Hallmark-Phoenix 3, L.L.C. v. Nat'l Labor Relations Bd.
| Decision Date | 24 March 2016 |
| Docket Number | No. 15–60011.,15–60011. |
| Parties | HALLMARK–PHOENIX 3, L.L.C., Petitioner Cross–Respondent v. NATIONAL LABOR RELATIONS BOARD, Respondent Cross–Petitioner. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Bryant Steven Banes, Attorney (argued), Linda Hursey Evans, Neel Hooper & Banes, P.C., Houston, TX, for Petitioner Cross–Respondent.
Linda Dreeben, Esq., Deputy Associate General Counsel, Usha Dheenan, Jamison Frank Grella, Esq. (argued), National Labor Relations Board, Washington, DC, Margaret J. Diaz, National Labor Relations Board, Tampa, FL, for Respondent Cross–Petitioner.
On Petition for Review and Cross–Application for Enforcement of an Order of the National Labor Relations Board.
Before JOLLY, HIGGINBOTHAM, and SMITH, Circuit Judges.*
E. GRADY JOLLY
, Circuit Judge:
Hallmark–Phoenix 3, L.L.C. petitions for review of an order of the National Labor Relations Board requiring Hallmark to make severance and accrued vacation payments to its former union employees. The Board cross-applies for enforcement of its order under 29 U.S.C. § 160(e)
.
Hallmark is a government contractor providing vehicle maintenance services at two United States Air Force bases in Florida. In providing these services, Hallmark entered into two separate collective bargaining agreements (“CBAs”) with two different unions. Hallmark lost its government contracts when the Air Force decided to go in-house with the contracted work. After the contract terminations, disputes arose under each CBA regarding severance pay, accrued vacation pay, and other related matters. Instead of seeking arbitration under the respective CBAs, the unions filed unfair labor charges under the National Labor Relations Act (“NLRA”), 29 U.S.C. § 151, et seq.,
charging Hallmark with bad faith collective bargaining by unilaterally modifying the terms of the CBAs.
The NLRB ruled largely in favor of the unions. The Board found that Hallmark violated Sections 8(a)(1), 8(a)(5), and 8(d) of the NLRA when it refused to make the disputed payments under the relevant collective bargaining agreements; included waiver language on employees' final pay checks without consulting with the unions; and refused to withhold and remit union dues from union members' final checks.
On appeal, Hallmark argues that this dispute should have been resolved under the arbitration procedures of the CBAs, and that the Board abused its discretion in exercising jurisdiction over this dispute. Hallmark further argues that, in any event, the company did not violate the NLRA because it had a “sound arguable basis” for its interpretation of the CBA provisions at issue. For the reasons set forth below, we grant Hallmark's petition in part and deny it in part. We remand this action to the Board for the limited purpose of recalculating severance pay and vacation pay so that it is consistent with this opinion. All other aspects of the Board's Order are enforced.
Hallmark, a private contractor to the U.S. Air Force, provided vehicle operations maintenance services (“VOM” or “VOMS”) at Patrick Air Force Base and Cape Canaveral Air Force Station, both of which are located in Florida. Hallmark's employees belonged to two different unions. The Cape Canaveral employees were represented by the Transport Workers Union of America, Local 525, AFL–CIO (“TWU”), and the Patrick employees were represented by the International Alliance of Theatrical Stage Employees and Motion Picture Technicians, Artists and Allied Crafts of the United States, its Territories and Canada, Local 780, AFL–CIO (“IATSE”). Hallmark entered into CBAs with each union. The two CBAs were similar, but not identical, and are discussed in further detail below. TWU's CBA was effective from October 1, 2010, to September 30, 2014. IATSE's CBA was effective from September 1, 2011, to August 31, 2014.
This dispute implicates the CBA provisions regarding severance pay, accrued vacation pay, and a $1.50 per hour “lead pay” bonus for those workers sometimes designated as “lead employees.” We briefly present an overview of the provisions at issue.
