On Tuesday last week, the NLRB ordered a New York local business owner to reopen his doors and rehire the workers he terminated after he shut down his truck repair shop to prevent union organization at both his truck repair shop, RAV, and his concrete retail business, Concrete Express.
This infrequently used order, known as a Gissel bargaining order, allows the NLRB to force a business to skip the union election process and proceed directly to bargaining. The name comes from a 1969 Supreme Court decision, NLRB v. Gissel Packing Co., which gave the NLRB the power to issue this order when it discovers that an employer unlawfully suppressed union organization.
In this most recent case, the repair shop owner fired two mechanics after learning from the NLRB that Teamsters Local 456 was looking to represent them. The judge determined that RAV terminated the mechanics and closed the business as a warning to his employees at Concrete Express that they should not join the union.
The closing of RAV was found to be in violation of Section 8(a)(3) of the NLRA, which prohibits discrimination against employees for their involvement with a union. As a result, RAV was forced to reopen, rehire the mechanics with back pay, and begin union negotiations with the Teamsters.
Some labor professionals may wonder why an employer can’t go out of business if it wants. It is certainly true that an employer has a lot of flexibility to cease doing business entirely. The problem arose here because the NLRB deemed RAV and Concrete Express to be “single employers.” The Supreme Court has previously held that the partial closure of a business can violate the NLRA when its purpose is to prevent unionization at other facilities. Thus, even though the owner completely closed the truck repair shop, because it was a single employer with the concrete business, a NLRA violation arose.
Moreover, the NLRB has traditionally viewed closing down part of a business in response to union organizing, firing union-eligible workers during an organizing campaign, or packing the proposed bargaining unit with new employees who are less sympathetic to organized labor as “hallmark” violations of the NLRA. When an employer commits such “hallmark” violations, the likelihood that the NLRB will issue a Gissel bargaining order dramatically increases.
This recent NLRB decision is just one more reminder to labor professionals to tread lightly and seek qualified legal counsel when employees begin discussing possible unionization. It also serves notice to employers that the recent trend towards more management-friendly decisions at the NLRB does not mean that the NLRB has stopped enforcing the law when violations of long-established rules occur.