NLRB Reverses Precedent on Permanent Replacements for Striking Workers

The National Labor Relations Board (NLRB) issued a decision last week upholding the right of employers to hire permanent replacements for striking employees unless the decision to replace workers is based on an “independent unlawful purpose.” However, reversing its longstanding precedent to the contrary, the Board held that the “independent unlawful purpose” need not be unrelated to or extraneous to the bargaining relationship or strike itself.

In American Baptist Homes of the West, employees of the continuing care facility authorized a strike to begin on August 2, 2010. The union made an unconditional offer to return to work by August 7. Although the employer had arranged for temporary employees to work through August 5, it began to make offers of permanent employment to some of those temporary workers on August 3, the day after the strike began. At the conclusion of the strike, the employer declined to return to work those employees who had been permanently replaced.

The Executive Director of American Baptist Homes of the West admitted that the company’s motivation in hiring permanent replacement workers was, in part, to avoid future strikes and the resulting cost of hiring temporary employees. The Board also considered testimony that the union understood the employer’s actions to be motivated by a desire to teach the striking workers a lesson.

As articulated in the 1964 case Hot Shoppes, Inc., employers are permitted to permanently replace striking workers unless the employer is motivated by an “independent unlawful purpose.” Prior interpretation of the Hot Shoppes decision required the “independent unlawful purpose” to be unrelated to or extraneous to the bargaining relationship or strike itself. Therefore, as held in Hot Shoppes, the employer’s motive in replacing workers is typically immaterial.

Although the Board upheld the permanent replacement rule in American Baptist Homes of the West, it held that “independent unlawful purpose” includes an employer’s replacement of striking workers with the intent to discriminate or discourage union membership or any other purpose prohibited by the NLRA. In rejecting the requirement that the “independent unlawful purpose” be distinct from the bargaining relationship or the strike at issue, the Board effectively eliminated the requirement that the unlawful purpose be “independent.”

It remains to be seen how the Board will evaluate whether an employer is motivated by an “independent unlawful purpose” where there is no direct evidence regarding the employer’s motivation to avoid future strikes or punish striking workers as was present in American Baptist Homes of the West. Indeed, NLRB Member Philip Miscimarra, dissenting in the case, noted that it will be “virtually impossible to distinguish self-preservation from antistrike motives in hiring permanent replacements.”

The Board’s latest decision is yet another victory for unions and represents a further erosion of an employer’s tools to resist unionization or to bargain with employees once unionized. In light of this decision, employers should consult with counsel to discuss available options if a strike is planned or threatened.

Ballard Spahr’s Labor and Employment Group advises employers on all aspects of labor-management relations and represents them in disputes before courts, administrative agencies, and alternative dispute resolution forums.

Source: Ballard Spahr LLP