Filed: Mar. 03, 1998
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Summary: [PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _ No. 96-6944 _ NLRB No. 15-CA-11498 NATIONAL LABOR RELATIONS BOARD, Petitioner, versus TRIPLE A FIRE PROTECTION, INC., Respondent, ROAD SPRINKLER FITTERS LOCAL UNION 669, AFL-CIO, Intervenor. _ Application for Enforcement of an Order of the National Labor Relations Board _ (March 3, 1998) Before ANDERSON and COX, Circuit Judges, and ALARCON*, Senior Circuit Judge. ANDERSON, Circuit Judge: _ *Honorable Arthur L. Alarcon, Se
Summary: [PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _ No. 96-6944 _ NLRB No. 15-CA-11498 NATIONAL LABOR RELATIONS BOARD, Petitioner, versus TRIPLE A FIRE PROTECTION, INC., Respondent, ROAD SPRINKLER FITTERS LOCAL UNION 669, AFL-CIO, Intervenor. _ Application for Enforcement of an Order of the National Labor Relations Board _ (March 3, 1998) Before ANDERSON and COX, Circuit Judges, and ALARCON*, Senior Circuit Judge. ANDERSON, Circuit Judge: _ *Honorable Arthur L. Alarcon, Sen..
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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 96-6944
________________________
NLRB No. 15-CA-11498
NATIONAL LABOR RELATIONS BOARD,
Petitioner,
versus
TRIPLE A FIRE PROTECTION, INC.,
Respondent,
ROAD SPRINKLER FITTERS LOCAL UNION 669, AFL-CIO,
Intervenor.
________________________
Application for Enforcement of an Order of
the National Labor Relations Board
_________________________
(March 3, 1998)
Before ANDERSON and COX, Circuit Judges, and ALARCON*, Senior Circuit Judge.
ANDERSON, Circuit Judge:
________________
*Honorable Arthur L. Alarcon, Senior U.S. Circuit Judge for the Ninth Circuit, sitting by
Designatiom.
The National Labor Relations Board seeks enforcement of its October 31, 1994
order finding Triple A Fire Protection, Inc. in violation of sections 8(a)(1) and (5) of the
National Labor Relations Act for unilaterally ceasing to make payments to fringe benefit
plans, unilaterally reducing wage rates of bargaining unit employees, and directly dealing
with employees outside the formal bargaining process. 29 U.S.C. §§ 158(a)(1) and (5).
The employer argues in its defense that the union never represented an uncoerced
majority, that an impasse existed, that the union bargained in bad faith, and that an
economic emergency justified their departure from the formal system of labor
negotiations. We find substantial evidence to support the Board’s findings and enforce its
order.
I. BACKGROUND
Triple A Fire Protection, Inc. (“Triple A”) was formed in 1983 by Alton Turner
(“Turner”) and engages in the business of installing and maintaining sprinkler and fire
protection systems in Mobile, Alabama. Turner holds a controlling interest in the
company’s stock and his wife Lovina owns the remainder of the stock. Turner’s son
Steve also works for the company as a supervisor.
Since its founding, Triple A’s employees have been represented by Road Sprinkler
Fitters Union No. 669 (“Local 669"). Local 669 is headquartered in Landover, Maryland.
2
Ronnie L. Phillips (“Phillips”) is Local 669's regional representative and business agent in
the southern district, which comprises Alabama, Mississippi, and Puerto Rico. Since
1983, Phillips has represented Local 669 in all dealings with Turner and Triple A.
In October 1983, Turner (who had himself been a long-time member of Local 669)
signed an agreement to be bound by the 1982-85 national agreement between the union
and the National Fire Sprinkler Association, a multi-employer collective bargaining unit.
Similarly, on February 8, 1984, Turner signed an “assent and interim agreement” binding
Triple A to the 1985-88 section 8(f) prehire national agreement between the union and the
national bargaining unit. 29 U.S.C. § 158(f).1
In February, 1987, the National Labor Relations Board decided John Deklewa &
Sons, 282 N.L.R.B. 1375, enf’d sub nom, Int’l Ass’n of Bridge, Structural and Ornamental
Iron Workers Local No. 3 v. NLRB,
843 F.2d 770 (3rd Cir. 1987), cert. denied,
488 U.S.
889,
109 S. Ct. 222,
102 L. Ed. 2d 213 (1988). The Board’s decision in Deklewa
1
Section 8(f) authorizes prehire contracts between employees and unions in the
building and construction industries. Under section 8(f), an employer may enter into a prehire
agreement with a union before a majority of employees has approved the union as its bargaining
representative. This sanctioning of prehire agreements is an exception to the general rule of the
National Labor Relations Act that guarantees employees the right to select their own bargaining
representatives. Normally, in industries other than the construction industry, a union must be
elected by a majority of the employees within a bargaining unit before that union can have the
right to represent employees in the formal bargaining process pursuant to section 9(a). 29 U.S.C.
§ 159(a).
