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Parties Involved:
International Union of Elevator Constructors
Intervenor
National Labor Relations Board
Petitioner
Viola Industries, Inc.
Respondent
Viola Industries-Elevator Division, Inc.
Respondent

Document Text:

~· 

J 

PUBLISH 

... FILL ,1) 

United States Court of Appeal, Tenth Circuit 

UNITED STATES COURT OF APPEALS NOV 2 1992 

FOR THE TENTH CIRCUIT ROBERT L. HOECKER 

NATIONAL LABOR RELATIONS BOARD, 

Petitioner, 

v. 

VIOLA INDUSTRIES-ELEVATOR 

DIVISION, INC., and its alter 

ego, VIOLA INDUSTRIES, INC., 

Respondent, 

INTERNATIONAL UNION OF 

ELEVATOR CONSTRUCTORS, 

Intervenor. 

NATIONAL ELEVATOR INDUSTRY 

WELFARE PLAN, NATIONAL ELEVATOR 

INDUSTRY PENSION PLAN, and 

NATIONAL ELEVATOR INDUSTRY 

EDUCATIONAL PLAN, 

Plaintiffs-Appellees, 

v. 

VIOLA INDUSTRIES, INC. and 

VIOLA INDUSTRIES-ELEVATOR 

DIVIS ION, INC. , 

Defendants-Appellants. 

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Clerk 

No. 88-1837 

(NLRB No. 5-CA-15990) 

No. 89-3024 

(D.C. No. 84-2286-S) 

(D. Kansas) 

OPINION ON REHEARING EN BANC 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 1 
No. 88-1837, NLRB v. Viola Industries-Elevator Division. Inc .• 

et al.: 

John H. Fawley, Attorney (Collis Suzanne Stocking, Supervisory 

Attorney, Jerry M. Hunter, General Counsel, Yvonne T. Dixon, 

Acting Deputy General Counsel, Nicholas E. Karatinos, Acting 

Associate General Counsel and Aileen A. Armstrong, Deputy 

Associate General Counsel), National Labor Relations Board, 

Washington, D.C., for Petitioner. 

Stewart L. Entz (Richard D. Anderson with him on the brief), of 

Entz, Anderson, Friend & Chanay, Topeka, Kansas, for Respondent. 

Francis J. Martorana of O'Donoghue & O'Donoghue, Washington, D.C., 

for Intervenor. 

No. 89-3024, National Elevator Industry Welfare Plan. et al. v. 

Viola Industries. Inc .• et al.: 

Joseph P. Boyle of O'Donoghue & O'Donoghue, Philadelphia, 

Pennsylvania, for Plaintiffs-Appellees. 

Stewart L. Entz (Richard D. Anderson with him on the brief), 

of Entz, Anderson and Chanay, Topeka, Kansas, for DefendantsAppellants. 

Before McKAY, Chief Judge, and HOLLOWAY, LOGAN, SEYMOUR, MOORE, 

ANDERSON, TACHA, BALDOCK, BRORBY, EBEL and KELLY, Circuit Judges. 

HOLLOWAY, Circuit Judge. 

The petitione~ National Labor Relations Board (the Board) has 

brought the first of these proceedings (No. 88-1837) to enforce 

its order based on the finding that the respondents Viola 

Industries-Elevator Division, Inc., and Viola Industries, Inc. 

2 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 2 
(collectively, Viola Industries1 ), violated sections of the 

National Labor Relations Act (the Act) by not honoring a Section 

8(f) prehire agreement entered into with the International Union 

of Elevator Constructors (the I.U.E.C. or the Union). The Union 

was the charging party and is a party in this enforcement 

proceeding as an intervenor. 

The National Elevator Industry Welfare Plan, the National 

Elevator Industry Pension Plan, and the National Elevator Industry 

Education Plan (the Plans) were the plaintiffs in a related suit 

in the United States District Court for the District of Kansas, 

brought to recover contributions alleged to be owed to the Plans 

by Viola Industries under the repudiated agreement with the Union. 

The district court found for the Plans and an appeal by Viola 

Industries to this court followed (No. 89-3024). 

The proceedings were consolidated, and oral arguments were 

made to a panel of this court. Because the cases raised important 

issues implicating previous decisions of the Supreme Court and of 

this court, on our own motion we requested briefing and argument 

before the full court sitting en bane on the following question: 

1 

In light of the Supreme Court's decisions in Jim 

McNeff, Inc, V. Todd, 461 U.S. 260 (1983), and NLRB v. 

Iron Workers, 434 U.S. 35 (1978), and the prior opinions 

of this court, should this court uphold the Board's 

application of its Deklewa decision on No. 88-1837 and 

the application of the Deklewa decision by the district 

court in No. 89 · 3024? 

Viola Industries-Elevator Division and Viola Industries, Inc. 

were found by the Board to be alter egos. Viola Indus. Elevator 

Div., Inc., 286 N.L.R.B. 306, 307 (1987). They do not contest 

that finding here and so will be treated as a single entity, 

referred to as "Viola Industries." 

3 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 3 
The cases will both be disposed of by this opinion and by the 

opinion of the original panel filed herewith. 

I 

The central facts of the controversy are well laid out in the 

opinions of the Board and the district court. Viola 

Indus.-Elevator Div., Inc., 286 N.L.R.B. 306, 126 L.R.R.M. 1198 

(BNA) (1987); National Elevator Indus. Welfare Plan v. Viola 

Indus., Inc., 684 F. Supp. 1549 (D. Kan. 1986). We will outline 

only the most salient points here . 

Viola Industries-Elevator Division is in the business of 

installing and servicing elevator equipment at a number of 

locations throughout the country. In 1972 Viola Elevator entered 

into a prehire contract with the Union. A prehire agreement is an 

arrangement unique to the construction industry in which an 

employer enters into an agreement with a union before the union 

has been designated or selected as the representative of the 

workforce. This kind of arrangement is necessitated by the 

relatively short duration of many construction projects. The 1972 

prehire agreement between Viola Industries and the Union expired 

in 1977, at which time the parties entered into a second 

agreement. After the expiration of the second agreement on July 

8, 1982, the local union contacted Bob Viola in July or August 

1982 about signing a new agreement. 

In the interim, Viola Elevator had been awarded the contract 

for the installation of elevators in a new building in Delaware. 

In a number of conversations between representatives of the Union 

and Viola Elevator, Viola assured the Union that the company would 

4 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 4 
1 

itself only be constructing elevators for this project and that it 

would subcontract all installation work. Since the Delaware 

project was intended to be all-union, the Union suggested a number 

of unionized subcontractors for Viola Industries to contact to 

perform the installation. Viola Industries was unable to persuade 

any of the subcontractors to agree to do the work. 

After further conversation with the Union, Viola Industries 

signed a third five-year prehire agreement on December 14, 1982, 

effective until July 8, 1987. Viola Industries subsequently 

performed work installing elevators on a number of projects. On 

November 4, 1983, Viola Industries repudiated the third prehire 

agreement by a letter from Bob Viola to E.A. Treadway, general 

president of the intervenor, the I.U.E.C. 

