12/18/2024: Two Cases Involving Illegal Partial Business Closures
The Starbucks Labor Relations Board keeps on chugging along.
Starbucks Corporation, 374 NLRB No. 8, 03-CA-296757 (Published Board Decision)
The NLRB reviewed an ALJ decision involving Starbucks' conduct at two stores in Albany, NY. The case centered on discipline issued to employee James Schenk, who was active in union organizing, and allegations of surveillance by district manager Beate Kuhnle-Hambster.
The Board reversed several key ALJ findings. First, contrary to the ALJ, the Board found that Kuhnle-Hambster created an unlawful impression of surveillance when she confronted Schenk with screenshots of private group chat messages but refused to reveal their source. The Board cited established precedent that failing to disclose sources of information about protected activities unlawfully suggests employer monitoring.
Second, the Board found three disciplinary actions against Schenk violated Section 8(a)(3):
A June 27 final written warning for profane messages in a group chat
A July 18 coaching for failing to complete closing tasks
An August 31 discharge for opening company mail
In each instance, applying Wright Line, the Board found the General Counsel proved discriminatory motivation through evidence of union activity, employer knowledge, demonstrated animus, and timing. The Board then determined Starbucks failed to prove it would have taken the same actions absent protected activity, noting evidence of disparate treatment and inconsistent enforcement of policies.
The Board agreed with the ALJ that Kuhnle-Hambster's dramatically increased presence at the Stuyvesant store during the union campaign created an unlawful impression of surveillance. The Board also affirmed the ALJ's dismissal of allegations regarding denial of union representation and threats about benefits.
For remedy, the Board ordered Schenk's reinstatement with backpay, removal of the disciplinary actions, and standard notice posting. The Board denied the General Counsel's request to overturn precedent regarding mandatory bargaining over discipline.
Significant Cases Cited
Wright Line, 251 NLRB 1083 (1980): Established the dual-motive framework for determining whether adverse actions are motivated by anti-union animus.
Charter Communications, LLC, 366 NLRB No. 46 (2018): Failure to explain the source of information about union activity creates the impression of surveillance.
Publix Supermarkets, 347 NLRB 1434 (2006): Employers fail their defense when disciplinary rules are applied inconsistently.
Kitsap Tenant Support Services, Inc., 366 NLRB No. 98 (2018): Progressive discipline relying on prior unlawful actions is itself unlawful.
Preferred Building Services, Inc. and Rafael Ortiz d/b/a Ortiz Janitorial Services, Joint Employers, 374 NLRB No. 11, 20-CA-149353 (Published Board Decision)
Preferred Building Services subcontracted janitorial services to Ortiz Janitorial Services (OJS). Employees, unsatisfied with wages, working conditions, and sexual harassment allegations, engaged in protected concerted activities, including picketing and distributing leaflets.
The picketing targeted Preferred rather than tenants but led to retaliatory actions by Rafael Ortiz, including threats, reduced hours, and eventual termination of employees involved. Preferred also canceled contracts with Harvest Properties and OJS during the dispute.
Key Legal Issues and Findings
1. Joint Employer Status
Finding: Applying the pre-2020 BFI Newby Island Recyclery standard (362 NLRB 1599), the Board affirmed the ALJ’s finding that Preferred and OJS were joint employers. This was based on Preferred's direct control over hiring, firing, and supervising OJS employees, making them jointly liable for unfair labor practices.
2. Affirmative Defenses
Secondary Picketing (Section 8(b)(4)(ii)(B)):
The Ninth Circuit remanded the case, rejecting the Board’s initial conclusion of unlawful secondary picketing. The court found the picketing was primary, targeting Preferred, not neutral third parties.
The Board, accepting this ruling, dismissed this defense on remand.
Recognitional Picketing (Section 8(b)(7)(C)):
The Board agreed with the ALJ that the picketing did not aim to force recognition or organization, as no direct evidence of such an object existed. Instead, the activities were informational protests.
