Opinion ID: 185833
Heading Depth: 2
Heading Rank: 1

Heading: The Statutory Duty to Bargain

Text: 17 On review, Regal first argues that the Board erroneously concluded that it had a duty to bargain with the Locals over its decision to convert to manager-operated theaters and thereby eliminate the projectionist position. Regal's argument includes two distinct claims. First, Regal maintains that the Board erroneously concluded that its conversion to manager-operated theaters constituted a transfer of bargaining unit work. Second, Regal contends that the Board applied the incorrect legal standard to determine whether Regal had a duty to bargain. 18 We must uphold the Board's factual findings if supported by substantial evidence on the record considered as a whole. 29 U.S.C. § 160(e); Cobb Mech. Contractors, Inc. v. NLRB, 295 F.3d 1370, 1375 (D.C.Cir.2002). Thus, with respect to findings of fact, we may [not] displace the Board's choice between two fairly conflicting views, even though [we] would justifiably have made a different choice had the matter been before [us] de novo. Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 465, 95 L.Ed. 456 (1951). Reviewing the Board's construction of the NLRA, including its classification of bargaining subjects as terms and conditions of employment, 29 U.S.C. § 158(d), we afford the Board's judgment considerable deference, Ford Motor Co. v. NLRB, 441 U.S. 488, 495, 99 S.Ct. 1842, 1848, 60 L.Ed.2d 420 (1979). We therefore uphold the Board's construction of the Act if it is reasonably defensible. Id. at 497, 99 S.Ct. at 1849. 19 Because substantial evidence supports the Board's finding that Regal transferred bargaining unit work to managers and assistant managers, and because the Board acted reasonably in adopting the ALJ's application of Fibreboard and Torrington to the instant case, we uphold the Board's conclusion that Regal had a duty to bargain over its decision to convert to manager-operated theaters.
20 Regal argues that the Board erred in finding that its conversion to manager-operated theaters resulted in a transfer of bargaining unit work to managers and assistant managers. Specifically, Regal maintains that the Board's mischaracterization stemmed from three factual errors, namely (1) finding that there was any legally significant transfer of work at all; (2) finding no `link' between the change in technology and the decision to [convert] to manager-operated theaters; and (3) finding that Regal `hired new assistant managers to perform' unit work. Br. for Pet'r at 23, 25, 28 (quoting JDA 9). Because the Board's factual findings are supported by substantial evidence, however, Regal's sundry challenges must fail. 29 U.S.C. § 160(e). 21 First, Regal argues that the Board erred in finding that there was any legally significant transfer of work at all. Br. for Pet'r at 23. Emphasizing the technological advances that have changed the projectionist position over the years, Regal maintains that [t]he assignment of the few remaining minimal tasks to managers and assistant managers cannot, in any real sense, be characterized as a transfer of work. Id. at 24. As the General Counsel correctly observes, however, we have previously recognized that the transfer of less work than occurred here is not a mere de minimis violation of the employer's duty to bargain where the change results in the loss of bargaining unit jobs. Int'l Union, UAW v. NLRB, 381 F.2d 265, 266 (D.C.Cir.), cert. denied, 389 U.S. 857, 88 S.Ct. 82, 19 L.Ed.2d 122 (1967) (finding adverse impact on bargaining unit where change in company's shipping method resulted in loss of six bargaining unit jobs). 4 Although technological advances have undoubtedly changed the scope of a projectionist's duties, the record amply supports the Board's finding that the typical projectionist still performs a number of tasks. JDA 163-71, 210-21, 363-70, 432-35. Given the existence of such tasks, plus the undisputed fact that Regal's managers and assistant managers assumed these tasks after the conversion to manager-operated theaters, see Br. for Pet'r at 24, substantial evidence supports the Board's finding that a legally significant transfer of work occurred as a result of the conversion. 