Opinion ID: 715784
Heading Depth: 2
Heading Rank: 2

Heading: Violations of Subsections 8(a)(1) and (5) of the NLRA: Unlawful Withdrawal of Recognition

Text: 32 Subsection 8(a)(1) of the NLRA, 29 U.S.C. § 158(a)(1), proscribes as an unfair labor practice any action taken by an employer to interfere with, restrain, or coerce employees in the exercise of [their] rights to choose their bargaining representatives. Subsection 8(a)(5) makes it an unfair labor practice for an employer to refuse to bargain with the union chosen by its employees as their collective bargaining agent. 6 The Board found that Katz's violated both of these provisions when it withdrew recognition from Local 100 and ceased bargaining with that union as its employees' agent. 33 As a preliminary matter, we reject Katz's argument that it was denied due process of law because the NLRB's complaint did not specifically allege that Katz's withdrawal of recognition from Local 100 was unlawful. In NLRB v. Coca-Cola Bottling Co. of Buffalo, Inc., 811 F.2d 82, 87 (2d Cir.1987), we held that the NLRB may find an uncharged violation if all issues surrounding the violation have been litigated fully and fairly. While the complaint alleged that Katz's illegally recognized and bargained with Local 131, Katz's claims that it did not charge improper withdrawal of recognition from Local 100. 7 These are indeed two separate unfair labor practices, but in this case they both hinge on the question of whether the fact-finder credits Local 100's March 30 and April 9 employee petitions (and the testimonial evidence in support of those petitions) as demonstrating support for that union--a question that was fully litigated before the ALJ. If the employee petitions are properly considered a valid indication of majority support for Local 100, then Katz's unlawfully withdrew recognition from Local 100 and unlawfully recognized and negotiated with Local 131. Furthermore, Katz's attorneys argued explicitly before the ALJ that Katz's was entitled to withdraw recognition from Local 100: 34 I believe that as a practical matter, Local 131 did represent a majority ... and therefore that the employer had a good faith [doubt] as to the continued majority status of Local 100 based on what was presented by Local 131, and that therefore the withdrawal of recognition from Local 100 was certainly proper. 35 Accordingly, we find no due process violation. 36 Upon the expiration of a collective bargaining agreement, an incumbent union is entitled to a rebuttable presumption of continued majority status. NLRB v. Koenig Iron Works, Inc., 681 F.2d 130, 137 (2d Cir.1982). With such a presumption in place, an employer may not withdraw recognition from or refuse to bargain with the incumbent union. Nevertheless, an employer may rebut the presumption and withdraw recognition from an incumbent union by introducing objective evidence that (1) the incumbent union has in fact lost its majority support, or (2) the employer's withdrawal was founded on a reasonably based good faith doubt of the union's continued majority status. Id. The employer has the burden of producing clear and convincing evidence of loss of union support; or under the good faith doubt alternative, it must come forward with easily verifiable and unambiguous evidence supporting [its] belief that [its] employees have rejected the incumbent union as a bargaining agent. Id. As noted above, the sufficiency of evidence is a factual question subject to limited review. 37 Upon hearing the testimony and reviewing the documentary evidence, the ALJ concluded that Katz's unlawfully withdrew recognition from Local 100. First, he found that the March 30 and April 9 employee petitions signed by a majority of Katz's employees were valid showings of support for Local 100; therefore, it had not lost its majority status. Second, he determined that Katz's failed to demonstrate its reasonably-based good faith doubt of Local 100's majority status. He found that at the time Katz's recognized Local 131 (and effectively withdrew recognition from Local 100) on April 11, Katz's co-owner, Dell, knew--at the very least--about the April 9 employee petition, because Local 100 had presented it at the NLRB conference on April 10. Indeed, the ALJ found that Dell acknowledged the existence and validity of the April 9 petition at that meeting, conced[ing] that the document proved that Local 100 represented a majority of the workers. In spite of this knowledge, Katz's withdrew recognition from Local 100 and recognized Local 131 as its employees' bargaining agent on April 11. The ALJ's findings were affirmed in their entirety by the NLRB after its review of the record. 