Banknote Corp. of America, Inc. v. N.L.R.B.
| Decision Date | 29 May 1996 |
| Docket Number | Nos. 643,D,880,s. 643 |
| Parties | 152 L.R.R.M. (BNA) 2321, 64 USLW 2800, 131 Lab.Cas. P 11,585 BANKNOTE CORPORATION OF AMERICA, INC., Petitioner-Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross-Petitioner. ocket 95-4017, 95-4041. |
| Court | U.S. Court of Appeals — Second Circuit |
Lewis B. Gardner, Houston, Texas (John P. Campbell, J. Richard Hammett, Brown McCarroll & Oaks Hartline, Houston, Texas, of counsel), for petitioner-cross-respondent.
David Fleischer, Washington, D.C. (Frederick L. Feinstein, General Counsel, Linda Sher, Associate General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel, National Labor Relations Board, of counsel), for respondent-cross-petitioner.
Before: VAN GRAAFEILAND, MINER and CABRANES, Circuit Judges.
Banknote Corporation of America, Inc. ("BCA") seeks review and the National Labor Relations Board ("NLRB" or "the Board") cross-petitions for enforcement of an order entered pursuant to subsections 8(a)(1) and (a)(5) of the National Labor Relations Act ("NLRA") (codified at 29 U.S.C. § 158(a)(1) and (a)(5)), concluding that BCA engaged in unfair labor practices. Banknote Corp. of America, 315 N.L.R.B. 1041, 1994 WL 727612 (1994). The Board found that BCA, which acquired a high-security printing facility in Suffern, New York, on February 27, 1990, became a legal successor to the facility's prior owner as of April 19, 1990, when it hired nearly its full complement of workers from among the prior owner's work force. The Board found that on April 23, 1990, BCA changed certain terms and conditions of employment, without notice to or bargaining with the three charging party unions:
the New York Lithographers & Photoengravers Union, # 1-P, Graphic Communications International Union ("Local 1-P"); District 15, International Association of Machinists & Aerospace Workers ("District 15"); and the Graphic Communications International Union, Local 119B-43B, New York ("Local 119B-43B"). Id. at 1044. The Board's order, issued on December 16, 1994, requires BCA to recognize and bargain with the three unions, to rescind the April 23 changes, and to make the affected employees whole for any losses incurred by virtue of the changes. Id. at 1044, 1047
BCA petitions for review on the ground that two of the Board's findings--that the bargaining units that the charging party unions seek to represent in this case are "appropriate"; and that the announcement of terms and conditions of employment on April 23 constituted an unlawful unilateral change--reflect improper application of legal principles and are contrary to the record evidence. We find merit in neither of BCA's contentions. We therefore deny BCA's petition for review and grant the General Counsel's cross-petition for enforcement.
The following facts of record are drawn primarily from the Administrative Law Judge's decision of March 3, 1992, affirmed by a divided panel of the Board in a Decision and Order dated December 16, 1994.
This labor dispute stems from BCA's acquisition in early 1990 of a high-security printing facility located in Suffern, New York. The facility was formerly owned by American Banknote Company ("ABN"), one of the two major U.S. firms engaged in the printing of security documents (e.g., stocks, bonds, visas, traveler's checks). In June 1989, ABN's competitor, United States Banknote Company ("USBN"), made a tender offer for ABN's parent company. The Justice Department raised antitrust objections to the proposed tender offer and required, as a condition of its approval of the transaction, the sale of an ABN printing facility to an independent third party. USBN entered into negotiations with a French security printing firm, Francois-Charles Oberthur Fiduciare ("FCO"), for the sale of ABN's Suffern facility. FCO formed an American subsidiary, BCA, to consummate the transaction. On December 15, 1989, USBN and BCA entered into a purchase agreement under which BCA would acquire substantially all of ABN's assets at the facility.
Under the terms of the purchase agreement, BCA was required to elect to receive either a "closed" plant or an "operating" plant after USBN completed its tender offer for ABN's parent company. If BCA chose an operating plant, it would interview ABN employees and, within thirty days, provide USBN with a list of the employees it wished to hire. On January 9, 1990, despite the fact that USBN had not yet gained control of ABN's parent, BCA announced its intention to receive an operating plant. USBN completed its tender offer for ABN's parent company on February 27. The sale of the Suffern facility assets to BCA closed on the same day.
