Source: https://law.justia.com/cases/federal/appellate-courts/F2/658/746/50810/
Timestamp: 2020-02-26 02:11:06
Document Index: 343722062

Matched Legal Cases: ['§ 8', '§ 8', '§ 158', '§ 158', '§ 8', '§ 8', '§ 8', '§ 8', '§ 308', '§ 308', '§ 8', '§ 8', '§ 8', '§ 158', '§ 158']

National Labor Relations Board, Petitioner,andstanley H. Egan and Donald R. Egan, Intervenors, v. the American Can Company; United Steelworkers of America,and Local 5490 of the United Steelworkers Ofamerica, Respondents, 658 F.2d 746 (10th Cir. 1981) :: Justia
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National Labor Relations Board, Petitioner,andstanley H. Egan and Donald R. Egan, Intervenors, v. the American Can Company; United Steelworkers of America,and Local 5490 of the United Steelworkers Ofamerica, Respondents, 658 F.2d 746 (10th Cir. 1981)
US Court of Appeals for the Tenth Circuit - 658 F.2d 746 (10th Cir. 1981) Argued July 13, 1981. Decided Aug. 31, 1981
Charges were filed against all the respondents by two former employees, S. H. Egan and D. R. Egan, who were members of Local 5490 before its decease. On the basis of these charges, the NLRB issued complaints against all of the respondents charging that the Union had violated § 8(b) (1) (A) and (2) of the National Labor Relations Act2 and that the Company had violated the § 8(a) (1) and (3) of the Act.3 Following a hearing held in May of 1977, the Administrative Law Judge recommended, on November 4, 1977, that the Board should order remedial action.
(3) by discrimination in regard to hire or tenure or any term or condition of employment to encourage or discourage membership in any labor organization ... 29 U.S.C. § 158(a) (1), (3).
Section 8(a) (3) goes on to make an exception allowing a union and an employer, in a collective bargaining agreement, to require employees to maintain union membership as a condition of employment. This statute states that only payment of dues and initiation fees may be required as a condition of membership in a union. Section 8(b) prohibits restraint or coercion of employees by unions in the exercise of the rights guaranteed in Section 157 of the general title. Subsection (2) provides that it is an unfair labor practice for a union to cause or attempt to cause an employer to discriminate against an employee in violation of subsection (a) (3). 29 U.S.C. § 158(b) (1) (A) and (2).
The encouragement or discouragement prohibited by Section 8 is not limited to incentives or disincentives to union membership. Rather, it includes encouragement or discouragement of participation in union activities. Radio Officers' Union v. N. L. R. B., 347 U.S. 17, 74 S. Ct. 323, 98 L. Ed. 2d 455 (1954). Thus the question boils down to whether the grant of superseniority to Howard and Schneider interfered with the rights of American Can Company employees to refrain from union activities, or by discrimination impermissibly encouraged participation in union activities.
The Supreme Court in Beth Israel Hospital v. N. L. R. B., 437 U.S. 483, 500-501, 98 S. Ct. 2463, 2473, 57 L. Ed. 2d 370 (1978), had occasion to expound general standards applicable to review of Board orders. The Supreme Court pointed out that it is the Board on which Congress conferred the authority to develop and apply fundamental national labor policy. It is to the Board that Congress entrusted the task of "applying the Act's general prohibitory language in light of the infinite combinations of events which might be charged as violative of its terms." The Court further said that if the Board is to accomplish the task which Congress set for it, it necessarily has to have the authority to formulate rules to fill the interstices of the broad statutory provisions. Ultimately, the problem is to balance the conflicting legitimate interests. The function of striking that balance to effectuate national labor policy is often difficult and delicate, but it is the responsibility which Congress gave to the Board, subject to limited judicial review. N. L. R. B. v. Truck Drivers, 353 U.S. 87, 96, 77 S. Ct. 643, 647, 1 L. Ed. 2d 676 (1957). The role of the judiciary is narrow; a Board order is reviewed for consistency with the Act and for rationality, but if it satisfies these criteria, the Board's application of the rule, if supported by substantial evidence on the record as a whole, is to be enforced. See also N. L. R. B. v. Iron Workers, 434 U.S. 335, 350, 98 S. Ct. 651, 660, 54 L. Ed. 2d 586 (1978); N. L. R. B. v. J. Weingarten, Inc., 420 U.S. 251, 266-267, 95 S. Ct. 959, 968, 43 L. Ed. 2d 171 (1975); N. L. R. B. v. Okla-Inn, 488 F.2d 498 (10th Cir. 1973); U. S. Soil Conditioning v. N. L. R. B., 606 F.2d 940 (10th Cir. 1979).
