08/31/2024: Fresenius's Wage Increase During Organizing Campaign Was Not Unlawful

Also, a failed self-determination election bid.

Marathon Pipe Line LLC and MPLX Logistics and Storage-Terminals, 21-RC-306935 (Regional Election Decision)

This case involves Marathon Petroleum Logistics Services LLC (the Employer) and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO-CLC (the Union). The Union filed a petition seeking an Armour-Globe self-determination election to add terminal lead operators, operators, and terminal technicians at the Employer’s San Diego sales terminal to an existing bargaining unit. The existing unit already includes employees at the Employer’s pipeline, Long Beach Harbor terminals, and Wilmington sales terminal in California. The Employer argued that the San Diego terminal employees do not share a community of interest with the existing bargaining unit, rendering the proposed unit inappropriate.

Legal Analysis:

1. Community of Interest Standard:

   • The Regional Director examined whether the employees at the San Diego terminal share a community of interest with those in the existing bargaining unit, a key requirement under the Armour-Globe standard. The analysis considered factors such as the employees’ skills and duties, terms and conditions of employment, employee interchange, functional integration, geographic proximity, centralized control of management, and bargaining history.

2. Skills and Duties:

   • The employees at the San Diego terminal perform similar roles to those in the existing unit, including overseeing the loading and unloading of petroleum products. However, the specifics of their duties differ due to the unique operations at each terminal. The Regional Director found that this factor did not strongly support a shared community of interest due to the distinct job functions across terminals.

3. Terms and Conditions of Employment:

   • Although there are some similarities in terms of wages, benefits, and training between the San Diego terminal employees and those in the existing unit, the differences in pay and benefits resulting from collective bargaining agreements are considered less significant. This factor slightly favored a shared community of interest​.

4. Employee Interchange:

   • There was no evidence of employee interchange between the San Diego terminal and the other terminals. The lack of interchange weighed against finding a shared community of interest​.

5. Functional Integration:

   • While all employees handle petroleum products, the lack of functional integration—such as distinct processes, products, and operational procedures at each terminal—led the Regional Director to conclude that this factor did not support a shared community of interest.

6. Geographic Proximity:

   • The San Diego terminal is approximately 95 miles from the nearest terminal in Long Beach. This significant distance further supported the conclusion that the San Diego terminal employees do not share a community of interest with those in the existing unit​.

7. Centralized Control of Management:

   • The terminals have separate on-site management, with only minimal oversight from a centralized management structure. This separation in day-to-day supervision weighed against a shared community of interest​.

8. Bargaining History:

   • The San Diego terminal employees have never been part of any collective bargaining agreement, unlike the Wilmington terminal, which was integrated into the existing unit due to its geographic proximity and historical bargaining coverage. This history also weighed against including the San Diego employees in the existing unit​.

Conclusion:

The Regional Director concluded that the employees at the San Diego terminal do not share a sufficient community of interest with the employees in the existing bargaining unit. Therefore, an Armour-Globe self-determination election to add the San Diego terminal employees to the existing unit was deemed inappropriate. However, the Regional Director directed that an election be held among the San Diego terminal employees to determine whether they wish to be represented as a standalone bargaining unit by the Union.

Significant Cases Cited:

1. Armour & Co., 40 NLRB 1333 (1942): Established that employees who share a community of interest with an existing bargaining unit may vote to be included in that unit.

2. Warner-Lambert Co., 298 NLRB 993 (1990): Provided the two-part standard for Armour-Globe elections: employees must share a community of interest and constitute an identifiable, distinct segment.

3. Executive Resources Associates, 301 NLRB 400 (1991): Clarified that the degree of interchange, contact, and functional integration is crucial when determining if employees share a community of interest.

Fresenius Kidney Care Elk Grove Blvd, 20-CA-328050 (Advice Memo)

The case involves Fresenius Kidney Care Elk Grove Blvd. (the Employer) and the Union’s campaign to represent employees at fourteen different units within the Employer’s facilities. The Union filed charges alleging that the Employer violated Sections 8(a)(1) and 8(a)(3) of the National Labor Relations Act (NLRA) by unilaterally implementing wage increases during an active organizing campaign. The primary legal issue was whether the wage increase was intended to undermine the Union's organizing efforts or if it was motivated by legitimate business considerations.

Legal Analysis:

1. Unilateral Wage Increases and Union Avoidance:

   • The central legal question was whether the Employer’s decision to implement wage increases during the Union’s organizing campaign constituted unlawful interference under Section 8(a)(1) of the NLRA. According to the standard set in NLRB v. Exchange Parts Co., 375 U.S. 405 (1964), employers cannot unilaterally grant benefits to employees during an organizing campaign if the intent is to discourage union support.

   • The advice memo determined that the evidence did not support a finding that the wage increase was implemented to undermine the Union. Instead, the Employer's actions were found to be motivated by legitimate business concerns, specifically to avoid turnover in anticipation of industry-wide wage increases spurred by state legislation. The memo emphasized that the timing of the wage increase coincided with external economic factors rather than an intent to influence the Union's organizing efforts.

2. Lack of Evidence of Anti-Union Animus:

   • The memo considered whether there was evidence of anti-union animus on the part of the Employer. It concluded that there was insufficient evidence to demonstrate that the wage increase was motivated by a desire to weaken the Union. The only potentially relevant incident involved a low-level supervisor making an isolated threat about the risk of strikes, but this was not sufficient to establish a broader pattern of anti-union conduct.

   • The memo also noted that the Employer's communication about the wage increase was generally lawful. The Employer stated that the issue of "wage adjustments" would be negotiated in good faith with the Union, thereby avoiding any suggestion that employees were foreclosed from obtaining wage increases due to union representation, as prohibited by KEZI, Inc., 300 NLRB 594 (1990).

3. Misleading Statements:

   • Although the Employer's statement that the wage increase was “consistent with the requirements of federal law” was somewhat misleading (since the Employer could have lawfully granted the increase with the Union’s consent), this was not sufficient to sustain a violation under Shell Oil Co., 149 NLRB 283 (1964). The memo found that the overall communication was not coercive and did not imply that employees would be penalized for supporting the Union.

4. Dismissal of Charges:

   • Given the lack of evidence of unlawful motivation or anti-union animus, the memo advised that the Region should dismiss the charges against the Employer. The memo also noted that there were no other related pending meritorious charges that would justify issuing a complaint or seeking a change in Board law.

Significant Cases Cited:

1. NLRB v. Exchange Parts Co., 375 U.S. 405 (1964): Held that an employer may not grant benefits to employees during an organizing campaign if the intent is to discourage union support.

2. KEZI, Inc., 300 NLRB 594 (1990): Prohibited employers from making statements that suggest employees are automatically foreclosed from obtaining benefits due to union representation.

3. Shell Oil Co., 149 NLRB 283 (1964): Established that an employer's misleading statements, absent evidence of coercion or animus, may not necessarily constitute an unfair labor practice.

Conclusion:

The advice memo concluded that the Employer’s wage increase during the Union’s organizing campaign was motivated by legitimate business concerns rather than a desire to undermine the Union. The Region was advised to dismiss the charges, as there was insufficient evidence of anti-union animus or coercion. This decision underscores the importance of evaluating the employer's intent and the context in which unilateral actions are taken during an organizing campaign, emphasizing that not all wage increases or benefit enhancements during such periods are inherently unlawful.