USCA1 Opinion
July 27, 1993
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 92-1993
TRUCK DRIVERS & HELPERS UNION, LOCAL NO. 170,
Petitioner,
v.
NATIONAL LABOR RELATIONS BOARD,
Respondent.
____________________
GIRARDI DISTRIBUTORS, INC.,
Intervenor.
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ERRATA SHEET
The opinion of this Court issued on May 26, 1993, is amended
as follows:
Page 5, line 21, capitalize "u" in "union".
Page 5, line 23, capitalize "u" in "union".
Page 12, line 8, substitute "183679" for "18679".
Page 19, footnote 12, line 5, substitute "111 S. Ct. 671" for
"xx U.S. xx".
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 92-1993
TRUCK DRIVERS & HELPERS UNION, LOCAL NO. 170,
Petitioner,
v.
NATIONAL LABOR RELATIONS BOARD,
Respondent.
____________________
GIRARDI DISTRIBUTORS, INC.,
Intervenor.
____________________
ON PETITION FOR REVIEW OF AN ORDER OF
THE NATIONAL LABOR RELATIONS BOARD
____________________
Before
Torruella, Cyr and Stahl,
Circuit Judges.
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_____________________
Randall E. Nash, with whom Grady and Dwyer, was on brief for
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petitioner.
Robert J. Englehart, Attorney, with whom Jerry M. Hunter,
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General Counsel, Yvonne T. Dixon, Acting Deputy General Counsel,
________________
Nicholas E. Karatinos, Acting Associate General Counsel, Aileen
_____________________ ______
A. Armstrong, Deputy Associate General Counsel, and Linda
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Dreeben, Supervisory Attorney, National Labor Relations Board,
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were on brief for respondent.
Henry F. Telfeian, with whom Keck, Mahin & Cate, was on
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brief for intervenor.
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May 26, 1993
____________________
TORRUELLA, Circuit Judge. In this case we review a
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decision and order of the National Labor Relations Board (the
"Board"). The General Counsel of the Board brought an unfair
labor practice complaint against an employer based on three
charges that it had previously dismissed. The facts underlying
these charges occurred more than six months prior to the filing
of the formal complaint by the General Counsel. The Board
dismissed the complaint as barred by the six-month statute of
limitations prescribed by section 10(b) of the National Labor
Relations Act ("NLRA"), 29 U.S.C. 160(b). In addition, the
Board rejected the General Counsel's alternative effort to
resuscitate these dismissed charges, finding amendment to a
timely charge improper since the charges were not "closely
related." We affirm the first decision, but reverse on the
latter.
I
I
_
BACKGROUND
BACKGROUND
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The Union represents certain employees of Girardi
Distributors, Inc., (the "Company"), a liquor distributor that
operates several distribution facilities in northwestern
Massachusetts. Over the years, the employees and the Company
entered into collective bargaining agreements, the most recent of
which covered from 1986 to May 19, 1989. In April of 1989, the
Union and the Company began negotiations for a new agreement.
The negotiations did not progress well. On May 19,
1989, the Union filed its first unfair labor practice charge
-2-
(case 1-CA-26394), alleging violation of 8(a)(1), (3), & (5)
of the NLRA, 29 U.S.C. 158(a)(1), (3), & (5).1 The General
Counsel of the Board dismissed the charge through the Office of
the Regional Director on July 19, 1989. Addressing the main
thrust of the charge, the Regional Director refused to bring a
complaint because, in its view, the investigation did not reveal
sufficient evidence of bad faith bargaining. Negotiations
between the Company and the Union continued during the Regional
Director's investigation. As a result of the investigation, the
charges were dismissed and the Union did not appeal the
dismissal.
The Union remained dissatisfied with the negotiations
and felt certain that the Company sought to bust the Union. In
June, the Company made its "last, best, and final offer," which
significantly undercut the wages and benefits received by the
members of the bargaining unit under the 1986-89 labor agreement.
Despite the final offer the parties continued to hold bargaining
sessions. The Union filed its second charge (case 1-CA-26561) on
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1 Section 8(a)(1) makes it an unfair labor practice for an
employer to "interfere, restrain or coerce employees" in the
exercise of their section 7 rights to engage in "concerted
activities for the purpose of collective bargaining or other
mutual aid or protection." 29 U.S.C. 157, 158(a)(1).
Section 8(a)(3) makes it an unfair labor practice for an
employer "to encourage or discourage membership in any labor
organization" by "discrimination in regard to hire or tenure."
Id. 158(a)(3).
___
Section 8(a)(5) requires that an employer "bargain
collectively with the representatives of his employees" and to do
so in good faith. See id. 158(a)(5); NLRB v. Insurance
___ ___ ____ _________
Agents' Int'l Union, 361 U.S. 477, 498 (1960).
