Court Opinion

ID: 185292
Source: CourtListenerOpinion
Date Created: 2011-02-05 02:30:15+00
Date Added: 2024-06-11T17:26:14.637865
License: Public Domain

235 F.3d 581 (D.C. Cir. 2000)
Deferiet Paper Company, Petitionerv.National Labor Relations Board, Respondent
No. 00-1067
United States Court of Appeals  FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 26, 2000Decided December 29, 2000

On Petition for Review and Cross-Application for Enforcement of an Order of the  National Labor Relations Board
Daniel G. Rosenthal argued the cause for petitioner.  With  him on the briefs were Donn C. Meindertsma and D. Scott  Poley.
Deirdre C. Fitzpatrick, Attorney, National Labor Relations  Board, argued the cause for respondent.  With her on the  brief were Leonard R. Page, General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel, and David  Habenstreit, Supervisory Attorney.
Before:  Ginsburg, Randolph, and Tatel, Circuit Judges.
Opinion for the Court filed by Circuit Judge Randolph.
Randolph, Circuit Judge:

1
In June 1999, Deferiet Paper  Company purchased the assets of a paper mill in Deferiet,  New York, from Champion International.  Champion had  collective-bargaining agreements with two unions representing maintenance employees in the mill.  Paper, Allied-Industrial, Chemical and Energy Workers, Locals 45 & 56,  AFL-CIO ("PACE") represented production workers and  those maintenance department workers classified as welders,  masons, oilers, tinsmiths, electricians and instrument mechanics.  Local Lodge 1009, District Lodge 65 of the International  Association of Machinists and Aerospace Workers, AFL-CIO  ("IAM") represented maintenance employees classified as  millwrights, pipefitters, machinists and shift mechanics.  Prior to the sale of the mill, there were 102 employees in  Champion's maintenance department.  IAM represented 60  of these employees;  PACE represented 42.  Of the 82 maintenance workers who remained at the mill after the sale to  Deferiet, 46 had been represented by IAM and 36 had been  represented by PACE.  Approximately 300 production employees, who work in the same area of the plant, are represented by PACE.

2
After Deferiet acquired the mill, each union requested  recognition to bargain on behalf of those maintenance employees it had represented in the past.  Deferiet declined to  recognize IAM, claiming that the division between IAM and  PACE maintenance employees was no longer appropriate. Instead Deferiet recognized PACE as the exclusive collective  bargaining agent for all production and maintenance personnel.

3
In the resulting unit clarification proceeding, Deferiet argued that the IAM unit should be accreted to the PACE unit  because changes in the work duties of plant employees meant  that the IAM employees no longer had a separate community of interest.  At Champion, maintenance employees were divided by craft classifications that corresponded to their individual skills (e.g., millwrights, pipefitters).  According to Deferiet they did little, if any, crossover work between their  respective areas of expertise.  Deferiet canceled the traditional craft-titled classifications and replaced them with categories for craftspersons called "A," "B," "AB" or "AA." Deferiet also developed a new employee handbook, alerting  employees that they might be required to work in areas other  than their traditional craft assignments.  Based largely on  these changes, and on the allegation that the PACE/IAM  distinction was solely the result of an historical accident,  Deferiet sought a determination that the separate units were  no longer appropriate.

4
The Board's Regional Director determined that Deferiet  had made insufficient changes to the operation of the facility  to render the existing IAM unit inappropriate.  She viewed  the reclassification of workers as craftspersons A and B as  largely meaningless, since the only basis for assignment to  one of these positions was the historical craft skill of the  employees.  All of the IAM-represented workers became  craftspersons A, and all of the PACE-represented workers  became craftspersons B.  She found that employees "perform  various maintenance duties in essentially the same manner as  before the sale," and concluded that Deferiet "did not make  significant changes in the structure and operation of the mill."

5
The Board denied Deferiet's request for review.  When the  company thereafter declined to bargain with IAM, the General Counsel filed a complaint and moved for summary judgment.  The Board granted this and issued an order requiring  Deferiet to bargain with the IAM upon request.  The company petitioned for review and the Board cross-petitioned for  enforcement of its order.

6
Board precedent in successor-employer cases favors the  retention of historical bargaining units.  "A successor employer is required to recognize and negotiate with the bargaining agent of a predecessor's employees if the bargaining  unit remains appropriate and the successor does not have a good faith doubt of the union's continuing majority support."1 Trident Seafoods, Inc. v. NLRB, 101 F.3d 111, 114 (D.C. Cir.  1996).  Deferiet tells us that this precedent, which the Board  invoked here, conflicts with a dictum in NLRB v. Burns  International Security Services, Inc., 406 U.S. 272, 281  (1972).2  The trouble is that Deferiet never made any such  argument during the Board proceedings.  We therefore cannot decide whether the Board should have followed the Burns  dictum.  See 29 U.S.C. § 160(e) ("No objection that has not  been urged before the Board, its member, agent, or agency,  shall be considered by the court, unless the failure or neglect  to urge such objection shall be excused because of extraordinary circumstances.");  Exxel/Atmos, Inc. v. NLRB, 147 F.3d 972, 978 (D.C. Cir. 1998).

