Moving forward, the Board will analyze any such statements on a case-by-case basis, and under the stricter test about predictive statements from the U.S. Supreme Court’s decision in NLRB v. Gissel Packing Co., Inc.

On November 8, 2024, in Siren Retail Corp. d/b/a Starbucks, the National Labor Relations Board (NLRB) prospectively overturned Tri-Cast, Inc., 274 NLRB 377 (1985), a 40-year-old decision that broadly permitted employer statements about how the relationship between management and employees will change post-unionization, namely that employees will lose their direct relationship with management.

Moving forward, the Board will analyze any such statements on a case-by-case basis, and under the stricter test about predictive statements from the U.S. Supreme Court’s decision in NLRB v. Gissel Packing Co., Inc., 395 U.S. 575 (1969). Under that test, if an employer “make[s] a prediction as to the precise effects he believes unionization will have on his company,” then “the prediction must be carefully phrased on the basis of objective fact to convey an employer’s belief as to the demonstrably probable consequences beyond his control.” To avoid running afoul of the National Labor Relations Act under this new standard, an employer must be thoughtful and strategic about how it communicates the impact of unionization on the relationship it will have with its employees.

40 Years of Tri-Cast

In Tri-Cast, the Board held that employer statements to employees regarding the impact of unionization on the relationship between individual employees and the employer were generally lawful. In Tri-Cast, a manager made the following statement:

We have been able to work on an informal and person-to-person basis. If the union comes in this will change. We will have to run things by the book, with a stranger, and will not be able to handle personal requests as we have been doing.

The Board found the statement was not a “retaliatory threat,” but rather was “permissible campaign conduct.” It explained that it was lawful to tell employees that when they select a union to represent them, the relationship that existed between the employees and management will not be as before. It found as lawful the employer’s statement that by unionizing, employees lose the ability to address their grievances directly with management.

Following Tri-Cast, the Board had repeatedly found as lawful employer statements that unionizing would eliminate employees’ ability to address workplace issues directly and/or individually with their employer. This included the recent decision in Tesla, Inc., 370 NLRB No. 101 (2021), where the Board, applying Tri-Cast, found that the following statements were lawful: “you don’t really have a voice. The [union] is a … two-class system where [the union] is the only one that has a voice and not the workers.” The Board in Tesla explained that the manager “accurately explained” that an effect of unionization would be that employees would deal with the company through the union, which would speak on their behalf. Though not expressly overturned, it appears that the holding in Tesla is no longer good law.

In overturning Tri-Cast, moving forward the Board will apply a stricter, narrower standard against company statements regarding the effects that unionization has on the relationship between employees and management.

The Board’s Decision in Starbucks to Overturn Tri-Cast

In Starbucks, the Board decided that “[e]mployer statements that broadly predict that unionization will necessarily foreclose employees’ ability to address issues individually with their employer are not reasonable predictions about the legal consequences of unionization that follow from the Act.” The primary basis for its reasoning was Section 9(a) of the National Labor Relations Act, which states:

[A]ny individual employee or a group of employees shall have the right at any time to present grievances to their employer and to have such grievances adjusted, without the intervention of the bargaining representative, as long as the adjustment is not inconsistent with the terms of a collective-bargaining contract or agreement then in effect: Provided further, that the bargaining representative has been given opportunity to be present at such adjustment.

The Board focused on the part of Section 9(a) that provides for the right of employees to continue to present grievances to their employer and to have those grievances adjusted. It reasoned that because employees have such rights, it is inaccurate to tell them that they will lose their direct relationship with management if they are represented by a union. However, the Board did not discuss other provisions of Section 9(a) that contain the caveat that adjustment is only permitted within the terms of a collective bargaining agreement and if the union has an opportunity to be present.

Though the Board decided to apply this shift in precedent prospectively, it commented that the statements at issue in Starbucks likely would be found unlawful if the Board were to apply its decision retroactively. In Starbucks, the employer said at a meeting:

If you want a union to represent you—uh—you want to give your right to speak to leadership through a union, you’re going to check off “yes” for the election. If you want to maintain a direct relationship with leadership, you’ll check off “no.”

And:

[A] representation of a union is the rules of employment will then be grounded in a contract. And if it’s not in that contract, it’s not a conversation in my opinion that’s going to happen with leadership. We’ll be bound by the contract. So the union will be bound. And Starbucks will be bound. So I want to be clear on that. That a third party comes in and speaks for you. And everything will be grounded, from my experience and my opinion through the lens of that contract.

While the Board did not specify how management’s statements failed to comport with Section 9(a), this dicta about the hypothetical indicates that it intends for the shift to the Gissel test to more or less prohibit statements about losing a “direct” relationship with management. (The Board also commented that the statements at issue in Tri-Cast also should have been found unlawful at the time.)

What This Means for Employers

The Board will apply this new precedent prospectively. Therefore, Tri-Cast will still apply to statements of this type made prior to November 8, 2024. However, moving forward, when communicating with employees about the effects of unionization, employers must be more careful and strategic about messaging how unionization may affect employees’ direct relationship with management.

For example, instead of making specific predictions about employees losing the direct relationship with management, companies defending against a union campaign could consider statements about how the relationship will change generally or statements about how it is difficult to predict the effects of unionization on employees’ relationship with management.

Another potential strategy could be communicating to employees the rules of Section 9(a). This could involve explaining that if employees unionize, while they may still bring concerns to management directly, management may only address those concerns to the extent allowed by the union or if the union is otherwise involved. In this regard, an employer may want to provide examples, such as explaining that if a labor agreement provides for set point system for attendance violations, the employer will not be able to meet with an employee to consider possible mitigating circumstances to excuse an absence unless the labor agreement provided for such discretion. Similarly, an employer could present as a hypothetical its inability to provide funds or a loan to a top-performing employee experiencing a personal crisis without a union representative being part of the conversation.

Ultimately, every situation must be assessed on a case-by-case basis. Experienced labor counsel can provide specific advice about developing a strategy to communicate with employees in a way that comports with the National Labor Relations Act and applicable Board law.

The New Administration

With President-elect Donald Trump set to enter the White House on January 20, 2025, the staying power of this holding in Starbucks is uncertain.

Currently, Chair Lauren McFerran is awaiting a Senate vote on her nomination for a third term on the Board. If she is confirmed, the Board will have a Democratic majority until 2026. However, if she is not confirmed, or if other political maneuverings take place, President-elect Trump could potentially flip the Board majority to Republican as early as spring 2025. Given that Tri-Cast was decided by a Republican majority Board, and Starbucks was decided along party lines (3-1), it seems likely that if the right case comes along, a new Republican-majority Board would reinstate Tri-Cast again (or enact a similar standard).

That said, we do not know how long it may take for the Board’s majority to shift, nor do we know whether a newly configured Board would have before it a case that involves this issue―and/or if it did, whether it would decide to overrule Starbucks. Therefore, employers should not ignore this or other Board decisions just because the administration will change in a few months. Rather, employers should carefully strategize to operate in accordance with the National Labor Relations Act and reach out to labor counsel to understand their legal options.

For More Information

If you have any questions about this Alert, please contact Thomas G. Servodidio, Eve I. Klein, Elizabeth Mincer, Haley Ferise, any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.