The National Labor Relations Board has ordered two closed businesses to reopen because of alleged labor law violations, including a Starbucks café and a strippers’ club that was already in bankruptcy.
Ordering closed businesses to reopen is a rare but not unknown tactic taken by the board in what it considers extreme cases of multiple violations of federal labor law by employers.
In the first case of an adult entertainment venue in Hollywood whose dancers and disc jockey voted for union representation, the company closed the club and filed for bankruptcy, seemingly to avoid having to bargain with the union.
Charged with various labor law violations, the company had agreed to a settlement before closing the club. NLRB ordered the club reopened, imposed operating conditions, and now seeks consequential damages in addition to a traditional back-pay award.
The second case involved the Starbucks branch in Georgetown, N.Y, near the campus of Cornell University, where employees had voted to unionize along with two other locations near the university, which also were shut down.
These actions also spurred a student protest and demands that the university administration sever all ties with the Starbucks parent corporation. Most of the employees at the three locations also were students attending Cornell.
The board ordered the Georgetown location reopen, also finding that the company had chosen to impose retaliatory discipline, only enforced certain rules after unionization, and cut worker hours (actually store opening hours) after union activity emerged.
“Bottom line: The potential liability facing employers in cases before the NLRB has expanded dramatically in the last 18 months.,” says attorney David J. Pryzbylski of the Barnes & Thornburg law firm. “Companies should be cognizant of this as they continue to navigate labor relations. Employers should take note that in these types of cases, the stakes are high, and the penalties can be steep.”