Opinion ID: 394187
Heading Depth: 2
Heading Rank: 1

Heading: Retroactivity of the Agreement

Text: 11 In its petition for review of the Board's decision, the Employer does not challenge the Board's unfair labor practice determinations, nor does it contest the propriety of the Board's order to recognize and bargain with the Council in the four-craft unit. The Employer's sole objection concerns the Board's order requiring any contract agreed upon by the parties to be retroactive to July 26, 1977. The Employer principally contends that the Board's order impermissibly establishes a substantive contract term and therefore should not be enforced. We believe the Employer's objection is well taken. 12 The obligation to bargain collectively does not compel either party to agree to a proposal or require the making of a concession. 29 U.S.C. § 158(d); NLRB v. Tomco Communications, Inc., 567 F.2d 871, 884 (9th Cir. 1978). This provision in our labor laws is based upon the basic principle that the National Labor Relations Act is grounded on the premise of freedom of contract. H. K. Porter Co. v. NLRB, 397 U.S. 99, 107, 90 S.Ct. 821, 825, 25 L.Ed.2d 146 (1970), quoting United Steelworkers v. NLRB, 389 F.2d 295, 300 (D.C.Cir.1967). 13 While the parties' freedom of contract is not absolute under the Act, allowing the Board to compel agreement when the parties themselves are unable to agree would violate the fundamental premise on which the Act is based private bargaining under governmental supervision of the procedure alone, without any official compulsion over the actual terms of the contract. (footnote omitted) 14 H. K. Porter, 397 U.S. at 108, 90 S.Ct. at 826. Therefore, the Board may not prescribe the substantive terms of a collective bargaining agreement, either directly or indirectly. See H. K. Porter, 397 U.S. at 106, 90 S.Ct. at 825; NLRB v. Tomco, 567 F.2d at 884. 15 In a case similar to the present, the Board recognized its limitations and refused a request that certain contract provisions be made retroactive. In Trustees of Boston University, 228 N.L.R.B. 1008 (1977), enforced, 575 F.2d 301 (1st Cir. 1978), vacated on other grounds, 445 U.S. 912, 100 S.Ct. 1271, 63 L.Ed.2d 597 (1980), the Trustees were found to have violated section 8(a)(5) of the Act by its refusal to bargain with the union. The union requested that the Board, in addition to the usual bargaining order, issue an order making all contract provisions involving salaries or fringe benefits retroactive because of the employer's frivolous objections and refusal to bargain. The Board declined to grant such extraordinary relief, stating that: 16 By its request for retroactivity of certain contract provisions, the Union in effect is asking the Board to establish the effective date of the contract with respect to these terms. Since the Board is without power to compel parties to agree to any such substantive provision of a collective bargaining agreement, we shall deny this request. 10  17 n. 10 H. K. Porter v. NLRB, 397 U.S. 99 (90 S.Ct. 821, 25 L.Ed.2d 146) (1970). 18 Id. at 1010. Thus, in Trustees, the Board acknowledged that the effective date of a collective bargaining agreement is a substantive provision and that it could not compel parties to agree to such a provision. 19 Here, the Board has ignored its holding in Trustees and the principles set forth in cases such as H. K. Porter and Tomco. The Board has ordered the Employer to recognize and bargain with the Council in the four-craft unit and if an understanding is reached, embody such agreement in a signed, written contract which shall be retroactive in all respects to July 26, 1977. This order does precisely what the Board acknowledged it had no authority to do it prescribes a substantive provision, the effective date of the contract, in a collective bargaining agreement. 20 The General Counsel presents several arguments to justify the enforcement of the order. First, General Counsel argues that the Board's order does not establish a substantive provision of a contract. We summarily reject this contention as the Board itself in Trustees has ruled otherwise. 21 General Counsel also argues that in previous cases, Board orders according retroactive effect to collective bargaining agreements have been upheld. While this court has enforced orders that have given retroactive effect to collective bargaining agreements, those cases are clearly distinguishable. There, collective bargaining agreements had already been negotiated and agreed upon. The issues in those cases were whether the employer was bound by the agreement or whether the employees were covered by the agreements. See, e. g., NLRB v. Lantz, 607 F.2d 290 (9th Cir. 1979); Authorized Air Conditioning Co. v. NLRB, 606 F.2d 899 (9th Cir. 1979), cert. denied, 445 U.S. 950, 100 S.Ct. 1598, 63 L.Ed.2d 785 (1980); NLRB v. Don Burgess Construction Corp., 596 F.2d 378 (9th Cir.), cert. denied, 444 U.S. 940, 100 S.Ct. 293, 62 L.Ed.2d 306 (1979). After concluding that the employer was bound by contract or that the employees were covered by the contract, the Board ordered the employer to comply with the agreement. The retroactive order merely gave the employees the full benefit of the bargain that had already been agreed upon. The Board was not engaged in prescribing contract terms. 