Section 8(f) was created to deal with problems unique to the building and construction
industries. Prior to the creation of section 8(f), the National Labor Relations Act prohibited
employers from bargaining with an uncertified union and, under the Act, a union could not be
certified as a bargaining representative until after employees were hired. Since the nature of the
construction industry required employers to know their labor costs before the beginning of a
project, Congress validated the practice of creating prehire contracts.
3
substantially altered the relationship between construction industry employers and unions.
The Board decided that section 8(f) prehire agreements were no longer terminable at will,
but were valid and binding for the entire term of the contract. Also, the Board held that
unions would not enjoy a presumption of majority status upon expiration of a section 8(f)
agreement. See U.S. Mosaic Tile Co. v. NLRB, 935 F.2d 1249, 1252 n.2 (11th Cir.
1991)(detailing the history of section 8(f) prehire agreements and the changes brought
about by Deklewa). Of significance for this case, Deklewa abandoned the former
“conversion doctrine” under which unions could very easily convert their status from that
of a section 8(f) prehire to a full section 9(a) status.2 29 U.S.C. § 159(a). Deklewa
adopted a new and much stricter “conversion doctrine,” under which the party asserting
conversion has the burden of proving section 9(a) status, for example, either by election
and Board certification or by voluntary recognition based upon a clear showing of
majority support.
Deklewa, 282 N.L.R.B. at 1385 n.41, 1387 n.53.3 Upon conversion to
2
The pre-Deklewa cases permitted conversion to full section 9(a) status merely by
showing that the union enjoyed majority support among the relevant employees at virtually any
time after signing a section 8(f) agreement. Deklewa, 282 N.L.R.B. at 1378 nn. 12-13.
3
The Board wrote that “[i]n light of the legislative history and the traditional prevailing
practice in the construction industry, we will require the party asserting the existence of a 9(a)
relationship to prove it.” Deklewa, 282 N.L.R.B. at 1385 n.41. Furthermore, the Board stated:
We do not mean to suggest that the normal presumptions would not flow from
voluntary recognition accorded to a union by the employer of a stable work force
where that recognition is based on a clear showing of majority support among the
unit employees, e.g., a valid card majority. That is, nothing in this opinion is meant
to suggest that unions have less favored status with respect to construction industry
employers than they possess with respect to those outside the construction industry.
4
full section 9(a) status, a union would enjoy all the rights of a majority representative
under section 9(a), including a presumption of majority support upon expiration of a
collective bargaining agreement and the correlative duty to bargain with respect to a new
contract. Thus, after Deklewa the question of whether a union for a construction industry
employer had satisfied the new and stricter “conversion doctrine” and achieved section
9(a) status became very important for both unions and employers.4
In light of the uncertainty raised by Deklewa, Local 669's business manager in
Maryland mailed a letter with enclosures to Triple A. The letter stated that “[Deklewa]
may throw into question the nature of the relationship between your organization and
Local 669. The purpose of this letter is to solicit your cooperation in minimizing any
possible disruption in our relationship that might otherwise be caused by the Deklewa
decision.” The letter requested that Triple A sign and return a recognition form
confirming the union’s status as the exclusive bargaining representative designated by a
majority of Triple A’s employees pursuant to section 9(a) of the Act. The recognition
Id. at 1387 n.53 (citation omitted).
4
It should be noted that this circuit has previously declined to specifically address
Deklewa. See Local Union 48 Sheet Metal Workers v. S.L. Pappas & Co., Inc. 106 F.3d 970,
974-75 (11th Cir. 1997); U.S. Mosaic
Tile, supra; Plumbers and Pipefitters Local Union 72 v.
John Payne Co., Inc.,
850 F.2d 1535, 1538 (11th Cir. 1988). Those cases addressed different
issues from the conversion by voluntary recognition issue before us. In Pappas, the court
observed our prior panel rule and followed the reasoning of John Payne concerning the ability of
employers to repudiate section 8(f) agreements.
Pappas, 106 F.3d at 975. Similarly, in Mosaic
this court refused to address the use of Deklewa as an affirmative defense because the issue had
not been raised in a timely fashion.
Mosaic, 935 F.2d at 1257. The question before this court
concerns issues involving Deklewa not addressed in the former cases and not affected by their
determinations.
5
form provided:
ACKNOWLEDGMENT OF THE REPRESENTATIVE
STATUS OF ROAD SPRINKLER FITTERS LOCAL UNION
NO. 669, U.A., AFL-CIO
The employer executing this document below has, on the basis
of objective and reliable information, confirmed that a clear
majority of the sprinkler fitters in its employ have designated,
are members of, and are represented by, Road Sprinkler Fitters
Union No. 669, U.S., AFL-CIO, for purposes of collective
bargaining.
The employer therefore unconditionally acknowledges and
confirms that Local 669 is the exclusive bargaining
representative of its sprinkler fitter employees pursuant to
Section 9(a) of the National Labor Relations Act.
Accompanying the letter, Local 669 included a copy of a recent fringe benefit report filed
by Triple A with the National Automatic Sprinkler Industry Fringe Benefit Funds listing
eight names, including Turner and his son Steve. Turner testified before the
administrative law judge (“ALJ”) that the greatest number of workers employed in any
given month was seven to eight. Alton Turner signed the recognition form on October
17, 1987.
