1

The Honorable John F. Nangle, United States District Judge for the Eastern

District of Missouri, sitting by designation.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

Nos. 98-3370/3713

___________

McKenzie Engineering Company, *

*

Petitioner/Cross-Respondent, * Petition to Review an Order

* of the National Labor 

v. * Relations Board.

*

National Labor Relations Board, *

*

Respondent/Cross-Petitioner.

___________

Submitted: March 10, 1999

Filed: June 25, 1999

___________

Before McMILLIAN and MORRIS SHEPPARD ARNOLD, Circuit Judges, and

NANGLE,1

 District Judge.

___________

MORRIS SHEPPARD ARNOLD, Circuit Judge.

This case concerns a labor dispute between McKenzie Engineering Company

and the United Brotherhood of Carpenters and Joiners of America, Local 410,

AFL-CIO (the union). The dispute arose during a project involving repairs to an

icebreaker structure located on a dam in the Mississippi River near Keokuk, Iowa. The

union filed charges against McKenzie before the National Labor Relations Board
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(NLRB), which subsequently found that McKenzie had engaged in unfair labor

practices in violation of several provisions of the National Labor Relations Act

(NLRA). See 29 U.S.C. § 158(a)(1), § 158(a)(3), § 158(a)(5). McKenzie petitions for

reversal of the NLRB's decision and remedy order, and the NLRB cross-petitions for

enforcement of its order. We deny McKenzie's petition for reversal and grant the

NLRB's cross-petition for enforcement of its order.

I.

When McKenzie began work on the Keokuk dam project in May, 1995, it was

a party to a "pre-hire" collective bargaining agreement with the union, see 29 U.S.C.

§ 158(f), that covered certain types of construction work in specific counties of Iowa

and Missouri. The agreement required that McKenzie give the union the first

opportunity to provide carpenters to perform work covered by the agreement, and

recognized the union as the bargaining agent for those carpenters. In May and June,

1995, McKenzie hired four union carpenters to work on the Keokuk dam project. In

November, McKenzie fired the union carpenters and replaced them with non-union

workers. For the remainder of the project, McKenzie continued to employ non-union

workers to perform the work previously done by the union carpenters, without giving

the union the first opportunity to refer workers to it. 

The NLRB found that McKenzie’s actions amounted to a repudiation of the

collective bargaining agreement, in violation of 29 U.S.C. § 158(a)(1) (unfair labor

practice to interfere with, coerce, or restrain employees in exercise of rights guaranteed

under the NLRA) and § 158(a)(5) (unfair labor practice to refuse to bargain collectively

with representatives chosen by employees). See also NLRB v. W. L. Miller Co., 871

F.2d 745, 746, 748 (8th Cir. 1989) (pre-hire agreement binds employer for its term).

McKenzie concedes that it withdrew recognition from the union and began hiring nonunion workers but contends that no violation occurred, because the provisions of the

collective bargaining agreement did not include the type of construction work involved

in the Keokuk dam project. In support of its position, McKenzie relies on language in
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the collective bargaining agreement that recognizes the existence of a separate

agreement covering "Highway and Heavy construction work," and provides that "[t]his

Agreement excludes work under the Highway and Heavy ... contract[]." 

The "Highway and Heavy" contract, to which the union and certain contractors

were signatories, covered work on "dams" and "breakwaters," which was arguably the

type of construction work performed by the carpenters on the Keokuk dam project.

Although McKenzie was not itself a party to the "Highway and Heavy" contract, it

points out that the collective bargaining agreement does not state that an employer must

be a signatory to that contract for the exclusion to apply. Thus, McKenzie contends,

the collective bargaining agreement did not apply to the work on the Keokuk dam

project, because that work was "work under [the] Highway and Heavy ... contract[]."

