The NLRB's Oil Capitol and Toering Decisions and Their Effects on Unionization and American Labor Law

• Author: MichaelJ. Hilkin
• Position: J.D. Candidate, The University of Iowa College of Law, 2009
• Pages: 02

J.D. Candidate, The University of Iowa College of Law, 2009; B.A., University of Northern Iowa, 2006. Thank you to the editors and writers of Volumes 93 and 94 of the Iowa Law Review for all of your support and assistance throughout the writing and editing process. special thanks to Professor Marc Linder for providing the inspriation for this Note.

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I Introduction

Congress passed the National Labor Relations Act ("NLRA" or "Act") in 1935. This Act provided employees with the legal right to unionize and engage in collective bargaining.¹ Supporters of the Act hoped that it would craft viable legal avenues for employees to assert their right to unionize, engage in collective bargaining, and ultimately create "industrial peace" in the workplace.² Unfortunately, in the decades after the Act, businesses have found numerous legal and illegal avenues to avoid unionization,³ and since the mid-1950s, union membership in the private sector has steadily declined.⁴

Hoping to stop this half-century-long decrease in influence over employer-employee relations, individual unions and the American Federation of Labor and Congress of Industrial Organizations ("AFL-CIO") have worked together to create new and aggressive unionization strategies designed for the current legal and social environment.⁵ One of the strategies that garnered significant attention from labor unions in the 1990s was union salting.⁶ The term "salting" refers to a strategy in which union members obtain employment in nonunionized businesses. Once hired, these union members, often called "salts," pressure nonunion employees to Page 1054 join their labor union.⁷ Furthermore, salts typically search for and report unfair labor practices ("ULPs") committed by the targeted business.⁸ Under current law, a business is guilty of a ULP and exposed to potentially significant financial liability if the business fires or refuses to hire a salt in order to prevent the unionization of the business or to prevent reports of illegal activity.⁹ Although salting has survived numerous legal and legislative challenges, businesses to this day continue to lobby Congress to pass legislation making labor-union salting illegal.¹⁰

The practical value of labor-union salting as a union-recruitment strategy, however, may soon diminish because of the NLRB's rulings in oil Capitol Sheet Metal, Inc.¹¹ and Toering Electric Co.¹² These rulings reversed a decade of precedent¹³ that presumed salts deserved backpay from the moment that businesses discriminated against them-either by illegally firing them or refusing to hire them-to the time that they received an offer of employment or reinstatement.¹⁴ The Oil Capitol Board ("Board") held that the burden of proving a proper remedy for discrimination against salts must belong to the salts themselves.¹⁵ If a salt cannot prove that she would have stayed employed with the offending business indefinitely, the Board will award a salt backpay only for the period of time that the evidence shows the salt would have stayed employed at the business.¹⁶ Meanwhile, in Toering, the Board shifted the burden to the complaining union salt to prove that she "is someone genuinely interested in seeking to establish an employment relationship with the employer."¹⁷ Although couched in common-sense language, the Oil Capitol and Toering rulings will significantly decrease or practically eliminate any meaningful financial penalty for businesses that discriminate against union salts.¹⁸

This Note examines how the Oil Capitol and Toering rulings may encourage unions to engage in subversive anti-business tactics in lieu of creating positive unionization strategies. On the other hand, this Note Page 1055 argues that these two decisions should help add to the political impetus for labor unions to successfully lobby Congress to strengthen penalties for ULPs and ultimately develop full-scale changes to the NLRA. Part II provides a general history of salting and explains why the tactic became popular in the 1990s.¹⁹ Part III examines the Oil Capitol and Toering rulings, including a review of the reasons behind the decision to unilaterally impose changes in remedies for salting discrimination and the dissents' fierce disagreement with those reasons.²⁰ Part IV explains how the Oil Capitol and Toering rulings may cause unions to abandon NLRA protections and turn salting into a purely subversive tactic.²¹ Finally, Part V examines how these two rulings expose the dire need for reform in NLRA remedies and how the Employee Free Choice Act ("EFCA") could revive the use of salting in unionization strategies.²²

