Court Opinion

ID: 185511
Source: CourtListenerOpinion
Date Created: 2011-02-05 02:32:55+00
Date Added: 2024-06-11T17:26:16.409403
License: Public Domain

266 F.3d 1233 (D.C. Cir. 2001)
Prime Service, Inc., d/b/a Prime Equipment, Petitionerv.National Labor Relations Board, Respondent
International Union of Operating Engineers, Local Union No 3, AFL-CIO, Intervenor for Respondent
No. 00-1306
United States Court of Appeals  FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 7, 2001Decided October 12, 2001

[Copyrighted Material Omitted][Copyrighted Material Omitted]
On Petition for Review and Cross-Application for Enforcement of an Order of the  National Labor Relations Board
Harry J. Secaras argued the cause for petitioner.  With  him on the briefs was Howard L. Bernstein.
Steven B. Goldstein, Attorney, National Labor Relations  Board, argued the cause for respondent.  With him on the  brief were Arthur F. Rosenfeld, General Counsel, John H.  Ferguson, Associate General Counsel, Aileen A. Armstrong,  Deputy Associate General Counsel, and Julie B. Broido,  Senior Attorney.  Howard E. Perlstein, Deputy Assistant  General Counsel, entered an appearance.
Before:  Henderson, Randolph, and Rogers, Circuit  Judges.
Opinion for the Court filed by Circuit Judge Randolph.
Randolph, Circuit Judge:

1
Prime Service, Inc.'s petition to  review and the National Labor Relations Board's crosspetition to enforce an order of the Board raise the question  whether Prime Service should have been treated as a successor employer who breached its duty to bargain with the  incumbent union and, if so, whether the Board's affirmative  bargaining order is an appropriate remedy.  Also before us is  Prime's motion for an order requiring the Board to reopen  the record.  We deny Prime's petition and its motion and  enforce the Board's order.

2
Prime Service, a Delaware corporation headquartered in  Houston, Texas, rented and sold construction and industrial  equipment.  In 1998 Prime entered into an agreement to  acquire the assets of Clementina, Ltd., a company in a similar  line of business in California.  Clementina had a collective  bargaining agreement with the Operating Engineers Local  Union No. 3, International Union of Operating Engineers,  AFL-CIO (the "Union"), covering seventeen employees working at its stores in San Francisco, San Mateo, Sacramento,  San Jose, and Berkeley.

3
On August 7, 1998, Prime notified the Union that it was in  the process of acquiring Clementina's assets and that it would  meet with Clementina's employees to discuss the sale.  In an  August 11 reply, the Union requested a meeting with Prime  and asserted that its collective bargaining agreement with  Clementina should remain in force after the sale.  Prime  responded on August 13, stating that although it would consider Clementina's employees for jobs with Prime, it  would not be bound by the Clementina collective bargaining  agreement.  The next day the Union again suggested a  meeting with Prime and cautioned Prime against making any  unilateral changes in the Clementina employees' terms and  conditions of employment.

4
Sometime between August 25 and 27, Roland M. Katz, the  contracts manager for the Union, and other Union representatives met with representatives of Prime, including Prime's  director of human resources, regional manager, and in-house  counsel.  At this lunch meeting, Prime's representatives expressed the company's desire to have a "seamless transition,"  and stated that they were thinking of calling the acquired  operation "Clementina/Prime" in order to facilitate a smooth  transition.  Katz stated the Union's position that Prime had  to recognize Local 3 and had to continue to employ the  Clementina collective bargaining unit employees.  The Prime  people stated that they would have to recognize the Union  only if a majority of employees were former Clementina  employees.

5
The participants also discussed potential locations for conducting negotiations.  Katz told Prime's representatives that  the Union always negotiated near the workplaces and suggested Alameda as a location.  One of Prime's representatives  proposed Houston;  another suggested a location in between  such as Phoenix.

6
Prime took over Clementina's five unionized facilities on  August 28.  Of Clementina's seventeen bargaining unit employees, twelve accepted Prime's offer of employment.  During the next few weeks, several of the twelve employees  resigned, forcing Prime to run advertisements seeking new  employees.  Prime also was forced to transfer temporarily  employees from its other facilities.  By September 25, 1998,  due to resignations and Prime's hiring of additional nonUnion employees, the former Clementina bargaining unit  employees no longer constituted a majority of Prime's work  force.

