Charles Bonanno Linen Service, Inc v. National Labor Relations Board

• Decision Date: 12 January 1982
• Docket Number: No. 80-931,80-931
• Citation: 454 U.S. 404,70 L.Ed.2d 656,102 S.Ct. 720
• Parties: CHARLES D. BONANNO LINEN SERVICE, INC., Petitioner v. NATIONAL LABOR RELATIONS BOARD et al
• Court: U.S. Supreme Court

454 U.S. 404

102 S.Ct. 720

70 L.Ed.2d 656

CHARLES D. BONANNO LINEN SERVICE, INC., Petitioner

v NATIONAL LABOR RELATIONS BOARD et al.

No. 80-931.

Argued Oct. 13, 1981.

Decided Jan. 12, 1982.

Syllabus.

Petitioner linen supply company was a member of an association formed to negotiate collective-bargaining agreements with respondent truckdrivers' union as a multiemployer unit. When the association and union reached an impasse in bargaining for a proposed agreement, the union initiated a selective strike against petitioner, most of the other members of the association locked out their drivers, and petitioner hired permanent replacements for its striking drivers. Thereafter, petitioner notified the association and the union that it was withdrawing from the association, and refused to sign a collective-bargaining agreement later executed by the union and the association. Meanwhile, the union filed the present action, alleging that petitioner's purported withdrawal from the bargaining unit constituted an unfair labor practice. The National Labor Relations Board (Board) affirmed the Administrative Law Judge's finding that no unusual circumstances excused such withdrawal, and ordered petitioner to sign and implement retroactively the agreement concluded between the union and the employers' association, the refusal to sign such agreement constituting an unfair labor practice in violation of §§ 8(a)(5) and (1) of the National Labor Relations Act (NLRA). The Court of Appeals enforced the Board's order.

Held : The bargaining impasse did not justify petitioner's unilateral withdrawal from the multiemployer bargaining unit. Pp. 417-419.

(a) An impasse is not sufficiently destructive of group bargaining to justify such a withdrawal but is only a temporary deadlock or hiatus in negotiations. Permitting a withdrawal at impasse would as a practical matter undermine the utility of multiemployer bargaining. While no interim or separate agreements were executed in this case, the impasse did not initiate any right to execute an agreement inconsistent with the duty to abide by the results of group bargaining. The balance the Board has struck is not inconsistent with the terms or purposes of the NLRA. Pp. 412-417.

(b) Here, the Board has developed a rule which although it may deny an employer a particular economic weapon, does so in the interest of the proper and pre-eminent goal of maintaining the stability of the multiemployer bargaining unit. Pp. 417-419. 630 F.2d 25, affirmed.

Sidney A. Coven, Boston, Mass., for petitioner.

Norton J. Come, Washington, D. C., for respondent N.L.R.B.

James T. Grady, Boston, Mass., for respondents Teamsters Local Union No. 25, et al.

Justice WHITE delivered the opinion of the Court.

The issue here is whether a bargaining impasse justifies an employer's unilateral withdrawal from a multiemployer bargaining unit. The National Labor Relations Board (Board) concluded that an employer attempting such a withdrawal commits an unfair labor practice in violation of §§ 8(a)(5) and 8(a)(1) of the National Labor Relations Act (Act), 29 U.S.C. §§ 158(a)(5) and 158(a)(1), by refusing to execute the collective-bargaining agreement later executed by the union and the multiemployer association.¹ The Court of Appeals for the First Circuit enforced the Board's order. 630 F.2d 25 (1980). Both the Board and the Court of Appeals recognized that several other Courts of Appeals had previously rejected the Board's position on this issue.² We granted certiorari, 450 U.S. 979, 101 S.Ct. 1512, 67 L.Ed.2d 813 (1981), to resolve the conflict among the Circuits on this important question of federal labor law. We affirm the judgment of the Court of Appeals.

I

The factual findings of the Administrative Law Judge were affirmed by the Board and are undisputed. Petitioner, Charles D. Bonanno Linen Service, Inc. (Bonanno), is a Massachusetts corporation engaged in laundering, renting, and distributing linens and uniforms. Teamsters Local No. 25 (Union) represents its drivers and helpers as well as those of other linen supply companies in the area. For several years, Bonanno has been a member of the New England Linen Supply Association (Association), a group of 10 employers formed to negotiate with the Union as a multiemployer unit and a signatory of the contracts negotiated between the Union and the Association. On February 19, 1975, Bonanno authorized the Association's negotiating committee to represent it in the anticipated negotiations for a new contract. Bonanno's president became a member of the committee.

