Additional Case: Progressive Electric, Inc. v. National Labor Relations
Board1
Facts: Progressive Electric was a non-union electrical contractor. The International Brotherhood of
Electrical Workers (IBEW) targeted the company for organizing.
Progressive advertised in the local paper that it was accepting applications for
electrician/technicians. Without revealing his IBEW membership, David Cousins responded to the ad
and was hired. A month later, eight more union members went as a group to Progressive to apply. They
carried video and tape recording equipment. Randy Neeman, Progressive’s president, realized they
were union members, and told them, “You guys, we are not hiring. We are not taking no [sic]
applications. We hired a couple of people and filled the spots. So I would love to put you all on and as
soon as I get an opening I will give you guys a call.” Newman immediately threw away their
completed job applications.
Don Hildreth, a Progressive foreman, told Cousins and one other employee that Neeman “didn’t
want any union crap around here.” “If the unions got into Progressive, Progressive would lose
contracts and would go out of business because Progressive couldn’t afford the Union wages and
benefits.”
Neeman held a company meeting, where he told his employees: “Alright, I’ve been quiet up ‘til
now…But we’re gonna talk about this dirty word- union.” Neeman’s presentation was punctuated by
phrases such as “Mr. Asshole Union Rep.” and “bunch of dummies.” Neeman wrote the word “union”
on the board, drew a circle around it and but a slash through it.
Progressive later filled several positions with non-union members, never advertising the jobs or
contacting the IBEW applicants.
IBEW filed charges with the NLRB, which concluded that Progressive had committed an unfair
labor practice by threatening job loss and plant closures if the union organized the company.
Progressive appealed.
Issues: Did the company commit an ULP?
Holding: Judgment for the NLRB affirmed. According to the court, it is an unfair labor practice for an
employer, by discrimination in hiring to encourage or discourage membership in any labor organization.
An employer violates this by refusing to consider or hire job applicants because of their union
affiliation. This extends even to union “salts,” or union members sent in to obtain employment with the
objective of inducing union organization.
According to the court, the Board’s finding is reasonable. Neeman accepted the Union Applicants’
information; he lied to them, assuring them that he would call, when in fact he had no such intention.
The Board also pointed to numerous instances such as multiple Union letters, which Neeman received
by fax but refused by certified mail, and failure to hire the Union Applicants to any of the seven
suitable positions that became available. While not independently sufficient, taken together the Board
reasonably found they were “part and parcel” of Progressive’s refusal to hire Union Applicants.
According to the court, the record permits a finding of anti-union animus.
Question: What is a ULP?
Question: What ULP did the Board and the court conclude that Progressive committed?
Question: Why did Progressive not want to hire union members?
Answer: According to the foreman, Progressive did not want to hire union members because the
Question: Aren’t increased expenses, such as higher wages, a legitimate reason for not hiring
someone?
1 453 F.3d 538, District of Columbia Court of Appeals, 2006.
Drafting Exercise: Advising Management
If you assigned this problem, this is a useful place to discuss it. Below are Parton Parcel’s proposed
actions and suggested responses.
Speaking to individual workers, to let them know what management regards as the dangers of
unionization, including economic harm to the company, and possible layoffs
Comment: Management is entitled to speak to workers and advocate its position. However, it may not
use subtle threats about possible layoffs to defeat the drive. For example, the company might show a
chart comparing corporate profits at unionized and non-unionized companies. Management may not
threaten that a successful drive will cause specific workers to lose their jobs.
Assembling all workers, in large groups, to speak against unionization, and asking all workers to
declare publicly whether they intend to vote for or against the union
Comment: Same comment in terms of management’s right to speak. However, a court would likely
consider it a ULP for management to demand that workers announce how they will vote. NLRA votes
are always by secret ballot.
Making pay changes, both up and down, to certain workers to prove that employees are better off
without a union, and may suffer if they play “too active” a role in organizing
Comment: This conduct definitely would be a ULP.
Immediately laying off all desk clerks and subcontracting the work to a part-time labor force
Comment: Although management has the right to restructure its company, it may not take such steps in
a punitive fashion designed to defeat a union drive. Timing layoffs and part-time rehiring during a union
drive is likely to be ruled a ULP.
Collective Bargaining
Once a union is formed, a company must then bargain with it toward the goal of creating a new
contract, which is called a collective bargaining agreement (CBA). The NLRA permits the parties to
bargain almost any subject they wish, but it only requires them to bargain certain issues.
Mandatory subjects include wages, hours, and other terms and conditions of employment. Both the
union and the employer must bargain in good faith. However, they are not obligated to reach an
agreement.
