Employer Lawfully Offered Cash Payment for Discharged Union Supporter to Waive Remedial Reinstatement: NLRB | Practical Law

Employer Lawfully Offered Cash Payment for Discharged Union Supporter to Waive Remedial Reinstatement: NLRB | Practical Law

In Shamrock Foods, the National Labor Relations Board (NLRB) concluded that an employer's cash payment offer to a fired union-supporting employee conditioned on the waiver of his remedial reinstatement was not unlawful.

Employer Lawfully Offered Cash Payment for Discharged Union Supporter to Waive Remedial Reinstatement: NLRB

by Practical Law Labor & Employment
Published on 14 Jan 2020 • USA (National/Federal)
In Shamrock Foods, the National Labor Relations Board (NLRB) concluded that an employer's cash payment offer to a fired union-supporting employee conditioned on the waiver of his remedial reinstatement was not unlawful.
On January 8, 2020, in Shamrock Foods, the majority of the panel (Board) heading the NLRB's judicial functions concluded that the employer did not violate Sections 8(a)(1) and 8(a)(3) of the NLRA by reaching a settlement agreement requiring an employee whose employment had been unlawfully terminated because of his union activity, to waive his remedial reinstatement in exchange for $214,270.30. The Board:
  • Noted that following factors offered a colorable basis for holding that the employer's settlement offer was unlawful:
    • the employer unlawfully discharged the individual;
    • the individual was an active and well-known union supporter after his termination;
    • the employer did not contest the NLRB-ordered remedial reinstatement using common objections such as that the individual's work performance was deficient or that his reinstatement would cause friction with other employees or with management;
    • the employer reasonably would have viewed the individual as a union campaign leader by the time he was ordered reinstated and would have recognized that whether the individual returned to work would have a dramatic impact on the campaign;
    • record evidence suggested that the employer was committed to preventing the individual from returning to work, even temporarily, based on a federal district court's interim injunctive order;
    • record evidence showed that fewer employees sign union authorization cards after the individual did not return to work because of the settlement;
    • the employer was willing to pay the individual in the settlement more than four times what he would have received under the NLRB's remedial order; and
    • the employer introduced no evidence regarding the motive behind its substantial settlement offer besides the settlement agreement's terms.
  • Noted that:
    • The Board has long recognized public policy favors compromise and settlement of unfair labor practice (ULP) charges and letting parties' settlements stand; and
    • there is nothing inherently unlawful about a settlement in which an employee waives reinstatement in exchange for an enhanced remedial payment from the employer. The Board has approved many of those settlements.
  • Held that the Board must review the lawfulness of the settlement offer using the mixed motive analysis under Wright Line rather than the Independent Stave non-Board settlement analysis since the complaint alleged that the settlement agreement violated Section 8(a)(3) (see Wright Line, 251 N.L.R.B. 1083 (1980), enforced, 662 F.2d 899 (1st Cir. 1981), cert. denied 455 U.S. 989 (1982) and Independent Stave Co., 287 N.L.R.B. 740, 743 (1987)).
  • Held that the public policy of favoring ULP settlements and the following factors support dismissing the ULP complaint allegation that the settlement offer was unlawful:
    • the employer's offer was not conditioned on a prospective waiver of Section 7 rights. The settlement required only an agreement not to resume employment;
    • record evidence showed that the individual independently negotiated with the employer, was not coerced into entering into the agreement, and had the option of refusing any settlement offer; and
    • the settlement payment resolved multiple claims the individual alleged against the employer, including a disability claim filed with the EEOC. There was a colorable argument that the settlement was a bona fide settlement of multiple claims.
(369 N.L.R.B. No. 5 (Jan. 8, 2020).)
Shamrock Foods demonstrates that an employer may lawfully make a monetary offer to the employee in exchange for waiver of an NLRB reinstatement remedy. The Board closely scrutinizes the totality of circumstances surrounding a settlement offer and lets stand settlements that do not require employees to waive Section 7 rights under the NLRA or interfere with the NLRB's interests in protecting those rights.