Before MIKVA and BORK, Circuit Judges, and HAROLD H. GREENE,* District Judge.

Opinion for the Court filed by District Judge HAROLD H. GREENE.

HAROLD H. GREENE, District Judge.

This case is before the Court for a second time on review from a decision of the National Labor Relations Board (the Board or NLRB) that the United Scenic Artists Local 829 of the Brotherhood of Painter and Allied Trades, AFL-CIO (Local 829) violated section 8(b)(4)(ii)(B) of the National Labor Relations Act, 29 U.S.C. Sec. 158(b)(4)(ii)(B), the "secondary boycott" provision.1 In the first review proceeding, this Court, in an opinion authored by Judge Tamm, reversed the Board's decision and remanded, holding that the agency decision could be sustained only on the basis of new evidence or a new, valid legal theory. United Scenic Artists, Local 829 v. NLRB, 655 F.2d 1267 (D.C.Cir.1981). Finding that no additional evidence was adduced and that the Board's new theory is legally flawed, we reverse once again.

* The underlying facts are as follows.2 Theatre Techniques, Inc. (TTI), a general contractor that supplies theatrical settings, frequently subcontracted with Nolan Scenery Studios, Inc. (Nolan) for the painting of scenery and props provided by TTI. Nolan, but not TTI, was a party to a collective bargaining agreement with Local 829 which gave the union jurisdiction over both the painting and sculpturing of props.3

Specifically involved here is a 1978 contract between TTI and Nolan for the painting of scenery for a Broadway show. This scenery included several props which required both sculpture and painting. When the props arrived at the Nolan studios, it became apparent that some of them had already been sculpted by TTI personnel. Relying upon their collective bargaining agreement with Nolan, some of Nolan's employees refused to paint the props that had previously been sculpted. Shortly thereafter, Domingo Rodriguez, the union's business agent, spoke about the dispute with Nolan's president.4 While giving permission for the painting of the props by the Nolan employees, Rodriguez informed Nolan that it had violated the collective bargaining agreement, and that it would accordingly be assessed a monetary amount for the time it would have taken Nolan employees to fabricate the props.5 No one from Nolan advised Local 829 that Nolan had a contract with TTI which gave the latter the right to control the sculpturing work.

TTI filed secondary boycott charges, which were upheld both by an administrative law judge and by the Board.6 The Board found unlawful coercion within the meaning of section 8(b)(4)(ii)(B) in the union's demand that Nolan stop painting scenery and props not fabricated by Nolan employees and its request for an estimate of hours for the purpose of calculating a monetary assessment against Nolan. The Board further found that the union's request for "premium pay" was made in order to force Nolan to stop painting prefabricated props supplied to it by TTI and thereby to force TTI, a neutral employer, to change its manner of doing business. On the basis of these findings, the Board concluded that Local 829 had violated the Act in that its action was "tactically calculated to satisfy union objectives elsewhere, and was, therefore, secondary and unlawful."7

Local 829 petitioned for review of this decision and order, and the Board cross-petitioned for enforcement. Upon its examination of the administrative record, this Court determined that the evidence did not support the Board's apparent assumption that Local 829 knew that TTI, rather than the immediate employer Nolan, possessed contractual control over the disputed work. More specifically, we noted that "much of the evidence on this point suggests that the Union did not know the provisions of the contract." 655 F.2d at 1270. In fact, Rodriguez, the only union representative to have made any kind of demand upon Nolan, testified that he had no knowledge of TTI's contractual control, that he believed that Nolan, which had the painting contract, also controlled whatever sculpting was to be done, and that Local 829 believed that Nolan had permitted the sculpturing to be done by TTI in violation of the collective bargaining agreement.8

Nevertheless, relying upon credibility determinations made by the ALJ, the Board decided to ignore the Rodriguez testimony9 and to assume that the union knew the terms of the contractual relationship between TTI and Nolan and therefore knew the locus of the "right of control." We concluded that the record did not contain substantial evidence to support such an assumption, and on that basis we remanded the case to the Board for further proceedings. In so doing, we directed the Board either to develop adequate evidentiary support for its assumption or to explicate what, if any, alternative rationale supported its decision.10

Following the remand, on August 26, 1983, the Board, without having reopened the proceeding to take additional evidence, issued a Supplemental Decision and Order in which it reaffirmed its earlier finding that Local 829 had engaged in unlawful secondary conduct. Having failed to take new evidence, the Board cannot, in the face of this Court's previous determination to the contrary, justify its decision on the basis of its earlier theory and the existing evidence,11 but it must rely on the alternative the Court offered--a new rationale.

