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Economically Motivated Relocations of Work and an Employer's Duties Under Section 8(d) of the National Labor Relations Act: A Three-Step Analysis,” Fordham University’s Fordham Urban Law Journal, Volume 11, Issue 4, Article 2

Ed O'Keefe

Over the past decade the continued rapid development of industrial technology, the rise of a global marketplace and an unsteady worldwide economy have forced American businesses in increasing numbers to implement major structural changes in order to attract capital, resources and customers. Changes such as automation, partial or total plant closures and even complete termination and subsequent reorganization of employing enterprises have become commonplace. These phenomena are most pronounced and have had the most devastating effect in urban industrialized areas of the United States. 

The implementation of such entreprenurial decisions often have a direct and adverse effect on employees involved by generally causing relocations, layoffs and terminations. Consequently, employees and their unions, state and local officials, and federal legislative and administrative bodies have attempted to restrict the increasing number of business closings and other reinvestment decisions which result in employee dislocation.

Some of the most strident resistance to major organizational business alterations has come from the National Labor Relations Board., In a series of administrative decisions and federal court actions," the Board has sought to limit employer attempts to implement sweeping changes in their operations without prior consultation, and in certain circumstances prior agreement, with bargaining representatives of affected employees.

The most recent development in this series of decisions is the case of Milwaukee Spring Division of Illinois Coil Spring Co. In Milwaukee Spring, the Board held that the employer unlawfully transferred work during the term of its collective bargaining agreement without theprior consent of its employees' collective bargaining agent. The mostdisturbing element of this decision is the Board's unequivocal reaffirmance of prior holdings that implementation of an employer's unilateral decision to relocate all or part of a business operation, regardless of prior bargaining, constitutes an unlawful modification of an existing collective bargaining agreement, in violation of sections 8(d) and 8(a)(5) of the National Labor Relations Act." Milwaukee Spring takes on particular importance because the Board adopted a sweeping analysis, easily adaptable to a broad range of fundamental managerial decisions.

This Article will address the legal and practical issues which arise under the Act in connection with fundamental alterations of a business enterprise. Initially, the Article will review relevant Board and judicial precedent and the general principles which have developed concerning management's right to implement a variety of changes in operation. Thereafter, it will discuss the current application of these principles to Board and court decisions concerning one type of fundamental business change: relocation of bargaining unit work, and the restrictions imposed by the Act upon an employer who is contemplating such action. Finally, the authors will propose a three-step analysis which the Board and courts should consider when faced with questions concerning an employer's duty in future relocation cases, particularly those cases which present factual and legal considerations different from those presented in Milwaukee Spring.

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