International Paper Co. v. N.L.R.B.
| Decision Date | 27 June 1997 |
| Docket Number | No. 95-1606,95-1606 |
| Citation | 115 F.3d 1045 |
| Parties | 155 L.R.R.M. (BNA) 2641, 325 U.S.App.D.C. 142, 134 Lab.Cas. P 10,018 INTERNATIONAL PAPER COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, International Brotherhood of Electrical Workers, et al., Intervenors. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board.
Stephen M. Shapiro, Chicago, IL, argued the cause for the petitioner. Timothy S. Bishop, Chicago, IL, and Andrew E. Zelman, New York City, were on brief. Evan M. Tager, Washington, DC, entered an appearance.
David A. Fleischer, Attorney, National Labor Relations Board, Washington, DC, argued the cause for the respondent. Linda R. Sher, Associate General Counsel, and Aileen A. Armstrong, Deputy Associate General Counsel, were on brief.
Robert D. Kurnick, Washington, DC, argued the cause for the intervenors and for amicus curiae AFL-CIO. Marsha S. Berzon, David M. Silberman and Laurence Gold were on joint brief.
Stephen A. Bokat, Robin S. Conrad, Mona C. Zeiberg, Daniel V. Yager, Robert E. Williams, Marshall B. Babson, Stanley R. Strauss, Harold P. Coxson, Jr., Jan Amundson and Maurice Baskin, Washington, DC, were on brief for amici curiae Chamber of Commerce of the United States, et al. Quentin Riegel entered an appearance.
Before WILLIAMS, HENDERSON and RANDOLPH, Circuit Judges.
Opinion for the Court filed by Circuit Judge HENDERSON.
Petitioner International Paper Company (IP) challenges a finding by the National Labor Relations Board (Board) that IP's permanent subcontracting of employee jobs during a lawful lockout violated section 8(a)(1), 8(a)(3) and 8(a)(5) of the National Labor Relations Act (Act), 29 U.S.C. § 158(a)(1), 158(a)(3), 158(a)(5). The Board concluded that IP's conduct fell into that class of cases that is so "inherently destructive" of employee rights that antiunion motive can be inferred and need not be proved. IP argues that it implemented the permanent subcontract during the lockout solely for economic reasons and that its action does not support an inference of antiunion motive. We grant IP's petition for review and deny the Board's cross-petition for enforcement.
IP manufactures paper products in over 100 facilities throughout the United States. This case involves a labor dispute at IP's paper mill in Mobile, Alabama, where production and maintenance employees are jointly represented by the United Paperworkers International Union (UPIU) and the International Brotherhood of Electrical Workers (collectively, the Unions). IP and the Unions were parties to a collective bargaining agreement in force at the Mobile plant until January 31, 1987. In early January 1987, IP and the Unions began negotiating for a new contract. During the next few weeks the parties met frequently but were unable to reach an agreement. On February 20, IP presented its "best and final" offer and stated its intention to lockout employees if its offer was not accepted. The Unions rejected IP's offer and on March 7, IP unilaterally implemented its proposal.
On March 21, in order to prevent a coordinated strike by the UPIU at several other IP facilities, IP locked out 915 production and 285 maintenance employees at the Mobile mill. Before the lockout IP had entered into a contract with BE&K Construction Company (BE&K) to provide temporary maintenance workers in the event of a work stoppage. Once the lockout began, IP continued to operate the Mobile mill with supervisors and workers from other mills and with BE&K workers providing maintenance.
During the lockout IP found that it was saving money by using BE&K workers to perform its maintenance work. Accordingly IP requested BE&K to submit a proposal for a permanent subcontract of the mill's maintenance work. After receiving BE&K's proposal IP concluded that it could ultimately save $7.2 million per year by permanently subcontracting maintenance work. At the first bargaining session after having received BE&K's proposal, IP introduced a proposal stating in part, "the company may, at its option, contract out any or all mill maintenance work on a temporary or permanent basis." JA 1599.
The Unions made a comprehensive request that IP provide them with all materials relating to IP's subcontracting proposal. In response to the Unions' request, at the next negotiating session IP produced BE&K's proposed permanent subcontract and pages 1-6 of IP's cost study on BE&K's proposal. Although IP claimed to have provided all the documentation it possessed, it failed to produce pages 7 and 8 of its cost study. While the Unions insisted they were willing to bargain on the subcontracting proposal, their strong opposition was evidenced by statements like JA 1601.