The Union filed its initial charge with the Board on November 

4, 1983. In the charge it accused Viola Industries of violating 

Section 7 of the Act by repudiating the agreement, of failing to 

recognize the collective bargaining agent, and of failing to pay 

wages and benefits provided for by the agreement. The complaint 

was later amended to include charges of discrimination against 

union members in hiring in violation of Section 8(a) (1) and (3) of 

the Act and of refusing to bargain collectively in violation of 

Section 8(a) (1) and (5). 

In a March 1985 decision the Administrative Law Judge (the 

ALJ) found that the Union had attained the support of the majority 

of Viola Elevator's employees sometime between 1978 and 1980. 

Under governing precedent 

retroactively converted into 

at 

5 

the 

the 

time, the 

full-fledged 

Union thus 

bargaining 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 5 
representative of Viola Industries' employees. Therefore the 1982 

agreement, rather than being a voidable prehire agreement as then 

existing law would otherwise have provided, was a fully 

enforceable collective bargaining agreement which Viola Industries 

had no right to repudiate. Viola Industries was accordingly 

ordered to abide by the agreement and to pay back wages and 

benefits it owed to employees as a result of its repudiation of 

the contract. 

In the interval between the decision of the ALJ and the 

appeal of his ruling to the Board, the Board decided John Deklewa 

& Sons, 282 N.L.R . B. 1375 (1987), enforced sub nom. International 

Ass'n of Bridge, Structural & Ornamental Iron Workers. Local 3 ·v. 

N.L.R.B., 843 F.2d 770 (3d Cir.), cert. denied, 488 U.S. 889 

( 1988) . There the Board explicitly overruled its prior 

interpretation of Section B(f) of the National Labor Relations 

Act. The Third Circuit thus summarized the new interpretation of 

Deklewa as follows: 

The Board then fashioned a new interpretation of 

§ B(f) which sought to accommodate both employers' and 

employees' interests. In response to the construction 

industry employees' concerns, that R.J. Smith permitted 

management to void prehire agreements at will, the Board 

held that§ S (fl agreements were no longer unilaterally 

voidable, .and that until expiration they would be 

enforced by the Board. The Board also responded to 

construction industry employers' complaints that the 

"conversion doctrine", by which a pre-hire agreement is 

converted into a standard collective bargaining 

agreement, effectively operated to force them, unlike 

all other employers, to bargain with a union whose 

majority status had never been established. The Board 

in its present order, which we review here, abandoned 

the "conversion doctrine," and held that§ 8(f) pre-hire 

agreements were only enforceable during the term of the 

agreement and could not be converted into traditional 

collective bargaining agreements with lingering rights 

and obligations absent an election and certification. 

6 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 6 
843 F.2d at 775. The Board also announced that it "will apply the 

Board's new 8{f) principles to the case and to all pending cases 

in whatever stage." 282 N.L.R.B. at 1389. 

Applying Deklewa to the Viola case before it, the Board found 

that the prehire agreement was binding and could not lawfully be 

repudiated by either party. Viola, 286 N.L.R.B. at 307. The 

Board found it unnecessary to pass on the ALJ's finding of 

majority status in light of its Deklewa decision. Id. at 306 n.4. 

It found that by failing to abide by the 1982 collective 

bargaining agreement and by repudiating it in November 1983, Viola 

Industries had violated Section 8{a) (5) and (1) of the Act. The 

Board ordered Viola Industries to cease and desist from the 

violations and to make whole the employees of Viola Industries, 

inter alia. The Board now seeks enforcement of that order in 

No. 88-1837. 

During the litigation before the Board, the Plans brought 

suit in the federal district court in Kansas to require Viola 

Industries to pay them monies they claim that Viola Industries 

owes by virtue of the firm's various agreements with the Union. 

The suit was brought pursuant to section 301{a) of the Labor 

Management Relations Act of 1947, 29 U.S.C. § 185(a), and sections 

502 and 515 of the Employee Retirement Income Security Act of 

1974, 29 U.S.C. §§ 1134 and 1145. The Plans moved for summary 

judgment and Viola Industries filed a cross motion for partial 

summary judgment. In a memorandum opinion and order the district 

court granted summary judgment for the Plans, holding that since 

the Union's majority status was established for a period late in 

7 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 7 
the term of the second prehire contract, the Union was presumed to 

still have majority support during the negotiations surrounding 

the third agreement. National Elevator Indus. Welfare Plan v. 

Viola Indus., Inc., 684 F. Supp. 1548, 1557 (D. Kan. 1986). The 

contract thus could not be repudiated. The court ordered the 

union to conduct an audit of the monies owed. 

This ruling was reconsidered by the district court on motion 

of Viola Industries in light of the Board's intervening decision 

in Deklewa. The court determined that under the new rule there 

could be no presumption of the Union's majority status which would 

carry over into the third agreement, but that the agreement was 

nevertheless binding because of Deklewa's elimination of the 

employer's right of repudiation. The court thus found Viola 

Industries liable for contributions to the fund from December 14, fl 

1982, to the end of the third agreement and ordered an audit. 

~N~a~t~i~o~n~a~l~E~l~e~v~a~t_o~r~I~n=d~u~s~·~w_e~l_f~a~r~e-~P=l~a~n-_v~. _V_i~o~l=a~~I-n~d-u=s~ .... , __ I~n~c~. , 6 8 4 

F. Supp. 1560, 1562-63 (D. Kan. 1987). 

After the auditor's report was complete, a hearing was held 

and Viola Industries was given the opportunity to brief its 

objections to the report. The objections, repeated in Viola 

Industries' brie~ here, were largely denied. Memorandum Decision 

and Order at 2. Judgment was granted for the Plans for the full 

amount suggested by the auditor's report -- $340,321.25. Viola 

Industries timely appealed the district court's summary judgment 

and the judgment for monetary recovery by the Plans to this court. 

The court en bane decides in this opinion the issues 

underlying the question stated earlier in this opinion which we 

8 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 8 
posed on our own motion and had briefed and argued. The remaining 

issues in the enforcement proceeding and in the district court 

suit will be disposed of by the panel opinion filed herewith. 

II 

Viola Industries has made similar arguments in both cases 

before us concerning the Deklewa ruling. It maintains that 

Deklewa was an improper interpretation of the National Labor 

Relations Act, and that even if proper the decision should not be 

applied retroactively to those who have relied on the old rule. 

Viola Industries relies heavily on Jim McNeff, Inc. v. Todd, 461 

U.S. 260 (1983), and our prior opinions in Jordan & Nobles 

Construction Co . v. New Mexico District Council of Carpenters, 802 

F.2d 1253 (10th Cir. 1986); Trustees of the Colorado Statewide 

Iron Workers (Erector) Joint Apprenticeship and Training Funds v. 

A. & P. Steel, Inc., 812 F.2d 1518 (10th Cir. 1987); and Trustees 

of Wyoming Health and Welfare Plan v. Morgen & Oswood Construction 

Co., Inc., 850 F.2d 613 (10th Cir. 1988). 

