Employer’s Failure to Follow Proper NLRB Procedures after Settlement Results in Entry of Default Judgment

By Geoffrey M. Gilbert, Jr. - McMahon Berger, PC.

May 14, 2018

It should come as no surprise that in the majority of the matters wherein the National Labor Relations Board (NLRB) investigates an alleged unfair labor practice and thereafter issues a complaint, the parties enter into an informal settlement agreement.  This is primarily due to the fact that historically the NLRB wins between 80% and 90% of the cases that proceed to trial.

Upon entering into a settlement agreement after a complaint has been issued against an employer, the employer is required, among other things, to sign and post a blue and white notice for sixty (60) days in a conspicuous place.  The notice typically contains, among other things, a commitment by the employer to comply with the National Labor Relations Act as well as language assuring employees that the employer will not engage in the complained of conduct in the future. After the expiration of the sixty (60) day posting period, the employer is required to furnish the NLRB with proof of compliance with the terms of the settlement agreement.  Pursuant to the boilerplate terms of an NLRB settlement agreement, failure to establish compliance with the terms of the agreement may result in reinstatement of the complaint and entry of a default judgment against the employer on all allegations in the complaint.

This is exactly what happened to the employer in Student Transportation of America, Inc., 366 NLRB No. 61 (2018).  In this case, the Regional Director in Region 12 issued a complaint against Student Transportation of America alleging it had violated the Act by establishing a bus washer position and the wage for said position without bargaining with the union.  After the case was settled, the Company posted the notice as required by the terms of the settlement agreement.  Thereafter, despite repeated requests from the compliance department in Region 12 for proof of compliance with the settlement agreement, the Company failed to remit the required NLRB documentation. As such, the complaint was reissued and a default judgment was entered against the Company. The NLRB then ordered the Company to cease and desist from creating new bargaining unit positions or setting new wage rates without obtaining the union’s consent, rescind the newly created bus washer position, and restore all bus washers to their previous positions.

Settling unfair labor practice charges both before and after a complaint has been issued can be an unpleasant experience for employers. Don’t make it even more unpleasant by failing to establish proof of compliance with the terms of the controlling settlement agreement.

The St. Louis employment attorneys at McMahon Berger have been representing employers across the country in labor and employment matters for over sixty years, and are available to discuss these issues and others.  As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation as every situation must be evaluated on its own facts. The choice of a lawyer is an important decision and should not be based solely on advertisements.