Successor Employer Agrees to Pay $1,000,000 in Backpay for Failing to Hire Long Time Employees

Tuesday, April 22, 2014

The San Francisco Regional Office of the National Labor Relations Board (NLRB) announced the receipt of $1,000,000 from the owners of the Yuba Skilled Nursing Center in Yuba City, California to compensate current and former employees for the loss of pay and benefits that occurred when the owners unlawfully refused to hire them in 2011.  

The Service Employees International Union, United Healthcare Workers West (the Union) represented employees at the nursing center before it was purchased by Nasaky, Inc. (the Employer) in 2011.  Under the National Labor Relations Act, new owners, who hire a majority of employees previously employed by the former owner, are obligated to recognize and bargain with the existing union as a successor employer.  The Union alleged in charges filed with the NLRB that the new owners failed to hire the longtime employees in order to avoid that obligation.   

The Region issued complaint and a hearing was held before Administrative Law Judge Gerald M. Etchingham, who found that the Employer unlawfully refused to hire employees in order to avoid its obligation to recognize and bargain with the Union. In September 2012, the Board ordered a comprehensive remedy for the unlawful conduct, requiring the nursing center to: offer jobs to employees of the former owner, restore the terms and conditions of employment that existed before the successor employer assumed control of the business, recognize and bargain with the Union, and pay backpay.  Thereafter, the successor employer made offers of employment to these employees, many of whom are currently working at the nursing center, and recognized the Union as the employees’ bargaining representative.  However, there remained a dispute over the backpay amount.    

The $1,000,000 settlement concludes an extensive investigation into the Employer’s finances by NLRB Region 20 agents, with assistance from its Division of Legal Counsel in Washington, D.C., including the issuance of dozens of investigative subpoenas, depositions of the Employer’s accountant and operating officers, and proceedings in a U.S. District Court. 

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