Alfred M. Lewis, Inc. v. N.L.R.B.
| Decision Date | 13 September 1978 |
| Docket Number | No. 77-2217,77-2217 |
| Citation | 587 F.2d 403 |
| Parties | 99 L.R.R.M. (BNA) 2841, 84 Lab.Cas. P 10,849 ALFRED M. LEWIS, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Raymond M. Hunter, of Ryley, Carlock & Ralston, Phoenix, Ariz., for petitioner.
Petition to Review a Decision of the National Labor Relations Board.
Before CHOY and KENNEDY, Circuit Judges, and HALL, * District Judge.
Alfred M. Lewis, Inc. (Company) petitions for review of an order of the National Labor Relations Board (Board), and the Board by cross-application seeks enforcement of its order. 1 This court has jurisdiction under sections 10(e) and (f) of the National Labor Relations Act (NLRA or Act), 29 U.S.C. § 160(e)-(f), since the underlying unfair labor practices occurred in Phoenix, Arizona.
The Company operates four wholesale grocery warehouses, including one located in Phoenix. The warehouse and trucking employees at the Phoenix warehouse are represented by Transport and Local Delivery Drivers, Warehousemen and Helpers, Local 104 (Union). In its warehouses the Company employs "order runners" who drive lift trucks through the warehouse aisles, collecting merchandise listed on an order and depositing the items at a loading dock for delivery to the Company's customers. For several years, order runners at the Phoenix warehouse have achieved lower production rates than order runners at the Company's other warehouses. In early 1975 the Company began what it designated an "informal" program of employee counseling in an effort to improve production. In March, 1975, after this procedure had failed to obtain the desired results, the Company unilaterally instituted a formal program of supervisory counseling of order runners whose output was five percent or more below the crew average. 2 In July of 1975, the Company adopted provisions for disciplining employees who consistently failed to meet the production standards. 3 Furthermore, on August 7, 1975, the Company unilaterally terminated its policy of permitting employees to have union representation at counseling and disciplinary procedures. The crew average concept of production quotas was abandoned by the Company in late March, 1976 and a set of engineered standards was adopted instead. 4
Pursuant to the program, the Company discharged and suspended some employees. 5 The Union filed grievances with respect to each of these disciplinary actions and processed the first two complaints through arbitration. The arbitrator's awards upheld the disciplinary actions. After receiving these two unfavorable decisions, the Union chose not to arbitrate the remaining grievances.
During the pendency of the arbitration proceedings, individual employees filed charges with the Board alleging that the Company had committed unfair labor practices. Complaints, which were later consolidated, were issued by the regional director, charging that the Company had violated the Act by imposing the production standards system without first bargaining with the Union and by adopting the policy of forbidding union representation at counseling and disciplinary sessions. 6 One of the complaints was amended to allege that the Company further violated the Act by instituting the engineered quota system in March of 1976 without first bargaining with the Union.
On April 15 and 16, 1976 the unfair labor practice charges were tried before an administrative law judge. In his decision issued July 30, 1976, the administrative law judge held that the Board's principle of deference to arbitration proceedings under Spielberg Manufacturing Co., 112 N.L.R.B. 1080 (1955), precluded Board action for possible violations arising out of the institution of the production standards system. The administrative law judge also concluded that the engineered quota system had not been shown to be a material change from that which was required of the employees under the production standards system and alternatively that Spielberg deference was proper. The administrative law judge did find that the Company's refusal to permit union representation at disciplinary sessions violated section 8(a)(1), but that no representation was required at counseling sessions preliminary to disciplinary action. Finally, the administrative law judge held that the complaint failed to allege that the change in policy concerning union representation violated sections 8(a)(5) and 8(a)(1).
The Board issued its decision on May 18, 1977 and partially overruled the decision of the administrative law judge. The Board held that (1) the Company violated sections 8(a)(5) and 8(a)(1) when it instituted the production standards system, the engineered quota system, and the change in policy concerning union representation without first bargaining with the Union; (2) deference to the arbitration proceedings was not warranted; and (3) the denial of union representation at counseling sessions and disciplinary proceedings violated section 8(a)(1). To remedy these violations, the Board ordered the Company to cease and desist from engaging in the cited unfair labor practices, required the Company to rescind the engineered quota and disciplinary systems, 7 and ordered it to restore the Status quo ante by reinstating all employees discharged as a result of the quota and disciplinary systems, making those employees whole for lost wages plus interest, and removing from employee files disciplinary memoranda resulting from the quota and disciplinary systems.
