# Labor Law: business closes in response to union vote **URL:** \ **Category:** Factual Questions\ **Created:** [November 3, 2017, 3:58pm UTC](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604 "2017-11-03T15:58:52Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Alley\_Dweller](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/alley_dweller/32/430_2.png) [@Alley\_Dweller](https://boards.straightdope.com/u/Alley_Dweller)\ **Post date:** [November 4, 2017, 2:24am UTC](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604/21 "2017-11-04T02:24:32Z")
> [@amarone](#): > > Cite please. This is certainly not the case in my state, but maybe you can show that it is in NY. Perhaps he is thinking of the [Federal WARN Act](https://www.doleta.gov/programs/factsht/warn.htm) which requires certain employers to give 60 days advance notice of plant closings or mass layoffs. Employers can pay employees if they do not give the required notice. > [@](#): > > An employer who violates the WARN provisions by ordering a plant closing or mass layoff without providing appropriate notice is liable to each aggrieved employee for an amount including back pay and benefits for the period of violation, up to 60 days. The employer’s liability may be reduced by such items as wages paid by the employer to the employee during the period of the violation and voluntary and unconditional payments made by the employer to the employee. I do not know if DNAinfo falls under the WARN Act. ---
**Author:** ![D\_Odds](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/d_odds/32/2882_2.png) [@D\_Odds](https://boards.straightdope.com/u/D_Odds)\ **Post date:** [November 6, 2017, 4:05pm UTC](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604/22 "2017-11-06T16:05:26Z")
> [@Alley\_Dweller](#): > > Perhaps he is thinking of the [Federal WARN Act](https://www.doleta.gov/programs/factsht/warn.htm) which requires certain employers to give 60 days advance notice of plant closings or mass layoffs. Employers can pay employees if they do not give the required notice. > > I do not know if DNAinfo falls under the WARN Act. I can understand this if a factory or workplace being shut down is part of a larger concern, but if it is the only business and it is already in the red, from where is the severance money coming? Mr. Ricketts assuredly wouldn’t be personally liable (assuming he’s not an idiot and keeps his personal wealth separate and protected from his businesses), and if the corporation set-up to run the business has no assets and no cash (likely after 8 years in the red), absent Mr. Ricketts personal guarantee there are no funds for severance. ---
**Author:** ![Evan\_Drake](https://avatars.discourse-cdn.com/v4/letter/e/b487fb/32.png) [@Evan\_Drake](https://boards.straightdope.com/u/Evan_Drake)\ **Post date:** [November 6, 2017, 6:06pm UTC](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604/23 "2017-11-06T18:06:20Z")
> [@John\_Bredin](#): > > I would assume the operation’s primary expense was labor. No printing presses, etc. If so, why not stay open another three months or so, which would still leave about a month’s severance to look for work? 😕 I would guess it is illegal for sacked workers to continue working when the business has been shuttered — with or without pay, because that would be a piratical coup against the beneficial owners. This fellow certainly still continues to own all rights in his purchased companies. ( Usefully, when he bought the earlier outfit, DNAinfo, they obligingly without being required to, removed all past references to him from the archives. Would that we all could erase parts of our past so easily. ) ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [November 6, 2017, 7:14pm UTC](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604/24 "2017-11-06T19:14:15Z")
> [@Fotheringay-Phipps](#): > > Would that depend on what the “threats” were? If this guy is intending to close the paper if the vote passes, and if he’s legally allowed to close it, is it possible that he’s not allowed to inform the employees upfront that this is what will happen? That sounds hard to imagine. It’s more than possible, it is a legal requirement with major repercussions (especially in Canada). “That’s not a threat, that’s a promise…” is usually a threat. Any attempt to influence the outcome of a union vote negatively by the employer or his agents is illegal. Just as, it is illegal to retaliate against employees for union organizing activity. Of course, once the vote is over, the employer may do what he wants with the business - close it, try to work with a packet line outside, maybe actually negotiate with his workers, etc. (I don’t think it is allowable to say “I’m closing because you have a union”. But if you close for “financial reasons”, valid or not, how can they prove anything? As I said earlier, this is a typical tactic for businesses with multiple places of business; close one and take the loss to imply the message you are not allowed to explicitly say. > [@friedo](#): > > You’re talking about at-will employment, not right-to-work laws. And it’s worth noting in this case that the owner gave the