Court Opinion

ID: 7851008
Source: CourtListenerOpinion
Date Created: 2022-09-08 17:26:08.414339+00
Date Added: 2024-06-11T16:29:06.396753
License: Public Domain

WALD, Circuit Judge,
dissenting:
Although I, like the majority, abhor the corrupt conduct of the union officials in *375this case, I have considerable difficulty in enforcing the Board’s remedial order against the union on the basis of the record before us. As the majority points out, Maj.Op. at 1391, this is apparently the first time in the fifty-year history of the NLRA that the Board has applied the section 8(a)(2) proscription of financial and other support of unions by employers to a scheme of individual corruption involving kickback payments that in no way benefit-ted the union as an entity.1 I am not willing to say at this juncture that the Board is not authorized under any circumstances to apply section 8(a)(2) and its decertification remedies to a union so infected by its leaders’ corruption that it cannot properly represent its members. But neither am I willing to read the statute as permitting the Board to make this major innovation in the interpretation of the law without any findings or allusions to evidence on the record demonstrating a relationship between the individual officers’ corruption and the union’s representation of its members. To do so would impermissibly expand the Board’s power to intervene in and dissolve collective bargaining relationships vitally affecting the welfare of union members in situations not within the legitimate ambit of section 8(a)(2).
The uniqueness of this case of course does not lie in the corrupt scheme recounted in detail by the majority. Kickbacks of precisely this kind motivated Congress to enact as part of the Taft-Hartley Act a special statute, 29 U.S.C. § 186, proscribing the acceptance of payments by union officials from employers and providing for both criminal penalties and various civil remedies for its violation. Indeed the very existence of 29 U.S.C. § 186 strongly suggests to me that Congress never intended section 8(a)(2), a provision designed to deal with the altogether different problem of “company unions,” to be applied to kickback schemes like this one.
By its terms, section 8(a)(2) proscribes financial or other support to a labor organization. There is absolutely no evidence that any of the kickback money here went into the union coffers or in any other way benefitted the union. AU Opinion at 27, J.A. 318. I cannot agree with the majority’s attempts to finesse this point by characterizing the payments as simply part of a “package deal” that benefitted the union. The sole basis for the Board’s finding of an unfair labor practice was the kickback payments themselves and those payments did not in any way (as far as the record shows) benefit the union. Under the “package deal” theory, the Board could abrogate under section 8(a)(2) virtually any bargaining relationship and any labor contract involving corrupt dealings between the employer and union officials. This would radically expand the Board’s power to determine for employees which unions are or are not worthy of their support. The AU specifically found that the union here maintained the support of an uncoerced majority. AU Op. at 40, J.A. 331. I need not remind this court of the fundamental premise of the National Labor Relations Act that employees should be free to choose their own representatives; we recently rejected a Board decision to issue a bargaining order where the union had not attained majority status because such an order was deemed inconsistent with that premise. Conair Corp. v. NLRB, 721 F.2d 1355 (D.C.Cir. 1983); see infra note 2.
The use of common law agency principles to substitute for a total lack of evidence that the kickbacks benefitted the union does not work. Obviously, as the AU noted, we could not expect the union to ratify the illegal actions of its officers. But that truism does not mean that we should presume that every illegal action taken by a union officer to line his own pockets is done by and for the benefit of the union. Indeed, the common law of agency incorporates the opposite presump*376tion, that an illegal act ordinarily will not be found within the agent’s scope of employment. Although there are situations in which the principal is held liable for such conduct, generally where innocent third parties are the direct victims of the agent's illegal conduct, it remains the general rule that “if the employee committing the crime is acting solely for his own benefit, his employer is not liable.” Melton v. United States, 488 F.Supp. 1066, 1074 (D.D.C. 1980). See also Hoston v. Silbert, 681 F.2d 876, 880 (D.C.Cir.1982) (under D.C. law, “foreseeability must be combined with a purpose to further the employer’s interest”); Restatement (Second) of Agency § 235. The solicitation and acceptance of kickback payments here appear in no way to have been motivated by the officials’ desire to serve their union. Instead it appears from the evidence that Scotto and Anastasio simply exploited their, powerful positions as ILA officials. Indeed, it is odd, in light of the Board’s attempt to portray this as a routine application of agency principles to what is unfortunately a familiar set of facts, that we have been cited to no prior Board decision that held a union responsible under principles of agency for its officers’ acceptance of illegal kickbacks.
