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Parties Involved:
Burns International Security Service
Petitioner
National Labor Relations Board
Respondent

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 4, 1998 Decided June 12, 1998

No. 97-1638

Burns International Security Services,

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

Thomas J. Piskorski argued the cause and filed the briefs

for petitioner.

Robert J. Englehart, Attorney, National Labor Relations

Board, argued the cause for respondent, with whom Linda

Sher, Associate General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel, and Frederick C. Havard,

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Supervisory Attorney, were on the brief. Frederick L. Cornnell, Jr., Attorney, entered an appearance.

Before: Edwards, Chief Judge, Silberman and Sentelle,

Circuit Judges.

Opinion for the Court filed by Chief Judge Edwards.

Edwards, Chief Judge: This case presents the narrow

question whether, under established case law, the National

Labor Relations Board ("NLRB" or "Board"), may decide a

refusal to bargain unfair labor practice claim, arising under

sections 8(a)(5) and 8(a)(1) of the National Labor Relations

Act ("NLRA" or "Act"), 29 U.S.C. ss 158(a)(5), (1), where an

employer acts pursuant to a viable claim of right under a

collective bargaining agreement ("CBA"), the matter in dispute is covered by the arbitration clause in the CBA, and the

employer unconditionally seeks submission of the dispute to

arbitration. On the facts at hand, the Board should have

deferred to arbitration. Because the Board gave no good

reason for failing to follow well-established case law, we grant

the employer's petition for review.

I. Background

During the time period relevant to this appeal, Burns

International Security Services ("Burns" or "employer") provided security guard services at a nuclear power plant owned

by Yankee Atomic Electric Services in Rowe, Massachusetts

("Yankee Rowe"). Approximately 20 Burns employees at

Yankee Rowe were represented by a union affiliated with

United Government Security Officers of America ("Union").

Burns and the Union had a CBA that ran from January 23,

1991, to December 10, 1993.

Under the "Holidays" clause (article XV) of the CBA, the

parties had agreed that holiday pay would be paid to "regular

full-time employees" who completed the last regularly scheduled work day before a given holiday and the first regularly

scheduled work day after such holiday.1 For a number of

__________

1 The Holidays clause states, in pertinent part:

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years, however, Burns had granted holiday pay to employees

who were out on workers' compensation leave, i.e., notwithstanding the fact that such employees had not actually

worked the days immediately preceding and immediately

following the holiday. In late 1993, Burns discovered that it

was not required by state law to give holiday pay to employees on workers' compensation. Subsequently, Burns refused

to pay three unit employees, who were then receiving workers' compensation, for the 1993 Thanksgiving holiday. On

December 23, 1993, Burns sent a letter, dated December 10,

1993, to the affected employees, notifying them of the change

in policy. In early January 1994, the Union's president

learned about this change when one of the three affected

employees showed him a copy of Burns' letter. Neither the

Union nor any of the affected employees sought to grieve the

issue under the CBA.

Meanwhile, in late 1993 and during the first few months of

1994, Burns and the Union attempted to negotiate a new

contract to replace the CBA which had expired on December

10, 1993. These negotiating efforts faltered, however, and, on

March 9, 1994, the Union called a strike. The striking

employees had marked their pro-strike ballots to show that

they based their votes, at least in part, on alleged unfair labor

practices committed by Burns, including "unilateral changes."

J.A. 13. On March 30, 1994, the Union voted to end the

strike, and, on April 1, 1994, Burns received unconditional

offers to return to work from all the striking employees.

Burns did not immediately reinstate the employees, however,

because by then the company had hired replacements.

__________

A regular full-time employee who has successfully completed

his six (6) month probationary period [is entitled to holiday

pay].

....

In order to receive [holiday pay], the employee must fully

complete his last regularly scheduled work day before the

holiday itself and first regularly scheduled work day after the

aforesaid holidays [sic].

Joint Appendix ("J.A.") 690-91.

