08/26/2024: The End of Consent Orders

ALJ's can no longer force settlement agreements.

Hospital Metropolitano Rio Piedras, Inc., 373 NLRB No. 89, 12-CA-284984 (Published Board Decision)

This case involves Metro Health, Inc., operating as Hospital Metropolitano Rio Piedras, and the Unidad Laboral de Enfermeras(os) y Empleados de la Salud (the Union). The Union represents four separate units of employees at the hospital. The primary legal issue arose from two consolidated cases: one alleging that the hospital violated Section 8(a)(5) and (1) of the National Labor Relations Act (NLRA) by failing to provide requested information regarding payroll records for unit employees, and another alleging unilateral subcontracting of unit work and layoffs of unit employees without bargaining.

ALJ Decision vs. Board Decision:

1. ALJ Decision:

   • The Administrative Law Judge (ALJ) Ira Sandron initially approved a "consent order" proposed by the hospital over the objections of the General Counsel and the Union (the Charging Party). The ALJ found that the consent order largely aligned with an earlier informal settlement proposed by the General Counsel, except for a non-admission clause and the exclusion of a provision requiring notice distribution by text message. The ALJ justified the approval of the consent order by relying on the UPMC standard, which allows approval of such orders based on their "reasonableness."

2. Board Decision:

   • The National Labor Relations Board (NLRB) reviewed the General Counsel’s Request for Special Permission to Appeal the ALJ’s approval of the consent order. The Board overruled the UPMC standard and determined that it would no longer accept or approve consent orders in future cases. The Board reasoned that the practice of approving consent orders, especially over the objection of the General Counsel and the Charging Party, undermines the General Counsel's prosecutorial authority and fails to effectuate the policies of the NLRA.

   • The NLRB emphasized that the Board's rules do not explicitly authorize consent orders, and the practice of approving such orders creates administrative inefficiencies and potential delays in resolving unfair labor practice cases. As a result, the Board granted the General Counsel’s appeal, setting aside the ALJ's approval of the consent order and remanding the case for further proceedings consistent with the Board's new policy.

   • The Board overruled the UPMC decision, which had allowed consent orders to be approved based on a "reasonableness" standard. The Board also chose not to return to the earlier Postal Service standard, which required a full remedy for the alleged unfair labor practices. Instead, the Board concluded that the best course of action was to discontinue the approval of consent orders altogether, thereby preserving the integrity of the adjudicative process and ensuring that cases are resolved either through full litigation or mutually agreed-upon settlements.

Significant Cases Cited:

1. UPMC, 365 NLRB No. 156 (2017): Previously allowed the approval of consent orders based on a reasonableness standard, which the Board overruled in this decision.

2. Postal Service, 364 NLRB No. 116 (2016): Required that consent orders provide a full remedy for the alleged unfair labor practices, a standard the Board chose not to return to.

3. Independent Stave Co., 287 NLRB 740 (1987): Provided a framework for evaluating the reasonableness of settlements, which the Board distinguished from consent orders in this decision.

4. National Licorice Co. v. NLRB, 309 U.S. 350 (1940): Highlighted the Board's exclusive power to decide whether unfair labor practices have been committed and to determine appropriate remedies.

Intertape Polymer Group, 373 NLRB No. 82, 07-CA-291784 (Published Board Decision)

This decision by the National Labor Relations Board (NLRB) addresses allegations that Intertape Polymer Corp. violated the National Labor Relations Act (NLRA) through various work rules and actions against union president Matthew Rose. Key aspects of the Board's legal analysis include:

1. The Board remanded allegations regarding certain work rules (Rules 5, 12, 13, 19, and 21) to the Administrative Law Judge (ALJ) for reconsideration under the framework established in Stericycle, Inc., 372 NLRB No. 113 (2023), which overruled the Boeing Co. standard previously applied by the ALJ.

2. The Board adopted the ALJ's findings that Rules 9 and 20 (regarding loitering and off-duty access) were unlawful, as the Respondent did not properly except to these findings.

3. The Board affirmed the ALJ's conclusion that Rule 7 (prohibiting distribution/posting without authorization) was unlawfully overbroad, violating Section 8(a)(1) of the NLRA. The Board relied on precedent like Brunswick Corp., 282 NLRB 794 (1987), which held that rules requiring employer permission for protected activities are unlawful.

4. Contrary to the ALJ, the Board found Rule 11 (prohibiting personal use of company phones without permission) to be lawful based on precedent like Churchill's Supermarkets, 285 NLRB 138 (1987), which allows employers to restrict company phone use.

5. The Board reversed the ALJ's deferral to arbitration of allegations related to Matthew Rose's discipline and discharge. The Board found these allegations inextricably intertwined with the unlawful Rule 7 and thus not suitable for deferral.

6. The Board remanded the allegations concerning Rose's discipline, discharge, and the removal of his union posting for further consideration by the ALJ.

