Striker Replacements: The Law, The Myths, The Realities

Recent debate in the Congress about proposed legislation to prohibit the use of permanent replacements to fill vacancies created when employees strike, has added to the general state of confusion as to the respective rights and obligations of employers and employees during the existence and upon the conclusion of a strike. With the exception of lawyers and judges who regularly work in the minefield that surrounds and permeates the National Labor Relations Act, 29 U.S.C. §§ 141, et seq., (the "Act"), most lay-persons and attorneys are susceptible to the oversimplified polemics articulated by proponents and opponents of change in those rights and obligations. The stated goal of the proposed legislation is to create a "level playing field" between labor and management in collective bargaining. Prior to 1935 when the Act became law, employers unilaterally controlled the workplace. That unbridled power was abused. Employees were not treated fairly and had no effective recourse. The Act provides employees with protection and encourages them to deal with their employers collectively, through unions.

The strike, as we know it today, is the exercise of an employee's right to withhold labor without being subjected to discrimination or retaliation by an employer. That right is at the core of the Act, which prohibits discipline, discharge or discrimination of an employee for participating in a strike, the ultimate form of union activity.

In 1938, the Supreme Court in N.L.R.B. v. Mackay Radio & Telegraph Co., 304 U.S. 333, 2 L.R.R.M. 610 (1938), addressed the problem of balancing an employee's right to strike without fear of being discharged, against the right of an employer who has not caused or prolonged a strike by violations of the Act, to operate its business during a strike by hiring replacements who can be assured of continued employment after the strike is over. These new employees, referred to by unions as "Scabs", and by employers as "Permanent Replacements", fill the job previously done by the striker. The Mackay decision resolved the issue in favor of the employer.

The Mackay rule is that employees who strike for economic reasons, typically when contract negotiations break down after good faith bargaining by the employer, run the risk of losing the job held before going on strike to a person hired for that job as a permanent replacement. Strikers' reemployment rights when the strike is over, or when they decide to abandon the strike, is reduced to having priority for positions that are open at the time they make an unconditional offer to return to work, or which become available thereafter. The original job, however, if occupied by a person who has been designated a permanent replacement, is lost to the employee who left it to participate in the strike. The replaced striker is placed on a preferential hiring list, and must be offered a job when an opening occurs.

Correction of the perceived inconsistency between the Act's prohibition on discharge or discipline in retaliation for engaging in a strike and the Mackay rule allowing employers to permanently replaced strikers, is high on organized labor's list of new legislation it believes necessary to balance the labor-management scale. Given the extreme and selective statements made by advocates for and against changing the Mackay permanent replacement rule, a clear statement of the respective rights and obligations of employers and employees, and the practical considerations related thereto, may serve a useful purpose.

