Tech Start-Up Fires Engineers Amid Union Organizing Effort

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By Hassan A. Kanu (Bloomberg Law) and Josh Eidelson (Bloomberg)

A group of Lanetix Inc. software engineers in San Francisco and Washington, D.C., were laid off for trying to join a union, according to organizers working with the group and a complaint obtained by Bloomberg Law.

One of the engineers was fired earlier in the year for “participating in group discussions on an internal” Slack instant messaging group, the Communication Workers of America said in the National Labor Relations Board complaint. The remaining 14 were laid off Jan. 26.

Engineers in the San Francisco office were informed of the decision after being called into an impromptu meeting. “By the time they left that meeting their computers were gone,” Melinda Fiedler, a CWA organizer working with the group, told Bloomberg Law Jan. 30.

The move came less than two weeks after the workers filed a petition to join a CWA unit and days before a union election hearing scheduled for Jan 31. The workers said the company told them the layoffs were due to lackluster fourth quarter performance last year, Fiedler said.

Lanetix didn’t respond to Bloomberg Law’s multiple requests for comment.

“They said they were looking at moving their engineering operations overseas,” Cet Parks, an executive director for a D.C.-based unit of the CWA, told Bloomberg Law. Parks said the company’s timing and explanation for the terminations “seems kind of crazy with the tax cut and everything—a lot of companies are trying to share and they’re doing the exact opposite of what the cuts were supposed to be for.”

Employees who inquired were told the company was moving engineering operations to contract workers in Eastern Europe, according to the CWA representatives. Lanetix had engineers and a supervisor working out of an an office in Arlington, Va., in the metropolitan Washington, D.C., area, but the company recently took that location off its website and added “Eastern Europe (coming soon),” Fiedler told Bloomberg Law.

Alleged Threats After Organizing Conversations

Outsourcing jobs abroad for the purpose of punishing or discouraging union organizing, as opposed to a valid business reason, would violate the National Labor Relations Act.

“The issue that typically would come up is the employer would claim it had some legitimate business reason, or maybe it would claim we were planning to do it all along,” Wilma Liebman, who chaired the NLRB under President Obama, told Bloomberg Law.

Even if the company had intended to eventually move the work to Europe, it may have violated federal labor law by speeding up the process in response to the union drive, Liebman said.

The union alleged in the complaint, which was filed with the NLRB Jan. 29, that the company threatened the software engineers after they began discussing unionizing in an internal instant messaging group. Lanetix later terminated “all engineers and senior engineers in retaliation for demanding recognition,” CWA said.

Businesses often fight organizing campaigns in an effort to retain more control of a workplace and the terms of employment when workers seek to organize. Union officials alleged that the recent decision to shut down DNAInfo, Gothamist, and a number of affiliated news publications late last year was in reaction to a union organizing drive. DNAInfo’s owners said financial struggles caused them to shut the doors.

“We believe one of the most anti-unions things you can do is to let all employees go,” Parks said. “We’re going to fight as hard as we can.”

The Lanetix engineers were seeking to organize under CWA’s Washington-Baltimore News Guild banner. The Guild represents Bloomberg Law reporters and other staff members.

Case Could Test New Board Prosecutor

A regional NLRB office is likely to get the first look at the Lanetix complaint, but it may ultimately be up to NLRB General Counsel Peter Robb’s (R) office to decide what to do with it.

The remedy for violations like those CWA is alleging often includes ordering that the outsourcing be canceled and that the workers be reinstated. The Lanetix dispute is the kind of case in which a general counsel would often be asked to seek a temporary court injunction, Liebman said.

“If jobs are about to be moved away, particularly if they’re about to be moved outside the country, you want to act fast to prevent that.”

Liebman said the case “will be a test” for Robb, a former management attorney who was appointed by President Donald Trump and confirmed by the Senate last fall. Worker advocates will likely be watching whether the labor board’s top prosecutor is willing to intervene in order to keep U.S. jobs from being outsourced.

“That typically has been one of the measures of how committed a board or a general counsel is to rigorous enforcement of the law,” said Liebman. “Certainly the case is one overall which will be a reflection of the views of this general counsel about the statute.”

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