Labor Logic

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John D. Finerty, Jr.

The National Labor Relations Act provides that "Employees shall have the right to self-organization, to form, join, or assist labor organizations … and to engage in other concerted activities for … other mutual aid or protection …." 29 U.S.C. § 157. These rights, known as Section 7 rights, allow employees to organize a union and withhold labor, or strike, to achieve their mutual goals.

In contrast, employers may hire temporary, or in some circumstances permanent, replacement workers during a strike. When employers hire permanent replacements, it may be weeks, months, or even years after the end of a strike before the striking employee can return to work, if ever.

An employer’s right to hire replacements, whether temporary or permanent, has been the subject of proposed federal legislation, executive orders, state and municipal laws. State laws that prohibit employers from hiring permanent replacements have been uniformly held to be preempted by the National Labor Relations Act. A new bill, however, circulating through the state Senate, adopts a slightly different approach in an attempt to stop employers from hiring replacement workers during a strike.

The Latest Striker Replacement Proposal

A number of state Senators are considering whether to propose an Act to amend Wis. Stats. § 103.545, and to create additional state laws, to prohibit temporary help agencies from providing temporary employees to a third-party employer whose employees are on strike or locked out.

Current law prohibits employers, and temporary agencies working on their behalf, from hiring "strike breakers" to replace employees on strike or who have been locked out. A strike breaker is defined as any employee who, within the previous 12 months, accepted employment during a strike or lock out in place of employees involved in the strike or lock out. The bill as written would expand this prohibition.

Under the proposed temporary agency striker replacement bill, employers would be prohibited from entering into contracts with temporary agencies for the purpose of retaining temporary employees during a strike or lock out. The proposal effectively eliminates the strike breaker requirement under existing law and prohibits temporary agencies from providing temporary employees to any employer engaged in a strike or lock out.

Further, the proposed law would prohibit any person from transporting or arranging to transport a temporary replacement worker to a place where a strike or lock out exists. The proposed new law, however, does not prohibit the continued employment of temporary employees retained prior to a strike or lock out. If past history is any indicator, this proposed law will likely face immediate legal challenges if enacted.

Background

In NLRB v. Mackay Radio & Telegraph Co., 304 U.S. 333 (1938), the U.S. Supreme Court held that it was not an unfair labor practice within the meaning of the NLRA to permanently replace striking employees so long as the strikers retained their status as employees. Striking employees, according to the Supreme Court, must be reinstated as there are vacant positions to be filled. This legal rule, known as the Mackay Doctrine, has come to stand for the proposition that the permanent replacement of economic strikers is lawful. The Mackay Doctrine, however, has been criticized as dicta. Nevertheless, the law of every circuit that has ruled has been that employers may permanently replace economic strikers.

Prior Attempts to Change the Law

The U.S. Senate has had before it a striker replacement bill for years. It has failed to ever reach the president for signing. Instead, President Clinton attempted to issue an executive order that prohibited government contractors from hiring strike replacements. A federal court, however, struck down the executive order in Chamber of Commerce v. Reich, 74 F.3d 1322 (D.C. Cir.1996). In the meantime, organized labor and worker advocates also turned their attention to the states.

Minnesota was one of the first states to prohibit employers from permanently replacing striking employees. The Minnesota Supreme Court, however, held Minnesota’s striker replacement law was preempted in Midwest Motor Express, Inc. v. International Brother-hood of Teamsters, 512 N.W.2d 881 (Minn.1994).

The U.S. Court of Appeals for the Eighth Circuit also held Minnesota’s law was preempted in Employers Associa-tion, Inc. v. United Steel Workers, 32 F.3d 1297 (8th Cir. 1994).

The "Temporary Employee" Twist

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In some industries, where highly skilled employees are in short supply, employers hiring during a strike usually need to offer permanent employment to replacement workers. In most every other industry, however, temporary replacements are the norm. Striking workers who return to work may immediately displace the temporary replacements. The Wisconsin legislation in its initial stages limits the employer’s
right to hire replacement workers from temporary agencies.

Sections 103.53 through 103.61 of the statutes set a number of rules regarding employer and employee conduct during a labor dispute. The proposed law would expand the rule against hiring "strike breakers" to apply to any employee referred to an employer or transported by a temporary agency to a work site for the purpose of replacing a striker worker.

Laws prohibiting "strike breakers" have some justification because, at one point in history, strike breaking had become an occupation in and of itself. This proposed law, however, does not deal merely with strike breakers, but rather with the conduct of temporary agencies that may assist employers in hiring temporary replacements during a strike. This may be, perhaps, one of the distinctions the bill’s sponsors are counting on to escape a preemption challenge.

For more information on this proposed legislation or for assistance in dealing with a labor dispute, contact John D. Finerty, Jr. at Michael Best & Friedrich at (414) 225-8269 or by email.