Palermo's Pizza Wins Some, Loses Other NLRA Claims

By Allen Smith November 30, 2012

When an employer’s obligations under labor laws appear to conflict with its obligations under immigration laws, it can be tricky for HR to navigate the maze of requirements. Sometimes those obligations coincide, but sometimes they diverge, Irving E. Gottschalk, regional director of the National Labor Relations Board’s (NLRB) Milwaukee regional office, said in a Nov. 27, 2012, interview.

In spring 2012, Palermo’s Pizza in Milwaukee discharged 75 employees whose documentation had been questioned by the federal government. On Nov. 21, 2012, Gottschalk determined that the employer had not acted in retaliation for the employees’ exercise of their right to concerted activity, as given by the National Labor Relations Act (NLRA). His ruling, which has yet to be published, determined that Palermo’s was merely complying with immigration laws.

‘Mixed Decision’

Gottschalk described his ruling as a “mixed decision,” noting that Voces de la Frontera, which represented workers dismissed by the company, persuaded him that in a few instances, some employees had been dismissed in violation of the NLRA.

Palermo’s immigration concerns flowed from an enforcement action by the U.S. Immigration and Customs Enforcement (ICE).

Palermo’s controversy with workers seeking to unionize arose soon after its workers delivered a petition signed by three-fourths of the staff, asking for union recognition on May 29, 2012.

The company declined to recognize the union and started bringing in temps. At approximately the same time, Palermo’s notified 75 workers that they had initially 28 days, which the company later switched to 10, to document that they were authorized to work in the United States.

On June 1, 2012, production employees went on strike.

ICE stayed its action against Palermo’s on June 7, 2012.

Soon thereafter, Palermo’s discharged 75 workers who had not provided the documentation.

Voces de la Frontera led the strike throughout the summer and into the fall, bringing an unfair labor practices charge against Palermo’s.

On Nov. 21, Gottschalk met with Palermo’s and Voces de la Frontera officials and told them about his determination, which he said will be in a written decision in a few days.

Most of the terminations weren’t a case of union busting or in response to the union activity, he concluded. Even though ICE suspended its processing of its immigration action on June 7, 2012, that did not relieve Palermo’s of its obligation to comply with immigration laws, Gottschalk explained.

ICE was simply trying to work in cooperation with the NLRB, he noted. After all, ICE has the power to deport people, and the NLRB needs to have people available as witnesses in order to finish its investigation of labor complaints.

There were two circumstances in which Gottschalk did find violations. In the first, he found that some of Palermo’s supervisors reacted to news that a strike was under way by telling employees if they joined the protest, they would lose their jobs. Even though the company was not yet unionized, that was a violation of the law, because the supervisors’ threats infringed on the workers’ right to concerted activity.

In addition, some workers who did not report to work on the first day of the strike for reasons unrelated to the protest were replaced when they returned to work on the second day of the strike. For example, one employee was confused about whether it was safe to come to work on the first day of the strike and a supervisor told the employee not to report to work. When the worker came in the next day, the employee was told he had been replaced.

Another employee was out sick on the first day of the strike, but learned he had been discharged the next day.

Gottschalk said that Palermo’s has shown a strong interest in settling that part of the unfair labor practice charge where he did find merit, though he said the settlement “may take a while.”

Parties’ Reactions

Palermo’s applauded Gottschalk’s ruling, releasing a statement saying “Today’s decision by the NLRB to dismiss all of the significant claims filed by Voces de la Frontera is a major victory for our workers and our company. The decision completely vindicates Palermo’s and reinforces our well-deserved reputation for being a responsible employer and a committed corporate citizen. It also validates that Palermo’s fully complied with all applicable labor and immigration laws.”

Voces de la Frontera published a statement saying, “We are glad that today the Milwaukee regional office of the NLRB announced a decision finding that Palermo Villa Inc. violated labor law. Palermo’s treatment of its workers and its response to our exercising our right to organize for a voice in our jobs has been outrageous. Under today’s decision, a significant number of workers will get their jobs back and be awarded back pay because of Palermo’s misconduct.”

It added, “We are disappointed, however, that the regional office of the NLRB did not issue a complaint on some important aspects of our charge. We will appeal this failing to the NLRB in Washington. The fact that Palermo’s Pizza is celebrating an NLRB complaint of wide-ranging violations of federal labor law illustrates just how out of touch they are—as well as how indifferent they are to the people who make Palermo’s Pizza. Responsible corporations do not celebrate findings that they broke the law.”

Ronald Meisburg, a former board member and NLRB general counsel who is now a partner at Proskauer Rose in Washington, D.C., told SHRM Online in a Nov. 29, 2012, interview that less than 2 percent of regional director decisions are reversed by the board’s general counsel through the appeals process.

“Cases that present factual determinations rather than legal analysis generally are not the kind of cases that get reversed,” he noted. “It’s like the courts, which rarely reverse on facts. More often, they reverse on points of law.”

Allen Smith, J.D., is manager, workplace law content, for SHRM.


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