employees a very generous severance, though he was not required to give them anything. It’s a shitty situation all around; there was no way DNAInfo would have ever been viable in the near future, with or without a union, and he cut his losses in about the least assholish way he could. Yes, this guy was fairly benign. If the business had not and was not about to make money for a while, why deal with the additional aggravation of a union negotiation too? (I knew a fellow who was on the board of a charity institution. When the 4 workers there joined a union, the entire board resigned. He told me - “I signed onto the board to help the community by running a charity, not to spend my time negotiating union contract details.”) However, the logic in Canada is that a job is a very important part of a person’s life - it’s their livelihood. The ability to arbitrarily disrupt someone’s life should be limited extraordinary circumstances, not the whim of an employer. Therefore, the more serious the work relationship - more skill required, how long employed, difficulty getting similar employment, age, etc. - all help determine that it would cost a significant amount to “unload” a worker without a justifiable cause. ---
**Author:** ![Evan\_Drake](https://avatars.discourse-cdn.com/v4/letter/e/b487fb/32.png) [@Evan\_Drake](https://boards.straightdope.com/u/Evan_Drake)\ **Post date:** [November 6, 2017, 7:29pm UTC](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604/25 "2017-11-06T19:29:24Z")
> [@md2000](#): > > (I knew a fellow who was on the board of a charity institution. When the 4 workers there joined a union, the entire board resigned. He told me - “I signed onto the board to help the community by running a charity, not to spend my time negotiating union contract details.”) I would consider that they would have needed to negotiate contract deals without any union in any case. ---
**Author:** ![Marvin\_the\_Martian](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/marvin_the_martian/32/2898_2.png) [@Marvin\_the\_Martian](https://boards.straightdope.com/u/Marvin_the_Martian)\ **Post date:** [November 6, 2017, 7:59pm UTC](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604/26 "2017-11-06T19:59:48Z")
Any idea of what kind of agreement the employees need to sign to get the severance pay? When I was laid off I had the choice of 9 months of severance if I would sign an agreement not to say anything negative about the company nor sue the company for wrongful termination or age discrimination (plus a few other things) vs. 2 weeks if I did not sign. ---
**Author:** ![doreen](https://avatars.discourse-cdn.com/v4/letter/d/858c86/32.png) [@doreen](https://boards.straightdope.com/u/doreen)\ **Post date:** [November 6, 2017, 8:45pm UTC](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604/27 "2017-11-06T20:45:32Z")
> [@Evan\_Drake](#): > > I would consider that they would have needed to negotiate contract deals without any union in any case. I’m not sure if the example of the charity took place in the US or Canada - but in the US there certainly would have been no need to negotiate contracts in the US absent a union. As long as the employer follows legal requirements , the employees can basically be told " take it or leave it" . The employer may choose to negotiate with high-valued potential employees , but it’s just that, a choice. ``` It has been my impression that the difference in the US and other countries is that the laws in many countries provide the sort the benefits that US unions seek in contract negotiations , not that the other countries require negotiations with non-union employees. ``` ---
**Author:** ![Evan\_Drake](https://avatars.discourse-cdn.com/v4/letter/e/b487fb/32.png) [@Evan\_Drake](https://boards.straightdope.com/u/Evan_Drake)\ **Post date:** [November 6, 2017, 9:11pm UTC](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604/28 "2017-11-06T21:11:15Z")
Perhaps — and admittedly I am going from a British standpoint here ( which politically is quite anti-union even under Labour governments, with all the opt-outs from union benefits they can muster since the time of that old lunatic Lady Thatcher ) — but I have never even had an _agency_ job where you didn’t sign various stipulating pieces of paper. ---
**Author:** ![Snnipe\_70E](https://avatars.discourse-cdn.com/v4/letter/s/b5a626/32.png) [@Snnipe\_70E](https://boards.straightdope.com/u/Snnipe_70E)\ **Post date:** [November 7, 2017, 5:46am UTC](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604/29 "2017-11-07T05:46:47Z")
> [@amarone](#): > > Cite please. This is certainly not the case in my state, but maybe you can show that it is in NY. I can not give you a site about having to pay severance pay, because there is no law requiring. I could not remember the proper name of the act requiring notice. But thank you Alley Dweller for providing the proper name. The WARN Act would also apply to your state. Without a proper notice the employer is required to pay an employee for the time they would have worked. I remembered the act because I was laid off some years back and subject to the the benefits of the act. ---
