Court Opinion

ID: 185577
Source: CourtListenerOpinion
Date Created: 2011-02-05 02:33:38+00
Date Added: 2024-06-11T17:26:16.919361
License: Public Domain

275 F.3d 1137 (D.C. Cir. 2002)
Tradesmen International, Inc., Petitionerv.National Labor Relations Board, Respondent
Sheet Metal Workers' International Association, Local Union No. 33 of Northern Ohio, AFL-CIO, Intervenor
No. 00-1523
United States Court of Appeals  FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued December 6, 2001Decided January 15, 2002

On Petition for Review and Cross-Application for Enforcement of an Order of the  National Labor Relations Board
Maurice Baskin argued the cause and filed the briefs for  petitioner.
Michael E. Avakian was on the brief for amici curiae  Associated Builders and Contractors, Inc. and the Center on  National Labor Policy, Inc.
Richard A. Cohen, Senior 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 Fred L. Cornnell, Attorney.
Craig Becker argued the cause for intervenor.  With him  on the brief was Richard P. James.
Before:  Sentelle and Rogers, Circuit Judges, and  Williams, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge Sentelle.
Sentelle, Circuit Judge:

1
Tradesmen International, Inc.  ("Tradesmen"), a labor leasing company, petitions this Court  for review of a National Labor Relations Board ("NLRB" or  "the Board") decision in which the NLRB found that Tradesmen violated sections 8(a)(1) and (3) of the National Labor  Relations Act ("the Act"), 29 U.S.C.  158(a)(1), (a)(3), by  refusing to hire Matthew Oakes, a union organizer, after he  unsuccessfully lobbied the city of Lorain, Ohio to require  Tradesmen to pay a surety bond for work performed in the  city.  Tradesmen argues in part that its refusal to hire Oakes  did not violate the Act because Oakes's activity before the  Lorain Board of Building Standards and Appeals was not  protected activity.  Because we find that the NLRB failed to  establish a nexus between Oakes's activity and the employment conditions of Tradesmen or union workers, we grant the  petition for review and vacate the decision and order of the  NLRB.

I. Background

2
In July 1996, the city of Lorain, Ohio adopted Ordinance  118-96 ("Lorain Ordinance"), which requires general and  subcontractors to post a $5000 surety bond when performing  construction work in the city.  Of particular significance to this case is the ordinance's definition of "Sub-Contractor,"  which means "any person who performs a special skill, trade,  craft, or profession as a business for profit in the City, and as  part of a construction contract, whether on behalf of the  general contractor, building owner, or agent of an owner." Lorain, Ohio, Ordinance 118-96  III(b)(2) (July 25, 1996). Petitioner Tradesmen is a construction labor leasing company.  It does not bid on, nor does it become a party to,  construction contracts.  Rather, it "leases" skilled workers to  construction companies that bid on, and enter into, construction contracts.

3
On January 15, 1997, Tradesmen contracted with Bay  Mechanical and Electrical, Inc. ("Bay Mechanical") to supply  it with employees who could work on a large construction  project in Lorain.  Bay Mechanical, as a subcontractor on the  project, posted a bond.  Tradesmen, as a leasing company,  did not.  In late March 1997, Matthew Oakes, a union organizer for the Sheet Metal Workers International Association,  Local Union No. 33 of Northern Ohio, AFL-CIO ("the Union"), contacted Tradesmen and inquired about openings for  Heating, Ventilation and Air Conditioning ("HVAC") positions.  Although Oakes was qualified for HVAC positions,  there were no such positions available through Tradesmen at  that time.  A few months later, Oakes met with Lorain City  Building Inspector Jack Murphy and provided him with a list  of three companies, including Tradesmen, that Oakes believed  were violating the Lorain Ordinance by operating as subcontractors but not posting bonds.  As a result, Murphy ordered  all Tradesmen employees to vacate the Bay Mechanical construction site.  However, at Tradesmen's request, Murphy  allowed Tradesmen employees to return to the job site pending a ruling by the Lorain Board of Building Standards and  Appeals ("Lorain Board") as to whether Tradesmen was to be  considered a "subcontractor" for purposes of the Lorain  Ordinance.

