Transfer of Work to Mexico Was Unlawful Retaliation for Strike By Workers

Amglo Kemlite Laboratories, Inc. v. NLRB - Seventh Circuit Court of Appeals

Facts:  Amglo makes specialty lights, often for those on airplane wings.  Before Amglo's President, Izabella Christian ("Christian"), visited an Illinois facility, several employees complained about low wages.  During her visit, Christian indicated wages would not go up.  The next morning, nearly all of the plant's 94 employees went on strike to protest the low wages.  The plant manager, Anna Czajkowska ("Czajkowska"), told the employees to go back to work or go home.  When pushed on the matter, Czajkowska produced resignation forms and said that if they did not like their wages, they could quit.  Christian then mentioned that companies can move production to China and Mexico (where Amglo already had plants).  The employees subsequently made a written demand for guaranteed annual raises but heard nothing in response.  

Over subsequent days, the strike continued.  However, many employees chose to return to work with no raise.  A week or so later, after the remaining employees on strike (over 50) signed an unconditional offer to return to work without a raise, Christian informed the workers that she could not give them a timeline for recalls as Amglo was transferring some work to Mexico "because of the situation."  Ultimately, all but 22 employees were recalled.  The 22 employees who were not recalled were sent a letter that their jobs were no longer open as the work had been transferred to Mexico.

The Administrative Law Judge found that Amglo engaged in unfair labor practices by (1) threatening to fire employees for striking and (2) transferring work from Illinois to Mexico in retaliation for the strike.  The National Labor Relations Board ("NLRB") asked the Seventh Circuit to enforce the order while Amglo asked the Court to set it aside.

Holding:  Note, Amglo did not challenge the contention that it warned employees work would be transferred to a foreign location if the strike continued.  Therefore, the Court only considered whether the actual transfer of work was an unlawful retaliation for the strike.  When the Seventh Circuit looked at the facts, it found "substantial evidence" supported the NLRB's finding that Amglo chose to transfer work to Mexico as a direct result of the strike.  The Court noted that Amglo demonstrated a pattern of hostility towards the strike by mentioning a globalization effort to send work to another country, threatening termination when the strike occurred, and saying Amglo was moving work to Mexico "because of the situation."  In fact, during an initial investigation, it was discovered that Czajkowska admitted that Amglo "accelerated" plans to transfer work out of the Illinois plant "because of the strike."

Judgment:  The Seventh Circuit Court of Appeals denied Amglo's petition for review and held that the NLRB's order would be enforced as the facts demonstrated that Amglo had unlawfully retaliated against its employees as a result of their strike.

The Takeaway:  This is a classic case of the facts, when looked at in their entirety, showed that Amglo had in fact chosen to retaliate against its employees because of the strike.  As the Court noted, Amglo demonstrated hostility towards the strike as soon as the employees started to protest their wages.  That, coupled with the statements by Christian and Czajkowska, did Amglo no favors.  Employers should take note of this case and the importance of training management and supervisors and how to act (and what to not say) when confronted with a strike.

Majority Opinion Judge:  Judge Williams

Date:  August 17, 2016

Opinion:  hr.cch.com/ELD/AmgloNLRB081716.pdf