It would be nice, of course, if the Board members' views provided us with a majority rationale in this case. Within limits which we believe to be established by the NLRA, the treatment of superseniority clauses is an appropriate area for the operation of the Board's special expertise in balancing conflicting interests, so as to effectuate national labor policy. Thus, had a majority of the Board members agreed upon a "defensible construction" of the Act, we would defer to that judgment. N. L. R. B. v. Iron Workers, supra, at 350, 98 S. Ct. at 660. There nevertheless remains a responsibility on this court to follow the statute and the Supreme Court decisions, and in so doing to enforce, modify or deny enforcement of the Board's judgment or decree. Although the court's function is limited, there is a role for it to play in defining the legal standards established by the NLRA. N. L. R. B. v. Brown, 380 U.S. 278, 85 S. Ct. 980, 13 L. Ed. 2d 839 (1965); Allied Chemical & Alkali Workers of America v. Pittsburgh Plate Glass Co., 404 U.S. 157, 92 S. Ct. 383, 30 L. Ed. 2d 341 (1971). In light of the conflict of views on the Board, we are not required to adopt one particular viewpoint, and although we hesitate to add still another viewpoint to those that have already been expressed, we will proceed to expound a decision in accordance with the governing act of Congress.
The policy of the Act is to insulate employees' jobs from their organizational rights. Thus §§ 8(a) (3) and 8(b) (2) were designed to allow employees to freely exercise their right to join unions, be good, bad, or indifferent members, or abstain from joining any union without imperiling their livelihood. The only limitation Congress has chosen to impose on this right is specified in the proviso to § 8(a) (3) which authorizes employers to enter into certain union security contracts, * * * Congress intended to prevent utilization of union security agreements for any purpose other than to compel payment of union dues and fees. * * * No other discrimination aimed at encouraging employees to join, retain membership, or stay in good standing in a union is condoned. Radio Officers' Union v. N. L. R. B., supra, 347 U.S. at 40-42, 74 S. Ct. at 335-336.
The Supreme Court has held also that "union membership" for the purposes of § 8(a) (3) includes "discrimination to discourage participation in union activities as well as to discourage adhesion to union membership. Similar principles govern the interpretation of union membership where encouragement is alleged." Radio Officers' Union v. N. L. R. B., supra, at 40, 74 S. Ct. at 335.
In one of the three cases dealt with in the Radio Officers' Union opinion, the Supreme Court found that a loss of seniority requested by a union and enforced by an employer as punishment for failure to pay union dues on time constituted discrimination to encourage union membership. The Court held that at least in the absence of a valid union security clause in a collective bargaining agreement, such discrimination violated the employee's right "to join in or abstain from union activities, without thereby affecting his job." 347 U.S. at 42, 74 S. Ct. at 336.
Not every action which encourages or discourages union membership is illegal. A possibility exists that such actions can be shown to be justified. Radio Officers' Union, supra, at 44, 74 S. Ct. at 337; American Shipbuilding Co. v. N. L. R. B., 380 U.S. 300, 85 S. Ct. 955, 13 L. Ed. 2d 855 (1965); N. L. R. B. v. Brown, supra. There need not be proof of specific intent to discriminate; proof of presumed intent is enough. Radio Officers', supra, 347 U.S. at 45-49, 74 S. Ct. at 338-340. There need not be proof of an actual encouraging or discouraging effect on the employee. Id. 48-52, 74 S. Ct. 339-342. The decision in N. L. R. B. v. Erie Resistor Corp., 373 U.S. 221, 227-228, 83 S. Ct. 1139, 1144-1145, 10 L. Ed. 2d 308 (1963), recognized that proof of a discriminatory intent can be sufficient proof of invalidity of an otherwise ambiguous act.
In sum, the Supreme Court has set forth the following principles, in the case of N. L. R. B. v. Great Dane Trailers, Inc., 388 U.S. 26, 34, 87 S. Ct. 1792, 1797-98, 18 L. Ed. 2d 1027 (1967):
The above principles are said to be of controlling importance. In determining whether a particular discriminatory practice can be justified by legitimate objectives, or whether such practice should be regarded as illegal in spite of such justification, the competing interests represented by business objectives and employee rights have to be weighed. N. L. R. B. v. Erie Resistor Corp., supra, 373 U.S. at 229, 87 S. Ct. at 1145.
