Adcock v. Freightliner LLC

• Decision Date: 23 December 2008
• Docket Number: No. 06-2287.,06-2287.
• Parties: Ronnie ADCOCK; Timothy Cochrane; Thomas Cochrane; Katherine Ivey; Kristi Jones, Plaintiffs-Appellants, v. FREIGHTLINER LLC; International Union, United Automobile and Agricultural Implement Workers of America, Defendants-Appellees. National Labor Relations Board, Amicus Curiae.
• Court: U.S. Court of Appeals — Fourth Circuit

550 F.3d 369

Ronnie ADCOCK; Timothy Cochrane; Thomas Cochrane; Katherine Ivey; Kristi Jones, Plaintiffs-Appellants, v. FREIGHTLINER LLC; International Union, United Automobile and Agricultural Implement Workers of America, Defendants-Appellees.

National Labor Relations Board, Amicus Curiae.

No. 06-2287.

United States Court of Appeals, Fourth Circuit.

Argued October 28, 2008.

Decided December 23, 2008.

ARGUED: William L. Messenger, National Right to Work Legal Foundation, Springfield, Virginia, for Appellants. William Lawrence Rikard, Jr., Parker, Poe, Adams & Bernstein, L.L.P., Charlotte, North Carolina; Stephen P. Berzon, Altshuler & Berzon, San Francisco, California, for Appellees. ON BRIEF: Philip M. Van Hoy, Stephen Dunn, Van Hoy, Reutlinger, Adams & Dunn, Charlotte, North Carolina, for Appellants. Eric D. Welsh, Kristin R. Poolos, Parker, Poe, Adams & Bernstein, L.L.P., Charlotte, North Carolina, for Appellee Freightliner LLC. Danielle Leonard, Altshuler & Berzon, San Francisco, California; George N. Davies, Nakamura, Quinn & Walls, Birmingham, Alabama; Daniel W. Sherrick, General Counsel, Jeffrey D. Sodko, Associate General Counsel, International Union, UAW, Detroit, Michigan; Seth Cohen, Smith, James, Rowlett & Cohen, L.L.P., Greensboro, North Carolina, for Appellee International Union, United Automobile and Agricultural Implement Workers of America. Ronald Meisburg, General Counsel, John E. Higgins, Jr., Deputy General Counsel, John H. Ferguson, Associate General Counsel, Margery E. Lieber, Deputy Associate General Counsel, Eric G. Moskowitz, Assistant General Counsel, Laura Bandini, Senior Attorney, National Labor Relations Board, Washington, D.C., for Amicus Curiae.

Before TRAXLER and KING, Circuit Judges, and HAMILTON, Senior Circuit Judge.

Affirmed by published opinion. Senior Judge HAMILTON wrote the opinion, in which Judge TRAXLER and Judge KING joined.

OPINION

HAMILTON, Senior Circuit Judge:

With certain exceptions not applicable in this case, § 302 of the Labor Management Relations Act (LMRA) prohibits, among other things, an employer from "pay[ing], lend[ing], or deliver[ing] . . . any money or other thing of value" to a labor union or labor union representative. 29 U.S.C. § 186(a). The issue presented in this appeal is whether Freightliner LLC (Freightliner) delivered "money or other thing[s] of value" to the International Union, United Automobile and Agricultural Implement Workers of America (the Union) pursuant to a card check agreement with the Union, wherein Freightliner agreed, among other things, to: (1) require some of its employees to attend, on paid company time, Union presentations explaining the card check agreement; (2) provide the Union reasonable access to nonwork areas in company plants to allow Union representatives to meet with employees; and (3) refrain from making negative comments about the Union during organizing campaigns. For the reasons stated below, we conclude that the district court correctly determined that Freightliner did not deliver a "thing of value" to the Union in violation of § 302. Accordingly, we affirm.

I

A

Freightliner owns several production facilities in North Carolina, including the Mt. Holly Truck Manufacturing Plant (Mt.Holly), the Gastonia Parts Manufacturing Plant (Gastonia), the Cleveland Truck Manufacturing Plant (Cleveland Truck), the Cleveland Parts Distribution Center (Cleveland Parts), the Thomas Built Buses Manufacturing Plant (Thomas Built), and the Freightliner Custom Chassis Manufacturing Plant (Custom Chassis). As of March 2002, the Union was the exclusive bargaining representative only of the employees at Mt. Holly. Around this time, the Union sought to organize and become the exclusive bargaining representative of the employees at Freightliner's other facilities in North Carolina, which were nonunion.

