N.L.R.B. v. L.B. Priester & Son, Inc., 81-4060

• Citation: 669 F.2d 355
• Decision Date: 05 March 1982
• Docket Number: No. 81-4060,81-4060
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)
• Parties: 109 L.R.R.M. (BNA) 3208, 65 A.L.R.Fed. 1, 93 Lab.Cas. P 13,275 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. L. B. PRIESTER & SON, INC., Respondent.

Page 355

669 F.2d 355

109 L.R.R.M. (BNA) 3208, 65 A.L.R.Fed. 1,

93 Lab.Cas. P 13,275

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. L. B. PRIESTER & SON, INC., Respondent.

No. 81-4060.

United States Court of Appeals Fifth Circuit.

March 5, 1982.

Elliott Moore, Deputy Associate Gen. Counsel, Joseph Alan Schwachter, N. L. R. B., Washington, D. C., for petitioner.

Paul O. Miller, III, Jackson, Miss., for respondent.

Application for Enforcement of an Order of the National Labor relations board.

Before GARZA and RANDALL, Circuit Judges ^*.

RANDALL, Circuit Judge:

The National Labor Relations Board ("NLRB" or "the Board") petitions for enforcement of its order directing L. B. Priester & Son, Inc. ("Priester" or "the company") to abide by a collective bargaining agreement and to reimburse several employees for underpayments in wages. Opposing enforcement of the order, Priester argues that it permissibly withdrew from the multiemployer bargaining unit that negotiated the collective bargaining agreement and, alternately, that the Board misinterpreted certain of its provisions. We conclude that the Board's order should be enforced.

I. Background

Priester is a general construction contractor based in Meridian, Mississippi. From 1956 until 1977, Priester was a member of the Meridian Contractors Association ("the association"), an employer organization which represents its members in negotiating collective bargaining agreements with local unions. On May 26, 1977, Local 2313, United Brotherhood of Carpenters and Joiners of America, AFL-CIO ("the union") notified the association that it desired to begin negotiations on a contract to replace the agreement between the union and the association due to expire on July 31, 1977. From June through August of that year, representatives of the parties met on several occasions to discuss a new contract. Priester's secretary-treasurer, Ralph Priester, Sr., then serving as president of the association, figured prominently in these discussions.

The final negotiating session was held on August 9. At one point in the meeting, the members of the association's bargaining committee adjourned to confer regarding the most troublesome issue: the wage increase. Ralph Priester suggested to the committee that no increase be offered, declaring that his firm could not afford an increase in labor costs and threatening to withdraw from the association if one was offered. The committee nevertheless decided to propose an increase to the union representatives, who accepted the proposal pending ratification by their membership. On August 16, one day after the agreement was ratified, the company withdrew from the association and Ralph Priester resigned as its president. Approximately one week later, the company informed a union representative of this action and refused to sign the new agreement.

The union filed an unfair labor practice charge on September 30, alleging that the company unlawfully refused to bargain by not signing the contract and by not complying with its terms. The company signed an informal settlement agreement two months later in which it agreed to abide by the new contract and to compensate employees who were paid less than the contract rate for their work. Despite this settlement, a second charge was filed on May 22, 1978 averring that Priester continued to refuse to pay the contract scale. The NLRB subsequently withdrew its approval of the settlement of the first charge, issued a consolidated complaint and scheduled a hearing before an administrative law judge (ALJ).

Following the hearing, the ALJ found that Priester's withdrawal from the bargaining unit was not excused by economic hardship. The ALJ also rejected Priester's claims narrowing the geographical boundaries of the contract, restricting it to members only, and limiting its definition of "journeyman." The ALJ concluded that Priester had violated §§ 8(a)(1), (5) and § 8(d) of the National Labor Relations Act ("NLRA" or "the Act") ¹ by refusing to sign the agreement and honor its terms. The Board affirmed the ALJ's order, and modified it to remedy wage underpayments occurring before settlement of the first charge. Pursuant to § 10(e) of the NLRA, 29 U.S.C. § 160(e), the Board now seeks enforcement of this order.

