Nat'l Labor Relations Bd. v. Int'l Bhd. of Teamsters

• Decision Date: 14 August 2012
• Docket Number: No. 11–1818.,11–1818.
• Citation: 691 F.3d 49
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, Cross–Respondent, v. INTERNATIONAL BROTHERHOOD OF TEAMSTERS, LOCAL 251, Respondent, Cross–Petitioner.
• Court: U.S. Court of Appeals — First Circuit

691 F.3d 49

NATIONAL LABOR RELATIONS BOARD, Petitioner, Cross–Respondent,

v.INTERNATIONAL BROTHERHOOD OF TEAMSTERS, LOCAL 251, Respondent, Cross–Petitioner.

No. 11–1818.

United States Court of Appeals,First Circuit.

Heard Feb. 8, 2012.

Decided Aug. 14, 2012.

David A. Seid, with whom Ruth E. Burdick was on brief, for petitioner.

Marc B. Gursky, with whom Elizabeth Wiens and Gursky Law Associates were on brief, for respondent.

Thomas J. McAndrew, with whom Thomas J. McAndrew & Associates were on brief, for intervenor J.H. Lynch & Sons, Inc.

Before LYNCH, Chief Judge, SOUTER,^* Associate Justice, and LIPEZ, Circuit Judge.

LIPEZ, Circuit Judge.

This case is before us upon an application for enforcement, and a cross-petition for review, of an order of the National Labor Relations Board (“NLRB” or the “Board”). Although the dispute between the parties has involved many issues, there is one central issue in this appeal—whether a May 28, 1999 letter of agreement (the “May 1999 agreement”) between the International Brotherhood of Teamsters, Local 251 (“Local 251” or the “union”) and J.H. Lynch & Co. (“Lynch”) violated section 8(e) of the National Labor Relations Act (the “Act”), 29 U.S.C. § 158(e), by impermissibly preventing Lynch from doing business with two third-party subcontractors. The Administrative Law Judge (“ALJ”) who originally heard the case found that the agreement did not violate section 8(e) with respect to one subcontractor, but did with respect to the other. Upon review, the NLRB, emphasizing the plain terms of the May 1999 agreement, found that the agreement's application to both subcontractors violated section 8(e) of the Act and entered a remedial order.

The Board now applies for enforcement of its order. In turn, Local 251 petitions for limited review of the NLRB's decision, arguing that the NLRB erred in reversing the ALJ and that, because more than 10 years passed between the events in question and the NLRB's decision, it would be inappropriate to enforce the decision.

We conclude that the NLRB erred in finding that the May 1999 agreement violated section 8(e) of the Act with respect to one of the subcontractors. In light of contradictory evidence in the record that the Board failed to consider, the plain text of the May 1999 agreement is not substantial evidence supporting the Board's conclusion that the agreement had an impermissible intent. Rather, as the ALJ found, the evidence in the record indicates that the agreement was intended to preserve union jobs at Lynch, a lawful purpose under the Act. Therefore, we reverse the Board's finding with respect to this aspect of the May 1999 agreement. However, the union does not challenge the Board's finding as it relates to the other subcontractor, and thus the Board is entitled to enforcement of that aspect of its order. Accordingly, we grant the Board's application for enforcement only as to the agreement's prohibition on Lynch's use of that second subcontractor.

I.

A. The Dispute

Lynch is a highway construction general contractor with facilities in Rhode Island, and a signatory of the Construction Industries of Rhode Island's (“CIRI”) collective bargaining agreement with Local 251. CIRI is an association representing construction industry employers in Rhode Island. As of 2000, there were approximately 100 Rhode Island employers who had joined the CIRI collective bargaining agreement with Local 251 and were thus bound by its terms. Local 251 is the Teamsters local union with jurisdiction over Rhode Island and portions of Massachusetts. Local 251 is the longtime representative of truck drivers employed by Lynch, although the number of members in Local 251's bargaining unit at Lynch has been steadily declining. Lynch employed 26 Local 251 members in 1995, 16 in 1997, and only 10 in 2001. According to Local 251's vice president and business agent, Joseph Boyajian, this decline is part of a concerted effort on the part of Lynch to replace its unionized drivers with non-union subcontractors. Before the ALJ, he testified that, each time a truck driver retired, Lynch would sell a truck and replace that person with a subcontractor, gradually reducing the number of bargaining unit employees.

