Board Concludes That An Executive's "Veiled Threat" Interfered With Election

In Student Transportation of America, Inc., 362 NLRB No. 156 (Aug. 3, 2015), the National Labor Relations Board concluded that an executive's statement, shortly prior to a union election, that the employer "could walk away" from a contract with the proposed bargaining unit's only client if "operations became too costly" might have tarnished the vote. As part of its ruling, the Board ordered a new election if the union did not prevail on a re-tally with challenged ballots added to the existing pool of votes.

The employer is a provider of transportation services to school districts from facilities throughout the United States. The proposed bargaining unit at issue was comprised of all drivers and mechanics employed at a specific township facility. The employer's only client in that facility was the township. The employer's contract with the township included a clause through which the township, but not the employer, could terminate the contract if the township determined that it lacked adequate funds to pay for the services under the contract. According to the testimony of an employee, at two employee meetings discussing unionization, the employer's executive stated that the employer "had it written into [its] contract" with the township that the employer "could walk away" from the contract if operations "became too costly." The employee also testified that the executive told the employees that he wanted the facility to succeed and "wanted to be in for the long haul." After the union lost the election by one vote, it challenged the election results based in part on the executive's statements.

The Board majority, through Members Hirozawa and McFerran, rejected the administrative law judge's conclusion that the executive's comments were not improper because the executive neither stated nor implied "that unionization would necessarily cause [the employer] to walk away from the contract and close the facility." The Board majority further rejected the judge's reasoning that the executive's additional statements about wanting the facility to succeed did not mitigate the negative impact that his statement about the township contract may have had.

The Board majority conceded that the executive's statements did not directly threaten the employees with job loss. Nevertheless, the Board majority characterized the executive's statements about the township contract as a "veiled threat," which "implied to the employees that, in the event of a [union] victory, the [e]mployer might respond by terminating the contract with the [t]ownship—its only client—and thereby leave the [employees] without jobs." According to the Board majority, employees "would have heard the threatening subtext that the employer might well decide to exercise this prerogative [to walk away from the contract with the township] in the event that the [union] was voted in." Ultimately, the Board majority held that "where...the threat involves one of the most fundamental aspects of employment conditions—i.e., job security—a single, widely disseminated threat can be sufficient to overturn election results in a very close election."

Member Johnson dissented, noting that the executive's "vague, abbreviated comment—which merely misstated a provision of the [e]mployer's contract with the [t]ownship and does not mention unionization, layoffs, or closure—is insufficient to constitute a threat of reprisal if the employees voted for the [u]nion."

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