We agree with the NLRB, however, that this language in the collective

bargaining agreement is at best ambiguous with respect to the central question here,

namely, whether an employer who is not itself a party to the "Highway and Heavy"

contract can nevertheless be engaged in work "under" that contract, and thus excepted

from the coverage of the collective bargaining agreement. In light of this ambiguity,

we think that the NLRB properly looked beyond the four corners of the agreement to

consider the parties' practice, usage, and custom regarding the agreement. See

Transportation-Communication Employees Union v. Union Pacific Railroad Co., 385

U.S. 157, 161 (1966); see also Rainbow Glass Co. v. Local Union No. 610, 663 F.2d

814, 817 (8th Cir. 1981). We further note that where, as here, the terms of a collective

bargaining agreement are ambiguous, questions of its interpretation must be resolved

by the trier of fact, and we will accord deference to that interpretation. See Central

States, Southeast and Southwest Areas Pension Fund v. Kroger Co., 73 F.3d 727, 732

(7th Cir. 1996). 

We think that substantial evidence exists in the record to support the NLRB's

finding that both McKenzie and the union believed that the collective bargaining
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agreement applied to the Keokuk dam project (and thus that it did in fact apply) and

that both parties adhered to the terms of that agreement until McKenzie repudiated it

in November, 1995. Since becoming incorporated in 1986, McKenzie had been a party

to several successive collective bargaining agreements with the union and had followed

the conditions set out in those agreements when hiring carpenters to perform work on

earlier construction projects. When it began work on the Keokuk dam project in May,

1995, McKenzie continued its practice of hiring carpenters through the union and

applying the terms of the collective bargaining agreement. 

From May until November, neither McKenzie nor the union raised any question

regarding the applicability of the agreement, or the possible exclusion of the Keokuk

dam project under the "Highway and Heavy" contract provision. On the contrary,

during that period McKenzie exclusively hired employees referred by the Union for

carpentry work on the project and handled various employee complaints with the

assistance of the union's business representative. McKenzie, moreover, deducted the

amounts specified in the collective bargaining agreement for dues, vacation, and

pension funds. Finally, statements by McKenzie's president suggest that he considered

the union carpenters to be covered by the agreement: For example, he testified that

during a dispute with the carpenters over their refusal to work in the rain, he said,

"[Y]our contract doesn't read like that at all." 

We therefore conclude that substantial evidence exists in the record to support

the NLRB's finding that McKenzie repudiated the collective bargaining agreement with

the union in violation of two sections of the NLRA. See 29 U.S.C. § 158(a)(1),

§ 158(a)(5). Indeed, McKenzie's posited construction of the agreement is barely

plausible. 

II.

The NLRB also found that McKenzie discharged union carpenters Fred Arnold,

Donald Patterson, Steve Perry, and Mark Spiekermeier because of their union
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membership and as part of the company’s plan to repudiate the collective bargaining

agreement with the union, in violation of several provisions of the NLRA. See 29

U.S.C. § 158(a)(1), § 158(a)(3) (employer may not use discriminatory employment

practices to discourage membership in labor organizations). 

McKenzie points out that in the union's complaint to the NLRB, the NLRB

General Counsel (who presents the union's position to the NLRB) alleged that

McKenzie discharged the four union carpenters because they “assisted the Union and

engaged in concerted activities,” not because of their union membership or as part of

the company’s plan to sever relations with the union. Relying on this discrepancy,

McKenzie contends that the NLRB violated due process by finding violations based

on a “new 'theory' of liability” outside the scope of the allegations by the union without

giving McKenzie notice and an opportunity to litigate the issue. 

We disagree. It is clear from our precedents that “[a] respondent to an agency

action ... has been accorded due process if the record shows that it understood the

issues and was afforded a full opportunity to meet the charges.” Citizens State Bank

v. FDIC, 751 F.2d 209, 213 (8th Cir. 1984); see also NLRB v. Mackay Radio and

Telegraph Co., 304 U.S. 333, 350 (1938). Regardless of the specific allegations made

in the complaint, we think that it is clear from the record that a significant portion of the

litigation in this case focused on whether McKenzie discharged the employees in

question as an integral part of its plan to terminate its relationship with the union. We

believe that McKenzie had a full and fair opportunity to defend its decision to fire the

union carpenters, and we therefore conclude that no due process violation occurred.

