American Automatic Sprinkler Systems, Inc. v. N.L.R.B.

• Decision Date: 17 December 1998
• Docket Number: No. 669,AFL-CIO,I,AFL-CI,Nos. 97-1821,97-2014,U,669,s. 97-1821
• Citation: 163 F.3d 209
• Parties: 160 L.R.R.M. (BNA) 2037, 137 Lab.Cas. P 10,325 AMERICAN AUTOMATIC SPRINKLER SYSTEMS, INCORPORATED, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Road Sprinkler Fitters Local UnionA.,ntervenor. National Labor Relations Board, Petitioner, v. American Automatic Sprinkler Systems, Incorporated, Respondent, Road Sprinkler Fitters Local UnionA.,Intervenor.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 209

163 F.3d 209

160 L.R.R.M. (BNA) 2037, 137 Lab.Cas. P 10,325

AMERICAN AUTOMATIC SPRINKLER SYSTEMS, INCORPORATED, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent,

Road Sprinkler Fitters Local Union No. 669, U.A., AFL-CIO,

Intervenor.

National Labor Relations Board, Petitioner, v. American Automatic Sprinkler Systems, Incorporated, Respondent, Road Sprinkler Fitters Local Union No. 669, U.A., AFL-CIO Intervenor.

Nos. 97-1821, 97-2014.

United States Court of Appeals Fourth Circuit.

Argued Sept. 23, 1998.

Decided Dec. 17, 1998.

ARGUED: Lawrence Edward Dube, Jr., Dube & Goodgal, P.C., Baltimore, Maryland, for American Automatic. Steven B. Goldstein, National Labor Relations Board, Washington, DC, for Board. William W. Osborne, Jr., Osborne Law Offices, P.C., Washington, DC, for Intervenor. ON BRIEF: Frederick L. Feinstein, General, Linda Sher, Associate General, Aileen A. Armstrong, Deputy Associate General, Margaret Ann Gaines, Supervisory Attorney, National Labor Relations Board, Washington, DC, for Board. Marc D. Keffer, Osborne Law Offices, P.C., Washington, DC, for Intervenor.

Before WIDENER and LUTTIG, Circuit Judges, and MAGILL, Senior Circuit Judge of the United States Court of Appeals for the Eighth Circuit, sitting by designation.

Petition granted in part and denied in part and cross-application for enforcement granted in part and denied in part by published opinion. Judge LUTTIG wrote the opinion, in which Judge WIDENER and Senior Judge MAGILL joined.

OPINION

LUTTIG, Circuit Judge:

Petitioner American Automatic Sprinkler Systems, Inc., petitions for review of a decision and order of the National Labor Relations Board concluding that American violated section 8(a)(1), (a)(3), and(a)(5) of the National Labor Relations Act, 29 U.S.C. § 158(a)(1), (a)(3), and (a)(5), by, inter alia, failing to bargain in good faith with the union locals upon the expiration of collective-bargaining agreements, unilaterally changing working conditions, and discriminating against certain individuals on the basis of union membership. The NLRB cross-petitions for enforcement of its decision and order. For the reasons that follow, we conclude that American did not have a legal obligation to negotiate with or recognize its collective-bargaining partners upon the expiration of their respective agreements, and thus did not violate section 8(a)(5) or (a)(1) by unilaterally changing the conditions of employment. However, because we conclude that the Board's findings of unlawful discrimination against union members in violation of section 8(a)(3) and (a)(1) are supported by substantial evidence in the record as a whole, we enforce the Board's order as to these findings. Accordingly, we grant in part and deny in part American's petition for review, grant in part and deny in part the Board's cross-petition for enforcement of its order, and remand the case to the NLRB for entry of an appropriate remedial order.

I.

American is an Owing Mills, Maryland, firm engaged in the fabrication, installation, and servicing of fire sprinkler systems. Road Sprinkler Fitters Local Union No. 669, U.A., A.F.L.-C.I.O. is a sprinkler fitters' union with near nationwide geographic jurisdiction. Road Sprinkler Fitters Local Union No. 536 has jurisdiction over Baltimore, Maryland, and surrounding areas.

Since it began operations in 1974, American has been a party to successive collective-bargaining agreements with Local 669 and Local 536 by virtue of its membership in a multiemployer bargaining association, the National Fire Sprinkler Association ("NFSA" or "the Association"). These negotiated collective-bargaining agreements established the terms and conditions of employment for American's journeymen and apprentice sprinkler fitter employees employed in the respective territorial jurisdictions of Locals 669 and 536.

