Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-96-01309/USCOURTS-caDC-96-01309-0/pdf.json

Parties Involved:
National Labor Relations Board
Respondent
Speedrack Products Group, Ltd.
Petitioner

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 3, 1997 Decided June 20, 1997 

No. 96-1309

SPEEDRACK PRODUCTS GROUP, LTD.,

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

C.V. Stelzenmuller argued the cause and filed the briefs for 

petitioner.

Sharon I. Block, 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 Linda Dreeben, Supervisory Attorney, were on the brief.

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Before: EDWARDS, Chief Judge, WALD and TATEL, Circuit 

Judges.

Opinion for the Court filed by Circuit Judge WALD.

WALD, Circuit Judge: Speedrack Products Group, Ltd. 

("Speedrack") petitions for review of an order of the National 

Labor Relations Board ("NLRB" or "Board") holding that 

Speedrack violated sections 8(a)(5) and 8(a)(1) of the National 

Labor Relations Act ("NLRA" or "Act"), 29 U.S.C. 

§§ 158(a)(1), 158(a)(5) (1994), by refusing to bargain with the 

United Steelworkers of America, AFL-CIO-CLC ("Union"), 

after the Union had been certified as the exclusive representative of all production and maintenance employees at Speedrack's Hamilton, Alabama facility. Speedrack argues that 

the Board erred in finding that four work release inmates 

employed at the facility were ineligible to vote in the representation election. The Board cross-petitions for enforcement of its order.

We conclude that the Board's exclusion of the work release 

inmates from the bargaining unit was unreasonable because it 

ignored past Board decisions holding that whether work 

release inmates are eligible to vote in representation elections 

turns on their status while in the employee relationship, and 

not on restrictions to which they may be subject at other 

times. Accordingly, we grant Speedrack's petition for review, 

reverse the Board's order and deny the Board's cross-petition 

for enforcement of its order. We remand for the Board to 

reconsider its decision in light of its precedent. If on remand 

the Board decides that the work release employees are 

eligible to vote in the representation election, the Board also 

should determine whether the Union is the exclusive bargaining representative when the ballots of the work release 

employees are included and, if not, whether the election 

results should be set aside and a new election held.

I. BACKGROUND

Speedrack, which manufactures storage racks and shelving 

at its Hamilton facility, participates in a work release proUSCA Case #96-1309 Document #280413 Filed: 06/20/1997 Page 2 of 13
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gram administered by the Alabama Department of Corrections ("DOC"). Under this program, Speedrack employs 

individuals at its Hamilton facility who are inmates at the 

DOC's work release center in Hamilton. These work release 

inmates perform the same duties, are paid the same wages, 

and receive the same benefits as other employees. The DOC 

transports the inmates to Speedrack's facility and back to the 

work release center, and they are required to return to the 

center whenever they are not working. Paychecks are made 

out jointly to the DOC and the inmates, they are required to 

work overtime when asked, and the DOC can remove an 

inmate from Speedrack's employment if it receives complaints 

about the inmate's behavior. The DOC can also discipline 

work release inmates if they engage in misconduct when 

working or if they quit their jobs without good cause.

In May, 1991 the Union filed a petition seeking a representation election for a unit composed of all production and 

maintenance employees at Speedrack's Hamilton facility. An 

election was held on July 21, 1991, pursuant to a stipulated 

election agreement, and resulted in 56 votes for the Union, 51 

against, with eight ballots challenged by the Union. At the 

time of the election, four inmates in the work release program 

were employed at Speedrack as production and maintenance 

employees, and four of the ballots that the Union challenged 

were the ballots cast by these employees. The Union also 

filed twelve objections to the election claiming that Speedrack 

had engaged in illegal conduct during the election period.

A hearing on the Union's ballot challenges and claims of 

illegal conduct was held on October 9-10, 1991, before a 

Board Hearing Officer. On October 31, 1991, the Hearing 

Officer issued a report finding that the work release 

employees were eligible to vote in the election. Hearing 

Officer's Report on Objections and Challenged Ballots, Case 

10-RC-14124, Joint Appendix ("J.A.") tab 3 at 23-26. As a 

result, the Hearing Officer rejected the Union's challenge to 

the four ballots cast by the work release employees. The 

report also rejected the Union's four other ballot challenges, 

but sustained four of the Union's allegations of illegal conduct 

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1

Specifically, the Hearing Officer sustained the Union's claims 

that, in violation of the NLRA, Speedrack had interrogated and 

harassed its employees, disciplined employees for engaging in protected activity, threatened to not recognize the Union, and refused 

to allow pro-union literature to be posted on a bulletin board used 

for other personal communications among employees. See Hearing 

Officer's Report, J.A. tab 3 at 31-35, 37-42. 

