By Joy P. Waltemath, J.D. Finding substantial evidence to support the NLRB’s finding that a pool supply manufacturer unlawfully locked out its employees because the health care proposal it offered was confusing, incomplete, and internally inconsistent, the D.C. Circuit granted the Board’s cross-application for enforcement. And, because the company failed to object to the Board’s finding that it could not, in a separate compliance proceeding, litigate the end date for its backpay liability, Section 10(e) of the NLRA barred the appeals court from considering it. There were no “extraordinary circumstances” to give the court jurisdiction (Alden Leeds, Inc. v. NLRB, February 5, 2016, Edwards, H.). Negotiations for new CBA. In September 2009, the parties began negotiations on a new contract to succeed their 2005 collective bargaining agreement, which was set to expire on October 3. The union sought increases in wages, sick days, and vacation days; changes in seniority; and a three-year agreement, but the main problem between the parties was health care, as premiums were set to increase under the existing plan. The appeals court carefully delineated the back-and-forth between the parties’ negotiators throughout the month of October (they extended their existing CBA until November 2). In short, the company communicated multiple different health plan options, but it refused to discuss the union’s other issues. Offer? During a phone conversation on October 30, the company said it wanted the union to vote on its offer, and the union rep responded “Vote on what? I have no idea what we’re voting on.” That same day, the company sent an email ostensibly detailing its offer and noting it would lock out employees on November 3 if it did not have an agreement on November 2. There was no agreement; the company locked out the employees. NLRB’s findings. After unfair labor practice charges were filed, an ALJ found for the union. The NLRB substantially adopted the ALJ’s findings that the company’s October 30 email supposedly detailing the terms of its offer was “confusing, incomplete, and internally inconsistent,” and that both union representatives were confused about which health care plan, if any, the company was proposing. Although the company then submitted a complete proposal to the union on November 9, this did not cure the company’s failure to provide a complete proposal prior to the lockout. Instead, the lockout was illegal until it was terminated and the affected employees were made whole, the Board agreed. The Board specifically noted that the company had not excepted to findings that its “failure to restore the status quo ante had no adverse impact on the subsequent collective bargaining,” and that “no such showing has been made.” Because it had not objected, the Board found “further litigation of this matter at compliance is unwarranted.” Proposal unclear; lockout unlawful. An employer may lawfully lock out its employees to bring economic pressure in order to support its legitimate bargaining position, but it must inform the union in a clear and timely manner of its demands so that the union has a fair opportunity to evaluate whether to accept the employer’s proposal and avoid a lockout. While the company contended its October 30 email was clear, and that the record showed its negotiating position remained unchanged throughout the entire period, the appeals court disagreed. Considering that email, a reasonable factfinder could find the health care proposal was unclear, said the court. The email did not “illuminate whether the Company was proposing any or all of its various alternative health care plans, which differed from the existing health care plan.” The court found the NLRB’s judgment “easily commands the deference of this court.” Status quo ante. To cure a lockout, the employer must restore the status quo ante as well as end the lockout, but an employer can avoid further liability if it is able to show affirmatively that its failure to restore the status quo ante did not adversely affect subsequent bargaining. Here, the company argued it should have been allowed to litigate the scope of its backpay liability in a compliance proceeding, specifically that its backpay liability ended on November 9 when it did submit a complete proposal. But the court found it lacked jurisdiction to consider this challenge because the company failed to raise it with the Board, as required by Section 10(e). No challenge to finding. Once the ALJ found that the November 9 offer did not cure the lockout, instead finding that the lockout remained illegal until the company ended it and made its employees whole, the company was obligated to challenge that finding in its exceptions to the Board in order to preserve the issue for judicial review, which it conceded it failed to do. Accordingly, the appeals court lacked jurisdiction to consider the challenge. Nor would the appeals court credit the company’s argument that the scope of its backpay liability should be reserved for the compliance stage of the Board’s proceedings. Precedent did not support this argument (in Greensburg Coca-Cola, which the company cited, the ALJ explicitly deferred the backpay issue of whether the lockout was cured or retained its initial taint of illegality to a future compliance proceeding, which was not the case here). Relying on Trump Plaza Associates v. NLRB, the company next argued that the jurisdictional bar of Section 10(e) should not apply because the Board was “sufficiently appraised” of the issue. The D.C. Circuit rejected that too. Unlike in Trump Plaza, the company never put the issue before the Board, in any manner, and had never argued that its other exceptions encompassed its backpay challenge. Finally, the company said that the Section 10(e) bar should not apply because the Board discussed the backpay issue on its own initiative, the issue had been briefed by the parties, and the issue involved an undecided question of law. Even though the company tried to frame these circumstances as “extraordinary,” the appeals court remained unswayed.
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