Court Opinion

ID: 3176262
Source: CourtListenerOpinion
Date Created: 2016-02-10 16:09:41.977152+00
Date Added: 2024-06-11T15:26:00.651076
License: Public Domain

United States Court of Appeals
                                  For the Eighth Circuit
                              ___________________________

                                      No. 15-1302
                                      No. 15-2039
                              ___________________________

                                  National Labor Relations Board

          lllllllllllllllllllll                         Petitioner/Cross-Respondent

        International Union of Operating Engineers, Local 150, AFL-CIO

                                     lllllllllllllllllllllIntervenor

                                                   v.

                                      Seedorff Masonry, Inc.

          lllllllllllllllllllll                   Respondent/Cross-Petitioner
                                           ____________

                                  Submitted: September 21, 2015
                                     Filed: February 10, 2016
                                          ____________

Before LOKEN, BENTON, and SHEPHERD, Circuit Judges.
                           ____________

LOKEN, Circuit Judge.

      On September 7, 2012, with an arbitrator selected to hear a pending grievance,
Local 150 of the International Union of Operating Engineers (“Local 150”) filed an
unfair labor practice charge, alleging that Seedorff Masonry, Inc. (“Seedorff”), a
masonry contractor based in Strawberry Point, Iowa, violated the National Labor
Relations Act (“NLRA”) “by repudiating the parties’ collective bargaining
agreement” (“CBA”). The National Labor Relations Board’s General Counsel filed
a Complaint alleging that Seedorff had violated NLRA §§ 8(a)(1) and (5), 29 U.S.C.
§§ 158(a)(1), (5), by repudiating a CBA between the Quad Cities Builders
Association (“QCBA”) and Local 150 to which Seedorff had agreed to be bound.

       After an evidentiary hearing, the Board’s Administrative Law Judge (“ALJ”)
ruled that Seedorff violated §§ 8(a)(1) and (5) by repudiating a valid pre-hire CBA
with Local 150 and by failing “to abide by the hiring hall and benefit provisions of
the contract.” The ALJ rejected as largely irrelevant Seedorff’s claim that its actions
were a lawful response to a jurisdictional dispute between Local 150 and the
Laborers’ International Union of North America (“the Laborers”) over whether
Seedorff was properly assigning masonry work that fell within the overlapping
coverages of the two unions’ pre-hire CBAs to members of the Laborers. The Board
affirmed the ALJ’s analysis and issued a Decision and Order requiring Seedorff to
pay Local 150’s members “for any loss of earnings and other benefits suffered as a
result of [Seedorff’s] failure to honor” its CBA with Local 150. Seedorff Masonry,
Inc., 360 N.L.R.B. No. 107, at *2 (2014). At oral argument, counsel for the Board
confirmed that this back pay remedy could include work that had been performed by
Laborers consistent with that union’s CBA. The Board petitions to enforce its
Decision and Order. Seedorff cross-petitions to review and vacate the Order. Local
150 has intervened in support of the Board. Concluding that the Board’s analysis was
contrary to the NLRA and pre-hire CBAs as construed in prior judicial decisions and
the Board’s own precedent, we deny enforcement and vacate the Decision and Order.

                                  I. Background.

       A. Section 8(f) Pre-Hire Agreements. Based on established practice in the
construction industry, Congress enacted § 8(f) of the NLRA to modify the rule that
an employer may not enter into a CBA with a union that does not represent a majority
of the employees in the bargaining unit. See 29 U.S.C. § 159(a); McKenzie Eng’g

                                         -2-
Co. v. NLRB, 303 F.3d 902, 906 (8th Cir. 2002). Section 8(f) “allows construction
industry employers and unions to enter into agreements setting the terms and
conditions of employment for the workers hired by the signatory employer without
the union’s majority status first having been established in the manner provided for
under § 9 of the Act.” Jim McNeff, Inc. v. Todd, 461 U.S. 260, 266 (1983).

