United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 19, 2000 Decided May 9, 2000
No. 99-1137
Local 702, International Brotherhood of
Electrical Workers, AFL-CIO,
Petitioner
v.
National Labor Relations Board,
Respondent
Central Illinois Public Service Company,
Intervenor
No. 99-1139
International Union of Operating Engineers,
Local 148, AFL-CIO,
Petitioner
v.
National Labor Relations Board,
Respondent
Central Illinois Public Service Company,
Intervenor
On Petitions for Review of an Order of the
National Labor Relations Board
Marilyn S. Teitelbaum argued the cause for the petitioners
in Nos. 99-1137 and 99-1139. Stacey A. Meyers was on brief
for Local 702, International Brotherhood of Electrical Work-
ers, AFL-CIO, the petitioner in No. 99-1137.
Cary Hammond and Greg A. Campbell were on brief for
petitioner International Union of Operating Engineers, Local
148, AFL-CIO in No. 99-1139.
Julie B. Broido, Attorney, National Labor Relations Board,
argued the cause for the respondent. Linda Sher, Associate
General Counsel, Aileen A. Armstrong, Deputy Associate
General Counsel, and Margaret A. Gaines, Attorney, Nation-
al Labor Relations Board were on brief for the respondent.
John D. Burgoyne, Deputy Associate General Counsel, Na-
tional Labor Relations Board, entered an appearance.
Stuart I. Cohen and Robert S. Seigel were on brief for
intervenor Central Illinois Public Service Company in Nos.
99-1137 and 99-1139.
Jonathan P. Hiatt, Larry Engelstein, James B. Coppess,
Victoria L. Bor and Sue D. Gunter were on brief for amici
curiae American Federation of Labor-Congress of Industrial
Organizations, International Brotherhood of Electrical Work-
ers and International Union of Operating Engineers in Nos.
99-1137 and 99-1139.
Robert E. Williams, Daniel V. Yager, Heather L. MacDou-
gall, Jan S. Amundson, Quentin Riegel, Stephen A. Bokat
and Robin S. Conrad on brief for the amici curiae LPA, Inc.,
National Association of Manufacturers and the Chamber of
Commerce of the United States of America in Nos. 99-1137
and 99-1139.
Before: Henderson, Randolph and Garland, Circuit
Judges.
Opinion for the court filed by Circuit Judge Henderson.
Karen LeCraft Henderson, Circuit Judge: Local 702 and
Local 148 of the International Brotherhood of Electrical
Workers, AFL-CIO (collectively Unions) challenge a decision
of the National Labor Relations Board (NLRB, Board) hold-
ing that the Central Illinois Public Service Company (CIPS)
did not commit an unfair labor practice when it locked out its
employees during contract negotiations. CIPS, 326 N.L.R.B.
No. 89, 1998 WL 600788 (Aug. 27, 1988). Reversing the
decision of the administrative law judge (ALJ), the Board
found that the lockout, implemented in response to the Un-
ions' "inside game" tactics, was not "inherently destructive of
employee rights," was justified by legitimate business inter-
ests and was not motivated by anti-union animus. Because
we conclude the Board's decision is in accord with the law and
supported by substantial evidence, we deny the Unions' peti-
tions for review.
I.
In April 1992 CIPS, a public utility which generates and
distributes electricity and gas in Illinois, began negotiating
with each of the Unions over contracts to succeed those
expiring in June 1992. When no agreement was reached by
March 1993 CIPS submitted a "final" offer to each of the
Unions, which each voted to reject. In lieu of striking, the
Unions decided to institute an "inside game" strategy under
which their members agreed to refuse to work voluntary
over-time and generally to "work-to-rule" (e.g., "adhering
strictly to all company safety and other rules; doing exactly
and only what they were told; reporting to work precisely on
time and parking work trucks at company facilities at day's
end (thus precluding employees from responding to after-
hours emergencies); presenting all grievances as a group;
advising non-employees to report unsafe conditions; and ad-
vising customers of their right to various company informa-
tion and of their right to have their meters checked annually
for accuracy," CIPS, slip op. at 1, 1998 WL 600788, at *1).
