LYNCH, Chief Judge.
This labor case comes from the intersection of an employer's desire to become more competitive by reducing costs and achieving greater efficiencies by consolidating two lab operations into one, and its obligations under national labor law to bargain with the union representing the affected employees.
The National Labor Relations Board petitions for enforcement of its 2011 order finding that Solutia, Inc. had violated sections 8(a)(1) and (5) of the National Labor Relations Act ("the Act"), 29 U.S.C. § 158(a)(1), (5). The order required Solutia to return to United Food and Commercial Workers International Union Local 414C certain work that Solutia had transferred in 2009 to another part of its worksite and to employees represented by another union.
Solutia cross-petitions for review of the Board's order, and Local 414C has intervened in support of portions of the Board's order. Local 414C also petitions for review, attacking that part of the Board's order finding that Solutia did not violate its collective bargaining agreement ("CBA") with Local 414C. On this point, Solutia has intervened in support of the Board.
The Board made no error of law in reaching its decision, and its findings were supported by substantial evidence in the record. We grant the Board's petition for enforcement of its order and deny Solutia's cross-petition for review. We deny Local 414C's petition for review. While there are reasons for some concern about the remedial order, there are further administrative remedial processes through which those concerns may be addressed.
The facts giving rise to this case are largely undisputed.
The relevant events took place at the 250-acre industrial "Indian Orchard Site" in Springfield, Massachusetts. A review of the Site's history is necessary to understanding how this case arose.
Historically, two companies operated two separate plants on the Site. The plant on the west side was known as the Bircham Bend Plant, and the one on the east side was known as the Springfield Plant. The chemical workers' union, Local 414C, represented the Bircham Bend Plant employees, while the electrical workers' union, Local 288, represented the Springfield Plant employees.
By 1963, Monsanto had acquired both plants on the Site, and it continued to operate them as separate facilities for many years, including keeping the fence up. The two unions continued to represent employees on their respective sides of the Site. In 1982, Monsanto consolidated certain salaried employees and departments onto the east side of the Site, and it took down the fence. This consolidation, however, did not result in job or work losses for hourly (union) employees on the west side. After the consolidation, Local 414C continued to represent west side hourly employees and Local 288 continued to represent east side hourly employees.
Also in 1982, Monsanto and Local 414C renegotiated their CBA, which resulted in a change to the recognition clause. The 1982 clause read:
Monsanto had proposed adding the first underlined clause; Local 414C agreed to that clause on the condition that Monsanto accept the second underlined sentence. This same language remained in Local 414C's CBA through the version adopted by Local 414C and Solutia in 2006, which was the version in effect when the events at issue occurred.
In the years after the consolidation, Monsanto bargained with the two unions when it made changes that would affect the work available to union employees. For instance, when Monsanto built a new building that straddled the line between the east and west sides, it negotiated a "Memo of Understanding" signed by both unions that designated the building as "geographically neutral" and that allowed both unions' employees to work there. When Monsanto built two new buildings on the east side and one on the west side, it negotiated another tri-party agreement in which all three buildings were also designated "geographically neutral," with the maintenance to be performed by union members from the side where each building was located. And in 1994, Monsanto bargained for a "Memo of Understanding" with Local 288 that provided for the transfer of certain sample testing work from a Local 288 lab to a Local 414C lab.
In 1997, Monsanto spun off its chemical manufacturing arm into a new affiliate, Solutia. Solutia took charge of the Site and maintained CBAs with Local 414C and Local 288. In 2006, Solutia negotiated a new agreement with each union that superseded the previous agreement as to the three newest buildings. These agreements allowed union employees to "cross lines" and perform maintenance, storage, and utility work in any of the three buildings, regardless of which union had historically performed those functions. The agreements also required Solutia to allocate future staffing for the three buildings evenly among the unions. They did not change the allocation of any production or lab work.
Solutia also reached a separate agreement with Local 414C in 2006 that gave Local 414C jurisdiction over a new product line that was being produced on the west side. This agreement specifically stated that Local 414C was being granted jurisdiction "[b]ased on the current location of the [production] operation" and "only for any period of time in which" Solutia chose to locate production on the west side.
The Bircham Bend Plant historically produced resins, and Solutia continues to manufacture resins at that plant. The Springfield Plant historically used these resins to produce Saflex (or its equivalent), a strong clear plastic sheet that is used in
Meanwhile, on the east side, the Springfield Plant included within its main building another lab, the Saflex Control Lab ("SCL"), in which employees performed testing on east side products. Employees in the SCL were represented by Local 288.
