Komatz Construction, Inc. v. NLRB

• Decision Date: 10 April 1972
• Docket Number: No. 71-1368.,71-1368.
• Citation: 458 F.2d 317
• Parties: KOMATZ CONSTRUCTION, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — Eighth Circuit

458 F.2d 317 (1972)

KOMATZ CONSTRUCTION, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 71-1368.

United States Court of Appeals, Eighth Circuit.

Submitted January 12, 1972.

Decided April 10, 1972.

COPYRIGHT MATERIAL OMITTED

David R. Hols, St. Paul, Minn., for petitioner; Felhaber, Larson, Fenlon & Vogt, St. Paul, Minn., of counsel.

Steven C. Kahn, Atty., Peter G. Nash, Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Thomas E. Silfen, Atty., N.L.R.B., Washington, D. C., for respondent.

Before MATTHES, Chief Judge, BRIGHT, Circuit Judge, and WEBSTER, District Judge.^*

MATTHES, Chief Judge.

This case is before the court on the petition of Komatz Construction Co., Inc. Komatz for review, and the cross application of the Board to enforce, an order of the Board to be described below. The Board's Order is reported at 191 N.L.R.B. No. 150. The circumstances giving rise to this order warrant detailed explanation.

Komatz is a highway construction contractor with home offices in St. Peter, Minnesota. The seasonal work force here involved numbered approximately 200, of whom 70-80% regularly return each season. Approximately 50 of these were truck drivers and helpers, another 50 were heavy equipment operators, and the remainder were laborers and mechanics. Prior to this controversy the drivers were represented by the Teamsters Union, Local 487, the operators by the Operating Engineers Union, AFL-CIO, and the others were nonunion employees.

The bargaining unit most particularly involved is the drivers and helpers, which first became represented by the Teamsters in 1951 pursuant to unilateral recognition by Komatz rather than by election or authorization cards. In recent years the contract has included a union security clause so that the drivers, when employed, have been active members of the Teamsters, although in the winter months they go on inactive status.

Komatz is a member of the Associated General Contractors of Minnesota A.G.C.. The A.G.C. acts by divisions corresponding to facets of the construction industry to negotiate contracts for its members with the various unions representing employees in that type work. The effect of these negotiations is a point of contention in this case. Komatz contends A.G.C. merely negotiates model contracts as an expedient method of bargaining and that each contractor is free to agree to the model terms or independently to negotiate further. The Board, however, found that arrangement to be binding, multi-employer bargaining.

Pursuant to notice from Local 487 that it desired to change and modify the contract which expired on December 31, 1969, negotiations began for a new contract. When the A.G.C. and the unions were unable to come to terms, there was an industry-wide strike by those unions. Only nonunion contractors and those represented by the independent Christian Labor Association C.L.A. commenced work in the spring of 1970. On April 10, the Teamsters came to terms with A.G.C., but honored the work stoppage until May 28, when the Operating Engineers came to terms.

Meanwhile, at least a substantial portion of Komatz' employees were as desirous as the management to get the construction season underway. This desire soon materialized into an organizational effort by C.L.A., which the Board found was unlawfully aided by Komatz. After a straw vote yielded a majority of those present favoring C.L.A., Komatz recognized C.L.A., signed a contract effective March 23, 1970 to April 30, 1972, with a union security clause covering all 200 employees,¹ and resumed operations. The Teamsters subsequently filed the charges resulting in the order now under review.

Concurring with the Trial Examiner in all respects, the Board concluded: (1) that Komatz had assisted C.L.A.'s organization both by individual actions and by recognizing and contracting with it before it attained a majority, all in violation of § 8(a) (1) and (2); (2) that the Teamsters Union had continued to retain its majority and its status as the exclusive representative in this unit, so that Komatz' refusal to recognize and bargain with it violated § 8(a) (5) and (1); and (3) that the A.G.C. negotiations constituted binding, multi-employer collective bargaining so that Komatz' refusal to honor the agreement negotiated by the A.G.C. with the Teamsters also violated § 8(a) (5) and (1).²

The Board's order directed Komatz to cease and desist recognizing and contracting with C.L.A. unless and until that union shall have been certified as representative of Komatz' employees by the Board and to cease and desist refusing to recognize and bargain collectively with the Teamsters as the exclusive representative of Komatz' drivers and helpers. The affirmative part of the remedy required Komatz: (1) to withdraw and withhold all recognition of C.L.A. as the collective bargaining representative of its employees and to refund to the employees covered by Komatz' contract with C.L.A. all union dues and fees withheld from their wages on or after April 20, 1970; (2) to sign forthwith the collective bargaining agreement negotiated by the A.G.C. with the Teamsters, effective April 6, 1970 through April 30, 1972, to give retroactive effect to the terms and conditions in that agreement, and to make its employees whole for any losses they may have suffered by reason of Komatz' refusal to execute and comply with the terms of that A.G.C. contract; and (3) to post appropriate notices.