**Author:** ![chappachula](https://avatars.discourse-cdn.com/v4/letter/c/d2c977/32.png) [@chappachula](https://boards.straightdope.com/u/chappachula)\ **Post date:** [November 8, 2017, 7:54am UTC](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604/30 "2017-11-08T07:54:45Z")
> [@Marvin\_the\_Martian](#): > > A When I was laid off I had the choice of 9 months of severance if I would sign an agreement not to say anything negative about the company nor sue the company for wrongful termination or age discrimination (plus a few other things) vs. 2 weeks if I did not sign. 9 months vs 2 weeks? That’s a huge chunk of cash. What was your company afraid of —so much that they had to bribe the ex-employees to cover up? I know that non-disclosure agreements are common, say, for ex-employees who know trade secrets. But an agreement like yours is a new concept to me. Are “cover-up” agreements like this common? ---
**Author:** ![busterpickle](https://avatars.discourse-cdn.com/v4/letter/b/258eb7/32.png) [@busterpickle](https://boards.straightdope.com/u/busterpickle)\ **Post date:** [November 8, 2017, 8:17am UTC](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604/31 "2017-11-08T08:17:59Z")
> [@md2000](#): > > As I said earlier, this is a typical tactic for businesses with multiple places of business; close one and take the loss to imply the message you are not allowed to explicitly say. I’m gonna need a cite for that, or some research. > [@](#): > > What are the chances of the union buying the paper from him and turning it into a co-op, possibly with crowdsourced initial funding? Hell, they have 4 months of paid salary to get it back together… Whatever they offered, if they did wasn’t enough. It also take time and money to transfer a business from one legal entity to another. Also, trademarks and other IP, this is all a very complicated matter. > [@](#): > > I would assume the operation’s primary expense was labor. No printing presses, etc. If so, why not stay open another three months or so, which would still leave about a month’s severance to look for work? Four months to find a job, or one month. I’ll take four. > [@](#): > > I can understand this if a factory or workplace being shut down is part of a larger concern, but if it is the only business and it is already in the red, from where is the severance money coming? Mr. Ricketts assuredly wouldn’t be personally liable (assuming he’s not an idiot and keeps his personal wealth separate and protected from his businesses), and if the corporation set-up to run the business has no assets and no cash (likely after 8 years in the red), absent Mr. Ricketts personal guarantee there are no funds for severance. Wow. You have access to financial statements to that fidelity? Sounds like you know something that the people getting laid off should know, sooner rather than later. WAG, liquidating all assets, cancelling leases, etc., would free up the sum required. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [November 8, 2017, 5:07pm UTC](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604/32 "2017-11-08T17:07:23Z")
> [@doreen](#): > > I’m not sure if the example of the charity took place in the US or Canada - but in the US there certainly would have been no need to negotiate contracts in the US absent a union. As long as the employer follows legal requirements , the employees can basically be told " take it or leave it" . The employer may choose to negotiate with high-valued potential employees , but it’s just that, a choice. > > ``` > It has been my impression that the difference in the US and other countries is that the laws in many countries provide the sort the benefits that US unions seek in contract negotiations , not that the other countries require negotiations with non-union employees. > > ``` Employment offered and accepted on a “take it or leave it” basis is still a contract. ---
**Author:** ![Gyrate](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gyrate/32/3588_2.png) [@Gyrate](https://boards.straightdope.com/u/Gyrate)\ **Post date:** [November 8, 2017, 5:31pm UTC](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604/33 "2017-11-08T17:31:32Z")
> [@dstarfire](#): > > Shutting down a business to avoid demands on that business, while not common, is definitely not unheard of or without precedent. > > A similar thing happened with Hostess (makers of Twinkies and other cake treats). However, with Hostess, it was a new labor contract that prompted the shutdown. …after years of spectacular mismanagement and the executives getting massive payouts and raises of up to 80%, and then breaking their union contracts by not paying future pensions benefits as agreed and demanding that the employees all take a huge paycut to cover the losses. The employees went on strike because they were getting screwed and previous agreements were being violated, not because they were being greedy. I just wanted to be clear on this. ---
**Author:** ![dba\_Fred](https://avatars.discourse-cdn.com/v4/letter/d/c37758/32.png) [@dba\_Fred](https://boards.straightdope.com/u/dba_Fred)\ **Post date:** [November 8, 2017, 5:44pm UTC](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604/34 "2017-11-08T17:44:01Z")
> [@Snnipe\_70E](#): > > I can not give you a **site** about having to pay severance pay, because there is no law requiring. \ www\_lastcheck\_biz? ---