1. The right to strike is not absolute. Dorchy v. Kansas, 272 U.S. 306 (1926); Machinists Lodge 76 v. Wisconsin Employment Relations Board, 427 U.S. 132, 92 L.R.R.M. 2881 (1976).
   For example, a federal statute prohibiting federal employees from striking does not violate the equal protection aspect of due process guaranteed by the Fifth Amendment. Postal Clerks v. Blount, 325 F.Supp 879, 76 L.R.R.M. 2932 (D.D.C.), aff'd, 404 U.S. 802, 78 L.R.R.M. 2463 (1971).
2. Although peaceful picketing is generally equated by the courts to speech protected by the First and Fourteenth Amendments, Thornhill v. Alabama, 310 U.S. 88, 6 L.R.R.M. 697 (1940), such activity can be restricted when it conflicts with "valid state policy in a domain open to state regulation," even if the picketing occurs as part of a bona fide labor dispute. Teamsters Local 695 v. Vogt, Inc., 354 U.S. 284, 40 L.R.R.M. 2208 (1957); Cox v. Louisiana, 379 U.S. 559 (1965). Such restrictions generally are upheld when property rights are balanced against First and Fourteenth Amendment rights and the union has alternate means to convey its message. N.L.R.B. v. Babcock & Wilcox Co., 351 U.S. 105, 38 L.R.R.M. 2001 (1956).
3. Federal statutes both protect and regulate the right to strike. The Clayton Act exempts strikes from the prohibitions of the anti-trust laws. 29 U.S.C. § 52; and the Norris-Laguardia Act deprives the federal courts of jurisdiction to issue restraining orders, preliminary or permanent injunctions in cases arising out of labor disputes. 29 U.S.C. § 101. On the other hand, the Act, which provides the most significant protection of the right to strike, 29 U.S.C. §§ 157, 158, also imposes restraints where the picketing, or even a threat to picket, is in furtherance of a secondary boycott, or a demand by a union for recognition, where picketing continues for an unreasonable time not to exceed thirty days, in the absence of a petition for an election. 29 U.S.C. § 158(b)(7).
4. The employer's right to permanently replace a striker is riddled with the aforementioned exceptions and is rarely used because of practical considerations. For example:
5. 1. A strike that commences for purely economic reasons may be converted into an unfair labor practice strike if the employer engages in conduct which may subsequently be determined by the National Labor Relations Board (the "Board") to have been in violation of the Act. Examples of such conduct are: bargaining found by the Board to have been in bad faith (i.e., changes in terms and conditions of employment without bargaining with the union; surface bargaining; direct negotiations with employees, bypassing the union; discharge or discipline of employees because of union activity; threats or promises designed to undermine the union. The list is endless. The result of such conversion is to vitiate the employer's right to retain an employee who was hired as a permanent replacement, if the striker whose job the replacement filled elects to return to work. Failure by the employer to reinstate the unfair labor practice striker, generally within five days of the unconditional offer to return to work, is an independent unfair labor practice which exposes the employer to backpay liability, plus interest compounded quarterly, less interim earnings. That liability continues to run until the former striker is reinstated.
   2. An employer who wants to reach agreement with the union, is ill-advised to hire permanent replacements in the event of a strike, because at such time as negotiations result in mutually acceptable terms for a new collective bargaining agreement, return of all strikers to the jobs they vacated when the strike began is always insisted upon by the union as a condition precedent to the new agreement. Absent reinstatement of the strikers, ratification of the new contract is unlikely. A further related complication is the potential for wrongful termination suits by persons hired to replace strikers who are terminated as part of a strike settlement. To the extent such replacements allege and can prove they were assured when hired, that the job would continue after the strike has ended, claims for a breach of contract or fraud may have merit. Belknap, Inc. v. Hale, 463 U.S. 491, 103 S.Ct. 3172, 77 L.Ed 2d 798 (1983); Rosner v. Whittlesea Blue Cab Co., 104 Nev. 725, 766 P.2d 888 (1988).
   3. An announcement by an employer that permanent replacements for strikers will be hired, increases the risk for the strikers and applies pressure to the union to make concessions during negotiations and end the strike. At the same time, however, such announcement and implementation thereof increases the intensity level of the strike and often escalates a peaceful, manageable labor dispute, to one earmarked by violence. Violence directed at replacements both at and away from the job site is not unusual, given the anger and frustration experienced by strikers whose jobs are taken by replacements. Legal remedies in response to strike violence are often more apparent than real. Restraining orders and injunctions prohibiting threats, acts of vandalism or violence are available from state courts, but enforcement of such orders or injunctions by way of contempt proceedings can be costly and complex. Further, it is a popular misconception that the police will enforce court orders. The reality is that strike violence is dealt with by the police pursuant to the standards applicable for enforcement of penal laws in general. That means, unless the violence or breach of the peace occurs in the officer's presence, there must be a citizen complaint. As most incidents fall into the misdemeanor category, absent serious injury or substantial property damage, the law enforcement agency's response is not given high priority and judicial treatment of persons convicted is not severe.
6. In most strike situations, the use of temporary employees can satisfy the employer's needs and avoid the pitfalls involved in hiring permanent replacements. The feasibility of this option depends upon the available supply of persons seeking employment and the skill levels required for the jobs to be filled. The greater the skills called for, the more difficult it will be to find persons willing to accept a job without assurance of continued employment when the strike is over. However, jobs that can be done with minimal training or even those considered semiskilled, can often be filled by motivated individuals who are informed of the risk of layoff when the strike is over and are willing to accept that risk. In the final analysis, whether an employer should resort to permanent replacements or operate with temporary workers, will depend upon the attendant circumstances. Factors to consider are the length or anticipated duration of the strike, the respective strengths of the union and the employer, the level of operating efficiency achieved by the replacements and the overall economic impact of the strike.

Conclusion

This Article offers an overview of an issue fraught with emotional, social and legal complexities. It is intended as a stimulus to discussion and reevaluation of present positions, whatever they may be. The references to legal rights and obligations are not comprehensive. If the reader's curiosity is piqued to make further inquiry, the effort has been worthwhile.