Bonnell/Tredegar Industries, Inc. v. N.L.R.B.

• Decision Date: 31 January 1995
• Docket Number: Nos. 94-1390,94-1553,s. 94-1390
• Citation: 46 F.3d 339
• Parties: 148 L.R.R.M. (BNA) 2392, 63 USLW 2544, 129 Lab.Cas. P 11,280 BONNELL/TREDEGAR INDUSTRIES, INCORPORATED, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. NATIONAL LABOR RELATIONS BOARD, Petitioner, v. BONNELL/TREDEGAR INDUSTRIES, INCORPORATED, Respondent.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 339

46 F.3d 339

148 L.R.R.M. (BNA) 2392, 63 USLW 2544,

129 Lab.Cas. P 11,280

BONNELL/TREDEGAR INDUSTRIES, INCORPORATED, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. BONNELL/TREDEGAR INDUSTRIES, INCORPORATED, Respondent.

Nos. 94-1390, 94-1553.

United States Court of Appeals Fourth Circuit.

Argued Oct. 31, 1994.

Decided Jan. 31, 1995.

ARGUED: Robert J. Martin, Jr., Elarbee, Thompson & Trapnell, Atlanta, GA, for petitioner. Vincent J. Falvo, Jr., N.L.R.B., Washington, DC, for respondent. ON BRIEF: Douglas H. Duerr, Elarbee, Thompson & Trapnell, Atlanta, GA, for petitioner. Frederick L. Feinstein, Gen. Counsel Before MURNAGHAN, NIEMEYER, and MOTZ, Circuit Judges.

Linda Sher, Acting Associate Gen. Counsel, Aileen A. Armstrong, Deputy Associate Gen. Counsel, Charles Donnelly, Supervisory Atty., Margaret Luke, N.L.R.B., Washington, DC, for respondent.

Petition denied and enforcement granted by published opinion. Judge MOTZ wrote the opinion, in which Judge MURNAGHAN and Judge NIEMEYER joined.

OPINION

MOTZ, Circuit Judge:

In these two consolidated cases, Bonnell/Tredegar Industries, Inc., a Virginia corporation ("Bonnell" or the "Company"), petitions for review of a Decision and Order of the National Labor Relations Board finding Bonnell in violation of the National Labor Relations Act. The Board seeks enforcement of its Order. Because Bonnell unilaterally modified the Christmas bonus provision in its collective bargaining agreement with United Steelworkers of America, AFL-CIO-CLC (the "Union"), in violation of Sec. 8(a)(1) and (5) of the Act, we deny Bonnell's petition for review and grant the Board's application for enforcement.

I.

Prior to 1990, the Union had represented Bonnell's production and maintenance employees every year since 1972. In the parties' collective bargaining agreement effective from January 20, 1990 to January 19, 1993, as in each of the parties' previous agreements during the preceding eighteen years, Bonnell obligated itself to pay its employees a Christmas bonus. The 1990-1993 Agreement provided in pertinent part:

ARTICLE XVI

INDUSTRIAL RELATIONS PLANS

All employees in the plant are entitled to such service credit as accrued under the Company's continuity of service rules and the Company will recognize such service for participation in the following Company Industrial Relations Plans:

1. Group Insurance Plan (Exhibit B)

2. Vacation Plan (Article XII)

3. Military Leave Plan (Article XI and Article XV)

4. Leave of Absence Plan (Article XV)

5. Pension Plan (Exhibit C)

6. Continuity of Service Rules (Exhibit C)

7. Jury Duty Plan (Article XI)

8. Funeral Leave Plan (Article XI)

9. Christmas Bonus

10. Thanksgiving Turkey

All of these plans shall remain in full force and effect during the term of this Agreement.

Consistent with the parties' prior six bargaining agreements, the 1990-1993 Agreement failed to specify a method for calculating the amount of each employee's Christmas bonus. ¹ A Company representative, B.F. Wilburn, testified that the parties "did not actually discuss the Christmas bonus" during the negotiations for the 1990-1993 Agreement and that the subject only arose in conversation on one occasion, when Wilburn commented to Union officials that he disliked Christmas bonuses because "rarely did the Company get the recognition during contract negotiations for that type thing." The parties also entered into several Letter Agreements in 1990, addressing a myriad of issues but making no reference to the Christmas bonus.

During the previous eighteen years, however, the Company each year had paid its employees a Christmas bonus based on a formula of one hour's pay for each 32-hour week worked, up to a total of 40 hours' pay. Under this formula, each employee had typically received a Christmas bonus of approximately $300 to $400 each year. Furthermore, in March, 1990, shortly after entering into the 1990-1993 Agreement, Bonnell issued an employee handbook to be given to new employees detailing the Company's fringe benefits and stating that the Christmas bonus was calculated in accordance with this formula. In December, 1990, the first Christmas holiday period under the 1990-1993 Agreement, Bonnell paid its employees a Christmas bonus according to the formula employed for the previous eighteen years: one hour's pay for each 32-hour week worked, up to a total of 40 hours' pay.