The Unions began the inside game strategy on April 24, 1993
and continued to negotiate while carrying it out. At 4:00 a.m.
on May 20, 1993 CIPS instituted a lockout of all members of
the two locals. Negotiations continued during the lockout
and CIPS reached an agreement with Local 148 in June,
thereby ending the lockout of its members. Local 148 none-
theless remained off the job in support of Local 702. CIPS
ended the lockout of Local 702 on August 25, 1993, although
no contract agreement was reached until January 1994.
Each of the Unions filed unfair labor practice charges with
the NLRB, alleging violations of section 8(a)(1), (3) and (5) of
the National Labor Relations Act, 29 U.S.C. s 158(a)(1), (3),
(5). Following a hearing the ALJ judge issued a decision
dated May 20, 1996, which found that CIPS had violated all
three cited subsections. In relevant part, the ALJ's decision
concluded that the work-to-rule campaign constituted protect-
ed activity for which the lockout was intended as punishment
in violation of section 8(a)(3). In a 2-1 decision dated August
27, 1998 the Board reversed the ALJ on the section 8(a)(3)
lockout charge, concluding the lockout was instituted not out
of anti-union animus but with the dual "legitimate and sub-
stantial" business justifications of facilitating contract negoti-
ations and of countering the economic effects of the inside
game strategy. See CIPS, slip op. at 4-7, 1998 WL 600788, at
*6-10.
II.
The Unions challenge both the Board's interpretation of the
law and its factual findings. "The courts accord a very high
degree of deference to administrative adjudications by the
NLRB." United Steelworkers Local 14534 v. NLRB, 983
F.2d 240, 244 (D.C. Cir. 1993). "The Board has primary
responsibility for applying the general provisions of the [Na-
tional Labor Relations Act], and where its interpretation of
what the Act requires is reasonable, in light of the purposes
of the Act and the controlling precedent of the Supreme
Court, courts should respect its policy choices." United Food
& Commercial Workers Int'l Union v. NLRB, 880 F.2d 1422,
1428 (D.C. Cir. 1989) (citing Pattern Makers' League of N.
Am. v. NLRB, 473 U.S. 95 (1985); Automobile Salesmen's
Union Local 1095 v. NLRB, 711 F.2d 383 (D.C. Cir. 1983)).
"[W]ith respect to questions of fact," "the findings of the
Board ... if supported by substantial evidence on the record
considered as a whole shall be conclusive." 29 U.S.C.
s 160(e). "Where the Board has disagreed with the ALJ, as
occurred here, the standard of review with respect to the
substantiality of the evidence does not change." United Food
& Commercial Workers v. NLRB, 768 F.2d 1463, 1469-70
(D.C. Cir. 1985) (citing Universal Camera Corp. v. NLRB,
340 U.S. 474, 496 (1951); General Teamsters Local Union
No. 174 v. NLRB, 723 F.2d 966, 971 (D.C. Cir. 1983)).
Nevertheless, "cases have made clear that '[t]he findings and
decision of the [ALJ] form an important part of the "record"
on which [the] judgment of substantiality is to be based,'
International Brotherhood of Teamsters, Local No. 310 v.
NLRB, 587 F.2d 1176, 1180 (D.C. Cir. 1978), and that the
Board, when it disagrees with the ALJ, 'must make clear the
basis of its disagreement ...' General Teamsters, supra, 723
F.2d at 971." Id. at 1470 (alteration in original). In the end,
however, "[s]ince the Board is the agency entrusted by Con-
gress with the responsibility for making findings under the
statute, 'it is not precluded from reaching a result contrary to
that of the [ALJ] when there is substantial evidence in
support of each result,' " and " 'is free to substitute its
judgment for the [ALJ]'s.' " Carpenters Local 33 v. NLRB,
873 F.2d 316, 319 (D.C. Cir. 1989) (quoting Sign & Pictorial
U., Local 1175 v. NLRB, 419 F.2d 726, 734 (D.C. Cir. 1969)
(alteration in original)). Because we conclude the Board's
decision here was supported by substantial evidence and its
disagreement with the ALJ fully explained, we do not disturb
it.
