In a case involving Starbucks, the National Labor Relations Board (NLRB or “Board”) ruled on November 8th that telling organizing workers that having a union would cut off “direct relationships with managers” could be a violation of the National Labor Relations Act (NLRA). Section 9(a) of the Act allows individual employees to present grievances to their employers and to have such grievances adjusted without the involvement of a bargaining representative as long as the adjustment is not inconsistent with the terms of a collective bargaining agreement provided that the bargaining representative has been given the opportunity to be present at such adjustment.
The new test set forth in Siren Retail Corp. d/b/a Starbucks and Workers United Affiliated with Service Employees International, Case 19-CA-29095, replaces the 40-year-old precedent of Tri-Cast, Inc., 274 NLRB 377 (1985). The NLRB majority held that Tri-Cast was poorly reasoned and has “immunized employer campaign statements that, based on their content and context, could reasonably be understood to threaten employees with the loss of an established workplace benefit.”
After a petition is filed for a representation election to decide whether employees want to become unionized, employers frequently communicate to employees regarding the advantages of remaining non-union and the impact a union would have on their workplaces, including the ability to deal directly with management without the involvement of a union. Starbucks managers spoke to employees after a petition was filed concerning the impact unionization would have on the employees’ ability to address issues individually with the company. The Union took issue with these statements as well as with other conduct of Starbucks and filed an unfair labor practice with the NLRB seeking an order that Starbucks
violated employees' rights under the NLRA.
The Board, through its “Decision and Order” of November 8th by a three-member majority, found that Starbucks committed several unfair labor practices, including by threatening employees that unionization would cause them to lose the current benefit of “Term Limited Assignments” and by stating that unionization would cause Starbucks to prioritize giving benefits to employees at its non-unionized stores. It also ruled that Starbucks violated the NLRA by implying that collective bargaining could not redress the employees’ current inability to receive tips from customer’s credit card payments. The Board also held that the social media posts of one of Starbucks’s supervisors that
threatened that unionization would cause the loss of certain employee benefits were attributable to Starbucks and thus violated the NLRA.
As to the manager’s statements concerning the impact unionization would have on the employees’ ability to address issues individually with Starbucks, the Board took the opportunity to overrule Tri-Cast and adopt a new test based upon the Supreme Court’s Opinion in NLRB v. Gissel Packing Co., 395 U.S. 575 (1969), which states that if an employer “make[s] a prediction as to the precise effects he believes unionization will have on his company,” then “the prediction must be carefully phrased on the basis of objective fact to convey an employer’s belief as to the demonstrably probable consequences beyond his control.” The new test is based on the NLRB’s determination
that some employer statements “concerning the impact of unionization on the employer-employee relationship can be unlawfully coercive if they amount to a threat to eliminate a beneficial practice.” “[W]hen an employer’s statement, based on its content and context, contradicts Section 9(a) by asserting that an existing practice of permitting individual employees to address their issues with management must end if employees choose union representation, that statement amounts to an unlawful threat of retaliation that an employer may end existing practices ‘solely of his own initiative.’” The NLRB stated that the new test “reasonably requires employers to ground their predictions concerning the consequences of unionization in objective fact.”
The NLRB’s usual practice is to apply new policies and standards retroactively to all pending cases, including the case in which the new rule is announced, unless doing so would amount to a “manifest injustice.” Here, although the Board ruled that Starbucks engaged in other unfair labor practices, it concluded that applying this new standard to Starbucks would not be fair. Thus, the new test will apply to all other cases going forward.
It is worth noting that this decision came from NLRB Chairman Lauren McFerran and members Gwynne Wilcox and David Prouty, all Democratic appointees. Member Marvin Kaplin, the Agency’s sole Republican, vigorously dissented to this ruling. With President Trump returning to the White House in January, and the makeup of the Board subject to change as terms expire, it remains to be seen whether the new standard stated here survives very long. However, for the foreseeable future, employers – particularly those dealing with union organization efforts – must recognize that general statements regarding employees’ ability to address their issues directly with management may be deemed illegal threats
in violation of the NLRA. In organizing situations, such violations could, under certain circumstances, lead the NLRB to conclude that the employer engaged in objectionable conduct, destroying the possibility of a fair election, and, thus, the employer must recognize a union as the bargaining representative of the employees and begin negotiating a labor agreement.
Calfee’s Labor and Employment practice group lawyers are available to address your questions and comments regarding employee rights under the NLRA, union organizing, and employers’ ability to communicate appropriately concerning the effects of union representation. The Starbucks case underscores the importance of educating all management personnel as to the “Do’s and Don’ts” when an employer is faced with union organizing efforts.
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