Martinsville Nylon Employees Council Corp. v. N.L.R.B., 89-1377

Decision Date02 November 1992
Docket NumberNo. 89-1377,89-1377
Citation969 F.2d 1263,297 U.S.App.D.C. 263
Parties140 L.R.R.M. (BNA) 2873, 297 U.S.App.D.C. 263, 61 USLW 2070, 122 Lab.Cas. P 10,286, 19 UCC Rep.Serv.2d 438 MARTINSVILLE NYLON EMPLOYEES COUNCIL CORPORATION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, E.I. DuPont DeNemours and Company, Intervenor.
CourtU.S. Court of Appeals — District of Columbia Circuit

Jonathan G. Axelrod, for petitioner.

Scott D. MacDonald, attorney, NLRB, with whom Aileen A. Armstrong, Deputy Associate Gen. Counsel, and Peter Winkler, Supervisory Atty., NLRB, were on the brief for respondent.

Raymond M. Ripple was on the brief for intervenor.

Before WALD, D.H. GINSBURG, and RANDOLPH, Circuit Judges.

Opinion for the Court filed by Circuit Judge D.H. GINSBURG.

Dissenting opinion filed by Circuit Judge WALD.

D.H. GINSBURG, Circuit Judge:

The National Labor Relations Board dismissed portions of a complaint alleging that E.I. Dupont DeNemours & Co., by newly insisting upon strict adherence to the terms of a collective bargaining agreement (CBA), refused to bargain with the Martinsville Nylon Employees' Council Corporation (the Union) and unilaterally implemented a midterm modification of their CBA, in violation of §§ 8(a)(1) & (5) and 8(d) of the National Labor Relations Act. 29 U.S.C. §§ 158(a)(1) & (5) and 158(d). The NLRB held that the "entire agreement" and "no oral modification" clause of the CBA precluded incorporation into the agreement of inconsistent past practices. Accordingly, the Employer's strict adherence to the agreement did not constitute a modification. We agree with the Board on that point, but remand for it to determine whether interpretation of the CBA in the light of past practices requires any different result.

I. BACKGROUND

As part of a general effort to increase productivity at its Martinsville, Virginia manufacturing facility, the Employer presented a "Union Officials and Council Representatives Productivity Proposal" to the Union for negotiation in February 1987. Prior to that time, Union officials enjoyed essentially unhindered freedom to attend to the Union's rather than the Employer's business on company time and with pay; they pursued grievances, policed the contract, and visited "the union's office at the plant [ ] to discuss with fellow representatives or union officials [ ] possible emerging contractual or labor related problems and to research such issues"--often switching shifts in order to do so. E.I. Dupont DeNemours & Co. (cases 5-CA-18636 & -18736), slip op. at 4 (May 17, 1988) (ALJ Decision ). The Productivity Proposal was designed to restrict this activity by requiring each Union official (except the President) to work his assigned shift, answer a series of five questions and obtain permission before leaving his post to pursue a grievance, and curtail the conduct of other Union business on company time. Id. at 2-4.

The Union refused to negotiate about the proposal, stating that it was a matter to be discussed the next time the CBA was to be renegotiated. In March 1987 the Employer implemented the Proposal unilaterally. The Union thereupon "insist[ed] that any future negotiations [i.e., on any matter] ... take place off-plant at a neutral location after 4:30 p.m., a position the Union maintained from that time forward." Id. at 3. The Employer in turn insisted upon continuing the parties' long-standing practice of meeting at the plant during the day shift. Id. at 10.

The Union then charged that the Employer's refusal to meet off-premises and during the non-daylight shifts was unreasonable, in violation of §§ 8(a)(1) & (5). The Union also charged that the Employer had modified the CBA, in violation of §§ 8(a)(5) and 8(d), by unilaterally implementing the Productivity Proposal. Before an Administrative Law Judge, the Union argued that past practice had established the right of Union officials to pursue Union activities on paid time, that such practice had been incorporated into the contract, and that the Productivity Proposal thus amounted to a unilateral mid-term modification of the CBA.

The ALJ held that "the contract covers and controls the subject matter of the alleged unilateral action," and that past departures from the contract did not amount to a prospective waiver of the Employer's rights. ALJ Decision at 5 & n. 6. The Productivity Proposal therefore was not an unlawful mid-term modification of, but merely a return to "literal interpretation" of, the contract. In reaching this conclusion the ALJ relied upon Article XII of the CBA, which set out the procedure by which the Union was to pursue grievances with the Employer; and upon Article II § 3, the so-called "zipper" clause, consisting of both an "entire agreement" provision and a "no-oral-modification" provision:

This [CBA] constitutes the entire Agreement between the parties hereto as of the execution date hereof. However, any supplement which may hereafter be mutually agreed upon between the parties when executed in the same manner as this Agreement shall become and be part of this Agreement.

