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Howard M. Kastrinsky, Esq. and Angelita E. Fisher, Esq., King & Ballow

The owner of a small manufacturing plant placed a number of restrictions on its employees' activities after a union organizing campaign began at the plant.  The National Labor Relations Board (NLRB) found those restrictions were unlawful.  In Loparex LLC v. NLRB (2009), the Seventh Circuit Court of Appeals upheld the NLRB's decision that the employer's actions violated the National Labor Relations Act (NLRA). 

In June 2006, Loparex purchased the plant located in Hammond, Wisconsin.  After assuming operations and the existing workforce, Loparex made several changes in its employment policies.  In response, a small group of employees sought to organize a union at the plant.

Loparex did not warmly receive the union campaign.  After union supporters posted campaign material on company bulletin boards, the company issued a policy statement that required employees to obtain approval before placing any material on the boards.  Several months later, several employees attempted to distribute prounion flyers in the Loparex parking lot.  They were stopped by company officials.  Around the same time, employees passed out union buttons in the plant and left some of them near a time clock for other employees to pick up.  Loparex called a meeting and told union advocates they were violating company policy.  It also implemented restrictions to discourage employees from talking about the union during working hours.  Finally, the company informed all of its shift leaders they were supervisors under the NLRA and, as supervisors, were prohibited from participating in union activities.

The union filed a series of unfair labor practice charges with the NLRB claiming each of the company' s actions violated Section 8(a)(1) of the NLRA.  After conducting a hearing, an Administrative Law Judge (ALJ) agreed with the union, and the NLRB agreed with the ALJ and found Loparex had violated the NLRA.  Loparex petitioned the Seventh Circuit to set aside the NLRB's order.

Appellate review of NLRB decisions is deferential.  The Seventh Circuit will accept the NLRB's factual findings if they are supported by substantial evidence and its legal conclusions unless they are irrational or inconsistent with the NLRA.

Section 8(a)(1) of the NLRA offers employees broad protection from employer attempts to interfere with, restrain, or coerce them in the exercise of their right to organize a union.  In each of the instances before the court of appeals, the NLRB found the company had interfered with the employees' right to unionize.

The court agreed with the NLRB that Loparex's bulletin board policy was unlawful.  Although the policy was neutral, in that it applied to all postings, the policy was enacted only after Loparex became aware of a union organizing campaign and a union supporter had placed a union flyer on a bulletin board.  In addition to the suspicious timing, the new policy also followed several statements by company officials making clear they opposed any union.

Loparex's attempt to restrict employees from distributing leaflets in its parking lot was also an unfair labor practice.  One day, four employees had been handing out union literature in the company parking lot and placing literature on car windshields.  Three Loparex officials came out to the parking lot and told them they were violating company policy. 

Employees are generally not allowed to distribute union literature in working areas, but employer restrictions on handing out union material in nonworking areas are generally frowned on by the NLRB.  The court of appeals agreed with the NLRB that, by stopping the parking lot distribution, the Loparex officials were telling off-duty employees they could not hand out material in the parking lot.  That policy was too broad and violated Section 8(a)(1).

On another occasion, a union supporter left a pile of prounion buttons on a table next to the time clock.  At a meeting soon thereafter, a Loparex official told employees he did not want to catch them handing out union buttons and that he did not want to see the buttons around when the employees were working.  That restriction was also unlawful.  While an employer may stop employees from distributing on behalf of a union while the employees are supposed to be working and also, at any time, in areas where employees are working, it may not prohibit that distribution in nonwork areas while the employees were not working. 

Here, the no-distribution rule applied to the union buttons was overly broad.  The Loparex official did not make any distinction between distribution in work areas and in nonwork areas; he told the employees they could not distribute buttons, period.  By purporting to restrict distribution in nonwork areas during break times, Loparex stepped over the line.

The final unfair labor practice charge concerned the company's instruction to its shift leaders not to engage in any union activities.   Under the NLRA, supervisors do not have any right to engage in union activities.  Therefore, the issue before the NLRB had been whether the shift leaders were "supervisors" who could be told by the company not to engage in union activities.

The court of appeals agreed with the NLRB that the shift leaders were not supervisors.  Each shift leader was part of a small crew typically comprising five or so workers.  Shift leaders worked directly under a team manager who was generally assigned to the same 12-hour shift.  While shift leaders, like other crew members, operated the production machinery, they also helped out other crew members, answered questions, and provided needed supplies.  Shift leaders were also required to assign crew members to various machines in order to accomplish the tasks allocated to the crew in the daily job priority sheet.

Not all assignment and direction of work is a supervisory function under the NLRA.  A supervisor must "responsibly direct" the work of a subordinate; responsible direction entails the supervisor be accountable for the employee's performance and the supervisor must have the authority to take corrective action and be subject to negative consequences for their failure to take action.

The NLRB had found the shift leaders did not responsibly direct work.  They lacked authority to take corrective action because they were unable to control their crew members in any meaningful sense.  Similarly, the shift leaders did not use independent judgment to assign work, and the evidence showed they simply assigned available work to employees on the basis of the daily priority sheet.  The court of appeals found the NLRB acted within its authority when it made the determination the shift leaders were not supervisors.  It enforced the NLRB's finding that the instructions to the shift leaders not to engage in union activities were unlawful because the shift leaders were not supervisors.

Note to Employers:  This case illuminates several important lessons for employers.  An employer may enforce existing rules against union activities in a nondiscriminatory manner, but it may not establish new rules in response to union organizing.  Also, the NLRB makes several distinctions between employee "solicitation" and "distribution," and the areas and times in which they may occur.  It is important for employers and supervisors to understand those distinctions.  There is no time like the present for employers to review their existing rules and to implement new rules to protect their workplace.

It is also important for employers to understand the definition of a "supervisor" under the NLRA may differ from other statutory definitions of exempt personnel.  Employers must analyze each position under the separate statutory criteria.

Submitted by Howard M. Kastrinsky, Esq., Partner, and Angelita E. Fisher, Esq., King & Ballow, Nashville, Tennessee.  You may contact Mr. Kastrinsky at hmk@kingballow.com and Ms. Fisher at afisher@kingballow.com.