N.L.R.B. v. Sheet Metal Workers Intern. Ass'n, Local Union No. 38

• Decision Date: 20 April 1978
• Docket Number: D,No. 696,696
• Citation: 575 F.2d 394
• Parties: 98 L.R.R.M. (BNA) 2147, 83 Lab.Cas. P 10,561 NATIONAL LABOR RELATIONS BOARD, Petitioner, and Elmsford Sheet Metal Works, Inc., Intervenor, v. SHEET METAL WORKERS INTERNATIONAL ASSOCIATION, LOCAL UNION NO. 38, Respondent. ocket 77-4196.
• Court: U.S. Court of Appeals — Second Circuit

Page 394

575 F.2d 394

98 L.R.R.M. (BNA) 2147, 83 Lab.Cas. P 10,561

NATIONAL LABOR RELATIONS BOARD, Petitioner and Elmsford Sheet Metal Works, Inc., Intervenor, v. SHEET METAL WORKERS INTERNATIONAL ASSOCIATION, LOCAL UNION NO. 38, Respondent.

No. 696, Docket 77-4196.

United States Court of Appeals Second Circuit.

Argued March 17, 1978.

Decided April 20, 1978.

Paul J. Spielberg, Deputy Asst. Gen. Counsel, and Edward S. Dorsey, Washington, D. C. (John S. Irving, Gen. Counsel, John E. Higgins, Jr., Deputy Gen. Counsel, Carl L. Taylor, Associate Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel, Washington, D. C., of counsel), for petitioner.

Singer & Silverstein, White Plains, N. Y. (Alan D. Singer, New York City, of counsel), for intervenor.

Delson & Gordon, New York City (Jeffrey S. Dubin and Ralph P. Katz, New York City, of counsel), for respondent.

Robert J. Fenlon, Robert L. Bach, Felhaber, Larson, Fenlon & Vogt, Saint Paul, Minn., for Sheet Metal and Air Conditioning Contractors National Ass'n as amicus curiae.

Granik, Silverman, Sandberg & Nowicki, New City, N. Y. (David W. Silverman and Paul V. Nowicki, New City, N. Y., of counsel), for Sheet Metal and Roofers Employers Ass'n of Southeastern New York, Inc. as amicus curiae.

Donald W. Fisher, Toledo, Ohio (Mulholland, Hickey, Lyman, McCormick, Fisher & Hickey, Toledo, Ohio, of counsel), for Sheet Metal Workers' International Ass'n, AFL-CIO as amicus curiae.

Before GEWIN ^* and MULLIGAN, Circuit Judges, and POLLACK, ^** District Judge.

POLLACK, District Judge:

The National Labor Relations Board (Board) seeks enforcement of an order requiring Sheet Metal Workers International Association, Local Union No. 38 (the Local) to desist from unfair labor practices in connection with collective bargaining between the Local and Elmsford Sheet Metal Works (Elmsford). The Board found that the Local violated section 8(b)(3) of the National Labor Relations Act, as amended, 29 U.S.C. § 158(b)(3), by its insistence on collective bargaining agreement provisions requiring Elmsford to contribute to two industry promotion funds. The Board also found that the Local violated sections 8(b)(1)(B) and 8(b)(3) of the Act, as amended, 29 U.S.C. § 158(b)(1) (B), -(b)(3), by its insistence on a provision for binding resolution of disputes concerning the terms of the subsequent collective bargaining agreement. Sheet Metal Workers Local 38, 231 N.L.R.B. No. 101 (1977). The application is granted for the reasons set forth below.

The parties waived a hearing before and proposed report of an Administrative Law Judge, and agreed to submit this controversy directly to the Board on stipulated facts and exhibits. In September, 1975 Elmsford and the Local entered into a collective bargaining agreement for the period through June 30, 1976. Article VIII, sections 12-13 of that agreement required Elmsford to make contributions to the Sheet Metal and Air Conditioning Contractors' National Industry Fund and the Sheet Metal Industry Fund of Westchester and Vicinity, to be used

"to promote programs of industry education, training, negotiation and administration of collective bargaining agreements, research and promotion, such programs serving to expand the market for the services of the sheet metal industry, improve the technical and business skills of employers, stabilize and improve Employer-Union relations, and promote, support, and improve the employment opportunities for employees."

