Case Study 1-1. Was “a Troublemaker” Laid off for Sharing Wage Information? Or for Business Reasons? The American Restoration Contractors (ARC), Inc. was hired to reroof and fix cracks in the bricks of several buildings of a regional university. Because it was a large job, several new employees were hired. One was an experienced mason and bricklayer named Bruce Potts.* Potts had completed a four-year union apprenticeship training program and another four years as a journeyman; subsequently, he had 12 years’ experience in both union and nonunion settings. ARC was a nonunion contractor. Potts testified before the federal NLRB that he had been led to believe by both his immediate supervisor, Gene Polizzi, and a co-worker who had been hired along with him, that the job would pay $44 per hour. However, upon arriving at the work site, Potts learned that it only paid $35 per hour, which made him angry, given the nature of the work. He described the work as difficult. It required him to wash the building surface and the roof, removing any dirt. Next, employees inspected the bricks, caulk, and wood for needed repairs. Rotted caulk and other defective building materials had to be removed and replaced. When the new caulk dried, the building was again sprayed with a high pressure hose. After the water dried, final waterproofing chemicals were applied. The caulk work was the most laborious, calling for the greatest expertise and precision. Much of this work took place on a 100° roof under the sweltering summer sun. In recognition of the excellent work that Potts was doing, Polizzi recommended him for several pay raises: As the summer passed, Potts’s pay went from $35 (the first week of June) to $36.13 (second week) to $37 (third week) to $39.21 (last week of June) to $40.13 throughout July and August, until he was laid off on in early September. As a result of these raises, Potts became the highest-paid nonmanagerial employee on the job site. Potts often told his co-workers what his current pay rate was and he encouraged them to ask for more money. He said everyone was underpaid and all the workers should all be getting more. He also criticized some of the work methods they were asked to use. One employee quit soon after Potts discussed wage rates with him. The following week, the firm’s Human Resources Manager, Dixie Boxrud, handwrote the following message on Potts’s July 1st pay stub: Please keep your pay rate to yourself. Thanks, Dixie B. Further, when he distributed pay envelopes, Polizzi told Potts that he shouldn’t be discussing his pay with his co-workers and “stirring up trouble” by encouraging them to complain. At the end of the summer, Potts was laid off with four other workers, even though three others who did similar work kept their jobs. Potts accused ARC of laying him off in retaliation for his complaining about the wages. Potts testified. “I was telling everyone how they were getting short-changed and management was making a lot of money off of them and how they ought to do something about it—threaten to quit or something—to get what they deserved.” Potts also indicated that Polizzi had told him that ARC had bid on another, similar job and that Potts offered to work at that site, even though it was several hours’ drive away. However, he was never called to work at that site, or any other ARC work sites. The General Counsel (which often prosecutes cases involving allegations of unfair labor practices under the National Labor Relations Act, as amended by the Labor Management Relations Act [LMRA]), alleged that ARC was retaliating against Potts for his activities. Under federal labor law, employees, have the right to “... engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection ...” (Section 7); it is an unfair labor practice for employers to “interfere with, restrain, or coerce employees in the exercise of [their] rights” or to discriminate “in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization ...” (Sections 8 (a) (1) and 8 (a) (3) of the LMRA). The General Counsel argued that ARC’s actions were illegal because • (1) they interfered with Potts’s actions aimed at “mutual aid and protection” (securing pay raises for all workers) and • (2) ARC discriminated against Potts when making layoff and rehiring decisions because of his efforts to organize the workers to complain about their pay. Polizzi and other company officials denied the charges. They said that from the first day that he showed up at the job site Potts had been a troublemaker. When he was hired, he had an erroneous impression as to what the pay for the work was worth. He was quite vocal about what he saw as low pay—and other subjects, such as how the work should be done. “I had to put up with his mouth, always complaining and whining,” Polizzi said. However, he overlooked it because, “he was a good caulker and he was productive.” His outstanding productivity and excellent work resulted in several pay raises in the ensuing weeks. Still, his constant complaining bred dissatisfaction and caused one co-worker to quit. ARC had an informal (unwritten) policy that people not tell others their pay rate; such complaining leads to workers comparing themselves to each other, breeding dissatisfaction. Potts went against that policy, even after he had been asked politely to “keep your pay rate to yourself.” Ms. Boxrud testified that she wrote this on Potts’s pay stub because he “was causing issues on the job site telling people that, walk off and they will give you a raise. I wanted to keep an atmosphere of calm on the job. We already had one employee quit over it. Talking about pay was causing problems, so I wanted him to stop talking about it.” Managers also denied that their actions violated labor law. The workers had not formed a union, nor were they contemplating forming a union. The word “union” was never mentioned to ARC managers. Further, workers were not bargaining collectively and they were not threatening to strike if wages stayed unchanged. Clearly, they were not joining together for “mutual aid and protection” against an exploitive employer, given that they were all earning over $30 per hour. Thus, management at ARC was not interfering with their rights under labor law. Finally, ARC did not retaliate against Potts for his complaints. He was laid off near the end of the job, along with several other workers. He would have been laid off regardless of his statements to his co-workers: When a job neared completion, fewer workers were needed. Yes, it was true that Potts offered to work at another job site. However, what Polizzi did not know at the time that he mentioned that project was whether ARC would win the contract. It turned out that the firm did not have the low bid and the contract was awarded to another firm. The firm won other bids, but the work was not as difficult; thus, the company did not need to hire a caulker who commanded the high rate of pay that Mr. Potts earned. Consequently, ARC did not need his services. Potts’s charges of retaliation are baseless. Questions 1. Given the facts of the case and the brief description of the LMRA, did ARC violate labor law by telling Mr. Potts to “Please keep your pay rate to yourself”? Explain your reasoning. 2. Did ARC retaliate against Mr. Potts when it laid him off and did not offer him work on other jobs? Did these actions constitute violations of the LMRA? Explain your reasoning
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