The Honorable Richard S. Arnold stepped down as Chief Judge of the United 1 States C ourt of Appeals for the Eighth Circuit at the close of business on April 17 , 1998. He has been succeeded by the Honorable Pasco M. Bowman, II. The H onorable Stephen N. Limbaugh, United States District Judge for th e 2 Eastern District of Missouri, sitting by designation.



## United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________ Nos. 97-2988/3217

___________ Sioux City Foundry Company, *

Petitioner, * On Petition for Review of an Order of

v. * National Labor Relations Board, *

Respondent. * *

* The National Labor Relations Board.

*

*

*

___________ Submitted: February 9, 1998 Filed: September 3, 1998

___________ Befor e RICHARD S. ARNOLD, Chief Judge, HANSEN, Circuit Judge, an d 1 LIMBAUGH, District Judge.

2

___________ HANSEN, Circuit Judge.-2-

The Sio ux City Foundry Company (the Company) petitions for review of th e National Labor Relations Board’s (NLRB) order ruling that it had committed various violations of section 8 of the National Labor Relations Act (the Act), see 29 U.S.C. § 158 (1994), and requiring that it recognize and, on request, bargain with th e Interna tional Association of Machinists and Aerospace Workers, AFL-CIO, Loca l Lo dge No. 1426 (IAM). The NLRB has filed a cross petition for enforcement of th e order. This case arises from events surrounding the affiliation of an independent union representing employees o f the Company with the IAM and the Company’s subsequent refusal t o bargain with the IAM. The Company makes numerous claims on appeal , including that the affiliation was improper, that its actions were lawful under the Act, and that some of the unfair labor practices charges were time-barred. We deny th e Company’s petition for review and grant enforcement of the NLRB’s order.

I. Factual and Procedural Background

Th e Company operates two plants, one in Sioux City, Iowa (Plant 1), an d another in South Sioux City, Nebraska (Plant 2). At Plant 1, the Company conducts structura lsteel fabrication, contract steel manufacturing, and rebar operations. Th e Company manufactures cast iron products at Plant 2. In 1994, the Company ha d approximately 135 total employees—75 at Plant 1 and 60 at Plant 2. E mployees at both plants were represented by the United Molders Union unt il 1986, when they then began bei ng represented by the Sioux City Foundry Company Shop Committee (the Sho p Committee), an independent union. The Company and Shop Committee negotiated a number of collective bargaining contracts covering employees at each plant. Employees at each plant elected their own Shop Committee representatives to deal with th e Company regarding day-to-day matters.
During 1994 some employees began seeking more effective uni on representation. On October 6, 1994, six em ployees met with three officials of the IAM concerning the possibility of affiliating with the IAM. These employees agreed that the Shop-3-

Com mittee should consider affiliating with the IAM. The Shop Committee the n scheduled an affiliation meeting and vote for Sunday, October 30, 1994.
Ronald Clingenpeel, the Shop Committee president, asked the Company for the
names and addresses of all the bargaining unit employees. Andrew Galinsky, th e Company’s president and chief executive officer , replied that it was not the Company’s policy to provide this information and that the Shop Committee officers would have to obtain this information on their own. Thus, Shop Committee officials informed Plant 2 workers of the affil iation meeting and vote orally and by posting notices at the plant. At an Oc tober 17 all-employee meeting, Company president Galinsky explained hi s opposition to the proposed affiliation with the IAM. Subsequently, employees and IAM officials hand-distributed about 60 notices of the affiliation meeting and vote outsid e Plant 1 on tw o different occasions. Apparently, some notices were also handed out at Plant 2, although the extent of this hand billing is unclear from the record.

On O ctober 28, 1994, Company president Galinsky approached Clingenpeel at work and told him that if arbitr ation was the employees’ main concern underlying their desire to affiliate with the IAM, he would amend the existing collective bargainin g contract to state that the Company would pay the costs of grievance arb itration. He also warned Clingenpeel that if the Shop Committee affiliated with the IAM, he would cease personally negotiating th e collective bargaining contracts and instead use a third party.

