# United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 24, 2008 Decided December 30, 2008

No. 07-1419

T HE R AYMOND F. K RAVIS C ENTER FOR THE P ERFORMING
A RTS

, I NC

., P ETITIONER

v.

N ATIONAL L ABOR R ELATIONS B OARD

, R ESPONDENT

Consolidated with 07-1459

On Petition for Review and Cross-Application for Enforcement

of an Order of the National Labor Relations Board

Charles P. Roberts III argued the cause for petitioner.

With him on the briefs were Robert J. Janowitz and Kimberly

Seten

.

David A. Seid , Attorney, National Labor Relations Board, argued the cause for respondent. With him on the brief were Ronald E. Meisburg , General Counsel, John H. Ferguson

,2

Associate General Counsel, Linda Dreeben , Deputy Associate General Counsel, and Jill A. Griffin , Attorney.

Before: R OGERS , G ARLAND , and K AVANAUGH

, Circuit Judges

.

Opinion for the Court filed by Circuit Judge

K AVANAUGH

.

K AVANAUGH

, Circuit Judge : This case arises out of a labor dispute between the Raymon d F. Kravis Center for the Performing Arts in West Palm Beach, Florida, and Local 623

of the International Alliance of Theatrical Stage Employees and Moving Picture Technicians and Allied Crafts. Kravis and the union entered into collective bargaining agreements that established an exclusive hiring hall arrangement: Kravis would use only employees referred by Local 623 to perform all stagehand work at Kravis’s Dreyfoos Hall. After the agreements expired, Kravis de clared impasse during contract renegotiations, withdrew rec ognition from the union, and did not request further referrals from it.

The National Labor Relations Board ruled that Kravis violated §§ 8(a)(5) and (1) of the National Labor Relations Act by, among other things, unilate rally changing the scope of the bargaining unit and withdrawing recognition from Local 623. The Board also determined that, as a result of a union merger, Local 500 was the successor union to Local 623. It ordered Kravis to recognize and bargain with Local 500 as the exclusive representative of Kravis’s stagehand employees. Kravis filed a petition for review in this Court. We deny the petition for review and grant th e Board’s cross-application for

enforcement.3

I

The Kravis Center for the Pe rforming Arts is a concert hall and theater complex in West Palm Beach, Florida. In 1992, Kravis and Local 623 of the International Alliance of Theatrical Stage Employees and Moving Picture Technicians and Allied Crafts entered into a five-year collective bargaining agreement. The agreement provided for an exclusive hiring hall arrange ment under which Local 623 would provide the stagehand em ployees at Kravis’s concert venue, Dreyfoos Hall, as the need arose – specifically, carpenters, electricians, fl ymen and riggers, props, and wardrobe employees. In 1998, the parties renewed the contract for two more years, effective until June 2000.

In April 2000, Kravis notified Local 623 of its intent to terminate the 1998 agre ement upon its expiration. The parties negotiated from May to September 2000. After various proposals were bandied back and forth, Kravis submitted its final bargaining proposal on September 9, 2000. The proposal included discretionary us e of Local 623 referrals, an unfettered right to subcontract stagehand work, and contract terms that would apply only to Local 623-referred workers, not to other stagehand workers at Dreyfoos Hall.

On September 11, 2000, Krav is declared impasse and unilaterally implemented its fina l proposal. On September 24, 2000, Kravis withdrew recognition from Local 623, and thereafter requested no furthe r referrals from Local 623 for stagehand employees at Dreyfoos Hall.

In March 2001, Local 623 filed unfair labor practice charges. After an investigat ion, the NLRB’s General Counsel filed a complaint.4

Meanwhile, in February 2002, Local 623 merged with five other local theater-employ ee unions in south Florida to

form a new Local 500. Local 623 members did not vote on the union merger.

After a hearing on the Genera l Counsel’s complaint, an administrative law judge found that Kravis violated §§ 8(a)(5) and 8(a)(1) of the National Labor Relations Act by, among other things, unilaterally changi ng the scope of the bargaining

unit to exclude non-referred st agehands and by withdrawing recognition from Local 623. However, the ALJ concluded that Local 623 ceased to exist as a result of the 2002 merger

that formed Local 500 and that Kravis’s bargai ning obligation

had ended on that date. A ll parties filed exceptions.

