Medallion Kitchens, Inc. v. N.L.R.B.

Decision Date26 November 1986
Docket NumberNo. 1267,I,No. 85-1548,1267,85-1548
Citation806 F.2d 185
Parties123 L.R.R.M. (BNA) 3153, 105 Lab.Cas. P 12,088 MEDALLION KITCHENS, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), Localntervenor.
CourtU.S. Court of Appeals — Eighth Circuit

Douglas P. Seaton, Minneapolis, Minn., for petitioner.

Paul Spielberg of the National Labor Relations Board, Washington, D.C., for respondent.

Before JOHN R. GIBSON, Circuit Judge, SWYGERT, * Senior Circuit Judge, and FAGG, Circuit Judge.

JOHN R. GIBSON, Circuit Judge.

Medallion Kitchens, Inc. appeals from an order of the National Labor Relations Board holding that it violated section 8(a)(1) and (3) of the National Labor Relations Act, 29 U.S.C. Sec. 158(a)(1), (3) (1982), by failing to reinstate returning strikers in place of temporary replacements and that it violated section 8(a)(1) by making coercive statements to the employees before the strike. 1 Medallion argues that the Board erred as a matter of law in concluding that Medallion's workers were temporary rather than permanent. Medallion further argues that because its replacement workers were permanent, it was justified in recalling them from layoff status rather than recalling the strikers. In a related argument, Medallion asserts that it was not accorded due process in the proceedings because the General Counsel's theory of the case in the complaint misled Medallion into believing that the General Counsel was conceding the permanent status of the replacements when in fact the replacements' temporary status turned out to be the basis upon which the violation was found. Medallion argues finally that the finding concerning threats made before the strike is not supported by substantial evidence. After examining each of these arguments, we affirm the decision and order of the Board.

Background:

Local 1267 of the United Auto Workers represented Medallion's production and maintenance employees for more than ten years. The bargaining unit contained about 279 employees of whom about 250 were at work on an average day. The most recent collective bargaining agreement had an expiration date of September 19, 1983. About ten days before the workers were to vote on whether to strike, foreman Bruce Roeder approached an employee that he supervised, Tony Arechigo, and asked how he thought the vote would go. When Arechigo replied that there would probably be a strike, Roeder said, "you guys go on strike, the union is not coming back." On September 15, the unit employees voted to reject Medallion's latest contract offer and authorized the Union to call a strike when the contract expired. On that day picketing began at the plant and most of the unit employees did not come to work. Medallion continued to operate using non-strikers and replacements. The applicants for employment were told that the workers were on strike and that they would receive the normal starting rate of $3.75 an hour. Medallion's Personnel Director told them that he did not know how long they would be working, "it might be a week, it might be less and it might be more * * * they would work up until the strike was over." ALJ Decision at 4.

On December 10, the plant's main building was destroyed by fire and production ceased. During the next few days Medallion contacted most of the post-strike employees through telephone calls and radio announcements to notify them of a meeting at the plant on December 15 and to tell them that the Christmas party would proceed as scheduled on December 17. At the December 15 meeting, Vice President Rone told the employees that Medallion was doing what it could to reopen as soon as possible. He told them to leave their current phone numbers with the company and to be ready to return to work. At the Christmas party on December 17, President Chalmers made a similar speech emphasizing that the company intended to get everyone back to work as soon as humanly possible.

On December 19, the Union informed Medallion that the strike would end as of December 25 and that all strikers would be unconditionally available for work the following day. On December 27 almost all of the strikers visited the company and left signed slips requesting reinstatement.

At the beginning of January 1984 Medallion began recalling employees to resume work. By the end of January fifty employees were at work and by late June, at the time of the hearing on the unfair labor practice charges, 114 had returned, but none of the former strikers had been recalled.

The Union then filed the unfair labor practice charges that led to the ultimate entry of the Board's order finding that Medallion had violated section 8(a)(1) and (3) of the Act.

I.

