Labor & Employment Law Daily Wrap Up, LABOR—UNFAIR LABOR PRACTICES—NLRB: Employer unlawfully removed work from union subsidiary and transferred it to nonunion subsidiary, (Sep 11, 2026)

By Ronald Miller, J.D.

The Board agreed with an administrative law judge that taking work away from unit members and transferring it to another operating company was a mandatory subject of bargaining.

Applying the clear and unmistakable waiver standard outlined in Endurance Environmental Solutions, a three-member panel of the NLRB found that employers violated NLRA Section 8(a)(5) and (1) by unilaterally transferring bargaining unit work away from bargaining unit employees. The Board found that the record did not establish a union clearly and unmistakably waived its right to bargain over the transfer of the disputed work. Moreover, because layoffs of bargaining unit employees were a direct result of the unlawful unilateral removal of the work, the layoffs also violated Section 8(a)(5) and (1). However, the Board dismissed an allegation that informing the union that an employer lost a bid was its own separate 8(a)(1) violation. On the other hand, the Board affirmed an ALJ’s finding that employers violated Section 8(a)(2) and (1) by prematurely recognizing a new union as collective bargaining representative of employees (Leo Marine Services, Inc., 375 N.L.R.B. No. 35 (Sept. 10, 2026)).

On October 14, 2020, Centerline Logistics Corporation (CLL), a marine petroleum transportation operator and parent company of Leo Marine Services, Inc. (LMS), Olympic Tug & Barge, Inc. (OTB), and Westoil Marine Services, Inc. (WMS), jointly initiated an internal bid process with Harley Marine Financing (HMF) whereby CLL’s various operating companies could submit bids for the “Glencore work” in Los Angeles/Long Beach (LA/LB).

WMS had been servicing the Glencore contract for over 20 years, and it accounted for a significant portion of WMS’s work each year. None of the companies notified the Inlandboatmen’s Union (IBU)—WMS employees’ exclusive bargaining representative—about the bid process at the time it was announced. WMS submitted its initial bid to retain the Glencore work.

WMS bid. After CLL advised WMS that its initial bid was out of range, WMS notified the IBU about the bid process for the first time and asked to discuss how WMS could submit a more competitive revised bid. WMS sought a “memorandum-of-understanding” (MOU) from IBU allowing for cost-reducing measures that would help WMS submit a competitive revised bid. But before the MOU was drafted, and more than two weeks before the final bid deadline, WMS submitted its final revised bid with no meaningful changes from its initial, rejected bid.

WMS did not inform IBU about the revised bid despite having multiple meetings with the IBU representatives. IBU was led to believe that WMS was working with it to lower operating costs and submit a more competitive bid. WMS rejected the IBU’s proposed MOU without sufficient explanation or counteroffer.

On December 9, 2020, CLL/HMF informed the IBU that they had awarded the Glencore work to OTB, a nonunion subsidiary of CLL. CLL/HMF could not convincingly or consistently explain why they selected OTB, nor could they account for the blatant deficiencies in OTB’s bid. Then, in late January 2021, CLL/HMF took the Glencore work from OTB and gave it to LMS, a subsidiary of OTB that never even bid on the Glencore work. CLL/HMF also failed to satisfactorily explain this decision.

Layoffs. On March 1, 2021, LMS officially took over the Glencore work. Consequently, WMS laid off 10 employees from its regular schedules and moved them to the non-scheduled “casual list.” Losing the Glencore work also significantly reduced the amount of casual work that was available, and because the casual list operates based on seniority, moving the employees who used to be regularly scheduled to the casual list meant that those who had previously been on the casual list were bumped down. This resulted in some casual employees receiving less work than before, and those at the bottom of the list receiving no work at all.

The General Counsel alleged that the employers violated Section 8(a)(5) and (1) by failing to bargain in good faith before taking away bargaining unit work from WMS employees and giving it to another subsidiary, and by laying off WMS employees as a result of that work transfer.

The Board agreed with an administrative law judge that taking work away from unit members and transferring it to another operating company is a mandatory subject of bargaining as labor costs were at the center of the decision. The Board also agreed with the ALJ that the employers did not bargain to impasse, nor could the parties have bargained to a valid impasse when the employers engaged in such blatant bad-faith bargaining.

