National Labor Relations Board (NLRB) Increases Penalties for Repeat Labor Law Violators
- The National Labor Relations Board (NLRB or Board) has signaled its intent to materially increase the severity of the remedies it will impose upon employers who repeatedly violate the National Labor Relations Act.
- The Board likely will be increasing its scrutiny of negotiation tactics used by employers.
- Companies engaged in union contract negotiations may wish to reconsider their negotiation tactics and be more cautious in declaring an impasse.
The National Labor Relations Board (NLRB or Board) decision in Noah's Ark Processors, LLC and United Food and Commercial Workers Local Union No. 293 went beyond ruling on the issues and provided a detailed list of the remedies it will consider in cases involving repeat labor law violators, including those who engage in bad faith bargaining.
The Board's Decision
The Board, in a decision released on April 20, 2023, found that Noah's Ark had bargained in bad faith as evidenced by: 1) deeply regressive proposals, 2) unwillingness to consider even minor changes, 3) general unwillingness to consider most other union proposals, 4) adherence to most of its own initial proposals without modification, 5) unwillingness to wait for the Union to make all of its proposals and 6) its wage proposal.
In an earlier proceeding, the Board found that Noah's Ark had violated numerous other provisions of the National Labor Relations Act (NLRA). Because Noah's Ark continued to violate the NLRA, the Board imposed numerous sanctions, including reading and mailing of the Notice and Explanation of Rights, a comprehensive document that informs employees of their rights; one-year publication of the Notice and Explanation of Rights; and visitations by a Board agent for one year to ensure compliance with its order. The Board justified its heavy-handed order on the grounds that greater remedies are necessary and appropriate for repeat offenders to remedy the misconduct and ensure employees know their rights.
The NLRB also went into significant detail concerning the various types of remedies it would consider in similar cases of repeated or serious misconduct. The Board explained that it may impose a broad cease-and-desist provision and require that the Notice and Explanation of Rights be posted, read aloud to employees in the presence of a Board agent and offending supervisors, mailed to employees' residences or published in local publications of broad circulation. Most significantly, the Board may require the employer to permit on-site visits by a Board agent to ensure compliance with its order and to order the employer to reimburse the union for costs and expenses incurred in collective bargaining and make affected employees whole for any loss of earnings.
Through this decision, the Board explained the sweeping remedies it may impose in cases brought against repeat violators of the NLRA, and has indicated a willingness to impose these harsh remedies upon employers that have continued to engage in illegal conduct despite previous citations. Noah's Ark Processors puts employers in a bind. Employers have a right to be aggressive in union contract negotiations, including the right to declare an impasse and impose their last contract offer. But at what point does aggressive bargaining become bad faith bargaining? The line is not always clear and is often heavily fact dependent. With Noah's Ark Processors, the consequences for crossing the line become more severe than in the past, potentially blunting an employer's ability to exercise its rights to the fullest when bargaining.
For now, employers, particularly those that have been previously cited for labor law violations, should exercise caution at the bargaining table in order to avoid the Board's new willingness to impose harsh sanctions.
Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.