Adcock v. FREIGHTLINER LLC

PUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

RONNIE ADCOCK; TIMOTHY 
COCHRANE; THOMAS COCHRANE;
KATHERINE IVEY; KRISTI JONES,
Plaintiffs-Appellants,
v.
FREIGHTLINER LLC; INTERNATIONAL
UNION, UNITED AUTOMOBILE AND
AGRICULTURAL IMPLEMENT WORKERS  No. 06-2287
OF AMERICA,
Defendants-Appellees.

NATIONAL LABOR RELATIONS
BOARD,
Amicus Curiae.

Appeal from the United States District Court
for the Western District of North Carolina, at Charlotte.
Graham C. Mullen, Senior District Judge.
(3:06-cv-00032)

Argued: October 28, 2008

Decided: December 23, 2008

Before TRAXLER and KING, Circuit Judges,
and HAMILTON, Senior Circuit Judge.

Affirmed by published opinion. Senior Judge Hamilton wrote
the opinion, in which Judge Traxler and Judge King joined.
2 ADCOCK v. FREIGHTLINER LLC
COUNSEL

ARGUED: William L. Messenger, NATIONAL RIGHT TO
WORK LEGAL FOUNDATION, Springfield, Virginia, for
Appellants. William Lawrence Rikard, Jr., PARKER, POE,
ADAMS & BERNSTEIN, L.L.P., Charlotte, North Carolina;
Stephen P. Berzon, ALTSHULER & BERZON, San Fran-
cisco, California, for Appellees. ON BRIEF: Philip M. Van
Hoy, Stephen Dunn, VAN HOY, REUTLINGER, ADAMS &
DUNN, Charlotte, North Carolina, for Appellants. Eric D.
Welsh, Kristin R. Poolos, PARKER, POE, ADAMS &
BERNSTEIN, L.L.P., Charlotte, North Carolina, for Appellee
Freightliner LLC. Danielle Leonard, ALTSHULER & BER-
ZON, San Francisco, California; George N. Davies, NAKA-
MURA, QUINN & WALLS, Birmingham, Alabama; Daniel
W. Sherrick, General Counsel, Jeffrey D. Sodko, Associate
General Counsel, INTERNATIONAL UNION, UAW,
Detroit, Michigan; Seth Cohen, SMITH, JAMES, ROWLETT
& COHEN, L.L.P., Greensboro, North Carolina, for Appellee
International Union, United Automobile and Agricultural
Implement Workers of America. Ronald Meisburg, General
Counsel, John E. Higgins, Jr., Deputy General Counsel, John
H. Ferguson, Associate General Counsel, Margery E. Lieber,
Deputy Associate General Counsel, Eric G. Moskowitz,
Assistant General Counsel, Laura Bandini, Senior Attorney,
NATIONAL LABOR RELATIONS BOARD, Washington,
D.C., for Amicus Curiae.

OPINION

HAMILTON, Senior Circuit Judge:

With certain exceptions not applicable in this case, § 302 of
the Labor Management Relations Act (LMRA) prohibits,
among other things, an employer from "pay[ing], lend[ing], or
deliver[ing] . . . any money or other thing of value" to a labor
 ADCOCK v. FREIGHTLINER LLC 3
union or labor union representative. 29 U.S.C. § 186(a). The
issue presented in this appeal is whether Freightliner LLC
(Freightliner) delivered "money or other thing[s] of value" to
the International Union, United Automobile and Agricultural
Implement Workers of America (the Union) pursuant to a
card check agreement with the Union, wherein Freightliner
agreed, among other things, to: (1) require some of its
employees to attend, on paid company time, Union presenta-
tions explaining the card check agreement; (2) provide the
Union reasonable access to nonwork areas in company plants
to allow Union representatives to meet with employees; and
(3) refrain from making negative comments about the Union
during organizing campaigns. For the reasons stated below,
we conclude that the district court correctly determined that
Freightliner did not deliver a "thing of value" to the Union in
violation of § 302. Accordingly, we affirm.

