Sixth Circuit upholds unfair labor practice findings against construction firm

A federal appeals court upheld findings that a construction company committed multiple unfair labor practices in a years-long union dispute. 

The U.S. Court of Appeals for the Sixth Circuit on April 8 denied a petition by Rieth-Riley Construction Co. and enforced a National Labor Relations Board order against the Indiana-based contractor. The ruling caps a dispute that has stretched nearly a decade between the company and Local 324, International Union of Operating Engineers, AFL-CIO – the union representing roughly 130 to 170 of its operating engineers in Michigan. 

The trouble started in 2018. The union decided it no longer wanted to bargain as part of a multiemployer group through the Michigan Infrastructure and Transportation Association, an employer coalition. Instead, it wanted to negotiate directly with each employer, including Rieth-Riley. The court found the union's withdrawal from the group arrangement was timely and lawful because it came before any successor contract negotiations had actually started. 

Rieth-Riley disagreed and kept pushing for multiemployer bargaining. When the union refused, a lockout followed on September 4, 2018, lasting more than three weeks. It took the personal intervention of then-Michigan Governor Rick Snyder to bring both sides back to the table. 

The court found the lockout was unlawful. Under federal labor law, the scope of a bargaining unit is not something either side can force the other to accept. By locking out workers to compel the union back into group bargaining, Rieth-Riley crossed a legal line. 

The wage and benefit issues added further trouble. After the prior collective-bargaining agreement expired, Rieth-Riley stopped making fringe-benefit contributions on behalf of employees and instead paid those amounts directly to workers. The company also rolled out a retroactive $2-per-hour raise without notifying or consulting the union. When the company later realized it was still legally required to contribute to benefit funds, it moved to claw back the money from employee paychecks – giving the union just four days' notice and proceeding over its objections. 

The court rejected the company's argument that an economic emergency justified the clawback. It noted that Rieth-Riley had known about its bargaining obligations for at least a month before acting and had effectively created the problem itself. 

A similar issue arose in 2020, when the company implemented another wage increase – $1 per hour – without union input. Rieth-Riley argued federal prevailing-wage rules required the raise, but the court found that did not excuse the company from its obligation to bargain, especially since it had consulted the union on similar increases in the past. 

The court also addressed a strike that began in July 2019. Rieth-Riley argued it was an economic strike, which would have allowed it to permanently replace striking workers. The NLRB disagreed, finding the strike was driven at least in part by the company's unfair labor practices – particularly the 2018 lockout and the company's rejection of a $1.8 million settlement meant to compensate workers for lost income during that lockout. Picket signs referenced unfair labor practices, and employees at a pre-strike meeting raised concerns about lingering financial harm from the lockout. 

That classification matters. Workers in an unfair-labor-practice strike cannot be permanently replaced and are entitled to their jobs back when the strike ends. For HR teams, the distinction between the two types of strikes carries real operational consequences around staffing, reinstatement, and legal exposure. 

As a remedy, the Board ordered Rieth-Riley to bargain in good faith and barred any attempt to decertify the union for as long as reasonably necessary. The company challenged that order on appeal but had not raised the objection before the Board, so the court declined to hear it.