NLRB v. Federal Security, Inc.

BEHIND THE SCENES STORY OF A
U.S. COURT OF APPEALS DECISION

By Richard H. Wessels, Esq.

It is not an everyday occurrence that a lawyer takes a case to the United States Court of Appeals. And wins. Especially when the lawyer is taking on the National Labor Relations Board (NLRB).

It is even more fun when there are some unique labor law facts. Robert Taylor homes on Chicago"s tough South Side. . . .no union involved, but a security company's guards walk off the job. . . .frightened Chicago Housing Authority (CHA) residents huddle in fear of gangs. . . .the guards are fired. . . . NLRB reinstates guards with backpay and interest!

Come on. . . .reinstatement with backpay? Here is the behind-the-scenes story.

Back last fall the frustrated owner of the guard company in Chicago called me. He was more than frustrated. He had been involved in a National Labor Relations Board case and it had been dragging on for five years. It was not going well. He related the story.

In 1992, several of his employees, whose job it was to guard CHA buildings, walked off the job. There was no union involved. They first notified a dispatcher that if the president of the company did not meet with them in 90 minutes to discuss their demands, the guards would walk out. Even though the dispatcher could not reach the president, the group of guards walked away from their posts 90 minutes later, leaving behind frightened residents and vulnerable co-workers.

The group marched through the street recruiting guards at other buildings to join them. Meanwhile, residents, as well as those looking for an opportunity to make residents their victims, looked on as the guards walked away in protest. The company reacted quickly and was able to restore security within 30 minutes.

The company fired the guards, partly because CHA rules barred security workers who walk out from working on CHA projects. The workers went to the local NLRB office which, after a hearing, found no danger existed and ordered that the workers be reinstated with backpay, benefits and interest. The Board found that the conduct qualified as "protected concerted activity." The NLRB in Washington agreed with the local region. Then the NLRB waited for two years to enforce its order in court.

The business owner needed to understand some cold facts about the labor law. To oppose the enforcement of an NLRB order in front of the United States Court of Appeals is not a simple undertaking. He was looking at substantial legal fees to review the five year record of the case, to carefully research the case law, to file briefs, and to prepare for and participate in oral argument before the Court. He didn't have that kind of money. But, as we discussed the case, it became more and more clear that a real injustice had been done. Finally, I was convinced and said, " Look, if it is okay with you, I will put a couple of my newer attorneys on this and try to keep fees down. They can handle the job. We'll consider this tough case as good training for them and see what they can do for you. We' ll take the case." The case was assigned to Ron Passarelli and Laura Smith to research, prepare and argue. Ron and Laura briefed the case and Ron argued the case in the U.S. Court of Appeals.

Now, you need a bit of the basic fundamentals of the labor law in this issue.

The National Labor Relations Act (NLRA) allows employees, whether unionized or not, to collectively protest issues involving their wages, hours, terms or conditions of employment. Activities to protest these issues are usually "concerted and protected" by the NLRA. However, that protection is not absolute and some concerted activities may actually lose NLRA protection. Courts have ruled that the NLRA's protection may be lost if the activities jeopardize the employer's property or the health, safety or welfare of others. This is referred to as the "health and safety" exception.

The NLRB had ruled that the exception did not apply because the company was able to provide coverage quickly, the walkout occurred at 10 a.m. and, because no one was actually injured, there was no threat to the safety of residents or co-workers. The Court of Appeals quizzed the NLRB attorney about the Robert Taylor Homes and the danger which goes with that area. The Court specifically wanted to know if the NLRB attorney had ever dropped by to visit the Robert Taylor Homes, even at 10 a.m., to be able to say that the walk out of security guards caused no danger.

The Court later ruled that the danger of harm existed and it was reasonable to believe that harm to residents and to guards who remained on the job could have occurred. Also, the Court found that the company should not be penalized for its quick reaction to adversity. The walk out may have been the type of concerted activity normally protected by the NLRA, but it lost that protection because of the danger it created. The activity fit the health and safety exception to the NLRA.

On September 9, 1998, a panel of judges for the U.S. Court of Appeals for the 7th Circuit in Chicago came down with the decision reversing the National Labor Relations Board. Score one for the little guy.

For interested readers, the case citation is NLRB v. Federal Security, Inc.

Posted 9/30/1998