NLRB Finds Kellogg Lockout Was Unlawful, Orders Bargaining and Back Pay for Workers

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By Lawrence E. Dubé

May 11 — Reversing an administrative law judge, the National Labor Relations Board May 7 held that Kellogg Co.'s nine-month lockout of more than 200 workers violated the company's duty to bargain with the Bakery, Confectionery, Tobacco Workers and Grain Millers and discriminated against workers at a Memphis, Tenn., cereal plant.

NLRB Chairman Mark Gaston Pearce and Members Kent Y. Hirozawa and Harry I. Johnson rejected Kellogg's claim the lockout was a lawful tactic in a labor dispute over local issues that were mandatory subjects of collective bargaining between the company and the union.

The board concluded that Kellogg violated the National Labor Relations Act by insisting to impasse on proposals that would have forced midterm changes in employee wages and benefits that already were established by a master agreement covering the Memphis plant and other Kellogg facilities.

The board ordered Kellogg to bargain with the union, offer reinstatement to any locked-out workers who have not returned to work, and make employees whole for any loss of pay or benefits resulting from the lockout.

Lockout Followed Local Bargaining Impasse

Workers at Kellogg's Memphis plant, who are represented by BCTGM Local 252G, were locked out in October 2013 when negotiations on a new collective bargaining agreement stalled over the company's proposal to increase its use of lower-paid “casual” workers at the plant. 

The Memphis facility is one of four Kellogg plants around the country covered by a master collective bargaining agreement that was last negotiated in 2012.

The master agreement was effective from 2012 to 2015, and was therefore in effect in 2013, when the company and union arrived at an impasse over the terms of a new local agreement for the Memphis plant.

Court, ALJ Reached Different Conclusions

The BCTGM and Local 252-G filed an unfair labor practice charge alleging that the company was engaged in unlawful bargaining and that the lockout violated the NLRA. The NLRB's general counsel issued a complaint against Kellogg, and the board sought a preliminary injunction under Section 10(j) of the act.

The U.S. District Court for the Western District of Tennessee granted the board's injunction request, finding that there was at least reasonable cause to believe that the employer's conduct violated the NLRA and finding that injunctive relief was just and proper. The court ordered Kellogg to offer reinstatement to the locked-out workers pending the NLRB's final resolution of the unfair labor practice charge.

In August 2014, shortly after the entry of the injunction, an NLRB ALJ issued a decision finding that Kellogg illegally denied the union access to some information, but he concluded that the parties reached an impasse over a mandatory bargaining subject and the lockout was lawful.

Board Finds Bargaining, Lockout Violations

The board disagreed with the ALJ. Pearce and Hirozawa wrote that the ALJ “misperceived the impact” of the employer's proposals concerning the employment of casual workers. If adopted, the proposals would have allowed Kellogg to cease hiring regular employees and replace them with casuals, the board said.

The board said the master agreement was intended to ensure that the core of the Kellogg workforce would be permanent full-time employees receiving the pay and benefits the union negotiated for regular workers.

Finding that the company's proposals would have modified the provisions of the master agreement as it applied to new and returning employees, the board held that the company violated sections 8(a)(1) and 8(a)(5) of the NLRA by insisting that the union accept midterm modifications to the master agreement, and by locking out employees.

Stating that the act only permits use of lockout in support of an employer's legitimate bargaining position, the board concluded that Kellogg's improper bargaining also dictated a finding that the lockout was unlawful discrimination that violated Section 8(a)(3) of the NLRA.

Johnson wrote a concurring opinion that questioned some of the majority's analysis of the Kellogg proposals, but he agreed that adoption of the proposals would have effectively modified the master agreement.

To contact the reporter on this story: Lawrence E. Dubé in Washington at ldube@bna.com

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

Text of the opinion is available at http://op.bna.com/dlrcases.nsf/r?Open=ldue-9wemdd.