Employers should be wary of the Ghost of Christmas Yet to Come (and/or the National Labor Relations Board (NLRB)) before excluding unionized workers from holiday parties and similar perks given to nonunionized employees.
I. Tiny Tim Goes Without Ice Skates
During the week of Thanksgiving leftovers, Starbucks (a frequent target of the Board) was handed a decision by an NLRB Administrative Law Judge ordering it to compensate unionized employees in the greater Seattle area the value of holiday parties from which they were excluded, and to take other dramatic remedial actions; see Starbucks Corp., 19-CA-310274 (Dec. 3, 2024).
In January 2023, Starbucks hosted four catered ice-skating parties at the training facility of the Seattle Kraken NHL team as a celebration and show of appreciation for its Seattle-area employees. However, the company intentionally excluded unionized employees from these parties by:
- Advertising the parties via flyers sent to and posted in only nonunion stores.
- Stating in an email accompanying the flyers that unionized employees were ineligible to attend because “the event was not bargained for.”
- Assigning an employee to screen party registrants daily to ensure that unionized employees did not register.
- Screening employees as they arrived for the parties to ensure that no unionized employees attended.
Starbucks also threw individual holiday parties at nonunionized stores in early 2023 but did not fund parties or an equivalent perk at unionized stores. Prior to the COVID-19 pandemic, the company regularly held store- and area-wide parties at which unionized employees were welcome. Starbucks did not discuss the 2023 events, or the unionized employees’ exclusion therefrom, with the union.
The ALJ concluded that Starbucks’ excluding unionized employees from the ice-skating and individual store parties violated the National Labor Relations Act by “interfere[ing] with, restrain[ing], or coerc[ing] employees in the exercise of” their collective bargaining rights and by “discriminati[ng] in regard to . . . any term or condition of employment to . . . discourage membership in a[] labor organization.” The ALJ noted in support that “[w]hen an employer deliberately withholds an existing benefit from unionized employees, the Board has held such conduct to be ‘inherently destructive’ of [employee] rights . . . even absent any discriminatory motive.”
That Starbucks previously included unionized employees in store- and area-wide holiday parties created a binding past practice that required it to continue providing these benefits so as not to interfere with employees’ collective bargaining rights. Citing a “widespread pattern” of anti-union discrimination, the ALJ issued “the broadest order possible,” requiring Starbucks to: (1) cease and desist from excluding unionized employees from parties and similar benefits; (2) compensate all unionized employees excluded from the parties the cash value of the benefits, approximately $40 each; (3) hold 45-minute training sessions for managers on employee collective bargaining rights; (4) post a notice acknowledging its violation for 365 consecutive days everywhere it customarily posts notices to employees throughout the greater Seattle area; and (5) send a copy of the notice to all employees in the greater Seattle area.
II. Nobody Wants to Be a Scrooge
Employers wishing to avoid the three ghosts and broad remedies orders should carefully evaluate whether they can exclude unionized employees from benefits like holiday parties. Best practices include:
- Determine whether a benefit has been given to unionized employees in the past and, if so, when, how frequently and in what form (one company milestone party seven years ago is less binding than a holiday party every December).
- Review records and communications with the union to assess whether the benefit was ever expressly agreed to (did the company ever verbally or in writing tell the union that bargaining unit employees would be invited to holiday parties?).
- Assess whether the conditions under which the benefit was first granted have changed (does a difficult sales year provide a sound reason to limit the holiday party to managers or eliminate it altogether?).
- Review past instances for abuse of the benefit by employees (have there been instances of drunkenness or other poor behavior at past holiday parties?).
- As always, and particularly under the current NLRB, consult with labor counsel before changing or eliminating any benefit for unionized employees.
Following these guidelines will help your company enjoy a festive holiday season without interruption by specters – or the NLRB.
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