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On April 21, 1994, the Union filed a charge with the NLRB,

and a complaint issued, alleging that Burns committed unfair

labor practices by changing the practice covering holiday pay

for employees on workers' compensation and by refusing to

reinstate the strikers. In a decision issued on September 30,

1996, an administrative law judge ("ALJ") found that Burns

had failed "to bargain collectively" with the Union pursuant to

sections 8(a)(5) and 8(d) of the NLRA, 29 U.S.C. ss 158(a)(5),

(d), and thereby committed an unfair labor practice under

sections 8(a)(5) and 8(a)(1) of the Act, by unilaterally discontinuing the holiday pay. The ALJ also found that Burns'

discontinuance of holiday pay was a "contributing" cause of

the strike and, therefore, Burns violated sections 8(a)(3) and

8(a)(1) of the Act, 29 U.S.C. ss 158(a)(3), (1), by refusing to

reinstate the strikers immediately upon their unconditional

offer to return to work on April 1, 1994. See J.A. 14.

The ALJ rejected Burns' arguments that the CBA authorized the company's holiday pay action. The judge also

dismissed the contention that the Union had waived its right

to bargain over holiday pay for employees on workers' compensation through a "Waiver" clause (article XXVII), also

known as a "zipper" clause, contained in the CBA.2

__________

2 The Waiver or zipper clause states:

The parties acknowledge that during the negotiations which

resulted in this Agreement, each had the unlimited right and

opportunity to make demands and proposals with respect to

any subject or matter not removed by law from the area of

collective bargaining, and that the understanding and Agreements arrived at by the parties after the exercise of that right

and opportunity are set forth in this Agreement. Therefore,

the Employer and the Union, for the life of this Agreement,

each voluntarily and unqualifiedly waives the right and each

agrees that the other shall not be obligated to bargain collectively with respect to any subject or matter not specifically

referred to or covered in this Agreement, even though such

subjects or matters may not have been within the knowledge or

contemplation of either or both of the parties at the time they

negotiated or signed this Agreement.

J.A. 9; J.A. 701-02.

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Finally, the ALJ rejected Burns' contention that the issue

of holiday pay was subject to arbitration. The judge first

questioned whether the holiday pay dispute "was even arbitrable," on the assumption that holiday pay for employees on

workers' compensation was an extra-contractual benefit. J.A.

15. Without resolving this point, the ALJ held that the

dispute need not be submitted to arbitration, because Burns

had notified the Union by letter dated December 27, 1993,

that it did not consider itself subject to binding arbitration

without a new collective bargaining agreement. See J.A. 15-

16.

The Board adopted the analysis and recommendations of

the ALJ with minor modifications. See Burns Int'l Security

Servs., 324 NLRB No. 89 (Sept. 29, 1997) ("Order"), reprinted

in J.A. 7-17. Although Burns again claimed that the dispute

should be submitted to arbitration, the Board did not specifically address the arbitration argument. The Board ordered

Burns to make whole all employees who were wrongly denied

holiday pay and to reinstate all striking employees who had

not yet been returned to their jobs. This petition for review

and cross-application for enforcement of the Board's order

followed.

II. Discussion

It is well settled that when an employer defends against a

refusal to bargain charge by contending that its actions were

authorized by the collective bargaining agreement, the refusal

to bargain charge presents an issue of contract interpretation.

See, e.g., Utility Workers Union v. NLRB, 39 F.3d 1210, 1215

(D.C. Cir. 1994). In Collyer Insulated Wire, 192 N.L.R.B.

837 (1971), the Board established the general rule, repeatedly

affirmed by this court, that it will refrain from initiating an

unfair labor practice proceeding if the collective bargaining

agreement provides for arbitration as the method of resolving

disputes over the meaning of the agreement. See McDonnell

Douglas Corp. v. NLRB, 59 F.3d 230, 233-34 (D.C. Cir. 1995);

NLRB v. United States Postal Service, 8 F.3d 832, 837 (D.C.

Cir. 1993); Hammontree v. NLRB, 925 F.2d 1486, 1490-91

(D.C. Cir. 1991) (en banc).

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Under Collyer and its progeny, there is little doubt that the

Board should have deferred the dispute over the holiday pay

action to arbitration. Burns contends that two provisions of

the CBA read together authorized its decision to eliminate

holiday pay for employees on workers' compensation. Burns

points, first, to the Holidays clause, which explicitly provides

that holiday pay will be given only to "regular employees"

who meet certain other requirements with respect to the

particular holiday for which pay is sought. Burns also relies

on the Management Rights clause (article II), which provides,

in pertinent part:

This Agreement shall not be construed to infringe or

impair any of the normal management rights of the

Employer which are not inconsistent with the provisions

of this Agreement. Included among management rights

... is the right to change existing business practices....

