Maas & Feduska, Inc. v. N.L.R.B.
| Decision Date | 01 August 1979 |
| Docket Number | No. 12,No. 78-1832,AFL-CI,I,12,78-1832 |
| Citation | 632 F.2d 714 |
| Parties | 102 L.R.R.M. (BNA) 2185, 87 Lab.Cas. P 11,615 MAAS & FEDUSKA, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, and Localnternational Union of Operating Engineers,ntervenor. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Howard C. Hay, Sandra L. Price, Paul, Hastings, Janofsky & Walker, Los Angeles, Cal., for petitioner.
Julius Reich (argued), Reich, Adell, Crost & Perry, Los Angeles, Cal., on brief; Christopher Katzenbach, Washington, D. C., for respondent.
Petition for Review of an Order of the National Labor Relations Board.
Before BRIGHT, * HUFSTEDLER, and ANDERSON, Circuit Judges.
Maas & Feduska, Inc. (the Company), appeals from an unfavorable decision by the National Labor Relations Board (the Board) upon its complaint that Local No. 12, International Union of Operating Engineers, AFL-CIO (the Union) committed an unfair labor practice, in violation of section 8(b)(3) of the National Labor Relations Act (the Act), 29 U.S.C. § 158(b)(3) (1976), by threatening to strike to force payment by the Company of about $18,000 it allegedly owed to Union fringe-benefit trust funds. The Board determined that because the matter of the Company's contributions to the trust funds on behalf of Messrs. Maas and Feduska, two Company supervisors, was a mandatory subject of bargaining, the Union could lawfully exert economic pressure as a means of compelling the Company's payment. 1
On this petition for review, the Company seeks reversal of the Board's decision on the ground that the issue of Company contributions to the fringe-benefit trust funds constitutes a permissive subject of bargaining over which the Union cannot employ threats of a strike to compel agreement. The Company requests that the Union be required to return all contributions the Company made to the trust funds because of the threatened strike.
Upon complete review of the record, we set aside the Board's finding and direct appropriate relief in favor of the Company.
The Company, a corporation solely owned by O. R. Maas and J. N. Feduska, rents heavy equipment to, and operates such equipment for, contractors in the Southern California construction industry. The Union serves as the collective bargaining agent for Company employees.
Since 1970 the Company and Union have executed "short form" collective bargaining agreements which incorporate by reference the provisions of a Master Labor Agreement (MLA) between the Union and various contractors operating in Southern California. 2 The short form agreement specifically excludes the grievance procedure and no-strike clauses of the MLA from its coverage and states that whenever a dispute between the parties arises, the contract does not "limit or modify the right of each party to enforce this agreement or adjust grievances by means of legal or economic procedures."
The MLA requires that an employer contribute, on behalf of its bargaining unit employees, to various fringe-benefit trust funds, i. e., health and welfare, pension, vacation-holiday, joint apprentice training, and joint journeyman retraining funds. The MLA provides that contributions to these funds will be made on the basis of "straight time or overtime hours worked by (or paid) each employee under this Agreement." (Articles VIII, IX & X.) Contributions for salaried employees who participate in the trust funds must be assessed on the basis of 40-hour work weeks.
Maas and Feduska both belong to the Union, notwithstanding their ownership and employment as executives of the Company. Until September, 1971, the two men performed bargaining unit work on virtually a full-time basis, and the Company regularly reported and made payments to the Union trust funds on their behalf on the basis of 40-hour work weeks. Subsequent to September, 1971, although still performing some bargaining unit work, Maas and Feduska devoted most of their time to supervision. The Company continued reporting these executives, along with other employees who performed full-time bargaining unit work, to the fringe-benefit trust funds, but it began contributing to the funds on their behalf on the basis of 20 hours of bargaining unit work per week. 3 Maas and Feduska have received substantial benefits from the trust funds since 1970.