We first consider whether the Board abused its discretion in refusing to defer to the arbitration process. Section 10(a) of the Act, 29 U.S.C. § 160(a), empowers the Board to prevent the commission of unfair labor practices and expressly provides that that power "shall not be affected by any other means of adjustment" which may be established. Nonetheless, the Board may defer to an arbitration award and decline to exercise authority over alleged unfair labor practices in an appropriate case. Carey v. Westinghouse Electric Corp., 375 U.S. 261, 270-72, 84 S.Ct. 401, 11 L.Ed.2d 320 (1964); Stephenson v. NLRB, 550 F.2d 535, 537 (9th Cir. 1977). The Board established criteria for determining when to defer to arbitral awards in Spielberg Manufacturing Co., 112 N.L.R.B. 1080 (1955). In the instant case, the Board's decision squarely relied on the Spielberg criterion that deference to arbitration will not be given where the arbitral award is repugnant to the purposes and policies of the Act. The Board's characterization of the award and consequent refusal to defer will be reversed on review only when the Board abuses its wide discretion. Hawaiian Hauling Service, Ltd. v. NLRB, 545 F.2d 674, 676 (9th Cir. 1976), Cert. denied,431 U.S. 965, 97 S.Ct. 2921, 53 L.Ed.2d 1061 (1977).
Both arbitration decisions concluded in relevant part that the production quota system was reasonable and that the Company had the right to introduce such a system without prior bargaining with the Union. The Board refused to defer to these rulings on the ground that the arbitrator "ignored well-established Board precedent holding exactly to the contrary." We agree with the Board that in this case the arbitrators ignored well-established principles of labor law, and we rule that the Board committed no abuse in refusing to defer to the arbitration awards.
Under section 8(a)(5), the duty to bargain collectively requires bargaining with respect to "wages, hours, and other terms and conditions of employment." NLRA § 8(d), 29 U.S.C. § 158(d). A production quota system and disciplinary sanctions are subjects that are within this statutory category and an employer violates section 8(a)(5) by unilaterally imposing such work rules without first bargaining. NLRB v. Miller Brewing Co., 408 F.2d 12 (9th Cir. 1969); Boland Marine and Manufacturing Co., 225 N.L.R.B. 824 (1976); Donna Lee Sportswear, 174 N.L.R.B. 318 (1969). By failing to bargain before instituting the quota and disciplinary systems, the Company clearly violated section 8(a) (5), and the Board did not abuse its discretion in refusing to give deference to the arbitrator's award.
The Company argues that the grievance procedure used by the Union to challenge the quota system was itself a bargaining mechanism; it follows, the Company contends, that there was adequate bargaining when the Union utilized this grievance process. We reject this theory. In these circumstances arbitration concerning the propriety or fairness of the Company's policy after it had been put into effect was not a substitute for bargaining between the Company and the Union as to whether the policy should be adopted in the first instance.
An essential aspect of the Union's role in collective bargaining is its right to be consulted by the employer about mandatory subjects of bargaining and to make comments, objections, or suggestions to the employer before action is taken. This is a practical mechanism to insure the stability of industrial relations. The Board correctly held that the employer disregarded it here. It would wholly undercut the duty to bargain if the employer were allowed to act with reference to a mandatory bargaining subject and then simply defend its actions in a later arbitration hearing. Aside from wages and hours, production quotas are among the most important of the conditions of employment. The Company cannot avoid an unfair labor practice charge by claiming that grievance procedures after the fact were an adequate substitute for its duty to bargain with the Union before instituting the quota systems challenged here.
The Company contends that the employee should not be allowed to bring an unfair labor practice charge since the Union chose to rest on the arbitration awards. It argues that to grant relief on these individual complaints would undermine the Union's...
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