38 Katz's argues that Local 100's March 30 and April 9 employee petitions are invalid in light of the fraudulent and coercive means by which Local 100 obtained the signatures, and therefore, the authorization cards signed by Katz's employees in support of Local 131 in January 1991 clearly prove that Local 100 had lost its majority support. In so contending, Katz's takes issue with the ALJ's credibility determinations and factual findings. We must affirm such findings unless, after reviewing the record as a whole, we conclude that no rational trier of fact could reach the same conclusion. Albany Steel, 17 F.3d at 568. 39 First, Katz's argues that in finding Local 100's employee petitions to be valid, the ALJ and the Board ignored the testimony by Katz's employees that Lynch had actually given the employees a blank piece of paper to sign and added the headings later. We reject this argument out of hand. The Board specifically found that the ALJ did not ignore that testimony, but rather that he implicitly discredited it. Such implicit credibility resolutions are appropriate where an ALJ's treatment of the evidence is supported by the record as a whole. NLRB v. Berger Transfer & Storage Co., 678 F.2d 679, 687 (7th Cir.1982); see Abbey's Transp. Services, Inc. v. NLRB, 837 F.2d 575, 580 (2d Cir.1988) (finding that ALJ obviously discredited a witness where he did not do so explicitly); cf. Marlowe v. Bottarelli, 938 F.2d 807, 813 (7th Cir.1991) (deferring to district court's implicit credibility resolution in context of employment discrimination suit); Lavernia v. Lynaugh, 845 F.2d 493, 500 (5th Cir.1988) (When ... a trial court fails to render express findings on credibility but makes a ruling that depends upon an implicit determination that credits one witness's testimony as being truthful, or implicitly discredits another's, such determinations are entitled to the same presumption of correctness that they would have been accorded had they been made explicitly.). In the instant case, the ALJ clearly noted that his findings were based on [his] examination of the entire record, [his] observation of the witnesses' demeanor while testifying, and [his] evaluation of the reliability of their testimony. Furthermore, he explicitly stated that any testimony which is inconsistent with or contrary to my findings is discredited. 40 Second, Katz's contends that insofar as the ALJ and the Board found that Local 100's employee petitions falsely stated that there was a contract between Katz's and Local 100, it was improper for them to rely on the petitions as a valid showing of support for Local 100. In other words, Katz's argues that because the ALJ and the Board did not credit Lynch's testimony that a final agreement had been reached and determined that the employee petitions contained false representations to that effect, the petitions could not reasonably be credited as indications of employee support for the union. There is no question that in determining that a final contract had not been reached between Katz's and Local 100, the Board credited Dell's testimony over Lynch's. However, the ALJ and the Board believed Lynch's testimony that he and Katz's had reached agreement on certain contract items and that he gave the employees some information about the terms agreed upon. 41 The question presented is whether there is substantial evidence on the record to support the Board's determinations with respect to the employee petitions; that is, is it possible for a rational trier of fact to find both that (i) the two Local 100 petitions signed by Katz's employees falsely stated that Katz's and Local 100 had agreed to a contract and (ii) the two employee petitions nevertheless represented a valid showing of employee support for Local 100? While the ALJ's findings concerning the employee petitions may seem surprising, they are not unsupported by the record. Even though the ALJ found that the petitions contained false information and were signed at least partially in response to Lynch's inaccurate statements about the status of contract negotiations, those