On review, if the Board's resolution of conflicting 

interpretations represents a defensible construction of the 

statute, it "is entitled to considerable deference." N.L.R.B. v. 

Local Union No. 103. International Ass'n of Bridge, Structural & 

Ornamental Iron Workers. 434 u.s. 335, 350 (1978) (Higdon). 

Moreover, an agency •is not disqualified from changing its mind; 

and when it does, the courts still sit in review of the 

administrative 

construction 

administrative 

decision and 

issue ~ 

understanding 

should 

and 

of the 

9 

not approach the statutory 

without regard to the 

statutes." Jg. at 351. 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 9 
-However, "[t]he judiciary is the final authority on issues of 

statutory construction and must reject administrative 

constructions which are contrary to clear congressional intent." 

Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 

U.S. 837, 843 n.9 (1984). Of course, the Board's findings of fact 

are conclusive if they are supported by substantial evidence on 

the record considered as a whole. Universal Camera Corp. v. 

N.L .R.B., · 340 U.S. 474, 488 (1951) . 

A 

Under the basic provisions of the Act, employers are 

forbidden to bargain with a union which has not been "designated 

or selected by the majority of the employees in a unit appropriate 

for such purposes." 29 U.S.C. § 159(a). Originally, a union 

could establish its Section 9(a) status only through voluntary 

recognition or 

however, when 

f orrnal 

these 

certification. Serious 

general principles were 

problems 

applied 

arose, 

to the 

construction industry. In that industry, Congress found that 

"[j]obs are frequently of short duration," considerable periods of 

time often separate jobs, and an "individual employee typically 

works for many different employers and for none of them 

continuously." S. Rep. No . 187, 86th Cong., 1st Sess. (1959), 

reprinted in, 1959 U.S. Code Cong. & Admin. News 2318, 2344. 

Consequently Congress amended Section 158 of the Act in 1959, 

providing in Section 8(f), inter tlll, that it is not an unfair 

labor practice under subsections (a) and (b) of the section for a 

construction employer to enter into a collective bargaining 

agreement wit_h a union whose members are building and construction 

10 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 10 
employees when the union has not established its "majority 

status ... under the provisions of Section 9 prior to the making 

of such an agreement. 11 Such an agreement would not bar a petition 

for a representation election. The amendment validated the 

existing practice of prehire agreements. Although Section 8(f) 

clearly removed the restrictions against construction industry 

?rehire agreements, it did not expressly state how these 

agreements were to be treated under the other provisions of the 

Act. 

The question of how Section 8(f) related to other provisions 

of the Act was addressed by the Board in R.J. Smith Construction 

Co., 191 N.L.R.B. 693 (1971), order set aside and case remanded 

sub nom. Local No. 150, International Union of Operating Engineers 

v. N.L.R.B., 480 F.2d 1186 (D.C. Cir. 1973), and in Ruttman 

Construction Co., 191 N.L.R.B. 701 (1971). Under the doctrine 

developed in R.J. Smith and Ruttman, a § 8(f) prehire agreement 

was merely a preliminary step which contemplated further action in 

the development of a full bargaining relationship. Ruttman, 191 

N.L.R.B. at 702. During this preliminary stage there was no 

presumption of majority status which would protect the signatory 

union from challenge during the contract's term. The agreement 

itself could be repudiated by either party at any moment and could 

not be enforced through the provisions of Sections 8(a) (5) and 

8 ( b) ( 3 ) . 2 9 U . S . C . § 15 8 ( a ) ( 5 ) and ( b) ( 3 ) . 

However, a prehire agreement 

Section 9(a) relationship/agreement 

signatory union enjoyed majority 

11 

could convert into a full 

upon a showing that the 

support, during a relevant 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 11 
period, among an appropriate unit of the signatory employer's 

employees. Deklewa, 282 N.L.R.B. at 1378. The R.J. Smith 

decision prevailed for seventeen years until it was replaced by 

Deklewa, which made prehire agreements fully binding and 

enforceable throughout their term. 

B 

In the instant case Viola Industries' objections to 

enforcement of the Board's order begin with its challenge to the 

Deklewa ruling of the Board. Essentially Viola Industries argues 

that the Board improperly devised in Deklewa the fictitious notion 

of a limited Section 9(a)• representative status, enforceable 

through a Section B(a) (5) contract enforcement mechanism for a 

prehire Section 8(f) agreement. The enforceability of such a 

prehire agreement was addressed in Higdon and Jim McNeff, Inc. v. 

Todd, 461 U.S. 260 (1983), which held that the Union could enforce 

obligations under a prehire agreement before its repudiation; 

However, in Higdon and McNeff, the Supreme Court recognized that 

absent majority credentials, the collective bargaining 

relationship and the Union's entitlement to act as exclusive agent 

had never matured. Higdon, 434 U.S. at 346. Thus Viola 

Industries concludes that the Board exceeded its statutory 

authority by grantir.g so-called "limited" Section 9(a) status upon 

the mere signing of a prehire agreement, and that the rule 

disallowing repudiation was inconsistent with congressional intent 

that prehire relationships remain voidable until full-fledged 

majority status under Section 9{a) attaches. 

12 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 12 
• 

To support its claim that this court should not apply 

Deklewa's prohibition against repudiation, as noted Viola 

Industries cites as binding authority the Supreme Court's McNeff 

opinion and the previous opinions of this court in which we upheld 

the rights of the parties to repudiate prehire agreements absent 

majority status. 

McNeff was preceded by Higdon and we first focus on Higdon. 

There the Court upheld a decision of the Board which relied on the 

Board's earlier R.J. Smith decision. The Court made it clear that 

it upheld the decision because "[t]he Board's resolution of the 

conflicting claims in this case represents a defensible 

construction of the statute and is entitled to considerable 

deference." Higdon, 434 U.S. at 350. It stressed that even when 

an agency has changed its mind, the courts "should not approach 

the statutory construction issue de novo and without regard to the 

administrative understanding of the statutes." Id. at 351. The 

Court concluded that "the Board's construction of the Act, 

although perhaps not the only tenable one, is an acceptable 

reading of the statutory language and a reasonable implementation 

of the purposes of the relevant statutory sections." Id. at 341. 

On the framework of this analysis, the Court upheld the Board's 

decision which relied on R.J. Smith. 