22 Next, Regal asserts that the Board erred in finding no `link' between the change in technology and the decision to [convert] to manager-operated theaters. Br. for Pet'r at 25. Although the General Counsel concedes that the motion picture industry experienced a period of dramatic technological change, resulting in the automation of numerous tasks previously performed by projectionists, Br. for Resp't at 43, Regal maintains that [t]he decision to eliminate the [projectionist] position cannot be evaluated separately from the decision to automate, Br. for Pet'r at 27. Yet Regal's argument ignores a crucial fact: no advances in projection technology occurred after 1995 and before the present litigation. JDA 208-09, 324, 351, 436-37. Indeed, most of the technological advances took place during the 1980s. JDA 208-09, 324, 351, 436-37. Notably, Regal does not challenge the ALJ's conclusion that the same duties that the union projectionists had been performing ... prior to the [conversion] are still required and performed. JDA 18. Substantial evidence thus supports the Board's conclusion that Regal's decisions were not founded on any new technological development. JDA 9. 23 Finally, Regal argues that the Board erred in finding that Regal `hired new assistant managers to perform' unit work. Br. for Pet'r at 28 (quoting JDA 9). The Board's conclusion stemmed from the ALJ's explicit finding that Regal hired assistant managers to replace, at least in part, the terminated projectionists. JDA 16-17. Regal maintains that its payroll records do not permit a conclusion that Regal hired new assistant managers to replace the projectionists on a one-for-one basis. Br. for Pet'r at 28. Any increase in management staffing may be explained, Regal asserts, by normal seasonal fluctuations in business, the release of a blockbuster film (Titanic) and the temporary need to train managers and assistant managers to perform projectionist duties. Reply Br. at 8-11. Neither the Board nor the ALJ concluded, however, that Regal hired new assistant managers to replace the projectionists on a one-for-one basis. JDA 16 n.2 (I find ... that some new assistant mangers have replaced projectionist[s] although not necessarily on a quid pro quo basis.). In addition to Regal's payroll records, JDA 73-115, testimonial evidence supports the Board's conclusion that Regal hired some additional managerial employees to perform projectionist duties after the conversion to manager-operated theaters, JDA 187-88, 227-31, 295-98. Although the evidence presents two fairly conflicting views of Regal's staffing increases after the conversion, Universal Camera, 340 U.S. at 488, 71 S.Ct. at 465, substantial evidence supports the Board's findings. 24
25 Having concluded that substantial evidence supports the Board's finding that Regal's conversion to manager-operated theaters resulted in a transfer of bargaining unit work, we now consider Regal's claim that the Board applied the incorrect legal standard to determine whether Regal had a duty to bargain over the conversion decision itself. On review, Regal maintains that the Board did not engage in the proper bargainability analysis because it implicitly relied on the approach of Torrington to the exclusion of the approach in First National Maintenance.  Br. for Pet'r at 22. Given our decision in Rock-Tenn Co. v. NLRB, 101 F.3d 1441 (D.C.Cir.1996), which upheld as reasonable the Board's application of Fibreboard and Torrington to a subcontracting decision that turned on labor cost considerations and involved `the same work under similar conditions of employment,' id. at 1446 (quoting Fibreboard, 379 U.S. at 213, 85 S.Ct. at 404), we must reject Regal's challenge.
