Capital Cleaning Contractors, Inc. v. N.L.R.B.
| Decision Date | 17 July 1998 |
| Docket Number | No. 97-1170,97-1170 |
| Parties | 158 L.R.R.M. (BNA) 2833, 331 U.S.App.D.C. 185 CAPITAL CLEANING CONTRACTORS, INC., Petitioner/Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent/Cross-Petitioner. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board.
Frederick D. Braid argued the cause for petitioner/cross-respondent, with whom James F. Kenniff was on the briefs.
Ana L. Avendano, Attorney, National Labor Relations Board, argued the cause for respondent/cross-petitioner, with whom Frederick L. Feinstein, General Counsel, Linda R. Sher, Associate General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel, and Fred L. Cornnell, Supervisory Attorney, were on the brief.
Before: GINSBURG, HENDERSON, and RANDOLPH, Circuit Judges.
Capital Cleaning Contractors, Inc. petitions for review, and the National Labor Relations Board cross-applies for enforcement, of a Board order holding that Capital is a successor employer within the meaning of NLRB v. Burns International Security Services, Inc., 406 U.S. 272, 92 S.Ct. 1571, 32 L.Ed.2d 61 (1972). The Board held that Capital violated §§ 8(a)(1), (3), and (5) of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(1), (3), and (5), by discriminating in hire against the unionized employees of its predecessor, refusing to bargain with their union, and establishing without consulting the union the terms and conditions of employment it would offer initially to the union employees of its predecessor. Capital argues that (1) the Board's finding that Capital was a successor because it acted with anti-union animus in refusing to hire union workers is not supported by substantial evidence; (2) under Burns it was entitled to establish the terms and conditions of employment it would offer initially to the employees of its predecessor; and (3) the Board's remedial order is punitive. For the reasons stated below we reject Capital's first two arguments but agree that the Board's order is punitive; therefore, we grant in part and deny in part both the Company's petition for review and the Board's application for enforcement.
Until May 2, 1992 Ogden Allied Corporation had a contract to clean the Bulova Corporate Center in Queens, New York, for which purpose it employed 19 people. Local 32B-32J, Service Employees International Union, AFL-CIO was the exclusive bargaining representative of the Ogden cleaning employees. The collective bargaining agreement (CBA) between Ogden and Local 32 for the years 1990 through 1992 provided for wages of between $8.50 and $9.50 per hour and for medical and pension benefits.
In the Spring of 1992 the management of the Bulova building solicited competitive bids for a new cleaning contract. During the bidding process the manager of the building told Dennis Kaplan, the vice-president of Capital, that he was not pleased with the quality of the work Ogden had done. On April 10, 1992 Capital won the contract, and the Bulova building became Capital's largest job. As was its general practice, Capital staffed the building with a subcontractor, in this instance KCR Maintenance. Because Kaplan was concerned that KCR would not be able fully to staff the Bulova building, however, he and KCR agreed that he could also hire some of the Ogden employees to continue working there. Indeed, Kaplan testified that because hiring the Ogden employees "could have made a very smooth transition," he would have hired all of them if they had passed the screening interview and if building management had approved.
Also on April 10 Anthony Spataro, the business agent of Local 32, learned about the Bulova building's switch from Ogden to Capital. According to Spataro, on April 14 he gave the Ogden employees copies of Capital's advertisement in the Yellow Pages and instructed them to call Capital and apply for a job. On April 15 Spataro drove to Capital's office in Huntington Station, New York and gave Al Kaplan, the president of Capital, a letter from the Union. The letter informed Capital that the Union represented the 19 Ogden employees; on their behalf it was making an "unconditional application for continued employment"; and it requested that Capital contact the Union's law firm "to commence negotiations." Dennis Kaplan testified that this request "seemed a little rough to us" because it was not a practice with which he was familiar and because Capital usually staffed a building with its own people. Spataro testified that he called Capital four times in mid-April and left messages for Dennis Kaplan, who never called back.
