People For the American Way Foundation

Biden Judge Affirms NLRB Finding that Corporation Committed Unfair Labor Practices by Underfunding Pensions and Other Misconduct

Biden Judge Affirms NLRB Finding that Corporation Committed Unfair Labor Practices by Underfunding Pensions and Other Misconduct

Judge Veronica Rossman, nominated by President Biden to the Tenth Circuit court of appeals, wrote an almost unanimous decision that affirmed a National Labor Relations Board (NLRB) ruling that a large corporation had committed unfair labor practices by underfunding a union pension plan, setting up a profit-sharing plan for non-union members only, and other misconduct. The April 2024 decision was in Coreslab Structures (Tulsa) Inc. v. NLRB


What is the background of this case?

 Coreslab “produces bridge components and other structural materials” at its Tulsa, Oklahoma factory. It signed a 2005 contract with a union to represent its “production and maintenance” workers, under which it was to make pension contributions for “all hours worked” by unit employees, whether or not they were union members.

Beginning in 2011, however, the company made pension contributions only for employees who were union members. For non-union members, it made annual contributions to a profit-sharing plan instead, without telling the union or making union members eligible.

In 2019, a pension plan audit found that just for 2016-2018, Coreslab had underfunded the pension by around $120,000 because of its conduct. The company told the union of the audit’s ‘basic conclusion” that it had underpaid the fund, without explaining the amount or the cause.

Also during 2019, a company official saw a new hire talking to a union representative about signing a union authorization agreement. Claiming the union could not talk to the new hire, the official broke up the conversation. The union representative disagreed, but no further action occurred at that time.

2019 also saw the union and Coreslab enter negotiations about a new contract, since the current one expired towards the end of the year. Little progress and few meetings took place, despite numerous union requests. The company finally told the union about its pension vs profit-sharing conduct since 2011, although it declined to provide details. In the fall, Coreslab gave the union a “disaffection petition” signed by 18 of the 26 bargaining unit members claiming they did not want to be represented by the union anymore, suspended further negotiations, and informed the union that it “would be withdrawing recognition” of the union when the existing contract expired at the end of September. Coreslab did so, and the union took the matter to the NLRB.

After extensive hearings and argument, the NLRB concluded that Coreslab had committed illegal unfair labor practices. The misconduct included “unilaterally modifying” the agreement with the union; failing to make required pension contributions; implementing a profit-sharing plan just for non-union members; improperly directing the new hire not to talk with the union; failing to bargain with the union in good faith; and improperly withdrawing recognition of the union.

As a remedy, the NLRB ordered Coreslab to make payments, including back payments, to the pension plan for all union and non-union employees; to include union members in the profit-sharing plan; to allow all employees including new hires to talk with the union; to recognize the union and provide it with necessary information; and to bargain “in good faith” for a new contract. Coreslab appealed to the Tenth Circuit.


How did Judge Rossman and the Tenth Circuit Rule and Why is it Important?

 Judge Rossman wrote a virtually unanimous opinion that upheld the NLRB, except for one portion of the remedy. After careful analysis of the record, relevant precedent, and Coreslab’s arguments, she concluded that the company’s pension underfunding/ profit-sharing conduct violated federal law because it “discriminates” on the “basis of union status.” She similarly found that the company’s refusal to allow the new hire to speak to a union representative was improper. The record also supported the NLRB’s finding, she wrote, that Coreslab had failed to bargain in good faith and relied on a disaffection petition that was “tainted” by “its own unfair labor practices.” These conclusions were unanimous, although Judge Harris Harts partly dissented and maintained that the union should have found out about the company’s conduct earlier.

The court also upheld the NLRB remedy with one exception. Judge Rossman explained that it was wrong for the NLRB to order back payments to the pension and profit-sharing plan “without offset” for payments already made. Such an order was truly “punitive” and not “remedial,” she wrote, and thus beyond the agency’s authority.

Judge Rossman’s opinion was obviously important to the workers and their union at Coreslab. It also reinforces important precedent concerning review of NLRB rulings, particularly in the Tenth Circuit, which includes Colorado, Kansas, Mew Mexico, Oklahoma, Utah, and Wyoming. In addition, it serves as a reminder of the importance of promptly confirming fair-minded judges like Judge Rossman to our federal courts.