THE DETROIT NEWSPAPER STRIKE: A TEMPLATE FOR EMPLOYERS ON PREPARING FOR AND OPERATING DURING A LABOR STRIKE

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1 Thomas Cooley Law School From the SelectedWorks of John A. Taylor April 17, 2008 THE DETROIT NEWSPAPER STRIKE: A TEMPLATE FOR EMPLOYERS ON PREPARING FOR AND OPERATING DURING A LABOR STRIKE John A. Taylor Available at:

2 THE DETROIT NEWSPAPER STRIKE: A TEMPLATE FOR EMPLOYERS ON PREPARING FOR AND OPERATING DURING A LABOR STRIKE JOHN A. TAYLOR I. INTRODUCTION The Detroit newspaper strike, the most ballyhooed labor strike of the last halfcentury, began with swagger on July 13, 1995, when six unions representing over 2,500 employees, struck the Detroit Newspaper Agency, The Detroit News and Detroit Free Press (hereinafter sometimes collectively referred as the employers ). 1 The strike would officially end with a whimper some 19 months later, on February 14, 1997, when those same unions made unconditional offers to return to work. 2 In reality, the strike, Associate Professor of Law, Thomas M. Cooley Law School; B.A. Western Michigan University 1970; J.D. University of Michigan Law School The author would like to acknowledge his research assistants, Rebecca Coyle and Jennifer Sarhan. 1 Mark Fitzgerald & George Garneau, Strike Ends In Detroit, EDITOR & PUBLISHER MAGAZINE, Feb. 22, 1997, at 6; Mark Fitzgerald, Strikers Get Another Victory, EDITOR & PUBLISHER MAGAZINE, July 12, 1997, at Fitzgerald & Garneau, supra note 1, at 6. Although the strike officially ended on February 14, 1997, the striking unions boycott did not end until December, John Gallagher, Newspapers and Unions settle 5½ year dispute, Detroit Free Press, December 18, 2000, at 1; Charlie Cain and Charles E. Ramirez, Newspaper Dispute Over, the Detroit News, at 1. See Diane E. Lewis, Labor Intensive; In Wake of Offer to Work, Newspaper Workers Escalate Corporate Campaign, BOSTON GLOBE, Feb. 22, 1997, at E1. Michael Zielinski, field representative for the International Brotherhood of Teamsters stated after the unconditional offer to return 2000 striking employees back to work that the unions would continue efforts to dissuade advertisers from placing ads in the Detroit Free Press and the Detroit News.... We want to spread the news that the strike is still here. Id.

3 dubbed by some as the strike to end all newspaper strikes 3 was doomed from the moment the unions, without adequate planning and preparation, launched their ill-fated walk out. The union s lack of preparedness stands in sharp contrast to the extensive planning and preparation the employers engaged in for at least three years leading up to the strike. 4 So extensive was the employers strike plans that even such details as researching ways to fill vending machines and get hot meals for round-the-clock workers in case of a walkout was carefully thought out. 5 While the employers incurred some surprises along the way, and were required to make some mid-course adjustments to their plans, there s no denying that these companies were arguably the most prepared of any employers in the history of labor/employment relations to take on a strike. And, in the end, that proved to be the decisive difference between winning and losing the battle. This article will examine, from an insider s viewpoint, 6 the extensive steps taken by management to prepare for union contract negotiations that began in the summer of 1995, and which did not end until 2000, some litigation relating to the strike still lingering to this very day. This article will also examine the law concerning many of the key issues management faced during the strike, as well as developments occurring during 3 Iver Peterson, Media: Publishing; Recalling Three Waves of Newspaper Strikes, After the Devastation In Detroit, N.Y. TIMES, Feb. 24, 1997, at D9. 4 See infra text accompanying note See Rachel Konrad, Newspaper Foes Pay Dearly for Year-Long Strike, DETROIT FREE PRESS, July 13, 1996, at 1E. 6 At all times during the strike and subsequent boycott, the author was employed as Senior Legal Counsel and Director of Labor Relations for the employers, and was intimately involved in the strike. Page 2 of 60

4 the strike. It will also serve as a template for any employer who is contemplating the decision of whether or not to continue to operate during a labor strike. II. THE DETROIT NEWSPAPER STRIKE A. General Strike Preparations Although the Detroit newspaper strike did not begin until July 13, 1995, the roots of the employers strike plan went back to 1992, when the previous three-year contracts with the unions expired. 7 Beginning in early 1992, the employers first developed a strike plan in the event that a successful contract could not be negotiated with the unions. 8 Fortunately, agreements were reached with all of the unions, rendering the 1992 strike plan unnecessary. After the 1992 contracts were settled, the employers went through a formal de-briefing process in which all key personnel were asked to critique the plan and identity its strengths and weaknesses. 9 After that, at the invitation of other newspapers around the country that were preparing for contract negotiations, a team of Detroit newspaper executives and managers visited newspaper representatives in Akron, Camden, Baltimore, San Jose, and Cleveland, sharing Detroit s comprehensive strike 7 Charlotte W. Craig, Unions Set A Strike Deadline For Detroit Newspapers, DETROIT FREE PRESS, July 7, Konrad, supra note 5, at 1E. 9 Detroit Newspaper Agency, Strike Plan Executive Summary (1995) (on file with author) [hereinafter Strike Plan Summary]. Page 3 of 60

