*Erin Turvey

I. INTRODUCTION

In 2021, American approval of labor unions reached the highest point since 1965.[1] During the first half of fiscal year (FY) 2022, union representation petitions[2] filed with the National Labor Relations Board (NLRB) increased by 57%.[3] Moreover, unions won more NLRB representation elections in the first half of FY 2022 than in FY 2021.[4]

At the same time, unionization has frequently been in the news as union organizing efforts have increased at large corporations such as Amazon, Apple, and Starbucks.[5] During organizing efforts, many workers alleged that these employers resorted to union-busting techniques.[6] Retaliation efforts against employees seeking to unionize include termination,[7] suspension,[8] preventing union organizers from speaking with employees,[9] threats,[10] and offering better pay and benefits to non-union employees.[11] The alleged anti-union activities have caused speculation regarding whether recent store closures have less to do with supposed labor shortages and decreased profits at certain locations, and more to do with chilling unionization efforts.[12] Ultimately, whether these closures are indeed illegal union-busting depends on the employers’ motive.[13]

II. AN EMPLOYER’S RIGHT TO CLOSE UP SHOP

In Textile Workers Union v. Darlington Manufacturing Company (Textile Workers Union), the Supreme Court held that, in relation to the unfair labor practices provision of the National Labor Relations Act (Act), “an employer has the absolute right to terminate his entire business for any reason he pleases.”[14] In such cases, the termination of an entire business is generally assumed to protect the employer from obligations under the Act.[15]

On the other hand, when an employer decides to close just a portion of their business (i.e., one or more locations in a chain or individual departments) while maintaining other portions, the employer may be committing unfair labor practices in violation of section 8(a)(3) of the Act.[16] The Court in Textile Workers Union reasoned that a discriminatory partial closing could affect the remaining business by giving the employer leverage to discourage the protected organizational efforts of remaining employees[17] who may become fearful of further closures if they seek to unionize.[18]

Accordingly, the Court held that the partial closing of a business is an unfair labor practice under section 8(a)(3) if the motivation is to “chill unionism” in the remaining locations and if the employer should have reasonably foreseen that the partial closing would likely have such an effect.[19] However, conclusory assertions alone are insufficient to establish that a partial closing is an unfair labor practice.[20] Rather, to amount to an unfair labor practice in violation of section 8(a)(3), there must be an affirmative showing that; 1) the partial closing was motivated by the employer’s desire to halt any unionization efforts of employees in remaining locations, 2) the closure did have such an effect on those employees, and 3) the effect was foreseeable.[21] When the effects are minimal, however, an employer’s non-discriminatory reasoning for such a partial closing is often accepted, regardless of its pretextual nature.[22]

III. RECENT PARTIAL CLOSURES

So far, 2022 has seen partial closures by numerous large employers.[23] Starbucks, for example, recently announced the closure of sixteen stores—two of which were newly unionized and one of which had petitioned for a union vote.[24] A popular organic frozen food company, Amy’s Kitchen (Amy’s), recently closed one of its production facilities, laying off around 300 workers.[25] While Amy’s alleged that the closure was due to economic reasons,[26] suspicions have arisen regarding the rationale, because workers at the closing location sought to unionize earlier this year in response to years of alleged unsafe working conditions.[27] Chipotle also recently closed one of its locations, just hours before a union representation election was scheduled to take place.[28]

Ironically, Chipotle’s stated reasoning for its partial closing was the same as the primary reason employees were seeking to unionize.[29] Chipotle could still be liable for unfair labor practices, however, if there is evidence that its motive was to thwart unionism in its remaining locations and if the NLRB finds evidence that the closure did have such effect on the remaining employees.[30] Similarly, in the cases of Amy’s and Starbucks, the companies could be held liable for unfair labor practices if their motivation for the closures stemmed from anti-union animus and a chilling of unionism elsewhere in the company was foreseeable.[31]

In determining an employer’s intent, the Supreme Court has noted that “specific evidence of [a] subjective intent”[32] to chill unionism is not necessary, rather when an “employer[’s] conduct inherently . . . discourages union membership,” the employer is “held to intend the foreseeable consequences of [it’s] conduct,”[33] as long as those consequences are “inherently destructive.”[34] Conversely, when the consequences are “comparatively slight” (such as a decrease in union membership alone) and the employer provides evidence of “legitimate and substantial business justifications for the conduct,”[35] discriminatory conduct is often exonerated, even if its foreseeable consequence is a chill of unionism.[36] Accordingly, if Chipotle, Amy’s, and Starbucks employees are unable to show that the effects of the partial closings extended beyond a decrease in union membership, the employers’ “financial” reasoning will likely be accepted.

