Tuesday, May 21, 2024

It's 100% legal to close your business to avoid a labor union

"We have some sad news to share. A process that began last year has reached its conclusion. Today was the last day of service for both cafes of the Wydown, which are now permanently closed." 

That sign hung on the door of both Wydown Coffee Bar locations late last week.

What's so newsworthy about two cafes closing? What if I tell you that the closure happened just five days before their 35 employees were set to vote on unionization?

The employees steadfastly believe that the cafes closed to avoid a labor union. The owners deny their claim and say that they were merely "ready for a change."

The employees' labor union plans to file an unfair labor practice charge with the NLRB over the closure decision, seeking damages for the employees. The union will lose that charge.

Under long established legal precedent, an employer is free to shutter its entire operation for any reason, even anti-union animus, retaliation, or vindictiveness. Indeed, according to the U.S. Supreme Court, it would be "startling" if an employer chose to put itself completely out of business instead of dealing with a union: "When an employer closes its entire business, even if the liquidation is motivated by vindictiveness toward the union, such action is not an unfair labor practice."

Wydown closed all of its operations. Whether motivated by anti-union animus or not, it's free to do so. I'm not suggesting that this is the correct solution for your business if you're facing a union organizing drive, but it's at least a solution that is relatively free and clear of legal risk, provided you're willing to flush your business instead of dealing with a labor union.