5 preparations. 10 In the process, the Detroit newspapers representatives benefited from hearing other publications points of view. In addition to that learning experience, strikes that had occurred in two other cities in 1992 and 1994 added to the Detroit newspapers education. In Pittsburgh in 1992, two daily newspapers in that city went on strike, and the newspapers were never able to distribute more than a token number of papers. 11 In fact, that strike crippled the Pittsburgh Press, so severely that not long after the strike ended the publication was forced to close its doors. 12 And, in the fall of 1994, the unions of the San Francisco Chronicle and Examiner went on strike. As in Pittsburgh, the San Francisco newspapers also encountered severe distribution problems. 13 A team of Detroit newspapers personnel were on hand during that strike, and got a bird s eye view of the situation and issues as they developed. 14 From those two labor stoppages, the Detroit newspapers learned two painful lessons about strikes: First, if they intended to remain viable publications after a strike, they could not afford to be shut down for any length of time; and, second, they had no 10 Id. 11 Peterson, supra note 3, at D Memorandum from Frank Vega, President and CEO of Detroit Newspaper Agency, to Alan Lenhoff, Strike Coordinator of Detroit Newspaper Agency (Nov. 9, 1994) (on file with author) [hereinafter Vega Memo]. 14 Id. at 1-2. Page 4 of 60

6 chance of defeating the unions without extensive planning, down to the minutest of details. 15 Armed with this knowledge, the employers extensively revised their 1992 strike plan. 16 The new plan involved much more detail than the original plan, and allowed for more flexibility, as well as, setting more realistic goals and expectations. 17 Speaking about the revised 1995 strike plan, Alan Lenhoff, the newspapers strike coordinator, stated that the theory of the planning was to [d]o it in extraordinary detail, far beyond delivering and printing a paper[.]... There were a lot of things that didn t happen according to plan, but we gave ourselves a lot of options. 18 The formal strike planning for the Detroit contracts expiring in the summer of 1995, began in earnest in July, 1994 when a small group of executives and managers began meeting to discuss strike preparations. Initially, meetings were held on a monthly basis, but beginning in early 1995 these meetings were increased to weekly; and, other key personnel from each department were brought into the discussions. Eventually, when it appeared that a settlement with the unions would not be forthcoming, and a strike appeared inevitable, daily planning sessions were held. Each department was charged with creating a punch list of tasks that needed to be addressed in the event of a labor stoppage. 19 Timelines were established, and various managers and supervisors within each department were assigned the 15 See Strike Plan Summary, supra note 9, at Id. at Id. at Konrad, supra note 5, at 1A. 19 Detroit Newspaper Agency, Strike Plan (1995) (on file with author). Page 5 of 60

7 responsibility for ensuring that those tasks were completed in a timely manner. 20 As each task was completed, it was checked off the list. A strike coordinator was appointed to oversee the entire strike plan and keep key newspaper executives informed of the plan s progress. The end product, which emerged from this process, was quite impressive, a fact that did not go unnoticed by national mediums and journalistic publications. The resulting strike may have been lost by the unions the moment management, with elaborate planning and a private security force in place, decided to continue to publish. 21 Both newspapers clearly studied the tactical mistakes of other owners. Unlike management in recent strikes in New York, Pittsburgh, and San Francisco, the Detroit newspapers were quickly able to put together a newspaper and distribute it. 22 Commenting on the newspapers elaborate strike planning, Frank Vega, President and CEO of the Detroit Newspaper Agency, stated, Our system was prepared for the strike at the Detroit Free Press and The Detroit News in July In 1992 the unions were threatening, and we put together a very comprehensive strike plan.... We planned security issues, which included passwords on computers [and] locks that are changeable at a moment s notice.... We pre-identified how many pressroom people we would need, how many composing room people, and how many reporters. Those people were pulled in from 20 Detroit Newspaper Agency, Strike Plan Timelines (1995) (on file with author). 21 Peterson, supra note 3, at D9. 22 Steven Franklin, Detroit: Which Side Are You On?, 34 COLUM. JOURNALISM REV. 13 (1995). Page 6 of 60

8 other Gannett and Knight-Ridder newspapers [owners of The Detroit News and Detroit Free Press, respectively]. We knew where these employees were going to park, how we would get them in the building, [and] how much they would pay for parking.... As a result, we [ ] published every day of the strike, which is now in its sixteenth month. 23 Since management had planned so extensively for the possibility of a strike, some union members claimed that management never intended to reach agreement with the unions, and a strike was a fait accompli. To this, Vega responded, Nothing could be further from the truth. Usually you feel if you are prepared, it s a deterrent.... Look, I come from Florida, and when we get hurricane warnings, we take precautions. But nobody accused us of wanting a hurricane. 24 An example of the Detroit Newspapers elaborate strike preparations can be seen in the newspaper s plans for the Circulation Department, the department responsible for the sale and distribution of the newspapers. The Circulation s Departmental strike plan consisted of a punch list of over 300 tasks that had to be performed, along with timelines for their completion. 25 These tasks included details, such as, how many newspapers were to be printed each day of the strike, 26 mapping out all newspaper carrier 23 Forbes, November 18, 1996, Pg Mark Fitzgerald, A War of Attrition, EDITOR & PUBLISHER MAGAZINE, March 16, 1996, at 8, Detroit Newspaper Agency, Strike Plan, Circulation Department Strike Plan (1995) (on file with author) [hereinafter Cir. Dept. Strike Plan]; Detroit Newspaper Agency, Strike Plan Timelines (1995) (on file with author). 26 Cir. Dept. Strike Plan, supra note 20, at 5. Page 7 of 60