___________________
-3-
August 4, 1989, alleging the same statutory violations but
providing more factual support for the bad faith bargaining
claim. The Regional Director again dismissed the charges and the
General Counsel's National Office of Appeal upheld the dismissal.
On September 8, 1989, the Union filed its third charge
(case 1-CA-26660, which was amended several times) on the same
general grounds with further factual support. Certain statements
made by management, which were held improper under 8(a)(1),
were the subject of an informal settlement agreement,2 while the
other charges were dismissed. The Union unsuccessfully appealed
the dismissal of the other charges.
By the end of 1989, despite numerous negotiation
sessions, the Union and the Company had not reached an agreement.
After the Union lost its appeal on the third set of charges, the
Company withdrew its final offer. On April 14, 1990, the Company
purportedly subcontracted the bargaining unit work to Suburban
Contract Carriers, Inc. ("Suburban"), terminated its union
employees, and withdrew its recognition of the Union as the
exclusive collective bargaining representative of the bargaining
unit.
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2 The Regional Director approved the unilateral informal
settlement on February 22, 1990. The Company complied with the
settlement's posting requirement. The case, however, was never
closed because of the pendency of a fourth set of charges (case
1-CA-27243) filed in April of 1990. The Regional Director
vacated and set aside the settlement agreement when it issued the
Consolidated Complaint that sought to reinstate the three charges
dismissed in 1989. The Union's second basis for avoiding the
statute of limitations pertains to this settlement agreement and
is discussed infra.
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-4-
On April 16, 1990, the Union filed a fourth set of
charges (case 1-CA-27243), alleging the Company violated
8(a)(1) & (5) by refusing to supply the name of the subcontractor
to the Union, and by unilaterally subcontracting the bargaining
unit work. Finally, the General Counsel filed a complaint and
set the hearing date for November 19, 1990.
On the morning of the hearing, the General Counsel
received new testimony from the principals of Suburban, David
Murphy and Peter DeVito. The proceedings were adjourned with the
consent of the parties. Based on the testimony of Murphy and
DeVito, the Regional Director further investigated the Union's
charges and procured testimony from Kenneth White, the Company's
former operations manager, and Daniel Maroni, another employee
close to management, which was damaging to the Company.
In March of 1991, the Regional Director issued a
Consolidated Complaint, which revived the three charges dismissed
in 1989 (cases 1-CA-26394, 1-CA-26561, 1-CA-26660), and an
Amended Complaint, which amended case 1-CA-27243. The
Consolidated Complaint alleged that the Company had engaged in
bad faith bargaining from April through September of 1989 and had
unlawfully implemented its final offer. The Amended Complaint
charged that failure to provide the name of the subcontractor and
withdrawal of recognition of the Union violated sections 8(a)(1)
& (5), and that subcontracting the bargaining unit's work to a
subcontractor that was the alter ego of the Company and
discharging the Union employees violated sections 8(a)(1) & (3).
-5-
With respect to the Amended Complaint, the
Administrative Law Judge ("ALJ") found that the Company had
violated the NLRA and ordered the Company to cease and desist
from subcontracting the bargaining unit work anew, to recognize
the Union, and to restore the status quo in existence before the
false subcontractor was engaged. With respect to the
Consolidated Complaint, the ALJ found that the General Counsel
had stated a prima facie case that the Company had bargained in
bad faith, that impasse had not been reached, and that
implementation of the final offer was unlawful. Nevertheless,
the ALJ dismissed the Consolidated Complaint because under
10(b) the charges dismissed in 1989 could not be reinstated more
than six months after the acts underlying those charges had
occurred. The ALJ found that the General Counsel did not satisfy
the fraudulent concealment exception to the statute of
limitations because it failed to demonstrate that facts had been
fraudulently concealed, and because the Union and the General
Counsel did not exercise due diligence in discovering the factual
basis for the charges. The Board affirmed and adopted the
decision and order of the ALJ.
The Union appeals the dismissal of the Consolidated
Complaint. The dismissed charges warrant reinstatement,
according to the Union, because the Company fraudulently
concealed the operative facts supporting the charges through
affirmative acts of concealment and by a "self-concealing"
scheme, and because the Union and the General Counsel exercised
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due diligence to uncover the evidence. Alternatively, the Union
asserts that the dismissed 8(a)(3) and (5) allegations were
"closely related" to the 8(a)(1) charges in the informal
settlement agreement reached in case 1-CA-26660. As the
agreement was later set aside by the Regional Director, the
8(a)(3) and 8(a)(5) charges in the Consolidated Complaint may be
reinstated by amendment to the now timely 8(a)(1) charge.
