In a recent 2-1 decision in Quickway Transportation,
Inc., 372 NLRB No. 127 (2023), the National Labor
Relations Board (the “Board”) reversed the Administrative
Law Judge and ordered a trucking company to re-open its terminal
and restore the status quo ante when it held that the company’s
decision to terminate all of its recently unionized truck drivers
and close the terminal violated sections 8(a)(3) and 8(a)(5) of the
National Labor Relations Act (the “Act”). While this
decision does not overturn existing Board precedent, as might be
expected given the spate of recent decisions that we previously
reported and discussed here, here, here, and here, but it is significant because it
demonstrates the current Board’s willingness to rigorously sift
through and interpret every aspect of the employer’s conduct to
infer union animus and to rely on that inference even in the
absence of direct evidence.
Factual Background
In this matter, the employer Quickway Transportation, Inc.
(“Quickway”), through its affiliates, has terminals with
trucking operations throughout the United States, including a
terminal in Louisville, Kentucky that only provided services for a
national grocery chain. Other than its Louisville and Indianapolis
terminals, Quickway is the primary carrier at every one of its
terminals that service this grocery chain. At the Louisville
terminal, however, two other trucking companies provide the
majority of services. Teamsters Local 89 (the “Union”)
represents the drivers from these other two trucking companies at
the Louisville terminal and started trying to organize
Quickway’s drivers there in June 2019. The contentious campaign
generated several unfair labor practice complaints that Quickway
settled without admitting liability, and the Union won an election
for a stipulated unit of truck drivers.
Quickway took all available legal avenues to contest the
election, but those efforts ended unsuccessfully when the Board
denied review on October 26, 2020. Quickway then promptly agreed to
bargain with the Union. Even though wages and other economics were
not discussed at the first session, several tentative agreements
were reached. The Union did suggest they would expect Quickway to
agree to “maintain area standards,” which referred to the
collective bargaining agreement (“CBA”) terms of the
other two trucking companies at the terminal. The area standards
were incompatible with Quickway’s preferred business model that
was in effect at all its terminals. A second bargaining session was
scheduled a few weeks later on December 10.
Days before the second session, the Quickway drivers met and
voted in favor of a strike if the company did not agree to all
their proposals on December 10. At the meeting, the Union confirmed
that the other two trucking companies would honor any picket line
at the terminal. The contemplated strike and any sympathy strike
would shut down all operations at the Louisville terminal because
the other trucking companies’ CBAs would not allow Quickway to
engage in any mitigation efforts, such as a reserved gate or
dedicated lane for drivers. Quickway only learned about this two
days before the December 10 bargaining session, when a local TV
station forwarded them an unattributed email with this information.
Quickway did not take any steps to assess or investigate the
email’s source or its veracity.
Quickway instead concluded that the economic consequences of
these threatened strikes would be financially catastrophic based on
its assessment that Quickway would be liable for: (1) replacing all
its own striking drivers (up to 62 drivers); (2) replacing all the
striking drivers for the other two trucking companies (up to 800
drivers); (3) any spoiled, perishable cargo caused by Quickway
drivers abandoning their loads; and (4) any spoiled, perishable
cargo caused by the other two trucking companies abandoning their
loads. In total, Quickway estimated these liabilities at $2-4M on
day one and $1M+ every day thereafter. Quickway immediately sought
to be released from its contractual obligations with the grocery
chain, and reached agreement to do so on December 9. Quickway
notified the Union and its Louisville drivers that Quickway was
ceasing all Louisville terminal operations effective 11:00 p.m. on
December 9, and that the drivers should not report to work.
On December 10, Quickway and the Union met for their second
bargaining session. They did not agree to bargain then or in the
future because the Union only wanted to bargain for a CBA, and
Quickway was only willing to bargain over the effects of its
decision to cease business at the Louisville terminal. That same
day, Quickway removed its forty-four trucks from the Louisville
terminal and either sold them or transferred them to other
terminals. Quickway then subleased the terminal to a third party
for the remaining lease term.
The Board Decision
All the Board members agreed that Quickway’s decision to
close the Louisville terminal was a partial business closure, and
that even if that decision was based on union animus, the closure
would only violate section 8(a)(3) of the Act if it was
“motivated by a purpose to chill unionism in any of the
remaining plants of the single employer and if the employer may
reasonably have foreseen that such closing would likely have that
effect” as set forth in Textile Workers Union of America
v. Darlington Mfg. Co., 380 U.S. 263, 373-74 (1965). Where the
Board members differed is on the required factual showing to
satisfy these key elements.
The Board majority conceded there was “no credited
evidence” that Quickway “had actual knowledge of an
active union campaign at any of its other terminals” when it
decided to close its Louisville terminal. Without any direct
evidence, the Board majority relied upon language from the
subsequent Darlington Board opinion, after the case was
remanded from the Supreme Court. That opinion noted that in the
absence of actual knowledge an inference may be warranted
“if the evidence establishes a strong employer belief
that the union is intending imminently to organize the
employees in his other operations.” Darlington Mfg.
