National Labor Relations Board v. American Firestop Solutions, Inc.

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 11-1440
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National Labor Relations Board, *
*
Petitioner, *
* Petition for Review of a
v. * Decision of the National
* Labor Relations Board.
American Firestop Solutions, Inc., *
*
Respondent. *
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Submitted: January 9, 2012
Filed: March 8, 2012
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Before MELLOY, ARNOLD, and SHEPHERD, Circuit Judges.
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ARNOLD, Circuit Judge.

The National Labor Relations Board has filed a petition with us to enforce its
order compelling American Firestop Solutions, Inc., to bargain with the International
Association of Heat & Frost Insulators and Allied Workers, Local 74, and to take
other remedial action because of its unlawful conduct. See 29 U.S.C. § 160(e). We
grant the petition.
 I.
AFS is in the business of installing materials in buildings that inhibit fire and
contain fires to limited areas of a structure. In 2003, AFS and the Union entered into
a collective bargaining agreement, and they entered into additional agreements
between 2003 and 2007. From 2003 until August, 2009, AFS contributed to the
Union's fringe benefit funds and complied with other terms of the parties’
arrangements. In mid-2009, AFS gave notice that it would end its relationship with
the Union on August 1; the Union objected, asserting that AFS was required to
continue to recognize the Union. After August 1, AFS made no further contributions
to the Union funds and began to make unilateral changes to its employees’ working
conditions.

The Union then filed a charge alleging that AFS had engaged in unfair labor
practices in violation of subsections 8(a)(1) and 8(a)(5) of the Act, see 29 U.S.C.
§ 158(a)(1), (a)(5). After a hearing, an administrative law judge held in favor of the
Union and ordered AFS, inter alia, to bargain with the Union and pay damages; AFS
appealed to the Board, which accepted the ALJ’s factual findings and legal
conclusions, altering only the remedies that the ALJ had fashioned.

II.
We must accept the Board's factual findings as "conclusive" if they are
"supported by substantial evidence on the record considered as a whole." 29 U.S.C.
§ 160(e). “Substantial evidence" is evidence that "a reasonable mind might accept
as adequate to support" a finding. Universal Camera Corp. v. NLRB, 340 U.S. 474,
477 (1951) (internal quotation marks and citations omitted); NLRB v. Whitesell Corp.,
638 F.3d 883, 890 (8th Cir. 2011).

With respect to legal issues, we have said that we uphold decisions when the
Board "correctly applied the law." See, e.g., Wal-Mart Stores, Inc. v. NLRB, 400 F.3d

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1093, 1097 (8th Cir. 2005). We review de novo the Board’s contract interpretations
that are not based on policy under the Act, see Litton Fin. Printing Div. v. NLRB,
501 U.S. 190, 202 (1991), but we defer to the Board’s interpretation of the Act, so
long as it is rational and consistent with that law, NLRB v. Kentucky River Community
Care, Inc., 532 U.S. 706, 725 (2001); Pony Express Courier, Corp. v. NLRB,
981 F.3d 358, 363 (8th Cir. 1992), cert. denied, 508 U.S. 950 (1993).

The issue in this case is whether the Union represented the AFS employees
under section 9(a) of the Act. Under that section, employers must bargain with
unions that have been "designated or selected for the purposes of collective
bargaining by the majority of the employees." 29 U.S.C. § 159(a). If an employer
enters into a contract with a union that represents its employees under 9(a), the
employer generally has a duty to continue to bargain with that union after the contract
expires and to maintain the status quo during bargaining. Allentown Mack Sales &
Serv., Inc. v. NLRB, 522 U.S. 359, 367 (1998). AFS contends, however, that it did
not violate the Act because its relationship with the Union is governed instead by
section 8(f) of the Act, see 29 U.S.C. § 158(f). That provision allows companies and
unions in the construction industry to enter into collective bargaining agreements
without first establishing that the union has majority support. The parties to an 8(f)
agreement have no further obligations after the contract expires, and, while the
contract is pending, employees may petition to remove the union as their
representative. See 29 U.S.C. § 158(f)

