District 1199E, Nat. Union of Hosp. and Health Care Employees, Retail, Wholesale and Dept. Store Union, AFL-CIO v. N.L.R.B., AFL-CI
| Decision Date | 18 December 1979 |
| Docket Number | P,AFL-CI,No. 78-1954,78-1954 |
| Citation | 613 F.2d 1102 |
| Parties | 103 L.R.R.M. (BNA) 2001, 198 U.S.App.D.C. 369, 87 Lab.Cas. P 11,728 DISTRICT 1199E, NATIONAL UNION OF HOSPITAL AND HEALTH CARE EMPLOYEES, RETAIL, WHOLESALE AND DEPARTMENT STORE UNION,etitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Bernard W. Rubenstein, Baltimore, Md., for petitioner.
Lawrence E. Blatnik, Atty., N. L. R. B., Washington, D. C., with whom John S. Irving, Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel and Allison W. Brown, Jr., Atty., N. L. R. B., Washington, D. C., were on brief, for respondent.
Before LEVENTHAL and WILKEY, Circuit Judges and OBERDORFER, * District Judge, United States District Court for the District of Columbia.
Opinion for the Court filed by District Judge OBERDORFER.
District 1199E of the National Union of Hospital and Health Care Employees Et al. ("Union") petitions to review and set aside a ruling by the National Labor Relations Board ("NLRB"). The Board held that the Union violated § 8(b)(3) of the National Labor Relations Act, 29 U.S.C. § 158(b)(3) (1976), by unlawfully refusing to bargain collectively with Olympic Management Services, Inc. ("Olympic") on behalf of seventeen former employees of Greater Pennsylvania Nursing Center, Inc. ("Greater Pennsylvania"). Pursuant to a service contract entered into between Olympic and Greater Pennsylvania, the former Greater Pennsylvania employees were performing services at the same Baltimore nursing home at which they had worked before they became employees of Olympic. The Union justified its refusal to bargain collectively with Olympic on the ground that an Arbitrator had determined that a collective bargaining agreement between the Union and Greater Pennsylvania barred the latter from contracting out these employees' services to Olympic and had ruled that the Union was entitled to continue in effect its collective bargaining agreement with Greater Pennsylvania. We find that the NLRB did not give adequate consideration to the Union's defense based on the collective bargaining agreement and the Arbitrator's interpretation of it, and therefore remand the case to the Board.
This dispute grows out of an October 22, 1976, transaction between Greater Pennsylvania and Olympic by which Greater Pennsylvania contracted out to Olympic certain dietary, housekeeping and laundry services previously performed by Greater Pennsylvania's own employees. On October 19 (three days earlier) Greater Pennsylvania had notified the Union which represented all Greater Pennsylvania employees that it intended to contract out to Olympic. Thereafter, representatives of the Union, Greater Pennsylvania and Olympic discussed the contracting out. Despite these negotiations, the parties were unable to reach any agreement about the Union representation of the Greater Pennsylvania employees transferring to Olympic. 1
At the time of the contracting out Greater Pennsylvania and the Union were parties to a Labor Relations Agreement which established the terms and conditions for the employees working at Greater Pennsylvania. Section 3.1 of that agreement retained "(a)ll management functions and responsibilities in Greater Pennsylvania" and provided that none of these functions "shall be exercised in an unreasonable manner." App. 180.
The Greater Pennsylvania/Olympic contract of October 22, 1976 specifically recognized "the existence of a collective bargaining agreement affecting the present employees of the housekeeping, laundry and dietary departments." Olympic agreed "that it shall do nothing that shall subject the company (Greater Pennsylvania) to damage and/or complaints arising out of said company's lawful obligations relating to the collective bargaining agreement." Olympic further agreed "to give first preference to Greater Pennsylvania employees in the affected departments." Finally, the agreement recited "the intent of the parties that no above-mentioned employee accepting employment with (Olympic) shall be suffered to lose seniority, salary or benefits as a result of the change of employer." 2
The Union took the position in the 1976 negotiations that it would not bargain with Olympic after the contracting out unless Olympic carried over by its terms the collective bargaining agreement between the Union and Greater Pennsylvania. Olympic refused to recognize the Union on this basis. In January, 1977, negotiations failed and the Union invoked the arbitration clause of the collective bargaining agreement. A few days later, Olympic filed with the NLRB the unfair labor practice charge that is the subject of the petition here.
An Arbitrator, selected by Greater Pennsylvania and the Union, held a hearing on April 1, 1977; he afforded both sides an opportunity to present evidence and received their briefs.
On June 6, 1977, the Arbitrator announced an award for the Union. 3 At the outset the Arbitrator explained his earlier refusal to defer consideration of the dispute before him as requested by Greater Pennsylvania in deference to prospective NLRB resolution of the unfair labor practice charge. The Arbitrator took the view that "this case is capable of settling all the issues between the parties without the delay inherent in waiting for an NLRB decision."
