A federal judge ruled that Smurfit Westrock in Salinas acted in bad faith when it switched employees’ health insurance in 2023, failing to provide equivalent coverage when the workers changed their union representation.
The May 12 decision by John Giannopoulos, an administrative law judge with the National Labor Relations Board, orders Smurfit Westrock to enact an insurance plan with the same coverage of the previous union’s plan and compensate affected employees “for any losses and additional expenses,” among other things.
Smurfit Westrock manufactures paper and packaging materials worldwide. Its Merrill Street location in Salinas specializes in corrugated packaging, used primarily for agriculture operations.
In November 2023, workers voted to switch their union representation from District Council No. 2 to Teamsters Local 856. Two of the company’s workers active in the campaign were fired in the days after.
Soon after the vote, District Council No. 2 cut off its insurance plan for workers. That plan split the health insurance premium, with Smurfit Westrock paying 80 percent of the premium while the workers paid 20 percent, according to a background of the case written by Giannopoulos.
Emails between Smurfit Westrock and Teamsters show discussions around insurance, with Smurfit Westrock eventually implementing its own plan for workers over a “sense of urgency” that resulted in higher premiums, according to testimony.
Workers eventually filed a complaint with the National Labor Relations Board, claiming unfair labor practices around the two employees’ firing and the insurance negotiations. The NLRB agreed there was enough evidence to support the claim, and in May 2025, court hearings took place at Monterey College of Law.
Over the past year, the company and the union settled the allegations of wrongful firing.
But regarding the health insurance, Giannopoulos determined that Smurfit Westrock officials “entered into negotiations with a closed mind,” and implemented the insurance plan as if the parties had arrived at an impasse although there was no documented impasse between the two parties, violating law.
“I find Respondent [Smurfit Westrock] did not bargain in good faith over the interim insurance plan, and that there was no valid impasse when the Consumer Choice Plan was implemented on November 13,” he wrote.
A spokesperson from Smurfit Westrock declined to comment on the case.
As part of the ruling, Smurfit Westrock must now post a notice in various places among the property where employees gather, stating that it violated federal labor law.