## Facts

- The union was certified on February 18, 1966 as bargaining representative for employees at Coca-Cola Bottling Works’ Dallas facility.
- After bargaining reached an impasse, employees began an economic strike on July 26, 1966; the employer continued operations with nonstrikers and replacement workers.
- During the strike, the employer eliminated “electric eye” bottle-inspecting machines and abolished eleven sales-helper positions without bargaining; the union claimed this conduct converted the strike into an unfair-labor-practice strike.
- Some strikers distributed “Health Warning” leaflets suggesting product sanitation risks due to inexperienced replacements; the employer argued this activity was unprotected disparagement.
- When the strike ended, the union sought reinstatement of all strikers; the employer reinstated 12 and stated others were permanently replaced or their positions were eliminated.
- Between the strike’s end and February 22, 1967, the employer experienced 242 vacancies through normal turnover but did not actively offer openings to unreinstated strikers; it filled vacancies through advertisements and employment agencies, telling the union that strikers who applied would receive “due consideration.”
- On February 22, 1967, the employer withdrew recognition and stopped bargaining, asserting the union had lost majority support.
- In later administrative proceedings, the NLRB applied its post-event decision in *The Laidlaw Corp.* (adopted after *NLRB v. Fleetwood Trailer Co.*) to require preferential reinstatement for former economic strikers as vacancies arose, and ordered backpay and other relief.
- The union petitioned for review of aspects of the NLRB’s order, and the NLRB cross-petitioned for enforcement against the employer.

## Issues

1. Whether the NLRB could retroactively apply the *Laidlaw* reinstatement preference rule through adjudication to impose liability and backpay for employer conduct that conformed to the Board’s pre-*Laidlaw* policy.
2. Whether the employer committed unfair labor practices under the NLRA by unilaterally eliminating machinery and positions, refusing reinstatement to certain strikers (including leafleters), and withdrawing recognition/refusing to bargain.
3. Whether the union retained majority support when the employer withdrew recognition on February 22, 1967.

## Decision

- The D.C. Circuit enforced the NLRB’s order only in part and denied enforcement in part.
- The court held that the NLRB could not fully apply *Laidlaw* retroactively to impose substantial backpay liability for pre-*Laidlaw* conduct that was consistent with the Board’s prior, clearly stated approach to permanently replaced economic strikers.
- The court accepted that the NLRB may develop policy through adjudication, but required limits on retroactive remedial consequences based on fairness and reasonable reliance.
- The court otherwise upheld substantial portions of the NLRB’s unfair-labor-practice determinations and prospective remedies, while trimming relief dependent on impermissible retroactive application of *Laidlaw*.

## Legal Principles

- An agency may announce and refine policy through adjudication rather than rulemaking, but retroactive application of a new standard is constrained by equitable considerations and reasonable reliance.
- Retroactivity analysis weighs factors including: reliance on the former rule, the abruptness of the departure from settled practice, the burden of retroactive liability, and statutory interests in enforcing the new standard.
- Where an employer’s conduct conformed to the NLRB’s established preexisting policy, imposing significant retroactive backpay based solely on a later policy change may be improper, even if the new rule is valid going forward.
- Preferential reinstatement rights for economic strikers (as recognized in *Fleetwood*/*Laidlaw*) may be applied prospectively, but courts may limit remedial enforcement when the Board seeks to attach full monetary consequences to pre-change conduct.

## Conclusion

The D.C. Circuit upheld much of the NLRB’s unfair-labor-practice analysis but curtailed the Board’s effort to impose substantial backpay through retroactive application of the *Laidlaw* striker-reinstatement policy, enforcing the order only to the extent consistent with fairness and reasonable reliance on prior Board precedent.


Retail, Wholesale & Dep’t Store Union, AFL-CIO v. NLRB, 466 F.2d 380 (D.C. Cir. 1972)