No-Strike Clauses and Lockouts in Minnesota

What Does a No-Strike Clause Require of the Union?

A no-strike clause is the union’s promise not to strike or stop work during the contract term. Minnesota’s act defines a strike as “the temporary stoppage of work by the concerted action of two or more employees as a result of a labor dispute” (Minn. Stat. § 179.01, subd. 8).

A contract may pair the promise with the employer’s own no-lockout promise. The clause in Metropolitan Edison Co. v. NLRB, 460 U.S. 693 (1983) read: “there shall be no strikes or walkouts by the Brotherhood or its members, and the Company agrees that there shall be no lockouts of the Brotherhood or its members.”

The union can be bound even when the contract has no express clause. In Teamsters Local 174 v. Lucas Flour Co., 369 U.S. 95 (1962), the U.S. Supreme Court approved the rule that “a strike to settle a dispute which a collective bargaining agreement provides shall be settled exclusively and finally by compulsory arbitration constitutes a violation of the agreement.” The Court did not imply a no-strike promise “beyond the area which it has been agreed will be exclusively covered by compulsory terminal arbitration.” For the wider effects of a union contract on your business, see how collective bargaining affects your operations.

When Does a No-Strike Clause Stop Binding the Union?

A no-strike clause stops binding the union when the contract expires, except to the extent the contract’s other dispute resolution methods survive expiration. In Litton Financial Printing Division v. NLRB, 501 U.S. 190 (1991), the U.S. Supreme Court described the National Labor Relations Board’s rule: “in recognition of the statutory right to strike, no-strike clauses are excluded from the unilateral change doctrine, except to the extent other dispute resolution methods survive expiration of the agreement.”

The unilateral change doctrine is the duty to keep most terms of employment in place after expiration while bargaining continues. A no-strike clause is not one of those terms. Litton also held that “an expired contract has by its own terms released all its parties from their respective contractual obligations, except obligations already fixed under the contract but as yet unsatisfied.” Litton arose from layoff grievances filed after expiration, not from a strike.

Once the clause ends, federal law’s protection of the right to strike applies. Under 29 U.S.C. § 163, nothing in the NLRA, “except as specifically provided for herein, shall be construed so as either to interfere with or impede or diminish in any way the right to strike, or to affect the limitations or qualifications on that right.” A lockout at expiration therefore does not hold the union to its old promise.

When Is a Lockout Lawful for a Minnesota Employer?

A lockout is lawful under federal law when the contract has expired, bargaining has reached impasse, and you use a temporary shutdown only to support a legitimate bargaining position. Minnesota defines a lockout as “the refusal of the employer to furnish work to employees as a result of a labor dispute” (Minn. Stat. § 179.01, subd. 9).

In American Ship Building Co. v. NLRB, 380 U.S. 300 (1965), the contract had expired and the parties had reached impasse before the company laid off its workers. The U.S. Supreme Court held “that an employer violates neither § 8 (a)(1) nor § 8 (a) (3) when, after a bargaining impasse has been reached, he temporarily shuts down his plant and lays off his employees for the sole purpose of bringing economic pressure to bear in support of his legitimate bargaining position.”

The holding has limits that matter to your planning:

1. Impasse and purpose. The Court said the question it answered was the use of a temporary layoff solely for bargaining pressure after impasse: “This is the only issue before us, and all that we decide.”
2. Hostile motive. The Court set aside cases where the employer “has used a lockout as a means to injure a labor organization or to evade his duty to bargain collectively.”
3. Contract term. A lockout before expiration can breach a no-lockout clause and the federal notice rules in the next section.

I suggest documenting the bargaining history and the business reason before any lockout, because the employer’s purpose is part of the federal test.

What Notice Must You Give Before a Lockout?

Federal law requires notice before either side ends or changes a contract, and it bars a lockout during the notice period. Under 29 U.S.C. § 158(d), no party may end or change the contract “unless the party desiring such termination or modification” takes these steps:

1. Notice to the other party. It “serves a written notice upon the other party to the contract of the proposed termination or modification sixty days prior to the expiration date thereof.”
2. Offer to bargain. It “offers to meet and confer with the other party for the purpose of negotiating a new contract or a contract containing the proposed modifications.”
3. Notice to mediators. It “notifies the Federal Mediation and Conciliation Service within thirty days after such notice of the existence of a dispute, and simultaneously therewith notifies any State or Territorial agency established to mediate and conciliate disputes within the State or Territory where the dispute occurred, provided no agreement has been reached by that time.” Minnesota’s agency is the Bureau of Mediation Services (Minn. Stat. § 179.02, subd. 1).
4. No lockout in the period. It “continues in full force and effect, without resorting to strike or lock-out, all the terms and conditions of the existing contract for a period of sixty days after such notice is given or until the expiration date of such contract, whichever occurs later.”

