N.L.R.B. v. City Wide Insulation of Madison, Inc.

• Decision Date: 27 May 2004
• Docket Number: No. 03-2887.,03-2887.
• Citation: 370 F.3d 654
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. CITY WIDE INSULATION OF MADISON, INC., d/b/a BUILDERS' INSULATION, INC., Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

370 F.3d 654

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. CITY WIDE INSULATION OF MADISON, INC., d/b/a BUILDERS' INSULATION, INC., Respondent.

No. 03-2887.

United States Court of Appeals, Seventh Circuit.

Argued February 13, 2004.

Decided May 27, 2004.

COPYRIGHT MATERIAL OMITTED

Michael H. Carlin (argued), Washington, DC, for Petitioner.

John H. Zawadsky (argued), Reinhart, Boerner, Van Deuren, Norris & Rieselbach, Madison, WI, for Respondent.

Before FLAUM, Chief Judge, and MANION and DIANE P. WOOD, Circuit Judges.

MANION, Circuit Judge.

The National Labor Relations Board ("NLRB" or "Board") petitions for enforcement of its order that City Wide Insulation of Madison, Incorporated, bargain with the Milwaukee and Southern Wisconsin Regional Council of Carpenters ("the Union"). Because the Board's decision has a reasonable basis in law, and because substantial evidence supports both the Board's substantive conclusion and decision not to hold an evidentiary hearing, we enforce the Board's order.

I.

City Wide buys and sells insulation from its facility in Germantown, Wisconsin. On October 18, 2002, the Union petitioned to represent the insulation workers at that location, and the Union and City Wide then agreed to hold a representation election on November 20, 2002, from 7:00 a.m. to 7:30 a.m at City Wide's Germantown location. Unfortunately, because of the Board's negligence, the Board agent responsible for conducting the election failed to appear on the morning of November 20. Although the Board offered to send an agent later that day or on November 21, City Wide rejected those proposals. The parties and the Board eventually agreed to hold the election on November 26. There were 21 eligible voters, and the Union prevailed by a vote of 15 to 5. City Wide challenged the election procedures administratively on the grounds that its employees inferred from the delay that City Wide had tampered with the election process, and neither the Union nor the Board did anything to dispel that notion. The Board rejected this argument and certified the Union as the unit employees' exclusive representative.¹

The Union then asked City Wide to bargain. After City Wide refused, the Union filed a charge of unfair labor practices with the Board, contending that City Wide violated 29 U.S.C. §§ 158(a)(1) and (a)(5). City Wide's only defense was that it was under no obligation to bargain because the Union had not been properly certified. Without holding an evidentiary hearing, the Board once again concluded that the certification election was proper and ordered City Wide to bargain with the Union. The Board also opined that, "[i]n order to avoid objections similar to the one the employer has raised here, we find that it would be preferable for Regional Offices to include in any notice of rescheduled election a statement that the election has been rescheduled for administrative reasons beyond the control of the employer or the union."²

City Wide appeals, maintaining that the Board's decision lacks a reasonable basis in law, that substantial evidence did not support the Board's decision, and that the Board erred by refusing to conduct an evidentiary hearing.

II.

Under 29 U.S.C. §§ 160(e) and (f), we have jurisdiction over petitions for review of the Board's decisions. Sears, Roebuck & Co. v. NLRB, 349 F.3d 493, 502 (7th Cir.2003). Our function is to decide whether the Board's factual decisions are supported by substantial evidence and whether its legal conclusions have a reasonable basis in law. Id. The Board's factual decisions satisfy the substantial evidence standard where the Board relies upon "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Id. We apply a similarly deferential standard to whether the Board's legal conclusions have a reasonable basis in law. Id. Bearing those standards in mind, we turn to the relevant statutory provisions.

Under 29 U.S.C. § 158, an employer may not "interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this title," 29 U.S.C. § 158(a)(1), nor may an employer "refuse to bargain collectively with the representatives of his employees, subject to the provisions of section 159(a) of this title," 29 U.S.C. § 158(a)(5). Framed as an affirmative requirement, these two provisions require an employer to bargain in good faith with a properly certified union. NLRB v. Horizons Hotel Corp., 49 F.3d 795, 805-06 (1st Cir.1995); NLRB v. Overnite Transp. Co., 938 F.2d 815, 821 (7th Cir.1991).

