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Seventh Circuit Court of Appeals Imposes $192,000 in Penalties and Other Remedies Based on Contempt Finding

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On March 10, 2023, the Seventh Circuit Court of Appeals issued an opinion finding that Neises Construction Corporation (“Neises”) of Crown Point, Indiana, it is required to bargain with the Indiana/Kentucky/Ohio Regional Council of Carpenters (“the Carpenters”) and pay $192,400 in fines, among other remedies, based on a finding of contempt of prior court orders.

In 2018, the Seventh Circuit enforced a National Labor Relations Board decision ordering Neises to bargain in good faith with the Carpenters. Despite the order, Neises began what would become a years-long pattern of delay, legal maneuvering, and bad-faith negotiations with no sincere intent to reach agreement. Twice, in 2019 and 2020, Neises promised to bargain with the union to settle allegations that it was in violation of the Court’s order. Nearly as soon as the last settlement was reached in 2020, however, Neises took bargaining positions that were tantamount to retracting prior tentative agreements, including a provision that would bar the Union from taking any part in decision making about the hours and working conditions of its membership, as well as a grievance procedure that was essentially illusory.

Accordingly, the Court adjudged Neises in contempt. The Court noted: “Parties must make reasonable efforts to comply with our orders, not engage in crafty feints designed to avoid court-imposed obligations. … Neises significantly violated our unambiguous command to bargain in good faith with the Union and failed to make reasonable and diligent efforts to comply with that command.”

To remedy Nieses’s misconduct, the Court imposed $192,400 in contempt fines, awarded compensatory damages to the Union, awarded costs and attorney’s fees to the Board, extended the six-month decertification bar protecting the current Union as the exclusive bargaining representative, and ordered Neises to post a notice to its employees explaining the Court’s judgment and describing the steps it will take to remedy its misconduct, in addition to other remedies.

“The Seventh Circuit’s decision in Neises sends a clear message to employers—when workers vote for union representation, an employer must bargain in good faith,” said General Counsel Jennifer Abruzzo. “The NLRB will not permit workers’ choices to be undermined and their voices to be silenced through bad faith bargaining by this or any other employer.”

Established in 1935, the National Labor Relations Board is an independent federal agency that protects employees from unfair labor practices and protects the right of private sector employees to join together, with or without a union, to improve wages, benefits and working conditions. The NLRB conducts hundreds of workplace elections and investigates thousands of unfair labor practice charges each year.