Car Dealer Denied High Court Review of NLRB Ruling

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By Kevin McGowan

March 21 — Denying an Illinois car dealership's petition, the U.S. Supreme Court March 21 declined to review whether the employer violated federal labor law by closing a dealership where its mechanics were union-represented and moving them to an affiliated, nonunion dealership where it refused to recognize the union.

Without comment, the justices left intact a U.S. Court of Appeals for the District of Columbia Circuit decision upholding an NLRB order that Burke Automotive Group Inc. and Dodge of Naperville Inc. committed unfair labor practices by refusing to bargain with the union over the effect of the move or recognizing the union as the mechanics' bargaining representative after the move .

In seeking review, the dealership urged the court to reverse the D.C. Circuit and rule an employer doesn't violate the National Labor Relations Act by refusing to bargain with a union that's supported only by a minority of employees.

‘Community of Interest' Questioned

Under the “community of interest” standard, the National Labor Relations Board should have considered the 20 mechanics at both dealerships as comprising one unit, Burke and Dodge of Naperville said. The six union-represented mechanics moved from the closed dealership therefore couldn't constitute a unit majority for union-recognition purposes, the dealership said.

Instead, the D.C. Circuit gave the board “a green light” to require employers to recognize and bargain with unions that don't represent a majority of unit employees, the dealership said.

Judge Merrick B. Garland, nominated March 16 by President Barack Obama to fill the Supreme Court vacancy caused by Justice Antonin Scalia's death, was part of the D.C. Circuit panel that upheld the board.

The NLRB waived its right to file a brief opposing review.

Bankruptcy Prompts Consolidation

The case stems from Chrysler Corp.'s 2009 bankruptcy proceedings. Burke, which operated several dealerships selling Chrysler-made Dodges and Jeeps, was instructed to close Dodge of Naperville, a small facility that sold only Dodges.

Burke offered the six union-represented mechanics at Dodge of Naperville jobs at the company's larger dealership in Lisle, Ill., which sold both Jeeps and Dodges. The six employees accepted the offer, but their union, the International Association of Machinists Local 701, filed unfair labor practice charges that the NLRB general counsel pursued before the board.

The NLRB ruled Burke and Dodge of Naperville violated the NLRA by not bargaining with the union over the move's effects and refusing to bargain with Local 701 after the relocated mechanics began working at the Lisle facility. Rejecting the dealership's appeal, the D.C. Circuit affirmed that the denial of effects bargaining and refusal to recognize the union as the mechanics' continuing representative violated the act.

Those conclusions conflict with “black-letter law” that employers aren't supposed to recognize or bargain with unions that don't represent a majority of the relevant unit's employees, the dealership argued.

Under the governing community-of-interest principles, the six former Naperville mechanics and the 14 incumbent, nonunion mechanics at Lisle made up one, 20-employee unit after the move, the dealership said.

The NLRB's “novel overreliance on bargaining history” to override the community-of-interest test and to require the dealership to bargain with a minority union conflicts with the statute, NLRB precedent and the decisions of four federal circuit courts, the dealership said.

James F. Hendricks Jr. of Litchfield Cavo LLP in Chicago was counsel of record for the dealership.

To contact the reporter on this story: Kevin McGowan in Washington at kmcgowan@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com