The Company continued reporting and contributing for Maas and Feduska on the minimum 20-hours per week basis until the summer of 1975. In July, 1975, an administrator of the trust funds notified the Company of deficiencies in fringe-benefit contributions on behalf of the Company's two executives and of some minor discrepancies with respect to five employees. The administrator demanded payment of $22,691.91, which included the deficiency, a 10 percent liquidated damages assessment, and the cost of the audit.
The Union threatened to strike if the Company failed to satisfy the alleged deficiency, but the Company initially refused to pay. After certain adjustments were made in the assessment of the deficiency, and notwithstanding the Company's protest of the Union's conduct, the Company eventually paid $17,805.62 to the fringe-benefit trust funds. 4
The Company filed an unfair labor practice charge against the Union with the Board and asserted that an employer's contributions to the fringe-benefit trust funds concerned a permissive subject of bargaining over which the Union could not strike. The Company charged that the Union's strike threat to compel payment of the alleged deficiencies constituted an unfair labor practice in violation of section 8(b)(3) of the Act.
The administrative law judge determined that Maas and Feduska were supervisors under the Act and that the Union could not compel the Company to treat them as employees for collective bargaining purposes. Consequently, the administrative law judge viewed the dispute between the Union and Company over the latter's payment of contributions to Union trust funds on behalf of nonbargaining unit employees as a permissive subject of bargaining.
The Board formulated the central inquiry in the case as follows:
"(T)he issue . . . is whether the threat of Respondent Union to strike over payment of the delinquency due the trust funds concerned a mandatory subject of bargaining."
The Board determined that the dispute over the Company's delinquent contributions constituted a mandatory subject of bargaining and, therefore, that the Union lawfully threatened to strike to compel payment. The Board elaborated upon its conclusion as follows:
An employer and the union representing its employees must bargain collectively with respect to "wages, hours, and other terms and conditions of employment." See 29 U.S.C. § 158(d) (1976). Beyond these issues, which constitute mandatory subjects of bargaining, "each party is free to bargain or not to bargain, and to agree or not to agree" about a subject matter. NLRB v. Wooster Division of Borg-Warner Corp., 356 U.S. 342, 349, 78 S.Ct. 718, 722, 2 L.Ed.2d 823 (1958). As to such nonmandatory, or permissive, subjects of bargaining, a union may not strike or threaten to strike to compel agreement. Ibid. A union breaches its obligation to bargain collectively within the meaning of section 8(b)(3) of the Act if it insists, by way of economic action, on a permissive subject of bargaining. A. D. Cheatham Painting Co., 126 NLRB 997, 1002 (1960).
"Since it is lawful to insist upon matters within the scope of mandatory bargaining and unlawful to insist upon matters without," Borg-Warner, supra, 356 U.S. at 349, 78 S.Ct. at 723, the issue in this case is whether an employer's contributions to union fringe-benefit trust funds on behalf of executives who perform little bargaining unit work falls within the phrase "wages, hours, and other terms and conditions of employment."
Maas and Feduska, supervisors and sole executives of the Company, cannot be deemed employees within the collective bargaining obligations of the applicable law, even though their performance of some bargaining unit work made them eligible for participation in the trust funds. 5
The Board, however, observed that neither the Union nor the Trustees sought to characterize the supervisors as bargaining unit employees so as to bring them within the collective bargaining obligations of the Act. Rather, the Board determined that the scope of mandatory bargaining extends to matters relating to persons outside a bargaining unit, where such "third party" relationship has a significant impact on the terms and conditions of employment of bargaining unit employees. 6
The Board determined that the Company's conduct in reporting and contributing for the two supervisors on a minimum-hour basis constituted "an economic detriment to the various funds" and that "the impact of many delinquencies in making contributions to such funds would be destructive of the entire trust fund plan." It stated, in effect, that the Company's underpayment of contributions to the fringe-benefit trust funds significantly affected the terms and conditions of employment of bargaining unit employees. The Board concluded that the preservation of the trust funds from erosion due to inadequate employer contributions on behalf of participating supervisory personnel constituted a subject of mandatory bargaining.
In reviewing the Board's order, we pay great deference to the Board's expertise in making determinations about mandatory and permissive subjects of bargaining....
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