A year later, on November 13, 1991, however, the Company notified its employees that "[t]he decision has ... been made to reduce the ... Christmas bonus this year to $100 per employee." On November 15, 1991, the Union advised the Company that it "strongly object[ed]" to the reduction of the Christmas bonus. Nevertheless, without negotiating to impasse, Bonnell paid each employee a Christmas bonus of $100 for Christmas 1991. The Union filed a grievance over the reduced bonus payment, but the Company refused to arbitrate the dispute. The parties subsequently negotiated to impasse over the amount of the 1992 Christmas bonus, after which Bonnell implemented its final offer by paying its employees a bonus similar to that paid in 1991. ²

On July 17, 1992, the Union filed a complaint and notice of hearing against Bonnell with the National Labor Relations Board alleging certain violations of the National Labor Relations Act with respect to the 1991 Christmas bonus. After a hearing on November 6, 1992, an Administrative Law Judge issued a recommended Decision and Order on January 8, 1993, to which both the Union and Bonnell filed exceptions. While the matter was pending before the Board, the Union filed a second complaint on April 22, 1993, alleging similar violations with respect to the 1992 Christmas bonus, after which the Company and the Union filed a joint motion waiving a hearing and requesting a transfer to the Board and a consolidation of the two cases. The Board granted the joint motion on September 16, 1993 and issued a Decision and Order on February 28, 1994, in which it found that Bonnell had violated Sec. 8(a)(1) and (5) of the National Labor Relations Act by unilaterally reducing the amounts of the contractually mandated employee Christmas bonuses in both 1991 and 1992. Pursuant to 29 U.S.C. Sec. 160, Bonnell filed a petition for review, and the Board subsequently filed a cross-application for enforcement.

II.

Section 8 of the National Labor Relations Act, 29 U.S.C. Sec. 158, provides in pertinent part:

(a) It shall be an unfair labor practice for an employer:

(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this title [providing for rights of employees to self-organization, collective bargaining, etc.];

* * * * * *

(5) to refuse to bargain collectively with the representatives of his employees....

Section 8(d) of the Act defines the duty to "bargain collectively" as the "mutual obligation of the employer and the representative of the employees to meet ... and confer in good faith with respect to wages, hours, and other terms and conditions of employment." 29 U.S.C. Sec. 158(d). An employer's duty under Sec. 8(d) to engage in collective bargaining prohibits it from unilaterally terminating or modifying a collective bargaining agreement during the effective term of the agreement. Section 8(d) provides:

[W]here there is in effect a collective-bargaining contract covering employees in an industry affecting commerce, the duty to bargain collectively shall also mean that no party to such contract shall terminate or modify such contract, unless the party desiring such termination or modification [complies with certain requirements, including notifying and offering to meet and confer with the other party] ... and the duties so imposed shall not be construed as requiring either party to discuss or agree to any modification of the terms and conditions contained in a contract for a fixed period, if such modification is to become effective before such terms and conditions can be reopened under the provisions of the contract.

Id.; see also W.R. Grace & Co. v. Rubber Workers Local 759, 461 U.S. 757, 771, 103 S.Ct. 2177, 2186, 76 L.Ed.2d 298 (1983) ("Absent a judicial determination ... [the company] cannot alter the collective bargaining agreement without the union's consent. Permitting such a result would undermine the federal labor policy that parties to a collective bargaining agreement must have reasonable assurances that their contract will be honored") (citations omitted); Social Sec. Admin. v. Federal Labor Relations Auth., 956 F.2d 1280, 1287 (4th Cir.1992) ("no duty to engage in midterm bargaining over matters 'contained in' the collective bargaining agreement"). ³ Moreover, a violation of Sec. 8(d) constitutes an unfair labor practice under Sec. 8(a)(1) and (5) of the Act. Allied Chemical & Alkali Workers, 404 U.S. at 160, 92 S.Ct. at 388; Herman Bros., Inc., 273 N.L.R.B. 124, 126 (1984), enforced, NLRB v. Herman Bros., Inc., 780 F.2d 1015 (3d Cir.1985).

The principal issue on appeal is whether Bonnell's established method of calculating Christmas bonuses was a term of the parties' 1990-1993 Agreement, the unilateral modification of which would have constituted a violation of the National Labor Relations Act. On appeal, the Board's findings of fact are "conclusive" if supported by "substantial evidence on the record considered as a whole." 29 U.S.C. Sec. 160(e), (f). Although ordinarily questions of law are reviewed de novo, "if the Board's construction of the National Labor Relations Act is defensible," it is entitled to considerable deference. Ford Motor Co. v. NLRB, 441 U.S. 488, 497, 99 S.Ct. 1842, 1849, 60 L.Ed.2d 420 (1979). No special deference is extended to the Board's interpretation of collective bargaining contracts, Litton Fin. Printing v. NLRB, 501 U.S. 190, 202-03, 111 S.Ct. 2215, 2223-24, 115 L.Ed.2d 177 (1991), but courts are "mindful of the...