The underlying ALJ decision had applied the Boeing Co. standard to most of the work rules, finding some lawful and others unlawful. The ALJ had also deferred the allegations regarding Rose to arbitration, which the Board overturned.

Significant cases cited include:

1. Stericycle, Inc., 372 NLRB No. 113 (2023) - Overruled Boeing Co. and adopted a modified version of the Lutheran Heritage Village-Livonia framework for evaluating work rules.

2. Boeing Co., 365 NLRB No. 154 (2017) - Previously established framework for evaluating work rules (now overruled).

3. Brunswick Corp., 282 NLRB 794 (1987) - Held that rules requiring employer permission to engage in protected activities are unlawful.

4. Churchill's Supermarkets, 285 NLRB 138 (1987) - Established that employers can restrict use of company phones to business-related conversations.

5. Continental Group, Inc., 357 NLRB 409 (2011) - Held that discipline under an unlawfully overbroad rule is unlawful absent showing of interference with operations.

SFR, Inc. d/b/a Parkside Café, 373 NLRB No. 84, 10-CA-268413 (Published Board Decision)

This NLRB decision addresses allegations that SFR, Inc. d/b/a Parkside Café violated Section 8(a)(1) of the National Labor Relations Act by constructively discharging three employees (Amber Taylor, Lacey King, and Erin Nichols) for participating in Black Lives Matter (BLM) protests in May 2020.

Key points of the Board's legal analysis:

1. The Board affirmed the Administrative Law Judge's (ALJ) dismissal of the complaint, agreeing that the employees' participation in BLM protests was not shown to be for "mutual aid or protection" under Section 7 of the Act in this specific context.

2. The Board adopted the ALJ's recommended order without significant modification.

3. In a footnote, Member Wilcox noted that while she agreed with the outcome, she believed the ALJ's articulation of the relevant standard for protected concerted activity was too narrow. She referenced the Board's recent decision in Home Depot USA, Inc., 373 NLRB No. 25 (2024), which stated that an employee's concerted actions are protected under Section 7 as long as an objective is protected, regardless of other objectives.

The ALJ's underlying decision provided a more detailed analysis:

1. The ALJ found that the employees' participation in BLM protests was not protected activity under Section 7, citing Eastex, Inc. v. NLRB, 437 U.S. 556 (1978). The ALJ reasoned that the connection between the BLM protests and workplace issues was too attenuated to fall under the "mutual aid or protection" clause.

2. Even assuming the activity was protected, the ALJ concluded that the employees were not constructively discharged. The ALJ analyzed the case under both the traditional constructive discharge theory and the "Hobson's Choice" theory, finding that neither was satisfied.

3. The ALJ rejected the employer's argument that the Board lacked jurisdiction due to reduced revenues during the COVID-19 pandemic, citing past Board precedent on temporary loss of business.

Significant cases cited include:

1. Eastex, Inc. v. NLRB, 437 U.S. 556 (1978) - Held that Section 7 protects some concerted activities in support of employees of other employers, but noted that at some point the relationship to employees' interests becomes too attenuated for protection.

2. Intercon 1 (Zercon), 333 NLRB 223 (2001) - Summarized Board law on constructive discharge, including the traditional and "Hobson's Choice" theories.

3. Home Depot USA, Inc., 373 NLRB No. 25 (2024) - Clarified that an employee's concerted actions are protected as long as an objective is protected, even if other objectives exist or predominate.

Starbucks Corporation, 373 NLRB No. 87, 10-CA-300921 (Published Board Decision)

This NLRB decision addresses a request by Starbucks Corporation for special permission to appeal an Administrative Law Judge's (ALJ) ruling that allowed the General Counsel to present evidence relevant to a Section 10(j) proceeding during an administrative hearing. The key points of the Board's legal analysis are:

1. The Board denied Starbucks' request because it failed to comply with the promptness requirement in Section 102.26 of the Board's Rules and Regulations.

2. The Board found that Starbucks' 7-week delay in filing the appeal request was not "prompt" as required by Section 102.26, especially given that the General Counsel had already presented 12 witnesses, including 4 who provided testimony relevant to the Section 10(j) proceeding.

3. The Board emphasized that Section 102.26 is framed in terms of promptness and does not expressly refer to prejudice, contrary to the dissenting opinion's focus on lack of prejudice.

4. The Board noted that it will be up to the federal district court to decide whether to accept or reject any "just and proper" evidence adduced during the hearing for the Section 10(j) proceeding.

The underlying ALJ decision is not extensively discussed, but it's noted that the ALJ granted the General Counsel's request to present Section 10(j) evidence during the administrative hearing, despite Starbucks' objection.

Member Kaplan's dissenting opinion argues:

1. The Board should have granted the special appeal and found that the ALJ abused her discretion by allowing irrelevant testimony.