I

A

Freightliner owns several production facilities in North
Carolina, including the Mt. Holly Truck Manufacturing Plant
(Mt. Holly), the Gastonia Parts Manufacturing Plant (Gasto-
nia), the Cleveland Truck Manufacturing Plant (Cleveland
Truck), the Cleveland Parts Distribution Center (Cleveland
Parts), the Thomas Built Buses Manufacturing Plant (Thomas
Built), and the Freightliner Custom Chassis Manufacturing
Plant (Custom Chassis). As of March 2002, the Union was the
exclusive bargaining representative only of the employees at
Mt. Holly. Around this time, the Union sought to organize
and become the exclusive bargaining representative of the
employees at Freightliner’s other facilities in North Carolina,
which were nonunion.

Negotiations between Freightliner and the Union ensued,
which resulted in the signing of two agreements in December
2002. The first agreement (the Card Check Agreement) out-
4 ADCOCK v. FREIGHTLINER LLC
lined the ground rules for the organizing campaigns. In the
Card Check Agreement, Freightliner agreed with respect to
each bargaining unit to forego a National Labor Relations
Board election if a majority of the bargaining unit employees
chose the Union as their exclusive bargaining representative
by signing authorization cards. As part of the Card Check
Agreement, Freightliner also agreed to: (1) require some of its
employees to attend, on paid company time, Union presenta-
tions explaining the Card Check Agreement; (2) provide the
Union reasonable access to nonwork areas in company plants
to allow Union representatives to meet with employees; and
(3) refrain from making negative comments about the Union
during the organizing campaigns.1

The second agreement signed by the parties was a precon-
1
Typically, a "card check" or "neutrality" agreement is an agreement
between the employer and the union "in which they agree that (a) the
employer will not speak for or against the union (neutrality) and/or (b) the
employer will recognize the union if it can get signed authorization cards
from a majority of the unit members (card-check)." Matthew T. Bodie,
The Market for Union Services: Reframing the Debate, 94 Va. L. Rev. In
Br. 23, 26-27 (2008). Neutrality agreements have been upheld by this and
other courts. See Amalgamated Clothing & Textile Workers Union, AFL-
CIO v. Facetglas, Inc., 845 F.2d 1250, 1253 (4th Cir. 1988) (holding neu-
trality and nondiscrimination provisions of election agreement enforceable
under § 301 of the LMRA as "an agreement between an employer and a
labor organization significant to the maintenance of labor peace between
them") (citation and internal quotation marks omitted); see also AK Steel
Corp. v. United Steelworkers, 163 F.3d 403, 406 (6th Cir. 1998) (uphold-
ing agreement preventing an employer from "demean[ing] the Union as an
organization or its representatives as individuals" and interpretation pre-
venting anti-union communication by employer); Hotel & Rest. Employ-
ees Union Local 217 v. J.P. Morgan Hotel, 996 F.2d 561, 563 (2d Cir.
1993) (upholding agreement preventing an employer from interfering with
union organizing effort or mounting a campaign with its employees oppos-
ing the union). Like the Card Check Agreement in this case, card check
agreements typically include a provision allowing the union "access to the
employer’s physical property." James J. Brudney, Neutrality Agreements
and Card Check Recognition: Prospects for Changing Paradigms, 90
Iowa L. Rev. 819, 826 (2005).
 ADCOCK v. FREIGHTLINER LLC 5
ditions agreement (the Preconditions Agreement). In the Pre-
conditions Agreement, the Union made commitments as to its
conduct if it were recognized as the exclusive bargaining rep-
resentative of Freightliner’s employees. Notably, the Union
agreed that: (1) there would be "separate consideration in
terms and conditions of employment for each Business Unit
because of industry differences (trucks, parts, busses, fire and
rescue, chassis) including competitive wage and benefits
packages within comparative product markets"; (2) there
would be "no guaranteed employment or transfer rights
between Business Units or Plants"; (3) there would be "no
provisions for severance pay . . . in the event of a layoff or
plant closure"; (4) there would be "no strikes during the term
of any collectively bargained agreement"; (5) there would be
"no subcontracting prohibitions, provided economics reflect
non-competitiveness"; (6) future "benefits cost increases, in
excess of normal inflation, will be shared between the Com-
pany and the employees proportionately at a rate to be deter-
mined between the Company and its employees"; and (7) in
consideration of Freightliner’s financial turnaround objec-
tives, there would be "no wage adjustments provided at any
newly organized facility prior to mid-2003." (J.A. 17-18).