II Salting's Origins and Legal Protections

The term "salting" originated in the mining industry.²³ Historically, mine owners artificially sprinkled, or "salted," their mines with a valuable mineral like gold and hoped that this would make the mine "'appear more valuable to investors.'"²⁴ In the labor setting, salting refers to a union strategy to gain access and unionize a business.²⁵ Unions have used salting as a recruitment strategy for over one hundred years.²⁶ Even though the word "salting" is rooted in a deceitful practice, unions have embraced the use of the term anyway.²⁷

During a salting campaign, a union enlists numerous organizers on a hired or volunteer basis to apply for jobs at a nonunion business.²⁸ These Page 1056 organizers, or "salts," may explicitly inform their target business that they intend to unionize the workplace.²⁹ Once hired, salts attempt to recruit fellow employees to join their labor union.³⁰ Often, salts actively search for business conduct that qualifies as a ULP or violates health and safety laws.³¹Salts typically report ULPs to the NLRB and health and safety violations to the Occupational Health and Safety Administration.³² However, to maintain their protected status, salts must follow general work rules and "perform [theirjobs] adequately."³³

The NLRB consistently holds that discriminating against salts, whether by an initial refusal to hire or a later discharge, qualifies as a ULP.³⁴ The NLRB reasons that the NLRA provides a broad definition of employees entitled to protection under the Act, and section 8(a)(3) of the Act outlaws all employers from discriminating against employees based upon employee involvement in union activity.³⁵ Although the NLRB allows the facts of each case to determine which salts qualify for a remedy under the NLRA,³⁶ the Board historically maintained that there was a "rebuttable presumption" that qualifying salts should receive backpay³⁷ from the date a business unlawfully refused to hire or fire the salt until the time the business gave the salt a job Page 1057 offer or offer of reinstatement.³⁸ If the qualifying salt never received a job offer or an offer of reinstatement from the offending business, the NLRB ordered instatement or reinstatement, respectively.³⁹ If the salt's "former position no longer exist[ed]," the employee received an offer for a "substantially equivalent" job.⁴⁰ Numerous courts of appeals, however, initially overruled the NLRB's protections for salts.⁴¹

Although unions have engaged in salting for over a century,⁴² and since the mid-1970s the NLRB has explicitly held that the NLRA protects salts from discrimination,⁴³ the power of salting did not receive sustained attention from labor unions until the U.S. Supreme Court restricted union-organizer access to workplaces in Lechmere, Inc. v. NLRB.⁴⁴ Lechmere held that unions could not organize on a business's private property unless a union could not access a business's employees by any other "reasonable" alternative means.⁴⁵ In reality, Lechmere's holding meant that unions could not access business property except in "rare cases" where employees lived on the jobsite.⁴⁶ In Lechmere's aftermath, the AFL-CIO Building and Construction Trades Council recommended the use of salting in nonunion construction businesses nationwide.⁴⁷ The AFL-CIO believed that salting would be an effective way to increase unionization among otherwise hard-to-reach nonunion employees in construction settings.⁴⁸

This increase in the use of salting as a unionization tactic, together with the circuit split on the NLRA's definition of employees protected from discrimination for union involvement,⁴⁹ pushed the U.S. Supreme Court to Page 1058 definitively determine whether the NLRA protects salts as employees. In NLRB v. Town & Country Electric, Inc., the Court unanimously accepted the NLRB's definition of employees covered by the NLRA under section 2(3), and thus found that the NLRB has the authority to provide salts protection against discrimination because of their union involvement.⁵⁰ The Court reasoned that salts, even while working for a union, are "subject to the control of the company employer" while on the job.⁵¹ As long as companies require salts to follow company orders while on company time, a salt's involvement with a union does not equate to "'abandonment of . . . service' to the company."⁵²

The Court's confirmation that salts are allowed to receive NLRB protection under the NLRA garnered significant attention from both labor unions and businesses. On the labor side, union leaders hailed the...