7
Throughout September and October, the Union repeatedly  contacted Prime regarding its assurance that it would honor  all legal obligations and negotiate with Local Union No. 3 if  legally required to do so.  When Prime refused to bargain,  the Union filed an unfair labor practice charge, alleging that  Prime had a duty to bargain with the Union as a successor  employer and that its refusal to bargain violated the National  Labor Relations Act.  After a hearing, an Administrative  Law Judge found that Prime had violated sections 8(a)(1) and  (a)(5) of the Act, see 29 U.S.C. §§ 158(a)(1) and (a)(5), and  recommended the issuance of a cease and desist order and an  affirmative bargaining order.  On March 10, 2000, the Board  affirmed the ALJ's findings, and ordered Prime to bargain  with the Union.

8
After the Board issued its order, Prime took affirmative  steps on March 24, 2000, to comply by posting a "Notice to  Employees." The notice informed employees that the Board  had found that Prime violated the National Labor Relations  Act and that Prime would not refuse to bargain with the  Union as the exclusive representative of its employees.  Within three weeks of the posting, fifteen of twenty-six Prime  employees submitted written objections expressing their opposition to the Union's representing them.  This led Prime to  inform the Union that it would not proceed with collective  bargaining because a majority of employees opposed Union  representation.

I.

9
We shall deal first with the Board's decision that Prime  was a successor employer obligated to recognize and bargain  with the Union.  In order to preserve industrial peace during  the transition between employers, the presumption of majority support ordinarily enjoyed by a certified union may continue in successor situations, thereby obligating a successor  employer to bargain with its predecessor's union.  See Fall  River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 41  (1987);  NLRB v. Burns Int'l Sec. Servs., Inc., 406 U.S. 272  (1972).  This presumption of majority status attaches if there is a "substantial continuity" between the predecessor's business and that of the new employer;  if the incumbent union  has made a bargaining demand;  and if the new employer has  hired a "substantial and representative complement" of its  work force, a majority of which consists of the predecessor's  employees.  See Williams Enters., Inc. v. NLRB, 956 F.2d 1226, 1232 (D.C. Cir. 1992).  These are primarily factual  inquiries, and to that extent the Board's judgment must be  sustained if it is supported by substantial evidence.  Fall  River, 482 U.S. at 43;  Williams, 956 F.2d at 1232.

10
The parties agree that substantial continuity existed between Prime and Clementina.  The dispute is whether the  Union made a valid bargaining demand on Prime before  August 28 and whether Prime had hired a substantial and  representative complement of its work force by that date.

A. Demand

11
A union need utter no particular words to convey its  demand for bargaining with a successor employer.  The  demand may be in writing or it may be oral.  Although it is  customary for a union seeking recognition to inform the  employer that it represents a majority of employees, even  this elementary representation may be unnecessary when the  successor has retained the entire workforce and hired no one  else.  See Burns Int'l Sec. Servs., 406 U.S. at 278-79.  Still, in  conveying its intentions to the successor the union must do  more than simply suggest a meeting without specifying the  subjects of the meeting or when or where the union would  like to get together.  We have held that such a vague  proposal is not enough to trigger an employer's  8(a)(5)  obligation to bargain.  Williams, 956 F.2d at 1233;  see also  K & S Circuits, Inc., 255 N.L.R.B. 1270, 1297 (1981);  Sheboyan Sausage Co., 156 N.L.R.B. 1490, 1500-01 (1966).  If the  union does not clearly express its purpose, if it does not  explicitly demand bargaining, then "some indicia of a demand,  such as a suggested meeting place and time, proposed topics,  and a method for reply" should be conveyed to the new employer.  Williams, 956 F.2d at 1233.  The burden is on the  union to make its desires known.

12
For example, in K & S Circuits, the Board held that a  union's verbal communication to a company stating that its  employees were forming a union and asking to negotiate did  not constitute a request for recognition and bargaining. 255 N.L.R.B. at 1297.  The Board relied on the fact that the  communication "did not claim majority status, nor did it  indicate how, or to whom" the company was to reply.  Id.  Similarly, in Williams, we held that a phone call indicating  that the union "would ... like to represent the employees of  the new company" and "would like to have an opportunity to  discuss, perhaps negotiate" was not a sufficient request for  recognition. 956 F.2d at 1229.  The call was vague and  nothing more than a suggestion.  Id. at 1233.