       For many years, the Board held that a construction industry employer could
unilaterally repudiate a § 8(f) pre-hire agreement any time before the union attained
majority status. However, the Board overturned this rule in John Deklewa & Sons,
Inc.1 Under Deklewa, § 8(f) agreements are “binding, enforceable, and not subject
to unilateral repudiation” throughout their term. 275 N.L.R.B. at 1389. We expressly
upheld the Deklewa rule in NLRB v. W.L. Miller Co., 871 F.2d 745, 747-48 (8th Cir.
1989). Although the rule provides that neither party may be compelled to negotiate
a successor agreement after expiration of a § 8(f) agreement, the Board has ruled that
an automatic renewal provision in a § 8(f) agreement extends the no-unilateral-
repudiation rule, a holding we upheld in Cedar Valley Corp. v. NLRB, 977 F.2d
1211, 1219 (8th Cir. 1992), cert. denied, 508 U.S. 907 (1993).

      Under Deklewa, an employer’s unilateral repudiation of a § 8(f) agreement
before its expiration violates the employer’s § 8(a)(5) duty to bargain, just as
repudiation of a CBA with a majority-status union has long been held to violate
§ 8(a)(5).2 McKenzie Eng’g, 303 F.3d at 908. However, the Board has carved a

      1
     282 N.L.R.B. 1375, 1389 (1987), enforced sub nom. Int’l Ass’n of Bridge
Workers, Local 3 v. NLRB, 843 F.2d 770 (3d Cir.), cert. denied, 488 U.S. 889 (1988).

      2
      § 8(a)(5) cryptically provides: “It shall be an unfair labor practice for an
employer . . . to refuse to bargain collectively with the representatives of his
employees, subject to the provisions of [§ 9(a)].” 29 U.S.C. § 158(a)(5).

                                         -3-
“single-employee unit” exception to its no-unilateral-repudiation rule for § 8(f) CBAs
which is critical in this case:

      [W]hen a unit consists of no more than a single permanent employee at
      all material times, an employer has no statutory duty to bargain and thus,
      will not be found in violation of the Act for disavowing a bargaining
      agreement and refusing to bargain.

Haas Garage Door Co., 308 N.L.R.B. 1186, 1187 (1992). The Board has explained
that this exception is based on a fundamental tenet of the NLRA: “[T]he principle of
collective bargaining presupposes that there is more than one eligible person who
desires to bargain. The Act therefore does not empower the Board to certify a one-
man unit.” Foreign Car Ctr., Inc., 129 N.L.R.B. 319, 320 (1960); see Stack Elec.,
Inc., 290 N.L.R.B. 575, 577 (1988).

       B. The Union/Employer Relationships at Issue. Seedorff is a union
contractor with an office in the Quad-Cities area that seasonally employs “between
ten and thirty Bricklayers all of the time, and ten to thirty Laborers all of the time.”
Seedorff’s President, Robert Marsh, testified that Seedorff as a masonry subcontractor
only enters into § 8(f) pre-hire CBAs; it has § 8(f) CBAs with the Laborers Union and
the Bricklayers Union. The administrative hearing record includes a multi-employer
§ 8(f) agreement with the Laborers, to which Seedorff was a party; a § 8(f) agreement
between Seedorff and Operators Local 234; a multi-union § 8(f) Project Labor
Agreement (“PLA”) governing construction of a state prison in Iowa, to which Local
150 and Seedorff were parties; and the QCBA agreement here at issue.

       In June 1988, the multi-employer QCBA and its contractor members entered
into a Building Agreement with Local 150’s predecessor in which each contractor
recognized Local 150 as the sole collective bargaining agent for employees engaged
in construction work covered by the agreement. Though not a member of QCBA,

                                          -4-
Seedorff signed an individual Building Agreement in July 1988 agreeing that it
“hereby becomes a signatory employer” and further reciting:

      [Seedorff] who is not a member of the [QCBA] agrees to be bound by
      any amendments, extensions, or changes in this Agreement agreed to by
      the Union and the [QCBA], and further agrees to be bound by the terms
      and conditions of all subsequent contracts negotiated between the Union
      and the [QCBA] unless ninety (90) days prior to the expiration of this
      or any subsequent agreement [Seedorff] notifies the Union in writing
      that it revokes such authorization.