In July 2008, Solutia began to consider consolidating lab work on all products produced at the Site into one location, the SCL. Solutia anticipated that consolidating the lab work would allow it to reduce staffing levels and thus reduce labor costs by $249,000 per year. It would also provide more work for SCL employees, whom the company thought were underutilized. Solutia also expected that moving its testing operations out of the WCL would cause Cytec to become responsible for all of the costs of operating that building, or if Cytec chose to move its testing operations elsewhere, the building could be shut down and there would be no operating costs. The transition would simply involve moving existing equipment from the WCL to the SCL, without requiring additional capital purchases. Finally, the company believed that consolidation would increase the SCL lab workers' skills because they would become knowledgeable about all stages of the testing process, not just the stage performed on their side of the Site. The company concluded that moving all testing to the SCL would mean that work formerly performed by Local 414C employees would have to be transferred to Local 288 employees.
On March 4, 2009, Solutia management presented the consolidation plan to representatives of Local 414C. The union recorder's notes from this meeting reflect that the company stated the consolidation was being "put[] on [the] table but needs to be worked out." Joseph Coppola, Solutia's human resources director, testified that as of March 4, 2009, the decision to go through with the consolidation was already final on the local level but was awaiting approval from higher-level management. He also stated that as of this date, Solutia had already determined that it did not have to bargain the decision to consolidate with Local 414C.
The next day, Local 414C representatives met with management again and expressed their view that, under the terms of Local 414C's CBA, Solutia did not have a right to consolidate the lab work without first obtaining Local 414C's consent.
During March 2009, Coppola met more than once with Robert Bellerive, Local 414C's president, to discuss the work transfer, but the Union and the company could not agree on whether the CBA authorized the transfer without Union consent. On May 7, 2009, Bellerive and Thomas Humiston, the Union's treasurer, sent a letter to Coppola requesting that the company provide the Union with the CBA language it was relying on to conclude that it had the right to transfer
On May 27, 2009, Coppola met with Local 414C representatives and reiterated that Solutia had made the decision to consolidate the lab work. He also stated that it was Solutia's position that it did not have to bargain that decision. Coppola informed the representatives that the transfer would result in the elimination of four Local 414C unit positions. He then stated, "[f]or the record," that the company had suggested that its lawyers and the Union's lawyers meet, but the Union had refused. Bellerive testified that he had contacted the international union's president about attorneys getting involved and that he was told the union's attorneys would only intervene at the arbitration stage, after negotiations had taken place between the company and the local.
Two days later, on May 29, 2009, Coppola sent a letter to Local 414C that confirmed his statements from the May 27 meeting and informed the Union that all Solutia testing at the WCL would cease by August 31, 2009. Coppola also stated that work transferred to the SCL would "necessarily" be performed by Local 288 employees because of the terms of Solutia's CBA with Local 288. He denied that the work transfer violated Local 414C's CBA and asserted that the decision could be made unilaterally because it fell within the CBA's "management rights" provision. Finally, Coppola wrote that Solutia would "discuss ... any reasonable proposals [the Union] may have" with regard to the Local 414C workers "affected by" the transfer, though it would not bargain over the transfer decision itself.
On June 16, 2009, Solutia provided formal written notice to Local 414C that four positions in the WCL would be eliminated on August 2, 2009. On July 18, 2009, Solutia entered into a new CBA with Local 288 that altered the qualifications and job descriptions for SCL employees in anticipation of the consolidation.
The lab consolidation began on August 3, 2009, and was completed within two weeks. The transition involved moving equipment from the WCL to the SCL and making some construction modifications to enlarge the SCL.
Although Solutia eliminated the WCL lab positions, it did not lay off any Local 414C personnel. Some of the former WCL employees elected retirement; others bid into production jobs (which were considered less desirable because they were more physically demanding); and others began performing testing work for Cytec at another location on the Site. Since the transfer, testing work has not been performed in the WCL building.
On October 1, 2009, Solutia and Local 414C entered into a new CBA. The parties dispute whether the CBA negotiations included any bargaining over the effects of the lab work transfer decision, but it appears undisputed that the CBA negotiations did not include bargaining over the decision itself.
On June 2, 2009, after Solutia confirmed by letter that it would not bargain the work transfer decision, Local 414C filed an unfair labor practice charge with NLRB's regional office, alleging that Solutia had violated the Act by unilaterally modifying the CBA and unilaterally transferring work out of the bargaining unit. The next
On December 31, 2009, NLRB's General Counsel issued a complaint against Solutia. The case was tried before an administrative law judge ("ALJ") on April 8 and 9, 2010. The ALJ issued his decision on July 30, 2010. His specific findings and conclusions will be detailed below as relevant to each issue in the present petitions. In short, however, the ALJ found that Solutia (1) did not violate the CBA, but (2) did violate the Act by refusing to provide an opportunity to bargain over a mandatory subject of bargaining. As remedies, the ALJ ordered Solutia to take the following actions: (1) restore the WCL to the status quo ante as of August 1, 2009; (2) offer full reinstatement to current or former WCL employees who had been reassigned or had retired as a result of the consolidation, and "make whole" any such employees who had lost earnings or benefits as a result; (3) remit contributions Solutia would have made on such employees' behalf to retirement, 401(k), and/or health care funds; (4) reimburse Local 414C for union dues that would have been deducted from such employees' salaries; (5) bargain with Local 414C before implementing any similar changes in the future;
Solutia filed exceptions to the ALJ's decision and remedies with the Board, and NLRB's General Counsel and Local 414C filed cross-exceptions. On July 15, 2011, a three-member panel of the Board issued its decision and order adopting the ALJ's decision in all relevant respects.