Thereafter, Turner signed an agreement to be bound by a third successive
bargaining agreement running from April 1, 1988, to March 31, 1991.5 Toward the end
5
The 1988-91 collective bargaining agreement contained a recognition clause which
stated:
Recognition: The National Fire Sprinkler Association, Inc. for and on behalf of its
contractor members that have given written authorization and all other employing
contractors becoming signatory hereto, recognize the Union as the sole and exclusive
6
of this agreement, on December 14, 1990, Local 669's business manager sent a letter to
Triple A indicating the union’s desire to negotiate another collective bargaining
agreement effective April 1, 1991. The letter warned that if a renewal contract were not
reached before March 31, 1991, then “lawful economic action” could ensue on or after
April 1, 1991. The letter enclosed two copies of an “Assent and Interim Agreement”
which would prohibit the signatories from negotiating a separate agreement with the
Union and mandating that they observe the terms of the expired agreement until the
effective date of a successor agreement. Turner never signed this assent form.
During the early spring of 1991, Turner approached employees on a number of
occasions to discuss both their employment with Triple A and general status with the
union. In early March, Turner approached employee Jack Moiren and told him that he
would receive certain benefits if the company “went nonunion.”6 Later that month,
Danny Carpenter, Cecil P. “Shorty” Davidson, and Moiren had a long conversation with
Turner and his son Steve on the front porch of Triple A.7 During the course of this
bargaining representative of all Journeyman Sprinkler Fitters and Apprentices in the
employ of said Employers, who are engaged in all work as set forth in Article 18 of
this Agreement with respect to wages, hours and other conditions of employment
pursuant to Section 9(a) of the National Labor Relations Act.
6
Specifically, Moiren testified before the administrative law judge that Turner promised
him the equivalent of union wages, raises at the same time as union employees, and continued
use of the company truck with gas paid.
7
Danny Carpenter testified that he would occasionally drink beer with Turner. He also
testified that, on one occasion in late February or early March, Turner approached him, Moiren,
and Philip Alan Thames while they stood on the front porch of Triple A and told them that, in
7
discussion, Turner told Shorty that “no matter what happens you’ve got a job here for the
same pay and you can pay half of your insurance.” Also that month, while visiting
Carpenter’s home, Turner stated that he would not sign the union agreement, but would in
any event raise Carpenter’s wage rate to the foreman level.8
On March 18, 1991, Phillips telephoned Turner to ask him if they could get
together to discuss the negotiation of a renewal contract.9 Turner responded that he had
business to attend to the following day in Atlanta and they set no date for a meeting. The
following day, Phillips made a surprise visit to Triple A where he found Turner. Turner
testified that the business trip to Atlanta had been canceled. Phillips asked Turner if he
would sign the interim agreement and told him that he had a copy of it ready in his
briefcase. Turner responded that he would not sign a “blank check” and informed
Phillips that he was preparing a proposed contract to submit to the union. On March 21,
the event that he did not sign the National Agreement, he would guarantee them a foreman’s job,
paid insurance, and a truck.
8
In March, 1991, Alton Turner’s son Steve Turner approached Thames and promised
him continued employment at $14.00 per hour with paid insurance if the company “did not sign
the contract.” In addition, Steve Turner alluded to the creation of a retirement or profit-sharing
plan for the benefit of employees.
9
Without Phillip’s knowledge, Turner tape recorded this conversation. The
administrative law judge excluded a transcript of this and another conversation from evidence.
The appellant argues that these transcripts should not be excluded from evidence. We have
reviewed the excluded transcripts and cannot conclude that the exclusion affected any substantial
rights of Triple A. The company apparently complains about the denial of some impeaching
evidence which we do not find significant. Thus, we need not address the legal issue raised by
Triple A.
The other evidentiary issues raised by Triple A are without merit and warrant no
discussion.
8
Turner mailed Triple A’s proposal for a complete contract to the union.
Also on March 21, Phillips wrote Turner expressing a need to “avert a work
stoppage on April 1, 1991.” In reference to their contacts on March 18 and 19, Phillips
accused Turner of refusing to negotiate with the union. Although the union’s March 1991
newsletter indicated that some employers would be struck, Phillips instructed Triple A
employees to report to work on April 1. On March 26, Turner wrote to Phillips that strike
replacements would be hired according to the terms of Triple A’s proposed contract. On
April 1, no strike occurred and union employees reported to work at Triple A.