22 General Counsel further contends that even if the effective date of the contract is a substantive term, the principles of H. K. Porter are not violated. General Counsel argues that the Board may not impose terms which it believes the parties should have agreed to, but it may fashion a remedy based upon what the parties would have agreed upon but for the unfair labor practice. In essence, the General Counsel contends that we adopt the decision of the D.C. Circuit in I.U.E. v. NLRB, 426 F.2d 1243 (D.C.Cir.), cert. denied, 400 U.S. 950, 91 S.Ct. 239, 27 L.Ed.2d 256 (1970) (hereinafter referred to as Tiidee Products ). In Tiidee Products, the employer's refusal to bargain was deemed to be a clear and flagrant violation of the Act. As a remedy, the Board had merely imposed a prospective bargaining order. The D.C. Circuit believed that a more meaningful remedy was warranted. The court ruled that a make-whole remedy could be imposed whereby the Board could award compensatory damages based upon a determination of what the parties themselves would have agreed to if they had engaged in the kind of bargaining process required by the Act. Id. at 1253. 23 We have apparently never adopted or rejected the Tiidee Products decision; see Culinary Alliance & Bartenders Union, Local 703 v. NLRB, 488 F.2d 664, 666 (9th Cir. 1973), cert. denied, 417 U.S. 946, 94 S.Ct. 3071, 41 L.Ed.2d 666 (1974). We decline to do so now as there is no indication that the Board intended to base its order upon the Tiidee Products decision. As the Supreme Court stated in NLRB v. Metropolitan Life Insurance Co., 380 U.S. 438, 443-444, 85 S.Ct. 1061, 1064, 13 L.Ed.2d 951 (1965): 24 When the Board so exercises the discretion given to it by Congress, it must 'disclose the basis of its order' and 'give clear indication that it has exercised the discretion with which Congress has empowered it.' (footnote omitted) Phelps Dodge Corp. v. Labor Board, 313 U.S. 177, 197, 61 S.Ct. 845, 854, 85 L.Ed. 1271, 1284 ... the integrity of the administrative process requires that 'courts may not accept appellate counsel's post hoc rationalizations for agency action ....' (citations omitted) For reviewing courts to substitute counsel's rationale or their discretion for that of the Board is incompatible with the orderly function of the process of judicial review. Such action would not vindicate, but would 'propel the court into the domain which Congress has set aside exclusively for the administrative agency.'  (citation omitted) 25 We have also considered the Board's decision in Trading Port, Inc., 219 N.L.R.B. 298 (1975). In this case, the ALJ stated that his recommended order was not greatly different from a Trading Port retroactive bargaining order. In Trading Port, the union commenced a campaign to organize the employees of the employer. The union was able to get a majority of the employees to sign union authorization cards; however, due to the employer's unlawful conduct prior to the Board certification election, the union was defeated. The Board determined that the pervasiveness of the employer's unfair labor practices had made the holding of a fair election impossible and, therefore, a bargaining order was warranted. The employer was ordered to recognize and bargain with the union. However, instead of the typical prospective bargaining order which operated only from the date of the Board's decision, the Board granted a retroactive bargaining order. The order provided that the employer's obligation to bargain with the union commence(s) as of the time the employer has embarked on a clear course of unlawful conduct or has engaged in significant unfair labor practices to undermine the union's majority status. Id. at 301. 26 In fashioning the remedy, the Board was concerned that in some instances the prospective bargaining order left unremedied an employer's unilateral changes in working conditions made after a union had established its majority status. Id. The retroactive bargaining order, it was hoped, would  're-establish the conditions as they existed before the employer's unlawful campaign' and not place a union in a disadvantaged position. Id. 27 It is evident that the Trading Port bargaining order does not compel the parties to agree to any terms in the contract. It is only the obligation to bargain which is made retroactive. Thus Trading Port does not support the Board's order in this case. 28 We conclude that the Board's order establishing the effective date of the contract cannot be enforced as it compels the parties to agree to a substantive term of the contract. We, therefore, remand this portion of the Board's order to allow the Board to impose appropriate remedies.