The ensuing organizing campaigns at Gastonia, Cleveland
Truck, and Cleveland Parts resulted in the Union becoming
the exclusive bargaining representative at these facilities in
the first part of 2003. In June 2003, Freightliner and the
Union, on behalf of the Mt. Holly employees, entered into a
collective bargaining agreement (CBA), which provided,
among other things, that: (1) there would be no increase in
employee wages for the first three years of the CBA; (2) the
employees’ profit sharing bonus would be canceled; and (3)
the employees would increase their share of employee benefit
payments. In December 2003, Freightliner and the Union, on
behalf of the employees at the Gastonia, Cleveland Truck, and
Cleveland Parts facilities, entered into CBAs.

In March 2004, a majority of the employees at Thomas
Built signed authorization cards choosing the Union as their
6 ADCOCK v. FREIGHTLINER LLC
exclusive bargaining representative. Consequently, Freight-
liner recognized the Union as the exclusive bargaining repre-
sentative of these employees. On April 14, 2004, Jeff Ward,
a Thomas Built employee, filed unfair labor practice charges
against the Union and Freightliner. After reviewing these
charges, General Counsel for the NLRB issued a complaint on
October 13, 2004 alleging that Freightliner and the Union vio-
lated the National Labor Relations Act (NLRA), 29 U.S.C.
§ 151 et seq., by "bargaining and entering into an agreement
regarding employee terms and conditions of employment
prior to the [Union] enjoying the support of a majority of
employees." (J.A. 29). The complaint also alleged that
Freightliner violated the NLRA by assisting the Union with
the solicitation of union authorization cards from employees
at Thomas Built and by recognizing the Union at Thomas
Built when, in fact, the Union did not represent "an uncoerced
majority of employees." (J.A. 29).

On March 17, 2005, the NLRB, the Union, and Freightliner
settled the unfair labor practice charges filed by General
Counsel for the NLRB. The terms of the settlement agreement
included that: (1) Freightliner and the Union would cease giv-
ing effect to the Preconditions Agreement at all Freightliner
facilities; (2) Freightliner would cease assisting the Union
with the solicitation of union authorization cards from
employees at Thomas Built; and (3) Freightliner would not
recognize the Union at Thomas Built unless the Union was
"certified by the NLRB." (J.A. 30).

B

On January 24, 2006, four employees of Gastonia and one
employee of Cleveland Truck filed this class action against
Freightliner and the Union in the United States District Court
for the Western District of North Carolina. The complaint
alleged four claims under the Racketeer Influenced and Cor-
rupt Organizations Act (RICO), 18 U.S.C. §§ 1961-1968. The
racketeering activity alleged in each of the four counts con-
 ADCOCK v. FREIGHTLINER LLC 7
sists of violations of § 302 of the LMRA.2 According to the
complaint, Freightliner violated § 302 when it: (1) required
some of its employees to attend on paid company time Union
presentations explaining the Card Check Agreement; (2) pro-
vided the Union reasonable access to nonwork areas in com-
pany plants to allow Union representatives to meet with
employees; and (3) agreed to refrain from making negative
comments about the Union during the organizing campaigns.
The complaint also alleges that the Union violated § 302
when it agreed to receive these alleged benefits. The five
employees (the Employees), for themselves and a proposed
class of Freightliner employees, sought damages for the
wages, benefits, and other terms of employment for which
they allegedly were deprived as a result of the alleged racke-
teering activity. The Employees also sought damages for the
dues that Freightliner’s employees paid to the Union because
they allegedly never received loyal collective bargaining rep-
resentation. Finally, the Employees sought treble damages
under 18 U.S.C. § 1964(c).

