George Arakelian Farms, Inc. v. Agricultural Labor Relations Bd.

Decision Date28 December 1989
Docket NumberAFL-CI,R,No. S007130,S007130
Citation783 P.2d 749,265 Cal.Rptr. 162,49 Cal.3d 1279
CourtCalifornia Supreme Court
Parties, 783 P.2d 749 GEORGE ARAKELIAN FARMS, INC., Petitioner, v. AGRICULTURAL LABOR RELATIONS BOARD, Respondent. UNITED FARM WORKERS OF AMERICA,eal Party in Interest.

Rynn & Janowsky and Lewis P. Janowsky, Newport Beach, for petitioner.

Dressler & Quesenbery, Marion I. Quesenbery, Newport Beach, Gray, Cary, Ames & Frye and Merrill F. Storms, Jr., San Diego, as amici curiae on behalf of petitioner.

Bernard L. Allamano, Fred A. Slimp II and Michael D. Stump, Sacramento, for respondent.

Dave Stirling, Sacramento, as amicus curiae on behalf of respondent.

Lyons, Macri-Ortiz, Schneider, Dunphy & Camacho, Silvia B. Viarnes and Dianna Lyons, Sacramento, for real party in interest.

MOSK, Justice.

For the second time in four years we consider the case of petitioner George Arakelian Farms, Inc. (hereafter Arakelian). In 1985 we affirmed an order of respondent Agricultural Labor Relations Board (hereafter Board) directing Arakelian to make its employees whole for certain violations of the Agricultural Labor Relations Act. (George Arakelian Farms, Inc. v. Agricultural Labor Relations Bd. (1985) 40 Cal.3d 654, 221 Cal.Rptr. 488, 710 P.2d 288 (Arakelian I ).) Now, because of a 1987 appellate decision that assertedly affects the presumptions and burdens of persuasion in these proceedings, Arakelian has petitioned the Board for reconsideration of its order directing make-whole relief. We granted review to determine whether the Board may reopen the case and consider vacating its order without violating our decree in Arakelian I. We hold that although the Board should be extremely reluctant to reopen such proceedings after this court's order, it may nonetheless do so in a case that is not yet final when there has been an intervening change in the controlling rules of law. We conclude, however, that because there has been no relevant change in the law affecting the Board's findings in this instance, our order affirming Arakelian's make-whole obligation remains the law of the case.

In 1976 real party in interest United Farm Workers won a union representation election among Arakelian's agricultural workers. The vote was 139 for the union and 12 for "no union," with 17 ballots challenged. Arakelian filed a timely petition with the Board, objecting to the election and asking it to set aside the results. After considering and rejecting Arakelian's election challenges, the Board certified the union as the employees' exclusive bargaining representative.

Although the union was certified as the employee's representative, Arakelian still asserted that the election was unfair and decided to seek judicial review of the Board's certification decision by "technically" refusing to bargain. 1 The union then brought an unfair labor practice charge, alleging that Arakelian violated Labor Code section 1153, subdivisions (a) and (e), by refusing to bargain collectively in good faith with the union. 2 The Board subsequently found that Arakelian's refusal to bargain was a violation of section 1153, and--consistently with its former policy of awarding make-whole relief in all cases involving a technical refusal to bargain--automatically imposed make-whole relief. 3 Arakelian then entered an appellate labyrinth and this litigation took on a life of its own.

Arakelian first petitioned for review on the ground that automatic imposition of make-whole relief in all technical refusal cases was an abuse of the Board's discretion. While that petition was pending before the Court of Appeal, we agreed with Arakelian's contention in J.R. Norton Co. v. Agricultural Labor Relations Bd., supra, 26 Cal.3d 1, 160 Cal.Rptr. 710, 603 P.2d 1306 (Norton ). In that case we held that the Board could order make-whole relief in cases involving a technical refusal to bargain only when it appears from the totality of the employer's conduct that the employer went through the motions of contesting the election results as a pretense to avoid bargaining. We concluded that the Board should not order make-whole relief when the employer litigated the certification issue in good faith and with a reasonable belief that the union would not have been selected as the employees' bargaining representative had the election been conducted properly. (Id. at p. 39, 160 Cal.Rptr. 710, 603 P.2d 1306.)

