Regal Cinemas, Inc. v. N.L.R.B.

Decision Date31 January 2003
Docket NumberNo. 01-1322.,01-1322.
Citation317 F.3d 300
PartiesREGAL CINEMAS, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
CourtU.S. Court of Appeals — District of Columbia Circuit

Charles L. Warren argued the cause for the petitioner. Richard L. Wyatt, Jr. was on brief.

Fred B. Jacob, Attorney, National Labor Relations Board, argued the cause for the respondent. Arthur F. Rosenfeld, General Counsel, John H. Ferguson, Associate General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel, and Robert J. Englehart, Attorney, National Labor Relations Board, were on brief. David S. Habenstreit and Ruth E. Burdick, Attorneys, National Labor Relations Board, entered appearances.

Before: HENDERSON, TATEL and GARLAND, Circuit Judges.

Opinion for the court filed by Circuit Judge KAREN LeCRAFT HENDERSON.

KAREN LeCRAFT HENDERSON, Circuit Judge:

Regal Cinemas, Inc. (Regal) petitions for review of a June 20, 2001 decision and order of the National Labor Relations Board (Board or NLRB) finding that Regal violated sections 8(a)(1) and 8(a)(5) of the National Labor Relations Act (NLRA or Act), 29 U.S.C. § 158(a)(1), (a)(5), by refusing to bargain in good faith with three union locals before converting to "manager-operated" theaters and terminating its union-represented projectionists. On review, Regal argues that the Board erred in (1) concluding that Regal had a duty to bargain over its conversion to manager-operated theaters; (2) applying a "waiver analysis" to the management rights clause contained in the collective bargaining agreements between Regal and the unions; (3) failing to find that one of the union locals had waived its right to bargain over Regal's conversion decision by failing to timely demand bargaining; and (4) ordering Regal to reinstate the terminated projectionists. We find that Regal's contentions are without merit and therefore deny its petition for review and grant the NLRB's cross-application for enforcement.

I. Background
A. Dedicated Projectionists and the Trend Toward Manager-Operated Theaters

Regal is a Tennessee corporation that operates movie theaters throughout the United States. Since its founding in 1989, Regal has expanded its business predominantly through the acquisition of existing theaters and smaller, regional theater chains. After an acquisition, Regal's practice has been to evaluate the existing equipment, physical layout and personnel in order to determine whether to convert the theater into a "manager-operated" theater. Joint Deferred Appendix (JDA) 484, 493-94. A typical movie theater employs a staff consisting of managers, assistant managers, concessionists, box office employees, ushers and projectionists. In a manager-operated theater, however, managers and assistant managers operate the projection equipment as part of their regular duties, thereby eliminating the need to employ dedicated projectionists. Over the past ten years, the general trend in the theater industry has been to eliminate the projectionist position and to convert to manager-operated theaters. JDA 486.

Today, the duties of a projectionist generally include the following tasks: "threading" the film through the projector at the beginning of each showing and disengaging the film at each showing's end; monitoring the film's focus and volume at the outset of each showing; preparing new films for the projector's continuous film platter by splicing together the film's multiple reels; performing the "breakdown" of older movies that are no longer being shown; changing movie "trailers" when necessary; fixing minor projector problems, such as broken belts and loose splices; and cleaning both the projection equipment and the projection booth. JDA 163-71, 210-21, 363-70, 432-35. The work required of a projectionist prior to the start of a film — threading the film, pushing the start button and checking the focus and volume — takes approximately five to ten minutes. JDA 202-03.

Not surprisingly, technological advances have greatly simplified the projection process and have thus eliminated many of the job duties originally performed by projectionists. As a result of the so-called platter system, for example, projectionists no longer need to change reels during a showing. JDA 190-91, 206-07. In addition, a computerized projection system now opens the curtains, changes the lighting, operates the sound system and automatically rewinds the film. JDA 189-96. Many of these advances in projection technology, including the platter system, occurred well before 1995, although none took place after 1995 and before the present litigation. JDA 208-09, 324, 351, 436-37.

