United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 10, 2002 Decided January 31, 2003
No. 01-1322
Regal Cinemas, Inc.,
Petitioner
v.
National Labor Relations Board,
Respondent
On Petition for Review and Cross-Application
for Enforcement of an Order of the
National Labor Relations Board
Charles L. Warren argued the cause for the petitioner.
Richard L. Wyatt, Jr. was on brief.
Fred B. Jacob, Attorney, National Labor Relations Board,
argued the cause for the respondent. Arthur F. Rosenfeld,
General Counsel, John H. Ferguson, Associate General Coun-
sel, Aileen A. Armstrong, Deputy Associate General Counsel,
and Robert J. Englehart, Attorney, National Labor Relations
Board, were on brief. David S. Habenstreit and Ruth E.
Burdick, Attorneys, National Labor Relations Board, entered
appearances.
Before: Henderson, Tatel and Garland, Circuit Judges.
Opinion for the court filed by Circuit Judge Henderson.
Karen LeCraft Henderson, Circuit Judge: Regal Cine-
mas, Inc. (Regal) petitions for review of a June 20, 2001
decision and order of the National Labor Relations Board
(Board or NLRB) finding that Regal violated sections 8(a)(1)
and 8(a)(5) of the National Labor Relations Act (NLRA or
Act), 29 U.S.C. s 158(a)(1), (a)(5), by refusing to bargain in
good faith with three union locals before converting to
"manager-operated" theaters and terminating its union-
represented projectionists. On review, Regal argues that the
Board erred in (1) concluding that Regal had a duty to
bargain over its conversion to manager-operated theaters; (2)
applying a "waiver analysis" to the management rights clause
contained in the collective bargaining agreements between
Regal and the unions; (3) failing to find that one of the union
locals had waived its right to bargain over Regal's conversion
decision by failing to timely demand bargaining; and (4)
ordering Regal to reinstate the terminated projectionists.
We find that Regal's contentions are without merit and
therefore deny its petition for review and grant the NLRB's
cross-application for enforcement.
I. Background
A. Dedicated Projectionists and the Trend
Toward Manager-Operated Theaters
Regal is a Tennessee corporation that operates movie
theaters throughout the United States. Since its founding in
1989, Regal has expanded its business predominantly through
the acquisition of existing theaters and smaller, regional
theater chains. After an acquisition, Regal's practice has
been to evaluate the existing equipment, physical layout and
personnel in order to determine whether to convert the
theater into a "manager-operated" theater. Joint Deferred
Appendix (JDA) 484, 493-94. A typical movie theater em-
ploys a staff consisting of managers, assistant managers,
concessionists, box office employees, ushers and projection-
ists. In a manager-operated theater, however, managers and
assistant managers operate the projection equipment as part
of their regular duties, thereby eliminating the need to em-
ploy dedicated projectionists. Over the past ten years, the
general trend in the theater industry has been to eliminate
the projectionist position and to convert to manager-operated
theaters. JDA 486.
Today, the duties of a projectionist generally include the
following tasks: "threading" the film through the projector at
the beginning of each showing and disengaging the film at
each showing's end; monitoring the film's focus and volume
at the outset of each showing; preparing new films for the
projector's continuous film platter by splicing together the
film's multiple reels; performing the "breakdown" of older
movies that are no longer being shown; changing movie
"trailers" when necessary; fixing minor projector problems,
such as broken belts and loose splices; and cleaning both the
projection equipment and the projection booth. JDA 163-71,
210-21, 363-70, 432-35. The work required of a projectionist
prior to the start of a film--threading the film, pushing the
start button and checking the focus and volume--takes ap-
proximately five to ten minutes. JDA 202-03.
Not surprisingly, technological advances have greatly sim-
plified the projection process and have thus eliminated many
of the job duties originally performed by projectionists. As a
result of the so-called platter system, for example, projection-
ists no longer need to change reels during a showing. JDA
190-91, 206-07. In addition, a computerized projection sys-
tem now opens the curtains, changes the lighting, operates
the sound system and automatically rewinds the film. JDA
189-96. Many of these advances in projection technology,
including the platter system, occurred well before 1995, al-
though none took place after 1995 and before the present
litigation. JDA 208-09, 324, 351, 436-37.
B. Regal's Bargaining History with the Union Locals
Regal's petition for review stems from its decision to
convert its movie theaters in Richmond, VA, Fort Wayne, IN
and Akron, OH to manager-operated theaters. This decision
affected the membership of three local affiliates of the Inter-
national Alliance of Theatrical and Stage Employees
(IATSE): Local 370 (Richmond), Local 364 (Akron) and Local
125 (Fort Wayne). We recount the relevant bargaining histo-
ry between Regal and the three union locals below.
1. Local 370
Regal acquired eight theaters in the Richmond, VA area in
1995. At the time of the acquisition, Local 370 had a collec-
tive bargaining agreement with Regal's predecessor that cov-
ered the projectionist employees at these theaters. JDA
529-539. With the collective bargaining agreement set to
expire on June 15, 1995, Regal gave Local 370 notice of its
intent to terminate the contract on April 17, 1995. JDA 602.
Meeting with union representatives on May 22, 1995, Regal
informed Local 370 of its intent to convert its Richmond
theaters to manager-operated and to eliminate the projection-
ist position. JDA 197-98, 497. Upon further discussions
with Local 370, however, Regal ultimately agreed to convert
only three of the eight theaters. JDA 172-76. Accordingly,
Regal and Local 370 entered into a collective bargaining
agreement covering the projectionist employees at the re-
maining five theaters. JDA 586-92. The agreement con-
tained a management rights clause, which read as follows:
The COMPANY shall have the right to intro-
duce new or improved work methods, facilities,
equipment, machinery, processes and procedures of
work and to change or eliminate existing methods,
facilities, equipment, machinery, processes and pro-
cedures or work ... and to automate[.] [T]he
COMPANY agrees to negotiate the effects [of such
decisions] on the employees.
