On May 9, 2024, the U.S. Court of Appeals for the Sixth Circuit heard oral argument regarding the National Labor Relations Board (“NLRB”) exception allowing an employer to unilaterally make decisions during an emergency.  The Board sought court enforcement of its ruling that Metro Man IV LLC failed to notify SEIU Healthcare Michigan about its emergency decisions to increase pay and hire non-union workers and failed to bargain about those decisions and their effects. 

Background

Metro Man, a company doing business in Detroit as a health and rehabilitation center, was faced with a staffing shortage due to the Pandemic in March 2020.  Approximately 70% of staff stopped coming to work when residents started contracting Covid-19.  In response, without notifying the union, the company increased pay $2 per hour and when that did not improve staffing, hired non-union workers.  The company removed the increase when it determined the emergency ended (i.e., once the facility was Covid free in June) and discharged the new workers before the end of the year.  In December 2022, the Board ruled that while the emergency allowed the company to make the wage and staffing decisions, the company violated Sections 8(a)(5) and (1) of the National Labor Relations Act (“NLRA”) when it failed to notify the union of its changes and failed to bargain over the decisions and their effects after the need for an immediate decision passed.

Sixth Circuit Oral Argument

During oral argument, Judge John Nalbandian, appeared to adopt an argument presented by Metro Man, stating that the Board was “expanding its power” when it required the employer to bargain with the union over the pay increase in response to its pandemic-based staffing shortage.  In response, the NLRB attorney attempted to clarify, claiming, “[t]he Board isn’t expanding its rule; the Board is interpreting its rule on a different set of facts, which perhaps has broader implications.”  The attorney also argued that the permissible employer’s decision to increase pay during the emergency was separate from its decision of when the increase would end, which it could not unilaterally determine months later.  In response, Judge John Bush pushed back, observing, “I think the benchmark that was set was it would end when Covid was out of the facility,” a reference to the employer’s original staff announcement that the increase would be in place as long as Covid patients were in the building.  

During one exchange, the attorney for Metro Man provided a sobering reminder of the context in which the employer found itself during that emergency.  In response to Judge Nalbandian’s question of why the employer couldn’t have emailed the union informing it about the pay and personnel changes, the attorney responded: “When you’re spending 12 hours a day trying to get people to pick up dead bodies and you’re going to 7-11 to get bags of ice, you don’t have a lot of time on your hands.”  However, it is worth noting that the Administrative Law Judge specifically rejected a Metro Man employee’s testimony that she was unable to contact the union regarding the increase due to having no time, given she conceded she was able to use email and company phones in April and June.

Takeaways

Based on the exchanges between the panel and the parties, the panel appeared skeptical of the Board second-guessing the employer’s actions during a dire emergency.  It remains to be seen whether the Sixth Circuit will uphold the Board’s ruling that Metro Man violated the NLRA.  While these cases are difficult, with courts often being asked to revisit times of catastrophe to determine whether the parties acted in accordance with the law, hopefully, this case will provide more guidance as to when an employer needs to bargain over decisions made during an emergency, which aspects of those decisions need to be bargained, as well as when notice of such decisions is required.  As always, we will continue to update you on these developments.

Photo of Paul Salvatore Paul Salvatore

Paul Salvatore provides strategic labor and employment law advice to companies, boards of directors/trustees, senior executives and general counsel in such areas as labor-management relations, litigation, alternative dispute resolution, international labor and employment issues, and corporate transactions.

He negotiates major collective bargaining agreements…

Paul Salvatore provides strategic labor and employment law advice to companies, boards of directors/trustees, senior executives and general counsel in such areas as labor-management relations, litigation, alternative dispute resolution, international labor and employment issues, and corporate transactions.

He negotiates major collective bargaining agreements in several industries, including real estate and construction. Paul represents the NYC real estate industry’s multi-employer organization, the Realty Advisory Board on Labor Relations (RAB), and its principal trade organization, the Real Estate Board of New York (REBNY). In 2023, he helped the RAB reach a new collective bargaining agreement with SEIU Local 32BJ, covering 20,000 commercial building employees, enabling the industry to adapt its labor practices to tenants’ post-COVID utilization of office space, including that caused by remote/hybrid work.

Paul has long represented construction employers and developers, such as the Related Companies, Cement League, Association of Master Painters and others. He negotiates Project Labor Agreements (PLA’s), such as for Related (enabling the construction of Hudson Yards), and presently for Gateway Development Corporation (GDC) in building the New York-New Jersey train tunnels, the largest infrastructure project in America. City & State magazine has named him one of the most powerful lawyers in New York for his work in this sector.

Paul also tries arbitrations and litigations, and argues appeals, arising from labor-management relationships. He argued and won before the U.S. Supreme Court 14 Penn Plaza LLC v. Pyett. In a 5-4 decision of importance to employers, the Court held that a collective bargaining agreement explicitly requiring unionized employees to arbitrate employment discrimination claims is enforceable, modifying 35 years of labor law. Unions and employers now negotiate “Pyett clauses” in collective bargaining. He has argued and won federal circuit court cases reversing the National Labor Relations Board’s findings against employers, including in the D.C. and Fifth Circuits.

