Closure of Gothamist and DNAinfo a Week After Unionization Likely Lawful

Newsrooms may not have had enough employees to be covered by WARN acts

By Allen Smith, J.D. Nov 10, 2017
LIKE SAVE PRINT
Reuse Permissions

​A week after workers at the Gothamist network of websites and DNAinfo voted to join a union, billionaire owner Joe Ricketts shut the sites down Nov. 2. The closure of his news sites, including DNAinfo, DCist, LAist, SFist, Chicagoist and Shanghaiist, probably did not violate the National Labor Relations Act (NLRA), said Molly Kaban, an attorney with Hanson Bridgett in San Francisco.

'Corrosive Us-Against-Them Dynamic'

Ricketts warned of his opposition to unions before the union vote. He spoke of business's narrow profit margins in a September blog post. "I believe unions promote a corrosive us-against-them dynamic that destroys the esprit de corps businesses need to succeed," he wrote. "And that corrosive dynamic makes no sense in my mind where an entrepreneur is staking his capital on a business that is providing jobs."

He added, "That's why the type of company that interests me is one where ownership and the employees are truly in it together without interference from a third-party union that has its own agenda and priorities."

In a letter on the shut-down websites, Ricketts said that while progress had been made toward building the websites into a successful business, "In the end, that progress hasn't been sufficient to support the tremendous effort and expense needed to produce the type of journalism on which the company was founded."

Protest

On Nov. 6, more than 300 people joined writers from the websites along with the Writers Guild of America East (WGAE) to protest the news sites' closure at New York City Hall Park.

Lowell Peterson, the WGAE's executive director, said, "We come not to mourn, but to organize." He added, "Joe Ricketts needs to come clean. Did he violate the law by firing people because they exercised their right to unionize? Or did he decide the business wasn't generating enough profit, and then try to score some ideological points by blaming his employees and their union? Either way, these journalists do work that is essential to communities across New York, and the WGAE will make sure their rights are protected and their voices are heard."

No NLRA Violation

A company can stop business after a recent union election, said Phillip Wilson, president and general counsel of the Labor Relations Institute in Broken Arrow, Okla. By contrast, it can't shut down to prevent employees from exercising rights under the NLRA. In addition, the company cannot close down one union operation and reopen a nonunion one somewhere else.

"In this case, the timing looks bad, but the employer reportedly shut down its whole business, not just the location that unionized," Wilson said. "Decisions like this are never made lightly, and it is likely that closing the business was under consideration for a while. It is likely that even if a union objects to this decision, the NLRB [National Labor Relations Board] will say it was lawful."

Kaban doesn't think the closures violated the NLRA, either. In Textile Workers v. Darlington Manufacturing Co., 380 U.S. 263 (1965), the U.S. Supreme Court held that even if an employer is motivated solely by anti-union sentiment when closing down its entire business, the employer isn't breaking the law, she noted. The closing "may be motivated more by spite against the union than by business reasons, but it is not the type of discrimination which is prohibited by the act," the high court said.

David Pryzbylski, an attorney at Barnes & Thornburg in Indianapolis, noted that the Supreme Court's ruling "will make it difficult for unions or the NLRB to challenge the closure of the Gothamist website, especially since it appears to be shutting down completely as opposed to only partially."

WARN Acts

Kaban said that the workers may have possible claims under the U.S. or New York Worker Adjustment and Retraining Notification (WARN) acts, which require businesses to give employees early warning of closings and layoffs, if the websites had enough employees to be covered by the laws.

But the U.S. WARN Act applies only to employers with at least 100 workers. The New York WARN Act covers employers with 50 or more employees.

[SHRM members-only toolkit: Complying with Workplace Records and Reporting Requirements]

An April 12, 2017, New York Times article referred to 26 members of the newsroom staffs of DNAinfo and Gothamist, who signed cards at that time to be represented by WGAE. Ricketts did not recognize the union at that time. DNAinfo and Gothamist had merged earlier this year.

 

Was this article useful? SHRM offers thousands of tools, templates and other exclusive member benefits, including compliance updates, sample policies, HR expert advice, education discounts, a growing online member community and much more. Join/Renew Now and let SHRM help you work smarter.


LIKE SAVE PRINT
Reuse Permissions

Job Finder

Find an HR Job Near You
Post a Job

SPONSOR OFFERS

Find the Right Vendor for Your HR Needs

SHRM’s HR Vendor Directory contains over 3,200 companies

Search & Connect