It promised to bargain in good faith, then bailed - the fine print bit back
A plumbing contractor that walked away from its union settlement lost at the Seventh Circuit - and must return to the bargaining table.
The dispute began in June 2021, when plumbers at American Backflow & Fire Prevention voted to unionize with Plumbers Local 130. Within six months, the union filed charges with the National Labor Relations Board, accusing the company of unfair labor practices - among them posting a decertification petition on the company bulletin board and emailing workers to encourage them to sign it.
To settle those charges, the company signed an agreement in April 2022. It promised to meet and bargain in good faith with the union on request. It also agreed to a steep penalty for backing out: if it breached the deal and failed to cure the problem within 14 days, the Board could treat every allegation as admitted and move straight to a default judgment. The only issue the company could still raise was whether it had actually defaulted.
In March 2023, after a single bargaining session, the company canceled the next meeting and told the union it was withdrawing recognition. It cited "documentary evidence" that the union no longer had majority support. When a Board field attorney warned that this breached the settlement, the company's representative replied, "Take whatever action you believe is appropriate."
The Board did exactly that. It moved for default judgment, and the company's defense collapsed. Under established law, an employer can withdraw recognition only with objective evidence that the union has lost majority support. The company disavowed the decertification petitions it had originally cited - the sole reason it gave for pulling out - then insisted, without explanation, that its withdrawal was "lawful." The Board treated that as a bare general denial, insufficient to earn a hearing. In a separate proceeding, an administrative law judge reached the same conclusion, and the Board affirmed that decision in August 2026.
On September 8, 2026, the Seventh Circuit denied the company's petition for review and enforced the Board's order to bargain. It also declined to consider the company's due process and statutory arguments because it had never raised them before the Board.
The case puts a practical question to any employer sitting on a union settlement: what happens when the penalty clause fires? Here, the answer was default judgment with no hearing - because the company agreed to those terms and offered nothing specific to contest the breach.