findings did not require him to disregard the petitions as evidence of employee support for Local 100. We regard it as significant that the ALJ explicitly found that, despite the fact that Lynch told the employees that the alleged contract would give them no salary increase, the employees signed the April 9 petition indicating that they were in no way interested in any other labor organization representing [them] other than H.E.R.E. Local 100. Even if the employee petition inaccurately stated that a contract between Katz's and Local 100 existed, it is notable that the employees signed it knowing little more about that contract than the fact that it did not include a wage increase. Under these circumstances, it was not unreasonable for the ALJ to draw the inference that the employees signed the petitions because of their underlying support for the union, not because of the financial terms offered by the putative agreement. We cannot find that the ALJ's decision (affirmed by the NLRB) to credit the employee petitions as evidence of majority support for Local 100 was incredible or flatly contradicted by undisputed documentary testimony. S.E. Nichols, Inc., 862 F.2d at 958. 8 42 Third, Katz's argues that the ALJ, and in turn, the Board, should not have credited the employee petitions because Lynch coerced employees to sign them by threatening them with the possibility of a strike and/or a loss of benefits if they refused. The ALJ found that in urging employees to sign the petitions, Lynch told them that a contract negotiated by Local 100 would provide them with better benefits, and if they chose a ghost union like Local 131, they either could or would lose their pension and other benefits. After hearing the testimony and carefully weighing those statements, the ALJ reasonably found that they did not constitute coercive labor tactics, but were essentially accurate arguments comparing Local 100 and Local 131 and explaining why [the employees] should continue to support Local 100 rather than switch to another labor organization. All of these findings were affirmed by the Board. 43 The instant case is readily distinguishable from 299 Lincoln Street, Inc., 292 N.L.R.B. 172, 172-74 (1988), and Mississippi Chemical Corp., 280 N.L.R.B. 413, 417, 422 (1986), inasmuch as the employers in those cases were not comparing two competing plans or programs, but rather, were directly threatening employees with a retaliatory loss of benefits on account of their involvement in protected union activities. Also, contrary to Katz's assertions, the ALJ and the Board did not find that Lynch told Katz's employees that they would be compelled to strike against their will if they did not sign the petitions; it only found that Lynch made the lawful statement that a strike would be called by the Union if the alleged contract was not ratified. Because we conclude that a rational trier of fact could have made such a finding based on the record presented, we will not disturb the Board's determination. 44 Accordingly, we find that the ALJ and the Board were entitled to credit the March 30 and April 9 employee petitions as valid indications of majority support for Local 100, analogous to the union authorization cards signed by Katz's employees in support of Local 131 in January 1991. As the Board properly found, it was faced with circumstances akin to a dual card situation. In dual card cases, the Board may not count toward the majority status of either union any authorization card signed by an employee who has signed cards for both unions, unless the evidence clearly dissipate[s] the ambivalence surrounding the signer's intent and leaves no doubt that the signer intended only one of his dual cards to indicate his support. Crest Containers Corp., 223 N.L.R.B. 739, 741 (1976). Out of the twenty employees of Katz's who signed cards for Local 131 in January, eighteen also signed at least one of the employee petitions for Local 100. At the very least, Local 131's authorization cards were rendered ambiguous (if not a nullity) by Local 100's employee petitions. The Board reasonably found that, given the absence of evidence that a majority of Katz's employees intended to give their support solely to Local 131, Local 100's employee petitions nullified Local 131's cards and precluded Katz's from relying on them to rebut Local 100's presumption of majority status. 