [on its own], assumed facts in support of that defense, and then cited cases support of its conclusion that did not support it.

The court stated that the Supreme Court used the NLRB v. Great Dane Trailers, framework deciding whether actions, such as a partial lockout are motivated by antiunion motives and thus violated NLRA Sec. 8(a)(3).

This test requires and employer to demonstrate that its action were based on a legitimate and substantial business justification.

The court criticized the Board for using a standard that essentially gave employers “carte blanche to lock out employees of their choosing without regard to seniority or any other criteria.” It said: “Such an approach would allow employers acting under the guise of maintaining business operations to engage in exactly the type of action Midwest undertook: punishing those who stood with the Union and rewarding those who crossed picket lines.” The court also required that the employer must do more than claiming or “labeling . . . its conduct as ‘necessary for business operations’.” The court explained that such a standard would “create an exception with no limiting principle, which would sanction discriminatory conduct by an employer where the employer chooses to announce its position as ‘necessary for business operations’ without evidence supporting such a need.”

Finally, the court concluded that a partial lockout was not justified as a lawful means of economically pressuring employees to agree to the employer’s proposal. The court said: “The Board in this case appears to launch a new approach with no discernable parameters. If employers were free to exercise economic penalties selectively against those employees whom they believe economic coercion would be most effective, an employer could take discriminatory actions that have traditionally been barred.
Under the Board’s analysis, an employer could choose to lockout only union leaders or only employees it believes voted against a proposed contract. This type of discrimination cannot be a legitimate and substantial business justification for a partial lockout.” The court concluded that, rather than presenting evidence that showed it had not violated the NLRA, the employer’s evidence and arguments demonstrated that it had used the partial lockout “in a retributive fashion to discourage employees from exercising their section 7 right to strike. . . . Merely because retribution against strikers may be effective does not make such actions legitimate and substantial.”

Bunting Bearings has been appealed and is pending in the D.C. Circuit.

And when the inevitable reversal of Bunting Bearings occurred, it said:

Second NLRB Decision Upholding Partial Lockout Overturned

The November 2004 LEL Newsletter discussed two problematic decisions handed down by two-person majority of the NLRB. In both cases the Board majority held that employers were allowed to lockout a portion of their employees. One case, Midwest Generation, 343 NLRB No.12 (Sept. 30, 2004) was reversed by the 7th Circuit last October. . The Board found the partial lockouts were not violations in either case.

The Seventh Circuit Court of Appeals overturned Midwest Generation in a decision that strongly criticizes the Board majority for assuming facts the employer never submitted and, based on those assumed facts, finding that the employer committed no violation. Local 15, IBEW v. NLRB, 429 F.3d 651 (7th Cir. 2005).

The second case, Bunting Bearings 343 NLRB No. 64 (Oct. 29, 2004), has now been overturned by the D.C. Circuit Court of Appeals. The Court stated that the Board majority’s decision cannot be enforced, for it is not consistent with controlling precedent. The Court found that the Board majority had required the union to prove facts when the law places that burden on the employer. In addition, the Board majority had used speculation about what the employers motives might have been and used that speculation to conclude that the employer had a legitimate motive. Although these may seem to be mere technicalities, they are serious failures in a decision maker. United Steelworkers v. NLRB, CaseNo.04-1435 (D.C. Cir. Apr. 28, 2006).

More analyses of these two partial lockout cases can be found in:

* A February 27, 2006 presentation at the ABA mid-winter meeting that discussed the lockout cases at that point.

* And in a summary of the cases by the Laborers’ International Union of North America (LIUNA):

• In a pair of cases involving partial lockouts, the Board undermined the fundamental right to strike by sanctioning lockouts in which employers discriminated among workers solely on the basis of union membership;

Midwest Generation, 343 NLRB 69 (2004), rev’d and remanded sub. nom, Local 15, IBEW v. NLRB, 429 F3d. 651 (7th Cir. 2005) – The NLRB allowed an employer to lock out strikers who had offered to return to work while it continued to employ those who had crossed the picket lines and abandoned the strike. The Court of Appeals, in a unanimous decision, denied enforcement and concluded that the Board’s decision was “in derogation of nearly four decades of employee protection.”

• Bunting Bearings Corp., 343 NLRB 479 (2004) – Relying on its decision in Midwest Generation (before it was reversed), the Board upheld another employer’s decision to lock out only its non-probationary employees, “all of whom were union members,” while allowing its probationary employees, “all of whom the … [employer] believed were not union members,” to continue to work. The partial lockout caused the union to lose support and provided the employer with an opportunity to stop bargaining and withdraw recognition from the union. In an unpublished decision issued in 2006, the U.S. Court of Appeals for the District of Columbia overturned the Board’s ruling.

At least one of these hard fought cases is coming to an end, and the employer is being made to pay for its violations. Not enough, of course, but had it not been for the NLRA and the lawsuit, what the employers did here would have been a perfectly legal tactic for destroying the unions.

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