On January 23, 2012, NLRB petitioned this court for enforcement of its July 15, 2011 order. Solutia cross-petitioned for review of the order on February 2, 2012. That same day, Local 414C moved to intervene on the Board's behalf; that motion was granted on February 16, 2012.
Meanwhile, also on February 2, 2012, Local 414C filed its petition for review of the July 15, 2011 order. Solutia moved to intervene on the Board's behalf on February 22, 2012, and that motion was granted on March 7, 2012.
On March 14, 2012, this court granted NLRB's motion to consolidate the two cases.
We begin by addressing the Board's finding that Solutia violated sections 8(a)(1) and (5) of the Act, 29 U.S.C. § 158(a)(1), (5), which is the subject of the Board's petition for enforcement and Solutia's cross-petition for review. We conclude that the Board did not err in the standard it applied in reaching its decision and that its findings were supported by substantial evidence.
The Board's factual findings are conclusive on this court if they are "supported by substantial evidence on the record considered as a whole." 29 U.S.C.
Solutia first seeks to prevent enforcement of the Board's order by arguing that the Board's determination that Solutia failed to provide an opportunity to bargain over a mandatory subject of bargaining was reached using an incorrect legal standard and that it was not supported by substantial evidence. The applicable standard turns on the nature of Solutia's decision and whether it was about a "term or condition of employment" subject to mandatory bargaining.
Section 8(a)(5) of the Act makes it an unfair labor practice for an employer to refuse to bargain collectively with its employees' representatives, see 29 U.S.C. § 158(a)(5), and section 8(a)(1) makes it an unfair labor practice for an employer to interfere with any of an employee's rights under the Act, see id. § 158(a)(1). The duty to bargain collectively comprises, in part, "the performance of the mutual obligation of the employer and the representative of the employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment." Id. § 158(d). Under the Act, an employer's decisions about "wages, hours, and other terms and conditions of employment" are mandatory subjects of bargaining. NLRB v. Wooster Div. of Borg-Warner Corp., 356 U.S. 342, 349, 78 S.Ct. 718, 2 L.Ed.2d 823 (1958). An employer violates section 8(a)(5) when it makes a unilateral change to a term or condition of employment without first bargaining to impasse with the union. Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 198, 111 S.Ct. 2215, 115 L.Ed.2d 177 (1991). The Board receives "considerable deference" in its determinations of what constitutes a "term or condition" of employment. Ford Motor Co., 441 U.S. at 495, 99 S.Ct. 1842.
Solutia contends that transferring the lab work was a change in the scope or direction of its business and that the Board should have used the tests set forth in First National Maintenance Corp. v. NLRB, 452 U.S. 666, 101 S.Ct. 2573, 69 L.Ed.2d 318 (1981), and Dubuque Packing Co., 303 N.L.R.B. 386 (1991), enforced sub nom. United Food & Commercial Workers Int'l Union, Local No. 150-A v. NLRB, 1 F.3d 24 (D.C.Cir.1993). In contrast, the Board found that the transfer was not a change in direction or scope of the enterprise, but a movement of the same unit work to different employees within the same facility, which is not covered by Dubuque and which is a mandatory subject of bargaining.
In First National, the Supreme Court identified three categories of management decisions: those that are "almost exclusively" about an aspect of the employment relationship, such as decisions affecting work rules and production quotas; those that "have only an indirect and attenuated impact on the employment relationship," such as decisions about advertising and product design; and those that have a "direct impact on employment" but "ha[ve] as [their] focus only the economic profitability" of the company. 452 U.S. at 677, 101 S.Ct. 2573. This third type of decision includes those that involve "a change in the scope and direction of the enterprise." Id. When it comes to decisions in the third category, the Court stated that bargaining should be mandatory "only if the benefit, for labor-management relations and the
In Dubuque, the Board established a test for deciding "whether a decision to relocate unit work is a mandatory subject of bargaining," holding that such a decision was within the third First National category. 303 N.L.R.B. at 390. The Board held that the initial burden in a relocation case rests with NLRB's General Counsel, who must "establish that the employer's decision involved a relocation of unit work unaccompanied by a basic change in the nature of the employer's operation." Id. at 391. If the General Counsel meets that burden, a prima facie case has been established that the relocation is a mandatory subject of bargaining. Id. The employer can then make out a defense to the prima facie case by showing that (1) "labor costs (direct and/or indirect) were not a factor in the decision"; or (2) "even if labor costs were a factor ..., the union could not have offered labor cost concessions that could have changed the employer's decision to relocate." Id.