2These parts of the Board's decision have not been challenged on 

appeal. 

by Speedrack.1 The Hearing Officer recommended that the 

Union be certified as the exclusive bargaining representative 

of the unit if it had a majority once all the challenged ballots 

were counted, and that otherwise the results of the election 

should be set aside and a new election held.

The Union filed exceptions to the Hearing Officer's conclusions on six of the challenged ballots, including the Hearing 

Officer's decision that the ballots of the four work release 

employees should be counted because these employees were 

eligible to vote in the election. On December 29, 1995, the 

Board unanimously affirmed the Hearing Officer's conclusions 

regarding the non-work release employees whose ballots had 

been challenged by the Union and the Union's objections to 

Speedrack's conduct. Speedrack Prods. Grp. Ltd., 320 

N.L.R.B. 627, 627 n.2, 629 (1995) (Speedrack I).2 By a 2 to 1 

vote, however, the Board reversed the Hearing Officer's 

conclusion that the work release employees were eligible to 

vote in the election. The Board majority found that the work 

release employees' inclusion in the unit would be inappropriate because, unlike other employees, the work release employees had to return promptly to the work release center 

when not working and were subject to prison discipline if they 

refused to work overtime, engaged in misconduct or arguments at work, or quit without good cause. Id. at 628-29. 

Chairman Gould, in dissent, argued that none of these differences was significant under the Board's precedent and that 

the only potentially significant factor separating work release 

employees and other employees was a DOC policy prohibiting 

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3Because Chairman Gould concluded that any policy prohibiting 

work release inmates from joining unions would be preempted, he 

did not determine whether in fact such a policy existed. See 

Speedrack I, 320 N.L.R.B. at 629-30 & n.4. 

work release employees from joining unions, but he concluded 

this policy was preempted by the NLRA.3Id. at 629-30.

As the vote after the Board's disposition of the Union's 

challenges was 56 to 55 in favor of the Union, the Board 

certified the Union as the exclusive bargaining representative 

of the unit employees. Id. at 629. The Board subsequently, 

without dissent, rejected Speedrack's motion for reconsideration. The Union then requested that Speedrack recognize 

and bargain with the Union. When Speedrack refused to do 

so, the Union filed an unfair labor practice charge against 

Speedrack and the Board issued an order holding that Speedrack had committed an unfair labor practice, in violation of 

sections 8(a)(5), 8(a)(1), 2(6) and (7) of the NLRA, by refusing 

to bargain. Speedrack Prods. Grp., Ltd., 321 N.L.R.B. No. 

143 (Aug. 23, 1996) (Speedrack II). Speedrack now appeals 

this order, arguing that its refusal to bargain was justified 

because the Board erred in sustaining the Union's challenges 

to the ballots of the work release employees.

II. ANALYSIS

An employee is eligible to vote in a representation election 

if she shares "a community of interest" with the other employees in the unit. The Board examines various factors to 

determine if a community of interest exists, such as the 

similarity of wages, benefits, skills, duties, working conditions, 

and supervision of the employee, but " 'there are no per se 

rules to resolve unit determinations.' " Skyline Distribs. v. 

NLRB, 99 F.3d 403, 407 (D.C. Cir. 1996) (quoting Bentson 

Contracting Corp. v. NLRB, 941 F.2d 1262, 1265 (D.C. Cir. 

1991); accord Cleveland Constr., Inc. v. NLRB, 44 F.3d 1010, 

1013 (D.C. Cir. 1995). The Board exercises broad discretion 

in making unit determinations, and its unit determinations 

are accorded particular deference by a reviewing court. See 

BB&L, Inc. v. NLRB, 52 F.3d 366, 369 (D.C. Cir. 1995); 

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Cleveland Constr., 44 F.3d at 1013-14. This deference is not 

without limits, however, and in particular "the Board cannot 

ignore its own relevant precedent but must explain why it is 

not controlling." BB&L, Inc. v. NLRB, 52 F.3d at 369.

