Want to Read More? To continue reading this article, please Log in or Register Now

How to Address Union Issues Arising from the Consolidation of Two or More Facilities

Author: Jed L. Marcus, Bressler, Amery & Ross, P.C.

Employers must constantly adapt to a rapidly changing economy. Often this means that, for many different reasons, they are forced to reorganize their business, which may involve the consolidation of two or more facilities to achieve certain economies, increase profits or cut costs to reduce losses. Most consolidations affect employees and their unions in many different ways. For example, many employees lose their jobs as part of a reduction in force (RIF) often accompanying a consolidation. Also, unions who represent employees will demand that they be permitted to bargain with the employer over the decision to, and the effects of, a plant relocation. Employers may be required to provide advanced notice to employees of layoffs attendant to the consolidation.

There are, in fact, many different labor and employment laws that influence an employer's actions when deciding to shut down one facility and consolidate the work into another facility. For example, an employer with a collective bargaining agreement (CBA) will have certain obligations under the National Labor Relations Act (NLRA) to bargain with the union over the impact of the consolidation. If an employer that employs at least 100 employees intends to close its facility, thereby laying off all employees, or, if the consolidation results in an employment loss of either: (1) 33 percent or more of the site's "active employees," but (2) at least 50 employees, it will be required to give advanced notice to its employees, or if unionized to the employees' union under The Worker Adjustment and Retraining Notification Act (WARN). Laying off employees will also expose the employer to potential discrimination lawsuits under such laws as the Age Discrimination in Employment Act (ADEA) and Title VII of the Civil Rights Act of 1964 (Title VII), which prohibits discrimination based on race, color, sex, religion and national origin, among other things.

Accordingly, an employer must be fully prepared when implementing a consolidation to ensure that it is done in such a way as to avoid unnecessary claims by unions and employees. These risks may be avoided with advance planning and appropriate process.