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DC Circuit Rules for NLRB on Removal of Employee Bonus Plan

By Tanya Roth, Esq. on July 13, 2012 10:01 AM

The D.C. Circuit Court of Appeals ruled on favor of the National Labor Relations Board, finding that Chevron Mining Inc. violated the National Labor Relations Act when it amended a bonus plan to penalize employees for work stoppages.

Chevron Mining's collective bargaining agreement had provisions for "memorial periods," which were essentially unpaid work stoppages. Under the collective bargaining agreement, strikes were prohibited. As a result, the union called six "memorial period" work stoppages at one mine in 2004 in an effort to pressure the employer.

The company had a bonus plan in place that was contingent on the employee's mine reaching its various safety and financial goals. The plan was subject to unilateral amendment with no arbitration. An employee's only recourse was to quit the plan, if he or she disagreed.

In response to these work stoppages, Chevron Mining amended its bonus plan to eliminate bonuses for union-represented employees where such an action took place, regardless of whether or not the mine met its financial or safety goals.

The D.C. Circuit Court of Appeals looked to whether the memorial period work stoppages were allowed under the collective bargaining agreements, as they took place. Generally, the court noted, it was an unfair labor practice for an employer to interfere with or restrain a right that was allowed under a CBA.

In looking at the district court's opinion, the appellate court determined that the parties intended that the memorial periods could be used to strike over an arbitrable dispute. At the time these stoppages occurred, Chevron Mining made no attempt to stop them,nor did it indicate that the employees were out of line.

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