I. The Order to Sign the A.G.C. Negotiated Contract

In the interests of clarity, we turn first to that portion of the Board's order which, seeking to remedy the failure both to recognize the Teamsters and to sign the A.G.C. contract, ordered Komatz to sign the A.G.C. contract. Since this remedy rests on the finding that Komatz had delegated binding authority to A.G.C. to negotiate for it, our consideration begins with the question whether that finding is supported by substantial evidence because, if it is not, the unenforceability of this part of the order will be unaffected by the question whether the Teamsters retained their majority.

We think it is clear that the record as a whole does not support the finding that A.G.C. was delegated unequivocal authority to bind its members and thus we decline to enforce the order requiring Komatz to sign the contract.

As the parties concede, the test for determining whether an employer has delegated to a multi-employer unit authority both to negotiate for it and to bind it by group action is as follows:

"The test to be applied in determining the status of a multi-employer unit is `whether the members of the group have indicated from the outset an unequivocal intention to be bound in collective bargaining by group rather than individual action, and whether the union representing their employees has been notified of the formation of the group and the delegation of bargaining authority to it, and has assented and entered upon negotiations with the group\'s representative.\'"

Western States Reg. Coun. No. 3, Int'l Woodworkers v. N.L.R.B., 130 U.S.App. D.C. 176, 398 F.2d 770, 773 (1968). Accord, N.L.R.B. v. Johnson Sheet Metal, Inc., 442 F.2d 1056, 1060 (10th Cir. 1971);³ Tennessee Prod. & Chem. Corp. v. N.L.R.B., 423 F.2d 169, 178 (6th Cir.), cert. denied, sub nom. U.M.W. v. Tennessee Prod. & Chem. Co., 400 U.S. 822, 91 S.Ct. 42, 27 L.Ed.2d 50 (1970). Cf. N.L.R.B. v. Local 210, Int'l Bro. of Teamsters, 330 F.2d 46 (2d Cir. 1964).

However, rather than an unequivocal intention to be bound by group action, the A.G.C. By-laws provide:

"Section 3. No member of any occupational division shall be bound by any collective bargaining agreement negotiated by this association, or any occupational division or labor committee thereof, until such member has notified the Association of election to be so bound."

By-laws of A.G.C., Rule VII, Section 3. the above By-law. First, the undisputed

Furthermore, the record evidences only the conclusion that the A.G.C. negotiations comport with a literal reading of testimony of both the Secretary-Treasurer of the Teamsters, Ray Pogue, and the Manager of A.G.C., William Gary, discloses that a committee of A.G.C. members negotiates with a committee of the various construction unions in Minnesota, but that each member of A.G.C. and each local union subsequently elects whether to be bound by the terms agreed upon by the negotiating committees. Indeed, some A.G.C. members have signed in some years and refused to sign in others. This is quite different from the group action implicit in multi-member bargaining where each constituent agrees beforehand to be bound by the decision of a portion, usually a majority, of the group. Second, both Pogue and Gary also testified that the Teamsters not only understood the foregoing to be the extent of A.G.C.'s authority, but in fact had demanded, each time contracts expired, that the A.G.C. members change their policy and consent to act as a group by majority rule through the A.G.C. Surely such a demand would be unnecessary if the Board's finding were correct. Third, Gary testified, and Pogue reluctantly gave a tacit concession, that A.G.C. has members whose workers are nonunion or represented by the C.L.A. Such an arrangement undercuts the Board's view that mere membership in A.G.C. operates, via its By-laws, as a delegation of authority to the A.G.C. and agreement to abide by the group action thereof.

To sustain its position the Board relies upon: (1) its interpretation of Sections 1 and 2 of A.G.C.'s By-laws; (2) Komatz' signing of the A.G.C.-negotiated contracts in previous years; (3) the provision in the A.G.C.-negotiated contract of a "most favored nation clause;" and (4) the statement made by Henry Komatz to Teamsters' representatives that "Our contracts are being negotiated by the A.G.C. We don't have anything to do with it." We conclude, however, when these matters are considered in light of the facts previously mentioned, the...