7th Circuit imposes NLRB proposed sanctions, fine in collective bargaining case

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The 7th Circuit Court of Appeals has found a northern Indiana construction company in contempt and imposed most of the National Labor Relations Board’s proposed sanctions against the company, including a $192,400 fine.

The case involved collective bargaining between Neises Construction Corporation and the Indiana/Kentucky/Ohio Regional Council of Carpenters, which represents the company’s employees.

This case began in 2018, when the NLRB obtained enforcement of its order requiring Neises to recognize and bargain with the union.

Then in May 2019, the board sought to hold Neises in contempt for failing to bargain with the union. The 7th Circuit entered a consent order that required Neises to bargain with the union not less than once every 30 days.

But in February 2020, the labor relations board again sought to hold Neises in contempt for failing to bargain with the union as required. The court again entered a consent order that required Neises to bargain with the union at least once every 30 days.

In April 2021, the NLRB sought to hold Neises in contempt for a third time.

The board alleged that while the previous consent order was under submission, Neises and the union engaged in productive discussions and came to tentative agreements on many aspects of a collective bargaining agreement.

But Neises effectively retracted those tentative agreements when it hired a new attorney who refused to adhere to them, the board continued — specifically, after it filed its February 2020 contempt petition.

Writing for the court, 7th Circuit Senior Judge Kenneth Ripple said Neises refused to bargain in good faith with the union, noting it had been ordered to do so three times.

“Despite these orders, Neises’s contumacious conduct persists,” Ripple wrote. “After reaching numerous tentative agreements on the articles to be included in a collective bargaining agreement with the Union, Neises retracted those tentative agreements without good cause.”

The court rejected Neises’ objections arguing that the NLRB did not have the authority to file the contempt petition and that the petition was not properly ratified.

It also rejected Neises’ objections arguing that a special master report improperly decided the parties reached tentative agreements, and that it did not violate an unambiguous command because the court’s February 2020 judgment and consent order do not use the phrase “in good faith,” and such a phrase is too vague anyway.

Finally, the court rejected Neises’ arguments as to why it should not be held in contempt for refusing to bargain in good faith with the union.

“There is no fair ground of doubt that our orders required good-faith bargaining. A command to bargain necessarily encompasses an order to engage in genuine efforts to reach an accord,” Ripple wrote.

The NLRB sought $192,400 in penalties.

It arrived at that number as follows: an initial $10,000 fine per violation — the board stipulated that there was just one violation here, failing to bargain in good faith — plus $200 per day that the violation continued, running from Aug. 4, 2020, through Feb. 2, 2023, totaling 912 days.

Ripple said Neises’ protest that it would be fined for defending the contempt petition relied on a false premise. Specifically, the noted the company agreed to the fine schedule in the 2020 consent order and judgment.

“The penalty we impose here is designed to address Neises’s failure to comply with our prior orders and to coerce Neises into compliance,” Ripple wrote.

The case is National Labor Relations Board v. Neises Construction Corporation, 18-1774.

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