The Supreme Court has not decided a case similar to the present one. However, seniority rights have been recognized as an important part of employment. See Radio Officers' Union v. N. L. R. B., supra, and N. L. R. B. v. Erie Resistor Corp., supra. In the latter case, the Board's determination that a grant of superseniority to strike replacements and strikers who returned to work was inherently discriminatory and in violation of the Act was upheld by the Court. Also, in Patterson v. Tulsa Local No. 513, 446 F.2d 205 (10th Cir. 1971), cert. denied 405 U.S. 976, 92 S. Ct. 1202, 31 L. Ed. 2d 251 (1972), we held that a seniority clause allowing motion picture machine operators to "bump" less senior operators from their jobs violated §§ 8(b) (1) (A) and (b) (2).
The Supreme Court in Aeronautical Industrial District Lodge 727 v. Campbell, 337 U.S. 521, 69 S. Ct. 1287, 93 L. Ed. 1513 (1949), considered a clause granting superseniority to union chairman. Under 50 U.S.C. § 308, World War II veterans returning to work following the war were entitled to return to prior jobs with seniority rights unaffected by their absence due to service in the armed forces. Three veterans challenged the application of a superseniority clause to union chairman during a layoff. They asserted that the superseniority clause violated their rights under 50 U.S.C. § 308 by causing the retention of union chairmen with less service seniority than the veterans. The Court said:
One of the safeguards insisted upon by the union for the effective functioning of collective bargaining is continuity in office for its shop stewards or union chairmen. To that end provision is made, as it was here, against laying them off merely on the basis of temporal seniority. Because they are union chairmen they are not regarded as merely individual members of the union; they are in a special position in relation to collective bargaining for the benefit of the whole union. To retain them as such is not an encroachment on the seniority system but a due regard of union interests which embrace the system of seniority rights. 337 U.S. at 527, 69 S. Ct. at 1290.
The Court also stated: "Because a labor agreement assumes the proper adjustment of grievances at their source, the union chairmen play a very important role in the whole process of collective bargaining. Therefore it is deemed highly desirable that union chairmen have the authority and skill which are derived from continuity in office." 337 U.S. at 528, 69 S. Ct. at 1290-91. The holding was that veterans, like other employees, were subject to superseniority clauses. The Court did not consider the issue of the validity of superseniority clauses under the NLRA.
The Board in subsequent decisions has reiterated the view that superseniority clauses which go beyond layoff and recall for stewards must be justified by the Union. Union Carbide Corp., Chemical & Plastics Operations Div., supra; Chauffeurs, Teamsters and Helpers Local Union No. 633, 230 NLRB 81 (1977), enforced without opinion 578 F.2d 441 (D.C. Cir. 1978); Connecticut Limousine Service, 235 NLRB 1350 (1978), aff'd. in part sub nom. Teamsters Local 20 of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America v. N. L. R. B., 610 F.2d 991 (D.C. Cir. 1979).
The conflict here is not so inherently destructive of important employee rights that it should be held to be unlawful in spite of legitimate justification. But where the conduct is such that an employee's rights could have been adversely affected, the burden is on the responsible party to come forward with proof of justification for the conduct. N. L. R. B. v. Great Dane Trailers, Inc., supra, 388 U.S. at 34, 87 S. Ct. at 1797-98. The Board seems to regard these clauses as presumptively valid when limited to layoff and recall of stewards. We need not pass on the propriety of that approach or viewpoint. See Aeronautical Industrial District Lodge 727 v. Campbell, supra. As to union officers, we read the Board's opinions as holding that the union bears an initial burden of demonstrating that officers awarded superseniority have duties which relate directly to the effective and efficient functioning of the bargaining unit.
We are satisfied that superseniority clauses are discriminatory and do "adversely affect employees' rights to some extent." N. L. R. B. v. Great Dane Trailers, Inc., supra, at 34, 87 S. Ct. at 1798. In the light of the Act's clear prohibition of discrimination and the Supreme Court's cases, it is our conclusion that those who are responsible for invoking or applying a superseniority clause to union officers must initially prove a legitimate and substantial purpose. The exact proof which will be sufficient has to depend on the surrounding circumstances of each case. The responsibility for development of such rules as may be appropriate in this area ought be left to the Board. We do say that in D'Amico v. N. L. R. B., supra, it is the Third Circuit's opinion that as a minimum the Act requires that the official duties and responsibilities of an officer who receives superseniority must help to implement the collective bargaining agreement in a meaningful way. We agree that a less demanding standard certainly would not satisfy the requirement that discrimination must be justified by legitimate and substantial business purposes.
