By: Jennifer Weitz, Esq. and Ty Hyderally, Esq.

While unionization continues to be a hot-button issue politically, a recent decision by the United States Court of Appeals for the Seventh Circuit amply demonstrates the importance of unions in defending worker protections. In Mondelez Global LLC v. NLRB, 2021 U.S. App. LEXIS 21548, the Seventh Circuit upheld the findings of the National Labor Relations Board (“NLRB”), finding there was substantial evidence to show violations of the National Labor Relations Act (“the Act”).

Mondelez Global, an Illinois corporation, is a manufacturer of baked goods. Mondelez’s Fair Lawn, New Jersey plant makes Ritz crackers, Oreo cookies and other baked goods. Id. at *3. The Bakery, Confectionary, Tobacco Workers and Grain Millers International Union Local 719 represents the plant’s workers (but not supervisors) across several departments. Id. Each employee has a specific job classification and may not work in other classifications. Id. Mondelez took over the plant from Kraft Foods Global, Inc. in 2014, in the process adopting the Collective Bargaining Agreement (“CBA”) between Kraft and Local 719. Id. at *4. When the CBA expired in 2016 union officials met with Mondelez but were unable to negotiate a new agreement.

In the absence of a CBA, Mondelez outsourced production work abroad, hired a subcontractor to clean equipment on a Saturday, and made changes to the short-term disability leave policy. Id. at *4-6. In each instance union officials pushed back, with mixed results. Subsequently, when Mondelez assigned utility-classification employees to work on the floor, the manager ignored the union representative’s complaints, telling the shift manager to “leave them there because [Local 719] did not have a contract.” Id. at *6. Similarly, when packing department employees were told to clean up a spill in the mixing department, the shift manager dismissed the union representative’s complaint, pointing out that the union could not do anything to stop management from assigning across classifications because there was no contract. Id.

Mondelez then began scrutinizing employee overtime. The three highest-ranking union representatives were individually questioned by Human Resources about their overtime, albeit without any opportunity to rebut the claims presented. After the HR Manager reported her findings, Mondelez fired the three union officials for falsifying time records and leaving the work area without authorization. Id. at *10. After this, the overtime investigation was stopped.

In 2016 Mondelez changed the terms and conditions of employment without notifying or bargaining with the union. In March of that year, Mondelez increased the amount of time an employee must wait before returning to work after submitting a doctor’s note, implementing this policy without collectively bargaining with the union. Id. at *11. That same month, Mondelez informed the union that, unlike in the past, when union officials were allowed to meet privately with new hires for an hour during the one-week orientation period, in the face of the expired CBA, the union “would not be permitted to speak separately with the new hires.” Id. Instead, management remained during the union part of the new hire orientation. This constituted an alteration of longstanding practice without notifying the union in advance or bargaining with it.

In June and December of 2016 Mondelez also changed the shift times of the warehouse employees without consulting or bargaining with the union. Id. at *11-12. And in May 2016, the union asked Mondelez for the names of employees who had been disciplined for violating the manual clock-in/clock-out policy used during overtime. Mondelez provided a partial response on September 9, 2016, and followed up with more information on January 5, 2017. Id. at *12. Finally, in July 2016, the union asked for contact information for all new hires since June 2015 to coordinate a new hire orientation.  Mondelez did not respond for two months, at which point the union submitted another request in September 2016.  Mondelez finally produced a partial list that month and again in January 2017 but never gave a complete list of new hires. Id. at *13.

Based on these events, Local 719 filed eight unfair labor practice charges, and the NLRB’s General Counsel filed a consolidated complaint against Mondelez, alleging various violations of the Act. Id.  After a seven-day hearing, an Administrative Law Judge (“ALJ”) found that Mondelez violated the Act on each claim. Id. at *14. The ALJ found that Mondelez displayed anti-union animus, characterized Mondelez’s overtime investigation as a “sham,” and determined that Mondelez violated the Act by unilaterally changing the terms and conditions of employment, and by not providing information the union requested. Id.  The NLRB affirmed the ALJ’s decision but with clarifications. Id. at *15.  Mondelez petitioned for review, and the NLRB cross-petitioned for enforcement.  The Seventh Circuit then heard the case.

First, the Court addressed the termination of the three union employees. It found “substantial evidence” to support the NLRB’s conclusion that union activity was a motivating factor in their discharge. Id. at *19. The Court also found “ample evidence” to support the NLRB’s finding of anti-union animus, noting, among other instances, that Mondelez ordered unionized workers to remove shirts that displayed a pro-union logo and slogan, and that Mondelez supervisors made hostile remarks toward union officials and derided the expired CBA. The Court found that Mondelez’s arguments “f[ell] short” and agreed with the NLRB’s conclusion that Mondelez’s justification was pretextual. Id. at *24.

The Court then turned to the balance of the NLRB’s findings, that Mondelez unilaterally changed the short-term disability leave plan, union access to new hires, and employee shift schedules, and that the failure to provide the union with new hire information was in violation of the Act.  Mondelez insisted that, while it did unilaterally effect these changes, the changes were either immaterial or permissible.  The Court disagreed, noting the NLRB’s finding that changing the short-term disability policy “affected the amount of wages that worker would earn.” Id.  at *26.  The Court also found that eliminating the union’s right to meet separately with new hires was material. Id. at *27.  As well, the Court found that Mondelez violated the Act by unilaterally changing its warehouse employees’ shift schedules, as employee work schedules are mandatory bargaining subjects. Id. at *28.  Lastly, the Court noted there was substantial evidence that Mondelez failed to provide the union with new hire information, thus constituting another violation of the Act. Id. at *32.

Based on the above, the Court denied Mondelez’s petition for review and granted the NLRB’s cross-application for enforcement. Id. at *33. While not all corporations will take the same anti-union stance as Mondelez did, in the absence of unionization, a corporation can make any material changes to the work it wants with little to stop it.  Even without an enforceable CBA, the union was able to successfully counter the employer’s efforts to detrimentally impact the terms of employment.

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