The ALJ also held that the Employer's insistence that negotiations take place at its premises during the day shift was consistent with long-standing practice and consequently not unreasonable. ALJ Decision at 11-12.

On appeal, the NLRB affirmed the ALJ's ruling with respect to the time and place of negotiations, but modified his ruling concerning the Productivity Proposal. 294 NLRB No. 43 (May 31, 1989). The Board allowed that a CBA could in some circumstances incorporate "past practices that are not specifically written into it," but interpreted the zipper clause of the present CBA to bar unwritten changes to the extent that they are inconsistent with the written terms of the contract. 294 NLRB No. 43, slip op. at 3. The Board thus distinguished between restrictions upon the Union's activity "that were, in effect, nothing more than implementations of the express terms of the [CBA] and restrictions that amounted to new requirements that were both inconsistent with past practice and not contained within the agreement." Id. at 2.

With respect to the specifics of the Productivity Proposal, the Board stated that:

the past practice by which employee/union representatives spent substantial amounts of paid time during their work shifts conducting nongrievance-related union business conflicts with the parties' written agreement on the activities of such representatives on paid time. Therefore, to the extent that the [Employer] proposed to limit union representatives to the activities defined in article XII of the collective bargaining agreement, we find that it did not make an unlawful midterm modification of the agreement.

Referring to the "five questions" to be answered before a Union representative could leave his work in order to pursue a grievance, the Board continued:

However, the [Employer] did not content itself with retreating to the bare bones of the contract terms. It added new procedures that were inconsistent with existing practice and that, at least in one respect [i.e., one of the five questions], could not fairly be implied from the contract terms.

Id. at 3.

Because the Board viewed this one aspect of the Productivity Proposal as going beyond the safe harbor of the written contract (as well as conflicting with past practice), it found that the Employer had unilaterally modified an implied term of the contract. Accordingly, the Board ordered the Employer to drop the offending portion of the Productivity Proposal, and dismissed the remainder of the complaint. Only the Union petitions for review.

II. UNILATERAL MODIFICATION

The Union challenges the Board's decision on two distinct grounds. First, it argues that the Board erred in interpreting the zipper clause to bar modification of the CBA by any practice inconsistent with its terms. The Union claims that "even an express stipulation against oral modification is no bar to the parties' right to contract anew [i.e., by their conduct] on the subject, since such a stipulation, like any other term of the contract, may be rescinded or amended." Second, assuming that the NLRB's interpretation of the zipper clause is correct, the Union argues that the Board misread the substantive terms of the CBA when deciding which past practices were inconsistent with the written agreement. In particular, the Union claims that the contract simply does not address the conduct of nongrievance-related Union activities, so that the past practice of doing Union business on company time cannot be in conflict with the CBA.

In reviewing the NLRB's decision, we do not defer to the Board's interpretation of the contract. Although we normally defer to the Board on matters of policy and on the interpretation of the NLRA, it is the responsibility of the federal courts to make "the federal common law of collective-bargaining agreements." Litton Fin. Printing Div. v. NLRB, --- U.S. ----, 111 S.Ct. 2215, 2223-24, 115 L.Ed.2d 177 (1991), citing Local Union 1395, IBEW v. NLRB, 797 F.2d 1027, 1030-31 (D.C.Cir.1986); see The Idaho Statesman v. NLRB, 836 F.2d 1396, 1401 (D.C.Cir.1988). The Board's factual findings must be upheld if supported by substantial evidence, but "[t]o the extent that the Board interprets a past agreement ... those findings are properly regarded as 'ultimate legal conclusion[s] attached to the parties' words and conduct,' and are not entitled to special deference from this court." Id. at 1401 (citations deleted).

A.

The Union's argument that the no-oral-modification requirement is essentially unenforceable because it is itself subject to subsequent oral modification has a considerable pedigree in the common law of contracts. Farnsworth, Contracts 475 (1982); see, e.g., City of Indianapolis v. Twin Lakes Enterprises, Inc., 568 N.E.2d 1073, 1084-85 (Ind.App. 1 Dist.1991) ("Even a contract...

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