Employment Law Daily Transferring work to Mexico was unlawful retaliation for strike
Friday, August 19, 2016

Transferring work to Mexico was unlawful retaliation for strike

By Lorene D. Park, J.D. Substantial evidence supported the NLRB’s finding that animus toward plant employees, because of their strike over low wages, was a "motivating factor" for an employer’s transfer of work to Mexico, ruled the Seventh Circuit, enforcing the Board’s order and denying the employer’s petition for review. Among other evidence, the company president made statements to the employees on the first day of the strike, discussing globalization and telling them that the company could move jobs to Mexico or China. And during the General Counsel’s investigation, the plant manager admitted that the company "accelerated" plans to transfer work "because of the strike" (Amglo Kemlite Laboratories, Inc. v. NLRB, August 17, 2016, Williams, A.). Strike over low wages. Amglo makes specialty lights, such as those on airplane wings. Before Amglo’s president came to visit the Illinois facility in September 2011, several employees had complained about low wages. During the visit, the president made clear that Amglo would not raise wages. The next morning, nearly all of the plant’s 94 employees went on strike. The president and the plant manager arrived shortly thereafter and told the employees that Amglo would not raise wages. The employees were told to return to work or go home. "You’re going to lose." The employees asked to speak to the owner, but the president said the owner was not as "pro-Polish" as he used to be (most of the employees were of Polish descent). The plant manager chimed in that "He will tell us to get rid of half of you. And you’re not going to do anything. You’re not going to scare him. You’re not going to threaten him. You’re going to lose." The plant manager held resignation forms in her hand and told employees that if they did not like their wages, they could quit. The president then discussed globalization and explained that companies can move production to China and Mexico (two places where Amglo had plants). The employees made a written demand for annual raises and backpay, but received no response. Work transferred to Mexico. After a week, some employees returned to work with no raise. On September 27, the rest (over 50 employees) signed an unconditional offer to return without a raise. The president said she could not guarantee recalls because Amglo was transferring work to Mexico "because of the situation." By September 30, Amglo had recalled all but 22 employees. A month later those 22 employees were sent a letter stating that, in part because of the transfer of work to Mexico, there were no jobs available. They were informed that they would have priority over new hires if a job opened up. As of February 2012, none of the 22 had been recalled. ULP charges. The General Counsel charged Amglo with unfair labor practices (ULP) and an administrative law judge issued findings that were appealed to the Board. The Board concluded that Amglo engaged in unfair labor practices by: (1) threatening to fire employees for striking, and (2) transferring work to Mexico in retaliation for the strike. Amglo was ordered to avoid such actions in the future, to return the work to Illinois, to offer reinstatement to those who lost their jobs due to the transfer, and to make affected employees whole in earnings and benefits. Strike was "motivating factor" for transfer. The NLRB asked the Seventh Circuit to enforce its order and Amglo asked that it be set aside. Amglo did not challenge the finding that it threatened to fire workers for striking so that was summarily affirmed and the only issue was the transfer of work from Illinois to Mexico. In the appeals court’s view, substantial evidence supported the NLRB’s finding that animus toward the employees, because of the strike, was a "motivating factor" for the transfer of work from Illinois to Mexico. Among other evidence, the court pointed to the company president’s discussion of globalization, which implicitly warned employees that Amglo would transfer work to a foreign facility if they continued striking. Amglo also showed hostility to the strike, threatening termination on the first day and later saying that Amglo was moving work to Mexico "because of the situation." And during the General Counsel’s investigation, the plant manager admitted that Amglo "accelerated" plans to transfer work "because of the strike." The timing of the transfer, so soon after the strike, was also suspicious. Violation was more than de minimis. Although Amglo argued that the Board’s order could not be enforced because the General Counsel failed to prove the extent of the unlawful transfer (exactly how much work went to Mexico), that was not necessary at this stage, explained the appeals court. The Board employs a "judicially approved bifurcation procedure" in which a first proceeding determines if an employer engaged in an unfair labor practice, and a second determines the contours of an appropriate remedy. "[S]o the initial proceeding must show the existence of a violation, while the extent may be proved at the second stage," though the initial showing must be that the violation was more than de minimis, the appeals court summarized. Here, the first proceeding addressed the number of employees affected by the transfer, and it was a significant fraction (22 out of 94 employees were told they could not return in part because of the transfer to Mexico). The Board also relied on evidence that, when more than 50 employees offered to return to work without a raise, the company president could not give them a timeline or say how many would be rehired, because of the transfer. "Because the Board relied on ‘such relevant evidence that a reasonable mind might accept as adequate to support the conclusions of the Board,’" the Seventh Circuit enforced the Board’s order.

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