Opinion ID: 732444
Heading Depth: 2
Heading Rank: 3

Heading: The Challenged Unfair Labor Practices

Text: 37 We turn first to the Board's determination that Canteen, as a successor employer, violated sections 8(a)(5) and (1) of the NLRA by unilaterally fixing initial terms of employment and by refusing to bargain with the Union after Canteen had made it perfectly clear that it intended to hire a majority of its employees from its predecessor's workforce. 38
39 The Board majority, the plurality and the concurring member, determined that Canteen intended to hire the employees of the predecessor employer, Service America, and that, consequently, it was perfectly clear that the employer intended to retain all the former employees. Canteen first submits that the record cannot support that determination. According to Canteen, it was not perfectly clear that it planned to retain a majority of Service America's employees. Canteen claims that it never announced an intention to employ the predecessor's employees; nor did it state that they would be hired under the predecessor's terms and conditions. Rather, Canteen states, it showed a consistent and unwavering intent to hire only those Service America employees who applied and who would accept the terms and conditions of employment being set by Canteen for its new employees. Pet'r Br. at 29. 40 We believe that the record supports, abundantly, the determination of the Board. The issue of Canteen's intent was the prime focus of the ALJ's assessment. The ALJ carefully delineated the events that occurred as Canteen prepared to assume operation of the food service at the Medical College of Wisconsin. He reviewed the documentary evidence, reported the testimony of the witnesses at the hearing, and resolved credibility questions when the testimony was in conflict. He then concluded that Canteen fully planned to rehire Service America's employees: 41 [A]ccording to a consistent segment of [Canteen's] evidence, [Canteen] held the intention, albeit unannounced, to retain the Service America employees at the Medical College. It also asserted on behalf of [Canteen] that it was expected that they would accept its offers of employment. 42 Canteen Corp., 317 NLRB at 1063. The Board agreed with the ALJ. It found that by June 22, when [Canteen] expressed to the Union its desire to have the predecessor employees serve a probationary period, [Canteen] had effectively and clearly communicated to the Union its plan to retain the predecessor employees. Id. at 1053. 43 The ALJ's finding, based on his observations of the witnesses' demeanor and his expressed or implied credibility determinations concerning their testimony, is entitled to considerable deference and may be overturned on review only in extraordinary circumstances. 4 Our review of the record leaves us with no doubt that the ALJ's finding, affirmed by the NLRB, is supported by substantial evidence. The totality of Canteen's conduct demonstrated that it was perfectly clear that Canteen planned to retain the predecessor employees. These occurrences prior to Canteen's July 1, 1992 takeover of operations at the Medical College substantiate such a conclusion: 44 (1) Canteen personally contacted the predecessor employees to encourage them to apply for employment with Canteen. 45 (2) Canteen took no action to hire outside applicants until after the predecessor employees turned down the jobs. 46 (3) In June, Canteen initiated several discussions with the Union concerning its desire (a) to establish a working manager position, (b) to pick the contract to be used as a model when negotiating a new collective bargaining agreement, and (c) to set a time, date and place for future discussions. 47 (4) On June 22, Canteen informed the Union that it wanted its predecessor employees to serve a probationary period with Canteen; the Union agreed to this request. 48 (5) On June 22, Canteen and the Union agreed to meet on June 30 to negotiate a collective bargaining agreement. 49 See Canteen, 317 NLRB at 1052. Of particular relevance to the ALJ was the fact that Canteen's intention to retain the Service America employees was backed by an expectation so strong that it neglected to take serious steps to recruit from other sources until it was informed that they had rejected job offers. Id. at 1063. Similarly, it was critical to the Board that Canteen intended from the outset to hire all of the predecessor employees and did not mention in these discussions the possibility of any other changes in its initial terms and conditions of employment. Id. at 1053 n. 5. The concurring member agreed with the NLRB majority that Canteen intended to hire the predecessor's employees and thus was obligated under Burns, 406 U.S. at 295, 92 S.Ct. at 1586, to bargain with the Union before it fixed terms. Canteen, 317 NLRB at 1054. As the ALJ put it, Canteen, at all times, to the point of dependency, ... held to an unflagging plan and desire to hire the Service America employees. Id. at 1067. 50 Because the evidence fully supports the finding that Canteen planned to retain the Service America employees, we have no basis for disturbing the Board's finding. 51