Unfortunately, the Board did precisely that in this case; it 

ignored its own precedent without offering any explanation 

as to why this precedent was inapplicable. In WinsettSimmonds Engineers, Inc., the Board addressed the same 

question at issue here, namely whether work release employees shared a community of interest with other employees 

such as to make them eligible to vote in a representation 

election. The Board stated in Winsett-Simmonds that the 

"test as to whether an employee shares a community of 

interest with his fellows so as to be included in a unit with 

them depends on his status while in the employment relationship and not what ultimate control he may be subjected to at 

other times." 164 N.L.R.B. 611, 612 (1967). The Board 

concluded that the work release employees in WinsettSimmonds shared a community of interest with the other 

employees in the unit because they were treated the same as 

other employees while at work; they worked side-by-side 

with the other employees, were paid the same wages, received the same benefits, and were assigned to work teams in 

the same fashion. Although the work release employees 

were subject to prison restrictions that did not apply to the 

other employees, the Board held that these differences were 

either unimportant because they did not affect the employees 

in their status as employees or were outweighed by the 

similarities between work release and other employees. Id.

at 611-12.

The Board reached similar conclusions in two subsequent 

cases where work release employees were treated similarly 

with other employees while on the job. In Georgia-Pacific 

Corp. the Board followed Winsett-Simmonds and held that 

"the critical test is that an employee's community of interest 

with his fellow employees depends on his status while in the 

employment relationship and not on what ultimate control he 

may be subject to at other times." 201 N.L.R.B. 760, 761 

(1973). Since "the record reveal[ed] an almost total assimilation of the [work release] employees into the Employer's 

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production and maintenance work force," id., with the work 

release employees sharing the same hours, wages, promotion 

opportunities, supervision, and work assignments as the other 

employees, the Board had little difficulty concluding that a 

substantial community of interest existed. Id. The Board 

once more adhered to the Winsett-Simmonds test in its 

decision in Rosslyn Concrete Constr. Co., which was later 

enforced by the Fourth Circuit. See 261 N.L.R.B. 732 (1982), 

enf'd, 713 F.2d 61 (1983). In Rosslyn the Board held that a 

community of interest existed because the work release employees worked side-by-side with other employees, shared the 

same working conditions and received identical benefits. The 

Board specifically found no significance in the fact that prison 

authorities could monitor the work release employees and end 

their employment because it did not "interfere with [the 

employer's] operation or affect the employee during the day." 

Rosslyn, 713 F.2d at 64.

The only case where the Board has held that a community 

of interest did not exist between work release and other 

employees is a pre-Winsett-Simmonds decision, National 

Welders Supply Co., Inc. But in National Welders the status 

of work release employees at work was substantially different 

from that of other employees; the work release employees 

could not advance in pay, could not be promoted, could not 

work overtime, and could only continue in their employment if 

the prison authorities determined that they were making 

satisfactory progress. 145 N.L.R.B. 948, 951-52 (1964). The 

Board underscored these differences in how work release and 

other employees were treated in explaining why it would not 

follow National Welders in its subsequent decisions holding 

that work release employees did share a community of interest with other employees and were eligible to vote in representation elections. See Georgia-Pacific Corp., 201 N.L.R.B. 

at 761; Winsett-Simmonds, 164 N.L.R.B. at 612 n.4.

In short, the Board's precedent demonstrates long-standing 

policy recognition that whether work release employees share 

a community of interest with other employees turns on their 

status in the employee relationship, and not on the fact that 

they are under the ultimate control of prison authorities. A 

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community of interest exists if work release employees are 

integrated into the employer's workforce and treated the 

same on the job as other employees, despite the restrictions 

to which they may be subject at other times. This emphasis 

on a work release employee's status on the job is eminently 

reasonable, since the focus of the community of interests test 

is on the interests of employees as employees, not their 

interests more generally, and is used by the Board to determine if including a group of employees in one unit would 

"assure to employees the fullest freedom in exercising the 

rights guaranteed by [the Act]." 29 U.S.C. § 159(b). Moreover, the Board has held in other contexts that employees 

subject to the ultimate control of outside forces may share a 

community of interest with other employees if they are 

treated the same as other employees when on the job. See 

Winsett-Simmonds, 164 N.L.R.B. at 612; Terri-Lee, Inc., 

103 N.L.R.B. 995, 996 (1953); compare Shepherd's Uniform 

& Linen Supply, Co., 274 N.L.R.B. 1423, 1423 (1985) (vocational student shares a community of interest with other 

employees where vocational school's rules did not require 

employer to treat student differently from other employees) 

with Towne Chevrolet, 230 N.L.R.B. 479, 479-80 (1977) (vocational student does not share a community of interest with 

other employees where student was not considered regular 

employee and employer was required to prepare reports on 

student's progress and train student).

