Midland Electrical Contracting Corp. v. United Electrical Workers of America, IUJAT, Local 363

• Decision Date: 06 June 2017
• Docket Number: 29-CA-144562,29-CA-144584
• Parties: Midland Electrical Contracting Corp. v. United Electrical Workers of America, IUJAT, Local 363.
• Court: National Labor Relations Board

Midland Electrical Contracting Corp. and United Electrical Workers of America, IUJAT, Local 363.

No. 29-CA-144562, 29-CA-144584

United States of America, National Labor Relations Board

June 6, 2017

Chairman Miscimarra and Members Pearce, and McFerran

DECISION AND ORDER

On February 1, 2016, Administrative Law Judge Mindy E. Landow issued the attached decision. The Respondent filed exceptions and a supporting brief.

The National Labor Relations Board has considered the decision and the record in light of the exceptions and brief and has decided to affirm the judge's rulings, findings, ^[1] and conclusions and to adopt the recommended Order as modified and set forth in full below. ^[2]

i. background

The relevant facts are fully set forth in the judge's decision. Briefly, the Building Industry Electrical Contractors Association (the Association) executed a collective-bargaining agreement with United Electrical Workers of America, IUJAT, Local 363 (Local 363 or the Union) on behalf of its employer-members, effective from December 1, 2008, through November 30, 2011. On June 30, 2010, Midland Electrical Contracting Corporation (the Employer or the Respondent) became a member of the Association when it executed a document entitled “Membership Application and Designation of Bargaining Representative” (Membership Application), which states in relevant part:

B. The Employer hereby designates the Association as its bargaining representative in all negotiations with Local 363 for its employees in the bargaining unit described above and agrees to be bound by all the terms of any agreement entered into between the Association and Local 363 covering said employees with the same force and effect as though the Employer had executed the agreement as a party

D. The Employer shall be responsible for payment of dues to the Association for the full period of the Agreement with Local 363. Resignation from the Association must be in writing and served on the Association by certified mail no less than 90 days prior to the date of expiration of the agreement between the Association and Local 363. Timely receipt of such resignation shall relieve the Association from any responsibilities or obligations to bargain on behalf of the Employer for a new collective bargaining agreement

Thereafter, the Respondent, the Association, and the Union signed a document entitled “Assumption Agreement, ” which states in relevant part:

1. The Employer is bound to all of the terms and conditions as are applicable from time to time by the nature of the work performed for each of the Association Collective Bargaining Agreements which are incorporated herein by reference as if fully set forth in this Agreement

. . .

5. The Employer agrees that the Association shall, on behalf of the Employer, negotiate successor Collective Bargaining Agreements, amendments, renewals and extensions of the Collective Bargaining Agreements and the Employer agrees to be bound by any and all amendments, renewals and/or extensions of the above referenced Association Collective Bargaining Agreements unless and until this Agreement is properly terminated by either the Employer or the Union in accordance with the renewal and/or Termination Provisions of the Association Collective Bargaining Agreement.

The collective-bargaining agreement (CBA) termination provision referenced in the Assumption Agreement states:

This Agreement shall be effective as of the 1st day of December, 2008 [and] shall remain and continue in full force and effect until Midnight November 30, 2011, and from year to year thereafter, unless either party gives written notice to the other by certified mail, return receipt requested, at least sixty (60) days prior to the date of expiration of this Agreement, that it desires to modify or amend and/or re-negotiate same.

The Association and the Union executed a successor CBA that included the same CBA termination timeline as set forth in the provision above, but with a term of December 1, 2011, through November 30, 2014.

After signing the Membership Application in 2010, the Respondent adhered to the 2008-2011 and 2011-2014 CBAs. In August 2014, ^[3] the Association and the Union began negotiations for a successor CBA and ultimately executed a Memorandum of Agreement effective December 1, 2014, through November 30, 2017. On September 4, less than 90 days (but more than 60 days) prior to the expiration of the 2011-2014 CBA, and after negotiations for the 2014-2017 CBA had begun, the Respondent sent a withdrawal notice to the Association and the Union stating that it would not renew the CBA and would not be bound by any CBA beyond November 30, 2014. The Respondent sent a follow-up notice to the Union on September 16 because it had not received any acknowledgement that its September 4 letter to the Union had been received. Beginning in September 2014, the Respondent ceased making payments to any of the contractually required benefit funds.