However, if an employer's transfer of work outside the bargaining unit is in the nature of an "allocation" rather than a "relocation," the Board has held that the decision is subject to mandatory bargaining regardless of whether it focuses on the company's profitability. See, e.g., Westinghouse Elec. Corp., 313 N.L.R.B. 452, 453 (1993). The Board derives this principle from the Supreme Court's decision in Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203, 85 S.Ct. 398, 13 L.Ed.2d 233 (1964), in which Justice Stewart's influential concurrence
The Board has interpreted this rule in a case that bears a striking resemblance to Solutia's. In Westinghouse Electric Corp., 313 N.L.R.B. 452, the employer made a unilateral decision to close a laboratory on the west side of its facility and consolidate the work in a more modern and efficient laboratory on the east side, whose workers were represented by a different bargaining unit. Id. at 452. The Board in Westinghouse concluded that "a shift of work from a group of employees in one building on an employer's corporate premises to a group of employees in another employer-owned building at the same site is not the kind of relocation which we dealt with in Dubuque."
Solutia's scope-or-direction argument rests on its factual assertion that consolidating the lab work in the SCL was a fundamental change to the way in which its products would be tested at the Site. Solutia's evidence before the Board does not come close to compelling this conclusion, and largely undercuts it. The evidence shows that the company did not plan for SCL employees to perform more or different tests than those formerly performed in the WCL; rather, Solutia expected that having SCL employees test both west side and east side products would improve their ability to "troubleshoot and respond to problems," and a primary motivation was a reduction in the number of jobs needed to perform the tests. The Board could easily conclude that this sort of skill improvement does not represent a fundamental change in the company's operations.
Additionally, Solutia's documents, as well as testimony from its plant manager, David Lahr, showed that employees in the consolidated SCL would use the same equipment that had been used in the WCL. In fact, a WCL employee trained the people who were to instruct the SCL employees on how to perform the tests, suggesting that there was no substantive difference between how the WCL employees had tested resins before the consolidation and how the SCL employees were expected to test them afterward. Solutia is still producing all of the same products at the Site as it did before August 2009. Now it merely has different (and fewer) employees performing the quality and safety testing on those products.
The Board did not err in applying the Westinghouse rule in this case.
Here, the Board did attend to the facts of Solutia's case, and based on the record, it concluded that Solutia's actions fell within the category of reallocation decisions subject to the mandatory duty to bargain. See, e.g., Regal Cinemas, Inc. v. NLRB, 317 F.3d 300, 310-12 (D.C.Cir.2003) (approving application of Westinghouse analysis to work allocation decision that did not involve a change in the nature of the work, and rejecting argument that Board's use of Westinghouse created a per se rule); Westinghouse, 313 N.L.R.B. at 453; Holmes & Narver, 309 N.L.R.B. 146, 147 (1992) ("[O]ur decision here does not purport to establish a rule as to all layoffs. We are dealing with layoffs that are made in connection with a decision to continue doing the same work with essentially the same technology, but to do it with fewer employees by virtue of giving some of the employees more work assignments."). The findings underlying this determination were supported by the record, and the Westinghouse interpretation of the mandatory duty to bargain is reasonably defensible. See Regal Cinemas, 317 F.3d at 312.
Solutia next argues that it cannot be liable under the Act because Local 414C waived its right to bargain the work transfer decision and Solutia fulfilled its statutory obligation to bargain the effects of that decision. We conclude that there is substantial evidence to support the Board's findings that Local 414C had not waived
"If an employer gives a union advance notice of its intention to make a change to a term or condition of employment, `it is incumbent upon the [u]nion to act with due diligence in requesting bargaining' in order to avoid waiving any of its claims under the NLRA." Regal Cinemas, 317 F.3d at 314 (alteration in original) (quoting Golden Bay Freight Lines, 267 N.L.R.B. 1073, 1080 (1983)). However, "[a] union is `not required to go through the motions of requesting bargaining[]'... if it is clear that an employer has made its decision and will not negotiate." Id. (quoting Gratiot Cmty. Hosp., 312 N.L.R.B. 1075, 1080 (1993)). Neither party contests these basic principles; their disagreements are about whether Local 414C met the first standard and/or falls into the exception stated by the second standard.
Solutia contends that Local 414C waived its right to bargain the work transfer decision because the Union did not request decision bargaining. Solutia argues that Local 414C insisted, from the time it learned about the proposed consolidation, that the work transfer would violate the CBA, and thus the Union did not even attempt to bargain the decision. Solutia also maintains that there was insufficient evidence to support the Board's conclusion that Local 414C did not have to demand bargaining because Solutia presented the decision as non-negotiable.
The Board's conclusion that Local 414C timely requested to bargain the work transfer decision rests primarily on Local 414C's letter of May 7, 2009.