In the decision before us, however, the Board made no 

reference to this long-standing policy or to the WinsettSimmonds test, other than to comment that "the factual 

situation presented here has not occurred before" and the 

earlier cases were "distinguishable." Speedrack I, 320 

N.L.R.B. at 628. Contrary to what the Board claimed, 

however, many of the differences on which it focused were 

specifically considered and dismissed as insignificant in

Winsett-Simmonds, Georgia-Pacific and Rosslyn. For example, the Board emphasized that work release employees 

unlike other employees were required to return promptly to 

the work release center when not working, which meant that 

they would not be able to picket or attend after-hour union 

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meetings. But in Winsett-Simmonds the Board specifically 

held that the requirement that work release employees return 

promptly to their work release facility did not preclude 

finding that a shared commonality of interest existed. 164 

N.L.R.B. at 612. The Board majority also stressed that the 

work release employees were subject to prison discipline if 

they engaged in misconduct or arguments at work, refused to 

work overtime and could be removed from their employment 

by the DOC. But in Winsett-Simmonds the Board denied 

that differences in the work release employees' ability to 

perform overtime or the fact that they had to "abide by 

certain rules of conduct" and could have their employment 

ended by corrections officials were significant. WinsettSimmonds, 164 N.L.R.B. at 611-12; see also Rosslyn, 713 

F.2d at 63-64 (community of interest exists even though 

prison officials could terminate inmates' employment and 

inmates were required to "behave responsibly"); GeorgiaPacific, 201 N.L.R.B. at 761 (community of interest exists 

even though inmates could only work overtime if their transportation back to the prison can be arranged).

More importantly, the differences emphasized by the Board 

are irrelevant under the Winsett-Simmonds test, because 

they simply reflect the ultimate control that prison authorities 

exercise over work release inmates and do not affect the work 

release employees in their status as employees. This is true 

even of the DOC requirement that work release employees 

must work overtime when asked. Employers often require 

employees to work overtime and the Board majority did not 

cite any evidence in the record indicating that the DOC's 

mandatory overtime requirement served in practice to differentiate the conditions under which work release employees 

and Speedrack's other employees worked. Rather, the Board 

simply insisted that the mere fact that other employees were 

not subject to prison discipline as well as employer discipline 

for rejecting overtimeor for engaging in job misconduct or 

quitting without good causewas an "obvious and substantial" difference between the two groups of employees. Id. at 

628. However, Winsett-Simmonds and the Board's other 

work release cases make clear that differences which do not 

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serve to differentiate work release employees from other 

employees in their relationship to their employer are irrelevant to the determination of whether a shared community of 

interest exists. Of course, the Board has authority to revisit 

its policy determinations. But if it decides to do so, it must 

provide "a reasoned analysis" for "changing its course." See 

Motor Vehicle Mfrs. Ass'n v. State Farm Mutual Auto. Ins. 

Co., 463 U.S. 29, 42 (1983); United Steelworkers of America 

v. NLRB, 983 F.2d 240, 244-45 (D.C. Cir. 1993). The Board 

has not even attempted to do so here.

The factor on which the Board appeared to put greatest 

weight was its finding that work release employees had to 

avoid getting into arguments when raising complaints. The 

Board concluded that, as a result, the "[work release employees] would not be able to participate meaningfully in the 

grievance-arbitration process." Speedrack I, 320 N.L.R.B. at 

628. An inability to participate in grievance-arbitration procedures might be a sufficient basis on which to hold that the 

work release employees did not share a community of interest 

with the other employees. We do not need to reach this 

question, however, because the Board's conclusion regarding 

the ability of work release employees to utilize grievance and 

arbitration procedures is not reasonable or supported by 

substantial evidence in the record.

In reaching its conclusion the Board quoted the testimony 

of Corrections Officer Robert Newton ("Newton"), who stated 

that "if he does have a problem, we hope the inmate will come 

to us also. We don't want him going down there blowing off, 

you know, and causing an argument or something." Id. at 

627 n.3. From this the Board inferred that work release 

employees would not be able to use any grievance and 

arbitration process, because "[i]t is difficult to imagine how a 

complaint or grievance against the Employer can be presented to the Employer without running the risk of 'causing an 

argument or something.' " Id. at 628. However, Newton 

also testified there was no work release program rule which 

would prevent a work release employee from filing a formal 

or informal complaint with an employer. Transcript at 253-

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4Newton's testimony on this score is supported by a letter 

written by the General Counsel of DOC and approved by the DOC 

Commissioner, which states that "[i]f the employer and the union 

agree to a grievance resolution procedure, work release inmates 

may utilize and participate in that procedure to the same extent as 

other bargaining unit members who are not union members." J.A. 

tab 15, Bd. Ex. 7 at 2. Since this letter was written after the 

election and in response to an inquiry by Speedrack, we do not rely 

on it in reaching our decision, other than to note that the Board 

never addresses this statement by the DOC in concluding, to the 

contrary, that DOC requirements would prevent work release employees from making use of grievance and arbitration procedures. 