7
Deferiet's fall-back position is that the old IAM unit is not  an appropriate unit despite the presumption in favor of  historical bargaining units.  Why?  Because creation of the  IAM unit at the mill was an "historical accident";  because  Deferiet substantially restructured the operations of the mill  after its acquisition;  and because under the Board's "traditional standards," a separate IAM unit for some maintenance  workers in the newly-acquired mill would be inappropriate. The Regional Director rejected the company's claims after examining each of its alleged post-acquisition changes, and  asking whether the change significantly altered the former  IAM unit.  But the proper inquiry was not simply whether  the evidence showed "significant changes in the operation of  the mill since [Deferiet] has assumed control."  Neither the  decisions of this court nor those of the Board sanction a  purely comparative inquiry.  See Trident Seafoods, 101 F.3d  at 118 (collecting standards);  Indianapolis Mack Sales &  Serv., 288 N.L.R.B. 1123, 1126 (1988);  Crown Zellerbach  Corp., 246 N.L.R.B. 202, 203 (1979).  Although "the Board  places a heavy evidentiary burden on a party attempting to  show that historical units are no longer appropriate," this  burden can be met if "historical units no longer conform  reasonably well to other standards of appropriateness."  Trident Seafoods, 101 F.3d at 118 (internal quotations and  citations omitted).

8
In determining whether a unit is appropriate, the Board  exercises wide discretion.  Packard Motor Car Co. v. NLRB,  330 U.S. 485, 491 (1947).  Determinations of this sort take  into account a variety of factors, and often focus on whether  the unit represents a "community of interest."  See Robert A.  Gorman, Basic Text on Labor Law 68-74 (1976);  Theodore  Kheel, Labor Law § 14.03 (2000) (listing various factors  taken into account by the Board).  In the context of a  successor employer, the appropriateness inquiry is not the  same inquiry the Board would conduct when certifying a unit  for the first time.  Trident Seafoods, 101 F.3d at 118.  We  wrote in Trident Seafoods:  "In most cases, a historical unit  will be found appropriate if the predecessoremployer recognized it, even if the unit would not be appropriate under  Board standards if it were being organized for the first  time,"3 id.--by which we meant that the Board will sustain  the historical unit even if it is not the most appropriate one.

9
This is not to say that a historical unit will always be  upheld in the face of "compelling evidence" of inappropriateness.  Crown Zellerbach Corp., 246 N.L.R.B. at 204;  Met  Elec. Testing Co., 331 N.L.R.B. No. 106, 2000 WL 1058928, at  *1 (July 27, 2000).  The most common way for a successor to  meet its burden is to show that it has made significant  revisions in plant operations and employee duties.  See Firestone Synthetic Fibers Co., 171 N.L.R.B. 1121, 1123 (1968)  (finding that similarities in working conditions outweighed the  historic unit).  Even if the successor implements no significant changes, we held in Trident Seafoods that an historical  unit may still be found inappropriate if it fails to "conform  reasonably well to other standards of appropriateness." 101 F.3d at 119-20.  On occasion, both pre-acquisition factors and  post-acquisition changes in plant operation will combine to  render an historical unit inappropriate.  Rock-Tenn Co., 274 N.L.R.B. 772 (1985);  see also Banknote Corp. of Am. v.  NLRB, 84 F.3d 637, 649 (2d Cir. 1996) (presumption in favor  of historical units inappropriate when there is evidence that  units had been rendered obsolete by industry shifts or  changes in the operation of the predecessor).  A unit might,  for instance, be only marginally appropriate prior to the  transaction, in which event relatively small changes following  the transfer of ownership could push it into the category of an  inappropriate unit.  Whether this describes the situation in  the Deferiet paper mill is for the Board, not us, to say.  The  question is--does the IAM unit "conform reasonably well to  other standards of appropriateness"?  Indianapolis Mack  Sales & Serv., 288 N.L.R.B. at 1123 n.5.  The Board never  answered this question.  Its Regional Director failed to consider the appropriateness of the unit as such.  Her review  was purely comparative--were Deferiet's changes so significant, or so major, or so fundamental that the old unit had  been replaced by a new and different one.  She did not go  further and determine whether Deferiet had shown by "compelling evidence" that the old unit no longer conformed to the  Board's contemporaneous standards of appropriateness.

10
We therefore deny enforcement of the Board's order, set  aside its decision that Deferiet committed unfair labor practices when it refused to recognize the IAM, and remand the  case to the Board for further proceedings.

11
So ordered.

Notes:

1
 Deferiet concedes that it is a successor employer.  It does not  contest the majority support of IAM within a unit comprised of  employees in the crafts this union previously represented, but the  company denies that majority support exists for IAM within the  larger unit of all production and maintenance workers.

2
 Burns held that a successor employer has an obligation to  bargain with the union if the bargaining unit remained unchanged  and a majority of the employees hired by the new employer are  represented by "a recently certified bargaining agent," id.  To this  the Supreme Court added:  "It would be a wholly different case if  the Board had determined that because [the successor's] operational structure and practices differed from those of [the predecessor  employer] and the ... bargaining unit was no longer an appropriate  one."  Id. at 280.  This sentence, according to Deferiet, precludes  the Board from adopting a presumption in favor of historical  bargaining units.

3
 We do not believe the court in Trident Seafoods meant to say  that in successorship cases, the Board approves improper bargaining units.  In support of the sentence quoted in the text, the court  cited the Board's decision in Indianapolis Mack. The Board there  ruled that a change in ownership of a facility will not automatically  uproot historical units, "as long as they remain appropriate." 288 N.L.R.B. at 1126.  Properly viewed, the sentence in Trident Seafoods conveys the idea that because the burden falls upon the  employer to demonstrate inappropriateness, the Board may wind up  certifying a less-than-ideal unit.