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Security Walls, Inc. Case Demonstrates Perils Of Refusing To Discuss Issues With Union

A significant change in NLRB precedent during the last few years was the added requirement that an employer bargain over discretionary aspects of discipline in the period between the union acquiring representational rights and the first contract.  Given the limited set of circumstances one doesn’t see a whole lot of these cases.  A recent NLRB case, however, demonstrates how problems can arise by a failure to discuss discipline/discharge with the union at any stage.  In a broader context, the case shows why,– if there is some chance an obligation to bargain exists, even a slim one,– that it is probably better to have the discussion with the union.

In Security Walls, Inc., 365 NLRB No. 99 (June 15, 2017), the employer, a security contractor, provided armed guards at an IRS facility in Austin, Texas.  When the employer took over the contract it started to bargain with the union but did reach agreement until 13 months later.

Pre-Collective Bargaining Agreement Disciplinary Policies

While the parties were bargaining, the employer posted at the workplace portions of its contract with the IRS that listed, among other behaviors, “neglect of duty” as grounds for “immediate removal” from the workplace.  Sometime after this posting, the employer posted a “Disciplinary Action/Policy Statement” which “supersedes all other policies on this subject.”  This latter document posted a progressive discipline system which listed specific violations and corresponding disciplinary actions.  As to breach of security, the conduct is treated as a third-level (2-day suspension) or fourth level (termination) of discipline based on previous offenses.”

Three Guards Are Suspended, Then Terminated

In two separate incidents, three guards became distracted and members of the public wandered past security into the IRS facility.  In response, the employer suspended the three, one of whom was the union president.  The union president responded with a written request for information about the suspensions, which included the following statement, “As Local Union President, I have some issues I needed [sic] to address regarding my and [the other guard’s] suspension.”

The IRS was notified of the incidents.  In an exchange of emails the IRS indicated that the guards “must be able to multi-task and recognize what is going on around them” but did not request the removal of the guards.

The guards filed a grievance protesting the actions and stating, “”The Union and the Company must work sincerely and wholeheartedly to the end, that the [policies] be applied and interpreted fairly and conscientiously, without discrimination, and to the best interest of efficient security operations of the client.”

A supervisor informed the guards that they were terminated.  However, the next day, the employer’s in-house counsel sent the union a letter stating that the guards were not terminated and that a “final decision” would be forthcoming.  The letter concluded:  “This is not an offer to bargain nor is it an offer to invoke the grievance procedure.”  The parties had tentatively reached agreement on a grievance procedure but had not yet completed negotiations.

The union emailed the employer demanding reinstatement and threatening to file NLRB charges if the demands were not met.  When the employer did not respond, the union filed charges.

Administrative Law Judge Finds Violation

The Administrative Law Judge ruled that the employer violated its obligation to bargain because it failed to bargain “on request” of the union and that the disciplinary policy was unilaterally changed because it called for suspension.

Board Majority Finds Employer Unilaterally Changed Its Disciplinary Policy and Unlawfully Refused To Bargain

On appeal a two person majority of the Board (Pearce and McFerran) affirmed the judge’s findings.  The Board found that the disciplinary policy warranted only a suspension, and that the employer’s departure from the policy constituted a unilateral change in a term or condition of employment.

The Board also found that the employer refused to bargain following the discharge of the guards.  The employer had asserted that the parties had tentatively reached a grievance procedure in negotiations, and therefore, the obligation to bargain was satisfied.  The Board rejected this defense based on the fact that the overall agreement had not been reached and that the employer’s response to the union rejected any notion that the matter was being treated pursuant to the grievance procedure.

The Board also addressed an issue raised by the Chairman Miscimarra in his dissent that the union had not demanded bargaining.  The Board majority rejected this assertion asserting that the “Board has never required a union to employ some combination of magic words to express a request to bargain.”  Thus, in this case, the union president’s statement that he had some “issues he needed to address” concerning his and another guard’s suspension was sufficient.  Further, the union’s statement in its grievance that the “Union and Company must work sincerely and wholeheartedly to the end…..” constituted a request to bargain.  Finally, the union’s threat to file an unfair labor practice charge, and the fact that it did, also added up to a demand to bargain.

The NLRB ordered reinstatement and backpay for the guards.

Dissent Takes Issue With Bargaining Violations

In his dissent Chairman Miscimarra asserted that there was no violation to the duty to bargain.  Miscimarra stated that there was no unilateral change in policy.  While the disciplinary policy said it superseded prior “policies” the employer’s contract with the IRS, which was posted and required immediate removal for neglect of duty, was not a policy but a contract binding on the employer.

Miscimarra also stated that the violation concerning post-discharge bargaining deprived the employer of due process because no such allegation was contained in the complaint.  Finally, Miscimarra noted that according to Board law a “Union’s objections, protests and threats to file a Board charge are not sufficient under Section 8(a)(5) to constitute a request for bargaining.”

Summary – Discussion Beats Litigation

This is one of those odd cases where the Board appears to be definitively interpreting a policy when it is clear no such interpretation can be applied.  Thus, the Board found a unilateral change had occurred because the policy clearly called for suspension.  However, it could be argued that the policy actually gave the employer discretion to decide which level to apply and that prior misconduct was a consideration for the employer, not that prior offenses must exist to impose discharge.

Whenever a termination case at the NLRB asserts that the violation is a failure to bargain the underlying conduct of the employee typically is not being challenged.  The vast majority of NLRB discharge cases involve an allegation of unlawful motivation,–the employer terminated the employee because of his or her protected activity; no such unlawful motivation was asserted here.  Here, there was no dispute that the guards did what was alleged:  they allowed members of the public to wander unchallenged into a secure IRS building.

When the discharge case involves only a refusal to bargain, then the government is saying the employer should have sat down and discussed the matter before taking any final action.  Under the contract with the IRS such conduct by the guards arguably warranted immediate removal; under the employer’s disciplinary policy the guards’ conduct arguably warranted a suspension or termination.  Had the employer sat down to discuss the matter with the union it may very well have deprived the union of any grounds for asserting the terminations were unlawful.  As we have seen in other contexts, an employer’s assertion that it had no obligation to bargain is risky.  The time and expense associated with bargaining (which could easily result in the terminations being validated) as opposed to undertaking litigation is something that should be considered before taking a position that there is no obligation to bargain.

© 2020 Proskauer Rose LLP. National Law Review, Volume VII, Number 174

TRENDING LEGAL ANALYSIS


About this Author

Mark Theodore, Employment Attorney, Proskauer Rose
Partner

Mark Theodore is a partner in the Labor & Employment Law Department. He has devoted his practice almost exclusively to representing management in all aspects of traditional labor law matters throughout the U.S. 

Some highlights of his career include:

  • Successfully negotiated the first contract for a shipping agency during constant threat by union to shut down Port of Los Angeles

  • Successfully defended a major theme park when the NLRB sought bargaining order after the union...

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