II. Withdrawal from Multiemployer Bargaining Units: Extreme Financial Pressures

A. Standard of Review.

Disputing the Board's conclusion that it unlawfully refused to bargain, Priester contends that its withdrawal was justified by serious economic difficulties. The Board argues that Priester's financial troubles were not acute enough to permit it to abandon an established multiemployer bargaining unit after negotiations had begun. The standard guiding our consideration of these arguments is tailored to afford appropriate deference to the Board's expertise in "applying the general provisions of the Act to the complexities of industrial life." NLRB v. Erie Resistor Corp., 373 U.S. 221, 236, 83 S.Ct. 1139, 1150, 10 L.Ed.2d 308 (1963). Whether Priester's conduct amounts to a statutory refusal to bargain is a mixed question of fact and law, requiring an examination of the legal effect of a given set of facts. The NLRB's resolution of such questions is to be upheld if reasonable, consistent with the Act, and based on findings supported by substantial evidence. NLRB v. Yeshiva University, 444 U.S. 672, 691, 100 S.Ct. 856, 867, 63 L.Ed.2d 115 (1980); Ford Motor Co. v. NLRB, 441 U.S. 488, 496-97, 99 S.Ct. 1842, 1848-49, 60 L.Ed.2d 420 (1979). ² Respect for the Board's expertise is particularly proper here, since Congress' deliberate inaction with regard to multiemployer bargaining indicates a commitment by Congress of the issues it raises to the Board's specialized judgment. Charles D. Bonanno Linen Service, Inc. v. NLRB, --- U.S. ----, ----, 102 S.Ct. 720, 723, 70 L.Ed.2d --- (1982); NLRB v. Truck Drivers Union, 353 U.S. 87, 96, 77 S.Ct. 643, 647, 1 L.Ed.2d 676 (1957) (Buffalo Linen).

B. The Retail Associates Rule.

Section 9(a) of the NLRA, 29 U.S.C. § 159(a), provides that employee bargaining representatives shall be selected by "the majority of the employees in a unit appropriate for such purposes." Section 9(b) charges the Board with the responsibility of deciding whether "the unit appropriate for the purposes of collective bargaining shall be the employer unit, craft unit, plant unit or subdivision thereof...." 29 U.S.C. § 159(b). Nowhere does the Act mention multiemployer bargaining units; the prototypical unit envisioned by the NLRA is employerwide or smaller. Despite the absence of explicit statutory authority, however, bargaining between employer coalitions and large unions representing their workers predates the NLRA and has expanded since its enactment. It also has been held to fall within the Board's purview. In Buffalo Linen, the Supreme Court inferred an intent that the Board continue to certify and regulate multiemployer units from Congress' rejection of efforts to curb multiemployer bargaining. Id. at 96, 77 S.Ct. at 647. The Court reaffirmed this position in Bonanno. Id. at ---, 102 S.Ct. at 725.

The prevalence of multiemployer bargaining ³ is attributable to the advantages it offers employers and unions, especially in certain types of industries in which employerwide bargaining may be difficult. Each side may be able to obtain an improved bargaining position, more reliable information on competitive conditions, and the opportunity for less frequent and less costly negotiations. The enhanced stability in labor-management relations that may result is also a pronounced objective of national labor policy. See NLRA § 1, 29 U.S.C. § 151. As we recently noted, "(t)he mechanism of a MEBU (multiemployer bargaining unit) can serve an important function in promoting efficient and consistent bargaining in an industry, as well as promoting the bedrock goal of industrial peace." Baton Rouge Building and Construction Trades Council v. E. C. Schafer Construction Co., 657 F.2d 806, 811 (5th Cir. 1981).

Multiemployer bargaining units are viable only if stable. To ensure stability, the Board has adopted guidelines governing resignation from such units, with the goal of removing the threat of withdrawal as a bargaining tool. Under these guidelines, announced in Retail Associates, 120 N.L.R.B. 388 (1958), upon adequate notice a party may withdraw freely prior to the commencement of negotiations for a new contract. After negotiations have begun, however, withdrawal is permissible only with consent of the parties involved ⁴ or in "unusual circumstances." This standard has won judicial approval. ⁵ Subsequent decisions by the Board and the courts have defined what sorts of circumstances are unusual enough to excuse untimely withdrawal. In Bonanno, the Supreme Court resolved a split among the circuits by upholding the Board's and this court's view that a bargaining impasse alone does not trigger a right to withdraw unilaterally. NLRB v. Marine Machine Works, 635 F.2d 522 (5th Cir. 1981); Hi-Way Billboards, Inc., 206 N.L.R.B. 22 (1973). Three other situations, however, have been held to excuse untimely withdrawal. At least one court, though not the Board, has held that an employer may withdraw where the employer association's negotiating committee does not fairly represent its interests. NLRB v. Siebler Heating & Air Conditioning, Inc., 563 F.2d 366 (8th Cir. 1977), cert. denied, 437 U.S. 911, 98 S.Ct. 3104, 57 L.Ed.2d 1142 (1978). Withdrawal after negotiations have commenced also has been permitted where the unit has been seriously fragmented, e.g., NLRB v. Southwestern Colorado Contractors Ass'n, 447 F.2d 968, 969-70 (10th Cir. 1971); Typographic Service Co., 238 N.L.R.B. 1565 (1978), or where an employer is suffering from extreme financial pressures. Priester contends that its withdrawal is excused by this last exception.

Although the Board has permitted some resignations from multiemployer bargaining due to...