Labor Board Orders Business to Reopen; D.C. Circuit Says Not So Fast
The NLRB has the authority to order an employer to reopen a business it finds was closed for discriminatorily anti-union reasons. In RAV Truck & Trailer Repairs, Inc., 369 NLRB No. 36 (Mar. 3, 2020), the NLRB did just that. However, upon review, the D.C. Circuit held that it “cannot decipher how the Board determined that the closure of [the business] constituted an unfair labor practice,” that the NLRB did “not purport to explain how restoration [of the operation] is even factually possible,” and remanded the case. RAV v. NLRB, No. 20-01090 (D.C. Cir. May 11, 2021).
RAV Truck and Trailer Repairs and Concrete Express of NY (a concrete supplier), although two separate entities, were found to constitute a single employer. RAV operated from a large garage but in February 2018 the building owner terminated RAV’s lease. RAV temporarily leased a much smaller space for a brief period to complete unfinished work projects but this space lacked state-mandated safety and environmental features. That lease ended on May 31, 2018.
During this same period, the Teamsters Local 456, International Brotherhood of Teamsters was attempting to organize workers at both Concrete Express and RAV.
Concrete Express. On April 19, 2018, the Union filed a petition to represent Concrete Express drivers and mechanics. The NLRB held an election on May 10, 2018, which the Union lost. Subsequently, the Board found the employer committed multiple unfair labor practices leading up to the election and ordered a re-run election (in which the Union was again defeated).
On May 14, 2018, the Union filed a petition to represent the two mechanics who worked for RAV, but incorrectly listed “RAV Trucking Corporation” (a different entity) as the employer. The next day, RAV told its mechanics that ICE agents were in the area, and asked if they had papers authorizing them to work. RAV discharged the mechanic who said no, and later laid off the remaining mechanic for lack of work. The Union filed an unfair-labor-practice charge regarding the discharges. The Union then filed a corrected petition. However, that same day, the employer informed the NLRB and the Union that RAV “will be shutting its doors …. It is now officially out of business.”
Eventually, the NLRB determined the employer’s discharge of the undocumented mechanic, the layoff of the other mechanic, and the closure of RAV were in retaliation for organizing or to chill remaining employees from engaging in union activity. In addition to other remedies, the Board ordered the employer to “reopen and restore the business operation of [RAV] as it existed on May 14, 2018.”
On review, the D.C. Circuit upheld the main thrust of the decision that the “discharge and layoff of these employees reflected impermissible retaliation for their pro-union activities.” However, it held “the record indicates that the Company closed the RAV operation because it could not exist without the leased space, not because of the Union activities.” The Court noted that while the Board could find the employer closed RAV to chill employees’ union activity at both RAV and Concrete Express, its conclusion was based only on the proximity of events. “Without a better explanation from the Board, we are constrained to remand.” As to the order to reopen, the Court found, “The Board’s decision fails to properly consider whether its restoration order is legally permissible, feasible, necessary, or unduly burdensome, as the law requires.” Even if it was unlawful to close RAV, it said, “the Company had no lawful, suitable location in which to house the RAV operation on May 14. And the Board has failed to cite any authority to support the legal legitimacy of an order that purports to compel a company to ‘reopen’ an operation that no longer exists due the loss of a lease and for which there is no adequate space to house the operation within the existing company facilities.” The D.C. Circuit remanded with the instruction, “as with any remedial order, the Board must justify its action.”
While the D.C. Circuit refused to enforce the Board’s order to reopen, in an appropriate case, the NLRB has the authority to take the extreme action of directing an employer to reopen. Such instances are relatively rare, and the facts, in this case, are unusual.