McNeff does not discuss the deference due to a Board decision 

or reason that its construction in R.J. Smith was a defensible 

interpretation of the Act. However, McNeff does rely on Higdon 

expressly and repeatedly and gives no indication of any 

reexamination of the Court's approach to its review function in 

13 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 13 
such cases. See McNeff, 461 U.S. at 265-271. And importantly, 

since McNeff the Court has again emphasized the general principle 

articulated in Higdon, 434 U.S. at 350, that where "[t]he Board's 

resolution of the conflicting claims 

construction of the statute [it] 

. represents a defensible 

is entitled to considerable 

deference." In Chevron U.S.A., Inc. v. Natural Resources Defense 

Council, 467 U.S. 837, 842-43 (1984}, in the context of reviewing 

an E.P.A. interpretation of the Clean Air Act expressed in a 

legislative regulation, the Court stated: 

When a court reviews an agency's construction of 

the statute which it administers, .it is confronted with 

two questions. First, always, is the question whether 

Congress has directly spoken to the precise question at 

issue. If the intent of Congress is clear, that is the 

end of the matter; for the court, as well as the 

agency, must give effect to the unambiguously expressed 

intent of Congress. If, however, the court determines 

Congress has not directly addressed the precise question 

at issue, the court does not simply impose its own 

construction on the statute, as would be necessary in 

the absence of an administrative interpretation. 

Rather, if the statute is silent or ambiguous with 

respect to the specific issue, the question for the 

court is whether the agency's answer is based on a 

permissible construction of the statute. 

(footnotes omitted ) . 

And the Court in Chevron, 467 U.S. at 844, noted that the 

principle of deference to administrative interpretations 

'has been cons i stently followed by this Court whenever 

decision as to the meaning or reach of a statute has 

involved recon=iling conflicting policies, and a full 

understanding o! the force of the statutory policy in 

the given situation has depended upon more than ordinary 

knowledge respecting the matters subjected to agency 

regulations. 

Moreover, in administrative adjudicatory proceedings courts "will 

uphold a Board rule so long as it is rational and consistent 

14 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 14 
with the Act." N.L.R.B. v. Curtin Matheson, 110 S. Ct. 1542, 1549 

(1990). 

Considering McNeff and Higdon against the background of the 

Court's decisions applying the deferential standard of review, it 

seems quite unlikely that the Court would so explicitly apply 

deference in Higdon and cases that have followed and yet adopt and 

apply a different, less deferential standard sub silentio in 

McNeff. Reading the cases together, we are persuaded that the 

Court's analysis in McNeff should not be viewed as adopting a new 

approach at variance with the rule of deference in reviewing Board 

interpretations of the Act. See C.E.K. Industrial Mechanical 

Contractors v. N.L.R.B., 921 F.2d 350, 357 (1st Cir. 1990). Thus 

McNeff does not represent an independent and conclusive 

interpretation of the statute which bars our application of 

Deklewa here. 

Similarly, our opinions in =J=o~r~d=a=n=--&=--=N~o=b~l~e=s-, Colorado 

Statewide Iron Workers, and Wyoming Health do not prevent us from 

adopting Deklewa should we hold it to be reasonable. The three 

cases all uphold the R.J. Smith repudiation doctrine. However, 

they all rely on McNeff, and since McNeff does not bar our 

adoption of Deklewa. neither do our opinions which depend on 

McNeff. 2 Accordingly, we are convinced that neither McNeff nor 

the previous precedents of this court hold that the R.J. Smith 

rule was the only reasonable interpretation of the statute. On 

2 

See Jordan & Nobles, 802 F.2d at 1255; Colorado Statewide 

Iron Workers, 812 F.2d at 1420; and Wyoming Health, 850 F.2d at 

622. 

15 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 15 
-reassessment in light of its experience in the administration of 

the Act, the Board has adopted its Deklewa interpretation which we 

may now proceed to consider. 

C 

We are persuaded that in light of the language of the Act, 

the Deklewa ruling was a defensible construction of the Act, after 

reassessment of the statute in view of the Board's experience with 

prehire agreements. Section 8(f}, 29 U.S . C. § 158(f}, provides in 

pertinent part that: 

It shall not be an unfair labor practice ... for 

an employer engaged primarily in the building and 

construction industry to make an agreement covering 

employees engaged (or who, upon their employment, will 

be engaged) in the building and construction industry 

with a labor organization of which building and 

construction industry employees are members ... because 

(1) the majority status of such labor organizations has 

not been established under the provisions of section 9 

of the Act prior to the making of such agreement ... 

Provided ... That any [such) agreement shall not be a 

bar to a petition [for a representation election) filed 

pursuant to section 9(c} 

This language is amply supportive of the revised 

interpretation of the Act made in Deklewa. The Board distilled 

the Deklewa ruling in its opinion in the instant case as follows; 

286 N. L . R.B. at 306: 

In Deklewa the Board announced the following 

principle with respect to 8(f) contracts: such 

contracts are enforceable through the mechanisms of 

Sections B(a) (5) and B(b) (3), and the Union therefore 

enjoys a 'limited' 9(a) status during the term of such a 

contract; they are not bars to the processing of valid 

representation petitions filed under Section 9(c} and 

Section 9(e); the appropriate unit normally will be the 

single employer's employees covered by the 8(f} 

agreement; and on expiration of an 8(f} agreement, the 

signatory union will enjoy no presumption of majority 

status and either party may repudiate the S(f} 

bargaining relationship. 

16 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 16 
We feel that the Third Circuit's views in International Ass'n 

of Bridge, Structural & Ornamental Iron Workers. Local 3 v. 

N.L.R.B., 843 F.2d 770 (3d Cir. 1988), upholding the Deklewa 

decision, are particularly . 3 persuasive. As that opinion noted, 

the earlier Supreme Court opinions concerning the R.J. Smith 

interpretation by the Board merely reviewed the Board's prior 

interpretation; the Court did not adopt as definitive and binding 

the R.J. Smith view of the statute in Higdon, 434 U.S. 335 (1978), 

or in Jim McNeff, Inc. v. Todd, 461 U.S. 260 (1983). Furthermore, 

the language of Section 8(f) does not require allowing either 

party to unilaterally repudiate a Section 8(f) prehire agreement; 

instead the language of the Act in broad terms indicates an intent 

to legitimate and make enforceable the earlier bargaining, 

referral, hiring and employment practices previously found 

unlawful. International Ass'n of Bridge, Structural & Ornamental 

Iron Workers, 843 F.2d at 777. Furthermore, the overarching 

objectives of the Act of promotion and protection of employee free 

choice and labor relations stability are not served, the Deklewa 

opinion pointed out, by the R.J. Smith rule granting unilateral 

repudiation rights to an employer who voluntarily enters into a 

collective bargaining agreement. IQ. at 778. 

Viola Industries claims that review of the Board's order 

3 

Those views of the Third Circuit have been followed by four 

other circuits. ~ C.E,K. Indus. Mechanical Contractors. Inc. v. 

N.L.R.B., 921 F.2d 350, 357 (1st Cir. 1990); N.L.R.B. v. Bufco 

Corp., 899 F.2d 608, 609 (7th Cir. 1990); N.L.R.B. v. W.L. Miller 

~. 871 F.2d 745, 748 (8th Cir. 1989); and Mesa Verde 

Construction Co. v. Northern Cal. Dist. Council of Laborers, 861 

F.2d 1124, 1126, 1134, 1137 (9th Cir. 1988) (en bane). 

17 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 17 
presents a question "whether the Board's sharp departure from 

precedent" was a defensible contrary reinterpretation of the Act. 