9 and truck delivery routes for replacement personnel, 27 and identifying which locksmiths would be retained to change locks on the newspaper warehouses after the onset of the strike. 28 The departmental strike plans for the Finance Department were as extensive as those for Circulation. The Finance department s tasks included details as diverse as establishing procedures for collecting money from customers, arranging for check cashing privileges for out-of-town replacement workers, creating a petty cash fund for such purposes as making bail money available to workers arrested during the strike and paying for the replacement of windows of storeowners whose property might be damaged by strikers. 29 In all, every department had to submit its own detailed strike plan to upper management for approval. These departmental plans were coordinated by the newspapers strike coordinator, and then integrated into the final document. 30 Some of the highlights of the final plan include: (1) Protection of the plants during the time of the anticipated walkout was a priority. 31 The employers were 27 Id. at Id. at Strike Plan Summary, supra note 9, at 7-8; Detroit Newspaper Agency, Strike Plan Timelines (1995) (on file with author). 30 Detroit Newspaper Agency, Strike Plan (1995) (on file with author). This document contained all departmental checklists, personnel assignments and timelines for the possible strike. 31 Detroit Newspaper Agency, Strike Plan, Operations Division Strike Plan, at 1 (1995) (on file with author) [hereinafter Op. Div. Strike Plan]. Page 8 of 60

10 determined to avoid the San Francisco experience in which both of their printing facilities were rendered useless in the first hours of the strike by sabotage to the plants and equipment, picket line violence, and the blocking of ingress and egress into the plant by picketers. 32 (2) Mobilizing out-of-town security guards and truck drivers and working with local law enforcement officials on a plan for getting strike replacement personnel in and out of the plants. 33 (3) In addition to the Detroit newspapers own in-house security staff, hiring two outside security contractors to guard all newspaper facilities and to drive and safeguard delivery trucks Vega Memo, supra note 12, at 6-7 (noting that in the Richmond, Ca. plant the workers attacked the ink delivery system, damaging the pipes and contaminating the ink supply with sawdust. At the Union City plant teamsters destroyed delivery trucks, employee cars with baseball bats, fired ball bearings from highpowers slingshots, and several people were injured.). 33 Detroit Newspaper Agency, Strike Plan, Human Resources Department Strike Plan, at 3 (1995) (on file with author) [hereinafter HR Strike Plan] (explaining that Human Resources would secure off-site parking facilities and will work with [the] security contractors to provide transportation for employees to work sites). 34 Strike Plan Summary, supra note 9, at 5 (consulting with retired FBI agent, John Anthony, the Detroit Newspaper Agency hired two main security contractors. One was based in Virginia and worked through Page 9 of 60

11 (4) Determining which plant would be the hub of their production operations. In Detroit s case, the employers selected the suburban Sterling Heights, MI plant (North Plant) as the hub instead of its City of Detroit facility (Riverfront Plant) because the North Plant was physically located farther from the road than the Riverfront Plant; and it was felt that the employers would receive better police support from the Sterling Heights police than the Detroit law enforcement officials. 35 (5) Identifying outside production sources, for the printing, typesetting and composition of the newspapers in the unlikely event that both North Plant and Riverfront Plant facilities were rendered useless. 36 (6) Training supervisors on how to operate printing presses, inserting equipment and other production equipment. 37 (7) Setting up an off-site hiring and training center for replacement workers. 38 strikes in Akron, San Jose, Philadelphia and Pittsburgh. The other was based in Troy, MI and worked for the San Francisco Newspaper Agency during its strike.). 35 Op. Div. Strike Plan, supra note 25, at Id. at 3; Strike Plan Summary, supra note 9, at Strike Plan Summary, supra note 9, at Id. at 6. Page 10 of 60

12 As prepared as the Detroit newspapers were to take on the unions, the unions were as equally unprepared to take on the newspapers. In contrasting the Detroit newspaper unions failed strategy to a successful strike by the International Brotherhood of Teamsters against United Parcel Service (UPS) around the same time, one national magazine wrote, [A] key victory at UPS was preparation. The Teamsters International waged a seven-month campaign both among members and, to a lesser extent, in public. It included a survey, buttons, T-shirts, Blow the Whistle Day, petitions, and parking lot rallies. Well before that, the union had organized members against UPS s cooperating team concept scheme, using a video and regional workshops to get out the message that we have a team -- it s the Teamsters In Detroit, in contrast, there was next to no strike preparation. When leaders called members out in July 1995, confusion reigned; half the Newspaper Guild the unions most visible members soon scabbed. Local leaders stated strategy was to wait management out for seven months, the figure they confidently gave as the usual length of a newspaper strike Jane Slaughter, VSP and Detroit Newspaper Strikes, MONTHLY REV., Jan. 1998, at 53. Page 11 of 60

13 Indeed, in a post-mortem strike assessment, Bernie Lunzer, who was Secretary-Treasurer of the Newspaper Guild during the newspaper strike, 40 writing in the unions own newspaper, candidly admitted that the unions were simply ill-prepared for the strike. Many have analyzed this strike s causes and logistics, but for me, it s clear we really weren t prepared for a strike. Our local had been badly bruised by internal political infighting, which damaged the Guild s overall credibility. There was not enough communication in the first month of the strike, and little mobilization. The unions weren t able to gear up a strike paper for almost half a year. The overall issues of the strike were not clear at inception some locals struck with as many as 100 issues on the table. Observers had to sort through this morass, and the moral high ground was not easily found. The immediate goal of the unions was not perfectly clear, which helped create doubt in many. These factors added up to a situation that caused serious and early erosion of support for Guild strikers The Newspaper Guild represented approximately 400 striking employees at the onset of the strike, in three different bargaining units. 41 The Guild Reporter, November 17, 2000 issue. Page 12 of 60

