N.L.R.B. v. Charles D. Bonanno Linen Service, Inc., 25

• Decision Date: 12 September 1980
• Docket Number: I,No. 79-1524,No. 25,25,79-1524
• Citation: 630 F.2d 25
• Parties: 105 L.R.R.M. (BNA) 2477, 89 Lab.Cas. P 12,234 NATIONAL LABOR RELATIONS BOARD, Petitioner, and Teamsters Local Unionnternational Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Intervenor, v. CHARLES D. BONANNO LINEN SERVICE, INC., Respondent.
• Court: U.S. Court of Appeals — First Circuit

Page 25

630 F.2d 25

105 L.R.R.M. (BNA) 2477, 89 Lab.Cas. P 12,234

NATIONAL LABOR RELATIONS BOARD, Petitioner,

and

Teamsters Local Union No. 25, International Brotherhood of

Teamsters, Chauffeurs, Warehousemen and Helpers of

America, Intervenor, v. CHARLES D. BONANNO LINEN SERVICE, INC., Respondent.

No. 79-1524.

United States Court of Appeals, First Circuit.

Argued May 6, 1980.

Decided Sept. 12, 1980.

John G. Elligers, Atty., Washington, D. C., with whom William A. Lubbers, Gen. Counsel, John E. Higgins, Jr., Deputy Gen. Counsel, Robert E. Allen, Acting Associate Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel and Standau E. Weinbrecht, Atty., Washington, D. C., were on brief, for petitioner.

Sidney A. Coven, Boston, Mass., with whom Howard I. Wilgoren and Lepie & Coven, Boston, Mass., were on brief, for respondent.

James T. Grady, Boston, Mass., with whom Gabriel O. Dumont, Jr. and Grady & McDonald, Boston, Mass., were on brief, for intervenor.

Before CAMPBELL and BOWNES, Circuit Judges, and DAVIS, Judge. ^*

BOWNES, Circuit Judge.

Pursuant to § 10(e) of the National Labor Relations Act, 29 U.S.C. § 160(e), the National Labor Relations Board (the Board) petitions for enforcement of a decision ¹ which it concedes is contrary to the pronouncements of five circuit courts. At issue is whether the occurrence of an impasse in the course of collective bargaining enables an employer unilaterally to withdraw from a multiemployer bargaining unit and thereafter negotiate with the union on an individual basis. Rejecting the various court decisions indicating otherwise as misguided, the Board concluded that an employer's withdrawal upon occurrence of a bargaining impasse is unjustified and violative of §§ 8(a)(5) and (1) of the Act. In so holding, the Board reaffirmed a position to which it has tenaciously adhered since 1973. For the reasons set forth below, we enforce the Board's order.

I.

The factual findings of the Administrative Law Judge are undisputed. Charles D. Bonanno Linen Service, Inc. (Bonanno) is a Massachusetts corporation engaged in the laundering, rental and distribution of linen products. The truck drivers and helpers employed by Bonanno, as well as by other linen supply companies in the area, have been represented by the Teamsters Local Union No. 25 (the Union). For the purpose of negotiating with the Union concerning the terms of employment of these workers, Bonanno for several years has joined with nine of its competitors in a multiemployer unit called the New England Linen Supply Association (the Association). Bonanno was a signatory to the most recent contract negotiated between the Association and the Union, which covered the period from September 21, 1972, to April 18, 1975. On February 19, 1975, Bonanno authorized the Association's negotiating committee to represent it in the anticipated negotiations for a new contract, and Bonanno's president became a member of that committee.

The Union and the Association held bargaining sessions throughout March and April of 1975. On April 30, a proposed contract was agreed upon by the negotiators, but was rejected by the Union members four days later. By May 15, the parties had reached an impasse over the issue of compensation: the Union demanded that the employees be paid on a commission basis, while the Association insisted that they continue to receive payment at an hourly rate. When several subsequent meetings proved unsuccessful in breaking the impasse, the Union on June 23 initiated a selective strike against Bonanno. In response, most of the Association members locked out their drivers. The stalemate continued throughout the summer, with the negotiators unable to agree upon a method of payment during their sporadic meetings. During this time, two employers secretly conferred with the Union, "presumably in an effort to make a separate settlement." No such agreement, however, was executed, nor was there any evidence that these contacts even reached the level of negotiations.

On November 21, by which time it had hired permanent replacements for all of its striking drivers, Bonanno notified the Association by letter that it was "withdrawing from the Association with specific respect to negotiations at this time because of an ongoing impasse with Teamsters Local 25." On the same day Bonanno mailed a copy of its revocation letter to the Union and read it over the phone to a Union representative. Shortly thereafter, the Association terminated the lockout and informed the Union that it wished to continue negotiations on a multiemployer basis. Several negotiating sessions were conducted between December and April. On April 13, 1976, the Union abandoned its demand for payment by commission and accepted a management offer of a revised hourly wage rate. With this development, the parties quickly reached agreement on a new contract, dated April 23, 1976, and given retroactive effect to April 18, 1975.