Article X, section 8 established a procedure for resolving "any controversy or dispute arising out of the failure of the parties to negotiate a renewal of this agreement." The section provided that if "the negotiations for renewal of this agreement become deadlocked in the opinion of" either party, that party could notify the international union and the Sheet Metal and Air Conditioners' National Association (SMACNA). If conciliation efforts by representatives of the international and SMACNA failed to produce an agreement, the controversy would be submitted to the National Joint Adjustment Board (NJAB), consisting of designees of the international and SMACNA. A unanimous decision of the NJAB would be binding. Strikes and lock-outs were barred unless and until the NJAB notified the parties that it was unable to reach a unanimous decision. Elmsford was not affiliated with SMACNA. We will refer to provisions such as Article VIII, sections 12-13 as industry fund provisions, and to provisions such as Article X, section 8 as interest arbitration provisions. ¹

On March 26, 1976 Elmsford requested renegotiation of the collective bargaining agreement, and in particular sought elimination of the industry fund and interest arbitration provisions. Elmsford met with the Local on May 11, June 7, August 30 and September 7, and on each occasion Elmsford sought elimination of these provisions from the new contract while the Local insisted on retaining them. At the September 7 meeting, the Local asserted that negotiations were deadlocked and announced that it would submit the controversy to the NJAB. It did so on September 10.

On September 23, Elmsford filed a Charge with the Board, asserting that the Local's insistence on industry fund and interest arbitration provisions violated sections 8(b)(1)(B) and 8(b)(3). The NJAB conducted a hearing on November 9, at which Elmsford did not appear. On November 11, the NJAB issued a decision directing Elmsford to execute a contract including the industry fund and interest arbitration provisions. Elmsford refused, and the Local wrote that as a result, they were "no longer in signed agreement." On November 29, the Local directed its members not to report to work at Elmsford on December 1. No work stoppage occurred, however. Elmsford and the Local signed a contract which omitted the disputed provisions, and agreed that those provisions would be added if the Board's Complaint against the Local were dismissed.

Section 8(b)(3), 29 U.S.C. § 158(b)(3), makes it an unfair labor practice for a labor organization to refuse to bargain collectively with an employer. Collective bargaining

is the performance of the mutual obligation of the employer and the representative of the employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment, or the negotiation of an agreement, or any question arising thereunder, and the execution of a written contract incorporating any agreement reached if requested by either party . . . .

29 U.S.C. § 158(d) (emphasis added). A party violates the duty to bargain collectively if it insists, as a precondition to reaching an agreement, on inclusion of a provision concerning a nonmandatory subject for bargaining, that is, a subject other than the mandatory issues of wages, hours, and other terms and conditions of employment. NLRB v. Borg-Warner Corp., 356 U.S. 342, 348-49, 78 S.Ct. 718, 2 L.Ed.2d 823 (1958).

Neither industry fund nor interest arbitration provisions are mandatory subjects for bargaining. An issue is mandatory only if it settles an aspect of the relationship between the employer and the employees. Further, it must have more than a speculative and insubstantial impact on that relationship. Chemical Workers Local 1 v. Pittsburgh Plate Glass Co., 404 U.S. 157, 178-82, 92 S.Ct. 383, 30 L.Ed.2d 341 (1971).

The Local acknowledges that the purpose of the funds is to increase the prosperity of the sheet metal industry as a whole. Accordingly, the industry fund provisions concern the relationship between the employer and the public, not between the employer and its employees. The Local contends that the funds affect the terms and conditions of employment by increasing the number of jobs available to sheet metal workers. However, this impact on the terms and conditions of employment is too insubstantial. The argument proves too much, for it applies to every management decision with an effect on the prosperity of the business. We agree with the other courts which have held that contributions to industry promotion funds are not a mandatory subject for bargaining, see NLRB v. Local 264, Laborers, 529 F.2d 778, 786 (8th Cir. 1976); NLRB v. Floor Decorators Local 2265, 317 F.2d 269 (6th Cir. 1963).

The impact of interest arbitration on the relationship between the employer and the employees is also too speculative to qualify it as a mandatory subject. An interest arbitration clause determines the procedure by which wages, hours and terms and conditions of employment under a subsequent contract may be established, if the union and the employer cannot agree. However, it is impossible to predict what issues will be submitted to interest arbitration, or whether the panel will be able to reach a decision, or, above all, what it will decide. The question is governed by Chemical Workers Local 1 v. Pittsburgh Plate Glass Co., 404 U.S. 157, 180-82, 92 S.Ct. 383, 30 L.Ed.2d 341 (1971). There, the Court rejected the argument that the terms of pensions for already-retired employees were a mandatory subject due to an effect on active employees, in that representation by their successors would safeguard the pensions of the currently active employees after they retired.

Furthermore, whether or not a subject should be included within the scope of mandatory bargaining should be determined in light of national labor policy. See Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203, 210-11, 85 S.Ct. 398, 13 L.Ed.2d 233 (1964). The Local's contention that a party is obliged to bargain concerning a demand that a subsequent collective bargaining agreement be determined by arbitration is inconsistent with the policy in favor of collective bargaining reflected in the National Labor Relations Act, 29 U.S.C. § 151. We hold that interest arbitration is not a mandatory subject for collective bargaining, in accord with every other court which has considered the issue, see NLRB v. Massachusetts Nurses...