Summary of a Recent
Judicial Development in
Ag Labor

Employer Did Not Violate the National Labor Reform Act
in Delaying Reinstatement or Limiting Overtime

Walt McCarter
National AgLaw Center Research Associate

Summary of Decision

In Fresh Fruit and Vegetable Workers Local 1096 v. National Labor Relations Board, 539 F.3d 1089 (9th Cir. 2008), the Ninth Circuit Court of Appeals held that an employer had substantial and legitimate business justifications for delaying reinstatement of locked-out employees for one month after a lock-out period of 14 years, and that treating the reinstated employees as new employees for overtime purposes was reasonable and logical, considering the new processes and technology that had been implemented during their 14-year absence.

Background

Employees of Bud Antle, Inc., a vegetable processing and distributing company, went on strike in 1989, and in response Bud Antle locked out its union employees and hired replacements. Id. at 1093. The lockout continued for 14 years. Id. In 2003, the Teamsters Union held an election in which temporary and striking employees voted not to be represented by a union, and Bud Antle subsequently offered reinstatement to the locked out employees with positions based on their pre-lockout seniority. Id. The offer was made on December 15, 2003, and the returning employees were to start back on February 23, 2004. Id. Twenty-four out of 133 eligible employees indicated they would return, but only eight actually did. Id. The returning employees had to complete a four-week training period with limited overtime, as was customary for new employees. Id. at 1094. The Union filed complaints against Bud Antle for not reinstating the locked out employees sooner and for the limitation on overtime. Id.

An administrative law judge found that Bud Antle had violated the National Labor Relations Act (NLRA) because it did not have a substantial and legitimate business justification for the delay in reinstating the formerly locked out employees, and because treating the returning employees as new employees for purposes of overtime was "inherently destructive" of their statutory rights, and ordered Bud Antle to make whole all 24 employees who had applied for reinstatement. Id. Upon review, the National Labor Relations Board found that Bud Antle was justified in delaying the employees' reinstatement from December 15 to January 22, but that the additional delay from January 23 to February 23 was not supported by a substantial and legitimate business justification. Id. The Board also found that the limitation on overtime was not "inherently destructive" of the employees' statutory rights and that the company had legitimate and substantial business reasons for doing so, and only ordered relief for the eight employees who actually returned to work. Id. at 1095. The Union appealed the decision. Id.

Arguments

The Union argued that Bud Antle violated NLRA because its delay of reinstatement and limited overtime was "inherently destructive" of the employee's statutory rights because only the locked out employees, and not the replacement employees, suffered "the adversities of being kept out of work." Id. at 1096.

Analysis and Holdings

The court explained that if the natural tendency of the employer's actions is to severely "discourage union membership while serving no significant employer interest," then the conduct is "inherently destructive" and discriminatory. Id. at 1097. The court reasoned that the one-month reinstatement delay was relatively short compared to the 14-year lockout period, and so it was less likely that employees would have viewed the delay as punishment for a union activity, and moreover that it was reasonable to anticipate that many of the locked out employees would need some time to prepare for the transition. Id. The court found that the delay was supported by substantial and legitimate business justifications, and thus Bud Antle did not violate the NLRA. Id. at 1097-100. The court likewise concluded that that the overtime policy was reasonable and justified, and also found that it had only a minimal effect on the rights of the employees. Id. at 1100-01. Regarding the Board's remedy, the court pointed out that the Board cannot impose back pay remedies based on speculation, so the Board was correct to award back pay only to those who were demonstrably harmed by the labor violation. Id. at 1101-02.

The case was decided on August 21, 2008.