The Union and the Association held 10 bargaining sessions during March and April. On April 30, the negotiators agreed upon a proposed contract, but four days later the Union members rejected it. By May 15, according to the stipulations of the parties, the Union and the Association had reached an impasse over the method of compensation: the Union demanded that the drivers be paid on commission, while the Association insisted on continuing payment at an hourly rate.

Several subsequent meetings failed to break the impasse. On June 23, the Union initiated a selective strike against Bonanno. In response, most of Association members locked out their drivers. Despite sporadic meetings, the stalemate continued throughout the summer. During this period two of the employers met secretly with the Union, presumably in an effort to reach a separate settlement. These meetings, however, never reached the level of negotiations.

Bonanno hired permanent replacements for all of its striking drivers. On November 21, it notified the Association by letter that it was "withdrawing from the Association with specific respect to negotiations at this time because of an ongoing impasse with Teamsters Local 25." Pet. for. Cert. 58. Bonanno mailed a copy of its revocation letter to the Union and read the letter over the phone to a Union representative.

Soon after Bonanno's putative withdrawal, the Association ended the lockout. It told the Union that it wished to continue multiemployer negotiations. Several negotiating ses- sions took place between December and April, without Bonanno participating. In the middle of April, the Union abandoned its demand for payment on commission and accepted the Association's offer of a revised hourly wage rate. With this development, the parties quickly agreed on a new contract, dated April 23, 1976, and given retroactive effect to April 18, 1975.

Meanwhile, on April 9, 1976, the Union had filed the present action, alleging that Bonanno's purported withdrawal from the bargaining unit constituted an unfair labor practice. In a letter dated April 29, the Union informed Bonanno that because the Union had never consented to the withdrawal, it considered Bonanno to be bound by the settlement just reached. In a reply letter, Bonanno denied that it was bound by the contract.

An Administrative Law Judge concluded, after a hearing, that no unusual circumstances excused Bonanno's withdrawal from the multiemployer bargaining unit. The Board affirmed, ordering Bonanno to sign and implement the contract retroactively. In a supplemental decision, the Board explained the basis of its decision that Bonanno's attempt to withdraw from the multiemployer unit was untimely and ineffective. Charles D. Bonanno Linen Service, Inc., 243 N.L.R.B. 1093 (1979). The Court of Appeals enforced the Board's order. 630 F.2d 25 (1980).

II

The standard for judicial review of the Board's decision in this case was established by NLRB v. Truck Drivers, 353 U.S. 87, 77 S.Ct. 643, 1 L.Ed.2d 676 (1957) (Buffalo Linen). There, the Union struck a single employer during negotiations with a multiemployer bargaining association. The other employers responded with a lockout. Negotiations continued, and an agreement was reached. The Union, claiming that the lockout violated its rights under §§ 7 and 8 of the Act, then filed charges with the Board. The Board rejected the claim, but the Court of Appeals held that the lockout was an unfair practice.

This Court in turn reversed. That the Act did not expressly authorize or deal with multiemployer units or with lockouts in that context was recognized. Nonetheless, multiemployer bargaining had "long antedated the Wagner Act" and had become more common as employers, in the course of complying with their duty to bargain under the Act, "sought through group bargaining to match increased union strength." 353 U.S., at 94-95, 77 S.Ct., at 646-647 (footnote omitted). Furthermore, at the time of the debates on the Taft-Hartley amendments, Congress had rejected a proposal to limit or outlaw multiemployer bargaining. The debates and their results offered "cogent evidence that in many industries multiemployer-bargaining basis was a vital factor in the effectuation of the national policy of promoting labor peace through strengthened collective bargaining." Id., at 95, 77 S.Ct., at 647.³ Congress' refusal to intervene indicated that it intended to leave to the Board's specialized judgment the resolution of conflicts between union and employer rights that were bound to arise in multiemployer bargaining. In such situations, the Court said:

"The ultimate problem is the balancing of the conflicting legitimate interests. The function of striking that bal- ance to effectuate national labor policy is often a difficult and delicate responsibility, which the Congress committed primarily to the National Labor Relations Board, subject to limited judicial review." Id., at 96, 77 S.Ct., at 647.

Thus, the Court of Appeals' rejection of the Board's justification of the lockout as an acceptable effort to maintain the integrity of the multiemployer unit and its refusal to accept the lockout as a legitimate response to the whipsaw strike had too narrowly confined the exercise of the Board's discretion. Id., at 97, 77 S.Ct., at 648.

Multiemployer bargaining has continued to be the preferred bargaining mechanism in many industries,⁴...