McKenzie also objects to the NLRB’s factual findings and contends that it

discharged all four carpenters for legitimate reasons unconnected to their union

membership. The company maintains that it fired Mr. Arnold and Mr. Perry because

they failed to show up for work on the morning of November 1. It further maintains

that it fired Mr. Patterson and Mr. Spiekermeier because they engaged in a “work
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stoppage” at the construction site that same day. The NLRB found, however, that

McKenzie failed to show that the four employees would have been discharged for those

reasons in the absence of a plan by McKenzie to terminate its relationship with the

union. See Pace Industries, Inc. v. NLRB, 118 F.3d 585, 590 (8th Cir. 1997), cert.

denied, 118 S. Ct. 1299 (1998) (in mixed-motive case, once NLRB General Counsel

establishes prima facie case that protected conduct was motivating factor in employer’s

decision, burden of production shifts to employer to show that same action would have

taken place in absence of protected conduct). 

We think that the record contains sufficient evidence to support the NLRB’s

findings. McKenzie presented no evidence that it would have fired Mr. Arnold and

Mr. Perry for their unexcused absences on November 1 if it had not intended to sever

relations with the union. Although McKenzie's president testified that he complained

to the union's business representative about the employees’ absences on the morning

of November 1, it is undisputed that the conversation contained no suggestion that

McKenzie was considering discharging Mr. Arnold and Mr. Perry for their absences.

Indeed, although McKenzie's president initially testified at the hearing before an

administrative law judge that Mr. Perry was fired because of the November 1 absence,

he later testified that Mr. Perry was a “very good” worker but was fired because “if you

have three of them gone you might as well have the fourth one gone.” We think that

the NLRB reasonably found from this testimony that McKenzie’s proffered reason for

discharging Mr. Arnold and Mr. Perry was pretextual and that the carpenters were in

fact fired as part of McKenzie’s plan to sever its relationship with the union.

As for McKenzie’s proffered reason for terminating Mr. Patterson and

Mr. Spiekermeier, at the hearing both Mr. Patterson and Mr. Spiekermeier denied

having engaged in a work stoppage on November 1. They further testified that the

project supervisor called off work later that morning because it had started to rain and

that they decided to stop at the union hall on their way home to chat with the union's

business representative. All three men testified to the effect that McKenzie's president
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walked into the business representative's office, asked Mr. Patterson and

Mr. Spiekermeier why they were not at work, and then said, according to the business

representative, “I quit, I’m getting my own people, you go your way, I’ll go my way.”

The NLRB credited the testimony of Mr. Patterson, Mr. Spiekermeier, and the business

representative over that of McKenzie’s witnesses. After carefully reviewing the record,

we see no reason to set aside the NLRB’s credibility findings. See Pace Industries,

Inc., 118 F.3d at 590 (court affords great deference to NLRB’s affirmation of

administrative law judge’s findings and credibility determinations).

We therefore conclude that sufficient evidence exists in the record to support the

NLRB’s finding that McKenzie fired Mr. Arnold, Mr. Patterson, Mr. Perry, and

Mr. Spiekermeier because of their membership in the union and in furtherance of a plan

to withdraw recognition from the union, in violation of two sections of the NLRA. See

29 U.S.C. § 158(a)(1), § 158(a)(3).

III.

The NLRB also found that McKenzie violated 29 U.S.C. § 158(a)(1) by

discouraging Vern Pascal, a diver hired by McKenzie to work on the Keokuk dam

project, from joining the union and by encouraging him to withdraw his membership

from the union after he had joined. We think that ample evidence exists in the record

to support that finding. 

