Although most employers don’t want a union in their workplace, the National Labor Relations Act (NLRA) is clear: You cannot interfere with union organizing efforts. A federal district court in Kentucky recently followed this rule and ordered a company to reopen a shuttered facility and rehire the workers affected by the closure. In NLRB v. Smyrna Ready Mix, the court issued the injunction because there was evidence allege that alleged the facility closure was intended to interfere with union organizing activities. The court held that the injunction was necessary to preserve the status quo until the administrative process within the National Labor Relations Board (NLRB) was completed. So, how does the NLRA’s injunctive process work?
Protected Activity and Board Charges
We have blogged about so-called protected concerted activity under the NLRA before, for example here and here. Again, the law protects workers’ rights to join together to address issues in the workplace. When employers interfere with those rights, such as by disciplining employees, by refusing to bargain collectively, or by closing a facility because of such activity – implementing a “runaway shop” – charges can be filed with the NLRB. Rather than focusing on the particular protected activity involved or the employer’s unfair labor practices, this post addresses the remedies available to the NLRB, particularly injunctions.
Injunctions under the NLRA
After charges are filed with the NLRB, the agency analyzes the facts and circumstances to determine whether the normal administrative process will be sufficient to remedy the charges or whether something greater will be necessary – an injunction preserving or restoring the status quo. For example, in a relatively simple case involving a single employee’s discipline, the board might let the normal administrative litigation process work itself, which could take months or years. An administrative law judge typically can order reinstatement and backpay fairly easily in such an instance. However, in more complex settings, such as involving a plant shutdown or relocation, implementing an order a year or more later might not be totally effective. Also of note, the NLRB’s authority to author remedies is remedial in nature and not punitive.
In these more complicated cases, the NLRB will consider whether to file a lawsuit in federal court to obtain what is called a Section 10(j) injunction. The NLRB has a whole list of types of cases in which 10(j) relief might be appropriate. These include interference with union organizational campaigns, subcontracting out union “work,” refusing to bargain, and, like in the Kentucky matter, shutting down a location allegedly to squelch union activity. The board normally looks at two main factors in each case as to whether to seek a 10(j) injunction: (1) whether there is a sufficient showing that an unfair labor practice has occurred, and (2) whether there is a sufficient showing that the “ultimate remedial order will be a nullity.”
Smyrna Ready Mix
To be clear, in Smyrna Ready Mix, the company disagrees with the allegations against it and is in the process of appealing. In the meantime, however, the board determined that the two 10(j) factors were present, so it filed a lawsuit seeking a Section 10(j) injunction and got one. The Kentucky federal court ordered that the company restore its Winchester, Kentucky facility to the status quo that existed prior to January 7, 2020, including transferring work back and reinstating employees who accepted offers of reinstatement. In making this determination, the judge noted statements the company allegedly made such as “we are not going to try to run a company with our hands tied behind our back” and we would rather “shut this place down first.” The judge also noted that work was transferred to other locations where presumably there was less or no union activity. The Smyrna court concluded that the evidence demonstrated the “chilling effect” on union activity for the remaining workers and that the reopening and reinstatement of workers was necessary to “preserve the Board’s remedial power.”
The key takeaway to the Smyrna Ready Mix case and the remedies the NLRB sought is the scope and impact of the board’s remedial power. Companies can be faced with very expensive and disruptive injunctive orders after implementing a complex business decision – such as closing a facility. In making the business decision, you should consider the risks associated with such an injunction. While employers have the right to make business decisions based on operational or entrepreneurial factors, adverse decisions based on union animus will almost always be subject to NLRB review and potential reversal.