Health care institutions have longer periods: “The notice of paragraph (1) of this subsection shall be ninety days; the notice of paragraph (3) of this subsection shall be sixty days; and the contract period of paragraph (4) of this subsection shall be ninety days.” Under 29 U.S.C. § 158(g), “A labor organization before engaging in any strike, picketing, or other concerted refusal to work at any health care institution shall, not less than ten days prior to such action, notify the institution in writing and the Federal Mediation and Conciliation Service of that intention.” I suggest checking the current text of §§ 158(d) and 158(g) and calendaring each step from your contract’s expiration date, because the periods run from that date and from the notice.

Minnesota’s act has its own rule. Under Minn. Stat. § 179.06, subd. 1, it is unlawful “for an employer to institute a lockout, unless such petition has been served by the party taking such action upon the commissioner and the other parties to the labor dispute at least ten days before the strike or lockout becomes effective.” The petition comes after a written notice step: “An employer shall give a like notice to employees, representative, or labor organizations of any intended change in any existing agreement.” The parties then have “the duty of the employer and the representative of employee or labor organization to endeavor in good faith to reach an agreement respecting such demand.” The petition also has a time limit: “Unless the strike or lockout is commenced within 90 days from the date of service of the petition upon the commissioner, it shall be unlawful for any of the parties to institute or aid in the conduct of a strike or lockout without serving a new petition in the manner prescribed for the service of the original petition, provided that the 90-day period may be extended by written agreement of the parties filed with the commissioner.” Minn. Stat. § 179.12(a)(2) makes a lockout “in violation of section 179.06 or 179.07” an employer unfair labor practice. For a dispute in a business “affected with a public interest,” Minn. Stat. § 179.07 adds that once the commissioner notifies the parties of a decision to appoint a fact-finding commission, “no strike or lockout shall be instituted until 30 days after the commissioner’s notification to the parties,” a period that “may be extended by stipulation of the parties to the labor dispute.” I suggest checking the current text of §§ 179.06 and 179.07 before relying on those periods.

That Minnesota rule reaches fewer employers than its text suggests. In Faribault Daily News, Inc. v. International Typographical Union, 53 N.W.2d 36 (Minn. 1952), the Minnesota Supreme Court held that “when interstate commerce is involved,” the act’s ten-day strike notice “is invalid, since it interferes with rights guaranteed by congress in § 7 of the federal act.” The revisor’s note on § 179.06 states that the strike-or-lockout waiting rule was preempted by that decision. Under 29 U.S.C. § 164(c), state courts may assert jurisdiction “over labor disputes over which the Board declines” to assert it. If the federal board would decline your dispute, I suggest planning for the Minnesota petition as well, because it may be the rule that applies to you.

What Happens to the Union’s Promise if You Lock Out Mid-Contract?

A lockout during the contract term can cost you the protection of the union’s promise. Minnesota’s act makes a union strike in breach of the contract an unfair labor practice only when “the employer is, at the time, in good faith complying with the provisions of the agreement” (Minn. Stat. § 179.11(a)(1)).

The same act makes it an employer unfair labor practice “to institute a lockout of its employees in violation of a valid collective bargaining agreement between the employer and its employees or labor organization if the employees at the time are in good faith complying with the provisions of the agreement, or to violate the terms and conditions of the bargaining agreement” (Minn. Stat. § 179.12(a)(1)). Each side’s protection under these two paragraphs depends on its own compliance.

Federal law has a parallel limit for a strike against employer practices “destructive of the foundation on which collective bargaining must rest.” In Mastro Plastics Corp. v. NLRB, 350 U.S. 270 (1956), the employers had backed a rival union and discharged employees. Reading that contract, the U.S. Supreme Court concluded that “the contract, taken as a whole, deals solely with the economic relationship between the employers and their employees,” so a promise “to refrain from engaging in any strike or work stoppage during the term of this agreement” did not waive the employees’ “right to strike solely against unfair labor practices of their employers.” The Court assumed that the employees, “by explicit contractual provision, could have waived their right to strike against such unfair labor practices.” The Court also held that strikers in that situation kept their employee status during the § 158(d) waiting period. Discipline tied to union activity carries its own risk; see retaliation for union activity.

How Can an Employer Enforce a No-Strike Clause?

