Clarity Requirement in Wage-Increase Postponements Under NLRA Section 8(a)(1)

Introduction

NLRB v. Russell Reid Waste Hauling & Disposal Service Co., Inc. (3d Cir. 2025) addresses the precise circumstances in which an employer’s postponement of an expected wage increase during a union‐representation election may run afoul of Section 8(a)(1) of the National Labor Relations Act (NLRA). The case arises out of a mail‐ballot union election at Russell Reid’s Keasbey, New Jersey facility in August 2020. Although Russell Reid historically granted annual merit increases in July to nonunion employees, it sent a targeted July 21 memorandum to Keasbey employees—who were then voting on union representation—postponing their increase and qualifying eligibility on nonmembership in a bargaining unit. After losing the election 23–11, the union objected and the NLRB’s General Counsel charged Russell Reid with an unfair labor practice. An ALJ and a majority of the Board found that the notice tended to coerce employees, set aside the election results, and ordered a new election. Russell Reid petitioned for review, and the Board cross-petitioned for enforcement.

Key issues include: (1) whether the employer’s July 21 memorandum coercively interfered with employees’ Section 7 rights by creating or reinforcing the impression that union supporters would lose the merit increase, and (2) whether the statutory remedy of setting aside the election is justified. The Third Circuit’s opinion, authored by Judge Shwartz, affirms the Board’s finding of an unfair labor practice but dismisses for lack of jurisdiction Russell Reid’s challenge to the remedy of a new election.

Summary of the Judgment

The Third Circuit granted the NLRB’s cross‐petition for enforcement and denied Russell Reid’s petition for review except as to the remedy. The court held that:

• Russell Reid’s July 21 memorandum, by postponing the merit increase for Keasbey employees and conditioning eligibility on nonmembership in a collective‐bargaining unit, objectively tended to coerce reasonable employees against voting for union representation.
• Substantial evidence supported the Board’s finding that the memorandum lacked the required clarity that wage increases would be paid to all employees after the election regardless of the outcome.
• The challenge to setting aside the election results and ordering a new election is not yet ripe for judicial intervention, so the court dismissed that portion for lack of jurisdiction.

Analysis

Precedents Cited

The court’s ruling builds upon and distinguishes several key precedents:

• Oberthur Technologies of America Corp. v. NLRB, 865 F.3d 719 (D.C. Cir. 2017): The D.C. Circuit held that postponing an expected wage or benefit increase is permissible only if the employer (1) explains that the delay serves solely to avoid the appearance of influencing the election, and (2) affirms that the benefit will be granted to all employees after the election, regardless of its result. The Third Circuit applied that two‐part framework here and found the Board correctly determined that Russell Reid’s memorandum failed the second prong.
• NLRB v. Garry Manufacturing Co., 630 F.2d 934 (3d Cir. 1980): Recognized that proof of implied coercion suffices for Section 8(a)(1) liability and that an employer’s unexplained change in benefits during an election period can interfere with employee free choice.
• FDRLST Media, LLC v. NLRB, 35 F.4th 108 (3d Cir. 2022): Reaffirmed the objective “reasonable employee” standard for evaluating coercion under Section 8(a)(1), focusing on what a reasonable employee would have understood from the employer’s statements in context.
• Starbucks Corp., 125 F.4th 78 (3d Cir. 2024): Emphasized that the employer’s intent is immaterial; the test is whether its communications would tend to coerce employees not to exercise their labor rights.

Legal Reasoning

The court applied the well-established objective test for Section 8(a)(1) violations: Would a reasonable employee, in all the circumstances, perceive the employer’s action as coercive or threatening to penalize union support?

• Context of the Announcement: Russell Reid customarily issued merit increases in mid-July to all nonunionized east region employees. Two memoranda were involved: a general July 13 notice (addressed region-wide) and a targeted July 21 notice (addressed only to Keasbey employees, who were voting that month).

• Eligibility Language: The July 21 memo stated employees must “not be part of a collective bargaining unit (i.e., Union)” to qualify. In plain context, a reasonable Keasbey worker would interpret that to mean that voting for and joining a union would disqualify him from the increase.

• “After‐Election” Assurance: Although the memo purported to assure employees that “all affected employees will receive their eligible merit increases” after the election regardless of its outcome, the court held that this language “compounds, rather than clears up, any confusion,” because it merely restated a promise for those already deemed “eligible”—i.e., non-union employees.

• Substantial Evidence: The Board’s finding that the memo tended to coerce employees was supported by substantial record evidence, including testimony that employees were genuinely concerned their pay increases hinged on voting against union representation.

Impact

The decision reconfirms that employers must exercise the utmost clarity when postponing any customary wage increase during an organizing campaign:

• Employers may delay wages or benefits but must expressly and unambiguously state that the delay is solely to avoid the appearance of election‐influencing and that all employees will receive the benefit regardless of election results and vote choices.
• Any conditional language—particularly tying eligibility to non-union status—risks being deemed coercive, even with after-election assurances.
• The ruling serves as a cautionary blueprint for employers across all circuits, underscoring the importance of neutral, plain-language communications during union campaigns.

Complex Concepts Simplified

• Section 8(a)(1) of the NLRA: Prohibits employer actions that “interfere with, restrain, or coerce” employees in exercising their right to organize or bargain collectively.
• “Reasonable Employee” Test: An objective standard asks how an ordinary employee, familiar with workplace norms, would interpret the employer’s communication. The court disregards the employer’s actual intent.
• Substantial Evidence Standard: Permits affirmance if a reasonable mind could accept the evidence as adequate to support the Board’s conclusion.
• Election Remedy Ripeness: An order directing a new election is not final until the new election is held, so courts lack jurisdiction to review that remedy until after the election is completed.

Conclusion

NLRB v. Russell Reid crystallizes the principle that employers must provide unequivocal assurances when postponing normal wage increases during union‐representation elections. The Third Circuit’s decision reinforces that any conditional or ambiguous communications—especially those suggesting that union supporters will forfeit a benefit—violate Section 8(a)(1). Going forward, employers nationwide must ensure that postponed wages or benefits are described in neutral, transparent terms, with explicit guarantees that all employees will receive them post-election irrespective of outcome or vote. The ruling thus strengthens the protection of employees’ free choice in union elections and offers clear guidance on lawful pre-election benefit communications.