Source: https://law.justia.com/cases/federal/appellate-courts/F2/950/1324/110404/
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Matched Legal Cases: ['§ 158', '§ 160', '§ 160', '§ 158', '§ 160', '§ 158', '§ 102']

National Labor Relations Board, Petitioner,andsheet Metal Workers International Association, Local Unionno. 20, Intervening Petitioner, v. George Koch Sons, Incorporated, Respondent, 950 F.2d 1324 (7th Cir. 1991) :: Justia
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National Labor Relations Board, Petitioner,andsheet Metal Workers International Association, Local Unionno. 20, Intervening Petitioner, v. George Koch Sons, Incorporated, Respondent, 950 F.2d 1324 (7th Cir. 1991)
US Court of Appeals for the Seventh Circuit - 950 F.2d 1324 (7th Cir. 1991)
Argued Sept. 5, 1991. Decided Dec. 23, 1991
This case is before us upon application of the National Labor Relations Board (the "Board") to enforce its Decision and Order against George Koch Sons, Incorporated ("Koch"). The Board adopted the finding of the Administrative Law Judge (the "ALJ") that Koch failed to bargain collectively and in good faith with the Sheet Metal Workers International Association, Local Union No. 20 (the "Union") and thereby violated Section 8(a) (5) and (1) of the National Labor Relations Act (the "Act"). 29 U.S.C. § 158(a) (5) and (1). The Board found that these violations arose when Koch failed to respond to the Union's questionnaire and when Koch failed to provide the Union with information regarding its business relationship and interconnections with Alpha Industries. The Board concluded that the Union requested this information to determine whether Koch was wrongfully diverting work to Alpha Industries, and it further concluded that this information was relevant to the Union's collective-bargaining duties. Therefore, in its Decision and Order the Board ordered Koch to provide the information requested.
Mr. Harmes, the Union's business representative, who collected much of the information about the relationship between Koch and Alpha Industries, received numerous reports indicating that Koch was diverting work to Alpha Industries. For example, in early 1983, Mr. Harmes spoke with Mr. Vinson about the relationship between Alpha Industries and Koch. Mr. Harmes asked Vinson, a former Alpha Industries employee, to memorialize this conversation in an affidavit. Mr. Vinson complied with this request. The Vinson affidavit states that " [d]uring all of the time I [Mr. Vinson] worked for Alpha Industrial Services, all of my checks for wages and for expenses were made out by Geo. Koch Sons, Inc." Exhibit GC-10. Vinson's affidavit further states that while working at Alpha Industries all the work he performed involved assembling and installing Koch's fabricated materials. Moreover, this affidavit goes on to explain that two of Alpha Industries's supervisors had told Vinson that Alpha Industries was started by Koch as "their own non-union company, because Geo. Koch Sons could not afford to send their union men on small jobs." Id.
The Union, unsatisfied with this response, continued to press for full compliance with its questionnaire. Accordingly, the Union made numerous verbal requests for this information during negotiations that continued from July to November of 1987. In fact, one of Koch's company memoranda indicates that the issue of subcontracting was discussed at some length in at least two negotiation sessions. For example, Koch's memorandum about the September 28, 1987, negotiation session indicates that " ' [t]he existence of union and non-union competition and its effect on KOCH's ability to obtain work was discussed at length, as was its relationship between Alpha [Alpha Industries] and GEORGE KOCH SONS, INC.' " ALJ Decision and Recommended Order at 5 (quoting Exhibit GC-11) (emphasis added). Moreover, this same memorandum states that at an October 7, 1987, meeting there was, once again, a discussion about non-union installation of Koch equipment. Exhibit GC-11. This memorandum further states that the Union made a specific accusation with regard to Alpha Industries's installation of Koch equipment at a job in Michigan. Id.
Koch did not provide the requested information to the Union during the twelve or so negotiation sessions that ensued from July to November 1987.2 Consequently, the Union filed charges on October 26, 1987, alleging that this refusal violated Section 8(a) (5) and (1) of the Act. This dispute was thereafter set for hearing before the ALJ.
