D.C. Circuit Remands NLRB's 2004 Bunting Bearings Corp. Decision and Questions Legality of Lockout of Non-Probationary Workers
Employee lockouts and the proper standards for reviewing their legality have received significant attention in recent years by the National Labor Relations Board and federal circuits. The United States Court of Appeals for the District of Columbia Circuit recently provided yet another look at this complex area of labor law when it questioned whether bearings manufacturer Bunting Bearings' lockout of non-probationary unit members, while allowing workers in their 90-day probationary period to continue working, was an unfair labor practice. Depending on the NRLB's decision and analysis on remand, this case could have a far-reaching impact on how the NLRB and courts assess the legality of lockouts and partial lockouts.
The collective bargaining agreement between Bunting Bearings and the Paper, Allied Industrial, Chemical and Energy Workers International Union required new workers to go through a probation period of 90 days, during which period the workers had no seniority rights, no paid holidays or sick leave, and no health benefits for the first 45 days. Workers were required to join the union at the end of the 90 days. After Bunting Bearings and the union reached an impasse in negotiations for a new collective bargaining agreement, Bunting Bearings locked out the union workers, but continued its operations using the probationary workers, as well as supervisors, clerical workers, and workers from other plants. Bunting Bearings then sent a letter to the non-probationary union employees, inviting them to return to work under the terms of its final offer, and when the union rejected the offer and commenced a strike, a number of the locked-out nonprobationary workers crossed the picket line and returned to work. A majority of the workers then signed a petition stating they did not want to be represented by the union, and Bunting Bearings withdrew its final contract offer and withdrew union recognition.
The NLRB dismissed the union's unfair labor practice charge, finding that the partial lockout was legal since Bunting Bearing's decision was based not upon membership in or support of the union, but rather on the workers' probationary status - with its accompanying difference in economic interest and limited contractual rights. According to the NLRB, Bunting Bearings' desire to put pressure on the group that actually controlled the decision to accept its bargaining proposals was legitimate. The NLRB found further support in the fact that the union itself had differentiated between the two groups by not allowing the non-probationary employees to vote on the strike. Based on this, it also held that the company's withdrawal of union recognition based on the decertification petition signed by a majority of the union workers was legal.
On the union's petition for review, the D.C. Circuit remanded the case to the NLRB, stating that the decision was inconsistent with the controlling precedent set forth in the Supreme Court's landmark NLRB v. Great Dane Trailers decision. Under Great Dane Trailers, the burden is on the employer to present evidence demonstrating that a lockout was motivated by legitimate objectives. The D.C. Circuit held that in this instance, Bunting Bearings had not met this standard, and thus remanded the case back to the NLRB for a determination as to whether the decertification petition was tainted.
While Great Dane Trailers and its progeny have been interpreted in numerous decisions by the NLRB and courts, the law on legality of lockouts is continuously evolving and developing. We will be closely monitoring the NLRB's application of Great Dane Trailers in the remand of Bunting Bearings, and will keep you apprised of the outcome.
Schiff Hardin LLP