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Parties Involved:
Matson Terminals, Inc.
Petitioner
National Labor Relations Board
Respondent

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 21, 1997 Decided June 10, 1997 

No. 96-1275

MATSON TERMINALS, 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

Eugene Scalia argued the cause for petitioner, with whom 

Kenneth W. Anderson and Scott A. Kruse were on the briefs.

Meredith L. Jason, Attorney, National Labor Relations 

Board, argued the cause for respondent, with whom Linda R. 

Sher, Associate General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel, and Peter D. Winkler, Supervisory Attorney, were on the brief.

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Before: GINSBURG, SENTELLE and HENDERSON, Circuit 

Judges.

Opinion for the Court filed by Circuit Judge SENTELLE.

Dissenting opinion filed by Circuit Judge HENDERSON.

SENTELLE, Circuit Judge: Matson Terminals, Inc. petitions 

for review of a National Labor Relations Board ("NLRB") 

order finding that the company violated sections 8(a)(3) and 

(1) of the National Labor Relations Act ("the Act") by accelerating the promotion of unit employees to supervisory positions to interfere with union activity and avoid a bargaining 

obligation. Although the evidence before the Board supported the company's position that the promotions were part 

of a reorganization which the company had planned to undertake in any event, nonetheless substantial evidence supported 

the Board's conclusion that in determining the timing of the 

promotions the company acted because of a requested union 

recognition and in order to exclude the promoted employees 

from the requested bargaining unit. Therefore, given the 

leniency of the standard of review, we deny the petition for 

review of the company and grant the Board's cross-petition 

for enforcement.

Background

Petitioner Matson Terminals is engaged in the business of 

stevedoring and terminal operation services in southern California. Matson employees work in the terminal yard, or on 

the vessels, or in planning. Until the mid-1970's, the title of 

employees charged with planning the loading and unloading 

of ships was "vessel planner." In the mid-1970's, Matson 

hired additional planners and began calling the incumbent 

employees "senior planners." In 1992, Matson changed the 

job title from "senior planner" to "senior planning supervisor." In that year, those planning employees affected by the 

change, previously receiving hourly wages, became salaried, 

but their overall compensation remained essentially the same. 

Their job duties did not change, and the company does not 

now dispute that the "senior planning supervisors" remained 

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employees covered by the Act, rather than supervisors exempted from the Act. Structurally, the company divided its 

planning work among three categories of employees, vessel 

planner, vessel superintendent, and yard superintendent positions, with each category being responsible for the portion of 

the job suggested by the nomenclature.

On May 13, 1994, Matson's senior vice president of operations sent a memorandum to Matson's chief executive officer 

calling for a reorganization integrating "all planning processes from the gate to the vessel." Thereafter, the company 

undertook a restructuring of its planning operation based on 

the senior vice president's concept. In the restructuring, 

Matson upgraded the requirements for new hires in the 

planning positions; began to rotate new hires in the relevant 

positions through all operations, including yard, vessel, and 

planning; and hired nine new "superintendents" to undergo 

the rotation. In September 1994, the company held a management retreat. At the retreat, participants discussed 

changes in the company's organizational structure, including 

the interrelatedness of the vessel planning, vessel superintendent, and yard superintendent positions.

In January of 1995, the Marine Clerks Association, International Longshoremen's and Warehousemen's Union, Local 63 

("the union") began an organizing campaign among the company's vessel planners. The union obtained signed authorization cards from a majority of the senior vessel planning 

supervisors. On February 6, officers of the union met with 

the company's terminal manager, informed the company that 

the union had obtained authorization cards from a majority of 

the senior vessel planning supervisors, and requested that the 

company recognize the union as the bargaining representative 

of those employees. The company advised the union officials 

that it would respond to the request for recognition in a few 

days.

Shortly after the union's request for recognition, the terminal manager informed higher officials of the company of the 

union's request. Senior officials of the company decided to 

meet to discuss the company's already existing integration 

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plans. Beginning February 8, through such meetings and 

other actions, the company proceeded with the previously 

discussed restructuring. Among other things, it eliminated 

the position of senior vessel planning supervisor, and created 

a new position called "Superintendent, Terminal Operations." 

Within a week following the union's request for recognition, 

the company had created the new positions, promoted the 

incumbent "supervisors" into those positions, and directed 

those employees to begin four-month rotations through the 

three stages of the company's operations. These promotions 

were met with varying reactions by the incumbents.

On February 14, the union sent a letter to the company 

protesting the promotion of the senior vessel planning supervisors without consulting the union, and complaining about 

the company's failure to respond to the February 6 request 

for recognition. On February 15, the union filed with the 

Board an election petition on behalf of the senior vessel 

planning supervisors. On February 17 the company notified 

the union that it was refusing recognition on the ground that 

the senior vessel planning supervisors were statutory supervisors. See 29 U.S.C. § 152(3) (1973). On March 2, the union 

filed the charge that gave rise to the General Counsel's 

complaint filed June 16, 1995.

