Hunton Employment & Labor Perspectives

The National Labor Relations Board (“Board” or NLRB) recently decided in Noah’s Ark Processors, LLC d/b/a WR Reserve, 372 NLRB No. 80 (2023) to impose extraordinary remedies upon an employer who violated a court order imposing certain collective bargaining obligations and committed multiple violations of the NLRA throughout the collective bargaining process. The extraordinary remedies included: the posting and distribution of a notice explaining employee rights under the NLRA (in addition to the standard notice that states the NLRB found NLRA violations, the violator will not commit those violations in the future, and the remedies); the reading of the notices in the presence of employees by the employer’s chief executive officer, or, if the employer prefers, by a Board agent in the presence of the CEO; and site visits by an NLRB agent to determine compliance for one year.

In issuing the decision, the Board expounded upon “the potential remedies the Board will consider in cases involving [parties] who have shown a proclivity to violate the [NLRA] or who have engaged in egregious or widespread misconduct.” Although the NLRB’s commentary on potential remedies is dicta, it foreshadows the types of remedies Board prosecutors may seek and the NLRB may order in future cases against parties the Board characterizes as habitual offenders and for violations it considers egregious.

A Summary of the Decision in Noah’s Ark Processors

The employer and union had been negotiating a successor collective-bargaining agreement (“CBA”) since 2018. In light of the employer’s allegedly unlawful conduct during negotiations, the NLRB sought and obtained injunctive relief in federal court requiring the employer to adhere to certain collective bargaining obligations. The court subsequently concluded that the employer violated those obligations, found the employer in contempt, and imposed sanctions and additional bargaining obligations upon the employer. Thereafter, the Board found the employer violated the NLRA by bargaining in bad faith and unilaterally imposing the terms of a final offer after prematurely declaring that the parties were at an impasse in their negotiations. Before declaring an impasse, the employer made regressive proposals, did not consider minor changes proposed by the union, and did not consider most of the union’s proposals. The NLRB highlighted that the employer proposed to remove binding arbitration from the grievance procedure while insisting on a no-strike provision (a standard trade-off in collective bargaining negotiations), and a broad management rights clause permitting the employer to assign work performed by bargaining unit members to others and to unilaterally change work rules.

In light of the conduct at issue, the Board imposed extraordinary remedies in addition to standard remedies upon the employer (e.g., recission of unilateral changes and make whole relief). In so doing, the NLRB elaborated upon “a non-exhaustive list of potential remedies” for the Board to consider in cases involving egregious or habitual violations.

To bring greater consistency to the Board’s exercise of its remedial discretion, and to better ensure that all appropriate remedies are ordered in any given case, we take this opportunity to present a non-exhaustive list of potential remedies that the Board will consider when a [party] has engaged in unlawful conduct warranting a broad order. . . . [O]ur aim is to ensure that in every case involving the type of repeated or serious misconduct recognized as permitting a broad order, the Board will consider a full range of established, potential remedies, and will not inadvertently stop short, at the expense of protecting both employees’ exercise of [NLRA] rights and their willingness to exercise those rights, in determining which remedies to order.

The extraordinary remedies include:

• the signing of the standard notice (stating the NLRB found NLRA violations, the violator will not commit those violations in the future, and the remedies) in addition to a separate notice explaining NLRA rights by a person who bears significant responsibility for the NLRA violations;

• the reading of the notices by either a specific corporate official/high-ranking manager or an NLRB agent in the presence of that person to employees;

• the documented presence of other managers/supervisors and the presence of a union representative at the reading of the notices;

• the distribution of the notices in numerous ways, including to employees and managers/supervisors during the meeting when the notices are read (prior to reading the notices), to current and former employees by mail, electronically, and by publication in local periodicals;

• the posting of the notices beyond the standard 60 day notice posting period; and

• site visits by a Board agent to inspect the postings and other records, and to take witness statements to determine compliance.

The NLRB imposed many of these extraordinary remedies in the case at hand. It required: a notice explaining NLRA rights in addition to the standard notice; the signing of the notices by the employer’s CEO who was present at two negotiation sessions; the posting of the notices in the workplace for one year; the reading of the notices by the CEO or by a Board agent in the CEO’s presence; the distribution of the notices by an NLRB agent at the meeting when the notices are read; and site visits by the Board agent to ensure compliance with the extended posting period. In addition, the NLRB required the employer to compensate the union for collective bargaining expenses incurred as a result of the employer’s violations, and, citing to its recent decision in Thryv, Inc., 372 NLRB No. 22 (2022) expanding the standard make whole remedy, to compensate employees for any direct or foreseeable pecuniary harms incurred because the employer unlawfully implemented its last, best, and final offer. The Board also ordered the employer to follow a collective bargaining schedule and provide written progress reports.

One Board member issued a dissent. Although he agreed that the employer violated the NLRA and certain remedies were needed, he criticized the NLRB for engaging in an “extended discussion of extraordinary remedies in general” and for some of the remedies it imposed.  With regard to the Board’s general discussion about extraordinary remedies, the NLRB member explained that the Board typically does not issue “advisory opinions,” has broad discretion to issue remedies under the NLRA rendering the discussion entirely unnecessary, and should not provide Board prosecutors advice regarding the remedies they should seek. As to the remedies imposed by the NLRB in the case at hand:

• He said the employer should not have to mail, post, or read the non-standard notice explaining NLRA rights, noting that such remedies have historically been limited to rare cases involving many and varied violations of the NLRA unlike the instant matter that only concerns collective bargaining violations.

• He would not require a specific individual—here, the employer’s CEO—to read the standard notice or be present while an NLRB agent read the notice, as the obligation should fall on a high-ranking management official.

• He would not require the standard notice to be distributed during the meeting when it is read, citing the lack of precedent for such a requirement and explaining such distribution is unnecessary because someone will be reading the notice in multiple languages.

• He disagreed with the requirement that the employer’s CEO sign the notices, again citing the lack of precedent for such a requirement and First Amendment concerns associated with “compelled-speech” issues.

• He added that he would not require the standard notice to be mailed in light of precedent because the employer remains in business and there is no evidence that posting the notice would be futile.

• He said the standard 60 day posting period requirement should not be extended to one year, explaining that the NLRB rarely issues such a remedy and has done so for much shorter periods of time, including where the violator’s conduct was more egregious than the conduct at hand in the instant case.

• He disagreed with the site visit requirement by a Board agent, opining that the employer’s conduct does not warrant such a remedy, unnecessarily intrudes upon the employer’s property rights, could violate the U.S. Constitution’s Takings Clause, could result in the NLRB agent exceeding statutory authority, and wastes government resources funded by taxpayer dollars as the closest regional office is more than 300 miles from the employer’s location.

Conclusion

The decision in Noah’s Ark does not change the law. However, it does foreshadow an increased likelihood that the Board will seek extraordinary remedies for NLRA violations, which employers should keep in mind.