City Wide argues that the Union was never properly certified and that it was thus under no obligation to bargain. A union may obtain certification in one of two ways: through an election or the employer's voluntary recognition. Lincoln Park Zoological Soc. v. NLRB, 116 F.3d 216, 219 (7th Cir.1997). Here, of course, there was no voluntary recognition and the only question is whether the Union obtained recognition through a valid election.

A. Whether the Board's decision has a reasonable basis in law.

The Board³ stated that the election procedures were valid because they met the standard set forth by the laboratory conditions doctrine enunciated in General Shoe Corp., 77 NLRB 124 (1948).⁴ City Wide nonetheless maintains that the Board, despite the pretense of applying the laboratory conditions doctrine, actually failed to use that standard, thus leaving the Board's decision without a reasonable basis in law. In general, the laboratory conditions doctrine is satisfied where the employees exercised a "free choice." Overnite Transp. Co. v. NLRB, 104 F.3d 109, 113 (7th Cir.1997) (reviewing the Board's application of the laboratory conditions doctrine). Because the alleged misconduct in this case, the delay, emanates from a third party, the Board, the more specific question is whether "the rational, uncoerced selection of a bargaining representative" was possible despite the Board's negligence. Id.; see also NLRB v. Chicago Tribune Co., 943 F.2d 791, 794 (7th Cir.1991) (stating that the party seeking to set aside a Board-certified election must show not only that improprieties occurred, but that they interfered with employees' free choice to such an extent that they "materially affected the results of the election").

At the beginning of the Regional Director's analysis, which was adopted in full by the Board, the Regional Director thoroughly delineated City Wide's evidence, cited General Shoe Corp., and then stated that he was applying the laboratory conditions test to that evidence. He then discussed why, in his view, neither the NLRB's "failure to provide a more complete explanation" for why the election was delayed, nor the speculation of some employees as to why the election was postponed, disrupted the "laboratory conditions" in which the election had to be held.

Despite the Regional Director's invocation of the laboratory conditions test, City Wide, as noted above, argues that the Regional Director did not really apply that doctrine. It bases this contention primarily on the Regional Director's reliance on a few cases, e.g., Malta Constr. Co., 276 NLRB 1494 (1985), that did not directly concern the laboratory conditions doctrine, but instead related to the disenfranchisement test. The disenfranchisement test is different from the laboratory conditions doctrine in that it typically applies to situations in which some, but not all, employees were alleged to have been denied the chance to vote. See, e.g., Wolverine Dispatch, Inc., 321 NLRB 796, 796-98 (1996) (applying the disenfranchisement test where polls closed early, preventing a minority of employees from voting). Under the disenfranchisement test, an election will be set aside if the number of employees possibly disenfranchised is sufficient to affect the election's outcome. Id. at 797.

The two standards are analogous, so much so that it is not always clear where to draw the line between them. For example, if inclement weather prevents one employee from voting, depending on the circumstances, the disenfranchisement test may apply. See V.I.P. Limousine, Inc., 274 NLRB 641 (1985) (citing Wanzer Dairy, 232 NLRB 631 (1977)). A storm that prevents one-quarter of eligible employees from voting, however, calls for the laboratory conditions doctrine. See id. It is unclear which test would apply to weather conditions that prevented, say, one-eighth of the employees from voting. The distinction may well be academic, because both tests have the same ultimate focus. As noted above, under either standard, the results of an election will be disturbed only where an irregularity affected the election's outcome.

Here, as City Wide correctly points out, the Regional Director cites cases applying each test. When he did so, however, the Regional Director was merely relying on analogous authority. Disenfranchisement cases, in which some employees were alleged to have been deprived of a meaningful choice in a representation election, are analogous to laboratory conditions cases, like this one, in which all employees are alleged to have been deprived of that meaningful choice. Cf. Superior of Mo., Inc., 2002 WL 31717852, at *4-8 (N.L.R.B.2002) (applying both the laboratory conditions doctrine and the disenfranchisement test where the election was delayed seven days because of the Board agent's failure to open the polls). Courts, of course, routinely invoke analogous authority, and we do not infer from the Regional Director's decision to do the same thing in this case that he somehow failed to apply the laboratory conditions test.

City Wide also notes that the Regional Director observed that 20 out of 21 employees voted, and that the missing employee's vote thus did not affect the election's outcome. In City Wide's view, this observation of a fact irrelevant to the laboratory conditions doctrine implies that the Regional Director did not actually apply the doctrine. The Regional...