45 Katz's argues that even if Local 100 did not actually lose its majority status, Local 131's authorization cards created a sufficient basis for Katz's to have a reasonable good faith doubt as to Local 100's status. We simply see no basis for disturbing the Board's finding that at the time Dell acted to withdraw recognition from Local 100, he knew of the existence of Local 100's April 9 employee petition and that the document proved that Local 100 represented a majority of the workers at the time Katz's withdrew recognition from that union. Accordingly, we affirm the decision below finding Katz's in violation of subsections 8(a)(1) and (5). 46 C. Violations of Subsections 8(a)(1), (2), (3), and Subsections 8(b)(1)(A) and (2): Unlawful Recognition and Entry into a Collective Bargaining Agreement 47 Subsection 8(a)(2) of the NLRA, 29 U.S.C. § 158(a)(2), makes it an unfair labor practice for an employer to recognize and enter a collective bargaining agreement with a union that has not been selected by a majority of the employees in the bargaining unit, regardless of whether the employer believes in good faith that the union has majority support. 9 Int'l Ladies' Garment Workers' Union v. NLRB, 366 U.S. 731, 739, 81 S.Ct. 1603, 1608, 6 L.Ed.2d 762 (1961) (The act made unlawful by § 8(a)(2) is employer support of a minority union.... [P]rohibited conduct cannot be excused by a showing of good faith.). Similarly, § 8(b)(1)(A), 29 U.S.C. § 158(b)(1)(A), makes it an unfair labor practice for a union without majority support to accept an employer's recognition. 10 Windsor Castle Health Care, 13 F.3d at 622. When an employer and a minority union include a union security clause in their contract, the employer violates § 8(a)(3) of the NLRA, 29 U.S.C. § 158(a)(3), and the union violates § 8(b)(2), 29 U.S.C. § 158(b)(2). Int'l Union of Petroleum & Indus. Workers v. NLRB, 980 F.2d 774, 778 (D.C.Cir.1992) (citing Local Lodge No. 1424 v. NLRB, 362 U.S. 411, 412-14, 80 S.Ct. 822, 824-25, 4 L.Ed.2d 832 (1960)). 48 The NLRB found that Katz's entry into a recognition agreement and a collective bargaining agreement with Local 131 violated the NLRA under two independent theories: (1) because circumstances akin to a dual card situation existed, Local 131 did not have majority support at the time Katz's recognized it as its employees' bargaining agent; and (2) Katz's and Local 131 could not enter a recognition agreement or a collective bargaining agreement while Local 131 had a representation petition pending with the NLRB for a Board-certified election.
49 In contesting the Board's finding that they unlawfully signed a recognition agreement and a collective bargaining agreement, Katz's and Local 131 make the identical argument that Katz's made in challenging the Board's finding that it unlawfully withdrew recognition from Local 100: because Local 100 used fraudulent and coercive means to obtain signatures from Katz's employees, the March 30 and April 9 employee petitions cannot be counted towards majority support for Local 100. Accordingly, they claim that the April 11, 1991, count of Local 131's authorization cards provided a valid and reasonable basis for Katz's good faith belief that it was proper to recognize and bargain with Local 131. 50 Under the NLRA, an employer may recognize a union as its exclusive collective bargaining agent only if that union enjoys the support of a majority of the employees. Local 144 v. NLRB, 9 F.3d 218, 223 (2d Cir.1993); see 29 U.S.C. §§ 159(a), 158(a)(2). As discussed above, the ALJ reasonably found that Local 100's employee petitions represented a valid showing of support for that union and created a dual card situation. All duplicate signatures were properly disregarded by the ALJ, and accordingly, he found that Local 131 lacked majority employee support. Inasmuch as Local 131 did not have the unambiguous support of a majority of Katz's employees, Katz's and Local 131 unlawfully entered into a recognition agreement and a collective bargaining agreement. Because [t]he employer's knowledge or ignorance of the union's minority status is irrelevant to the question [of] whether the recognition constitutes an unfair labor practice, Human Development Ass'n v. NLRB, 937 F.2d 657, 665 (D.C.Cir.1991), cert. denied, 503 U.S. 950, 112 S.Ct. 1512, 117 L.Ed.2d 649 (1992), we need not consider Katz's good faith argument.