13
The facts of this case are different.  Katz testified that he  made a demand for recognition on behalf of the Union in  early August.  The ALJ credited his testimony.  Katz also  testified that when they met for lunch at the end of August he  informed the Prime representatives of the Union's position  that the company had to recognize Local 3.  Katz further  testified that the Union and Prime then discussed potential  bargaining locations, and the subject of the transition from  Clementina to Prime, which was about to occur.  Substantial  evidence thus supported the ALJ's and the Board's finding  that the Union made a bargaining demand.  The Union  requested recognition, and the parties discussed bargaining  locations and the subject of negotiation.

14
We recognize the line of judicial authority holding that a  bargaining demand is not required in cases--such as this  one--in which there has been an immediate rather than a  gradual transition period.  See Banknote Corp. of America v.  NLRB, 84 F.3d 637, 645-46 (2d Cir. 1996).  Whether this  circumstance sufficiently distinguishes Fall River, 482 U.S. at  47, and Williams, 956 F.2d at 1230, 1232-34, which required a  bargaining demand in the context of gradual hiring during  prolonged start-up periods, is an issue about which we express no opinion in light of our agreement with the Board  that the Union did make a bargaining demand.

15
B. Substantial and Representative Complement

16
Prime also challenges the ALJ's (and the Board's) finding  that a substantial and representative complement of the  workforce existed at the five California stores on August 28. In fixing the time for determining the composition of the  successor's workforce, the "substantial and representative  complement" rule reconciles the employees' interest in choosing a bargaining agent with their interest in being represented at the earliest possible time.  Fall River, 482 U.S. at 47, 48  & n. 15.  "If, at this particular moment,"--the moment when  a substantial and representative complement is on board--"a  majority of the successor's employees had been employed by  its predecessor, then the successor has an obligation to  bargain with the union that represented these employees." Id. at 47.

17
Deciding when a substantial and representative complement existed can be difficult, particularly when the new  employer has plans to expand or alter operations.  See Sullivan Indus. v. NLRB, 957 F.2d 890, 895-96 (D.C. Cir. 1992); see also Pennsylvania Transformer Tech. v. NLRB, 254 F.3d 217, 223 (D.C. Cir. 2001).  Here the matter is relatively  simple.  Prime was not rebuilding a moribund business and  the ALJ properly refused to give weight to the company's  unsupported assertions that it planned to expand the workforce.  Prime was intent on having what it described as a  "seamless transition."  Appendix 65-66 (testimony of Roland  M. Katz).  When Prime took over the stores on August 28, it  encountered a shortage of workers because several former Clementina employees had rejected their employment offers  or had quit immediately.  But the company quickly brought  in new workers to fill the vacancies.  Employing twelve of  Clementina's seventeen former bargaining unit employees, it  continued Clementina's full operations on August 28 without  any hiatus.  See NLRB v. Cutter Dodge, Inc., 825 F.2d 1375,  1378 (9th Cir. 1987).  Prime itself wrote the Union on October 28 stating that its "substantial and representative complement of employees" consisted of eighteen workers, only one  more than the contingent under Clementina.  See Appendix  345.  Substantial evidence therefore supported the ALJ's  finding, adopted by the Board, that August 28 was the correct  date for determining whether the successor had a majority of  union members in its workforce.  On that date a majority of  Prime's employees were former Clementina employees. Prime was thus a successor employer obligated to recognize  and bargain with the Union.  The Board properly decided  that the company's failure to do so violated sections 8(a)(1)  and (a)(5) of the National Labor Relations Act.

II.

