N.L.R.B. v. Pinkston-Hollar Const. Services, Inc.

• Decision Date: 27 February 1992
• Docket Number: PINKSTON-HOLLAR,No. 90-4483,90-4483
• Citation: 954 F.2d 306
• Parties: 139 L.R.R.M. (BNA) 2686, 121 Lab.Cas. P 10,021, 15 Employee Benefits Cas. 1021 NATIONAL LABOR RELATIONS BOARD, Petitioner, v.CONSTRUCTION SERVICES, INC. d/b/a Construction Services, Inc., Respondent.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 306

954 F.2d 306

139 L.R.R.M. (BNA) 2686, 121 Lab.Cas. P 10,021,

15 Employee Benefits Cas. 1021

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. PINKSTON-HOLLAR CONSTRUCTION SERVICES, INC. d/b/a Construction Services, Inc., Respondent.

No. 90-4483.

United States Court of Appeals Fifth Circuit.

Feb. 27, 1992.

John D. Burgoyne, Aileen A. Armstrong, Deputy Assoc. Gen. Counsel, N.L.R.B., Washington, D.C., Margaret Bezou, Linda Dreehen, for petitioner.

David M. Thomas, Neil Martin, Fulbright & Jaworski, Houston, Tex., for respondent.

Michael Dunn, Director, Region 23, Ft. Worth, Tex., for other interested parties.

Ted B. Kuhn, Buttvill & Kuhn, Houston, Tex., for Local 116.

Petition for Review of an Order of The National Labor Relations Board.

Before POLITZ, Chief Judge, JOHNSON, and GARWOOD, Circuit Judges.

GARWOOD, Circuit Judge:

Respondent-appellant Pinkston-Hollar Construction Services, Inc. (the Company) petitions for review of a decision of the National Labor Relations Board (the Board), which held that the Company violated section 8(a)(1) and 8(a)(5) of the National Labor Relations Act (the Act), 29 U.S.C. § 158(a)(1), (5), by unilaterally withdrawing from Union benefit plans and implementing its own benefit plans. The Board has filed a cross-application for enforcement of its order. Because the Board failed to evaluate the parties' conduct under the correct legal standard, we reverse the Board's decision and remand the case to the Board for further consideration.

Facts and Procedural History

Since approximately 1980, the Company had a bargaining relationship with the United Union of Roofers, Waterproofers and Allied Workers Local Union No. 116 (the Union). On January 13, 1987, the Company was a party to a collective bargaining agreement entered into on behalf of the Company and other roofing and waterproofing contractors by the Houston Roofing and Waterproofing Contractors Association on April 23, 1984. That agreement was due to expire on March 31, 1987.

By way of a letter dated January 13, ¹ the Company informed the Union of its intention to withdraw from the employer association and to open the collective bargaining agreement for modification or termination upon expiration in March. The parties held approximately ten negotiating sessions between March and August with Company Vice-President Bill Ferem (Ferem) usually representing the Company and Union Business Agent Robert Banks (Banks) representing the Union. No attorneys were present during these sessions.

At a meeting held on March 30, the subject of the Company's continued participation in the Union Trust Funds (which included a Welfare Trust Fund, Vacation Trust Fund, Pension Plan and Apprentice Trust Plan) first surfaced. Ferem then requested the Union to provide the Company with a copy of the Union pension plan's Statement of Financial Condition, Form 5500. By letter dated April 9, the Company informed the Union that it was considering proposing a new benefits package and sought information on the Union plans then in effect. Not having received the requested information, the Company issued its first written proposed contract, dated April 24th, which provided for Benefits and Funds "to be negotiated"; no specifics of any proposed plan were included.

On July 22, following further negotiations and still not having received the requested financial information from the Union despite repeated requests, the Company informed the Union that it intended to cease participation in the Union Plans, effective September 1, and instead "utilize its own group health plan, profit sharing plan, and vacation plan for its employees." The letter invited the Union to meet and bargain over the Company's cessation of participation. On July 30, the Union informed the Company of its desire to bargain, and offered three dates in August on which it would be available to negotiate over the matter.

The first meeting following the Company's announcement of impending withdrawal from the Union plans was held August 14. However, no bargaining on the proposed benefits changes took place; instead, the Union tried, as it had in previous sessions, to convince the Company to extend the expired collective bargaining agreement for a year or to sign an agreement similar to the prior agreement with some modifications. The parties then agreed to meet again on August 20. By way of a certified letter, received by the Union on August 18, the Company confirmed the agreement to meet on the 20th, and informed the Union that the Company's attorney would attend all future negotiating sessions. Again, no bargaining occurred at the August 20 meeting.

