Seventh Circuit Blasts ADT For NLRA Violations

Mathew Moldawer
Mathew Moldawer

From the opening, it was apparent that the Seventh Circuit Court of Appeals was not pleased with ADT.  ADT, well known for their blue signs to discourage intruders, was found to have violated the National Labor Relations Act (NLRA) by the National Labor Relations Board (NLRB).  As stated by the Court, the case “presents a disappointing and transparent attempt by an employer to avoid its obligations under the National Labor Relations Act.”  The case is ADT, LLC v. NLRB, 54 F.4th 981 (7th Cir. 2022).

The circumstances presented in the case are by no means unique – instead it was the actions by ADT that put them in hot water.  ADT had union employees at a facility in Rockford, Illinois and non-union employees at a facility in Madison, Wisconsin.  In May 2019, ADT announced that the two facilities would merge and work out of a new facility in Janesville, Wisconsin.  ADT management assured the Rockford employees that there would be no change to the status of the union.  This held true for several months until ADT took the step to withdraw recognition of the union based on a decertification petition that was not signed by a single bargaining-unit member.  When asked about the decertification, ADT management told the employees that they were no longer part of the union.  ADT management also told the employees this had been done at other facilities and was totally legal.  The union filed unfair labor practice charges against ADT and the NLRB agreed.

The Court of Appeals for the Seventh Circuit framed the issue as whether changed circumstances called for a change in the bargaining unit.  The Court answered that in the negative.

The theory proposed by ADT was that combining Rockford and Madison offices changed the work of the two groups so substantially that it would be intolerable to keep them split for purposes of a bargaining unit.  ADT stated that the Rockford and Madison employees now work side by side, and complete the same work, in the same geographic areas, wear the same uniform, and report to the same managers.

The Court conceded that the employees’ work was very similar.  Yet, ADT did not meet its heavy burden.  As to the factual circumstances supporting the lack of distinct identity between the two groups, the Court noted that this was because ADT had unilaterally changed the conditions of the employment so to match one another – absent the unlawful changes by ADT, the distinct nature of the bargaining unit would have remained. Moreover, “integration,” the Court held, requires more than random encounters at the central office, weekly online meetings, and a welcome breakfast provided to the employees at the new facility.

The Court found especially relevant the bargaining history of the Rockford facility.  It noted there is a strong presumption to maintain the status quo absence compelling circumstances in cases involving consolidation of union and non-union employees.  In this case, the union had been present at the Rockford facility since the 1990s. ADT and the union had successfully negotiated eight or nine collective bargaining agreements (CBAs).

In addition to the bargaining history between ADT and the union, the Court found equally compelling that ADT had used this same scheme to avoid obligations to the union before.  In 2008, ADT closed a union facility in Kalamazoo, Michigan and reassigned the employees to another Michigan facility.  Subsequently, ADT claimed the union employees had integrated with the non-union employees.  Much like the result here, the Board rejected ADT’s arguments, finding the Kalamazoo bargaining unit did not disintegrate but remained an appropriate unit. The Sixth Circuit affirmed.

Employers can learn from this case.  There are circumstances by which a bargaining unit may be so integrated so as to destroy its unique identity. Cases from the Board support that.  However, as identified by the Seventh Circuit, “relocating a bargaining unit from one facility to another does not alone create the compelling circumstances needed to justify withdrawal of recognition.”  

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