The affiliation meeting and vote took place as scheduled on October 30, 1994, with 24 employees attending, only two of whom worked at Plant 1. IAM officials at the meeting informed the employees in attendance about the specific consequences of a n affiliationwith the IAM, including that the IAM had an international constitution that would bind the affiliation, and that bylaws existed for the IAM and local lodge

. However, neither the constitution nor bylaws were provided for the employees to review at the meeting. An affiliation agreement, which had been prepared before the-4-

meetin g, was read to the employees. The IAM officials also answered employe e questions.
Shortly before 4:00 p.m. the IAM officials left the meeting, and following a brief di scussion, the employees decided to proceed with the affiliation vote. Secret ballo t voting then commenced. The polls remained open until 5:00 p.m., as the notice s concerning the affiliation meeting had specified, although the only votes cast were by the 2 4 employees already in attendance. The vote was 22 to 2 in favor of affiliation

. The IAM officials then retur ned to the meeting and two IAM representatives and three Shop Committee officers signed the affiliation agreement. No Shop Committe e representa tives from Plant 1 signed the agreement because none had attended th e affiliationmeeting. The IAM sent a letter to one Plant 2 employee congratulating the employ ees on the affiliation, and he posted the letter on the bulletin board at Plant 2

. No employees protested the Shop Committee’s affiliation with the IAM. The IAM later demand ed that the Company recognize it as the employees’ exclusive bargainin g representative, but the Company refused.

In October 1995, Galinsky assumed ownership of Continental Rebar (Cont inental), a firm previously owned by his wife. Continental conducts rebar operatio ns at Plant 1. Although Continental’s employees work at Plant 1, they use a separat e entrance to the plant, have minimal contact with the Company’s employee s and, during the relev ant time period, had their own independent union, the Continental Committee, representing them.

On October 31, 1995, Galinsky met with the president of the Shop Committe e and a member of the

Continental Committee. Galinsky told them that he wanted them to merg e the two committees so that he could negotiate one contract with both th e Conti nental and Company employees. He gave the two employees proposed letter s signed by him and addressed to their respective commit tees requesting that negotiations for a new contract begin at a later date than those specified in the existing collective-5-

ba rgaining contracts. He also gave each a separate document stating that the tw o committees agreed to merge and that the merged shop committee would appear as an alter native on any ballot used for voting on union representation. Both employee s signed the letters and merger document, although the Company’s employees neve r voted on the merger.
In December 1995, the Company had three ne gotiating sessions with the merged shop commit tee. On December 21, 1995, the parties reached an agreement an d executed a new collective bargaining contract for a term of January 1, 1996, t o December 3 1, 1998. Several employees from both Plant 1 and Plant 2, as well a s employee s of Continental, signed the contract as representatives of the merged sho p committee. The Company did not contact the IAM concerning the merger of the two committees or the ne gotiation and execution of the new collective bargaining contract.

IAM filed an unfair labor practices charge with the NLRB on December 13 , 1994, which was amended on January 31, 1995, alleging violations of the Act arising from the Company’s refusal to recognize the affiliation with the IAM and Galinsky’ s offer to pay arbitration costs. The IAM filed a second unfair labor pr actices charge with the NLRB on November 8, 1995, which was amended on January 17, 1996, allegin g violati ons of the Act arising from the merger of committees and the Company’ s negotiatio n

and execution of a collective bargaining contract with the merged sho p committee.
The first unfair labor practices cha rge, filed on December 13, 1994, was initially dismissedby the Regional Director of the NLRB on March 16, 1995. This dismissal was appealed by the IAM to the Gen eral Counsel. That appeal was still pending when the second unfair labor practice charge was filed by the IAM on November 8, 1995