The Board apparently adopted the first meaning, and Solutia has not pointed to evidence showing that the second meaning is the only correct one. Bellerive testified that at the March 5, 2009 meeting with management and in his meetings with Coppola before the May 7 letter, he repeatedly told Coppola that the work transfer decision was a "negotiable item" that should be addressed in upcoming CBA negotiations. While the position that Bellerive communicated to Coppola relied on CBA bargaining rather than on a separate statutory duty to bargain, it was clear that Local 414C was asking to bargain regarding the decision. Bellerive's testimony supports the Board's conclusion that the May 7 letter meant that the Union was demanding to bargain the decision in the event it agreed that the CBA did not otherwise prohibit the transfer.
To support its argument, Solutia highlights a line in the notes from the May 27, 2009 meeting, in which Bellerive stated
The authorities relied on by both Solutia and the Board do not address a situation in which one reason for a union's purported failure to request decision bargaining is the union's clearly communicated position that the decision is prohibited regardless of bargaining. At least one court has held that under somewhat similar circumstances, there was no waiver. See Patent Office Prof'l Ass'n v. Fed. Labor Relations Auth., 872 F.2d 451, 455-56 (D.C.Cir.1989) (holding that federal employee union's request to employer agency that agency halt decision pending a determination of its lawfulness "did not waive [the union's] right to bargain, as much as initiate it"). Based on Bellerive's testimony and the text of the May 7 letter, there was substantial evidence for the Board to conclude that Local 414C requested decision bargaining.
Moreover, even if Solutia were correct that the May 7 letter cannot be read as a demand for decision bargaining, there is ample evidence to support the Board's conclusion that Local 414C did not need to request decision bargaining because the decision was presented as a "fait accompli." See Regal Cinemas, 317 F.3d at 314 (quoting Int'l Ladies' Garment Workers Union v. NLRB, 463 F.2d 907, 919 (D.C.Cir.1972)). Coppola testified that the company had decided before March 2009 that it had no duty to, and would not, bargain the work transfer decision with Local 414C. Lahr also testified that the decision was final at least as of May 7, 2009. During the May 27, 2009 meeting, Solutia announced to the Union that it did not believe it had an obligation to bargain the decision, but both Bellerive's and Coppola's testimony suggests that Coppola had already communicated to Bellerive during their meetings in March that the company believed the CBA authorized a unilateral work transfer. This evidence supports the conclusion that any request to bargain the decision would have been futile.
Solutia counters that, although it had determined that it had no duty to bargain even before informing the Union of the plan, it did not confirm this position with the Union until late May, and Local 414C had not requested decision bargaining before then. It is true that in order for a situation to fall within the "fait accompli" exception, it must be "clear" to the
Finally, Solutia argues that the "management rights" clause in its CBA with Local 414C waived the Union's right to bargain the decision.
This was a primary argument Solutia advanced before the ALJ and Board, but a secondary argument in its petition to this court. The Board concluded that the management rights clause did not cover the type of decision at issue here and thus could not preclude the Union's right to bargain the decision.
It is difficult, from our perspective, to know why Solutia acted with such assurance that it had no obligation to bargain the decision. Coppola's belief that Solutia did not have to bargain the decision was based on consulting Local 414C's and Local 288's CBAs. The CBA language was cited in Solutia's May 29, 2009 letter to Local 414C and in Solutia's denial of Local 414C's grievance. Just as the Union relied on the CBA for its insistence that Solutia could not transfer the work, Solutia relied on the CBA for its insistence that it could.
Under the rule in this circuit set forth in Bath Marine Draftsmen's Ass'n v. NLRB, 475 F.3d 14, 25 (1st Cir.2007), the standard for evaluating a CBA-based defense to a section 8(a)(5) claim is the "contract coverage" test. That test looks to whether the parties have negotiated a provision in their CBA that establishes the parties' rights regarding an otherwise mandatory bargaining subject.
The parties have not briefed the question of what standard of review we should apply to the question of contract coverage and the Board's interpretation of the CBA.
"In determining whether a subject is covered by a CBA, ... we will consider whether the parties bargained over the mandatory subject at issue." Bath Marine, 475 F.3d at 25. The plain language of the management rights clause would not suggest to any reader that the geographical allocation of work had been one of the bargaining topics when Solutia and Local 414C negotiated this clause. As the Board noted, the illustrative list of "operation[s]" reserved to management under the clause describes decisions of only one type: "routine employment actions" concerning individual employees, such as promotions and discipline. See Regal Cinemas, 317 F.3d at 312-13 (management rights clause that reserved employer's right to "introduce new or improved work methods ... processes and procedures" and "change or eliminate existing ... procedures or work," id. at 312 (alterations in original), did not cover employer's decision to remove work from bargaining unit employees and reassign it to managers). The language of the management rights clause clearly does not encompass cross-plant work consolidation and elimination of unit positions. Compare U.S. Postal Serv., 8 F.3d at 838 (management rights clause reserved to employer the right "[t]o determine the methods, means and personnel by which [its] operations are to be conducted" (second alteration in original)).