26 Under section 8(a)(5) of the NLRA, an employer commits an unfair labor practice by refus[ing] to bargain collectively with the representatives of his employees. 29 U.S.C. § 158(a)(5). The obligation to bargain collectively requires an employer to confer in good faith with respect to wages, hours, and other terms and conditions of employment. Id. § 158(d). An employer thus violates section 8(a)(5) by unilaterally changing an existing term or condition of employment without first bargaining to impasse. 5 Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 198, 111 S.Ct. 2215, 2221, 115 L.Ed.2d 177 (1991). 27 The Supreme Court has interpreted the statutory phrase terms and conditions of employment in two well-known decisions. In Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203, 85 S.Ct. 398, 13 L.Ed.2d 233 (1964), the Court considered whether a company's decision to hire an independent contractor to perform maintenance work previously performed by union employees violated the NLRA. Noting that the [c]ompany merely replaced existing employees with those of an independent contractor to do the same work under similar conditions of employment, id. at 213, 85 S.Ct. at 404, the Court held that the company's decision to contract out its maintenance work fell within the phrase terms and conditions of employment and, consequently, its unilateral action violated the NLRA, id. at 215, 85 S.Ct. at 405. The Court cautioned, however, that its decision does not encompass other forms of `contracting out' or `subcontracting' which arise daily in our complex economy. Id. 28 Nearly two decades later, the Supreme Court further defined the duty to bargain in First National Maintenance Corp. v. NLRB, 452 U.S. 666, 101 S.Ct. 2573, 69 L.Ed.2d 318 (1981), which involved the company's decision to cancel a service contract following a fee dispute and its subsequent firing of the union employees it had hired to work on the cancelled job. In First National Maintenance, the Court identified three types of management decisions: (1) those that have only an indirect and attenuated impact on the employment relationship, such as decisions regarding advertising and financing; (2) those that are almost exclusively `an aspect of the relationship' between employer and employee, such as decisions related to production quotas and work rules; and (3) those that have a direct impact on employment... but [have] as [their] focus only the economic profitability of the business. Id. at 676-77, 101 S.Ct. at 2580 (quoting Chem. & Alkali Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157, 178, 92 S.Ct. 383, 397, 30 L.Ed.2d 341 (1971)). The Court concluded that the employer's decision to close part of its business belonged in the third category. Id. at 677, 101 S.Ct. at 2580. Such decisions require mandatory bargaining, the Court reasoned, only if the benefit, for labor-management relations and the collective-bargaining process, outweighs the burden placed on the conduct of the business. Id. at 679, 101 S.Ct. at 2581. Applying this balancing test, the Court held that the company did not have an obligation to bargain before closing part of its business for purely economic reasons. Id. at 686, 101 S.Ct. at 2584-85. Although the Court intimate[d] no view as to other types of management decisions, such as plant relocations... [and] other kinds of subcontracting, id. at 686 n. 22, 101 S.Ct. at 2585 n. 22, it did observe that  Fibreboard implicitly engaged in [the balancing] analysis described above, id. at 679, 101 S.Ct. at 2581. 29 Despite the Supreme Court's observation that Fibreboard and First National Maintenance represent a consistent analytical approach by which to determine the subjects of mandatory bargaining, the Board's attempts to integrate the two decisions have generated some degree of confusion. Guided by the principles of First National Maintenance, the Board subsequently developed a burden-shifting test in Dubuque Packing Co., 303 N.L.R.B. 386, 1991 WL 146795 (1991), enforced in relevant part sub nom. United Food & Commercial Workers Local 150-A v. NLRB, 1 F.3d 24 (D.C.Cir.1993), to determine whether an employer's decision to relocate bargaining unit work necessitated mandatory bargaining. 6 We affirmed the Board's decision on review, stating that the test accords with [Supreme Court] precedent [and] is fully defensible. United Food, 1 F.3d at 32. The Board did not apply Dubuque 's burden-shifting test in Torrington Industries, Inc., 307 N.L.R.B. 809, 1992 WL 127799 (1992), however, because the case involved not a relocation decision but a subcontracting decision, factually similar to Fibreboard, in which the employer simply replaced unit employees with non-unit employees to perform the same work. Given that the Supreme Court had already addressed this form of subcontracting in Fibreboard, the Board reasoned that there is no need to apply any further tests in order to determine whether the decision is subject to the statutory duty to bargain. Id. at 810.
