Opinion ID: 715784
Heading Depth: 3
Heading Rank: 2

Heading: Pending Representation Petition

Text: 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.