Court Opinion

ID: 9377294
Source: CourtListenerOpinion
Date Created: 2023-03-07 16:01:00.563407+00
Date Added: 2024-06-11T17:17:13.369811
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 6, 2022              Decided March 7, 2023

                        No. 21-1209

INTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIP
  BUILDERS, BLACKSMITHS, FORGERS AND HELPERS, LOCAL
                         627,
                     PETITIONER

                             v.

           NATIONAL LABOR RELATIONS BOARD,
                     RESPONDENT

   HAWAIIAN DREDGING CONSTRUCTION COMPANY, INC.,
                   INTERVENOR

            On Petition for Review of an Order
           of the National Labor Relations Board

    David A. Rosenfeld argued the cause for petitioner. With
him on the briefs was Michaela F. Posner.

    Joel A. Heller, Attorney, National Labor Relations Board,
argued the cause for respondent. With him on the brief were
Jennifer A. Abruzzo, General Counsel, Ruth E. Burdick, Deputy
Associate General Counsel, David Habenstreit, Assistant
General Counsel, and Usha Dheenan, Supervisory Attorney.
                              2
    Barry W. Marr was on the brief for intervenor Hawaiian
Dredging Construction Company, Inc. in support of
respondent. Megumi Sakae entered an appearance.

    Before: MILLETT, KATSAS and WALKER, Circuit Judges.

    Opinion for the Court filed by Circuit Judge WALKER.

    WALKER, Circuit Judge: More than a decade ago,
Hawaiian Dredging Construction Company and a Hawaiian
chapter of the Boilermakers union failed to renew a collective
bargaining agreement. Hawaiian Dredging then discharged
Boilermakers welders who were covered by the now-expired
agreement. The Boilermakers thought those discharges were
an “unfair labor practice” under the National Labor Relations
Act, 29 U.S.C. § 158(a), and asked the National Labor
Relations Board to weigh in.

    Originally, the Board sided with the Boilermakers. But
Hawaiian Dredging asked this court to review that decision,
and we remanded to the Board to reconsider.

     The Board then changed its view and concluded that no
unfair practice occurred. Now the Union takes its turn in
petitioning us for review.

    Because the Board’s new decision was supported by
substantial evidence and correctly applied established law, we
deny the Union’s petition.
                               3
                               I

                               A

     Hawaiian Dredging is Hawaii’s “largest general
contractor.” JA 1. To staff its construction jobs, it relies on
union employees. According to officials at the company, it
has a decades-old policy of performing craft work only when it
has a “prehire” agreement with a union.

     Unique to the construction industry, prehire agreements
are collective bargaining agreements that permit a construction
company to contract with a union before it hires any union
workers. See 29 U.S.C. § 158(f); NLRB v. Iron Workers, 434
U.S. 335, 337-38 (1978). The union typically operates a
“hiring hall” from which an employer may hire union workers
on a project-by-project basis. See, e.g., Boilermakers Local
No. 374 v. NLRB, 852 F.2d 1353, 1355 (D.C. Cir. 1988).

     Unlike a typical collective bargaining agreement, a prehire
agreement is formed with a union that need not enjoy majority
support from the employer’s current employees. See 29
U.S.C. §§ 159(a), 158(f). As a result, construction employers
are not required to bargain in good faith with a union after a
prehire agreement expires. See Iron Workers, 434 U.S. at
345-46. Once a prehire agreement expires, either party can
walk away.

    For years, Hawaiian Dredging employed welders through
a prehire agreement with the International Brotherhood of
Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and
Helpers. When that agreement expired, the parties tried to
reach a new deal. Hawaiian Dredging continued to employ its
Boilermakers welders while it attempted to negotiate a new
agreement, but negotiations stalled. Once it became clear that
                              4
the relationship between the parties had ended, Hawaiian
Dredging suspended its welding projects and discharged
thirteen Boilermakers welders.1

     Hawaiian Dredging then entered a new prehire agreement
with a different union, the United Plumbers and Pipefitters
Union, Local 675. Under this new agreement, Hawaiian
Dredging offered the discharged Boilermakers welders a path
back to employment. If the welders met the Pipefitters’
referral requirements — including a welding exam — they
could go back to work for Hawaiian Dredging. Eight of the
thirteen welders eventually did just that.

     The Boilermakers union disapproved of the way Hawaiian
Dredging treated its welders. It claimed that Hawaiian
Dredging had discriminated against them for being
Boilermakers. But Hawaiian Dredging denies that. It says
the welders were fired because it had a neutral policy of
employing craft workers only when it has a prehire agreement
in place.

     Unsatisfied with that explanation, the Boilermakers union
took its case to the National Labor Relations Board, accusing
Hawaiian Dredging of unfair labor practices under the National
Labor Relations Act. It alleged that Hawaiian Dredging’s
treatment of the welders violated §§ 8(a)(1) and 8(a)(3) of the
Act. See 29 U.S.C. §§ 158(a)(1), (a)(3), 157.

