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Parties Involved:
National Labor Relations Board
Respondent
Southern California Edison Company
Intervenor
Utility Workers Union of America, Local 246, AFL-CIO
Petitioner

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 19, 1994 Decided November 18, 1994

No. 93-1350

UTILITY WORKERS UNION OF AMERICA,

LOCAL 246, AFL-CIO,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

SOUTHERN CALIFORNIA EDISON COMPANY,

INTERVENOR

Petition for Review of an Order of the

National Labor Relations Board

Glenn E. Rothner argued the cause and filed the briefs for petitioner.

Paul J. Spielberg, Deputy Assistant General Counsel, National Labor Relations Board, argued the

cause and filed the brief for respondent. With him on the brief were Linda R. Sher, Acting Associate

General Counsel, and Aileen A. Armstrong, Deputy Associate General Counsel, National Labor

Relations Board.

Kenneth E. Johnson argued the cause and filed the brief for intervenor Southern California Edison

Company. With him on the brief was Gordon E. Krischer.

Before: SILBERMAN, GINSBURG, and ROGERS, Circuit Judges.

Opinion for the Court filed by Circuit Judge SILBERMAN.

SILBERMAN, Circuit Judge: Petitioner, Utility Workers Union of America, Local 246, AFLCIO, challenges a National Labor Relations Board dismissal of a complaint alleging that Southern

California Edison Co. violated § 8(a)(5) of the National Labor Relations Act (NLRA) by unilaterally

implementing drug testing procedures for "red badge" employees working in the "Protected Area"

of its San Onofre Nuclear Generating Station. In dismissing the charges, the Board deferred to an

arbitrator's determination that the parties' collective bargaining agreement authorized the company

to implement the testing program. We conclude that the Board's decision to defer to the arbitrator's

award was a permissible exercise of its discretion and therefore deny the petition for review.

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1Section 8(a)(5) provides:

It shall be an unfair labor practice for an employer ... to refuse to bargain

collectively with the representatives of his employees....

29 U.S.C. § 158(a)(5) (1988). 

2The Board's Collyer deferral policy was approved by this court in Hammontree v. NLRB, 925

F.2d 1486 (D.C. Cir. 1991) (en banc). 

I.

The San Onofre Nuclear Generating Station is one of the nation's largest nuclear power

plants. In September 1984, the Station's operator, Southern California Edison Co., instituted a drug

screening program for its "red badge" employeesthose workers whose assignments require

unescorted accessto the Protected Area of the Station that comprisesthe nuclear reactor and related

facilities. Under the drug screening program, employees are required to undergo a urinalysis test

before being awarded a "red badge" and are subject to annual testing thereafter. Southern California

Edison had notified the union of the drug screening program prior to its implementation, but refused

to consult with the union despite a request to bargain.

Shortly after learning of the company's determination to institute drug screening, the union

filed an unfair labor practice charge with the RegionalDirector ofthe Board. The charge alleged that

by unilaterally implementing drug tests Southern California Edison had unlawfully refused to bargain

in violation of §§ 8(a)(1) and (5) of the Act.1 Pursuant to the Board's policy of deferring the

processing of unfair labor practice claims until the parties have exhausted their contractual arbitration

procedures, see Collyer Insulated Wire, 192 N.L.R.B. 837 (1971), the Regional Director set aside

the unfair labor practice charge pending resolution of the dispute under the contractual

grievance-arbitration clause.2

In April 1986, the union filed a grievance that eventually proceeded to final and binding

arbitration. The question put to the arbitrator was whether Southern California Edison's unilateral

implementation of the drug screening program had violated the collective bargaining agreement,

which in turn had incorporated the parties' bargaining obligation under the NLRA. After an

exhaustive proceeding, the arbitrator determined that SouthernCalifornia Edison wasrelieved of any

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continuing bargaining obligation on that question by virtue of its authority to implement reasonable

safety rules under Article X, sections N(1) and (2) of the collective bargaining agreement, which

state,

(1) The Company shall make reasonable provisionsfor the safety of employees in the

performance of their work. The Union shall cooperate in promoting the realization

of the responsibility of the individual with regard to the prevention of accidents.