14 Ben Burns, a former editor at The Detroit News, who now teaches journalism at Wayne State University in Detroit, offered an even more blunt assessment of the strike fiasco, calling the strike ill-timed, ill-conceived and ill-led. 42 B. Strike Background In the summer of 1995, six newspaper unions formed a coalition known as the Metropolitan Council of Newspaper Unions (MCNU), which bargained jointly with the employers. The six unions comprising the MCNU were the International Brotherhood of Teamsters, Local #372, Graphic Communications International Union, Local 13-N, Newspaper Guild, Local #22, Graphic Communications International Union, Local #289-M, Detroit Typographical Union No. 18, and Detroit Mailers Union, Local #204. Initially, both sides were cautiously optimistic about reaching a settlement. 43 This optimism was fueled by the fact that on April 30, 1995, in separate negotiations, the newspapers had reached a settlement with the unions representing their so-called skilled trades employees the International Brotherhood of Electricians, International Brotherhood of Carpenters, International Union of Operating Engineers and the International Association of Machinists. 44 These settlements called for a 10.3% wage 42 Carol Schlagheck, Living in the Wake of a Newspaper Strike, THE QUILL, March 1, 2001, at Rachel Konrad, End of Strike May Be Costly for Detroit Newspapers, DETROIT FREE PRESS, Feb. 15, The International Association of Machinists represented employees employed in the machine shop and garage mechanics, in two separate bargaining units. See Tom Henderson, Pulp Friction, CORP. DETROIT, March 1996, at 4 (stating that [f]ive unions two units of the mechanists, the operating engineers, the electricians and the carpenters, with a total of 150 employees settled and continued to work ). Page 13 of 60

15 increase over three years. 45 However, bargaining with the six unions that formed the MCNU stalled. Management and the MCNU initially agreed to extend the contracts, which also expired on April 30, 1995, on a day-to-day basis. 46 In late June, 1995 the newspapers informed the MCNU-represented unions that the expired contracts would not be extended beyond June 30, and on July 6, 1995 The Detroit News declared that negotiations with the Newspaper Guild had reached an impasse and unilaterally implemented a merit pay plan for its journalists. 48 One week later, on July 13, 1995, the six unions comprising the MCNU struck all three employers, and 2,500 employees walked off the job. 49 Why did the unions go on strike? What were the hot-button issues that drove them out on the picket line? Who is to blame for the strike? Not surprisingly, management and the unions disagree on who, or what, caused the walkout. The company started the war by canceling the contracts last Sunday. That was a slap in the face of the unions[,] according to Al Derey, Chairman of the MCNU. 50 Then, on Wednesday, management of The Detroit News declared talks 45 Konrad, supra note 5, at 1A. 46 Id. 47 Detroit Newspapers, F/K/A The Detroit Newspaper Agency, The Detroit News, Inc. and The Detroit Free Press, Inc., and Detroit Typographical Union No. 18, Communications Workers of America, et.al., case No. 7-CA-37361, et.al. at ID at Id. 50 Charlotte W. Craig, Unions Set A Strike Deadline for Detroit Newspapers, DETROIT FREE PRESS, July 7, 1995, at??. Page 14 of 60

16 with its journalists at an impasse and imposed a pay plan based primarily on merit raises rather than contractually scheduled pay hikes. We had notified the Detroit Newspapers that if they took any more provocative steps, we would respond in kind, Derey said. 51 The newspapers, Frank Vega, denies that these actions were intended to provoke the unions. [h]ow do you force somebody to strike?... For people to think I m this big union buster believe me, I come from union roots. I understand the purpose of unions. 52 One local Detroit publication has its own take on the causes and wisdom of the strike. Writing in Corporate Detroit Magazine, former Detroit Free Press writer and former Newspaper Guild member, Tom Henderson, noted that it became harder to find a rational explanation for the strike the more you study the issues [and] the more you talk to the union leaders and management. 53 Henderson, further stated: The Great newspaper Strike of does not comprise a complicated set of issues. It has been an insult to the great union movement of the 1930s; a travesty of bad tactics used to fight a bad and unwinnable war, spearheaded by union leaders who seem remarkably out of touch with the technology that has rendered their strike impotent, as well as the social and economic changes that have rendered their issues irrelevant, anachronistic or downright counterproductive. 51 Id. 52 Henderson, supra note 44, at Id. at 1. Page 15 of 60

17 This is not a strike about dignity. It is not about protecting the hard-won gains of the working class, or improving one s dangerous work environment, or ensuring that hard-working people are not crunched in the cogs of industry. It s about internecine warfare for the sake of internecine warfare, protecting turf (or, in the jargon of the unions, jurisdiction ), featherbedding, dues protection and work rules that are stunning in their laxity or stupidity. 54 Whatever the reasons that provoked the strike, primarily with the help of replacement and cross-over employees; and to a lesser extent with temporary loaners from other Gannett and Knight Ridder properties, management continued to operate throughout the labor interruption, not missing a single day s publication. 55 The decision to continue to operate during the strike was not a difficult one for management to make; the employers felt that they could not afford to fold up shop, and hope to emerge after a lengthy strike as a viable entity Id. at See Anya Sacharow, Walking the Line in Detroit; Is This the Future of Labor Relations, or Just One Strike?, ADWEEK, July 22, 1996 (noting that adding to the initial reasons for the strike was then the hiring of permanent replacement workers during the strike). 56 Tony Case, Detroit Strike Stirs NABJ Strife; Recruiters, Strikers Square Off In Philadelphia; Times Mirror Recruits, Despite Cutbacks, EDITOR & PUBLISHER MAGAZINE, Aug. 26, 1995, at 13. Luther Keith, Assistant Managing Editor of The Detroit News, in explaining at the time why the News chose to continue operating, said, We re faced with a very serious business reality. If you don t publish your product, then Page 16 of 60

