Labor & Employment Law Daily Employer’s anti-union letter and PowerPoint presentation not illegal threats
Tuesday, August 6, 2019

Employer’s anti-union letter and PowerPoint presentation not illegal threats

By Wayne Garris Jr., J.D.

The appeals court found the employer initiated a strategy to inform its employees of the potential disadvantages of union representation but was not coercive; the dissent suggested the majority had substituted its judgment for that of the NLRB.

A letter stating contract negotiations would begin “from scratch” and a PowerPoint presentation suggesting that the culture of the company would change for the worse after unionization were not anti-union threats, the Sixth Circuit found, granting an employer’s petition for review of a contrary NRLB decision. While the NLRA prohibits coercive threats to discourage union participation, an employer may present argument in opposition to union representation without making a threat of depriving employees of the benefits of employment (Hendrickson USA, LLC v. National Labor Relations Board, August 1, 2019, McKeague, D.).

Anti-union campaign. Hendrickson’s management initiated an anti-union strategy after learning that employees were attempting to organize. The human resources director advised employees to read any union-related documents carefully before signing and emphasized the company’s preference for its “direct employee relationship strategy.” A few days later, the plant manager distributed a letter questioning whether a union would improve the employer-employee relationship and warning employees that union representation would not guarantee an increase in compensation, stating that “[t]he Company and any recognized Union would begin the negotiation process from scratch.” Finally, the company showed a PowerPoint presentation to all employees, which urged employees not to vote for unionization and stated that when a plant unionizes, “the culture will definitely change,” “relationships suffer,” and “flexibility is replaced by inefficiency.”

ULP charge. An employee filed an unfair labor practice charge with the Board and the Board’s General Counsel issued a complaint against Hendrickson, alleging that the employer violated the NLRA by threatening loss of access to management, a more onerous work environment, and a loss of wages and benefits. The ALJ accepted the allegations regarding the work environment and loss of wages and benefits, and the Board adopted the ALJ’s findings. Hendrickson petitioned for review of the NLRB decision.

Threat v. advocacy. Quoting the Supreme Court in NLRB v. Gissel Packing Company, the court began by explaining that the “distinction between lawful advocacy and coercive threat turns on whether the employer communicates that predicted adverse consequences of unionization are “outside [the employer’s] control” or instead “taken solely on [the employer’s] own volition.” If the employer suggests that it will take adverse action on its own volition, it has violated the NLRA.

Hard bargaining is OK. The court first considered the statement in the company’s letter that contract negotiations would begin “from scratch;” that phrase can be a violation of the NLRA depending on the context in which it was made. For example, if the statement was made within a larger environment of anti-union animus and additional unfair labor practices, the court would be more likely to find that a violation occurred. After reviewing federal cases in which the phrase was at issue, the court disagreed with the Board’s conclusion that Hendrickson’s use of the term was a threat here.

The court concluded that the letter emphasized the risks of contract negotiations, but it did not “essentially promise” that employees will end up with less. Analyzing to the specific language in the letter, the court found that the employer was clear that the letter was meant to counter any ideas that unionizing would automatically lead to increased compensation and that it “respectfully disagreed” with the perceived benefits of union membership.

Similarly, the company’s PowerPoint presentation acknowledged that there could be benefits to union membership, but some disadvantages. Most importantly, the court concluded, was that there was no evidence of coercive or threatening environment for union members. Employers are allowed to be tough in bargaining, the court held, and that is what it concluded that Hendrickson was implying.

Prediction v. threat. As to the PowerPoint presentation, the court found that the statements in the PowerPoint (”the culture will change,” “relationships will suffer,” and “flexibility is replaced by inefficiency”) merely reflected the company’s argument on the ineffectiveness of unionizing. The first statement, “the culture will definitely change,” does not have negative connotations in isolation, the court found. The statements that “relationships suffer” and “flexibility is replaced by inefficiency” are negative, but they were merely the employer’s predictions of the effects of unionizing and not a statement of any proposed adverse action by the employer.

Duty to present both sides? Finally, the court rejected the Board’s argument that Hendrickson was required to present the pros and cons of unionizing. The court found that there was no precedent requiring Hendrickson to present arguments counter to its position. Finding the Board’s opinion was not supported by substantial evidence, it granted Hendrickson’s petition and denied the Board’s cross-appeal for enforcement.

Dissent. In dissent, Judge White argued that the majority exceeded the scope of review. The court is supposed to give deference to the Board’s findings of fact, inferences drawn from those facts, and the application of law to the facts. The majority substituted its own judgment from the Board, “giving no deference at all,” the dissent argued. She evaluated the statements in the letter and the PowerPoint and concluded that while the majority and the employer’s positions were reasonable, a reasonable worker also could conclude that the statements were coercive, as the Board concluded. Because reasonable minds can differ, the court was obligated to defer to the Board’s conclusions.

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