On February 23, 1996, after a hearing on the above matters, an administrative law judge ("ALJ") entered the decision in which he concluded that the company's eradication of 

the bargaining unit was an unfair labor practice in violation of 

sections 8(a)(1) and (3) of the Act done in direct response to 

the union's request for recognition. On July 31, 1996, the 

Board entered its decision and order affirming the ALJ and 

largely adopting his decisions, ruling, and finding. The company now petitions this court for review.

Analysis 

The Board's decision in this case is consistent with applicable principles of labor law. Section 8(a)(1) of the Act, 29 

U.S.C. § 158(a)(1) (1994), declares it an unfair labor practice 

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ees in the exercise of their rights guaranteed in section 7 [of 

the Act]." Section 8(a)(3) of the Act, 29 U.S.C. § 158(a)(3) 

(1994), declares it an unfair labor practice for an employer to 

discriminate "in regard to hire or tenure of employment or 

any term or condition of employment to encourage or discourage membership in any labor organization...." Both the 

Board and the courts have long held that an employer who 

promotes employees to supervisory positions to strip them of 

their right of self-organization because of a union campaign 

violates these sections. See, e.g., Hospitality Motor Inn, Inc.,

249 N.L.R.B. 1036, 1037 (1980), enf'd., 667 F.2d 562 (6th Cir.), 

cert. denied, 459 U.S. 969 (1982); United Oil Mfg. Co., 254 

N.L.R.B. 1320, 1324-25 (1981), enf'd. on other grounds, 672 

F.2d 1208 (3d Cir.), cert. denied, 459 U.S. 1036 (1982). The 

Board in this case and previously has interpreted these 

sections of the Act to be equally applicable where an employee accelerates a promotion or other employment action affecting employee status in response to union activity even if it 

would eventually have taken the same action without the 

union activity. See, e.g., A.M.F.M. of Summers County, Inc.,

315 N.L.R.B. 727, 730-31 (1994), enf'd., 89 F.3d 829 (4th Cir. 

1996) (promotion to supervisor status).

While the Act may not unambiguously outlaw this conduct 

on the part of an employer, we review the Board's determinations of the applicability of the Act under the Chevron standard, Chevron U.S.A. Inc. v. Natural Resources Defense 

Council, Inc., 467 U.S. 837, 842-44 (1984), permitting an 

agency's construction of ambiguities in its statute to stand, 

provided it is reasonable. Whatever ambiguity there is in the 

Act, we cannot say that the Board has resolved it unreasonably. It is perfectly reasonable for the Board to determine, 

as it has, that an employer, upon learning of employee union 

activity, cannot preempt a potential bargaining obligation by 

promoting or discharging all the unit employees.

That said, whether an employer's action constitutes unlawful discrimination depends upon the employer's motive. Here 

the ALJ found, and the Board affirmed, that the company 

had accelerated the reorganization of the relevant positions to 

eradicate the bargaining unit based, at least in part, on a 

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motive of anti-union animus, triggered by the protected conduct of the employees whom the union sought to organize. 

While the petitioner argues that it would eventually have 

executed the same reorganization with or without the protected conduct, it does not seriously contest the conclusion that it 

accelerated the timing in response to the union recognition 

request. In any event, we must uphold the finding of unlawful motive by the Board so long as there is substantial 

evidence in the record to support it. 29 U.S.C. § 160(e); see 

Passaic Daily News v. NLRB, 736 F.2d 1543, 1551-52 (D.C. 

Cir. 1984). The present record contains ample support. In 

the first place, the proximity between union activity and the 

employer's action by itself is substantial circumstantial evidence. Teamsters Local 171 v. NLRB, 863 F.2d 946, 955 

(D.C. Cir. 1988), cert. denied, 490 U.S. 1065 (1989). But here 

there is far more than proximity. Matson admitted at the 

hearing that the union activity "focused the company's attention" on the need to implement the plan expeditiously. That 

by itself makes out a prima facie case required under the 

law.

Under the "Wright Line" test, a familiar doctrine of labor 

law, when the General Counsel has established a prima facie

showing, as in this case, sufficient to support an inference 

that the protected conduct was a motivating factor in the 

employer's decision, the burden shifts to the company to show 

that the conduct would have taken place even in the absence 

of the protected conduct. Wright Line, 251 N.L.R.B. 1083, 

1089 (1980), enf'd., 662 F.2d 899 (1st Cir. 1981), cert. denied,

455 U.S. 989 (1982). See NLRB v. Transportation Management Corp., 462 U.S. 393, 401-03 (1983) (approving Wright 

Line test). Matson contends that it has countered the prima 

facie case because it has offered, and the ALJ accepted, "very 

credible evidence that it was working toward implementation 

of its plan long before February 11," the date of the protected 

conduct. Matson Terminals Inc., 321 N.L.R.B. 124, at 7 

(July 31, 1996). However, this does not defeat the prima 

facie case.