Subsequent to our decision in Norton the Court of Appeal remanded Arakelian's case to the Board for reconsideration. On remand the Board applied the Norton standards and concluded that Arakelian's election challenges were not meritorious but were instead pursued with the sole intent to delay negotiations. Consequently, the Board again imposed make-whole relief. Arakelian sought judicial review of the Board's decision for a second time. The Court of Appeal granted a writ of review and remanded the case with directions to conduct a hearing on Arakelian's election challenges. On the union's petition, we granted review and reversed. (Arakelian I.)

In our decision we determined that Arakelian had challenged the union's certification in bad faith. After considering the circumstances under which Arakelian sought review, evaluating the substantive merit of its legal claims, and reviewing the margin of the union's victory, we concluded that Arakelian could not have entertained a reasonable, good faith belief that errors in the election would have prevented the United Farm Workers from being selected as the employees' bargaining representative. Instead, it appeared from the totality of the circumstances that Arakelian merely went through the motions of contesting the election as an elaborate pretense to avoid bargaining with the union. (Arakelian I, 40 Cal.3d at p. 667, 221 Cal.Rptr. 488, 710 P.2d 288.) In consequence, we affirmed the award of make-whole relief and ordered that "a decree issue enforcing the board's order in full." (Id. at p. 668, 221 Cal.Rptr. 488, 710 P.2d 288.)

Unfortunately, our decision in Arakelian I did not end the matter. Pursuant to its regular practice, the Board remanded the case to the regional director for a determination of Arakelian's monetary obligation under the make-whole award. Before the director determined the precise amount of the employees' relief, the Court of Appeal for the Third District decided the case of William Dal Porto & Sons, Inc. v. Agricultural Labor Relations Bd. (1987) 191 Cal.App.3d 1195, 237 Cal.Rptr. 206 (Dal Porto ). Dal Porto involved an employer's refusal to bargain with union representatives in the context of "surface bargaining." 4 The Dal Porto court held that the Board may impose make-whole relief in such cases only after it determines that the parties would have reached an agreement but for the employer's unlawful refusal to bargain. According to the Dal Porto court, when innocent and wrongful conduct combine to prevent an agreement between the parties, make-whole relief is appropriate only if the employer's wrongful conduct was primarily responsible for the breakdown in negotiations. (Id. at p. 1207, 237 Cal.Rptr. 206.)

Subsequent to the Dal Porto decision, the Board opted to apply the decision retroactively to pending matters involving charges of surface bargaining. However, the Board refused to apply the decision to matters involving an employer's technical refusal to bargain, reasoning that in such cases there would be no bargaining history from which it could conclude that the parties would have reached an agreement but for the employer's wrongful conduct. 5 Despite this rational determination, Arakelian nonetheless petitioned the Board to reopen the liability phase of its case and reconsider its make-whole order in light of Dal Porto. Arakelian offered to produce evidence of the subsequent negotiations, after the make-whole period had ended, to show that the parties would not have entered into a contract even if they had negotiated in good faith. 6 The Board refused to reopen the proceedings, and Arakelian once again sought judicial review.

The Court of Appeal granted review and determined that the Board erred in refusing to apply Dal Porto to pending cases involving a technical refusal to bargain. The court dismissed the union's claim that our previous decision in Arakelian I was res judicata, because it was convinced that Arakelian had not been given an opportunity to litigate the applicability of the Dal Porto "but for" test in that proceeding. The court then concluded that if the Board was authorized to impose make-whole relief even if the parties would not have consummated an agreement, the remedy would be transformed into a penalty designed to punish an employer for seeking judicial review. Thus, the court directed the Board to reopen the liability phase of these proceedings. We granted the union's petition for review and now reverse.

The United Farm Workers renews its contention that once a party has litigated its unfair labor practice claim before the Board and a reviewing court has passed on the Board's action, the preclusive effects of res judicata prevent further litigation of the issue. According to the union, our decision in Arakelian I was a final judgment on the merits, and even an intervening change in the law does not justify reopening the matter. The contention is unpersuasive.

Arakelian I affirmed the Board's order awarding make-whole relief, an order that was a product of the Board's bifurcated process for adjudicating unfair labor claims. The Board divides that process into a "liability phase" and a "compliance phase"; the National Labor Relations Board (NLRB) follows the same procedure. (See N.L.R.B. v. C.C.C. Associates, Inc. (2d Cir.1962) 306 F.2d 534, 539.) In construing the Agricultural Labor Relations Act, of course, we are guided by applicable precedent of the NLRB. (Lab.Code, § 1148.)

In the liability phase, the Board issues an order adjudicating whether or not ...

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