Rieth-Riley is an Indiana-based construction contractor that performs asphalt paving and highway work in Michigan, employing 130 to 170 operating engineers represented by the union since at least 1993. The dispute began in 2018 when Local 324 sought to withdraw from a multiemployer bargaining arrangement with the Michigan Infrastructure and Transportation Association to negotiate individual contracts with employers. The union's withdrawal triggered a series of confrontations, including Rieth-Riley's implementation of a $2-per-hour wage increase without union notice, a three-week lockout of union members, and an ongoing strike that began in July 2019.
The NLRB found that Rieth-Riley violated federal labor law by insisting on multiemployer bargaining after the union's timely withdrawal, unilaterally granting wage increases in 2018 and 2020, clawing back benefit fund contributions from employee paychecks, and locking out bargaining unit members. As Circuit Judge Mathis explained, 'Because the Union timely withdrew from the multiemployer unit, Rieth-Riley violated the NLRA when it improperly: (1) insisted on multiemployer bargaining after the termination of the Road Agreement, (2) increased wages for bargaining-unit employees in July 2018, and (3) locked out members of the bargaining unit in September 2018.'
The court was particularly critical of Rieth-Riley's claim of economic exigency to justify clawing back benefit contributions without bargaining. Rejecting the company's arguments, Judge Mathis wrote that 'Rieth-Riley knew at least a month before its October 11 letter that it needed to continue contributing to its employees' benefits funds. Yet, despite this knowledge, the company perpetuated its own economic crisis by paying the contributions to its employees rather than the funds.'
The case began when MITA terminated the Road Agreement on behalf of member employers in February 2018, and the union responded with its own termination notice in May 2018, seeking to withdraw from multiemployer bargaining. Despite MITA's attempts to continue negotiations on a multiemployer basis, tensions escalated when Rieth-Riley stopped deducting benefit fund contributions and implemented wage increases without union consultation. In September 2018, MITA initiated a lockout that lasted over three weeks until Michigan Governor Rick Snyder intervened.
Rieth-Riley argued that the union's withdrawal was untimely because it occurred after the contract modification deadline, but the court found this argument unpersuasive. The panel noted that under established precedent, 'The Union timely withdrew from the multiemployer unit' because what matters is providing notice 'before negotiations on a new agreement began.' The company also claimed economic exigency justified its unilateral actions, but Judge Mathis found that 'the purported economic exigency was not beyond Rieth-Riley's control and, at a minimum, it was reasonably foreseeable.'
The Sixth Circuit also upheld the NLRB's determination that the 2019 strike was an unfair labor practice strike, reversing an administrative law judge's finding that it was purely economic. The court found substantial evidence supported the Board's conclusion, noting that 'multiple employees complained about backpay issues stemming from the September 2018 lockout' and that 'picket signs and related paraphernalia from the strike identified the lockout as a reason for the protest.' This classification means striking workers cannot be permanently replaced and must be reinstated when the strike ends.
The decision represents a significant victory for the NLRB and organized labor, as it upholds the Board's authority to issue affirmative bargaining orders and reinforces unions' rights to withdraw from multiemployer bargaining arrangements. The ruling also clarifies that employers cannot unilaterally implement changes to wages and benefits during ongoing labor disputes, even when claiming regulatory compliance requirements.
The case will now return to the NLRB for enforcement of its order requiring Rieth-Riley to bargain in good faith with the union and prohibiting any attempt to decertify Local 324 for as long as 'reasonably necessary.' The strike, which began in July 2019, continues as the parties work toward a resolution under the court-enforced bargaining order.