Leach Corp. v. N.L.R.B.

• Decision Date: 12 May 1995
• Docket Number: No. 93-1707,I,AFL-CI,93-1707
• Citation: 54 F.3d 802
• Parties: 149 L.R.R.M. (BNA) 2285, 311 U.S.App.D.C. 398, 63 USLW 2750, 130 Lab.Cas. P 11,336 LEACH CORPORATION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, International Association of Machinists and Aerospace Workers, District Lodge 94, Local Lodge 102,ntervenor.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 802

54 F.3d 802

149 L.R.R.M. (BNA) 2285, 311 U.S.App.D.C.

398, 63 USLW 2750,

130 Lab.Cas. P 11,336

LEACH CORPORATION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent International Association of Machinists and Aerospace Workers, District Lodge 94, Local Lodge 102 AFL-CIO, Intervenor.

No. 93-1707.

United States Court of Appeals District of Columbia Circuit.

Argued March 24, 1995.

Decided May 12, 1995.

William H. Emer, Los Angeles, CA, argued the cause for petitioner. With him on the briefs was Kelly F. Watson, Los Angeles, CA.

Robert J. Englehart, Atty., N.L.R.B., Washington, DC, argued the cause for respondent. With him on the brief were Linda R. Sher, Acting Associate General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel and Linda Dreeben, Supervisory Atty., N.L.R.B., Washington, DC.

Allison Beck, Washington, DC, was on the brief for intervenor. Ira R. Mitzner, Washington, DC, entered an appearance.

Before WILLIAMS, SENTELLE and ROGERS, Circuit Judges.

Opinion for the court filed by Circuit Judge ROGERS.

Dissenting opinion filed by Circuit Judge STEPHEN F. WILLIAMS.

ROGERS, Circuit Judge:

Petitioner Leach Corporation seeks review of an order of the National Labor Relations Board finding Leach liable for unfair labor practices under Secs. 8(a)(5) & (1) of the National Labor Relations Act, 29 U.S.C. Secs. 158(a)(5) & (1), in connection with its relocation of a manufacturing operation. ¹ Leach contends that the Board erred in ruling that the collective bargaining contract applied to workers at the new facility notwithstanding the company's adoption of a different manufacturing process, and in rejecting its affirmative defense that the charge filed by the Union ² was untimely under Sec. 10(b) of the Act, 29 U.S.C. Sec. 160(b). We deny the petition for review and grant the Board's cross-application for enforcement of its order.

I.

Leach manufactures relay devices, a type of electronic switch used primarily in the aerospace industry. It had a longstanding collective bargaining relationship with the Union covering production and maintenance employees at a manufacturing facility known as the Los Angeles Relay Division ("Los Angeles"). The outstanding collective bargaining contract extended through October 22, 1991.

Relay production at Los Angeles, laid out over 14 buildings, operated according to a relatively inefficient manufacturing method known as "batch" production. In 1990, Leach decided to change its relay manufacturing process from the batch method to the more flexible and efficient "just-in-time" system. Due to physical limitations at the Los Angeles site, however, the company elected to close the plant and relocate the relay division to a pre-existing Leach facility in Buena Park, 19 miles away. Leach notified the Union in February 1991 of the plans to transfer the relay division, advising that the closure and relocation would commence in July and be completed in September. During the period leading up to the move, representatives of Leach and the Union met several times to discuss the new operation. At a March 20 meeting, Leach informed the Union that it would not extend the collective bargaining contract to Los Angeles employees who relocated to Buena Park due to the different nature of relay production there, and Leach denied the Union's request to view the Buena Park premises. At each of these meetings, the Union also requested that Leach recognize it as the representative of relocating employees, and Leach refused. On June 26, Leach denied the Union's request for the names, departments and positions of the employees to be relocated.

The relocation process commenced on July 3, when the first 35 Los Angeles workers began work at Buena Park, and continued until completion on September 17. In all, approximately 280 of the 340 Los Angeles unit employees had been transferred. Except for the 35 employees who relocated on July 3, the record does not reveal the number of employees transferred on any particular date. When the relocation was complete, the new relay production line at Buena Park consisted entirely of former Los Angeles relay workers, and the old facility was closed.