After 1988, the QCBA and Local 150 entered into ten successor agreements,
including the one at issue, which was effective from June 1, 2010, to May 31, 2014
(the “2010 QC Agreement”). Although not apparent from its terms (at least not to
us), it is undisputed that the 2010 QC Agreement was, as to Seedorff, a § 8(f) pre-hire
agreement. It is also undisputed that Seedorff never gave Local 150 timely ninety-
day notice revoking QCBA’s authority to bind Seedorff to the 2010 QC Agreement.

       The record contains little evidence of relations between Seedorff and Local 150
from 1988 until Seedorff and Local 150 entered into the Iowa prison PLA in the
spring of 2010. Marsh testified, based on his personal knowledge and review of
Seedorff’s payroll records, that Seedorff continuously worked in Local 150’s
jurisdictional territory but only one Operator was ever employed by Seedorff after
Marsh was hired in 2006, a member of Operators Local 234 who worked on a project
in Local 150’s territory for three months in 2009, causing Seedorff to make payments
to Local 150’s benefit funds. On cross examination, Marsh recalled that 1993 payroll
records showed that Seedorff then employed a Local 150 member who had retired in
2003. Neither the General Counsel nor Local 150, whose records would doubtless
show such information, introduced evidence that Seedorff employed any other Local
150 Operator. In 2011, Local 150 requested that Seedorff sign an agreement that

                                         -5-
appears to be a majority-status CBA between Local 150 and a different multi-
employer bargaining association. Seedorff declined.

      C. The Work Dispute at Issue. Marsh testified that Seedorff has historically
and contractually assigned the work of “mason tending” to members of the Laborers
Union for the last 55 years. Mason tending encompasses a variety of tasks, and it
includes “conveying of all materials used by Masons by any mode or method.” In
2011, Local 150 challenged Seedorff’s work assignments under its § 8(f) CBA with
the Laborers. This was hardly a surprising development. As the Seventh Circuit
noted some years earlier, “[t]he Laborers and Operators were fierce rivals for mason-
tending forklift work on construction projects,” resulting in “substantial litigation
before the NLRB.” Hutter Constr. Co. v. IUOE, Local 139, 862 F.2d 641, 642 n.7
(7th Cir. 1988).

        In July 2011, Local 150 filed a grievance claiming that Seedorff violated its
§ 8(f) PLA with Local 150 by assigning Laborers to operate forklifts at the Iowa
prison project. An arbitrator dismissed the grievance, concluding that Seedorff had
properly assigned the forklift work to the Laborers. Changing tactics, Local 150 filed
two new grievances in October, claiming that Seedorff had violated the 2010 QC
Agreement, first, by assigning a Laborer to operate a “boom truck” at a project in
Burlington, Iowa, and second, by assigning equipment maintenance work to Laborers
at the Iowa prison project. In both grievances, commonly referred to as “pay-in-lieu”
grievances, Local 150 demanded “back wages and fringe benefits lost by all affected
members of the bargaining unit [established by the 2010 QC Agreement] who would
be working had you honored our Agreement.”

      Seedorff declined to pay the demanded amounts. On November 3, Marsh sent
Local 150 an email inquiry:

                                         -6-
      To my knowledge, Seedorff Masonry, Inc. is not a signatory to the
      [2010] Quad City Agreement . . . . If you disagree, please identify the
      document(s) upon which you are relying. We will need this information
      to be able to address your grievances further.

Within hours, Local 150 sent Seedorff a memorandum and correspondence
“pertaining to the QC Building Agreement,” which are not part of the administrative
record. The parties then proceeded through the Agreement’s grievance procedures,
ultimately selecting an arbitrator and setting possible dates for an arbitration hearing
to resolve both grievances in the spring of 2012.

