Emerald Maintenance, Inc. v. NLRB

• Decision Date: 19 June 1972
• Docket Number: 71-1591.,No. 71-1402,71-1402
• Citation: 464 F.2d 698
• Parties: EMERALD MAINTENANCE, INC., Petitioner-Cross Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross Petitioner. PUBLIC SERVICE, PRODUCTION AND MAINTENANCE EMPLOYEES LOCAL UNION NO. 1057, Affiliated with The Laborers' International Union of North America, AFL-CIO, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — Fifth Circuit

464 F.2d 698 (1972)

EMERALD MAINTENANCE, INC., Petitioner-Cross Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross Petitioner.

PUBLIC SERVICE, PRODUCTION AND MAINTENANCE EMPLOYEES LOCAL UNION NO. 1057, Affiliated with The Laborers' International Union of North America, AFL-CIO, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

Nos. 71-1402, 71-1591.

United States Court of Appeals, Fifth Circuit.

June 19, 1972.

John M. Bee, New Orleans, La., Frank S. Manitzas, San Antonio, Tex., Glenn E. Bandelin, Sandpoint, Idaho, for petitioner, Emerald Maintenance, Inc.; Clemens, Knight, Weiss & Spencer, San Antonio, Tex., Bandelin & Swanstrom, Sandpoint, Idaho, of counsel.

Marcel Mallet-Prevost, Asst. Gen. Counsel, N. L. R. B., Washington, D. C., Clifford Potter, Director, Region 23, N. L. R. B., Houston, Tex., Nancy M. Sherman, N. L. R. B., Washington, D. C., Eugene G. Goslee, Acting Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Ronald I. Tish, Atty., N.L.R.B., for respondent.

Jules Bernstein, Washington, D. C., Marvin Menaker, Dallas, Tex., Robert J. Connerton, Arthur M. Schiller, Washington, D. C., for petitioner-intervenor Union.

Before WISDOM, COLEMAN and SIMPSON, Circuit Judges.

WISDOM, Circuit Judge:

This case was argued and submitted to us before the Supreme Court handed down its decision in NLRB v. Burns International Security Services, Inc., 406 U.S. 272, 92 S.Ct. 1571, 32 L.Ed.2d 61 (1972). Burns disposes of the most troublesome issues in the present case. We see no error in the Board's disposition of the issues not disposed of by Burns. The net result is that we enforce the Board's order requiring Emerald Maintenance to bargain with the incumbent union but deny enforcement of the portion of the Board's order requiring restitution of certain benefits of which the employees were deprived by allegedly unilateral action on the part of Emerald.

I.

On April 1, 1969, the Bartlett Co. and Rice Cleaning Service undertook contracts to handle the assignment of base housing and the maintenance of roads and grounds at Laredo (Texas) Air Force Base. Both the Bartlett and Rice contracts were for one year. On March 31, 1969, Local Union No. 1057 of the Public Service, Production, and Maintenance Employees Union executed substantially identical collective bargaining agreements with Bartlett and Rice. The agreements were to expire eighteen months thereafter, on September 30, 1970, exceeding the term of the Rice and Bartlett contracts with the Government by six months. The agreements contained a Union recognition clause, a checkoff provision, and a clause in which the companies agreed to permit the union to furnish all classes of employees set forth in the bargaining agreement. The agreements also contained important wage and hour provisions; provisions governing holidays and vacations; and a "successors and assigns" clause. In addition, each agreement provided for substantial increases in employee benefits, including wages, to take effect on April 1, 1970, the day after the Rice and Bartlett contracts with the Air Force expired.

In early January 1970, the Government invited bids for the service contracts then held by Rice and Bartlett. On January 12, the Union notified all interested bidders that it was the certified bargaining agent for the employees involved, that the collective bargaining agreements "contained a successor clause which shall make them binding upon any successor of the present contractors", and that it expected the successful bidder "to honor the terms of the Union agreement."

Having submitted its bid in January 1970, on March 18, 1970, the Emerald Maintenance Company was awarded both the maintenance contract previously held by Rice as well as the billetting contract held by Bartlett. Over the protest of the union business manager, Emerald refused to recognize the union when it took over the work, under its contract, on April 1, 1970. Union members were required to apply for employment as new applicants for jobs; Emerald would not recognize Union referral slips which carried the blessing of the prior collective bargaining agreements. As it turned out, however, the work force hired by Emerald was comprised in large part of Rice and Bartlett employees. On April 1, the company employed 47 persons for its grounds maintenance operation; 37 of these employees had been Rice employees and dues paying members of the Union as well. The grounds maintenance crew was increased to 86 by early May, and 63 of that number were former employees of Rice and union members. Emerald also hired "substantially the same employees" as were employed under the Bartlett contract to perform the base housing services contract. As a whole, then, of the 100 individuals in Emerald's work force by early May of 1970, about 76 had been employees of either Bartlett or Rice and 71 were dues paying union members.

On May 5 or May 6, several weeks after the commencement of Emerald's contract, the company notified the employees of their "rights and privileges" with the Company. The thrust of the message was that Emerald would not provide terms of employment as favorable as those specified by the Bartlett and Rice contracts — including modifications of the prior contractual specifications on holidays, vacations, seniority, and grievances. In addition, the wage scale actually paid by Emerald did not reflect the wage increase scheduled to take place on April 1, 1970, under the Bartlett and Rice agreements. Instead, the company adhered to a wage schedule geared to the prevailing rates in effect at the time bids were advertised.

On the basis of these facts, the Board found that Emerald was a "successor" employer to Rice and Bartlett. The Board found that Emerald violated Sections 8(a) (5) and 8(a) (1) of the National Labor Relations Act by refusing to recognize and bargain with the Union, and by unilaterally changing its employees' conditions of employment after April 1, 1970. The Board found, however, that Emerald's failure to honor the terms of the contracts between the Union and Rice and Bartlett did not constitute a violation of the Act, as a result of Emerald's status as a government services contractor. The board ordered the company to bargain with the union and to make whole the employees for any losses suffered by reason of "unilateral" changes made in the terms and conditions of their employments.

The cause is before this Court under Section 10(f) of the Act. In No. 71-1402, Emerald protests the Board's holding that it is a successor employer obligated to bargain with the union and to make whole the employees for losses resulting from unilateral changes. In No. 71-1591, the union seeks reversal of the Board's holding that the company is not obligated to honor the collective agreements previously negotiated with Emerald's "predecessor" employers.

II.

Burns compels this Court to hold that the union's petition for review cannot be sustained. First, a successor employer in the position of Emerald is not bound by the substantive provisions of a collective bargaining agreement, negotiated by a predecessor, to which the successor has not agreed or the obligations of which are not assumed. Moreover, Burns requires us to deny enforcement of the Board's order requiring Emerald to make restitution of economic benefits withheld or denied because of "unilateral" changes in the terms of employment previously agreed to by Rice and Bartlett. In the words of the Supreme Court, "It is difficult to understand how Emerald could be said to have changed unilaterally any pre-existing term or condition of employment without bargaining when it had no previous relationship...