A recent Administrative Law Judge ruling in Starbucks Corp.sets up a possibility for the National Labor Relations Board to reinstate an employer’s obligation to bargain with a union before imposing serious discretionary discipline in a newly-organized workplace before a first contract is agreed to—even when the discipline is consistent with the company’s established disciplinary policy or practice.

Current Board Law 

In 2016, the Board ruled in Total Security Management Illinois 1, LLC, 364 NLRB 1532 (2016), that employers have the obligation to bargain before imposing serious discretionary discipline on an employee in an organized workplace that has not yet reached a first contract. 

This requirement did not last long.  Just four years later, in 2020, the Board overturned Total Security in Care One at New Milford, 369 NLRB No. 109 (2020).  In a unanimous opinion, the Board held that the employer was permitted to unilaterally discipline employees before a first contract has been reached pursuant to its existing disciplinary policy.

The stage is now set for the Board to overturn Care One and return to Total Security

ALJ Decision

In Starbucks Corp., the ALJ ruled that an employee in New York was fired for union activities, agreeing with the NLRB General Counsel that the company’s actions violated Section 8(a)(3) of the Act. 

However, the ALJ also found that the employer did not violate Section 8(a)(5) of the Act when it failed to either bargain with or provide requested information to the union regarding the employee’s termination.  The store was newly-organized at the time of the employee’s discharge, and the parties had not yet entered into an initial collective bargaining agreement.  Therefore, the ALJ applied the standard set forth in Care One applied, and the employer was not required to bargain over the decision to discharge the employee.

The NLRB General Counsel argued that this set of facts presents an opportunity to overturn Care One and revert to Total Security, and urged the ALJ to do so.  While ALJs are bound to apply Board precedent, the General Counsel may appeal this decision to the full Board, which has shown an inclination to return to pre-2017 standards.  

Takeaways

If the Board accepts the case and returns to the Total Security standard, employers will need to bargain with a newly-certified union prior to imposing serious discretionary discipline with respect to its employees during the pre-contract hiatus period.  This requirement applies even if the discipline is consistent with the employer’s past practice regarding imposing discipline.   

We will continue to monitor this issue for any developments.

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Photo of Joshua Fox Joshua Fox

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several…

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several Major League Baseball Clubs in all aspects of the salary arbitration process, including the Miami Marlins, Boston Red Sox, Los Angeles Dodgers, Kansas City Royals, San Francisco Giants, Tampa Bay Rays and Toronto Blue Jays. In particular, Josh successfully represented the Miami Marlins in their case against All-Star Catcher J.T. Realmuto, which was a significant club victory in salary arbitration. Josh also represents Major League Baseball and its clubs in ongoing litigation brought by current and former minor league players who allege minimum wage and overtime violations. Josh participated on the team that successfully defended Major League Baseball in a wage-and-hour lawsuit brought by a former volunteer for the 2013 All-Star FanFest, who alleged minimum wage violations under federal and state law. The lawsuit was dismissed by the federal district court, and was affirmed by the U.S. Court of Appeals for the Second Circuit.

Josh also has extensive experience representing professional sports leagues and teams in grievance arbitration proceedings, including playing a vital role in all aspects of the grievance challenging the suspension for use of performance-enhancing drugs of then-New York Yankees third baseman Alex Rodriguez. Josh also has counseled NHL Clubs and served on the trial teams for grievances alleging violations of the collective bargaining agreement, including cases involving use of performance-enhancing substances, domestic violence issues, and supplementary discipline for on-ice conduct. He has played a key role in representing professional sports leagues in all aspects of their collective bargaining negotiations with players and officials, including the Major League Baseball, National Hockey League, the National Football League, Major League Soccer, the Professional Referee Organization, and the National Basketball Association,.

In addition, Josh has extensive experience representing clients in the performing arts industry, including the New York City Ballet, New York City Opera, Big Apple Circus, among many others, in collective bargaining negotiations with performers and musicians, the administration of their collective bargaining agreements, and in grievance arbitrations.

Josh also represents a diverse range of clients, including real estate developers and contractors, pipe line contractors, hospitals, hotels, manufacturers and public employers, in collective bargaining, counseling on general employment matters and proceedings before the National Labor Relations Board, New York State Public Employment Relations Board and arbitrators.

Josh has also recently served as an adjunct professor at Cornell University’s School of Industrial Labor Relations for the past two years, teaching a course regarding Major League Baseball salary arbitration.

Prior to joining Proskauer, Josh worked for a year and a half at the National Hockey League, where he was involved in all labor and employment matters, including preparations for collective bargaining, grievance arbitration, contract drafting and reviewing and employment counseling. Josh also interned in the labor relations department of Major League Baseball and at Region 2 of the National Labor Relations Board. He was a member of the Brooklyn Law Review and the Appellate Moot Court Honor Society and served as president of the Brooklyn Entertainment and Sports Law Society.

Photo of Yonatan Grossman-Boder Yonatan Grossman-Boder

Yonatan (Yoni) Grossman-Boder is an associate in the Labor & Employment Law Department. Yoni assists clients in a wide range of labor and employment law matters, including litigations, administrative proceedings, arbitrations, internal investigations, labor-management relations and claims of employment discrimination, harassment, retaliation, and…

Yonatan (Yoni) Grossman-Boder is an associate in the Labor & Employment Law Department. Yoni assists clients in a wide range of labor and employment law matters, including litigations, administrative proceedings, arbitrations, internal investigations, labor-management relations and claims of employment discrimination, harassment, retaliation, and wrongful termination. He frequently represents clients across a variety of industries and sectors, including educational institutions, financial services, media and entertainment companies, health services and professional services.

Yoni clerked for the Honorable Richard M. Gergel of the U.S. District Court for the District of South Carolina.  While attending Duke University School of Law, Yoni served as the publication and lead articles editor of Law and Contemporary Problems.

Prior to coming to Proskauer, Yoni served as a legal intern at the New York Human Resources Administration Employment Law Unit. As a legal intern, he worked on a variety of employment matters, including employment discrimination investigations and litigation. While a summer associate at Proskauer, Yoni co-authored an article on retiree health care benefits under ERISA titled “Understanding M&G Polymers v. Tackett,” published by Benefits Magazine in April 2015.

Photo of Dixie Morrison Dixie Morrison

Dixie Morrison is an associate in the Labor & Employment Department and a member of the Employment Litigation & Arbitration Group. She is a member of the Discrimination, Harassment, & Title VII and the Labor-Management Relations practice groups.

Dixie assists clients across a…

Dixie Morrison is an associate in the Labor & Employment Department and a member of the Employment Litigation & Arbitration Group. She is a member of the Discrimination, Harassment, & Title VII and the Labor-Management Relations practice groups.

Dixie assists clients across a variety of industries in litigation and arbitration relating to wrongful termination, discrimination, harassment, retaliation, wage and hour, trade secrets, breach of contract, and whistleblower matters in both the single-plaintiff and class and collective action contexts. She also maintains an active traditional labor and collective bargaining practice and regularly counsels employers on a diverse range of workplace issues.

Dixie earned her J.D. from Harvard Law School, where she was the Executive Editor of Submissions for the Journal of Sports and Entertainment Law. Dixie received her B.A., magna cum laude, from Pomona College. Prior to law school, she served as a labor and economic policy aide in the United States Senate.