51 The NLRA forbids an employer from recognizing a union while a genuine question concerning representation (QCR) exists regarding whether that union or a rival represents a majority of its employees. Human Development Ass'n, 937 F.2d at 666; American Can Co. v. NLRB, 535 F.2d 180, 185-86 (2d Cir.1976); Midwest Piping and Supply Company, 63 N.L.R.B. 1060 (1945). The Board has long held that the filing of an election petition with the NLRB raises a QCR, mandating strict employer neutrality with respect to the unions competing to represent its employees. See Bruckner Nursing Home, 262 N.L.R.B. 955, 957 (1982) ([O]nce notified of a valid [election] petition, an employer must refrain from recognizing any of the rival unions.). A valid representation petition is one which has the support of least 30% of the employees in the relevant bargaining unit. 29 C.F.R. § 101.18(a). 52 In RCA Del Caribe, Inc., 262 N.L.R.B. 963, 965, 1982 WL 24672 (1982), the Board discussed how the rule of strict employer neutrality applied in circumstances where a rival union filed an election petition challenging an incumbent's status as a majority representative. It held that because the incumbent maintains a presumption of majority status the mere filing of a representation petition by an outside, challenging union [will not] require or permit an employer to withdraw from bargaining or executing a contract with an incumbent union. Id. (emphasis added). The Board reasoned that in light of the existing relationship between the employer and the incumbent union, the employer could not maintain the neutral posture required by Midwest Piping by ceasing negotiations because a refusal to bargain with the incumbent could easily be viewed as giving an advantage to the rival union. However, this did not alter the Midwest Piping and Bruckner rules forbidding an employer from recognizing and bargaining with a rival union whose petition for representation remains on file with the Board. Id; see Bruckner, 262 N.L.R.B. at 957; see also Haddon House Food Products, Inc. v. NLRB, 764 F.2d 182, 186 (3d Cir.1985), cert. denied, 475 U.S. 1011, 106 S.Ct. 1187, 89 L.Ed.2d 303 (1986). This policy of employer neutrality with respect to a rival union is rooted in the Board's concern for maintaining stability in labor relations and preserving the integrity of the election process during a potentially disruptive period. The incumbent union need not demonstrate its continued majority support before a violation can be charged for an employer's recognition of a rival union. The incumbent must only maintain its claim to be the representative of the unit's employees. See Signal Transformer Co., 265 N.L.R.B. 272, 281 (1982). 53 Katz's and Local 131 clearly violated this rule. Neither party disputes the following facts: On April 2, 1991, after the expiration of Local 100's sixty-day insulated period, Local 131 filed an election petition with the NLRB seeking to represent Katz's employees. Katz's was aware of Local 131's election petition, and indeed, Dell and Kirschner attended a conference on that petition at the NLRB's regional office on April 10. Nevertheless, Katz's and Local 131 signed a recognition agreement on April 11 and subsequently reached a collective bargaining agreement containing a union-security clause, which was ratified by the employees on April 18. On April 18, pursuant to 29 C.F.R. § 101.18(b), 11 Local 131 requested that the NLRB withdraw its election petition, and the NLRB approved its withdrawal on April 22. 54 Katz's and Local 131 assail the Board's finding of a violation for their signing of the recognition and collective bargaining agreements as a technical application of the petition-pending rule that should not apply to them because the parties were aware that Local 131 intended to withdraw the election petition (and it was in fact withdrawn) within several days of signing the agreements. This argument runs counter to the sound view that (as the Board noted in its opinion adopting the findings of the ALJ) Midwest Piping created a clearly defined rule of conduct designed to give a preference for a Board-conducted election in the face of competing claims. This clearly defined rule is not altered merely because the parties contemplated withdrawing the election petition or because they ultimately did so after signing the recognition agreement. 55 Insofar as we find that Local 100's conduct did not amount to an unfair labor practice, see supra at 765-66, we need not address Katz's argument that Local 100 lost its incumbent status and its continuing claim to represent Katz's employees based on its commission of such alleged practices. We affirm the decision below finding Katz's and Local 131 in violation of subsections 8(a)(1), (2), and (3), and 8(b)(1)(A) and 8(b)(2), respectively. D. Remedies 56 Katz's and Local 131 both challenge various remedial provisions in the Board's order. The NLRB has broad discretion in such matters and its choice of remedies is subject to limited review. NLRB v. Browne, 890 F.2d 605, 607 (2d Cir.1989). We will not disturb a remedial order 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 Electric & Power Co. v. NLRB, 319 U.S. 533, 540, 63 S.Ct. 1214, 1218, 87 L.Ed. 1568 (1943). 