Landmark Case: NLRB v. Truitt Manufacturing Co.2
Facts: A union representing workers at Truitt Manufacturing Company requested a raise of 10 cents
per hour for all members. The company offered an additional 2.5 cents per hour, and argued that a
larger increase would bankrupt the company. The union demanded to examine Truitt’s books, and when
the company refused, the union complained to the National Labor Relations Board.
The NLRB determined that the company had failed to bargain in good faith and ordered it to allow
union representatives to examine its finances. A court of appeals found no unfair labor practice and
refused to enforce the Board’s order. The Supreme Court granted certiorari.
Issue: Did the company refuse to bargain in good faith?
Excerpts from Justice Black’s Decision:
We think that in determining whether the obligation of good faith bargaining has been met, the
Board has a right to consider an employer’s refusal to give information about its financial status.
While Congress did not compel agreement between employers and bargaining representatives, it did
require collective bargaining in the hope that agreements would result. [T]he Act admonishes both
employers and employees to exert every reasonable effort to make and maintain agreements.
2 351 U.S. 149, United States Supreme Court, 1956.
In their effort to reach an agreement here both the union and the company treated the company’s
ability to pay increased wages as highly relevant. Claims for increased wages have sometimes been
abandoned because of an employer’s unsatisfactory business condition; employees have even voted
to accept wage decreases because of such conditions.
Good faith bargaining necessarily requires that claims made by either bargainer should be honest
claims. This is true about an asserted inability to pay an increase in wages. If such an argument is
important enough to present in the give and take of bargaining, it is important enough to require
some sort of proof of its accuracy.
The Board concluded that under the facts and circumstances of this case the respondent was guilty
of an unfair labor practice in failing to bargain in good faith. We see no reason to disturb the
findings of the Board.
Reversed.
Question: What is good faith bargaining?
Question: Why did the court say that the employer failed to bargain in good faith?
Answer: The court stated that, in this circumstance, it was reasonable for the employees’ union to
Subcontracting Work
Can American workers compete with foreigners? Often, the answer is “no,” but the disparity has
nothing to do with hard work or discipline. Many American companies have shipped jobs overseas to
take advantage of extraordinarily low wages in developing countries. Indonesia has become one of the
world’s largest manufacturers of American athletic shoes. Factories there churn out millions of pairs of
Nikes, Reeboks, and other popular brands.
One Indonesian shoemaker, the Sung Hwa Dunia factory, illustrates what happens in countries
without effective labor laws. The Indonesian minimum wage was raised to $1.25 per day. The Sung
Hwa Dunia factory, which makes Nikes, refused to pay the wage. Several hundred workers walked out.
Police and soldiers arrived quickly, and the “strike” ended immediately, with most workers returning to
work. Eventually, the factory began to pay the mandated minimum wage. However, the factory fired
and refused to rehire the leaders of the employee walkout.
Meanwhile, Nike’s earnings for that same quarter jumped 38 percent, and revenue from athletic
shoes and clothing in the United States alone topped $1 billion for the first time in any quarter. Philip
Knight, Nike’s chief executive officer, was estimated to be worth more than $5 billion.
Workers in these and other factories can barely subsist on their wages. Most live in squalid shacks,
often without water or sanitation. The majority are malnourished. U.S. labor organizations are
attempting to publicize working conditions, and wages overseas, to convince the public that profitable
companies should keep their jobs at home. As international trade continues to grow, the battle over
subcontracted work is likely to become angrier.
General Questions:
When American companies subcontract part or all of the work to make an athletic shoe, what effect
does that have on American workers?
What effect does the subcontracting have on the corporation? Its profits? Its shareholders?
What are the effects of the Nike and Reebok jobs on Indonesia and its workers? Do the workers
benefit? The nation? Will the country develop enough so that wages will increase?
Suppose you work for an American company that manufactures apparel here in the United States.
The company is considering subcontracting work to factories in Asia. What position would you
take?
As a consumer, how much more per pair of Nikes would you be willing to pay to ensure that the
shoes were made in the United States or by a foreign worker paid a decent wage?
Concerted Action
Concerted action refers to any tactics union members take in unison to gain some bargaining
advantage. It is this power that gives a union strength. The NLRA guarantees the right of employees to
engage in concerted action for mutual aid or protection. The most common forms of concerted action
are strikes and picketing.
Strikes
-The NLRA guarantees employees the right to strike, but with some limitations.
-The union may strike as an economic weapon, but it must notify management of its intention to do so
and then must wait 60 days. This cooling off period is designed to give both sides a chance to reassess
negotiations and to decide whether some additional compromise would be wiser than enduring a strike.