Further, the bargaining history shows that Solutia (and its predecessor, Monsanto
In sum, neither the language of the clause nor the bargaining history support the conclusion that the employer and the Union had already bargained to give the company unilateral control over the mandatory subject of allocation of work to different units within the plant. Solutia has failed to make out a contractual defense to its violation of the statutory duty to bargain the work transfer decision.
Solutia next argues that the Board's determination that Solutia failed to provide Local 414C with an adequate opportunity to bargain the effects of the work transfer decision was unsupported by substantial evidence. Solutia agrees that it had an obligation under the Act to bargain the effects, but it denies that it failed to offer an opportunity to do so. This is a closer question.
The Board's finding that Solutia had not satisfied its statutory duty to bargain the effects was largely based on the finding that Solutia had not satisfied its duty to bargain the decision. The Board argues to us that, in the absence of an offer to bargain the decision, any offer to bargain the effects would have been insufficient, because an employer cannot satisfy the latter obligation without first satisfying the former. It cites its own precedent in Dan Dee West Virginia Corp., 180 N.L.R.B. 534 (1970), which stands for a different proposition: that an employer cannot use a union's refusal to bargain effects as a defense when there is an ongoing dispute about the employer's obligation to bargain the decision. See id. at 539. The Supreme Court has recognized that the duty to bargain a decision and the duty to bargain its effects are two separate obligations under the Act. See First National, 452 U.S. at 677 n. 15, 686, 101 S.Ct. 2573 (holding that employer had no obligation to bargain decision but did have an obligation to bargain the effects of the decision).
We are far from convinced that a per se rule, operating regardless of the underlying facts, as argued by the Board, is defensible. We also disagree with the Board's assertion that this circuit has previously
Solutia's argument that it did provide a meaningful opportunity first relies on Local 414C's alleged failure to request effects bargaining and its failure to respond to Solutia's letter of May 29, 2009, which stated that Solutia would "discuss ... any reasonable proposals [Local 414C] may have" with regard to the Local 414C workers "affected by" the transfer. However, this argument overlooks the Union's May 7, 2009 letter, which stated that, should the Union "agree with the company's decision to take this action," the Union "demands to bargain this issue." The Board could reasonably find that this statement referred to bargaining both the decision and the effects or to bargaining the effects only. Under either interpretation, the May 7 letter would establish a demand for effects bargaining, at least once the CBA issue was resolved. As it happened, the CBA issue was not resolved until the parties litigated it before the Board.
Solutia falls back to an argument that certain negotiations in September 2009, which occurred in connection with Solutia and Local 414C's new CBA, actually constituted effects bargaining as to the work transfer of August 2009. The evidence supports a conclusion that the CBA-related negotiations were not in the nature of effects bargaining.
For instance, during the CBA negotiations Solutia proposed to "make whole" the employees who had been forced to take a temporary pay cut while training for the new positions into which they had transferred after the WCL closure. But Lahr testified that the purpose of this proposal was to encourage the bargaining committee to recommend ratification of the new CBA, and that the Union made clear that its acceptance of this proposal was not meant to resolve the unfair labor practice charge then pending on the work transfer issue. Gary Bordeau, a former WCL employee, testified that he had filed a grievance regarding these training wages and that the grievance was resolved through negotiations, suggesting that the "make whole" proposal was linked to this separate dispute. Finally, neither party suggested that the September 2009 negotiations touched upon the remedial issues ultimately addressed by the Board, such as the treatment of WCL employees who had retired rather than transferred. There was substantial evidence that the CBA transactions were part of a separate set of negotiations that did not constitute effects bargaining specifically as to the lab work transfer dispute.
Finally, Solutia contends that the effects of the work transfer decision were largely determined by the CBA, and so no additional effects bargaining was necessary.
Local 414C petitions for review of that part of the Board's order finding that Solutia did not violate the CBA, as opposed to its bargaining obligations under the Act. The Union seeks review of this aspect of the decision despite the finding against Solutia on the statutory ground because, if there were a CBA violation, Local 414C would have to give its consent in order for Solutia to keep the lab work at the SCL, instead of the Union merely receiving the opportunity to bargain. We find no error in the Board's conclusion and deny Local 414C's petition.
Local 414C argues that the lab work transfer constituted an impermissible midterm modification of the scope of the bargaining unit. Unit modification is a permissive, not mandatory, subject of bargaining. Local 666, Int'l Alliance of Theatrical Stage Emps. & Moving Pictures Mach. Operators v. NLRB, 904 F.2d 47, 50 (D.C.Cir.1990). Permissive subjects cannot be bargained to impasse or unilaterally implemented; the consent of the other party is required to alter agreements on these subjects. See id.; Wackenhut Corp., 345 N.L.R.B. 850, 852 (2005).
