• Appeals Courts Decisions Provide Employers Guidance for Policies to Deal with
  • September 19, 2004 | Author: John J. Matchulat
  • Law Firm: Baker, Donelson, Bearman, Caldwell & Berkowitz, PC - Nashville Office
  • Very recent decisions issued by two United States Circuit Courts of Appeals have upheld employers' hiring rules and policies which had been challenged by unions conducting "salting" campaigns.

    Since the U.S. Supreme Court's 1995 decision in N.L.R.B. v. Town & Country Electric Co., 560 U.S. 85, 150 LRRM 2897, professional union organizers as well as voluntary organizers (usually out-of-work union members not paid by their union) have been considered "employees" under the National Labor Relations Act. Since then, it has been considered unlawful for employers to refuse to consider for hire, refuse to hire, or fire known union organizers, called "salts", because of their union organizer status. Salts typically flaunt their union affiliation and membership during the application process by specifying their "union organizer" status on their applications, and often wear hats and apparel clearly signifying their union affiliation. The construction industry is most frequently the target of salting campaigns, where "overt" and "covert" salts are used to organize a contractor's employees. The union will then file charges when the salts are not hired, claiming that the employer's policies are structured to discriminate against union members, or otherwise have that same effect, or that they were not hired because of the employer's animosity to unions. NLRB decisions have often upheld union charges based on various types of policies which were either deemed "inherently" discriminatory or were applied inconsistently, thereby raising inferences of discriminatory conduct toward union members.

    Contractor's Labor Pool, a Nevada-based employer, is in the business of supplying construction workers on a temporary basis to numerous contractors in six western states. It implemented policies to carefully examine applicants' driving records and references. It also asked its applicants to specify an applicable wage rate. This was done to improve the applicant screening process. Its assumption was that applicants who previously had earned substantially higher wages soon would become dissatisfied and quit. The assumption was based on a worker retention study conducted in 1994, and provided the basis for rejecting applicants whose previous wages differed by 30 percent or more from the company's starting wage rate.

    On March 28, the United States Circuit Court of Appeals for the District of Columbia Circuit reversed a National Labor Relations Board ruling which held that the 30 percent rule had a discriminatory effect on union members and was "inherently destructive of workers' right to choose whether or not to join a union." (Contractor's Labor Pool v. N.L.R.B., D.C. Cir. No. 01-1393, 3/28/03). The circuit court found the Board's determination was logically flawed. The circuit court held that the Board erred because it was "indispensable to a determination of a violation of Section 8(a)(3) that the employer acted out of anti-union or pro-union motivation." The court found that the Board could not find the policy inherently disruptive if it was not motivated by union animus.

    A second case, decided the same day by the United States Court of Appeals for the Seventh Circuit, held that a road construction company's hiring system, which gives hiring preference to former employees and referrals from trusted sources, did not violate the National Labor Relations Act. The company, Brandt Construction Co., of Mylan, Illinois, has a hiring policy giving preference in hiring to employment applications filed by current and former employees, as well as individuals referred by current supervisors or employees. The company also gives hiring preference to applicants referred to it by equal employment opportunity service providers, pursuant to an agreement that it entered into with the Department of Labor in 1997. The company would fill open positions with the "preferred" applicants prior to considering of applications of any unknown or walk-in job applicants. On numerous occasions, union members wearing hats and other insignia applied for jobs with Brandt and indicated on their applications that they were union members. During the same period, the company hired a number of other workers who were either former employees, referred by supervisors, or provided by equal opportunity service providers. No union members were hired. The circuit court stated that despite their being some showing of anti-union animus by Brandt, the company showed that it would not have hired the pro-union salts based on its strict and consistent adherence to a non-discriminatory hiring policy. The court observed that pursuant to that lawful policy, the pro-union applicants were the last resort for the company and were lawfully denied employment.

    Lessons to be learned from these decisions are that implementation of rules such as the 30 percent pay differential rule, and consistently applied preferences being given to former employees and referrals by supervisors, can provide sound defenses for the employer confronted with problematic salting campaigns.