II. THE JUDGE'S DECISION

The judge found that the Respondent failed to timely withdraw from the Association and therefore was bound to the terms of the 2014-2017 CBA between the Association and the Union. In so doing, the judge first found that the Membership Application controlled the Respondent's withdrawal from the Association and that the Respondent failed to meet the 90-day withdrawal timeframe set forth therein. Relying on Rome Electrical Systems, 349 NLRB 745 (2007), enfd. 286 Fed.Appx. 697 (11th Cir. 2008), she rejected the Respondent's argument that the Assumption Agreement, which incorporated the CBA's 60-day notice of termination provision, superseded the Membership Application. The judge further found that the Respondent's withdrawal notices were independently untimely because the Respondent sent them after the Association and the Union had commenced negotiations for the 2014-2017 CBA. Having found that the Respondent failed to timely withdraw from the Association on two separate bases, the judge concluded that the Respondent violated Section 8(a)(1), (5) and (d) of the National Labor Relations Act (the Act) by failing to adhere to the 2014-2017 CBA and by failing make contractually-required benefit fund payments.

On exception, the Respondent argues that the judge erroneously failed to find that its withdrawal notices, which complied with the termination provision set forth in the Assumption Agreement, prevented the Respondent from becoming bound to the 2014-2017 CBA. As discussed below, we agree with the judge's findings that the Respondent's withdrawal notices were untimely both because they were sent after the Association and the Union had commenced negotiations for the 2014-2017 CBA and because they did not comply with the terms of the Membership Application. Because the withdrawal notices were untimely, we agree with the judge that the Respondent violated Section 8(a)(1), (5), and (d) of the Act by failing to adhere to the 2014-2017 CBA.

III. DISCUSSION

It is well established that the fundamental purpose of the Act is to foster and maintain stability in bargaining relationships. See Retail Associates, Inc., 120 NLRB 388, 393 (1958). In the context of multiemployer bargaining units, the Board has held that such units “can be accorded the sanction of the Board only insofar as they rest in principle on a relatively stable foundation.” Id. “[T]he stability requirement of the Act dictates that reasonable controls limit the parties as to the time and manner that withdrawal will be permitted from an established multiemployer bargaining unit.” Id. The Board has thus held that, where an employer is contractually bound to a multiemployer bargaining agency relationship, its withdrawal from that relationship is not “free and uninhibited” and that attempts to withdraw must be timely and unequivocal. Id. The Board will refuse to permit the withdrawal of an employer from a multiemployer bargaining arrangement, except upon adequate written notice given prior to the date set by the contract for modification or to the agreed upon date to begin the multiemployer negotiations. Where actual negotiations have commenced, the Board does not permit, “except on mutual consent, an abandonment of the unit upon which each side has committed itself to the other, absent unusual circumstances.” Id. at 395. This policy prevents a race for bargaining leverage in which individual parties withdraw “in the hope of obtaining, through separate negotiations, more favorable contract terms than those which are foreshadowed” by group bargaining. ^[4] The Carvel Company, 226 NLRB 111, 112 (1976) (quoting Mor Paskesz, 171 NLRB 116, 118 (1968)), enfd. 560 F.2d 1030 (1st Cir. 1977), cert. denied 434 U.S. 1065 (1978).

Applying these established principles here, we find, in agreement with the judge, that the Respondent was bound to the 2014-2017 CBA because it failed to withdraw from the Association before the Association and the Union commenced negotiations for the 2014-2017 agreement. Further, even if the Respondent's attempted withdrawal had occurred before the commencement of negotiations, we would nevertheless find the withdrawal untimely because it was not made within the timeframe set forth in the Membership Application.

A. Withdrawal after the Association and the Union had Commenced Negotiations

The Association and the Union began negotiations for the 2014-2017 CBA in August. The Respondent sent its withdrawal notices on September 4 and 16. Applying Board precedent, the judge found that the Respondent is bound to the 2014-2017 CBA because its withdrawal notices were sent after the Association and the Union had commenced negotiations for that CBA. Although the Respondent generally excepted to the judge's findings, it makes no supporting argument in its brief as to why the judge's finding in this regard should be overturned....