N.L.R.B. v. Vanguard Tours, Inc.

• Citation: 981 F.2d 62
• Decision Date: 02 December 1992
• Docket Number: No. 143,D,R,AFL-CI,143
• Parties: 142 L.R.R.M. (BNA) 2041, 61 USLW 2420 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. VANGUARD TOURS, INC., Bedford Bus Co., Inc., and Local 456, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America,espondents. ocket 92-4024.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 62

981 F.2d 62

142 L.R.R.M. (BNA) 2041, 61 USLW 2420

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. VANGUARD TOURS, INC., Bedford Bus Co., Inc., and Local 456,

International Brotherhood of Teamsters,

Chauffeurs, Warehousemen and Helpers of

America, AFL-CIO, Respondents.

No. 143, Docket 92-4024.

United States Court of Appeals, Second Circuit.

Argued Sept. 2, 1992.

Decided Dec. 2, 1992.

Joseph S. Rosenthal, New York City (Carol M. Roberts, Bondy & Schloss, on the brief), for respondents Vanguard Tours, Inc. and Bedford Bus Co., Inc.

Roy Barnes, Hempstead, N.Y., for respondent Local 456, IBT.

Vincent Falvo, N.L.R.B., Washington, D.C. (Jerry M. Hunter, Gen. Counsel, Aileen A. Armstrong, Deputy Assoc. Gen. Counsel, and John D. Burgoyne, Asst. Gen. Counsel, N.L.R.B., on the brief), for petitioner.

Before FEINBERG, NEWMAN, and CARDAMONE, Circuit Judges.

JON O. NEWMAN, Circuit Judge:

This case is before the Court upon the petition of the National Labor Relations Board to enforce its order issued on September 28, 1990, 300 NLRB No. 30. The order includes requirements that the respondents Vanguard Tours, Inc. and Bedford Bus Co., Inc. ("Vanguard" or the "employer") make whole certain employees who suffered temporary discharge following a strike in 1981 and compensate certain other employees who were named in a lawsuit brought by Vanguard to enjoin the strike. Because we conclude that the Board erred in concluding that the strike was an unfair labor practice strike and in concluding that the employer's lawsuit lacked a reasonable basis in fact or law, we enforce in part and deny enforcement in part.

Background

Vanguard is a school bus and charter transportation company with several offices in New York. At the time of the events at issue in this case, it employed approximately 300 people, of whom 18 were members of respondent Local 456, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, AFL-CIO ("Local 456" or "union"). The union members were all classified as "full-time" or "regular" employees, and the non-union employees were classified as part-time (although some appeared to work a "full-time" day). Pursuant to two collective bargaining agreements, one signed in 1978 and another in 1981, the full-time employees enjoyed a much higher hourly wage than the part-time employees, as well as benefits unavailable to the part-time employees. This dispute grows out of the part-time employees' dissatisfaction with this arrangement. Commencing in 1980, the part-time employees engaged in various concerted activities, including a strike, to protest their treatment, and the employer took various actions in response.

In 1981, the Regional Director filed complaints concerning these responses as well as other alleged unfair labor practices involving the structure of the Vanguard-Local 456 relationship, the pension plan provisions of the collective bargaining agreements, and a workplace rule restricting discussion of work conditions. In 1984, an ALJ found against the employer and the union on most allegations. The Board's Decision and Order of September 28, 1990, adopted most of the ALJ's conclusions of law and most provisions of his remedial order, finding violations of section 8(a)(1)-(3), (b)(1)(A), (b)(2) of the Labor Management Relations Act of 1947, 29 U.S.C. § 158(a)(1)-(3), (b)(1)(A), (b)(2) (1988). The only significant conclusion of the ALJ not adopted by the Board was that the two-tiered wage and benefit system maintained by the employer was itself an unfair labor practice. The Board concluded that the differentials in pay and benefits reflected a bona fide classification of employees into full-time and part-time categories, and did not constitute discrimination on the basis of union membership.

Discussion

1. The Strike

Several of the Board's findings of unfair labor practices rest on a determination that the part-timers' strike was a protected strike intended to protest the employer's prior unfair labor practices. See conclusion of law 7 (renumbered) ¹ (threatening strikers with discharge and loss of benefits in violation of section 8(a)(1)); conclusion of law 8 (discharging striking employees and reinstating them conditionally with loss of seniority, in violation of section 8(a)(1)); conclusion of law 9 (discharging certain other striking employees in violation of section 8(a)(1)). The employer now argues that there was no substantial evidence to show any motivation for the strike other than an economic one, and claims that the finding of an unfair labor practice is inconsistent with the Board's determination (overruling the ALJ) that the employer had not committed an unfair labor practice by maintaining a disparate system of wages and benefits for union and non-union employees.