On April 3, Phillips and Turner agreed to begin negotiations on April 9.10 On
April 9, the parties met to begin formal bargaining sessions at the Bradbury Inn in
Mobile, Alabama. The union was represented by Clarence Radecker and Phillips. Triple
A was represented by Turner and attorney Deborah H. Kehoe. At the meeting, Turner
submitted a list of 23 jobs that it had bid on but lost in the past year when the bids were
based on union wages and benefit cost levels. The notes of the meeting indicate that
neither party really discussed these figures in much detail. The ALJ found that they did
not talk long enough to indicate to the union that there was an economic emergency as the
company asserts. The parties discussed Triple A’s proposed contract and tentatively
10
On April 4, Turner wrote Phillips to confirm the meeting of April 9. This letter
indicated that Turner had not received Local 669's counterproposal to Triple A’s complete
contract submitted in late March. Turner expressed an interest in having the union’s counter-
proposal sent to him by express mail so that he could review it before the April 9 meeting. On
April 5, Phillips sent his own confirmation letter to Turner (apparently crossing Turner’s letter in
the mail). Phillips stated in this letter that he had some questions about Triple A’s proposal and
that he had some of his own contract proposals to add to negotiations on April 9.
9
approved a limited number of provisions. The union promised that it would submit
counter-proposals as to several provisions during future bargaining. Although the
meeting lasted much of the day, the parties accomplished little and a second meeting was
scheduled for April 30, 1991, the date suggested by Turner. Neither party mentioned any
deadline for negotiation.
On April 12, 1991, Turner mailed a letter to the union accusing it of not
“seriously address[ing]” the company’s March 21, 1991, proposal. The letter asserted
that since the union had failed to submit a “meaningful proposal to Triple A,” they
“[could] no longer tolerate [Local 669's] inaction.” The company issued an ultimatum
that would effectuate its proposed contract if no agreement was reached with the union
prior to April 22, 1991. The letter indicated that Triple A was available to negotiate prior
to this date, but firmly stated that changes would be implemented on April 22, 1991.
Phillips received Triple A’s demand on April 16, 1991. Phillips wrote to Triple A on
April 17 confirming the April 30 meeting.11 As of April 22, 1997, Triple A ceased
making payments to the health, welfare, and pension funds as required by the expired
collective bargaining agreement, and hired employees at wage rates different from those
specified in the expired collective bargaining agreement.
At the second meeting on April 30, 1991, the parties made little progress on
11
Before the administrative law judge, Phillips testified that he “didn’t see any reason to
change th[e] date” that the parties had formerly agreed upon to sit down and negotiate a new
agreement. He didn’t specifically respond to the letter sent by Triple A, because he thought
Triple A was trying to “set me up for something that I didn’t understand.”
10
reaching an agreement. The union, represented by Billy Littleton, objected to Triple A’s
implementation of its proposal and informed the company that it actions constituted an
unfair labor practice. Littleton told Turner and Kehoe that Local 669 and the company
had a section 9(a) relationship which required Triple A to bargain with Local 669
concerning the terms and conditions of the expired collective bargaining agreement until
the parties reached an impasse or negotiated a new agreement. Although Triple A stated
that they were willing to bargain until a new agreement could be worked out, Littleton
told Triple A that he was not prepared to bargain the next day.
II. PROCEDURAL HISTORY
The Regional Director of Region 15 issued a complaint on September 27, 1991,
alleging violations of sections 8(a)(1) and (5) of the National Labor Relations Act (the
“Act”). 29 U.S.C. §§ 158(a)(1) and (5). On March 26, 1993, the ALJ issued a decision
finding that the contract between Local 669 and Triple A was a section 8(f) prehire
agreement and not a section 9(a) collective bargaining agreement. Triple A Fire
Protection, 312 N.L.R.B. 1088, 1093-94 (1993), supplemental decision
315 N.L.R.B. 409
(1994). The General Counsel filed exceptions to this finding and the Board, on October
16, 1993, reversed this holding and determined that the agreement was a collective
bargaining agreement under section 9(a) of the Act. Triple
A, 312 N.L.R.B. at 1088-89.
The Board stated that Triple A “voluntarily and unequivocally granted recognition to the
11
Union as 9(a) representative.” Id. at 1088. Relying on Deklewa, the Board found that the
union’s section 9(a) status mandated that the six month statute of limitations as codified
in section 10(b) precluded an inquiry into Triple A’s defense that the union never
represented an uncoerced majority of Triple A’s employees.
Id. at 1089. Consistent with
these findings, the Board remanded the case to the ALJ for further disposition.
In the supplemental decision of January 19, 1994, the ALJ found that Triple A
violated sections 8(a)(1) and (5) of the Act by bypassing the proper bargaining channels
and dealing directly with employees, by unilaterally reducing wage rates for bargaining
unit employees, and by unilaterally ceasing to make required fringe-benefit payments to
established benefit plans. Triple A Fire Protection, 315 N.L.R.B. 409, 422 (1994). In
response to Triple A’s asserted defenses, the ALJ noted the Board’s ruling that section
10(b) barred Triple A’s defense that the union never represented an uncoerced majority,
and then the ALJ determined that the evidence did not support a finding that an impasse
existed, that the union bargained in bad faith, that the union waived its right to bargain
over changes, or that an economic hardship existed.
Id. at 416-22. 29 U.S.C. § 160(b).
On October 31, 1994, the Board affirmed the ALJ’s findings and conclusions and adopted
the order.
Id. at 409. We address each of the above issues in turn.
