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Parties Involved:
National Labor Relations Board
Respondent
Sundor Brands, Inc.
Petitioner

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 7, 1998 Decided February 26, 1999

No. 98-1184

Sundor Brands, 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

Terrence J. Nolan argued the cause for petitioner. With

him on the briefs was Christopher H. Mills.

Fred B. Jacob, Attorney, National Labor Relations Board,

argued the cause for respondent. With him on the brief were

Linda Sher, Associate General Counsel, John D. Burgoyne,

Acting Deputy Associate General Counsel, and Fred L. Cornnell, Supervisory Attorney.

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Before: Ginsburg, Henderson and Rogers, Circuit Judges.

Opinion for the Court filed by Circuit Judge Ginsburg.

Ginsburg, Circuit Judge: Local 68 of the International

Union of Operating Engineers, AFL-CIO, petitioned the

National Labor Relations Board to hold a representation

election among certain employees at a plant operated by

petitioner Sundor Brands, Inc. Over Sundor's objection, the

Regional Director of the NLRB approved a less than plantwide bargaining unit and ordered an election. Sundor appealed the Regional Director's unit determination to the

Board, which affirmed. When the Union won the representation election, Sundor refused to bargain with it and was held

to have committed an unfair labor practice.

Sundor now petitions for review of the Board's order in the

unfair labor practice case on the ground that the underlying

bargaining unit determination is unlawful. We hold more

narrowly that the Board failed adequately to explain its unit

determination. Accordingly, we remand this matter for further proceedings before the NLRB.

I. Background

In order to understand this controversy one must know

something about how Sundor manages its fruit juice beverage

plant in South Brunswick, New Jersey. Work there is organized pursuant to a team-based method of management that

Sundor calls its "High Performance Work System." Under

that system, the Company assigns most of its non-managerial

employees each to a so-called team. Instead of giving responsibility for a specific task to a specific individual, the

Company assigns all the tasks in a given part of the plant to a

team. It may, for example, give a team in the packing

department not only the job of operating the packing equipment in its area, but also responsibility for maintaining that

equipment and for checking the quality of the product being

packed. Sundor expects each of its employees to be able to

perform all of the tasks for which his team may be responsible. At least in principle, therefore, the job duties of many

employees overlap significantly.

Each newly hired employee starts as a "Level 1 technician"

and receives a standard pay and benefit package. A Level 1

technician who demonstrates a mastery of basic operational

tasks may bid for a more specialized and better paying Level

2 position. A similar increase in specialization and pay

accompanies promotion to Level 3. All non-managerial employees are subject to the same disciplinary rules and standards for promotion, and all use the same parking lot, cafeteria, and smoking room.

Not all non-managerial employees are members of a work

team. Of particular relevance here, non-team members include the Maintenance Group Leaders (MGLs), the Level 3

Electrical and Instrumentation Technicians (EITs), and the

sole Level 3 Utilities Coordinator (UC).

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In March, 1997 the Union petitioned the Regional Director

of the NLRB to hold a representation election for a bargaining unit consisting of all full-time and regular part-time

Advanced Maintenance Technicians (AMTs), who are team

members; and of the EITs and UCs, who are not. Sundor

objected to the petition, contending that the employees the

Union sought to represent have nothing in common except

what they also share with all non-managerial employees.

Because of the homogenizing influence of the High Performance Work System, the Company maintained, the only

appropriate bargaining unit would include all the nonmanagerial employees in the plant.

After holding a hearing, the Regional Director ordered a

representation election for a unit consisting of all AMTs,

EITs, UCs, and MGLs. Despite the unusual organizational

scheme in the plant, he reasoned, these groups of employees

have a community of interest distinct from that of the other

employees because they: (1) have specialized skills related to

the maintenance of plant equipment; (2) are responsible for

the performance of maintenance tasks; (3) spend some part

of their working day in the maintenance shop; (4) interact

frequently with each other; (5) earn relatively high salaries;

and (6) insofar as they do maintenance work, are supervised

separately.

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Upon Sundor's appeal, the Board generally affirmed but

held that, because the Company had raised a substantial

objection to their inclusion in the unit, Level 2 UCs should

cast ballots marked as challenged. The parties did not

receive the Board's order, however, until the election was

underway, and four of the five Level 2 UCs had already

voted. The Union won the election by a substantial margin

and the Board certified it as the exclusive bargaining representative of the employees in the designated bargaining unit.