JDA 590 (redundant phrase omitted). According to Regal
negotiators, the purpose of the management rights clause was
to allow Regal to convert to manger-operated theaters with-
out having to bargain with Local 370 beforehand. JDA 496.
The parties did not discuss the management rights clause,
however, during the 1995 negotiations.1 JDA 176, 268-70.
The agreement between Regal and Local 370 was effective
from November 24, 1995 to November 23, 1997. JDA 586-92.
On September 22, 1997, Local 370 wrote to Regal request-
ing a meeting to discuss a new collective bargaining agree-
ment. JDA 644-45. This letter crossed in the mail with a
letter from Regal to Local 370 in which Regal gave notice of
its intent to convert to manager-operated theaters and to
eliminate the projectionist position as of November 24, 1997.
JDA 640. Regal did offer to bargain, however, over the
effects of its decision. JDA 640. Although the parties met in
October 1997, Local 370 refused to bargain over the effects of
Regal's decision while Regal refused to bargain over the
decision itself. As a result, Regal terminated the remaining
projectionists at the end of their shifts on November 23, 1997
and converted the five theaters to manager-operated.
2. Local 364
Regal purchased Montrose Movies in 1994, thereby assum-
ing its predecessor's bargaining relationship with Local 364,
the IATSE affiliate that represented dedicated projectionists
in the Akron, OH area. Although Regal and Local 364
entered into a collective bargaining agreement in 1994, the
parties began negotiations anew in 1995 when Regal pur-
chased two other theaters in the area. The parties eventually
reached agreement on a contract that combined all three
theaters under a single collective bargaining agreement, ef-
__________
1 The collective bargaining agreement between Local 370 and
Regal's predecessor contained a similarly worded management
rights clause. Compare JDA 525 with JDA 590. According to
Local 370, the purpose of that clause was to enable the employer to
update equipment and to accommodate technological changes in
projection work. JDA 199-200, 245-47.
fective October 13, 1995 to October 12, 1997. JDA 580-85.
This contract contained a management rights clause identical
to the one included in Regal's collective bargaining agreement
with Local 370. Compare JDA 583 with JDA 590. Once
again, however, the parties did not discuss the management
rights clause during the contract negotiations. JDA 443.
On July 21, 1997, Regal notified Local 364 that it intended
to convert to manager-operated theaters and to eliminate the
projectionist position. JDA 637. Local 364 responded to
Regal's letter on August 25, 1997 and requested a meeting.
JDA 639. The parties had difficulty communicating with one
another throughout September and did not meet until Octo-
ber 8, 1997. JDA 444. At this meeting, Local 364 sought to
negotiate a new collective bargaining agreement retaining the
projectionist position; Regal, however, was willing to discuss
only the effects of its conversion decision. JDA 444-46. No
meeting occurred after this date. Regal therefore terminated
the remaining projectionists at the end of their shifts on
October 12, 1997 and converted its Akron theaters to manag-
er-operated.
3. Local 125
Regal purchased seven theaters in the Fort Wayne, IN
area between 1993 and 1994. Local 125 represented the
dedicated projectionists at these theaters and entered into
separate collective bargaining agreements with Regal for the
projectionists working at each theater. JDA 553-74. On
January 2, 1996, Regal notified Local 125 of its decision to
terminate these contracts and to convert to manager-operated
theaters. JDA 604. Regal subsequently agreed to delay the
conversion of three of the theaters, however, in exchange for
wage concessions. JDA 347-48, 358-62. The final contract
between Regal and Local 125 contained a management rights
clause nearly identical to those included in its contracts with
Local 370 and Local 364. Compare JDA 596 with JDA 583
and 590. Although Regal negotiators testified that the pur-
pose of the management rights clause was to allow Regal to
convert to manager-operated theaters without first having to
bargain with Local 125, JDA 496, very little discussion of the
clause took place during the negotiations.2 JDA 349-51. The
agreement between Regal and Local 125 was in effect from
March 29, 1996 to March 28, 1997. JDA 593-99.
On January 16, 1997, Local 125 contacted Regal in an
attempt to negotiate a successor agreement. JDA 605. Re-
gal soon informed the union, however, that it had decided to
convert the remaining Fort Wayne theaters to manager-
operated and to eliminate the projectionist position. JDA
606. Subsequent negotiations proved futile as Regal refused
to bargain over its conversion decision and Local 125 refused
to bargain over the effects of Regal's decision. As a result,
Regal terminated the remaining projectionists at the end of
their shifts on March 28, 1997 and converted the theaters to
manager-operated.
C. The Board's Decision and Order
As a result of the foregoing events, the three Locals filed
unfair labor practice charges against Regal. After investigat-
ing the claims, the Board's General Counsel issued separate
complaints against Regal, which were subsequently consoli-
dated for hearing and decision. After a hearing on the
consolidated complaint, an Administrative Law Judge (ALJ)
concluded that Regal violated sections 8(a)(1) and 8(a)(5) of
the NLRA, 29 U.S.C. s 158(a)(1), (a)(5), by refusing to
bargain with the Locals before converting to manager-
operated theaters and terminating the union-represented pro-
jectionists. JDA 20. Rejecting Regal's arguments under
First National Maintenance Corp. v. NLRB, 452 U.S. 666
(1981), and Dubuque Packing Co., 303 N.L.R.B. 386 (1991),
the ALJ held that Regal had a duty to bargain under
Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203
(1964), and Torrington Industries, Inc., 307 N.L.R.B. 809
(1992). JDA 16-17. Applying a waiver analysis, the ALJ
also rejected Regal's argument that the management rights
__________
2 Discussion of the management rights clause was limited to
Regal's authority under the clause to annex an entertainment
center, called a "funscape," without first bargaining with Local 125.
