Fresh Fruit and Vegetable Local 1096 v. N.L.R.B.

• Decision Date: 21 August 2008
• Docket Number: No. 06-72992.,06-72992.
• Parties: FRESH FRUIT AND VEGETABLE WORKERS LOCAL 1096, UNITED FRUIT COMMERCIAL WORKERS INTERNATIONAL UNION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — Ninth Circuit

539 F.3d 1089

FRESH FRUIT AND VEGETABLE WORKERS LOCAL 1096, UNITED FRUIT COMMERCIAL WORKERS INTERNATIONAL UNION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 06-72992.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted April 14, 2008.

Filed August 21, 2008.

David A. Rosenfeld (argued), Caren P. Sencer, Weinberg, Roger & Rosenfeld, Alameda, CA, for the petitioner.

Joan Hoyte (argued), David Habenstreit, Stacy Garrick Zimmerman, National Labor Relations Board, Washington, DC, for the respondent.

On Petition for Review of an Order of the National Labor Relations Board. NLRB No. 32-CA-21181/21596.

Before: RONALD M. GOULD, RICHARD R. CLIFTON, and N. RANDY SMITH, Circuit Judges.

CLIFTON, Circuit Judge:

The Fresh Fruit and Vegetable Workers Union ("the Union") seeks review of an enforcement order by the National Labor Relations Board ("NLRB") declaring that Bud Antle, Inc., the employer, did not violate the National Labor Relations Act ("NLRA"), 29 U.S.C. § 158(a)(1) and (3), when, after a fourteen-year lockout, it delayed reinstatement of returning employees by approximately one month and it failed to offer the returning employees the same overtime opportunities available to other employees during a four-week retraining period. Given the unique circumstances of this case, notably the unusually long duration of the lockout, we conclude that the NLRB's decision was supported by substantial evidence, and we deny the petition.

I. Factual and Procedural Background

Bud Antle processes and distributes lettuce and other vegetables out of three refrigerated warehouses in California and Arizona. In June 1989, Bud Antle and the Union began negotiating for a new labor contract. When negotiations failed to produce a new agreement, the employees began an economic strike. In response, Bud Antle locked out its union employees and hired temporary replacements. The lockout continued for fourteen years.¹

During the fourteen-year lockout, many of Bud Antle's operating practices changed. Some changes occurred because of the introduction of new products and others resulted from new technology. For example, the company introduced bagged salads, a product that did not exist when the lockout started in 1989. The need to maintain the freshness of that product required a more complicated dating and distribution system than the one used in 1989. Similarly, the company introduced hand held scanners, the use of which required additional knowledge and training.

In 2003, the Teamsters Union attempted to organize the replacement employees. Pursuant to an agreement reached between the two unions and Bud Antle, a representation election was held in which all temporary and striking employees were permitted to vote whether to be represented by the Teamsters, by the Fresh Fruit Workers, or by no union. It was also agreed that, following the certification of election results, the company would offer reinstatement to the locked out employees, the offer would remain open for thirty days, positions would be filled based on seniority, and seniority would be honored equally for locked out and replacement employees. "No union" received a majority of the 253 ballots cast in the election.² The election result was certified on December 15, 2003.

Bud Antle sent out letters on Friday, December 19, 2003 offering reinstatement to the 133 previously locked out employees. The letter instructed employees seeking reinstatement to notify the company by Thursday, January 22, 2004. The locked out employees were told that "the date of reinstatement and the job to which you will be reinstated will depend on (1) the number of locked out employees seeking reinstatement, (2) your seniority relative to other employees, including both locked out and replacement employees, and (3) your being qualified to perform the job to which you are recalled." The letter also guaranteed that the employees' pre-lockout seniority would be used for all purposes.

