N.L.R.B. v. Delta-Macon Brick and Tile Co., Inc.

• Decision Date: 04 October 1991
• Docket Number: DELTA-MACON,No. 90-4381,90-4381
• Citation: 943 F.2d 567
• Parties: 138 L.R.R.M. (BNA) 2493, 60 USLW 2292, 120 Lab.Cas. P 10,954 NATIONAL LABOR RELATIONS BOARD, Petitioner, v.BRICK AND TILE COMPANY, INC., and Delta Brick, a Division of Boral Bricks, Inc., Respondents.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 567

943 F.2d 567

138 L.R.R.M. (BNA) 2493, 60 USLW 2292,

120 Lab.Cas. P 10,954

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. DELTA-MACON BRICK AND TILE COMPANY, INC., and Delta Brick, a Division of Boral Bricks, Inc., Respondents.

No. 90-4381.

United States Court of Appeals Fifth Circuit.

Oct. 4, 1991.

Paul Hitterman, Aileen A. Armstrong, Deputy Associate Gen. Counsel, N.L.R.B., and Julie Broido, Atty., Washington, D.C., for N.L.R.B.

Shannan M. Kane, Washington, D.C., Tom Kilpatrick and Susan S. Hughey, Smith, Currie & Hancock, Atlanta, Ga., for Intervenor, United Broth. of Crpntrs. & Joiners.

On application for enforcement and cross-petition for review of an order of the National Labor Relations Board.

Before GOLDBERG, SMITH, and BARKSDALE, Circuit Judges.

GOLDBERG, Circuit Judge:

This is a labor case of Great Expectations: the expectations of striking employees and the expectations of those hired to permanently replace them. Both seek protective materials in the statutory framework and the developing caselaw. We reasonably expect that our decision will be a disappointment to one or the other.

LOST LABOR

Following unsuccessful efforts to renegotiate a collective bargaining agreement with its employer Delta-Macon Brick and Tile Company ("the Company") in the summer of 1979, approximately one hundred and seventy-five of the Company's two hundred and thirty-five union employees began an economic strike in support of their wage demands. In response, the Company hired thirty-seven employees as "permanent striker replacements" to fill the positions vacated by the strikers. Within twelve days, the Company and the Union settled the strike, and the strikers made unconditional offers to return to work. The Company reinstated all of the strikers except the thirty-seven whose jobs had been displaced by the permanent striker replacements. The Company placed the unreinstated strikers on a preferential hiring list and advised them that they would be rehired as job vacancies became available.

Although operations at the Company were back to normal, all was not well; the Company was feeling the brunt of the impending economic recession of the early 1980's. On January 30, 1980, due to deteriorating business conditions, the Company laid off seventy employees, five of whom were among the thirty-seven permanent striker replacements. Although the Company usually experienced annual layoffs due to the natural business cycles of the building industry, the January 1980 layoff was the most drastic in the Company's thirty year history. The Company advised the laid-off employees that their health insurance benefits would cease with the termination of their employment, but they could, if they chose to, pay for the insurance themselves. The Company did not indicate when the laid-off employees could expect to return to work.

Fourteen to sixteen months later, in March and May 1981, the Company recalled the five permanent striker replacements laid off in January 1980. ¹ In recalling them, the Company gave no consideration to offering those five positions to any of the thirty-seven unreinstated strikers whose names were on the preferential recall list since the termination of the strike in September 1979. These unreinstated strikers had substantially greater seniority than the five permanent replacements who were recalled by the Company.

On account of the Company's failure to first offer the recall positions to the thirty-seven unreinstated strikers, the Union, the United Brotherhood of Carpenters and Joiners of America, filed an unfair labor practice charge with the National Labor Relations Board ("the Board") against the Company alleging violations of sections 8(a)(1) and 8(a)(3) of the National Labor Relations Act ("the Act"). The General Counsel issued a complaint against the Company, and the case came before an Administrative Law Judge ("the ALJ") for trial. On June 9, 1982, the ALJ issued a decision recommending that the complaint be dismissed. Concluding that the laid-off, permanent striker replacements had a "reasonable expectation of recall," the ALJ held that the layoffs did not create job vacancies which the Company was later obligated to offer the unreinstated strikers. The General Counsel noted its exceptions to the ALJ's decision.