       D. Seedorff Seeks Relief from the Board. The NLRA provides that it is an
unfair labor practice for a union to coerce an employer “to assign particular work to
employees in a particular labor organization . . . rather than to employees in another
labor organization.” 29 U.S.C. § 158(b)(4)(D). When an employer charges a union
with violating § 8(b)(4)(D), § 10(k) authorizes the Board “to hear and determine the
dispute out of which such unfair labor practice shall have arisen.” Usually, the
dispute involves competing claims to work by two unions; often, both have
“legitimate contractual claims.” Local 30, United Slate Workers v. NLRB, 1 F.3d
1419, 1428 (3d Cir. 1993). In resolving the § 10(k) dispute by awarding the work to
one of the competing unions, the Board looks “beyond the four corners of the [CBA]
to consider the parties’ practice, usage, and custom regarding the agreement.”
McKenzie Eng’g Co. v. NLRB, 182 F.3d 622, 625-26 (8th Cir. 1999).

      On January 3, 2012, Seedorff wrote the Great Plains Laborers’ District Council,
advising that Local 150 was pressuring Seedorff to reassign the operation and
maintenance of equipment used to transport masonry materials to the operating
engineers and giving notice that Seedorff “is considering the reassignment of this
work.” On January 31, Seedorff filed an unfair labor practice charge against the
Laborers, alleging that Seedorff’s past practice was to assign the work of transporting
masonry material to the Laborers, Local 150 was pressuring Seedorff to reassign the

                                          -7-
work, and the Laborers “have threatened to strike and picket” work sites if Seedorff
reassigned the work. In late February, the Board’s Regional Director dismissed the
charge without a hearing, explaining in one paragraph of a letter to Seedorff’s counsel
that the PLA provided a method to resolve the Iowa prison site dispute and “there are
no competing claims for the same work” at the Burlington project.3

       E. Seedorff Provokes This Proceeding. Denied a remedy by the Board,
Seedorff was left with its contractual remedies and obligations.4 With an arbitrator
selected to hear Local 150’s grievances, counsel for Seedorff wrote Local 150’s
counsel “to discuss settlement” of the PLA and Burlington grievances. Regarding the
PLA grievance, Seedorff noted the prior favorable arbitration ruling, predicted “the
arbitrator would rule similarly in the case at hand,” and offered to settle the grievance

      3
      The latter, unexplained ruling is, in a word, inexplicable. Under the 2010 QC
Agreement, Local 150 claimed the “operation and maintenance of . . . any [] power
machine that may be used by [Seedorff] for the construction, alteration, repair or
wrecking of a building.” Under its § 8(f) CBA with Seedorff, the Laborers claimed
“conveying of all materials used by Masons by any mode or method.”

       In the months before and after the Board’s decision in this case, the Board held
§ 10(k) hearings to resolve similar disputes between other Operators and Laborers
local unions, concluding there were competing claims -- the Operators’ pay-in-lieu
grievances, and the Laborers’ threats to strike if the work was reassigned -- and
awarding the disputed work to the Laborers. Laborers Local 310 (KMU Trucking),
361 N.L.R.B. No. 37 (Sept. 3, 2014); Laborers Local 894 (Donley’s, Inc.), 360
N.L.R.B. No. 20 (Jan. 10, 2014). The merits of the Regional Director’s ruling are not
at issue. What is troubling is the ALJ’s treatment of the no-competing-claims issue
as resolved by the Regional Director’s ruling despite overwhelming evidence of
competing claims in the hearing record.
      4
       Grievance/arbitration contractual remedies subject to judicial review under
§ 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a), and § 10(k)
decisions by the Board, are alternative methods for resolving jurisdictional work
assignment disputes. Carey v. Westinghouse Elec. Corp., 375 U.S. 261, 266 (1964).