. In a letter dated January 22, 1996, the Regional D irector partially revoked his dismissal
as to some allegations in the first charge. Nine days later, the NLRB issued an order consolidating the first and second charges into one case.The NLRB did make a minor modification to the ALJ’s order that is not re levant 3 to this petition for review.
-6- The consolidated case w as heard by an Administrative Law Judge (ALJ). After considering the facts outlined above, the ALJ denied the Company’s motion to dismiss allegations in the first charge, ruling that they were not time-barred. The ALJ further ruled that: (1) the affiliation of the Shop Committee and the IAM was proper; (2) the Com pany unlawfully refused to recognize the IAM as the bargaining agent of th e employees ; (3) the Company unlawfully initiated the merger of the two sho p committees; (4) the Company unlawfully recognized, bargained with, and executed a collective bargaining contract with the merged shop committee; and (5) the Company made unlawf

ul promises to pay for arbitration costs prior to the affiliation vote. Th e ALJ entered an order requiring the Company to recognize and, on request, to bargain with the IAM. The Company appealed and on June 24, 1997, the NLRB affirmed the ALJ’s findings, ruling, and order. The Company petitions for review, and the NLRB 3 cross petitions for enforcement of the order.
II. Analysis
The Company makes four arguments for reversal of t he NLRB’s order. It claims the NLRB erred in: (1) denying its motion to dismiss the allegations in the first unfair labor p ractice charge as time barred; (2) concluding that the affiliation of the Sho p Committee w ith the IAM was proper; (3) ruling that the Company violated the Act by initia ting the merger of the two shop committees; and (4) ruling that the Compan y violated the Act by making promises to pay arbitration cost s prior to the affiliation vote.

In rev iewing the NLRB’s order, we give “great deference” to the NLRB’ s affirmat ion of the ALJ’s findings. Pace Indus., Inc. v. NLRB , 118 F.3d 585, 590 (8th Cir. 1997) (internal quotation omitted), cert. denied , 118 S. Ct. 1299 (1998). We will enforce the NLRB’s order if the NLRB has “correctly applied the law and its factual-7-

findings a re supported by substantial evidence on the record as a whole, even if w e might have reached a different decision had the matter been before us de novo.” Id

. (internal quotation omitted).

A. The Motion to Dismiss

The Company first claims that its motion to dismiss should have been grante d because the allegations made in the first unfair labor practices charge were time-barred under section 10(b) of the Act, 29 U.S.C. § 160(b). The Company concedes that the
se cond unfair labor practices charge was timely. Section 10(b) of the Act provide s “[t]h atno complaint shall issue based upon any unfair labor practice occurring mor e than six months prior to the filing of the charge with the Board . . . .” 29 U.S.C. § 160 (b). The Company argues that the NLRB violated this section when it considered allegations from the first charge that had b een reinstated by the Regional Director more tha n six months after the allegations had occurred, citing Ducane Heating Corp. , 27 3 N.L.R.B. 1389 (1985), enforced per me m. , 785 F.2d 304 (4th Cir. 1986), and enforced sub nom. International Union of Elec. Workers , 785 F.2d 305 (4th Cir. 1986). W e disagree.

In Ducane Heating , the Regional Direct or dismissed a charge and no appeal was filed. The Regional Director then sua sponterei nstated the dismissed charge more than nine months afte

r it had been filed. The NLRB stated that when a charge is dismissed and such dismissal is not appealed, “the charge has been disposed of and, in effect , ceases to exist.” Ducane Heating , 273 N.L.R.B. at 1391. Thus, absent fraudulen t concealment

or some other basis for equitably tolling the six month period, the NLRB ruled th at the disposed charge cannot be reinstated more than six months after th e allegations occurred. Id.

The Ducane Heating rule does not apply here. In this case, the IAM ha d appealed the dismissal of the first charge to the General Counsel and this appeal was-8-

pending when the Regional Director reinstated some of the allegations from the charge. Unlike in Ducane Heating , the charge had not been finally resolved because of th e pending appeal. See Redd-I, Inc. , 290 N.L.R.B. 1115, 1118 (1988) (“When there is a pending tim

ely charge on file, however, [the charged party] has no right to assume his liabi lity is extinguished . . . .”). The General Counsel could have reinstated th e allegations from the first charge on appeal, and we see no re ason why the NLRB cannot delegate t his authority to allow the Regional Director, sua sponte , to reinstate thos e same allegations.

