In NLRB v. Great Dane Trailers, Inc., the Supreme Court addressed whether an employer’s refusal to pay accrued vacation benefits to striking employees, while intending to pay such benefits to replacements, returning strikers, and non-striking employees, constituted an unfair labor practice under §§ 8(a)(3) and (1) of the National Labor Relations Act (NLRA), even in the absence of proven antiunion motivation.

The case involved a collective bargaining agreement that was set to expire. The agreement stipulated vacation benefits for employees meeting certain hour requirements, with provisions for pro-rata shares in cases of layoff or termination. When negotiations for a new agreement stalled, the union initiated a strike. During the strike, the company continued operations with non-strikers and replacements. Strikers demanded their accrued vacation pay, which the company refused, asserting that all contractual obligations had been terminated by the strike. However, the company subsequently announced a new policy to pay vacation benefits to employees who reported for work on a specific date, including non-strikers and returning strikers, but continued to deny payment to those still on strike.

The National Labor Relations Board (NLRB) found the company’s actions to be an unfair labor practice, violating §§ 8(a)(3) and (1) by discriminating against striking employees and discouraging union membership and protected concerted activity. The Court of Appeals for the Fifth Circuit, while acknowledging the discrimination, denied enforcement of the NLRB's order, reasoning that the NLRB had not proven an affirmative showing of antiunion motivation. The appellate court speculated about potential legitimate business reasons for the company's actions, such as cost reduction or encouraging employee tenure.

The Supreme Court, in its review, clarified the legal analysis for determining § 8(a)(3) violations. The Court established a two-tiered approach:

1. Inherently Destructive Conduct: If an employer’s discriminatory conduct is "inherently destructive" of important employee rights, such as participation in a legitimate strike, then proof of antiunion motivation is not required. In such cases, the NLRB can find an unfair labor practice even if the employer presents evidence of business considerations. This is because such conduct carries unavoidable consequences that the employer must have intended, and it bears its own indicia of unlawful intent. The employer then bears the burden of justifying the conduct.

2. Slightly Adverse Effect on Employee Rights: If the adverse effect of the discriminatory conduct on employee rights is "comparatively slight," then an affirmative showing of antiunion motivation is required to sustain the charge, provided the employer has presented evidence of legitimate and substantial business justifications for the conduct.

The Court emphasized that in either scenario, once discriminatory conduct with a potential adverse effect on employee rights has been proven, the burden shifts to the employer to establish legitimate motivations, as such information is more accessible to the employer.

Applying these principles, the Supreme Court found that the Court of Appeals erred by speculating about possible business justifications. The company had failed to present any evidence of legitimate motives for its discriminatory action. Since discriminatory conduct that could adversely affect employee rights was proven, and no evidence of proper motivation was offered by the employer, the NLRB’s conclusions were supported by substantial evidence. Therefore, the Supreme Court reversed the judgment of the Court of Appeals and ordered enforcement of the NLRB’s order.

The dissenting Justices argued that the majority's distillation of prior decisions was inaccurate and that the Court of Appeals had correctly analyzed the situation. They contended that the case did not involve conduct "inherently destructive" of employee rights and that the employer’s actions were not so devoid of legitimate business purpose as to infer antiunion motive without independent evidence. They also expressed concern that the majority's approach might unduly shift the burden of proof in § 8(a)(3) cases and potentially infringe upon employers' rights to take reasonable economic measures during a strike.

Significant Cases Cited

• American Ship Building Co. v. Labor Board, 380 U.S. 300 (1965): This case established that employer lockouts for the purpose of strengthening the employer's bargaining position are not per se violations of the NLRA and that discrimination is a key element of an § 8(a)(3) violation, requiring proof of antiunion motivation.
• Labor Board v. Erie Resistor Corp., 373 U.S. 221 (1963): This decision held that granting super-seniority to strike replacements and returning strikers was an unfair labor practice because its destructive impact on employee rights outweighed any legitimate business justification, even without direct proof of antiunion animus.
• Labor Board v. Brown, 380 U.S. 278 (1965): The Court found that an employer’s temporary lockout and shutdown of operations during contract negotiations, which had a demonstrably slight adverse effect on employee rights and served a substantial business end, was not an unfair labor practice without affirmative proof of antiunion motivation.
• Republic Aviation Corp. v. Labor Board, 324 U.S. 793 (1945): This case affirmed that employer rules prohibiting union insignia on company property, when not justified by business necessity, are discriminatory and tend to discourage union membership, thus violating the NLRA.
• Teamsters Union v. Labor Board, 365 U.S. 667 (1961): The Court held that the union's imposition of fines on members who crossed picket lines during a lawful strike was a violation of the NLRA, as such conduct tended to encourage union membership and participation in concerted activities.

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