18 On February 14, 1997, nineteen months after the strike began, the unions made an unconditional offer to return to work, which officially ended the strike, but they vowed to continue their circulation and advertising boycotts. 57 While the MCNU s Derey refused to characterize the strike as a failure, 58 analysts disagreed. 59 Charles Eisendrath, Director of the University of Michigan Journalism Fellows at the time, and a former reporter and Newspaper Guild member, opined, It confirms what everyone knows anyway, the unions couldn t possibly win[.]... Technological advances made it so much easier for management to outflank a strike. 60 you won t have a product after a while. We need to keep our product before the public, and we need people [in order] to do that. Id. 57 John Hughes, Detroit Strikers Offer to Return to Newspapers, CHICAGO SUN-TIMES, Feb. 16, 1997, at 36. We re launching a strategy that will increase and strengthen our leverage to get a fair contract. Today, the Teamsters and other unions made an offer as required by law to reclaim our jobs at both papers, said Al Derey, chairman of the umbrella organization for the six striking unions. Id. 58 Rachel Konrad & Charlotte W. Craig, Unions Seek Return, But Won t End War On Papers, DETROIT FREE PRESS, Feb. 15, 1997, at 1A (stating, This strike has not ended, Derey declared. This is simply a new strategy... ). 59 Stephen Franklin & Tim Jones, Airlines Pilots, Detroit News Strikers Show How Labor s Power Has Changed, Feb. 18, John Morton, President of Morton Research Inc., said, I should hope that the unions learned that in the quintessential union town the papers can keep on publishing and eventually make money The strike was a mistake.... The companies refused to extend the unions contracts, but... the unions should not have walked out. By not continuing to bargain, they basically handed management in Detroit a platter to achieve right away what they would have had to wait 10 years to obtain. Id. 60 Chris Christoff et al., Strike Effects Rippled Through Industry All Around Detroit, Rivals of Big Newspapers Gained, Feb. 15, 1997, at 4A. Page 17 of 60

19 After the unions surrendered on February 14, 1997, management refused to reinstate the strikers to their former positions, instead placing them on a preferential hiring list. 61 As will be discussed later in this article, this action set off a long legal battle in the courts, which reverberated for many years to come, and indeed, to this very day. The remainder of this article will be devoted to some of the specific strikerelated, legal issues that newspaper management had to address before and during the strike. Indeed, the issues which follow can serve as a template for every employer who is considering the decision of whether or not to operate during a strike. III. THE DECISION TO USE TEMPORARY VERSUS PERMANENT REPLACEMENT WORKERS One of the first decisions an employer must make concerns the use of replacement employees. It is well settled that an employer may continue its operations during a strike by hiring replacement workers. 62 In 1938, the U.S. Supreme Court noted in NLRB v. MacKay Radio & Telegraph Co. that while the National Labor Relations Act (NLRA) 63 gives a worker the right to strike, it does not follow that an employer... has lost the right to protect and continue his business by supplying places left vacant by strikers. 64 The MacKay Doctrine was an essential element in the Detroit Newspaper Strike as 61 Konrad & Craig, supra note 57 (stating that strikers who wanted to return to work had to put their names on a rehire list and take jobs as they open[ed] through attrition or turnover ). 62 NLRB v. MacKay Radio & Telegraph Co. 304 U.S. 333, 345 (1938) U.S.C. 163 (2006). 64 NLRB v. MacKay Radio & Telegraph Co. at 345. Page 18 of 60

20 permanent replacements were hired and the newspapers were not required to rehire the strikers at the end of the strike. 65 While the employer has the unfettered right to use replacement workers during a strike, the employer s obligations to rehire striking employees are significantly affected by whether the replacements were hired as temporary or permanent workers, and whether the strike is classified as an economic strike as opposed to an unfair labor practice strike. 66 A. Unfair Labor Practice Strikes If a strike has been called due to unfair labor practices committed by the employer, the employer may not hire permanent replacements, but must reinstate the strikers upon their request. 67 Unfair labor practice strikers that make an unconditional offer to return to work have the right to immediate reinstatement, regardless of whether temporary or permanent replacement workers were hired in place of the striking workers. 68 strikers. 69 Replacement workers must be discharged to make room for the returning Upon an unconditional offer to return to work, these strikers are entitled to full reinstatement within five days Id. (noting that the employer was not bound to discharge those hired to fill the places of strikers, upon the election of the [strikers] to resume their employment, in order to create places for them ). 66 See discussion infra Parts III.A-B. 67 Collins & Aikman Corp., 165 N.L.R.B. 678 (1967), enforced, 395 F.2d 277 (4th Cir. 1968). 68 Mastro Plastics Corp. v. NLRB, 350 U.S. 270, 278 (1956) (citations omitted). Contra NLRB v. MacKay Radio & Tel. Co., 304 U.S. 333, (1938) (stating that in an economic strike, the employer would be required to reinstate the striking workers only if they had not been permanently replaced). 69 Id. Page 19 of 60