We also r eject the Company’s argument that because rules in the NLRB’ s casehandling manual are in consistent with the ALJ’s reinstatement of these allegations
we must reverse the NLRB’s denial of the Company’s motion to dismiss. Th e
cas ehandling manual is not binding on this court or the NLRB. See Children’s Nat' l Med. C tr. , 322 N.L.R.B. 205, 205 n.1 (1996). The NLRB did not err in denying th e Company’s motion to dismiss.

B. The Affiliation
Section 8(a)(5) of the Act makes it unlawful for an employer “to ref use to bargain collectiv ely with the representatives of his employees,” subject only to exceptions not applicable in

this case. 29 U.S.C. § 158(a)(5). Section 7 and 8(a)(1) of the Act make it unlawful for an employer “to interfere with . . . employe es in the exercise of the rights guarant eed” under the Act, including the right “to bargain collectively throug h rep resentatives of their own choosing.” 29 U.S.C. §§ 157, 158(a)(1). Because th e NLRB found that the affiliation between the Shop Committee and the IAM was proper, it ruled that the Company violate d the Act by refusing to recognize and to bargain with the IAM, and it ordered the Comp any to recognize and, on request, to bargain with the IAM.-9-

The Company argues that the affiliation between the Shop Committee and th e IAM was improper and therefore that it did not violate the Act by negotiating an d
exec uting the new collective bargaining contract with the merged shop committee s rather than the IAM. When a union affiliates with another union it raises the issue of whether there is a “question of representation,” which occurs when “it is unclear whether a majority of employees continue to support the reorganized union.” NLR B v. Financial I nst. Employees , 475 U.S. 192, 202 (1986) ( SeaFirst ) (internal quotations omitted); Minn-Dak Farmers Co-op. v. NLRB , 32 F.3d 390, 393 (8th Cir. 1994). When
a union desires to affiliate with another union an election is required and the NLR B mak es two central findings to determine if the affiliation election was proper: (1 ) whether the affiliation election was conducted with adequate due process safeguards; and(2) whether there is “substantial continuity” between the pre- and post-affiliation unions. SeaFirst , 475 U.S. at 198-99; May Dep’t Stores Co. v. NLRB , 897 F.2d 221, 225-26 & n.6 (7th Cir.), cert. denied , 498 U.S. 895 (1990).
In this case, the NLRB found that due process safeguards were met and th ere was substantial continuity between the Shop Committee and the IAM. The Company attacks both of these findings. The NLRB’s f indings are “entitled to deference if supported by sub stantial evidence on the record as a whole.” Minn-Dak , 32 F.3d at 393. I n reviewing these findings, we are cognizant of the Supreme Court’s observation i n SeaFirst that “all ow[ing] employers to rely on employees’ rights in refusing to bargain with” a ne wly affiliated union “is not conducive to industrial peace.” 475 U.S. at 209 (internal quotation and alteration omitted).

1. Due Process

We first address the Company’s argument that the affiliation election lacke d minimal due process safegua rds. The Company claims that the notice of the affiliation election was inadequate. Minimal standards of due process require that notice of the affiliation election be given to the union members. SeaFirst , 475 U.S. at 199. TheAltho ugh it does not affect our analysis, we note that Clingenpeel asked th e 4 Company fo r the addresses of all the employees more than three weeks before th e affili ation vote and his request was denied. It appears that all employees would have rece ivedmailed notice of the election if the Company had simply provided th e addresses, thus eliminating the need for the Company to argue tha t the union denied the employees their rights to notice of the affiliation vote. -10- employer has t

he burden of proving that due process was not satisfied. Sullivan Bros. Printers, Inc. v. NLRB , 99 F.3d 1217, 1222 (1st Cir. 1996).

