Good Faith Bargaining-Sanctions

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7^th Circuit Court of Appeals

Case Name: NLRB v. Neises Construction Corporation

Case No.: 18-1774

Officials: Ripple, Rovner, and Wood, Circuit Judges.

Focus: Good Faith Bargaining-Sanctions

Neises Construction Corporation refuses to bargain in good faith with the Indiana/Kentucky/Ohio Regional Council of Carpenters (“the Union”), which represents its employees. The Seventh Circuit has ordered Neises to bargain with the Union three times.  Despite these orders, Neises’s conduct persists. After reaching numerous tentative agreements on the articles to be included in a collective bargaining agreement with the Union, Neises retracted those tentative agreements without good cause. The National Labor Relations Board then sought to hold Neises in contempt for refusing to bargain with the Union in good faith. The Seventh Circuit appointed a Special Master to resolve the parties’ factual disputes. After more than a year of discovery, motions practice, and deliberation, the Special Master found, by clear and convincing evidence, that Neises should be held in contempt. The Special Master’s Report and Recommendation is sound, and Neises’s objections are unpersuasive, and thus the Seventh Circuit holds Neises in contempt.  The court rejected arguments that the NLRB did not have the authority to file the contempt petition and that the petition was not properly ratified; that the Report improperly decided that the parties reached tentative agreements; and that Neises did not violate an unambiguous command because the judgment and consent order do not use the phrase “in good faith” and such a phrase is too vague anyway. The Seventh Circuit imposed most of the Board’s proposed sanctions, including a $192,400 fine.

Decided 03/10/23

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