III. DISCUSSION
In reviewing a factual determination of the National Labor Relations Board, we
12
analyze the totality of the record to determine whether the conclusion is supported by
substantial evidence. Northport Health Serv., Inc. v. NLRB, 961 F.2d 1547, 1550 (11th
Cir. 1992). Substantial evidence constitutes more than a mere scintilla of evidence.
Id.
The Board’s order may only be enforced if the record reflects “such relevant evidence as
a reasonable mind might accept as adequate to support a conclusion.”
Id. (quoting
Universal Camera Corp. v. NLRB,
340 U.S. 474, 477,
71 S. Ct. 456, 459,
95 L. Ed. 456
(1951)). Furthermore, the Board cannot ignore relevant evidence that detracts from its
findings because such evasion detracts from a finding of substantial evidence.
Id.
A. CONVERSION OF THE SECTION 8(f) AGREEMENT INTO SECTION
9(a) STATUS
The Board found that the relationship between Local 669 and Triple A had been
converted into full section 9(a) status by virtue of Triple A’s October 1987 voluntary
recognition of Local 669 as having been designated by a clear majority of Triple A’s
employees as their exclusive bargaining representative. As noted above, Local 669
mailed the voluntary recognition form to Triple A with a cover letter calling attention to
the then recent Deklewa decision. The letter also enclosed a list of Triple A’s eight
employees indicating that they were members of Local 669. The voluntary recognition
form expressly and clearly called on Triple A to confirm “that a clear majority of . . . [its
13
employees] have designated, are members of, and are represented by . . . [Local 669 . . .
for the purposes of collective bargaining.” Because only eight employees were involved
and because Triple A’s owner himself, Turner, and his son Steve were among the eight,
the Board could reasonably conclude that Turner would have actually verified and known
that a clear majority of the employees had designated Local 669 as their exclusive
bargaining representative, as called for by the form he signed.12
Indeed, Triple A does not in its brief on appeal challenge the Board’s finding that
the conversion to full section 9(a) status was achieved. Moreover, on these facts the
NLRB has satisfied the Deklewa standard that a “voluntary recognition . . . [be] based on
a clear showing of majority support.” Deklewa, 282 N.L.R.B. at 1387 n.53. See MFP Fire
Protection, Inc. v. NLRB,
101 F.3d 1341, 1343 (10th Cir. 1996). Having established its
full section 9(a) status, it follows that Local 669 was entitled to a presumption of majority
support upon the expiration of the collective bargaining agreement at the end of March
1991. Similarly, both parties had a duty to bargain in good faith, and Triple A had a duty
12
Some of the Board’s decisions following Deklewa seem to suggest that the Board
might be applying a kind of estoppel doctrine, so that an employer that voluntarily recognizes a
union based solely on the union’s assertion of majority status is thereafter limited in its freedom
to repudiate same, even though the employer did not actually verify the majority status at the
time. See Hayman Electric, 314 N.L.R.B. 879, 887 n.8 (1994). As indicated in the text, the case
before us is much easier, involving as it does very strong evidence that Local 669 enjoyed
majority status at the time, and that Turner knew that. For this reason, and because Triple A has
not challenged the majority status (except for its coercion claim), we need not address an
estoppel type theory.
14
not to deal directly or make unilateral changes in violation of section 8(a)(5).13
B. TRIPLE A’s VIOLATIONS OF SECTIONS 8(a)(1) and (5)
1. Direct Dealing
Section 8(a)(5) creates an obligation on the part of the employer to bargain with
the incumbent union as the exclusive bargaining representative of its employees. “[T]he
employer’s statutory obligation is to deal with the employees through the union, and not
with the union through the employees.” General Electric Company, 150 N.L.R.B. 192
(1964). The repeated efforts of Turner and his son Steve to deal directly with employees
outside the normal channels of collective bargaining are amply supported in the record.
On a number of occasions, Turner attempted to dissuade employees from supporting the
union and create incentives for them to abandon their support for the union. These
actions are per se violations of sections 8(a)(1) and (5) of the National Labor Relations
Act. Medo Photo Supply Corp. v. NLRB,
321 U.S. 678, 684-88,
64 S. Ct. 830, 833-35,
88
L. Ed. 1007 (1944); Cagle’s Inc. v. NLRB,
588 F.2d 943, 948 (5th Cir. 1979). Therefore,
we enforce the Board’s order concerning these violations.
13
Consistent with Triple A’s failure to argue that there was no conversion to full section
9(a) status, Triple A does not argue that there was merely a section 8(f) relationship, and thus
upon expiration of the agreement, Triple A had no duty to bargain or other obligations to Local
669.