Between December 22, 2003 and January 22, 2004, Bud Antle received twenty-four responses from locked out workers requesting reinstatement. On January 28, Bud Antle sent out letters to those 24 employees notifying them that it had established Monday, February 23, 2004 as the return-to-work day for all formerly locked out employees, that they should report to the company's Yuma, Arizona facility, that the first four weeks of re-employment would consist of mandatory training and orientation, and that they would receive travel pay and a per diem during that time. On the first day of work, only eight of the twenty-four employees reported. One of the employees who returned the first day did not report to work after that, due to a pre-existing injury, reducing the group to seven. None of the other sixteen employees contacted the company again.

For the first four weeks all returning employees were trained in the new systems and methods implemented during the lockout period. In addition, during the training period Bud Antle limited the overtime work assignments given to the seven returning employees, effectively treating them as new employees. The company customarily limited overtime for new employees during initial training because it wanted overtime work to be accomplished as quickly as possible and generally new employees were not as efficient. After the training period, the overtime assignments were distributed evenly.

The Union filed two complaints against Bud Antle: one for its failure to reinstate the locked out employees at an earlier date, and the other for the limitation on overtime assignments for the returning employees during the four-week training period. The two complaints were consolidated, and an administrative law judge ("ALJ"), Burton Litvak, conducted a hearing to determine whether or not Bud Antle had violated Sections 8(a)(3) and (1) of the NLRA. After hearing testimony, the ALJ determined that Bud Antle violated the Act because it did not have a substantial and legitimate business justification for the delay in reinstating the formerly locked out employees. He ordered the company to make whole the twenty-four employees who had requested reinstatement from the date of their individual acceptances until February 23. Additionally, the ALJ determined that Bud Antle's treatment of the returning employees as new employees for the purpose of overtime assignment was "inherently destructive" of the employees' statutory rights and as such violated the NLRA.

Upon review by a three-member panel of the NLRB, a majority reached a somewhat different conclusion. It unanimously held, in disagreement with the ALJ, that the company had a legitimate and substantial business justification for delaying the employees' reinstatement from December 15 to January 22 and thus did not violate the NLRA by that delay. According to the Board, Bud Antle was justified in delaying reinstatement through January 22 because time was needed to determine which locked out employees would seek to return and, after comparing their seniority with the seniority of the current replacement employees, which employees would actually be reinstated. The company's desire to retrain all of the returning employees and the benefit of doing the retraining of all returning employees at once also served to justify that delay.

The Board concluded that the additional delay from January 23 to February 23 was not supported by a substantial and legitimate business justification, however, thus upholding the ALJ's finding of violation for that part of the delayed re-employment. Although Bud Antle argued to the Board that the second delay was needed to ensure that the returning employees could give two-weeks notice to their then-current employers and so that a particular manager could conduct the training session, the NLRB determined that these reasons were merely for "administrative convenience" and not substantial business reasons. The panel majority then awarded back pay for the period from January 23 to February 23, but only to the seven employees that reported for work on February 23. The ALJ had ordered that all twenty-four employees who requested reinstatement should be made whole for the delay, but the Board concluded that the employees who did not appear for work, despite indicating their desire to be reinstated, were ineligible for back pay because the union was unable to show that "the date of reinstatement affected their decision to return."

As for the limitation on overtime for the initial four weeks of employment, the NLRB majority concluded, again in disagreement with the ALJ, that the limitation was not "inherently destructive" of the employees' statutory rights and that the company had legitimate and substantial business reasons for limiting the overtime opportunities during the retraining period. The majority noted the significant changes that had occurred during the lockout period:

With bagged mixed salads, the Respondent, in selecting products to ship, considers a number of issues, including where the customer is located. To illustrate, according to the Respondent, a customer in New York typically will need a product harvested from the field on that day, while a customer in Los Angeles will accept 3-day old product. Thus, it is incumbent on cooler workers to know the date of the product and whether the particular customer will accept that product. Given these requirements, it is essential that employees know where each product is located within the cooler in order to efficiently fill orders, as well as to satisfactorily rotate raw commodities to ensure that these products are as fresh as possible. It is also important to know the location of products for purposes of combining pallets.

Because of these changes the majority concluded that the company had a significant interest in retraining the returning employees. During the retraining period, the employer had a legitimate business interest in ensuring that...