It was recently announced that after years of litigation, news company CNN has agreed to pay over 300 unionized camera operators a total of $76 million. The award was the result of the company terminating the contracts of the unionized employees and hiring replacement employees to do the same work back in 2003.
CNN had a service agreement with its subcontractor, Team Video Services, and replaced the workers without bargaining with the two unions who represented the laid off employees. The company also let former workers know that their work with the subcontractor and membership in a union disqualified them from employment.
In 2008, an ALJ found that CNN was a successor to and joint employer with its subcontractor, and as such, had an obligation to recognize and bargain with the employees’ unions. The ALJ found CNN’s reasons for terminating the contract were pretextual and that it engaged in “blatant discrimination against bargaining unit members.”
The Board agreed with the ALJ, and it also awarded backpay. The case eventually rose to the DC Court of Appeals, where Judge Merrick Garland and future Supreme Court Justice Brett Kavanaugh adopted the majority of the findings of the Board, finding that while the Board misapplied its standards for joint employer status, CNN was a successor to its subcontractor because it did not make a significant change in the essential nature of its business and a majority of CNN’s employees were employed by its subcontractor. The court would have analyzed whether CNN employed workers previously employed by its subcontractor, but because the Board found that CNN refused to rehire those employees due to anti-union animus, it was not required to determine if CNN hired those employees back.
After that, the court remanded the case back to the Board for findings on backpay, based on the wages CNN actually paid its new employees who did the work previously done by its subcontractor’s employees.
Having seen the writing on the wall, CNN agreed to enter into alternative dispute resolution on the back wages for its terminated employees, and arrived at a $76 million settlement for wages and benefits.
While rare, joint/successor employer issues are incredibly complicated, and based on the court’s analysis of this Board decision, the slightest hint of anti-union animus in employment decisions by a successor employer can lead to disastrous results for a company. CNN is now liable for millions of dollars in backpay that it may not have been responsible for had it simply worked with the employees that previously performed work for its subcontractor.
If you or your organization are in a takeover/successor employment situation with a unionized workforce, it is necessary for you to have the right advice when dealing with your new workforce. For this, and all other services pertaining to labor relations, contact the Wiley Law Office, for labor advice that works.