JDA 349-51.
clause authorized Regal to convert to manager-operated the-
aters without first bargaining to impasse. JDA 17-19. Last-
ly, the ALJ rejected Regal's argument that Local 364 failed
to timely demand bargaining over Regal's conversion deci-
sion. JDA 19. The ALJ then ordered Regal, among other
remedies, to reinstate the terminated projectionists to their
former or substantially equivalent positions. JDA 20.
The Board adopted the ALJ's rulings, findings and conclu-
sions in its June 20, 2001 decision and order. JDA 9.
Adopting the ALJ's conclusion that Regal violated sections
8(a)(1) and 8(a)(5) of the NLRA by refusing to bargain over
its conversion decision, the Board emphasized the ALJ's
finding that "the reclassification or transfer of bargaining unit
work to managers or supervisors is a mandatory subject of
bargaining where it has an impact on unit work" and stated
that Regal "both transferred unit work to existing managers
and also hired new assistant managers to perform [that
work.]" JDA 9. With respect to the management rights
clause, the Board concluded that Regal's "decisions were not
founded on any new technological development" and that
"there was no clear and unmistakable waiver of bargaining
regarding the allocation of the work among different classifi-
cations of employees." JDA 9. The Board upheld the ALJ's
remaining conclusions without comment and affirmed the
ALJ's remedial order.3 JDA 11.
II. Analysis
We address each of Regal's challenges to the Board's
findings below.
A. The Statutory Duty to Bargain
On review, Regal first argues that the Board erroneously
concluded that it had a duty to bargain with the Locals over
__________
3 Although he concurred in the result reached by the Board
majority, Chairman Hurtgen disagreed with the ALJ's reliance
upon Fibreboard and Torrington, as well as with the ALJ's applica-
tion of a waiver analysis to the management rights clause. JDA
11-12.
its decision to convert to manager-operated theaters and
thereby eliminate the projectionist position. Regal's argu-
ment includes two distinct claims. First, Regal maintains
that the Board erroneously concluded that its conversion to
manager-operated theaters constituted a "transfer of bargain-
ing unit work." Second, Regal contends that the Board
applied the incorrect legal standard to determine whether
Regal had a duty to bargain.
We must uphold the Board's factual findings "if supported
by substantial evidence on the record considered as a whole."
29 U.S.C. s 160(e); Cobb Mech. Contractors, Inc. v. NLRB,
295 F.3d 1370, 1375 (D.C. Cir. 2002). Thus, with respect to
findings of fact, we "may [not] displace the Board's choice
between two fairly conflicting views, even though [we] would
justifiably have made a different choice had the matter been
before [us] de novo." Universal Camera Corp. v. NLRB, 340
U.S. 474, 488 (1951). Reviewing the Board's construction of
the NLRA, including its classification of bargaining subjects
as "terms and conditions of employment," 29 U.S.C. s 158(d),
we afford the Board's judgment "considerable deference,"
Ford Motor Co. v. NLRB, 441 U.S. 488, 495 (1979). We
therefore uphold the Board's construction of the Act if it is
"reasonably defensible." Id. at 497.
Because substantial evidence supports the Board's finding
that Regal transferred bargaining unit work to managers and
assistant managers, and because the Board acted reasonably
in adopting the ALJ's application of Fibreboard and Torring-
ton to the instant case, we uphold the Board's conclusion that
Regal had a duty to bargain over its decision to convert to
manager-operated theaters.
1. Substantial Evidence
Regal argues that the Board erred in finding that its
conversion to manager-operated theaters resulted in a trans-
fer of bargaining unit work to managers and assistant manag-
ers. Specifically, Regal maintains that the Board's "mischar-
acterization" stemmed from three factual errors, namely (1)
"finding that there was any legally significant transfer of
work at all"; (2) "finding no 'link' between the change in
technology and the decision to [convert] to manager-operated
theaters"; and (3) "finding that Regal 'hired new assistant
managers to perform' unit work." Br. for Pet'r at 23, 25, 28
(quoting JDA 9). Because the Board's factual findings are
supported by "substantial evidence," however, Regal's sundry
challenges must fail. 29 U.S.C. s 160(e).
First, Regal argues that "the Board erred in finding that
there was any legally significant transfer of work at all." Br.
for Pet'r at 23. Emphasizing the technological advances that
have changed the projectionist position over the years, Regal
maintains that "[t]he assignment of the few remaining mini-
mal tasks to managers and assistant mangers cannot, in any
real sense, be characterized as a transfer of work." Id. at 24.
