Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-98-01481/USCOURTS-caDC-98-01481-0/pdf.json

Parties Involved:
Associated Milk Producers, 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 October 1, 1999 Decided October 22, 1999

No. 98-1481

Associated Milk Producers, 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

Patrick W. Jordan argued the cause for petitioner. With

him on the briefs was Bradford K. Newman.

Jill A. Griffin, Attorney, National Labor Relations Board,

argued the cause for respondent. With her on the brief was

Frederick C. Havard, Supervisory Attorney, Linda Sher,

Associate General Counsel, John D. Burgoyne, Acting Deputy

Associate General Counsel.

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Before: Edwards, Chief Judge, Wald and Williams,

Circuit Judges.

Opinion for the Court Filed by Chief Judge Edwards.

Edwards, Chief Judge: The National Labor Relations

Board ("Board") seeks to enforce an order directing Associated Milk Producers, Inc. ("Associated Milk") to bargain in

good faith with the Chauffeurs, Teamsters and Helpers, Local

Union No. 238 ("Union"). The Board found Associated Milk

in violation of s 8(a)(1) and (5) of the National Labor Relations Act ("NLRA") because Associated Milk refused to bargain with the Union after it had been certified. See 29 U.S.C.

s 158(a)(1) and (5) (1994). The Union had been certified

after an election in which 23 votes were cast for the Union, 20

against, and challenges to 4 ballots were sustained. Associated Milk argues that the certification of the election was

invalid, because challenges to three of the ballots should have

been rejected. Associated Milk seeks to have this court

accept the votes of the challenged employees, reverse the

Board's certification of the election, and vacate the Board's

order that Associated Milk bargain in good faith.

The Union challenged the votes of three employees who, it

argued, were not a part of the stipulated bargaining unit.

Prior to the election, the Union and Associated Milk agreed

to a stipulated bargaining unit consisting of "employees ...

employed by the Employer at its Arlington, Iowa facility."

The Board's Regional Director determined that the stipulation is unambiguous, but he then went on to treat it as if it

were ambiguous by conducting an ex parte "investigation"

which led him to conclude that the three employees did not

work at the Arlington facility. For the most part, the Regional Director's decision, affirmed by the Board, has no basis

in a record. This is because his so-called investigation fell

short of a hearing pursuant to which a record could have been

established. In the absence of such a record, there is no basis

upon which to uphold the judgment of the Board. Accordingly, we remand the case to the Board for a hearing to

determine whether the challenged employees are part of the

stipulated bargaining unit.

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It is clear from the briefs and arguments in this case that

the parties, and possibly the Board as well, are terribly

confused over the meaning of this court's decision in Avecor,

Inc. v. NLRB, 931 F.2d 924 (D.C. Cir. 1991), which we herein

clarify. The point of confusion is over the Board's responsibility when it is faced with a stipulated bargaining unit that is

ambiguous. As we explain below, in such a situation, the

Board must seek to determine the parties' intent through

normal methods of contract interpretation, including the examination of extrinsic evidence. Only when the stipulation is

a nullity from which no intent can be discerned should the

Board ignore the stipulated agreement and determine the

bargaining unit on the basis of its community of interest test.

I. Background

The facts surrounding the election and the stipulated bargaining agreement are uncontroverted. After the Union

petitioned to represent Associated Milk's employees, the Union and Associated Milk stipulated to a bargaining unit. The

stipulation provides that the Union would represent

[a]ll full-time and regular part-time production and maintenance employees, including lead persons, operators,

baggers, sanitation workers, truck mechanics, milk quality technicians, maintenance workers, local drivers, bulk

truck drivers and waste water operator employed by the

Employer at its Arlington, Iowa facility; excluding all

over-the-road drivers, milk quality lab clerical employees,

other clerical employees, salespersons, professional employees, guards and supervisors, as defined by the National Labor Relations Act, as amended.

Decision and Direction of Election, reprinted in Petitioner's

Appendix ("P.A.") 18 (emphasis added). The Regional Director approved the stipulation, noting that it constitutes an

appropriate unit for the purposes of collective bargaining

within the meaning of s 9(b) of the NLRA. See id.

During the representation election, the Union challenged

the votes of three bulk truck drivers on the basis that those

drivers were employed not at Associated Milk's Arlington,

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Iowa facility, but, instead, at Associated Milk's Fredericksburg facility. Associated Milk disagreed. The stipulation is

clear that the bargaining unit includes only employees who

work at the Arlington facility; it is unclear whether the

three challenged drivers fit that description.