4
The Lorain Board held a hearing on May 28, 1997.  Oakes  attended the hearing accompanied by union counsel and, after  identifying himself as a Local 33 member, testified that  Tradesmen should be subject to the Lorain Ordinance because it operated as a subcontractor.  Tradesmen responded  that it was an employee leasing agency that merely provided  other companies with skilled workers.  The Lorain Board  adjourned without immediately rendering an opinion.  Two  days later, Oakes contacted Tradesmen to inquire once again  about available HVAC work.  He was informed by Tradesmen's Vice President that because he intentionally tried to  hurt Tradesmen's business at the Lorain Board hearing,  Tradesmen would not hire Oakes for any open positions.  In  response to that conversation, the NLRB's General Counsel  filed a complaint alleging that Tradesmen violated sections  8(a)(1) and (3) of the Act.  Specifically, the complaint alleged  that Tradesmen refused to hire Oakes because he tried to  lobby the city of Lorain to require Tradesmen to pay a surety  bond, thus increasing Tradesmen's cost of doing business in  Lorain.  In June 1997, the Lorain Board issued its ruling: Tradesmen was not a subcontractor for purposes of the  Lorain Ordinance and was therefore not required to post a  bond.

II. Proceedings Below

5
The General Counsel's complaint was heard before an  Administrative Law Judge ("ALJ"), who dismissed the complaint after finding that Oakes's "solo effort to increase  Tradesmen's cost of doing business in Lorain was not 'concerted activity' as defined by Section 7 of the Act."  Tradesmen International, Inc., 332 NLRB No. 107, 2000 WL 1679479, at *13 (Oct. 31, 2000) (hereinafter Tradesmen).  The  ALJ also held that even if Oakes's activity was concerted, it  was not otherwise protected under section 7 because "Oakes's  lobbying efforts ... had absolutely nothing to do with the  specific terms and conditions of employment."  Id.  That is,  Oakes's effort to apply the Lorain Ordinance to Tradesmen  did not involve employee-employer relations, nor was it even  generally related to employees' interests.  Instead, the purpose of the Lorain Ordinance was to fund the city's building  department, "as opposed to having anything to do with the  employees of various contractors or subcontractors working  in the city."  Id.  Finally, the ALJ held that Oakes's activity  was unprotected under section 7 because "it was designed to  injure Tradesmen's business" and "posed a threat of immediate harm to Tradesmen's business operation in Lorain,"  which, if effective, would have harmed Tradesmen employees  as well.  Id. at *14.

6
The General Counsel filed exceptions to the ALJ's findings  and the case was heard before the Board.  The Board  reversed the decision of the ALJ, finding that Oakes's May 28  testimony before the Lorain Board was concerted, protected  activity.  Id. at *3.  In particular, the Board found "a nexus  between Oakes's activity and employees' legitimate concern  over their continued employment."  Id. at *4.  The Board  explained that Oakes's efforts were intended to protect local  unionized companies and the job opportunities of their employees, and was similar in that respect to area-standards  picketing, a protected activity under the Act.  Id.  Board  Member (now Chairman) Hurtgen dissented from the decision, finding instead that Oakes's activity, while concerted,  was nonetheless unprotected because Oakes failed to establish any relationship between the bonding ordinance and  employees' terms and conditions of employment.  Id. at *8.

7
Tradesmen petitions for review, challenging the Board's  findings that Oakes's activity before the Lorain Board was  concerted activity for mutual aid or protection protected  under section 7 of the Act.  The Board, supported by Intervenor Sheet Metal Workers' International Association, Local  No. 33 of Northern Ohio, AFL-CIO, cross-petitions for enforcement.

III. Analysis

8
Our review of NLRB decisions is limited.  See, e.g., Pioneer Hotel, Inc. v. NLRB, 182 F.3d 939, 942 (D.C. Cir. 1999). We will affirm the judgment of the Board unless, "upon  reviewing the record as a whole, [this Court] conclude[s] that  the Board's findings are not supported by substantial evidence, or that the Board acted arbitrarily or otherwise erred  in applying established law to the facts of the case."  International Union of Electronic, Elec., Salaried, Mach. & Furniture Workers v. NLRB, 41 F.3d 1532, 1536 (D.C. Cir. 1994)  (internal quotations and citations omitted).  We will not,  however, " 'merely rubber-stamp NLRB decisions.' "  Douglas Foods Corp. v. NLRB, 251 F.3d 1056, 1062 (D.C. Cir.  2001) (quoting Avecor, Inc. v. NLRB, 931 F.2d 924, 928 (D.C.  Cir. 1991)).  As we have said before,

9
this court is a reviewing court and does not function simply as the Board's enforcement arm. It is our responsibility to examine carefully both the Board's findings and its reasoning, to assure that the Board has considered the factors which are relevant to its choice of remedy, selected a course which is remedial rather than punitive, and chosen a remedy which can fairly be said to effectuate the purposes of the Act.