As the General Counsel correctly observes, however, we have
previously recognized that the transfer of less work than
occurred here is not a mere de minimis violation of the
employer's duty to bargain where the change results in the
loss of bargaining unit jobs. Int'l Union, UAW v. NLRB, 381
F.2d 265, 266 (D.C. Cir), cert. denied, 389 U.S. 857 (1967)
(finding adverse impact on bargaining unit where change in
company's shipping method resulted in loss of six bargaining
unit jobs).4 Although technological advances have undoubt-
edly changed the scope of a projectionist's duties, the record
amply supports the Board's finding that the typical projec-
tionist still performs a number of tasks. JDA 163-71, 210-21,
363-70, 432-35. Given the existence of such tasks, plus the
undisputed fact that Regal's managers and assistant manag-
ers assumed these tasks after the conversion to manager-
__________
4 Regal attempts to distinguish International Union by arguing
that "nothing in the ... decision ... suggests that the work
underlying the jobs at issue had disappeared; rather, the work
apparently continued to exist at full historic levels, the only differ-
ence being that the employer assigned it to a different work group."
Reply Br. at 7. Regal's suggestion to the contrary notwithstanding,
the record amply supports the Board's finding that Regal "contin-
ues to employ the same methods and techniques for showing movies
that it employed before it eliminated the dedicated projectionist
position." JDA 9; see JDA 207-09, 324, 351, 436-37.
operated theaters, see Br. for Pet'r at 24, substantial evidence
supports the Board's finding that a "legally significant" trans-
fer of work occurred as a result of the conversion.
Next, Regal asserts that the Board erred "in finding no
'link' between the change in technology and the decision to
[convert] to manager-operated theaters." Br. for Pet'r at 25.
Although the General Counsel concedes that "the motion
picture industry experienced a period of dramatic technologi-
cal change, resulting in the automation of numerous tasks
previously performed by projectionists," Br. for Resp't at 43,
Regal maintains that "[t]he decision to eliminate the [projec-
tionist] position cannot be evaluated separately from the
decision to automate," Br. for Pet'r at 27. Yet Regal's
argument ignores a crucial fact: no advances in projection
technology occurred after 1995 and before the present litiga-
tion. JDA 208-09, 324, 351, 436-37. Indeed, most of the
technological advances took place during the 1980s. JDA
208-09, 324, 351, 436-37. Notably, Regal does not challenge
the ALJ's conclusion that "the same duties that the union
projectionists had been performing ... prior to the [conver-
sion] are still required and performed." JDA 18. Substantial
evidence thus supports the Board's conclusion that Regal's
"decisions were not founded on any new technological devel-
opment." JDA 9.
Finally, Regal argues that the Board erred "in finding that
Regal 'hired new assistant managers to perform' unit work."
Br. for Pet'r at 28 (quoting JDA 9). The Board's conclusion
stemmed from the ALJ's explicit finding that Regal hired
assistant managers to replace, at least in part, the terminated
projectionists. JDA 16-17. Regal maintains that its payroll
records "do not permit a conclusion that Regal hired new
assistant managers to replace the projectionists on a one-for-
one basis." Br. for Pet'r at 28. Any increase in management
staffing may be explained, Regal asserts, by normal seasonal
fluctuations in business, the release of a blockbuster film
("Titanic") and the temporary need to train managers and
assistant managers to perform projectionist duties. Reply
Br. at 8-11. Neither the Board nor the ALJ concluded,
however, that Regal hired new assistant managers to replace
the projectionists on a one-for-one basis. JDA 16 n.2 ("I find
... that some new assistant mangers have replaced projec-
tionist[s] although not necessarily on a quid pro quo basis.").
In addition to Regal's payroll records, JDA 73-115, testimoni-
al evidence supports the Board's conclusion that Regal hired
some additional managerial employees to perform projection-
ist duties after the conversion to manager-operated theaters,
JDA 187-88, 227-31, 295-98. Although the evidence presents
"two fairly conflicting views" of Regal's staffing increases
after the conversion, Universal Camera, 340 U.S. at 488,
substantial evidence supports the Board's findings.
2. The Reasonableness of the Board's Approach
Having concluded that substantial evidence supports the
Board's finding that Regal's conversion to manager-operated
theaters resulted in a transfer of bargaining unit work, we
now consider Regal's claim that the Board applied the incor-
rect legal standard to determine whether Regal had a duty to
bargain over the conversion decision itself. On review, Regal
maintains that the Board did not engage in the proper
bargainability analysis because it implicitly "relied on the
approach of Torrington to the exclusion of the approach in
First National Maintenance." Br. for Pet'r at 22. Given
our decision in Rock-Tenn Co. v. NLRB, 101 F.3d 1441 (D.C.
Cir. 1996), which upheld as reasonable the Board's application
of Fibreboard and Torrington to a subcontracting decision
that turned on labor cost considerations and involved " 'the
same work under similar conditions of employment,' " id. at
1446 (quoting Fibreboard, 379 U.S. at 213), we must reject
Regal's challenge.
a. The Legal Framework
Under section 8(a)(5) of the NLRA, an employer commits
an unfair labor practice by "refus[ing] to bargain collectively
with the representatives of his employees." 29 U.S.C.
s 158(a)(5). The obligation to "bargain collectively" requires
an employer to "confer in good faith with respect to wages,
hours, and other terms and conditions of employment." Id.
s 158(d). An employer thus violates section 8(a)(5) by unilat-
erally changing an existing term or condition of employment
without first bargaining to impasse.5 Litton Fin. Printing
Div. v. NLRB, 501 U.S. 190, 198 (1991).
The Supreme Court has interpreted the statutory phrase
"terms and conditions of employment" in two well-known
decisions. In Fibreboard Paper Products Corp. v. NLRB,
379 U.S. 203 (1964), the Court considered whether a compa-
ny's decision to hire an independent contractor to perform
maintenance work previously performed by union employees
violated the NLRA. Noting that "the [c]ompany merely
replaced existing employees with those of an independent
contractor to do the same work under similar conditions of
employment," id. at 213, the Court held that the company's
decision to "contract out" its maintenance work fell within the
phrase "terms and conditions of employment" and, conse-
quently, its unilateral action violated the NLRA, id. at 215.