Bulk truck drivers are responsible for delivering whole

milk from neighboring farms to Associated Milk's processing

facilities. Associated Milk employs a number of bulk drivers,

most of whom deliver all of their loads to the Arlington

facility. The three challenged drivers, however, deliver three

out of every four loads to Associated Milk's Fredericksburg

facility. Only the fourth load is delivered to Associated Milk's

Arlington facility. The Fredericksburg facility is, however, a

part of the Arlington Division, which is based at the Arlington facility. As a result, in addition to making one out of four

deliveries to Arlington, there are other factors to suggest the

drivers are employed at the Arlington facility. For instance,

the challenged drivers wash and maintain their trucks at the

Arlington facility, they are supervised by someone at Arlington, and all of their personnel records are kept at Arlington.

Despite this ambiguity, the Regional Director found that

the stipulation is unambiguous. He did not, however, treat it

that way: He treated it like an ambiguous stipulation by

conducting an ex parte investigation to determine whether, in

fact, the challenged bulk drivers worked at the Arlington

facility. Based on the evidence he gathered through the

investigation, the Regional Director upheld the Union's challenges. See Supplemental Decision and Certification of Representative, reprinted in P.A. 26. Most of the evidence he

gathered, however, is not in the record.

Associated Milk appealed the Regional Director's decision

asking the Board either to reverse the Regional Director's

findings on the challenged ballots or to remand for a hearing

according to the Board's community of interest standard.

Associated Milk's position was muddled. On the one hand, it

argued that the drivers fall within the terms of the stipulation; on the other, it argued that the parties' intent was not

clear and that the Board should determine the bargaining

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unit on the basis of the community of interest standard. In

any case, Associated Milk disputed many of the Regional

Director's findings.

Despite these factual disputes, and without much of a

record to review, the Board denied Associated Milk's appeal.

Soon thereafter, the Union attempted to bargain with Associated Milk. Associated Milk refused to bargain, choosing

instead to precipitate an unfair labor practice charge so that

it could seek review of the Board's decision. See Family

Serv. Agency San Francisco v. NLRB, 163 F.3d 1369, 1373

n.2 (D.C. Cir. 1999) (noting that the proper path to seek

review of a Board's certification of an election is to precipitate

an unfair labor practice charge). The Union then filed a

charge against Associated Milk and, based on that charge, the

Regional Director filed a complaint alleging that Associated

Milk's refusal to bargain with the Union was an unfair labor

practice. The Board, on a motion for summary judgment,

upheld the complaint and ordered Associated Milk to bargain

in good faith with the Union. This appeal followed.

II. Analysis

Under s 10(e) and (f) of the NLRA, 29 U.S.C. s 160(e), (f)

(1994), this court will "reverse the Board if, upon reviewing

the record as a whole, we conclude that the Board's findings

are not supported by substantial evidence." Micro Pacific

Dev. Inc. v. NLRB, 178 F.3d 1325, 1329 (D.C. Cir. 1999)

(citation and internal quotation marks omitted). Substantial

evidence "is more than a mere scintilla. It means such

relevant evidence as a reasonable mind might accept as

adequate to support a conclusion." Id. (quoting Consolidated

Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). Associated

Milk argues that the Board's order should be overturned

because the stipulation unambiguously includes the three

challenged drivers. In the alternative, Associated Milk argues that if the stipulation is ambiguous, the Board was

required to ignore the stipulation and determine the status of

the three drivers by employing its normal community of

interest standard. As petitioners put it, "either the stipulaUSCA Case #98-1481 Document #471744 Filed: 10/22/1999 Page 5 of 9
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tion is unambiguous, and the Challenged Bulk Drivers ...

are included, or the stipulation is ambiguous, and their inclusion had to be determined under a community of interest

test." Petitioner's Opening Br. at 30.

The Company's position is not only wrong, but it reflects a

fundamental misunderstanding of the law regarding ambiguous stipulations. Associated Milk is not alone in its confusion:

The Board here seems to make the same mistake. It argues

that the "parties here clearly and unambiguously defined the

unit." Br. for the NLRB at 19. And it notes that its own

precedent states that "if the unit description of that agreement is expressed in clear and unambiguous terms, the Board

will not examine extrinsic evidence to determine the parties'

intent regarding the bargaining unit composition." Id. (quoting Laidlaw Transit, Inc., 322 N.L.R.B. 895, 895 (1997)).

Nonetheless, the Board then cites extrinsic evidence to support its interpretation of what it argues is an unambiguous

stipulation. The Board's studious aversion to admitting that

the stipulation is ambiguous suggests that it also believes that

an ambiguous stipulation must be disregarded in favor of a

community of interest inquiry. This belief is a misunderstanding of this court's holding in Avecor, Inc. v. NLRB, 931

F.2d 924 (D.C. Cir. 1991), which we will now clarify.

In Avecor, this court noted that when the Board creates a

bargaining unit de novo, it "determines which employees

share common interests such that they could fruitfully bargain in concert." 931 F.2d at 932. But, the court held,

[w]hen the parties stipulate the bargaining unit, ... the

Board has a more limited role. First it must ensure that

the stipulated terms do not conflict with fundamental

labor principles. Having done so, its task is simply to

enforce the agreement. If the terms of the stipulation

are unambiguous, the Board must hold the parties to its

text. If the terms are ambiguous, the Board may look to

the usual factors governing the definition of an 'appropriate unit,' including the community-of-interest standard.