On December 14, 1988, the ALJ issued its Decision and Recommended Order where it concluded that Koch's refusal to disclose information within its knowledge and control constituted unfair labor practices in violation of Section 8(a) (5) and (1) of the Act. In this decision, the ALJ found that the Union had an objective factual basis for believing that Koch was involved in double-breasted operations with Alpha Industries. Moreover, the ALJ determined that the requested information was relevant to both the negotiations and the then-current Article II subcontracting provisions. ALJ Decision and Recommended Order at 9-10.
The Board issued a Decision and Order on June 15, 1989,3 whereby the Board affirmed, with modifications, the ALJ's findings and conclusions. The Board affirmed the ALJ's finding that Koch's refusal to provide the relevant information constituted unfair labor practices in violation of Section 8(a) (5) and (1) of the Act. The Board specifically stated in its decision that "the Union had an objective factual basis for believing that the Respondent [Koch] was subcontracting unit work to Alpha and that Alpha and the Respondent were a double-breasted operation." Decision and Order at 1-2, n. 1. Moreover, the Board agreed with the ALJ's determination that the information was relevant to the Union's performance of its job as a collective-bargaining representative. Id. at 2, n. 1.4
The Board petitioned this court for enforcement of its Decision and Order. We have jurisdiction to review the Board's Application for Enforcement pursuant to Section 10(e) of the Act. 29 U.S.C. § 160(e). The standard of review, also governed by Section 10(e), requires this court to uphold Board decisions if its factual findings are supported by substantial evidence on the record as a whole and if its legal conclusions have a reasonable basis in the law. Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S. Ct. 456, 464-65, 95 L. Ed. 456 (1951); 29 U.S.C. § 160(e).
The Board found that Koch violated Section 8(a) (1) and (5) of the Act when it failed to disclose information relevant to the Union's role as a bargaining representative. 29 U.S.C. § 158(a) (5), (1). The Board's finding of a Section 8(a) (5) and (1) violation is a predominantly factual determination and, therefore, we must uphold this determination if "it is supported by substantial evidence in the record as a whole." Mary Thompson Hosp. v. NLRB, 943 F.2d 741, 745 (7th Cir. 1991); 29 U.S.C. § 160(e). " ' [T]his standard of review does not allow us to dabble in fact-finding, and we may not displace reasonable determinations simply because we would have come to a different conclusion if we reviewed the case de novo.' " NLRB v. Illinois-American Water Co., S. Div., 933 F.2d 1368, 1378 (7th Cir. 1991) (quoting NLRB v. P*I*E Nationwide, Inc., 923 F.2d 506, 513 (7th Cir. 1991)).
An employer engages in an unfair labor practice when it "refuse [s] to bargain collectively with the representatives of his employees." 29 U.S.C. § 158(a) (5). The employer's duty to bargain requires that it "furnish all requested, relevant information 'that is necessary to the union in order for it to fulfill its obligation as representative of bargaining unit employees.' " Mary Thompson, 943 F.2d at 745 (quoting Illinois-American, 933 F.2d at 1377). This obligation requires an employer to furnish the union with the information necessary to police a current collective-bargaining agreement or to negotiate a new agreement. General Elec. Co. v. NLRB, 916 F.2d 1163, 1168 (7th Cir. 1990).
A primary consideration when determining whether an employer has a duty to disclose information is whether the information is relevant to the union's collective-bargaining duties. Id. Certain types of information are "so intrinsic to the core of the employer-employee relationship" that they are presumptively relevant. Atlas Metal Parts Co., Inc. v. NLRB, 660 F.2d 304, 310 (7th Cir. 1981) (citations omitted). "Conversely, when the requested information is not ordinarily pertinent to a union's role as bargaining representative, but is alleged to have become pertinent under particular circumstances, the union has the burden of proving relevance before the employer must comply." Id. (citing San Diego Newspaper Guild v. NLRB, 548 F.2d 863, 867 (9th Cir. 1977)).
