Local No. 150, International Union of Op. Eng. v. NLRB

• Decision Date: 20 June 1973
• Docket Number: No. 71-1689.,71-1689.
• Citation: 480 F.2d 1186
• Parties: LOCAL NO. 150, INTERNATIONAL UNION OF OPERATING ENGINEERS, AFL-CIO, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — District of Columbia Circuit

480 F.2d 1186 (1973)

LOCAL NO. 150, INTERNATIONAL UNION OF OPERATING ENGINEERS, AFL-CIO, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 71-1689.

United States Court of Appeals, District of Columbia Circuit.

June 20, 1973.

Bernard M. Baum, Daniel S. Shulman, Robert H. Baum, Chicago, Ill., and J. Albert Woll, Washington, D. C., were on the brief for petitioner.

Peter G. Nash, Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Washington, D. C., at the time the brief was filed, Charles N. Steele, and Alan D. Cirker, Washington, D. C., Attys., N.L. R.B., were on the brief for respondent.

Before McGOWAN, Circuit Judge, and WINTER^* and MacKINNON, Circuit Judges.

WINTER, Circuit Judge:

The basic question we must decide is whether an employer may be guilty of an unfair labor practice with respect to a union with which it has executed a pre-hire contract, valid under § 8(f) of the National Labor Relations Act, 29 U. S.C. § 158(f) (1965), to the same extent that it may with respect to a union which has gained recognition and secured a contract after traditional demonstration of its majority support. The question arises from the petition of Local 150, International Union of Operating Engineers, AFL-CIO (the union), to review and set aside the Board's decision and order holding that R. J. Smith Construction Company, Inc. (the company) did not violate §§ 8(a) (5) and (1) of the Act, 29 U.S.C. §§ 158(a) (5) and (1), when it unilaterally changed existing wage rates at a time that it had a pre-hire contract with the union. 191 N.L.R.B. No. 135 (members Fanning and Brown dissenting). We conclude that the Board's order is premised upon an erroneous construction of the Act. We therefore set aside its order and remand the case to the Board for entry of an order granting appropriate relief.

I.

The operative facts are not in dispute and they may be stated succintly:

The union represents employees in the building and construction industry. The company is a contractor in the building and construction industry. In 1964, the union and the company entered into a collective bargaining agreement, the term of which expired January 1, 1966. The agreement adopted the terms, including the wage rates, of a pre-existing master agreement between the union and an employers' association. R. J. Smith, president of the company, testified before the hearing examiner that when he signed this agreement, he had no intention of paying the wage rates prescribed therein. In fact, the company did not comply with the terms of the contract.

No contract existed between the parties from 1966 until October, 1968. During this period, chronic disagreements between them persisted. On October 8, 1968, the company and the union executed two new collective bargaining agreements, which again adopted the terms and conditions of employment of a master agreement between the union and two employers' associations. The contracts recognized the union as the exclusive bargaining agent for the company's equipment operators. The union did not represent, or claim to represent, a majority of the company's employees at this time or at any time during the term of the contracts. It is undisputed that these contracts were pre-hire agreements, i. e., collective bargaining contracts entered into before the union's majority status had been certified under § 9 of the Act.

As with the prior contract, the company never intended to, and did not, conform work conditions to the terms of the contracts. After November 1, 1968, the company initiated a policy of unilateral intermittent pay increases for selected individual employees, without prior notice to, or bargaining with, the union. These individual pay increases did not raise the level of wages to those designated in the contracts.¹

The union filed an unfair labor practice complaint charging the employer with unilaterally changing the terms of the collective bargaining agreement, and refusing to bargain with the union, in violation of §§ 8(a) (5) and 8(a) (1) of the Act.² While the trial examiner concluded, inter alia, that the company had violated §§ 8(a) (3) and (1) with respect to the discharge of two employees, he also concluded that there had been no violation of § 8(a) (5) because the parties were not attempting to establish their bargaining relationship for the first time and because the union at no time had a majority status. The Board adopted his recommended conclusions and recommendations. It reasoned that the pre-hire agreements had been validly executed, but they were not binding because the union failed to achieve majority status and that therefore the company did not commit an unfair labor practice by unilaterally changing the terms and conditions of its employees' employment.