The right of the Employer to make rules and regulations

not in conflict with this Agreement as it may from time

to time, deem best for the purpose of maintaining order,

safety and/or effective operations, and after advance

notice thereof to the Union and to the employees, to

require compliance therewith by employees is recognized.

J.A. 9-10 n.3; J.A. 665-66. An arbitrator plausibly might

conclude from these provisions that Burns, upon discovering

in late 1993 that state law did not require it to pay employees

on workers' compensation for holidays, was authorized by the

CBA to cease making those payments. The Union, in turn,

could claim that the Holidays clause was not inconsistent with

the employer's holiday pay practices and so the employer

should be bound to continue established past practices. In

short, the claim that Burns had no right to eliminate holiday

pay for certain employees undoubtedly presents a dispute

over the proper interpretation of the CBA.

Burns also argues that the holiday pay issue is one that the

company and the Union agreed to make subject to grievance

and arbitration procedures under the terms of the CBA. See

Br. of Petitioner at 7. Article VII of the CBA, entitled

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"Grievance and Arbitration Procedure," sets forth a multistep procedure for resolving a dispute between the employer

and an employee or the Union regarding "the meaning or

application of" the CBA. J.A. 670. The final step of the

procedure is arbitration, with the arbitrator's award being

"final and binding." J.A. 674. The Board does not dispute,

and we agree, that a disagreement over the meaning of the

Holidays and Management Rights clauses is subject to arbitration under the CBA. See AT&T Technologies v. Communications Workers, 475 U.S. 643, 650 (1986) (arbitration

clause in collective bargaining agreement gives rise to "presumption of arbitrability") (citing Steelworkers v. Warrior &

Gulf Co., 363 U.S. 564, 582-83 (1960)); Collyer, 192 N.L.R.B.

at 842.

Finally, it is clear that Burns raised the issue of arbitration

before the Board. In its amended answer to the General

Counsel's complaint, Burns stated as an alternative defense

that: "In the case of the unfair labor practices alleged

[arising out of the discontinuance of holiday pay], the Union

failed to pursue a grievance. The employer remains willing

to waive any procedural barriers to arbitration of said

dispute, and the matter should be deferred to arbitration."

Amended Answer to Complaint (Sept. 8, 1995), reprinted in

J.A. 597 (emphasis added). Thus, this case is unlike Postal

Service, in which the employer never claimed that the Board

should have deferred to arbitration. See Postal Service, 8

F.3d at 837. In those circumstances, we held that the Board

had authority to interpret the relevant contract for purposes

of deciding the unfair labor practice charge. See id. Here,

by contrast, Burns argued to the ALJ, to the Board, and to

this court, that the Board should defer, because the holiday

pay issue raised an arbitrable dispute. Given the contractual

nature of the holiday pay dispute and Burns' unambiguous

and unconditional request for arbitration, we agree that the

Board should have deferred.

The Board, in rejecting Burns' defenses, appeared to adopt

the theory that the issue of holiday pay for employees on

workers' compensation was not "contained in" the CBA within

the meaning of section 8(d) of the Act, 29 U.S.C. s 158(d).

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The Board thought that, because Burns had developed a

"past practice" of granting holiday pay that was arguably

separate from the explicit terms of the CBA, the company

could not change the existing holiday pay arrangement without agreement from the Union. In other words, the Board

thought that holiday pay for employees on workers' compensation was outside the scope of the CBA, so there was no

contractual term that required interpretation in arbitration.

We reject the Board's theory. We first note, however, that

in argument before this court, Board counsel confused the

issue by suggesting that the disputed holiday pay practice

was an "implied term" of the CBA. If, as Board counsel

suggested, the holiday pay practice was an implied term, then

undoubtedly it was "contained in" the CBA and the dispute

over its meaning should have been submitted to arbitration.

See generally Consolidated Rail Corp. v. Railway Labor

Executives' Ass'n, 491 U.S. 299, 311 (1989) ("[C]ollective

bargaining agreements may include implied as well as express terms."); Bonnell/Tredegar Indus., Inc. v. NLRB, 46

F.3d 339, 344 (4th Cir. 1995) ("An employer's established past

practice can become an implied term of a collective bargaining agreement.") (citing cases); Elkouri & Elkouri, How

Arbitration Works 632 (5th Ed. 1997) (surveying circumstances in which arbitrators give employer custom " 'binding

practice' effect as an implied term of the agreement").

