United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 13, 2006 Decided December 1, 2006
No. 05-1378
M&M BACKHOE SERVICE, INC.,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL
487, AFL-CIO,
INTERVENOR FOR RESPONDENT
Consolidated with
05-1412 and 05-1433
On Petitions for Review and Cross-Application for
Enforcement
of an Order of the National Labor Relations Board
Michael E. Avakian argued the cause and filed the briefs for
petitioner M&M Backhoe Service, Inc.
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Osnat K. Rind argued the cause and filed the briefs for
petitioner International Union of Operating Engineers, Local
487, AFL-CIO.
Gregory P. Lauro, Attorney, National Labor Relations
Board, argued the cause for respondent. With him on the brief
were Ronald E. Meisburg, General Counsel, John H. Ferguson,
Associate General Counsel, Aileen A. Armstrong, Deputy
Associate General Counsel, and Fred B. Jacob, Attorney.
Before: HENDERSON, RANDOLPH and GRIFFITH, Circuit
Judges.
RANDOLPH, Circuit Judge: The threshold issue in these
consolidated petitions for review of an order of the National
Labor Relations Board and the Board’s cross-application for
enforcement is whether M&M Backhoe Service, Inc.,
voluntarily recognized the union’s majority status and converted
the relationship between the company and the union from one
governed by section 8(f) of the National Labor Relations Act to
one governed by section 9(a).
The Act gives employees the right to select their own union
representation. See 29 U.S.C. § 159(a). Employers must
bargain in good faith with unions, see id. § 158(a)(5), but only
if the union has been “designated or selected . . . by the majority
of the employees in a unit appropriate for such purposes,” id.
§ 159(a). The Supreme Court underscored the importance of
worker self-determination decades ago in International Ladies’
Garment Workers’ Union v. NLRB, 366 U.S. 731 (1961), and we
reiterated the principle in Nova Plumbing, Inc. v. NLRB, 330
F.3d 531 (D.C. Cir. 2003).
An exception, specific to the construction industry, permits
employers to enter into pre-hire agreements with unions without
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any showing of majority support. See 29 U.S.C. § 158(f). As
we explained in Nova Plumbing, the exception adapts the law to
conform with “the unique nature of the industry: Construction
companies need to draw on a pool of skilled workers and to
know their labor costs up front in order to generate accurate
bids; union organizing campaigns are complicated by the fact
that employees frequently work for multiple companies over
short, sporadic periods.” 330 F.3d at 534 (citing NLRB v. Local
Union No. 103, 434 U.S. 335, 348-49 (1978)).
Pre-hire agreements differ from the typical collective
bargaining agreement. Under section 8(f), either party may
repudiate the terms of a pre-hire agreement when it expires. See
John Deklewa & Sons, 282 N.L.R.B. 1375, 1377-78, 1386
(1987), enforced sub nom Int’l Ass’n of Bridge, Structural &
Ornamental Iron Workers, Local 3 v. NLRB, 843 F.2d 770 (3d
Cir. 1988). The employer then has no obligation to bargain with
the union, “because the union enjoys no presumption that it ever
had majority support.” Nova Plumbing, 330 F.3d at 534. Under
section 9(a), by contrast, the union benefits from “a conclusive
presumption of majority status during the term of any collective-
bargaining agreement, up to three years.” Auciello Iron Works,
Inc. v. NLRB, 517 U.S. 781, 786 (1996) (footnote omitted).
A union may convert its relationship with the employer to
one governed by section 9(a) if it demonstrates support from a
majority of employees in the unit. Local 487’s attempt to do
just that raises the principal issue in the case.
M&M is a small, Florida-based construction contracting
company founded by president Robert Miley. Miley had been
a member of Local 487 for more than twenty-seven years before
starting M&M in 1991. From M&M’s inception, the company
operated under a series of pre-hire agreements with Local 487.
The last agreement permitted either party to terminate it by
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notifying the other party at least sixty days before June 30, 2002,
its expiration date.
On March 26, 2002, Miley notified the union by letter that
M&M would terminate the pre-hire agreement when it expired.
The union’s business manager, Gary Waters, promptly
instructed a member of his staff, James Allbritton, to visit
M&M’s worksite and to have the employees sign authorization
cards recognizing the union. Allbritton collected signed
authorization cards from all seventeen of M&M’s employees on
March 27 and 28.
On March 29, Waters faxed Miley a letter notifying him
that the union had support from the majority of M&M’s
employees and requesting “voluntary recognition from your firm
and 9(a) status under the National Labor Relations Act.” The
letter asked Miley to sign the attached Recognition Agreement,
which stated that M&M “acknowledges and agrees, based on a
showing of signed authorization cards, that a majority of its
employees have authorized the Union to represent them in
collective bargaining” and that M&M “hereby recognizes the
Union as the exclusive bargaining agent under Section 9(a) of
the National Labor Relations Act.” The letter stated that if
Miley did not sign the Recognition Agreement, the union would
petition the NLRB for a representation election.
