Clarity Requirement for Postponed Wage Increases to Avoid Coercion in Union Representation Elections

Introduction

Russell Reid Waste Hauling & Disposal Service Company, Inc. (“Russell Reid”) and the National Labor Relations Board (“NLRB” or “the Board”) clashed over memoranda that postponed a routine wage increase until after a union election at Russell Reid’s Keasbey, New Jersey facility. The central issue was whether Russell Reid’s July 21, 2020 memorandum unlawfully coerced employees in violation of Section 8(a)(1) of the National Labor Relations Act (“NLRA”). Russell Reid petitioned for review of the Board’s order finding an unfair labor practice, setting aside the union election results, and directing a new election. The NLRB cross-petitioned to enforce its order.

Key parties:

Russell Reid Waste Hauling & Disposal Service Company, Inc.—Employer at issue, owned by United Site Services.
National Labor Relations Board—Federal agency charged with enforcing the NLRA.
Union—Petitioner in the representation election at the Keasbey facility.

Summary of the Judgment

On March 19, 2025, a three-judge panel of the Third Circuit granted the NLRB’s cross-petition for enforcement and denied Russell Reid’s petition for review, with one exception. The court held:

Substantial evidence supported the Board’s conclusion that the July 21 memorandum had “the tendency to coerce” reasonable employees not to vote for union representation because it conditioned eligibility for a merit increase on not being in a “collective bargaining unit.”
Russell Reid’s unexhausted constitutional challenges—attacking the removal protections of NLRB administrative law judges and raising a First Amendment defense—were barred for failure to raise them before the Board.
The objection to setting aside the election results and ordering a new election was dismissed for lack of jurisdiction, as that remedy is not final until the new election is held.

Analysis

Precedents Cited

Section 8(a)(1), 29 U.S.C. § 158(a)(1): Prohibits employer statements or actions that “interfere with, restrain, or coerce” employees in exercising NLRA rights.
Garry Manufacturing Co. v. NLRB, 630 F.2d 934 (3d Cir. 1980): Held that implied coercion suffices to violate § 8(a)(1).
Oberthur Technologies of America Corp. v. NLRB, 865 F.3d 719 (D.C. Cir. 2017): Approved postponement of expected wage increases so long as the employer clearly states (1) the sole purpose is to avoid influencing the election; and (2) the increases will be reinstated after the vote, regardless of outcome.
FDRLST Media, LLC v. NLRB, 35 F.4th 108 (3d Cir. 2022): Reaffirmed the objective “reasonable employee” test for coercion.
Atlantic City Electric Co. v. NLRB, 5 F.4th 298 (3d Cir. 2021) and Advanced Disposal Services East, Inc. v. NLRB, 820 F.3d 592 (3d Cir. 2016): Standards for “substantial evidence” review.

Legal Reasoning

1. Objective Coercion Test
Section 8(a)(1) violation occurs when, “in light of all the existing circumstances,” an employer’s statements or conduct would tend to coerce a reasonable employee not to exercise NLRA rights. The focus is on how a reasonable employee would interpret the communication—employer intent is irrelevant.

2. Application to Russell Reid’s Memoranda
• July 13, 2020 memorandum (JA 434) announced a routine wage increase for all nonunion east region employees. It was unclear whether Keasbey employees saw this notice.
• July 21, 2020 memorandum (JA 435), addressed only to Keasbey employees, postponed the merit increase until after the representation election and stated that only those “not part of a collective bargaining unit (i.e., Union)” were “eligible.” It then promised back pay only after the election, “regardless of how anyone votes.”
A reasonable Keasbey employee would conclude that voting in favor of the union would forfeit the wage increase—precisely the chilling effect § 8(a)(1) forbids.

3. Failure to Exhaust Constitutional Arguments
Russell Reid’s attacks on ALJ removal protections and its First Amendment claim under Counterman v. Colorado were raised for the first time on appeal. The Third Circuit refuses to entertain unexhausted issues absent extraordinary circumstances, which were not shown here.

4. Jurisdictional Limits on Remedies
The order directing a new election is interlocutory until the rerun occurs. The court therefore lacks jurisdiction to review that aspect of the remedy.

Impact

• Employers planning to delay wage or benefit increases during organizing drives must clearly explain:
a. That the sole purpose of any delay is to avoid the appearance of influencing the election; and
b. That employees will receive full retroactive pay or benefits after the election “regardless of the outcome and regardless of how anyone votes.”
• Any eligibility language that ties increases to non-union status—or that can reasonably be read to do so—will be deemed coercive.
• The decision reinforces strict observance of administrative exhaustion for constitutional claims in NLRB proceedings.

Complex Concepts Simplified

Section 8(a)(1) NLRA: Makes it unlawful for an employer to interfere with employees’ rights to organize or support a union.
Reasonable Employee Standard: Looks at how an objective, typical employee would interpret the employer’s message; personal employer intent is irrelevant.
Substantial Evidence: Meaningful, probative evidence that a reasonable mind would accept as adequate to support a conclusion.
Exhaustion of Remedies: Parties must present arguments to the NLRB first; appellate courts generally will not hear new issues.
Interlocutory Order: A decision that is not final until subsequent proceedings (e.g., a new election) are complete.

Conclusion

This ruling cements the principle that any postponement of expected wage or benefit increases during a union election must be accompanied by unambiguous assurances of retroactive pay to all employees—no matter how they vote. Employers who fail to meet this clarity requirement risk a finding of coercion under Section 8(a)(1) and may face overturning of election results. Moreover, the decision underscores the procedural necessity of raising constitutional claims before the Board and delineates the limits of judicial review over interim election remedies.