Section 8(a)(3) of the National Labor Relations Act pro-
vides in relevant part: "It shall be an unfair labor practice for
an employer ... (3) by discrimination in regard to hire or
tenure of employment or any term or condition of employ-
ment to encourage or discourage membership in any labor
organization:...." 29 U.S.C. s 158(a)(3). In NLRB v. Great
Dane Trailers, 388 U.S. 26 (1967), the United States Supreme
Court construed its precedent to establish a comprehensive
framework for analyzing allegations of a section 8(a)(3) viola-
tion:
The statutory language 'discrimination * * * to * * *
discourage' means that the finding of a violation normally
turns on whether the discriminatory conduct was moti-
vated by an antiunion purpose. American Ship Build-
ing Co. v. National Labor Relations Board, 380 U.S. 300,
85 S.Ct. 955 (1965). It was upon the motivation element
that the Court of Appeals based its decision not to grant
enforcement, and it is to that element which we now
turn. In three recent opinions we considered employer
motivation in the context of asserted s 8(a)(3) violations.
American Ship Building Co. v. National Labor Rela-
tions Board, supra; National Labor Relations Board v.
Brown, 380 U.S. 278, 85 S.Ct. 980, 13 L.Ed.2d 839 (1965);
and National Labor Relations Board v. Erie Resistor
Corp., [373 U.S. 221, 227, 83 S.Ct. 1139, 1144-45, 10
L.Ed.2d 308 (1963)]. We noted in Erie Resistor, supra,
373 U.S. at 227, 83 S.Ct. at 1144, that proof of an
antiunion motivation may make unlawful certain employ-
er conduct which would in other circumstances be lawful.
Some conduct, however, is so 'inherently destructive of
employee interests' that it may be deemed proscribed
without need for proof of an underlying improper motive.
National Labor Relations Board v. Brown, supra, 380
U.S., at 287, 85 S.Ct. at 986, American Ship Building Co.
v. National Labor Relations Board, supra, 380 U.S. at
311, 85 S.Ct. at 963. That is, some conduct carries with
it 'unavoidable consequences which the employer not only
foresaw but which he must have intended' and thus bears
'its own indicia of intent.' National Labor Relations
Board v. Erie Resistor Corp., supra, at 228, 231, 83 S.Ct.
at 1145-1147. If the conduct in question falls within this
'inherently destructive' category, the employer has the
burden of explaining away, justifying or characterizing
'his actions as something different than they appear on
their face,' and if he fails, 'an unfair labor practice charge
is made out.' Id., at 228, 83 S.Ct. at 1145. And even if
the employer does come forward with counter explana-
tions for his conduct in this situation, the Board may
nevertheless draw an inference of improper motive from
the conduct itself and exercise its duty to strike the
proper balance between the asserted business justifica-
tions and the invasion of employee rights in light of the
Act and its policy. Id., at 229, 83 S.Ct. at 1145. On the
other hand, when 'the resulting harm to employee rights
is * * * comparatively slight, and a substantial and
legitimate business end is served, the employers' conduct
is prima facie lawful,' and an affirmative showing of
improper motivation must be made. National Labor
Relations Board v. Brown, supra, 380 U.S. at 289, 85
S.Ct. at 987; American Ship Building Co. v. National
Labor Relations Board, supra, 380 U.S. at 311-313, 85
S.Ct. at 963-964.
388 U.S. at 33-34. Applying this framework, the Board found
that the CIPS lockout did not violate section 8(a)(3).