Negotiations between Freightliner and the Union ensued, which resulted in the signing of two agreements in December 2002. The first agreement (the Card Check Agreement) outlined the ground rules for the organizing campaigns. In the Card Check Agreement, Freightliner agreed with respect to each bargaining unit to forego a National Labor Relations Board election if a majority of the bargaining unit employees chose the Union as their exclusive bargaining representative by signing authorization cards. As part of the Card Check Agreement, Freightliner also agreed to: (1) require some of its employees to attend, on paid company time, Union presentations explaining the Card Check Agreement; (2) provide the Union reasonable access to nonwork areas in company plants to allow Union representatives to meet with employees; and (3) refrain from making negative comments about the Union during the organizing campaigns.¹

The second agreement signed by the parties was a preconditions agreement (the Preconditions Agreement). In the Preconditions Agreement, the Union made commitments as to its conduct if it were recognized as the exclusive bargaining representative of Freightliner's employees. Notably, the Union agreed that: (1) there would be "separate consideration in terms and conditions of employment for each Business Unit because of industry differences (trucks, parts, busses, fire and rescue, chassis) including competitive wage and benefits packages within comparative product markets"; (2) there would be "no guaranteed employment or transfer rights between Business Units or Plants"; (3) there would be "no provisions for severance pay . . . in the event of a layoff or plant closure"; (4) there would be "no strikes during the term of any collectively bargained agreement"; (5) there would be "no subcontracting prohibitions, provided economics reflect non-competitiveness"; (6) future "benefits cost increases, in excess of normal inflation, will be shared between the Company and the employees proportionately at a rate to be determined between the Company and its employees"; and (7) in consideration of Freightliner's financial turnaround objectives, there would be "no wage adjustments provided at any newly organized facility prior to mid-2003." (J.A. 17-18).

The ensuing organizing campaigns at Gastonia, Cleveland Truck, and Cleveland Parts resulted in the Union becoming the exclusive bargaining representative at these facilities in the first part of 2003. In June 2003, Freightliner and the Union, on behalf of the Mt. Holly employees, entered into a collective bargaining agreement (CBA), which provided, among other things, that: (1) there would be no increase in employee wages for the first three years of the CBA; (2) the employees' profit sharing bonus would be canceled; and (3) the employees would increase their share of employee benefit payments. In December 2003, Freightliner and the Union, on behalf of the employees at the Gastonia, Cleveland Truck, and Cleveland Parts facilities, entered into CBAs.

In March 2004, a majority of the employees at Thomas Built signed authorization cards choosing the Union as their exclusive bargaining representative. Consequently, Freightliner recognized the Union as the exclusive bargaining representative of these employees. On April 14, 2004, Jeff Ward, a Thomas Built employee, filed unfair labor practice charges against the Union and Freightliner. After reviewing these charges, General Counsel for the NLRB issued a complaint on October 13, 2004 alleging that Freightliner and the Union violated the National Labor Relations Act (NLRA), 29 U.S.C. § 151 et seq., by "bargaining and entering into an agreement regarding employee terms and conditions of employment prior to the [Union] enjoying the support of a majority of employees." (J.A. 29). The complaint also alleged that Freightliner violated the NLRA by assisting the Union with the solicitation of union authorization cards from employees at Thomas Built and by recognizing the Union at Thomas Built when, in fact, the Union did not represent "an uncoerced majority of employees." (J.A. 29).

On March 17, 2005, the NLRB, the Union, and Freightliner settled the unfair labor practice charges filed by General Counsel for the NLRB. The terms of the settlement agreement included that: (1) Freightliner and the Union would cease giving effect to the Preconditions Agreement at all Freightliner facilities; (2) Freightliner would cease assisting the Union with the solicitation of union authorization cards from employees at Thomas Built; and (3) Freightliner would not recognize the Union at Thomas Built unless the Union was "certified by the NLRB." (J.A. 30).

B

On January 24, 2006, four employees of Gastonia and one employee of Cleveland Truck filed this class action against Freightliner and the Union in the United States District Court for the Western District of North Carolina. The complaint alleged four claims under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961-1968. The racketeering activity alleged in each of the four counts consists of violations of § 302 of the LMRA.² According to the complaint, Freightliner violated § 302 when it: (1) required some of its employees to attend on paid company time Union presentations explaining the Card Check Agreement; (2) provided the Union reasonable access to nonwork areas in company plants to allow Union representatives to meet with employees; and (3) agreed to refrain from making negative comments about the Union during the organizing campaigns. The complaint also alleges that the Union violated § 302 when it agreed to receive these alleged benefits. The five employees (the Employees), for themselves and a proposed class of Freightliner employees, sought damages for the wages, benefits, and other terms of employment for which they allegedly were deprived as a result of the alleged racketeering activity. The Employees also sought damages for the dues that Freightliner's employees paid to the Union because they allegedly never received loyal collective bargaining representation. Finally,...