Defamatory Statements:
The Board rejected the argument that employee statements about harassment were maliciously false, affirming their protection under the Act.
3. Violations of Section 8(a)(1) and (3)
Threats and Retaliation:
Rafael Ortiz made unlawful threats, including demands for immigration documentation and threats of reduced hours and discharge, all in response to protected concerted activities.
Unlawful Discharges:
The Board affirmed that the discharges of employees Mendoza and Banegas were motivated by their union activities, violating Sections 8(a)(3) and (1).
Contract Cancellation:
Preferred unlawfully canceled its contract with Harvest Properties to chill union activity at other locations, satisfying the Darlington standard for partial closures intended to discourage unionization.
Significant Cases Cited
BFI Newby Island Recyclery, 362 NLRB 1599 (2015): Established criteria for joint employer status based on shared or co-determined control over employment terms.
Sailors’ Union of the Pacific (Moore Dry Dock Co.), 92 NLRB 547 (1950): Set the rebuttable presumption criteria for primary picketing.
Textile Workers v. Darlington Mfg. Co., 380 U.S. 263 (1965): Addressed partial closures for anti-union reasons under Section 8(a)(3).
SEIU Local 525 (General Maintenance Co.), 329 NLRB 638 (1999): Analyzed coercive actions in the context of union picketing.
Victor’s Cafe 52, Inc., 321 NLRB 504 (1996): Found requests for immigration documents unlawful when motivated by protected concerted activities,
Mom’s Siam, Inc., JD-81-24, 05-CA-321197 (ALJ Decision)
In early 2023, employees at Mom's Siam restaurant in Richmond, Virginia began discussing workplace concerns including wages, tip calculations, and shift assignments. They formed group chats to coordinate their efforts and on May 24, 2023, presented a demand letter to management requesting changes to wages and working conditions.
On June 21, 2023, employees met with owner Sukanya Palaart to discuss their concerns. During this meeting, Palaart told employees who were unhappy to "find another job" and expressed interest in cutting staff from 25 to 12 people.
Employees organized a rally across from the restaurant for June 25, 2023. That morning, manager Vanderhoof called several employees warning that the restaurant might close if the rally occurred. During the rally, the restaurant lost internet connectivity and could only serve cash-paying customers. Palaart decided to close the restaurant, citing both the internet issue and planned renovations.
The restaurant remained closed until July 6, 2023. When it reopened, seven employees who participated in the rally were not brought back to work. In a recorded conversation on July 2, Palaart explicitly stated that employees who participated in the rally would not be returning.
The Administrative Law Judge found multiple violations of the National Labor Relations Act:
The restaurant made unlawful statements, including:
Telling employees not to discuss wages
Inviting employees to quit rather than raise concerns
Interrogating employees about protected activities
Threatening closure in response to protected activities
The temporary closure was unlawful because it was motivated by employees' protected activities rather than legitimate business reasons.
The failure to bring back seven rally participants constituted unlawful discharge.
The ALJ ordered the restaurant to:
Reinstate the discharged employees
Provide backpay for the period of closure and subsequent discharge
Remove references to the discharges from employee files
Post and read a notice about employees' rights
The ALJ dismissed allegations about statements in a newspaper article and found insufficient evidence that one employee's (Kay's) discharge was unlawfully motivated.
Significant Cases Cited
NLRB v. Burnup & Sims, Inc., 379 U.S. 21 (1964): An employer violates the Act if it discharges an employee based on protected activity, even if it incorrectly believes the employee engaged in misconduct.
Textile Workers v. Darlington Mfg. Co., 380 U.S. 263 (1965): A partial business closure intended to discourage union activity constitutes a violation of Section 8(a)(3).
Intertape Polymer Corp., 360 NLRB 957 (2014): Coercive statements and threats in response to employee organizing are per se violations of Section 8(a)(1).
General Motors Corp., 284 NLRB 1167 (1987): Emphasized the importance of distinguishing between lawful management rights and actions intended to interfere with union or protected concerted activities.