The Court cautioned, however, that its decision "does not
encompass other forms of 'contracting out' or 'subcontracting'
which arise daily in our complex economy." Id.
Nearly two decades later, the Supreme Court further de-
fined the duty to bargain in First National Maintenance
Corp. v. NLRB, 452 U.S. 666 (1981), which involved the
company's decision to cancel a service contract following a fee
dispute and its subsequent firing of the union employees it
had hired to work on the cancelled job. In First National
Maintenance, the Court identified three types of manage-
ment decisions: (1) those that have "only an indirect and
attenuated impact on the employment relationship," such as
decisions regarding advertising and financing; (2) those that
"are almost exclusively 'an aspect of the relationship' between
employer and employee," such as decisions related to produc-
tion quotas and work rules; and (3) those that have "a direct
impact on employment ... but [have] as [their] focus only the
__________
5 An employer who violates section 8(a)(5) also derivatively vio-
lates section 8(a)(1), which makes it unlawful for an employer "to
interfere with, restrain, or coerce employees in the exercise of"
their statutory labor rights. 29 U.S.C. s 158(a)(1).
economic profitability of" the business. Id. at 676-77 (quot-
ing Chem. & Alkali Workers v. Pittsburgh Plate Glass Co.,
404 U.S. 157, 178 (1971)). The Court concluded that the
employer's decision to close part of its business belonged in
the third category. Id. at 677. Such decisions require man-
datory bargaining, the Court reasoned, "only if the benefit,
for labor-management relations and the collective-bargaining
process, outweighs the burden placed on the conduct of the
business." Id. at 679. Applying this balancing test, the
Court held that the company did not have an obligation to
bargain before closing part of its business for purely econom-
ic reasons. Id. at 686. Although the Court "intimate[d] no
view as to other types of management decisions, such as plant
relocations ... [and] other kinds of subcontracting," id. at
686 n.22, it did observe that "Fibreboard implicitly engaged in
[the balancing] analysis" described above, id. at 679.
Despite the Supreme Court's observation that Fibreboard
and First National Maintenance represent a consistent ana-
lytical approach by which to determine the subjects of manda-
tory bargaining, the Board's attempts to integrate the two
decisions have generated some degree of confusion. Guided
by the principles of First National Maintenance, the Board
subsequently developed a burden-shifting test in Dubuque
Packing Co., 303 N.L.R.B. 386 (1991), enforced in relevant
part sub nom. United Food & Commercial Workers Local
150-A v. NLRB, 1 F.3d 24 (D.C. Cir. 1993), to determine
whether an employer's decision to relocate bargaining unit
work necessitated mandatory bargaining.6 We affirmed the
__________
6 Under Dubuque Packing's burden-shifting test, the General
Counsel must first establish a prima facie case "that the employer's
decision involved a relocation of unit work unaccompanied by a
basic change in the nature of the employer's operation." Dubuque
Packing, 303 N.L.R.B. at 391. If the General Counsel successfully
establishes a prima facie case, the burden shifts to the employer to
demonstrate that (1) "the work performed at the new location varies
significantly from the work performed at the former plant;" (2)
"the work performed at the former plant is to be discontinued
entirely and not moved to the new location;" or (3) "the employer's
decision involves a change in the scope or direction of the enter-
Board's decision on review, stating that the test "accords with
[Supreme Court] precedent [and] is fully defensible." United
Food, 1 F.3d at 32. The Board did not apply Dubuque's
burden-shifting test in Torrington Industries, Inc., 307
N.L.R.B. 809 (1992), however, because the case involved not a
relocation decision but a subcontracting decision, factually
similar to Fibreboard, in which the employer simply replaced
unit employees with non-unit employees to perform the same
work. Given that the Supreme Court had already addressed
this form of subcontracting in Fibreboard, the Board rea-
soned that "there is no need to apply any further tests in
order to determine whether the decision is subject to the
statutory duty to bargain." Id. at 810.
b. Regal's Challenge
Here, the Board affirmed the ALJ's conclusion that the
Fibreboard/Torrington approach governed Regal's decision to
convert to manager-operated theaters and thereby eliminate
the projectionist position. This conclusion stemmed directly
from the ALJ's determination that Regal "has continued to
operate the same business at the same locations and the only
change is in the identity of the employees doing the work."
JDA 16. On review, Regal maintains that the Board's deci-
sion cannot be sustained due to its reliance upon Torrington,
a decision that, in its view, "creates a virtual 'per se' rule that
is incompatible with the test established in First National
Maintenance." Br. for Pet'r at 17. Because the Board's
decision is both "reasonably defensible," Ford Motor Co., 441
U.S. at 497, and consistent with this court's precedent, see,
e.g., Rock-Tenn, 101 F.3d at 1446, we reject Regal's challenge.
Regal's argument relies chiefly upon the Third Circuit's
decision in Furniture Renters of America, Inc. v. NLRB, 36
F.3d 1240 (3d Cir. 1994), which criticized the Board for
__________
prise." Id. Alternatively, the employer may show that either (1)
"labor costs ... were not a factor in the decision" or (2) even if they
were a factor, "the union could not have offered labor cost conces-
sions that could have changed the employer's decision to relocate."
Id.
applying the Torrington standard to an employer's decision to
subcontract delivery services because of employee theft.