Paul represents universities and colleges in their labor and employment relations, including in the currently active areas of unionization and collective bargaining with graduate students, undergraduates, athletes and adjunct faculty. Among other schools he has worked with are Yale, Duke, Chicago, Washington University in St. Louis and Caltech. Paul pioneered innovative non-NLRB graduate student union election agreements at Cornell, Brown and Syracuse Universities.

An honors graduate of Cornell’s School of Industrial and Labor Relations (ILR) and the Cornell Law School, Paul served eight years on Cornell’s Board of Trustees, including on its Executive Committee. He subsequently was elected Trustee Emeritus and Presidential Councilor. He presently serves as a Trustee Member of the Board of Fellows of Weill Cornell Medicine, as well as on the Law School and ILR Deans’ Advisory Councils. In 2002, ILR awarded him the Judge William B. Groat prize, the school’s highest honor.

At Proskauer, Paul was elected to its Executive Committee and served as co-chair of its global Labor & Employment Law Department, named during his tenure by The American Lawyer and Chambers USA as one of the premier U.S. practices. He is widely recognized as a leading U.S. labor and employment lawyer in such publications as Chambers Global and USA (Band 1), and Legal 500 (“Hall of Fame”). The National Law Journal selected Paul as one of “The Decade’s Most Influential Lawyers” – one of only three in the labor and employment law field. His peers elected him to the College of Labor and Employment Lawyers.

An active speaker and writer on labor and employment law issues, Paul’s recent publications include “One Dozen Years of Pyett: A Win for Unionized Workplace Dispute Resolution” in the American Bar Association Labor & Employment Law Journal (“ABA Journal”), Volume 36, Number 2 at 257, and “The PLA Alternative in an Increasingly Open Shop New York City Construction Market: The REBNY-BCTC Statement of Principles,” Volume 37 ABA Journal, Number 3 at 415. He is an Adjunct Professor at Cornell Law School, teaching “Current Issues in Collective Bargaining.”

Photo of Joshua Fox Joshua Fox

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several…

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several Major League Baseball Clubs in all aspects of the salary arbitration process, including the Miami Marlins, Boston Red Sox, Los Angeles Dodgers, Kansas City Royals, San Francisco Giants, Tampa Bay Rays and Toronto Blue Jays. In particular, Josh successfully represented the Miami Marlins in their case against All-Star Catcher J.T. Realmuto, which was a significant club victory in salary arbitration. Josh also represents Major League Baseball and its clubs in ongoing litigation brought by current and former minor league players who allege minimum wage and overtime violations. Josh participated on the team that successfully defended Major League Baseball in a wage-and-hour lawsuit brought by a former volunteer for the 2013 All-Star FanFest, who alleged minimum wage violations under federal and state law. The lawsuit was dismissed by the federal district court, and was affirmed by the U.S. Court of Appeals for the Second Circuit.

Josh also has extensive experience representing professional sports leagues and teams in grievance arbitration proceedings, including playing a vital role in all aspects of the grievance challenging the suspension for use of performance-enhancing drugs of then-New York Yankees third baseman Alex Rodriguez. Josh also has counseled NHL Clubs and served on the trial teams for grievances alleging violations of the collective bargaining agreement, including cases involving use of performance-enhancing substances, domestic violence issues, and supplementary discipline for on-ice conduct. He has played a key role in representing professional sports leagues in all aspects of their collective bargaining negotiations with players and officials, including the Major League Baseball, National Hockey League, the National Football League, Major League Soccer, the Professional Referee Organization, and the National Basketball Association,.

In addition, Josh has extensive experience representing clients in the performing arts industry, including the New York City Ballet, New York City Opera, Big Apple Circus, among many others, in collective bargaining negotiations with performers and musicians, the administration of their collective bargaining agreements, and in grievance arbitrations.

Josh also represents a diverse range of clients, including real estate developers and contractors, pipe line contractors, hospitals, hotels, manufacturers and public employers, in collective bargaining, counseling on general employment matters and proceedings before the National Labor Relations Board, New York State Public Employment Relations Board and arbitrators.

Josh has also recently served as an adjunct professor at Cornell University’s School of Industrial Labor Relations for the past two years, teaching a course regarding Major League Baseball salary arbitration.

Prior to joining Proskauer, Josh worked for a year and a half at the National Hockey League, where he was involved in all labor and employment matters, including preparations for collective bargaining, grievance arbitration, contract drafting and reviewing and employment counseling. Josh also interned in the labor relations department of Major League Baseball and at Region 2 of the National Labor Relations Board. He was a member of the Brooklyn Law Review and the Appellate Moot Court Honor Society and served as president of the Brooklyn Entertainment and Sports Law Society.

Photo of Austin McLeod Austin McLeod

Austin D. McLeod is an associate in the Labor & Employment Law Department. Austin assists clients in a wide range of labor and employment matters, including litigations, administrative proceedings, internal investigations, labor-management relations and claims of discrimination, harassment, retaliation, wrongful termination, defamation, and…

Austin D. McLeod is an associate in the Labor & Employment Law Department. Austin assists clients in a wide range of labor and employment matters, including litigations, administrative proceedings, internal investigations, labor-management relations and claims of discrimination, harassment, retaliation, wrongful termination, defamation, and breach of contract. He represents clients in a variety of industries, including health services, professional sports, real estate, and finance.