Auciello Iron Works v. Nat'l Labor Relations Bd.

• Decision Date: 03 June 1996
• Docket Number: 95668
• Parties: AUCIELLO IRON WORKS, INC. v. NATIONAL LABOR RELATIONS BOARD
• Court: U.S. Supreme Court

517 U.S. 781

116 S.Ct. 1754

135 L.Ed.2d 64

AUCIELLO IRON WORKS, INC.

v NATIONAL LABOR RELATIONS BOARD

Certiorari to the United States Court of Appeals for the First Circuit.

No. 95-668.

Supreme Court of the United States

Argued April 22, 1996

Decided June 3, 1996

Syllabus ^*

The day after petitioner Auciello Iron Works's outstanding contract offer was accepted by its employees' collective-bargaining representative (Union), Auciello disavowed the agreement because of its good-faith doubt, based on knowledge acquired before the offer's acceptance, that a majority of its employees supported the Union. The National Labor Relations Board ruled, inter alia, that Auciello's withdrawal from it was an unfair labor practice in violation of the National Labor Relations Act and ordered that the agreement be reduced to a formal written instrument. The First Circuit enforced the order as reasonable.

Held: The Board reasonably concluded that an employer commits an unfair labor practice when it disavows a collective-bargaining agreement because of a good-faith doubt about a union's majority status at the time the contract was made, when the doubt arises from facts known to the employer before the union accepted its contract offer. Pp. 4-10.

(a) In its efforts to achieve the Act's object of industrial peace and stability fostered by collective-bargaining relationships, see e.g., Fall River Dyeing & Finishing Corp. v. NLRB, 482 U. S. 27, 38, the Board has held that a union is entitled to, inter alia, a conclusive presumption of majority status during a collective-bargaining agreement's term, up to three years, see, e.g,. NLRB v. Burns Int'l Security Services, Inc., 406 U. S. 272, 290, n. 12. Upon the contract's expiration, the employer may rebut the presumption of majority status by showing that it has a good-faith doubt, founded on a sufficient objective basis, of the union's majority support. NLRB v. Curtin Matheson Scientific, Inc., 494 U. S. 775, 778. Auciello's assertion that an employer may raise the latter defense even after a contract period has apparently begun to run upon a union's acceptance of an outstanding offer is rejected. Pp. 4-6.

(b) The same need for repose that first prompted the Board to adopt the rule presuming a union's majority status during its collective-bargaining agreement's term also led the Board in this case to rule out an exception for the benefit of an employer with doubts arising from facts antedating the contract. The Board's judgment in the matter is entitled to prevail. Auciello's argument for case-by-case determinations of the appropriate time for asserting a good-faith doubt in place of the Board's bright-line rule cutting off the opportunity at the moment of apparent contract formation fails to point up anything unreasonable in the Board's position. Its approach generally allows companies an adequate chance to act on their preacceptance doubts before contract formation, and Auciello's view would encourage bad-faith bargaining by employers. The Board could reasonably conclude that giving employers flexibility in raising their good-faith doubts would not be worth skewing bargaining relationships by such one-sided leverage, and the fact that any collective-bargaining agreement might be vulnerable to such a postformation challenge would hardly serve the Act's goal of achieving industrial peace by promoting stable collective-bargaining relationships. Moreover, rejection of the Board's position is not compelled by the statutory right of employees to bargain collectively through representatives of their own choosing and to refrain from doing so. The Board is entitled to suspicion when faced with an employer's benevolence as its workers' champion against their certified union, and there is nothing unreasonable in giving a short leash to an employer as vindicator of its employees' organizational freedom. Pp. 6-9.

(c) Garment Worker's v. NLRB, 366 U.S. 731, 738-739, does not compel reversal; its rule concerning recognition agreements is not inconsistent with this decision. The Board reasonably found an employer's precontractual, good-faith doubt inadequate to support an exception to the conclusive presumption arising at the moment a collective-bargaining contract offer has been accepted. Pp. 9-10. 60 F. 3d 24, affirmed.

Justice Souter delivered the opinion of the Court.

The question here is whether an employer may disavow a collective-bargaining agreement because of a good-faith doubt about a union's majority status at the time the contract was made, when the doubt arises from facts known to the employer before its contract offer had been accepted by the union. We hold that the National Labor Relations Board reasonably concluded that an employer challenging an agreement under these circumstances commits an unfair labor practice in violation of Section(s) 8(a)(1) and (5) of the National Labor Relations Act, 49 Stat. 452, 453, as amended, 29 U. S. C. Section(s) 158(a)(1) and (5).

