11/04/2024: 36 Illegally Fired Workers Get Reimbursed 10 Years Later

Yet another Starbucks case.

Michael Cetta, Inc. d/b/a Sparks Restaurant, 373 NLRB No. 129, 02-CA-142626 (Published Board Decision)

In 2014, Sparks Restaurant unlawfully discharged 36 employees who had engaged in an economic strike. After the NLRB found these discharges violated the National Labor Relations Act and ordered reinstatement with backpay, this compliance proceeding determined the specific amounts owed to each discriminatee.

Administrative Law Judge Kenneth Chu conducted an extensive hearing examining each discriminatee's efforts to find work after their discharge. The employees described searching for jobs through various means - visiting restaurants in person, applying online, networking through colleagues, and working with employment agencies. Many faced significant challenges finding comparable work in New York's high-end restaurant industry, where turnover was low and many establishments preferred to hire through union referrals.

The employer argued that the discriminatees failed to make reasonable efforts to find work, bringing in vocational experts who testified that equivalent jobs were readily available. The experts claimed the employees should have found work by May 2015 if they had conducted proper searches. However, ALJ Chu found the experts' analysis flawed, noting they applied an overly rigid standard rather than the "reasonable efforts" test required by law.

The ALJ credited the discriminatees' testimony about their job searches and interim employment, finding they made good faith efforts to mitigate their losses even though many couldn't find equivalent positions. He awarded varying amounts of backpay plus interest, reimbursement for expenses like employment agency fees, and compensation for early 401(k) withdrawal penalties some incurred after losing their jobs.

The NLRB largely affirmed the ALJ's detailed findings and conclusions. The Board rejected the employer's procedural arguments about conducting hearings by videoconference during the pandemic. It granted some technical corrections requested by the General Counsel regarding calculation of 401(k) contributions and tax consequences. The Board remanded one discriminatee's case for further proceedings to determine whether certain interim earnings should be deducted.

This case illustrates the complex nature of compliance proceedings involving multiple discriminatees over extended periods. It reinforces that employees need only make reasonable, not maximum, efforts to find work after an unlawful discharge. The decision also demonstrates how the Board evaluates mitigation in the restaurant industry context, where comparable positions may be scarce despite surface appearance of job availability.

The case follows established precedent that places the initial burden on the General Counsel to show gross backpay due, then shifts the burden to the employer to prove failure to mitigate or other reductions. It reinforces that uncertainties are resolved against the wrongdoing employer, reflecting the remedial purpose of backpay awards to make employees whole for losses suffered due to unlawful conduct.

Significant Cases Cited

• St. George Warehouse, 351 NLRB 961 (2007) - Established burden-shifting framework for mitigation

• Lucky Cab Co., 366 NLRB No. 56 (2018) - Held exactness not required in calculating interim earnings

• Florida Steel Corp., 234 NLRB 1089 (1978) - Found discriminatees can quit interim jobs for justifiable reasons without penalty

Starbucks Corporation, JD-67-24, 18-CA-307276 (ALJ Decision)

This case involves Starbucks Corporation and allegations by Workers United, affiliated with the Service Employees’ International Union, that Starbucks violated Sections 8(a)(1) and 8(a)(3) of the National Labor Relations Act (the Act). The central issues revolved around Starbucks' decision to withhold benefits, including a weekly payroll benefit, from unionized and unionizing stores, while offering those benefits to nonunion stores.

ALJ Decision Summary

The Administrative Law Judge (ALJ), Kimberly Sorg-Graves, found that Starbucks had violated the Act by both announcing and implementing the weekly payroll benefits at nonunion stores while excluding unionized and unionizing stores from receiving these benefits. The ALJ concluded that Starbucks' actions interfered with employee rights under Section 7 of the Act, and discriminated against employees engaging in union activities, thereby violating Sections 8(a)(1) and 8(a)(3).

Legal Analysis

1. Section 8(a)(1) Violation: Coercive Statements

The ALJ found that Starbucks violated Section 8(a)(1) by issuing statements, including an internal announcement and FAQ documents, that suggested only employees at nonunion stores would receive the new weekly payroll benefit. These statements were deemed coercive because they conveyed to employees that unionization would lead to the loss of certain benefits. Citing Niagara Wires, 240 NLRB 1326 (1979), the ALJ explained that such statements violate the Act when they suggest that unionized employees are automatically ineligible for a benefit. Starbucks argued that it was simply explaining the legal consequences of union representation, but the ALJ rejected this defense, finding the statements to be more exclusionary than explanatory.

2. Section 8(a)(3) Violation: Discriminatory Conduct

The ALJ also found that Starbucks violated Section 8(a)(3) by withholding the weekly payroll benefit from employees at unionized and unionizing stores. The General Counsel argued that the withholding of a new benefit, like the withholding of an established benefit, is inherently destructive of employee rights. While the ALJ did not extend the "inherently destructive" doctrine to new benefits, she nonetheless found that Starbucks' actions were discriminatory under the framework established in NLRB v. Great Dane Trailers, 388 U.S. 26 (1967). This framework requires the employer to demonstrate a legitimate business justification for its actions, which Starbucks failed to do convincingly.