II
II
__
Section 10(b) of the NLRA prescribes a six-month
statute of limitations for the filing of unfair labor practice
charges.3 In Ducane Heating Corp., 273 N.L.R.B. 1389 (1985),
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enforced without opinion, 785 F.2d 304 (4th Cir. 1986), the Board
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extended the breadth of 10(b) to prohibit the reinstatement of
dismissed charges outside the six-month period. The Board also
held that the limitations period is tolled when "a respondent
fraudulently conceals the operative facts underlying the alleged
violation." Ducane Heating, 273 N.L.R.B. at 1390. The period
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will begin to run anew when "the charging party knows or should
have known of the concealed facts." Id. In effect, the Board
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borrowed the federal doctrine of fraudulent concealment, which is
an "equitable doctrine read into every federal statute of
limitations." Holmberg v. Armbrecht, 327 U.S. 392, 397 (1946);
________ _________
O'Neill, Ltd., 288 N.L.R.B. 1354, 1988 WL 214303 at * 57.
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3 "[N]o complaint shall issue based upon any unfair labor
practice occurring more than six months prior to the filing of
the charge with the Board and the service of a copy thereof upon
the person against whom such charge is made . . . ." 29 U.S.C.
160(b).
-7-
While the language of 10(b) does not apply on its
face to the reinstatement of dismissed charges, the Board is free
to fill a "gap" left in the statute by applying 10(b) to
dismissed charges and by fashioning its own rule of fraudulent
concealment to toll the statute of limitations. Chevron USA,
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Inc., v. Natural Resources Defense Council, Inc., 467 U.S. 837,
____ ________________________________________
843-44 (1984). Traditionally the Board has been accorded
"deference with regard to its interpretation of the NLRA as long
as its interpretation is rational and consistent with the
statute." NLRB v. United Food & Commercial Workers Union, Local
____ _____________________________________________
23, 484 U.S. 112, 123 (1987). The Court of Appeals for the
__
District of Columbia found the application of 10(b) to
dismissed charges to be reasonable and consistent with the
underlying policy of the statute in District Lodge 64, Int'l
__________________________
Ass'n of Machinists and Aerospace Workers v. NLRB, 949 F.2d 441,
__________________________________________ ____
445 (D.C. Cir. 1991). We agree with that determination. In the
absence of a clear statement from Congress on the application of
the fraudulent concealment tolling doctrine in the 10(b)
context, we must defer to the Board's reasonable interpretation.
Chevron, 467 U.S. at 843-44. We turn now to the Board's
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formulation of its interpretation and to whether it is
permissible.
The Board's reluctance to delimit the precise contours
of the fraudulent concealment doctrine as applied to 10(b) has
been a matter of some frustration for the federal courts. See
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NLRB v. O'Neill, 965 F.2d 1522, 1527 (9th Cir. 1992); District
____ _______ ________
-8-
Lodge 64, 949 F.2d at 449 (remanding fraudulent concealment issue
________
because court was "unable to make enough sense of the Board's
opinion to justify affirmance"). In this case, the Board,
adopting the ALJ's reasoning and conclusions, purported to rely
on the general federal fraudulent concealment doctrine as
explained by an earlier Board decision, O'Neill, Ltd., 288
______________
N.L.R.B. 1354 (1988), and by the Court of Appeals for the
District of Columbia in Hobson v. Wilson, 737 F.2d 1, 33-36 (D.C.
______ ______
Cir. 1984), cert. denied sub. nom., Brennan v. Hobson, 470 U.S.
_______________________ _______ ______
1084 (1985). Nevertheless, the Board appears to have adopted a
rule that is different from the one upon which it claims to rely.
In Hobson, the Court of Appeals for the District of
______
Columbia recognized two means by which fraudulent concealment can
occur -- by affirmative acts of concealment or by a "self-
concealing" wrong or scheme. The Hobson court held that a
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plaintiff may establish a self-concealing wrong by demonstrating
that the defendant "engage[d] in some misleading, deceptive or
otherwise contrived action or scheme, in the course of committing
___________________________
the wrong, that is designed to mask the existence of a cause of
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action." Hobson, 737 F.2d at 34-35. The court announced a broad
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and inclusive understanding of self-concealing wrongs, stating
that "[t]he deception may be as simple as a single lie or as
complex as [a scheme], so long as the defendants conceal 'not
only their involvement, but the very conduct itself.'" Id. at
___
34-35 (citation omitted).
Based on Hobson and its belief that O'Neill, Ltd.
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-9-
adopted Hobson's reasoning, the Union contends that it has
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demonstrated fraudulent concealment and that the statute of
limitations was tolled. The Union's argument proceeds roughly as
follows: Normally, in the course of negotiation each party at a
bargaining session attempts to force the other side to accept
concessions. The NLRA requires that the parties meet and bargain
in good faith, but does not require that they reach agreement.
