In HTH Corp. (Pacific Beach Hotel), the National Labor Relations Board (NLRB) affirmed the findings of an administrative law judge (ALJ) that the employer engaged in a series of pervasive and egregious unfair labor practices (ULP). The NLRB sua sponte imposed unprecedented remedies and enforcement measures. The NLRB also found that it could award front pay in lieu of reinstatement but declined to order that additional unprecedented remedy for an employee who was repeatedly targeted by the Hotel for engaging in protected activity.
On October 24, 2014, in HTH Corp. (Pacific Beach Hotel), the panel (Board) heading the NLRB's election and judicial functions affirmed the findings of an NLRB administrative law judge (ALJ) that the employer committed a series of pervasive and egregious unfair labor practices (ULP). Observing that the employer previously committed multiple other ULPs, engaged in objectionable conduct that interfered with two NLRB elections and failed to comply with two federal district court injunctions that the NLRB obtained under Section 10(j) of the NLRA, the Board sua sponte imposed unprecedented remedies and enforcement measures. The NLRB also found that it could award front pay in lieu of reinstatement but declined to order that additional unprecedented remedy for an employee who was repeatedly targeted by the Hotel for engaging in protected union activity. (361 N.L.R.B. slip op. 65 (Oct. 24, 2014).)
On August 15, 2005, the International Longshore and Warehouse Union, Local 142 was certified as the bargaining representative for a group of the hotel’s employees. Before the certification, the hotel engaged in many ULPs and extensive objectionable conduct causing the Board to twice overturn election results and rerun an election.
After the certification, the hotel continued to commit numerous egregious ULPs. The union filed separate ULP charges with the NLRB which were consolidated for trial.
An ALJ issued a decision and recommended order, finding that the hotel violated:
Section 8(a)(1) of the NLRA by:
advising union members that two union representatives were prohibited from entering the Hotel’s property;
conducting surveillance of employees engaging in protected union activities; and
threatening to remove a union representative from a public sidewalk because he was engaging in lawful leafleting.
Section 8(a)(3) and (1) of the NLRA by unlawfully warning, suspending and ultimately terminating an employee because he was a union activist.
Section 8(a)(1) and (5) of the NLRA by:
unilaterally ceasing matching contributions to employees' 401(k) plans;
unlawfully barring two union representatives from entering the Hotel’s property despite an agreed-on access policy and past practices;
unilaterally changing the union members employment terms and conditions; and
refusing to provide requested information and records to the union.
The hotel filed exceptions to the ALJ’s findings with the Board.
The five-member panel of the Board (Chairman Pearce and Members Miscimarra, Hirozawa, Johnson and Schiffer) unanimously affirmed the ALJ's findings that the Hotel committed numerous egregious and pervasive ULPs, applying slightly different analyses to reach the same liability conclusions. The panel also unanimously approved of:
Standard Board remedies, such as:
rescission of unlawful or unilaterally imposed employment rules or practices;
make whole remedies to harmed employees, including reinstatement, backpay and restoration of lost benefits;
an order to cease and desist from bargaining in bad faith, including by refusing to bargain about mandatory subjects, unilaterally changing mandatory terms and refusing to provide relevant requested information to the union; and
an order to cease and desist from disciplining employees for their union or other concerted activities.
Enhanced remedies for extreme misconduct, including:
an affirmative bargaining order;
requiring the employer to reimburse the union for collective bargaining costs incurred because the of the employer's bad faith;
requiring the employer to mail the Board's remedial notice and decision to employees;
requiring a management representative to read the Board decision and order aloud to employees in the presence of an NLRB agent and union agent;
requiring the employer to provide the union access to its premises, consistent with past practices or contractual rights; and
requiring that the employer provide NLRB agents access to its premises to inspect and confirm compliance with the Board's order.
However, a three-member Board majority (Chairman Pearce and Members Hirozawa and Schiffer) sua sponte ordered the following unprecedented enhanced remedies and enforcement measures:
Requiring the hotel to pay:
the NLRB General Counsel’s litigation fees and costs;
the union's litigation fees and costs;
the union's fees, expenses and associated per diems for bargaining; and
the unspecified non-litigation and non-bargaining union fees and costs associated with the employer's ULPs including its denial of union representatives' access to its premises.
