It’s Getting Harder to Say Goodbye

by Holland & Knight LLP

The National Labor Relations Act (NLRA or Act) allows employers, including those in the construction industry, to join together to bargain with a union. This is called "multi-employer bargaining." But there are specific rules and requirements that an employer must follow in order to remove itself from multi-employer bargaining and avoid being bound by the next collective bargaining agreement negotiated by the multi-employer group. Failure to follow these rules means that an employer will continue to be bound by the contract resulting from multi-employer bargaining — whether it wants to or not.

In a decision issued late last year, the National Labor Relations Board (Board or NLRB) made it even more difficult for a construction industry employer to leave a multi-employer bargaining group. Previously, and for almost 20 years, a union seeking to keep a construction industry employer in a multi-employer group and bind it to a new contract had to show that the employer affirmatively demonstrated to the union its intention to be bound by the new contract. Now it appears that the NLRB will bind a construction industry employer to the multi-employer agreement if it failed to follow the multi-employer association’s rules for withdrawing from multi-employer bargaining — even if the employer did not give the union any indication it intended to be bound by a new contract. Carr Finishing Specialties, Inc., 358 NLRB No. 165 (2012).

As a result, in 2013 and going forward, construction employers considering whether and how to join or withdraw from multi-employer bargaining associations should pay careful attention to Carr Finishing as they make their strategic business and employment-related decisions.

Employer Repudiation of Union Relationships in Construction Industry

Section 8(f) of the NLRA gives construction industry employers a unique exception to the standard election procedures and requirements under section 9(a) of the Act. Outside the construction industry, unions receive recognition under section 9(a) only by either: (1) establishing majority status representation of employees through a secret ballot election conducted by the Board, or (2) through voluntary recognition by the employer. The section 8(f) exception, however, recognizes the special predicament of construction employers, which typically do not have permanent workforces, need to be able to predict their labor costs when submitting bids on contracts, and rely upon the local unions as their source of labor. Accordingly, construction employers are permitted to recognize and enter into collective bargaining agreements with construction industry unions even before they hire any employees, and without any expression of union support by the employees.

While neither party to such an 8(f) "pre-hire" agreement may repudiate the agreement during its term, once a pre-hire agreement expires, and unlike in the section 9(a) context,1 either side is then free to repudiate the relationshipand refuse to continue to honor the expired agreement. The employer may even refuse to recognize the union in the absence of the union’s demonstrated majority status.

In addition to being able to enter Section 8(f) "prehire" agreements, construction industry employers can also band together with other employers to engage in multi-employer bargaining. The intersection of the right to repudiate a "pre-hire" contract and the rules for exiting a multi-employer bargaining group can create problems for employers, as the Carr Finishing decision demonstrates.

Prior Precedent Favored Allowing Single Employer Withdrawal from Multi-Employer Negotiations

The Board’s rules for withdrawal from multi-employer associations has evolved. It established the rules on which an employer outside the construction industry can withdraw from participation in a multi-employer bargaining association in the Section 9(a) context in Retail Associates, Inc., 120 NLRB 388 (1958). Under Retail Associates, an employer outside the construction industry that was previously part of a multi-employer bargaining association must affirmatively demonstrate its intention to withdraw from the multi-employer association before multi-employer bargaining starts; an employer that remains silent before and during multiemployer bargaining will be bound to the next agreement negotiated by the multiemployer association.

In its 1994 decision in James Luterbach Construction Co., 315 NLRB 976 (1994), the Board addressed withdrawal from a multi-employer association by a construction industry employer subject to a pre-hire agreement. It ruled that because a single 8(f) employer may automatically repudiate the agreement and its relationship with the union, once its pre-hire agreement with a union expires, an employer participating in a multiemployer association must also demonstrate some "affirmative action" illustrating its intention to be bound to the association’s bargaining efforts, in order to be found to be bound to any successor agreement.  