On November 9, 2006, the district court dismissed the com-
plaint for failure to properly allege a § 302 violation. See Fed.
R. Civ. P. 12(b)(6). According to the district court, the com-
plaint did not set forth allegations demonstrating that Freight-
liner delivered "‘things of value’" to the Union. (J.A. 62). The
Employees noted this timely appeal.

II

The Employees contend that the district court erred when
it determined that their complaint did not properly allege a
§ 302 violation. Our review of the district court’s Rule
12(b)(6) dismissal is de novo. Schatz v. Rosenberg, 943 F.2d
485, 489 (4th Cir. 1991). In conducting this review, we con-
strue the factual allegations of the complaint "in the light most
2
A violation of § 302 is one of the enumerated predicate racketeering
activities in the RICO statute. 18 U.S.C. § 1961(1)(c).
8 ADCOCK v. FREIGHTLINER LLC
favorable to plaintiff." Battlefield Builders, Inc. v. Swango,
743 F.2d 1060, 1062 (4th Cir. 1984). However, we are not
bound by the legal conclusions drawn in the complaint. Dist.
28, United Mine Workers of Am., Inc. v. Wellmore Coal
Corp., 609 F.2d 1083, 1085-86 (4th Cir. 1979). To survive a
Rule 12(b)(6) motion, "[f]actual allegations must be enough
to raise a right to relief above the speculative level," Bell Atl.
Corp. v. Twombly, 127 S. Ct. 1955, 1965 (2007), and the
complaint must have "enough facts to state a claim to relief
that is plausible on its face." Id. at 1974.

With certain exceptions not applicable in this case, § 302 of
the LMRA prohibits, among other things, an employer from
"pay[ing], lend[ing], or deliver[ing], or agree[ing] to pay,
lend, or deliver, any money or other thing of value" to a labor
union or a representative of such union. 29 U.S.C. § 186(a).
With these same inapplicable exceptions, the statute also pro-
hibits a labor union or union representative from receiving or
accepting "any money or other thing of value" from an
employer. Id. § 186(b). According to the Employees, Freight-
liner delivered "thing[s] of value" to the Union when it agreed
to: (1) require some of its employees to attend, on paid com-
pany time, Union presentations explaining the Card Check
Agreement; (2) provide the Union reasonable access to non-
work areas in company plants to allow Union representatives
to meet with employees; and (3) refrain from making negative
comments about the Union during the organizing campaigns.
As the Employees’ argument goes, because these concessions
made by Freightliner benefited the Union’s organizing efforts,
they were "thing[s] of value" under § 302, because a "thing of
value" means anything that has subjective value to the Union.

We agree with the district court that Freightliner did not
deliver "thing[s] of value" to the Union, as the phrase
"thing[s] of value" is used in § 302. First, the plain language
of the statute does not support the Employees’ position. In
determining the meaning of a statute, we examine the statute’s
plain language. United Seniors Ass’n, Inc. v. Social Sec.
 ADCOCK v. FREIGHTLINER LLC 9
Admin., 423 F.3d 397, 402 (4th Cir. 2005). In doing so, we
look at "the language itself, the specific context in which that
language is used, and the broader context of the statute as a
whole." Robinson v. Shell Oil Co., 519 U.S. 337, 341 (1997).