21 A strike may begin as an economic strike and later converted into an unfair labor practice strike due to unfair labor practices committed by the employer. In that case, strikers have the rights of economic strikers prior to the conversion and the rights of unfair labor practice strikers after the conversion. 71 Therefore, if the strike is considered an unfair labor practice strike at the time of the unconditional offer to return to work, the strikers would be entitled to reinstatement. 72 B. Economic Strikes In an economic strike, when strikers positions are filled by temporary replacements, generally the employer must reinstate the strikers upon an unconditional offer to return to work. 73 In NLRB v. Fleetwood Trailer Company, an employer denied the reinstatement of six economic strikers when the strike ended and instead filled their positions with new hires. 74 The U.S. Supreme Court held that striking economic workers must be reinstated at the conclusion of a strike; 75 however, two exceptions apply. The first exception is where the employer can show that the employee obtained regular and substantially equivalent employment elsewhere. 76 The court made this holding based on 70 Chevron Chem. Co., 261 N.L.R.B. 44, 63 (1982) ( It is the [NLRB s] established policy to require employers to reinstate unfair labor practice strikers within the 5 days after said strikers have made a full and unconditional offer to return to work. ). 71 See SKS Die Casting & Machining, Inc. v. NLRB, 941 F.2d 984, 990, 993 (9th Cir. 1991). 72 Id. 73 Id. at NLRB v. Fleetwood Trailer Co., 389 US 375, (1967). 75 Id. at Id. at 378. Page 20 of 60

22 the language of the NLRA, which states that the term employee... include[s] any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute and who has not obtained any other regular and substantially equivalent employment. 77 The second exception applies when the employer can show that the refusal to reinstate was due to legitimate and substantial business justification. 78 As will be discussed later in this article, the Detroit newspapers frequently used this latter exception to deny reinstatement to employees discharged for picket line misconduct during the strike. 79 There are numerous other ways that an employer may meet the legitimate and substantial business justification test and refuse to reinstate a striker. An employer may meet this burden by showing that there has been a decline in business or curtailed production, 80 that the striker is unable to perform the type of work required, 81 or that a striker has attempted to diminish an employer s product quality during a strike. 82 In an economic strike when strikers positions are filled by permanent replacements, the MacKay Doctrine allows the employer to retain the permanent replacements even if the strikers make an unconditional offer to return to work. 83 Such U.S.C. 152(3) (2006). 78 Fleetwood Trailer Co., 389 U.S. at See discussion infra Part VI 80 Bushnell s Kitchens, Inc., 222 N.L.R.B. 110, 118 (1976). 81 Salinas Valley Ford Sales, 279 N.L.R.B. 679, 680 (1986). 82 Diamond Walnut Growers, Inc. v. NLRB, 113 F.3d 1259, 1276 (D.C. Cir. 1997). 83 NLRB v. MacKay Radio & Telegraph Co., 304 U.S. 333, (1938). Page 21 of 60

23 employees, however, retain their employee status under the NLRA; 84 and, must be given preferential hiring status as future job openings occur. 85 full reinstatement upon the departure of the replacements. 86 The strikers are entitled to Similar to strikers replaced with temporary workers, the two exceptions also apply to strikers replaced with permanent workers; the strikers are not entitled to reinstatement if they have acquired regular and substantial equivalent employment or if the employer can show a legitimate and substantial business justification. 87 To avoid any question as to whether or not striking employees have been temporarily or permanently replaced, and to protect itself from being sued by replacement employees who are later dismissed as part of a negotiated settlement with the union, employers should sign an employment contract with prospective permanent replacements. The contract would make it clear that their continued employment is subject to a settlement with the striking union, or to a NLRB unfair labor practice charge ordering reinstatement of the strikers. In Belknap Inc. v. Hale, for instance, an employer advertised for permanent replacement workers and repeatedly assured the replacements that they were to remain permanent employees. 88 The employer, facing the possibility that the strike would be classified as an unfair labor practice, made a settlement with the 84 See supra text accompanying note Laidlaw Corp., 171 N.L.R.B. 1366, (1968), enforced, 414 F.2d 99 (7th Cir. 1969). 86 Id. 87 Laidlaw Corp. at Belknap Inc. v. Hale, 463 U.S. 491, 491 (1983). Page 22 of 60

24 union that required the employer to reinstate the strikers. 89 The permanent replacement workers were laid off and brought suit for breach of contract and misrepresentation. 90 The court allowed the replacement workers to bring their breach of contract and misrepresentation claims, and held that the claims were not preempted by the NLRA. 91 The court reasoned that although employers are privileged by federal law to hire replacement workers with promises of permanent employment during a strike, it would be unreasonable not to allow damage suits for the employer's breach of these same promises. 92 One final note on strikers who have been permanently replaced: They have the statutory right to vote in union elections held within twelve months of the commencement of the strike, 93 as they are considered permanent employees Pay for Replacement Workers The level of pay of replacement workers will have an obvious impact in the decision of whether to hire them in the midst of a strike. After the collective bargaining agreement expires, an employer may pay replacements lower wages than 89 Id. 90 Id. 91 Id. at Id. at U.S.C. 159(c)(3) (2006). 94 Pacific Tile & Porcelain Co., 137 N.L.R.B. 1358, 1360 (1962). Page 23 of 60

