Organizations generally have broad discretion to make business decisions regarding facility closures and relocations; however, this discretion is limited when actions violate federal labor laws. It is illegal to close a facility in order to escape an incumbent union’s jurisdiction (D) because this constitutes an unfair labor practice under the National Labor Relations Act (NLRA).
SPHR-level HR practice emphasizes that employers may not take adverse employment actions that interfere with employees’ protected rights to organize, bargain collectively, or engage in concerted activity. Closing or relocating a facility with the intent to eliminate union representation or avoid collective bargaining obligations is considered anti-union discrimination and unlawful interference. The National Labor Relations Board (NLRB) has consistently ruled that such actions violate the NLRA.
In contrast, reducing state tax liability (A) and benefiting from a more favorable labor climate (B) are generally lawful business considerations, provided they are not a pretext for union avoidance or retaliation. Employers may relocate operations to manage costs, access talent, or improve operational efficiency, as long as decisions are not motivated by anti-union animus.
Meeting affirmative action goals (C) would also not be illegal in itself; however, affirmative action efforts must comply with equal employment opportunity principles and cannot involve discriminatory practices. This option does not address the legality of facility relocation.
From an SPHR perspective, this question tests knowledge of labor relations, management rights, and prohibited employer conduct. HR leaders must ensure that business decisions are documented, legitimate, and free from unlawful motives—particularly when unionized employees are involved.
References :
HRCI SPHR Exam Content Outline — Functional Area: Employee Relations and Engagement (labor relations; unfair labor practices; management rights).
HRCI SPHR Study Guide — Application of NLRA principles to organizational restructuring and facility relocation decisions.
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