10
Peoples Gas Sys., Inc. v. NLRB, 629 F.2d 35, 42 (D.C. Cir.  1980).  In that light, we review the Board's conclusion that  Oakes's testimony before the Lorain Board was protected  activity under section 7 of the Act and that Tradesmen  committed an unfair labor practice by refusing to hire him  following his testimony.

11
In relevant part, section 7 states:  "Employees shall have  the right to self-organization, to form, join, or assist labor  organizations, to bargain collectively through representatives  of their own choosing, and to engage in other concerted  activities for the purpose of collective bargaining or other  mutual aid or protection."  29 U.S.C.  157 (emphasis added).  Defining the scope of section 7's protections "is for the  Board to perform in the first instance as it considers the wide  variety of cases that come before it."  NLRB v. City Disposal  Systems, Inc., 465 U.S. 822, 829 (1984).  Thus, if an issue  arises that implicates the Board's expertise in labor relations,  "a reasonable construction by the Board is entitled to considerable deference."  Id.

12
The Board concedes that Tradesmen's refusal to hire Oakes  only constitutes an unfair labor practice if Oakes's testimony  before the Lorain Board was protected by section 7.  Tradesmen, 2000 WL 1679479, at *2.  Our analysis of whether  Oakes's activity enjoys section 7's protections is guided by Supreme Court precedent, which clearly provides that the  "mutual aid or protection" clause in section 7 includes employees' efforts "to improve terms and conditions of employment or otherwise improve their lot as employees through  channels outside the immediate employee-employer relationship."  Eastex, Inc. v. NLRB, 437 U.S. 556, 565 (1978).  This  includes employees' "resort to administrative and judicial  forums" to improve their working conditions.  Id. at 566 &  n.15 (collecting cases).  But the "mutual aid or protection"  clause is not without bound.  That is, an employee's activity  will fall outside section 7's protective reach if it fails in some  manner to relate to "legitimate employee concerns about  employment-related matters."  Kysor/Cadillac, 309 N.L.R.B. 237, 237 n. 3 (1992);  see Eastex, 437 U.S. at 567-68.  Thus an  essential element before section 7's protections attach is a  nexus between one's allegedly protected activity and "employees' interests as employees."  Eastex, 437 U.S. at 567. With  the limits of section 7's protections in mind, we turn to the  Board's decision.

13
We assume without deciding that Oakes's activity as a  union representative constituted concerted activity, see City  Disposal Systems, 465 U.S. at 832-33, but reject the Board's  finding that his activity was protected under section 7.  Our  deferential review of Board decisions notwithstanding, the  record before us provides no evidence to support a nexus  between Oakes's efforts to impose a bond on Tradesmen and  any employee-related matters.  The relationship between  Oakes's lobbying efforts and "employees' interests as employees" was "so attenuated that [it] cannot fairly be deemed to  come within the 'mutual aid or protection' clause" of section 7. Eastex, 437 U.S. at 568.  The Board's attempt to characterize  Oakes's activity as "similar to area-standards picketing" is  unsupported and unsupportable.

14
The Board justified its decision by claiming a nexus between Oakes's activity and union employee concerns over  continued employment.  Tradesmen, 2000 WL 1679479, at *4. The Board found that "Oakes's attempt to secure [Tradesmen's] compliance with the Lorain bonding ordinance was  designed to protect local unionized companies and, in turn, the job opportunities of their employees, by ensuring that  [Tradesmen] did not have an undue bidding advantage in the  Lorain construction market."  Id. Tradesmen argued at  length that because Oakes's activity hurt rather than benefitted Tradesmen employees, it cannot be considered protected  under the Act.  Protected behavior is not limited to just those  concerted activities that benefit the actor's fellow employees. The Supreme Court has made clear that an employee may  engage in otherwise proper concerted activities to support  employees of employers other than his own.  See Eastex, 437 U.S. at 564.  Thus, even if he was an employee of Tradesmen  (a point on which the parties disagree and which we decline to  address), Oakes was free to engage in behavior that supported union employers and employees.  Indeed, Oakes  openly admitted to the ALJ that his purpose before the  Lorain Board, "as a representative of the union and as an  organizer, [was] to level [the] playing field as much as possible" between union and non-union companies.  The Board  agreed that "if the Lorain Board had found that was subject to the bonding ordinance, then cost of doing business in Lorain would have increased." Tradesmen, 2000 WL 1679479, at *5.

15
Despite Eastex's recognition that non-union employers may  be acceptable targets of union employees' concerted activities,  we fail to see in the first instance how a bonding ordinance  that applies equally to union and non-union entities can be  said to be a means of leveling the playing field between the  two, and we further fail to see how invoking the application of  a requirement that is wholly unrelated to employment issues  relates in any sense to "employees' interests as employees." Eastex, 437 U.S. at 567.  The Board has simply failed to  provide an adequate or persuasive explanation to us.  The  explanation it does provide, that Oakes's activity was similar  to area-standards picketing and that forcing Tradesmen to  pay a bond would "protect local unionized companies," is  wholly invalid.  Tradesmen, 2000 WL 1679479, at *4.