52 Canteen also asserts that, even assuming that the record supports the Board's determination that Canteen intended from the outset to hire the entire workforce of the predecessor employer, such a determination is without legal significance because the Board misinterpreted the perfectly clear exception. Canteen urges us to follow the Second Circuit's ruling in Nazareth Regional High School v. NLRB, 549 F.2d 873 (2d Cir.1977). More specifically, it asks us to: 53 read [Spruce Up ] as limited to those situations where employees are led at the outset by the successor-employer to believe that they will have continuity of employment on pre-existing terms and as not applying where the new employer dispels any such impression prior to or simultaneously with its offer to employ the predecessor's work force. 54 Id. at 881 (quoting Brotherhood of Ry. Clerks v. REA Express, Inc., 523 F.2d 164 (2d Cir.), cert. denied, 423 U.S. 1017, 96 S.Ct. 451, 46 L.Ed.2d 388 (1975)). On the basis of Nazareth, Canteen claims that any misconception about its intent with respect to the predecessor's employees was clarified when, at the job interviews, it offered terms and conditions different from those of its predecessor. 55 We have noted earlier the deferential nature of our review of the Board's interpretation of the statute that it is charged with administering. See Fall River. 5 We must recognize that, in applying the general provisions of the Act to the complexities of industrial life, NLRB v. Erie Resistor Corp., 373 U.S. 221, 236, 83 S.Ct. 1139, 1150, 10 L.Ed.2d 308 (1963) (citations omitted), the Board brings to its task an expertise that deserves our deference. 56 It is clear that a majority of the Board, although questioning whether Spruce Up was correct in extending the perfectly clear exception to situations in which the employees are misled into believing that they will be hired by the new employer, adheres to that part of the Spruce Up holding that applies the perfectly clear exception when the employer intended from the outset to hire the employees of the predecessor employer. Canteen gives us no new reason to question the Board's long-standing position. Indeed, as the Board plurality wrote, to accept such a position would require that we reject the very language of the perfectly clear formulation of the Supreme Court in Burns. Indeed, in the past, we expressed some concern with the Second Circuit's reformulation of the Board's Spruce Up doctrine. See U.S. Marine Corp., 944 F.2d at 1321 n. 22. Similar reservations have been expressed by the Sixth Circuit. See Spitzer Akron, Inc. v. NLRB, 540 F.2d 841, 846 (6th Cir.1976), cert. denied, 429 U.S. 1040, 97 S.Ct. 739, 50 L.Ed.2d 752 (1977). The Court of Appeals for the District of Columbia Circuit correctly grasped the wisdom of the Board's position when it stressed that, when it is clear that the new employer intends to hire the employees of the predecessor, those employees will place significant reliance on that situation and forego other employment opportunities. 57 That is significant because unconditional retention-announcements engender expectations, ofttimes critical to employees, that prevailing employment arrangements will remain essentially unaltered. Even when incumbents are not affirmatively led to believe that existing terms will be continued, unless they are apprised promptly of impending reductions in wages or benefits, they may well forego the reshaping of personal affairs that necessarily would have occurred but for anticipation that successor conditions will be comparable to those in force. 58 International Ass'n of Machinists & Aerospace Workers, AFL-CIO v. NLRB, 595 F.2d 664, 674-75 (D.C.Cir.1978), cert. denied, 439 U.S. 1070, 99 S.Ct. 839, 59 L.Ed.2d 36 (1979). 59 The approach of the Board is compatible with the practical reality expressed by the Supreme Court in Fall River, 482 U.S. at 40-41, 107 S.Ct. at 2234: [T]o a substantial extent, the applicability of Burns rests in the hands of the successor. It may explore all options with respect to the composition of its workforce. However, when it determines that it will retain the workforce of its predecessor, it cannot ignore the Union those employees have chosen when it comes time to determine the conditions of employment.