See NLRB v. Insurance Agents' Int'l Union, 361 U.S. 477, 490-01
___ ____ ______________________________
(1960); Soule Glass & Glazing Co. v. NLRB, 652 F.2d 1055, 1103
__________________________ ____
(1st Cir. 1981) ("Adamant insistence on a bargaining position . .
. is not in itself a refusal to bargain in good faith.")
(citation omitted). Therefore, in the average "surface"
bargaining case (bargaining without the intent to reach an
agreement) the central issue is motive. As the Union perceives
the issue, the deception committed by the Company was
misrepresenting bad faith or surface bargaining as good faith
bargaining. The self-concealing wrongs were the statements to
the Board that the Company honestly put forward negotiating
positions with a good faith bargaining intent. In the Union's
view, the Company prevented the Union from discovering the cause
of action, despite the Union's due diligence, by fraudulently
concealing the operative fact -- its bad faith. In effect, the
Union argues that tolling continues as long as the concealment
has so impaired its case that it is unable to furnish to the
General Counsel with, or the General Counsel cannot discover,
sufficient evidence to file a formal complaint before the Board.
-10-
We fully understand the rationale supporting the
Union's stance. In this case, the Union filed three separate
charges alleging essentially the same grievance -- that the
Company was surface bargaining and its true intent was to destroy
the Union. These charges were dismissed on three separate
occasions and twice on appeal. The General Counsel explained, in
its memorandum in support of exceptions to the ALJ decision, that
at the time the charges were dismissed, the Company's bargaining
table conduct, the first and generally exclusive source of
evidence, revealed no indications of bad faith. Indeed, the
evidence showed that the parties were meeting and that various
proposals were being discussed. Despite the Union's claims that
the Company intended to destroy the Union, there was no concrete
evidence of that intention. The General Counsel asserted,
therefore, that it would not have brought the complaint because
the extensive paper trail compiled by the Company indicated that
it was bargaining in good faith while at the table. The General
Counsel denied that it knew all the facts subsequently considered
by the ALJ to support a prima facie case of surface bargaining.
Nonetheless, the General Counsel stated that even if it had known
the facts, it would not have brought a complaint given the
Company's conduct during discussions at the bargaining table.
Consequently, from the Union's perspective, the conduct
at the table and the position statements submitted to the
Regional Director defending against the charges, which were
designed to deceive the Union and the General Counsel, were
-11-
sufficient to conceal the cause of action and therefore toll the
statue of limitations under the self-concealing wrong theory.
The cause of action was concealed because the General Counsel
would not bring the complaint without direct evidence of illegal
intent if the bargaining table conduct at least superficially
appeared to be in good faith. Furthermore, because the General
Counsel's dismissal of the charges is unappealable,4 whether a
cause of action is concealed must be decided according to its
criteria.
While it quoted from Hobson, the ALJ's decision did not
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rely on Hobson's statement of the "self-concealing wrong" theory.
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The ALJ stated that the Board had never found fraudulent
concealment without some affirmative act, even if it was simply
affirmative verbal misrepresentation. Girardi Distributors,
______________________
Inc., 307 N.L.R.B. No. 236, 1992 WL 18679 at *38 n.24 (citing
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Brown & Sharpe Mfg., 299 N.L.R.B. No. 89 (1990); Kanakis Co., 293
___________________ ___________
N.L.R.B. No. 50 (1989); Strawsine Mfg., 280 N.L.R.B. 553 (1986);
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Garrett Railroad Car & Equipment, Inc., 275 N.L.R.B. 1032
___________________________________________
(1985)). The ALJ specifically noted that the Board's decision in
O'Neill, Ltd., which also quoted extensively from Hobson, did not
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4 Procedurally, the charging party files a complaint with the
Regional Director and if the Regional Director decides to dismiss
the charge its decision may be appealed only to the General
Counsel, not to the Board or the courts. Consequently, the
General Counsel's decision to dismiss is final. See United Food
___ ___________
& Commercial Workers Union, 484 U.S. at 118-19 & nn.8 & 10. We
___________________________
note the force of the Union's analogy to the rule that a party
who commits a "fraud on the court" should not expect the benefits
of repose bestowed by the statute of limitations. See Hazel
___ _____
Atlas Glass Co. v. Hartford Empire Co., 322 U.S. 238 (1944).