Noting that "[i]nflexibly applied, the holding in Torrington is
at odds with the principles of Fibreboard and First National
[Maintenance]," id. at 1247, the Third Circuit decried "the
Torrington manner of examining [a] decision to subcontract
only to see whether it is analogous to Fibreboard's general
factual framework" as "simplistic and ... potentially ham-
handed," id. at 1248. Determining whether a subcontracting
decision requires mandatory bargaining necessitates, the
Third Circuit reasoned, an examination of the reasons moti-
vating the decision. Id. Citing the Third Circuit's favorable
discussion of Dubuque, id. at 1246-48, Regal argues that the
Board should have applied Dubuque's burden-shifting frame-
work to Regal's decision to convert to manager-operated
theaters.
The Third Circuit's criticisms of Torrington aside,7 we have
long held that "[t]he allocation of work to a bargaining unit is
a 'term and condition of employment' "and that "an employer
__________
7 Although Regal correctly observes that Geiger Ready-Mix Co.
of Kansas City v. NLRB, 87 F.3d 1363, 1369 (D.C. Cir. 1996)
(holding that Board reasonably relied upon "transfer of unit work"
approach in case involving double-breasted employer), cited Furni-
ture Renters with approval, the Geiger decision maintained that
"the [court's transfer of work] approach ... is not inconsistent with
the Third Circuit's analysis in Furniture Renters." Specifically, the
court stated that "[t]he Third Circuit rightly pointed out that
whether unilateral action violates the [NLRA] depends less on the
'form that the employer's decision takes' and more on the 'reasons
motivating the decision.' " Id. (quoting Furniture Renters, 36 F.3d
at 1248 n.4 (emphasis in original)). The court recognized, however,
that "[a] change in the employer's established use of its union and
nonunion sides in work assignments will almost always involve
factors within the union's control." Id. (emphasis in original).
Accordingly, transfer of work decisions will almost always be suit-
able for resolution within the collective bargaining framework. See
id. The unusual contracting decision in Furniture Renters--where
the employer hired a subcontractor because of employee theft--is
thus the exception, not the rule, where transfer of work decisions
are concerned.
may not unilaterally attempt to divert work away from a
bargaining unit without fulfilling [its] statutory duty to bar-
gain." Road Sprinkler Fitters Local Union No. 669 v.
NLRB, 676 F.2d 826, 831 (D.C. Cir. 1982) (reviewing "double-
breasted" operation in which single employer transferred unit
work from union side of firm to non-union side of firm). We
have likewise recognized that "First National Maintenance is
inapposite" to transfer of work cases in the context of double-
breasted operations, finding Fibreboard to be the "more apt
precedent." Road Sprinkler Fitters Local Union No. 669 v.
NLRB, 789 F.2d 9, 16 n.22 (D.C. Cir. 1986) (reaffirming "the
principle that the diversion of bargaining unit work is a
mandatory subject of bargaining").
Most recently, in Rock-Tenn, we upheld the Board's appli-
cation of Fibreboard to an employer's decision to permanently
subcontract its trucking operations to a third party, thereby
eliminating the unit work previously performed by the em-
ployer's union-represented drivers. Rock-Tenn, 101 F.3d at
1446. Concluding that the Board "permissibly distinguishe[d]
what it calls a Fibreboard subcontract from a relocation
decision," i.e., the type of decision at issue in Dubuque
Packing, we held that it is "a permissible reading of the
[NLRA] in light of the Supreme Court opinions to hold that
when a subcontracting decision turns on labor cost consider-
ations and involves 'the same work under similar conditions of
employment,' it is a prototype Fibreboard case regardless of
the alleged futility of bargaining." Id. (quoting Fibreboard,
379 U.S. at 213).
Although the instant case involves a transfer of unit work
to managers and assistant managers, and not a transfer of
unit work to an outside subcontractor, we find this distinction
to be irrelevant. What matters, in our view, is that Regal,
like the employer in Rock-Tenn, transferred " 'the same
work' " performed by the union-represented projectionists to
its managers and assistant managers " 'under similar condi-
tions of employment,' " and did so, not because of technologi-
cal change but, instead, to reduce its labor costs. Id. Given
our conclusion that substantial evidence supports the finding
that Regal's conversion to manager-operated theaters result-
ed in a transfer of bargaining unit work, we find the ALJ's
legal approach, adopted by the Board, to be "reasonably
defensible." Ford Motor Co., 441 U.S. at 497.
B. The Management Rights Clause
Next we address Regal's argument that the Board errone-
ously interpreted the management rights clause contained in
the collective bargaining agreements between Regal and the
Locals. According to Regal, the Board erred in applying a
waiver analysis to the management rights clause because the
clause arguably covered Regal's decision to convert to manag-
er-operated theaters. Thus, Regal maintains, the Board
should have analyzed the management rights clause under
standard contract law principles. This argument fails.
Although a union may waive its statutory protection against
an employer's unilateral changes in subjects of mandatory
bargaining, we will not infer such a waiver from a general
contractual provision unless the waiver is " 'clear and unmis-
takable.' " Honeywell Int'l, Inc. v. NLRB, 253 F.3d 125, 133
(D.C. Cir. 2001) (quoting Metro. Edison Co. v. NLRB, 460
U.S. 693, 708 (1983)). In determining whether a union has
clearly and unmistakably waived its bargaining rights, we
consider the language of the collective bargaining agreement
as well as the bargaining history between the parties "when it
is crucial to understanding the purpose behind the contractual
language." Local Union No. 47, IBEW v. NLRB, 927 F.2d
635, 640 (D.C. Cir. 1991). Waiver analysis does not apply,
however, if a collective bargaining agreement "covers" the
challenged action. NLRB v. United States Postal Serv., 8
F.3d 832, 836-37 (D.C. Cir. 1993) (USPS). Unlike waiver, by
which a union knowingly and voluntarily relinquishes its right
to bargain, if a subject matter is "covered by" a collective
bargaining agreement, "the union has exercised its bargaining
right and the question of waiver is irrelevant." Dep't of Navy
v. FLRA, 962 F.2d 48, 50 (D.C. Cir. 1992). In such a case,
"the resolution of the refusal to bargain charge rests on an
interpretation of the contract at issue." USPS, 8 F.3d at 837.