The Administrative Law Judge (ALJ) examined whether the replacement employees had temporary or permanent status to determine whether Medallion violated the Act by failing to reinstate the economic strikers. A commitment to replacements that their positions are permanent may provide a substantial and legitimate business justification, which is a defense to a charge of unfair labor practices under section 8(a)(3). NLRB v. Fleetwood Trailer Co., 389 U.S. 375, 378-79, 88 S.Ct. 543, 545-46, 19 L.Ed.2d 614 (1967). Before we address Medallion's argument that substantial evidence does not support the finding that the replacements were temporary, we first address Medallion's assertion that it was denied due process because it was not fairly notified that the permanent status of the replacement employees was at issue.

In its complaint, the Board alleged the following:

5. (a) On or about December 19, 1983, the Union made an unconditional offer on behalf of all bargaining unit employees who had been engaged in an economic strike to return to work effective December 26, 1983.

(b) On or about December 26, 1983, Respondent placed the employees described above in subparagraph (a) on layoff status.

6.(a) Since on or about January 4, 1984, and continuing to date, Respondent has recalled striker replacements from layoff status and has failed and refused, and is continuing to fail and refuse, to recall any of the strikers, notwithstanding the fact that said strikers have more seniority than the striker replacements who have been recalled.

(b) Respondent engaged in the conduct described above in subparagraph (a) because the employees joined, supported, or assisted the Union, and engaged in concerted activities for the purpose of collective bargaining or other mutual aid or protection, and in order to discourage employees from engaging in such activities or other concerted activities for the purpose of collective bargaining or other mutual aid or protection.

At the hearing there was some testimony regarding the permanency of the replacement workers' positions, and in its post-hearing brief, the General Counsel argued that the evidence did not establish that the replacements were permanent under the prevailing law, and that Medallion was not justified in refusing to reinstate the strikers.

Following the hearing and the filing of post-hearing briefs, Medallion moved to strike portions of the General Counsel's brief or, in the alternative, to reopen the record to permit Medallion to present additional testimony. Medallion asserted that the Board's complaint did not give notice that the permanent status of the replacement employees was in dispute. Medallion argued that, in fact, the sole issue raised by the General Counsel's theory of the case was whether the replacements had seniority over the strikers, an issue that is relevant only if the permanent status of the replacements is conceded. Medallion argued that it had ample documentary evidence and testimony that it did not produce on the permanence issue because it was misled by the allegations of the complaint.

The ALJ denied Medallion's motion and found against Medallion on the basis that the replacement employees were not permanent replacements and, therefore, the strikers, upon their unconditional offer to return to work, were entitled to be recalled in lieu of the replacements. The Board affirmed the ALJ's decision. Medallion now asserts that because the issue of permanence was neither pleaded nor litigated, the Board violated its due process rights by basing its decision and order on those grounds. We reject this argument.

Medallion correctly argues that the Board's complaint must specifically plead the charges upon which it bases its allegation that there has been a violation of the Act, and that in the absence of specific pleading, there must have been the opportunity for Medallion to fully and fairly litigate the charges. See Boyle's Famous Corned Beef Co. v. NLRB, 400 F.2d 154, 163 (8th Cir.1968).

Medallion cites a number of cases in which there were significant differences between the alleged violations and the violations ultimately found. In those cases, the courts held that due process had not been accorded the respondent in the agency action. See Boyle's Famous Corned Beef Co., 400 F.2d at 160 (complaint alleged only that company dominated and assisted the independent union in violation of section 8(a)(1) and (2), but trial examiner went on to find refusal to bargain with the local union as a violation of section 8(a)(1) and (5)); NLRB v. Homemaker Shops, Inc., 724 F.2d 535, 542-44 (6th Cir.1984) (complaint alleged charge of "unlawful assistance," but General Counsel raised charge of domination after hearing record was closed); NLRB v. Complas Industries, Inc., 714 F.2d 729, 734 (7th Cir.1983) (original complaint alleged unlawful firing of one employee; the complaint was not amended until the date of the hearing to include charge of unlawful interrogation of another employee); Presto Casting Co. v. NLRB, 708 F.2d 495, 498 (9th Cir.), cert. denied, 464 U.S. 994, 104 S.Ct. 489, 78 L.Ed.2d 684 (1983) (complaint...

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