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School bus giant First Student Inc. unlawfully changed employee wages and benefits when it took over school bus operations from a Michigan school district, a divided NLRB held.
The ruling is significant for First Student, one of North America’s largest school transportation providers. But it also highlights a division among the National Labor Relations Board members on how to apply the agency’s successorship doctrine to disputes over setting initial employment conditions in a new work relationship. The debate in this case suggests that there will be more discussion on the issue once a Republican majority takes control of the board.
First Student hired unionized drivers as a majority of its workforce in the Saginaw, Mich., school district. The bus company admitted it became a “successor” employer that inherited an obligation to recognize and bargain with a United Steelworkers local. Prior to bargaining, First Student unilaterally set employment conditions for the new driver unit.
That was a violation of the National Labor Relations Act, according to the board’s two democratic appointees. First Student had a duty to bargain with Steelworkers Local 9036 as soon as the company made it “perfectly clear” that it intended to retain the unionized workers as a majority of its new crew, NLRB members Mark Gaston Pearce and Lauren McFerran said. That duty to bargain required the company to refrain from making unilateral changes, the board said.
NLRB Chairman Marvin E. Kaplan (R) dissented from the ruling. Kaplan said the company gave employees notice there would be a change in their employment terms more than a month before it gave them firm employment offers. First Student set the initial employment terms before entering union negotiations, which did not violate the NLRA, he said.
Kaplan questioned the NLRB’s “perfectly clear” successorship rulings and said several of the cases relied on by the majority weren’t correctly decided. However, Kaplan said that “in the absence of a Board majority” willing to overrule the cases, “I understand for institutional purposes that precedent is applicable here.”
Kaplan can’t secure the majority he wants because the board is presently divided between Democrats and Republicans. Kaplan was outvoted in the case by the two Democrats because his fellow Republican on the board, William J. Emanuel (R), could not participate because his former law firm represented First Student.
President Donald Trump in January nominated management attorney John Ring to fill the last remaining vacancy on the board. If confirmed, Ring would give the board a 3-2 Republican majority.
Attorneys for First Student and the Steelworkers didn’t immediately respond during non-business hours to requests for comment on the decision.
Legghio & Israel, P.C. in Royal Oak, Mich., represented the United Steelworkers. Littler Mendelson, P.C. in Columbus, Ohio, represented First Student Inc.
The case is First Student, Inc., 2018 BL 39393, 366 N.L.R.B. No. 13, 2/6/18.
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