Mr. Pascal testified that on two occasions McKenzie's president offered to pay

him $2.00 per hour above the union’s pay scale if he would refrain from joining the

union. Mr. Pascal also testified that when the union's business representative

approached him about joining, McKenzie's president stood behind the business

representative throughout the conversation and shook his head “no.” Finally,

Mr. Pascal testified that a few weeks after he joined the union, and soon after

McKenzie discharged the other union employees, McKenzie's president again

approached him and explained that he “would like to do away with the union.”
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According to Mr. Pascal, McKenzie's president offered him a company-sponsored

health plan and offered to reimburse the $250 union initiation fee that he had paid if he

would withdraw his union membership.

In his own testimony, McKenzie's president offered alternative explanations for

his discussions with Mr. Pascal regarding wages and benefits and for his negative

headshaking during the conversation with the union's business representative. The

NLRB credited the testimony of Mr. Pascal over that of McKenzie's president,

however, and we defer to that credibility determination. See Pace Industries, Inc.,

118 F.3d at 590. We conclude that the record contains substantial evidence to support

the NLRB’s finding that McKenzie violated 29 U.S.C. § 158(a)(1) by offering

Mr. Pascal economic inducements to dissuade him from joining, or continuing his

membership in, the union.

IV.

McKenzie's president made several statements in the presence of his employees

on the Keokuk dam project that the company “would have to go non-Union” and that

unions "were on their way out.” The NLRB found that these remarks had an

“inherently coercive impact” upon the employees who overheard them and thus

interfered with the employees' rights in violation of 29 U.S.C. § 158(a)(1). See

DeQueen General Hospital v. NLRB, 744 F.2d 612, 614 (8th Cir. 1984) (test is

whether employer engaged in conduct that reasonably tends to interfere with, restrain,

or coerce employees in exercise of rights guaranteed by NLRA). McKenzie contests

that finding.

In reviewing the NLRB's finding, this court "must recognize the Board's

competence in the first instance to judge the impact of utterances made in the context

of the employer-employee relationship." NLRB v. Gissel Packing Co., 395 U.S. 575,

620 (1969). After carefully reviewing the record, we believe that the NLRB was

reasonable in determining that the statements in question amounted to an unlawful
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attempt to interfere with the employees' right to union membership, in furtherance of

a plan to terminate McKenzie's relationship with the union. We therefore conclude that

substantial evidence exists in the record to support the NLRB's finding that those

remarks violated 29 U.S.C. § 158(a)(1).

V.

The NLRB issued a remedy order requiring, among other things, reinstatement

and back pay for the four discharged union employees. McKenzie contends that

reinstatement and back pay are inappropriate remedies because the Keokuk dam

project has been completed and there is no evidence that McKenzie would have hired

these same individuals for subsequent construction projects. 

We believe, however, that the appropriateness of such a remedy should be

resolved at the compliance stage of this proceeding. See Sure-Tan, Inc. v. NLRB, 467

U.S. 883, 902 (1984) (“courts have long recognized the Board’s normal policy of

modifying its general reinstatement and backpay remedy in subsequent compliance

proceedings”). At the compliance proceeding, McKenzie will have a full opportunity

to litigate the appropriateness of the NLRB's remedy and to avoid the reinstatement

obligation altogether by showing that the union carpenters would not have been hired

for work on subsequent projects. See Amcar Division, ACF Industries, Inc. v. NLRB,

592 F.2d 422, 432 (8th Cir. 1979) (determination of employees’ entitlement to back

pay was appropriate for litigation at subsequent compliance proceeding); Dean General

Contractors, 285 N.L.R.B. 573, 573-75 (1987) (determination whether, absent

discrimination, employer would have transferred employee to another jobsite upon

termination of initial project is best resolved by factual inquiry at compliance

proceeding). 

VI.

For the foregoing reasons, we deny McKenzie's petition for reversal and grant

the NLRB's cross-petition for enforcement of its order.
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A true copy.

Attest:

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