                                          -8-
by paying $846.40 to the Local 150 Assistance Fund. Regarding the Burlington
grievance, to which the PLA did not apply, Seedorff asserted there was no basis for
the grievance because “no collective bargaining agreement currently exists between
Seedorff and Local 150,” and “therefore request[ed] that Local 150 withdraw the
Burlington grievance.” On September 7, Local 150 filed this unfair labor practice
charge alleging that the April 12 letter “violated the Act by repudiating the parties’
collective bargaining agreement.”

                                    II. Discussion.

       The ALJ and the Board first ruled that Seedorff was bound by the 2010 QC
Agreement prior to sending Local 150 the April 12 letter. Substantial evidence
supports this ruling. See NLRB v. Whitesell Corp., 638 F.3d 883, 890 (8th Cir. 2011)
(standard of review). In July 1988, Seedorff agreed to be bound to the then-existing
Quad Cities Agreement and to “all subsequent contracts negotiated between” Local
150 and the QCBA. Seedorff concedes it did not timely revoke QBCA’s
authorization to bargain the 2010 QC Agreement in the manner prescribed. In Cedar
Valley, we enforced the Board’s order that an employer was bound by a subsequent
§ 8(f) pre-hire agreement in virtually identical circumstances. 977 F.2d at 1220;
accord Local 257, IBEW v. Grimm, 786 F.2d 342, 346 (8th Cir. 1986).

       In the April 12 letter, Seedorff asserted that, after July 1988, it “consistently
has informed Local 150 that it has not assigned its bargaining rights to the [QCBA]
and has not agreed to a [CBA] with Local 150.” Assuming without deciding that
such conduct would distinguish our decision in Cedar Valley, Seedorff presented no
evidence supporting this assertion at the administrative hearing. Rather, Seedorff
argued that Local 150 itself terminated a prior Quad Cities agreement with a March
2006 letter to the QCBA asking to “start negotiations leading to a new agreement.”
The ALJ’s finding that this letter served only as notice to start negotiation of a
successor agreement, not as notice to terminate the existing agreement, was well

                                          -9-
supported by the hearing record, including QCBA’s response to Local 150.
Moreover, even if the 2006 letter had terminated the then-existing Quad Cities
agreement, we fail to see how that would have affected QCBA’s authority to bind
Seedorff to the successor 2010 QC Agreement. See Cedar Valley, 977 F.2d at 1220
(“[T]he decisive issue is whether [the employer] affirmatively, and in compliance
with the terms of the 1978 agreements, revoked [the association’s] authority to bind
it to successive agreements.”).

       The ALJ and the Board went on to conclude: (A) that the April 12, 2012, letter
was a “clear and unequivocal” repudiation of the 2010 QC Agreement; (B) that the
repudiation charge filed by Local 150 was not time-barred by the six-month statute
of limitations in § 10(b) of the NLRA; and (C) that Seedorff failed to prove its single-
employee unit “affirmative defense.” We conclude that each of these rulings was
legally flawed.

        A. The Repudiation Issue. After concluding that Seedorff was bound by the
2010 QC Agreement, the ALJ stated, “I further find that [Seedorff] violated Section
8(a)(5) and (1) of the Act5 by failing to abide by the terms of the agreement and by
repudiating its collective-bargaining relationship with [Local 150].” The “failing to
abide” finding was a reference to Seedorff assigning to the Laborers work that fell
within the broad classes of construction work covered by the 2010 QC Agreement,
an issue not raised in Local 150’s charge for obvious reasons, as we will later explain.
Neither the ALJ nor the Board discussed why Seedorff’s statement in the April 12
letter, “Thus, no collective bargaining agreement currently exists between Seedorff
and Local 150, and there is no basis for Local 150’s Burlington grievance,”

      5
        “A violation of Section 8(a)(5) of the Act produces a derivative violation of
Section 8(a)(1) by interfering with the collective bargaining rights of employees.”
St. John’s Mercy Health Sys. v. NLRB, 436 F.3d 843, 846 n.5 (8th Cir. 2006)
(quotation omitted). Here, the parties focus exclusively on § 8(a)(5) issues.

