N.L.R.B. v. Joseph Magnin Co.

• Decision Date: 03 May 1983
• Docket Number: No. 82-7165,82-7165
• Citation: 704 F.2d 1457
• Parties: 113 L.R.R.M. (BNA) 2476, 97 Lab.Cas. P 10,101 NATIONAL LABOR RELATIONS BOARD, Appellee, v. JOSEPH MAGNIN COMPANY, Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1457

704 F.2d 1457

113 L.R.R.M. (BNA) 2476, 97 Lab.Cas. P 10,101

NATIONAL LABOR RELATIONS BOARD, Appellee, v. JOSEPH MAGNIN COMPANY, Appellant.

No. 82-7165.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Dec. 14, 1982.

Decided May 3, 1983.

Jerrold J. Wohlgemuth, Washington, D.C., for N.L.R.B.

Kathleen M. Kelly, Littler, Mendelson, Fastiff & Tichy, Roland C. Davis, Davis, Cowell & Rowe, San Francisco, Cal., for Joseph Magnin Co.

On Application for Enforcement of an Order of the National Labor Relations Board.

Before WALLACE and FERGUSON, Circuit Judges, and GRANT, ^* District Judge.

FERGUSON, Circuit Judge:

The National Labor Relations Board petitions for enforcement of its order finding the Joseph Magnin Company in violation of sections 8(a)(3) and (1) of the National Labor Relations Act, 29 U.S.C. Sec. 158(a)(1), (3), and ordering that affected employees be made whole. We enforce the Board's order.

FACTS

Joseph Magnin Company, Inc. operates retail stores in California and other western states. It currently has seven locations within San Francisco, including its O'Farrell Street store (Store No. 1). Prior to 1977 the company had voluntarily extended recognition to Department Store Employees Local 1100 and extended the collective bargaining agreement to each of its newly opened stores in San Francisco. However, its locations outside the city remained unorganized. In 1977 Magnin opened the Embarcadero store in San Francisco without extending recognition.

The company has a policy, which first appeared in written form in 1977, of not transferring hourly employees between locations, with exceptions only for employee relocations or promotions. When the Embarcadero store opened, the company refused to transfer employees from organized locations but did allow some transfers from unorganized locations, claiming that each transfer fell within an exception to its policy. The union filed unfair labor practice charges at that time, which were dismissed for lack of evidence of unlawful motivation. The union later won a representation election at the Embarcadero store.

For some time before 1978, Joseph Magnin had operated a Gucci department in Store No. 1 which was devoted exclusively to the products of that designer. In 1978 Magnin entered into an agreement with Gucci to open several separate Gucci shops, one of which was to be on Post Street in San Francisco. The company did not inform its employees of its plans to open the new Gucci shop; rather, it took affirmative steps to conceal its plans from them. After the plans became public, those employees who asked about transfers were told that none would be permitted, and one who attempted to apply was told it would be futile. Employees were told, however, they could resign, thereby losing their accumulated seniority, and then apply for jobs at the new store.

An employee at Store No. 1 filed a grievance in September, 1978. The union requested arbitration and when the company withdrew its participation, procured a state court order to arbitrate. The arbitrator issued an award finding that the company had discriminated against union employees at Store No. 1 on account of their union affiliation, in violation of the collective bargaining agreement, and recommended that employees in the Gucci department at Store No. 1 be allowed to transfer to the new Gucci shop on Post Street.

Meanwhile, the union filed unfair labor practice charges with the NLRB in 1979 and a hearing was held before an administrative law judge (ALJ). The Board, adopting the findings of the ALJ, found that the company had violated sections 8(a)(3) and (1) by refusing to transfer employees from organized San Francisco locations to the new Gucci shop in order to prevent the union from gaining majority status at the new location. It ordered the company to make whole through transfer "any employees found to have been discriminated against because of union membership either by being denied transfer opportunities or by being discouraged from applying for transfer." 257 N.L.R.B. 656, 658 (1982). Additionally, the Board found that the company's actions had made it impossible to determine whether the union would have represented a majority of the Gucci shop employees at its opening absent the company's unfair labor practices. It therefore found a bargaining order inappropriate, but did order that backpay be computed as if the collective bargaining agreement had been in effect. Id. The Board then applied for enforcement, and the company cross-appealed both the determination of violation and the remedy ordered.

ANALYSIS

I. Unfair Labor Practice.

Section 8(a)(3) of the Act prohibits an employer from discriminating in its treatment of employees in order to discourage union membership. Section 8(a)(1) prohibits employer interference with employees' rights to organize and bargain collectively; a violation of 8(a)(1) may be predicated on an 8(a)(3) violation. ¹ The Board's determination that Joseph Magnin refused to transfer organized employees in order to avoid organization of its Gucci shop must be upheld if supported by substantial evidence on the record as a whole. NLRB v. Brooks Camera, Inc., 691 F.2d 912, 915 (9th Cir.1982); NLRB v. Anchorage Times Publishing Co., 637 F.2d 1359, 1363 (9th Cir.), cert. denied, 454 U.S. 835, 102 S.Ct. 137, 70 L.Ed.2d 115 (1981).

