Firing Employees for Union Activity Isn’t Always Against the Law

SHAWN WRIGHT—Imagine showing up to work one morning at your satellite office and the doors being locked. Whether you are a lawyer, doctor, professor, or salesman, you would likely be shocked at the letter posted on the door from your boss to employees and customers that reads, “[Company Name] has closed. I have decided to shut down the company today. We have been very successful, and have changed the world for the better. However, this is a business and the money we make is not worth the effort we put in. Thank you.” Having no notice, you first might be shocked, then realize that you and your coworkers are all jobless.

This is similar to what happened on November 2, 2017, to journalists and other employees at DNAinfo and Gothamist, websites that specialize in neighborhood reporting, when CEO Joe Ricketts, also the CEO and Billionaire founder of TD Ameritrade, posted a link to his letter on the news websites. Of course, there is more to the story. Just one week prior to Ricketts’ essential termination of 115 employees, twenty-five of twenty-seven (or just under 93%) of those workers in New York voted to form a union.

It is perfectly legal to close a business or fire workers for business reasons; however, when employees are discharged due to their union activities, such action goes against the crux of the section 7 and section 8 of the National Labor Relations Act (NLRA), which is enforced by the National Labor Relations Board (NLRB). In NLRB v. Consolidated Biscuit Company, the Court of Appeals for the Sixth Circuit found that to make an initial showing there was an NLRA violation, wronged employees must show that they were engaged in protected activity, that the employer knew the activity was going on, and the animus towards the activity was the reason that the employer took the adverse action. Additionally, the court stated that the causation standard to prove a violation is the “but-for” standard. In other words, if Ricketts would have closed down DNAinfo and Gothamist for any reason other than the vote to unionize, then there would be no NLRA violation (that is, the vote to unionize would not have been the “but-for” cause of the shut down).  In Consolidated Biscuit Company, temporal proximity and union animus were two factors the court used to help establish an NLRA violation.

Federal courts have held that a temporal proximity of two weeks as well as twenty-four days have been close enough to infer a causal connection while three to four months is insufficient. Although Hutton v. Maynard says “temporal proximity alone is insufficient” to support a violation, when you couple strong temporal proximity with the intense animosity Mr. Ricketts apparently has for unions, as demonstrated in a September blog post penned by Rickets, entitled “Why I’m Against Unions at Businesses I Create,” it is hard to imagine the union vote was not the reason that caused him to shut down the business.

If a charge is brought, the NLRB may side with the workers and union as they are bound to their own case law precedent and interpretations of the NLRA and the factors of proof listed above. But if this issue were to make it into the federal court system on appeal, judges will be bound to follow the Supreme Court ruling in Textile Workers Union v. Darlington Mfg. Co., where the Court held that “an employer has the absolute right to terminate his entire business for any reason he pleases.” The only thing employers cannot do, the Court said, is terminate part of their business to dissuade other parts of their business from unionizing. For example, the A.G. Boone Company was ordered to reopen a facility when it was closed “in order to take reprisal against employees for engaging in union activities.” The District of Columbia Circuit Court said that as long as reopening the facility was not “unduly economically burdensome,” the order to reopen would stand. In Canada, even the notoriously non-union Walmart lost a case in the Canadian Supreme Court in 2014 for closing down a store when the employees at the store voted to unionize.

As Ricketts admitted in his post, unions are for the purposes of “balancing power between ownership and labor.” Unfortunately for DNAinfo and Gothamist employees, they were never given a chance to see that to be true. One thing Joe Ricketts made extremely clear is he did not want anything to conflict with the imbalance of power in which he held the majority. Despite the Supreme Court being very clear in its 1965 Darlington decision, it will be interesting to see if a charge is filed with the NLRB and what legal action may be taken in the near future to stand up for employee rights in the currently pro-employer era.


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