(2) The Company reservesthe right to draft reasonable safety rulesfor employees and

to insist on observance of such rules. The Union may submit suggestions to the

Company's Labor Relations Division concerning plant safety conditions and revision

and enforcement of safety rules.

In light of the parties' bargaining history and past practices as well as the particular safety

considerations attending the operation of a nuclear power facility, the arbitrator held that the drug

screening policy was a reasonable safety rule within the meaning of the contractual language. As

such, it was a proper exercise of contractually secured management prerogatives, and therefore did

not violate the collective bargaining agreement.

By determining that the company'simposition ofthe drug screening policy was authorized by

the contract, the arbitrator perforce determined that the company had not violated its obligation to

bargain over the subject. The statutory and contractual questions were bound together in the single

proceeding, and the answer to one was the answer to the other. There could be no unlawful refusal

to bargainunder either the collective bargaining agreement or the Actif the agreement had

authorized the company to adopt the testing policy. "No such statutory violation lies," the arbitrator

observed, "where contractual language clearly grants to the employer the right, at itssole discretion,

to [make and apply safety rules]."

After the arbitrator's decision was finally issued in September 1989, Southern California

Edison petitioned the Board's Regional Director to dismiss the unfair labor practice charge that had

been held in abeyance. The Regional Director opted to pursue the claim, however, and in May 1992

filed a complaint with the Board alleging that Southern California Edison had violated §§ 8(a)(1) and

(5) in implementing the San Onofre drug screening procedures.

As a concomitant to the Board's Collyer deferral policy the Board will, after an arbitrator

decides a case, defer to his award if four conditions are satisfied: the arbitrator, in resolving the

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contractual dispute, must have faced and considered the unfair labor practice issue; the arbitration

proceedings must have been fair and regular; the parties must have contractually agreed to be bound

by the arbitrator's award; and the arbitrator's award cannot be "clearly repugnant to the purposes and

policies of the Act." Olin Corp., 268 N.L.R.B. 573, 573-74 (1984); Spielberg Mfg. Co., 112

N.L.R.B. 1080 (1955). Although this court has affirmed the Board's application of Spielberg/Olin

deference to arbitration awards on severaloccasions, the theoretical underpinnings ofthe policy have

remained somewhat unclear. See Hammontree, 925 F.2d 1486, 1504 n.6 (D.C. Cir. 1991) (en banc)

(Edwards, J., concurring); Darr v. NLRB, 801 F.2d 1404, 1409 (D.C. Cir. 1986) (remanding to the

Board for further explanation of its deference policy); see also Plumbers &Pipefitters, Local Union

No. 520 v. NLRB, 955 F.2d 744, 752, 757 (D.C. Cir.) (approving Board deference to pre-arbitration

grievance settlement, but urging the Board "to give serious consideration to the logical flaws in its

current policy and to attempt to develop a comprehensible theory of deference"), cert. denied, 113

S. Ct. 61 (1992).

The only real dispute before the Board was whether the arbitrator's award satisfied the last

of the Olin standardsi.e., whether it was "clearly repugnant" to the Act. Southern California

Edison Co., 310 N.L.R.B. No. 211, at 4 (1993). To establish repugnancy, and thereby avoid

dismissal of the complaint, the charging party must show that the arbitrator's decision is "palpably

wrong" or "not susceptible to an interpretation consistent with the Act." Olin Corp., 268 N.L.R.B.

at 574. After weighing "all the circumstances," including the arbitrator's findings with respect to

contractuallanguage, working conditions, past practice, and the parties' bargaining history, theBoard

concluded that the arbitrator's award was not "palpably wrong" and so was entitled to deference.

Southern California Edison Co., 310 N.L.R.B. No. 211, at 6. The Board consequently dismissed

the complaint. Id.

The union then petitioned for review of the Board's decision.

II.

"[T]he Board has considerable discretion to respect an arbitration award and decline to

exercise its authority over alleged unfair labor practices if to do so will serve the fundamental aims

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of the Act." Carey v. Westinghouse Elec. Corp., 375 U.S. 261, 271 (1964). We therefore are

obliged to proceed cautiously when reviewing a Board determination to defer to an arbitrator's

conclusions. The question for us is limited to whether the Board, in deferring to the arbitrator,

abused its broad discretion under the Act. Plumbers & Pipefitters, 955 F.2d at 750; Bakery,

Confectionery & Tobacco Workers Int'l Union 25 v. NLRB, 730 F.2d 812, 813 (D.C. Cir. 1984).

