Opinion ID: 1315745
Heading Depth: 2
Heading Rank: 2

Heading: Proceedings Before the NLRB

Text: The Union filed a charge alleging that Jones Plastic had violated sections 8(a)(1) and (3) of the NLRA when it refused to reinstate economic strikers after the Union's unconditional offer to return to work. It maintained that all of Jones Plastic's strike replacements were temporary, not permanent, employees. Jones Plastic defended by asserting that all of the strike replacements were permanent replacements. The NLRB ruled in favor of Jones Plastic and, in the course of its decision, overruled in part its prior decision in Target Rock Corp., 324 NLRB 373 (1997), enf'd, 172 F.3d 921 (D.C.Cir.1998). Accordingly, it dismissed the Union's complaint. The majority and dissenting members of the Board agreed about the general principles governing the rights of economic strikers and replacement workers. An economic striker who unconditionally offers to return to work is entitled to reinstatement immediately unless the employer can show a legitimate and substantial business justification for refusing immediate reinstatement. Jones Plastic, 351 NLRB No. 11, at ,  (citing NLRB v. Fleetwood Trailer Co., 389 U.S. 375, 378, 88 S.Ct. 543, 19 L.Ed.2d 614 (1967)). One such business justification is an employer's permanent replacement of economic strikers as a means of continuing its business operations during a strike. Id. (citing NLRB v. Mackay Radio & Tel. Co., 304 U.S. 333, 345-46, 58 S.Ct. 904, 82 L.Ed. 1381 (1938)). Thus, at the conclusion of a strike, an employer is not bound to discharge those hired to fill the places of economic strikers if it made assurances to those replacements that their employment would be permanent; permanence means that they would not be displaced by returning strikers. Id. The business justification defense is an affirmative defense, and the employer has the burden of proving that it hired permanent replacements. Id. To meet its burden, the employer must show a mutual understanding of permanence between itself and the replacements. Id. Despite agreeing on these general principles, the majority and dissent differed on two interrelated issues: first, how an employer may prove that an at-will employee is permanent; and second, how the Board's decision in Target Rock affected the present case. The majority explained that, in its view, the Target Rock majority opinion suggests that [Jones Plastic's] at-will disclaimers informing employees that their employment was for no definite period and could be terminated for any reason and at any time, with or without cause detract from its showing of permanent replacement status. We disagree. That view is based on a misreading of controlling law and is inconsistent with the basic scheme of the Act. We therefore decline to follow it. Id. at . The majority held that the evidence that Jones Plastic had presented was sufficient to establish that the replacement employees were permanent. Specifically, it noted that: the forms that the replacement employees had signed stated that they were permanent replacements for striking employees; Jones Plastic told the striking employees that it had begun to hire permanent replacements; and its human resources manager had told at least one replacement that he was a permanent employee. The majority also rejected the Union's petition for a rule requiring employers that seek to hire at-will permanent replacements to explicitly advise employees that they cannot be discharged to make way for returning strikers. Id. at  n. 9. The majority declined to adopt such a rule and held that Jones Plastic implicitly had advised new employees that they were permanent. In the Board's view, such implicit advice was sufficient: While [the Union's explicit] language to that effect would support a finding of permanent replacement status, the Board has in the past eschewed a requirement that specific language be used to establish the required mutual understanding of permanent employee status. Where, as here, that understanding is established without the use of such language, we will continue to find that strikers have been permanently replaced. Id. (citation omitted). The majority also rejected the Union's contention that, for replacements to be permanent, there must be an enforceable contract between the replacement and the employer. Id. No requirement of this nature has ever been imposed by any Board or court decision. In Belknap [ v. Hale, 463 U.S. 491, 103 S.Ct. 3172, 77 L.Ed.2d 798 (1983) ], the Supreme Court did not hold that there must be an enforceable contract to establish permanent replacement status. Instead, the Court held only that the Act did not preclude the enforcement of such a contract if it existed. Moreover, this proposed standard would make the determination of permanent replacement status dependent on whether an enforceable contract was formed under State law. The requirements for formation of such a contract will necessarily vary from one state to another, whereas the Board is charged with fashioning a uniform national labor policy. Id. The dissent, in contrast, believed that the majority had mischaracterized the Target Rock majority opinion: What then, does Target Rock stand for? It applied existing law concerning the requirement of a mutual understanding of permanent replacement to its particular facts. As for the [ Target Rock ] majority's statement that the employer's expression of its at-will policy did not support a finding of permanent status, that is a truism. The [ Target Rock ] majority did not say that at-will employment was incompatible with permanent replacement, nor even that it was evidence against a finding of permanent replacement. The [ Target Rock ] majority merely stated that an employer's avowal of an at-will policy does not lend support to an affirmative defense of permanent employment. Like the Target Rock majority, we regard that as obvious. Prior to Target Rock, the Board had held that at-will employment was not incompatible with permanent replacement status. J.M.A. Holdings, [310 NLRB 1349, 1358 (1993)]. In Target Rock, the Board did not overrule J.M.A. Holdings or even mention it. In the final analysis, neither Target Rock nor any other case stands for the proposition that the majority purports to overrule. In our view, the majority's strained effort to overrule a nonexistent holding can be explained only by its desire to reverse precedent. Although we disagree with the majority's determination in the present case that the replacements were permanent, that disagreement has nothing to do with Target Rock, properly understood. Rather, it turns on the facts of the case: [Jones Plastic] has simply failed to establish the existence of the requisite mutual understanding of permanent status. Jones Plastic, 351 NLRB No. 11, at -10 (Liebman & Walsh, Members, dissenting) (footnotes omitted). With respect to the evidence in the case before it, the dissenting members believed that there was no mutual understanding of permanence between Jones Plastic and the replacement employees. The dissenting members explained: The replacements here were required to sign a statement stating that they were permanent replacement[s], but that they could be terminated ... at any time, with or without cause. The statement then stated, I further understand that my employment may be terminated as a result of a strike settlement agreement ... or by order [of] the National Labor Relations Board. Had [Jones Plastic] made only the latter statement, a finding that the replacements were permanent would follow. But [Jones Plastic] did not so limit itself. Rather, it told the employees not only that they could be displaced as a result of a strike settlement or Board order, but, additionally, that they could be discharged at any time for any reason. Taken togetherand absent any other evidence of mutual understanding of permanence [Jones Plastic's] statements did not reflect any commitment by [Jones Plastic] to the replacements. Certainly, the statements did not reflect a commitment that [Jones Plastic] would refuse, in the absence of a strike settlement, to reinstate strikers if it meant terminating replacements. Although [Jones Plastic] used the term permanent replacement, it then undercut that statement by failing to give the replacements any assurance that they had rights vis-à-vis the strikers. In the words of Belknap [ v. Hale, 463 U.S. 491, 103 S.Ct. 3172, 77 L.Ed.2d 798 (1983)], [Jones Plastic]'s statements, like those of the employer in Covington Furniture [ Manufacturing Corp., 212 NLRB 214 (1974) ], created a situation in which the replacement could be fired at the will of the employer for any reason; the employer would violate no promise made to a replacement if it discharged some of them to make way for returning strikers. Or, in the simpler formulation of the Board, [Jones Plastic], by its statements, kept [all] its options open. Target Rock, supra at 375. As a result, the evidence fails to support a finding that [Jones Plastic] and the replacements shared an understanding that the replacements were permanent. Id. at  (penultimate alteration in original).