Under the plain language of the statute, the concessions
made by Freightliner in the Card Check Agreement do not
involve the payment or delivery of a "thing of value." The
concessions provided by Freightliner all involve permitting
the Union access to employees during an organizing cam-
paign. Such concessions do not involve the delivery of either
tangible or intangible items to the Union. A vacuum salesman
who is permitted by a company to make a sales pitch to
employees does not receive a thing of value from the com-
pany. So, too, is the case of a company that allows a union
access to its employees during an organizing campaign. In
such situations, no "thing[s] of value" are delivered by the
company. Rather, all that is involved is the establishment of
mutually acceptable ground rules, for the sales pitch in the
case of the vacuum salesman, and the organizing campaign in
the case of the union.

Our reading of the statute is consistent with the purposes of
§ 302. The Supreme Court has noted that § 302 was enacted
to curb abuses that Congress felt were "inimical to the integ-
rity of the collective bargaining process." Arroyo v. United
States, 359 U.S. 419, 425 (1959). In particular, Congress was
"concerned with corruption of collective bargaining through
bribery of employee representatives by employers, with extor-
tion by employee representatives, and with the possible abuse
by union officers of the power which they might achieve if
welfare funds were left to their sole control." Id. at 425-26
(footnotes omitted); see also Turner v. Local Union No. 302,
Int’l Bhd. of Teamsters, 604 F.2d 1219, 1227 (9th Cir. 1979)
("The dominant purpose of § 302 is to prevent employers
from tampering with the loyalty of union officials and to pre-
vent union officials from extorting tribute from employers.").
Thus, § 302 is aimed at preventing "bribery, extortion and
10 ADCOCK v. FREIGHTLINER LLC
other corrupt practices conducted in secret." Caterpillar, Inc.
v. Int’l Union, United Auto., Aerospace & Agric. Implement
Workers of Am., 107 F.3d 1052, 1057 (3d Cir. 1997) (en
banc).

In this case, the concessions made by Freightliner do not
involve bribery or other corrupt practices. By no stretch of the
imagination are the concessions a means of bribing represen-
tatives of the Union; indeed, no representative of the Union
personally benefited from these concessions. Rather, the con-
cessions serve the interests of both Freightliner and the Union,
as they eliminate the potential for hostile organizing cam-
paigns in the workplace. In this sense, the concessions cer-
tainly are not inimical to the collective bargaining process.

Our interpretation of the phrase "thing of value" also is but-
tressed by § 302’s penalty provision. Under § 302’s penalty
provision, the severity of the sentence is dictated by the mon-
etary value of the thing delivered by the employer or received
by the union. A person who willfully violates § 302 is guilty
of a felony unless the value of the money or thing involved
does not exceed $1,000, in which case the person is guilty of
a misdemeanor. Thus, Congress clearly intended § 302’s
"thing of value" to have at least some ascertainable value. In
this case, unquestionably, the concessions made by Freight-
liner, which simply involved allowing the Union access to
Freightliner’s employees, have no such whatsoever.3

We also note that our reading of § 302 is consistent with a
decision on similar facts from the Third Circuit. In Hotel
Employees & Rest. Employees Union, Local 57 v. Sage Hos-
pitality Res., LLC, 390 F.3d 206, (3d Cir. 2006), an employer
and a labor union signed an agreement which contained a
3
Because the concessions made by Freightliner have no ascertainable
value, we need not decide the extent to which intangible items may have
value under § 302 or any other criminal statute prohibiting the delivery,
conveyance, or acceptance of a "thing of value."
 ADCOCK v. FREIGHTLINER LLC 11
series of provisions, including one that provided for a card
check procedure, whereby the union would present cards
requesting union representation signed by a majority of the
employer’s employees and the employer would provide a cur-
rent list of employees and valid signature samples. Id. at 209.
One of the arguments raised on appeal by the employer was
that the agreement was void because it required the employer
to deliver "thing[s] of value" to the union in violation of
§ 302. Id. at 218. In rejecting this argument, the court noted:

Not surprisingly, Sage is unable to provide any legal
support for the remarkable assertion that entering
into a valid labor agreement governing recognition
of a labor union amounts to illegal labor bribery.
There are many reasons why this argument makes no
sense, including the language of section 302 itself,
which proscribes agreements to "pay, lend, or deliver
. . . any money or other thing of value." The agree-
ment here involves no payment, loan, or delivery of
anything. The fact that a Neutrality Agreement—like
any other labor arbitration agreement—benefits both
parties with efficiency and cost saving does not
transform it into a payment or delivery of some ben-
efit. Furthermore, any benefit to the union inherent
in a more efficient resolution of recognition disputes
does not constitute a "thing of value" within the
meaning of the statute.