In 1987, American signed a form recognition agreement acknowledging Local 669 as the exclusive bargaining representative of its sprinkler fitter employees working in Local 669's jurisdiction. The agreement, which was accompanied by fringe benefit forms demonstrating majority union membership, stated:

[American] ... has, on the basis of objective and reliable information, confirmed that a clear majority of the sprinkler fitters in its employ have designated, are members of, and are represented by ... Local 669 ... for purposes of collective bargaining. [American] therefore unconditionally acknowledges and confirms that Local 669 is the exclusive bargaining representative of its sprinkler fitter employees pursuant to Section 9(a) of the National Labor Relations Act.

American signed another such recognition agreement with Local 669 in 1988 that stated as follows:

[American] hereby freely and unequivocally acknowledges that it has verified the Union's status as the exclusive bargaining representative of its employees pursuant to Section 9(a) of the National Labor Relations Act.

And, in 1991, NFSA, which was then American's bargaining representative, negotiated a collective-bargaining agreement with Local 669 that included a similar recognition clause. That agreement took effect April 1, 1991, and expired on March 31, 1994. NFSA also negotiated a collective-bargaining agreement on behalf of its members, including American, with Local 536. This agreement, which was effective from June 1, 1991, to May 31, 1994, included an identical recognition clause to that in the Local 669 agreement:

The National Fire Sprinkler Association for and on behalf of its contractor members ... recognizes [Local 536] as the sole and exclusive bargaining representative for all journeymen sprinkler fitters and apprentices in the employ of said employers [working in the City of Baltimore and its 10 surrounding miles], ... pursuant to section 9(a) of the National Labor Relations Act.

In late January, 1994, American notified both Local 669 and 536 that it was withdrawing bargaining authority from the NFSA and intended thereafter to bargain independently with the unions. Within days, Local 536 requested that the Company identify dates and times to bargain. The Company never responded to this initial communication or to three telephone messages to the same effect.

The Company eventually met with the Local on May 31, 1994, the day the NFSA agreement expired. At that time, however, the Company offered no proposal and filed the Local's proposal without reviewing it. The Company's Vice-President Mike McCusker submitted its first proposal to the Local on July 25, 1994. The proposal was less than a page long in its entirety, and, in addition to drastically cutting wages and benefits, it would have effectively eliminated union representation. The proposal included no recognition clause, no description of the bargaining unit, no contract term, and no provisions addressing dues check-off, union security, grievances and arbitration, overtime, or lunch time, holiday or vacation pay. The proposal required employees to furnish all of their own tools, irrespective of cost, created a new non-unit position of "helper," and eliminated the union apprenticeship program and territorial jurisdiction.

After three brief "bargaining sessions" in which the Company expressed no willingness to deviate in any way from its initial proposal, McCusker informed the union negotiating representative on August 9, 1994, that the parties were at an "impasse" because the union had rejected its "final offer." Further, McCusker indicated that the Company would begin implementing the terms of its proposal on August 11. When the union stated its wish to continue negotiations, the Company did not respond, and instead began implementing the terms of its proposal through negotiations with individual employees.

McCusker's negotiations with Local 669 proceeded in similar fashion. There were three negotiating sessions in which the Company expressed no willingness to compromise on its substantially identical proposal or even consider the Local's proposal. As occurred with Local 536, the sessions ended with the Company's abrupt declaration of impasse and its rejection of further entreaties by the union.

In the weeks following American's declarations of impasse, the Company required all employees to submit individual applications for work and entered into individualized negotiations. Executives of the Company told employees and union members that the Company was going "nonunion," and suggested that it would be able to give better offers to individuals who resigned their union cards. During this time period, one of the general contractors for whom the Company was working as a subcontractor complained repeatedly that the Company was behind schedule due to labor shortages.

As a consequence of the Company's actions, Locals 669 and 536 and their individual members filed charges with the Regional Director of the NLRB, who in turn issued a series of complaints against the Company. The Administrative Law Judge to whom the complaints were referred found that the Company had violated section 8(a)(5) and (a)(1) of the NLRA by bargaining in bad faith with the Locals and prematurely declaring an impasse, bypassing both Locals and dealing directly with individual employees, and unilaterally making changes in mandatory subjects of bargaining and the scope of the bargaining units. ¹ The ALJ further found that the Company had violated section 8(a)(1) of the NLRA by telling employees it was going "non-union," telling an employee that he could not work as a foreman because of his father's union affiliation, and impliedly promising an employee a wage increase if he resigned his union membership card. Finally, the ALJ found that the Company had violated section 8(a)(3)and (a)(1) of the Act by refusing to hire or reinstate, discharging and constructively discharging, and imposing onerous working conditions on, members of both Locals.

On appeal, the Board affirmed the conclusions of the ALJ, finding additional...