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Car Dealer Denied Review of Adverse NLRB Ruling

Posted Apr. 18th 2016

On March 21st, the U.S. Supreme Court denied an Illinois car dealer’s petition for review of a court of appeals decision upholding an adverse National Labor Relations Board (NLRB) ruling. The NLRB ruling found the dealer to be in violation of the National Labor Relations Act (NLRA) by closing a dealership and transferring the unionized mechanics to a related non-union dealership that refused to recognize the union.

In Dodge of Naperville, Inc. v. NLRB, U.S. No. 15-876, cert. denied 3/21/16, the Court let stand the decision of the U.S. Court of Appeals for the District of Columbia Circuit upholding the NLRB ruling that Burke Automotive Group Inc. and Dodge of Naperville, Inc. committed an unfair labor practice when Dodge of Naperville was closed by Burke, its operator, as a result of the Chrysler Corporation bankruptcy. Six union-represented mechanics of Dodge of Naperville were transferred to another dealership operated by Burke that was a non-union facility. The union members would constitute a minority among the total mechanics at the non-union facility. While the mechanics accepted the transfer, ownership refused to bargain with the Local 701 of the International Association of Machinists over the consequences of the transfer. The NLRB found that Burke and Dodge of Naperville violated the NLRA by its refusal to bargain over the effects of the transfers and its refusal to recognize the union as the collective bargaining agent for the mechanics at the non-union dealership.

Though the dealership contended that the combined 20 mechanic unit should have constituted a single unit under the “community of interest” standard, which unit would not have had a majority for union recognition, the NLRB ruled otherwise and the Court of Appeals agreed.

Given the ruling, independent business operations, such as those auto dealerships in the Dodge of Naperville matter, that have common-ownership but are of varying unionized status should not, in a consolidation effort, solely rely upon the collective bargaining status of the surviving business. Rather, ownership should consult with labor counsel to assess and coordinate any merger of unionized and non-unionized units. The failure to do so may result in an unfair labor practice charge under the NLRA.

John R. McGlinchey
Partner
jrmcglinchey@abbottnicholson.com