The Board affirmed the finding that Kravis violated §§ 8(a)(5) and 8(a)(1). It reasoned that the parties’ relationship, based on the agreements in effect since 1992, constituted a § 9(a) collectiv e bargaining relationship, rendering unlawful Kravis’s unilateral change to the bargaining unit and withdrawal of recognition from the union. The Board also rejected the AL J’s determination that the 2002 union merger terminated Kravis ’s bargaining obligation. Overruling its traditional due process requirement for union mergers in response to the Supreme Court’s decision in NLRB v. Financial Institution Employees of America, Local 1182 ( Seattle-First ), 475 U.S. 192 (1986), the Board concluded that Local 500 was the successor to Local 623 notwithstanding the absence of a vote by Local 623 members. Accordingly, the Board ordered Kravis to recognize and bargain with Local 500 as the representative of its stagehand employees.

Kravis has petitioned for revi ew, and the Board has filed a cross-application for enforcem ent. We review the Board’s5

decision to determine whether its factual findings are supported by substantial evidence and whether the Board

otherwise acted arbitrar ily and capriciously. See Beverly Health & Rehab. Servs., Inc. v. NLRB , 317 F.3d 316, 320 (D.C. Cir. 2003).

II

Kravis has raised a variety of arguments to justify its decision to stop using refe rrals from Local 623 after

termination of the collective bargaining agreement in 2000.

To analyze Kravis’s arguments, we first review the statutory background. Section 8( a)(5) of the National Labor Relations Act makes it “an unfair labor practice for an employer . . . to refuse to bargain collectively with the representatives of his employees.” 29 U.S.C. § 158(a)(5). Section 9(a) defines the term “representatives”: “Representatives designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate for such purposes, shall be the exclusive representatives of all the em ployees in such unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment.” 29 U.S.C. § 159(a).

A union can achieve the status of a majority collective bargaining representative through either Board certification or voluntary recognition by the em ployer – in a contract, for example. See Exxel/Atmos, Inc. v. NLRB , 28 F.3d 1243, 1247 (D.C. Cir. 1994). Under Board precedent, a union with § 9(a) status enjoys numerous benef its, including “a conclusive presumption of majority status during the term of any collective-bargaining agreement, up to three years.” Auciello Iron Works, Inc. v. NLRB , 517 U.S. 781, 786 (1996). This6

conclusive presumption is “based not so much on an absolute certainty that the union’s majority status will not erode,” as on the need to achieve “stability in collective-bargaining relationships” and allow the union to focus on obtaining and administering an agreement. Fall River Dyeing & Finishing Corp. v. NLRB , 482 U.S. 27, 38 (1987) (quoting Terrell

Machine Co. , 173 NLRB 1480, 1480 (1969)). After the agreement expires or after three years (if the agreement is for more than three years), a union with § 9(a) status enjoys a rebuttable presumption of conti nuing majority support. The employer can rebut the presumption by presenting evidence that the union no longer possesses majority support. See
Levitz Furniture Co. , 333 NLRB 717, 723 (2001); cf. Allentown Mack Sales & Serv., Inc. v. NLRB , 522 U.S. 359, 361 (1998).

When a collective bargaining agreement expires, an employer is ordinarily obligated to continue bargaining with the union, absent a showing that the un ion no longer has majority support. See Auciello , 517 U.S. at 786-87. Even if negotiations reach impasse, moreover, an employer cannot unilaterally change the scope of the bargaining unit. See Boise Cascade Corp. v. NLRB , 860 F.2d 471, 474-75 (D.C. Cir. 1988).

A

In this Court, Kravis argues that Local 623 was not a § 9(a) union because it was not the exclusive representative of stagehand employees at Kravis’s Dreyfoos Hall. If this were correct, Kravis would have ha d no obligati on after 2000 to bargain with Local 623 regard ing employment at Dreyfoos

Hall. But Kravis’s contention fl outs the plain language of the 1992 and 1998 collective bargaining agreements. In both contracts, Article I’s jurisdicti on clause and Article II clearly7

provided that Kravis would exclusively use Local 623 referrals as stagehand workers at Dreyfoos Hall. Article I defined the union’s work jurisdiction as “All carpentry, electrical, sewing, fitting, and re lated work performed on or in connection with the sets and props, costumes and wardrobe used in the Theater.” Article II provided that the Kravis Center “agrees that the work described in ARTICLE I above shall be performed by qualif ied workers referred by the