The Board first concluded that "the lockout in the instant
case, standing alone, cannot be considered inherently destruc-
tive of employee rights," based on the Supreme Court's
holding in American Ship Bldg. that "a lockout for the
purpose of applying pressure on a union during a bargaining
dispute is not 'one of those acts which are demonstrably so
destructive of collective bargaining that the Board need not
inquire into employer motivation.' " CIPS, slip op. at 3, 1998
WL 600788, at *4 (quoting American Ship Bldg., 380 U.S. at
309); see also slip op. at 3, 1998 WL 600788, at *4 (noting
even in Brown, where employer took "additional step of
hiring temporary replacements after the lockout to continue
operations," Supreme Court "found that such conduct is not
inherently destructive of employee rights"). The Board
therefore determined "to treat [the lockout] as having a
'comparatively slight' impact on employee rights and apply
the second Great Dane test to determine the lockout's legali-
ty." CIPS, slip op. at 4, 1998 WL 600788, at *5. We agree
with the Board's analysis. The Supreme Court made it clear
in American Ship Bldg., as the Board observed, that a
lockout "does not fall into that category of cases arising under
s 8(a)(3) in which the Board may truncate its inquiry into
employer motivation." 380 U.S. at 312.1 Thus, the Board
__________
1 Local 702 contends the Board was required to "analyz[e] the
specific facts in this case," in order to make the "inherently
destructive" determination. See Local 702 Brief at 39-44. The
Supreme Court decisions indicate, however, that an across-the-
board lockout "as a means to bring economic pressure to bear in
support of the employer's bargaining position," 380 U.S. at 308, is
categorically not "inherently destructive." See American Ship
Bldg., 380 U.S. at 310-12 ("Nor is the lockout one of those acts
which are demonstrably so destructive of collective bargaining that
the Board need not inquire into employer motivation, as might be
the case, for example, if an employer permanently discharged his
unionized staff and replaced them with employees known to be
possessed of a violent antiunion animus.... This is not to deny
that there are some practices which are inherently so prejudicial to
union interests and so devoid of significant economic justification
that no specific evidence of intent to discourage union membership
or other antiunion animus is required. In some cases, it may be
that the employer's conduct carries with it an inference of unlawful
intention so compelling that it is justifiable to disbelieve the employ-
er's protestations of innocent purpose.... But this lockout does
not fall into that category of cases arising under s 8(a)(3) in which
the Board may truncate its inquiry into employer motivation.");
Brown, 380 U.S. at 284. ("[W]e do not see how the continued
operations of respondents and their use of temporary replacements
imply hostile motivation any more than the lockout itself; nor do we
see how they are inherently more destructive of employee rights.").
Thus, the "specific facts" come into play only in the subsequent
correctly concluded that under the Great Dane framework
the Board must inquire "whether the Respondent possessed a
legitimate and substantial business justification for the lock-
out." CIPS, slip op. at 4, 1998 WL 600788, at *5. The Board
reasonably found that CIPS had two such justifications.
The first objective the Board attributed to CIPS was "to
force the Unions to cease their inside game activities." CIPS,
slip op. at 4, 1998 WL 600788, at *5. Noting that the strike
that prompted the lockout in Brown was "also an economic
bargaining weapon in support of contract demands and no
less protected than the inside game that the judge found was
protected in this case," the Board concluded that the lockout
was a legitimate defense against the Unions' "inside game
weapon" deployed as part of "economic warfare in the midst
of bargaining negotiations with the hope of securing agree-
ment on their terms for new contracts." CIPS, slip op. at 4,
1998 WL 600788, at *5. Applying the standard of review set
forth above, we find the Board's conclusion--that CIPS's
defensive use of the lockout here against the Unions' inside
game was as justified as the lockout in Brown aimed at the
employees' economic strike--to be "reasonable, in light of the
purposes of the Act and the controlling precedent of the
Supreme Court," United Food, 880 F.2d at 1428. According-
ly, we defer to the Board's policy choice. Id.
We also agree that the second business objective the Board
identified--"resolution of issues that were dividing the parties
in their bargaining negotiations," CIPS, slip op. at 4, 1998 WL
600788, at *6--was a legitimate one and supported by the
evidence. The Board found as a fact that in implementing
the lockout CIPS "sought resolution of issues that were
dividing the parties in their bargaining negotiations," CIPS,
slip op. at 4, 1998 WL 600788, at *6, based on the text of
letters CIPS's chief executive officer sent the members of
each of the Unions on May 20, 1993, the day the lockout
began. The bulk of each letter outlined the contract conces-
sions CIPS made in its final offer and the chronology of
__________
inquiries whether the particular lockout has a legitimate business
justification and whether it was motivated by anti-union animus.
negotiations, culminating in the inside game. In addition, the
letter to Local 702 members stressed that union negotiators
had continually rejected CIPS's urging to place its offers
before the membership and was accompanied by an analysis
of the differences between the previous contract and CIPS's
final offer of a new one.2 The letters to Local 148 explained
the Company's position on the one apparent sticking point in
negotiations (the transfer of six union positions to manage-
ment). Each letter closed with the following language:
Like you, I am anxious to bring these issues to a
successful conclusion and have you back at your jobs at
the earliest possible date. I sincerely regret the disrup-
tion this decision will bring into your lives. My hope is
that this aspect of our labor dispute is short-lived.
