NLRB v. American Backflow & Fire Prevention, Inc., 24-2434 (7th Circuit)
The Seventh Circuit denied a company's petition for review and enforced a Board order requiring American Backflow & Fire Prevention to bargain with Plumbers Local 130, finding that the company had defaulted on a settlement agreement it entered into after earlier unfair labor practice charges.
The case traced back to a 2022 settlement in which American Backflow promised to bargain in good faith with the Union and agreed that, if it later breached the agreement, it would waive its right to answer any resulting complaint and could contest only whether a default had occurred. After holding one bargaining session in 2023, the company canceled a second one and withdrew recognition of the Union, citing what it called documentary evidence that the Union had lost majority support.
The Board's General Counsel moved for default judgment, arguing that the company's withdrawal breached its settlement obligations because the decertification evidence it cited either predated the certification year or was tainted by the company's own unfair labor practices. A divided Board panel granted the motion, reasoning that American Backflow had abandoned its stated justification for withdrawing recognition without offering any alternative basis, leaving nothing but a bare denial that could not defeat default judgment.
On review, the court explained that after a union's initial certification year, an employer may rebut the presumption of majority support only by showing the union actually lacked majority support or that the employer had a good-faith doubt grounded in objective evidence. American Backflow never substantiated either theory once it disavowed reliance on the decertification petitions, so its "lawful withdrawal" assertion amounted to nothing more than a conclusory denial. The court found this consistent with Board precedent holding that general denials, without specific facts rebutting a detailed breach allegation, do not warrant a hearing.
The court also rejected the company's due process argument that it was entitled to a hearing under the NLRA, holding that the argument was never raised before the Board and was therefore forfeited under the statute's requirement that objections be urged before the agency first.
Significant Cases Cited
Levitz Furniture Co. of the Pacific, 333 NLRB 717 (2001): An employer may withdraw recognition of an incumbent union only upon objective evidence that the union has actually lost majority support.
NLRB v. Curtin Matheson Scientific, Inc., 494 U.S. 775 (1990): After certification, a union's majority support presumption becomes rebuttable, and an employer can rebut it by showing actual loss of majority support or a good-faith doubt based on objective evidence.
Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27 (1987): Describes the rebuttable presumption of majority support a union holds after its initial certification year.
Alaris at Hamilton Park Health Care Center, 366 NLRB No. 90 (2018): A general denial that fails to specifically refute a detailed breach allegation is insufficient to defeat a motion for default judgment.
Williamsville Suburban, LLC, 365 NLRB 114 (2017): An assertion made only "upon information and belief" does not raise a material issue of fact sufficient to avoid default judgment.