This is what an illegal plan closure looks like, and the consequences an employer can face as a result

In December 2020, Quickway Transportation made the decision to close one of its distribution terminals after facing a union organizing drive led by Local 89 of the Teamsters Union. The drivers at the terminal, which served Kroger, had voted to unionize, prompting concerns from Quickway's leadership about potential strikes that could disrupt operations at the distribution center. Fearing financial losses from a possible strike, Quickway chose to terminate its contract with Kroger and ceased all operations at the terminal, laying off all drivers at that facility.

The 6th Circuit upheld the NLRB's finding that Quickway violated the NLRA when it closed its Kroger terminal because the closure was motivated by anti-union animus.

Under the National Labor Relations Act (as interpreted by SCOTUS's 1965 Darlington Manufacturing case) an employer's partial closure of its business is unlawful if it's done for the purpose of union avoidance. If an employer closes part of its business (such as a single plant in a larger company) with the intent of punishing employees for union activities or discouraging union activity at its other operations, it is an unfair labor practice. In such cases, the employer’s intent plays a crucial role in determining legality.

The court concluded that the evidence in the case showed that Quickway had an intent to avoid its employee's unionization efforts and to punish them for it when it shuttered the Kroger terminal. Management had expressed hostility toward union efforts, conducted surveillance of employees' pro-union activities, and warned employees that unionizing could lead to job losses.

The court also found that Quickway's intent in closing the terminal was to discourage union activity at its other locations, making it reasonably foreseeable that the closure would chill unionization efforts company wide. Indeed, prior to the closure Quickway's management expressly stated its concern about the union activity "infect[ing]" other terminals.

As a result, Quickway has been ordered to do all of the following:

1. Reopen and restore its business operations at the Louisville terminal as they existed on December 9, 2020;

2. Recognize and, on request, bargain with the union;

3. Offer reinstatement to all unlawfully discharged employees to the extent that their services are needed at the Louisville terminal to perform the work that Quickway is able to attract and retain from Kroger or new customers after a good-faith effort;

4. Offer reinstatement to any remaining discharged employees to any positions in its existing operations that they are capable of filling, with appropriate moving expenses; and

5. Make the unlawfully discharged employees whole for their loss of earnings and benefits, and for any other direct or foreseeable pecuniary harms suffered as a result of the discrimination against them, including any adverse tax consequences of receiving lump-sum backpay awards.

It's a significant remedial order, underscoring the seriousness of a partial closing to get rid or otherwise avoid your employees' labor union.