03/20/2025: Memo Stating Workers Would Not Get Raise If Union Won Election Was Illegal
The Third Circuit affirmed the NLRB's decision in Russell Reid.
Russell Reid Waste Hauling Disposal Service Company v. NLRB, 24-1890 (3rd Circuit)
This case involves a petition for review by Russell Reid Waste Hauling & Disposal Service Company, Inc. and a cross-petition for enforcement by the National Labor Relations Board (NLRB) regarding an unfair labor practice determination.
Background
Russell Reid, owned by United Site Services (USS), operates a waste management facility in Keasbey, New Jersey. In June 2020, a union petitioned to represent certain employees at the Keasbey facility, and a mail-ballot election was scheduled for early August 2020. At that time, no employees at the Keasbey facility were unionized, although some workers at other east region facilities were union members.
USS had a practice of granting wage increases to non-unionized employees in July or August. In July 2020, Russell Reid issued two memoranda:
A July 13 memorandum to all east region employees announcing wage increases for employees not "part of a collective bargaining unit (i.e. Union)"
A July 21 memorandum specifically addressed to Keasbey facility employees
The July 21 memorandum stated that while merit increases would be effective July 5th for eligible employees, the company would postpone implementing increases for Keasbey employees eligible to vote in the upcoming union election. The memorandum explained this delay was to avoid appearing to influence the election outcome and stated that after the election, "all affected employees will receive their eligible merit increases retroactive to July 5th regardless of the results of the election and regardless of how anyone votes." However, it also stated that to be eligible, employees "must not be part of a collective bargaining unit (i.e., Union)."
The union election resulted in a loss for the union by a vote of twenty-three to eleven.
Legal Proceedings
The NLRB's General Counsel filed a complaint alleging Russell Reid's memoranda violated the National Labor Relations Act (NLRA). The union also filed objections to the election, arguing the memoranda influenced the election results. An Administrative Law Judge (ALJ) found that Russell Reid committed an unfair labor practice in violation of Section 8(a)(1) of the NLRA, set aside the election results, and ordered a new election. An NLRB panel subsequently affirmed the ALJ's ruling. Russell Reid petitioned the Third Circuit to review the decision and the NLRB cross-petitioned to enforce the decision.
Court’s Analysis
The Third Circuit addressed four arguments raised by Russell Reid:
Constitutionality of ALJ Removal Protections: The court declined to consider this unexhausted argument, as Russell Reid failed to raise it before the Board and no extraordinary circumstances excused this failure.
First Amendment Violation: The court also declined to consider Russell Reid's unexhausted First Amendment argument based on the Counterman v. Colorado case.
Substantial Evidence for Unfair Labor Practice: The court found substantial evidence supported the Board's conclusion that Russell Reid violated Section 8(a)(1) of the NLRA. The court applied an objective test, examining whether a reasonable employee would have understood the July 21 memorandum to have a coercive effect on their labor rights. The court determined that a reasonable Keasbey employee would understand the memorandum to mean they would not receive a wage increase if they voted for the union and the union won. The memorandum's statement that employees "must not be part of a collective bargaining unit" to be eligible for increases, combined with the language about post-election increases for "eligible" employees, failed to clearly communicate that employees would receive their increases regardless of the election outcome.
Challenge to the New Election Order: The court dismissed this portion of Russell Reid's petition for lack of jurisdiction, as an order directing a new election is not considered final until the new election is complete.
Result
The Third Circuit granted the Board's cross-petition for enforcement and denied Russell Reid's petition, except for the challenge to setting aside the election results and ordering a new election, which was dismissed for lack of jurisdiction.
Significant Cases Cited
FDRLST Media, LLC v. NLRB, 35 F.4th 108 (3d Cir. 2022): Established the objective test for determining whether employer statements violate Section 8(a)(1) by asking if they "would tend to coerce a reasonable employee not to exercise her labor rights."
Oberthur Techs. of Am. Corp. v. NLRB, 865 F.3d 719 (D.C. Cir. 2017): Held that an employer may postpone wage increases during a union election if it clearly communicates the sole purpose is avoiding influence on the election and that increases will be implemented regardless of outcome.
NLRB v. Garry Mfg. Co., 630 F.2d 934 (3d Cir. 1980): Established that proof of actual interference with employees' rights is not necessary to find a Section 8(a)(1) violation, and implied coercion may suffice.
Graham Architectural Prods. Corp. v. NLRB, 697 F.2d 534 (3d Cir. 1983): Held that an order directing a new election is not final until the election is complete, thus limiting judicial review.
NLRB v. Starbucks Corp., 125 F.4th 78 (3d Cir. 2024): Established that challenges to ALJ removal protections do not call into question core authority to act and require exhaustion before the Board.