On August 11, 1987, with the lockout still in effect, IP implemented a permanent subcontract with BE&K to perform IP's maintenance work after fulfilling its bargaining obligations on the issue. Under the terms of the subcontract either party could terminate the agreement on 30 days' notice. If IP terminated the contract within 3 years without cause, it was required to pay BE&K a fee of $250,000. The Unions were aware of the terms of the permanent subcontract because a copy of the contract was provided to them. Before executing the contract IP sent a letter to BE&K confirming that the end of the lockout would constitute cause to terminate the permanent subcontract without penalty. The Unions were not aware of the letter.
Over the next nine months the parties continued to negotiate but were unable to reach an agreement. On May 3, 1988, upon hearing that the Board's General Counsel intended to issue a complaint alleging that IP's implementation of the permanent subcontract was unlawful, IP canceled the subcontract and reexecuted the agreement with BE&K to provide temporary maintenance work during the remainder of the lockout. IP also withdrew its permanent subcontracting proposal from the bargaining table. The parties nonetheless could not reach agreement and the lockout continued for an additional five months. In October 1988 the parties finally reached an agreement and the lockout ended. While the Unions agreed to allow IP to subcontract, IP agreed to retain enough of its maintenance employees to perform maintenance work at the Mobile mill without subcontracting.
The Board found that IP had violated section 8(a)(3) of the Act by implementing a permanent subcontract for maintenance work during the lockout at the Mobile mill. The Board also found that IP's implementation of the permanent subcontract, because it violated section 8(a)(3), "derivatively" violated section 8(a)(5). The Board found an independent violation of section 8(a)(5) based on IP's failure to produce pages 7 and 8 of its cost study. The Board issued a cease and desist order and awarded backpay to maintenance and production workers for the period that the permanent subcontract had been in effect.
Section 8(a)(3) of the Act makes it an unfair labor practice for an employer to "discriminat[e] in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization." 29 U.S.C. § 158(a)(3). An employer does not violate section 8(a)(3) every time it acts in a manner that may affect union activity. Rather, an employer's action violates section 8(a)(3) only if it acts specifically with the intent or purpose of encouraging or discouraging union membership. Thus "a finding of a violation under this section will normally turn on the employer's motivation." American Ship Bldg. Co. v. NLRB, 380 U.S. 300, 311, 85 S.Ct. 955, 963, 13 L.Ed.2d 855 (1965). This does not mean, however, that a violation of the Act cannot be established absent direct evidence of unlawful motivation. Employer conduct may so tend to discourage union activity that an unlawful purpose will be inferred. This conduct is divided into two categories--"inherently destructive" and "comparatively slight"--depending on the potential effect of the employer's conduct on union activity:
[I]f it can reasonably be concluded that the employer's discriminatory conduct was "inherently destructive" of important employee rights, no proof of an antiunion motivation is needed and the Board can find an unfair labor practice even if the employer introduces evidence that the conduct was motivated by business considerations ... If the adverse effect of the discriminatory conduct is "comparatively slight," an antiunion motivation must be proved to sustain the charge if the employer has come forward with evidence of legitimate and substantial business justifications for the conduct.
NLRB v. Great Dane Trailers, Inc., 388 U.S. 26, 34, 87 S.Ct. 1792, 1798, 18 L.Ed.2d 1027 (1967). An employer that engages in inherently destructive conduct may overcome the inference of unlawful intent with sufficient evidence of a legitimate and substantial business justification. See Metropolitan Edison Co. v. NLRB, 460 U.S. 693, 703, 103 S.Ct. 1467, 1474-75, 75 L.Ed.2d 387 (1983). We have, however, described the employer's burden in justifying inherently destructive conduct as "heavy ... if not impossible." International Bhd. of Boilermakers, Local 88 v. NLRB, 858 F.2d 756, 763 (D.C.Cir.1988). Here the Board found that IP's implementation of the permanent subcontract was inherently destructive of employee rights and that IP had failed to meet the heavy burden of establishing a business justification to overcome the inference of unlawful motive. Although we owe deference to the Board's interpretation of the Act if it is "rational and consistent," NLRB v. United Food & Commercial Workers...
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