In Atlas Metal Parts, this court refused to hold, without evidence presented to the contrary, that the issue of subcontracting is so intrinsic to the union's collective-bargaining duties as to make it presumptively relevant. Atlas Metal Parts, 660 F.2d at 310. See also NLRB v. Leonard B. Hebert, Jr. & Co., 696 F.2d 1120, 1124 (5th Cir. 1983), cert. denied, 464 U.S. 817, 104 S. Ct. 76, 78 L. Ed. 2d 88 (1983) (union's requests regarding double-breasted operations are not presumptively relevant). The Union, in this case, like the union in Atlas Metal Parts, failed to present evidence that its requests for information about subcontracting and double-breasted operations were so intrinsic to the Union's duty so as to make them presumptively relevant.
Moreover, the Union's requested information focused to a great extent on the operations of Alpha Industries, an employer with whom the Union did not have a bargaining relationship. As the Board conceded, other courts of appeals have held that a union's request for information about employees with whom a union does not have a bargaining relationship is not presumptively relevant. NLRB v. U.S. Postal Services, 888 F.2d 1568, 1570 (11th Cir. 1989); Walter N. Yoder & Sons v. NLRB, Inc., 754 F.2d 531, 535 (4th Cir. 1985). Accordingly, requests that pertain to the operations of employers with whom the union has no relations are not relevant either. Bohemia, Inc. v. NLRB, 272 N.L.R.B. 1128, 1129 (1984) ("when a union's request for information concerns data about employees or operations other than those represented by the union ... there is no presumption that the information is necessary and relevant to the union's representation of employees.").
The courts apply a liberal discovery-type standard when determining the relevance of an information request. Mary Thompson, 943 F.2d at 745. Under this discovery-type standard, the union is entitled to " 'a broad range of potentially useful information ... for the purpose of effectuating the bargaining process....' " Id. (quoting NLRB v. Pfizer, Inc., 763 F.2d 887, 889-90 (7th Cir. 1985)).
Although the relevance standard is a liberal standard, the courts will not allow the union to go on unfounded fishing expeditions. See General Elec., 916 F.2d at 1167-68; San Diego Newspaper Guild, 548 F.2d at 868. Therefore, just as there are some limits as to what is discoverable information under the Rules of Civil Procedure, there are similar limits to discoverable information in the collective-bargaining context. These limits are not stringent, however; in fact, the Board may find a duty to disclose "if it finds even 'a probability that the information is relevant and that it will be of use to the union in carrying out its statutory duties.' " Illinois-American, 933 F.2d at 1378 (quoting Pfizer, 763 F.2d at 889). The ALJ articulated this burden as requiring the Union to demonstrate "a reasonable basis based on objective facts" for suspecting that the information sought will aid the union in its representational duties. ALJ Decision and Recommended Order at 8. Moreover, other Courts of Appeals, such as the Courts of Appeals for the Fourth, Fifth and Ninth Circuits, have also articulated this discovery-type standard as requiring a showing of reasonable suspicion. See Walter N. Yoder & Sons, 754 F.2d at 535 (if a union wishes to obtain information with regard to a possible contract violation due to the operation of an alter-ego company then the union need only establish "a reasonable basis to suspect such violations have occurred...."); Leonard B. Hebert, Jr., 696 F.2d at 1125 (to obtain information with regard to possible double-breasting in violation of the collective bargaining agreement, " [i]t is sufficient that the information sought is relevant to possible violations where the union has established a reasonable basis to suspect such violations have occurred...."); NLRB v. Associated Gen. Contractors, 633 F.2d 766, 771 (9th Cir. 1980), cert. den., 452 U.S. 915, 101 S. Ct. 3049, 69 L. Ed. 2d 418 (1981) (unions satisfied burden "by showing that the information sought is relevant to investigations of contract violations, and that there is a reasonable basis for further investigation...."). This articulation of the standard for determining relevance is fundamentally the same as that articulated by this court.
