Local 15, Afl-Cio v. N.L.R.B.

• Decision Date: 31 October 2005
• Docket Number: No. 05-1058.,05-1058.
• Citation: 429 F.3d 651
• Parties: LOCAL 15, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL-CIO, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, and Midwest Generation, EME, LLC, Intervenor.
• Court: U.S. Court of Appeals — Seventh Circuit

429 F.3d 651

LOCAL 15, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL-CIO, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, and Midwest Generation, EME, LLC, Intervenor.

No. 05-1058.

United States Court of Appeals, Seventh Circuit.

Argued September 27, 2005.

Decided October 31, 2005.

COPYRIGHT MATERIAL OMITTED

Marilyn Teitelbaum (argued), Schucat, Cook & Werner, St. Louis, MO, for Petitioner.

Robert G. Chavarry, National Labor Relations Board, Chicago, IL, Steven B. Goldstein (argued), Robert J. Englehart, Aileen Armstrong, National Labor Relations Board Office of the General Counsel, Washington, DC, for Respondent.

Jeremy C. Moritz (argued), Franczek Sullivan, Chicago, IL, for Intervenor.

James B. Coppess (argued), Washington, D.C., for Amicus Curiae.

Before FLAUM, Chief Judge, and BAUER and SYKES, Circuit Judges.

FLAUM, Chief Judge.

Petitioner Local 15, International Brotherhood of Electrical Workers, AFL-CIO ("Union") petitions this Court for review of an order of the National Labor Relations Board ("NLRB" or "Board") finding that the Intervenor, Midwest Generation, EME, LLC ("Midwest"), did not violate sections 8(a)(1) and (3) of the National Labor Relations Act ("NLRA"). 29 U.S.C. §§ 158(a)(1) and (3). Because substantial evidence did not support the Board's decision, we reverse the holding and remand to the Board to determine whether Midwest's unfair labor practices render the current collective bargaining agreement void.

I. Background

The Union began an economic strike against Midwest on June 28, 2001, over stalled negotiations for a new collective bargaining agreement. Approximately 1150 workers went on strike. Eight employees refused to strike ("non-participants"). During the course of the strike, 47 employees who were part of the Union made individual offers to return to work ("crossovers"). Midwest accepted each of these offers and reinstated the individual employees. Sixteen employees crossed the picket line in July, and thirty-one crossed between August 1 and August 30. Six additional employees made offers to return to work shortly before the strike ended on August 31. Midwest returned these last six crossovers to the workforce between September 1 and September 6. In all, a combination of sixty-one crossovers and non-participants offered to return to the workforce before the end of the strike.

Midwest continued to operate during the course of the strike, relying upon supervisors, contractors, and some temporary replacement employees. Midwest hired no permanent replacements. No evidence that the sixty-one non-participants and crossovers were necessary to maintain operations during the strike was submitted. Employees who returned to work were not questioned concerning their status in the Union and Midwest did not encourage or assist any employee in resigning from the Union.

On Friday, August 31, 2001, after failing to reach a collective bargaining agreement, the Union members voted to end their strike and offered to return to work unconditionally. Midwest initially gave no response to this offer, but on September 6, 2001, Midwest informed the Union that it was instituting a lockout. The Union alleges that the purpose of the six-day delay in announcing the lockout was to process the last six crossovers.

The lockout did not include those sixty-one workers who offered to return to work before the Union made its unconditional offer on August 31. Midwest locked out any employee who sought to return to work after the Union had voted to end the strike; and the lockout continued until the parties reached a collective bargaining agreement. The announced purpose of the lockout was to exert pressure upon the Union to meet Midwest's contract demands.

On October 3, 2001, the Union voted on Midwest's "final offer." The Union informed Midwest that it believed if the NLRB later found Midwest had committed an unfair labor practice during the lockout, the contract would be "void because the Company's unfair labor practice[s] . . . coerced the employees into accepting it. Nothing the Union or its representatives say or do should be interpreted as a waiver of this position." On October 3, 2001, the Union rejected the offer. The Union sent a similar notification letter before a second vote on the same contract. On the second vote, the contract passed easily. The lockout officially ended on Monday, October 22, 2001.

Midwest informed the Union in early September that it would not allow employees who had not previously offered to return to work access to their jobs "until a new contract is agreed to and ratified[.] [E]mployees who had already returned to work, or were scheduled to return to work prior to Friday, August 31, 2001 [would] be allowed to continue to work."

