Employer's Labor Consultants Found to Have Engaged in Unfair Labor Practices By Interrogating, Threatening to Reduce Wages, & Making Threats of Futility

UNF West, Incorporated v. National Labor Relations Board - Fifth Circuit Court of Appeals

Facts:  UNF West, Incorporated ("UNF") is a corporation involved in distributing natural and organic foods.  At its facility in Moreno Valley, California, the International Brotherhood of Teamsters, Local 166 ("Union") began an organizing campaign in 2012.  A representation election was conducted and the Union lost.  The Union then filed objections based upon alleged unfair labor practices and requested the election results be set aside.  Before an Administrative Law Judge ("ALJ") could rule on the objections, the Union withdrew them and sought another election.  Although a new election was set for a short time later, it was canceled the night before it was to take place due to fresh allegations of unfair labor practices by two labor consultants hired by UNF.

The two labor consultants, Juan Negroni ("Negroni") and Carlos Ortiz ("Ortiz") allegedly engaged in three separate incidents which formed the basis of the unfair labor practices complaint:

1. A UNF employee, Armando Perez Aceves ("Aceves") attended a 40 - 50 minute meeting with Ortiz, in which Negroni was present.  After the meeting, Negorni approached Aceves in the warehouse and asked his thoughts on the union.  Aceves asked to be left alone and proceeded to produce a document entitled "Employee Rights Under the National Labor Relations Act".  In response, Negroni said "This document doesn't work here, my brother."  Negroni made further reference to the fact that Aceves should remember that UNF paid his salary, not the Union.
2. Another UNF employee, Lino Contreras, alleged he had a conversation with Negroni in the warehouse in which Negroni approached him and asked about his thoughts on the Union.  Negroni apparently said "I have heard that the Union is making a lot of promises."  After Contreras stated that he believed Negroni and his colleagues were making false promises, lying, and threatening, Negroni allegedly stated "I hope the company won't hear what you're saying."  After Contreras showed Negroni the same document Aceves had, Negroni called the document "useless" as "[t]he company ha[d] its own policies."
3. Contreras was subsequently called to attend an employee meeting in the human resources department in which Ortiz gave a presentation.  After Ortiz apparently began speaking ill of the Union, Contreras commented that he heard that if the Union won the election, UNF would reduce wages.  Ortiz responsed and said "Lino, of course, if the Union wins, the Company could reduce your wages."  After Contreras claimed it was illegal, Ortiz responded that "...the Company has the right to reduce your salary."  Another employee at the presentation corroborated the event.

The ALJ found that based upon the three incidents, the consultants had violated Section 8(a)(1) of the National Labor Relations Act ("NLRA").  The National Labor Relations Board ("NLRB") affirmed the ALJ's rulings.  UNF subsequently filed a petition with the Fifth Circuit Court of Appeals.

Holding:  The Court established that it would affirm the NLRB's findings of fact if the findings were "supported by substantial evidence on the record, considered as whole."  Although a reviewing court is "obligated to consider evidence that detracts form the Board's [NLRB] finding," an ALJ's decision stands "if a reasonable person could have found what the ALJ found, even if the appellate court might have reached a different conclusion had the matter been presented to it in the first instance."  (Got all that?  Now we have a basis that will guide the Court's analysis).

While Section 7 of the NLRA provides employees with a wide range of rights to organize themselves, Section 8 functions to protect employees in the exercise of those rights and outlaws as "unfair labor practices" any employer activities that "interfere with, restrain, or coerce employees in the exercise of rights guaranteed in [Section 7]."  

In regard to the three incidents, the Court examined each individually to determine if a violation of the NLRA had occurred:

1. When considering the first incident when Negroni allegedly referred to the employee rights document that Aceves had as "not working here", a threat of futility could be found to exist.  Threats of futility include "remarks concerning the futility of election a union", or those that communicate a message to "employees that selection of a union would be an 'exercise in futility.'"  Unlike other circuits, the Fifth Circuit Court of Appeals noted that it has only found comments to be unlawful statements about futility when accompanied by a threat or implication that the employer will take some action to render union support futile."  In this instance, Negroni's comments not only constituted a threat of futility but when coupled with his comments in regard to who pays Aceves's check constituted a threat (or implication) that UNF could take action to ensure the futility of unionization, in violation of Section 8(a)(1).
2. The Court then turned to the second incident in which Negroni said the document Contreras had (the same one Aceves showd Negroni) was "useless" and stated that "I [Negroni] hope the company won't hear what you're [Contreras] saying".  In regard to the comments about the document Contreras had, it signified that attempts to exercise employee rights are futile because UNF has its own policies.  When coupled with the full context of Negroni's comments, the Court found that substantial evidence existed to show the labor consultant improperly made threats of futility.
3. In regard to the third incident when threats were allegedly made that wages would be reduced, a violation occurs under Section 8(a)(1), "if, under the totality of the circumstances, 'the employees could [have] reasonably conclude[d] that the employer [was] threatening economic reprisals if they support[ed] the Union."  While employers are free to tell what they "reasonably believe" will be the likely economic consequence of unionization that are outside their control, threats of economic reprisal are improper.  The Court examined Ortiz's statements and held that when taken in context, his comments amounted to an improper threat of a reduction in employee wages.

Judgment:  The Fifth Circuit Court of Appeals denied UNF's petition for a review of the NLRB's Decision and Order which held that UNF's labor consultants engaged in unfair labor practices in violation of the NLRA.

The Takeaway:  This case caught my eye, particularly because of the three separate incidents that involved alleged unfair labor practices by a company's labor consultants.  It is not uncommon for labor consultants to be brought in when a union election is upcoming.  Of course, there are certain prohibited comments and actions (as provided for by the NLRA) that the company and its labor consultants must abide by.  With that being said, based upon the three incidents, it certainly appears that violations of the NLRA occurred.  Even when taken in the most favorable light towards the company, as the Fifth Circuit pointed out, substantial evidence existed to establish multiple violations of the NLRA.  Employers should heed this case, in particular because of the reminder that the actions of labor consultants (and any unfair labor practices) can spell trouble for the employer.

Majority Opinion Judge:  Chief Judge Stewart

Date:  December 20, 2016

Opinion:  hr.cch.com/eld/UNFNLRB122016.pdf