30 Here, the Board affirmed the ALJ's conclusion that the Fibreboard/Torrington approach governed Regal's decision to convert to manager-operated theaters and thereby eliminate the projectionist position. This conclusion stemmed directly from the ALJ's determination that Regal has continued to operate the same business at the same locations and the only change is in the identity of the employees doing the work. JDA 16. On review, Regal maintains that the Board's decision cannot be sustained due to its reliance upon Torrington, a decision that, in its view, creates a virtual ` per se ' rule that is incompatible with the test established in First National Maintenance.  Br. for Pet'r at 17. Because the Board's decision is both reasonably defensible, Ford Motor Co., 441 U.S. at 497, 99 S.Ct. at 1849, and consistent with this court's precedent, see, e.g., Rock-Tenn, 101 F.3d at 1446, we reject Regal's challenge. 31 Regal's argument relies chiefly upon the Third Circuit's decision in Furniture Rentors of America, Inc. v. NLRB, 36 F.3d 1240 (3d Cir.1994), which criticized the Board for applying the Torrington standard to an employer's decision to subcontract delivery services because of employee theft. Noting that [i]nflexibly applied, the holding in Torrington is at odds with the principles of Fibreboard and First National [ Maintenance ], id. at 1247, the Third Circuit decried the Torrington manner of examining [a] decision to subcontract only to see whether it is analogous to Fibreboard 's general factual framework as simplistic and ... potentially hamhanded, id. at 1248. Determining whether a subcontracting decision requires mandatory bargaining necessitates, the Third Circuit reasoned, an examination of the reasons motivating the decision. Id. Citing the Third Circuit's favorable discussion of Dubuque, id. at 1246-48, Regal argues that the Board should have applied Dubuque 's burden-shifting framework to Regal's decision to convert to manager-operated theaters. 32 The Third Circuit's criticisms of Torrington aside, 7 we have long held that [t]he allocation of work to a bargaining unit is a `term and condition of employment' and that an employer may not unilaterally attempt to divert work away from a bargaining unit without fulfilling [its] statutory duty to bargain. Road Sprinkler Fitters Local Union No. 669 v. NLRB, 676 F.2d 826, 831 (D.C.Cir.1982) (reviewing double-breasted operation in which single employer transferred unit work from union side of firm to non-union side of firm). We have likewise recognized that  First National Maintenance is inapposite to transfer of work cases in the context of double-breasted operations, finding Fibreboard to be the more apt precedent. Road Sprinkler Fitters Local Union No. 669 v. NLRB, 789 F.2d 9, 16 n. 22 (D.C.Cir.1986) (reaffirming the principle that the diversion of bargaining unit work is a mandatory subject of bargaining). 33 Most recently, in Rock-Tenn, we upheld the Board's application of Fibreboard to an employer's decision to permanently subcontract its trucking operations to a third party, thereby eliminating the unit work previously performed by the employer's union-represented drivers. Rock-Tenn, 101 F.3d at 1446. Concluding that the Board permissibly distinguishe[d] what it calls a Fibreboard subcontract from a relocation decision, i.e., the type of decision at issue in Dubuque Packing, we held that it is a permissible reading of the [NLRA] in light of the Supreme Court opinions to hold that when a subcontracting decision turns on labor cost considerations and involves `the same work under similar conditions of employment,' it is a prototype Fibreboard case regardless of the alleged futility of bargaining. Id. (quoting Fibreboard, 379 U.S. at 213, 85 S.Ct. at 404). 34 Although the instant case involves a transfer of unit work to managers and assistant managers, and not a transfer of unit work to an outside subcontractor, we find this distinction to be irrelevant. What matters, in our view, is that Regal, like the employer in Rock-Tenn, transferred `the same work' performed by the union-represented projectionists to its managers and assistant managers `under similar conditions of employment,' and did so, not because of technological change but, instead, to reduce its labor costs. Id. Given our conclusion that substantial evidence supports the finding that Regal's conversion to manager-operated theaters resulted in a transfer of bargaining unit work, we find the ALJ's legal approach, adopted by the Board, to be reasonably defensible. Ford Motor Co., 441 U.S. at 497, 99 S.Ct. at 1849.