NLRB Rules that Pre-Strike Threat to Replace Workers Violates the NLRA

It is settled law under the National Labor Relations Act (“NLRA”) that an employer has the right to permanently replace “economic” strikers – employees who strike to support the union’s demands or because collective bargaining has broken down. It is also clear that an employer may truthfully inform its employees who are threatening strike activity of its legal right to hire permanent replacements in the event of a strike. However, a divided National Labor Relations Board (“NLRB”) recently concluded that one employer went too far by telling its employees that if they struck they would be permanently replaced. This statement, the NLRB ruled, constituted an illegal threat in violation of the NLRA. Noel Foods Division of the Noel Corp., 315 N.L.R.B. No. 131 (Dec. 16, 1994).

The NLRB has long held that an employer may lawfully inform employees already on strike that if they do not return to their jobs by a specified date it will take the necessary steps to permanently replace them. See, e.g., Chromalloy American Corp., 286 N.L.R.B. 868 (1987), enf. denied on other grounds, 873 F.2d 1150 (8th Cir. 1989). However, in American Linen Supply Co., 297 N.L.R.B. 137 (1989), the NLRB found that an employer committed an unfair labor practice when it told employees who were about to engage in a strike, scheduled to begin 10 minutes later, that “if [you] do not report to work” as scheduled, “you are permanently replaced.” Since the statement was false, in that the employer had not hired replacements (nor could it do so in the ten minutes remaining before the strike), it constituted an unlawful threat of termination and not a truthful statement of the employer’s rights under the NLRA.

In the NLRB’s recent Noel Foods case, the manager of a wholesale grocery distributor notified employees that if they engaged in a strike, which was expected to occur within less than two hours, they would be permanently replaced. However, at the time the statement was made by the manager, the employer had not hired any replacements. Therefore, the NLRB reasoned, the effect of the employer’s statement was to imply that the moment a strike commenced, the employees would have no right to return to their unoccupied jobs. The NLRB noted: “[the employer’s] emphasis on a rapidly approaching deadline and the necessity to make a choice at that deadline indicated to employees that a choice to strike would result in immediate permanent replacement.” The NLRB found this situation to be indistinguishable from American Linen; in both situations, the employer’s message was that “if employees join the strike when it begins, they will be permanently replaced at that time.”

The NLRB found significant the fact that the employer’s statements were untrue: as was the case in American Linen, no permanent replacements had been hired when the employer made the statement in question. In earlier cases, the NLRB had ruled that an employer who informs economic strikers that they have been permanently replaced, when in fact the employer has not obtained permanent replacements, violates the NLRA, since the employer’s statement effectively results in the withholding from strikers of the right to return to their unoccupied jobs solely because they went on strike. See, e.g., Mars Sales & Equipment Co., 242 N.L.R.B. 1097 (1979), enf’d. in rel. part, 626 F.2d 567 (7th Cir. 1980).

In Noel Foods, NLRB Member James Stephens dissented, concluding that the employer’s statement was a lawful expression of the employer’s right to hire permanent replacements: “Such statements do not falsely imply that the strikers would be replaced immediately, but only that the [employer] intended to replace them when he could do so.”

The decisions in Noel Foods and American Linen underscore the difficulties employers face when they seek to educate employees who are contemplating strike activity about the risks a strike entails. Employers must be extremely cautious under these circumstances, especially when making statements to employees prior to the commencement of a strike. At a minimum, employers must limit their statements to descriptions of the employer’s rights under the NLRA, rather than threats that certain actions will be implemented. In addition, employers must avoid making false statements about the steps they have taken, or not taken, to replace striking employees.