Unmistakable waiver standard. The ALJ found an 8(a)(5) and (1) violation for the unilateral transfer of bargaining unit work under the “contract coverage” standard in place at the time he issued his decision. Since then, however, the Board issued its decision in Endurance Environmental Solutions, LLC, 373 NLRB No. 141 (2024), and returned to the clear and unmistakable waiver standard. Applying the clear and unmistakable waiver standard here, the Board found that the record did not establish that IBU clearly and unmistakably waived its right to bargain over the transfer of the Glencore work.

Evidence of statements made by IBU during previous bargaining negotiations and during the MOU “negotiations” throughout the Glencore bid process did not constitute a clear and unmistakable waiver of the IBU’s right to bargain over the Glencore work, as the parties had never meaningfully bargained over transferring the Glencore work away from unit employees or to another operating company. Additionally, there was no credible evidence that WMS had a routine past practice of assigning LA/LB unit work to OTB or any other CLL operating company.

Moreover, nothing in the CBA’s Management Rights Clause was sufficient to grant WMS unilateral authority to transfer bargaining-unit work to another operating company, as the language was too broad and general and did not waive the IBU’s right to bargain about this specific topic. Accordingly, the Board found that the employers violated Section 8(a)(5) and (1) by unilaterally taking the Glencore work away from WMS.

Because the layoffs were a direct result of the unlawful unilateral removal of the Glencore work, the ALJ correctly found that the layoffs also violated Section 8(a)(5) and (1).

Lost bid announcement. The Board disagreed with the ALJ that informing the IBU that WMS lost the bid was its own separate 8(a)(1) violation in these particular circumstances. On the same day that CLL/HMF informed OTB it had won the bid, WMS called IBU representatives to inform them that WMS had lost the bid. There was nothing independently coercive or threatening about the announcement, and informing the IBU about the change on the same day that CLL/HMF announced its decision to the other bidders was inseparable from the 8(a)(5) and (1) unilateral change violation. Accordingly, the Board dismissed this Section 8(a)(1) allegation.

Premature recognition of union. The Board affirmed the ALJ’s finding that the employers violated Section 8(a)(2) and (1) by prematurely recognizing the Seafarers International Union (SIU) as the collective-bargaining representative of LMS employees. On February 12, LMS received a letter from the SIU, indicating that it had authorization cards showing representative status for LMS employees. During the meeting, SIU presented signed pledge cards from 13 employees. LMS recognized SIU and the parties engaged in negotiations and reached a tentative agreement.

On February 19, LMS was informed that the tentative agreement had been ratified by the SIU. LMS and the SIU executed the CBA. On March 3, LMS notified a Region that it had voluntary recognized the SIU on February 17.

An employer violates Section 8(a)(2) of the Act when it extends recognition to a union that does not represent an uncoerced majority of employees. In determining whether an employer prematurely recognized a labor organization, the Board applies a two-part test: (1) the employer must employ a substantial and representative complement of its projected work force; and (2) the employer must be engaged in normal business operations.

Prior to the date of LMS’s recognition of SIU it employed only one bargaining unit employee at its Los Angeles facility, whereas the other 16 LMS employees worked out of its Alameda facility. Moreover, not until March 1, 2021, did LMS Los Angeles begin operating equipment and servicing customers. Accordingly, when the employer granted the SIU voluntary recognition, such recognition was premature.

The slip opinion is 375 NLRB No. 35.

Attorneys: Sanam Yasseri for General Counsel. Christopher L. Hilgenfeld (Davis Grim Payne & Marra) for Leo Marine Services, Inc. Dimitri Iglitzen (Barnard, Iglitzen & Lavitt) for Inlandboatmen’s Union of the Pacific. Jason Wojciechowski (Bush Gottleib) for International Organization of Masters, Mates & Pilots, AFL—CIO.

Companies: Leo Marine Services, Inc.; Olympic Tug & Barge, Inc.; Centerline Logistics Corporation; Westoil Marine Services, Inc.; Harley Marine Financing, LLC; Inlandboatmen’s Union of the Pacific; International Organization of Masters, Mates & Pilots, AFL—CIO

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