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NLRB Clarifies Remedies for Applicants in Refusal-to-Hire Cases
Practical Law Legal Update w-005-0635 (Approx. 6 pages)
NLRB Clarifies Remedies for Applicants in Refusal-to-Hire Cases
by Practical Law Labor & Employment
| Law stated as of 10 Oct 2019 • USA (National/Federal) |
In Aerotek, Inc., the National Labor Relations Board (NLRB) held that when an employer discriminatorily fails to hire a job applicant based on his union involvement, remedies include backpay and instatement, even if the applicant engaged in conduct disloyal to the employer after being denied employment, remedial notices mailed to applicants, and employee rights statements included on job applications and advertisements.
On December 15, 2016, in Aerotek, Inc., the majority of the panel (Board) heading the NLRB's judicial functions held that when an employer discriminatorily fails to hire a job applicant based on his union involvement, remedies should be implemented that make employees and applicants aware of their statutory right to protection from discrimination under the NLRA. These remedies include a remedial notice mailed to all applicants, an employee rights statement on job applications and advertisements, and backpay and instatement of applicants who were unlawfully denied employment. (365 N.L.R.B. No. 2 (Dec. 15, 2016).)
Background
Four union members, Brett Johnson, Tim Hendershot, Alan Winge, and Tom Jankowski applied for electrician jobs with Aerotek, a company that places individuals in employment in various industries, including construction. The four applicants were not hired and alleged that the discriminatory reason was their involvement in a union that competes with Aerotek in placing electricians with employers. In February 2012, after not receiving a reply to his Aerotek job application, Johnson visited one of Aerotek's major clients and offered, unsuccessfully, to have the union refer electricians directly to the client (removing Aerotek from the relationship).
Charges were filed alleging several NLRA violations. An administrative law judge (ALJ) concluded that:
- Aerotek violated Section 8(a)(1) and (a)(3) of the NLRA by failing to hire the four union members.
- Aerotek unlawfully told employees that wages were confidential and should not be discussed with other employees.
- Johnson's attempted solicitation of Aerotek's client to hire electricians referred by the union should disqualify him from instatement and full backpay.
- A specific notice must be posted and distributed electronically to ensure that employees and applicants are aware of their unionization rights.
Aerotek and the NLRB General Counsel filed exceptions to the ALJ's decision.
Outcome
The Board panel unanimously (Chairman Pearce and Members McFerran and Miscimarra) held, in agreement with the ALJ's conclusion, that:
- Aerotek violated Section 8(a)(1) and (a)(3) of the NLRA by failing to hire the four union members.
- Aerotek unlawfully told employees that wages were:
- confidential; and
- not to be discussed with other employees.
However, the majority and dissent disagreed regarding:
- Johnson's entitlement to the full remedy.
- The remedial notice the Board should require.
Johnson's Entitlement to a Full Remedy
Contrary to the ALJ's finding, the Board's majority (Chairman Pearce and Members McFerran) concluded that Johnson's attempt to solicit one of Aerotek's clients to hire electricians referred directly from the union hiring hall did not disqualify Johnson from instatement and full backpay. The majority noted that:
- No previous decision addressed a situation where an applicant for employment engaged in arguably disloyal conduct after the prospective employer had unlawfully refused to hire him.
- Current employees have a duty of loyalty to their employer, and a violation of this duty may constitute unprotected activity (NLRB v. Electrical Workers Local 1229 (Jefferson Standard), 346 U.S. 464 (1953)).
- In keeping with this duty of loyalty, the Board has held that where an employee has been unlawfully discharged:
- remedial reinstatement may be denied if the employer proves that the employee engaged in "misconduct so flagrant as to render the employee unfit for further service, or a threat to efficiency in the [workplace]"; and
- an employer has a higher burden ("unfit for further service") concerning employee misconduct that occurs after an unlawful discharge than before the discharge because it is natural for an employee that was wrongfully terminated to "react with some vehemence to an unlawful discharge."
The Board found that:
- Johnson had some duty of loyalty to Aerotek and behaved disloyally.
- The heightened "unfit for further service" test that the Board applies when an unlawfully discharged employee has engaged in post-discrimination misconduct is also appropriate in determining whether instatement was appropriate in Johnson's case.
- It could not find Johnson "unfit for further service" because:
- given Johnson's suspicion that he had been unlawfully denied employment, his seeking to turn clients away from Aerotek might have been a natural and reasonable response; and
- nothing about Johnson's conduct reasonably tended to suggest that this disloyal conduct would continue if he were instated to employment with Aerotek.
In dissent, Member Miscimarra:
- Agreed with the ALJ that Aerotek should not be required to employ Johnson, who sought to injure the company's business interests. Miscimarra noted that:
- the Board has held that employers are not required to employ individuals who attempt to interfere with their business interests (North American Dismantling Corp., 341 N.L.R.B. 665, 666 (2004); ATC/Forsythe & Associates, 341 N.L.R.B. 501, 503 (2004)); and
- the Board has applied these principles to job applicants in a refusal-to-hire case (see Five Star Transportation, Inc., 349 N.L.R.B. 42 (2007)).
- Found that regardless of whether the "unfit for further service" standard applied, Johnson's conduct should have disqualified him from instatement and backpay.
Remedial Notice
Contrary to the ALJ's finding, the Board's majority (Chairman Pearce and Members McFerran) held that:
- The ALJ's required posting of remedial notice in the usual locations and electronically should be modified because:
- the discrimination affected job applicants, who may not even have the opportunity to visit Aerotek's facility or access internal electronic media; and
- most electricians hired by Aerotek are referred out to work at worksites and may never see notices posted at the facility.
- Aerotek must, for any advertised electrician positions in the region serviced by the facility:
- mail copies of the remedial notice to all individuals who applied on or after July 29, 2011 (the day after Johnson applied for a job at Aerotek); and
- include for six months a statement at the beginning of Aerotek's job applications and advertisements regarding Aerotek's compliance with the NLRA.
In dissent, Member Miscimarra argued that:
- The Board's standard remedy is to require notice mailing if the respondent has gone out of business or closed the facility where the unfair labor practice occurred, which did not occur with Aerotek.
- The extraordinary remedy of requiring Aerotek to prominently post an employee rights statement at the beginning of its job applications and ads has only been ordered in two other cases, both of which were distinguishable from Aerotek (see Tradesmen International, 351 N.L.R.B. 399 (2007) and KenMor Electric Co., 355 N.L.R.B. 1024 (2010)).
Practical Implications
In Aerotek, Inc., the Board ordered unprecedented remedies for applicants that an employer unlawfully refused to hire because of their union involvement. First, the Board required an employer to mail remedial notices to applicants and include an employee rights statement on job applications. Additionally, the Board required the employer to hire an applicant that (after he was unlawfully denied employment) engaged in conduct intended to hurt the employer's business interests. Employers should be aware of these potential remedies in refusal-to-hire cases, as well as the high standard an employer must meet to show that an applicant who engaged in disloyal conduct (after being unlawfully denied employment) was unfit for service.
UPDATE: On October 10, 2019, the a three-member panel of the Board, on remand from the US Court of Appeals for the Eighth Circuit, accepted the court's opinion as the law of the case and:
- Found that Johnson was not entitled to instatement or full backpay.
- Issued a new order limiting the backpay to the period of time from the discrimination until the date Aerotek became aware that Johnson had solicited one of Aerotek's clients to accept referrals directly from the union hiring hall.