     Section 8(a)(1) says employers cannot “interfere with,
restrain, or coerce employees in the exercise of the rights
1
  Although the record suggests that Hawaiian Dredging may have
fired fourteen welders, JA 362-75, the charge before the Board
complained of only thirteen of those firings, JA 260-61.
Accordingly, we discuss the thirteen employees relevant to the
charge.
                               5
guaranteed” by the Act, 29 U.S.C. § 158(a)(1), including the
right to form a union and collectively bargain, 29 U.S.C. § 157.
Section 8(a)(3) says employers cannot “discourage
membership in” a union. 29 U.S.C. § 158(a)(3). Taken
together, those provisions make it unlawful to “discharge . . . a
worker because of union activity.” NLRB v. Transportation
Management Corp., 462 U.S. 393, 394 (1983).

                               B

     Initially, an Administrative Law Judge found that no unfair
practice occurred. She reasoned that Hawaiian Dredging’s
asserted practice of staffing craft workers only when a prehire
agreement is in place was “a legitimate business justification”
for the discharges. Hawaiian Dredging Construction Co., 362
NLRB 81, 104 (2015) (Hawaiian Dredging I).

     The Board reviewed the ALJ’s determination and
reversed, with one member dissenting. Id. at 87-88. It found
that Hawaiian Dredging could not rely on its asserted neutral
policy because, on several occasions, it had continued to
employ the Boilermakers welders after a prehire agreement
expired and while negotiations for a new agreement were
ongoing. Id. at 84.

    This court reversed. We held that the Board gave
“inappropriate emphasis to the gap periods” when Hawaiian
Dredging continued to employ Boilermakers welders in the
absence of a prehire agreement.         Hawaiian Dredging
Construction Co. v. NLRB, 857 F.3d 877, 884 (D.C. Cir. 2017).
We noted that the Board failed to engage with the reasoning of
the dissenting Board member, who argued that the short
periods of continued employment could be explained by
Hawaiian Dredging’s “long history of bridging such hiatus
                              6
periods cooperatively” while negotiations with the union were
ongoing. Id. (cleaned up).

     On remand, the Board changed its view. It found that
Hawaiian Dredging’s actions were the result of a legitimate
business practice — the company’s prehire policy — and not
anti-union discrimination. Hawaiian Dredging Construction
Co., 368 NLRB No. 7, at 6 (2019) (Hawaiian Dredging II).

    The Boilermakers then petitioned us for review.

                              II

    Our review of Board decisions is deferential. “[W]e must
uphold the judgment of the Board unless its findings are
unsupported by substantial evidence, or it acted arbitrarily or
otherwise erred in applying established law to the facts of the
case.” Wendt Corp. v. NLRB, 26 F.4th 1002, 1008 (D.C. Cir.
2022) (cleaned up).

     A Board decision is arbitrary if it “entirely failed to
consider an important aspect of the problem or offered an
explanation for its decision that runs counter to the evidence
before” it. Hawaiian Dredging Construction Co. v. NLRB,
857 F.3d 877, 881 (D.C. Cir. 2017) (cleaned up). “Substantial
evidence . . . is such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion.” Oak
Harbor Freight Lines, Inc. v. NLRB, 855 F.3d 436, 440 (D.C.
Cir. 2017) (cleaned up).

                              III

    The Board concluded that Hawaiian Dredging did not
commit an unfair labor practice when it discharged the
Boilermakers welders because of a neutral, non-discriminatory
                                 7
policy of only hiring welders under a prehire agreement with a
union. Under our deferential standard of review, we deny the
petition challenging that decision.2

                                 A

     When an employer fires an employee protected by the
National Labor Relations Act, the Board may use one or both
of two tests to decide whether anti-union motive explains the
firing. See 29 U.S.C. §§ 158(a)(1), (a)(3), 157. Here, the
Board applied both.

    One test derives from the Board’s decision in Wright Line,
251 NLRB 1083 (1980). Under Wright Line, the General
Counsel of the Board (who prosecutes cases on behalf of the
charging party) must make an initial showing that a discharge
was the result of an anti-union motive. Id. at 1089; see also
NLRB v. Transportation Management Corp., 462 U.S. 393,
395 (1983). If he does, an employer can rebut that showing
with a “legitimate business reason” for the discharge. Wright
Line, 251 NLRB at 1088.

     The other test derives from the Supreme Court’s decision
in NLRB v. Great Dane Trailers, Inc., 388 U.S. 26 (1967).
Under Great Dane, an anti-union motive can be inferred when
an employer’s action “is so inherently destructive of employee
interests that it may be deemed proscribed without need for

2
   The Boilermakers raise a separate argument that Hawaiian
Dredging violated § 8(a)(1) in a manner distinct from the
discrimination covered by § 8(a)(3), see Petitioner’s Br. 46-47, but
we lack jurisdiction to address that argument because it was not
raised to the Board on remand. See Woelke & Romero Framing,
Inc. v. NLRB, 456 U.S. 645, 666 (1982) (“the Court of Appeals lacks
jurisdiction to review objections that were not urged before the
Board”).
                               8
proof of an underlying improper motive.” Id. at 33 (cleaned
up). By contrast, actions that are “comparatively slight”
infringements of employee interests do not give rise to that
conclusive inference. Id. at 34 (cleaned up). Instead, an
employer can rebut the charge of illegal discrimination by
demonstrating “legitimate and substantial business
justifications for” its action. Id. If it does so, the burden is
on the General Counsel to prove an anti-union motive. Id.

