Tradesmen International v. National Labor Relations Board

Citation275 F.3d 1137
Decision Date15 January 2002
Docket NumberNo. 00-1523,AFL-CI,I,No. 33,33,00-1523
Parties(D.C. Cir. 2002) Tradesmen International, Inc., Petitioner v. National Labor Relations Board, Respondent Sheet Metal Workers' International Association, Local Unionof Northern Ohio,ntervenor
CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)

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:

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

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.

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.

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

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.

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.

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

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,

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.

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.

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...

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