Opinion ID: 521923
Heading Depth: 2
Heading Rank: 3

Heading: The Transmarine Remedy

Text: 39 Without conceding the merits of the case, the respondents also submit that the Board exceeded its authority in imposing the so-called Transmarine remedy in this case. In National Labor Relations Board v. Transmarine Navigation Corp., 380 F.2d 933 (9th Cir.1967), the Ninth Circuit was asked to enforce a Board order. The Board had found, pursuant to the decision of an ALJ, that the decision to close Transmarine Navigation Corporation's (Transmarine) shipping operation and its reinvestment of that capital into a joint venture (in a different location) was a subject of mandatory bargaining. As a remedy for this unfair labor practice, Transmarine was ordered to pay its displaced personnel the loss of wages they may have suffered between the closing of the [business] and ... when [Transmarine] offered to bargain with respect to any matter in dispute. Transmarine Navigation Corp., 152 N.L.R.B. 998, 1006 (1965). On Petition for Enforcement of the Order, the Ninth Circuit found that the decision to close was not a mandatory subject of bargaining and consequently found an unfair labor practice only with respect to the failure to bargain over effects. 380 F.2d at 939. Because the court had found a different kind of unfair labor practice, the Ninth Circuit remanded the case to the Board to allow it to review its ordered remedy in light of the new decision. On remand, the Board found that, [u]nder the circumstances of [the] case, including the lapse of time and changes in the corporate nature of [Transmarine], it is impossible to reestablish a situation equivalent to that which would have prevailed had [Transmarine] more timely fulfilled its statutory bargaining obligation. Transmarine Navigation Corp., 170 N.L.R.B. 389, 389 (1968). The Board found that the lapse of time would make a bargaining order, without more, an inadequate remedy. It was necessary for the Board to create conditions essentially similar to those that would have existed had Transmarine bargained at the time required by the Act. 40 The Transmarine Board entered the following order, 41 [I]n order to assure meaningful bargaining and to effectuate the purposes of the Act, we shall accompany our order to bargain over the effects of the shutdown with a limited backpay requirement designed both to make whole the employees for losses suffered as a result of the violation and to recreate in some practicable manner a situation in which parties' bargaining position is not entirely devoid of economic consequences for [the company]. We shall do so in this case by requiring [the company] to pay backpay ... [and] require the amounts to be paid to be not less than the amounts the [employees] would have earned during a 2-week period of employment. 42 Accordingly, we shall order the [company] to bargain with the Union, upon request, about the effects on [its employees] of the ... shutdown, and to pay these employees amounts at the rate of their normal wages when last in the [company's] employ from 5 days after the date of this Supplemental Decision until the occurrence of the earliest of the following conditions: (1) the date the [company] bargains for agreement with the Union on those subjects pertaining to the effects of the closing on the [employees]; (2) a bona fide impasse in bargaining; (3) the failure of the Union to request bargaining within 5 days of this Supplemental Decision, or to commence negotiations within 5 days of the [company's] notice of its desire to bargain with the Union; or (4) the subsequent failure of the Union to bargain in good faith; but in no event shall the sum paid to any of these employees exceed the amount he would have earned as wages [from the date of closing] to the time he secured equivalent employment elsewhere, or ... the date when the [company] offered to bargain, whichever occurred sooner; provided, however, that in no event shall this sum be less than these employees would have earned for a 2-week period at the rate of their normal wages when last in the [company's] employ. 43 Transmarine, 170 N.L.R.B. at 390. In this case, the Board entered a similar order: 44 ESI shall pay the unit employees on the payroll as of 1 August 1984 amounts at the rate of their normal wages when last in ESI's employ from 5 days after the date of the Board's order until the occurrence of the earliest of the following conditions: 45 (1) the date ESI bargains for agreement with the Union on those subjects pertaining to the effects of closing on the unit employees; 46 (2) a bona fide impasse in bargaining; 47 (3) the failure of the Union to request bargaining within 5 days of the Board's order, or to commence bargaining within 5 days of ESI's notice of its willingness to bargain with the Union; or 48 (4) the subsequent failure of the Union to bargain in good faith. 49 The sum paid to any of these employees shall not exceed the amount he would have earned as wages from 11 August 1984, the date Emsing's Supermarket closed, to the time he secured equivalent employment elsewhere, or the date on which ESI offers to bargain, whichever occurs sooner; provided, however, that in no event shall this sum be less than the employees would have earned for a 2-week period at the rate of their normal wages when last in ESI's employ.... 50 ALJ Dec. at 21-22 (footnotes omitted). 51 In reviewing the legal propriety of this order, we begin with the fundamental proposition that, in fashioning remedies for violations of the Act, the Board draws on a fund of knowledge and expertise all its own, and its choice of remedy must therefore be given special respect by the reviewing courts. NLRB v. Gissel Packing Co., 395 U.S. 575, 612, 89 S.Ct. 1918, 1939, 23 L.Ed.2d 547 (1969). At the same time, we have noted that, while the Board is given wide leeway in fashioning remedies, the remedy chosen must 'achieve the remedial objectives which the Act sets forth.'  Yorke, 709 F.2d at 1144-45 (quoting Republic Steel Corp. v. NLRB, 311 U.S. 7, 9-11, 61 S.Ct. 77, 78-79, 85 L.Ed. 6 (1940)). The remedy must not punish the employer for its violations. Yorke, 709 F.2d at 1145. The Transmarine remedy was not designed as a punitive measure by the Board. 52 The object of such a remedy is twofold. First, the remedy does seek to make employees whole for their losses to limited degree [sic]. Secondly, and more importantly, Transmarine and other similar 8(a)(5) remedies are designed to restore at least some economic inducement for an employer to bargain as the law requires. 53 O.L. Willis, Inc., 278 N.L.R.B. 203, 205 (1986); see also Kirkwood Fabricators, Inc., v. NLRB, 862 F.2d 1303, 1307 (8th Cir.1988) (limited backpay remedy may be set aside only upon a showing of abuse of [the Board's] broad discretion in its field of specialization). We have recognized that [e]nsuring meaningful bargaining comports with the primary objective of the Act. Yorke, 709 F.2d at 1145. On the other hand, we have also refused to permit the Board to calculate the backpay remedy from the date of the Board's decision when the case raised a novel issue of law and the employer resisted enforcement as the only legitimate way to obtain a definitive ruling on the question. See id. at 1146. 54 In this case, we believe that the Board acted within the bounds of its statutory discretion in imposing the Transmarine remedy as part of its order. While this case involves relatively close factual questions, and required the Board to employ its expertise in evaluation of the factual setting, it does not present any novel question of law. As we have noted earlier, the duty to bargain with respect to the effects of a closing is well settled. See First National, 452 U.S. at 681-82, 101 S.Ct. at 2582-83. It is also well settled that an employer may not make unilateral changes in the terms of the bargaining agreement while renewal negotiations are still in progress. See NLRB v. Harvstone Mfg. Corp., 785 F.2d 570, 581 n. 12 (7th Cir.), cert. denied, 479 U.S. 821, 107 S.Ct. 88, 93 L.Ed.2d 41 (1986). Therefore, the exception applicable in Yorke is not available to the respondents in this case.