Opinion ID: 747748
Heading Depth: 2
Heading Rank: 2

Heading: Substantively Meritless.

Text: 10 Even though we are satisfied that HBS cannot overcome the procedural default of this claim, we will nevertheless briefly discuss its argument on the merits. As we stated, HBS argues that Section 302 prohibited it from making payments to the Fund, therefore, it did not commit a ULP by refusing to remit payments to the Fund. 11 Section 302 prohibits contributions to a trust fund absent a written agreement. 4 This restriction is in place to insure that employer contributions are only for a proper purpose and to insure that the benefits from the established fund reach only the proper parties. Moglia v. Geoghegan, 403 F.2d 110, 116 (2nd Cir.1968). On this basis, HBS argues that the Board's make-whole remedy offends the policies of Section 302. In addition, HBS contends that the absence of a written agreement subjugates an essential policy of freedom of contract. We are unpersuaded by either of these contentions. 12
13 The Board is charged with fashioning remedies which effectuate the policies of the Act. Sure-Tan, Inc. v. NLRB, 467 U.S. 883, 898-99, 104 S.Ct. 2803, 2812-13, 81 L.Ed.2d 732 (1984). The Board's choice of remedies is subject to limited judicial review. Id. Moreover, the Board's make-whole Order in the instant case is in line with its traditional remedial powers because it seeks to restor[e] the economic status quo that would have [been] obtained but for the [employer's] wrongful [conduct]. NLRB v. J.H. Rutter-Rex Mfg. Co., 396 U.S. 258, 263, 90 S.Ct. 417, 420, 24 L.Ed.2d 405 (1969). Within the Board's Order, the Board pronounced a make whole remedy which included an Order to HBS to cease and desist from unilaterally refusing to make payments to the employee pension fund, annual benefit fund, and health and welfare funds. See HBS I, 296 NLRB 808. 14 Here, Housekeepers' CBA with the Union called for it to remit payments to the Fund. Because HBS is the successor employer 5 to Housekeepers, it maintained a relationship with the Union as a result of that agreement. 6 In HBS II, it was established that HBS' failure to initiate its own terms and conditions of employment and its act of hiring all of Housekeepers' employees, did nothing to combat the impression that any reasonable employee would have ... that the 'new' job merely was a continuation of the old. HBS II, 936 F.2d at 180. Thus, at that point, HBS was precluded from unilaterally changing the terms and conditions of employment without bargaining with the union. HBS' refusal to remit payments to the Fund was therefore a violation of the Act. 15 The Board's remedial power to order HBS to make whole the aggrieved employees is entitled to enforcement 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. Virginia Elec. & Power Co. v. NLRB, 319 U.S. 533, 540, 63 S.Ct. 1214, 1218, 87 L.Ed. 1568 (1943). When Section 302 is viewed against this backdrop, it is clear that the Board's remedy passes muster. Section 302 addresses the threat of foul play permeating an undocumented payment, rather than the type of remedy the Board fashioned here. See Arroyo v. United States, 359 U.S. 419, 425-26, 79 S.Ct. 864, 868-69, 3 L.Ed.2d 915 (1959) (discussing that the policy behind Section 302 was to address the concerns of corruption of collective bargaining through bribery of employee representatives by employers). In short, the Board's make-whole remedy was fashioned to insure the payment of monetary benefits into the Fund to return the employees to the status quo. This cannot be said to offend the policies behind Section 302. We therefore reject this argument. 16
17 HBS next argues that the Board's Order subjugates the basic tenet of freedom of contract. It opines that the Board's Order attempts to create an implied contract between the parties who have agreed on nothing under the premise that it makes the affected employees whole. We disagree. The Board's Order does not offend the notion of freedom of contract; indeed, the Board's Order balances HBS' freedom of contract with its remedial power to restore the status quo. 18 In HBS I, the Board found--and this court later upheld--that by HBS failing to exercise its right as a successor employer to implement its own initial terms and conditions of employment for its employees, the terms and conditions embodied in Housekeepers' contract with the Union became the employees' initial terms and conditions of employment when HBS took over. Although the terms of Housekeepers' CBA were not binding on HBS, it was required to first bargain with the Union to an impasse before unilaterally changing those terms and conditions of employment. NLRB v. Edjo, Inc., 631 F.2d 604, 606-08 (9th Cir.1980). Thus, the Board's Order implicitly recognized HBS' right to depart from the terms of Housekeepers' CBA. The Board's make whole remedy, however, stems from HBS' failure to bargain to an impasse before it refused to make payments to the Fund. This omission, preceded by HBS' failure to implement its own initial terms thus giving employees the appearance that they would be covered by the Housekeeper CBA, was a clear violation of § 8(a)(5) of the Act. HBS cannot now come before us with unclean hands and say the Board interfered with its freedom to contract. 19 In sum, much of HBS' argument is of [its] own making. See HBS II, 936 F.2d at 180. It was HBS' failure to adhere to its duties as a successor employer, which caused it to lose its right to unilaterally depart from its predecessor's contract. We therefore reject HBS' second contention. Accordingly, we hold that HBS' argument is both procedurally barred and, in any event, substantively meritless.