Petitioner presentsseveral arguments, all of which relate back to one critical contention: that

the arbitrator's awardwasinconsistent withexistingBoard precedent, and therefore "palpablywrong"

as a matter of governing labor law. To defer under such circumstances, petitioner claims, is

necessarily an abuse of discretion. If the Board would not, if deciding for itself, reach the same

conclusion as did the arbitrator, it cannot accept such an outcome merely because it wasfirst reached

in arbitration but must explain why the difference does not amount to a palpable wrong.

Petitioner argues that Board deference is foreclosed in this case by Johnson-Bateman Co.,

295 N.L.R.B. 180 (1989). In that case, the Board ruled that an employer cannot claim that it has

satisfied its bargaining obligation with respect to implementing drug testing by pointing to a so-called

"zipper clause" in the collective bargaining agreementa customary contractual provision that

secures to management all rights that it would have in the absence of an agreement. This sort of

general clause, the Board held, id. at 184, cannot provide evidence of the "clear and unmistakable

waiver" that must be shown before a union will be deemed to have surrendered its statutory

bargaining rights for any "terms and conditions of employment." 29 U.S.C. § 158(d). It thus could

not excuse an employer's implementation of drug testing in the absence of negotiations. JohnsonBateman, 295 N.L.R.B. at 182-87.

Petitioner maintainsthat the safety-rules clause upon which SouthernCalifornia Edison relies

no more establishes a "clear and unmistakable waiver" than did the "zipper clause" at issue in

Johnson-Bateman. Indeed, the arbitrator did not even purport to apply the "clear and unmistakable

waiver" standard in interpreting the scope of the employer's contractual right under the safety-rules

provision. As petitioner puts it, the Board actually conceded that the arbitrator's decision was

contrary to existing labor law principlesin both its analytical method and its conclusionand yet the

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Board sanctioned an outcome in this case at odds with its prior decision, which it mentioned only in

a footnote. See Southern California Edison Co., 310 N.L.R.B. No. 211, at 6 n.4.

We agree with the Board, however, that petitioner's description of its stated reasoning is

inaccurate. Although hardly more than a cursory incantation of the arbitrator's conclusions, the

Board's opinion below emphatically did not decide that the arbitrator's decision wasinconsistent with

Board precedent. Nor for that matter did the Board determine that it would have come to the same

conclusion as did the arbitrator if deciding the case de novo. It was enough, the Board held, to

determine that the arbitrator had not been "palpably wrong" as a matter of labor law.

As the Board noted (admittedly, in a footnote), Johnson- Bateman was distinguishable in

several respects. The more general "zipper clause" was less susceptible to an interpretation

encompassing drug testing rulesthan the safety-rules clause at issue here, and the arbitrator had found

that the Station was a "safety-critical" environment and that safety concerns had animated the

company's drug testing requirement. For these reasons we, like the Board, are satisfied that JohnsonBateman does not foreordain what decision the Board would have reached in this case de novo. We

therefore think that the Board reasonably concluded that the arbitrator's conclusions were not

"palpably wrong" as a matter of law.

Petitioner also claims that the Board's deference to the arbitrator's award in this case is

inconsistent with prior decisions by the Board not to defer. The union points principally to Bath Iron

Works, 301 N.L.R.B. 898 (1991), in which the Board rejected as "palpably wrong" part of an

arbitrator's award regarding an employer's contractual authority to institute a range of drug policies.

See id. at 902. The Board thought that the agreement's drug-use ban could not be read to authorize

rules making possession of "drug paraphernalia" or a drug conviction groundsfor discipline. See id.

On the question most closely analogous to the dispute in this case, howeverwhether the company

was authorized to initiate random drug testing to implement a contractual drug use banthe Board

did defer to the arbitrator's award as not "repugnant," notwithstanding that the contractual limitation

on drug use did not specify testing. See id. at 900. Bath Iron Works hardly advances petitioner's

cause.