Local 414C's argument rests largely on the word "for" in its CBA's recognition clause: "A unit comprising of all hourly rated employees ... for the then existing, Bircham Bend Plant." Local 414C argues that "for" must mean that its unit is not defined solely by geography (i.e., all employees who perform work on the west side of the Site) but also by function (i.e., all employees who perform work that contributes to the items produced on the west side of the Site). It argues that the work transfer necessarily modified the scope of its bargaining unit because the transfer took work under Local 414C's jurisdiction — that is, quality and safety testing "for" resin products produced at the Bircham Bend Plant — and reassigned that work to Local 288. The Union maintains that the resin testing was still "for" the Bircham Bend Plant despite being moved to the Springfield Plant location.
The Board found that Solutia's decision to transfer the work to Local 288 employees in the SCL did not modify the scope of the bargaining unit because the unit was geographically defined: the recognition clause says nothing about the type of work to be performed by Local 414C employees and refers only to the location where the work will be performed. The Board characterizes Local 414C's reliance on the difference between "for" and "at" as a "distinction without difference."
In applying CBAs to work transfer disputes, courts and NLRB have distinguished between "jurisdictional" clauses that define the assignment of work to union members and "scope" clauses that define who is included in the bargaining unit. Local 666, 904 F.2d at 50. The former type of clause addresses a mandatory subject of bargaining, while the latter addresses a permissive subject. Id. If a work transfer affects a unit's jurisdiction but not its scope, then the transfer does not constitute a unit modification. In such a case, the union's consent is not required and the parties may bargain to impasse over the transfer. Id.
The word "for" does not itself substitute for a definition of particular tasks assigned to the Local 414C unit.
The 2006 agreement between Local 414C and Solutia regarding the new product line reinforces this understanding, as it described the grant of jurisdiction in purely geographic terms. Local 414C would have jurisdiction over the new production work "[b]ased on the current location of the [production] operation" and "only for any period of time in which" Solutia chose to locate production on the west side. The emphasis on the west side location in this agreement undercuts the argument that the parties understood the unit's scope in functional terms. Additionally, Bellerive testified that Local 414C employees had only ever performed work on the east side under the terms of specific agreements with the employer. These agreements, bargained with Monsanto and Solutia at various points since 1982, demonstrate a pattern of work allocation negotiations that were based on the geography of the Site. The evidence does not show that the Union had ever before claimed jurisdiction over work located on the east side based on that work being "for" the Bircham Bend Plant.
The Board supportably found that the lab work transfer did not make any change to the geographical scope of the unit, and thus that the transfer at issue here was not of the type that constitutes a unit modification.
The Union also argues that the lab work transfer effectively modified the "consolidation" language that was added to the recognition clause in 1982: "This recognition clause shall be unaffected by any future consolidation of the plants at the Indian Orchard Site." Local 414C insists that this clause is "work preservation" or "protection" language that prevents the employer from moving work from the west side to the east side without Local 414C's consent. Solutia, on the other hand, interpreted the clause as permitting the transfer of work across sides of the Site so long as the transfer did not involve a modification
Once an employer and a union agree on a CBA, one party may not unilaterally modify that CBA without the other's consent during the term of the CBA. 29 U.S.C. § 158(d); Bath Marine, 475 F.3d at 20. In determining whether an employer's action constitutes a prohibited midterm modification of a CBA, the Board must ask whether the employer had a "sound arguable basis" for interpreting the CBA as it did. Bath Marine, 475 F.3d at 22.
Local 414C argues that Solutia's interpretation of the clause lacked a sound arguable basis because it was contrary to the plain language of the clause as well as the parties' bargaining history, and it would render the clause meaningless because it would be duplicative of the "for the then existing Bircham Bend Plant" language.
The Board found that Solutia had a sound arguable basis for its interpretation, based on both the CBA's language and past practice. The Board took a different lesson from the parties' bargaining history than the one advocated by the Union. It reasoned that previous issues regarding "crossing lines" (most often involving employees rather than tasks crossing over) had been addressed by bargaining, so Solutia at most would have inferred that it had an obligation under the CBA to bargain, not an obligation to get Local 414C's consent. The Board also denied that Solutia's reading would render the clause meaningless, because if Solutia were to make a work transfer decision that did in fact modify the scope of the unit, then the consolidation language would prohibit the transfer unless the Union consented. The Board's finding is well supported in the record.
As the Board found, the history of negotiations over cross-Site work would not have required Solutia to conclude that the CBA prohibited the transfer of tasks from one unit to another without Local 414C's consent. If anything, the history suggests that Solutia had an obligation to bargain over changes to work allocation — as the Board in fact found when it determined that Solutia had violated section 8(a)(5) of the Act. The historical understanding that Local 414C was the "west side" union and Local 288 was the "east side" union would have supported a reasonable interpretation that moving a task from west to east, without moving any employees, would be a subject of bargaining with the Union, since it would maintain each union's representation of all employees on its respective side.
