eLABORate: Fifth Circuit Agrees with NLRB that Employer's Labor Consultant's Comments to Employees Violated the NLRA

January 05, 2017

In a late-December published opinion, the Fifth Circuit Court affirmed a decision by the National Labor Relations Board (NLRB) that a labor consultant’s threats to lower wages, along with assurances that union support was futile, were unfair labor practices under the National Labor Relations Act. UNF West Inc. v. National Labor Relations Board.

At a slide-show presentation to employees during a union campaign, the labor consultant confirmed that “if the Union wins, the Company could reduce your wages.” He warned that “If the Union won and they would represent [you] . . . the company could lower [your] wages, salaries . . . because the company pays [your] salaries.” Finally, the consultant rhetorically asked “who pays your salary? The Company, right? Therefore, the Company has the right to reduce your salary.” Though later slides described collective bargaining more objectively, the consultant did not directly address the earlier implication that the employer could unilaterally reduce wages.

The Fifth Circuit agreed with the NLRB that the statements constituted a threat to reduce wages in violation of the NLRA. The court reiterated that implications that an employer may unilaterally act on its own initiative and for its own reasons (unrelated to economic necessities) are impermissible threats. The court recognized that employers can give their general views about unionism, specific views about a particular union, and even reasonable beliefs of the likely economic consequences of unionization. But, the court held that employers cannot—as the consultant implied—threaten economic reprisals. More specifically, the court held that the consultant reasonably implied that the employer could unilaterally lower wages for any reason, irrespective of a union.

Similarly, the court held that employers cannot imply that supporting a union will bring about economic reprisals, unless made in a context indicating that the bargaining process requires: mutual agreement, proposals from each side, and the ability to trade away benefits. That is, the context must be based on collective-bargaining, economic necessities, or objective facts. In some cases, the court added, an employer can correct the context. Earlier or contemporaneous comments to clarify, expand, or alter the context and reasonable meaning of an objectionable statement could dispel misimpressions. It must, however, be clear that any economic consequences would result only from the give and take of collective bargaining. In this case, the subsequent slides in the consultant’s presentation, though more objective, failed to dispel misimpressions.

The court also held that the consultant made unlawful threats of futility to discourage employees from exercising their Section 7 rights. In response to an employee’s protest to the consultant's predictions of the possible negative consequences of unionization, the consultant said, “I hope the company won’t hear what you’re saying.” Then, regarding a flyer entitled Employee Rights Under the National Labor Relations Act, the consultant announced that “[t]his document doesn’t work here” because of the existing company policies. The consultant added, “Who pays your check, the company or the Union?”

Again, the court agreed with the NLRB that the flyer remark communicated that it would be futile to elect a union or to exercise Section 7 rights. The court reasoned that the remark signified both that company policies nullified employees’ rights and that the employer alone controlled the results of unionization. Likewise, the court viewed the who-pays-your-check reminder as a threat of futility, because it implied that an employer could take action to ensure the futility of unionization.

The decision is a reminder that, while employers have rights to make statements about unionization, those statements must be carefully calibrated to ensure that they do not run afoul of the NLRA.