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3On remand the Board determined not to defer to the arbitrator's award after all, and so

avoided answering the questions we put to it. See Cone Mills Corp., 298 N.L.R.B. 661 (1990). 

Petitioner alternatively argues that the Board's "palpably wrong" standard is illegitimately

employed to avoid required decisionmaking. According to petitioner, the Board has no warrant under

the statute to defer to an arbitrator's decision that is merely not "palpably wrong." And, petitioner

argues, since analytically the Board must first determine whether the arbitrator's decision is wrong

before it can conclude that the award is not palpably wrong, the Board may therefore appropriately

defer to an arbitrator's decision only if the Board concludes that the arbitrator correctly applied the

NLRA. As an appellate court, we have little difficulty in rejecting petitioner's logic. We must

consider virtually every day whether a district court's decision as to factual matters is "clearly

erroneous," and whenwe determine that thatstandard has not beenmet, we often never decideeven

in our own mindswhether the court actually committed error. In other words, petitioner has the

analytical process exactly backwards; one can certainly determine that a decision under review is not

clearly or palpably wrong without ever determining whether it is simply wrong or erroneous.

Essentially, petitioner's argument is nothing less than a broadside attack on the Board's

deference policy itself. Obviously, if the Board must determine whether the arbitrator decided the

question exactly asthe Board itself would have, it would not be deferring; it would be reviewing the

arbitrator's decisionand reviewing it de novo at that.

To be sure, this court has, as petitioner reminds us, expressed concern asto the doctrinalbasis

that underlies the Board's deferral policy as well as its "palpably wrong" limitation. See Darr v.

NLRB, 801 F.2d 1404, 1409 (D.C. Cir. 1986); Plumbers & Pipefitters Local Union No. 520 v.

NLRB, 955 F.2d 744, 757 (D.C. Cir.), cert. denied, 113 S. Ct. 61 (1992). In Darr, we remanded to

the Board to explain under which of several possible theories it might permissibly defer to an

arbitrator's award inconsistent with Board precedent. The Board has yet to respond.3 Petitioner

argues that at minimum we should, by remanding again, compel the Board to answer the questions

we posed in Darr. We think, however, that Darr is distinguishable. There, an arbitrator found that

an employee had been discharged discriminatorily, in likely violation of § 8(a)(3), and yet in awarding

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reinstatement refusedcontrary to explicit Board policyto order back payas well. Darr, 801 F.2d

at 1406. Moreover, the arbitrator's conclusion that the employer's action violated the Act did not in

any way depend on an interpretation of the collective bargaining agreementindeed, it is unclear

whether an employee's statutory protection against discriminatory treatment in retaliation for

exercising his or her § 7 rights can even be "waived" in collective bargaining. See id. at 1408; see

also Metropolitan Edison Co. v. NLRB, 460 U.S. 693, 705-07 (1983). Under those circumstances,

we could not understand how the Board could ignore its uniform remedial precedent and instead

defer to the arbitrator's contrary award.

In the case at bar, by contrast, whether or not the employer violated § 8(a)(5) of the Act (the

obligation to bargain in good faith) depends entirely on what the collective bargaining agreement

means. As we have noted, "[t]o the extent that a bargain resolves any issue, it removes that issue pro

tanto from the range of bargaining." United Mine Workers 1974 Pension v. Pittston Co., 984 F.2d

469, 479 (D.C. Cir.) (quoting Connors v. Link Coal Co., 970 F.2d 902, 905 (D.C. Cir. 1992)), cert.

denied, 113 S. Ct. 3040 (1993). For this reason, we have expressed doubt as to whether the Board's

requirement of a "clear and unmistakable waiver" is even appropriate when interpreting a collective

bargaining contract. "[Q]uestions of "waiver' normally do not come into play with respect to subjects

already covered by a collective bargaining agreement." NLRB v. United States Postal Serv., 8 F.3d

832, 836-37 (D.C. Cir. 1993). And, consistent with this reasoning, we have concluded that when a

refusal to bargain claim is answered with a defense of contractual right, the unfair labor practice and

the contractual dispute converge. See IRS v. FLRA, 963 F.2d 429, 440 (D.C. Cir. 1992) ("In the

refusal to bargain context, ... the resolution of the unfair labor practice claim is entirely a matter of

contract interpretation, because whether there is a duty to bargain depends solely upon what the

contract means."); cf. American Freight Sys., Inc. v. NLRB, 722 F.2d 828, 832 (D.C. Cir. 1983)

(where dispute concerns contractual waiver of § 8(a)(1) statutory rights, the "contention that there

is a statutory issue apart from the contractual issue" is an "obvious fallacy.").

