Auto Workers Strike: 7 Implications for In-house Counsel

Thousands of US auto workers went on strike this September. What implications do in-house counsel need to keep in mind for US employers and global businesses?

    1. Know the landscape of labor relations 

• Get the big picture: The Evolving World of Labor Relations: An Organizing Re-Union (United States), by Jackson Lewis P.C. 
• There have been major recent changes, such as a new US National Labor Relations Board standard for union representation, social media policies, and more.  
• Companies should involve their labor counsel to help them navigate this evolving landscape. 
• Discuss labor relations trends with in-house peers in the ACC Employment and Labor Law Network. Not an ACC member yet? Join now.   

    2. Prepare for negotiations with unions 

• Assemble the negotiation team, involve labor counsel, and plan your strategy. 
• Keep in mind negotiations may last several months. 
• Learn more tips from in-house peers. Read Anatomy of a Strike: How a Midwestern Management Team Survived an 18-month Labor Battle 

    3. Reductions in Force and WARN requirements 

• Furloughs or layoffs as a punishment for striking would be contrary to US federal law and expose the employer to liability. Striking and picketing are protected concerted activities.  
• Disruptions to a company’s supply chain or production line may cause reductions in force. 
• Employers must comply with the notice requirements of the WARN Act (US Worker Adjustment and Retraining Notification Act) for plant closures or mass layoffs lasting certain time periods / affecting certain numbers of employees. However, there are exceptions to such notice requirements, including for strikers or locked out workers. 

    4. Lock-outs 

• As pressure, employers may lock unionized workers out of facilities and deny them work until the union accepts the terms proposed by the employer.  
• Employers may temporarily replace the locked-out workers. 

    5. Impact on foreign workers 

• Federal law prohibits the involuntary benching, or pay reduction, of certain visa holders. 
• Employers who terminate employment of certain visa holders must comply with requirements, for example notifying authorities and funding the worker’s return to the home country. 

    6. Strike damages 

• Under state law, employers may be able to bring tort claims against a union for property damages due to strikers’ failure to take reasonable precautions to protect the property.  
• In June 2023, the US Supreme Court ruled the National Labor Relations Act does not preempt state law tort claims for intentional destruction of property (Glacier Northwest v. Teamsters). 

    7. Beyond employment: Impact on global supply chains

• The strikes may impact supply chains beyond US borders.
• Upstream, disruption in car production plants may impact the manufacturers’ suppliers, due to reduced demand for parts.
• Downstream, the situation may also impact the manufacturers' ability to deliver parts from plants where strikes lead to reduced production capacity.
• Both suppliers and clients facing such disruptions may want to review contracts and assess implications, such as the ability to invoke force majeure, or contractual damages or penalties for failures or delays in deliveries.

You may also be interested in: Employee Termination Process and the Legal Department's Role (an in-house peer discussion). 

This article was initially published on September 20, 2023, and edited on September 21, 2023.