On or about April 20 Dennis Kaplan went to the Bulova Center with the following notice addressed to the Ogden employees:
Effective May 2, 1992, we will be the new cleaning company at the Bulova Building....
Although a number of you have called our office, no one has submitted an application for work. The union which represents you with your current employer has written to us and stated that it is making an "unconditional application for continued employment" for everyone on a list which they enclosed. This is not sufficient to apply for work with us. You must call our office at [phone number] and ask for the Personnel Department. Tell them you are working at the Bulova Building, and that you are interested in applying for a job with us. Make an appointment to fill out an employment application, and bring satisfactory proof that you may lawfully be employed in this country. We will advise you of our decision after we complete a reference check.
Starting wages are $5.00 per hour. We do not provide health insurance, and there is no pension.
Kaplan asked the building supervisor to distribute the notice to the Ogden employees and to post it near the employees' locker room. On April 27 Capital also mailed the notice to each Ogden employee by certified mail.
Also on that date Capital's law firm wrote to the Union, enclosing the notice offering jobs to the Ogden employees, and reiterating that the Union's blanket application was not sufficient; each employee would have to apply individually in order to get a job. The letter also stated that if Capital hired a majority of union employees, then it would bargain with the Union.
In the event, Capital did not hire any of the Ogden employees. At least three of the employees (Moore, Gallardo, and Mercado) testified that when they called Dennis Kaplan to apply for a job and informed him that they were Ogden employees, he said he was not hiring union workers. Others (including Diaz-Miranda, Mazurek, and Rojas) testified that Kaplan told them he did not need them because he was going to staff the job with his own people. Some of these employees in turn told their co-workers what Kaplan had told them.
Several of the employees testified that they did not apply for a job with Capital because Kaplan indicated that he would not hire them. One of the employees said he did not apply because the salary was too low, another because there were no benefits. Only one of the employees set up an interview for the job, and she testified that after one of her co-workers related his conversation with Kaplan she decided not to keep her appointment.
Dennis Kaplan testified that he spoke on the telephone with two or three Ogden employees about a job and told them about the application procedure. Kaplan told some of the callers that the job paid $5.00 with no benefits. Kaplan denied, however, that he told any of the Ogden employees that he was not hiring union members or that there were no positions because he was bringing in his own people.
Capital took over the job on May 2. On May 6 the Ogden employees began picketing the building, which they continued to do through July.
On July 23 the General Counsel of the Board issued a complaint against Capital. A hearing was held before an Administrative Law Judge in March 1993 and in December the ALJ issued her decision. After observing that "much of the instant case rests on credibility determinations," she determined that Dennis Kaplan was "not a credible witness." Acknowledging that there were inconsistencies in the testimony of the Ogden employees, she concluded that these were due to the passage of time and to the employees' lack of sophistication and education. The ALJ then found that although two of the Ogden employees would not have applied for a job with Capital because of the low wage and lack of benefits, the other 17 would have applied and would have been hired by Capital but for its anti-union discrimination.
The ALJ also concluded that Capital was a successor employer to Ogden and that it was liable under §§ 8(a)(1) and (3) of the Act for refusing to hire union members, and under §§ 8(a)(1) and (5) both for failing to recognize and bargain with the Union and for unilaterally setting the initial terms and conditions of employment. The ALJ ordered Capital to reinstate the 17 affected Ogden employees, to bargain with Local 32, and to restore retroactively the terms and conditions of employment (including wages and benefits) called for in the 1990-92 CBA between Local 32 and Ogden. The wage and benefit remedy runs for the period from May 2, 1992 until such time as Capital negotiates in good faith with Local 32 and reaches either a new agreement or an impasse. The Board affirmed the ALJ's decision in all relevant respects.
Capital asserts that the ALJ's conclusion that it discriminated against union members is not supported by substantial evidence and that therefore it is not a successor to Ogden. Capital also claims that regardless whether it is a successor it was entitled to set the initial terms and conditions of employment without first consulting with Local 32. Finally, Capital argues that the remedy imposed upon it is punitive and...
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