25 strikers previously enjoyed. 95 It may also provide replacements with greater wages than were presented in the last offer to the strikers or in the expired contract. 96 The well-established rule that an employer is under no obligation to bargain with a union concerning the employment terms of a replacement worker was first articulated in Times Publishing Company in The NLRB has reasoned that unions cannot be expected to represent the conflicting interests of both replacements and strikers. 98 Furthermore, the employer s ability to set employment terms for replacements is a necessary incident of the very right to hire them in the first place. 99 Employers must be careful, however, when providing greater wages or benefits to replacements. The courts and the NLRB generally disfavor the practice unless an employer has a substantial business justification for doing so. 100 In NLRB v. Erie Resistor Corporation, the U.S. Supreme Court held that extending greater seniority rights to replacement workers constituted an unfair labor practice because the employer s claimed-business justification for doing so was outweighed by the harm it caused to the 95 Imperial Outdoor Adver., 192 N.L.R.B. 1248, 1249 (1971). 96 GHR Energy Corp., 294 N.L.R.B. 1011, 1029 (1989). 97 In re Times Publ g Co., 72 N.L.R.B. 676, 684 (1947). 98 Service Elec. Co., 281 N.L.R.B. 633, 637 (1986). 99 Id. at NLRB v. Erie Resistor Corp., 373 U.S. 221 (1963). Page 24 of 60

26 employee s right to strike. 101 Several cases have held that granting unilateral wage and benefit increases to replacements is indicia of bad-faith bargaining. 102 In some circumstances, the NLRB may even impose an obligation on the employer to bargain with the union over the replacement s employment terms. In Service Electric Company, the NLRB affirmed the Times Publishing holding that an employer has no obligation to bargain over the replacements employment terms but noted that it would find an exception to the rule: 103 when the employment terms for replacements have been formulated and implemented to accomplish illegal objectives, then... a bargaining obligation should be imposed. 104 In summary, employers should protect themselves to avoid a finding of bad-faith bargaining or the imposition of a duty to bargain with the union over the replacements employment terms. If possible, replacements should not receive greater wages or benefits than were contained in either the expired contract or the last offer to the employees. If an employer finds it necessary to pay higher wages to replacement workers, it should obtain evidence of its substantial business justification for doing so. 101 Id. at See NLRB v. Tom Joyce Floors, Inc., 353 F.2d 768 (9th Cir. 1965); NLRB v. St. Clair Lime Co., 315 F.2d 224 (10th Cir. 1963); In re Beverly Health and Rehab. Serv., Inc., 335 N.L.R.B. 635 (2001); Service Elec. Co., 281 N.L.R.B. 633 (1986). 103 Service Elec. Co., 281 N.L.R.B Id. at 639 n.11, 640 (stating that if the employer attempts to exercise the right to hire replacements in a manner designed to undermine the bargaining representative, it would be considered an illegal objective). Page 25 of 60

27 2. Unemployment Compensation of Striking Workers A company s decision to use temporary or permanent replacement workers may also be influenced to some degree by state unemployment compensation laws. In most states, during the time temporary replacements are used the strikers are not eligible for unemployment compensation. 105 Many states have adopted labor dispute disqualification provisions which further the states goals of maintaining neutrality during strikes. 106 These provisions prohibit the payment of unemployment compensation to strikers during labor disputes thereby erasing the appearance of states financing the strikers with funds assessed against the employer. 107 The issue of whether unemployment compensation is available to strikers varies from state to state; it is not preempted by the NLRA as Congress intended the several States to have broad freedom in setting up the types of unemployment compensation that they wish. 108 However, many states have held that once strikers are permanently replaced, they are eligible for unemployment compensation. In Plymouth-Stamping, Division of Eltec Corp. v. Lipshu, the Michigan Supreme Court affirmed that the labor 105 James K. Bradley & Daniel R. Schuckers, Toward A Unified Theory of Unemployment Compensation Eligibility For Replaced Striking Employees, 61 U. PITT. L. REV. 499, (2000) (stating that [t]wenty-two states have adopted [a] provision... [that] denies unemployment compensation to any employee who is unemployed due to a stoppage of work which exists because of a labor dispute... [and f]ifteen states and the District of Columbia have adopted a statutory disqualification for any employee who is unemployed due to a labor dispute in active progress. ). 106 See id.; New York Tel. Co. v. New York State Dept. of Labor, 440 U.S. 519 (1979); Plymouth- Stamping, Div. of Eltec Corp. v. Lipshu, 436 Mich. 1 (1990). 107 Plymouth-Stamping, 436 Mich. at 1, Page 26 of 60

28 dispute disqualification ceases to exist once a striker is permanently replaced. 109 The court reasoned that once permanent replacement occurs, the striker s unemployment is not due to a labor dispute in active progress as the labor dispute disqualification requires, 110 but to the fact that his or her job ceases to exist. 111 Employers considering the use of permanent replacements should proceed with caution. The use of permanent replacements has the potential to make strikers eligible for unemployment compensation. Employers preparing for a strike should ascertain whether a labor dispute disqualification provision exists in the applicable state(s) and if so, how it has been construed there. IV. LOCKER-INSPECTION POLICIES AS PART OF THE STRIKE PREPARATION PLAN Any employer facing a prospective strike may be well-advised to consider a locker-inspection policy as part of its general strike-preparation plans. The reason for having such a policy is to prevent employees from stashing contraband in their lockers which they could use to sabotage the employers premises, equipment or machinery once a strike has been called. Any locker-inspection policy must, of course, comply with the NLRA. A. A Locker-Inspection Policy Is A Mandatory Subject Of Collective Bargaining That An Employer May Not Implement Or Change Before An Impasse Is Reached 108 New York Tel. Co., 440 U.S. at Plymouth-Stamping, 436 Mich. at MICH. COMP. LAWS (8) (2007). 111 Plymouth-Stamping, 436 Mich. at 866. Page 27 of 60