Thus, in Luterbach, the Board formalized this distinction with its two-part test. The first prong (like the test for 9(a) employers) asks whether the employer was part of the multiemployer association prior to the dispute at issue. If that answer is yes, prong two then asks whether "the employer has, by a distinct affirmative action, recommitted to the union that it will be bound" by the upcoming or current multiemployer negotiations. Luterbach strongly implies that only where the second prong is also answered in the affirmative will a single employer in the construction industry then be bound to a successor multiemployer agreement.

Luterbach has remained the law, but it has been enforced rarely since 1994. See Iron Workers Tri-State Welfare Plan v. Carter Construction, Inc., 530 F. Supp. 2d. 1021, 1031 (N.D. Ill. Jan. 18, 2008) (finding that a single employer undertook no distinct affirmative act sufficient to bind it to subsequent multiemployer negotiations). For example, and on the federal appellate level, the First, Third and Tenth U.S. Circuit Courts of Appeals have cited the Luterbach two-prong approach as background in section 9(a) contexts, but each then applied the Retail Associates method.2 See, e.g., Haas Electric, Inc. v. NLRB, 299 F.3d 23, 27 (1st Cir. 2002) (covering Connecticut, Massachusetts, Maine, New Hampshire and Rhode Island); Sheet Metal Workers' Int'l Ass'n Local 19 v. Herre Bros., Inc., 201 F.3d 231, 242 (3d Cir. 1999) (covering Delaware, New Jersey and Pennsylvania); NLRB v. Triple C Maintenance, Inc., 219 F.3d 1147, 1156 (10th Cir. 2000) (covering Colorado, Kansas, New Mexico, Oklahoma, Utah and Wyoming).

Limits on Employer Withdrawal and Repudiation under Association Agreements

In Carr Finishing, the Board added a roadblock to individual employers seeking to exit multiemployer associations. In this recent decision, the Board determined that the employer at issue violated the Act by unilaterally ceasing to apply the terms of the multi-employer collective bargaining agreement to unit employees without following the multi-employer association’s rules to withdraw. In the case, the Upstate Iron Workers Employers’ Association (UIWEA) — like many multi-employer bargaining associations — accepted those employers that completed an agency agreement stating that the UIWEA would be the sole and exclusive agent of the employers in collective bargaining with local unions.

The Board explained that the employer would have only been able to lawfully withdraw from the UIWEA by complying with the agency agreement’s express terms, which the employer failed to do when it neglected to resign its membership in the UIWEA before the final 90 days of the prior collective bargaining agreement.

What This Means for Construction Industry Employers

Carr Finishing strongly suggests that once a single employer has designated the multi-employer association as its bargaining agent, the NLRB will not require any additional affirmative action to bind the employer to subsequent multi-employer negotiations or agreements. It is, then, virtually automatic — making it significantly harder for the employer to say goodbye to the multi-employer association and avoid being bound to the association’s next negotiated agreement with the union.

As a result of Carr Finishing, employers in the construction industry who enter multi-employer associations should carefully scrutinize the obligations conferred on them under their association’s documents. Carr Finishing raises a concern that by joining an association for the convenience of shared resources and greater negotiating leverage than each individual employer would have alone, an employer may be sacrificing significant advantages it would otherwise hold under section 8(f), namely, the ability to repudiate freely its recognition of a union at the end of each collective bargaining agreement term.


1 Employers outside the construction industry can end a relationship with a union only on a showing that the union no longer represents a majority of the bargaining unit employees no longer supports the union or the union no longer wishes to represent the employees.

2The employers at issue in both Herre Bros. and Triple C Maintenance, respectively, were each found to have voluntarily recognized the union as a section 9(a) bargaining representative by including recognition language in their collective bargaining agreements with the unions. The employer in Haas Electric never challenged the application of the Retail Associates analysis, so the First Circuit did not apply the Board’s reasoning and test of Luterbach in its review.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Holland & Knight LLP | Attorney Advertising

Written by:

Holland & Knight LLP

Holland & Knight LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.