As to the retroactivity contention: We disagree that this is an abrupt change in a previously announced rule. Cf., Retail, Wholesale and Department Store Union v. N. L. R. B., 466 F.2d 380 (D.C. Cir. 1972). In Dairylea, the Board did not, as respondents suggest, adopt a rule that all superseniority clauses are lawful if limited to layoff and recall. Dairylea dealt with superseniority for stewards; superseniority limited to layoff and recall was recognized as lawful "on the ground that it furthers the effective administration of bargaining agreements on the plant level by encouraging the continued presence of the steward on the job." 219 NLRB at 658 (emphasis added).
It does not appear that there are any Board opinions regarding superseniority clauses for union officials prior to Dairylea, supra. The fact that unions and employers may have been negotiating and enforcing such clauses for some time does not preclude the Board from finding such clauses improper when presented with the issue. An administrative agency can rule on a question of first impression in an adjudicative context. See S. E. C. v. Chenery Corp., 332 U.S. 194, 67 S. Ct. 1575, 91 L. Ed. 1995 (1947), reh. denied 332 U.S. 783, 68 S. Ct. 26, 92 L. Ed. 367 (1947), and N. L. R. B. v. Bell Aerospace Co. Div. of Textron, Inc., 416 U.S. 267, 94 S. Ct. 1757, 40 L. Ed. 2d 134 (1974), where the court stated: "The Board is not precluded from announcing new principles in an adjudicative proceeding and the choice between rule-making and adjudication lies in the first instance within the Board's discretion." 416 U.S. 294, 94 S. Ct. 1771.
In the case at bar, adjudication can be viewed as particularly appropriate. There are a wide variety of circumstances in which superseniority might be asserted for union officers. "The Board thus has reason to proceed with caution, developing its standards in a case-by-case manner, with attention to the specific circumstances presented. The Board's judgment that adjudication best serves this purpose is entitled to great weight." 416 U.S. at 294, 94 S. Ct. at 1772. We, therefore, reject the respondent's contention that the Board's order is not to be enforced because of its retroactive impact.
It is for the Board, not the courts, to determine how the effects of unfair labor practices are to be expunged. N. L. R. B. v. Link-Belt Co., 311 U.S. 584, 600, 61 S. Ct. 358, 366, 85 L. Ed. 368 (1941).
Section 10(c) * * * charges the Board with the task of devising remedies to effectuate the policies of the Act. The Board's power is a broad discretionary one, subject to limited judicial review. The relation of remedy to policy is peculiarly a matter for administrative competence. In fashioning remedies to undo the effects of violations of the Act, the Board must draw on enlightenment gained from experience. The Board's order will not be disturbed unless it can be shown that the order is a patent attempt to achieve ends other than those which can fairly be said to effectuate the policies of the Act. Fibreboard Paper Products Corp. v. N. L. R. B., 379 U.S. 203, 216, 85 S. Ct. 398, 405-406, 13 L. Ed. 2d 233 (1964) (citations omitted).
In Union Carbide Corp., Chemical & Plastics Operations Div., supra, it was found that an employer had violated § 8(a) (5) and (1) of the Act by refusing to apply superseniority rights to stewards regarding shift transfers. The employer in that case had relied on Dairylea for the view that superseniority for stewards must be limited to layoff and recall. The Board found that superseniority regarding shift retention was justified, because it served to protect the steward's continued presence in their respective departments. Thus, an employer may be found to be in violation of the Act for improperly allowing or improperly disallowing use of superseniority. In the case of union officers, the lawfulness of superseniority turns on the nature and extent of their collective bargaining duties. A company may thus have to determine the nature of a union officer's duties, an effort which may prove awkward.
The task of balancing such problems as are set forth above as against the need to enforce the provisions of the NLRA is the responsibility of the Board. The Supreme Court has expressed the proposition that both unions and employers are liable for violations of the Act which constitute discrimination in respect to encouragement of union membership. Radio Officers' Union v. N. L. R. B., supra. The Act itself contemplates such liability in the parallel provisions of § 8(a) (1) and (3), and § 8(b) (1) and (2). It cannot be denied that the Company here acceded to the Union's request and in doing so made the unlawful discrimination possible and effective. Therefore, we must refuse the request to overrule the Board's judgment that American Can Company is to be held responsible along with the Unions for the violations shown in this case.
29 U.S.C. §§ 158(b) (1) (A) and (2)
29 U.S.C. §§ 158(a) (1) and (3)