Nat'l Labor Relations Bd. v. Solutia, Inc.

• Decision Date: 02 November 2012
• Docket Number: No. 12–1129,12–1174.,12–1129
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. SOLUTIA, INC., Respondent. United Food and Commercial Workers International Union, Local 414C/International Chemical Workers Union Council, Intervenor. United Food and Commercial Workers International Union, Local 414C/International Chemical Workers Union Council, Petitioner, v. National Labor Relations Board, Respondent. Solutia, Inc., Intervenor.
• Court: U.S. Court of Appeals — First Circuit

699 F.3d 50

NATIONAL LABOR RELATIONS BOARD, Petitioner,

v.SOLUTIA, INC., Respondent.

United Food and Commercial Workers International Union, Local 414C/International Chemical Workers Union Council, Intervenor.

United Food and Commercial Workers International Union, Local 414C/International Chemical Workers Union Council, Petitioner,

v.National Labor Relations Board, Respondent.

Solutia, Inc., Intervenor.

No. 12–1129, 12–1174.

United States Court of Appeals, First Circuit.

Heard Oct. 1, 2012.

Decided Nov. 2, 2012.

Zachary R. Henige, with whom Robert J. Englehart, Supervisor Attorney, Lafe E. Solomon, Acting General Counsel, Celeste J. Mattina, Deputy General Counsel, John H. Ferguson, Associate General Counsel, and Linda Dreeben, Deputy Associate General Counsel, were on brief, for the National Labor Relations Board.

Hugh F. Murray, III, with whom Murtha Cullina, LLP was on brief, for Solutia, Inc.

Randall Vehar, with whom Robert W. Lowrey, David Rome, and Pyle Rome Ehrenberg, P.C. were on brief, for United Food & Commercial Workers International Union, Local 414C.

Before LYNCH, Chief Judge, BOUDIN, Circuit Judge, and McCONNELL, ^* District Judge.

LYNCH, Chief Judge.

This labor case comes from the intersection of an employer's desire to become more competitive by reducing costs and achieving greater efficiencies by consolidating two lab operations into one, and its obligations under national labor law to bargain with the union representing the affected employees.

The National Labor Relations Board petitions for enforcement of its 2011 order finding that Solutia, Inc. had violated sections 8(a)(1) and (5) of the National Labor Relations Act (“the Act”), 29 U.S.C. § 158(a)(1), (5). The order required Solutia to return to United Food and Commercial Workers International Union Local 414C certain work that Solutia had transferred in 2009 to another part of its worksite and to employees represented by another union.

Solutia cross-petitions for review of the Board's order, and Local 414C has intervened in support of portions of the Board's order. Local 414C also petitions for review, attacking that part of the Board's order finding that Solutia did not violate its collective bargaining agreement (“CBA”) with Local 414C. On this point, Solutia has intervened in support of the Board.

At issue here are the legal consequences of Solutia's decision to consolidate two of its product testing labs at different locations on its worksite into one lab, which resulted in a reduction in positions and in Local 414C losing jurisdiction over lab testing work that its members had previously performed. Solutia refused to bargain this decision with Local 414C, considering it to be a management prerogative. The Board found that the lab work transfer decision involved a mandatory subject of bargaining, so that Solutia's refusal to bargain violated the Act. It also found that the recognition clause in the CBA between Solutia and Local 414C did not, as the Union alleged, prohibit the work transfer without Local 414C's consent. Solutia now challenges the former finding, while Local 414C challenges the latter. Both parties also allege errors in the Board's remedial order.

The Board made no error of law in reaching its decision, and its findings were supported by substantial evidence in the record. We grant the Board's petition for enforcement of its order and deny Solutia's cross-petition for review. We deny Local 414C's petition for review. While there are reasons for some concern about the remedial order, there are further administrative remedial processes through which those concerns may be addressed.

I.

A. Factual Background

The facts giving rise to this case are largely undisputed.

1. The Indian Orchard Site

The relevant events took place at the 250–acre industrial “Indian Orchard Site” in Springfield, Massachusetts. A review of the Site's history is necessary to understanding how this case arose.

Historically, two companies operated two separate plants on the Site. The plant on the west side was known as the Bircham Bend Plant, and the one on the east side was known as the Springfield Plant. The chemical workers' union, Local 414C, represented the Bircham Bend Plant employees, while the electrical workers' union, Local 288, represented the Springfield Plant employees. ¹ A chain-link fence separated the two sides of the Site.

