Textile Workers Union of America v. Darlington Manufacturing Co.

Supreme Court of the United States · Labor Law

Labor LawNLRAPlant ClosingsUnfair Labor PracticesNLRA § 8(a)(3)NLRA § 8(a)(1)complete closurepartial closure

Facts

Darlington Manufacturing Company operated one textile mill, and a majority of its stock was held by Deering Milliken, which was controlled by Roger Milliken and other members of the Milliken family. After the union organized Darlington's employees and won a close election, Roger Milliken decided to call a board meeting to consider closing the mill, and the board voted to liquidate the corporation. The plant ceased operations entirely, and its machinery and equipment were sold piecemeal at auction. The Board found antiunion animus and also found Darlington to be part of a larger enterprise controlled by the Milliken family through Deering Milliken.

Issue

Does an employer commit an unfair labor practice under NLRA § 8(a)(3) by permanently closing its entire business because of antiunion animus? If the closed plant is part of a larger enterprise or its controllers have substantial interests in another business, does a discriminatory closure become an unlawful partial closing when intended and likely to chill unionism elsewhere?

Rule

A bona fide complete termination of an employer's entire business is not an unfair labor practice under NLRA § 8(a)(3), even if motivated by vindictiveness toward a union. A partial closing is an unfair labor practice under § 8(a)(3) if it is motivated by a purpose to chill unionism in remaining operations and the employer may reasonably have foreseen that effect. More generally, when those controlling the closed plant have a sufficiently substantial interest in another business, close the plant with the purpose of discouraging unionization there, and stand in a relationship to that business making employee fear of similar closure realistically foreseeable, § 8(a)(3) is violated.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Red Clay Furniture, a family-owned manufacturer in Macon, Georgia, operates a single workshop and no other business. After employees vote to unionize, the owners angrily decide to liquidate the company, sell the machinery at auction, and permanently cease all operations.

Assuming the shutdown is a bona fide permanent liquidation of the entire enterprise, what is the strongest conclusion under NLRA § 8(a)(3)?

Explanation. The majority held that a bona fide complete liquidation of an employer’s entire business is not an unfair labor practice under § 8(a)(3), even if the decision is motivated by vindictiveness toward unionization. The key distinction is that a true total closure ends the enterprise and yields no future economic benefit to the employer from discouraging union activity. (Derived from Textile Workers Union of America v. Darlington Manufacturing Co. (n.d.).)