18
This brings us to Prime's motion to reopen the record. Prime asserts that regardless whether the Board correctly  found it to be a successor employer, it still had no duty to  bargain with the Union because new evidence showed that  the Union lacked the support of unit employees.  Prime asks  this court to grant its motion to reopen the record pursuant  to  10(e) of the Act, 29 U.S.C.  160(e), so that it can adduce  petitions and letters signed by fifteen of twenty-six bargaining unit employees in April 2000 stating that they did not  want to be represented by the Union.  Section 10(e) provides  that reviewing courts may order evidence to be taken before  the Board if the party moving for leave to adduce additional  evidence shows "that such additional evidence is material and  that there were reasonable grounds for the failure to adduce  such evidence in the hearings before the Board."  See NLRB  v. Mexia Textile Mills, Inc., 339 U.S. 563, 569 (1950).  This  information, according to Prime, gave it a good faith doubt  about the Union's majority status.

19
Once a successor employer develops a "good faith doubt"  about a union's majority status, it is no longer obligated to  recognize and bargain with the union.  Williams, 956 F.2d at  1234;  see also St. Agnes Med. Ctr. v. NLRB, 871 F.2d 137,  145 (D.C. Cir. 1989).  An anti-union petition signed by a  majority of the successor's employees stating that they do not want to be represented by the union may serve to create such  a good faith doubt.  See Williams, 956 F.2d at 1234.  But the  Board has adopted a presumption--which this court has  upheld--that an employer's unlawful refusal to bargain taints  any later anti-union petition.  See Harter Tomato Prods. Co.  v. NLRB, 133 F.3d 934, 938-39 (D.C. Cir. 1998);  see also Lee  Lumber & Bldg. Material Corp. v. NLRB, 117 F.3d 1454,  1458-61 (D.C. Cir. 1997).  An employer can rebut this presumption of taint only by showing :  (1) that employee disaffection arose after it resumed recognition of the union;  and  (2) that it bargained with the union for a reasonable time  without committing additional unfair labor practices.  See  Harter Tomato, 133 F.3d at 939.

20
Prime did post a notice at some of its locations in compliance with the Board's order, but it never engaged in bargaining with the Union.  The company canceled a bargaining  session scheduled for April 13, 2000.  Given these facts,  Prime has not rebutted the Board's presumption that an employer's unlawful refusal to bargain taints any later antiunion petition.

21
We reject Prime's argument that we should reopen the  record so that it can demonstrate that at the time the Board  issued the bargaining order (March 10, 2000) the Union no  longer enjoyed majority status.  If Prime had objected to the  bargaining order it might have a point.  We have held that  before the Board issues a bargaining order on the basis of a  union majority of authorization cards--a Gissel order, after  NLRB v. Gissel Packing Co., 395 U.S. 575 (1969)--the Board  must take into account changes between the time of the  unfair labor practices and the issuance of its order.  See  Flamingo Hilton-Laughlin v. NLRB, 148 F.3d 1166, 1170-71  (D.C. Cir. 1998).  In mounting this argument Prime assumes  that it may attack the bargaining order, an assumption we  reject for the reasons given in the next section.

III.

22
Prime argues that the Board erred in issuing the bargaining order without offering a reasoned explanation.  This court has repeatedly held that the Board must supply a reasoned  analysis for issuing a bargaining order rather than milder  relief.  See Vincent Indus. Plastics, Inc. v. NLRB, 209 F.3d 727, 738 (D.C. Cir. 2000);  Flamingo Hilton-Laughlin, 148 F.3d at 1173.  But Prime failed to raise any specific objections to the propriety of the bargaining order in the Board  proceedings.  It merely excepted to the remedy "in its entirety" and to the order "in its entirety."  Appendix 350-52  (Exceptions of Respondent/Employer Prime Service, Inc. to  the Administrative Law Judge's Decision).  This form of  generalized objection is insufficient to preserve the argument  for appeal.  See Quazite Div. v. NLRB, 87 F.3d 493, 497  (D.C. Cir. 1996).  Section 10(e) of the Act precludes reviewing  courts from considering objections not first presented to the  Board "unless the failure or neglect to urge such objection  shall be excused because of extraordinary circumstances," 29  U.S.C.  160(e), circumstances not present here.  See  Exxel/Atmos, Inc. v. NLRB, 147 F.3d 972, 978 (D.C. Cir.  1998);  Quazite, 87 F.3d at 497-98.

23
The petition for review and the motion to reopen are  denied.  The Board's cross-petition for enforcement is granted.

24
So ordered.