_______________ ___________________
-12-
turn on Hobson's expansive definition of what sort of self-
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concealing wrong could be considered fraudulent concealment
sufficient to toll the statute of limitations. The ALJ read
O'Neill, Ltd. to require a showing that "there were affirmative
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misrepresentations made (exculpatory statements aside) with
respect to the dismissed charges," and that there was a self-
___
concealing scheme in place (as opposed to a single lie). Girardi
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Distrib., 1992 WL 18679 at *29 (citing O'Neill, Ltd., 288
________ ______________
N.L.R.B. at 1355). Under this formulation, there must be an
affirmative misrepresentation other than telling the General
Counsel and the charging party that the accused is not engaged in
surface bargaining and supplying rational excuses for the
accused's conduct at the bargaining table. See id. at *38
___ ___
n.23.5 The ALJ's conception of the scheme necessary seems
rather great indeed; he appeared to require a showing of "some
master plan of contingencies that would be triggered by unfolding
events." Id. at *29.
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We agree with the ALJ that, to the extent O'Neill, Ltd.
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discusses the more relaxed standard of self-concealing wrongs
explained in Hobson, those statements are only dicta. O'Neill,
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5 The ALJ relied on the Board's statement in O'Neill, Ltd. that
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"the mere fact that a party makes exculpatory representations
does not, by itself, constitute fraudulent concealment or serve
to toll the 10(b) period." 288 N.L.R.B. 1353, n.10 (1988)
(citing Al Bryant, Inc., 260 N.L.R.B. 128, 133-35 (1982)).
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We note that we find this rule rather peculiar because we can
think of no reason to distinguish "exculpatory" statements to the
Board designed to avoid a formal complaint from any other lie
that a party may proffer to avoid sanctions for unfair labor
practices.
-13-
Ltd. did not announce the rule upon which the Union now urges
____
that we rely.6 It is impossible to say what deceptive actions,
short of proof of a complicated scheme replete with contingency
plans to get rid of the Union, would satisfy the Board. It is
clear, however, that the deception that the Board now requires is
significantly more than the "single lie" which the Hobson court
______
rule would accept.
Irrespective of the extent of the effort to conceal,
the fraudulent concealment doctrine will not save a charging
party who fails to exercise due diligence, and is thus charged
with notice of a potential claim. Girardi Distrib., at * 28-29;
________________
Hobson, 737 F.2d at 35.7 Normally, when the party seeking to
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toll the statute by fraudulent concealment alleges affirmative
acts of concealment, the burden of showing due diligence falls on
that party. Morales v. Rosa-Viera, 815 F.2d 2, 5 (1st Cir.
_______ __________
1987). The opposite rule applies, however, when the charging
party alleges that the statute is tolled by a self-concealing
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6 We note parenthetically that the Board would probably be able
to develop a new rule, or narrow a present one, without offending
decisions limiting an agency's authority to apply such rules
retroactively. See Chevron Oil Co. v. Huson, 404 U.S. 97 (1971);
___ _______________ _____
District Lodge 64, 949 F.2d at 446-48. The absence of a clear
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rule would negate any claim of reasonable reliance, which is
necessary for a finding that application of the new rule would
cause "substantial inequitable results." See District Lodge 64,
___ _________________
949 F.2d at 448.
7 The party seeking the shelter of the 10(b) affirmative
defense bears the burden of proving "clear and unequivocal notice
-- either actual or constructive -- of the acts that constitute
the alleged unfair labor practice." John Morrell & Co., 304
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N.L.R.B. No. 116, 1991 WL 181868 at *5; Pennsylvania Energy
____________________
Corp., 274 N.L.R.B. 1153, 1155 (1985).
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-14-
wrong, in which case the defendant bears the burden. Hobson, 737
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F.2d at 35. Thus, "[w]hen tolling is proper because the
defendants have concealed the very cause of action, . . . they
have the burden of coming forward with any facts showing that the
plaintiff could have discovered . . . the cause of action if he
had exercised due diligence." Id. (quoting Richards v. Mileski,
___ ________ _______
662 F.2d 65, 71 (D.C. Cir. 1981)). In another significant
departure from the Hobson decision, the Board here placed the
______
burden of proving the exercise of due diligence in discovering
the fraud on the party seeking to toll the statute of
limitations. The significance of which party bears the burden of
proof on due diligence is palpable in this case because, in large
measure, the Board's decision turned on the utter absence of
evidence of due diligence by the Union and the General Counsel.
Nevertheless, because courts apportion this burden differently,
compare Hobson, 737 F.2d at 35 (placing burden on party seeking
_______ ______
shelter of statute of limitations in self-concealing wrong case)
with NLRB v. O'Neill, 965 F.2d 1522, 1527 (9th Cir. 1992)
____ ____ _______
(placing burden on party seeking to toll statute of limitations
in self-concealing scheme case), we cannot say that the Board's
decision is unreasonable and therefore must defer to it.
Chevron, 467 U.S. at 843-44.