App. 632-33, 644-48. Given their focus and tenor (concen-
trating on the course and substance of negotiations and
CIPS's eagerness to resolve the contract dispute), we con-
clude the letters constitute substantial evidence in support of
the Board's finding "that a purpose of the lockout was to
affect the outcome of negotiations between the Respondent
and the Unions." CIPS, slip op. at 5, 1998 WL 600788, at *7.
We therefore uphold the Board's consequent determination
"that application of economic pressure in support of this
bargaining position constitutes a legitimate and substantial
business justification for the lockout within the meaning of
Great Dane." CIPS, slip op. at 5, 1998 WL 600788, at *7.
Finally, having found two substantial and legitimate busi-
ness objectives, the Board undertook the third inquiry of the
Great Dane framework: asking whether the Unions had
made an "affirmative showing of improper motivation," such
as through "evidence indicating that the lockout was intended
to 'discourage union membership' or that was [sic] used 'in
the service of designs inimical to the process of collective
bargaining.' " CIPS, slip op. at 6, 1998 WL 600788, at *9
(quoting American Ship Bldg., 380 U.S. at 308, 312-313).
__________
2 According to the ALJ, a similar analysis was included with the
letters to Local 148 members, CIPS, ALJ Dec. 23 [App. 806], but it
does not appear in the appendix filed with the court.
The Board reasonably found "that 'not only is there absent in
[sic] the record any independent evidence of improper motive,
but the record contains positive evidence of the [Respon-
dent's] good faith.' " CIPS, slip op. at 7, 1998 WL 600788, at
*10 (quoting Brown, 380 U.S. at 290). As examples of such
evidence, the Board pointed to CIPS's long and stable bar-
gaining relationship with the Unions and its lengthy, good
faith attempts to reach a contract here, including its clearly
expressed desire in the May 20, 1993 letter to resolve differ-
ences and resume business as usual as soon as possible. We
conclude the Board's historic and continuing good faith deal-
ing with the Union, combined with the absence of affirmative
evidence showing anti-union animus, sufficiently supports the
Board's finding here.
Despite the Board's faithful adherence to Great Dane and
its predecessors and specific factual findings, the Unions
challenge the Board's decision on two grounds: (1) precedent
precludes the Board's finding that CIPS's use of the lockout
as an economic defense to the Unions' economic inside game
weapon was in furtherance of a permissible business interest
and (2) the finding of no anti-union animus on CIPS's part is
belied by the record. We find neither argument a basis for
overturning the Board's determination.
First, the Unions contend the Board's acceptance of the
economic defense justification is contrary to Supreme Court
precedent which, the Unions maintain, requires finding the
lockout unlawful because it was intended to curtail "protect-
ed" activity, namely the inside game tactics. As the Board
correctly observed, however, that activity may be protected
does not insulate it from counteraction by an employer.
CIPS, slip op. at 4, 1998 WL 600788, at *5 (noting: "To hold
that it is not a legitimate business justification for the Re-
spondent to defend against this weapon with a lockout in
order to force the Unions to yield, ignores the Court's obser-
vation in American Ship that the 'right to bargain collectively
does not entail any "right" to insist on one's position free
from economic disadvantage.' ") (quoting 380 U.S. at 309); see
Machinists v. Wisconsin Employment Relations Comm'n,
427 U.S. 132, 152-53 (1976) ("[E]ven were the activity pre-
sented in the instant case 'protected' activity within the
meaning of s 7, economic weapons were available to counter
the Union's refusal to work overtime, e.g., a lockout....")
(citing American Ship Bldg.) (footnote omitted). The strikes
in both American Ship Bldg. and Brown, as the Board noted,
were also protected activities--yet the employers' responsive
lockouts in those cases were upheld by the Supreme Court.
We see no reason to treat differently the lockout here which
was implemented in response to the inside game strategy that
the Unions adopted as an alternative to a strike.