The Board has adopted and proffers for our consideration a new rationale for its decision. Under the Board's test, in order to make out a prima facie case under section 8(b)(4)(ii)(B), the general counsel is not required to establish that a union knew when it exerted pressure on an employer that he lacked control over the disputed work. Rather, in the view of the Board, when a union coerces a neutral employer it must be presumed to have knowledge of that employer's neutral status. It follows, according to the Board, that once the neutrality of an affected employer has been established by the general counsel, the burden shifts to the union to demonstrate that it possessed a reasonable good-faith belief that the primary employer had control over the disputed work. Moreover, that burden would be "high" and could only be met in "extraordinary circumstances," i.e., by evidence establishing that, before the union exerted pressure, it was either denied access to information of the employer's neutrality or deliberately misled. Finally, the Board noted that it "[did] not envision that the instances in which this defense will be found meritorious will be many." Board Decision on August 26, 1983 at 14, J.A. at 17a.

Applying this standard to the instant case, the Board found that Local 829 had failed to rebut the general counsel's prima facie showing because it had not shown that it had been denied access to information concerning Nolan's lack of contractual control or that it had been affirmatively misled in that regard. The Board therefore concluded that "an object of [Local 829's] conduct must have been the unlawful one of influencing TTI."12

It is clear from this history that the basic issue before the Court is whether the Board may, consistently with the Act, impose upon a labor union the burden of ascertaining, before engaging in coercive activity, whether the immediate employer with whom it has a labor dispute is, in fact, neutral. In our view, the Board's approach cannot be squared with the language of the statute, its purposes, or the precedents.

Section 8(b)(4)(ii)(B) provides13 that two requirements must be satisfied before the Board may find that a union has engaged in an unfair labor practice: (1) it must have been an object of the challenged union conduct to require a neutral employer to cease doing business with the employer with whom the union is engaged in a dispute, and (2) the union must have pursued this object by threatening, coercing, or restraining the neutral employer. Soft Drink Workers Union Local 812 v. NLRB, 657 F.2d 1252, 1261 (D.C.Cir.1980); see generally, R. Gorman, LABOR LAW, Chap. XII, Sec. 1 (1976).

We will assume for purposes of this opinion that the activities of Local 829 satisfied the second part of the test, although that issue is hotly disputed.14 The question here, then, is how the secondary object element of the statute may properly be established.

The language of section 8(b)(4)(ii)(B) is plain. It does not permit the Board to find that a labor organization is guilty of a secondary boycott unless it is an "object" of the union activity to pressure a neutral employer. In other words, as the Supreme Court has explained, this provision does not proscribe all union activities which may be designed to cause a cessation of business: it prohibits only those activities which have a "secondary objective"--that is, activities which are "tactically calculated to satisfy union objectives elsewhere." National Woodwork Manufacturers Association v. NLRB, 386 U.S. 612, 644, 87 S. Ct. 1250, 1268, 18 L. Ed. 2d 357 (1967).

The term "object" as it is found in the statute,15 or the words "tactically calculated ... objectives" as the Supreme Court paraphrased it in National Woodwork Manufacturers,16 are generally taken as synonyms for "purpose."17 On that basis, it has been held in the secondary boycott cases that the union's "improper motive and intent" must be established;18 that the union's conduct must "reveal[ ] a specific intent to involve neutrals in labor disputes not their own";19 and that a union violated section 8(b)(4)(ii)(B) when it "purposefully picketed and handbilled the entire [jobsite] in order to influence neutral individuals ...."20

If any doubt remained that it is the union's intent, not the effect of its actions, that is critical to the resolution of a secondary boycott charge, it is dispelled by a recent decision of this Court which held that "[t]he Board must ... establish that union conduct reveals a specific intent to involve neutrals in labor disputes not their own in order to establish a secondary boycott violation," and that "[t]he ultimate inquiry focuses on the intent of the union, not the effects of its actions." Local Union 501, International Brotherhood of Electrical Workers, AFL-CIO v. NLRB, 756 F.2d 888, 893 (D.C.Cir.1985).21

In short, inasmuch as the statute requires a showing of a purpose to coerce a neutral employer, the Board may make an unlawful secondary boycott determination only if it is able to find that the union had such a purpose; a finding that the union's actions affected a neutral employer is not sufficient.

The Board here sought to discharge its responsibility with respect to the "object" element of the statute by means of a presumption. It decided that if a union is not denied access to information and if it is not affirmatively misled concerning the issue of control, it must be presumed to have had knowledge of the neutral status of the controlling employer and thus to have had an unlawful secondary object. That theory is unsound as a matter of law and of logic.

