Arbitrator and NAA member Lise Gelenter discusses a recent decision by the National Labor Relations Board dealing with the use by the union of the grievance/arbitration process to influence a subsidiary of the main employer.

In Road Sprinkler Fitters Local Union 669 and Firetrol Protection Systems, 365 NLRB No. 83 (27-CC-091349) 5/23/17), the National Labor Relations Board found that a Union had committed an unfair labor practice by trying to use the grievance/arbitration process and litigation to influence Firetrol, a subsidiary of the same parent company that owned Cosco, the company at which the Union was the certified bargaining representative for a unit of employees.  Cosco, which had had a collective bargaining relationship with the Road Sprinkler Fitters Local Union 669 (Union) since 1959, provides fire suppression and control systems in several states and is a subsidiary of MX.  Firetrol, which provides similar services in several states where Cosco does not operate, is also a subsidiary of MX and is a non-union company.

In 2012, the Union had filed a petition with the NLRB to represent Firetrol’s sprinkler fitter employees in Denver.  Firetrol closed that company on June 26, 2012 and stopped serving clients in Colorado.  The Union then filed a grievance against Cosco, Firetrol and MX alleging that they had violated Addendum C of the CBA between Cosco and the Union.  Addendum C was a preservation of work provision which required the signatory employer, Cosco, to apply the same wage and benefit terms to employees doing any work  within the “trade and territorial jurisdiction” of the Union whether the employer operated ”under its own name or under the name of another, as a corporation, sole proprietorship, partnership, or any other business entity including a joint venture.”  The grievance was filed on behalf of Firetrol’s Denver employees, claiming that Firetrol’s closing of the Denver venture was an act of retaliation against Firetrol’s employees’ union activity.  The Union subsequently filed a lawsuit in federal court in California against Cosco and MX to compel arbitration of the grievance.

The NLRB agreed with the Administrative Law Judge (ALJ), who found that Firetrol and Cosco were separate, independently managed subsidiaries of MX and were not a “single employer.” Therefore, the Cosco CBA did not apply to Firetrol.  The ALJ also found that the grievance was not really intended to preserve bargaining unit work, but was really trying to acquire work from Firetrol.  In addition, the grievance was intended to compel Firetrol to recognize the Union as its employees’ bargaining representative.  These secondary purposes violate Section 8(b)(4)(ii)(A) and (B) of the National Labor Relations Act, the Board and ALJ agreed, which provide that a union commits an unfair labor practice if: 1) it threatens or coerces any entity to cease doing business with an employer for the purpose of forcing the employer to enter into an agreement with the union; or 2) if it tries to force an employer to recognize a union through coercive measures.

This case hinged on the finding that Cosco and Firetrol were not commonly managed companies and that, therefore, the grievance and arbitration process in Cosco’s CBA was inapplicable to any Union disputes with Firetrol.