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NLRB says employers need lawful reason to employ permanent striker replacements

Date Posted: June 15 2016

WASHINGTON (PAI)—In a legal win for workers and unions, the National Labor Relations Board is sharply curbing employer justification for hiring and using “permanent replacements” for workers forced to strike for economic reasons.

In a 2-1 decision on May 31, involving the Piedmont Nursing Home in Oakland, Calif., and SEIU/United Health Care Workers West, the NLRB majority said employers must prove they do not have other, unlawful motives for permanently replacing striking workers.

The decision is extremely important. Especially since the 1981 PATCO air traffic controllers strike – when GOP President Ronald Reagan fired all the controllers, who struck over safety issues, and permanently replaced them – employers routinely fire striking workers and bring in “permanent replacements,” or threaten to, sometimes even before a strike begins.

That replacement threat in turn has had a chilling effect on the right to strike, which is theoretically legal under U.S. labor law. The number of strikes has dropped precipitously.

Harvard law professor Jeffrey Sachs, quoting his colleague Mark Kaltenbach in the OnLabor blog, noted that over the years, the NLRB was lax in holding employers to standards the Supreme Court set in 1938 and 1964 rulings about permanent replacements. Instead, Kaltenbach has pointed out, “the board...has been giving employers too much latitude in using permanent replacements...."

Now it’s time to restore the meaning of those two Supreme Court cases and require employers to prove they don’t have independent illegal motives for hiring permanent replacements, said current NLRB Chairman Mark Gaston Pearce.

And Sachs said the board may not be done in questioning company justifications for hiring permanent replacements.

In two footnotes in the current case, Sachs noted: “The board has often presumed that if the employer hires permanent replacements it has done so to carry on the business, without requiring an evidentiary showing from the employer that replacements were in fact necessary for that purpose. Given the severe damage that permanent replacements do to the strike right, we ought at a minimum to require this kind of evidentiary showing."

The case in question prompting the NLRB's ruling included testimony from the nursing home’s own executive director and its counsel which shows “two reasons for its decision to permanently replace strikers: To punish the strikers and the union and to avoid future strikes. We find both reasons are independently unlawful within the meaning of” both Supreme Court cases, particularly the second one, Pearce said.

Pearce wrote that the Supreme Court in 1938 ruled firms could permanently replace workers who strike for economic reasons if the companies establish “a legitimate and substantial justification for failing to reinstate striking employees by showing the strikers’ positions have been filled by permanent replacements.”

“However, the permanent replacement of strikers is not always lawful,” Pearce pointed out. “The board will find a violation” of labor law “if it is shown that, in hiring the permanent replacements, the employer was motivated by ‘an independent unlawful purpose.’”

The catch, Pearce said, was that over the years since 1938, the board and the courts had not enforced that standard, even though the justices reinforced it in 1964. Now, he said, the board will require employers to prove they lack illegal motives for replacing workers.