15
2. Unilateral Changes
The Board has taken the position that allowing employers to make unilateral
changes in the terms and conditions of employment which are subject to negotiation
would decrease the ability of parties to bargain effectively. Litton Financial Printing,
Div. v. NLRB, 501 U.S. 190, 198,
111 S. Ct. 2215, 2221,
115 L. Ed. 2d 177 (1991). As
the Supreme Court determined in NLRB v. Katz,
369 U.S. 736, 743,
82 S. Ct. 1107, 1111,
115 L. Ed. 2d 177 (1962), “[a] refusal to negotiate in fact as to any subject which is within
§ 8(d), and about which the union seeks to negotiate, violates § 8(a)(5) though the
employer has every desire to reach agreement with the union upon an over-all collective
agreement and earnestly and in all good faith bargains to that end.” Therefore, “an
employer commits an unfair labor practice if, without bargaining to impasse, it effects a
unilateral change of an existing term or condition of employment.”
Litton, 501 U.S. at
198, 111 S.Ct. at 2221 (citing NLRB v. Katz,
369 U.S. 736,
82 S. Ct. 1107,
8 L. Ed. 2d 230
(1962)).
In this case, the Board adopted the ALJ’s findings that Triple A violated sections
8(a)(5) and (1) of the Act by ceasing to make contributions to the pension and benefit
funds. The record supports this finding. On April 9, Local 669 and Triple A met for the
first formal bargaining session following the expiration of the collective bargaining
agreement. The parties read over Triple A’s proposed contract and Local 669 submitted
its own minor suggestions. At this meeting, Triple A submitted to Local 669 a list of 23
jobs that it had bid for in the last year and not received, allegedly due to the union wage
16
and benefit levels. Although the parties met for much of the day, excluding breaks and
lunch, they made little progress, but agreed to meet again in about three weeks, on April
30.
Three days later, the employer sent the union a letter indicating that it would stop
making payments to the employee pension and health funds on April 22. The union
representative received the letter on April 16 and responded merely by affirming the April
30, 1991, meeting. On April 22, 1991, the employer ceased funding the plans. Similarly,
the employer admitted in its answer that following April 21, 1991, employees were hired
at wage rates not specified in the expired collective bargaining agreement. At the
meeting on April 30, 1991, the union representative objected to the employer’s unilateral
implementation of its own plan. We find that this evidence substantially supports the
findings reached in the Board’s order.
C. TRIPLE A’S DEFENSE: THE MAJORITY WAS COERCED.
Triple A’s first defense is that Local 669 never represented an uncoerced majority
of its employees because the 1988-91 National Agreement discriminated in favor of
union members, and thus was coercive. The gist of Triple A’s argument is that various
provisions in the collective bargaining agreements which the parties have signed over the
years (and in the union constitution) discriminate in favor of union membership, and thus
the union majority which existed at the time of the October 1987 voluntary recognition
17
was a coerced majority. The Board did not address the merits of this challenge to Local
669's majority status, because it found that section 10(b) and the Board’s Deklewa
decision foreclosed this defense. 29 U.S.C. § 160(b).
It has long been recognized that section 10(b) prohibits employers from waiting
more than six months to attack the majority status of union representation at the time of
recognition.14 In 1960, the Supreme Court so held in Local Lodge No. 1424 (Bryan Mfg.
Co.) v. NLRB, 362 U.S. 411,
80 S. Ct. 822,
4 L. Ed. 2d 832 (1960). There, a union and an
employer had entered into a collective bargaining agreement containing a “union
security” clause at a time when the union lacked majority status. A “union security”
clause required all employees to become and remain members of the union. It was an
unfair labor practice to enter into such an agreement if at the time of execution the union
did not represent a majority of the employees. Ten months later, the employees filed an
unfair labor practice charge, alleging the union’s lack of majority status at the time of
execution and the consequent illegality of the continued enforcement of the agreement.
The Supreme Court held that, although an unfair labor practice occurred at the time of the
illegal recognition, the six-month limitations proviso of section 10(b) barred the unfair
labor practice complaint. Accord Daisy’s Originals, Inc. of Miami v. NLRB,
468 F.2d
14
See NLRB v. Viola Industries-Elevator Div.,
979 F.2d 1384, 1387 (10th Cir.
1992); Brower’s Moving & Storage, Inc.,
297 N.L.R.B. 207, 209 n.11 (1989) (“[A]n employer
may not defend against a refusal-to-bargain allegation on the basis that the original recognition,
occurring more than 6 months before charges have been filed in the proceeding raising the issue,
was unlawful. Any such defense is barred by Section 10(b) of the Act.”) (quoting Morse Shoe,
Inc.,
227 N.L.R.B. 391, 394 (1976)).
18
493, 501 (5th Cir. 1972) (citing International Assoc. of Machinists, AFL-CIO (Bryan
Mfg. Co.) v. NLRB, 362 U.S. 411,
80 S. Ct. 822,
4 L. Ed. 2d 832 (1960)).
In this case, the Board held that its decision in Deklewa had established that
unions in the construction industry which had achieved full section 9(a) recognition
should not have less favored status than unions outside the construction industry. Thus,
the Board held that the six-month limitations period of section 10(b) was applicable and
that a challenge to a union’s majority status would not be entertained after a lapse of
more than six months. We hold that the Board’s interpretation is reasonable. As
discussed above, the relationship between Local 669 and Triple A in this case was
converted to full section 9(a) status by the October 1987, voluntary recognition. Under
Deklewa, Local 669 thus enjoyed section 9(a) status, just as any other union outside the
construction industry. Deklewa, 282 N.L.R.B. at 1387 n.53. We find nothing unreasonable
in the Board’s conclusion in Deklewa and in the instant case; after achieving full section
9(a) status, Local 669 was entitled to full membership in section 9(a) status, including the
application of section 10(b).