On January 21, 1992, the Union filed a charge with the Board alleging that Leach had unlawfully repudiated the contract and withdrawn recognition of the Union in violation of Secs. 8(a)(5) & (1). An Administrative Law Judge ("ALJ") found that the Buena Park relay operation was substantially the same as production at Los Angeles, notwithstanding the different manufacturing methodology at Buena Park and the concomitant need for worker retraining. 312 N.L.R.B. at 995-96. Because Los Angeles transferees made up significantly more than 40 percent of the relevant relay unit at Buena Park, the ALJ ruled that the relocation did not relieve Leach of its collective bargaining obligation with respect to the transferred Los Angeles employees. Id. at 995-96 & n. 3. The ALJ also found that Leach's refusal to provide information to the Union about the relocation process constituted an unfair labor practice in violation of Secs. 8(a)(5) & (1). Id. at 996. ³ However, the ALJ ruled that because the unfair practice occurred on July 3, when the first group of Los Angeles employees actually relocated to Buena Park, the Union had filed its charge more than six months later and it waS THEREFORE UNTIMELY UNDEr Sec. 10(b). ⁴ id. at 996-98. Accordingly, while ordering Leach to cease and desist from refusing to provide requested information to the Union, the ALJ declined to enter an order regarding the withdrawal of recognition and contract repudiation charges. Id. at 998.

The Board reversed the ALJ's decision on the Sec. 10(b) time-bar, ruling that the limitations period began at the earliest on September 17--"the date the transfer process was substantially completed." Id. at 991. Rejecting Leach's argument that Sec. 10(b) was triggered prior to the relocation, the Board noted that "a statement of intent or threat to commit an unfair labor practice does not start the statutory six months running. The running of the limitations period can begin only when the unfair labor practice occurs." Id. at 991 & n. 7 (internal quotations and citations omitted). The Board emphasized that the Sec. 10(b) period begins to run "only when a party has clear and unequivocal notice of a violation of the Act," and that the party asserting the Sec. 10(b) defense bears the burden of demonstrating such notice. Id. at 991.

Applying this principle to Leach's relocation, the Board determined that Leach had failed to show that the Union "had knowledge of the facts necessary to support a ripe unfair labor practice charge on July 3," when the relocation began. Id. In reaching this conclusion, the Board looked to the point at which Leach could be found to have committed an unfair labor practice. When an employer relocates a business, the Board has held that an existing contract remains in effect if (1) transferees from the old plant comprise a "substantial percentage" of employees in the relevant bargaining unit at the new plant, and (2) operations at the new facility are "substantially the same" as those at the old plant. Rock Bottom Stores, Inc., 312 N.L.R.B. 400, 402, 1993 WL 382095 (1993), enf'd, NLRB v. Rock Bottom Stores, 51 F.3d 366 (2d Cir.1995); Harte & Co., 278 N.L.R.B. 947, 948, 1986 WL 68757 (1986). For a gradual plant relocation involving new hires or other non-transferred workers, the Board has adopted a rule that the appropriate time for measuring whether the "substantial percentage" is met is when the relocation has been "substantially completed," rather than when the new plant becomes operational. Harte, 278 N.L.R.B. at 949. In the Board's view, this rule represents a workable balance between "the newly hired employees' interest in choosing whether or not to have union representation" and "the transferees' interest in retaining the fruits of their collective activity." Id. at 950.

The Board treated the gradual relocation of Leach's Los Angeles employees to the pre-existing Buena Park facility, where approximately 100 non-union workers were already employed, as a situation governed by Harte. Thus, it determined that Leach became obligated to recognize the Union and the contract at Buena Park only when the relocation had been substantially completed. Consequently, "on this record," Sec. 10(b) could not be triggered until that point, as only then would "sufficient facts [be] in existence to sustain a finding of an unfair labor practice." 312 N.L.R.B. at 991. In view of the absence of data about how many employees were transferred on any particular day after July 3, the Board concluded that "September 17 is the earliest date on which the Union can be found to have had clear and unequivocal notice that Harte 's substantial-percentage-of-transferees requirement had been fulfilled." Id. at 992. The Board also found that the Union's lack of knowledge could not be attributed to its failure to seek information about the relocation, but rather was due in part to Leach's unlawful refusal to provide the requested information. Id. at 992 n. 8. The Board upheld the ALJ's findings and conclusion that Leach had violated Secs. 8(a)(5) and (1) by repudiating its contract and withdrawing recognition of the Union, and ordered Leach, among other things, to recognize the Union at Buena Park as the exclusive collective bargaining representative for the transferred employees engaged in manufacturing relays, and to apply the terms of the contract with the Union. Id. at 992-93.

II.

Leach contends that the Board erred in determining when the Sec. 10(b) limitation period commenced to run with respect to the Union's non-recognition and refusal-to-bargain charges. The Board's interpretation of Sec. 10(b), provided it is reasonable, is entitled to judicial deference. See Drug Plastics & Glass Co., Inc. v. NLRB, 44 F.3d 1017, 1021 (D.C.Cir.1995) (o...