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The NLRB recently determined that merely discrediting an employer’s justification for a union activist’s termination (a pretext finding) could be insufficient to demonstrate the termination was unlawful. Electrolux Home Products, 368 NLRB No. 34 (2019). This outcome was preordained by the NLRB’s decision in Wright Line, 251 NLRB 1083 (1980) and was reinforced as an acceptable legal analysis by the Supreme Court in a decision under Title VII, St. Mary’s Honor Center v. Hicks, 509 US 502 (1993). The logic of the rule found its voice in ABF Freight Systems v. NLRB, 510 US 317 (1994) in which the Court determined it was permissible for the NLRB to order the reinstatement of an employee even after the employee lied under oath during the NLRB hearing, as to do otherwise, would “distract the Board” with collateral credibility disputes.

Case History and Facts

The Electrolux case arose when the employer terminated a member of a newly certified union’s bargaining committee. The employee had tried to debate a manager during a captive audience speech some seven months before her termination and had complained about workplace issues in the interim. When two fork lift drivers were absent from work, she was directed to make deliveries to a production line, but did not do so. She was subsequently terminated for insubordination.

The Administrative Law Judge determined the reason for her termination — insubordination — was pretextual because other employees who were insubordinate had not been terminated. The NLRB panel majority noted the facts surrounding the other employees’ incidents were not introduced or made part of the trial record. There was no allegation of union-animus or other unfair labor practice charges separate and apart from the termination itself.

The NLRB majority (Member McFadden dissented) focused on language in Wright Line which cabined the evidentiary value of a pretext finding. As the NLRB majority explained, pretext could give rise to an inference of unlawful motive when “the surrounding facts tend to reinforce that inference.” Turning to the surrounding facts in Electrolux the majority found they did not “reinforce that inference” pointing to the absence of any contemporaneous unfair labor practices and the employer’s evident good faith bargaining.  Experienced practitioners may find this decision reflective of the Seventh Circuit’s rejection long ago of the NLRB’s presumption that the discharge of a union activist during a union campaign was prima facia illegal. NLRB v. Loy Food Store, 697 F.2d 798 (7th Cir 1983) and Chicago Tribune v NLRB, 962 F.2d 712 (7th Cir 1992).

Employer Takeaways

The decision highlights the value of good behavior. By engaging in good faith bargaining after the union’s certification the employer vitiated any inference of unlawful union-animus attributable to the ALJ’s pretext finding.

Employers would be well served to review their Employee Handbooks and Workplace policies to ensure they are compliant with the NLRB’s standards. Non-compliant handbooks are a likely source of labor law violations and union animus. Additionally, the decision highlights the importance of training supervisors and managers, even when the workforce is non-union, to avoid inadvertent Section 8(a)(1) violations prior to or during a union organizing campaign.