Applying section 10(b) to the facts of the instant case, the Board declined to
entertain the merits of Triple A’s challenge to Local 669's majority status because Triple
A waited almost four years after the October 1987 voluntary recognition to object. We
find no error in the Board’s application of the section 10(b) bar to the facts of this case.15
15
Section 10(b) bars Triple A’s challenge to the majority status of Local 669
as of October 1987. We note, however, that section 10(b) does not leave a company
19
Accord MFP Fire Protection, supra, at 1343; see also NLRB v. Viola Industries-Elevator
Div., Inc.,
979 F.2d 1384, 1387 (10th Cir. 1992).
After applying section 10(b) pursuant to the Deklewa mandate that unions in the
construction industry which had achieved full section 9(a) status should not have less
favored status than unions outside the construction industry, the Board in the instant case
cited Casale Industries, 311 N.L.R.B. 951 (1993). Like the Board in the instant case, its
decision in Casale also relied upon Deklewa as authority for applying section 10(b) in an
analogous situation. Triple A observes that Casale was decided after the relevant events
in this case. Therefore, Triple A argues, Casale should not be applied retroactively. We
reject Triple A’s argument. As indicated above, the controlling authority relied upon by
the Board in the instant case was Deklewa, which predated the relevant events in this
case. Because Deklewa established that unions in the construction industry which had
achieved full section 9(a) status should not have less favored status than unions outside
the construction industry, it follows that the six-month limitation period of section 10(b)
without other remedies if a union no longer enjoys majority status. For example, one
treatise states:
An employer may withdraw recognition from an incumbant union at any
time when such withdrawal is not precluded by law, if it can affirmatively
establish either (1) that the union no longer enjoyed majority status when
recognition was withdrawn, or (2) that the withdrawal was predicated on a
reasonably grounded doubt as to the union’s continued majority status,
which doubt was asserted in good faith, based upon objective
considerations, and raised in a context free of employer unfair labor
practices.
1 The Developing Labor Law 571 (Patrick Hardin et al. eds., 3rd ed. 1992) (footnote
omitted). In the instant case, Triple A makes no such argument.
20
would be applicable. There is no retroactivity problem. 16
D. TRIPLE A’s OTHER DEFENSES
As the administrative law judge noted, an employer may rebut a showing that
unilateral changes were made by asserting the existence of certain affirmative defenses,
notably that the parties reached an impasse, delay or bad faith by the union, and economic
hardship.
Triple A argues in its defense that the negotiations had reached an impasse at the
time it made its unilateral changes. As this court has stated, an “[i]mpasse is a deadlock
in negotiations and presupposes [good faith] negotiations.” Electric Machinery Co. v.
NLRB, 653 F.2d 958, 963 (5th Cir. 1981).17 The determination of impasse involves an
inquiry into “a myriad of circumstances,” including (1) the background and relationship
of the parties, (2) their willingness to negotiate, (3) the extent and frequency of
bargaining, (4) the integrity of the bargaining, and (5) the good or bad faith of the parties.
Id. at 963 n.5.
At the point Triple A decided to institute its unilateral changes, there had been
16
Deklewa was decided on February 20, 1987, before the relevant events in this
case. Thus, Triple A’s discussion of cases questioning the retroactivity of Deklewa is not
relevant to this case.
17
In Bonner v. City of Pritchard, 661 F.2d 1206 (11th Cir. 1981) (en banc), this court
adopted as binding precedent all of the decisions of the former Fifth Circuit handed down prior
to the close of business on September 30, 1981.
Id. at 1209.
21
only one formal session to discuss the respective positions of the parties. The
negotiations were still in a stage of exploration, as both sides were still reading and
considering the positions of the other party. Triple A did not even have possession of a
full union proposal for its consideration. Although Triple A argues that the union’s
failure to submit a full-length proposal at this early point in the bargaining process
indicated their bad faith, and a “take-it-or-leave-it” approach, the union had submitted
counter-proposals at the April 9 meeting and had specifically agreed to continue
negotiations in the future. When Triple A mailed the letter to the union on April 12
indicating that it was going to make unilateral changes, and when it actually made such
changes on April 22, the parties had already agreed to a bargaining session later in the
month. We readily conclude that there is substantial evidence in the record as a whole to
support the finding that the parties had not reached an impasse in bargaining.18
18
Triple A also argues in defense of the unfair labor charges that Local 669's bad faith
justified its unilateral changes. The company asserts that, from the beginning of negotiations,
the union had absolutely no intention of entering into an agreement separate from the National
Agreement negotiated with the multi-employer collective bargaining unit. The union simply
expected Triple A to sign onto the National Agreement as it had on three previous occasions. In
support of its allegation of bad faith, Triple A produced evidence of Phillips’s behavior at the
April 9 meeting, the union’s failure to bring a comprehensive counter-proposal to the first
meeting, and the union’s history of relying upon the National Agreement. The company also
argues that the union representatives simply read aloud the company proposal at the April 9
negotiating session.