-Many states have outlawed strikes by public employees.
-The NLRA prohibits violent strikes.
-A union may either walk off the job or stay on it, but it may not alternate.
-Management has the right to hire replacement workers during a strike.
-Picketing the employer’s workplace in support of a strike is generally lawful.
-In a so-called “lockout,” management prohibits workers from entering the premises, and earning their
paychecks. Most lockouts are legal.
Ethics: “Work to Rule”
There is no perfect answer to the dilemma of teachers refusing to write college recommendation letters
or engage in other activities outside the letter of their CBA. The teachers’ point is that their union lacks
the basic weapon that gives most unions bargaining power: the ability to strike. Because they must
keep working, no matter how long the bargaining takes, they believe they must resort to other means to
grab the attention of the community and force the school Board to put its money where its mouth is to
maintain a good school. The students and parents also have an understandable argument: the one person
who is entirely powerless in the dispute is the student, and she is the one who will suffer from a
teacher’s refusal to write a letter of recommendation. The father’s anger is understandable, since he
pays the taxes that pay the teacher’s salary. Some would question, though, whether there is hypocrisy
mixed in with the rage, since most parents pay little attention to school matters (or salaries) until they
are personally inconvenienced.
Additional Assignment:
Students who researched a current strike could present their findings here.
Multiple Choice Questions
1. Brook moved from Denver to San Francisco to take a job with an advertising agency. His
employment contract stated that he was “at-will and could be terminated at any time.” After 28
months with the company, he was fired without explanation. Which of the following statements is
true?
(a) His contract implied that he could only be fired for cause.
(b) Because he had a contract, he was not an employee at-will.
(c) He could only be fired for a good reason.
(d) He could be fired for any reason.
(e) He could be fired for any reason except a bad reason.
2. CPA QUESTION An unemployed CPA generally would receive unemployment compensation
benefits if the CPA:
(a) Was fired as a result of the employer’s business reversals
(b) Refused to accept a job as an accountant while receiving extended benefits
(c) Was fired for embezzling from a client
(d) Left work voluntarily without good cause
3. During a job interview with Venetia, Jack reveals that he and his wife are expecting twins. Venetia
asks him if he is planning to take a leave once the babies are born. When Jack admits that he would
like to take a month off work, he can see her face fall. She ultimately decides not to hire him
because of the twins. Which of the following statements are true?
(a) Venetia has violated the FMLA.
(b) Venetia has violated the Pregnancy Discrimination Act.
(c) Venetia has violated Title VII.
(d) All of the above.
(e) None of the above.
4. Which of the following statutes defines unfair labor practices and ensures workers’ right to form a
union?
(a) The Norris-LaGuardia Act
(b) The National Labor Relations Act
(c) The Labor-Management Relations Act
(d) The Labor-Management Reporting and Disclosure Act
5. Alpha Company’s workers walk out on strike. The company hires replacement workers so that it can
continue to operate its business. When the strike ends, Alpha must rehire the original workers if the
strike was over ________________.
(a) wages
(b) an unfair labor practice
(c) both A and B
(d) none of the above
Essay Questions
1. Debra Agis worked in a Ground Round restaurant. The manager informed the waitresses that “there
was some stealing going on.” Until he found out who was doing it, he intended to fire all the
waitresses in alphabetical order, starting with the letter “A.” Dionne then fired Agis. Does she have
a valid claim against her employer?
2. You Be the Judge: WRITING PROBLEM FedEx gave Marcie Dutschmann an
employment handbook stating that: (1) she was an at-will employee, (2) the handbook did not
create any contractual rights and (3) employees who were fired had the right to a termination
hearing. The company fired Dutschmann, claiming that she had falsified delivery records. She said
that FedEx was retaliating against her because she had complained of sexual harassment. FedEx
refused her request for a termination hearing. Did the employee handbook create an implied
contract guaranteeing Dutschmann a hearing? Argument for FedEx: The handbook could not have
been clearer – it did not create a contract. Dutschmann is an employee at-will and is not entitled to
a hearing. Argument for Dutschmann: FedEx intended that employees would rely on the
handbook. The company used promises of a hearing to attract and retain good employees.
Dutschmann was entitled to a hearing.
