## Facts

- A union represented Laidlaw Corporation’s production and maintenance employees at its Peru, Indiana plant under a contract expiring in December 1966.
- Wage negotiations failed after the company declined to offer any raise, citing financial concerns.
- The union began an economic strike on January 12, 1966.
- Before the strike, a plant manager told employees that if they struck and were replaced they would “forever lose their right” to employment with the company.
- The company hired permanent replacements for strikers.
- After one striker sought unconditional reinstatement, the company stated his job was filled and would allow return only on “new-hire” terms (reduced seniority/benefits), later maintaining that position even when offering comparable pay.
- On February 11, most strikers unconditionally applied to return; the company reinstated some to vacancies but told others they were permanently replaced, sent termination notices, and did not treat them as employees awaiting openings.
- Despite denying reinstatement to replaced strikers who had applied, the company continued advertising for openings and hired new employees without checking striker applications.
- The NLRB found violations of NLRA §§ 8(a)(1) and 8(a)(3) and ordered cease-and-desist relief, full reinstatement to former or substantially equivalent positions, and backpay.

## Issues

1. Whether the employer’s threat that strikers who were replaced would lose employment rights “forever” violated NLRA § 8(a)(1).
2. Whether replaced economic strikers who unconditionally sought to return remained “employees” entitled to preferential reinstatement to vacancies under NLRA §§ 8(a)(3) and 8(a)(1).
3. Whether hiring new employees while declining to reinstate qualified returning strikers, absent legitimate and substantial business justification, constituted unlawful discrimination.

## Decision

- The Seventh Circuit largely enforced the NLRB’s order.
- The court upheld the finding that the “forever” statement unlawfully interfered with employees’ § 7 right to strike, violating § 8(a)(1).
- The court upheld the finding that the employer’s no-distribution rule was unlawful, constituting an additional § 8(a)(1) violation.
- Applying the Supreme Court’s economic-striker reinstatement rule, the court agreed that replaced economic strikers remained statutory employees after unconditional offers to return and were entitled to preferential reinstatement to openings unless the employer proved legitimate and substantial business justification.
- The court upheld the finding that the employer violated §§ 8(a)(3) and 8(a)(1) by refusing full reinstatement (including seniority/benefits) and by hiring new employees instead of recalling qualified returning strikers.
- The court enforced the reinstatement and make-whole backpay remedies.

## Legal Principles

- Economic strikers do not lose NLRA “employee” status merely because an employer hires permanent replacements.
- After an unconditional offer to return, replaced economic strikers are presumptively entitled to reinstatement to available former or substantially equivalent positions; the employer may refuse only for legitimate and substantial business reasons.
- An employer violates NLRA § 8(a)(3) and § 8(a)(1) by preferring new hires over qualified returning economic strikers without adequate business justification.
- Threats that reasonably tend to interfere with employees’ exercise of § 7 rights, including threatening permanent loss of employment rights for striking, violate NLRA § 8(a)(1).
- The NLRB may order cease-and-desist relief, full reinstatement, and backpay to remedy discriminatory conduct against strikers.

## Conclusion

The court enforced the NLRB’s determination that replaced economic strikers who unconditionally sought to return retained employee status and preferential rights to vacancies, and that the employer violated the NLRA by coercive threats and by refusing full reinstatement while hiring new employees, warranting reinstatement and backpay.


Laidlaw Corp. v. NLRB, 414 F.2d 99 (7th Cir. 1969)