I.

Petitioner Auciello Iron Works of Hudson, Massachusetts, had 23 production and maintenance employees during the period in question. After a union election in 1977, the NLRB certified Shopmen's Local No. 501, a/w International Association of Bridge, Structural, and Ornamental Iron Workers, AFL-CIO, as the collective-bargaining representative of Auciello's employees. Over the following years, the company and the Union were able to negotiate a series of collective-bargaining agreements, one of which expired on September 25, 1988. Negotiations for a new one were unsuccessful throughout September and October 1988, however, and when Auciello and the Union had not made a new contract by October 14, 1988, the employees went on strike. Negotiations continued, nonetheless, and, on November 17, 1988, Auciello presented the Union with a complete contract proposal. On November 18, 1988, the picketing stopped, and nine days later, on a Sunday evening, the Union telegraphed its acceptance of the outstanding offer. The very next day, however, Auciello told the Union that it doubted that a majority of the bargaining unit's employees supported the Union, and for that reason disavowed the collective-bargaining agreement and denied it had any duty to continue negotiating. Auciello traced its doubt to knowledge acquired before the Union accepted the contract offer, including the facts that 9 employees had crossed the picket line, that 13 employees had given it signed forms indicating their resignation from the Union, and that 16 had expressed dissatisfaction with the Union.

In January 1989, the Board's General Counsel issued an administrative complaint charging Auciello with violation of Section(s) 8(a)(1) and (5) of the NLRA. ¹ An administrative law judge found that a contract existed between the parties and that Auciello's withdrawal from it violated the Act. 303 N. L. R. B. 562 (1991). The Board affirmed the administrative law judge's decision ² ; it treated Auciello's claim of good-faith doubt as irrelevant and ordered Auciello to reduce the collective-bargaining agreement to a formal written instrument. Ibid. But when the Board applied to the Court of Appeals for the First Circuit for enforcement of its order, the Court of Appeals declined on the ground that the Board had not adequately explained its refusal to consider Auciello's defense of good-faith doubt about the Union's majority status. 980 F. 2d 804 (1992). On remand, the Board issued a supplemental opinion to justify its position, 317 N. L. R. B. 364 (1995), and the Court of Appeals thereafter enforced the order as resting on a "policy choice [both] . . . reasonable and . . . quite persuasive." 60 F. 3d 24, 27 (CA1 1995). We granted certiorari, 516 U. S. ___ (1996), and now affirm.

II.

A.

The object of the National Labor Relations Act is industrial peace and stability, fostered by collective-bargaining agreements providing for the orderly resolution of labor disputes between workers and employees. See 29 U. S. C. Section(s) 141(b); Fall River Dyeing & Finishing Corp. v. NLRB, 482 U. S. 27, 38 (1987) (Fall River Dyeing). To such ends, the Board has adopted various presumptions about the existence of majority support for a union within a bargaining unit, the precondition for service as its exclusive representative. Cf. id., at 37-39. The first two are conclusive presumptions. A union "usually is entitled to a conclusive presumption of majority status for one year following" Board certification as such a representative. Id., at 37. A union is likewise entitled under Board precedent to a conclusive ³ presumption of majority status during the term of any collective-bargaining agreement, up to three years. See NLRB v. Burns Int'l Security Services, Inc., 406 U. S. 272, 290, n. 12 (1972); see generally R. Gorman, Basic Text on Labor Law: Unionization and Collective Bargaining Section(s) 9, pp. 54-59 (1976). "These presumptions are based not so much on an absolute certainty that the union's majority status will not erode," Fall River Dyeing, 482 U. S., at 38, as on the need to achieve "stability in collective-bargaining relationships." Ibid. (internal quotation marks omitted). They address our fickle nature by "enabl[ing] a union to concentrate on obtaining and fairly administering a collective-bargaining agreement" without worrying about the immediate risk of decertification and by "remov[ing] any temptation on the part of the employer to avoid good-faith bargaining" in an effort to undermine union support. Ibid.

There is a third presumption, though not a conclusive one. At the end of the certification year or upon expiration of the collective-bargaining agreement, the presumption of majority status becomes a rebuttable one. See NLRB v. Curtin Matheson Scientific, Inc., 494 U. S. 775, 778 (1990); see n. 6, infra. Then, an employer may overcome the presumption (when, for example, defending against an unfair labor practice charge) "by showing that, at the time of [its]...