Source: http://openjurist.org/475/f3d/14/bath-marine-draftsmens-association-v-national-labor-relations-board
Timestamp: 2015-11-27 12:21:47
Document Index: 339184980

Matched Legal Cases: ['§ 158', '§ 8', '§ 158', '§ 8', '§ 8', '§ 8', '§ 301', '§ 8', '§ 301', '§ 301']

475 F3d 14 Bath Marine Draftsmen's Association v. National Labor Relations Board | OpenJurist
475 F. 3d 14 - Bath Marine Draftsmen's Association v. National Labor Relations Board HomeFederal Reporter, Third Series475 F.3d
475 F3d 14 Bath Marine Draftsmen's Association v. National Labor Relations Board 475 F.3d 14
BATH MARINE DRAFTSMEN'S ASSOCIATION; Local Lodges S-6 & S-7, District Lodge 4, International Association of Machinists and Aerospace Workers, AFL-CIO, Petitioners,v.NATIONAL LABOR RELATIONS BOARD, Respondent, andBath Iron Works Corporation, Intervenor.
No. 05-2623.
James B. Coppess, with whom Catherine Fayette, Aaron D. Krakow, Allison Beck, and Daniel W. Sherrick, were on brief, for petitioners.
Kira Dellinger Vol, Attorney, National Labor Relations Board, with whom Fred B. Jacob, Supervisory Attorney, Ronald E. Meisburg, General Counsel, John E. Higgins, Jr., Deputy General Counsel, John H. Ferguson, Associate General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel, were on brief, for respondent.
William J. Kilberg, P.C., with whom Eugene Scalia, William M. Jay, and Gibson, Dunn & Crutcher LLP, were on brief, for intervenor.
Charles I. Cohen, with whom Daniel P. Bordoni, and Morgan, Lewis & Bockius, LLP, were on brief, for amicus curiae Council on Labor Law Equality.
This case arises from an unfair labor practice charge brought by three unions against an employer for unilaterally merging an employee pension plan with that of its parent company. The National Labor Relations Board (the "Board") dismissed the complaint, finding that the employer had a sound arguable basis for interpreting the employees' contract as granting it the authority to merge the pension plan without the unions' consent. After careful consideration, we affirm the Board's order.
Bath Iron Works Corporation ("the Company") builds surface warships for the United States Navy. Three unions have long represented the Company's employees covered under the relevant pension plan: Local Lodge S-6 ("S-6") of the International Association of Machinists and Aerospace Workers ("IAM"), Local Lodge S-7 ("S-7") of the IAM, and the Bath Marine Draftsmen's Association ("BMDA," collectively "the Unions").
The Company established the Bath Iron Workers Pension Plan for Hourly Employees (the "Plan") in 1963. The Plan is governed by the Employee Retirement Income Security Act of 1974 ("ERISA"). Article XII of the Plan addresses amendment, termination, and merger.1 Article 12.1 provides that "[s]ubject to the applicable provisions of any collective bargaining agreement, the Company shall have the right to amend, modify, or suspend the Plan." Under Article 12.2, the Company "reserves the right to terminate the Plan." Article 12.5 governs the transfer of Plan assets in the case of merger or consolidation, but does not mention who has the authority to merge the Plan.2
New benefits stopped accruing under the Plan for S-6 and S-7 members on August 31, 1994, when those employees switched to an IAM multiemployer pension plan. Nonetheless, S-6 and S-7 Plan participants are still eligible for certain benefits under the Plan based on their prior participation.
C. The Collective Bargaining Agreements
During the relevant time period, March 1998 to March 2001, each union had a collective bargaining agreement ("CBA") with the Company. The CBAs between the Company and S-6 and S-7 respectively both briefly refer to the Plan. Both CBAs also provide that the language therein represents only highlights of the Company's benefits program, as the terms and conditions of specific benefits are governed by separate plan documents.3 BMDA's CBA discusses the Plan at greater length, providing that the Plan "shall remain in full force and effect in accordance with the provisions thereof."
D. The Plan Merger
General Dynamics Corporation acquired the Company in 1995. During its 1998 negotiations with BMDA, the Company announced that it was considering a merger of the Plan, which was underfunded, into the General Dynamics Pension Plan. BMDA requested bargaining over the merger of the pension plans, but the Company took the position that the merger was too speculative to warrant negotiations. Shortly after concluding contract negotiations with BMDA, the Company received permission from General Dynamics and the government to merge the plans. The Company then discussed the merger with the Unions, but did not gain their consent. Finally, in October 1998, the Company unilaterally merged the Plan into the General Dynamics Pension Plan.
On October 7, 1998, S-6 and S-7 filed unfair labor practice charges against the Company based on its merger of the Plan, and BMDA followed with its charge on November 27, 1998. A consolidated complaint was issued on July 29, 1999.
The Administrative Law Judge ("ALJ") found that the merger of the Plan violated Sections 8(a)(1) and (5) and 8(d) of the National Labor Relations Act ("NLRA") by materially, substantially, and significantly modifying the terms and conditions of employment of the represented employees. The ALJ also determined that the Unions had not clearly and unmistakably relinquished their right to bargain over the merger.
