Employment Law Daily NLRB finds employer engaged in unlawful scheme to avoid becoming ‘successor’ employer
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Monday, February 22, 2016

NLRB finds employer engaged in unlawful scheme to avoid becoming ‘successor’ employer

By Ronald Miller, J.D. An employer entered into an unlawful scheme enabling it to underbid other contractors seeking to provide vehicle processing work for Ford Motor Company, ruled a divided three-member panel of the NLRB. Moreover, the Board found that the employer unlawfully attempted to avoid becoming a legal “successor” by refusing to hire 85 Teamsters-represented applicants who previously worked for its predecessor; refused to hire predecessor employees because it believed they engaged in concerted activities; refused to recognize and bargain with the Teamsters; acted unlawfully by setting initial terms and conditions of employment without first giving the Teamsters notice and an opportunity to bargain about those changes; unilaterally entered in a subcontracting agreement with a staffing company; and rendered assistance and support to the UAW. The Board also found that the employer acted unlawfully by threatening to discharge an employee if she did not wear a safety vest with the UAW logo. Member Miscimarra filed a separate opinion concurring in part and dissenting in part (Voith Industrial Services, Inc., February 17, 2016). Previously, the vehicle processing work for Ford’s Louisville Assembly Plant was performed by Auto Handling, whose employees had been represented by the Teamsters. In order to underbid Auto Handling, Voith informed Ford that its work force would be represented by the Auto Workers (UAW) and based its projected labor costs on the UAW tier 2 wage scale. The UAW scale was far below that which Auto Handling had paid its Teamster-represented employees. Ford awarded Voith the contract. Voith then entered into a contract with Aerotek, a labor staffing company, to assist in hiring permanent vehicle processing employees, and subcontracted to Aerotek the hiring of temporary employees to perform some of the vehicle processing work under the joint supervision of Voith and Aerotek. Unlawful assistance. To avoid incurring a successorship obligation that would require it to recognize and bargain with the Teamsters and pay the Teamsters wages and benefits, Voith engaged in conduct designed to ensure that its employees would be represented by the UAW rather than the Teamsters. First, it limited its hiring of the Teamsters-represented former Auto Handling employees and other Teamsters-represented applicants, and it transferred inexperienced, UAW-represented janitorial employees to vehicle processing positions. It then unlawfully assisted the UAW in organizing that work force and unlawfully recognized the UAW as the representative of its vehicle processing employees based on the authorization cards that were obtained as a result of the unlawful assistance. The Board found that the recognition was based on authorization cards that were tainted by Voith’s unlawful assistance and the UAW’s coercive methods in obtaining them. The Board agreed with an administrative law judge that Voith entered into an unlawful scheme enabling it to underbid other contractors for the vehicle processing work. It also agreed with the ALJ finding that but for Voith’s unlawful intent and actions, it would have hired Auto Handling’s Teamster-represented work force, resulting in a successorship obligation to recognize and bargain with the Teamsters as the representative of the employees performing the vehicle processing work. Moreover, because of the unlawful hiring scheme, Voith lost its right to set initial terms and conditions of employment and it was not entitled to make unilateral changes in terms and conditions of employment. Threats of discharge. Contrary to the ALJ, the Board found that the employer unlawfully threatened to discharge employees if they did not wear safety vests bearing the UAW logo. The threat occurred after an employee objected to wearing the UAW vest because she was a member of the Teamsters. The employer’s statement was inherently coercive, because the UAW was not the duly constituted exclusive bargaining representative of unit employees. Moreover, the employer’s later repudiation of the threat was ineffective. While the attempted repudiation was timely, occurring the next morning, it was not unambiguous, as required under Passavant Memorial Area Hospital. Backpay remedies. Additionally, the Board determined that reinstatement and backpay remedies should be awarded to all 166 employees on Auto Handling’s seniority list, not just the 85 employees listed in the complaint. Voith was also ordered to make whole any employee whose hiring was delayed on account of the discriminatory hiring scheme. On the other hand, the Board declined to order Voith to remit to the Teamsters dues that would have been deducted had it recognized the Teamsters as the bargaining representative of employees performing vehicle processing work. The Board found that the requested dues reimbursement remedy was not appropriate in this case. Partial concurrence and partial dissent. While Member Miscimarra agreed with the majority that Voith should be considered a legal “successor” by refusing to hire 85 Teamster-represented applicants who previously worked for its predecessor, and that it unlawfully refused to recognize the Teamsters, he parted ways regarding three aspects of this case. First, Miscimarra argued that the majority violated due process principles and exceeded its remedial authority by ordering Voith to make whole and offer employment to 182 additional applicants, other than the 85 Teamster employees. Further, he dissented from the majority’s finding that Voith acted unlawfully by unilaterally establishing initial terms and conditions of employment. Finally, he disagreed with the majority that Voith acted unlawfully by failing to give the union notice and the opportunity to bargain over the outsourcing of certain work to Aerotek. The dissent pointed out that when this subcontracting decision was made, Voith did not yet have a “substantial and representative complement” of employees.

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