Clarification of “Permanent-Replacement Employees” During Economic Strike

Union members engaged in an economic strike are entitled to immediate reinstatement once they make an unconditional offer to return, unless the employer can demonstrate a legitimate and substantial business justification for refusing such reinstatement.  One such justification occurs when the employer hired “permanent replacement workers” to enable the continued operation of the business.  Last month, the Seventh Circuit Court of Appeals ruled on this requirement and came down on the side of the employer. image

The union-plaintiff in the case filed an Unfair Labor Practice charge (ULP), with the National Labor Relations Board (NLRB), after its members were refused reinstatement despite having made an unconditional offer to return to work following an economic strike.  The employer contended that, because it had hired permanent replacement workers shortly after union members announced the strike, it was under no obligation to reinstate the members upon their request.

At issue was a form that the replacement workers signed at the time they were hired.  The form stated that the signatory accepted employment as a permanent replacement worker but could quit or be fired at any time, with or without cause or notice, including as a result of a strike settlement.  The union argued that the at-will status of the new employees prohibited them from being considered “permanent replacements.”  Instead, claimed the union, a replacement worker had to be employed under a binding employment contract. 

The NLRB disagreed and so did the Seventh Circuit, both finding that at-will status and permanent-replacement status are not mutually exclusive concepts.  So long as the employer intends to employ the replacements only until the strike is resolved.

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