On April 9, 1976, the Union filed the present action, alleging that Bonanno's purported withdrawal from the multiemployer bargaining unit constituted an unfair labor practice. By letter dated April 29, 1976, the Union for the first time informed Bonanno that the Union had never consented to its withdrawal and therefore considered Bonanno to be bound by the settlement just reached. Bonanno denied it was bound by the contract in a reply letter dated May 3, 1976.

II.

Crucial to any examination of the right of withdrawal from a multiemployer bargaining arrangement is an understanding of the private and public interests served by such an arrangement and the extent to which those interests would be undermined were a party free at any time to withdraw from the multiemployer unit. Multiemployer bargaining offers advantages to both management and labor. It enables smaller employers to bargain "on an equal basis with a large union" and avoid "the competitive disadvantages resulting from nonuniform contractual terms." NLRB v. Truck Drivers Local 449, 353 U.S. 87, 96, 77 S.Ct. 643, 647, 1 L.Ed.2d 676 (1957). At the same time, it facilitates the development of industry-wide, worker benefit programs that employers otherwise might be unable to provide. More generally, multiemployer bargaining encourages both sides to adopt a flexible attitude during negotiations; as the Board explains, employers can make concessions "without fear that other employers will refuse to make similar concessions to achieve a competitive advantage," and a union can act similarly "without fear that the employees will be dissatisfied at not receiving the same benefits which the union might win from other employers." Brief at 10. Finally, by permitting the union and employers to concentrate their bargaining resources on the negotiation of a single contract, multiemployer bargaining enhances the efficiency and effectiveness of the collective bargaining process and thereby reduces industrial strife. For these reasons, Congress has recognized multiemployer bargaining as "a vital factor in the effectuation of the national policy of promoting labor peace through strengthened collective bargaining." NLRB v. Truck Drivers Local 449, 353 U.S. at 95, 77 S.Ct. at 647.

It is apparent that, absent some constraints on the parties' freedom to withdraw from a multiemployer unit during the course of negotiations, the utility of this bargaining process would be substantially undermined. Withdrawal by unit members and their negotiation of separate contracts obviously would reduce the efficiency of the bargaining process. Perhaps more importantly, if the withdrawing members were successful in obtaining more favorable contractual terms, their competitive advantage would encourage additional defections. In order to forestall such withdrawals, the unit's bargaining representative likely would adopt a more extreme position and a more intransigent approach, thereby diminishing the likelihood of a prompt and peaceful settlement. At the same time, a flat prohibition on withdrawal from a multiemployer unit during negotiations would be equally troublesome: such a rule would subvert each employer's interest in controlling its own labor relations, would cause injustice whenever an employer developed a unique situation requiring individualized treatment, and would undermine the multiemployer bargaining process itself by discouraging involvement therein.

In an effort to balance these competing concerns, the Board in Retail Associates, Inc., 120 NLRB 388 (1958), prescribed guidelines to govern withdrawal from multiemployer bargaining. Under these rules, an employer or union is free to withdraw from the multiemployer unit for any reason prior to the date set for renegotiation of the existing contract or the date on which negotiations actually commence, provided adequate written notice is given. Once negotiations towards a new contract have begun, however, a party may only withdraw if "mutual consent" is given or if "unusual circumstances" exist. Id. at 395 (dictum). This approach affords each party an opportunity to rescind its consent to multiemployer bargaining, but restricts unilateral withdrawal during the period when such action would jeopardize the viability and effectiveness of the bargaining process. Even then, however, a necessary measure of flexibility is provided by the "mutual consent" and "unusual circumstances" exceptions. We have recently endorsed the Retail Associates approach to multiemployer withdrawal. ² See Carvel Co. v. NLRB, 560 F.2d 1030, 1034-35 (1st Cir. 1977), cert. denied, 434 U.S. 1065, 98 S.Ct. 1240, 55 L.Ed.2d 766 (1978); accord, e. g., McAx Sign Co., Inc. v. NLRB, 576 F.2d 62, 67-68 (5th Cir. 1978), cert. denied, 439 U.S. 1116, 99 S.Ct. 1021, 59 L.Ed.2d 75 (1979); NLRB v. Sheridan Creations, Inc., 357 F.2d 245, 247-48 (1966), cert. denied, 385 U.S. 1005, 87 S.Ct. 711, 17 L.Ed.2d 544 (1967).

Since its delineation of the Retail Associates guidelines, the Board, with judicial...