You can ask a court to stop a strike that breaches the clause, and you can sue the union for damages, but each remedy has conditions. Federal law starts from a bar: under 29 U.S.C. § 104, “No court of the United States shall have jurisdiction to issue any restraining order or temporary or permanent injunction in any case involving or growing out of any labor dispute” to stop listed acts, including refusing to work.

Boys Markets, Inc. v. Retail Clerks Union, Local 770, 398 U.S. 235 (1970) created a narrow exception. The U.S. Supreme Court held that the anti-injunction law “does not bar the granting of injunctive relief” where the contract “contains a mandatory grievance adjustment or arbitration procedure” and the strike is over an arbitrable grievance. The employer “should be ordered to arbitrate, as a condition of his obtaining an injunction against the strike,” and the court weighs ordinary equity factors, including irreparable injury.

Buffalo Forge Co. v. United Steelworkers, 428 U.S. 397 (1976) limits that exception. The Court held that “Boys Markets plainly does not control this case,” because the sympathy strike “was not over any dispute between the Union and the employer that was even remotely subject to the arbitration provisions of the contract.” No injunction issued pending arbitration.

Damages run against the union, not its members:

• Union suit. 29 U.S.C. § 185(a) allows “Suits for violation of contracts between an employer and a labor organization” in federal court. Under § 185(b), a money judgment against a union “shall be enforceable only against the organization as an entity and against its assets, and shall not be enforceable against any individual member or his assets.”
• No individual suits. In Complete Auto Transit, Inc. v. Reis, 451 U.S. 401 (1981), the Court held “that § 301 (a) does not sanction damages actions against individual employees for violating the no-strike provision of the collective-bargaining agreement, whether or not their union participated in or authorized the strike.”

A Minnesota state court applies the same federal rules to the contract. Lucas Flour held that “Congress intended doctrines of federal labor law uniformly to prevail over inconsistent local rules.” Where Minnesota’s act does apply, Minn. Stat. § 179.14 allows “a suit to enjoin such practice” in district court, after live testimony and findings. The arbitration step can decide the dispute; see the grievance and arbitration process.

What Minnesota Rules Apply to Replacement Workers During a Lockout?

Minnesota bars an employer from knowingly using a professional strikebreaker during a strike or lockout. Minn. Stat. § 179.12(a)(8) makes it an unfair labor practice “willfully and knowingly to utilize a professional strikebreaker to replace an employee or employees involved in a strike or lockout at a place of business located within this state.” Paragraph (b) makes that conduct an unlawful act as well.

The definition turns on the worker’s history. Under Minn. Stat. § 179.01, subd. 16, a professional strikebreaker is a person who “makes an offer to an employer at whose place of business a labor dispute is presently in progress to work as a replacement for an employee or employees involved in such labor dispute.” The person must also be someone who, “during a period of five years immediately preceding such offer, has, on more than one occasion, made an offer to employers to work as a temporary employee to personally replace employees involved in labor disputes.”

The statute’s next clause bars an employer “to grant or offer to grant the status of permanent replacement employee to a person for performing bargaining unit work for an employer during a lockout of employees in a labor organization,” or during a union-authorized strike. In Midwest Motor Express, Inc. v. Teamsters Local 120, 512 N.W.2d 881 (Minn. 1994), a case arising from a strike, the Minnesota Supreme Court held “that Minn. Stat. § 179.12(9) . . . is preempted by federal law.” The revisor’s note marks clause (9) as preempted and carries no such note for clause (8).

Two more Minnesota rules reach a replacement crew. Paragraph (b) also makes clause (7) of Minn. Stat. § 179.12(a) an unlawful act. That clause bars an employer “to engage or contract for the services of a person who is an employee of another if the employee is paid a wage that is less than the wage to be paid by the engaging or contracting employer under an existing union contract for work of the same grade or classification.” Under Minn. Stat. § 181.64, it is unlawful for anyone “doing business in this state, directly or through any agent or attorney,” to “induce, influence, persuade, or engage any person to change from one place to another in this state, or to change from any place in any state, territory, or country to any place in this state, to work” through “failure to state in any advertisement, proposal, or contract for the employment that there is a strike or lockout at the place of the proposed employment, when in fact such strike or lockout then actually exists in such employment at such place.” Under Minn. Stat. § 181.65, a violator “shall be guilty of a misdemeanor,” and the recruited worker has “a right of action for the recovery of all damages sustained” and, “in addition to all such actual damages such person may have sustained,” may recover “such reasonable attorney fees as the court shall fix.”

