NLRB Curbs Employer Justification for Firms Using ‘Permanent Replacements’ for Strikers
In a legal win for workers and unions, the National Labor Relations Board is sharply curbing employer justification for hiring and using “permanent replacements” for workers forced to strike for economic reasons.
In a 2-1 decision on May 31, involving the Piedmont Nursing Home in Oakland, Calif., and SEIU/United Health Care Workers West, the board majority said employers must prove they do not have other, unlawful, motives for permanently replacing striking workers.
The decision is extremely important. Especially since the 1981 PATCO air traffic controllers strike – when GOP President Ronald Reagan fired all the controllers, who struck over safety issues, and permanently replaced them – employers routinely fire striking workers and bring in “permanent replacements,” or threaten to, sometimes even before a strike begins.
That replacement threat in turn has had a chilling effect on the right to strike, which is theoretically legal under U.S. labor law. The number of strikes has dropped precipitously.
In 1938, Board Chairman Mark Gaston Pearce wrote, the Supreme Court ruled firms could permanently replace workers who strike for economic reasons if the companies establish “a legitimate and substantial justification for failing to reinstate striking employees by showing the strikers’ positions have been filled by permanent replacements.”
“However, the permanent replacement of strikers is not always lawful,” Pearce pointed out. “The board will find a violation” of labor law “if it is shown that, in hiring the permanent replacements, the employer was motivated by ‘an independent unlawful purpose.’”
The catch, Pearce said, was that over the years since 1938, the board and the courts had not enforced that standard, even though the justices reinforced it in 1964. Now, he said, the board will require employers to prove they lack illegal motives for replacing workers.
Neither the AFL-CIO nor the Republican-run radical right-dominated House Education and the Workforce Committee immediately reacted to the board’s ruling in American Baptist Homes and United Health Care Workers-West, the official name of the NLRB case.
Pearce explained that nothing in the 1938 Supreme Court ruling or a 1964 High Court decision reinforcing it “suggested the employer’s right was absolute, i.e., that an employer could lawfully replace economic strikers even if it did so for a purpose prohibited by the act.”
In the 1964 decision, the justices said that “When specific evidence of a subjective intent to discriminate or to encourage or discourage union membership is shown, and found, many otherwise innocent or ambiguous actions” normal in business – such as permanent replacements -- “may, without more, be converted into unfair labor practices.”
For a company to hire such permanent replacements, the board ruled in American Baptist Homes, it must prove it does not have “an independent unlawful purpose” for doing so.
Testimony from the nursing home’s own executive director and its counsel shows “two reasons for its decision to permanently replace strikers: To punish the strikers and the union and to avoid future strikes. We find both reasons are independently unlawful within the meaning of” both Supreme Court cases, particularly the second one, Pearce said.
“This statement evinces an intent to punish the striking employees for their protected conduct, and plainly reveals a retaliatory motive prohibited by the” National Labor Relations Act, he stated.
The nursing home also decided to permanently replace the striking SEIU members because its executive director “assumed the permanent replacements would be willing to work in the event of another strike” and the nursing home did not want to again have to spend money to hire more temps and permanent replacements.
Pearce said the nursing home’s motive is clear from its attorney’s statement to the union that it hired permanent replacements “because it ‘wanted to avoid any future strikes, and this was the lesson they were going to be taught.’ This evidence establishes an additional independent unlawful motive, specifically a desire to interfere with employees’ future protected activity,” the right to strike.
Harvard law professor Jeffrey Sachs, quoting his colleague Mark Kaltenbach in the OnLabor blog, noted that over the years, the board was lax in holding employers to standards the justices set in their 1938 and 1964 rulings about permanent replacements. Instead, Kaltenbach has pointed out, “the board...has been giving employers too much latitude in using permanent replacements” even since the second ruling, involving Hot Shoppes restaurants.
Now it’s time to restore the meaning of those two Supreme Court cases and require employers to prove they don’t have independent illegal motives for hiring permanent replacements, Pearce said.
And Sachs said the board may not be done in questioning company justifications for hiring permanent replacements.
In two footnotes in the current case, Sachs noted: “The board has often presumed that if the employer hires permanent replacements it has done so to carry on the business, without requiring an evidentiary showing from the employer that replacements were in fact necessary for that purpose.
“Given the severe damage that permanent replacements do to the strike right, we ought at a minimum to require this kind of evidentiary showing,” Sachs suggested.