Construction contracts are presumed to be 8(f) agreements, In re John Deklewa
& Sons, 282 NLRB 1375, 1387 n. 53 (1987), but a Union may rebut that presumption
by showing "that it made an unequivocal demand for, and that the employer
unequivocally granted, majority recognition based on a showing of majority support"
of the union employees. Staunton Fuel & Material, Inc. d/b/a Central Illinois
Construction, 335 NLRB 717, 719-20 (2001). In Staunton, the Board, relying on
Tenth Circuit cases, concluded that written contract language, standing alone, can

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establish 9(a) bargaining status: "A recognition agreement or contract provision will
be independently sufficient to establish a union's 9(a) representation status where the
language unequivocally indicates that (1) the union requested recognition as the
majority or 9(a) representative of the unit employees; (2) the employer recognized the
union as the majority or 9(a) bargaining representative; and (3) the employer's
recognition was based on the union's having shown, or having offered to show,
evidence of its majority support." Id. at 720.

Here, the Board based its decision that the Union had 9(a) status primarily on
the language of a union-recognition clause in the 2003 agreement:

Pursuant to [the Union's] claim that it represents an uncoerced
majority of the Employer's full-time and regular part-time insulators,
Employer has submitted to a "card check" and hereby acknowledges and
agrees that a majority of the subject employees have, in fact, authorized
[the Union] to represent them in collective bargaining. Therefore, the
Employer agrees to recognize and does hereby extend recognition [the
Union] [sic], its agents, representatives or successors, as the exclusive
bargaining agent for all employees in the bargaining unit described
below, as if [the Union] had been certified as exclusive representative
pursuant to Section 9(a) of the National Labor Relations Act.

We believe that the union-recognition clause clearly satisfies the Staunton
criteria. The provision essentially lays out the Union's request for 9(a) recognition
by including its "claim that it represents the uncoerced majority" of the workers. And
based on that claim, AFS "submitted to a ‘card check’ " (in which employees check
off whether they choose to be represented by the union) and then specifically
"acknowledges" that a "majority" of employees authorized the Union to represent
them. Finally, AFS states that it recognizes the Union "as if" it "had been certified
as exclusive bargaining representative pursuant to 9(a)."

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 AFS argues that its statement that it would treat the Union "as if" it had been
certified as the employees’ 9(a) bargaining representative means that the parties
assumed that they had not in fact formed such a relationship. The Board interpreted
the agreement to mean that, although the Board had not certified the Union following
a formal election, the company recognized the Union as a 9(a) representative based
on the stated facts. We agree with the Board’s interpretation because it is more
reasonable under the Act: Although employers are bound by Board-certified election
results, they may choose not to recognize a union based on alternative means of
proof, such as signed authorization cards. See Linden Lumber Div. v. NLRB, 419 U.S.
301, 310 (1974). Therefore, when an employer wants to avoid the complications
caused by an election, it may do as AFS did in the recognition clause, i.e., recognize
the Union "as if" the Board had "certified" it as the employees' "exclusive
representative." Also, if the 2003 contract were not a 9(a) agreement, the parties
would have had no need to mention 9(a) at all but could have referred to 8(f) instead.
The agreement, however, mentions only 9(a), and the Board has said that such a
reference may indicate "that the parties intended to establish a majority rather than
an 8(f) relationship." Staunton, 335 NLRB at 720.

We also see no error in the Board's determination that the discrepancies in the
dates on the parties' copies of agreements did not preclude reliance on the union-
recognition clause. As the Board concluded, "no discrepancy" existed "as to the
recognition clause" itself: Both parties' copies of the first agreement contained the
"dispositive recognition clause" and the parties had agreed "that their bargaining
relationship began" on the effective date of that agreement.