As applied to this case, this means that the Union needed to demonstrate the following to the Board: (1) it had a reasonable basis for suspecting that Koch was diverting bargaining unit work through subcontracting to Alpha Industries or by operating Alpha Industries as a second, nonunion company, and (2) there was a reasonable basis for believing that this information would be helpful to its collective-bargaining negotiations. See Walter N. Yoder & Sons, 754 F.2d at 535; Leonard B. Hebert, Jr., 696 F.2d at 1125; Associated Gen. Contractors, 633 F.2d at 771. See also ALJ Decision and Order at 8 (" [t]he central question posed by the pleadings is whether the Union had a reasonable belief based on objective facts that the Respondent (Koch) and another company (Alpha), were engaged in double-breasted operations.").
Implicit in the ALJ's finding of a Section 8(a) (5) and (1) violation is that the Union demonstrated a reasonable belief based on objective facts that Koch was involved in double-breasted operations. See ALJ Decision and Recommended Order at 8-10. Moreover, the Board upheld the ALJ's findings on this matter.6 We find that there is substantial evidence, when viewing the record as a whole, to support this finding.
Nevertheless, the issue is not that simple. This is because the Board, without rejecting the "then-current contract finding," modified the ALJ's conclusions of law and recommended order in a manner which implies that the Board intended to narrow the scope of the ALJ's relevancy findings. This can be seen in the Board's modification of the ALJ's fifth conclusion of law. The ALJ's fifth conclusion of law broadly stated that Koch "failed to bargain collectively with the Union and has thereby engaged, and is engaging in unfair labor practices within the meaning of Section 8(a) (5) and (1) of the Act." ALJ Decision and Recommended Order at 11. The Board, however, modified the fifth conclusion to read as follows: " [b]y refusing to furnish the Union with the requested information relevant to collective-bargaining negotiations, the Respondent failed to bargain collectively and in good faith with the Union and has thereby engaged in unfair labor practices within the meaning of Section 8(a) (5) and (1)...." Board Decision and Order at 2 (emphasis added).
Moreover, decisions by the NLRB and the Court of Appeals for the Sixth Circuit also support the argument that Koch waived the issue of deadlock by failing to present evidence of deadlock before the ALJ. In Camay Drilling Co. v. NLRB, 254 N.L.R.B. 239 (1981) the Board refused to review an issue that was not fully litigated at the hearing stage. 254 N.L.R.B. at 240, n. 9. Likewise, the Court of Appeals for the Sixth Circuit, in Local 594, Int'l Union, United Automobile Workers of America v. NLRB, 776 F.2d 1310 (6th Cir. 1985), held that the party's failure to raise an issue before the ALJ meant that the issue could not be raised for the first time before the Board. 776 F.2d at 1314. These decisions are backed by sound reasoning.
The ALJ, not the Board, is the fact-finder in administrative proceedings. See Sahara Coal Co. v. Office of Workers' Comp. Programs, U.S. Dept. of Labor, 946 F.2d 554, 557 (7th Cir. 1991). That is, the ALJ is to some extent the administrative equivalent of the federal district judge in the civil and criminal system. Indeed, the administrative regulations require the ALJ to follow the rules of evidence to the extent possible in conducting its proceedings. 29 C.F.R. § 102.39. Therefore, just as parties are not permitted, without restriction, to present new evidence on appeal in the civil and criminal context, neither should Koch be permitted to raise evidence and issues to the Board that were available but not raised to the ALJ. Indeed, if parties were permitted to present new evidence to the Board without restriction, then this would disrupt the ALJ's role as fact-finder. Furthermore, in the context of this case, if we considered the deadlock argument at such a late stage, it would overly burden the Union who did not have an opportunity to defend this claim. See Camay, 254 N.L.R.B. at 240, n. 9 ("to determine an issue of this magnitude when it is raised for the first time as a post-hearing theory would place an undue burden on Respondent and deprive it of an opportunity to present an adequate defense."). Therefore, Koch waived the ability to raise this argument before this court.
