OAKLAND – A long-term care facility is waiting to see which court of appeals will hear its case after the National Labor Relations Board refused Aug. 24 to reconsider a previous ruling that the facility violated the National Labor Relations Act.

In May, in a 2-1 decision, the board ordered American Baptist Homes of the West, doing business as Piedmont Gardens, to reinstate workers it replaced after a strike. The board ruled that Piedmont Gardens broke parts of the labor law by delaying reinstatement of striking workers and refusing to reinstate others. It concluded that the purpose was the punish strikers and avoid future strikes, considered “independent unlawful purposes” under a recent ruling in another case.

Piedmont Gardens requested reconsideration, arguing that in making its decision, the board retroactively applied a new standard “in a grossly unlawful and unfair way,” Christopher Foster, an associate with law firm DLA Piper in San Francisco, which represents Piedmont Gardens, told the Northern California Record.

“A bare bones, two-member majority has decided to impose a radical, new standard to a strike that took place six years ago,” Foster said. “This standard is contrary to unbroken NLRB and Supreme Court precedent going back to the 1930s. Piedmont Gardens has filed petitions for review of the NLRB’s decisions in the D.C. Circuit and fully expects to have its rights vindicated."

In 2010, Piedmont Gardens and the Service Employees International Union, United Healthcare Workers-West, were at odds over health care, pensions and disciplinary policies while negotiating an agreement to replace an expiring contract. After several months of collective bargaining, about 80 of the unit’s 100 employees went on strike for five days. To prepare, the company hired 60 to 70 temporary replacement workers. Workers had committed to return to work after the five days but Piedmont Gardens had permanently replaced about 20 workers.

According to NLRB documents, the company’s attorney said it hired permanent replacements “to teach the strikers and the union a lesson,” adding that it “wanted to avoid any future strike, and this was the lesson that they were going to be taught.”

The union brought the issue to the NLRB. An administrative judge decided in Piedmont Gardens’ favor, saying the employer’s reasons for replacement didn’t violate the law because they were directly related to the strike. The majority on the three-member NLRB panel disagreed. In its August decision, the board responded to Piedmont Gardens’ assertion that it was wrong to apply the new standard.

“The respondent’s argument proceeds from an incorrect premise. The board did not make law in this case, but, as stated in the decision and explained below, applied existing law. Even if the decision had announced a new standard, the respondent’s argument would fail,” the decision stated.

Foster said the NLRB’s application of the previous case, Hot Shoppes Inc., contradicted “the core holding” of that case and others.

“Hot Shoppes held that an employer has a fundamental right to replace economic strikers ‘at will,’ and that the motive for such replacements is ‘immaterial,’” Foster said. “In Hot Shoppes, the NLRB upheld an employer’s right, even before a strike begins, to begin seeking applications from likely replacements so that they can be hired instantly once a strike begins. Like the Board said in a 1992 decision (Choctaw Maid Farms), ‘[i]f striking employees are economic strikers, the law allows an employer to hire permanent replacements. What its state of mind might be in exercising that right is irrelevant.’”

He said as it stands now, the NLRB’s ruling could have serious repercussions for employers who use the threat of permanent replacements as a tool in bargaining the same way a union uses the threat of a strike.

 “Unions frequently employ a strategy whereby they strike for a relatively short period, return, and then strike at a later date if their demands are not met, thus draining the employer's resources if they have to staff with temporaries over and over again,” Foster said. “Given the language of this decision, it's hard to envision any situation where an employer can safely decide to deploy permanent replacements. This split decision has the potential to seriously shift the balance of power envisioned by Congress when they passed the National Labor Relations Act in the first place.”

After the administrative judge’s initial ruling, the union appealed the case to the 9th Circuit Court of Appeals. Piedmont Gardens believes its appeal to the D.C. Circuit Court will prevail because it is the aggrieved party in the NLRB ruling.

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