                                         -10-
constituted a refusal-to-bargain repudiation. The Supreme Court explicitly cautioned
in Jim McNeff, 461 U.S. at 270 n.11, that context matters in deciding “what specific
acts would affect the repudiation of a prehire agreement.” Because “[a]rbitrators and
courts are still the principal sources of contract interpretation,” and repudiation is a
question of contract interpretation, we review this issue de novo. Litton Fin. Printing
Div. v. NLRB, 501 U.S. 190, 202-03 (1991).

       When Seedorff wrote the April 12 letter, it had been denied a § 10(k) remedy
by the Board and was facing an arbitration hearing on Local 150’s grievances. As
relevant here, Seedorff had three arbitration defenses -- that it was not bound by the
2010 QC Agreement; that it could unilaterally repudiate a § 8(f) CBA that purported
to cover a single-employee unit; and that it had properly assigned work covered under
the two overlapping § 8(f) CBAs to the Laborers. The first two defenses challenged
whether there was a CBA for the arbitrator to enforce. Those questions of
arbitrability are for a court to decide, not the arbitrator, unless the parties agree
otherwise. See AT & T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643,
648-49 (1986). If those defenses failed, the third issue, whether Seedorff had
properly assigned the work, was unquestionably for the arbitrator. See id. at 650
(“[T]hat the employer has violated the [CBA] is to be decided, not by the court asked
to order arbitration, but as the parties have agreed, by the arbitrator.”).

       After receiving the April 12 letter, Local 150 had various procedural options
to resolve the jurisdictional contract dispute. It could inquire whether Seedorff
agreed that the arbitrator would decide arbitrability, in which case the parties would
schedule the arbitration hearing. It could ask the arbitrator to schedule the hearing,
leaving Seedorff the option to file a § 301 suit to enjoin arbitration. It could file a
§ 301 suit to compel arbitration. Or Local 150 and Seedorff could petition the Board
to reconsider the competing claims issue and conduct a § 10(k) hearing. Local 150
invoked none of these available remedies. Instead, it filed this § 8(a)(5) repudiation
charge, a procedure that effectively excluded the competing Laborers Union.

                                         -11-
       In these circumstances, the Board could not decide the contract repudiation
issue without considering the context of the April 12 letter. The letter did not refuse
to bargain any issue, the explicit focus of § 8(a)(5). Rather, Seedorff asserted there
was “no basis” for the breach of contract Local 150 alleged in the Burlington pay-in-
lieu grievance. Seedorff also offered to settle the Iowa prison work assignment
grievance; Local 150 had framed that grievance as a breach of the 2010 QC
Agreement, but Seedorff argued it would be controlled by prior arbitration under the
PLA. The ALJ and the Board failed to explain why the April 12 letter, standing
alone and in context, was a repudiation of the § 8(f) 2010 QC Agreement. “[M]ere
noncompliance with the contract does not in itself suffice to establish repudiation.”
Grimm, 786 F.2d at 346.

       B. The § 10(b) Statute of Limitations Issue. Section 10(b) of the NLRA
provides: “[N]o complaint shall issue based upon any unfair labor practice occurring
more than six months prior to the filing of the charge with the Board.” 29 U.S.C.
§ 160(b). The six-month limitation period begins to run when the charging party
receives “clear and unequivocal notice that the unfair labor practice had occurred.”
NLRB v. La-Z-Boy Midwest, 390 F.3d 1054, 1061 n.1 (8th Cir. 2004). “[A]
repudiation need not be an express, written repudiation but instead can be manifested
in a variety of ways.” NLRB v. Jerry Durham Drywall, 974 F.2d 1000, 1004 (8th Cir.
1992). Seedorff has the burden to establish this defense by proving that Local 150
was put on notice more than six months before its September 2012 charge that
Seedorff had repudiated the 2010 QC Agreement. See id. (collecting Board cases);
AMCAR Div., ACF Indus., Inc. v. NLRB, 596 F.2d 1344, 1351-52 (8th Cir. 1979).

