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🗞️ NLRB ALJ Decision: Oak Harbor Freight Lines Must Pay

Administrative Law Judge Brian D. Gee ruled that Oak Harbor Freight Lines must pay $19.7 million in delinquent trust fund contributions plus $3.9 million in liquidated damages for unlawfully discontinuing employee health benefits from 2009-2018

onthelaborfront

19 Dec 2025 — 5 min read

On December 19, 2025, Administrative Law Judge Brian D. Gee ruled that Oak Harbor Freight Lines must pay $19.7 million in delinquent trust fund contributions plus $3.9 million in liquidated damages for unlawfully discontinuing employee health benefits from 2009-2018, concluding a 16-year legal dispute that imposed substantial costs on both the employer and affected workers.

This supplemental compliance decision addresses the monetary remedy stemming from a protracted unfair labor practice case. The dispute began in February 2009 when Oak Harbor Freight Lines, a regional freight carrier operating across seven western states, made the business decision to withdraw employees from the Teamsters 206 Employers Trust and implement its own company health plan following the expiration of the collective bargaining agreement.

Lengthy Litigation Timeline

The case underwent extensive procedural proceedings over 16 years:

2009: Initial unfair labor practice charge filed in March
2011: ALJ McCarrick ruled in favor of Oak Harbor on the contribution withholding issue
2012: NLRB reversed the ALJ decision (358 NLRB 328)
2014: Decision vacated due to unconstitutional Board appointments in NLRB v. Noel Canning, 573 U.S. 513
2014: Board reissued decision at 361 NLRB 884
2017: D.C. Circuit enforced Board order
2018: Supreme Court denied certiorari
2022: Compliance specification issued
2024: Five-day compliance hearing in Portland
2025: Final compliance decision issued

Employee Benefits and Interests

ALJ Gee determined that employees and retirees maintained concrete economic interests in the Trust's financial viability throughout the proceedings and continuing into the future. Notably, the Trust's governing board passed resolutions in 2023 and 2024 committing to provide retroactive welfare benefits and subsidized retiree health coverage once back contributions are received. These resolutions demonstrate that affected workers—particularly retirees who may access bridge coverage before Medicare eligibility—retain tangible interests in the Trust's solvency.

The decision emphasized that the remedy serves to make employees whole by restoring benefits they would have received but for the employer's unilateral action, consistent with established NLRB make-whole principles.

Employer Defenses and Business Concerns

Oak Harbor advanced several substantive defenses challenging the compliance specification:

1. Windfall Argument: The company contended that ordering $23.6 million in total payments would create an improper windfall to the Trust rather than benefiting individual employees. The ALJ rejected this, finding employees maintained nonspeculative interests in Trust viability.

2. Union Disclaimer Defense: Oak Harbor argued that when the union disclaimed interest in representing the bargaining unit in October 2019, this terminated any ongoing obligation to make contributions. The ALJ found this disclaimer occurred after the backpay period ended and did not affect employee interests.

3. Offset Claims: The employer sought credit for amounts spent providing substitute health coverage through its company plan during the backpay period. Citing Board precedent including Stone Boat Yard v. NLRB, 715 F.2d 441 (9th Cir. 1983), the ALJ ruled that employers cannot offset costs incurred through unlawfully-implemented substitute benefits.

4. Settlement Agreement Defense: Oak Harbor asserted that a February 2011 letter exchange (the "Beranbaum Agreement") with union negotiators constituted an agreement limiting liability to two years. The ALJ found no meeting of the minds, noting the union's chief negotiator explicitly reserved all rights and could not waive remedies sought by the General Counsel.

5. Constitutional Challenge: Based on SEC v. Jarkesy, 144 S.Ct. 2117 (2024), Oak Harbor argued the Seventh Amendment requires a jury trial for the monetary remedy. The ALJ cited longstanding precedent from NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937) that Board proceedings do not implicate the Seventh Amendment.

Calculation Methodology

The Regional compliance officer calculated back contributions using a straightforward formula: eligible employees × monthly contribution rate × applicable months = annual total. The number of eligible employees was stipulated by all parties.

The contribution rates increased over the backpay period, rising from $1,025.66 per employee per month in 2008 to higher amounts through 2018. The Region determined these increases were contractually required based on:

CBA Section 17.03: "The Employer shall during the life of this Agreement pay any increase in rates needed to maintain the benefits... if required by the Trustees of the Trust(s)."
Trust Agreement Article V, Section 6: Granting trustees power to "establish a monthly amount of money to be paid... by Employers"

The ALJ found this calculation method reasonable and not arbitrary under compliance proceeding standards.

Liquidated Damages and Interest

The specification included $3,947,052.21 in liquidated damages (20% of delinquent contributions) plus interest at 12% annually. These amounts were based on Article III, Section 10 of the trust agreement, which the parties incorporated by reference into their collective bargaining agreement.

The trust agreement explained that late payments "require individual hand processing... and necessitate investigative, accounting, and legal expenditures by the Trust, all resulting in considerable expense." The 20% liquidated damages rate was established as equal to or less than actual processing costs.

The ALJ ruled these additional amounts were mandated by the Board's order requiring payment of "all delinquent contributions to the Oregon Warehousemen Trust, as well as any additional amounts due to the fund" and were remedial rather than punitive, consistent with Merryweather Optical Co., 240 NLRB 1213 (1979).

Union Institutional Role

While the decision focused on employee rights and interests, the procedural history reveals the institutional union's evolving position. After initially losing before the ALJ on the contribution issue in 2011, the union pursued appeals while simultaneously negotiating with the employer. In October 2019—after the Supreme Court denied certiorari but before the compliance proceeding—the union disclaimed interest in representing the bargaining unit.

Notably, throughout the February 2011 letter exchange, union negotiator Michael Beranbaum explicitly stated he "had no authority to make any agreement for the General Counsel" and that "the case at this point... was the General Counsel's." This acknowledgment distinguished between the union's institutional interests and the remedies sought by the federal agency on behalf of employees.

Practical Implications

The 16-year timeline from charge to compliance decision illustrates the substantial costs labor litigation imposes on all parties. Oak Harbor incurred significant legal expenses defending its position through multiple levels of review while simultaneously providing alternative health coverage. Employees experienced disruption to their established benefit arrangements and uncertainty about coverage. The federal agency dedicated considerable resources to investigation, litigation, and compliance proceedings.

The decision affects approximately 176 employees who worked in the bargaining unit during the 2009-2018 period, with particular significance for retirees who continue to rely on Trust-provided health coverage to supplement Medicare or bridge coverage until Medicare eligibility.

Key Points

Final Amounts: $19,735,261.12 in back contributions + $3,947,052.21 in liquidated damages + interest
Backpay Period: February 26, 2009 through December 31, 2018 (nearly 10 years)
Litigation Duration: 16 years from initial charge (March 2009) to compliance decision (December 2025)
Employee Impact: Affects workers and retirees with concrete interests in Trust viability; resolutions promise retroactive benefits once contributions paid
Employer Defenses Rejected: All affirmative defenses failed, including windfall, union disclaimer, offsets, settlement agreement, and Seventh Amendment arguments
Calculation Method: Stipulated employee counts × contractually-required contribution rates × applicable months
Institutional Union Role: Disclaimed interest in October 2019 after Supreme Court proceedings; union negotiator acknowledged General Counsel controlled remedies
Legal Standards Applied: NLRB compliance precedent requiring reasonable approximation of make-whole amounts; uncertainties resolved against respondent whose unlawful conduct created dispute