Starbucks attempted to argue that its actions were motivated by a desire to comply with the law and avoid legal risks associated with making unilateral changes at unionized stores. The ALJ rejected this argument, stating that Starbucks could have implemented the changes across all stores or sought the union’s consent to apply the benefit to unionized stores. The ALJ emphasized that Starbucks' approach undermined collective bargaining, which is central to the Act.

Significant Cases Cited

1. Niagara Wires, 240 NLRB 1326 (1979): Held that statements indicating that unionized employees are ineligible for certain benefits are unlawful, as they discourage union support by suggesting union activity leads to a loss of benefits.

2. NLRB v. Great Dane Trailers, 388 U.S. 26 (1967): Established that once discriminatory conduct is shown, the burden shifts to the employer to provide a legitimate business justification for its actions.

3. Woodbridge Winery, 367 NLRB No. 79 (2019): Held that conveying to employees that unionization leads to ineligibility for benefits constitutes a per se violation of the Act.

4. Longmont United Hospital, 373 NLRB No. 97 (2024): Clarified that withholding benefits from unionized employees while challenging a union’s certification is unlawful.

5. Handleman Co., 283 NLRB 451 (1987): Established that benefits can lawfully be withheld from unionized employees if their inclusion is left to the process of collective bargaining, as long as the employer does not foreclose the possibility of the benefit.

Nitro Construction Services, JD-64-24, 09-CA-313196 (ALJ Decision)

This Administrative Law Judge (ALJ) decision involves Nitro Construction Services, where the General Counsel alleged that the company violated Sections 8(a)(1), 8(a)(3), and 8(a)(4) of the National Labor Relations Act (the Act). The key issues were the alleged retaliatory layoff of two employees, Robert Darren Brumfield and Michael Bishop, due to their engagement in union and protected concerted activities, and the refusal to rehire Brumfield for two subsequent projects after he filed an unfair labor practice charge.

Legal Issues and ALJ Findings

1. Unlawful Layoff of Brumfield and Bishop (Section 8(a)(3) and 8(a)(1)):

   • The General Counsel argued that Nitro Construction laid off Brumfield and Bishop on December 30, 2022, in retaliation for their union activities. Specifically, Brumfield and Bishop had raised concerns about working conditions and pay discrepancies at Nitro's PureCycle project in Ohio.

   • The ALJ applied the Wright Line test, which determines whether an employer unlawfully discriminated against an employee due to union activity. The General Counsel successfully established that Brumfield and Bishop’s protected activities were a motivating factor in their layoff, particularly their discussions with management about a pay issue and workplace conditions.

   • The ALJ found that the employer’s justification for the layoff—a reduction in force—was not credible. The employer claimed that the layoff was due to a reduction of work at the site, but soon after the layoff, the company hired additional employees to replace those laid off. The timing of the layoff, coupled with the proximity of Brumfield and Bishop’s protected activity, supported a finding of unlawful motivation.

   • Conclusion: Nitro Construction Services violated Sections 8(a)(3) and 8(a)(1) by laying off the employees to discourage union activity.

2. Refusal to Rehire Brumfield (Section 8(a)(3) and 8(a)(4)):

   • The second set of allegations concerned Nitro’s refusal to rehire Brumfield for two projects in 2023. The General Counsel argued that this refusal was motivated by Brumfield’s union activities and his filing of an unfair labor practice charge.

   • To analyze this, the ALJ relied on the FES framework (refusal to hire). For the refusal to hire to be unlawful under 8(a)(3), the General Counsel needed to show that Nitro was hiring, that Brumfield was qualified, and that the refusal was motivated by union animus. Under 8(a)(4), the refusal to hire must be related to Brumfield’s participation in NLRB processes.

   • The ALJ found that the General Counsel failed to establish sufficient evidence of anti-union animus motivating the refusal to hire. Nitro’s project manager stated that Brumfield was not hired because he was not known to the foreman, a subjective but lawful criterion. The ALJ noted the absence of evidence linking the refusal to hire to Brumfield’s prior union activity or the filing of the charge.

   • Conclusion: Nitro did not violate Sections 8(a)(3) or 8(a)(4) when it refused to rehire Brumfield.

Significant Cases Cited

1. Wright Line, 251 NLRB 1083 (1980): Established the test for determining whether an adverse employment action is motivated by union activity. It requires the General Counsel to prove union activity was a motivating factor, and then shifts the burden to the employer to show it would have taken the same action regardless.

2. FES, 331 NLRB 9 (2000): Set the standard for proving a discriminatory refusal to hire: the General Counsel must show that the employer was hiring, the employee was qualified, and union activity contributed to the refusal.

3. NLRB v. Great Dane Trailers, Inc., 388 U.S. 26 (1967): Established that once discriminatory intent is shown, the burden shifts to the employer to justify its action, and failure to do so may lead to a finding of unlawful motivation.

4. New York Paving, Inc., 371 NLRB No. 139 (2022): Held that laying off employees in retaliation for union activity, such as the filing of a grievance, is unlawful.

5. Sunbelt Rentals, Inc., 370 NLRB No. 102 (2021): Found that laying off employees due to their support of union activity violated the Act.

NAPA Transportation, Inc., 05-RD-353624 (Regional Election Decision)

In late October 2024, Region 5 of the NLRB addressed a straightforward question about union disclaimers of interest. The case arose at NAPA Transportation's Richmond facility, where local drivers had been represented by Teamsters Local 322 since June 2023. An employee filed a decertification petition on October 28, 2024, seeking to remove the union. Two days later, the union filed a disclaimer of interest.

Regional Director Marshall's decision focused on whether the union's disclaimer was legally sufficient despite not explicitly detailing the bargaining unit description. Citing the NLRB Casehandling Manual, Marshall noted that disclaimers need not follow any specific format. The union's reference to the RD petition number and statement about "disclaiming interest in the bargaining unit" satisfied the legal requirements through incorporation by reference.

The decision turned on two key factors. First, the disclaimer adequately identified the relevant unit by referencing the petition number. Second, there was no evidence the union was acting inconsistently with its disclaimer, such as continuing representational activities.

Given these findings, Marshall determined there was no reason to proceed with the decertification process. He dismissed the petition, cancelled the scheduled hearing, and revoked the union's certification from the original RC case.

Holaday-Parks-Fabricators, Inc. d/b/a Holaday-Parks, Inc., 19-RC-347610 (Regional Election Decision)

This case involves a representation election conducted among employees of Holaday-Parks-Fabricators, Inc., where the International Association of Sheet Metal, Air, Rail, and Transportation Workers, Local 55, affiliated with the Northwest Regional Council of SMART (the Union), sought to represent the employees for collective bargaining purposes. The employer filed objections to the conduct of the election, challenging the validity of the results. The Regional Director’s decision overruled the employer’s objections and certified the Union as the exclusive collective-bargaining representative.

Legal Issues and Objections

1. The Election Results and Petition:

   • The election was conducted by mail ballot from August 26, 2024, to September 16, 2024. The bargaining unit consisted of full-time and regular part-time technicians and specialists at Holaday-Parks’ Richland, Washington facility.

   • Of the 12 eligible voters, six voted in favor of the Union, and five voted against it, with no challenged or void ballots. The employer filed two objections contesting the results.

2. Employer's Objection 1: Pro-Union Conduct by a Supervisor:

   • The employer contended that a Field Supervisor engaged in pro-union conduct during a meeting on August 1, 2024, five days before the petition was filed, and that this conduct may have interfered with employees' free choice in the election. The employer argued that the supervisor falsely stated that Holaday-Parks’ competitors were already using union labor and that unionization was inevitable.

   • The Harborside Healthcare standard, which governs allegations of improper conduct by supervisors, was applied. This two-part test examines whether the supervisor's conduct tended to interfere with employee free choice and whether the conduct materially affected the election results.

   • The Regional Director found that the supervisor’s conduct was isolated and did not include threats, coercion, or promises of benefit. As such, the conduct did not rise to the level of objectionable conduct under the Harborside Healthcare standard. Additionally, the statements were made before the critical election period and were deemed expressions of opinion protected under Section 8(c) of the Act.

3. Employer's Objection 2: A Lost Ballot:

   • The employer’s second objection involved a ballot that allegedly was lost in the mail. The employer argued that this missing ballot would have created a tie vote, altering the election outcome. However, there was no indication of misconduct by the NLRB or the parties involved, and the ballot was never received by the Regional Office.

   • The Regional Director referenced the Classic Valet Parking and CenTrio Energy South precedents, which hold that ballots arriving after the tally are not counted, even if they could affect the election outcome. The Director noted that the NLRB provides a grace period for late-arriving mail ballots, but once the tally is conducted, any subsequent ballots cannot be counted. The employer’s reliance on the Window to the World Communications case was dismissed, as the circumstances in that case involved significant administrative errors, which were not present in this case.

Significant Cases Cited

1. Harborside Healthcare, Inc., 343 NLRB 906 (2004): Established the standard for evaluating whether a supervisor’s conduct in support of a union could be deemed coercive, requiring a showing of interference with employee free choice and a material impact on the election.

2. Classic Valet Parking, Inc., 363 NLRB No. 23 (2015): Held that ballots arriving after the tally of votes in a mail ballot election cannot be counted, even if determinative.

3. Window to the World Communications, Inc., 372 NLRB No. 3 (2022): An exception to the general rule regarding late-arriving ballots, granted in a unique case involving regional error and a one-person election.

4. CenTrio Energy South, LLC, 371 NLRB No. 94 (2022): Reaffirmed that late-arriving ballots in a mail election cannot be counted after the tally has been conducted unless exceptional circumstances exist.