After the Board adopted the requirements set out in Staunton, the D.C. Circuit
held that even if an agreement meets those standards, the parties do not necessarily
have a 9(a) relationship. Nova Plumbing, Inc. v. NLRB, 330 F.3d 531 (D.C. Cir.
2003). In so doing, the court relied on the Supreme Court’s decision in International
Ladies' Garment Workers' Union v. NLRB, 366 U.S. 731 (1961). In that case, the

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Court held that the employees' right to the representation of their choice cannot be
circumvented by agreements between their employer and a union. "Even if the
employer and union have both acted on a good faith belief of majority status, such
agreements are unenforceable because ‘[t]o countenance such an excuse would place
in permissibly careless employer and union hands the power to completely frustrate
employee realization of the premise of the Act – that its prohibitions will go far to
assure freedom of choice and majority rule in employee selection of representatives.' "
Nova Plumbing, 330 F.3d at 534 (quoting Garment Workers, 366 U.S. at 738-39).
The D.C. Circuit rejected the Board's reliance on an agreement that met the Staunton
requirements to find a 9(a) relationship, where other evidence from both parties
supported a finding that the union lacked support. It held that "[s]tanding alone ...
contract language and intent cannot be dispositive at least where, as here, the record
contains strong indications that the parties had only a section 8(f) relationship." Nova
Plumbing, 330 F.3d at 537.

Here the extra-contract evidence is sparse and, for the most part, does not
directly address the degree of employee support for the Union. The Union employee
who negotiated the 2003 agreement had died, and the Union offered no union check
cards or other evidence that it had majority support. Although Mark Gilchrist, the
company president and negotiator in 2003, denied that the union had majority support
at that time, the ALJ did not believe him: The ALJ questioned why, if Mr. Gilchrist
were telling the truth, he had offered no explanation for having signed a statement to
the contrary. The ALJ also remarked that, although Mr. Gilchrist had testified that
AFS employees had gradually joined the Union over a period of time until a majority
supported the Union, he neither referred to any specific instances nor provided the
date when they achieved majority support. The ALJ also noted that Mr. Gilchrist did
not explain why the parties made the agreement retroactive to three months before
they signed it. The ALJ believed that the parties might well have agreed to work
together on the earlier date, but waited to sign the final agreement until the Union
obtained the majority support that the contract provision reflected. He noted that

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Mr. Gilchrist had testified that soon after he first talked to someone from the Union,
he had invited a Union representative to meet with the AFS employees. The ALJ
thought, too, that the fact that AFS had followed a pattern over six years of signing
agreements with the Union and complying with their provisions supported a finding
that AFS believed it had a 9(a) relationship with the Union.

As we have said, the Board accepted all of the ALJ's factual findings. And we
see no basis for overturning them because we conclude that they are supported by
substantial evidence. See 29 U.S.C. § 160(e). Some of the findings are based on the
ALJ's credibility assessments, moreover, which we are particularly reluctant to
second-guess. Cintas Corp. v. NLRB, 589 F.3d 905, 915 (8th Cir. 2009).

We also uphold the Board's conclusion that the parties had a 9(a) agreement.
We agree with Nova Plumbing that, no matter how clearly a 9(a) agreement may be
set out in a contract, all the evidence must be considered. Here the 2003 recognition
clause meets the Staunton requirements for establishing a 9(a) relationship, and the
ALJ's findings based on its credibility determinations provided additional support for
its existence. Considering the entire record, we do not believe that the Board's
conclusion that the Union had overcome the presumption that the parties had an 8(f)
relationship, and had established the existence of its 9(a) status, was an unreasonable
interpretation or erroneous application of the Act.

Finally, AFS argues that the Union did not show that AFS acted with animus
against the Union. But it has offered no authority for its contention that the charged
violations have a state-of-mind requirement and we are aware of none. And it's well-
settled that a party may violate the duty to bargain without acting in bad faith. NLRB
v. Katz, 369 U.S. 736, 742-43 (1962). In addition, AFS's failure to raise this issue in
proceedings before the Board precludes us from considering it absent "extraordinary
circumstances," 29 U.S.C. § 160(e), which are not present here.

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 We grant the petition to enforce the order of the National Labor Relations
Board.
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