Miley responded on April 2. He agreed to a collective
bargaining session with the union and invited Waters to contact
him about scheduling the session. Miley did not sign the
Recognition Agreement at that time. On April 3, Waters called
Miley and left a telephone message about the Recognition
Agreement. The next day, Waters sent Miley another letter.
The letter thanked Miley for agreeing to a collective bargaining
session, but noted that Miley’s previous letter alone was not
sufficient to achieve the union’s goals because “to change our
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bargaining relationship from 8(f) to 9(a) status under the
National Labor Relations Act, you must voluntarily recognize
that the union has majority status by signing the previously
provided agreement.” Miley signed and returned the
Recognition Agreement later that day. Before signing the
Recognition Agreement, Miley did not request proof that Local
487 in fact had authorization cards from the majority of M&M’s
employees.
In June 2002, Miley attended two meetings in which the
union negotiated with M&M and three other local contractors.
At these meetings, the union demanded an increase in employer
payments to the union’s health care fund. The other three
employers agreed to the increases the union requested. Miley
wrote Waters a letter refusing those terms, explaining that “any
increase at this time would be cost prohibitive.” In response,
Waters made a counterproposal and requested documents from
M&M to establish Miley’s claim of financial hardship.
On June 30, three days after Waters sent his
counterproposal, the pre-hire agreement between M&M and the
union expired of its own terms. The union believed that M&M
had voluntarily recognized it and had concomitant obligations
under section 9(a) to maintain the status quo while continuing to
bargain in good faith. M&M proceeded as if the section 8(f)
agreement had expired and it had no obligations to the union. In
the early part of July, M&M changed its overtime policies and
hired new employees without going through the union hiring
hall as required by the pre-hire agreement. In response, Waters
sent another letter, requesting information about the non-union
hires. Also in July, M&M stopped making payments to union
funds that the pre-hire agreement had required it to support.
On these facts the Board decided that Local 487 had
become M&M’s employees’ section 9(a) representative and that
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M&M had violated section 8(a)(5) of the Act by withdrawing
recognition of the union, refusing to provide information to it,
and unilaterally changing the terms and conditions of
employment. See M&M Backhoe Serv., Inc., 345 N.L.R.B. No.
29, 2005 NLRB LEXIS 452 (Aug. 27, 2005) (“NLRB
Decision”). M&M urges us not to enforce the Board’s order
because it conflicts with Nova Plumbing.
Generally, a union seeking to convert its section 8(f)
relationship to a section 9(a) relationship may either petition for
a representation election or demand recognition from the
employer by providing proof of majority support. See J&R Tile,
Inc., 291 N.L.R.B. 1034, 1036 (1988). Nova Plumbing
presented the question of what showing a union had to make to
establish majority support sufficient to transform its relationship
with an employer from one governed by section 8(f) to one
under section 9(a). The company there objected to the Board’s
position that the union’s offer to provide evidence of majority
support was alone sufficient, without regard to whether the
union in fact had a majority. See Nova Plumbing, 330 F.3d at
536-37. We held that when the Board relied solely on the
union’s offer “the Board failed to protect the employees’ section
7 rights” to determine their own representation. Id. at 533.
“[T]his relatively easy-to-establish option . . . giv[es] employers
and unions ‘the power to completely frustrate employee
realization of the promise of the Act – that its prohibitions will
go far to assure freedom of choice and majority rule in employee
selection of representatives.’” Id. (quoting Int’l Ladies’
Garment Workers’ Union, 366 U.S. at 738-39).
We held in Nova Plumbing that an offer of proof could not
substitute for actual proof. 330 F.3d at 537. Nor could language
in the collective bargaining agreement’s recognition clause
stating that evidence presented to the employer established the
union’s majority status. “If the Board considers contract
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language in determining section 9(a) status, it must take such
language seriously when a recognition clause indicates that there
is a concrete basis upon which to assess employee support.” Id.
at 538.
This case is like Nova Plumbing in the following respects:
the union offered to prove to the employer that it had majority
support; and the employer recognized the union without
examining the union’s proof. But there is a critical difference.
Unlike Nova Plumbing, in which there was no evidence that the
union actually had majority support, here the record shows – as
the Board found – that a majority of employees voluntarily
signed union authorization cards signifying their support of
Local 487. In fact, all seventeen of M&M’s eligible employees
signed authorization cards during the final week of March 2002.
An employer who recognizes a union after the union offers to
provide evidence of its majority status cannot revoke that
recognition solely because the employer never took the union up
on its offer – provided that the union actually had majority
support. To rule otherwise would be to allow the employer to
frustrate the employees’ section 7 rights by turning its back to
the union’s evidence. See NLRB v. Gissel Packing Co., Inc., 395
U.S. 575, 596-98 (1969). Under this standard, Local 487
properly converted its relationship with M&M to one governed
by section 9(a), and M&M cannot disclaim the conversion after
the fact.