Presumptions may, of course, be established both by legislative bodies and by administrative agencies, but their validity depends as a general rule upon a rational nexus between the proven facts and the presumed facts. McCormick Evidence 3d ed. (1984) Sec. 344 at 969; Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 28, 96 S. Ct. 2882, 2898, 49 L. Ed. 2d 752 (1976); Bandini Petroleum Co. v. Superior Court, 284 U.S. 8, 19, 52 S. Ct. 103, 107, 76 L. Ed. 136 (1931); Mobile, Jackson & Kansas City Ry. Co. v. Turnipseed, 219 U.S. 35, 43-44, 31 S. Ct. 136, 138, 55 L. Ed. 78 (1910); United States Steel Corp. v. Oravetz, 686 F.2d 197, 201-02 (3d Cir.1982). Where such a nexus is lacking, the presumption is invalid. United States Department of Agriculture v. Murry, 413 U.S. 508, 93 S. Ct. 2832, 37 L. Ed. 2d 767 (1973); Vlandis v. Kline, 412 U.S. 441, 93 S. Ct. 2230, 37 L. Ed. 2d 63 (1973); Holland Livestock Ranch v. United States, 543 F. Supp. 158 (D.Nev.1982), aff'd, 714 F.2d 90 (9th Cir.1983); United States v. Murff, 265 F.2d 504, 506 (2d Cir.1959); Owens v. Roberts, 377 F. Supp. 45, 54-55 (M.D.Fla.1974).

This rule has in various circumstances been relaxed with respect to legislative presumptions. Since presumptions established by a legislature must normally survive scrutiny only on due process grounds, they have sometimes been upheld even if they were not based on probabilities but rather on policy. McCormick Evidence, supra, Sec. 345 at 985. However, an administrative agency's presumptions do not enjoy a similar protection: such an agency is not free to ignore statutory language by creating a presumption on grounds of policy to avoid the necessity for finding that which the legislature requires to be found. See Atchison, T. & S. F. Ry. Co. v. ICC, 580 F.2d 623, 629 (D.C.Cir.1978).

These general principles have applicability to the NLRB. The Supreme Court has held on several occasions that a presumption created by the Board is subject to judicial review "for consistency with the Act, and for rationality." NLRB v. Baptist Hospital, Inc., 442 U.S. 773, 787-90, 99 S. Ct. 2598, 2606-07, 61 L. Ed. 2d 251 (1979) ("It is, of course, settled law that a presumption adopted and applied by the Board must rest on a sound factual connection between the proved and inferred facts"); see also, Beth Israel Hospital v. NLRB, 437 U.S. 483, 501, 98 S. Ct. 2463, 2473, 57 L. Ed. 2d 370 (1978); Republic Aviation Corp. v. NLRB, 324 U.S. 793, 804-05, 65 S. Ct. 982, 988-89, 89 L. Ed. 1372 (1945).

For the reasons discussed above, it is clear that the presumption the Board attempted to establish in this case is not consistent with the Act.22 Indeed, the Supreme Court has struck down an NLRB-created presumption in a similar context on grounds of inconsistency with the statute.

In Local 357, International Brotherhood of Teamsters v. NLRB, 365 U.S. 667, 81 S. Ct. 835, 6 L. Ed. 2d 11 (1961), the Court considered a Board determination that a hiring hall agreement was presumptively unlawful under section 8(a)(3) of the Act23 if it did not include certain protective provisions relating to discrimination. As the Court analyzed it, the Board sought to dispense with proof of the union's intent or motive by imposing an affirmative duty upon it and by inferring a violation of the statute from a breach of that duty. The Court squarely rejected that attempt, stating that where the dispositive issue is the union's "true purpose" or "real motive" for a hiring or firing decision, "the Board is confined to determining whether discrimination has in fact been practiced. If hiring halls are to be subjected to regulation that is less selective and more pervasive, Congress not the Board is the agency to do it." 365 U.S. at 675, 677, 81 S. Ct. at 839, 840.

Likewise clear is the factual irrationality of the Board's presumption. The conclusion (that the union's object must have been to influence the neutral employer) simply does not follow from the premise (that the union was not denied access to the relevant information and that it was not misled). As this case demonstrates, it is at least as likely that the union believed, albeit mistakenly, that the primary employer controlled the disputed work,24 and that its object was therefore to influence that employer, not a neutral party.

Nevertheless, under the Board's present rationale, in the absence of a prior investigation, the union's actual objective is irrelevant: a secondary objective is presumed as matter of law, whether or not this squares with the actual facts and the relationships between and among the various parties,25 and that presumption can be overcome only in "extraordinary circumstances."

On the basis of the principles discussed above, we hold that the creation of such a presumption is beyond the Board's statutory authority.26

The NLRB responds by pointing to a number of decisions, principally NLRB v. Enterprise Association of Steam Pipefitters, Local 638 (Enterprise), 429 U.S. 507, 97 S. Ct. 891, 51 L. Ed. 2d 1 (1977). However, none of these cases supports the Board's position.