At the initial April 9 meeting, the union examined the employer’s proposal and displayed
a willingness to extract all references from its own counter-proposals to the multi-employer
bargaining unit. Furthermore, while Phillips himself had never negotiated an agreement separate
from the National Agreement, he testified that Local 669 had negotiated agreements separate
from the National Agreement. While the record contains conflicting evidence (with inferences
of bad faith on the part of both parties), we cannot conclude that the ALJ’s finding is without
substantial support in the record. Accordingly, we reject Triple A’s bad faith defense.
22
Triple A argues that, in the event that this court finds that an impasse did
not exist at the time unilateral changes were made, an exception to the rule of impasse
applies in this case. Triple A asserts that when, upon expiration of a collective bargaining
agreement, the union unreasonably delays or stalls the bargaining process, the employer
may make unilateral changes without bargaining to impasse if it first notifies the union of
its intent to make these changes. See NLRB v. Pinkston-Hollar Construction Services,
Inc., 954 F.2d 306, 311 (5th Cir. 1992).
Triple A contends that Pinkston-Hollar supports its argument that a waiver of
rights occurred. However, the facts of Pinkston-Hollar are very different from those of
the instant case. In Pinkston-Hollar, the employer and the union had conducted months of
formal bargaining sessions. Finally, after informing the union of its interest in
considering a new benefits package, and after several unsuccessful attempts to get a copy
of the existing union benefits package, the employer informed the union that it intended
to cease participation in the union plan and substitute its own plan effective some forty
days hence, and invited the union to bargain over the matter. In two intervening
bargaining sessions, the union declined to bargain over the issue. When reminded that
the company planned to implement the change, the union made no request for a
postponement. The ALJ found that the union failed to act with due diligence. Assuming
arguendo that the Pinkston-Hollar rule is applicable in this circuit, we find that the facts
of this case are clearly insufficient to justify an exception to the general duty to bargain to
impasse.
23
Here, the negotiations had barely begun. Local 669 was not found guilty of delay,
and in fact there was only minimal delay before Triple A instituted unilateral changes.
Moreover, Triple A’s April 12, 1991, ultimatum was not comparable to the Pinkston-
Hollar notice. Triple A’s letter gave only ten day’s advance notice, and only six days
from Local 669's receipt. Moreover, the April 30 negotiation session had already been
scheduled before the unilateral changes were announced.
We return next to Triple A’s waiver argument. In concluding that the union did
not waive its statutory right to bargain over any terms and conditions of employment, the
administrative law judge relied on the Board’s decision in Bottom Line Enterprises, 302
N.L.R.B. 373 (1991). In Bottom Line, the Board noted that “when . . . the parties are
engaged in negotiations, an employer’s obligation to refrain from unilateral changes
extends beyond the mere duty to give notice and an opportunity to bargain; it
encompasses a duty to refrain from implementation at all, unless and until an overall
impasse has been reached on bargaining for the agreement as a whole.”
Id. at 374.
Bottom Line recognized two exceptions to this general rule: when a union delays the
process of bargaining and when “economic exigencies compel prompt action.”
Id.
Under the circumstances here--after meeting for the first time on April 9 and, at that
meeting, establishing a date to meet for a second discussion--substantial evidence
supports the finding that the union intended to continue negotiations and did not lack due
diligence in bargaining. We find that there is no merit to the employer’s argument that
the union waived its right to bargain.
24
Finally, we find no merit to Triple A’s contention that its economic situation
justified the unfair labor practices. A situation of economic necessity requires either a
showing of “extenuating circumstances” or a “compelling business justification” that is
not present here. Winn-Dixie Stores, 243 N.L.R.B. 972, 974 n.9 (1979). The mere assertion
that the company lacks the financial ability to make the required fringe benefit payments
does not justify these unilateral changes. Stevens & Assoc. Constr. Co.,
307 N.L.R.B. 1403,
1403 (1992). The fact that Turner submitted a list of 23 jobs that he had bid for and lost
in the past year did not establish that the company was in grave economic difficulty.
Indeed, the parties did not even discuss the issue at the April 9 meeting. The employer
clearly did not satisfy its burden and establish that its economic situation warranted a
unilateral change in the terms and conditions of employment.
IV. CONCLUSION
In the instant case we find substantial evidence to support the Board’s conclusion
that Triple A violated sections 8(a)(1) and (5) of the Act by directly dealing with
employees outside the bargaining process, by unilaterally ceasing to make payments to
the fringe benefit plans, and by unilaterally reducing the wage rates for bargaining unit
employees. We find no error in the Board’s decision applying section 10(b) and
declining to address the merits of Triple A’s coerced majority defense. We also find no
merit to the employer’s defenses regarding impasse, bad faith, or economic necessity.
25
The Board’s order is ENFORCED.
26