M&M’s efforts to avoid this result deserve only a few
words. The company claims that its president did not know the
import of the Recognition Agreement when he signed it. The
Board and the Administrative Law Judge found otherwise, and
for good reason. Local 487 twice demanded recognition in
unmistakable terms. Cf. Western Pipeline, Inc., 328 N.L.R.B.
925, 926 (1999) (“The claim for recognition need not be made
in any particular form.”). And the Recognition Agreement is as
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clear as can be: “The Employer hereby recognizes the Union as
the exclusive bargaining agent under Section 9(a) of the [Act]
. . ..” M&M’s other contention – that some of the authorization
cards were invalid for one reason or another – fails. Even if
M&M were correct, the remaining cards gave the union a
majority.
Because the union achieved section 9(a) status, M&M
violated section 8(a)(5) when it breached its duty to bargain with
Local 487, failed to provide information necessary for the union
to act as the employee representative, and unilaterally changed
employment conditions. The Board also found that M&M
violated sections 8(a)(1) by threatening, coercing, discriminating
against, and conducting surveillance of its employees. No
useful purpose would be served by reciting M&M’s objections
to these findings, all of which turn on issues of credibility
resolved against the company. We have considered and rejected
each of M&M’s objections. As to the Board’s additional finding
that the company violated section 8(a)(3) by taking adverse
employment actions to discourage union membership and
activity, the Board evaluates employer motivation under the
Wright Line test. See Tasty Baking Co. v. NLRB, 254 F.3d 114,
125-26 (D.C. Cir. 2001). The Wright Line test considers
multiple factors, of which “the employer’s hostility toward the
union” is but one. Id. Other factors include the timing of the
employer’s activities and the employer’s knowledge of union
activities. Id. The union and M&M each point to evidence
supporting one interpretation or the other of the events leading
up to and following the disciplinary actions M&M took against
two employees. Even considered in the best possible light, the
company’s version does not rise to the threshold required to set
aside the Board’s factual determinations.
***
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Local 487’s petition for review claims that the Board should
have held M&M liable for ceasing its contributions to the
union’s pension, vacation, and apprenticeship trust funds. The
union maintains four trust funds: health and welfare, pension,
vacation, and apprenticeship. M&M cut off its contributions to
all four. The Board ruled in the union’s favor with respect to the
health and welfare fund but, over the dissent of one member,
refused to consider the other three funds because its General
Counsel had not raised them in the complaint. See NLRB
Decision, 2005 NLRB LEXIS 452 at *3-5.
The union’s charge did not mention the vacation and
apprenticeship funds. It alleged that M&M had “failed and
refused to make fringe benefit contributions to the pension,
welfare funds, thereby unilaterally changing terms and
conditions of employment.” The General Counsel’s complaint
removed the reference to the “pension” fund. The relevant
paragraph of the complaint reads: “Since on or about July 1,
2002, [M&M] has ceased remitting health and welfare fund
contributions, and on or about that same date and thereafter,
[M&M] changed other terms and conditions of employment of
employees in the Unit.” Given the alteration of the charge, the
Board had good reason to conclude that the company was not on
notice that its contributions to the other three funds were at
issue. As the Board recognized, it “may not make findings or
order remedies on violations not charged in the . . . complaint or
litigated in the subsequent hearing.” Chicago Local No. 458-3M
v. NLRB, 206 F.3d 22, 24 n.1 (D.C. Cir. 2000); see NLRB v.
Blake Constr. Co., 663 F.2d 272 (D.C. Cir. 1981). We cannot
say the Board acted arbitrarily in concluding that the
complaint’s additional allegation – that the company changed
other terms and conditions of employment – was “too vague” to
put the company on notice, particularly because the health and
welfare fund was specifically mentioned.
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The union also argues that M&M’s non-payments to the
pension, vacation, and apprenticeship trust funds were fully
litigated before the ALJ. The only mention of the three funds
during the hearing, or at least the only mention the union cites,
was in connection with an M&M stipulation during the
testimony of the union’s business manager. Counsel for the
company stipulated that balance sheets the General Counsel
sought to introduce reflected contributions the company made
into the funds and that after a particular date there were no
documents reflecting further contributions. The stipulation may
have assisted in making the case against the company for its
failure to contribute to the health and welfare funds. But we
cannot say the Board abused its discretion in determining that at
the time of the stipulation the company was not on notice that
the other three funds were at issue and that if the General
Counsel thought otherwise, the General Counsel should have
moved to amend the complaint pursuant to the NLRB’s
procedural rules. See 29 C.F.R. § 102.17.
For the foregoing reasons the petitions for judicial review
are denied and the cross-application for enforcement is granted.
So ordered.