It stresses the prior decision in Higdon, 434 U.S. 335 (1978), 

upholding the earlier interpretation of the statute. The bare 

fact of a "departure" does not condemn the Board's Deklewa ruling, 

however. As the Higdon decision itself notes, 11 [a]n 

administrative agency is not disqualified from changing its mind." 

Id. at 351. With more experience, the· Board arrived at its 

Deklewa decision, and we hold that it reasonably construed the Act 

in so doing. 

In its appeal from the district court Viola Industries makes 

an additional, unusual pair of arguments. Viola Industries argues 

that the district court was wrong to apply Deklewa's elimination 

of the right of unilateral repudiation. Yet it also argues that 

the district court was right to apply Deklewa's rejection of the 

conversion doctrine. It contends that there is a critical 

distinction between representation issues, concerning which the 

courts should defer to the Board, and contract issues, for which 

federal courts are free to develop their own common law. Thus, in 

Viola Industries' view, this court should accept that part of 

Deklewa which would not permit the Union to convert into the fullfledged bargaining agent for Viola Industries' workers simply 

because the Union achieved majority status for a period during the 

second agreement. At the same time Viola Industries says that we 

must reject that part of Deklewa which runs contrary to those 

Tenth Circuit precedents which have previously allowed the 

unilateral repudiation of prehire agreements. 

18 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 18 
The distinction which Viola Industries would have us make in 

our degree of deference owed to the rulings of the Board is 

untenable. For support of this "critical distinction" Viola 

Industries relies on McNeff heavily. There the Court did 

distinguish between representation issues and contract issues, 461 

U.S. at 267, but this was in the context of whether both types of 

questions were litigable in§ 301 actions. Whether a court or the 

Board should decide a question of law is an entirely separate 

issue from what substantive law a court should apply if it decides 

the issue . The Court in Higdon nowhere suggested that the 

deference courts owe to the Board's interpretation of the Act 

should be greater for some administrative interpretations than for 

others. We are not persuaded to create such a distinction here. 

D 

Having held that the Board's Deklewa decision is a defensible 

interpretation of the Act, we turn to the question whether the new 

interpretation is to be applied retroactively to cases in which 

the operative facts arose prior to the decision in Deklewa. 

Several Circuits have addressed the question of whether a new rule 

announced by an administrative agency in adjudicatory proceedings 

is to be applied retroactively and have upheld retroactive 

4 application unless manifest injustice would result. This was the 

test applied by the Third Circuit in its review proceedings in 

4 

See Consolidated Freightways v. N.L.R.B., 892 F.2d 1052, 1058 

(D.C. Cir. 1989); N.L.R.B. v. Semco Printing Ctr., Inc., 721 F.2d 

886, 892 (2d Cir. 1983); N,L,R.B. v. Bufco, 899 F.2d 608, 611 

(7th Cir. 1990); N.L.R,B . v. New Columbus Nursing Home. Inc., 720 

F.2d 726, 729 (1st Cir. 1983). 

19 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 19 
Deklewa, International Ass'n of Bridge, Structural & Ornamental 

Iron Workers, 843 F.2d at 781, and we hold it to be the proper 

test also. Applying that test, we agree with the Third Circuit 

that the Board's determination to apply its new Section 8(f) 

principles "to all pending cases in whatever stage," 282 N.L.R.B. 

at 1389, should be upheld. 

Viola Industries' main arguments against applying Deklewa 

retroactively are that it would work injustice here because the 

company was induced by coercion to sign the agreement and the 

agreement was not entered into by a union representing a majority 

of the workers. Even if the factual bases of these claims are 

true, these are not actually arguments against retroactive 

application. The injustice involved in enforcing an agreement 

which a party was coerced into signi ng has nothing to do with the 

frustration of expect~tions involved in retroactive application of 

the Deklewa rule . 5 Furthermore, although the problems associated 

with validating an agreement entered into by a union which does 

not enjoy majority support are real, they too are not a result of 

Deklewa's retroactive application. They are present in all 

applications of D~klewa whether retrospective or prospective and 

have already bee n weighed 1n the process of formulating the 

Deklewa principle . 

Second, Viola Industries says we should not apply Deklewa 

retroactively because i t is an abrupt departure from the prior law 

5 

The coercion claim is considered as a separate issue in the 

panel opinion issued herew i th and the panel rejects that claim as 

time-barred. 

20 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 20 
upon which unions and employers have relied. We disagree. It is 

true that Deklewa is a sharp departure from prior law and its 

retroactive application will frustrate in part the expectations of 

those who relied upon the earlier rule in R.J. Smith; they will 

not be able to repudiate the prehire agreement. However, these 

frustrated expectations will not in 

injustice. As the Third Circuit 

general 

pointed 

enforcement to Deklewa with retroactive 

amount to manifest 

out when it granted 

application, by 

eliminating the right to repudiate prehire contracts the Board is 

only holding employers and unions to the essential terms of 

agreements which they themselves negotiated and accepted. 843 

F.2d at 781. 

Those courts which have declined to apply the Deklewa rule 

retroactively have often done so when it would amount to a penalty 

for actions which were legal when taken. C.E.K. Industrial 

Contractors v. N.L.R.B., 921 F.2d 350, 358 (1st Cir. 1990); Mesa 

Verde Construction v, Northern California District Council of 

Laborers, 895 F.2d 516, 519 (9th Cir. 1989). The district court's 

judgment here does include double interest on the amounts owed as 

provided for by 29 U.S.C. § 1132(g) (2). However, such double 

interest has been held not to be a penalty but rather a form of 

liquidated damages. Central States. Southeast and Southwest Areas 

Pension Fund v. Alco E~ress Co., 522 F. supp. 919, 929 n. 12 

(E.D. Mich. 1981); see also Painters District Council No. 3 

Pension Fund v. Johnson, 566 F. Supp. 592, 599 (W.D. Mo. 1983); 

but see N.L.R.B. v. w, L, Miller Co., 871 F.2d 745, 749-750 (8th 

Cir. 1989) (finding that it would be manifestly unjust to award a 

21 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 21 
portion of interest ret~oactively). We feel there is not an 

unjust penalty in the remedies formulated by either the Board or 

the district court here. 

Finally, many courts have held the existence of majority 

status to be an important factor in deciding whether to apply 

Deklewa retroactively. See C.E.K. Mechanical, 921 F.2d at 358. 

Indeeed, in this case Viola's claims that retroactive application 

of Deklewa would be unjust is undercut by the fact that the ALJ 

found that the Union had achieved majority status and that the 

B(f) agreement accordingly was converted into an enforceable 

agreement. Thus regardless of whether Deklewa is applied 

retroactively here the contract may not be repudiated. There can 

therefore be no manifest injustice in retroactivity. We hold that 

the Board appropriately applied the Deklewa rule retroactively in 

this case . 

III 

In sum, we are convinced that we should 

application here of its Deklewa decision. 

accept the Board's reconsideration of the 

uphold the Board's 

We a~e persuaded to 

former R.J. Smith 

decision, with which we had agreed, because of the Board's 

convincing Deklewa decision and the decisions of the five circuits 

which have upheld the Deklewa principles. See note 3, supra. 