**Author:** ![Iggy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/iggy/32/3364_2.png) [@Iggy](https://boards.straightdope.com/u/Iggy)\ **Post date:** [November 8, 2017, 6:40pm UTC](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604/35 "2017-11-08T18:40:35Z")
> [@md2000](#): > > … (I don’t think it is allowable to say “I’m closing because you have a union”. But if you close for “financial reasons”, valid or not, how can they prove anything? … In the United States it is completely legal to entirely close a business due to anti-union animus. So, yes, an owner could completely shut down because a union vote was successful. [Textile Workers Union v. Darlington Mfg. Co., 380 U.S. 263 (1965)](https://supreme.justia.com/cases/federal/us/380/263/case.html) > [@Appeals Court in above matter](#): > > … a company has the absolute right to close out a part or all of its business, regardless of anti-union motives. … > [@Supreme Court ruling in Textile Workers Union v Darlington Mfg Co](#): > > It is not an unfair labor practice for an employer to close his entire business, even if the closing is due to anti-union animus. > … > We hold that, so far as the Labor Relations Act is concerned, an employer has the absolute right to terminate his entire business for any reason he pleases, but disagree with the Court of Appeals that such right includes the ability to close part of a business no matter what the reason. In short, if a partial closure is seen as a warning message to the employees of the remaining business not to unionize then that _ **might** _ be a prohibited act. There are, of course, certain factors that must be satisfied before a partial closure is prohibited. ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [November 8, 2017, 7:06pm UTC](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604/36 "2017-11-08T19:06:34Z")
> [@Evan\_Drake](#): > > I would consider that they would have needed to negotiate contract deals without any union in any case. > [@electronbee](#): > > I’m gonna need a cite for that, or some research. > > … Walmart did not explicitly say so, but considering the only stores it closed were the ones that voted for union certification, most commentators could read the writing on the wall. And apparently the Supreme Court there agreed. > **[Supreme Court sides with Quebec unionized Wal-Mart workers | CBC News](https://www.cbc.ca/news/canada/montreal/quebec-unionized-wal-mart-workers-win-supreme-court-victory-1.2689646)** > > The Supreme Court of Canada has sided with the union representing former Wal-Mart employees who claimed the company violated Quebec labour law when it abruptly closed its store in Jonquière, Que., not long after the workers voted to unionize. > **[SCC orders Wal-Mart to compensate workers fired from Quebec store](https://www.ctvnews.ca/business/scc-orders-wal-mart-to-compensate-workers-fired-from-quebec-store-1.1889144)** > > The Supreme Court of Canada has found in favour of Quebec workers who were fired from a WalMart in Jonquiere, Que., after it shut its doors suddenly and says the former employees must be compensated. > [@](#): > > The ruling ends nearly a decade of legal battles between the corporate giant and the 190 employees who lost their jobs at the Jonquiere location in the province’s Saguenay region. > > The store never re-opened so it is impossible for the workers to be re-hired. Instead, the court said an arbitrator will determine appropriate reparations, possibly with damages and interest. > > Friday’s judgment stems from a complaint filed by the union against Wal-Mart that alleged the enterprise had modified working conditions by eliminating their jobs Mind you, this was a 2014 court decision about a 2005 closure… so I think most other Wal-Mart employees could see the options. > [@Really\_Not\_All\_That\_Bright](#): > > Employment offered and accepted on a “take it or leave it” basis is still a contract. Obviously you have never read all 100 pages of a full union contract, with each provision needing to be scrutinized and argued over endlessly - every three years. Versus, “take it or leave it” employment. “you’re hired at $13/hour, here are your hours and list of rules and benefits.” The irony in this situation was that the person who lead the unionization drive was the lead employee of the group home who turned out to be exempt from the union group as management. > [@Iggy](#): > > In the United States it is completely legal to entirely close a business due to anti-union animus. So, yes, an owner could completely shut down because a union vote was successful. > > [Textile Workers Union v. Darlington Mfg. Co., 380 U.S. 263 (1965)](https://supreme.justia.com/cases/federal/us/380/263/case.html) > > In short, if a partial closure is seen as a warning message to the employees of the remaining business not to unionize then that _ **might** _ be a prohibited act. There are, of course, certain factors that must be satisfied before a partial closure is prohibited. My point was that a company (in Canada, and in some places in the USA, I presume) cannot act or say anything to influence the vote at a location. After the vote is over, they can do what they want with their business. If I happens to “send a message” to other locations, other employees … well, that’s up to those employees to interpret. ---
