Since 1938, when the Supreme Court decided Mackay Radio, there’s been a famous contradiction in U.S. labor law with respect to strikes.  On the one hand, we know that the NLRA protects the “right to strike.”  If that protection is to mean anything, it must mean – and it does mean – that an employee can’t be fired for striking.  On the other hand, Mackay holds that, at least in certain circumstances, employees can be permanently replaced if they go on strike.  The distinction between being fired and being permanently replaced is a fine one.  To the employee involved, it’s often a distinction without a difference because in both cases the result is permanent job loss.

Since Mackay, then, there’s existed a deep tension between the right of employees to strike and the right of employers to hire permanent replacements.  The question since Mackay has thus been what are the circumstances in which an employer can permanently replace strikers.  In its American Baptist Homes decision, released yesterday, the Board restores some common sense to the law of striker replacements and shows renewed faithfulness to the Supreme Court cases in this area of labor law.

In Mackay, the Supreme Court held that an employer may hire permanent replacements during a strike “in an effort to carry on the business.”  In other words, where the employer needs to hire permanent striker replacements in order to maintain business operations, then permanent replacements may be hired.  Two related points ought to follow.  First, if the employer does not need to hire permanent replacements in order to carry on the business, permanent replacements should not be permitted.  Second, if the employer in fact hires permanent replacements for some reason other than an effort to carry on the business – particularly if that other reason involves undermining labor law rights – then the use of permanent replacements should not be permitted.

As Mark Kaltenbach has pointed out, the Board has been unfaithful to Mackay over the years by giving employers too much latitude in using permanent replacements.  For one thing, the Board has often presumed that if the employer hires permanent replacements it has done so to carry on the business, without requiring an evidentiary showing from the employer that replacements were in fact necessary for that purpose.  Given the severe damage that permanent replacements do to the strike right, we ought at a minimum to require this kind of evidentiary showing. And American Baptist Homes, in a footnote or two, seems to signal that this presumption will be reexamined in a future case.

American Baptist itself, however, concerns not evidentiary burdens but the question of employer motive itself.  And herein lies the major significance of the holding.  Beginning in 1964, with its Hot Shoppes decision, the Board has held that permanent replacements are legal if the employer hires them to “continue the business” but illegal if they are hired for “an independent unlawful purpose.”  At times, the Board has effectively written out of the law the “independent unlawful purpose” inquiry, allowing employers to use replacements for nearly any reason at all.   American Baptist restores this prong of Hot Shoppes by holding that if replacements are hired in order to interfere with employees’ protected rights – including employees’ protected right to strike – then the replacements are illegal.  Thus, if an employer hires replacements in order to interfere with or undermine existing employees’ right to strike, then the hiring of replacements is illegal.  This holding not only balances employees’ right to strike with employers’ legitimate business needs, it also clearly follows from the Supreme Court’s decision in Eerie Resistor, where the Court declared that an employer’s otherwise legitimate decision to hire replacements may be “wholly impeached by the showing of an intent to encroach upon protected rights.”

And that’s what the Board concludes happened in the instant case.  The evidence showed that the employer used permanent replacements for two reasons.  One, to avoid the likelihood of future strikes, and, two, to “punish the strikers and the Union.”  The employer’s Executive Director testified that she wanted permanent – rather than temporary – replacements in order to avoid future strikes:

I knew that it would take time to acclimate the new employees . . . but the more important consideration for me was that I knew that those replacements would come to work if there was another work stoppage.  I assumed that because these people were willing to work during this strike, they’d be willing to work during the next strike.

Since employees have a right to strike, hiring replacements in order to prevent future strikes is an unfair labor practice, and cannot be permitted consistent with the statute.

Similarly, the employer’s lawyer told union counsel Bruce Harland that the employer “wanted to teach the strikers and the Union a lesson.” As the Board put it, “[t]his statement evinces an intent to punish the striking employees for their protected conduct.”  Again, that’s not a permissible reason to hire permanent replacements.

Although the Board suggests that American Baptist does not break new ground, yesterday’s decision is profoundly different, and far better reasoned, than Avery Heights, the Board’s last major striker replacement case.  That decision gave employers nearly unlimited discretion in hiring replacements (and was rejected by the second circuit).  How big an impact will the new decision have?  By reinvigorating the “independent unlawful purpose” test, the case makes motive matter again.  That’s a big deal.  Of course, employers who wish to avoid the import of a motive inquiry might respond by being more careful in what they say, during testimony and to opposing counsel, so as not to reveal an unlawful purpose (…no more statements about teaching the union a lesson or heading off future strikes). But if the Board follows up, as it should, by requiring employers to to provide affirmative evidence that permanent replacements are in fact necessary to carry on the business, the impact on the law of strikes would be quite significant indeed.