ABN's approximately 100 production employees were divided into eleven bargaining units to reflect the diversity of its work force, which included individuals with a variety of skills involved in the high-security printing process--designers, engravers, photoengravers, plate finishers, machinists, and so on. Because of the delay in USBN's acquisition of ABN's parent company, BCA officers were not able to gain access to the facility to interview employees as contemplated by the purchase agreement. Accordingly, on March 13, BCA supplied USBN with a list of those employees it wished to hire without having interviewed the employees. USBN "rejected" the employee list because it purportedly created difficulties under the seniority provisions of the collective bargaining agreements between ABN and the labor unions representing employees at the plant. When BCA officers began to discuss the rejection of the employee list with USBN officers, they discovered that there had been a communication by the human resources director of ABN to union representatives at the facility on March 1 to the effect that "[FCO] has agreed to recognize the Unions who are party to collective bargaining agreements at the ... plant and to be bound to the terms of the As planned, BCA distributed employment applications to ABN employees prior to the closing of the plant. BCA interviewed 102 ABN employees on April 16 and 17, and extended offers of employment to fifty ABN production workers and four ABN supervisors, all of whom began work on April 19. BCA also hired two maintenance workers not previously employed by ABN. On April 23, BCA announced certain terms and conditions of employment, with the result that as of that date all employees worked the same hours, participated in the same pension, vacation, and sick pay plans, received the same health and welfare benefits, and observed new company holidays. BCA also voluntarily recognized two of the eleven unions that had previously represented ABN employees.
existing collect[ive] bargaining agreements." BCA retained labor counsel, who subsequently wrote a letter to union representatives indicating that the statements in the March 1 letter were not authorized, that BCA had made no commitment to recognize the unions or to be bound by the collective bargaining agreements, and that BCA intended to "attempt to hire its initial work force from among the employees currently working at the ... facility." BCA's president, Martin Ferenczi, met with union representatives on April 11, 1990. At that meeting, he announced that: (1) ABN would close its Suffern facility on April 13; (2) all ABN employees in Suffern would receive applications for employment with BCA; (3) BCA officers would conduct interviews with the former ABN employees on April 16 and 17; (4) the facility would reopen on April 19; and (5) BCA would not honor the collective bargaining agreements existing between ABN and the unions. Ferenczi also stated that BCA intended to introduce greater "flexibility" in operations at the plant, and that employees' existing health benefits would continue for a period of sixty days. He did not otherwise discuss the terms or conditions of employment
Five unions filed charges against the company for violations of subsections 8(a)(1) and (a)(5) of the NLRA, claiming that BCA had improperly failed to recognize and bargain with them prior to changing the terms and conditions of employment on April 23. The Board's regional enforcement counsel issued a consolidated complaint on behalf of all five unions in September 1990. In March 1991, the Board severed and withdrew complaints filed on behalf of two of the unions because each sought to represent only one employee. The Board filed amended complaints on behalf of the three remaining unions, Local 1-P, District 15, and Local 119B-43B. The case was heard before Administrative Law Judge D. Barry Morris on April 15-19, 1991. On March 3, 1992, the ALJ issued a decision and recommended order.
The ALJ found that, as of April 19, 1990, when BCA had hired nearly its full complement of employees from ABN's work force, BCA acquired a duty to bargain with the three charging party unions. The ALJ concluded that, despite the fact that BCA had hired only half of ABN's employees and had indicated its intent to introduce greater "flexibility" in its operations, BCA was a legal successor to ABN. As a prerequisite for the finding that BCA was a legal successor with a duty to bargain with the charging party unions, the ALJ assessed whether the three units involved in the proceedings were "appropriate" bargaining units under BCA's operations. The ALJ found that BCA had failed to sustain its burden of demonstrating that the bargaining units the charging party unions sought to represent were inappropriate. As a result, BCA's duty to bargain attached no later than April 19. The duty to bargain carried with it a duty not to institute unilateral changes in the terms and conditions of employment without providing notice to or bargaining with the charging party unions. BCA therefore engaged in an unfair labor practice in announcing terms and conditions of employment on April 23 without consulting the...
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