Both parties agree that the events during the August 20 meeting are significant to the determination of this case; however, the facts are disputed. Finding that Banks appeared "uncertain and hesitant during his testimony," the Administrative Law Judge (ALJ) credited the Company's scenario of the meeting, which outlined the following sequence of events. Upon his arrival at the meeting, Banks told the Company that the Union's attorney was out of town on business and the Union was not prepared to bargain without him. Banks indicated that the Union's attorney would be available in mid-September to meet. The Company stated that it still intended to implement the changes on September 1; Banks' sole response was an acknowledgment that he would inform the Union's attorney. The Union did not at that time request the Company to postpone implementation, nor did the Union schedule another bargaining session prior to September 1. Moreover, the Union at no time requested specific information on the Company's proposed changes.

The Company ceased payment into the Union plans on September 1. However, the parties continued to schedule meetings. The next meeting was held September 23, at which time the Union's attorney was present and the parties discussed the broad spectrum of the contract. When the focus turned to the Company's discontinued participation in the Union's benefit programs, the Union declined to bargain and asserted that it believed the Company's unilateral implementation of the new plans to have been an unfair labor practice. The Company denied the allegation and expressed continued willingness to meet and bargain. On November 16, the Union's attorney announced that the Union would no longer negotiate until it was resolved whether the Company's withdrawal from the Union plans constituted an unfair labor practice. The Company agreed to suspend negotiations.

On November 20, the Union filed an unfair labor practice charge with the Board. The Regional Director of the Board initially refused to issue the complaint. However, the Union's appeal was sustained by the Board's General Counsel and on April 20, 1988, the complaint issued. On June 21, 1988, a hearing was held before an ALJ, who found no violation of the Act and dismissed the complaint. In his decision issued June 22, 1989, the ALJ observed:

"These facts present the rare situation where the Union has waived its bargaining rights because of its failure to act with due diligence. Initially it is not clear when, if ever, the Union had even suggested to the Company that it postpone or cancel its decision, including the implementation of its own benefit plans. Indeed, the record shows the contrary, namely, that Banks had never formally demanded that the Company refrain from effectuating its announced intentions pending bargaining with the Union. The Union's failure to do so may not have been the 'green light' for the [Company] to implement the proposal on September 1, 1987, after it gave the Union notice by letter of July 22, 1987, but it certainly made it easier for the [Company] to act unilaterally. Considering the bargaining process in its entirety, I find that the Union's performance in this regard appeared superficial and indifferent, particularly since there is no evidence that the [Company] employed dilatory methods to avoid bargaining over this issue; to the contrary, the [Company] was prepared on August 20, 1987, to meet and bargain with the Union, but Banks declined because he did not have his attorney. Moreover, there is also no suggestion that the [Company] was motivated by discriminatory reasons to cease its participation in the union-sponsored benefits programs. The evidence suggests that the Company implemented its own programs for economic reasons. Finally, instead of attempting to bargain about the issue with the [Company] even after it had implemented its own plans on September 1, the Union merely informed the [Company] that it would file charges with the Board" (emphasis added).

Based on this set of facts, the ALJ determined that the Union failed to act with due diligence and thereby waived its bargaining rights.

The General Counsel then filed an exception, and the Board issued a decision and order on March 30, 1990, reversing the ALJ, and concluding that the Company violated sections 8(a)(1) and (5) of the Act by unilaterally discontinuing payments into the Union's funds and unilaterally implementing its own plans. In reversing the ALJ's decision, the Board determined that the ALJ's "due diligence" standard was incorrect, and stated instead that a "union may relinquish a statutory right during contract negotiations, however, only by clear and unmistakable waiver." Accepting the facts as found by the ALJ, the Board nevertheless concluded that the Union's actions did not establish such a waiver of its statutory bargaining rights. The order now challenged by the Company and sought to be enforced by the Board requires the Company to cease unfair labor practices; to pay into the Union funds any monies due since September 1, 1987; and to make unit employees whole for losses incurred as a result of the Company's failure to make the payments.

Discussion

I.

The Board's findings must be upheld if supported by substantial evidence in the record considered as a whole, not...