The re cord shows that a notice of the affiliation meeting and election wa s continuously posted on the Plant 2 bulletin board for 23 days prior to the election—from October 7 until the vote on Oct ober 30. A second notice was posted at Plant 2 a week prior to the el ection. It was certainly reasonable for the NLRB to find that all th e emplo yees at Plant 2 had notice of the affiliation election. Also, at the all-employe e
mee ting 13 days prior to the affiliation vote, Company president Galinsky expresse d oppositio n

to the Shop Committee affiliating with another union. Further, the recor d shows that about 60 notices were distributed to employees outside of Plant 1 durin g shift cha nges on October 24 and 27. (Jt. App. at 173, 244.) The evidence shows that some employees refused the notices, and there is nothing in the record to suggest that any of the handbillers refused to give notices to any empl oyees. A reasonable inference may be drawn from this hand billing, as well as from Galinsky’s comments at the allemployee meeting, that the vast m ajority of employees at Plant 1 also had notice of the meeting. Although the notice of the affiliation election provided to the employees in this
case was l ess than ideal, our review of the record as a whole convinces us that th e NLRB’s finding that t

he notice of the affiliation election satisfied minimal due process standards is supported by substantial evidence. 4

Th e Company also claims that there was an inadequate opportunity for th e employees to discuss the proposed affiliation pri or to voting. Minimal standards of due process require that “an adequate opportunity for members to discuss the [affiliation]-11-

e l ection” be provided and that “reasonable precautions to maintain ballot secrecy” be ta ken. SeaFirst , 475 U.S. at 199. The Company concedes that ballot secrecy wa s maintained.
After reviewing th e record as a whole, we are satisfied that the NLRB’s finding that t he employees were provided an adequate opportunity to discuss the propose d af filiationis supported by substantial evidence. The record shows that the propose d affiliation agreement was read verbatim to the employ ees at the affiliation meeting prior to the vote . The employees were told that the current collective bargaining contrac t would remain in force until its expirat ion. The employees were also informed that they would elect their own negotiating committee and have full control over negotiations and that the IAM would only intervene and provide assistance if the negotiators requested such help. The IAM officials explained to the employees that the IAM had a constitution and that the local and district lodges had bylaws, all of which would b e binding on t he members. Although the Company relies heavily on the fact that th e IAM’s constitution and local and district l odge bylaws were not provided for employee inspection at the meeting, that does not require us to overturn the NLRB’s finding that suffic ient opportunity to discuss the proposed affiliation was provided. The IA M offici als explained the $20 per month dues, the right not to join and to pay this as a service fee, and the right not to pay the dues or fees and the IAM w ould still be required by law to represent

the employees. All employee questions were also answered at the meeting. Fi nally, we deem it significant that no employee has objected to either th e procedures used to discuss the affiliation or to the affiliation itself.
2. Substantial Continuity

We next address the Company’s argument that the affiliation lacks substantia l continuity. There is a lack of substantial continuity between th e pre- and post-affiliation organiz ations if there are changes “sufficiently dramatic to alter the union’s identity ” such that it raises a question of representation. SeaFirst , 475 U.S. at 206. In-12-

making this determination, the NLRB and this court consider the totalityof the situation, in cluding such relevant factors as: “comparison of the membership and leadershi p before and after the affiliation; the effect on membership rights and dut ies; and the effect of affiliatio n on the procedures for contract negotiations, administration and grievance processing.” Minn-Dak , 32 F.3d 395. The employer has the burden of proving that the affiliation lacks substantial continuity. Id.

Our rev iew leads us to conclude that the NLRB’s finding that substantia l continuity existed after the affilia tion is supported by substantial evidence in the record as a whole. Although the IAM’s local lod ge alone has between 600 and 800 members, far more members than were in the independent Shop Commi ttee prior to the affiliation, the evidence supports the NLRB’s finding that the employees have retai ned control over much of the union’s operation. An increase in the number of members alone canno t prove a lack of substantial continuity. See May Dep’t Stores , 897 F.2d a t 229 n. 9. The record sh ows that the employees held an election shortly after the affiliation and three officials were retained and one was replaced. These leaders were elected by th e employe es themselves without any outside involvement. Further, the employee s ret ainedthe right to elect their own negotiating teams for collective bargaining. Th e IAM woul d only assist if requested by the negotiating team. The employees als o retained the right to decide whether to accept contract proposals. Rega rding grievances, the testimony before the ALJ was that t he local employees’ leaders would have control over whether to take a particula r grievance to arbitration and IAM officials would only become involved in the process if requested. The emplo yees also continued to have the rightto choose whether or not to pay dues because both Plant 1 and Plant 2 are i n “right-to-work” states and, therefore, no emplo yees could be forced to pay dues or fees to the IA M. This evidence provides adequate support for the ALJ’s finding that th e employ ees had significant control over negotiation, grievances, and leadership, both before and after affiliation, sufficient to show substantial continuity.-13- C. Merger of the Shop Committees