The majority, the AU and the Board all presume that no direct evidence could be shown — and therefore that none need be shown — to link the kickback payments to the union. But that link is precisely what the statute requires — some proof that the employer provided unlawful support to the union by virtue of the payments — or at least what agency law ordinarily requires— that Scotto and Anastasio, in soliciting and accepting kickbacks, were' acting pursuant to a plan entered into for the benefit of or with the approval of the union as an entity. This would for instance be a different case if there were evidence of widespread knowledge and acceptance of the kickback scheme by other union officers or members. Instead we have only the bare fact of an indictment that came down at the very end of the kickback scheme. Whatever our personal views of what action a “truly upright union” would take under the circumstances, Maj.Op. at 1395, there is no evidence at all in this record of knowledge or ratification by other officers or members so as to fill the gaping holes in the Board’s application of agency law.
This would also be a different case if the Board had found on the basis of substantial evidence that the employer or the union had, by virtue of the kickback payments or otherwise, coerced or restrained employees in their choice of bargaining representative, or that the union had failed to represent the employees adequately. Instead, the AU specifically found on the evidence before him that Local 1814 had maintained the support of an uncoerced majority, AU Op. at 40, J.A. 331, and had provided the employees with “vigorous and effective representation” in spite of the ongoing kickback scheme. AU Op. at 42, J.A. 333. Without pointing to a single piece of evidence undermining these carefully supported findings, the Board concluded that the entire bargaining relationship was “tainted.” It proceeded to order a set of section 8(a)(2) remedies, including decertification of the union and abrogation of the collective bargaining agreement, that make sense only in the usual 8(a)(2) case, in which the employer’s out front assistance to the union carries with it a threat of coercion to the rank and file and therefore undermines the union’s claim of majority status. I point out at the risk of tedium the absence of any precedent for the application of these remedies to a case of direct and secret employer payments to officials, apparently inuring solely to the personal benefit of those individual union officials.
If the Bo.ard’s decision in this case is based on its conclusion that concealed kickback payments of this kind to high union officers are inherently coercive and necessarily taint the bargaining relationship, then the Board has introduced a major innovation in the law of labor relations permitting massive government intervention into collective bargaining relationships in the absence of any evidence of coercion or lack of majority status. At the very *377least the Board is obligated to acknowledge the significance of this innovative use of the NLRA and to justify it.2 Here, however, we are presented with no link, logical or factual, between the corrupt kickbacks and the need for a complete abrogation of the entire collective bargaining relationship that the Board, reversing the AU, ordered as a remedy.
The government has a wide range of remedies and penalties under 29 U.S.C. § 186 that are tailor-made to penalize and rectify the evil of such kickback schemes. Section 8(a)(2) and the traditional remedies for its violation simply do not fit the situation depicted here of corrupt union officers extorting money from the employer solely for their own use. Without proof of any motive to benefit the union or any relationship between their individual greed and the union’s activities, I am not convinced that there is a legitimate invocation of section 8(a)(2). However distasteful the misdeeds of these individuals, they do not justify novel remedies that bend the statute out of shape and, in so doing, penalize not the culprits but the union and its members who are, as far as we can tell from this record, only innocent bystanders to the wrongdoing. I respectfully dissent.

. Although the Board also found violations of § 8(a)(1) and § 8(b)(1)(A), making it unlawful for an employer and a labor organization respectively to restrain or coerce employees in the exercise of their rights under the labor laws, those violations are entirely derivative of the § 8(a)(2) violation.

. In Conair Corp. v. NLRB, 721 F.2d 1355 (D.C. Cir.1983), this court held that the principle of majority support is so central to the statutory scheme that the NLRB may never issue a bargaining order in the absence of evidence that the union had a majority before the employer’s coercive conduct took its toll. 721 F.2d at 1377-84. I dissented. In my view, the Board had adequately supported its conclusion that the employer’s massive and unprecedented campaign of coercion had eliminated any possibility of a fair election and that a temporary bargaining order was the only possible means of restoring employee freedom of choice. See id. at 1387-1401. The majority decides here, ironically, that the principle of majority rule and freedom of choice is so unimportant that a collective bargaining representative whose majority status is not in doubt may be ousted on the basis of individual officers’ corruption bearing no demonstrated relationship to the quality of the representation in collective bargaining.