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Having established the legal tests governing the
Board's decision, we turn to the Board's findings of fact. We
must accept the Board's factual findings if they are supported by
substantial evidence on the record when considered as a whole.
-15-
29 U.S.C. 160(f); Universal Camera Corp. v. NLRB, 340 U.S. 474,
______________________ ____
488 (1951). In this case, the Board adopted the ALJ's findings
and conclusions. The ALJ found that the Company did not
fraudulently conceal by affirmative actions the operative facts
underlying the dismissed charges. The ALJ exhaustively reviewed
the evidence and found that the General Counsel had made a prima
facie case of bad faith or surface bargaining based on (1)
evidence of the Company's generalized intent to bust the Union;8
(2) the discrepancy between wage proposals for union workers and
the wages paid to nonunion workers at other Company facilities;
(3) the solicitation of replacement workers early in the
bargaining process; (4) the expressed belief that the proposals
would provoke a strike; and (5) the statements of operations
manager, Ken White, indicating that better wages and benefits
would be provided if the employees renounced the Union. The ALJ
therefore concluded that the operative facts could not have been
fraudulently concealed because the Union and the General Counsel
knew the facts supporting the prima face case when the dismissed
charges were originally filed by the Union. Finally, the ALJ
determined that the dismissed charges could not be reinstated
because the Union and the General Counsel had offered no evidence
that they had exercised due diligence to uncover the alleged
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8 The record evidence showed that the Union membership
understood that the Company wanted to get rid of the Union. This
general animus began after George Girardi, Jr. took over
management of the Company from his father. As the Union notes,
everyone was aware of this animus after 1985, and, despite this
antipathy, the parties were able to reach an accord in 1986.
-16-
fraud.
Given the narrow scope of the fraudulent concealment
doctrine in the 10(b) context, we cannot conclude that the
Board's findings of fact and conclusions are unsupported by
substantial evidence in the record. Consequently, they must
stand. The strength of the Union's argument proceeded from the
evidence of intent garnered from statements made by former
insiders not available to the General Counsel or the Union at the
time the charges originally were filed. The Board was not
swayed; it explicitly held that the new evidence did not alter
its calculus.
Clearly there is an incongruity between what the Board
and the General Counsel find sufficient to state a claim of
surface bargaining. The Board's prima facie case, and hence its
finding of notice, rests on facts which it holds constitute
constructive, as opposed to actual, evidence of bad faith or
intent. The ALJ asserted that a surface bargaining case must be
made on the basis of the "totality of respondent's observable
conduct." Girardi Distrib. at *29. In contrast, the General
_________________
Counsel contended in this case that it normally would not bring a
formal unfair labor practice complaint, irrespective of the
surrounding circumstances, in cases in which the bargaining table
conduct appeared to be in good faith. The ALJ specifically
rejected the General Counsel's suggestion to follow the Hobson
______
court's statement of fraudulent concealment, stating, "[i]f I
agreed with the position of the General Counsel, virtually every
-17-
surface bargaining case would be potentially exempt from the
strictures of section 10(b), needing only some newly discovered
evidence of intent to surface." Id.
___
This incongruity places the charging party in a
difficult position. A charging party cannot get the General
Counsel to file a timely complaint if it only possesses
circumstantial evidence supporting a finding of bad faith. On
the other hand, its timely charges that the General Counsel
unappealably dismissed will not be reinstated if the General
Counsel later finds direct evidence of bad motive because the
Board construes evidence of constructive intent based on the
totality of the circumstances as notice of the claim. That is
what happened in this case.
While we believe the Court of Appeals for the District
of Columbia's construction of the fraudulent concealment
doctrine urged by the General Counsel and the Union to be a
better and more equitable rule for the victims of surface
bargaining, the Board ultimately controls the terms of 10(b)
unless its interpretation is unreasonable. We may not supplant
the Board's judgment since the Board reasonably adopted a less
expansive fraudulent concealment doctrine that it viewed as more
faithful to industrial relations policy favoring finality in the
resolution of labor disputes. We note, however, that under the
present formulation, the General Counsel will rarely demonstrate
fraudulent concealment in surface bargaining cases. Therefore,
instead of waiting for the smoking gun, the General Counsel
-18-
should search diligently for circumstantial evidence of unlawful
intent as understood by the Board to prevent sound unfair labor
practice charges from being barred by the 10(b) statute of
limitations. Investigation should include interviewing senior
bargaining representatives or company presidents concerning their
intention to bargain in good faith and their union animus, if
only to later assert misrepresentation that tolls the statute of
limitations.9
III
III
___
We turn now to the Union's second argument to avoid the
statute of limitations bar. The third set of charges dismissed
in 1989 (case 1-CA-26660) involved several charges. It alleged,
inter alia, violations of 8(a)(5) for bad faith bargaining and
___________
8(a)(1) based on statements made by the Company's operations
manager promising improved wages and working conditions if the
workers renounced the Union.10 All the charges except the
8(a)(1) charge, were dismissed. The 8(a)(1) charge was the
subject of a unilateral informal settlement agreement approved by
the Regional Director.11 Because settlement agreements may be
set aside if the provisions are breached or subsequent unfair
labor practices are committed, see Universal Blanchers, Inc., 275
___ _________________________
____________________
9 The General Counsel stated before the Board that such
interviews would be fruitless because individuals do not admit to
unfair labor practice violations.