In any event, the Board's analysis, predicated on the

assumption that the discontinued holiday pay was extracontractual, is patently flawed. The relevant inquiry in this

case is whether Burns acted on a viable claim of right under

the parties' CBA in eliminating the holiday pay practice. So

long as the employer plausibly claims contractual justification

for its actions under the express or implied terms of the CBA,

and the matter in dispute is subject to arbitration, then the

Board should leave the parties to their contract remedies

unless the employer refuses to go to arbitration. See Harry

T. Edwards, Deferral to Arbitration and Waiver of the Duty

to Bargain; A Possible Way Out of Everlasting Confusion at

the NLRB, 46 Ohio St. L.J. 23, 32-35 (1985). This is not a

case in which the employer, relying solely on a zipper clause

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that did no more than waive the duty to bargain, sought to

take unilateral action with respect to a mandatory subject of

bargaining not contained in the CBA. See United Auto

Workers v. NLRB, 765 F.2d 175, 183 (D.C. Cir. 1985) ("Although a zipper clause may waive the obligation to bargain

over all mandatory subjects during the term of an agreement,

it surely does not waive the union's right to object to an

employer's taking unilateral action with respect to such subjects."). Here, the employer plausibly relied on the Holidays

and Management Rights provisions in claiming an issue proper for arbitration.

The Board also thought it could resolve the failure-tobargain claim because of Burns' letter to the Union, dated

December 27, 1993, which stated, "absent a new agreement,

Burns is not bound by and would not recognize binding

arbitration for any disputes which may arise in the grievance

procedure." Letter from Guy R. Thomas, Labor Relations

Manager, Burns International Security Services, to James A.

Vissar, President, International Union, United Government

Security Officers of America (Dec. 27, 1993), J.A. 715; see

Order, J.A. 15-16. The Board's position on this point is

meritless. It is undisputed that Burns implemented its new

holiday pay policy in November 1993, before the CBA expired.

Thus, Burns' letter, written after expiration of the CBA, does

not support the Board's conclusion that Burns had "disavowed its obligation to process" a grievance based on the

holiday pay dispute pursuant to article VII of the CBA.

Order, at J.A. 16. The letter only served to notify the Union

that Burns would not recognize arbitration for issues arising

after the expiration of the CBA, as long as there was no

replacement CBA. Indeed, as the ALJ and Board found, the

Union officials themselves informed the membership at the

strike-vote meeting on March 9, 1994, that Burns "had notified the Union in December that it would not arbitrate any

grievances that arose after the contract expired." Id. at J.A.

13 (emphasis added).

In short, there is nothing in the record to suggest, nor did

the ALJ or the Board ever claim, that Burns ever refused to

arbitrate an issue that arose during the course of the CBA.

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Indeed, had the Union sought to grieve the holiday pay action

pursuant to the expired CBA, it is doubtful Burns would have

had a plausible legal basis to refuse such a request. See

Litton Financial Printing Div. v. NLRB, 501 U.S. 190, 205-

06 (1991) ("A postexpiration grievance can be said to arise

under the contract ... where it involves facts and occurrences that arose before expiration...."). Goya Foods, Inc.,

238 N.L.R.B. 1465 (1978), says nothing to the contrary (as the

ALJ seemed to think), nor does it support the Board's

suggestion that ongoing arbitration proceedings are a prerequisite to the enforcement of a CBA's arbitration clause.

Under Collyer and its progeny, the Board was required to

defer to arbitration, plain and simple. The Board has not

pointed to any factual circumstances which, under established

case law, would weigh against a decision to defer to arbitration. See Hammontree, 925 F.2d at 1490 (suggesting conditions where deferral to arbitration may be inappropriate)

(citing Collyer, 192 N.L.R.B. at 842). Indeed, arbitration is

ideally suited to resolving the type of contractual dispute

decided by the Board in this case.

Because the Board erred in resolving the failure-to-bargain

charge, there is no basis for the Board's conclusions that the

strike by employees at Yankee Rowe was an unfair labor

practice strike, and that Burns violated sections 8(a)(3) and

8(a)(1) by failing to immediately reinstate the strikers upon

their unconditional offer to return to work. Thus, we need

not address the question whether substantial evidence supports the Board's finding that the holiday pay dispute was a

contributing cause of the strike.

III. Conclusion

For the foregoing reasons, we grant Burns' petition for

review and deny the Board's cross-application for enforcement.

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