Union.” Both contracts thus e xplicitly stipul ated that all Dreyfoos Hall stagehands within the prescribed categories were to be referred by Local 623 – and would be subject to the terms and conditions negotiated by Kravis and Local 623 in the collective bargaining agreement. See Strand Theatre of Shreveport Corp. v. NLRB , 493 F.3d 515, 519-20 (5th Cir. 2007) (finding a § 9(a) collectiv e bargaining agreement based on exclusive language in the contra ct). To be sure, this case involves a hiring hall referra l arrangement, not the typical situation where an employer hires its employees directly. But for Dreyfoos Hall stagehand workers, the hiring hall was exclusive, and the Board reas onably equated Local 623 to a traditional union representing a bargaining unit of employees.

Kravis also cites NLRA § 8(f), which provides an exception for employers in the construction industry to the usual rule requiring continued bargaining at the end of a contract. 29 U.S.C. § 158(f). Bu t § 8(f) is a narrow statutory exception carved out for empl oyers in the construction industry only. See M & M Backhoe Serv., Inc. v. NLRB , 469 F.3d 1047, 1048 (D.C. Cir. 2006) (describing the § 8(f) exception as “specific to the construction industry”); Nova Plumbing, Inc. v. NLRB , 330 F.3d 531, 534 (D.C. Cir. 2003) (describing § 8(f) as “a limited exception” due to “the unique nature of the [construction] industry”); Strand Theatre , 493 F.3d at 520 (“[E]xcept in the c onstruction industry, a Union is entitled to a presumption of majority support . . . and the8

agreement need not expressly reflect the Union’s majority status.”). Kravis may have a good policy argument for equating itself with a constructi on employer given that it hired stagehand employees through a hiring hall arrangement. But the statutory text simply doe s not extend to non-construction employers. Kravis’s attempts to nudge its contracts into the § 8(f) paradigm are thus unavailing.

For those reasons, the Board reasonably concluded that Local 623 was a § 9(a) union and was the exclusive representative of stagehand em ployees at Dreyfoos Hall.

B

Having upheld the Board’s conclusion that Local 623 was a valid § 9(a) union and th at Local 623’s presumption of majority support therefore continued to apply as of 2000, we next consider Kravis’s argument that it rebutted the presumption of majority suppor t. Kravis contends, in particular, that it demonstrated a good-faith reasonable doubt about Local 623’s continued major ity support, consistent with

Allentown Mack Sales & Serv. v. NLRB , 522 U.S. 359, 361 (1998). 1 But Kravis provides no evidence to support its alleged doubt about Local 623’s continued majority support. Cf. BPH & Co. v. NLRB , 333 F.3d 213, 217 (D.C. Cir. 2003) (finding good-faith doubt where employer showed decertification petition signed by majority of bargaining unit);

1 The Board has since modified the Allentown Mack standard so that reasonable doubt of a union’s majority status is no longer sufficient to justify an employer’s unilateral withdrawal of recognition. Now, the Board requires an actual showing that the union no longer has majority support. See Levitz Furniture Co.

, 333 NLRB 717, 723 (2001). The Board declined, however, to apply the new standard to cases pending prior to the Levitz decision and thus did not apply it here. Id. at 729.9

see also NLRB v. Curtin Matheson Scientific, Inc. , 494 U.S. 775, 778 (1990) (requiring “suffici ent objective evidence of a good-faith doubt”).

To sustain its good-faith doubt argument despite the lack of evidence, Kravis creatively contends that the union never had majority support at the time of the 1992 or 1998 agreements. To the extent Kravis is questioning the union’s original majority status, that argument is time-barred by NLRA § 10(b). 29 U.S.C. § 160(b). The case law interpreting Section 10( b) requires that any challenge to the initial majority status of a union be made within six months of recognition by the Board or the employer. See Local Lodge

No. 1424 v. NLRB , 362 U.S. 411, 423 (1960). The six-month time period for challenging Lo cal 623’s alleged lack of majority support in 1992 and 1998 passed long before Kravis first raised this challenge.

To the extent Kravis is raising this point in a circuitous effort to prop up its claim of good-faith doubt about the union’s majority support in 2000, it is entirely unavailing.