2. The 7-week delay should not be considered untimely, citing cases where longer delays were deemed "prompt" when no prejudice was shown.

3. The case raises concerns about the General Counsel's delay in pursuing Section 10(j) relief after receiving Board authorization.

4. The Board should monitor the timeliness of the General Counsel's actions in seeking 10(j) injunctive relief.

Patrick Aluminum, Inc. d/b/a Altec Aluminum Technologies, JD-49-24, 09-CA-300333 (ALJ Decision)

This ALJ decision addresses allegations that Patrick Aluminum, Inc. d/b/a Altec Aluminum Technologies violated Sections 8(a)(1), (3), and (4) of the National Labor Relations Act by terminating employee Steven Overton for engaging in protected concerted activities, assisting the union, and filing charges with the NLRB.

Key points of the ALJ's legal analysis:

1. The ALJ applied the Wright Line framework to analyze the discharge, which requires the General Counsel to show protected activity, employer knowledge, adverse action, and a causal connection.

2. The ALJ found the first three Wright Line elements were met, as Overton had engaged in protected activities (filing grievances and NLRB charges), the employer knew about these activities, and Overton was discharged.

3. However, the ALJ concluded there was no causal connection between Overton's protected activities and his discharge, primarily due to the significant time gap between his last protected activity in July 2020 and his discharge in July 2022.

4. The ALJ rejected the General Counsel's argument that the employer was "lying in wait" to discharge Overton after the union withdrew recognition, finding no evidence that the union's presence affected the employer's actions.

5. The ALJ found that while there may have been evidence of discriminatory motive in the past (e.g., a 2019 email discussing terminating Overton), it was too remote in time to establish a causal connection to the 2022 discharge.

6. The ALJ noted the lack of evidence of contemporaneous unfair labor practices or independent 8(a)(1) violations around the time of Overton's discharge.

7. The ALJ concluded that even if the General Counsel had met its initial burden, the employer established a legitimate justification for the discharge based on Overton's violation of the company's code of conduct.

Significant cases cited:

1. Wright Line, 251 NLRB 1083 (1980) - Established the causation test for analyzing discriminatory discharge cases.

2. Lucky Cab Co., 360 NLRB 271 (2014) - Identified factors that can support a finding of discriminatory intent.

3. Electrolux Home Products, Inc., 368 NLRB No. 34 (2019) - Held that if an employer's stated reason for an adverse action is pretextual, the trier of fact may infer animus.

4. Golden State Foods Corp., 340 NLRB 382 (2003) - Held that if reasons for an employer's action are pretextual, there is no need to perform the second part of the Wright Line analysis.

5. Amcast Automotive of Indiana, Inc., 348 NLRB 836 (2006) - Found that a two-year gap between union activity and discharge was too long to establish discriminatory motive.

First Transit of Puerto Rico, Inc., 12-RC-343475 (Regional Election Decision)

This is a Decision and Order issued by NLRB Regional Director David Cohen dismissing a representation petition filed by Central General de Trabajadores (the Petitioner) seeking to represent drivers employed by First Transit of Puerto Rico, Inc. The key points of the legal analysis are:

1. The Regional Director found that a collective bargaining agreement executed on March 1, 2024 between the Employer and the incumbent union (the Intervenor) constituted a contract bar to the petition.

2. The Regional Director applied the contract bar doctrine, which requires that a contract meet certain requirements to bar an election, including being in writing, signed by the parties, containing substantial terms and conditions of employment, and covering an appropriate unit.

3. The Regional Director rejected the Petitioner's arguments that the 2024 agreement was invalid because it was not ratified by employees or negotiated with employee participation, citing Appalachian Shale Products Co., 121 NLRB 1160 (1958), which held that ratification is not required unless expressly made a condition precedent in the contract itself.

4. The Regional Director found that the premature extension doctrine did not apply, based on Union Carbide Corporation, 190 NLRB 191 (1971), because the petition was filed after the open period for the original contract had passed and after the new agreement took effect.

5. The Regional Director determined that the short time between the new agreement's effective date and alleged non-implementation was insufficient to show the agreement was not in effect.

Significant cases cited include:

1. Appalachian Shale Products Co., 121 NLRB 1160 (1958) - Held that ratification is not required for a contract to bar an election unless expressly made a condition precedent in the contract itself.

2. Deluxe Metal Furniture Co., 121 NLRB 995 (1958) - Established the premature extension doctrine and requirements for a contract to serve as a bar.

3. General Cable Corporation, 139 NLRB 1123 (1962) - Established the three-year contract bar rule.

4. Union Carbide Corporation, 190 NLRB 191 (1971) - Held that a petition filed after the open period of an original contract and after a new agreement took effect was barred, even if the new agreement was a premature extension.

5. Visitainer Corp., 237 NLRB 257 (1978) - Held that general statements are insufficient to show a contract has been abandoned or is so at variance with actual conditions as to remove its bar quality.