**Author:** ![rbroome](https://avatars.discourse-cdn.com/v4/letter/r/838e76/32.png) [@rbroome](https://boards.straightdope.com/u/rbroome)\ **Post date:** [November 8, 2017, 9:55pm UTC](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604/37 "2017-11-08T21:55:30Z")
> [@chappachula](#): > > 9 months vs 2 weeks? > That’s a huge chunk of cash. What was your company afraid of —so much that they had to bribe the ex-employees to cover up? > > I know that non-disclosure agreements are common, say, for ex-employees who know trade secrets. > But an agreement like yours is a new concept to me. > > Are “cover-up” agreements like this common? pretty much universal in my experience. The company finds it to their advantage to pay severance. This way they get something for the money. I take is that most departing employees seem to leave with a negative view of at least management if not the entire job. Even if they have positive memories of the work itself. So they would tend to spread negative rumors. Unless they say something in print or on the record, it would be hard to prove, but the agreement helps. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [November 8, 2017, 10:04pm UTC](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604/38 "2017-11-08T22:04:04Z")
> [@md2000](#): > > Obviously you have never read all 100 pages of a full union contract, with each provision needing to be scrutinized and argued over endlessly - every three years. Versus, “take it or leave it” employment. “you’re hired at $13/hour, here are your hours and list of rules and benefits.” The irony in this situation was that the person who lead the unionization drive was the lead employee of the group home who turned out to be exempt from the union group as management. Sure I have. I’m an employment lawyer (well, I practice in a specific niche of that field). It’s irrelevant. “$13 an hour take it or leave it” is still a _contract_, regardless of how much relative bargaining power each side has. ---
**Author:** ![doreen](https://avatars.discourse-cdn.com/v4/letter/d/858c86/32.png) [@doreen](https://boards.straightdope.com/u/doreen)\ **Post date:** [November 8, 2017, 11:22pm UTC](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604/39 "2017-11-08T23:22:42Z")
> [@Really\_Not\_All\_That\_Bright](#): > > Employment offered and accepted on a “take it or leave it” basis is still a contract. It may be a contract- but “take it or leave it” can hardly be described as “negotiation”. ---
**Author:** ![D\_Odds](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/d_odds/32/2882_2.png) [@D\_Odds](https://boards.straightdope.com/u/D_Odds)\ **Post date:** [November 9, 2017, 2:01am UTC](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604/40 "2017-11-09T02:01:58Z")
> [@electronbee](#): > > Wow. You have access to financial statements to that fidelity? Sounds like you know something that the people getting laid off should know, sooner rather than later. WAG, liquidating all assets, cancelling leases, etc., would free up the sum required. No, I don’t have access to financial statements, but I understand how business finance and asset protection works. DNAInfo/Gothamist was an internet news site with ~115 employees. It has been reported in every article about the closure that DNAInfo has never made a profit. Pretty safe to assume that they don’t have a lot of assets to be sold off (and even those will be done at cut rates) and that their balance sheet won’t be showing lots of free capital. Cancelling a lease, _if_ they can cancel the lease, just stops the outflow. I have no clue what debts, if any, this business has. Without Mr. Ricketts, no way there is money for that severance package, even if it was mandated by law. And if it was mandated by law and Mr. Ricketts did not want to offer the package, it would be very difficult to get paid, because I assume the man behind TD Ameritrade would fully separate his businesses from his personal fortune. For a hypothetical factory not part of a larger company, much of the same holds true. If severance is mandated, I would have to assume that the lawmakers were smart enough to ensure former employees are superior to any creditors. Maybe the owners were lucky to have owned the factory and land instead of leasing it, and that the space is desirable. But even then, selling those assets take time, significantly more than selling off the equipment and office supplies. I’m not saying this is a bad law. I’m wondering, outside being part of a larger concern, how a failing business could afford the mandated severance packages discussed earlier. [Previous page](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604.md?page=1) [Next page](https://boards.straightdope.com/t/labor-law-business-closes-in-response-to-union-vote/800604.md?page=3)