3. Triec, Inc., is a small electrical contracting company in Springfield, Ohio, owned by its executives
Yeazell, Jones, and Heaton. Employees contacted the International Brotherhood of Electrical
Workers, which began an organizing drive. Six of the 11 employees in the bargaining unit signed
authorization cards. The company declined to recognize the union, which petitioned the NLRB to
schedule an election. The company then granted several new benefits for all workers, including
higher wages, paid vacations, and other measures. When the election was held, only two of the 11
bargaining unit members voted for the union. Did the company violate the NLRA?
Answer: Yes, the company violated the NLRA by extending benefits during an organizing
campaign, shortly before the election. An employer may not interfere or punish any workers, nor
4. Q-1 Motor Express was an interstate trucking company. When a union attempted to organize Q-1’s
drivers, it met heavy resistance. A supervisor told one driver that if he knew what was good for
him, he would stay away from the union organizer. The company president told another employee
that he had the right to fire everybody, close the company, and then rehire new drivers after 72
hours. He made numerous other threats to workers and their families. Based on the extreme nature
of the company’s opposition, what exceptional remedy did the union seek before the NLRB?
Answer: Based on the extreme nature of the company’s opposition, the union sought an order to
bargain. An administrative law judge found that the company had committed a ULP by interfering
with the organizing drive. The NLRB affirmed, issued a bargaining order, and appealed to the court
5. Billy comes down with chicken pox and is sent home from school. His mother takes him to a
pediatrician. The doctor tells her, “Well…he should be fine in about a week. Bed rest is all he really
needs – and plenty of fluids.” Billy’s mother calls her employer and requests FMLA leave to take
care of Billy for the next few days. Must the employer grant the leave? Why or why not?
Answer: Billy’s mother is not entitled to FMLA leave. Billy is a “close relative,” but he does not
Discussion Questions
1. When Walton Weiner interviewed for a job with McGraw-Hill, Inc., he was assured that the
company would not terminate an employee without “just cause.” Weiner also signed a contract
specifying that his employment would be subject to the provisions of McGraw-Hill’s handbook.
The handbook said, “[The] company will resort to dismissal for just and sufficient cause only, and
only after all practical steps toward rehabilitation or salvage of the employee have been taken and
failed. However, if the welfare of the company indicates that dismissal is necessary, then that
decision is arrived at and is carried out forthrightly.” After eight years, Weiner was fired suddenly
for “lack of application.” Does Weiner have a valid claim against McGraw-Hill?
Answer: The court held that the handbook had created a contract between Weiner and
2. Some companies now require all job applicants to provide their Facebook login information so that
the potential employer can learn more about them. Is this behavior ethical on the part of an
employer?
3. Should employers be allowed to fire smokers? Nicotine is highly addictive and many smokers
begin as teen-agers when they may not fully understand the consequences of their decision. As
Mark Twain, who began smoking at 12, famously said, “Giving up smoking is the easiest thing in
the world. I know because I’ve done it thousands of times.”
4. Union membership has fallen steadily in recent decades in part because many unionized
manufacturing jobs have been shipped overseas. Do you believe that unions will make a comeback
in new industries? Would you prefer to be a member of a union if you had a choice? Why or why
not?
5. Would you personally be less likely to apply for a job if you were required to first pass a polygraph
exam? What if you were required to pass a drug test? For legal or illegal drugs? Would you be less
likely to apply because you thought the company was too intrusive or because you want the right
to use these substances? What if the company required you to quit smoking or chewing tobacco?
Bonus Exam Strategy:
Question: Janet recently joined the Freewill Pentecostal Holiness Church and as a member she is not
allowed to wear pants. Her employer, Sal’s Seafood Sales and Distributing, requires all
employees to wear coverall (overalls) provided by the company for sanitary reasons. Although
Janet wore the uniform prior to joining the church, she now refuses to wear the coveralls. She
explained to Sal that wearing pants was against her religion. Sal offered to allow her to split the
seams on the coveralls and wear it over her dress. Janet refused. Sal fired her for insubordination.
Does Janet have a claim against Sal’s?
Strategy: This question is an employment discrimination issue. We know that under Title VII, an
employer may not discriminate based on race, color, national origin, gender, or religion. When a
religious belief conflicts with an employment policy, the employer has a duty to reasonably
accommodate the employee’s belief, unless so doing would cause an undue hardship for the
employer.
Result: Janet has a conflict with her belief and the requirement to wear the coveralls. She
explained this to Sal. Sal offered to accommodate Janet’s beliefs by allowing her to split the
seams on the coveralls so that they could be worn over her dress, however Janet refused. Sal’s
offer to accommodate Janet’s beliefs seems reasonable: it would allow her to abide be her
religious belief in not wearing pants, while fulfilling the sanitary requirements of her job. Janet
does not have a claim against Sal’s.