IV. CONCLUSION

With American support of unions at the highest rate since 1965[37] and a substantial increase in union representation petitions,[38] the alleged union-busting tactics of well-known corporations have come to light.[39] Media coverage has led to speculation as to whether companies’ partial closures at newly unionized locations or where employees were in the process of unionizing were instances of illegal union-busting. While union-busting is arguably good for the bottom line, it infringes upon individuals’ rights to organize and collectively bargain. In an era where CEOs are making record profits,[40] it is imperative that the employees whose work helped achieve those profits are afforded the opportunity to organize and collectively bargain for better working conditions. Ultimately, if unfair labor practice complaints are filed, the issue will boil down to the employer’s motive behind the partial closure and the closure’s effects on the remaining employees.[41] While there is a strong likelihood that recent partial closings have in fact stemmed from anti-union animus and bad intentions, absent explicit evidence of motive and a clear showing of substantial union chilling among remaining employees, the arguably pretextual reasoning of these corporations will likely be accepted.

*Erin Turvey is a second-year evening student at the University of Baltimore School of Law, where she is a Staff Editor for Law Review, a teaching assistant for Introduction to Lawyering Skills/Civil Procedure I, a Law Scholar for Contracts I, and a Research Assistant for Professor Tiefer. After receiving her J.D., Erin hopes to work in public interest or labor law.

Photo Credit: Elliot Stoller (licensed under the Creative Commons Attribution-Share Alike 2.0 Generic license)

[1] Megan Brenan, Approval of Labor Unions at Highest Point Since 1965, Gallup: News (Sept. 2, 2021), https://news.gallup.com/poll/354455/approval-labor-unions-highest-point-1965.aspx. According to the poll, 68% of Americans approve of labor unions, Id.

[2] Union representation petitions are filed by employees, unions, or employers prior to the NLRB conducting an election. Union Election Petitions Increase 57% in First Half of Fiscal Year 2022, Nat’l Lab. Rel. Bd.: News & Publications (Apr. 6, 2022), https://www.nlrb.gov/news-outreach/news-story/union-election-petitions-increase-57-in-first-half-of-fiscal-year-2022.

[3] Id. The NLRB reported 1,174 petitions for union representation from October 1–March 31, 2022, compared to 748 during the same time frame in 2021. Id.

[4] NLRB Election Statistics: Mid-Year 2022 1, Bloomberg L. (August 2022), https://aboutblaw.com/4mG. In the first half of FY 2022, unions won 76.6% of the 837 elections conducted compared to 76.1% of the 465 elections held in the first half of FY 2021. Id.

[5] See generally Jennifer Elias & Amelia Lucas, Employees Everywhere Are Organizing. Here’s Why it’s Happening Now, CNBC (May 7, 2022), https://www.cnbc.com/2022/05/07/why-is-there-a-union-boom.html.

[6] See, e.g., Nitasha Tiku et al., From Amazon to Apple, Tech Giants Turn to Old-school Union-busting, Washington Post (Apr. 24, 2022), https://www.washingtonpost.com/technology/2022/04/24/amazon-apple-google-union-busting/; Henry Snow, Today’s Union-busters are Following a Centuries-old Playbook, The Washington Post (Sept. 14, 2022), https://www.washingtonpost.com/made-by-history/2022/09/14/todays-union-busters-are-following-centuries-old-playbook/.

[7] Caroline O’Donovan, Amazon Calls Cops, Fires Workers in Attempts to Stop Unionization Nationwide, Washington Post (June 13, 2022) (“In the two months since the ALU’s victory, more than half a dozen Amazon workers claim to have been fired in what they call an effort to intimidate others who might be interested in unionizing.”).

[8] Aaron Gregg, NLRB Accuses Starbucks of Retaliating Against Workers Seeking to Unionize, Washington Post (Mar. 16, 2022), https://www.washingtonpost.com/business/2022/03/16/starbucks-nlrb-complaint/.

[9] See Tiku et al., supra note 6.

[10] See, e.g., Id.; Amelia Lucas, Starbucks Union: Company Threatens That Unionizing Could Jeopardize Gender-affirming Health Care, CNBC (June 14, 2022), https://www.cnbc.com/2022/06/14/starbucks-union-company-threatens-that-unionizing-could-jeopardize-gender-affirming-health-care.html (Starbucks managers at one store allegedly threatened workers that unionization could worsen health care benefits, specifically gender-affirming health care benefits).