Applying a waiver analysis, the Board concluded that the
management rights clause did not constitute a "clear and
unmistakable waiver of bargaining regarding the allocation of
the work among different classifications of employees." JDA
9. Relying upon our decision in USPS, 8 F.3d at 836-38,
Regal argues that the Board should have applied a "covered
by" analysis to the management rights clause. Specifically,
Regal argues that the management rights clause, which ex-
pressly authorized Regal "to introduce new or improved work
methods ... processes and procedures" and "to change or
eliminate existing ... procedures or work," JDA 583, 590,
596, implicitly afforded Regal "the right to change or elimi-
nate projectionist work" without first bargaining, Br. for Pet'r
at 32-33. Regal attempts to buttress its reading of the
management rights clause by emphasizing, among other con-
textual factors, the fact that the parties adopted the clause
only after Regal had made known to the Locals its intent to
convert all of its theaters to manager-operated.
Regal's reliance on USPS is misplaced. Although Regal
correctly observes that we rejected the Board's "crabbed
reading of the 'waiver'/'covered by' distinction" in USPS--a
reading which relied upon the fact that the management
rights clause did not specifically refer to the type of employer
decision at issue in the case--Regal overlooks crucial differ-
ences between the management rights clause at issue in
USPS and its own. USPS, 8 F.3d at 838. The broadly
worded management rights clause in USPS gave the Postal
Service "the exclusive right" "[t]o hire promote, transfer,
assign, and retain employees in positions within the Postal
Service," "[t]o maintain the efficiency of the operations en-
trusted to it" and "[t]o determine the methods, means, and
personnel by which such operations are to be conducted." Id.
at 835. Rejecting the Board's waiver analysis, we held that
the above language "covered" the Postal Service's unilateral
decision to change the work schedules of its employees. Id.
at 838.
Here, Regal advocates a more expansive reading of a much
narrower management rights clause. Unlike the clause in
USPS, id. at 835, Regal's management rights clause does not
grant the authority to "hire, promote, transfer, assign, and
retain employees," see JDA 583, 590, 596. As the General
Counsel observes, the plain language of the clause involves
"only the right to introduce new technology, machinery, and
methods for the projectionists to execute the tasks they are to
perform." Br. for Resp't at 37. In fact, the clause mentions
"employees" only with respect to Regal's obligation "to nego-
tiate the effects [of such decisions] on the employees." JDA
583, 590, 596. Regal thus fashions its "covered by" argument
around the language giving it the authority to change or
eliminate existing methods, procedures "or work." JDA 583,
590, 596. But Regal's actions here are not embraced by the
literal language of the management rights clause. As dis-
cussed above, the record shows that Regal's decision involved
no change in the "methods" or "procedures" of projection and
no elimination of "work." Rather, Regal merely transferred
to managers work that was previously done by projectionists.
Moreover, we have previously cautioned that "the canon of
ejusdem generis ('of the same kind or class') counsels against
... reading [a] general phrase to include conduct wholly
unlike that specified in the immediately preceding list of
prohibited acts." Mohave Elec. Coop., Inc. v. NLRB, 206
F.3d 1183, 1191-92 (D.C. Cir. 2000). We therefore find that
the language of the management rights clause fails to support
Regal's argument that the clause authorized its unilateral
decision to convert all of its theaters to manager-operated.
The bargaining history between Regal and the Locals
likewise fails to support Regal's claim. Although Regal re-
peatedly emphasizes that it made known to the Locals its
intent to convert all of its theaters to manager-operated
before they separately agreed to the management rights
clause, Regal "does not and apparently [cannot] show that
any specific discussions occurred during negotiations that
equated or tied in that 'intention' with its introduction of the
management rights clause." JDA 18. Absent such affirma-
tive evidence, we are loath to conclude that a union would
knowingly agree to a clause that would effectively permit the
employer to unilaterally extinguish the bargaining unit alto-
gether. Hence, Regal's argument that the Locals should
have understood that the management rights clause permit-
ted Regal to eliminate the projectionist position simply fails.
Accordingly, we affirm the Board's conclusion that the Locals
did not clearly and unmistakably waive their right to bargain
over the transfer of unit work to non-unit employees. See
Honeywell Int'l, 253 F.3d at 133.
C. Failure to Timely Request Bargaining
Asserting that Local 364 failed to timely demand bargain-
ing over the effects of its conversion decision, Regal further
argues that Local 364 should be deemed to have waived its
right to bargain over the conversion decision itself. Because
the Board--upholding the ALJ's decision without comment--
reasonably concluded that a more prompt response to Regal's
conversion decision would have been futile, we reject Regal's
challenge.