Kravis had the burden to show good-faith doubt as to theunion’s continued majority support in 2000. Raising a timebarred argument about an allege d lack of majority support in

1992 or 1998 does not alone suffi ce to meet Kravis’s burden

to show its doubt about Local 623’ s lack of majority support

in 2000.

In short, the Board reasona bly concluded that Kravis “was not privileged to withdr aw recognition from Local 623 without demonstrating a good- faith reasonable doubt or uncertainty as to the Uni on’s support among employees. Because [Kravis] failed to meet this burden, the withdrawal of recognition was unlawful.” 351 NLRB No. 19, at 2-3 (2007).10

C

Kravis argues that, even if it had an obligation to recognize and bargain with Local 623, it did not violate NLRA §§ 8(a)(5) and 8(a)(1) be cause it did not unilaterally change the scope of the bargaining unit at impasse. Changes in the scope of the bargaining unit may not be implemented unilaterally. Boise Cascade , 860 F.2d at 474

. In Boise

Cascade , we defined unit scope as referring to “what employees the unit represents.” Id. (emphasis omitted). We explained that this was distinct from jurisdiction, which referred to the “type of work.” Id (emphasis omitted)

. The parties’ dispute over coverage of non-refe rred stagehands at Dreyfoos Hall plainly related to what employees Local 623 represents. Under our preced ent, therefore, the Board reasonably concluded that Kravis acted unlawfully in unilaterally changing the scope of the bargaining unit.

III

Kravis contends that, contrary to the Board’s determination, any obligation it otherwise had to bargain with Local 623 ceased upon Local 623’s merger with other unions

to form Local 500.

In cases involving union mergers or affiliations, the Board traditionally had required an employer to continue bargaining with a union (i) if the union merger or affiliation was conducted by a vote with adequate due process safeguards, and (ii) if the orga nizational changes were not so dramatic that the post-merger entity lacked substantial continuity with the preexisting entity. See Sullivan Bros.

Printers Inc. , 317 NLRB 561, 562 (1995).11

In the decision in this case, however, the Board expressly overruled its precedent and jettiso ned the first factor in light of the Supreme Court’s decision in NLRB v. Financial Institution Employees Local 1182 ( Seattle-First ), 475 U.S. 192 (1986). In Seattle-First , the Supreme Court rejected a Board rule requiring that al l bargaining unit members be

allowed to vote on affiliation. Id. at 201-04. The Court reasoned that an employer’s obligation to recognize a union may not be discontinued unless the affiliation raises a question concerning representation. Id. at 202-03. “In many cases, a majority of employees will continue to support the union despite any changes precipitated by affiliation” and therefore no such question will be raised. Id. at 203.

In this case, the Board reasonably concluded that SeattleFirst ’s rationale applied to a merger. As the Board reasonably determined, when there is “substantial continuity” between the pre-merger and pos t-merger union, the lack of a membership vote on the merger does not cast doubt on employee support for the union because the union is “largely unchanged.” 351 NLRB No. 19, at 5 (2007).

Kravis, “as the party seeking . . . displacement, has the burden of proving its clai m of discontinuity.” News/Sun

Sentinel Co. v. NLRB , 890 F.2d 430, 432 (D.C. Cir. 1989). Kravis emphasizes various factors – including size differences, reduced particip ation, different levels of organization, and different numbe rs of hiring halls – which, in its view, highlight the distin ctions between Locals 623 and 500. The Board, however, acknowledged such changes but reasonably explained that c ountervailing considerations outweighed any differences: Th ere was no substantial change

in fee structure. There wa s no change in the hiring hall system in terms of where the employees would be geographically placed. Employers continued their benefit12

contributions to the union’s vacation and pension funds.

Local 623 officials continued to have leadership roles in Local 500. And representation and resources for the union members were arguably enhanced, rather than diminished, given the former financia l straits of Local 623.

Substantial evidence supports the Board’s finding that the changes were not “so great that a new organization” came into being. 351 NLRB No. 19, at 6 (quoting Western Commercial Transp., Inc. , 288 NLRB 241, 217 (1988)). We therefore uphold the Board’s order that Kr avis recognize and continue to bargain with Local 500 as the successor to Local 623.

* * *

We deny the petition for review and grant the Board’s cross-application for enforcement.

So ordered.