Section 8(a)(2) of the Act prohibits employers from interfering with “th e formation or administration of any labor organization.” 29 U.S.C. § 158(a) (2). Sections 7 and 8(a)(1) of the Act prohibit an employer from interfering with “employees in the exercise of their rights guaranteed” under the Act, including the right “to bargai n collecti vely through representatives of their own choosing.” 29 U.S.C. §§ 157 , 158(a)(1). The NL RB ruled that the Company violated these sections by initiating the merger of the Shop Committee and the Continental Committee, and by negotiating and ente ring into a collective bargaining contract with the merged shop committee. Th e Com pany argues that the NLRB’s ruling is erroneous because the Continenta l Committee has never been a separate bargaining unit, and therefore the Company did not viola te the Act when it merged the two committees. We reject this argumen t because the NLRB’s finding that the Continental Committee was a separate bargaining unit when it m

erged with the Shop Committee is supported by substantial evidence on the record as a whole.

Before Company president Galinsky acquired Continental from his wife , Continental employees had been represented by their own shop committee, th e Continental Committee. The Continental employees had their own colle ctive bargaining contract with Continental, separate from the Company’s employees. There is n o evidence to show that after Galinsky acquired Continental there were any changes that would de stroy the identity or viability of the Continental Committee as a separat e bar gaining unit. The merger agreement itself, drafted by the Company, calls for th e merger o f “the shop committees of both [the Company] and Continental.” (Jt. App

. at301.) Further, the admitted purpose of the merger was to allow bargaining for one contract instead of two. It is clear that the Company itself viewed the Continenta l Commit tee as a separate bargaining unit. The NLRB’s finding that the Continenta l employees were represented by a bargaining unit separate from the bargaining unit-14-

rep resenting the Company’s employees is supported by substantial evidence on th e record as a whole.
D. Offer to Pay Arbitration Costs

An employer violates § 8(a)(1) of the Act by offering employees benefit s cond itionedon their selection or rejection of a bargaining representative. NLRB v

. Spotlight Co. , 462 F.2d 18, 20 (8th Cir. 1972). The NLRB ruled that the Compan y violated § 8 (a)(1) of the Act when, shortly before the affiliation election in Octobe r 1994, Company president Galinsky offered to pay the Shop Committee’s arbitratio n costs. T he NLRB found that Galinsky offered to pay these arbitration costs in a n attempt to influence the employees to vote against affiliating with the IAM. Th e Company argues that this finding is “factually inaccurate” because Galinsky wa s “simply reiterating an offer which he had made to [Shop Committee] representatives on previous occasions.” (Appellant’s Br. at 32.) We disagree.

The rec ord shows that in October 1994, shortly before the affiliation election , Galinsky told Clingenpeel that if arbitration was the employees’ main concer n underlying their desire to affiliate with the IAM, he would amend the existing collective bargaining contract to state that the Company would pay the costs of grievanc e arbitration. He also w arned Clingenpeel that if the Shop Committee affiliated with the IAM, he would cease personally negotiating the collective bargaining contracts an d instead use a third party. We agree with the ALJ that these latter comments conveyed
a “natural meaning” that negotiations would become more difficult if the Sho p Committee affiliated with the IAM. ( Jt. App. at 57.) The ALJ also considered the fact that Galinsky had made promises to pay arbitration costs in the past, but found that the promises in October 19 95 were meant to influence the affiliation election. Our review of the record as a whole convinces us that substantial evidence supports the NLRB’ s finding that Galinsky’s promises to pay arbitration costs were meant to influence the-15-

affiliationelection in violation of the employees' statutory right to determine thei r bargaining representative without employer interference.

III. Conclusion

We have considere d and rejected all of the Company’s arguments in its petition for review. Accordingly, we deny the petition for review and grant the NLRB’s cross petition for enforcement of the order.
A true copy.

Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT