12/06/2024: Weed Company Claims NLRA Does Not Apply to Illegal Businesses
Starbucks illegally excluded union workers from ice skating parties.
Sho-Me Power Electric Cooperative, 373 NLRB No. 139, 14-UC-317439 (Published Board Decision)
The National Labor Relations Board issued a decision on December 3, 2024, denying a union's request to review a Regional Director's determination about the status of certain workers at SHO-ME Power Electric Cooperative. The case centered on whether dispatchers and central office technicians should be classified as guards under Section 9(b)(3) of the National Labor Relations Act.
Two Board members, with one member dissenting, found that these employees qualified as statutory guards because they performed security functions at the company's facilities. These functions included controlling access to facilities, managing visitor logs, responding to alarms, and coordinating with law enforcement when needed. Though the employees spent most of their time on non-security duties, the Board determined that the nature of their security responsibilities, rather than the time spent on them, was the decisive factor.
The Board's analysis relied on established precedent, particularly the Boeing Co. decision from 1999, which held that guard status depends on the character of the security duties rather than the percentage of time devoted to them. The Board also cited cases involving similar situations at other companies where employees who monitored security systems or controlled access were deemed to be guards.
Member Prouty dissented from the majority decision, stating that the case warranted a more thorough review of the complete record to determine whether these employees truly qualified as guards under the NLRA. However, the majority's decision stood, maintaining the Regional Director's original classification of the workers as guards.
Through this ruling, the Board reinforced its position that employees can be classified as statutory guards even when their security duties constitute a minor portion of their overall responsibilities, as long as those security functions are not merely incidental to their work.
Significant Cases Cited
Boeing Co., 328 NLRB 128 (1999): The Board evaluates the nature of guard duties, not the percentage of time spent performing them.
Wells Fargo Alarm Services, 289 NLRB 562 (1988): Employees enforcing property and safety rules qualify as statutory guards.
Madison Square Garden, 333 NLRB 643 (2001): Emphasized the importance of specific guard responsibilities over their frequency.
University Hospitals aka UH legally known as University Hospitals Health Systems, Inc. and affiliate, JD-75-24, 08-CA-280382 (ALJ Decision)
The Administrative Law Judge examined allegations that University Hospitals Cleveland Medical Center (UH) violated the National Labor Relations Act through its Resident Manual rules and a cease-and-desist letter issued to a former resident.
The case centered on three provisions: Section 6.5.B of the Manual, which prohibited residents from joining organizations that might consider strikes; Section 6.4.2, which restricted communications with the press; and a cease-and-desist letter broadly limiting a former resident's communications with employees.
The ALJ first analyzed Section 6.5.B under established Board precedent. The rule explicitly prohibited protected activity by barring residents from joining labor organizations that could consider strikes. While UH argued this restriction was necessary to comply with medical ethics guidelines, the ALJ determined that such guidelines do not override employees' statutory rights to engage in protected labor activities, including the right to strike.
Regarding Section 6.4.2, the ALJ applied the framework from Stericycle Inc., which requires showing that a challenged rule would reasonably tend to chill protected activities. The rule prohibited giving out "any information relative to the Hospital" to the press. Although UH maintained this protected patient privacy, the ALJ found the broad language extended well beyond that legitimate interest and would restrict protected communications about working conditions.
The ALJ then examined the cease-and-desist letter issued to Dr. Nicholas Krudy, a former resident. Under threat of litigation, the letter required Krudy to cease all communications with current employees and channel any necessary contact through UH's attorneys. Applying the standard from KSM Industries, which examines whether employer statements would reasonably tend to interfere with protected rights, the ALJ determined the letter's broad restrictions would improperly limit protected activities like discussing working conditions or assisting with Board charges.
The ALJ rejected UH's procedural defenses, including arguments that Dr. Krudy lacked standing as a former employee to file charges and that the claims were time-barred. The ALJ cited long-standing precedent that former employees retain rights under the NLRA and that maintaining unlawful rules constitutes a continuing violation not subject to the statute of limitations. The ALJ also noted that there is no standing requirement for filing a charge and that anyone may file a charge.
Finding violations of Section 8(a)(1) on all three counts, the ALJ ordered UH to rescind the unlawful manual provisions and cease-and-desist letter requirements. The order required UH to notify all current and former residents employed since March 2021 that these provisions are no longer in effect and to post notices about employees' rights.
Significant Cases Cited
Stericycle Inc., 372 NLRB No. 113 (2023): Established current standard requiring proof that challenged rules have reasonable tendency to chill Section 7 rights.
KSM Industries, 336 NLRB 133 (2001): Established objective standard for analyzing whether employer statements reasonably tend to interfere with Section 7 rights.
McLaren Macomb, 372 NLRB No. 58 (2023): Held that broadly restricting employee communications under threat of litigation violates Section 8(a)(1).
Starbucks Corporation, JD(SF)-32-24, 19-CA-310274 (ALJ Decision)
The Administrative Law Judge examined unfair labor practice charges against Starbucks Corporation regarding its treatment of unionized stores in the Seattle area (Area 10) during the 2022-2023 holiday season.
The case centered on Starbucks' organization of ice skating parties at the Kraken Community Iceplex in January 2023. Through flyers and registration systems, Starbucks explicitly excluded employees from unionized stores from these events. Additionally, management informed unionized stores they would not receive funding for individual store holiday parties that was being provided to non-union locations.
In analyzing whether this conduct violated the National Labor Relations Act, the ALJ first determined whether holiday parties constituted an existing benefit under Starbucks' past practice. The evidence showed that before the COVID-19 pandemic, Starbucks regularly provided holiday parties and extended sports team sponsorship benefits to all Area 10 employees without exclusion. One long-term employee testified to attending multiple holiday parties since 2014, including events where the company provided several hundred dollars for food and activities. Based on this consistent pattern, the ALJ found these benefits represented an established practice that employees could reasonably expect to continue.
Having established the parties were an existing benefit, the ALJ determined that deliberately withholding them from unionized employees was "inherently destructive" of protected rights under Section 7 of the Act. This violated Section 8(a)(3) even without requiring proof of discriminatory intent. The ALJ rejected Starbucks' argument that area-wide ice skating parties represented a new benefit distinct from past store-level events, finding this a difference in format rather than fundamental nature.
Regarding statements by management about withholding party funding from unionized stores, the ALJ found these communications would reasonably tend to interfere with protected rights by explicitly linking the denial of benefits to union representation. This constituted a separate violation of Section 8(a)(1).
In crafting remedies, the ALJ considered Starbucks' pattern of similar violations documented in over 30 other cases nationwide. This led to broad remedial measures including an extended 365-day notice posting period, mandatory management training, monetary compensation of $40.09 per excluded employee (representing the cost of attendance), required meetings to read the notice, and multi-channel distribution of remedial notices.
Significant Cases Cited
Arc Bridges, Inc., 355 NLRB 1222 (2010): Held that withholding existing benefits from unionized employees is inherently destructive of Section 7 rights.
In re Caterpillar, Inc., 355 NLRB 521 (2010): Established that past practice must occur with such regularity that employees could reasonably expect it to continue.
Miller Electric Pump & Plumbing, 334 NLRB 824 (2001): Created objective test for analyzing whether employer statements interfere with Section 7 rights.
NLRB v. Great Dane Trailers, 388 U.S. 26 (1967): Established that some conduct is so destructive of employee rights that proof of anti-union motivation is unnecessary
International Brotherhood of Teamsters, Local 492 (Various Employers), JD(SF)-36-24, 28-CB-232327 (ALJ Decision)
The International Brotherhood of Teamsters Local 492 operated an exclusive hiring hall for drivers and wranglers in the New Mexico movie industry, organizing workers into experience-based groups and an "Exhausted List" for overflow workers. The system operated through an electronic call board managed by Business Agent Melissa Malcolm, with production companies accessing workers through Memoranda of Agreement (MOAs).
The Administrative Law Judge found several distinct violations of the National Labor Relations Act. First, the union's operation of the exclusive hiring hall violated Sections 8(a)(3) and 8(b)(2) of the Act. The judge applied the standard from Int'l Bhd. of Teamsters Loc. 492, which had previously examined this specific hiring hall and established that its exclusive nature created a heightened duty of fair representation. Under this duty, the union was required to use objective criteria and consistent standards in its operations.
The union violated this duty when it caused the termination of Frost, Rivera, and Wagy. After authorizing their hiring, Malcolm demanded their termination six weeks later, claiming a rule requiring return to the call board system after three days of layoff. The judge found this justification inconsistent with past practices and determined the union had improperly interfered with the employment relationship. Under Operating Engineers Local 406, when a union causes an employee's discharge, it must prove its action was necessary for effective representation - a burden the union failed to meet.
The union's rules requiring hiring hall users to assist in organizing activities violated Section 8(B)(1)(A). The judge relied on Radio Officers' Union v. NLRB, which established that employment must be insulated from organizational rights. The union's practice of maintaining different solicitation rules for union members versus non-members on the Exhausted List constituted unlawful discrimination.
The charging of referral fees to special equipment operators who were hired directly, without using the hiring hall, violated Section 8(b)(1)(A). Applying Spector Freight System, Inc., the judge found these fees unlawful because the union provided no actual referral services to these workers. The union's practice of requiring Exhausted List members to pay both an initial $750 fee and 3% of their earnings was particularly problematic.
When Teamsters Local 399 replaced Local 492 in August 2022, it continued using the same hiring hall system. Under Golden State Bottling Co. v. NLRB, this made Local 399 a successor union equally responsible for remedying the violations. The judge ordered comprehensive remedies including cease and desist orders, back pay, fee reimbursement, removal of negative references, and notice posting.
The decision emphasized that while unions may operate exclusive hiring halls, they must do so without discrimination and without using the system to encourage union membership. The union's various rules and practices had effectively created two tiers of workers - union members with greater rights and non-members subject to additional requirements and restrictions - which violated the Act's prohibition on using hiring hall procedures to encourage union membership.
Significant Cases Cited
Lucas v. NLRB, 333 F.3d 927 (9th Cir. 2003): Exclusive hiring halls impose a heightened duty of fair representation, requiring unions to act in a non-discriminatory manner.
Operating Engineers Local 406, 262 NLRB 50 (1982): A union's interference in employment decisions to enforce discriminatory rules violates the NLRA.
Spector Freight System, Inc., 248 NLRB 260 (1980): Charging referral fees for services not provided is unlawful.
IBEW Local 48, 342 NLRB 101 (2004): Unions may not condition job access on union loyalty or organizational participation.
Golden State Bottling Co. v. NLRB, 414 U.S. 168 (1973): A successor employer or union is responsible for remedying unfair labor practices of its predecessor.
Grow Op Farms, LLC, JD(SF)-38-24, 19-CA-309512 (ALJ Decision)
The case involves unfair labor practice charges and representation election issues at Grow Op Farms, a cannabis processing facility in Washington state. In mid-2022, employees began organizing with UFCW Local 3000, leading the company to hire a labor consultant to oppose unionization. An election was held in April 2023, resulting in 8 votes for and 12 votes against unionization, with 6 challenged ballots.
During the organizing campaign, the Administrative Law Judge found that the company engaged in several unlawful actions. Manager Tyler Miller created an impression of surveillance by calling an employee into his office immediately after observing union discussions and threatening termination. The company also discriminatorily enforced its solicitation rules, allowing non-union discussions during work time while prohibiting union-related conversations.
The company posted notices stating that wages and benefits would be "frozen in place" during unionization. The ALJ found this violated labor law since the company had an established practice of granting periodic increases. Additionally, management removed union literature from break rooms while allowing other materials to remain posted.