By 1963, Monsanto had acquired both plants on the Site, and it continued to operate them as separate facilities for many years, including keeping the fence up. The two unions continued to represent employees on their respective sides of the Site. In 1982, Monsanto consolidated certain salaried employees and departments onto the east side of the Site, and it took down the fence. This consolidation, however, did not result in job or work losses for hourly (union) employees on the west side. After the consolidation, Local 414C continued to represent west side hourly employees and Local 288 continued to represent east side hourly employees.

Also in 1982, Monsanto and Local 414C renegotiated their CBA, which resulted in a change to the recognition clause. The 1982 clause read:

A unit comprising of all hourly rated employees, excluding executives, office and clerical employees, guards, professional employees and supervisors as set forth in the National Labor Relations Board Certification of Representatives dated October 26, 1950, for the then existing Bircham Bend Plant. This recognition clause shall be unaffected by any future consolidation of the plants at the Indian Orchard Site.

Monsanto had proposed adding the first underlined clause; Local 414C agreed to that clause on the condition that Monsanto accept the second underlined sentence. This same language remained in Local 414C's CBA through the version adopted by Local 414C and Solutia in 2006, which was the version in effect when the events at issue occurred.²

In the years after the consolidation, Monsanto bargained with the two unions when it made changes that would affect the work available to union employees. For instance, when Monsanto built a new building that straddled the line between the east and west sides, it negotiated a “Memo of Understanding” signed by both unions that designated the building as “geographically neutral” and that allowed both unions' employees to work there. When Monsanto built two new buildings on the east side and one on the west side, it negotiated another tri-party agreement in which all three buildings were also designated “geographically neutral,” with the maintenance to be performed by union members from the side where each building was located. And in 1994, Monsanto bargained for a “Memo of Understanding” with Local 288 that provided for the transfer of certain sample testing work from a Local 288 lab to a Local 414C lab.³

In 1997, Monsanto spun off its chemical manufacturing arm into a new affiliate, Solutia. Solutia took charge of the Site and maintained CBAs with Local 414C and Local 288. In 2006, Solutia negotiated a new agreement with each union that superseded the previous agreement as to the three newest buildings. These agreements allowed union employees to “cross lines” and perform maintenance, storage, and utility work in any of the three buildings, regardless of which union had historically performed those functions. The agreements also required Solutia to allocate future staffing for the three buildings evenly among the unions. They did not change the allocation of any production or lab work.

Solutia also reached a separate agreement with Local 414C in 2006 that gave Local 414C jurisdiction over a new product line that was being produced on the west side. This agreement specifically stated that Local 414C was being granted jurisdiction “[b]ased on the current location of the [production] operation” and “only for any period of time in which” Solutia chose to locate production on the west side.

The Bircham Bend Plant historically produced resins, and Solutia continues to manufacture resins at that plant. The Springfield Plant historically used these resins to produce Saflex (or its equivalent), a strong clear plastic sheet that is used in making safety glass. Solutia continues to produce Saflex at the Springfield Plant. At the relevant times, the Bircham Bend Plant included a stand-alone building known as the West Control Lab (“WCL”), in which employees performed quality control testing and analysis on the resins produced on the west side.⁴ WCL employees also performed testing on adhesives for an unrelated company, Cytec, a “guest operation” under contract with Solutia. Local 414C represented the employees in the WCL.

Meanwhile, on the east side, the Springfield Plant included within its main building another lab, the Saflex Control Lab (“SCL”), in which employees performed testing on east side products. Employees in the SCL were represented by Local 288.

2. The Lab Work Transfer Dispute

In July 2008, Solutia began to consider consolidating lab work on all products produced at the Site into one location, the SCL. Solutia anticipated that consolidating the lab work would allow it to reduce staffing levels and thus reduce labor costs by $249,000 per year. It would also provide more work for SCL employees, whom the company thought were underutilized. Solutia also expected that moving its testing operations out of the WCL would cause Cytec to become responsible for all of the costs of operating that building, or if Cytec chose to move its testing operations elsewhere, the building could be shut down and there would be no operating costs. The transition would simply involve moving existing equipment from the WCL to the SCL, without requiring additional capital purchases. Finally, the company believed that consolidation would increase the SCL lab workers' skills because they would become knowledgeable about all stages of the testing process, not just the stage performed on their side of the Site. The company...