16
Area-standards picketing is a protected activity under the  Act.  See, e.g., O'Neil's Markets v. NLRB, 95 F.3d 733, 737  (8th Cir. 1996) (area-standards hand billing by non-employees protected);  NLRB v. Browning-Ferris Industries, 700 F.2d 385, 387-88 (7th Cir. 1983) (employees' refusal to cross picket  line at customer's property protected);  Yellow Cab, Inc., 210 N.L.R.B. 568, 569 (1974) (employee's distribution of handbills  supporting other employer's employees protected).  It is an  effective means "by which unions attempt to protect their  constituents' jobs by generating public and economic pressure  on nonunion employers to pay higher wages and benefits to  their employees, thereby ending unfair competitive advantage."  Tradesmen, 2000 WL 1679479, at *4.  That is, union  employees may effectively protect their job security by seeking to raise non-union employment wages and benefits (or  "standards") to the levels of union standards, thereby increasing non-union employers' costs and succeeding, albeit indirectly, in "leveling the playing field."  Here, however, the  bonding requirement is not a "union standard."  It applied to  all subcontractors, whether they employed union workers,  non-union workers, or both.  Moreover, in the traditional  area-standards picketing scenario, benefits flow to both union  and non-union employees.  When effective, union employees  receive increased job security and non-union employees receive, for example, increased employee benefits, or at least  that is the theory, and a plausible outcome in many cases.  In  the present case, Oakes's activity was not an effort to improve  any employees' (union or non-union) working conditions.  So  far as the record shows, it was solely an effort to raise  Tradesmen's costs.  Paying the bond would not place Tradesmen on a more level playing field with union companies, it  would instead subject leasing companies to one discreet element of construction costs required of contractors and subcontractors, regardless of whether either the leasing companies or contractors employed union or non-union employees. Moreover, neither the Board nor the intervening union has  suggested any meaningful sense in which the bond related to  employees' interests as employees.  The half-hearted suggestion at oral argument that because the proceeds of the bond  funded city inspection departments the bond related to employees' interest in the safety of working conditions is unconvincing.  There is no showing, nor is it likely that there could be any, that there would have been more or better inspections  if the bonds paid by contractors and subcontractors had been  supplemented by other entities supplying them labor, or by  any other suppliers with whom they might deal.

17
The Board's decision suggests a new standard that any  activity that raises a non-union employer's costs "levels the  playing field" between union and non-union employers, even if  unrelated to working conditions or union/non-union status,  and is therefore protected under the Act.  This standard, it  seems, would apply whether the activity resulted in a benefit  to non-union employees, as in area-standards picketing, or  resulted in harm to non-union employees, as was the case  here.  But such a standard effectively erases any line between acceptable and unacceptable activity directed toward  an employer's economic health.  We reject this sweeping and  unprecedented expansion of "concerted activity for mutual aid  or protection."  As the Supreme Court has stated, and as the  Board has previously agreed, for an employee's concerted  activities to be protected under the Act, the activity must  bear an identifiable relationship or nexus to legitimate employee concerns about employment-related matters.  See  Eastex, 437 U.S. at 565-68;  Kysor/Cadillac, 309 N.L.R.B., at  238 n.3.  Because Oakes's lobbying efforts did not, we reject  the Board's conclusion that they were protected under the  Act.

18
We need not and do not decide whether the Act requires  that an employee's concerted activities result in an actual,  measurable benefit to a targeted employer's employees.  We  note, however, that our research has failed to produce any  case where, if the targeted employer had acquiesced to the  demands of the picketing employees, the targeted employees  would directly suffer, rather than benefit.1  At oral argument,  the Union urged us to recognize that, because only licensed  applicants are approved for the bond, Tradesmen employees'  benefit would be to operate under a state license that guaranteed their qualifications, experience, and training.  See Lorain, Ohio, Ordinance 118-96,  III(d) (July 25, 1996).  This  argument is a difficult one to follow.  By definition, employees who are leased from a labor leasing company will always  be operating under the license of the subcontractor or contractor leasing them, regardless of whether their leasing  company held a license independently.  In any event, we do  not address whatever merit this argument might (or might  not) have, as the Board did not rely on the benefits of  licensing as the basis for its opinion.  We cannot consider  such justification now, because "[a]gency decisions must generally be affirmed on the grounds stated in them."  Association of Civilian Technicians v. FLRA, 269 F.3d 1112, 1117  (D.C. Cir. 2001);  see also, Burlington Truck Lines, Inc. v.  United States, 371 U.S. 156, 168 (1962) ("The courts may not  accept appellate counsel's post hoc rationalizations for agency  action....").

