Second Circuit Raps Novelis, NLRB in Labor Dispute

MANHATTAN (CN) – Finding unclean hands all around, the Second Circuit ruled Thursday that an aluminum plant in upstate New York unfairly discouraged unionization with threats and incentives, but federal officials wrongly tried to enforce a bargaining order to remedy the violations.

Saying that the correct move would have been to mandate another election, the ruling says the National Labor Relations Board failed to “sufficiently account for employee choice” when it imposed a bargaining order between Novelis Corporation and a metal workers’ union.

The dispute began in late 2013 when an aluminum plant Novelis operated in Oswego, New York, announced it was no longer offering employees premium pay for working Sundays or overtime pay for working on holidays and during vacation.

One employee in turn began working on a union-organizing campaign with the local president of the Unite Steel, Paper, and Forestry, Rubber, Manufacturing, Energy, Allied Industrial, & Service Workers International Union. Soon about two dozen employees started organizing and obtained pro-union signatures from the majority of eligible employees.

After the union sought voluntary recognition from Novelis in January 2014, however, the company announced it had reversed its position on the premium pay and overtime. Ultimately a number of employees requested the return of their signed union-authorization cards, and Novelis declined to recognize the union.

The following month, Novelis managers warned employees that a unionized Novelis plant in Canada had closed while a nonunionized plant in Chicago had remained open.

A vote on unionization was held in late February 2014, with Novelis closely prevailing 287-273.

The employee who had started the campaign, Everett Abare, posted a Facebook statement calling those who had voted against unionization “F*#KTARDS” and said the election gave Novelis a chance “to screw us more.”

After seeing the post, Novelis demoted Abare. The union then filed a lawsuit against the company, attributing Abare’s demotion to his pro-union activities and citing other violations of labor law.

An administrative law judge and later the U.S. District Court for the Northern District of New York found Novelis had threatened pro-union employees — including Abare, whom the company eventually reinstated — and conducted a number of other unfair labor practices.

Finding that the unfair labor practices were not overwhelming, however, the district judge refused to issue an interim bargaining order.

Additionally, Novelis filed exceptions with the NLRB, stating that a change of circumstances causes by employee and management turnover had since made a bargaining order inappropriate. Four employees filed for intervention in support of the company.

Ultimately, the NLRB found that Novelis’ threats and its restoration of Sunday premium pay and holiday pay had been attempts to thwart pro-union support among employees, and it issued an order requiring the company to bargain with the union and reinstate Abare.

In its opinion today, a three-judge panel with the Second Circuit affirmed that Novelis’ carrot-and-stick approach had violated labor laws.

“We have cautioned that employees are not likely to miss the inference that the source of benefits conferred is also the source of benefits denied,” U.S. Circuit Judge Barrington Parker wrote of the company’s reversal on Sunday and holiday pay.

Parker also wrote that Novelis had violated labor practices by demoting Abare following his Facebook post, which was protected as “concerted” speech aimed at initiating group action.

The Manhattan-based appeals court found as well, however, that the NLRB had gone too far to fix the labor violations when it issued a bargaining order instead of requiring a new election.

Parker wrote that a bargaining order is a “rare remedy” intended for when such other remedies as secret ballot election reruns fall short.

“Ironically, a bargaining order may unintentional undermine the employee rights it seeks to uphold,” he wrote. “The preference for elections reflects the important policy that employees should not have union representation imposed on them when, by exercise of their free will, they might choose otherwise.”

Parker noted that the Second Circuit has elected before to vacate NLRB-issued bargaining orders in cases of employee turnover, and pointed out that the district judge had also found a bargaining order “a bridge too far because it did not believe that such an order best reflected employee choice.”

Novelis was represented by Kurt Powell at Hunton & Williams in Atlanta, Ga. He did not return an email seeking comment, but Novelis spokeswoman Fiona Bell said the company was pleased with the ruling and that it looked forward to “continuing to partner with our employees.”

A spokesperson for the NLRB declined to comment.

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