In order to contest the Board's unit determination, Sundor

refused to bargain with the Union. The Board held that the

Company thereby violated ss 8(a)(1) and (5) of the National

Labor Relations Act, 29 U.S.C. ss 158(a)(1) and (5), and

ordered it to bargain. Sundor now petitions for review of the

Board's order and the Board cross-applies for its enforcement.

II. Analysis

Under s 9(b) of the National Labor Relations Act, 29

U.S.C. s 159(b), the Board may certify a group of employees

as a bargaining unit only if they share a substantial "community of interest." Bentson Contracting Co. v. NLRB, 941

F.2d 1262, 1265 (D.C. Cir. 1991). To determine whether this

standard is met in a particular case, the Board considers a

variety of factors, including the employees' "wages, hours and

other working conditions; commonality of supervision; degree of skill and common functions; frequency of contact and

interchange with other employees; and functional integration." Ore-Ida Foods, Inc., 313 N.L.R.B. 1016, 1019

(1994), enforced, 66 F.3d 328 (7th Cir. 1995). No one factor is

controlling. See Airco, Inc., 273 N.L.R.B. 348, 348 (1984).

Upon judicial review the Board's unit determination, if supported by substantial evidence, see Cleveland Constr., Inc. v.

NLRB, 44 F.3d 1010, 1014 (D.C. Cir. 1995), is entitled to

"wide deference" from the court. Willamette Indus., Inc. v.

NLRB, 144 F.3d 877, 878 (D.C. Cir. 1998).

A.Adherence to Precedent

Sundor first argues that the unit determination in this case

constitutes an improper departure from Board precedent.

The Board has generally presumed that a plant-wide unit is

appropriate. See, e.g., Kalamazoo Paper Box Corp., 136

N.L.R.B. 134, 137 (1962).* It follows, according to Sundor,

that a smaller unit is presumptively inappropriate, yet the

Board failed to consider whether this presumption was overcome in this case.

The argument is without merit. In American Hospital

Association v. NLRB, 499 U.S. 606 (1991), the Supreme

Court made it clear that the Board may certify any appropriate unit, and is not limited to the "single most appropriate"

one. Id. at 610. That a plant-wide unit presumptively would

be proper, therefore, has no necessary bearing upon whether

a smaller unit also would be proper. Rather, the Board

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applies the presumption in favor of a plant-wide unit only

when the union proposes and the employer opposes such a

unit, not when the union proposes a smaller unit. See, e.g.,

Airco, 273 N.L.R.B. at 348-49; see also American Hosp.

Ass'n, 499 U.S. at 610 ("[T]he initiative in selecting an appropriate unit resides with the employees" seeking representation).

Nor, Sundor's argument to the contrary notwithstanding,

does the Board's general rule conflict with s 9(c)(5) of the

Act, 29 U.S.C. s 159(c)(5) ("In determining whether a unit is

appropriate ... the extent to which the employees have

organized shall not be controlling"). To be sure, by applying

the presumption as it does the Board gives the Union an

initial advantage should any conflict ensue regarding the

proper scope of the bargaining unit. This modest benefit,

however, hardly grants "controlling" weight to the extent the

Union has organized the employees. See NLRB v. Metropolitan Life Ins. Co., 380 U.S. 438, 441-42 (1965) (s 9(c)(5) "was

not intended to prohibit the Board from considering the

extent of organization as one factor, though not the controlling factor, in its unit determination").

__________

* The Board has created one industry-specific exception to this

general principle, but it plainly does not apply here. See Willamette, 144 F.3d at 879-80 (Board has consistently approved only

plant-wide units in the lumber industry).

B.Substantial Evidence

Sundor's more weighty objection is to the sufficiency of the

evidence supporting the Board's unit determination. As noted above, that decision was predicated upon the Regional

Director's analysis of six factors. Because there is no suggestion in either the Regional Director's decision or the Board's

order affirming it that any of those factors was unnecessary

to its decision, we must assume that the Board relied upon

each of them. If any one is unsupported by evidence in the

record, therefore, the Board must reconsider its unit determination. See SEC v. Chenery Corp., 318 U.S. 80, 87 (1943)

("The grounds upon which an administrative order must be

judged are those upon which the record discloses that its

action was based"). Cf. Fleshman v. West, 138 F.3d 1429,

1433 (Fed. Cir. 1998) (remand unnecessary where it is clear

that agency would have reached the same result had it

applied correct reasoning). In the event, we conclude that

there is sufficient evidence in the record to support the

Board's reliance upon two, and perhaps a third,* of the six

factors it invoked; its reliance upon the other three is unjustified.