The question before the Arbitrator on the merits was whether Greater Pennsylvania "violated its collective bargaining agreement" with the Union "by subcontracting its housekeeping, dietary and laundry operations" to Olympic. App. 176. The Arbitrator focused upon the section of the collective bargaining agreement which vested management functions in the employer and provided that: "None of the above shall be exercised in an unreasonable manner." App. 180. 4 Finding "no evidence of substantial business justification in this case," the Arbitrator rejected Olympic's contention that it acted reasonably "by hiring the old employees and offering to negotiate a new contract with the Union." The Arbitrator noted that "the question is not whether Olympic implemented the contract in a reasonable manner," but whether Great Pennsylvania "acted reasonably in subcontracting." The Arbitrator concluded that "(s)ince no substantial business justification was shown, I find the employer acted unreasonably." 5 On this basis the Arbitrator ruled in the award that Greater Pennsylvania "violated its collective bargaining agreement by subcontracting laundry, dietary and housekeeping services to Olympic . . ." The Arbitrator directed Greater Pennsylvania "to put into effect immediately . . . all the terms of its collective bargaining agreement."
Meanwhile, the unfair labor charge against the Union was heard by an Administrative Law Judge ("ALJ") on May 2, 1977, decided by him on April 7, 1978 (10 months after the Arbitrator's award of June 6) and affirmed by the Board on September 7, 1978.
The ALJ, like the Arbitrator, received evidence and briefs; he made a more detailed exposition of the circumstances. These findings focused on the transaction between Greater Pennsylvania and Olympic, testing whether it was a sham. The ALJ treated the Arbitrator's award as an abstract holding. Indeed, the ALJ's findings made no specific mention of the Arbitrator's ruling that the employer had violated its collective bargaining agreement by subcontracting. According to the ALJ, the Arbitrator recognized that the agreement does not expressly limit subcontracting and that the right to subcontract "depends upon reasonableness established by substantial business justification." Proceeding from this conclusion, the ALJ read the Arbitrator's ruling as holding that the subcontracting was unreasonable because Greater Pennsylvania had not given any reason or "strong business necessity" for the subcontract. On the basis of this analysis of the Arbitrator's award, the ALJ decided not to defer to it because:
(1) Olympic was not a party to the arbitration;
(2) the unfair labor practice (the Union's refusal to bargain with Olympic) was not considered by the Arbitrator; and
(3) the Arbitrator's decision (as perceived by the ALJ) was at variance with the doctrine of Fiberboard Paper Products Corp. v. NLRB, 379 U.S. 203 (85 S.Ct. 398, 13 L.Ed.2d 233) (1964), which states that there is no statutory bar to subcontracting so long as the employer notifies employees and negotiates with them about the contract. According to the ALJ, Fiberboard imposed no duty on the employee to "convince the union or anyone else that the subcontracting is reasonable." App. 202.
Having disposed of deferral on the authority of Fiberboard, the ALJ invoked the same premise to find the Union refusal to bargain to be unlawful. "Greater Pennsylvania did more than meet the bare requirements derived from Fiberboard," he said. App. 203. According to the ALJ Olympic's partial recognition of the Greater Pennsylvania employees more than satisfied its successorship obligations. Viewed in this light, the ALJ found that the Union's refusal to negotiate with Olympic to change the collective bargaining agreement was an unwarranted attempt "to impose on the successor employer, without bargaining, the obligations of the predecessor's collective bargaining contract." Having so decided, the ALJ directed the Union to bargain with Olympic. The Board approved.
Petitioner urges here that the Board "decided this matter as if no collective bargaining agreement was in existence." According to petitioner, the Arbitrator found that the subcontract violated the collective bargaining agreement and that the Board did not decide to the contrary. This, petitioner urges, "automatically relieved the union of the duty of bargaining a new contract with Olympic." Br. for Petitioner at 6. According to the petitioner, "it appears inconceivable that (it) could violate the Act by seeking an...
To continue reading
Request your trial
-
N.L.R.B. v. Max Factor and Co.
...reasons for this conclusion would, as Judge Pregerson states, have been helpful. Cf. District 1199E, National Union of Hospital and Health Care Employees v. NLRB, 613 F.2d 1102, 1108-09 (D.C. Cir. 1979). We cannot say, however, that its refusal to defer on the ground of repugnance to the Ac......
-
United Mine Workers of America, Dist. 31 v. N.L.R.B.
...agreement." 379 U.S. at 219, 85 S.Ct. at 407 (Stewart, J., concurring). Indeed, in District 1199E, Nat'l Union of Hosp. & Health Care Employees v. NLRB, 613 F.2d 1102, 1108 (D.C.Cir.1979), we specifically noted that Fibreboard "did not involve a contractual agreement not to subcontract In t......
-
International Ass'n of Machinists and Aerospace Workers, AFL-CIO (Local 2201) v. International Air Service of Puerto Rico, Inc.
...also Carey v. Westinghouse Corp., 375 U.S. 261, 272, 84 S.Ct. 401, 409, 11 L.Ed.2d 320 (1964); District 1199E, National Union of Hospital Employees v. NLRB, 613 F.2d 1102, 1106-07 (D.C.Cir.1979) (citing cases); Retail Clerks Local 588 v. NLRB, 565 F.2d 769, 778 (D.C.Cir.1977). In the presen......
-
Bakery, Confectionery and Tobacco Workers Intern. Union 25 v. N.L.R.B., 83-1416
...of a collective bargaining agreement "is the very stuff of labor contract arbitration." District 119E, National Union of Hospital and Health Care Employees v. NLRB, 613 F.2d 1102, 1109 (D.C.Cir.1979). This is so even where, in a case such as this, the interpretation of a labor agreement det......