David R. Webb Co., Inc. v. N.L.R.B., s. 88-3204

• Decision Date: 07 December 1989
• Docket Number: Nos. 88-3204,s. 88-3204
• Citation: 888 F.2d 501
• Parties: 133 L.R.R.M. (BNA) 2103, 58 USLW 2308, 113 Lab.Cas. P 11,645 DAVID R. WEBB COMPANY, INCORPORATED, Petitioner, Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Cross-Petitioner. & 88-3344.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 501

888 F.2d 501

133 L.R.R.M. (BNA) 2103, 58 USLW 2308,

113 Lab.Cas. P 11,645

DAVID R. WEBB COMPANY, INCORPORATED, Petitioner, Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Cross-Petitioner.

Nos. 88-3204 & 88-3344.

United States Court of Appeals, Seventh Circuit.

Argued June 16, 1989.

Decided Oct. 30, 1989.

Rehearing and Rehearing In Banc Denied Dec. 7, 1989.

Aileen A. Armstrong, Paul J. Spielberg, N.L.R.B., Appellate Court--Enforcement Litigation, Washington, D.C., William T. Little, N.L.R.B., Indianapolis, Ind., for N.L.R.B.

Jack H. Rogers, Barnes & Thornburg, Indianapolis, Ind., for David R. Webb Co., Inc.

Before POSNER, RIPPLE and MANION, Circuit Judges.

MANION, Circuit Judge.

David R. Webb Company (Webb) petitions for review of an order of the National Labor Relations Board (NLRB or the Board), in which the Board found that Webb violated Sections 8(a)(1) and (3) of the Labor-Management Relations Act (the Act), 29 U.S.C. Secs. 158(a)(1) and (3), by failing to reinstate three striking employees to their pre-strike positions or the substantial equivalent of those positions. The NLRB filed a cross-application for enforcement of this order. ¹ For the reasons stated below, we enforce the NLRB order.

I.

On July 28, 1986, 246 of Webb's 260 production and maintenance employees began an economic strike. On November 3, 1986, the striking employees unconditionally offered to return to work. By then, the positions of the three employees involved in this case had been filled by permanent replacements, and therefore the employees were placed on a preferential recall list, arranged according to qualifications and seniority. ²

By February, these three employees had reached the top three slots on the recall list. Webb offered Alice Hill an entry level position as a "dryer-feeder." ³ She accepted the job but performed poorly, and Webb terminated her after one day. Rex Young replaced Hill, but he lasted two days and was terminated. Eugene McGaha followed Young and two days later Webb terminated him as well. There is little dispute that the three employees failed to perform satisfactorily as dryer-feeders. Webb, however, did not return any of the three to the recall list.

The Regional Director for Region 25 of the NLRB issued a complaint against Webb, claiming it had engaged in unfair labor practices in violation of Sections 8(a)(1) and (3) of the Act ⁴ by rehiring workers for positions that were not the substantial equivalent of their pre-strike positions, and then terminating them not only from that position but also from their right to recall to their original positions, or the substantial equivalent of those positions. The Board relied on Laidlaw Corp. v. NLRB, 414 F.2d 99 (7th Cir.1969), cert. denied, 397 U.S. 920, 90 S.Ct. 928, 25 L.Ed.2d 100 (1970), for the proposition that employers violate Sections 8(a)(1) and (3) of the Act by failing to reinstate striking employees to their former or substantially equivalent positions (as they became available) after the employees have unconditionally offered to return to work following an economic strike.

Webb argued before the ALJ, as it argues on appeal, that Laidlaw does not require an employer to reinstate an employee to a position substantially equivalent to his pre-strike position; rather, Webb argues that any rights the employees had as economic strikers were abrogated upon acceptance f the lower-level dryer-feeder position. Webb contends that a striker who accepts a job other than his pre-strike position forfeits his right to future recall to that position if he is unable to perform the job he accepts and is terminated from that position. Alternatively, Webb argues that even if the employees have such a right under Laidlaw, Webb had offered a legitimate and substantial business justification for not reinstating these three employees to their former or substantially equivalent positions.

II.

The ALJ held that the termination of the employees from the lower-level position and the simultaneous termination of their preferential recall rights violated Sections 8(a)(1) and (3) because Webb failed to offer a legitimate and substantial business justification for its failure to satisfy the employees' Laidlaw reinstatement rights. The ALJ held that those reinstatement rights included the right to eventually be recalled to their pre-strike positions or one substantially equivalent, without any impairment to the employees' previous seniority rights and other benefits. Because the pre-strike positions of two of the employees (Hill and Young) became vacant after their termination from the dryer-feeder position, the ALJ ordered Webb to reinstate the employees to their pre-strike positions. The ALJ ordered Webb to reinstate the third employee (McGaha) to his pre-strike truck driver position, if available, or to a substantially equivalent position if the truck driver position was still held by the permanent replacement who filled the position during the strike. The ALJ also ordered Webb to make the three employees whole for any loss of pay from the date they should have been reinstated to their original positions, or in McGaha's case, to a substantially equivalent position.

