Supreme Court Gives Big Win to Employers Over Unions

Supreme Court Unions agency fees labor law Alabama Employment Law
Public sector unions cannot require non-members to pay “agency fees.”

Today, the United States Supreme Court provided employers with a big win over labor unions.  In Janus v. AFSCME, the Court ruled that the First Amendment rights of non-union members were violated when they were forced to pay “agency fees” to support union activities.  Here’s a link to a Chicago Sun-Times article discussing the decision:  Government Workers No Longer Have to Pay “Fair Share” Fees.

An “agency fee” is also called a “fair share fee” or a “service fee.”  Those fees are imposed on employees who refuse to join a union in a workplace that is subject to a collective bargaining agreement.  Typically, those fees are imposed where the union is deemed the “exclusive representative” of all employees in a bargaining unit, including employees who decline to join the union.  In theory, non-union employees gain the benefit of union-negotiated wages and benefits.  Therefore, the “agency fee” is imposed so that non-union employees pay an amount equal to the union’s costs of collective bargaining and contract administration.  After the Janus decision, “agency fees” can no longer be imposed on employees in public sector jobs.

The impact of the Janus case for most employers in Alabama is minimal.  Alabama is a “right to work” state.  As a result, mandatory “agency fees” are generally impermissible in Alabama.  See Alabama Code § 25-7-34.  Potentially, this ruling might impact workers at “federal enclaves” in Alabama like Fort Rucker or Redstone Arsenal.  In many areas of those enclaves, the federal government possesses exclusive jurisdiction, and federal law can trump Alabama’s “right to work” laws.  But see Professional Helicopter Pilots Assoc. v. Lear Siegler Svcs., Inc., 326 F.Supp.2d 1305 (M.D. Ala. 2004)(find that Alabama’s “right to work” law controlled over Shell Field at Fort Rucker, because Alabama did not cede exclusive jurisdiction over that land).

Union Efforts Under the NLRA Just Got Easier at Mercedes

Mercedes Union NLRA
Union efforts at the Mercedes plant in Vance, Alabama just got easier under the NLRA.

Efforts to unionize the Mercedes plant in Vance, Alabama just got easier under the National Labor Relations Act (“NLRA”).  See Mercedes-Benz U.S. Int’l, Inc. v. UAW, No. 15-10291, 2016 WL 5728329 (11th Cir. Oct. 3, 2016).  In the Mercedes opinion, the Eleventh Circuit reviewed a decision by the National Labor Relations Board and focused on union solicitation by employees and distribution of union literature by employees.

Generally, under the NLRA, employers like Mercedes cannot prohibit employees, who are not on working time, from soliciting other employees to join a union.  Also, an employer cannot prohibit distribution of union literature by employees in non-working areas on non-working time.  Nevertheless, an employer may prohibit distribution of union literature in working areas.

The Eleventh Circuit first found that the following Mercedes policy improperly restricted union solicitation:

MBUSI prohibits solicitation and/or distribution of non-work related materials by Team Members during work time or in working areas.

Mercedes, 2016 WL 5728329 at *2.  The Court found that employees would reasonably understand that policy to prohibit union solicitation.  Such a policy is presumed to be unlawful, but an employer like Mercedes can rebut that presumption by proving that it clearly conveyed its intent to permit solicitation — despite the language of the policy.  The Eleventh Circuit found that Mercedes did not meet its burden, and enforced the NLRB’s order holding the policy unlawful.

The Eleventh Circuit gave Mercedes a minor win with regard to distribution of union literature.  The Mercedes facility has 19 “Team Centers” which are adjacent to the Mercedes production line.  For brief periods each day, those centers are used as break areas for employees.  At all other times, the “Team Centers” are work areas.  A Mercedes employee was verbally reprimanded for distributing union literature in a “Team Center” during a break period.  Based upon that reprimand, the NLRB found that Mercedes was violating the NLRA in each of its 19 Team Centers.

The Eleventh Circuit modified that result.  The Court found that the Team Center where the employee was reprimanded might be a non-work area during the brief break periods.  Therefore, the Court remanded the case to the NLRB to determine if that Team Center could be a non-work area (called a “converted mixed-use area”) during the breaks.  Yet, the Court also found that it was improper to characterize all 19 “Team Centers” as non-work areas.  Instead, the NLRB only presented evidence regarding one “Team Center” and declined to present evidence on the other 18.  The Eleventh Circuit ruled that it was improper to characterize the other 18 “Team Centers” as non-work areas in the absence of additional evidence.

The Mercedes opinion provides a reminder to Alabama employers to review their policies to ensure that the policies do not restrict union solicitation in violation of the NLRA.  It also provides guidance on mix-used work areas, and employers should be careful in applying their non-distribution rules in those areas.

Employers Relocating a Unionized Facility Have a Duty To Bargain in New Location



Employers relocating a unionized facility have a duty to collectively bargain with the union at the new location.  See National Labor Relations Board v. Gaylord Chemical Co., No. 15-10006, 2016 WL 3127087 (11th Cir. Jun. 3, 2016).   “Generally, if an employer relocates and the new plant is considered merely a continuation of the old one, the employer must continue to recognize and bargain with the union which represented the employees at the old plant.”  Gaylord Chemical, 2016 WL 3127087 at *4.  In determining if a new plant is a “continuation” of a closed facility, the NLRB and Courts look “to whether the employer has maintained the same ‘operational methods, managerial hierarchy, customers, and services or products,’ as well as ‘changes in either the size, makeup, or the identity of the employee complement.'”  Id. at *5.  Generally, if employees transferring from the closed plant constitute 40% of the new facility’s workforce, the NLRB and courts will find a continuity of workforce.  Id.

In Gaylord Chemical, the employer closed a plant in Bogalusa, Louisiana and relocated it to a new plant inTuscaloosa, Alabama.  Ninety percent of the employees at the Tuscaloosa plant were former Bogalusa employees.  The United Steel Workers were the collective bargaining unit for the Bogalusa plant, but Gaylord Chemical refused to bargain with the USW in Tuscaloosa.  In an extensive analysis, the Eleventh Circuit found that the Tuscaloosa plant was a continuation of the Bogalusa facility and that Gaylord Chemical had an obligation to bargain with the USW.

Certain parts of Alabama are perceived to be less “union friendly” than others.  Thus, there might be a temptation for some employers to close unionized plants and move to those parts of Alabama.  Nevertheless, Gaylord Chemical demonstrates that merely relocating a facility cannot achieve elimination of a union.