Harley-Davidson Gets Pulled Over for Bargaining Violation

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By Lawrence E. Dubé

Harley-Davidson Motor Co. should have allowed the International Association of Machinists to bargain before the company offered employees incentives to resign their jobs, the National Labor Relations Board ruled.

A collective bargaining agreement with IAM Lodge 175 gave the motorcycle maker the right to lay off employees based on seniority without union negotiations. The NLRB decided June 29, however, that the union never gave up its right to notice and an opportunity to bargain about the company’s decision to offer employees $15,000 payments to resign.

Members Mark Gaston Pearce (D), Marvin E. Kaplan (R), and William J. Emanuel (R) rejected Harley-Davidson’s claim that it offered to bargain about its voluntary separation incentive plan (VSIP) after the union objected to it.

The decision shows the importance of a company carefully reviewing its bargaining duties under both collective bargaining agreements and the National Labor Relations Act before announcing or implementing layoffs or employee buyouts. No one questioned Harley-Davidson’s right to make its own decisions about employee layoffs, but the company failed to persuade the NLRB its incentive plan was simply part of the same management prerogative.

Dispute Over Buyout Offer

According to the board, Harley-Davidson decided in 2016 to reduce the staff at its York, Pa., plant by 102 unionized production and maintenance employees.

Lodge 175 has a 2016-2022 contract that allows employees to be laid off by seniority, but the company announced in August 2016 that it could reduce the number of employees laid off if some workers accepted a $15,000 offer to leave.

The union protested that it hadn’t agreed to the separation proposal and wanted to bargain about it, but the company said the $15,000 proposal was “all the Company is prepared to offer.”

An NLRB administrative law judge found that because the incentive payments were related to the layoff announcement, Harley-Davidson had no obligation to bargain about the incentive program. The board disagreed.

The board members said the incentive payments “encompass wages and terms and conditions of employment” and were a mandatory subject of bargaining under the NLRA.

Finding Harley-Davidson failed to give the union reasonable advance notice or an opportunity to bargain, the board ordered the employer to bargain with Lodge 175 before implementing changes in wages, hours, and working conditions, and to rescind the 2016 VSIP, if requested by the union.

NLRB attorneys represented the board’s general counsel. McNees, Wallace & Nurick LLC in Harrisburg, Pa., represented Harley-Davidson. Willig, WIlliams & Davidson in Philadelphia represented Lodge 175.

The case is Harley-Davidson Motor Co., 2018 BL 232587, 366 N.L.R.B. No. 121, 6/29/18.

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