DC Circ. Reviews NLRB Order in Rite Aid Labor Violation Dispute

A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit recently heard oral arguments over whether the National Labor Relations Board (NLRB) properly found that Rite Aid violated labor laws in unilaterally imposing a bargaining proposal concerning employee health care coverage. The appellate court also considered whether the NLRB acted appropriately in ordering Rite Aid to contribute to a union’s health care benefits fund.

The case is Thrifty Payless Inc. dba Rite Aid v. National Labor Relations Board, Case Numbers 22-1204 and 22-1241, U.S. Court of Appeals for the District of Columbia Circuit.

In August 2022, the NLRB ruled that Rite Aid had failed to reach an impasse in contract negotiations with United Food and Commercial Workers Local 8-Golden State before implementing a proposal that changed health care benefits for some workers. More specifically, Rite Aid changed health care coverage for associates from the union fund’s plan to Rite Aid’s plan, which allegedly led to the loss of coverage for some retirees and part-time workers. The NLRB amended the agency judge’s remedies, requiring Rite Aid to pay delinquent contributions to the union’s health care fund and to rescind its changes upon the union’s request.

During oral arguments, Rite Aid argued that the NLRB did not adequately consider evidence of an impasse in bargaining or appropriately apply agency standards in reviewing the allegedly exigent circumstances that led to its unilateral action. The company further claimed that its actions were necessary due to the poor financial state of the union’s health and welfare trust fund and the union in general. Furthermore, Rite Aid challenged the NLRB’s remedy, arguing that the agency failed to consider the insurance coverage it provided workers.

In contrast, the NLRB argued that Section 10(e) of the National Labor Relations Act (NLRA) prevented Rite Aid from challenging the NLRB’s remedy, as the company failed first to file a motion to reconsider. The NLRB also claimed that Rite Aid lacked a compelling reason to unilaterally impose its health insurance plan on the employees, as the fund’s reserves had dropped in the past.

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