     Under both tests, the search for an anti-union motive is the
touchstone of the analysis. If an anti-union motive cannot be
inferred from “inherently destructive” conduct, then the
General Counsel must prove that such a motive best explains
the employer’s action, rather than the legitimate business
justification alleged by the employer.

                               B

     Applying both Wright Line and Great Dane, the Board
found that Hawaiian Dredging’s discharges were not the result
of an anti-union motive.

     That conclusion rested on two findings. First, the Board
found        that      Hawaiian      Dredging’s       asserted
policy — conditioning       craft  work    on    a     prehire
agreement — was “a legitimate and substantial business
justification for the discharges.” Hawaiian Dredging II, 368
NLRB No. 7, at 6 (2019). Second, it found that the discharges
were the result of that policy, and not some discriminatory
reason. Id. The General Counsel therefore failed to carry its
burden under either test.

        To start, we agree with the Board that Hawaiian
Dredging demonstrated “a legitimate and substantial business
justification for” discharging the welders.       Hawaiian
                              9
Dredging II, 368 NLRB at 6. When a prehire agreement
expires, a construction employer has no continuing obligation
to maintain a bargaining relationship with a union. See NLRB
v. Iron Workers, 434 U.S. 335, 345-46 (1978). So, absent
other evidence, there is nothing discriminatory about a policy
that suspends work and discharges all employees when an
agreement expires. If anything, Hawaiian Dredging’s policy
promotes collective bargaining by ensuring that all of its
welding work is done pursuant to a prehire agreement.

     We also conclude that substantial evidence supports the
Board’s factual finding that Hawaiian Dredging discharged the
welders because of its policy, and not for some discriminatory
reason. Hawaiian Dredging officials gave uncontroverted
testimony that it discharged the welders under the policy. See
Hawaiian Dredging I, 362 NLRB 81, 104.

    The Boilermakers point to evidence that they say cuts
against the Board’s conclusion. But each argument fails to
persuade.

     First, the Boilermakers point to short periods where
Hawaiian Dredging continued to employ Boilermakers welders
while no prehire agreement was in place. The Boilermakers
allege that these gap periods show that Hawaiian Dredging’s
asserted policy is pretextual. But the Board reasonably found
otherwise. As this court previously pointed out, Hawaiian
Dredging has a “long history of bridging . . . hiatus periods
cooperatively” by keeping union employees on the books while
attempting to negotiate a new prehire agreement. Hawaiian
Dredging Construction Co. v. NLRB, 857 F.3d 877, 884 (D.C.
Cir. 2017) (quoting Hawaiian Dredging I, 362 NLRB at 95
n.33); see also Hawaiian Dredging II, 368 NLRB at 4
(incorporating this court’s view into the Board’s decision).
That suggests the gap periods were not contrary to, but rather
                              10
consistent with, Hawaiian Dredging’s longstanding policy and
practice.

     Second, the Boilermakers point to a letter they received
from Hawaiian Dredging about the discharges. Hawaiian
Dredging wrote that it did “not intend to utilize members of the
Boilermaker’s Union for future work.” JA 360. The
Boilermakers say that the letter shows an anti-union motive.
But the Board concluded that the letter does not support that
theory when it’s read as a whole. Hawaiian Dredging II, 368
NLRB at 3-4. The letter explains that Hawaiian Dredging
planned to end its relationship with the Boilermakers because
its “prior agreement with the Union terminated.” JA 360; see
also Hawaiian Dredging, 857 F.3d at 885 (considering the
letter in context). So again, the Boilermakers’ evidence does
not show discriminatory intent.

     Finally, the Boilermakers argue that Hawaiian Dredging
exhibited an anti-union motive when it discharged the
welders — completely terminating their employment —
instead of laying them off with the expectation of recall.
According to the Boilermakers, the welders would have been
able to return to work for Hawaiian Dredging more quickly had
they been laid off instead of discharged. Hawaiian Dredging
II, 368 NLRB at 5. However, given the context of Hawaiian
Dredging’s established policy of suspending all work in the
absence of a prehire agreement, and the Board’s factual finding
that there was no ‘practical difference’ between laying the
workers off and firing them, see Hawaiian Dredging II, 368
NLRB at 6 n.29, that choice between layoffs and discharges by
itself does not evidence discriminatory animus. As we have
explained, the question under Wright Line and Great Dane is
whether an employer’s action was due to an anti-union motive,
not whether an employer’s action adversely affected
employees. As long as it does not discriminate, an employer
                              11
is free to decide between discharging and laying off its
employees without violating §§ 8(a)(1) and 8(a)(3) of the
National Labor Relations Act. That is so even when its
decision might disadvantage employees.

                          *   *    *

     The Board’s decision correctly applied established law and
is supported by substantial evidence. We therefore deny the
petition for review.

                                                   So ordered.