Just hours after it became clear that Donald Trump would be returning to the White House, the majority Democratic National Labor Relations Board (“NLRB”) showed no signs of slowing down its efforts to implement the Biden Administration’s pro-labor agenda before January 20.
In its latest decision the Board severely curtailed what types of statements employers can make to employees when pointing out the legal and practical effects of unionization.
On November 8, 2024, the NLRB issued a decision in Siren Retail Corp. d/b/a Starbucks, 373 NLRB No. 135, which overturned long-standing case law Tri-Cast, Inc., 274 NLRB 377 (1985). Under Tri-Cast, the Board held that it was lawful for employers to accurately explain that a union’s certification as the collective bargaining representative of employees would change the relationship between the employer and its employees, holding that, “there is no threat, either explicit or implicit, in a statement which explains to employees that, when they select a union to represent them, the relationship that existed between the employees and employer will not be as before,” regardless of “the truth or falsity of the parties campaign statements.” Tri-Cast, 274 NLRB 377, 378 (quoting Midland National Life Insurance Co., 263 NLRB 127, 133 (1982)).
In Siren Retail, the Board overturned that well-established precedent and held, citing the Supreme Court’s decision in NLRB v. Gissel Packing Co., 395 U.S. 575 (1969), that “to be deemed lawful, employer predictions about the negative impacts of unionization on employees’ ability to address issues individually with their employer ‘must be carefully phrased on the basis of objective fact to convey an employer’s belief as to demonstrably probable consequences beyond his control.’” 373 NLRB No. 135, slip op. at 2 (quoting Gissel, 395 U.S. 575, 618 (1969)).
Under this new precedent, the NLRB found that a Starbucks manager violated the National Labor Relations Act (“NLRA”) by inferring “adverse” consequences to unionization efforts, rather than simply presenting employees with incontrovertible fact, when the manager said:
If you want a union to represent you- uh- you want to give your right to speak to leadership through a union, you’re going to check off “yes” for the election. If you want to maintain a direct relationship with leadership, you’ll check off “no”… [A] representation of a union is the rules of employment will then be grounded in a contract. And if it’s not in the contract, it’s not a conversation in my opinion that’s going to happen with leadership. We’ll be bound by the contract. So the union will be bound. And Starbucks will be bound. So I want to be clear on that. That a third party comes in and speaks for you. And everything will be grounded, from my experience and in my opinion through the lens of that contract.
In Siren Retail, the Board explained that continuing to follow the nearly 40-year precedent set forth in Tri-Cast would “give employers carte blanche to misrepresent their obligations under the Act in order to deter employees from exercising their right to organize[.]” 373 NLRB No. 135, slip op. at 14 (emphasis added). The Board reached this conclusion despite Section 8(c) of the NLRA explicitly providing that an employer’s “expressing of any views, argument, or opinion, or the dissemination thereof, . . . shall not constitute or be evidence of an unfair labor practice . . . if such expression contains no threat of reprisal or force or promise of benefit.” 29 U.S.C. § 158(c).
Under its new standard, the NLRB now says it will review statements made by management to determine whether the Board believes such statements contravene the text of, or policy underlying, the NLRA. If the Board considers that a statement by management “inaccurately conveys what the Act allows or requires,” the statement may now be found to constitute an unlawful “‘threat of retaliation based on misrepresentation and coercion’ depending on its content and context.” 373 NLRB No. 135, slip op. at 12 (quoting Gissel, 395 U.S. at 617). Member Kaplan’s dissent challenged the Board’s decision to adopt a drastically new legal standard and set aside 40 years of precedent under Tri-Cast, highlighting that the Board did so in a case in which it conceded that the employer’s underlying conduct did not violate the Act at the time of the conduct. As the employer’s statements were plainly lawful under applicable precedent, the majority declined to apply its new standard retroactively.
The majority’s ruling in this case is yet another example of the Board choosing to discard longstanding precedent to adopt the stated policy preferences of the Biden-appointed General Counsel of the NLRB, Jennifer Abruzzo. In criticizing the majority decision, Member Kaplan quoted Chairman McFerran’s own lengthy dissent in Hy-Brand Industrial Contractors, 365 NLRB 1554, 1558 (2017), in which she noted that the Board’s authority to change the law is not unlimited and that the Board in that case “fail[ed] to engage in the reasoned decision making required of administrative agencies by the Administrative Procedure Act” when it engages in overreach. Noting this case is no different, Member Kaplan highlighted that the NLRB’s decision here is nothing more than dicta without any precedential value because it develops a new standard to apply to future employer statements not currently before the NLRB for a decision.
While Member Kaplan’s lone dissent was not enough to impede the majority’s decision to radically depart from established law, such unreasoned decision making may not be the norm for long at the Board. It is widely expected that General Counsel Abruzzo will be removed shortly after the presidential inauguration on January 20, 2025, which would be consistent with the precedent established by President Biden, who removed former General Counsel Peter Robb on inauguration day. Beyond an early removal of Abruzzo, the new administration may also have a path to shift majority status to its Board member appointees at some point in 2025, depending on the outcome of current Board member nominations. Further, this case appears to be ripe for appeal to a Circuit Court that will likely look skeptically on the Board’s decision on several grounds, including its conflict with section 8(c) of the NLRA and the First Amendment of the Constitution.
Employers should remain abreast of ongoing developments at the NLRB to ensure that their current practices are aligned with long-standing labor law to prevent unfair labor practice charges—and, given this decision, should closely engage with managers to strategically determine what messaging to employees regarding union organizing is best suited to the employer’s goals, risk tolerance, and likely direction of future NLRB decisions.
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