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Once it has been established that an employer's conduct negatively affects protected rights under § 7 of the National Labor Relations Act, the key question for the National Labor Relations Board, informed by NLRB v. Great Dane, is whether the employer can state a business justification for its actions. If an employer can show no legitimate and substantial business justification, a lockout is presumptively an unfair labor practice under either prong of the Great Dane analysis. Thus, the question of whether a legitimate and substantial business justification exists is a threshold question.
Petitioner Local 15, International Brotherhood of Electrical Workers, AFL-CIO ("Union") began an economic strike against employer, Midwest Generation, EME, LLC over stalled negotiations for a new collective bargaining agreement (CBA). The employer continued to operate during the strike. After a few months, and after failing to reach a new CBA, the union members voted to end their strike and offered to return to work unconditionally. The employer, however, instituted a partial lockout. The employer did not lock out workers who offered to return to work before the union made its unconditional offer, but did lock out those who sought to return to work after the union had voted to end the strike. The purpose of the lockout was to exert pressure upon the union to meet the employer's contract demands. After a contract agreement was reached, the lockout ended. The NLRB found that the employer had not violated the National Labor Relations Act (NLRA) with its lockout. Petitioner sought review.
By instituting the partial lockout, did the employer violate the NLRA?
The court noted that to justify a partial lockout on the basis of operational need, an employer must provide a reasonable basis for finding some employees necessary to continue operations and others unnecessary. In this case, the court held that the employer failed to show that it had a legitimate and substantial business justification for the partial lockout. Moreover, its different treatment of employees who offered to return prior to the end of the strike from those who voted to return afterwards discriminated against union activity.