__________

* With regard to the unit members' pay, the Board's reasoning is

not entirely clear. The Board suggests in its brief that they receive

relatively high salaries because they are maintenance employees,

but that is not the case. The undisputed evidence shows that

Sundor determines its employees' pay exclusively with reference to

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their experience and skill level; maintenance employees do not earn

more than equally skilled and equally senior non-maintenance employees. The Regional Director, however, may have meant only to

distinguish unit members, all of whom are Level 3 employees, from

non-unit employees, the majority of whom are at Levels 1 and 2.

Because the Board is not required to identify the most appropriate

unit, but only an appropriate one, see American Hosp. Ass'n, 499

U.S. at 610, a showing that the unit members are better paid than

most non-unit employees may provide a degree of support for the

conclusion that they have a distinct community of interests. Upon

remand, the Board will have to clarify its reasoning if it wants to

rely upon this ground.

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First (in the latter category) is the degree to which the

employees in the unit interact with each other. The Board

points to testimony suggesting that the MGLs and the AMTs

have largely overlapping job responsibilities, and that the

AMTs are generally responsible for performing planned

maintenance work on production equipment. It also cites

evidence that Level 3 EITs regularly work alongside other

employees both within the designated unit as well as those

excluded from it, and that the "maintenance personnel" attend a monthly meeting.

How the Board could conclude from this evidence that the

employees in the unit interact frequently with each other

eludes us. That the AMTs and the MGLs may have common

job duties does not mean they work together in performing

those duties. As to the Level 3 EITs, testimony in the record

confirms that they work with other unit employees in "maintenance or trouble-shooting functions" but there is no indication whether they do so with any frequency. The Board's

strongest point--but only by default--concerns the monthly

maintenance meetings: They show that members of the unit

have at least some contact with each other. As Sundor points

out, however, the AMTs attend meetings with employees

outside the unit not monthly but daily, and the UC interacts

most consistently with other utilities employees, not with

other members of the disputed unit. Perhaps the monthly

maintenance meetings are for some reason so significant that

they outweigh the apparently extensive, indeed daily, interaction the AMTs have with employees outside the unit. The

Board has not, however, claimed as much, let alone told us

why.

Second, the Board based its decision in part upon the

Regional Director's conclusion that "[a]lthough most of [Sundor's] skilled maintenance employees are members of teams

and receive some direction from team leaders, they receive

separate direction concerning the performance of their skilled

maintenance duties." Again, we fail to see how this factor, on

the facts of this case, lends any support to the Board's unit

determination. The Board admits--indeed, puzzlingly, seems

to assert--that each of the four groups in the bargaining unit,

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even insofar as they do maintenance work, is supervised

separately, and that only two of them (the MGLs and the

AMTs) have even one supervisor (the Technology Manager)

in common. If, upon remand, the Board is to adhere to its

present unit determination, therefore, it must explain why

that decision is justified in spite of, not because of, the

disparate supervision of the employees in the unit.

Finally, the Board asserts that the employees in the unit

have the common task of ensuring that equipment at the

plant is properly maintained. At least as to the Level 3 UC,

however, that claim is grossly overstated. The testimony

describing the UC's responsibilities is that he does maintenance work only to fill in for a Level 2 UC who is on vacation

or otherwise unavailable; the bulk of his time is devoted to

training more junior utilities personnel. Insofar as the

Board's decision to include the Level 3 UC is based upon his

responsibility for the maintenance of equipment, therefore, it

is unsupported by substantial evidence.

In short, three of the six factors upon which the Board

relied in reaching its decision are, in whole or in part, without

support in the record. In these circumstances, we must

remand this matter for the Board to reconsider its decision.

In so doing we express no opinion upon the question whether

the factors for which there is support in the record could

suffice by themselves to support the Board's present unit

determination.

C.Late Notice of the Board's Order

Sundor maintains that the Board, by failing to inform the

parties before voting began that the Level 2 UCs were to cast

challenged ballots, unfairly interfered with the election. Employees who voted for the Union believing that it would

represent the Level 2 UCs, the Company suggests, may have

voted differently had they known that those employees would

likely be excluded from the unit.

Whatever the merits of this contention, Sundor did not

timely raise it before the Board. Under 29 C.F.R.

s 102.69(a), an objection to conduct allegedly affecting the

result of a representation election must be made within seven

days of the Board's tally of the ballots. Because the Company neither raised its objection in a timely fashion nor alleged

special circumstances that could excuse its tardiness, the

Board properly declined to consider it.

III. Conclusion

For the foregoing reasons, the petition for review is granted, the Board's cross-application for enforcement is denied,

and this matter is remanded to the Board for further proceedings.

So ordered.

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