II.

Section 8(f) of the Act validates prehire agreements in the construction industry by providing in pertinent part that:

It shall not be an unfair labor practice under subsections (a) and (b) of this section for an employer engaged primarily in the building and construction industry to make an agreement covering employees engaged (or who, upon their employment, will be engaged) in the building and construction industry with a labor organization of which building and construction employees are members . . . because (1) the majority status of such labor organization has not been established under the provisions of section 159 of this title prior to the making of such agreement . . . Provided further, That any agreement which would be invalid, but for clause (1) of this subsection, shall not be a bar to a petition filed pursuant to section 159(c) or 159(e) of this title.

The significance of § 8(f) is manifest when it is remembered that §§ 8(a) (2) and (1) and 8(b) (1) (A) of the Act collectively require that a representative number of employees be hired and that a majority shall have designated the union as their bargaining representative prior to the execution of a valid exclusive bargaining contract. Without § 8 (f), both of these conditions must be met, else both parties to the contract will have committed unfair labor practices.

Congress adopted § 8(f) in 1959 to solve the problems created by the Taft-Hartley Act's extension of the Act to the unique situation prevalent in the construction industry, which had theretofore not been subject to the Act.³ In most industries other than the construction industry, employment patterns are relatively stable and long-term. But in the building and construction industry,

it is customary for employers to enter into collective bargaining agreements for periods of time running into the future, perhaps 1 year or in many instances as much as 3 years. Since the vast majority of building projects are of relatively short duration, such labor agreements necessarily apply to jobs which have not been started and may not even be contemplated . . .. One reason for this practice is that it is necessary for the employer to know his labor costs before making the estimate upon which his bid will be based. A second reason is that the employer must be able to have available a supply of skilled craftsmen ready for quick referral.⁴

This arrangement is also advantageous to workers, for it enables a union to know and advise its members of job openings and the union is strengthened in its efforts to maintain wages and working conditions in conformity to the standards in the area.⁵ In effect, a construction company typically hires a union before commencing a particular project and before hiring any individual employee in the union. In the normal course of events, as the employer staffs his project from the union's pool of skilled labor, the union attains majority status among the employees.

The final proviso of § 8(f) makes inapplicable the twelve-month bar to election rule established by § 9(c) (3) of the Act, 29 U.S.C. § 159(c) (3) (1965).⁶ Therefore, an employer in the construction industry is not required to wait one year before seeking a representation election after he has entered into a pre-hire agreement. He may petition for an election at any time, and we have little doubt that an employer, who after a reasonable period perceives that he is bound by a collective bargaining agreement with a union whose minority status seems permanent and who can advance reasonable grounds to believe that the union has not and will not achieve majority status, may obtain relief under § 9(c). Similarly, thirty percent or more of the employees may petition under § 9(e) to rescind the purported majority status of the union at any time. See N.L.R.B. v. Irving and McKelvy, 475 F.2d 1265 (3 Cir., 1973).

Since the company has this remedy, we can find no sanction in the language, history, or policy of § 8(f) for permitting an employer to abrogate unilaterally a validly executed pre-hire agreement, or for permitting the employer to commit what is otherwise an unfair labor practice even though at the time of either the union has not achieved majority status. See Irving and McKelvy, supra.⁷ It follows that unions, party to pre-hire agreements, have the right to complain of unfair labor practices, including alleged refusals by the employer to bargain collectively, before the union achieves a majority.⁸

The Board contends that § 8(f) merely exempts the parties from unfair labor practice liability when they execute a pre-hire agreement, but does not validate the agreement regardless of the union's ultimate attainment of majority...