Aqua-Chem, Inc., Cleaver-Brooks Div. v. N.L.R.B.
| Decision Date | 23 August 1990 |
| Docket Number | 88-2475,CLEAVER-BROOKS,AQUA-CHE,Nos. 88-2191,INC,s. 88-2191 |
| Citation | 910 F.2d 1487 |
| Parties | 135 L.R.R.M. (BNA) 2173, 59 USLW 2162, 116 Lab.Cas. P 10,276 ,DIVISION, Petitioner, Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Cross-Petitioner. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Thomas W. Mackenzie, Lindner & Marsack, Milwaukee, Wis., for Aqua-Chem, Inc., Cleaver-Brooks Div.
Aileen A. Armstrong, Elliott Moore, Peter D. Winkler, Appellate Court--Enforcement Litigation, and Julie Broido, N.L.R.B., Washington, D.C., George F. Squillacote, N.L.R.B., Milwaukee, Wis., and Gerald P. Fleischut, N.L.R.B., Region 26, Memphis, Tenn., for N.L.R.B.
Before WOOD, Jr., CUDAHY and KANNE, Circuit Judges.
The National Labor Relations Board found the petitioner, Aqua-Chem, Inc., guilty of violating sections 8(a)(1) and 8(a)(3) of the National Labor Relations Act. 29 U.S.C. Secs. 158(a)(1), (3). Aqua-Chem has petitioned for review. The Board has cross-petitioned for the enforcement of its order. We grant the Board's petition for enforcement.
This case began when Aqua-Chem, Inc. and its employees' union could not agree on the terms of a new collective bargaining agreement. The employees eventually struck the company and Aqua-Chem was forced to hire replacement workers. This economic strike ended after five months, with the employees offering unconditionally to return to work. At the end of the strike, Aqua-Chem's workforce consisted of 25 former strikers and 69 replacement workers.
The strike settlement agreement negotiated by the parties included a provision dealing with the recall of striking employees. Under this new agreement, striking employees were to be returned to work as vacancies occurred, subject to worker qualifications. The new collective bargaining agreement, on the other hand, provided for recall from layoff "in reverse order of layoff." When business slowed, Aqua-Chem laid off 14 replacement workers and 1 former striker. These workers were told that their layoff was indefinite, that their life insurance would be cancelled immediately, that their medical insurance would be terminated at the end of the month and that they should look for other jobs or apply for unemployment compensation.
Subsequently, the company laid off another former striker, recalled 4 workers from layoff (3 of whom had been replacement workers) and laid off another former striker. Aqua-Chem did not consider any of the 28 strikers who had yet to be reinstated to fill the positions offered to the 3 laid-off replacement workers. Each of the unreinstated strikers had more seniority than the replacement workers who had been recalled. Some of the unreinstated strikers were qualified to fill the positions given to the recalled striker replacements. 1 In addition, at about this same time (and long after the strike had ended) Aqua-Chem sent a letter to the unreinstated strikers which stated that the reinstatement rights of these strikers would be terminated if they failed to notify the company within 5 days of their continuing interest in being recalled.
The National Labor Relations Board issued a complaint with respect to these practices, alleging that the company had violated Secs. 8(a)(1) and (3) of the National Labor Relations Act. The case was tried before an ALJ who found against Aqua-Chem. The NLRB basically affirmed the ALJ's findings. Aqua-Chem has petitioned this court for review of the Board's decision. The NLRB, on the other hand, has cross-petitioned for the enforcement of its order requiring Aqua-Chem to cease and desist from engaging in the unfair labor practices we have described and requiring Aqua-Chem to offer reinstatement, with backpay, to those unreinstated strikers for whom positions were available. We grant the Board's cross-petition for the enforcement of its order.
The issue presented by this case is one of first impression, though the policies underlying the issue are fundamental to labor law. Section 8(a)(3) of the National Labor Relations Act protects striking workers' jobs from discrimination so that their rights to union organization and other collective activity will not be chilled. 2 This means that economic strikers are entitled to full reinstatement to their former positions at the conclusion of a strike. NLRB v. Fleetwood Trailer Co., 389 U.S. 375, 378, 88 S.Ct. 543, 545, 19 L.Ed.2d 614 (1967). On the other hand, labor law purports to recognize business reality and allows a company that has been struck by its work force to hire permanent replacements as business needs dictate. NLRB v. Mackay Radio & Telegraph Co., Inc., 304 U.S. 333, 345-346, 58 S.Ct. 904, 910-911, 82 L.Ed. 1381 (1938). A balance between the rights of organized workers and business has been struck by allowing replacement workers to be kept on permanently (in order to give the replacement workers adequate incentive to take replacement jobs), but by requiring genuine vacancies in the workforce to be given, in line of seniority, to the striking workers after the strike is over. Laidlaw Corporation, 171 NLRB 1366 (1968), enf'd, 414 F.2d 99 (7th Cir.1969).