The Board's decision was premised not upon a finding that 

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ganization but upon a finding that anti-union animus caused 

the company to implement the reorganization when it did. 

That is a factual question. As we noted above, the Board's 

factual findings, including motive, are conclusive as supported 

by substantial evidence on the record as a whole. 29 U.S.C. 

§ 160(e). Universal Camera v. NLRB, 340 U.S. 474, 477, 488 

(1951). That factual finding being accepted, the only remaining question is whether the Board was unreasonable in its 

interpretation that the legal effect of a change in timing, at 

least on the facts of this case, is the same as the effect of a 

change in the nature of the reorganization itself. We cannot 

conclude that it was unreasonable.

The company may argue, credibly, that even without the 

recognition request, it would have completed the reorganization in time to have eradicated the bargaining unit in the 

same way that its accelerated reorganization did. The evidence, however, is hardly so compelling in that direction that 

the Board was required to so find. Indeed, it is quite 

reasonable of the Board to have determined that management 

witnesses' testimony that the union's request caused them to 

"get off the dime" made a plain record that something of 

substance did change. Conceivably there could be a case in 

which a change in timing of a management decision triggered 

by protected conduct would be so de minimis that the Board 

could not reasonably conclude that the employees or union 

had suffered adverse consequence as a result. This is not 

that case, and we need not decide the legal ramifications of 

such facts, as we do not have them before us.

Matson argues that the Board's decision here is the establishment of a per se liability standard inconsistent with our 

previous applications of Wright Line. That is, in previous 

cases we have concluded that even where the General Counsel had established a prima facie case of anti-union animus, 

"the employer may avoid liability by demonstrating by a 

preponderance of the evidence that the" alleged unfair labor 

practice would have occurred even absent the protected conduct. Synergy Gas Corp. v. NLRB, 19 F.3d 649 (D.C. Cir. 

1994) (internal quotations and citation omitted). In Matson's 

view, the Board's decision in this case creates a per se rule 

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inconsistent with that line of decisions, by "tying the hands of 

employers, no matter to what extent they have pursued a 

prior legitimate business plan, once a union demands recognition of employees who will be affected by that plan." We do 

not find the Board's decision to establish such a per se rule. 

The Board did not have before it a decision where dates for 

the reorganization had been set and were left in place after 

the request for recognition, nor even where management had 

fixed its plans for establishing such dates. The Board did not 

purport to establish a rule that would apply if it faced such 

facts. When it does face such facts, the Board can rule; if 

necessary, we can review that ruling. That is not this case.

Conclusion

For the reasons set forth above, we conclude that the 

Board did not err. We therefore deny the petition for review 

and allow the cross-petition for enforcement.

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KAREN LECRAFT HENDERSON, Circuit Judge, dissenting:

The majority's otherwise fine opinion suffers only from a 

disjunction with reality. Matson not only may argue, as the 

majority states, but has argued "credibly, that even without 

the recognition request, it would have completed the reorganization in time to have eradicated the bargaining unit in the 

same way that its accelerated reorganization did." Maj. Op. 

at 7. Matson introduced evidence that it had planned the 

reorganization in spring 1994, had taken a number of steps 

toward implementationincluding restructuring the staff that 

served vessels not owned by Matson and hiring new, more 

qualified personnelduring 1994 and early 1995 and would 

have completed the conversion of the planners' positions by 

March 13, 1995, when a new Operations Manager came on 

board. The Board acknowledged that the testimony of Matson's Vice President and Area Manager, which the General 

Counsel failed to refute, showed "that [Matson] would have 

acted in March 1995 if it had no bargaining obligation." 

Matson Terminals, Inc., 321 N.L.R.B. No. 124 at 1 (July 31, 

1996), reprinted at App. 2. Thus, the date the reorganization 

would have been completed absent any acceleration, March 

13, occurred only 26 days after the date the Union filed its 

petition to represent the planners, February 15.

Under the Board's workforce-in-flux doctrine, no election 

should have been held during that period. See, e.g., Hughes 

Aircraft Co., 308 N.L.R.B. 82, 83 (1992) (election not appropriate if substantial change to workforce is "imminent and 

certain"). Even if the doctrine is inapplicable, it is unreasonable to believe that an election could have been held and the 

Union certified (assuming it won) between February 15 and 

March 13. As the Board's counsel conceded at oral argument, an election could not have been held "[i]f [the reorganization] had definitely been done on March 13." Thus, under 

the Board's own assumptions, the Union would not have 

represented the planners before their positions became supervisory; it could not have represented them thereafter. In 

other words, Matson's one-month acceleration of the reorganization had no actual impact on the unionization effort and 

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this is that de minimis case in which "the Board could not 

reasonably conclude that the employees or union had suffered 

adverse consequence." Maj. Op. at 7. Because the Board 

did so conclude, I would grant the petition. Respectfully, I 

dissent.

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