We also believe the Board's endorsement of the economic
defense justification is, contrary to the Unions' insistence,
consistent with its own precedent. The Unions rely most
heavily here on the Board's decisions in Riverside Cement
Co., 296 N.L.R.B. 840 (1989), Thrift Drug Co, 204 N.L.R.B. 41
(1973), and Carlson Roofing, 245 N.L.R.B. 13 (1979). The
Board reasonably distinguished Riverside on the ground that
the action taken there was not in furtherance of "lawful
bargaining" but was an attempt to implement "a unilateral
change in the employees' contractual terms of employment"
by requiring employees to furnish specific personal tools
which, under their collective bargaining agreement, they were
expressly exempted from furnishing. CIPS, slip op. at 6-7
n.20, 1998 WL 600788, at *15 n.20. Any worker who did not
provide his own tools was locked out. In finding a section
8(a)(3) violation, the Riverside Board stressed that the "denial
of work was limited to only those employees who engaged in
action they were entitled to take under the contract" and
therefore "was not a lawful lockout," which is "generally
permissible in anticipation of a strike or in support of an
employer's legitimate bargaining position." 296 N.L.R.B. at
841. Similarly, in Thrift Drug Co., the Board found a section
8(a)(3) violation where the employer suspended a single pick-
eting employee solely on the ground the employee "was
unlawfully selected for suspension because of her activities on
behalf of the Union." 204 N.L.R.B. at 41. In contrast to
Riverside and Thrift Drug, the lockout here was directed
unit-wide, not to specific employees engaged in specific acts.
Finally, Carlson Roofing is inapposite because the Board's
finding that the lockout there violated section 8(a)(3) was
overturned on review by the Seventh Circuit. See Carlson
Roofing Co. v. NLRB, 627 F.2d 77, 82 (7th Cir. 1980).
The Unions also argue that the Board ignored the ALJ's
credibility determinations and findings regarding the true
motive behind the lockout. The Board, however, expressly
accepted the ALJ's finding that the lockout was implemented
"in reprisal" for the inside game, ALJ Decision at 22, 1998
WL 600788, at *35, CIPS, slip op. at 2, 1998 WL 600788, at
*2, but then found the motive was "not ... impermissible,"
CIPS, slip op. at 4, 1998 WL 600788, at *5. The ALJ based
his motive finding on statements by company management
that it would have "preferred" and been "better off with" a
strike or lockout than with the inside game strategy, under
which unit employees "were getting the best of both worlds"
by "putting pressure on the Company while still getting their
paycheck for the daytime work." ALJ Dec. at 65 [App. 848].
Neither this testimony nor the finding itself is at odds with
the Board's finding that CIPS implemented the lockout as an
economic response to the inside game, which CIPS viewed as
economically injurious. The Board's principal factual dispute
with the ALJ was on how to construe the text of the May 20,
1993 letters and the Board decision sufficiently explains its
differing, and we believe more defensible, interpretation of
the letters' language. See Mathews Readymix, Inc. v.
NLRB, 165 F.3d 74, 77 (D.C. Cir. 1999) ("Board's findings of
fact are conclusive if supported by substantial evidence,"
provided it "make clear the basis of its disagreement" when
reversing ALJ) (citing Avecor, Inc. v. NLRB, 931 F.2d 924,
928 (D.C. Cir. 1991); United Food & Commercial Workers
Int'l Union, Local 152 v. NLRB, 768 F.2d 1463, 1470 (D.C.
Cir. 1985)).
Finally, Local 128 challenges the Board's finding that its
members were locked out in order to obtain a contract on the
ground that agreement on a contract with Local 128 (as
distinct from Local 702) was imminent. We accept the
Board's finding as supported by the facts. The record estab-
lishes that Local 128 acted in unison with Local 207 in
planning and implementing the inside game and that, even
after CIPS terminated the lockout of Local 128, its members
stayed away from work in support of Local 702 (as they might
well have done ab initio if CIPS had not locked them out). It
was therefore not unreasonable for CIPS and the Board to
treat the two locals as a single bargaining force. In fact,
given the unified actions of the two locals, lockout of only one
might well have suggested unlawful discrimination under the
Board's decisions in Riverside and Thrift Drug. See supra p.
12.
For the preceding reasons, the Unions' petitions for review
are
Denied.