10 See supra note 1.
___ _____
11 The Company agreed to post the appropriate notice to remedy
the infraction.
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N.L.R.B. 1544, 1545 (1985), the Regional Director did not close
case 1-CA-26660. The Regional Director rescinded the settlement
agreement and asserted that the Consolidated Complaint was
"closely related" to the then-resurrected 8(a)(1) charge, and
therefore not time-barred.12 The Union proffers this same
argument on appeal.
In Nickles Bakery of Indiana Inc., 296 N.L.R.B. 927
________________________________
(1989), the Board summarized the closely related test established
in Redd I, Inc., 290 N.L.R.B. 1115 (1988):
____________
First, the Board will look at whether
otherwise untimely allegations involve
the same legal theory as the allegations
in the pending timely charge. Second,
the Board will look at whether the
otherwise untimely allegations arise from
the same factual circumstances or
sequence of events as the pending timely
charge. Finally, the Board will look at
whether a respondent would raise similar
defenses to both allegations.
Nickles Bakery, 296 N.L.R.B. at 928 (footnotes omitted).
_______________
Applying this standard, the ALJ rejected the "closely related"
argument. In addition, while the ALJ agreed that the informal
settlement agreement could be set aside due to the charges
pending in the Amended Complaint, he ultimately recommended that
____________________
12 The six-month limitations period applies only "to the filing
and service of the charge, not to the issuance or amendment of
the complaint." NLRB v. Overnite Transp. Co., 938 F.2d 815, 820
____ ____________________
(7th Cir. 1991); accord Sonicraft, Inc. v. NLRB, 905 F.2d 146,
______ ________________ ____
148 (7th Cir. 1990), cert. denied, 111 S. Ct. 671 (1991). A
_____________
complaint based on a timely filed charge may be amended to
include other allegations if they are "closely related" to the
underlying timely charge and occurred within six months of the
charge. See Eastern Maine Medical Center v. NLRB, 658 F.2d 1, 6
___ _____________________________ ____
(1st Cir. 1981); see also NLRB v. Complas Indus., Inc., 714 F.2d
___ ____ ____ ____________________
729, 734 (7th Cir. 1983).
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it be reinstated. The ALJ favored reinstatement because
rescinding the agreement served no purpose in light of its other
holding that the 8(a)(1) allegations were not "closely related"
to the 8(a)(5) charges. Girardi Distrib. at *31-*33 & n.30.
________________
The Board adopted the ALJ's recommendations and conclusions.
Appellee Company urges that we may not consider the
"closely related" theory supporting reinstatement of dismissed
charges. It reasons that because neither the General Counsel nor
the Union raised objections to the reinstatement of the set aside
settlement agreement, the Union has waived its right to do so
now. See 29 U.S.C. 160(e);13 Woelke & Romero Framing, Inc.
___ _______________________________
v. NLRB, 456 U.S. 645, 665 (1982); Detroit Edison Co. v. NLRB,
____ __________________ ____
440 U.S. 301, 311 & n.10 (1979). It follows, then, that since
the settlement agreement disposing of the 8(a)(1) charges has
been reinstated, no timely charge exists to which the dismissed
charges of the Consolidated Complaint can be "closely related."
It is true that the General Counsel did not object
specifically to the reinstatement of the set aside settlement
agreement before the Board.14 The General Counsel objected
strenuously, however, to the ALJ's decision that the 8(a)(5)
charges were not "closely related" to the 8(a)(1) charges. We
____________________
13 Judicial review is barred by 10(e) of the Act, 29 U.S.C.
160(e), which provides that "[n]o objection that has not been
urged before the Board . . . shall be considered by the court,
unless the failure or neglect to urge such objection shall be
excused because of extraordinary circumstances."
14 Nor did the Union, although it could have intervened in the
appeal to the Board. See 29 U.S.C. 10(f).
___
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think that the exception taken on this ground challenged the
recommendation to reinstate the set aside agreement with
sufficient particularity to survive the rule waiving issues not
timely raised. By attacking the ALJ's decision on the "closely
related" issue, the General Counsel attacked the ALJ's rationale
for reinstatement. Thus, the General Counsel implicitly objected
to reinstatement of the set aside agreement.