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. Golden Bay Freight Lines, 267
N.L.R.B. 1073, 1080 (1983). A union is "not required to go
through the motions of requesting bargaining," however, if it
is clear that an employer has made its decision and will not
negotiate. Gratiot Cmty. Hosp., 312 N.L.R.B. 1075, 1080
(1993), enforced in relevant part, 51 F.3d 1255, 1259-60 (6th
Cir. 1995). The Board does not require "futile gestures," id.,
because "[n]otice of a fait accompli is simply not the sort of
timely notice upon which the waiver defense is predicated,"
Int'l Ladies' Garment Workers Union v. NLRB, 463 F.2d
907, 919 (D.C. Cir. 1972).
On review, Regal argues that Local 364 waived any right it
may have had to demand bargaining by not being available to
meet until October 8, 1997, almost three months after Regal
originally notified the Local of its conversion decision and
only days before the decision's implementation. Noting that
"a formal request to bargain about [Regal's] decision would
[have been] futile," the ALJ concluded that Local 364's "fail-
ure to quickly respond to [Regal's] notice ... is no defense to
[Regal's] unilateral action." JDA 19. The record provides
substantial support for the ALJ's conclusion. As the General
Counsel correctly observes, Regal's July 21, 1997 letter to
Local 364 "did not ask the [Local] to negotiate a proposal to
eliminate the dedicated projectionist position," Br. for Resp't
at 46, but simply informed it that "the Company has decided
to go manager operated in the Akron area theaters" and that
"its decision has the effect of eliminating the projectionist's
[sic] positions," JDA 637. Moreover, when the parties finally
met in October 1997, Regal steadfastly refused to bargain
over its decision, informing the Local that the decision had
"been made months ago and [could not] be changed." JDA
454. The Board's decision reviewing Regal's untimeliness
contention is thus a reasonable one and is therefore affirmed.
D. The Board's Remedial Order
Lastly, we turn to Regal's claim that the Board's remedial
order does not effectuate the purposes of the NLRA and,
accordingly, is unenforceable. Having found that Regal vio-
lated the NLRA by converting to manager-operated theaters
without first bargaining with the Locals, the Board ordered
Regal, among other remedies, to reinstate the terminated
projectionists. JDA 11, 20-21. Because Regal's compliance
with the Board's remedial order is not unduly burdensome,
Regal's challenge fails.
Under section 10(c) of the NLRA, the Board has the
authority "to take such affirmative action[,] including rein-
statement of employees with or without back pay, as will
effectuate the policies of [the Act]." 29 U.S.C. s 160(c).
Consistent with this provision, the purpose of a remedial
order is "to 'restor[e] the economic status quo that would
have obtained but for the company's wrongful [action.]' "
Southwest Merch. Corp. v. NLRB, 53 F.3d 1334, 1344 (D.C.
Cir. 1995) (quoting NLRB v. J.H. Rutter-Rex Mfg. Co., 396
U.S. 258, 263 (1969)). We have previously recognized, howev-
er, that reinstatement is an inappropriate remedy if it would
be "unduly economically burdensome" for the employer.
Teamsters Local Union No. 171 v. NLRB, 863 F.2d 946, 957-
58 (D.C. Cir. 1988), cert. denied, 490 U.S. 1065 (1989). To
demonstrate undue burden, the employer must show that
"the Board's [remedial] order would require a substantial
outlay of new capital or otherwise cause undue financial
hardship." Id. at 958.
Relying chiefly on Dorsey Trailers, Inc. v. NLRB, 233 F.3d
831 (4th Cir. 2000), Regal first argues that "a restoration
remedy is beyond the authority of the Board when the unfair
labor practice does not involve discriminatory conduct." Br.
for Pet'r at 39-40. Regal's reliance upon Dorsey Trailers is
misplaced. Although the Fourth Circuit refused to enforce
the Board's restoration order in Dorsey Trailers, the decision
rested, in part, upon the court's conclusion that the employer
did not violate its duty to bargain when it unilaterally closed
one of its manufacturing plants. Dorsey Trailers, 233 F.3d at
845. Contrary to Regal's assertions, this court has recog-
nized restoration as a presumptively valid remedy where the
employer violates its duty to bargain. See Power, Inc. v.
NLRB, 40 F.3d 409, 425 (D.C. Cir. 1994) (employer unilateral-
ly subcontracted bargaining unit work).
On somewhat firmer ground, Regal next argues that we
should not enforce the Board's reinstatement order because
reinstating the terminated projectionists would impose an
undue burden upon its business. Specifically, Regal main-
tains that the Board's order is unduly burdensome because it
"would force Regal to spend significant amounts of money to
pay employees to spend the vast majority of their time doing
nothing." Br. for Pet'r at 40. Regal's argument fails, howev-
er, because the Board's remedial order does not require
"capital expenditures," "the importation of expertise not now
possessed," or "the coordination of ... activities that [Regal]
lacks the experience and expertise to effectively handle."
JDA 11. Regal's bare statements about the economic costs of
reinstating the terminated projectionists fail to meet our
"undue burden" test. See Teamsters Local Union, 863 F.2d
at 958. Given the "high degree of deference" we afford the
Board's choice of remedies, Teamsters Local 115 v. NLRB,
640 F.2d 392, 399 (D.C. Cir.), cert. denied, 454 U.S. 827
(1981), we affirm the Board's remedial order reinstating the
terminated projectionists.8
III. Conclusion
For the foregoing reasons, the petition for review is denied
and the cross-application for enforcement is granted.
So ordered.
__________
8 As the Board noted below, however, Regal is not precluded from
presenting new evidence on the reinstatement issue at the compli-
ance stage of this proceeding. See, e.g., Lear Siegler, Inc., 295
N.L.R.B. 857, 861-62 (1989).