Should Unions Be Allowed To Discipline Employees For Reporting Safety Violations?

Date: Apr 25, 2011

On April 5, 2011, the U.S. Court of Appeals for the District of Columbia (Court of Appeals) issued a decision in International Union of Operating Engineers, Local 513, AFL-CIO v. National Labor Relations Board, Case No. 10-1121. This case involved a petition for review of the National Labor Relations Board's (Board) decision that the union violated the National Labor Relations Act (NLRA). The court granted the union's petition for review, and in the process, rejected a Board policy that extended back more than thirty years and was endorsed by the Ninth Circuit. Since 1977 the Board had held that when a union disciplined a union member who complied with an employer's safety rules, the discipline was a per se violation of NLRA, 29 U.S.C. § 158(b)(1)(A). The Court held that Board's policy was at odds with the NLRA.

Facts of the Case

Two construction companies formed Ozark Constructors, LLC (Ozark) to rebuild a hydroelectric facility in southeast Missouri. The International Union of Operating Engineers (IUOE) Local 513 represented Ozark's operating engineers. Ozark hired Mark Overton, a member of Albuquerque's local for IUOE for his expertise with specialized equipment. Although Overton requested a transfer of his union membership to Local 513, the request was denied; Local 513 instead granted a traveler permit to Overton for his work on the project.

One morning, Overton noticed an outrigger was not fully extended and reported the safety violation to a supervisor, as required by Ozark's safety rules. After an investigation, a Local 513 member was found responsible and suspended for three days. Shortly thereafter, Local 513 filed charges against Overton for gross disloyalty and conduct unbecoming a union member and fined him $2,500. Overton subsequently filed an unfair labor practice charge against the union.

Upon review, the Board's General Counsel issued a complaint against the union alleging a violation of Section 8(b)(1)(A), which states that it is an unfair labor practice for the union to restrain or coerce "employees in the exercise of the rights guaranteed in section 7." Section 7 allows an employee to "engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all such activities."

An administrative law judge (ALJ) recommended that the Board find a violation for two reasons. First, Overton was refraining from concerted activity when he refused to join other employees that were ignoring Ozark's safety orders. Second, even if there was no concerted activity, the Board has long held that when a union's disciplinary action affects an employee's "employment relationship," the action is a per se violation of Section 8(b)(1)(a).

The Board disagreed with the ALJ's categorization of Overton's action as "refraining from concerted activity." Instead, the Board relied on its long-standing precedent of finding a Section 8(b)(1)(A) violation for this type of union action, even in the absence of a concerted activity by the employee.

What The Court Said

The court agreed with the union's argument that because the Board did not find any concerted activity protected by Section 7 by Ozark employees, the Board could not reach a decision on whether Overton engaged in or refrained from engaging in the concerted activities. Thus, the court concluded, there is no way the union could have restrained or coerced Overton in the exercise of his Section 7 rights.

The Court of Appeals rejected the notion that the Board is entitled to find a violation if the union punishes a member for reporting a safety violation, even if he had a duty to report. The court said the Board relied too heavily on both NLRB v. Allis-Chalmers Mfg. Co. and Scofield v. NLRB, two Supreme Court cases that recognized the presence of concerted activity before determining that unions could not enforce their internal rules in a manner that affects a member's employment status. The court also noted that although the Board had relied on this NLRA interpretation for several decades, they had never attempted to explain how their interpretation was consistent with the Act.

Because the court found no support in Sections 7 or 8(b)(1)(A) for the Board's decision, it granted the union's petition for review.

What The Future Holds

The Court of Appeals not only disregarded thirty-four years of policy, but also explicitly disagreed with the Ninth Circuit's endorsement of the Board's policy. With two differing opinions, employers can reasonably expect courts in other federal circuits to weigh in. How various circuits decide this issue may lead to forum shopping for a union looking to have Board decisions on unfair labor practices overruled.

In addition, and of great practical importance to employers, the decision strikes a blow against workplace safety and health by giving unions the power to punish employees who report safety violations to their employers. The Court of Appeals ignored the potentially significant impact this decision will have on the willingness of employees to report such violations especially if there is a labor-management dispute. Moreover, the Court of Appeals focused solely on the NLRB decision, and ignored the mandate in the Occupational Safety and Health Act that employees are to follow all safety standards and regulations, including both those issued by their employer as well as those issued by OSHA. This decision sets up an additional conflict between duties under the two statutes, which based on Supreme Court precedent, may result in the Court of Appeals decision being overturned.

Additionally, circuit splits are frequently precursors to the Supreme Court granting certiorari to ultimately decide an issue. The Supreme Court may be called on to eventually settle the dispute on whether unions can discipline members who comply with their employer's safety rules. Such union discipline would on its face appear to frustrate the purposes of Section 5(b) of the Occupational Safety and Health Act which directs that employees, too, are required to comply with all OSHA standards, rules and regulations.

For more information regarding the interplay among OSHA, employment. and labor laws like the Americans with Disabilities Act, the National Labor Relations Act, and others, please contact David G. Sarvadi at 202-434-4249 or sarvadi@khlaw.com, Manesh K. Rath at 202-434-4182 or rath@khlaw.com or Lawrence P. Halprin at 202-434-4177 or Halprin@khlaw.com.