      The ALJ found that Local 150’s charge was timely because Seedorff’s
communications relating to the work assignment disputes in 2011 and 2012 were
equivocal and therefore the April 2012 letter was the first clear and unequivocal
notice of repudiation Local 150 received. The ALJ also found, elsewhere in the
opinion, that Seedorff breached the 2010 QC Agreement by “using Laborers to

                                         -12-
perform union work.” Numerous Board and court decisions establish that a valid
§ 8(f) CBA may be repudiated by “open and notorious acts by one party, known to
the other, which are inconsistent with the continuance of the contract.” Contractors
Health & Welfare Plan v. Harkins Constr. & Equip. Co., 733 F.2d 1321, 1326 (8th
Cir. 1984) (remanding a § 301 case for a finding on this issue); see Laborers Health
& Welfare Tr. Fund v. Westlake Dev., 53 F.3d 979, 982-83 (9th Cir. 1995); In re
CAB Assocs., 340 N.L.R.B. 1391, 1392 (2003).

         From the inception of the 2010 QC Agreement, Seedorff did not hire any Local
150 member for work that Local 150 contends was covered by that agreement, nor
did Seedorff make contributions to the Operators benefit funds that hiring Local 150
members would have required. This conduct, known to Local 150 no later than its
filing of the October 2011 grievances, appears to have been “open and notorious acts
. . . inconsistent with the continuance of the contract.” Yet the ALJ did not consider
whether Seedorff had repudiated the 2010 QC Agreement by conduct well before its
April 2012 letter, and the Board did not address the issue. If there was repudiation
by conduct before March 2012, the Board would have been compelled to dismiss the
General Counsel’s complaint. See St. Barnabas Med. Ctr., 343 N.L.R.B. 1125, 1127
(2004) (“[I]f the repudiation occurred outside the 10(b) period, all subsequent failures
. . . to honor the terms of the [CBA] are deemed consequences of the initial
repudiation for which the union may not recover.”).

      C. The Single-Employee Unit Issue. Seedorff argues that it lawfully
repudiated the 2010 QC Agreement because the Board recognizes that an employer
may unilaterally repudiate a § 8(f) CBA during its term if the union has not achieved
majority status. We join the Seventh Circuit in recognizing the single-employee unit
exception in the § 8(f) context. See J.W. Peters, Inc. v. Bridge Workers, Local 1, 398
F.3d 967, 973-75 (7th Cir. 2005); accord Westlake Dev., 53 F.3d at 982-83. Because
employment fluctuates greatly in the construction industry, a § 8(f) bargaining unit
may fall to fewer than two employees with some frequency. See Jim McNeff, 461

                                         -13-
U.S. at 266. Therefore, for the exception to apply, the Board “require[s] proof that
the purportedly single-employee unit is a stable one, not merely a temporary
occurrence.” McDaniel Elec., 313 N.L.R.B. 126, 127 (1993).

       Here, Marsh, Seedorff’s President, testified that Seedorff had not employed a
Local 150 member since 2003 and had employed only one member of Operators
Local 234 when he worked briefly in Local 150’s territory in 2009. In rejecting the
single-employee unit defense, the ALJ first held that Seedorff had failed to meet its
burden of proof on this affirmative defense because Seedorff failed to introduce
payroll records supporting Marsh’s “conclusory testimony.” This ruling was an error
of law. The single-employee unit exception is a defense that an employer must
invoke. But the exception is based on the principle that the NLRA does not empower
the Board to certify a one-man unit. Therefore, when the defense is properly invoked,
the Board has recognized that a § 8(a)(5) unfair labor practice charge must be
dismissed if “the General Counsel has failed to establish” that the appropriate
bargaining unit consisted of more than one employee during the time in question. D
& B Masonry, 275 N.L.R.B. 1403, 1409 (1985) (emphasis added), followed in Stack
Elec., 290 N.L.R.B. at 577-78. We have carefully reviewed the Board cases cited by
the ALJ; none support her ruling reversing these contrary burden-of-proof rulings.
Marsh’s testimony was clearly sufficient to require that the General Counsel submit
evidence proving the absence of a single-employee unit. In summarily affirming the
ALJ on this issue, the Board lost sight of the important distinction between an
employer’s burden of going forward with evidence establishing a prima facie case for
the exception, and the General Counsel’s ultimate burden of persuasion. See
generally NLRB v. Mastro Plastics Corp., 354 F.2d 170, 176-78 (2d Cir. 1965).