Lynch acknowledged that hiring subcontractor drivers was a common practice, noting that during particularly busy times it would hire as many as 30 to 40 additional trucks each day. These additional drivers were employed by several different subcontractors, many of which were non-union employers. Boyajian was especially troubled by Lynch's use of two subcontractors, Northeast Transportation, Inc. (“Northeast”) and Cullion Excavating Corp. (“Cullion”), because these two subcontractors did not pay the prevailing rate to their drivers.¹ The collective bargaining agreement (“CBA”) between Local 251 and CIRI provides that employers are not permitted to use subcontractors unless employees of the subcontractors are paid the prevailing rate. Over the course of several years, Boyajian complained to Lynch about its use of subcontractors, especially Northeast, that did not pay the prevailing rate. Finally, in May 1999, Local 251 filed grievances with the NLRB complaining that the use of subcontractors who failed to pay the prevailing rate was a violation of the union's CBA with CIRI.²

After these grievances were filed, Boyajian met with David Lynch, the president of Lynch, and Billy Cabral, Lynch's controller, to discuss the issue. At the meeting, Lynch promised not to use Northeast or Cullion, and he subsequently sent a May 28, 1999 letter to Boyajian memorializing the agreement between the parties. In relevant part, this letter states:

The trucking services of Northeast Transportation Corp. and Cullion Excavating Corp. will not be utilized. Should a particular project come along that requires excessive trucking and we are not able to supplement our fleet adequately, we will notify you of the situation to allow us to amicably resolve the problem. The Employer acknowledges the Union's right to strike to enforce this Agreement.

This agreement is the primary subject of the dispute between the parties at this stage.

In April 2001, Boyajian learned that Lynch was again using Northeast for trucking services, even though Northeast drivers still were not being paid the prevailing rate. After Lynch indicated that it intended to continue to use Northeast, Local 251 members went on strike on April 16, 2001, at Lynch locations in Cumberland and East Providence. Lynch sought a temporary restraining order enjoining the strike, which was eventually resolved by the union's agreement to end the strike on April 23, 2001. In a separate lawsuit, Lynch sought money damages against Local 251 for what it alleged to be an illegal strike.³

B. The ALJ's Decision

Immediately following the strike, Lynch filed several charges against Local 251 with the NLRB alleging violations of section 8(b)(4)(ii)(A) & (B) and 8(e) of the Act.⁴ These charges were consolidated with those filed by another employer and the case referred to an administrative law judge. With regard to the charges brought by Lynch, the major issue was whether the parties' May 1999 agreement violated section 8(e) of the Act by impermissiblypreventing Lynch from doing business with a third party. As described in greater detail below, such an agreement is valid if its objective is the preservation of work for bargaining unit employees—such an agreement involves primary activity. In contrast, if the purpose of the agreement is to further union objectives with respect to a third party (e.g., pressuring the third party to accept unionization of its employees), it involves secondary activity and violates section 8(e). Thus, the focus of the ALJ was an inquiry into Local 251's motives in entering into the May 1999 agreement.

After eight days of hearings, held between August and December of 2001, the ALJ issued his decision on April 25, 2002. He found that the May 1999 agreement, memorialized by Lynch's May 28, 1999 letter, violated section 8(e) of the Act with regard to Cullion, but not Northeast. The written decision explains that “the May 1999 agreement is secondary activity with regards to Cullion because the Union has not established that Cullion was performing work traditionally performed by Lynch's bargaining unit employees.” In contrast, the ALJ found that the Northeast drivers hired by Lynch were doing bargaining unit work. Therefore,

the ... agreement and the Union's efforts to enforce it with regard to Northeast in April 2001, were valid efforts at ‘work preservation’.... [Accordingly, the] dispute with Lynch over the use of Northeast trucks [is] a primary dispute and therefore I find that the parties' May 1999 agreement with regard to Northeast did not violate Section 8(e). Similarly, I find that the Union's efforts to enforce this agreement in April 2001 did not violate Section 8(b)(4).

C. The NLRB's Decision

The NLRB reversed the ALJ's decision with respect to Northeast. While it applied the same legal standard, and stated that it did not intend to disturb the ALJ's findings of fact, the NLRB found that “the May 1999 agreement [between Local 251 and Lynch] violated Section 8(e) on its face without regard to whether the work covered by the agreement was work traditionally performed by employees in the unit.”

In reaching this conclusion, the NLRB focused on the fact that the May 1999 agreement singled out two companies, Northeast and Cullion. It acknowledged that “an agreement that permits an employer to subcontract bargaining unit work only to subcontractors that honor the economic terms of the collective-bargaining agreement serves a lawful primary purpose—eliminating any economic incentive to take work away from employees in the unit.” However, it found that the May 1999 agreement was more akin to a union signatory clause, which forbids an employer from subcontracting work to any person not party to an agreement with the...