Two employees were terminated during this period. Nathan Howell, a maintenance technician, was fired after helping an employee change a tire in the parking lot. Though management claimed he violated policy, the ALJ found this reason pretextual since a supervisor had requested the assistance. Matthew Holz, an environmental services employee, was terminated for removing company anti-union notices. The ALJ found this termination unlawful since the notices did not comply with the company's own posting requirements and Holz's job involved removing unauthorized postings.
The company argued that certain employees were exempt agricultural laborers, but the ALJ rejected this, finding they performed maintenance and cleaning work unrelated to agricultural production. The company also contended that providing remedies would require the NLRB to involve itself in federally illegal cannabis operations, but the ALJ deferred this novel question to the Board.
The ALJ ordered comprehensive remedies: reinstatement and backpay for the discharged employees, mandatory NLRB training for supervisors, and notice posting. Regarding the election, the ALJ directed that the challenged ballots be counted and, if the union still lost, ordered a rerun election due to the company's interference with laboratory conditions.
Significant Cases Cited
Tres Estrellas de Oro, 329 NLRB 50 (1999): Creating the impression of surveillance unlawfully interferes with Section 7 rights.
New Process Co., 290 NLRB 704 (1988): Removing union materials while allowing other materials constitutes unlawful interference.
Frazier Industrial Co., 328 NLRB 717 (1999): Employers cannot discriminatorily restrict union-related discussions.
Wright Line, 251 NLRB 1083 (1980): The General Counsel must prove union activity motivated an adverse action; the burden then shifts to the employer.
Holly Farms Corp. v. NLRB, 517 U.S. 392 (1996): Clarified the definition of "agricultural laborer" under the NLRA.
MVM, Inc., 28-RC-344888 (Regional Election Decision)
This case involves an NLRB election decision regarding MVM, Inc., a federal contractor providing security services to Immigration and Customs Enforcement (ICE) at its El Paso facility. The International Brotherhood of Teamsters Local 745 filed a petition to represent two employee groups: approximately 170 Child and Family Protection Care Specialists and 15 Logistics Specialists.
The central issue was whether Child and Family Protection Care Specialists qualified as guards under Section 9(b)(3) of the National Labor Relations Act. This distinction matters because the law prohibits unions representing non-guards from also representing guards, a measure designed to prevent potential conflicts of interest during labor disputes.
The Regional Director examined the duties of Child and Family Protection Care Specialists, who transport detainees from border facilities to shelters and licensed facilities. These employees maintain custody of detainees, conduct searches, monitor detainees constantly, and are authorized to use restraints when necessary. Though they do not wear uniforms or carry weapons, they receive specialized security training and carry federal government-issued identification allowing access to secure facilities.
Based on these factors, the Regional Director determined that Child and Family Protection Care Specialists qualified as guards under the Act. Since the Teamsters represent non-guard employees, they cannot represent this group.
The Regional Director then analyzed whether Logistics Specialists constituted an appropriate standalone bargaining unit. These employees work exclusively at the El Paso facility handling warehousing, equipment arrangements, inventory management, and trip dispatching. After examining factors like departmental organization, job functions, and working conditions, the Director found they shared a sufficient community of interest to form an appropriate unit.
As a result, the Regional Director ordered a mail ballot election for the Logistics Specialists only. The decision set forth specific procedures for the election, including eligibility requirements, voter list specifications, and notice posting obligations. The election was scheduled with ballots to be mailed on December 17, 2024, and due back by January 7, 2025.
Significant Cases Cited
Burns Security Services, 300 NLRB 298 (1990): Established that Congress enacted Section 9(b)(3) to prevent conflicts between guard and non-guard employees represented by the same union.
The Boeing Company, 328 NLRB 128 (1999): Outlined seven typical guard responsibilities, including rule enforcement, authority to compel compliance, security training, and control of access.
Rhode Island Hospital, 313 NLRB 343 (1993): Determined that the nature of guard duties, not the percentage of time performing them, is the controlling factor in guard status.