Federal law’s answer on replacements is open in American Ship Building, where the Court said “we intimate no view whatever as to the consequences which would follow had the employer replaced its employees with permanent replacements or even temporary help.”

How Does Minnesota Unemployment Law Treat Locked-Out Employees?

Locked-out employees can collect Minnesota unemployment benefits, while strikers generally cannot. Minn. Stat. § 268.085, subd. 13b, provides that “An applicant who has stopped working because of a labor dispute at the establishment where the applicant is employed is ineligible for unemployment benefits.” For a participant, that lasts “until the end of the calendar week that the labor dispute was in active progress.” The subdivision uses chapter 179’s meaning: “the term “labor dispute” has the same definition as provided in section 179.01, subdivision 7.”

The same subdivision excepts an applicant who “stops working because of a lockout.” Additional benefits can follow. Minn. Stat. § 268.125 makes them available when “the applicant stopped working because of a lockout,” using the chapter 179 definition, and subdivision 5 provides that “the applicant may receive additional unemployment benefits for up to 26 weeks so long as the lockout is in active progress.” Under subdivision 3, a locked-out applicant qualifies for a week of those benefits only if, among other conditions, “the applicant has exhausted regular unemployment benefits under section 268.07 or the law of another state; (3) the applicant is not eligible for extended unemployment benefits or unemployment benefits under any federal law.”

That cost can fall on you. Minn. Stat. § 268.047, subd. 2, keeps benefits out of an employer’s future tax rate when “the applicant stopped working because of a labor dispute at the applicant’s primary place of employment if the employer was not a party to the labor dispute.” An employer running its own lockout is a party. If a former employee’s claim does reach a hearing, see contesting an unemployment claim.

What Should Your No-Strike and No-Lockout Clause Say?

Your clause should state when it ends, what conduct it covers, and what the union must do about stoppages it did not call, because Lucas Flour, Buffalo Forge, and Metropolitan Edison each limited what a general clause accomplished. I suggest these terms, each for the reason given:

1. Duration. I suggest deciding whether the clause should survive expiration, because Litton said a contract “might be drafted so as to eliminate any hiatus between expiration of the old and execution of the new agreement, or to remain in effect until the parties bargain to impasse.”
2. Scope. I suggest naming sympathy strikes, slowdowns, and refusals to cross picket lines, because Lucas Flour implies a promise only within mandatory arbitration and Buffalo Forge denied an injunction against a sympathy strike.
3. Union duty. I suggest a promise like the one quoted in Buffalo Forge: “The Union recognizes its possible liabilities for violation of this provision and will use its influence to see that work stoppages are prevented.” Complete Auto Transit said Congress chose to allow a damages remedy for breach of a no-strike clause “only against unions, not individuals.” The limit on union liability comes from Carbon Fuel Co. v. United Mine Workers, 444 U.S. 212 (1979). There the Court said Congress “stopped short of imposing liability upon a union for strikes not authorized, participated in, or ratified by it” and limited union responsibility to cases decided under “the common-law rule of agency.”
4. Officer duty. I suggest stating any duty of stewards and officers in plain terms, because Metropolitan Edison held that a union may waive its officials’ protection from harsher discipline only “by clearly imposing contractual duties on its officials” to support the no-strike clause.
5. Your promise. I suggest writing the no-lockout promise with the same care, because Minnesota’s act and the federal notice rule apply to your conduct during the term.

If you are buying a company with a union workforce, the successor rules are in buying a business with a union contract.

Next Steps Before a Lockout

Before a lockout, I suggest confirming four things, because each bears on the rules above. The first is that the contract has expired, or that its no-lockout promise no longer applies. The second is that whichever side sought the change, you or the union, served the federal notices and the notice period has run. The third is where bargaining stands, since American Ship Building approved a lockout “after an impasse has been reached,” and that your file shows the business reason. The fourth is that your replacement plan complies with Minnesota’s strikebreaker, contract-wage, and recruiting-disclosure rules and accounts for the federal replacement question American Ship Building left open, and that your budget covers the unemployment cost.

If the union strikes during the contract term, the first questions are whether the dispute is arbitrable and whether you are complying with the contract yourself. Those answers bear on whether an injunction is available and whether the strike is an unfair labor practice under Minnesota’s act. I advise Minnesota employers on these decisions, including employers facing union organizing at their company before any contract exists.

If you are planning a lockout or facing a strike during your contract term, email me at [email protected] with a brief description. I can tell you which of these rules govern your situation and what the first step should be. For the full range of employer-side labor and employment issues, see my employment law practice.