A trucking company has won a legal decision after shutting operations at a Kroger distribution center where the Teamsters had won a representation victory. However, the ruling laid out in detail how the company sought to hold off the unionization effort, and questioned its strategy and tactics.

The decision was handed down last week by an administrative law judge at the National Labor Relations Board, Arthur J. Amchan. It involves Quickway Transportation, which lost a unionization vote for employees based out of the Louisville, KY distribution center operated by supermarket giant Kroger (NYSE: KR). Teamsters Local 89 won an election held between May and June 2020, with the workers voting to be represented by the union by a 25-17 vote.

Quickway is described in the judge’s ruling as an “affiliate” of Paladin Capital. It served the Louisville facility along with several other companies, including Transervice Logistics and J.B. Hunt. (NASDAQ: JBHT).

Negotiations undertaken after the union vote did not produce a contract. In December 2020,  Quickway terminated its contract to service Kroger–after some initial Kroger resistance–and the Quickway workers were laid off, along with workers at two sub-terminals elsewhere in Kentucky. But the company kept the tractors used to service the Kroger account, and they were distributed to other affiliates of Paladin Capital.

Judge Amchan rejected the union’s argument that the closure of the Quickway operations at Louisville was a violation of the National Labor Relations Act. Citing an earlier precedent, Judge Amchan said that a 1965 decision, Textile Workers Union of America vs. Darlington Manufacturing, held that “closing an entire business does not violate the Act, even if done for discriminatory reasons.”

But he added that a “partial closing” could be in violation if it was “motivated by a desire to chill unionism.”

In the Textile Workers Case, the company liquidated itself. But as Judge Amchan notes, Quickway didn’t “liquidate anything, other than getting rid of some trailer cabs that were at the end of their shelf life.” Other assets were transferred within Quickway or Paladin, actions that could be considered a “partial closing.”

Quickway was making money on its Kroger deal; the judge referred to the operation as “highly profitable.” It still has the lease at Louisville and “there is substantial incentive for (Quickway) to return to Louisville without any obligation to honor its former employees’ organizational rights.”

But Judge Amchan ultimately concluded that his reading of the Darlington precedent gave Quickway the ability to end its operations at Louisville legally.

Additionally, “chilling” union organizing activities at other Paladin affiliates can not be seen as a goal undertaken by Quickway, Judge Amchan wrote. The record of what happened in Louisville “only establishes (Quickway”s) determination not to bargain with the union in Louisville and a determination not to take chances on a strike…if it failed to reach agreement.”

In the judge’s decision, there is evidence of Quickway management expressing concern about how a successful unionization drive at Louisville might affect any potential Teamsters efforts at a Quickway facility in Murfreesboro, Tennessee. Work was shifted away from there so that Louisville drivers would not be visiting that facility and, according to the words of one Quickway executive, “infecting” the Tennessee drivers.

Although Judge Amchan ruled in favor of Quickway on the key legal question of whether it violated law by shutting its Louisville operations, his decision leans more toward criticism than exoneration.

For example, he suggests the company likely violated the law by not negotiating with the Teamsters to an impasse. “Respondent did what it did to avoid collective bargaining or even on the best interpretation of its motives, to avoid a perfectly legal strike,” he wrote.

He also criticized Quickway for not pursuing other steps to get around the impact of a strike, like hiring replacement workers or setting up a “reserve gate” at the Kroger facility that would have allowed drivers from other companies to transport product in and out of the facility without crossing a Teamsters picket line.

Although Quickway’s actions were found not to have violated the National Labor Relations Act, Judge Amchin did rule against two Quickway executives for their actions with employees in the months leading up to the unionization vote.

Jeff Curry, Quickway’s Louisville terminal manager, and Chris Cannon, its vice president of operations, were singled out as having violated the Act. McCurry was found to have illegally “interrogated” employees about their union sentiments. Cannon was charged with “condoning” surveillance of employees.

But the penalty is only a requirement that Quickway agree to no longer conduct those sorts of activities.

The surveillance of the Quickway workers involved taking photos of workers’ private vehicles with union stickers attached. Those pictures were then forwarded to management. Judge Amchan ruled that while Cannon was not involved in the photography, he was aware of it and did not dissuade it.

In recapping the history of the unionization battle, the review by Judge Amchin spells out several of the actions taken by Quickway management to discourage unionization efforts.

–Discipline against a driver perceived as anti-union was possibly lighter than against others, solely because of his views about the Teamsters organization.

–Kerry Evola, Quickway’s operations manager, was said to have told several employees that if the union came to the Louisville operations, the company would shut down. Evola denied that in testimony. But in a recording made by an employee, Evola also told employees that a pro-unionziation vote would lead to Quickway no longer making contributions to an employee stock plan.

–Lori Brown, the office manager for Quickway in Louisville, took notes on driver conversations regarding unionization and was encouraged by Cannon, through an intermediary, to continue to do so.

Judge Amchin also noted that Cannon sent an email to William Prevost, CEO of Paladin and Quickway, suggesting the company hire the Labor Relations Institute to help fight unionization. Quoting an email from Cannon, the LRI would be used because “the advantage of these companies is they have the legal right to say what our company cannot say during a union campaign,” which Cannon went on to describe as “the negative effects if the drivers form a union.”

“This email not only evidences anti-union animus, but indicates a willingness to violate” a section of the Act, Judge Amchin wrote. That section, 8 (a) (1), lists actions that management can not take during a unionization drive.

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