Background
American Backflow & Fire Prevention, Inc.’s plumbers voted to unionize in June 2021. After Plumbers Local 130 accused the company of multiple unfair labor practices—including encouraging decertification, threatening not to bargain in good faith, withholding requested information, and refusing to meet at reasonable times—the company entered an April 2022 settlement agreement with the union and the National Labor Relations Board.
Under the settlement, American Backflow agreed to recognize the union and bargain with it in good faith. The company also agreed that, if it breached the settlement and failed to cure the breach, the allegations in a resulting complaint would be deemed admitted and the only issue it could contest would be whether it had defaulted. After one bargaining session in March 2023, the company canceled the next session and withdrew recognition, initially citing documentary evidence that the union had lost majority support. When the Board’s General Counsel sought default judgment, however, the company disavowed reliance on the decertification documents and asserted without elaboration that its withdrawal was lawful.
The Court’s Holding
The Seventh Circuit denied American Backflow’s petition for review and granted the Board’s cross-application to enforce its order requiring the company to bargain collectively and in good faith with the union. The court held that substantial evidence supported the Board’s finding that the company had defaulted under the settlement agreement.
The court concluded that American Backflow’s unexplained assertion that its withdrawal of recognition was lawful amounted only to a general denial. Once the company abandoned the decertification evidence identified in its withdrawal notice, it offered no specific facts showing that the union had actually lost majority support or otherwise refuting the detailed account of its breach. The Board reasonably applied its precedent holding that a general denial does not create a material factual dispute requiring a hearing on a motion for default judgment.
The court declined to consider the company’s arguments that the National Labor Relations Act and due process guaranteed it a hearing because American Backflow had not presented those objections to the Board. Under 29 U.S.C. § 160(e), an appellate court generally may not consider an objection that was not urged before the Board absent extraordinary circumstances, and the company identified none.
Key Takeaways
- An employer that agrees to a default provision in an NLRB settlement may be held to that provision if it later breaches its bargaining obligations.
- A conclusory assertion that withdrawal of union recognition was lawful does not create a material factual dispute when the employer supplies no objective evidence or specific explanation supporting withdrawal.
- Statutory and due-process objections must be presented to the NLRB before they may ordinarily be raised in a petition for appellate review.
Why It Matters
The decision underscores that employers must support withdrawal of recognition with objective evidence that an incumbent union has actually lost majority support. Abandoning the stated evidentiary basis for withdrawal while offering only a general denial may leave the employer unable to contest default under a settlement agreement.
The ruling also highlights the importance of preserving arguments during Board proceedings. Even constitutional and statutory hearing claims may be unavailable on appellate review when the party did not first give the Board an opportunity to address them.