Id. Avecor did not mean, however, that any time a stipulation is ambiguous, the Board must ignore it and turn to the

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community of interest standard. In a stipulated unit case,

the Board's primary responsibility is to discern the parties'

intent. That responsibility does not fall away at the first hint

of ambiguity. Rather, the Board should only turn to the

community of interest test when it is unable to discern the

parties' intent from the stipulation. In other words, the

ambiguity to which Avecor refers is ambiguity about the

parties' intent, not ambiguity in the stipulation itself.

When faced with a stipulated bargaining unit, the Board

must first determine whether the stipulation is ambiguous.

If it is not, then the Board must simply enforce the agreement. See id. If, however, the stipulation is ambiguous, then

the Board must determine whether the parties' intent can

nonetheless be discerned from the stipulation. If the stipulation is a nullity such that the parties' intent cannot be

discerned, then the Board determines the bargaining unit by

employing its normal community of interest standard. See

id.; International Union of Elec., Radio and Mach. Workers

v. NLRB, 418 F.2d 1191, 1201 (D.C. Cir. 1969) (noting that a

de novo approach to determining the bargaining unit is

appropriate when intent of parties cannot be discerned);

Venture Indus., Inc., 327 N.L.R.B. No. 165 (Mar. 19, 1999)

(noting that the Board will apply the community of interest

test when the parties' intent is not clear).

If the parties' intent can be discerned, then the Board

should interpret the ambiguous stipulation as one would

interpret an ambiguous contract, including resort to extrinsic

evidence. See International Union, 418 F.2d at 1201 (noting

that when a stipulation is ambiguous, the Board properly

turns to extrinsic evidence "in order to ascertain the intent of

the parties"). Avecor did not articulate this approach, but it

certainly did not reject it either. Moreover, some of our

sister circuits have followed it for years. See NLRB v.

Barker Steel Co., 800 F.2d 284, 286 (1st Cir. 1986) (noting that

where a stipulation is ambiguous, "the Board has the authority to interpret the agreement according to what it finds to

have been the intent of the parties") (citation and internal

quotation marks omitted); NLRB v. Detective Intelligence

Serv., 448 F.2d 1022, 1025 (9th Cir. 1971) ("[W]here a stipulaUSCA Case #98-1481 Document #471744 Filed: 10/22/1999 Page 7 of 9
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tion is ambiguous, the Board has the authority to interpret

the agreement according to what it finds to have been the

intent of the parties."); NLRB v. Joclin Mfg. Co., 314 F.2d

627, 634 (2d Cir. 1963) ("Certainly [if] the stipulation ... was

ambiguous, evidence of practical construction would be of

moment."). Indeed, the Board itself recognizes its ability to

interpret ambiguous stipulations. See Gala Food Processing,

Inc., 310 N.L.R.B. 1193, 1193 (1993) (noting that the Board

has the authority to interpret ambiguous stipulations by

resorting to extrinsic evidence as to parties' intent).

However, in interpreting an ambiguous stipulation, the

Board must create a record. An appellate court can only

uphold the Board's findings as to the meaning of an ambiguous stipulation if those findings are supported by substantial

evidence, see Micro Pacific Dev. Inc., 178 F.3d at 1329, and

there will only be evidence to support the Board's findings if

a record is created. Thus, the Board must hold a hearing to

examine extrinsic evidence of the parties' intent. Cf. International Union, 418 F.2d at 1201 (holding that when examining

extrinsic evidence to discern parties' intent, the Board must

examine evidence from both sides).

The Board's failure to create a record in this case requires

us to remand. The stipulation in this case indicates that the

bargaining unit is to include "bulk truck drivers ... employed

by the Employer at its Arlington, Iowa facility." Decision

and Direction of Election, reprinted in P.A. 18. This stipulation is ambiguous. It clearly expresses the parties' intent to

include only those bulk truck drivers employed at the Arlington facility. However, there is ambiguity about whether the

three challenged drivers fit that description. That ambiguity

could not be resolved without reference to extrinsic evidence.

The Regional Director knew that: He conducted an investigation to determine where the three challenged drivers worked.

But he did not create a record. Thus, there is no substantial

evidence to support his resolution of the ambiguity in the

Union's favor. In other words, this court cannot know whether there was any evidence to support his finding that the

three challenged drivers were not employed at the Arlington

facility.

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III. Conclusion

For the reasons given above, enforcement of the Board's

order is denied, the petition for review is granted, and the

case is remanded to the Board for a hearing to determine

whether the three challenged drivers belong in the bargaining

unit.

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