Martin Marietta Energy Systems, Inc. v. N.L.R.B.

Citation842 F.2d 332
Decision Date17 March 1988
Docket NumberNo. 87-5369,87-5369
Parties131 L.R.R.M. (BNA) 3072 Unpublished Disposition NOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit. MARTIN MARIETTA ENERGY SYSTEMS, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
CourtUnited States Courts of Appeals. United States Court of Appeals (6th Circuit)

On Appeal from the National Labor Relations Board.

Before LIVELY, Chief Judge, NATHANIEL R. JONES and MILBURN, Circuit Judges.

PER CURIAM.

Petitioner seeks review of an order of the National Labor Relations Board holding that it had committed an unfair labor practice by engaging in a midterm modification of a collective bargaining agreement in violation of Section 8(a)(5) and (1) and Section 8(d) of the National Labor Relations Act. We shall enforce the order.

I.

Petitioner, Martin Marietta Energy Systems, Inc. ("the Company"), operates certain government-owned laboratories and nuclear facilities at Oak Ridge, Tennessee pursuant to a contract with the United States Department of Energy. One of the facilities operated by the Company is the Oak Ridge Gaseous Diffusion Plant (referred to as K-25). The Oil Chemical and Atomic Workers International Union, and its Local 3-288 ("the Union"), have together represented hourly employees at K-25 since 1946. At all times relevant to this case, a collective bargaining agreement was in effect between the Company and the Union. This agreement was to expire on October 14, 1987.

Two memoranda of agreement, which are a part of the collective bargaining agreement, specify that the Company agrees to provide for its employees a Special Medical Expense Plan and a Hospital and Surgical Plan. Employee participation in both plans is voluntary. The specific matters covered in each of these plans are set forth in two booklets and both plans are incorporated into the contract as the Medical Insurance Plan for Hourly Employees, effective January 1, 1985. J.App. at 75A.

Article XV, Section 1 of the collective bargaining agreement contains a "zipper clause" which reads as follows:

It is hereby agreed that this contract contains the complete agreement between the parties or their successors, and no additions, waivers, deletions, changes or amendments shall be made during the life of this contract except by mutual consent, in writing, of the parties herein.

J.App. at 4A.

In late 1985, the Company began investigating Health Maintenance Organizations ("HMO's") with the thought that it might offer such plans as an alternative to the existing indemnity plans set out in the contract. To acquaint the various unions representing hourly employees at the Oak Ridge facility with the HMO concept, the Company scheduled meetings in December 1985 with the representatives of those unions, including Local 3-288. The Company met with representatives of Local 3-288 on December 19, 1985. The meeting was conducted by Robert Burnett, the Director of Personnel Administration.

As the Company acknowledges, Burnett's purpose at the meeting was two-fold. First, he reviewed with the Union the concept of HMO's and, second, he advised the Union of the Company's intent to implement an HMO during the first part of January 1986. During the meeting, Burnett gave a presentation using transparencies in which he described typical health care services which an HMO provides and contrasted the advantages and disadvantages of a typical HMO plan with those provided under the indemnity plan in effect at K-25. Because the Company had not yet contracted with any specific HMO, actual benefits by a specific HMO were not described.

Burnett emphasized at the meeting that the HMO would be offered as an alternative to the existing health care plan and not as a replacement. An employee who elected the HMO plan, however, could not remain enrolled in the indemnity benefit plan specified in the contract. When asked whether the benefits offered by HMO's were negotiable like those in the contractual indemnity plan, Burnett replied they were not, that the "HMO's themselves decide what they offer." J.App. at 144A. At the meeting, the Company did not solicit support or approval from the Union or ask whether it had any objections to the Company's plan. The Union, for its part, expressed neither support nor objection to the Company's announced plans.

More information regarding HMO's was disseminated to employees after the December 19 meeting. On January 6, 1986, the Company sent a letter to all employees stating that two HMO plans would be available to employees who lived within the geographical areas covered by the plans and that the enrollment period would be between January 15 and February 15. The letter also stated that individual employees could choose either to remain with the current plan or to join one of the HMO's. Thereafter, both HMO plans were implemented and coverage began March 1, 1986.

On January 21, 1986, the Union filed an unfair labor practice charge against the Company. A complaint was subsequently issued by the NLRB on May 13, 1986. The complaint alleged that the Company "unilaterally and without bargaining with the Union, implemented a health maintenance benefits plan for its employees," in violation of Sections 8(a)(5) and (1) of the Act. 1

A hearing was held before an administrative law judge on June 24, 1986. Although the complaint, as noted above, alleges the unfair labor practice to be the Company's unilateral implementation of a health benefit plan, at the hearing the General Counsel asserted that the "broader issue" involved was whether there had been a midterm change in the collective bargaining agreement in violation of the proviso to Section 8(d) of the Act. 2

After hearing all the evidence and considering the briefs filed by the parties, the ALJ concluded that by offering unit employees an HMO plan as an alternative to the existing indemnity plan, without obtaining the written consent of the Union, the Company unilaterally changed the collective bargaining agreement during its term, and "modified by abrogation that section of the contract requiring that any such modification be by mutual consent and in writing." J.App. at 11A. The ALJ concluded that the Company's action was in violation of the proviso to Section 8(d) and thus constituted a violation of Sections 8(a)(5) and (1) of the Act. In reaching this conclusion the ALJ rejected the Company's arguments that there was no midterm modification of the contract and that the Union had waived by inaction its rights to bargain on the issue of HMO's. The ALJ then recommended that the Company be ordered to take certain remedial action.

The Company filed exceptions to the ALJ's decision. On March 4, 1987, the Board adopted in full the ALJ's recommended order without opinion. The Company then filed this appeal and the Board cross-appealed for enforcement of its order.

II.

It is well settled that an appellate court's review of a decision of the NLRB is exceedingly narrow. This court must accept the Board's factual findings as conclusive if supported by substantial evidence on the record as a whole. Universal Camera Corp. v. NLRB, 340 U.S. 474, 488-90 (1974). The Board's conclusions of law are entitled to acceptance if they are based upon a reasonably defensible construction of the Act. NLRB v. Local Union No. 103, Int'l Ass'n of Bridge, Structural & Ornamental Iron Workers, 434 U.S. 335, 350 (1978); NLRB v. J. Weingarten, Inc., 420 U.S. 251, 266-67 (1975).

Section 8(a)(5) of the Act provides that it shall be an unfair labor practice for an employer "to refuse to bargain collectively with the representatives of his employees...." The limits of this statutory duty to bargain are defined in Section 8(d), which requires the employer to "confer in good faith with respect to wages, hours, and other terms and conditions of employment...." Because bargaining is mandatory only with regard to subjects which fall within this language, such subjects are called "mandatory" (as opposed to "permissive") subjects of bargaining. It is well established that the type of benefits involved in the instant case--i.e., health insurance...

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  • N.L.R.B. v. Beverly Enterprises-Massachusetts, Inc.
    • United States
    • U.S. Court of Appeals — First Circuit
    • February 4, 1999
    ... ...         The National Labor Relations Board (NLRB or Board) petitioned this court for enforcement of its ... without opinion, 9 F.3d 104 (5th Cir.1993); Martin Marietta Energy Sys., 283 NLRB 173, 1987 WL 89523 (1987) ... See id.; Litton Systems, 300 NLRB 324, 331, 1990 WL 179692 (1990), enforced, 949 ... ...

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