Our review of the record convinces us that the Board's determination is well supported. Although the Board considered evidence concerning prior events surrounding the opening of the Embarcadero store as "background," the evidence of a violation drawn solely from the company's actions concerning the Gucci shop opening is "reasonably substantial in its own right." NLRB v. MacMillan Ring-Free Oil Co., 394 F.2d 26, 33 (9th Cir.) cert. denied, 393 U.S. 914, 89 S.Ct. 237, 21 L.Ed.2d 199 (1968). While events occurring more than six months before filing may not be used as the basis of a charge, 29 U.S.C. Sec. 160(b), under the circumstances the Board was entitled to consider the Embarcadero store evidence to "shed light on the true character of matters occurring within the limitations period." Local Lodge No. 1424, I.A.M. v. NLRB, 362 U.S. 411, 416, 80 S.Ct. 822, 826, 4 L.Ed.2d 832 (1960); NLRB v. MacMillan Ring-Free Oil Co., 394 F.2d at 33.

The Board determined that Joseph Magnin's refusal to transfer employees to the Gucci shop was based on its desire to avoid unionization of that shop rather than on any neutral policy. In analyzing motivation, the Board must rely on circumstantial as well as direct evidence, and "is to be accorded special deference in drawing derivative inferences from the evidence." NLRB v. Tischler, 615 F.2d 509, 511 (9th Cir.1980). The Board had before it ample evidence of the company's desire to open the Gucci shop non-union. Additionally, the ALJ specifically found that the company refused to consider transferring employees from Store No. 1 even when such transfers would have fallen within the company's stated exceptions to its policy. The Board's inference of unlawful motivation is thus reasonable and must be accepted. NLRB v. Miller Redwood Co., 407 F.2d 1366, 1369 (9th Cir.1969).

II. Deferral to Arbitration.

Joseph Magnin contends that the Board erred in refusing to defer to the arbitrator's award, which found that the company had discriminated against union members, but failed to make any backpay award. The Board has wide discretion in determining whether or not to defer to an arbitrator's award, and only abuses that discretion if "it fails to follow its own deferral standards or if the standards themselves are invalid." Ad Art, Inc. v. NLRB, 645 F.2d 669, 675 (9th Cir.1980). In Spielberg Mfg. Co., 112 N.L.R.B. 1080 (1955), the Board announced that it would defer to an arbitration proceeding if (1) the proceedings appear to have been fair and regular; (2) all parties agree to be bound; and (3) the arbitrator's decision is not repugnant to the purpose and policies of the Act. These criteria were approved by the Supreme Court in Carey v. Westinghouse Electric Corp., 375 U.S. 261, 84 S.Ct. 401, 11 L.Ed.2d 320 (1964). The Board will, however, refuse to defer "unless the unfair labor practice issue before the Board was both presented to and considered by the arbitrator." Suburban Motor Freight, Inc., 247 N.L.R.B. No. 2 (1980), quoted in Ad Art, Inc. v. NLRB, 645 F.2d at 676.

We note in passing that at the administrative hearing, the company argued that the ALJ should not defer to the award. We need not address the significance, if any, of the company's change in position, however, since under the law of this circuit, the Board was entitled to refuse to defer under the third prong of the Spielberg test, as glossed by Suburban Motor Freight.

The Board found this case inappropriate for deferral based on the ALJ's determination that the arbitrator was not presented with sufficient evidence by the parties and was therefore unable to make findings of fact crucial to shaping the necessary remedy with regard to backpay. This circuit has stated that "[t]he Board has wide discretion to apply its Spielberg criteria," NLRB v. Max Factor & Co., 640 F.2d 197, 204 (9th Cir.1980), cert. denied, 451 U.S. 983, 101 S.Ct. 2314, 68 L.Ed.2d 840 (1981), and in fact has questioned the authority of a reviewing court to interpret those criteria differently from the Board. Id. at 204 n. 7. Thus, the Board is not required to defer to an arbitral award where the arbitrator's inability to make a determination on appropriate relief, in the Board's sound discretion, renders the award repugnant to the purpose and policies of the Act. ²

III. Make-whole Remedy.

Section 10(c) of the Act empowers the Board, upon finding that an unfair labor practice has been committed, to order the violator to cease and desist and "to take such affirmative action ... as will effectuate the policies of [the] Act." 29 U.S.C. 160(c). Under this section, "...