60 The Board also agreed with the ALJ that Canteen had violated sections 8(a)(3) and (1) of the NLRA by constructively denying employment to the predecessor employees (i.e., making them choose between employment on its unlawfully unilateral terms and declining the employment offer). Canteen, 317 NLRB at 1054. The ALJ found that Canteen had constructively denied employment to Service America's employees by unilaterally setting and imposing a predictably unacceptable condition of employment, the low salary offer. Id. at 1066. As the ALJ explained, 61 [T]he 8(a)(3) allegations are controlled by the principle that employees who quit rather than work under conditions established in derogation of the statutory right to bargain ... [are] ... constructively discharged in violation of Section 8(a)(3) and (1) of the Act. Accordingly, on this basis, it is concluded that [Canteen] violated Section 8(a)(3) and (1) of the Act by denying employment, on a constructive basis to Piquette, Anderson, and Cook. 62 Id. at 1068. 63 Canteen submits that there can be no violation of section 8(a)(3) without proof that the employer's conduct was motivated at least in part by discriminatory intent, specifically antiunion animus, and, in this case, the ALJ found that there was no discrimination. It is true that, although the ALJ found that the wages offered were predictably unacceptable, he did not believe that the low wage was part of a deceptive, deliberate scheme to avoid collective bargaining. Id. at 1068 n. 39. In his view, Canteen was confident that the Service America employees would accept employment at the lower wage. In the end, he based his decision on the fact that specific evidence of an antiunion intent was not required to substantiate an 8(a)(3) violation. Id. 64 It is an unfair labor practice, under section 8(a)(3) of the NLRA, for an employer by discrimination in regard to ... any term or condition of employment to encourage or discourage membership in any labor organization. 29 U.S.C. § 158(a)(3). As a general proposition, an employer violates this provision when it purposefully creates working conditions so intolerable that the employee has no option but to resign--a so-called 'constructive discharge.'  Sure-Tan, Inc. v. NLRB, 467 U.S. 883, 894, 104 S.Ct. 2803, 2810, 81 L.Ed.2d 732 (1984). The employer also must have acted with the intent to discourage union membership or activity. NLRB v. Bestway Trucking, Inc., 22 F.3d 177, 181 (7th Cir.1994). However, although the finding of a section 8(a)(3) violation usually depends on proof of intent or antiunion motivation, no such proof is necessary if it can reasonably be concluded that the employer's discriminatory conduct was 'inherently destructive' of important employee rights. NLRB v. Great Dane Trailers, Inc., 388 U.S. 26, 34, 87 S.Ct. 1792, 1798, 18 L.Ed.2d 1027 (1967). As the Court explained that phrase: 65 [S]ome conduct carries with it unavoidable consequences which the employer not only foresaw but which he must have intended and thus bears its own indicia of intent. If the conduct in question falls within this inherently destructive category, the employer has the burden of explaining away, justifying or characterizing his actions as something different than they appear on their face, and if he fails, an unfair labor practice charge is made out. 66 Id. at 33, 87 S.Ct. at 1797 (citations omitted). Thus the section 8(a)(3) violation depended on proof that Canteen's conduct was inherently destructive of important employee rights or that Canteen acted with the intent to discourage union membership. 67 The Board, with the approval of appellate courts, has held that an employer who unlawfully conditions employment on conditions established in derogation of the employees' statutory right to union representation creates an intolerable working condition. Furthermore, an employee who resigns when continued employment is so conditioned has been constructively discharged in violation of sections 8(a)(3) and (1) of the Act. See NLRB v. Haberman Constr. Co., 641 F.2d 351, 358 (5th Cir.1981) (en banc); RCR Sportswear, Inc., 312 NLRB 513, 513 (1993), enforced without opinion, 37 F.3d 1488 (3d Cir.1994); Control Services, Inc., 303 NLRB 481, 484-85 (1991), enforced without opinion, 975 F.2d 1551 (3d Cir.1992). 68 In this case, Canteen instituted unilateral changes in the initial terms of employment by offering drastically reduced rates of pay to the predecessor's experienced employees without prior negotiation. The employees' refusal to accept employment was found by the ALJ and the Board to be a constructive denial of employment. We agree that Canteen's conduct was inherently destructive of the rights of those employees. As a result, Canteen had the burden of justifying its actions. 69 [O]nce it has been proved that the employer engaged in discriminatory conduct which could have adversely affected employee rights to some extent, the burden is upon the employer to establish that he was motivated by legitimate objectives since proof of motivation is most accessible to him. 70 Great Dane, 388 U.S. at 34, 87 S.Ct. at 1798. Canteen has failed to satisfy this burden. It has failed to characterize its conduct in lawful terms. As a result, we enforce the Board's order with respect to its ruling that Canteen violated sections 8(a)(3) and (1) of the Act by constructively denying employment to the predecessor's employees.