29 It is an unfair labor practice for an employer to refuse to bargain collectively with the employees representatives 112 on matters concerning the terms and conditions of employment under the NLRA. 113 Work rules, especially when penalties are imposed for their violation, are covered by the phrase terms and conditions of employment. 114 Therefore, an employer cannot unilaterally change or implement a work rule before an impasse is reached without violating the NLRA. 115 However, once an impasse is reached, an employer is permitted to make unilateral changes in the terms and conditions of employment as long as the changes are consistent with the last offer made to the union. 116 A locker-inspection policy is considered a term and condition of employment. 117 In Great Western Produce, Inc., the NLRB found that an employer committed an unfair labor practice when it unilaterally implemented work rules, including a locker inspection policy, through the use of an employee handbook. 118 The NLRB reasoned that inspections of personal lockers involve personal rights which employees may well choose to try to protect through collective bargaining U.S.C. 158(a)(5) (2006). 113 Id. at 158(d). 114 NLRB v. Southern Florida Hotel & Motel Ass n, 751 F.2d 1571 (11th Cir. 1985). 115 NLRB v. Katz, 369 U.S. 736, 741 (1962). 116 Id. 117 Great Western Produce, Inc., 299 N.L.R.B. 1004, (1990). 118 Id. at Id. at Page 28 of 60

30 B. A waiver of the union s right to collective bargaining is not to be lightly inferred A union may waive the right to collective bargaining but waivers are not to be lightly inferred. 120 One of the numerous requirements for a waiver, found in Metropolitan Edison Company v. NLRB, is that a waiver must be clear and unmistakable. 121 A fair summary of these numerous requirements is expressed as follows: for a union to waive its right to bargain over a term or condition of employment not contained in the collective-bargaining agreement, the matter must have been fully discussed and consciously explored during negotiations and the union must have consciously yielded or clearly and unmistakably waived its interest in the matter. 122 A waiver of the right to collective bargaining may be made by one of three methods: the employer may claim (1) that there was a contractual waiver; 123 (2) that the union has acquiesced to its past practices; 124 and (3) that the union made a waiver by failing to request bargaining after the employer notified the union of its intent to make a work-rule change. 125 A brief discussion of the first two methods follows. 120 Alexander v. Gardner-Denver Co., 415 U.S. 36, 51 (1974) (stating that a union may waive certain statutory rights... to obtain economic benefits for union members ). 121 Metro. Edison Co. v. NLRB, 460 U.S. 693, 707 (1983). 122 Rockwell Int l Corp., 260 N.L.R.B. 1346, 1347 (1982). 123 Johnson-Bateman Co., 295 N.L.R.B. 180 (1989). 124 Shell Oil Company, 149 N.L.R.B. 283 (1964). 125 YHA, Inc. v. NLRB, 2 F.3d 168 (6th Cir. 1993). Page 29 of 60

31 1. Contractual Waivers Must Specifically Refer to the Subject Being Waived to Meet Metropolitan Edison s Clear and Unmistakable Standard Employers will often claim a contractual waiver has occurred based on a management rights clause contained in the collective-bargaining agreement. 126 These clauses, also referred to as zipper clauses, are usually broadly drafted reservations of management s rights to carry out ordinary and customary managerial functions. 127 An alleged waiver in a management-rights clause must make specific reference to the subject matter being waived. In Johnson-Bateman Company, an employer unilaterally implemented work rules including a drug and alcohol testing policy. 128 The management-rights clause stated that the employer could unilaterally issue, enforce, and change company rules. 129 The Board held that the policy, a mandatory subject of bargaining, was not waived, 130 reasoning that the managementrights clause was couched in very general terms and failed to specifically mention the drug and alcohol testing policy. 131 A management-rights clause must specifically reference a lockersearch policy to constitute a waiver of the right to bargain on the policy. In the 2006 Success Village Apartments, Inc. decision, the Board found that the employer violated the NLRA when it unilaterally implemented, among other things, a locker-inspection 126 Faculty, Judge Advocate General School, 2000 ARMY LAW 24, 28 (2000). 127 Id. at 28 (explaining that a zipper clause is one that is intended to waive [or limit] the obligation to bargain during the term of the agreement on matters not contained in the agreement (citation omitted)). 128 Johnson-Bateman Co., 295 N.L.R.B. 180, (1989). 129 Id. at Id. at Id. at Page 30 of 60

32 policy. 132 The Board reasoned that the union did not waive the right to bargain because the management-rights clause did not specifically reference the locker search policy. 133 The opinion stated that [we] cannot find that the Union by such general language in the contractual terms, clearly and unmistakably waived its right to bargain about these longstanding practices, or consciously yielded its interest in these matters A Waiver Occurs When the Union Acquiesces in the Employer s Unilateral Actions A waiver may be found even though an employer unilaterally implements changes if the union is found to have acquiesced in the changes. In Shell Oil Company, the employer unilaterally awarded subcontracts under a broadly drafted management-rights clause and the union failed to object. 135 The Board held that the union waived the right to collective bargaining because it acquiesced in the employer s past practice of unilaterally awarding subcontracts. 136 The Board reasoned that the pattern of unilateral change under the management-rights clause became a term and condition of employment and a similar unilateral change after the expiration of the collective bargaining agreement was permissible to maintain the status quo. 137 In a 2002 decision interpreting Shell Oil, the NLRB emphasized that it is the actual past practice of unilateral activity under the management-rights clause of the [collective bargaining agreement], and not the existence of the management-rights clause itself, that allows the 132 Success Village Apartments, Inc. (Success Village I), 347 N.L.R.B. No. 100, 2006 WL , at *10 (N.L.R.B. Sept. 29, 2006). 133 Id. 134 Id. at * Shell Oil Company, 149 N.L.R.B. 283, 284 (1964). 136 Id. at Id. Page 31 of 60