Id. at 219. We agree with the Third Circuit that an agreement
setting forth ground rules to keep an organizing campaign
peaceful does not involve the delivery of a "thing of value" to
a union.

The Employees’ real beef in this case seems to be with the
concessions made by the Union in the Preconditions Agree-
ment. However, the Union’s concessions in the Preconditions
Agreement do not bring § 302 into play, because § 302 only
prevents employers from delivering (and the union or union
12 ADCOCK v. FREIGHTLINER LLC
representatives from accepting or receiving) "thing[s] of
value." Pursuant to the Preconditions Agreement, Freightliner
did not deliver anything to the Union, and the Union did not
extort anything.

With that said, it is important to note that adequate reme-
dies under the NLRA are available to employees, allowing
them to challenge agreements similar to the two agreements
in this case, though the available remedies do not include the
treble damages that are available under RICO. Sections
8(a)(2) and 8(b)(1)(A) of the NLRA, 29 U.S.C. §§ 158(a)(2)
and (b)(1)(A), prohibit, in certain circumstances, the negotia-
tion of a CBA establishing wages, fringe benefits, and other
terms and conditions of employment before the union receives
the support of a majority of bargaining unit employees. The
NLRA also separately prohibits employers from improperly
coercing employees with regard to their right to choose or
reject union representation. See id. §§ 158(a)(1) and (2).4 In
4
The NLRB, as well as this court, has held that allowing unions to
address employees on company property and company time does not,
without some further evidence of coercion, violate the NLRA. See Tecum-
seh Corrugated Box Co., 333 NLRB 1, 6 (2001) ("As to Tecumseh’s con-
duct in allowing the Teamsters to address its employees on company time
and property, the Board has long held that such conduct, without more,
does not amount to unlawful assistance within the meaning of section
8(a)(2) of the Act."); Longchamps, Inc., 205 NLRB 1025, 1031 (1973)
("[T]he use of company time and property does not, per se, establish
unlawful employer support and assistance."); see also Kimbrell v. NLRB,
290 F.2d 799, 802 (4th Cir. 1961) ("The petitioners stress particularly the
circumstances that the employer gave permission to the union to address
the employees during working hours, for which the employees were paid,
and that the employer accepted the card check without a formal election
as evidence of the majority choice of the union and speedily negotiated a
union contract. These are of course circumstances to be taken into account
in making an ultimate finding but they are not conclusive, for it has been
frequently held that they do not constitute per se violations of the statute
in the absence of coercion, interference or restraint."). The fact intensive
inquiry conducted by the NLRB to resolve access issues under the NLRA
 ADCOCK v. FREIGHTLINER LLC 13
this case, unfair labor practice charges containing such allega-
tions concerning Thomas Built were, in fact, filed against
Freightliner and the Union and were settled to the satisfaction
of the NLRB. The availability of such adequate remedies
severely undermines the Employees’ attempt to stretch § 302
beyond its limits. We simply cannot apply § 302 in a manner
inconsistent with both the statute’s plain language and Con-
gress’ intent in passing the statute.

III

For the reasons stated herein, the judgment of the district
court is affirmed.

AFFIRMED

can lead to different results depending on the circumstances presented.
Compare Vernitron Elec. Components, Inc., 221 NLRB 464, 465 (1975)
(finding access amounted to unlawful assistance) with Tecumseh Corru-
gated Box Co., 333 NLRB at 6 (dismissing complaint alleging improper
access).