Pay Increase Made to Avoid Union May be Unlawful
October 1, 2006
by Employment & Labor Law / Employee Benefits Group
Stinson Morrison Hecker LLP
Copyright © 2006
A company’s decision to increase their employees’ pay or benefits, in part because it wants to stay "one step ahead" of a union, may be unlawful, depending on the timing of the increase and the company’s knowledge of any union organizing activities, according to an August 31, 2006 decision by the National Labor Relations Board (Board). Hampton Inn NY-JFK Airport.
Unlawful if Union Election is Pending – It has long been held that "the conferral of employee benefits while a representation election is pending, for the purpose of inducing employees to vote against the union," interferes with the employees’ protected right to organize, and is unlawful.
Unlawful if Knowledge of Union Activity – The rule set out above is also applicable to "promises or conferral of benefits during an organizational campaign but before a representation petition has been filed." For example, a pre-petition announcement and promise to improve wages or benefits is unlawful if the company is reacting to knowledge of union activity among its employees.
Lawful if No Knowledge of Union Activity – "Where it cannot be established that the employer knew of union activity, the Board has not found unlawful the grant or announcement of economic benefits." Accordingly, "it is not unlawful for a nonunion employer to improve working conditions in an attempt to reduce the general appeal of unionization when no union is actively organizing."
- Focus of Inquiry – "Thus, to find an employer’s promise of economic benefits unlawful, the Board must focus on whether the [employer] intended to interfere with actual union organizational activity among its employees, rather than whether the [employer] wanted to stay 'one step ahead' of the union by diminishing the appeal of unionization."
- Knowledge is Required – To be unlawful, "a promise of benefits must be more than coincidentally made after organizing has commenced; it must be made in specific response to organizing. Consequently, employer knowledge of union activity is an essential element" of a violation. "Thus, the law makes a clear and appropriate demarcation between a general desire to remain nonunion and a specific intent to interfere with an ongoing campaign."
Bottom Line – Employers are well advised to periodically review the competitiveness of their wage and benefit structure, and to develop and utilize effective employee communication strategies, in order to timely respond to workplace issues prior to the start of any union organizing activity.
Stinson Morrison Hecker LLP is one of the country's largest law firms with more than 335 attorneys in more than 45-industry-focused areas. If you would like more information regarding this summary, please contact one of our Employment & Labor Law and Employee Benefits attorneys.
Law at Work is designed to give general information and is not intended to be a comprehensive summary or to treat exhaustively the subjects and matters covered. The information appearing herein does not constitute legal advice or opinions. Such advice and opinions are provided only upon engagement with respect to specific factual situations. Nothing contained herein shall be considered as an admission in any matter or controversy.
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