Posting the notice, NLRB’s Decision and Order, and an Explanation of Rights in the Hotel for a period of three consecutive years.
Mailing the notice, NLRB’s Decision and Order, and an Explanation of Rights to the homes of supervisors, managers, and both past and present Hotel employees, within 14 days.
Requiring the notice and the Explanation of Rights to be given to new employees, supervisors and managers for a period of three consecutive years.
Requiring general publication of the notice and Explanation of Rights in two local publications of “broad circulation and local appeal” twice a week for 8 weeks.
Requiring the reading of the notice and Explanation of Rights to all employees, and requiring the attendance of all employees at the meetings where the readings will take place.
Requiring the hotel to allow a "duly-appointed Board agent" to enter the hotel for a period of three years to ensure compliance with the "posting, distribution mailing requirements."
The Board majority also found that to protect the integrity of its election and ULP processes, it could award front pay in lieu of reinstatement for an employee who it found had been the subject of repeated discrimination and retaliation for engaging in protected union activity, and twice terminated. The majority declined to award this unprecedented remedy in this case.
Member Johnson concurred with the majority that:
The hotel's ULPs warranted some extraordinary remedies.
The issue of front pay should be addressed in a future case where the issue was actually raised in the litigation by the parties.
While Member Johnson concurred with the majority that the case warranted extraordinary remedies, he dissented from much of the remedial order and argued that many of the remedies imposed by the majority exceeded the limits of the make-whole relief permitted under the NLRA and were therefore unlawfully punitive, because:
Awarding litigation costs to the NLRB's General Counsel or the union is beyond the Board’s statutory authority as Congress did not expressly authorize such actions in the NLRA.
Awarding payments to the union for the exclusion of union representatives from the hotel is unwarranted because such actions are not similar to a persistent bad-faith bargaining violation.
The imposed three-year periods are excessive and punitive, and the Board is unable to cite to any administrative agency's remedial order to support its extensive notice and compliance period.
Requiring publication of the notices in newspapers is both excessive and punitive considering:
the Board's extensive notice and compliance requirements; and
the absence of any showing that the employees cannot be reached by the Board’s imposed requirements of postings, readings and mailing of the notices.
Member Johnson refrained from opining on the Board's authority to award front pay.
Member Miscimarra concurred with the majority that the hotel is a recidivist offender, warranting many of the standard remedies and enhanced remedies for aggravated conduct.
However, in dissent, Member Miscimarra argued that:
Awarding attorney's fees is outside the Board’s remedial authority under the NLRA because:
Congress intentionally decided not to authorize "fee-shifting" in the NLRA evidenced by the absence of statutory authorization to recover such fees and the presence of "fee-shifting" in other statutes authorized by Congress;
the NLRA does not require a party to retain an attorney when pursuing Board charges and complaints;
unlike other statutes that expressly provide for the payment of attorney fees, the NLRA does not confer a private right of action or right to those fees for pursuing a cause of action;
the NLRA has no provision permitting the NLRB to recover its own attorney's fees from private parties; and
the Board does not have “inherent authority” to award attorney's fees as the structure and language of the NLRA demonstrates Congress's intent not to allow the Board to award such fees.
The Board's endorsement of front pay in lieu of reinstatement is a "radical departure" from the Board’s traditional remedies.
The Board erred in relying on the Supreme Court decision in Pollard v. E. I. du Pont de Nemours & Co. to support the award of front pay (532 U.S. 843 (2001)).
Member Miscimarra also noted that the Board should not use enhanced remedies and enforcement measures as compensation for its own failure to pursue contempt proceedings against the Hotel.
In Pacific Beach Hotel, the Board majority expanded the array of remedies it may order in ULP cases. This case was certainly an extreme case involving a recidivist employer committing many ULPs over the course of ten years. However, it likely will open the door for the Board to impose previously unprecedented remedies and will be the starting point for arguments that the Board may award front pay in lieu of reinstatement based on the Board's purported "inherent authority" to craft novel, non-statutory remedies to protect the integrity of its processes.
The decision in part runs counter to circuit court precedent circumscribing the Board's remedial authority and imposes many remedies that the parties did not seek. It will likely be appealed. However, employers should recognize that, in the meantime, the Board majority is continuing to expand the types of remedies it orders, all couched as equitable relief or relief necessary to preserve the integrity of NLRB processes.