       The ALJ went on to conclude that Seedorff’s single-employee unit defense
failed because Seedorff “used Laborers to perform union work as defined in the
QCBA agreement.” This alternative holding is based on two more serious errors of
law. First, the General Counsel’s complaint alleged that the bargaining unit consisted

                                        -14-
of “the employees described in Article 11” of the 2010 QC Agreement, which set
forth wages and classifications for all Operators covered by the agreement. The
General Counsel submitted no evidence supporting that allegation. The ALJ’s ruling
implicitly decided an issue which to our knowledge the Board has never addressed --
when an employer has entered into § 8(f) pre-hire CBAs that define overlapping work
coverages, and the employer has validly assigned all the work to members of another
union and claims the single-employee unit exception to its § 8(a)(5) duty to bargain
with the charging party union, does the bargaining unit to which the exception applies
include the second union’s employees? In our view, the logical answer is no. But in
any event, we will not enforce an order that simply refused to address the issue.

       Second, the ALJ concluded (assumed would be more accurate) that Seedorff
violated the 2010 QC Agreement by assigning work covered by that pre-hire CBA to
members of the Laborers Union.6 This ruling was contrary to the well-recognized
principle that, when an employer has entered into § 8(f) CBAs with competing craft
unions, the NLRB and § 301 courts look beyond the four corners of the CBAs to
consider the parties’ practice, usage, and custom in determining whether the employer
violated the NLRA in assigning the work at issue. See McKenzie Eng’g, 303 F.3d
at 908-10; Sheet Metal Workers Int’l Ass’n Local Union No. 27 v. E.P. Donnelly,
Inc., 737 F.3d 879, 888 (3d Cir. 2013). Here, since the General Counsel declined to
introduce evidence addressing the question, the record can only support the
conclusion that Seedorff did not violate the 2010 QC Agreement by continuing its
long-standing practice of assigning mason-tending work at the Burlington and Iowa
prison projects to members of the Laborers Union. By refusing to resolve this issue,
the Board entered an Order that may enrich Local 150’s members for work they were
not entitled to perform and may force Seedorff to pay for work that it already properly

      6
       The ALJ also found that Seedorff “created this ‘jurisdictional dispute’ . . .
when it attempted to assign union work to the Laborers,” an assertion made by the
Operators and rejected by the Board in KMU Trucking, 361 N.L.R.B. No. 37, at *3,
and in Donley’s, Inc., 360 N.L.R.B. No. 20, at *4.

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paid Laborers to do. This we will not enforce. McKenzie Eng’g, 373 F.3d at 894
(NLRA remedy may not confer a “windfall” nor be “unduly punitive”).

                                 III. Conclusion.

       By refusing to acknowledge these issues and present evidence addressing them,
the General Counsel and Local 150 as Charging Party failed to prove essential
elements of the Complaint, as was true in McKenzie Eng’g, 303 F.3d at 911. By
ruling that these issues were irrelevant and failing to resolve them, the ALJ and the
Board issued an unlawful Order that may not be enforced. Accordingly, we deny the
Board’s Application for Enforcement, grant Seedorff’s Cross Petition for Review, and
vacate the Board’s Decision and Order dated May 7, 2014.
                        ______________________________

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