Section 20.6.3 of the IATSE CBA further limited Hallmark's obligation to pay severance, stating that “[s]everance pay will not be granted when the employee accepts employment of the same, similar, or greater responsibility or skill by a Successor Contractor to the [Patrick and Cape Canaveral] VOM.”
The TWU CBA contained similar provisions limiting Hallmark's obligation to pay severance. Section 30.2 stated that “[s]everance allowance will not be paid if the layoff is the result of an Act of God, a national war emergency, dismissal for cause, resignation, retirement, or a strike or picketing causing a temporary cessation of work,” and section 30.5 stated that “[s]everance allowance will not be granted when ... the employee accepts employment of the same, similar, or greater responsibility or skill by a Successor Contractor to the [Patrick and Cape Canaveral] VOM.”
Under the TWU and IATSE CBAs, employees also enjoyed paid vacation and were to be compensated for accrued, unused vacation time upon discharge. The TWU CBA provided that “[a]n employee who has completed his probationary period shall be paid for his accrued vacation upon termination of employment with the Company, except that he shall not be paid for such vacation if he has been discharged for a cause involving monetary or material loss to the Company.” Section 27.7 of the TWU CBA also allowed for “carry over” of unused vacation hours, but added that the maximum number of hours that could be carried over was 180. Section 27.7 also stated that “[c]arry over does not apply if [Hallmark] is not the successful contractor for the rebid of VOM Contract.”
The IATSE CBA contained near-identical provisions regarding vacation pay, stating that “[a]n employee who has met the prerequisites of this section and who leaves the Company's employment for any reason, or who is laid off indefinitely, shall receive pay in lieu of any unused vacation.” The IATSE CBA added that
Finally, both CBAs required an upward adjustment in pay for certain “lead” employees. Sections 31.3 and 32.2 of the TWU CBA provided:
The IATSE CBA also contained a lead-pay provision, which stated that “[a]ny employee that performs a lead function shall receive one dollars [sic ] and fifty cents ($1.50) per hour in addition to his/her regular straight-time base rate of pay for all hours worked as a lead.”
This dispute originates from Hallmark's loss of the Air Force VOMS contracts for the Patrick and Cape Canaveral bases. In 2011, the Air Force told Hallmark that it intended to “in-source” VOMS at the two bases, and thus would not renew Hallmark's contract. Hallmark convinced the Air Force to postpone in-sourcing by one year, but was ultimately unable to persuade the Air Force to continue the VOMS contracts.
In June 2012, Hallmark emailed the unions to confirm that the VOMS contract would soon end. Soon after receiving the news, TWU and IATSE officials contacted Hallmark to discuss severance pay under the CBAs. Hallmark responded that it had doubts whether the company's employees were entitled to severance pay because the employees were not being “laid off” within the meaning of the CBAs; instead they were being “terminated.” Hallmark further asserted that, in any event, the Air Force was responsible for severance payments to the discharged employees. Hallmark did, however, agree that employees would receive their accrued vacation pay.
Hallmark's Air Force contracts ended effective September 1, 2012. That same day, the company laid off all of its Patrick and Cape Canaveral employees. On September 14th, Hallmark sent its former employees checks for their accrued vacation payments. IATSE and TWU took issue with the amount of the payments, and submitted grievances to Hallmark. Both unions asserted that Hallmark failed to include a $1.50 per hour “lead pay” bonus in the vacation pay for employees who had been designated lead employees. In addition, TWU argued that Hallmark failed to include “carry-over” vacation pay in its members' checks.1
IATSE's grievance further contested Hallmark's failure to withhold and remit union dues, and objected to Hallmark's inclusion of waiver language on its members' checks. The checks read: “By signing this check employee agrees that it has been paid all that it is owed for accrued pay and waives any and all claims for that purpose.” Hallmark later stated that it would not enforce the waiver language....
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