In that same vein, although theBoard certainlyhas authority to interpret collective bargaining

agreements in the course of determining whether a party has committed an unfair labor practice,

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NLRB v. C &C Plywood Corp., 385 U.S. 421, 429 (1967); Carey v. Westinghouse Elec. Corp., 375

U.S. 261, 272 (1964), it is by no means apparent that the Board is thereby entitled to disregard an

arbitrator's interpretation of a contract as "palpably wrong." After all, a federal district court

presiding over a § 301 proceeding seeking enforcement of an arbitrator's award must give the award

the greatest deference imaginablethe award must be enforced so long as the arbitrator purports to

be interpreting the contract rather than dispensing "his own brand of industrial justice." United

Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597 (1960). And as the Supreme

Court hasrecognized (relying on an opinion of our court, Local Union 1395, Int'l Bhd. Elec. Workers

v. NLRB, 797 F.2d 1027, 1032 (D.C. Cir. 1986)), the federal judiciary owes no deference to the

Board's interpretation of collective bargaining agreements, because parties can seek enforcement of

arbitration awards in the federal courts directly. Litton Fin. Printing Div. v. NLRB, 501 U.S. 190,

203 (1991). "We would risk the development of conflicting principles were we to defer to the Board

in itsinterpretation of the contract, as distinct from its devising a remedy for the unfair labor practice

that follows from a breach of contract." Id. But cf. NLRB v. Acme Indus. Co., 385 U.S. 432, 437

(1967) (dicta) (because § 10(a) ofthe NLRA providesthat the Board's power to prevent unfair labor

practices "shall not be affected by any other means of adjustment or prevention that has been or may

be established by agreement, law, or otherwise," 29 U.S.C. § 160(a) (1988), the Board may not be

obliged "to defer to the primary determination of an arbitrator"). That proposition of law suggests

that if the Board were to decide against deferring to an arbitrator's award on the ground that it was

"palpably wrong" when a federal court would have been obliged to enforce the award under

Enterprise Wheel &Car, 363 U.S. at 596-97, the Board's order would be unenforceable in the courts

of appeals; otherwise, both an arbitrator's award and a conflicting Board order could be enforced

simultaneously in the federal courts.

Be that as it may, whether or not the Board could refuse in a § 8(a)(5) case to defer to an

arbitrator's award under its palpably wrong standard, it seems rather clear to us that the Board can

do the oppositedefer to an arbitrator's award that is not palpably wrong. Petitioner is, in a sense,

correct in its claim that the Board's "palpably wrong" standard is a vehicle for the avoidance of

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4Petitioner also argues that review should be granted because the Board failed to consider its

contention that the award proceedings were not "fair and regular," and thus not entitled to

deference under Olin. Petitioner's theory of irregularity and unfairness is based simply on its

contention that the arbitrator refused to accept submissions after the close of the arbitration

proceedings and thus did not consider important developmentsnamely, the Board's intervening

decision in Johnson-Bateman. In other words, petitioner's unfairness claim merges with its

argument that the award was inappropriate as a matter of law. We think the Board adequately

addressed the fairness concern when it determined that the arbitrator's award was not "clearly

repugnant" to Johnson- Bateman.

decisionmaking. It is precisely that: the Board's deference policy is motivated by an effort to

conserve the Board's resources and, where possible, to abide by the resolutions arrived at by the

private mechanisms that are the primary and preferred adjudicators of contractual labor disputes.

Arbitration is preferred for the simple reason that it is understood to be "a part of the continuous

collective bargaining process" that lies at the heart of the NLRA. United Steelworkers v. Warrior &

Gulf Navigation Co., 363 U.S. 574, 581 (1960). Having found that the award was not "palpably

wrong" as a matter of national labor policy, the Board wasfully justified in deferring to the arbitration

proceedings. The petition for review is therefore denied.4

So ordered.

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