19
At oral argument, the Board's counsel asserted that Petrochem Insulation, Inc. v. NLRB, 240 F.3d 26 (D.C. Cir. 2001),  supports its decision in this case.  We disagree.  In that case,  we upheld the Board's finding that unions who filed environmental objections to zoning and construction permits sought  by non-union contractors were protected activities.  The  Board, we noted, relied on the unions' statement that they  sought to "force construction companies to pay their employees a living wage, including health and other benefits."  Id.  at 30 (emphasis added) (citation omitted).  If the unions were  successful, the Board reasoned, they would expand union  members' job opportunities while improving their bargaining  power for higher wages.  See id.  Thus it is clear that even  though union members were actively opposing the hiring of  non-union contractors, the union's stated purpose was to force  non-union employers to conform to area wage and benefit  standards--a goal that, if accepted by the non-union employers, would benefit non-union employees.  Such activity, unlike  a bond requirement, relates to "employees' interests as employees."  Eastex, 437 U.S. at 567.

20
The Board also relied on the Ninth Circuit's decision in  Kaiser Engineers v. NLRB, 538 F.2d 1379, 1385 (9th Cir. 1976), holding that lobbying members of Congress in an effort  to change the national immigration policy was action taken  for "mutual aid or protection" under section 7 because the  policy could affect the engineers' job security.  The facts of  that case, though, are distinguishable from ours.  The Kaiser  court was considering whether protected activity could occur  "outside the strict confines of the employment relationship." Id.  No one argues before us that employees may not petition, lobby, picket or otherwise direct their concerted activities toward entities other than their employers or other  employees' employers.  Specifically, the Ninth Circuit held  that "lobbying legislators" for policy changes affecting employee "job security" was protected activity.  Id.  The policy  at issue involved easing restrictions on the importation of  foreign engineers who would compete directly with American  engineers for jobs.  In our case, we are not concerned with a  policy that would flood the labor market and affect workers'  job security.  We are concerned with whether the application  of a bonding ordinance that applies equally to union and nonunion subcontractors affects the job security of union employees.  It does not.

21
While unable to identify a case supporting its position at  oral argument, the Board came closer to success in its brief,  although not close enough, in citing NLRB v. Circle Bindery,  536 F.2d 447 (1st Cir. 1976).  The question before the First  Circuit in Circle Bindery was whether a union employee's  "policing" of a non-union employer's adherence to specific  contract terms was protected under section 7.  In that case, a  union employee notified the union that his employer was  labeling books with a union "bug" (a mark indicating that the  book was bound by union employees) in violation of its  customer's contract.  See id. at 449.  The union then sought  and caused the non-union company to lose the binding contract.  As here, the employer argued that because the employee's actions were detrimental to the company and did not  benefit its own employees, the actions were unprotected  under section 7.  The Board, however, ruled that the employee's actions, although harmful to the employer's business,  were nonetheless protected because they were "directed solely to protect[ ] himself and his fellow members of the Union  by preventing misuse of the union label which could undercut  the Union's standards."  Id. at 451.  The court, in upholding  the Board's decision, found that the non-union employer's  obtaining of the work "was a direct violation of its customer's  union contract," so any harm the employer sustained "was  merely to lose work which ... it should not have received in  the first place."  Id. at 452-53.

22
The Board cites Circle Bindery for the proposition that  "promoting the employment of union members under union  conditions" is protected by the Act.  Id. at 452.  We do not  disagree.  That proposition simply has nothing to do with the  alleged unfair labor practice by Tradesmen found by the  Board.  Oakes's activity did not involve union conditions.  It  did not involve non-union conditions.  Indeed it did not  involve any employee-related conditions at all.  It involved a  bond.  Rather than raise the level of employee terms or  conditions of employment, the bond raises funds for the city. Such city fund raising, however, bears too attenuated a  relationship to employees' interests as employees.  As such,  Oakes's actions to enforce the bond against Tradesmen cannot enjoy section 7's protections.

IV. Conclusion

23
For the reasons stated, we grant the petition for review,  vacate the decision and order of the Board, and deny the  Board's cross-petition for enforcement.

Notes:

1
 An arguable exception, NLRB v. Circle Bindery, 536 F.2d 447  (1st Cir. 1976), is distinguishable from the present case for reasons  set forth later in this opinion.