Even Without Trump, Labor Law is Still Broken

Published March 23rd, 2018 -  - 03.23.1814


So far, President Trump has appointed a Supreme Court Justice, Neil Gorsuch, who may cast the deciding vote to upend decades of settled labor law in two major cases, Epic Systems Corp. v. Lewis and Janus v. AFSCME; he has nominated dozens of right-wing lawyers for life-tenure on the federal courts, including one, Thomas Farr, who spent part of his career as a staff attorney for an anti-union organization; he has appointed two members of the National Labor Relations Board who promptly voted to overturn a series of pro-worker decisions; and he has appointed two members of the National Mediation Board who have already issued a decision that will make it harder for contracted-out airport workers to organize.  But, the Second Circuit Court of Appeals’ recent decision in Novelis Corp. v. NLRB, is a useful reminder that even without Trump’s intervention, labor law was already failing workers.

The Novelis case is almost a textbook example of how employers can use the delays inherent in the NLRB administrative processes to deny workers a meaningful remedy for serious labor law violations.  Novelis operates a factory in Oswego, New York that makes aluminum products.  In December 2013, management announced a plan to eliminate premium pay on Sundays and to stop counting holiday and vacation days toward overtime eligibility.  Workers responded by signing authorization cards seeking representation by the Steelworkers Union.  By January 7, 2014 the Union had obtained cards from 351 of the 599 workers at the plant, and it requested voluntary recognition.  Novelis refused to voluntarily recognize the Union, insisting upon an election.  Two days later, Novelis announced that it was rescinding the changes it had previously announced.  The Union filed a charge with the NLRB alleging that the restoration of premium pay was an illegal grant of benefits.  At captive audience meetings, the company President and plant manager falsely told workers that if the Union’s charge were successful, the company would have to take away the restored benefit.  The same two individuals also threatened workers at the captive audience meetings that they risked losing their jobs if they voted to unionize.  The union election took place in February 2014, and the workers voted against unionization by a margin of 287 to 273.  A month after the election, the leader of the worker organizing effort posted a comment on his Facebook page criticizing workers who voted against unionizing.  In response, the employer demoted him.

After the election, the Union filed unfair labor practice charges accusing Novelis of breaking the law in numerous ways.  The NLRB issued a series of complaints against Novelis that were consolidated for hearing.  Novelis challenged each allegation, and as a result there were seventeen days of hearing of the course of three months.  In addition, a group of anti-union workers intervened in the case, mysteriously represented by an attorney who asserts on his firm’s website that he “exclusively” represents management in labor relations.  Due to the seriousness of the violations, the NLRB’s General Counsel decided to seek a bargaining order, a remedy authorized by a 1969 Supreme Court decision, NLRB v. Gissel Packing Co.  In Gissel, the Supreme Court explained that a bargaining order is necessary in some cases because a remedy short of a bargaining order would allow an employer to profit from its own wrongdoing.  The Court further noted that an election held in the wake of an employer’s serious unfair labor practices “would not be likely to demonstrate the employees’ true, undistorted desires.”  On January 30, 2015, the Administrative Law Judge (ALJ) issued his decision.  The ALJ found that that Novelis committed nineteen separate unfair labor practices.  Among these violations were threats of job loss, granting wages and benefits, and demoting a key union activist.  The ALJ further found that a bargaining order was the appropriate remedy.  Novelis appealed the decision to the Board, and on August 26, 2016, the Board issued its decision affirming the ALJ’s decision.  The Board explained that a bargaining order was appropriate because of the seriousness of the employer’s misconduct.  The Board further explained that the grant of benefits and threats of job loss are the type of violations that “are likely to persist in the employees’ minds for longer periods of time than other unlawful conduct, and are particularly likely to destroy the chances of a fair re-run election.”

While the decision was pending before the NLRB, Novelis filed a motion to reopen the record to introduce evidence of employee and management turnover.  Novelis supplemented that request with two subsequent filings offering further evidence of turnover.  The Board found that neither turnover nor the passage of time would negate the need for a bargaining order because the employees who remained would likely inform new hires of the history, and some of the management personnel who committed the illegal acts were still working at the plant.

Instead of complying with the Board’s order, Novelis appealed the decision to the Second Circuit.  Once again, the anti-union workers intervened on the side of the company.  The Second Circuit upheld all of the violations that the Board found.  Nevertheless, the Court refused to uphold the bargaining order.  Instead, the Court held that the NLRB had refused to adequately account for employee turnover and the passage of two years between the February 2014 election and the Board’s order.  The Court found that approximately one-third of the current workforce was not around when the unfair labor practices were committed.  In addition, the Court asserted that a public reading of the Board’s remedial notice would reassure the workers that from now on the employer will respect their rights.

By appealing the case to the Second Circuit, Novelis was in a no-lose situation.  Even if the Court had upheld the bargaining order, the NLRB was not proposing to compensate the workers for the four-year delay from the time they demonstrated their interest in unionizing until the Court issued its decision.  So, at worst, Novelis gained additional time by filing its appeal.  But, not content to impose a four-year delay, the Court now requires the workers to start over again from scratch.  Imagine how discouraged the workers must be at this point.  They see that their employer’s strategy of filing endless appeals has paid off – the workers won before the ALJ, they won before the NLRB, and even the Court of Appeals sided with them on the merits.  But, Novelis actually comes out ahead as a result of its illegal acts.  The NLRB has never developed an effective remedy for either a grant of benefits or a threat of job loss.  In both cases, the only remedy the Board typically issues is a cease and desist order combined with a remedial notice.  But, even the remedial notice only serves to reinforce the violation.  Novelis will now post a notice at its plant informing workers that “we will not threaten you with job loss if you select the Union as your bargaining representative.”  Instead of providing reassurance, the notice is just as likely to remind the workers of the threats Novelis has previously made.

The message the Second Circuit has sent to employers and workers is that when it comes to stopping a union organizing campaign, employers can make threats with impunity, and even if they are caught in the act, they can use stalling tactics to avoid any meaningful consequences for their acts.  As Trump and his appointees push labor law even further in a pro-employer direction, it’s worth remembering how weak and ineffective our labor laws are already.

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