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NLRB determination that union unlawfully ran exclusive hiring hall stands

By Brandi O. Brown, J.D.

A union that petitioned for review of an NLRB finding that it had violated the NLRA through its hiring practices was denied relief on appeal to the Eighth Circuit, which upheld the determination that the union had run an exclusive hiring hall with regard to two employers and that it had violated the NLRA by suspending and refusing referrals for several members and prioritized members over nonmembers for referrals. The court also granted the Board’s cross-application for enforcement (International Alliance of Theatrical Stage Employees, Moving Picture Technicians, Artists and Allied Crafts of the United States, its Territories and Canada, Local Union No. 151 v. NLRB, March 26, 2018, Smith, L.).

NLRB issues complaint. IATSE, a union that furnishes labor for entertainment-venue employers, including the two involved in this matter—The Freeman Companies and SMG—was named in a complaint issued by the NLRB. The complaint alleged that the union had operated an exclusive hiring hall with respect to the two employers and had violated section 8(b)(1)(A) and (2) of the NLRA. It further alleged that the union had discriminated against nonunion employees by granting priority to members for referrals, that it had refused to refer two employees for a job in 2013, that it had suspended several members from its referral list, and that it committed several other violations.

ALJ rules, union appeals. After a trial, the ALJ found all but one of the allegations to be supported by the evidence (one related to an allegation that the union failed to include certain language in its constitution and bylaws) and the Board affirmed. The union petitioned the Eighth Circuit for review. The appeals court rejected the union’s argument that the Board did not have jurisdiction over one of the employers, which was based on an argument that the Board should not have considered the employer as a whole, rather than only the location where the alleged incidents occurred, in concluding that the $50,000 threshold was met. The union provided no legal authority for its argument, the Board’s conclusion was supported by substantial evidence, and, in any event, the threshold was a self-imposed requirement that could be disregarded.

Operated exclusive hiring hall. As to the hiring hall issue, the appeals court concluded that substantial evidence supported the finding that the union operated an exclusive hiring hall with regard to the two employers. With regard to Freeman, the evidence presented including CBAs that contained language indicating the employer’s agreement that work should be performed only by workers referred by the union. Testimony by a manager for the employer indicated that the practice matched the language. Although the union argued that the CBAs were not valid because there was evidence they had not been ratified, the Board had concluded that there was no credible evidence indicating ratification was standard practice. Moreover, even if the agreements were not valid, the parties acted as if the terms applied and an exclusive hiring hall could be inferred from the evidence.

As to SMG, the Board concluded that the union also operated an exclusive hiring hall with regard to its Pershing location based on the parties’ practices. Although the union presented testimony that the employer did not exclusively use union-referred workers, the ALJ had mostly discredited that testimony. The evidence in the record, including credible and supported testimony by an SMG manager, supported the Board’s conclusion that the employer hired its labor through the union. The ALJ was entitled to credit one witness’s testimony over another’s. Furthermore, the “Letter of Understanding” noted by the Board, although it purported to describe a “non-exclusive” relationship between the union and SMG Pershing, instead supported the finding of exclusivity. It showed that the parties agreed the employer would use the union to staff events, but that it could supplement with other personnel if the union could not supply sufficient numbers of employees. The Board’s finding did not shock the conscience and would not be disturbed, the appeals court concluded.

Lawsuit-based suspensions. Although the union challenged three of the findings with regard to NLRA violations, the appeals court declined to overturn them. The Board had found a violation based on the union’s act of suspending seven members for a year from receiving referrals. The reasons given were not credible and were contradicted. Notably, the union had complained, with regard to six of the employees, that they had brought lawsuits against the union. The union argued that the suspensions were necessary because the lawsuits had damaged its business relationships. The Board rejected as not credible the union’s perception that the lawsuits had damaged its business relationships, noting testimony from companies that conducted business with the union that they were aware of the suits and that it had not affected their business relationship with the union. Furthermore, the activity referenced was protected under the NLRA, the court explained, and substantial evidence supported the Board’s finding that the union failed to show that the suspensions were necessary for it to effectively represent its constituency.

Other violations. Likewise supported was the Board’s conclusion that the union violated section 8(b)(1)(A) and (2) by refusing to refer two members to a hotel job because they had visited the union’s payroll provider to discuss payroll issues. The ALJ made a credibility determination in rejecting the testimony of one of the union’s witnesses and the court was not persuaded to “go behind” that determination. The appeals court also found sufficient support for the Board’s determination that the union had prioritized members over nonmembers for job referrals.

Finally, the appeals court rejected the union’s argument that the charge with regard to the referrals lists was untimely. Again, a credibility determination as to the testimony of one of the union witnesses—a business agent—was key to the ALJ’s conclusions.