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NLRB must reassess seldom-seen order requiring reopening of closed business operations

By Marjorie Johnson, J.D.

Though the Board found that a concrete company violated the NLRA by closing its auto repair operations after two mechanics turned in union authorization cards, the record showed the decision was due to the loss of the lease of the space.

Although substantial evidence supported the NLRB’s determination that a concrete company committed an unfair labor practice (ULP) by terminating the two mechanics who worked in its small repair shop in retaliation for their organizing activity, the Board must reconsider an affirmative bargaining order directing the employer to reopen the shuttered shop, to rehire the mechanics, and to bargain with the union that had sought to represent them. Granting in part the employer’s petition for review, the D.C. Circuit remanded the case for the Board to reconcile its determination that the shop was shut down for the purpose of chilling union activity with clear evidence that it was closed due to the termination of the company’s lease for the garage where it was housed. Amongst other things, the appeals court also directed the Board to explain what legal authority allowed it to compel the restoration of a company operation that no longer exists and for which there was no adequate space within any of the company’s existing facilities (RAV Truck and Trailer Repairs, Inc. v. NLRB, May 11, 2021, Edwards, H.).

Lease expires. In addition to its concrete business, the employer leased a garage where it employed two mechanics to perform repairs on its own trucks as well as those of third parties. In February 2018, the garage’s owner notified the employer that its lease would be terminated. As a result, the employer moved the operation to a much smaller garage where it obtained a month-to-month lease from March 1 to May 31 for “the repair of commercial vehicles to finish remaining repairs from previous location.”

Union election. Meanwhile, on April 19, 2018, a local Teamsters union sought to represent a unit of employees at the concrete facility. The Board conducted an election on May 10 that resulted in a slim victory for the union and later found in a related case that the company had committed several ULPs prior to the election, including threatening employees with discharge if they voted for the union, interrogating employees about union activities, promising an employee a new truck if he refrained from union activities, and telling employees that the business would close if they elected the union.

On May 14, 2018, the two mechanics who worked at the repair shop signed union authorization cards and later that day, the union emailed the owner a petition to represent them. The next day, the company owner told the mechanics that he heard a rumor that Immigration and Customs Enforcement (ICE) agents were in the area and asked if they had authorization papers. After only one responded affirmatively, the owner told the other that he could not give him anymore work and terminated him. The union filed an ULP charge over the firing the next day.

Less than one week later, on May 21, the owner told the remaining mechanic that it was his last day since he was closing the garage for lack of work even though his workload had not changed since the repair shop had changed locations. Afterwards, the union continued to seek to represent the mechanics unit and the employer ultimately notified the union that it would be “shutting its doors” and was “officially out of business.”

Underlying proceedings. The case was argued before an ALJ who ultimately issued a decision and recommended order finding, amongst other things, that the concrete business and the repair shop constituted a single employer and that the company violated sections 8(a)(3) and (1) of the NLRA by discharging and laying off the two mechanics and closing the repair shop. The Board affirmed those findings and ordered the employer to offer the mechanics reinstatement to their former jobs or substantially equivalent positions and to make them whole for any loss of earnings or benefits. The Board also ordered the company to bargain with the union and to “reopen and restore” its business operations “as it existed on May 14, 2018.”

Unlawful terminations. At the outset, the D.C. Circuit affirmed the Board’s finding that employer violated the NLRA by discharging the undocumented mechanic in retaliation for signing a union authorization card. The close temporal proximity supported an inference of retaliation as he was fired less than 24 hours after the union filed its first petition. Furthermore, the owner’s admission that he prepared the employee’s termination letter before questioning him about his immigration status suggested pretext, particularly as there was no evidence that he had ever checked an employee’s work authorization in the past even though ICE agents had “been in the area before.”

The court also affirmed the Board’s application of the Wright Line analysis to find that the other mechanic was unlawfully laid off. Even if the Board concludes on remand that the employer did not violate the NLRA by closing the shop, the suspicious timing and inconsistent reasons for the mechanic’s discharge suggested a retaliatory motive.

Board to reconsider shop closure. In sending the case back for further consideration regarding whether the employer committed a ULP by closing its repair shop, the court emphasized that in February 2018, the company’s lease for the space in which it had housed the auto repair operation was terminated. Thus, “[t]he loss of this work location had nothing to do with any union organizing campaigns.” Moreover, after the lease expired, the company moved the repair operations to “an unsuitably small, temporary space which the Company used to finish repairs from the previous location” that it then shut down “for good.” Given this evidence, the court held that it “cannot decipher . . . how the Board determined” that the closure of [the repair shop] constituted an unfair labor practice.”

Restoration order also questionable. The court also remanded the Board’s order directing the employer to reopen and restore the repair shop. Significantly, the temporary space into which the repair operations were moved was covered by a month-to-month lease that had ended on May 31, 2018. Moreover, the record showed that the space was neither adequate in size nor properly registered under New York law to accommodate a third-party repair shop. Finally, the Board did not find that the company intended to reopen the repair shop in a new location. Under these circumstances, the Board’s decision “does not purport to explain how restoration is even ‘factually possible,’” explained the court.