As to the redundancy argument, while Local 414C did show that Solutia's interpretation was not the only possible one, the Board correctly found that the Union's evidence was not enough to overcome the deferential "sound arguable basis" standard.
Finally, we address both Solutia's and Local 414C's attacks on the Board's remedial order. We conclude that many of these challenges are premature and the remaining ones are without merit.
Section 10(c) of the Act empowers the Board to issue "an order requiring [an entity found to be in violation of the Act] to cease and desist from such unfair labor practice" and to "take such affirmative action... as will effectuate the policies" of the Act. 29 U.S.C. § 160(c). The Board has "wide discretion" in selecting remedies, Pan Am. Grain, 558 F.3d at 26 (quoting
Solutia alleges the following errors in the Board's remedies: (1) the Board stated an improper standard for determining whether former WCL employees who retired after the work transfer would be entitled to reinstatement and back pay; (2) the order to make payments to "health care funds" could result in a windfall to some employees; and (3) it was improper to order Solutia to reimburse Local 414C for lost union dues.
Local 414C challenges the Board's denial of the following cross-exceptions that the Union filed to the ALJ's recommended remedies
Solutia's objections (1) and (2), as well as Local 414C's objection (1), are premature. The Board may reserve issues regarding individual employees' entitlements to certain remedies, such as back pay, until a post-enforcement compliance proceeding. See Holyoke Visiting Nurses Ass'n v. NLRB, 11 F.3d 302, 308 (1st Cir.1993). In this case, the Board specifically noted that "all parties agreed to defer fully litigating" the specifics of the reinstatement and make-whole remedies until the compliance stage. Because the parties "rested with the understanding that full litigation of the reinstatement and make whole issues would be deferred to compliance," the record is incomplete with regard to these issues, and as such, this court will not decide them.
The remaining three objections may be addressed at this stage, although they can be dispatched quickly.
First, Solutia's objection (3) is without merit. Reimbursement of lost union dues is an accepted form of remedy. See, e.g., Baltimore Sun Co., 335 N.L.R.B. 163, 170 (2001); Ogle Protection Serv., Inc., 183 N.L.R.B. 682, 682-83 (1970), enforced sub nom. NLRB v. Ogle Prot. Serv., Inc., 444 F.2d 502 (6th Cir.1971). Under NLRB precedent, such an order is interpreted as requiring the employer to subtract the union dues reimbursement from the back pay otherwise owed to affected workers, not as requiring the employer to pay the union out of its own funds. See Ogle Protection, 183 N.L.R.B. at 683. This obviates Solutia's argument that it cannot legally pay money to a union.
Next, Local 414C's objection (2) also fails. The Board noted that Solutia had not presented evidence of undue hardship at the complaint hearing and limited
Finally, Local 414C's objection (3) is unnecessary. The Board's finding that transferring the lab work is a mandatory subject of bargaining means that Solutia will already have an obligation to bargain any further attempt to transfer the work, with or without a specific bargaining order. A bargaining order would not change Solutia's obligations, nor prevent it from eventually bargaining to impasse and implementing the transfer.
The National Labor Relations Board's petition for enforcement is granted. Solutia's cross-petition for review is denied. Local 414C's petition for review is denied.
There is substantial evidence to support a finding that the General Counsel made out a prima facie case for mandatory bargaining under Dubuque. As described in the text, the Board could have found that Solutia's work transfer did not involve a change in the scope or direction of its business, and the company did "relocate" work out of the bargaining unit. See Dubuque, 303 N.L.R.B. at 391.
Solutia's argument that labor costs were not a factor in its decision is contradicted by the record. Coppola specifically testified that labor costs played a role in the consolidation decision. Solutia expected to save almost $250,000 in salaries from eliminating WCL positions. Solutia also anticipated that the work transfer would remedy the underutilization of the SCL workers, which the company considered a labor cost issue. First National contemplated that "labor costs" would include not just per-person costs such as wages but also elements such as "size of workforce and production goals." Furniture Rentors of Am., Inc. v. NLRB, 36 F.3d 1240, 1249 (3d Cir.1994).
Solutia does not point to any specific evidence supporting its contention that there were no possible concessions Local 414C could have offered to change its decision, relying instead on its own asserted reasons for why it decided to consolidate work in the SCL. The Board rightly pointed out that Solutia bore the burden on this issue, and the evidence does not compel a finding that the Board was wrong to conclude that Solutia failed to meet its burden. See Comar, Inc., 349 N.L.R.B. 342, 359 (2007) (finding that employer's "self-serving and conclusory testimony" that decision could not have been altered by bargaining was "insufficient to establish" that changes at issue were not a mandatory subject of bargaining, and citing cases).