The Board reversed the ALJ and dismissed the complaint on the ground that the ALJ had applied the incorrect standard in the case. Bath Iron Works Corp., 345 N.L.R.B. No. 33, 2005 WL 2115867 (Aug. 27, 2005). While acknowledging that the "clear and unmistakable waiver" standard applies in an 8(a)(5) unilateral change case, the Board concluded that "the General Counsel's sole allegation is the allegation of unlawful modification of the contracts within the meaning of Section 8(d)." Id. at 3. In such contract modification cases, the Board stated, "the issue is whether the [Company] had a sound arguable basis for its actions." Id. at 5. The Board went on to determine that the Company did have a sound arguable basis for its interpretation that the CBA and the Plan documents allowed the merger. Id. The Board declined to rule on whether the Company's interpretation of the contracts was correct, leaving such determinations to arbitrators and the courts. Id.
BMDA petitioned for review of the Board's decision on or about October 24, 2005, and S-6 and S-7 followed on December 1. The Company moved to intervene on December 21. The cases were consolidated into this appeal on December 23.
The Unions appeal the Board's dismissal on two grounds: First, the Unions argue that the Board incorrectly applied the "sound arguable basis" standard rather than the "clear and unmistakable waiver" standard. Second, they contend that even if the Board applied the correct standard, it erred in finding that the CBAs arguably granted the Company the authority to unilaterally merge the Plan. We address each of the Unions' arguments in turn.4
Sections 8(a)(5) and 8(d) define an employer's obligation to bargain collectively with its employees' representatives regarding "wages, hours, and other terms and conditions of employment." 29 U.S.C. § 158(a)(5), (d). An employer generally may not institute changes with respect to these mandatory subjects of collective bargaining until the parties reach a good faith impasse in bargaining. Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 198, 111 S.Ct. 2215, 115 L.Ed.2d 177 (1991) (citing NLRB v. Katz, 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962)). A union may, however, agree to waive its statutory rights and allow the employer to make changes with respect to a mandatory subject without further bargaining. See Metro. Edison Co. v. NLRB, 460 U.S. 693, 705, 103 S.Ct. 1467, 75 L.Ed.2d 387 (1983) ("This Court long has recognized that a union may waive a member's statutorily protected rights. . . ."); NLRB v. C & C Plywood, 385 U.S. 421, 564, 87 S.Ct. 559, 17 L.Ed.2d 486 (1967) (discussing the Board's power to determine whether a union agreed to give up statutory safeguards).
In order to stabilize collective bargaining agreements, the 1947 revision of the NLRA, the Labor Management Relations Act (LMRA), enacted both the "provisions in §§ 8(d) and 301(a) to prohibit unilateral mid-term modifications and terminations of CBAs and to confer federal jurisdiction over suits for contract violations." Allied Chem. & Alkali Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157, 186, 92 S.Ct. 383, 30 L.Ed.2d 341 (1971).
[W]here there is in effect a collective-bargaining contract covering employees in an industry affecting commerce, the duty to bargain collectively shall also mean that no party to such contract shall terminate or modify such contract, unless [certain requirements are met]. . . . [These requirements] shall not be construed as requiring either party to discuss or agree to any modification of the terms and conditions contained in a contract for a fixed period, if such modification is to become effective before such terms and conditions can be reopened under the provisions of the contract.
29 U.S.C. § 158(d). In enacting § 8(d), "Congress intended . . ., at least in part, to overturn earlier [rulings] that even issues squarely covered in a written labor contract were subject to continuing renegotiation during the life of the contract." Gorman & Finkin, Basic Text on Labor Law 625 (2d ed.2004). From the start, Board members have approached the interpretation of the section with different philosophies. See id. at 624-27 (describing divisions among Board members evidenced in Jacobs Mfg. Co., 94 N.L.R.B. 1214 (1951), enforced, 196 F.2d 680 (2d Cir.1952)).
The role played by the Board in § 8(d) cases is limited. The section applies only to mandatory, not permissive, subjects of bargaining. Allied Chem., 404 U.S. at 184, 92 S.Ct. 383. It is meant to prevent one party from engaging in economic warfare during the term of the contract by disrupting the economic relationship. Id. at 187, 92 S.Ct. 383. The Board's role is to prevent such economic warfare by prohibiting as unfair labor practices clear mid-term modifications of a contract that disrupt the economic relationship. In such situations, the Board may award remedies including a cease and desist order (effectively, an order to adhere to the contract); an order for an employer to compensate employees for unlawfully reduced wages, benefits, or bonuses; or an order stripping employees who unlawfully strike of their status as employees, thereby "subject[ing] them to immediate discharge and jeopardiz[ing] forthwith the union's status as bargaining representative." Gorman & Finkin, supra, at 570.
It is clear that § 8(d) is not meant to confer on the Board broad powers to interpret CBAs. In enacting § 301, Congress determined "that the Board should not have general jurisdiction over all alleged violations of collective bargaining agreements and that such matters should be placed within the jurisdiction of the courts." C & C Plywood, 385 U.S. at 427, 87 S.Ct. 559 (footnote omitted). To do otherwise "would have been a step toward governmental regulation of the terms of those agreements," rather than addressing the mechanisms by which such agreements could be reached. Id. Thus, § 8(d) is commonly understood as being constrained by § 301.
In turn, § 301(a) gives the courts, not the Board, jurisdiction over certain disputes, providing:
Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce