Labor & Employment Law Daily Wrap Up, LABOR—UNFAIR LABOR PRACTICES—3d Cir.: Employer unlawfully told employees that it was delaying pay increase pending results of union election, (Mar 26, 2025)

By Ronald Miller, J.D.

An employer memorandum explicitly told facility employees that, to be “eligible” for the merit increase, they must not be part of a collective bargaining unit.

Substantial evidence supported an NLRB determination that an employer memorandum had a tendency to coerce a reasonable employee not to exercise his right to choose union representation for fear that he would not receive a merit wage increase if the union won an upcoming election, ruled the Third Circuit, in an unpublished opinion. Because the memorandum defined eligibility for the increase as excluding unionized employees, a facility employee would have reasonably believed he would not receive his “eligible merit increase” if he voted for the union, and the union won. However, the appeals court lacked jurisdiction to review employer’s challenge to Board’s remedy setting aside election results and directing a new election (Russell Reid Waste Hauling & Disposal Service Co. Inc. v. NLRB, Nos. 24-1890 and 24-2014 (3d Cir. Mar. 19, 2025, unpublished)).

Union election. The employer operates a company providing portable sanitation and nonhazardous liquid waste management services. In June 2020, a union petitioned to represent certain employees at a New Jersey facility and a mail-ballot vote on whether to unionize was subsequently scheduled to commence in early August 2020.

Employer memorandums. Consistent with its past practice of granting wage increases in July or August to nonunion employees, on July 13, 2020, the employer sent a memorandum to employees announcing this year’s wage increase and explaining that employees not “part of a collective bargaining unit” were eligible for the increase, which would take effect in July.

On July 21, 2020, the employer issued a separate memorandum addressed only to the New Jersey facility employees. This was the only facility with a pending union election. The memorandum announced a merit-increase to eligible employees. However, any increase for the facility employees was postponed for employees in job classifications eligible to vote in the election.

A few weeks later, the facility held the representation election, and the union lost twenty-three to eleven.

The NLRB’s General Counsel issued a complaint alleging that the employer’s memoranda violated the NLRA. The union also filed objections to the election, arguing that the memoranda influenced the election results and requesting that the election be set aside.

Unfair labor practice. An administrative law judge found that the employer committed an unfair labor practice in violation of § 8(a)(1), because the July 21 memorandum tainted the election results. The ALJ set aside the election results and ordered a new election. The employer filed objections to the ALJ’s decision.

In a two-member majority decision, the Board affirmed the ALJ’s ruling, concluding that the memorandum had the tendency to coerce employees not to vote for union representation, as employees reading it would reasonably be concerned that they would not receive the increase if they unionized.

The employer petitioned for review and the Board cross-petitioned to enforce the order.

The employer raised four grounds for relief: (1) the removal protections for the Board’s ALJs are unconstitutional; (2) the Board’s ruling violates the First Amendment; (3) substantial evidence did not support the conclusion that it committed an unfair labor practice; and (4) the purported unfair fair labor practice did not justify setting aside the election results and ordering a new election.

Extraordinary circumstances. Here, the Third Circuit found that none of these arguments provided grounds for granting the employer’s petition for review. As an initial matter, the employer conceded that it did not raise the ALJ’s removal protections or First Amendment arguments before the Board. Further, the appeals court rejected the employer’s argument that extraordinary circumstances excused its failure to raise its challenge to the ALJs’ removal protections. A challenge “does not call into question the ALJ’s or the Board’s core authority to act” because even if an official’s removal protections are unconstitutional, she “can still carry out [her] duties.”

Moreover, the employer identified no extraordinary circumstances to warrant considering this unexhausted constitutional challenge to the ALJs’ removal protections.

Additionally, the appeals court declined to consider the employer’s unexhausted argument that the Board’s ruling runs afoul of the First Amendment because there was no finding that the employer understood its July 21 memorandum was threatening. The employer’s contention that raising this constitutional argument to the Board would have been futile was not an extraordinary circumstance that excused its failure to exhaust.

Substantial evidence. Rejected also was the employer’s contention that substantial evidence did not support the Board’s conclusion that it committed an unfair labor practice under Section 8(a)(1).

An employer’s statements violate Section 8(a)(1), if “in light of all the existing circumstances,” they “would tend to coerce a reasonable employee not to exercise her labor rights.”

Postponed wage increase. An employer does not violate Section 8(a)(1) by delaying “an expected wage or benefits increase so long as it makes clear to employees that: (1) the sole purpose of the postponement is to avoid the appearance of influencing the election’s outcome; and (2) the employees w[ill] receive their... increases after the election regardless of the outcome.” Failure to make these representations when postponing an expected increase, however, may constitute an unfair labor practice.

Here, the employer’s July 13 memorandum announced the annual increase to certain employees (some of whom were part of a union), but the record is unclear on whether employees at the New Jersey facility received it. It was clear, however, that the July 21 memorandum: (1) was sent to the employees of the New Jersey facility; (2) announced that increases would be delayed until after the up-coming union election; and (3) explicitly to the employees that, to be “eligible” for the merit increase, they must not be part of a collective bargaining unit.

The memorandum failed to make clear that employees would receive their increases regardless of the election outcome. In this context, a reasonable employee would understand this to mean that he would not receive an increase if he voted for the union and the union won.

Therefore, the appeals court granted the Board’s cross-petition for enforcement of its order, and denied the employer’s petition to review the Board order.

The cases are Nos. 24-1890 and 24-2014.

Judge: Schwartz, P.

Attorneys: Emily Carapella (Littler Mendelson) for Russell Reid Waste Hauling Disposal Service Co. Inc. Ruth E. Burdick for the NLRB.

Companies: Russell Reid Waste Hauling Disposal Service Co. Inc.

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