To be sure, in Enterprise the Supreme Court upheld the Board's finding of a secondary boycott on the basis that the union's objective was not confined to the employment relationship with its immediate employer, the subcontractor, but also included that of influencing a neutral. However, unlike here, the union in Enterprise did not and could not contend that it believed that the primary employer completely controlled the assignment of the disputed work. Not only was the neutral employer, the general contractor, present at the job site but there was evidence that the union approached that employer directly with its demand that internal piping work be performed by union members. 429 U.S. at 512-13, 97 S.Ct. at 895-96.27 The Board's own decision in Enterprise emphasized the fact that the union knew that Austin had the right to control:

Hudick [the primary employer] was incapable of assigning its employees this work; such work was never Hudik's to assign in the first place. Moreover, we note that the [union] informed Austin [the neutral], who did not employ employees represented by the [union], that it would not let Hudik install the climate control units involved. Considered together, these facts clearly indicate that [the union] was exerting prohibited pressure on Hudik with an object of either forcing a change in Austin's manner of doing business or forcing Hudik to terminate its subcontract with Austin.

Enterprise Association of Steamfitters, 204 N.L.R.B. 760 (1973). Thus, if anything, Enterprise confirms the significance of a union's knowledge or lack of knowledge of the locus of control in a secondary boycott case.

The other common situs picketing cases upon which the Board relies are similarly inapposite.28 In all of these cases the union knowingly involved a second employer in its labor dispute with a primary employer.29 Under these circumstances, it is entirely appropriate to require a union which has chosen to take its appeal to a site occupied by a neutral to ascertain whether the primary employer is, in fact, present and to limit the effect of its appeal to the employer with whom it has the primary dispute. See note 26, supra.30

Here, by contrast, the union's conduct was restricted to a contact with Nolan, the primary employer.31 There was no evidence that Local 829 approached TTI or in any other way attempted to involve TTI in its dispute with Nolan, and there likewise was no evidence that the union knew that TTI had actual control over the disputed work. The Court has been made aware of no case prior to this one where either the Board or a court has found a violation of the secondary boycott provision under circumstances such as these.

Similarly unpersuasive are the Board's "practical" arguments for shifting the burden of proof to the union.32 The Board's conclusion that a union which is not misled or denied access to the relevant information must bear the burden of a mistake might be reasonable if, as a matter of common sense, a union, rather than the primary employer, had superior knowledge. That, however, is not so.

An employer who is pressured by a union to do something which he is incapable of doing (because someone else has control of the work) can quite simply inform the union of that fact. He knows that he has no control; he therefore also knows, far better than does the union, that the union's activities would affect a neutral party,33 and he is therefore a logical candidate upon whom to impose the burden of imparting information. Moreover, that burden is minimal.

By contrast, it would be very onerous and it would also substantially infringe on the rights of employees to engage in concerted activity protected by the Act if, before they could exert legitimate34 pressure on their employer, they were required to conduct an investigation into whether that employer might, on some basis, have a contractual relationship with a neutral party whose interests would be affected by that pressure. Both section 8(b) and the labor laws generally35 have as their purpose not only the prevention of secondary boycotts; they also protect the rights of labor organizations to place pressure on employers with whom they have a primary dispute. Edward J. DeBartolo Corp. v. NLRB, 463 U.S. 147, 103 S. Ct. 2926, 79 L. Ed. 2d 535 (1983); International Longshoremen's Association, AFL-CIO v. Allied International, Inc., 456 U.S. 212, 223 n. 20, 102 S. Ct. 1656, 1663 n. 20, 72 L. Ed. 2d 21 (1982); NLRB v. Local 825, International Union of Operating Engineers, AFL-CIO, 400 U.S. 297, 302, 91 S. Ct. 402, 406, 27 L. Ed. 2d 398 (1971). As the Supreme Court phrased it in the Denver Building and Construction Trades Council case, supra, the secondary boycott rules were designed to implement the "dual congressional objectives of preserving the right of labor organizations to bring pressure to bear on offending employers in primary labor disputes and of shielding unoffending employers and others from pressure in controversies not their own." 341 U.S. at 692, 71 S.Ct. at 953. By shifting the burden to the union, the board entirely ignores and, in fact, jeopardizes the other, non-secondary boycott purposes of the labor laws.

For these reasons, we hold that the Supplemental Decision and Order of the Board cannot be sustained on the basis of its new rationale.

Upon remand, the Board must either explicitly find that Local 829 had a forbidden secondary object or it must dismiss the proceeding.36 In order to find that the union had a secondary object, the Board must have before it new, credible evidence to support its inference that the union knew that TTI possessed absolute contractual control over the disputed work. Absent such evidence, the Board may not find a violation of section 8(b)(4)(ii)(B). The decision of the Board is reversed and remanded for further proceedings not inconsistent with this opinion.

So ordered.