Co., 165 NLRB 1074, 1084 (1967) (emphasis added).
The Quickway Board majority’s inference was based on their
finding that Quickway closed the Louisville terminal for
“antiunion reasons” and further opined this
“indicates a disposition toward a second antiunion
purpose.” Then, as to Quickway’s other terminals, the
Board majority relied upon their conclusion that (1) drivers at its
Indianapolis terminal had failed to elect a union over a year ago
and were no longer time-barred from petitioning for a new election;
(2) an email from a former employee stating the Union was
“coming for” the Hebron terminal (the dissent notes the
terminal is beyond the Union’s geographical jurisdiction); and
(3) Quickway’s decision before the election to
re-route any Murfreesboro terminal drivers from picking up loads at
its Louisville terminal to prevent the Murfreesboro drivers from
being “infect[ed].” For the second Darlington
element, that it was reasonably foreseeable that the closure would
have the effect of chilling unionization efforts, the Board
majority relied on the Louisville terminal closing and found that
it in turn ended renewed unionization efforts at the Indianapolis
terminal, because two of the three drivers stopped working with a
union organizer stating “[t]here goes our campaign.” The
Board majority also concluded it was reasonably foreseeable that
other terminals would learn that the Louisville terminal had
closed, through their on-site drivers or mechanics.
Although Quickway contended that economic necessity forced it to
close the Louisville terminal, the Board majority rejected that
argument because Quickway (1) did not investigate the veracity of
the strike information; (2) did not investigate other alternatives;
and (3) based the decision on unreasonable assumptions that all
drivers would strike and would have to be replaced by Quickway and
that Quickway would be responsible for all spoiled, perishable
goods. The Board majority did not – as the dissent noted
– consider whether there was an economic necessity if the
anticipated consequences were limited to only the 62 Quickway
drivers (versus all 800+ drivers) and only to perishable goods
transported by the Quickway drivers.
Practical Considerations
To understand how the current Board is likely to find an
inference under Darlington, that an employer chilled
unionism and it was reasonably foreseeable that the partial
business closure would have that effect, it is helpful to compare
the Quickway factual analysis to that in the Darlington
Board decision. After the Supreme Court remanded the
Darlington case, an evidentiary hearing was held, and the
Board relied on an inference to find the partial closure was
improper. The case centered around one textile mill in Darlington,
South Carolina, which – along with 25 other mills in the
South and New England – was owned and controlled by the
Milliken family through Roger Milliken, who was the President and
active manager for each mill. The Darlington mill was the only mill
in over 10 years that voted to be represented by a union. A few
days after the vote, Roger Milliken held a board meeting to
liquidate the Darlington mill for economic reasons. He told the
board that the mill’s financial picture had changed (even
though it had stable for years) because of unspecified
“promises” made by the union that would have unspecified
consequences. The stockholders (Roger Milliken owned 72% of the
stock) also voted to liquidate the mill’s assets. A state
senator urged Milliken to reconsider and presented a petition to
disavow the union signed by 83% of the mill employees.
Roger Milliken stood firm because “[a]s long as there are
seventeen percent of the hard core crowd here, I refuse to run the
mill.” One month after the union vote, Roger Milliken also
reached out to the other 20-plus mills the family owned and sent
each mill treasurer an article decrying unions with a cover
memorandum that asked the treasurers to review the article and
carefully consider the steps they are taking at their mill because
the unions will be making a “tremendous drive all through this
area.”
The factual support for the inference in the Darlington
Board decision is linked to the union vote, is contemporaneous with
the union vote, and the remaining mills owned and controlled by the
Milliken family were informed of impending union activity. By
comparison, the Quickway inference includes events that were not
contemporaneous with the union vote (e.g., pre-election events) or
were not tied to the union vote (e.g., time bar ended to petition
for new election), or were outside the union’s jurisdiction
(e.g., the Hebron terminal).
In light of this, employers contemplating a partial business
closure should be cognizant of the likelihood that the current
Board would evaluate the Darlington factors as they did in
Quickway, particularly because the Board has the ability to impose
sweeping relief that can have significant economic and operational
impact. In Quickway, the Board required the company to reopen and
restore its business at the Louisville terminal as it existed the
date it closed, even though almost three years had passed, Quickway
had: ceased all operations and was released from its contract with
the grocery chain, disposed of the terminal’s 44 trucks, and
subleased the terminal facility to a third party. Quickway was also
ordered to offer reinstatement to all discharged employees and make
them whole, not just for the prior years’ lost earnings and
benefits, but also for any direct or foreseeable pecuniary harm,
including moving expenses and ameliorating any tax penalties for
lump sum payments.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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