While the seminal Supreme Court case on unfair labor practice strikes, Mastro Plastics Corp. v. NLRB, 350 U.S. 270, 76 S.Ct. 349, 100 L.Ed. 309 (1955), involved a strike "solely against unfair labor practices," id. at 271, 76 S.Ct. at 352, we have made clear that a strike may have mixed motivations and still be classified as an unfair labor practice strike. See, e.g., NLRB v. Heads & Threads Co., 724 F.2d 282, 288 (2d Cir.1983). The Board found a separate unfair labor practice in the employer's maintenance of a system whereby its supervisors acted as union shop stewards, and specifically found that this violation was "a substantial contributing factor to the strike." Upon a review of the record, we have concluded that this finding is not supported by substantial evidence. Each employee who testified as to the cause of the strike articulated exclusively economic rationales. Perhaps in a hypothetical case, economic grievances that otherwise would have been redressed through collective bargaining can cause an unfair labor practice strike when the employer has co-opted the union's representatives. In such a case, both unfair labor practices and economic grievances would have combined to cause the strike. There is no suggestion on this record, however, that dissatisfaction with the representation arrangement, as opposed to dissatisfaction with the economic consequences of that arrangement, was a cause of the part-time employees' strike.

Finding no substantial evidence to support conclusion of law 6, we deny enforcement to provisions A(1)(d), A(1)(h), A(1)(i), A(2)(a), and A(2)(b) of the Board's remedial order.

2. The Lawsuit

On the day the strike commenced, January 9, 1981, the employer filed suit in New York Supreme Court, seeking injunctive relief and $500,000 in damages from each of 24 strikers. The State Court issued a temporary restraining order, effectively ending the strike, but the suit remained pending for another two weeks. On January 15, Vanguard dismissed all but seven "ringleaders." The ringleaders were obliged to retain counsel and required to appear in court on January 23, at which time the employer asked the Court to dismiss the suit in its entirety. Overruling the ALJ, the Board concluded that it was permissible for Vanguard initially to have filed the suit. But the Board determined that leaving the suit pending for eight days after January 15--after the strike had ended--constituted an unfair labor practice.

In Bill Johnson's Restaurants, Inc. v. NLRB, 461 U.S. 731, 103 S.Ct. 2161, 76 L.Ed.2d 277 (1983), the Supreme Court struck a balance between protected rights under labor law and the First Amendment right to institute legal proceedings. The Court held that a pending lawsuit can be an unfair labor practice only if it is retaliatory in motive and lacks a reasonable basis in fact or law. Id. at 743-44, 103 S.Ct. at 2170. Once the suit has been adjudicated, however, the standard is less forgiving to persons who have filed a retaliatory suit. If the plaintiff has lost on the merits--even if he had a reasonable basis in bringing suit--the Board may consider the filing of the suit to have been an unfair labor practice. Id. at 747, 749, 103 S.Ct. at 2171, 2173; see also id. at 753, 756, 103 S.Ct. at 2175, 2176 (Brennan, J., concurring); Premier Electrical Construction Co. v. National Electrical Contractors Association, Inc., 814 F.2d 358, 374 n. 7 (7th Cir.1987); Dash v. NLRB, 793 F.2d 1062, 1070 (9th Cir.1986); Sheet Metal Workers' International Association v. NLRB, 716 F.2d 1249, 1265 (9th Cir.1983).

In this case, there is little question that Vanguard had a retaliatory motive, perhaps at the outset, and no later than the time it permitted the suit to remain pending against certain defendants. More difficult is determining the applicable standard for evaluating whether the suit was sufficiently lacking in merit to constitute an unfair labor practice. The ALJ took the position that any termination favorable to the defendants constituted a loss on the merits, and that accordingly it was irrelevant whether the suit may have had a reasonable basis in fact or law. Having "lost" once, the employer automatically lost again. The Board, concerned that this position discouraged the settlement of lawsuits, adopted a different stance. In the Board's view, any termination favorable to the defendants gives rise to a presumption that a suit lacked a reasonable basis in fact or law. To avoid a finding that the retaliatory lawsuit was an unfair labor practice, the employer must come forward with evidence to show a reasonable basis in fact or law. Convinced that the employer did not do so in this case, the Board held that the continuation of the lawsuit constituted an unfair labor practice.

Both positions are inconsistent with Bill Johnson's. The crucial language of the decision provides:

In instances where the Board must allow the lawsuit to proceed, if the employer's case in the state court ultimately proves meritorious and he has judgment against the employees, the employer should also prevail before the Board, for the filing of a meritorious lawsuit, even for a retaliatory motive, is not...