Because economic strikers who have been permanently replaced but who have unconditionally offered to return to work are entitled to reinstatement upon the departure of their replacements, this case centers upon the concepts of "vacancy" and "departure" employed in Laidlaw: How should the layoff of a permanent replacement worker--who has a contractual right to recall--affect the reinstatement rights of unreinstated strikers? When is a layoff considered permanent so as to trigger the striking workers' rights to reinstatement? These questions are presented by this case. Their answers require balancing the competing labor policies that we have discussed.
In this case, the NLRB adopted a burden-shifting analysis which attempted to accommodate the policy of protecting striking workers' rights to organize with a company's need to hire and protect the jobs of replacement workers. This analysis requires that the General Counsel first make a showing that any layoffs "truly signified the departure of the replacements": that the laid-off replacement workers had no "reasonable expectancy of recall." 3 Once a prima facie showing that the laid-off replacements had no "reasonable expectancy of recall" has been made, the burden shifts to the employer to rebut the showing of a vacancy or to show legitimate and substantial justifications for failing to recall the striking workers.
The narrowness of our review of NLRB decisions is well-established. We "must uphold the legal conclusions of the Board 'unless they are irrational or inconsistent with the [National Labor Relations Act].' " David R. Webb. Co., Inc. v. NLRB, 888 F.2d 501, 503 (7th Cir.1989), quoting NLRB v. Parents and Friends of the Specialized Living Center, 879 F.2d 1442, 1448 (7th Cir.1989) (citing NLRB v. Financial Institution Employees, 475 U.S. 192, 202, 106 S.Ct. 1007, 1012, 89 L.Ed.2d 151 (1986)); see also NLRB v. Manitowoc Engineering Co., No. 89-2623, slip op. at 14-15, n. 10, 909 F.2d 963, 971, n. 10 (7th Cir.1990). We will, however, review the record of a case as a whole. See NLRB v. Emsing's Supermarket, Inc., 872 F.2d 1279, 1283-1284 (7th Cir.1989). After reviewing the record in the case before us, we conclude that the fact-specific burden-shifting analysis adopted by the Board is both rational and consistent with the policies behind the NLRA because it comports with the actual expectations of all concerned: the unreinstated strikers, the replacement workers and the company. On that basis, we shall assess whether the Board's factual findings are supported by substantial evidence. 29 U.S.C. Sec. 160(e); Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951).
Aqua-Chem claims that the laid-off replacement workers actually had a "reasonable expectancy of recall" because they were guaranteed the right to be recalled in reverse order of layoff by the new collective bargaining agreement. We think, however, that Aqua-Chem's position begs the question--given the policies at issue. The replacement workers were exposed to layoff only because they had secured jobs by replacing the striking workers. Thus, the real question to be answered here is where do we strike a fair balance between the competing policies. 4
It is undisputed that the laid-off replacement workers were told: that their layoff was indefinite, that their life insurance would be cancelled immediately, that their medical insurance would be terminated at the end of the month and that they should look for other jobs or apply for unemployment compensation. Petitioner's Brief at 15. The Board concluded that because the laid-off replacement workers had no reasonable expectation of recall, their layoffs and the resulting vacancies triggered the strikers' reinstatement rights. 5 In short, the Board thought that a departure of this kind--though called a "layoff"--constituted a departure sufficient to bring Laidlaw into play. We agree with the Board's finding that the circumstances presented to the laid-off replacement workers could reasonably have extinguished any expectancy of recall harbored by these workers on account of the contract. Since Aqua-Chem did not proffer any relevant business justification below--and has not pursued one on review--Aqua-Chem has not adequately rebutted the conclusion that, under the circumstances, the laid-off employees had no "reasonable expectancy of recall." We therefore find the Board's factual conclusions on this issue to be supported by substantial, and unrebutted, evidence.
On August 18, 1982 (more than 2 1/2 years...
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