Stronger NLRB Refusal-to-Bargain Remedies Wait for Perfect Case

National Labor Relations Board General Counsel Jennifer Abruzzo is doubling down in her hunt for the perfect case to overturn a Nixon-era precedent limiting the agency’s power to impose monetary damages on companies that unlawfully refuse to bargain with unions.

Labor law attorneys, though, say finding a suitable case to overturn the 1970 Ex-Cell-O decision and give the agency stronger remedy powers could be difficult before the 2024 presidential election.

Two cases in the last year could’ve been a vehicle but failed—one involving Starbucks Corp. in which the NLRB’s Democratic majority declined to issue a decision, and another involving a New York veterinary hospital that settled before it reached the board.

NLRB attorneys argued in the now-settled Pathway Vet Alliance LLC case that the board can force companies to compensate workers for what they could’ve earned with good-faith negotiations. This remedy would be limited to the consideration of past damages and wouldn’t bind them to future contract terms.

In the case involving machines manufacturer Ex-Cell-O Corp. and the United Auto Workers union, the board ruled that it can’t force companies or unions to accept provisions of a collective bargaining agreement.

It’s not unusual for the agency to cast a wide net for precedent changes, and Abruzzo is trying to ensure the agency has a solid case that will stand up to the board’s examinations, said Daniel Dorson, an associate at Faegre Drinker Biddle & Reath LLP. He added that the board will be more likely to reexamine a precedent with a case that has similar facts to the precedential one.

“There are a lot of refusal to bargain charges out there but to have something successful here, I think they’ll need to find a test of certification case,” Dorson said. “The general counsel wants to be confident that they can go before the board and say ‘we’ve got a case that’s almost identical to Ex-Cell-O and we need to revisit this.’”

Adding to the pressure of finding the right case is the possibility of a Republican president taking the White House in 2024, which could change the makeup of the NLRB.

Perfect Case Elusive

Abruzzo will be looking for a case where the employer admits to refusing to bargain because it’s contesting a representation election, Dorson said.

The National Labor Relations Act doesn’t give parties a path to contest election results before the NLRB. If an employer wants to fight a representation election beyond the regional director, it can refuse to bargain with the union, leading to an unfair labor practice charge.

In overturning Ex-Cell-O, the board also will have to set a benchmark for how much workers can be compensated. In their Pathway Vet Alliance briefs, agency lawyers said the board should look to comparable contracts in similar unions, which could pose another sticking point.

“It’s very hard to say definitively whether both parties would have agreed to these terms and wage increases,” Dorson said. “The board can’t force a contract onto the parties and in a way, this is sort of an acknowledgment of what the parties would have agreed to if they were bargaining. So the speculation there is going to be difficult to overcome.”

One prior potential vehicle was a case involving Siren Retail Group, a Starbucks subsidiary that refused to negotiate with Starbucks Workers United after a bargaining unit of about 100 baristas was certified at the company’s downtown Seattle roasteries.

Starbucks argued before the board that the unit should have been expanded to include all baristas in the area, not just baristas in the roastery.

The board issued summary judgment for the union in the Siren Retail case, but declined Abruzzo’s request to overturn Ex-Cell-O. The three-member panel instead said they would set the issue aside and release a supplemental decision at an unspecified later date.

Starbucks ignored the board’s order to bargain, prompting the NLRB to file for court enforcement. The coffee giant is currently fighting that order in the US Court of Appeals for the Ninth Circuit.

‘Devastating for Workers’

Benjamin Berger of Barnard Iglitzin & Lavitt LLP, who represents the union, said Starbucks is a prime example of a company taking advantage of the board’s inability to order remedies for refusing to bargain.

“The momentum from that initial drive dissipates over time and I think Starbucks knows that,” Berger said. “They’re looking for any tactic that will delay bargaining long enough so they can hire new workers to mold in the company image while all of this is tied up in court.”

Starbucks continues to deny any wrongdoing amid mounting pressure from the NLRB and Congress.

Overturning Ex-Cell-O is critical to dissuading companies from refusing to bargain with unions, some labor scholars say. The board’s current remedy for refusing to bargain is an order for the company to bargain, which needs a separate court order to be enforced.

Rosemarie Cipparulo, assistant professor at the Rutgers University School of Management and Labor Relations, said remedies now available to the board in these cases are “practically useless.”

“The only remedy is an order for the company to do what they were supposed to do already. It’s ridiculous,” she said. “This is why it’s so easy for employers to break the law and it’s devastating for workers.”

But those who oppose Abruzzo’s moves say an expanded Ex-Cell-O remedy leaves no room for employers to object to representation elections.

“If an employer genuinely thinks something happened that warrants a challenge to a representation petition, they would have to bear the risk of paying pretty substantial damages,” Dorson said. “A lot of things can go awry during an election and if this is overturned, employers will have to think really hard about whether they want to challenge certification even if they have good reasons to do so.”