November 28, 2021

Volume XI, Number 332

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Bargaining from Scratch is Alright. Sometimes

In Hendrickson USA, LLC. v. National Labor Relations Board, a divided Sixth Circuit panel revisited one of the oft-litigated phrases in labor law: “bargaining from scratch.”  The majority—applying a series of Supreme Court, Sixth Circuit, and NLRB decision on the subject—determined the NLRB lacked support when it ruled the phrase, as used here, was an unlawful threat rather than lawful speech.

The dispute arose when an employer responded to the formation of a union organizing committee by sending a letter to all plant employees advocating against unionization. The letter described the disadvantages that could follow unionization and stated that “contract negotiations would begin ‘from scratch.’” An employee complained to the NLRB, which determined the letter represented an unlawful threat of a more onerous work environment and lower wages and benefits.

A divided Sixth Circuit panel reversed.  According to Judge McKeague’s majority opinion (joined by Judge Cook), the phase “bargain from scratch” can be coercive, but is not per se unlawful:

In general, the phrase is lawful when the company makes clear that it is warning employees about the natural give and take of the bargaining process, in order to counter the idea that unionization will automatically increase compensation. On the other hand, the phrase is coercive when it indicates that the employer will retaliate against employees by adopting a “regressive bargaining posture” during negotiations or by “unilaterally discontinu[ing] existing benefits prior to negotiations,” so that employees receive only what the union can induce the company to restore.

It all depends on the context. Because the Hendrickson letter did not “essentially promise” that employees would end up with less, it was not a threat. And the NLRB’s contrary determination was not supported by substantial evidence.

Judge Helene White dissented. Her opinion stressed the deference due the “NLRB’s judgment and expertise.” Because it was unclear whether a reasonable employee might perceive the letter as having a coercive impact, the NLRB’s ruling should have been affirmed.

© Copyright 2021 Squire Patton Boggs (US) LLPNational Law Review, Volume IX, Number 227
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About this Author

Benjamin Beaton Litigation Attorney Squire Patton Boggs Cincinnati, OH
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Benjamin Beaton is co-chair of the Appellate & Supreme Court Practice. He handles complex appeals, regulatory disputes and law-intensive trial proceedings. Ben has authored more than a dozen briefs at the US Supreme Court, where he previously served as a law clerk. He has drafted dozens more in the federal courts of appeal and state supreme courts, and regularly confers with trial and in-house counsel regarding appellate and motions strategy. Chambers has noted the firm’s “well-resourced appellate team, with notable experience in disputes heard before the Sixth Circuit.” The...

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Lauren S. Kuley Appellate & Supreme Court Attorney Squire Patton Boggs Cincinnati, OH
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Lauren Kuley is co-chair of the Appellate & Supreme Court Practice. She leads complex appeals and critical motions practice in courts nationwide. She simplifies complex issues and develops creative arguments to curtail legal disputes and overturn bad outcomes. Deploying this strategy, Lauren has argued and won reversals of significant verdicts on appeal and obtained dismissal of high-stakes claims at the pleading stage in federal courts. In the US Supreme Court, Lauren authored the briefs leading to a unanimous reversal for a Fortune 500 company. Lauren previously served in the Ohio...

513-361-1241
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