ContractsProf Blog

Editor: Jeremy Telman
Oklahoma City University
School of Law

Tuesday, October 8, 2024

Eleventh Circuit Upholds NLRB Decision Requiring Corporation to Hire Union Workers

TK Global (TK) was hired to provide pipefitting services in connection with the construction of a manufacturing facility in Commerce, Georgia.  In March, 2020, a representative from the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada, AFL-CIO (the Union) approached TK to ask if the company needed more workers for the job.  The initial answer was no, because the company had brought in its own work crews form Korea, but later in the project the company needed more workers.  

NLRB SealA Union representative offered to provide workers in exchange for the company's agreement to be bound by a collective bargaining agreement (CBA).  Among other things, the CBA provided that TK had the right to reject or terminate Union workers, but only with notice to the Union.  The CBA was a 62-page document, and TK's principal expressed some discomfort, but he signed it and returned it to the Union representative.  From there, the facts get complicated, but to sum it all up: TK hired some Union workers, terminated them due to language barriers between them and the Korean workers, and later hired some more Union workers.  The Union workers were compensated as provided for in the CBA.  

Troubles arose when TK hired a subcontractor to complete the job.  The Union then reminded TK that it had agreed to only hire through the Union.  TK claimed it had never agreed to any such thing.  The sub-contractor then advised TK to simply withdraw from or terminate the CBA and drafted the termination letter.  It did so and terminated all of the Union workers still on the site.

At that point the National Labor Relations Board (NLRB) got involved, charging TK with violations of the National Labor Relations Act (NLRA), specifically of 29 U.S.C. ยง 158(a)(1), (3), (5).  An Administrative Law Judge (ALJ) concluded that TK had violated the NLRA by terminating the CBA, either because it was bound by having signed the CBA or by its conduct. Second, TK violated the NLRA by firing the workers on a discriminatory basis and without consultation with the Union.  Third, TK's firing of the workers and refusing to rehire them violated the NLRA by conduct "inherently destructive of workers' rights" and by exhibiting an anti-union animus.  A panel of the NLRB affirmed the ALJ's conclusions.

11th CircuitIn TK Global, LLC v. Nat'l Lab. Rels. Bd., the Eleventh Circuit found that the  NLRB's ruling was supported by substantial evidence, and it thus affirmed the NLRB's decision.  The court first found that there was a binding agreement between the parties.  TK argued that it had never agreed to hire Union employees exclusively.  The facts could be viewed to support such a conclusion, but there was also substantial evidence going the other way, and that sufficed to satisfy the operative standard of review. 

Much of TK's argument hinges on their principals' poor English language skills and allegations of "cultural differences."  Courts routinely enforce contracts against ordinary employees and consumers who do not have the English language abilities or knowledge of the culture surrounding contracts of adhesion in the United States. I can't imagine why a court would take these arguments seriously in the context of a sophisticated business engaged in a large construction project.  If its principals lack language skills, the corporation clearly has the means to hire attorneys who can explain the terms to them.  Nonetheless, the court treats these arguments as colorable, just not enough to overcome the substantial support for  arguments on the other side.

https://lawprofessors.typepad.com/contractsprof_blog/2024/10/eleventh-circuit-upholds-nlrb-decision-requiring-corporation-to-hire-union-workers.html

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