B. Regal's Bargaining History with the Union Locals

Regal's petition for review stems from its decision to convert its movie theaters in Richmond, VA, Fort Wayne, IN and Akron, OH to manager-operated theaters. This decision affected the membership of three local affiliates of the International Alliance of Theatrical and Stage Employees (IATSE): Local 370 (Richmond), Local 364 (Akron) and Local 125 (Fort Wayne). We recount the relevant bargaining history between Regal and the three union locals below.

1. Local 370

Regal acquired eight theaters in the Richmond, VA area in 1995. At the time of the acquisition, Local 370 had a collective bargaining agreement with Regal's predecessor that covered the projectionist employees at these theaters. JDA 529-539. With the collective bargaining agreement set to expire on June 15, 1995, Regal gave Local 370 notice of its intent to terminate the contract on April 17, 1995. JDA 602. Meeting with union representatives on May 22, 1995, Regal informed Local 370 of its intent to convert its Richmond theaters to manager-operated and to eliminate the projectionist position. JDA 197-98, 497. Upon further discussions with Local 370, however, Regal ultimately agreed to convert only three of the eight theaters. JDA 172-76. Accordingly, Regal and Local 370 entered into a collective bargaining agreement covering the projectionist employees at the remaining five theaters. JDA 586-92. The agreement contained a management rights clause, which read as follows:

The COMPANY shall have the right to introduce new or improved work methods, facilities, equipment, machinery, processes and procedures of work and to change or eliminate existing methods, facilities, equipment, machinery, processes and procedures or work ... and to automate[.] [T]he COMPANY agrees to negotiate the effects [of such decisions] on the employees.

JDA 590 (redundant phrase omitted). According to Regal negotiators, the purpose of the management rights clause was to allow Regal to convert to manager-operated theaters without having to bargain with Local 370 beforehand. JDA 496. The parties did not discuss the management rights clause, however, during the 1995 negotiations.1 JDA 176, 268-70. The agreement between Regal and Local 370 was effective from November 24, 1995 to November 23, 1997. JDA 586-92.

On September 22, 1997, Local 370 wrote to Regal requesting a meeting to discuss a new collective bargaining agreement. JDA 644-45. This letter crossed in the mail with a letter from Regal to Local 370 in which Regal gave notice of its intent to convert to manager-operated theaters and to eliminate the projectionist position as of November 24, 1997. JDA 640. Regal did offer to bargain, however, over the effects of its decision. JDA 640. Although the parties met in October 1997, Local 370 refused to bargain over the effects of Regal's decision while Regal refused to bargain over the decision itself. As a result, Regal terminated the remaining projectionists at the end of their shifts on November 23, 1997 and converted the five theaters to manager-operated.

2. Local 364

Regal purchased Montrose Movies in 1994, thereby assuming its predecessor's bargaining relationship with Local 364, the IATSE affiliate that represented dedicated projectionists in the Akron, OH area. Although Regal and Local 364 entered into a collective bargaining agreement in 1994, the parties began negotiations anew in 1995 when Regal purchased two other theaters in the area. The parties eventually reached agreement on a contract that combined all three theaters under a single collective bargaining agreement, effective October 13, 1995 to October 12, 1997. JDA 580-85. This contract contained a management rights clause identical to the one included in Regal's collective bargaining agreement with Local 370. Compare JDA 583 with JDA 590. Once again, however, the parties did not discuss the management rights clause during the contract negotiations. JDA 443.

On July 21, 1997, Regal notified Local 364 that it intended to convert to manager-operated theaters and to eliminate the projectionist position. JDA 637. Local 364 responded to Regal's letter on August 25, 1997 and requested a meeting. JDA 639. The parties had difficulty communicating with one another throughout September and did not meet until October 8, 1997. JDA 444. At this meeting, Local 364 sought to negotiate a new collective bargaining agreement retaining the projectionist position; Regal, however, was willing to discuss only the effects of its conversion decision. JDA 444-46. No meeting occurred after this date. Regal therefore terminated the remaining projectionists at the end of their shifts on October 12, 1997 and converted its Akron theaters to manager-operated.

3. Local 125

Regal purchased seven theaters in the Fort Wayne, IN area between 1993 and 1994. Local 125 represented the dedicated projectionists at these theaters and entered into separate collective bargaining agreements with Regal for the projectionists working at each theater. JDA 553-74. On January 2, 1996, Regal notified Local 125 of its decision to terminate these contracts and to...

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