Recently, a majority of employees at the news websites DNAinfo and Gothamist decided to join the Writer’s Guild union to bargain collectively over their terms of employment. In response, the owner of the websites decided to shut down its operations completely. This begs the question: can a business close its doors in response to its employees voting to join a union? Perhaps surprisingly, the answer to that question is, with few exceptions, yes.

In general, the National Labor Relations Act prevents businesses from retaliating against employees for engaging in protected activities, including voting to join a union. However, the United States Supreme Court held in 1965 that closing a business in response to union activity is “not the type of discrimination which is prohibited by the Act.” Textile Workers v. Darlington Mfg. Co., 380 U.S. 263 (1965). In Darlington, the Court essentially found that the law

does not reach the act of purposefully liquidating a business because restraining a business from taking such an action was too “startling … [to] entertain.” Fundamentally, the rule announced in Darlington is premised on the rationale that an employer that leaves the sphere of business entirely does not gain any advantage by shedding union-represented employees. While this rule may sound odd, given that employers cannot discriminate against employees for their union activities, the law simply does not prevent an employer from going out of business, even when the closing is based solely on anti-union sentiment.

As is usually the case, there are exceptions to this rule. An employer cannot close a facility due to union activity in order to inhibit unionization at other plants. One can imagine a situation where a non-union employer with multiple facilities closes the first plant to unionize in order to make a statement to all of its employees. Where a decision to close is based on anti-union animus and aimed at employees at other locations, such a closing will be deemed to be unlawful.

All that being said, the closing of a business only provides a union with limited grounds to contest a closing as unlawful. In this case of DNAinfo and Gothamist, the Writers Guild most likely need to limit any claims at the NLRB to that theory.

Andrew MacDonald is an associate in the firm’s Labor and Employment Department, resident in its Philadelphia office.