Six years later, the Board remanded the case to the ALJ to allow the General Counsel to show, in accordance with Aqua-Chem, Inc., 288 N.L.R.B. 1108, 1988 WL 214299 (May 26, 1988), enforced, 910 F.2d 1487 (7th Cir.1990), cert. denied, --- U.S. ----, 111 S.Ct. 2871, 115 L.Ed.2d 1037 (1991), that the five permanent replacements who were laid off had no reasonable expectancy of recall. In Aqua-Chem, the Board adopted a "burden-shifting analysis which attempt[s] to accommodate the policy of protecting striking workers' rights to organize with a company's need to hire and protect the jobs of replacement workers." 910 F.2d at 1490. The test "requires that the General Counsel first make a showing that any layoffs truly signified the departure of replacements: that the laid-off replacement workers had no 'reasonable expectancy of recall.' " Id. If the General Counsel makes a prima facie showing, then "the burden shifts to the employer to rebut the showing of a vacancy or to show legitimate and substantial justifications for failing to recall the striking workers" ahead of the permanent replacements. Id.

On remand, the ALJ held an evidentiary hearing at which the five permanent striker replacements testified about the events surrounding their layoff and subsequent recall. Two of the replacements testified that when they were laid off, the Company told them that they would be recalled when work picked up, but the Company did not indicate when that might happen. One of the replacements testified that he was told nothing when he was laid off. The testimony of the two other replacements suggests that they too expected that they might be recalled, but they were not told when that might occur. ²

On July 21, 1989, the ALJ issued its supplemental decision concluding, contrary to its 1982 decision, that the permanent replacements did not have a reasonable expectancy of recall. The ALJ based its decision not on the testimony of the five replacement witnesses, but rather on a clause in the collective bargaining agreement which provided that an employee laid off for a short period--not to exceed one week--could be recalled to his or her job regardless of seniority. By implication, the ALJ reasoned that once the layoff exceeded one week, "one on layoff would have no expectation of recall to his or her job in the event that more senior people in the department were out of work and available for recall." Because the Company did not assert a "legitimate and substantial justification[ ]" for hiring the replacements ahead of the unreinstated strikers, the ALJ found that the Company violated the Act.

On review, the Board affirmed the ALJ's July 21, 1989 ruling, albeit on different grounds. The Board found the ALJ's reliance on the contractual seniority clause in the collective bargaining agreement misplaced, and relied instead "on other factors" which, in the Board's view, suggested the same conclusion: that the laid-off, permanent striker replacements did not have a reasonable expectancy of recall. 297 N.L.R.B. No. 178, slip op. at 4-5. Specifically, the Board was persuaded by "the unprecedented nature of the layoff, its indefinite duration, ... that employees were given no specific indication as to when, if ever, they might be recalled, and that their medical insurance benefits were cancelled." Id. at 5. The Board concluded, therefore, that the Company violated § 8(a)(1) and § 8(a)(3) of the Act. The Board then petitioned this court for enforcement, and the Company cross-petitioned for review.

LABORING THE POINT

The right of employees to organize and strike has a long and important history in our nation's labor relations jurisprudence. Those rights have been protected for decades by the National Labor Relations Act, which prohibits employers from discriminating against employees who have engaged in a lawful strike to protest arguably unsatisfactory pay. 29 U.S.C. § 151 et seq. When employees engage in an "economic" strike, an employer may not retaliate against the striking employees by refusing to reinstate them upon their unconditional offers to return to work; otherwise, such retaliation would "discourage employees from exercising their rights to organize and strike guaranteed by ... the Act." NLRB v. Fleetwood Trailer Co., 389 U.S. 375, 378, 88 S.Ct. 543, 546, 19 L.Ed.2d 614 (1967). Accordingly, an employer must reinstate the returning strikers to their former positions absent a "legitimate and substantial business justification." Id. (quoting NLRB v. Great Dane Trailers, Inc., 388 U.S. 26, 87 S.Ct. 1792, 1797, 18 L.Ed.2d 1027 (1967)). "[O]ne such justification arises when, in an economic strike, returning strikers' jobs have been filled by workers hired as permanent replacements during the strike in order to continue operations." Eastern Air Lines v. Air Line Pilots Ass'n Intern., 744 F.Supp. 1140, 1142 (S.D.Fla.1990) (citing Fleetwood ), affirmed, 920 F.2d 722 (11th Cir.1990).

Thus, while the Act is sensitive to the rights of strikers and the potential for retaliation against them for disrupting the employer's business, the Act is equally responsive to the needs of the employer to maintain its operations throughout a strike. Toward that end, an employer whose employees are engaging in an economic strike, may, without violating the rights of striking employees, hire other persons to fill the void left by the striking employees. NLRB v. Mackay Radio & Telegraph Co., Inc., 304 U.S. 333, 345-46, 58 S.Ct. 904, 910-11, 82 L.Ed. 1381 (1938) ("Mackay "); see also Trans World Airlines, Inc. v. Independent Federation of Flight Attendants, 489 U.S. 426, 109 S.Ct. 1225, 1230, 103 L.Ed.2d 456 (1989) ("We...