## Facts

- The Union had been the certified bargaining representative for service and maintenance employees at Church Homes, Inc., d/b/a Avery Heights, since the early 1970s.
- After collective bargaining negotiations stalled, approximately 180–185 employees began an economic strike on November 17, 1999.
- Avery continued operations using nonstriking employees, managers, temporary workers, and volunteers.
- Avery decided to hire permanent replacement workers for the strikers and did so without informing the Union.
- After learning of the replacement hiring, the Union made an unconditional offer to return to work; Avery refused to reinstate all strikers, asserting that permanent replacements had been hired, and recalled only some strikers to unfilled positions.
- The General Counsel issued a complaint alleging Avery violated NLRA §§ 8(a)(1) and 8(a)(3) by hiring permanent replacements and refusing reinstatement for an unlawful purpose.
- An ALJ found Avery acted with an independent unlawful motive—seeking to “break the Union”—relying on management statements and the secretive manner of replacement hiring.
- The NLRB reversed, concluding the General Counsel failed to prove an independent unlawful motive and reasoning that secrecy about replacement hiring could not support an inference of illegality because Avery had no duty to disclose the decision.

## Issues

1. Whether the NLRB acted arbitrarily and capriciously in rejecting the ALJ’s finding that Avery hired permanent replacements with an independent unlawful motive to “break” the Union, thereby dismissing §§ 8(a)(1) and (3) allegations.
2. Whether the Board could treat Avery’s secrecy about hiring permanent replacements as categorically non-probative of unlawful motive solely because Avery had no legal duty to notify the Union.

## Decision

- The Second Circuit granted the Union’s petition for review and denied enforcement of the Board’s order to the extent it dismissed the unfair labor practice complaint.
- The court held the Board’s analysis was arbitrary and capricious because it applied an unjustified categorical rule that secrecy could not be evidence of unlawful motive absent a disclosure duty.
- The court concluded the Board failed to evaluate the evidence of motive cumulatively (including supervisory statements, timing, and secrecy) and did not provide a reasoned explanation for discounting that evidence.

## Legal Principles

- An employer may lawfully hire permanent replacements for economic strikers to continue operations or withstand a strike.
- Even where replacement hiring is lawful in itself, it violates NLRA §§ 8(a)(1) and 8(a)(3) if motivated by an independent unlawful purpose, such as anti-union hostility or an intent to chill or break the union.
- Proof of unlawful motive commonly relies on circumstantial evidence and must be assessed in context and in combination, not by isolating and excluding categories of evidence.
- The NLRB must engage in reasoned decisionmaking; a departure from ordinary evidentiary treatment or Board practice requires an adequate explanation, and conclusions must be supported by substantial evidence rather than arbitrary reasoning.

## Conclusion

The Second Circuit required the NLRB to reconsider the unfair labor practice allegations because the Board improperly insulated secrecy surrounding striker-replacement hiring from evidentiary use and, in doing so, failed to apply a reasoned, substantial-evidence motive analysis consistent with the NLRA.


New England Health Care Emps. Union, Dist. 1199, SEIU, AFL-CIO v. NLRB, 448 F.3d 189 (2d Cir. 2006)