Board Order Enforced on Secret Permanent Replacements

Way back in 2006, we posted on the Church Homes case, in which the Second Circuit rejected the NLRB's conclusion that an employer's secret hiring of permanent replacements did not suggest an independent unlawful action under Section 8(a)(3).  On remand, the Board found that the secret hiring did violate Section 8(a)(3).  The Second Circuit has recently denied the employer's petition for review of this order:

The Board appropriately recognized that the logical inference to be drawn from Avery’s [the employer's] secrecy, absent evidence of a legitimate purpose or credible explanation for the secrecy, was that Avery intentionally concealed its hiring of permanent replacements to remove Union members from its workforce and thereby break up the Union.  The Board reasonably determined that neither Avery’s assertion of good faith in bargaining nor its actions subsequent to the secret hiring of replacements effectively rebutted the inference that the secret hiring was illegitimate under the circumstances. . . .

Avery contends the Board improperly shifted the burden of proof onto it. In support of the argument, it cites a footnote in which members of the Board, who concurred only reluctantly in the Board’s disposition, asserted that our Court had shifted the burden and expressed disagreement with that action. In Church Homes I [the original case], we did not shift the burden to the employer. We rather ruled that Avery’s secrecy, unless rebutted, supported an inference of an independent unlawful purpose through which the General Counsel could carry the burden of proving violation of the Act.

As we understand the Board’s opinion, it correctly placed the burden of proving a violation of the Act on the General Counsel. Member Walsh noted in the same footnote that Avery’s secrecy “is probative of whether the decision to replace the strikers was motivated by an independent unlawful purpose.”  The Board found that the General Counsel sustained his burden of proving Avery’s violation by putting forth evidence of Avery’s secrecy which, when inadequately rebutted by Avery, supported an inference of independent unlawful purpose.

This may represent one of a dwindling number of cases in which circuit courts reverse or drag the NLRB in a direction more favorable to unions.  Once the new Obama Board is in place and starts issuing orders, get set for more cases in which the court pushes back in a more pro-employer direction.

-JH