1. Dues and Fees 57 First, Local 131 contends that the Board erred in requiring Katz's and Local 131 jointly and severally to reimburse all Katz's employees who did not voluntarily sign authorization cards for Local 131 prior to the execution of the collective bargaining agreement--that is, all employees who were required to join Local 131 by virtue of the union security clause in Local 131's contract with Katz's--for dues and fees paid. According to Local 131, such an order violates the rule requiring NLRB orders to be remedial, not punitive, because it purports to compensate employees for dues and fees paid without regard for the representation provided for them by Local 131 over the past five years. 58 Where the Board finds that a party has committed an unfair labor practice, section 10(c) of the NLRA permits it to order that party to cease and desist from such unfair labor practice, and to take such affirmative action ... as will effectuate the policies of the Act. 29 U.S.C. § 160(c). We have previously held that the policies of the Act are essentially remedial, and as such, must compensate for the injury actually suffered by the employees. Manhattan Eye Ear & Throat Hosp. v. NLRB, 942 F.2d 151, 156-57 (2d Cir.1991). In the instant case, the injury suffered by the relevant group of employees (those who did not sign authorization cards and paid dues to Local 131 only by virtue of the union security clause) was their coerced payment of dues and fees to an unlawfully recognized union as a result of an unlawful union-security clause. 59 While we are mindful of the fact that even those employees who joined Local 131 solely as a consequence of the security clause received some benefit from Local 131's representation and negotiation on their behalf, we do not find the Board's order requiring reimbursement of those employees to be punitive or a patent attempt to achieve ends other than those which can fairly be said to effectuate the policies of the Act. Virginia Electric & Power Co., 319 U.S. at 540, 63 S.Ct. at 1218. The relevant question is not whether these employees received some benefit from Local 131's representation in exchange for their dues and fees, but whether they should be reimbursed in light of the fact that they were compelled to make those payments when they might have preferred representation by Local 100 or indeed, no union at all. We held in Local 144 v. NLRB, 9 F.3d at 225, that the NLRB did not abuse its discretion in ordering that employees be reimbursed for dues and initiation fees paid where their employer unlawfully recognized another union as its employees' collective bargaining agent. See also Haddon House Food Prods., 764 F.2d at 185, 188 (holding that Board remedy ordering employer and union to reimburse employees for fees and dues paid pursuant to unlawful union-security clause was not an abuse of discretion and was particularly appropriate for restoration of a climate of neutrality); Cascade General v. NLRB, 9 F.3d 731, 737 (9th Cir.1993) (finding that Board's order requiring employer to reimburse employees who did not freely choose union for fees and dues promotes the policies of the [NLRA] by assisting in completely disestablishing the illegally constituted union, severing its connection with the employer, restoring freedom of choice to the employee, and encouraging the employee to exercise his rights under the Act) (citations omitted), cert. denied, --- U.S. ----, 114 S.Ct. 1610, 128 L.Ed.2d 338 (1994); cf. Cascade General, 9 F.3d at 739-40 (Rymer, J., concurring in part and dissenting in part) (arguing that such an order is punitive where it is directed solely against an employer and there is no evidence in the record of the employer's knowingly culpable conduct). Thus, we affirm the Board's order requiring that Katz's and Local 131 jointly and severally reimburse all unit employees, except those who joined or signed authorization cards for Local 131 prior to the execution of the collective-bargaining agreement between Katz and Local 131 on April 18, 1991, for initiation fees, dues, or other obligations of membership in Local 131, plus interest. 60 Since Katz's should never have recognized Local 131, much less entered a collective bargaining agreement containing a union security clause with that union, it was entirely within the Board's remedial authority to order reimbursement of dues and fees. 61 2. Payments to Local 100's Welfare and Pension Funds 62 Katz's challenges the NLRB's order requiring it to make retroactive payments into Local 100's welfare and pension funds. The Board's order specifically requires Katz's to 63 rescind any departures from terms and conditions of employment that existed prior to April 11, 1991, retroactively restoring preexisting terms and conditions of employment of employees as set forth in the remedy section of this decision. 64 The remedy section of the decision makes repeated references to Katz's duty to restor[e] the status quo, by placing the employees in the same position that they would have been in, had [Katz's] not unlawfully withdrawn recognition [from Local 100] and notes that it must restore its employees' terms and conditions of employment to its prior status ... including, but not limited to payments into the Local 100 funds. 