According to the record, the Union did not receive answers to any of its questions during the ongoing negotiations. Indeed, the record indicates that the only answers that the Union received from Koch were partial answers, received for the first time on February 19, 1988. This was nearly seven months after the initial request and three months after negotiations had ceased. Because the record supports both the finding that the Union had reason to suspect that Koch was diverting work to Alpha Industries, and because the record indicates that further information regarding such a diversion of nonunion work was relevant to the bargaining of a new collective-bargaining agreement, we find that there is substantial evidence based on the record as a whole to uphold the Board's decision that Koch violated Section 8(a) (5) and (1) when it failed to provide the Union with any of the requested information at or near the time of the request.
The "particular means by which the effects of unfair labor practices are to be expunged are matters 'for the Board not the court to determine.' " Virginia Electric Power Co. v. NLRB, 319 U.S. 533, 539, 63 S. Ct. 1214, 1218, 87 L. Ed. 1568 (1940) (quoting International Assoc. of Machinists v. NLRB, 311 U.S. 72, 82, 61 S. Ct. 83, 89-90, 85 L. Ed. 50 (1940)). As such, the Board has wide discretion in formulating its remedies. Indeed, the administrative remedy "should stand 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." Id. 319 U.S. at 540, 63 S. Ct. at 1218-19.
In an attempt to facilitate informed, good-faith collective-bargaining, Section 8(a) (5) and (1) of the Act require parties to disclose information which will be helpful to the Union in carrying out its collective-bargaining duties. See Pfizer, 763 F.2d at 889-90. The Board, by requiring Koch to supply the requested information, is putting the burden on Koch, the noncomplying party, to demonstrate why it is unable to reveal specific information. Placing the burden on Koch, the noncomplying party, fairly achieves the Act's policy of facilitating informed, good-faith bargaining. Therefore, it seems to be within the Board's authority to implement a remedy that leaves to the compliance stage the issue of whether information is within Koch's knowledge and/or control.
Indeed, the Court of Appeals for the Sixth Circuit came to a similar conclusion in NLRB v. Rockwell Standard Corp., Transmission and Axle Div., Forge Div., 410 F.2d 953 (6th Cir. 1969). In that case, the respondent asserted that an order for disclosure, under Section 8(a) (5) and (1) of the Act, should have been denied because there was no showing that the requested information existed or that the respondent had the requested information within its control. Rockwell, 410 F.2d at 958. The Rockwell court found that argument unpersuasive, especially considering that the respondent had made no good-faith attempt to comply with the request. Id.
Moreover, the Courts of Appeals for the District of Columbia and the Tenth Circuit have also considered issues similar to that raised by Koch. These courts found that the possibility of a substantial time and money burden did not excuse the duty to disclose. Instead, these Courts of Appeals agreed that these issues should be reserved for the compliance stage. Safeway Stores, Inc. v. NLRB, 691 F.2d 953, 957 (10th Cir. 1982) ("time and pecuniary considerations, though not irrelevant, are not a basis for refusing to supply requested information. Negotiations concerning a means of reducing the employer's burden are proper at the compliance stage but not at the request stage...."); International Union of Electrical, Radio and Machine Workers v. NLRB, 648 F.2d 18, 26 (D.C. Cir. 1980) (time and money considerations "are not irrelevant and must be considered at compliance stage, but as bases for initially refusing to supply the requested data they are in this case unpersuasive....").
As the ALJ described in his decision, " ' [t]he term double-breasted is used to describe contractors who operate two companies, one unionized and the other nonunionized or open-shop....' " ALJ Decision and Recommended Order at 4-5, n. 4 (quoting Associated Gen. Contractors of California, 272 N.L.R.B. 891, 892, n. 5 (1979))
Although the Board agreed with the ALJ that Koch had violated Section 8(a) (5) and (1) in failing to provide information relevant to the Union's bargaining duties, the Board modified the ALJ's conclusions on this matter. This issue is discussed more fully in Section II of this opinion
In its Decision and Order, the Board specifically stated that it "agree [d] with the judge [ALJ] that ... the Union had an objective factual basis for believing that the Respondent [Koch] was subcontracting unit work to Alpha and that Alpha and the Respondent were a double-breasted operation." Board's Decision and Order at 1-2, n. 1