With respect to our prior opinions in Jordan & Nobles, Colorado 

Statewide Iron Workers, and Wyoming Health, which upheld the 

Board's earlier R.J. Smith rule, we hold that those opinions and 

the Supreme Court cases upon which they rely do not bar 

application of the Deklewa decision, which we here apply 

22 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 22 
retroactively. Insofar as there may be any inconsistency between 

those three prior opinions of this court and our decision here 

upholding the application of Deklewa, those prior opinions are 

accordingly modified. 

In No. 88-1337, the petition of the National Labor Relations 

Board is granted and the order of the Board will be ENFORCED. In 

No. 89-3024, the summary judgment granted for the Plans is 

AFFIRMED. Due to rulings also detailed in the panel opinion filed 

herewith, the district court's monetary judgment is VACATED with 

respect to the awards for employees Moon, Bertleson, Stultz, 

McIntire, and Wood, and the district court shall modify its 

judgment to exclude the liability imposed on the Plans respecting 

these employees. In all other respects the judgment for monetary 

relief is AFFIRMED. 

23 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 23 
No. 88-1837, National Labor Relations Board v. Viola-Elevator 

Division, Inc.; No. 89-3024, National Elevator Industry Welfare 

Plan, et. al v. Viola Industries, Inc. 

BALDOCK, J., dissenting. 

My concern in this case transcends the specific point of 

labor law at issue. I have no doubt that the construction given 

to§ 8(f) by the National Labor Relations Board in John Deklewa & 

Sons, 282 .NLRB 1375 (1987), enf'd sub nom. International Ass'n of 

Bridge, Structural & Ornamental Iron Workers v. NLRB ("Deklewa"), 

843 F.2d 770 (3d Cir.), cert. denied, 488 U.S. 889 (1988), and 

applied by the majority here, is a "defensible construction" of 

the statute, notwithstanding the Supreme Court's recognition that 

the polar opposite construction as also defensible. See NLRB v. 

Local Union No. 103, Int'l Ass'n of Bridge, Structural & 

Ornamental Iron Workers ("Higdon"), 434 U.S. 335, 350 (1978). Nor 

do I have any quarrel with the proposition that the Deklewa 

construction of§ 8(f), borne out of the NLRB's "cumulative 

individual and institutional expertise," more effectively achieves 

the "overarching objectives" of the National Labor Relations Act 

to promote and protect employee free choice and labor relations 

stability than the prior construction given to§ 8(f) in R.J. 

Smith Construction Co., 191 NLRB 693 (1971), enf. denied sub nom. 

Operating Engineers v, NLRB, 480 F.2d 1186 (D.C. Cir. 1973). See 

Deklewa, 843 F.2d at 778-79. Rather, my concern relates to the 

separation of power between the judiciary and the executive 

branches of our government, ~ Mesa Verde Constr. Co. v. Northern 

Cal. Dist. Council of Laborers. 861 F.2d 1124, 1146-49 (9th Cir. 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 24 
1988) (en bane) (Kozinski, J., dissenting), and the majority's 

willingness to revise, ultra vires, the Supreme Court's opinion in 

Jim McNeff, Inc. v. Todd, 461 U.S. 260 (1983), in order to avoid 

this substantial constitutional question. 

If Higdon were the only statement from the Supreme Court of 

§ 8(f) 's meaning, I would gladly bow in deference to the NLRB's 

contrary, albeit defensible, Deklewa construction. Higdon 

involved an unfair labor practices action brought before the NLRB 

by an employer against a union with whom the employer had entered 

into a§ 8(f) prehire agreement. In reversing the D.C. Circuit, 

which had denied enforcement of the NLRB's cease and desist order 

which was based on the R.J. Smith construction of§ 8(f), the 

Supreme Court clearly relied upon the deferential standard of 

review afforded to agency interpretations and held that the R.J. 

Smith construction of§ 8(fl was a "defensible construction of the 

statute . . " See Higdon, 434 U.S. at 350. See also id. at 

341 (" [T)he Board's construction of the Act, although perhaps not 

the only tenable one, is an acceptable reading of the statutory 

language and a reasonable implementation of the purpose of the 

relevant statutory sections."). Indeed, the Court's deference to 

the Board's interpretation of§ S(f) is consistent with the 

Court's subsequent pronouncements concerning the judicial standard 

of review of an agency decision. See National R.R. Passenger 

Corp. v. Boston & Me, Co;p,, 112 s. Ct. 1394, 1401 (1992); Chevron 

U.S.A., Inc. v. NRDC, Inc,, 467 U.S. 837, 842-43 (1984). 

-2-

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 25 
However, the judicial deference afforded to an agency's 

construction of a statute has no place outside of the context of 

reviewing an agency decision. Unlike Higdon, McNeff was not on 

review from an order of the NLRB; rather, McNeff involved a 

lawsuit brought by a union against an employer pursuant to§ 301 

of the Labor Management Relations Act to recover payments of trust 

fund obligations due under a§ B(f) prehire agreement. At issue 

before the Supreme Court was "whether monetary obligations that 

have accrued under a prehire contract .. can be enforced, prior 

to the repudiation of such contract, in a [§ 301] suit brought by 

a union against an employer ... absent proof that the union 

represented a majority of the employees." McNeff, 461 U.S. at 

262. In affirming the lower courts, which had recognized the 

validity of such a suit, the Court was required to interpret the 

statute, and interpreted it consistently with the interpretation 

approved of in Higdon. For example, in the course of rejecting 

the argument that a§ 301 action "trench[ed] on the voluntary and 

voidable characteristics of a§ B(f) prehire agreement," the Court 

stated that 

although the voidable nature of prehire agreements 

clearly gave petitioner the right to repudiate the 

contract, it is equally clear that the petitioner never 

manifested an intention to void or repudiate the 

contract .... Whatever may be required of a party 

wishing to exercise its undoubted right to repudiate a 

prehire agreement before the union attains majority 

support in the relevant unit. no appropriate action was 

taken by petitioner to do so in this case. 

lg. at 269-70 (emphasis added and footnote omitted). In its 

conclusion setting forth its holding, the McNeff Court stated in 

- 3 -

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 26 
terms that could not be any clearer that the R.J. Smith 

construction of the statute was the law: "A§ 8(f) prehire 

agreement is subject to repudiation until the union establishes 

majority status." Id. at 271. 

I read the McNeff Court's interpretation of§ 8(f) as 

essential to the Court's rejection of the petitioner's argument, 

and, as such, I do not believe that it can be dismissed as dicta. 

While McNeff relied on Higdon in construing§ 8(f), the McNeff 

Court was not operating under the deferential standard of review 

applied in Higdon. The McNeff Court was resolving a lawsuit 

between private parties rather than reviewing an agency decision, 

and, as the majority concedes, nowhere in McNeff does the Court 

limit its interpretation of§ 8(f) to being merely a defensible 

construction. What the majority fails to recognize is that the 

McNeff Court could not have proceeded from the deferential 

standard of review because it was not reviewing an agency 

decision. McNeff construed§ 8(f) in order to resolve the issue 

before it, and, in doing so, its construction became the law. 

Mesa Verde, 861 F.2d at 1144 (Hug, J., dissenting). See also id. 

at 1137 (Wallace, J., dissenting). Indeed, our subsequent cases 

interpreting McNeff never portended that the meaning given to 

§ 8{f) was merely a defensible construction; rather we applied the 

McNeff interpretation of§ S(fl as if it were the law. See 

Trustees of Wyo. Health & Welfare Plan v. Morgen & Oswood Constr. 

Co., Inc., 850 F.2d 613, 615 n.2 (10th Cir. 1988), Trustees of 

Colo. Statewide Ironworkers v. A & P Steel, Inc., 812 F.2d 1518, 

-4-

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 27 
-1520-21 (10th Cir. 1987); New Mexico Dist. Council of Car:penters 

v. Jordan & Nobles Constr. Co., 802 F.2d 1253, 1255 (10th Cir. 

1986). 

Once the Supreme Court says what the law is, its 

interpretation binds not only us as a lower court but also the 

agency charged with administering that law until a contrary act of 

Congress or a Court decision overruling its earlier precedent. 

Thus, while we defer to an agency's defensible statutory 

interpretation, once the Supreme Court states what the law is, as 

it did in McNeff, the agency loses its authority to interpret the 

statute in a contrary, albeit reasonable, manner. This is not the 

case in which Congress has delegated rule-making authority over to 

an agency. See Mesa Verde, 861 F.2d at 1139-42 (Hug, J., 

dissenting). Rather, this is a case in which Congress has enacted 

a law, the Supreme Court has said what the law means, and the 

agency charged with administering the law has subsequently decided 

it means something entirely different. In relying on the NLRB's 

Deklewa interpretation of§ S(f), the majority is compelled to 

reason that the Supreme Court in McNeff did not mean what it said. 

I respectfully disagree and, therefore, dissent. 

-5-

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 28 
PUBLISH 

FIL~.u 

United States CAJurt at Appeal, Tenth Circuit 

UNITED STATES COURT OF APPEALS NOV 2 1992 

ROBERT L. HOECKER 

Clerk 

FOR THE TENTH CIRCUIT 

NATIONAL LABOR RELATIONS BOARD, 

Petitioner, 

v. No. 88-1837 

VIOLA INDUSTRIES-ELEVATOR 

DIVISION, INC., and its alter 

ego, VIOLA INDUSTRIES, INC., 

Respondent, 

INTERNATIONAL UNION OF 

ELEVATOR CONSTRUCTORS, 

Laurence 

E. Allen, 

Associate 

Attorney, 

Relations 

Intervenor. 

ON APPLICATION FOR RNFORCKMKNT OF AN ORDER 

OF TIIB NATIONAL LABOR RELATIONS BOARD 

(No. 5-CA-15990) 

S. Zakson (Rosemary M. Collyer, General Counsel, Robert 

Associate General Counsel, Aileen Armstrong, Deputy 

General Counsel, Collis Suzanne Stocking, Supervisory 

and Margaret Gaines Bezou, Attorney), National Labor 

Board, Washington, D.C., for Petitioner. 

Stewart L. Entz (Richard D. Anderson with him on the brief), of 

Entz, Anderson, Friend & Chanay, Topeka, Kansas, for Respondent. 

Francis J. Martorana (Donald J. Capuano and Sally M. Tedrow with 

him on the brief), of O'Donoghue & O'Donoghue, Washington, D.C., 

for Intervenor. 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 29 
NATIONAL ELEVATOR INDUSTRY 

WELFARE PLAN, NATIONAL ELEVATOR 

INDUSTRY PENSION PLAN, and 

NATIONAL ELEVATOR INDUSTRY 

EDUCATIONAL PLAN, 

Plaintiffs-Appellees, 

v. 

VIOLA INDUSTRIES, INC. and 

VIOLA INDUSTRIES-ELEVATOR 

DIVISION, INC., 

Defendants-Appellants. 

No. 89-3024 

APPEAL FROM TIIB UNITED STATES DISTRICT COURT 

FOR TIIB DISTRICT OF KANSAS 

(D.C. No. 84-2286-S) 

Joseph P. Boyle (Sally M. Tedrow with him 

O'Donoghue & O'Donoghue, Phila¢elphia, 

Plaintiffs-Appellees. 

on the brief), of 

Pennsylvania, for 

Richard D. Anderson of Entz, Anderson and Chanay, Topeka, Kansas, 

for Defendants-Appellan~s. · · 

Before SEYMOUR, HOLLOWAY, and EBEL, Circuit Judges. 

HOLLOWAY, Circuit Judge. 

This case arises from two separate proceedings which have 

been consolidated here. The petitioner National Labor Relations 

Board (the Board) has brought the first of these proceedings (No. 

88-1837) to enforce its order based on the finding that the 

respondents Viola Industries-Elevator Division, Inc. and Viola 

Industries, Inc. (collectively, 

2 

Viola Industries) violated 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 30 
J 

sections of the National Labor Relations Act (the Act) by not 

honoring a Section 8(f) prehire agreement entered into with the 

International Union of Elevator Constructors (the I.U.E.C. or the 

Union). The Union was the charging party and is a party in this 

enforcement proceeding as an intervenor. 

The National Elevator Industry Welfare Plan, the National 

Elevator Industry Pension Plan, and the National Elevator Industry 

Education Plan (the Plans) were the plaintiffs in a related 

district court suit brought to recover contributions alleged to be 

owed to the Plans by Viola Industries under the repudiated 

agreement with the Union. The district court found for the Plans 

and an appeal by Viola Industries to this court followed (No. 

89-3024). 

The cases have been consolidated for argument, and oral 

arguments were made to a panel of this court. Because we felt 

that the cases raised important questions implicating previous 

decisions of the Supreme Court and of this court, we requested 

briefing and argument before the court en bane in both No. 88-1837 

and No. 89-3024. The primary issues in both cases have been 

disposed of by the en bane opinion filed today. In this opinion 

we resolve the remaining issues. 

The facts and the proceedings below have been well summarized 

in the en bane opinion. There the court determined that the 

Deklewa doctrine prevents Viola Industries from unilaterally 

repudiating its prehire agreement with the Union. The en bane 

court did not, however, rule on Viola's claim that it cannot be 

bound by the contract because it was improperly coerced into 

3 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 31 
signing it. Nor did the en bane court rule on Viola's challenges 

to the auditor's report on which the district court based its 

findings of the amount of money owed to the Plans. It is these 

issues which we address here. 

I. 

In the enforcement proceeding, Viola Industries contends that 

the Union coerced it into making the prehire agreement and that 

therefore the agreement should not be enforced in any event. The 

core of the claim is that the Union pressured two subcontractors 

into refusing to work for the firm until it signed the prehire 

agreement with the Union. 

As the Administrative Law Judge found, we need not reach the 

merits of this claim because it is time barred under Section l0(b) 

of the Act. See 29 U.S.C. § 160(b). Section l0(b) requires that 

any unfair labor practice claim be asserted within six months 

after it arises. The time bar has been interpreted to apply to 

affirmative defenses such as coercion as well. See Land Eguip. 

Inc., 248 N.L.R.B. 685, 685 n.2 (1980), enforced, 649 F.2d 867 

(9th Cir. 1981); N.L.R.B . v. Marin Operating, Inc., 822 F.2d 890, 

893 (9th Cir. : 987 ) . The unfair labor practice charge in this 

case was filed on Nove~ber 14, 1983. The alleged coercion must 

have occurred be!ore the prehire agreement was signed on December 

14, 1982. Thus the a!!1rn4t1ve defense to enforcement based on 

the alleged unfair labor practice of coercion is time-barred . 

.,. T .I.. 

In its appeal fror. the district court, Viola Industries makes 

four basic objections to the damage calculations used by the 

4 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 32 
J 

auditor and accepted by the district judge. Viola Industries 

maintains that the auditor improperly included hours worked by 

employees who only worked inside plant and so were not elevator 

constructors under the agreement. Second, it argues that some 

employees who were actual elevator constructors occasionally 

worked at the Viola Industries plant and that these "shop hours" 

were not covered by the contribution requirement of the agreement. 

Third, Viola Industries claims that the auditor failed to exclude 

the inexperienced mechanics' "probationary hours" for which 

contributions were not owed according to the agreement. Lastly, 

Viola Industries objects to the inclusion of hours spent 

installing elevator doors and manlifts. It says that these are 

tasks traditionally done by ironworkers and millwrights and so are 

not within the work jurisdiction of the union. 

Insofar as Viola Industries challenges findings of fact by 

the district court, the question for this court under Rule 52(a) 

"is not whether it would have made the findings the trial court 

did, but whether 'on the entire evidence [the appellate court] is 

left with the definite and firm conviction that a mistake has been 

committed.'" Zeni;h Radio Corp. v, Hazeltine Research, Inc., 395 

U.S. 100, 123 (1969 l !quoting United States v. United States 

Gypsum Co., 333 D.S. 364, 395 (1948)). We can overturn the 

district court's factua: findings only if we hold them clearly 

erroneous. Salve Regina College v. Russell, U.S. , 111 

S. Ct. 1217, 1222 (1991 ). 

The challenge to the inclusion by the auditor of hours of 

five alleged "plant workers" is strong. A serious argument is 

5 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 33 
made by Viola Industries that these workers (Moon, Bertelson, 

Stultz, McIntire and Wood) never did work in the field and that 

they worked only in the plant. Work in the field was covered by 

the agreement. Work in the plant was not. Viola's attack is 

based on affidavits of two of the workers, Bertelson and Wood, and 

on time records and ~estimony of Mrs. Viola, the company 

bookkeeper. III R. 58. Mrs. Viola testified that the five men 

punched in daily and had time records therefor, and her direct 

testimony was that she saw those individuals every day . 

58-60. 

Id. at 

The only testimony contradictory to that of Mrs. Viola and to 

the affidavits and records was the auditor's testimony. His 

assumption was that because he had requested that Viola Industries 

send him printouts which only included reportable hours, and the 

printouts he received listed the five workers' hours, he should 

include the workers in his report of liability to the Plans. The 

trial judge made no independent finding concerning this liability 

and instead made a general adoption of the conclusions of the 

auditor. He did inquire whether the testimony and records would 

cause the auditor to make any substantial changes in his report. 

The auditor replied in the negative. The judge then adopted the 

auditor's report without any detailed findings and conclusions 

otherwise. 

Considering all the evidence on this issue, we have a 

definite and firm conviction that a mistake was made in the 

imposition of liability respecting these five workers. The 

direct, specific and corroborated testimony of Mrs. Viola is not 

6 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 34 
7 

-contradicted by any direct proof. Accordingly we must hold that 

the awards respecting these five plant employees should be 

vacated. 

Next, Viola Industries contends that there was error in that 

11 [some) work performed was not covered work as defined in the 

I.U.E.C. Agreement" yet that work was included in the auditor's 

report of hours for which contributions were owed. Specifically 

Viola alleges that employees "such as James Van Horn and L. Mark 

Fiske" did some covered work in the field but were brought "into 

the plant for short periods" when there was no more work in the 

field. Brief of Appellants at 26. 

We have already noted the auditor's testimony that he made 

his determinations on the basis of records furnished by Viola 

Industries. Insofar as the records themselves were deficient, in 

such litigation "[a]n employer cannot escape liability for his 

failure to pay his employees the wages and benefits due to them 

under the law by hiding behind his failure to keep records as 

statutorily required." Brick Masons Pension Trust v. Industrial 

Fence & Supply, 839 F.2d 1333, 1338 (9th Cir. 1988). The court's 

findings concerning these "shop hours" are not shown to be clearly 

erroneous. 

Further, Viola Industries claims error in the auditor's 

failure to allow deductions 

employees. Brief of 

Probationary hours are the 

for probationary periods for four 

Appellants at 27-28. We disagree. 

first hundred hours worked by an 

elevator constructor novice. The auditor testified that he 

requested information specifically relating 

7 

to probationary 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 35 
employees and that he had not received the detailed reports 

necessary for determining which hours were probationary. III R. 

32. The auditor testified that Viola Industries designated 

certain people as being I.U.E.C. probationary for the year 1982 

and that he excluded those people without further explanation in 

later years. Id. at 32. All other hours were assumed to be not 

?robationary. At the hearing there were contradictory affidavits 

and testimony supporting the company's claim for deductions for 

additional probationary employees. The court weighed this 

evidence and entered its ruling. The findings on this aspect of 

the audit are not shown to be clearly erroneous. 

Finally, there remains the issue of the inclusion of hours 

spent installing manual doors and cage and belt lifts. There was 

conflicting testimony as to whether such work was traditionally 

within the work jurisdiction of the union. See Tr. at 90 

(Testimony of Bob Viola); Doc. 134, Ex. 1 (Deposition of Jerome 

Mullett). The issue is thus a controverted question of fact. The 

resolution of such conflicts is exclusively the province of the 

district court. Raydon Exploration, Inc. v. Ladd, 902 F.2d 1496, 

1499 (10th Cir. 1990). We cannot say that the findings on this 

matter are clearly erroneous. 

IV 

On the basis of the determinations made in this panel opinion 

respecting both the enforcement proceeding (No. 88-1837) and the 

appeal from the United States District Court for the District of 

Kansas (No. 89-3024), and in light of the conclusions reached in 

8 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 36 
, 

our en bane opinion, the judgments in both of said proceedings are 

announced and entered by the en bane opinion filed herewith. 

l 

9 

Appellate Case: 88-1837 Document: 010110145647 Date Filed: 11/02/1992 Page: 37