65 Katz's objects to the order, arguing that it is punitive because Katz's employees have been adequately compensated by Katz's contributions to Local 131's welfare and annuity funds since April 1991, pursuant to Katz's collective bargaining agreement with Local 131, and that ordering retroactive payment to Local 100's welfare and pension funds for the same period would give a windfall to that union without benefitting the employees. In so arguing, Katz's relies on Manhattan Eye, 942 F.2d at 157, in which we refused to enforce a Board order requiring an employer to make back payments to the union's health and pension funds as a remedy for the employer's unfair labor practices because the employer had compensated the employees with substitute benefit plans during the relevant period. In rejecting the Board's order in that case, we held that enforcement of such an order, under the circumstances there presented, fail[ed] to benefit the employees, [was] unduly harsh on the employer, and result[ed] in a windfall for the union funds. Id. at 159-60. 66 We find Katz's appeal of this matter to be premature inasmuch as the Board's Decision and Order is not necessarily inconsistent with our opinion in Manhattan Eye. On its face, the order merely requires that Katz's make retroactive payments to Local 100's pension and welfare funds so as to plac[e] [its] employees in the same position that they would have been in, had [Katz's] not unlawfully withdrawn recognition. The Board has yet to determine how Katz's payments should be structured to best achieve that result, because there has been no compliance proceeding in this case. Compliance determinations are routinely made after entry of a Board order directing remedial action, or the entry of a court judgment enforcing such [an] order. 29 C.F.R. § 102.52. Formal proceedings, including a hearing before an ALJ, are instituted when it is necessary to resolve compliance issues. Id. § 102.54. We have previously likened NLRB compliance proceedings to the damages phase of a civil proceeding. Coca-Cola Bottling Co. of Buffalo, 55 F.3d at 77. Indeed, Manhattan Eye was decided only after the NLRB had conducted compliance proceedings, interpreting a similar Board order, requiring the employer to 67 restore the terms and conditions of employment in existence prior to the unlawful ... changes and make whole the employees for any losses suffered by reason of the unlawful unilateral changes and make contributions to the [funds], if any, which would have been made but for the [employer's] unilateral institution of the pension, health, and insurance plans. 68 942 F.2d at 154. 69 Compliance proceedings are particularly necessary in cases such as this, where there is insufficient evidence on the record to determine how best to restore Katz's employees to the position they would have otherwise occupied. With regard to the two unions' welfare funds, we are unable to determine how the plans compare and to what extent employees may have been denied benefits under the Local 131 plan that they would have received under the Local 100 plan. Similarly, on the current record, we have no way of knowing (1) how Local 100's pension fund compares to Local 131's annuity fund; (2) whether and to what extent Katz's employees had individual pension accounts with Local 100 that suffered losses or whether they otherwise lost their pension contributions when Katz's shifted its employees to Local 131's plan; and (3) whether and to what extent the money paid by Katz's on behalf of its employees into Local 131's annuity fund since April 1991 can be transferred into Local 100's pension fund. 70 Only after such determinations have been made can we evaluate whether the Board's remedial order is consistent with Manhattan Eye--ordering retroactive benefit payments only to the extent necessary to restore Katz's employees to the position they would have been in had Katz's not withdrawn recognition from Local 100 and recognized Local 131. The NLRB should be given the opportunity, in the first instance, to apply Manhattan Eye to this case. 71 We therefore remand this case to the NLRB, with instructions to initiate formal compliance proceedings in accordance with 29 C.F.R. § 102.54 to resolve the remaining questions. In so doing, we again emphasize that the compliance proceedings should aim to restore Katz's individual employees to the position they would have occupied had Katz's not violated the NLRA, without creating a windfall for Local 100. 72 In closing, we note that the NLRB's order does not make Local 100 the permanent collective bargaining representative for Katz's employees. In keeping with the NLRA's motivating principles of freedom of association, self-organization, and designation of representatives of [employees'] own choosing, 29 U.S.C. § 151, the order merely requires that Katz's bargain in good faith with Local 100. Even if an agreement is reached, the employees can refuse to ratify it and they can call for an election if they desire a different union to serve as their collective bargaining agent. Similarly, even after a collective bargaining agreement is signed, they remain free to petition for decertification if they are dissatisfied with Local 100's representation. See 29 C.F.R. § 101.17.