Although at times all but eight of the approximately 1,150 workers were on strike, Midwest maintained normal operations throughout the strike and lockout. Midwest contends that the non-strikers and crossovers "helped the company weather the work stoppage's effects." Midwest also contends that the sixty-one employees had "abandoned an economic strike undertaken for the express purpose of supporting the Union's bargaining demands."

In response to an unfair labor practice charge filed by the Union, the General Counsel of the National Labor Relations Board issued a complaint against Midwest on March 7, 2002, for unfair labor practices in violation of NLRA sections 8(a)(1) and (3). 29 U.S.C. §§ 158(a)(1) and (3). The complaint alleged that Midwest committed an unfair labor practice by refusing to reinstate employees who were on strike at the time of an unconditional offer to return to work, while allowing other workers who had already returned or planned to return to work access to their jobs. The parties waived an ALJ hearing and stipulated to the record. The Board issued a Decision and Order on September 30, 2004, finding that Midwest had not violated the Act. There was a dissent from the three-member board decision.

There is no evidence of bad faith by either party, nor is there any evidence that Midwest gave the crossovers or non-participants special treatment before or after the lockout.

The only issue for resolution submitted to the Board, and therefore the only issue for this Court to review, was stipulated to by the parties:

Whether the Company violated Sections 8(a)(1) and (3) of the [National Labor Relations] Act by locking out and/or refusing to reinstate those employees who were on strike at the time of the union's unconditional offer to return to work, while not locking out and/or reinstating those individuals employed by the Company who, prior to the union's unconditional offer to return to work, had ceased participating in the strike by making an offer to return to work, and had either returned to work or scheduled a return to work at the Company?

II. Discussion

A. Standard of Review/Method of Analysis

Board Rulings are "entitled to considerable deference so long as [they are] rational and consistent with the [National Labor Relations] Act." NLRB v. Curtin Matheson Scientific, Inc., 494 U.S 775, 787, 110 S.Ct. 1542, 108 L.Ed.2d 801 (1990); see also NLRB v. United Food, Commercial Workers Union, Local 23, 484 U.S. 112, 123, 108 S.Ct. 413, 98 L.Ed.2d 429 (1987). This Court, however, is not "obliged to stand aside and rubberstamp [its] affirmance of administrative decisions that [it] deem[s] inconsistent with a statutory mandate or that frustrate the congressional policy underlying a statute." NLRB v. Brown, 380 U.S. 278, 291, 85 S.Ct. 980, 13 L.Ed.2d 839 (1965).

This complaint was brought under section 10(a) of the National Labor Relations Act, 29 U.S.C. § 160(a), for a violation of sections 8(a)(1) and (3) of the Act. 29 U.S.C. §§ 158(a)(1) and (3). Section 8 states that it is an unfair labor practice for an employer to interfere with employees' rights that are protected by section 7 of the NLRA, which includes the right to "engage in . . . activities for the purpose of collective bargaining." 29 U.S.C. § 157. The basic procedure to evaluate whether a company has engaged in an unfair labor practice was first outlined by the Supreme Court in NLRB v. Great Dane Trailers, Inc., 388 U.S. 26, 87 S.Ct. 1792, 18 L.Ed.2d 1027 (1967).

The first question in the Great Dane framework is whether the employer's conduct is "inherently destructive of important employee rights." 388 U.S. at 34, 87 S.Ct. 1792. Actions that harm the collective bargaining process, interfere with employees' right to strike, or are taken against employees based upon union status are "inherently destructive." Esmark, Inc. v. NLRB, 887 F.2d 739, 748 (7th Cir.1989). To be "inherently destructive," the effect on the collective bargaining process must be more than temporary; it must instead establish a barrier to future collective bargaining. Id. If an action by an employer is inherently destructive of important rights, no proof of an anti-union motivation is needed. Great Dane, 388 U.S. at 34, 87 S.Ct. 1792.

A harmful action by an employer that is not inherently destructive is classified as "comparatively slight." These two categories, "inherently destructive" harm and "comparatively slight" harm, make up the two prongs of the Great Dane framework. Under the first prong of the Great Dane test ("inherently destructive"), an employer's actions are submitted to a stringent test. Such actions are permissible only if after balancing business justifications against employee rights, the business justification is found to be superior. Under the second prong of the Great Dane test, ("comparatively slight"), an employer's actions are more likely to be justified. "[A] finding of comparatively slight harm calls for a threshold test of business justification, rather than a balancing of interests." Int'l Bhd. of Boilermakers v. NLRB, 858 F.2d 756, 762 n. 2 (D.C.Cir.1988). If an individual employer's actions cannot be justified under the comparatively slight...