A few months after the housekeeping employees at the Hyatt Hotel considered whether to unionize, the hotel launched a disinformation campaign against the union and subcontracted out its housekeeping work. The subcontractor hired most of the former hotel employees, but the hotel then cancelled the subcontract, fired its old employees and replaced them with new people. The U.S. government filed an unfair labor charge against the hotel, and an administrative law judge ruled against the hotel. When the case reached federal court, the judge refused to dismiss the unfair labor practice petition but also declined to enter an injunction against the hotel.
The case is Paulson v. Remington Lodging & Hospitality, LLC, decided on December 12. This case highlights the usual tactics of an anti-union campaign. Since the ALJ ruled in favor of the union on the merits, we deem the above sequence of events as true for purposes of deciding whether the hotel went too far in opposing the union campaign. The issue for the Court of Appeals (Winter, Parker and Hall) is what to do about this violation. The district court declined to reinstate the employees who were fired; it said that the NLRB had waited too long to seek that relief, and rehiring the employees would displace the replacement employees. The Court of Appeals disagrees.
The Second Circuit writes that "the district court's analysis ... focused heavily on the harm to individual employees (both those discharged and their replacements) caused by the discharges and delayed reinstatements. That analysis, however, failed adequately to account for harm to unionization efforts." First, the Court of Appeals says, "the rights of improperly discharged employees take priority over the rights of those hired to replace them." Second, time was of the essence in replacing the fired employees, as their absence from the workplace "can quickly extinguish organizational efforts and reinforce fears within the workforce concerning the consequences of supporting a unionization campaign." The Court of Appeals relies on extra-Circuit authority for these propositions, so this ruling covers new ground in the Second Circuit.
Without citation to any authority, though, the Court rejects the district court's belief that the fired workers knew they were being offered reinstatement and also knew this case was pending in court, which should have reassured them that they had a right to organize. But the countervailing concern, says Judge Parker, is that litigation is always uncertain and the hotel was challenging the ALJ's findings.
In the end, however, reinstatement is not appropriate because circumstances have changed in the case over time. All the housekeeping employees have been offered reinstatement. Some came back, and some did not, but the ones who did not would probably not return at this point. And a cease and desist order against unfair labor practices remains in place.