[11] Hilary Russ, Starbucks Adds Benefits for Non-union U.S. Workers Ahead of Investor Day, Reuters (Sept. 12, 2022) https://www.reuters.com/markets/us/starbucks-adds-benefits-non-union-us-workers-ahead-investor-day-2022-09-12/ (Starbucks has increased hourly pay and added student loan repayment tools for non-union employees).

[12] Aaron Gregg, Chipotle Closes Maine Store That Sought to Unionize, Washington Post (July 20, 2022), https://www.washingtonpost.com/business/2022/07/20/chipotle-union-maine-store-closure/. Just hours before a union representation election was scheduled to take place at a Chipotle in Maine, the employer notified workers that the location would be closing permanently, citing worker shortages as the root cause. Id.; Alexandra Martinez, Amy’s Kitchen Closes San Jose Facility After Workers Seek to Form a Union, Prism (Aug. 4, 2022), https://prismreports.org/2022/08/04/amys-kitchen-closes-san-jose-workers-organize/. In July 2022, Amy’s Kitchen, a well-known organic frozen food company, abruptly announced that it would be closing its factory in San Jose, California, where workers had been organizing, citing supply chain issues and decreased demand as reasoning for the closure. Id.

[13] Textile Workers Union v. Darlington Mfg. Co., 380 U.S. 263, 275 (1965) (holding that a partial closing motivated by the intent to chill unionism throughout the rest of the company is an unfair labor practice).

[14] Id. at 268. In the pertinent part, the unfair labor practices provision of the Act discussed by the Court states: “It shall be an unfair labor practice for an employer – (3) by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization . . .” National Labor Relations Act (NLRA), 29 U.S.C. § 158(a)(3).

[15] Textile Workers Union, 380 U.S. at 270–71.

[16] Id. at 274–75.

[17] Id.

[18] See, Id.

[19] Id.

[20] Textile Workers Union, 380 U.S. at 276.

[21] Id.

[22] See infra note 35 and accompanying text.

[23] See infra notes 23-27 and accompanying text.

[24] Emily Heil, Starbucks is Closing 16 Locations Due to Worker, Customer Safety Fears, Washington Post (July 13, 2022), https://www.washingtonpost.com/food/2022/07/13/starbucks-closures-worker-safety/. Starbucks cited safety concerns for the reasoning of these store closures. Id.

[25] Len Ramirez, Amy’s Kitchen Set to Close San Jose Frozen Food Plant; Employees in Shock, CBS News (July 18, 2022), https://www.cbsnews.com/sanfrancisco/news/amys-kitchen-san-jose-frozen-food-plant-closure/.

[26] Id. Amy’s alleged it was losing $1 million a day operating the San Jose location due to increased supply costs and decreased demand for its products, although three of its other facilities remain “unaffected and running at full capacity.” Id.

[27] Alexandra Martinez, Workers at Amy’s Kitchen Are Organizing After Years of Unsafe Working Conditions, Prism (Apr. 1, 2022), https://prismreports.org/2022/04/01/amys-kitchen-workers-organize-unsafe-conditions/.

[28] Gregg, supra note 8. Chipotle cited worker shortages for the permanent closure of a Maine location seeking to unionize. Id.

[29] Chipotle Workers Are Trying to Form the Company’s First Union, More Perfect Union (July 18, 2022), https://perfectunion.us/chipotle-workers-are-trying-to-form-the-companys-first-union/.

[30] Textile Workers Union, 380 U.S. at 275.

[31] Id.

[32] NLRB v. Erie Resistor Corp., 373 U.S. 221, 227 (1963).

[33] Radio Officers’ Union of Com. Telegraphers Union v. NLRB, 347 U.S. 17, 45 (1954).

[34] Rebecca Hanner White, Modern Discrimination Theory and the National Labor Relations Act, 39 Wm. & Mary L. Rev. 99, 135 (1997).

[35]  Id. at 135–36.

[36] Id. at 137.

[37] Brenan, supra note 1.

[38] National Labor Relations Board, supra note 2.

[39] Gregg, supra note 8; Tiku et al., supra note 6; Gregg, supra note 12; Martinez, supra note 12.

[40] See, e.g., Nitasha Tiku & Jay Greene, The Billionaire Boom, Washington Post (Mar. 12, 2021), https://www.washingtonpost.com/technology/2021/03/12/musk-bezos-zuckerberg-gates-pandemic-profits/.

[41] Textile Workers Union, 380 U.S. at 274–76.