Webb filed exceptions to the ALJ's decision with the NLRB. After reviewing the ALJ's opinion, the NLRB issued an order adopting the ALJ's rulings, findings and conclusions. That order, however, clarified the ALJ's decision by emphasizing that because of the poor performance of the three employees in the dryer-feeder position, Webb was not required to retain them in that position; but because that position was not substantially equivalent to the employees' pre-strike positions, Webb failed to offer reinstatement sufficient to satisfy its obligations under Laidlaw.

III.

The narrowness of our review of NLRB decisions is well-established in this circuit.

We will defer to the Board's judgment and the Board's factual findings shall be conclusive if supported by substantial evidence on the record considered as a whole. 29 U.S.C. Sec. 160(e).... This "court may not substitute its judgment for that of the Board when the choice is 'between two fairly conflicting views, even though the court would justifiably have made a different choice had the matter been before it de novo.' " ... We shall also defer to the Board's inferences in areas where the Board is considered to have 'specialized experience and expertise.'

NLRB v. Emsing, 872 F.2d 1279, 1283-84 (7th Cir.1989) (citations omitted). This court must uphold the legal conclusions of the Board "unless they are irrational or inconsistent with the [Act]." NLRB v. Parents and Friends of the Specialized Living Center, 879 F.2d 1442, 1448 (7th Cir.1989) (citing NLRB v. Financial Institution Employees, 475 U.S. 192, 202, 106 S.Ct. 1007, 1012, 89 L.Ed.2d 151 (1986)). In conducting this review, however, we must look at the record in its entirety. Emsing, 872 F.2d at 1283; NLRB v. Stor-Rite Metal Products, Inc., 856 F.2d 957, 964 (7th Cir.1988). After reviewing the record in this light, we conclude that the ALJ's relevant factual findings, as adopted by the NLRB, are supported by substantial evidence, and affirm those findings. We now review the ALJ's legal conclusions.

A.

Section 152(3) of Title 29 states that persons considered "employees" entitled to the protections of the Act include any individual "whose work has ceased as a consequence of, or in connection with, any current labor dispute ... and who has not obtained any other regular and substantially equivalent employment." ⁵ Based on this provision, the Supreme Court held in NLRB v. Fleetwood Trailer Co., 389 U.S. 375, 381, 88 S.Ct. 543, 547, 19 L.Ed.2d 614 (1967), that after a striker has made an unconditional offer to return to work, he is entitled to an offer of reinstatement "[i]f and when a job for which the striker is qualified becomes available." The court reasoned that if "after conclusion of the strike, the employer refuses to reinstate striking employees, the effect is to discourage employees from exercising their rights to organize and strike guaranteed by Secs. 7 and 13 of the Act." Id. at 378, 88 S.Ct. at 546.

Our first major application of the Fleetwood Trailer holding came in Laidlaw, 414 F.2d 99. In that case, we upheld an NLRB order which decided that an employer violated Secs. 8(a)(1) and (3) by refusing to reinstate a striker after his permanent replacement left unless he agreed to give up his seniority and vacation rights, and by terminating strikers whose jobs were not available on the day they applied to return to work. We held that a striking employee has a right to full reinstatement, and this right cannot be conditioned on job availability on the day the employee unconditionally offers to return to work; an employer is thus obligated to offer reinstatement to the striking employee before hiring applicants who do not have the striking employee's continuing "employee" status under the Act. Laidlaw, 414 F.2d at 103.

Neither the Supreme Court in Fleetwood Trailer nor this court in Laidlaw defined the parameters of what action by an employer will constitute adequate reinstatement. Neither case discussed whether reinstating an employee to a different job with the company fulfilled the company's reinstatement obligation. Nor did the cases focus on whether the "substantially equivalent" language in Sec. 152(3) referred only to jobs at another company or whether offering a substantially equivalent job at the reinstating company met the company's obligation. A few circuits, however, have begun the process of establishing guidelines for reviewing the adequacy of the reinstatements of striking employees. In Arlington Hotel Co. v. NLRB, 785 F.2d 249, 251 (8th Cir.), cert. denied, 479 U.S. 914, 107 S.Ct. 314, 93 L.Ed.2d 288 (1986), the Eighth Circuit held that under the circumstances of that case (where employees had been cross-trained for other positions) if a position...