54.4 Further, Newton only stated that work release program 

officials hoped work release employees would also come to 

them, not that this was their only means of redress. Given 

Newton's explicit testimony that the work release program 

would not prevent an inmate from using grievance or arbitration processes, it is unreasonable to read Newton's statement 

to mean that work release employees would be disciplined for 

getting into any argument with their employer over a grievance, even an argument that took the form of an even-toned 

disagreement. Indeed, as Chairman Gould argued in dissent, 

Newton's testimony is far more reasonably interpreted as 

indicating only that work release program officials were 

"concerned about prisoners engaging in angry outbursts on 

the job," Speedrack I, 320 N.L.R.B. at 629 n.3, and work 

release employees might well be able to use the grievance 

process meaningfully even if they had to avoid "angry outbursts." In any event, they might be able to do so even if, as 

the Board majority claimed, they had to avoid all arguments, 

since they could have a union representative negotiate on 

their behalf. Consequently, the Board's conclusion that work 

release employees would not be able to use grievance and 

arbitration procedures available to employees generally is 

simply not supported by the record.

We also need not address whether the DOC prohibits work 

release employees from joining unions, and if it does so, 

whether this policy is preempted by the NLRA or would be 

sufficient to prevent the work release employees from sharing 

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a community of interest with the other employees. Although 

Chairman Gould focused on this policy in his dissent, the 

Board majority explicitly denied that it was relying on this 

policy in determining that work release employees would be 

unable to participate in strikes and other "activities [that] are 

part and parcel of the collective-bargaining process." Id at 

628 & n.8. It is a basic principle of administrative law that a 

court can only affirm an agency on the basis of same rationale 

relied on by the agency. See SEC v. Chenery Corp., 332 U.S. 

194, 196-97 (1947); see also Oil, Chemical & Atomic Workers 

v. NLRB, 46 F.3d 82, 92-93 (D.C. Cir. 1995) (refusing to 

consider explanation for agency action not adopted by a 

majority of the Board).

In sum, the Board's decision holding that the work release 

employees did not share a community of interest with other 

unit employees was unreasonable because it completely ignored applicable Board precedent. Since the Union's certification was based on a vote count from which the votes of the 

work release employees were excluded, we reverse the 

Board's order finding that Speedrack committed an unfair 

labor practice by refusing to bargain with the Union.

III. REMEDY

It is apparent from the record that the work release 

employees in this case enjoyed the same employment relationship with Speedrack as did other unit employees. The 

work release employees were "completely integrated" into 

Speedrack's workforce. Speedrack I, 320 N.L.R.B. at 629 

(Chairman Gould, dissenting). As the Board majority itself 

noted, the work release employees "receive[d] the same 

wages, vacation, holidays, health insurance, and other benefits 

as 'free world' employees." Id. at 627. Undisputed evidence 

in the record also established that the work release employees "work[ed] side by side with the 'free world' employees 

and [we]re subject to same supervision" and the same working conditions as the other employees. Id. at 629 (Chairman 

Gould, dissenting).

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Thus, under Winsett-Simmonds and the Board's other 

cases, Speedrack's work release employees appear to share a 

community of interest and to be eligible to vote in the 

representation election. But the Board must be the one to 

apply this precedent in the first instance and determine if the 

existence of a shared community of interest between work 

release employees and other employees should continue to 

turn solely on the status of the work release employees in the 

employee relationship. It is the Board, and not this court, 

that "has the primary responsibility for developing and applying national labor policy." NLRB v. Curtis Matheson Scientific, Inc., 494 U.S. 775, 786 (1990).

Consequently, we remand for the Board to reconsider its 

decision holding that Speedrack's work release employees are 

not eligible to vote in the representation election in light of 

Winsett-Simmonds and the Board's other precedent. If the 

Board decides to abandon its prior precedent, it must adequately justify any new policy it adopts. In addition, if the 

Board decides that the work release employees are eligible to 

vote in the election, the Board should also determine whether 

the Union is the exclusive bargaining representative when the 

ballots of the work release employees are included and, if the 

Union does not have a majority, whether to set aside the 

results of the election and direct that a second election be 

held, given the violations of the Act that the Board found 

Speedrack committed during the first election.

IV. CONCLUSION

We conclude that the Board's determination that the work 

release employees were not eligible to vote in the representation election was unreasonable. We therefore reverse the 

Board's order finding that Speedrack committed an unfair 

labor practice by refusing to bargain with the Union and 

remand for further proceedings consistent with this opinion.

So ordered.

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