The U.S. 8th Circuit Court of Appeals—which covers Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota—recently enforced a National Labor Relations Board (NLRB) order that found a Burger King franchisee violated the National Labor Relations Act (NLRA) by declining to hire an employee for having engaged in protected labor activity.
In March 2015, EYM King acquired numerous Burger King franchises in Kansas City, Missouri, from Strategic Restaurants Acquisitions Company, LLC. These acquisitions included a location at 1102 East 47th Street. EYM King retained the 47th Street store’s general manager, “Penny,” and gave her permission to rehire Strategic employees. Penny rehired most of the Strategic employees, but not “Leonard,” a well-known labor organizer who had been working at various Burger King stores for over 11 years and at the 47th Street store since early 2012.
Penny told Leonard that he wasn’t being rehired because of a change in his schedule availability and his insubordination. He had filled out an application form that indicated he was no longer available to work overnight on Saturdays or anytime on Sundays.
During his time at the 47th Street store, Leonard had received a few disciplinary warnings. One of those warnings occurred on April 21, 2014, for arriving to work 1 hour late, and that was followed by a second warning on May 5 for arriving 15 minutes late. He had also received a warning on May 6 for not calling in more than 3 hours before his shift to inform supervisors that he was running a little late. Although he received no further formal warnings, he was twice verbally counseled by Penny for cooking too much food.
Leonard participated in the Workers’ Organizing Committee in Kansas City, which advocated that fast-food employees receive a minimum wage of $15 per hour, a request referred to as the “Fight for $15.” Leonard had assumed a leadership role in the labor organization and was responsible for bringing the “Fight for $15” campaign to the 47th Street store. He also assisted with bringing unfair labor practice charges against the store in May 2014. Penny was aware of those activities.
The NLRB General Counsel filed a complaint with the Board alleging that EYM King had violated Sections 8(a)(1) and (3) of the NLRA by refusing to hire Leonard. An administrative law judge (ALJ) held a hearing at which Penny testified that her decision not to hire Leonard was based on his limited availability, several instances of insubordination, and his record of tardiness.
She told the ALJ that the extent of Leonard’s behavioral problems weren’t documented because after May 2014, Strategic had directed her to report to HR any negative behavior by Leonard (and other individuals involved with the Workers’ Organizing Committee). Strategic would then determine an appropriate response. Penny testified that she e-mailed Strategic a number of times about Leonard’s behavior but never received a response. She eventually stopped sending the reports.
The ALJ found that Penny wasn’t “an overall credible witness” and that her stated reasons for declining to hire Leonard were implausible. The ALJ then concluded that the decision not to hire Leonard was motivated in part by his involvement in protected labor activities, in violation of the NLRA. The Board agreed with those determinations, and petitioned the 8th Circuit for enforcement of its order.
8th Circuit’s Opinion
The court explained that under Section 8(a)(3) of the NLRA, certain discrimination in the hiring of employees is an unfair labor practice. It continued explaining that the Board has adopted a three-part test for a refusal-to-hire violation under Section 8(a)(3). The General Counsel must first show that:
- The employer was hiring, or had concrete plans to hire;
- The applicant had experience or training relevant to the requirements of the position; and
- Antilabor organization animus contributed to the decision not to hire the applicant.
The burden then shifts to the employer to show that it wouldn’t have hired the applicant even in the absence of his labor organization activity or affiliation.
The court noted that because EYM King doesn’t dispute that it was hiring or that Leonard was qualified for the position, it had to determine whether substantial evidence supported the Board’s determination that his involvement in the Workers’ Organizing Committee was a motivating factor in EYM King’s decision not to hire him.
The court recognized that both implausible explanations and false or shifting reasons support a finding of illegal motivation. When an employer’s explanation fails to withstand scrutiny, it’s considered pretextual, thereby providing a substantial reason to reject the argument that the employer would have taken the same action regardless of any protected activity.
Penny testified that she declined to hire Leonard because of his change in schedule, tardiness, and insubordination. The 8th Circuit concluded that substantial evidence supported the Board’s determination that her reasons were pretextual.
First, Leonard didn’t dramatically change his availability, as EYM King argued. Although he had recently started working night shifts, he had been working primarily day shifts at the beginning of 2015, and he only limited his availability for 2 nights and 1 day per week.
Second, Leonard had a minor disciplinary record spread out over years of working at Burger King (all of his formal warnings were issued in April and May 2014). Penny also hadn’t disciplined him for some of his allegedly insubordinate behavior before she had allegedly received a directive from Strategic telling her to run all discipline through HR.
Finally, Penny provided vague and inconsistent testimony throughout the hearing, including testimony that she both did and “did not” inform HR about an incident in which Leonard allegedly took hamburgers after a shift. The court believed that her implausible explanations provided substantial evidence to support the Board’s determination that her hiring decision was based on an improper motivation.
EYM King argued that the Board erred by declining to credit Penny’s testimony that in May 2014 she received a directive from Strategic that precluded her from disciplining Leonard without the approval of HR.
However, the court responded that the Board actually observed that she had failed to provide evidence to corroborate her version of some events. It further found that even if it were to conclude that the Board erred by declining to credit her testimony, there was other substantial evidence to support the Board’s determination that her explanation was pretextual. It pointed to the Board’s finding regarding her demeanor at the hearing and her vague and inconsistent testimony.
The court, therefore, concluded that substantial evidence supported the Board’s determination that EYM King refused to hire Leonard because of his participation in protected labor activities, in violation of Sections 8(a)(1) and (3) of the NLRA.
The credibility of key decision makers is critical in NLRA discrimination cases. When a decision maker contradicts herself about important events and provides implausible reasons for an adverse employment action, judges and courts will likely find that her given reasons were pretextual.