We therefore consider whether the charges in the
Consolidated Complaint were closely related to the 8(a)(1)
charge. While the ALJ found that none of the elements of the
test had been met, his explanations were less than satisfactory.
We examine each in turn.
The ALJ combined the "same legal theory" and "similar
defense" components of the test, asserting that the legal
theories behind each charge were "far different," but only
illustrating the differences between the defenses that would be
raised to each charge. The ALJ stated that the only defense to
the 8(a)(1) charge was that the statements had not been made.
In contrast, a defense to the 8(a)(5) charge would involve
detailed explanations of each step taken by the Company
throughout the negotiations and disintegration of the parties'
relationship. The only connection that the ALJ could see between
the two sets of charges was "their bearing on the issue of
intent." Girardi Distrib. at *33.
________________
With respect to the "same factual circumstances or
sequence of events" element of the test, the ALJ imposed an
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extremely high burden regarding the required nexus. Without
proof that the Company specifically directed the operations
manager, Ken White, to make the 8(a)(1) statements as part of a
"scheme" to get rid of the Union, the ALJ rejected the assertion
that the statements were part of the same factual situation or
sequence of events. He concluded that the statements were
"simply isolated statements reflecting the common knowledge of
all [the Company's] employees that Mr. Girardi would like to get
rid of the Union." Id. at *32.
___
We think that the ALJ's factual conclusions are not
supported by substantial evidence in the record and that the ALJ
misapplied the closely related test. With respect to the
similarity between the legal theories underlying each charge, it
is clear that the allegations need not be under the same
statutory section. See Redd I, Inc., 290 N.L.R.B. 1115; NLRB v.
___ ____________ ____
Overnite Transp. Co., 938 F.2d 815, 821 n.8 (7th Cir. 1991). It
____________________
is sufficient that both charges are part of the same effort or
crusade against the union. See, e.g., Overnite Transp. Co., 938
___ ____ ____________________
F.2d at 821; Texas World Service Co. v. NLRB, 928 F.2d 1426, 1437
_______________________ ____
(5th Cir. 1991). In this case, the ALJ conceded that the
8(a)(1) statements were probative of the Company's intent when
dealing with the Union, which was the central issue for the bad
faith bargaining charges under 8(a)(5). It would seem then
that the charges involved the same legal theory, broadly
speaking.
We do not understand the ALJ's finding that the
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statements by White were just isolated statements confirming
facts already known to the Union. As we stated earlier, the
evidence did not support finding a detailed "scheme" with
contingency plans. The factual nexus required under the closely
related test, however, does not demand that General Counsel
establish that sort of a conspiracy. Charges will be found
closely related factually if they arise from the same "sequence
of events." Earlier in his opinion, the ALJ found that after the
bargaining unit members complained about the wage difference
between the Company's union and nonunion employees, White,
"acting on information given him by Mr. Girardi, advised the men
they could have the benefits afforded the nonunion personnel if
they decertified." Girardi Distrib. at *26. Thus, despite the
_________________
inconsistency in the ALJ's characterization of the impetus for
the statements, it is clear that the Company directed White to
make the antiunion statements in violation of 8(a)(1). The ALJ
also relied upon White's statements in determining that the prima
facie case on surface bargaining existed. Finally, the evidence
indicated that White played an important role in the campaign to
bust the Union, even if the evidence did not support a finding
that a detailed conspiracy existed by which the Union's ouster
would be accomplished. Consequently, we think the facts
underlying the two charges are factually "closely related."
The fact that the defenses to the 8(a)(5) charges
would be much more detailed and lengthy in their presentation, as
the ALJ found, is not fatal to a finding that the charges are
-24-
closely related. Taken as a whole, the closely related test
seeks to ensure that the General Counsel does not amend a charge
to include unrelated infractions of the NLRA. Each component of
the test adds specificity to the inquiry. The "same defense"
prong of the test is but another way to ferret out amendments
which involve extraneous material. In defending against the
8(a)(5) charge the Company would attempt to show that White's
statements were not part of its effort to decertify the Union and
that its efforts to bust the Union did not include surface
bargaining. The overlap between the subject matter of the
defenses is readily apparent. The Union, therefore, has met the
"closely related" test and the merits of the charges in the
Consolidated Complaint warrant consideration.
IV
IV
__
We affirm the Board's holding with respect to the
______
10(b) bar. We reverse the reinstatement of the set aside
_______
settlement agreement and remand for a hearing on the Consolidated
______
Complaint having found those charges closely related to the
timely 8(a)(1) charges underlying the set aside agreement.
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