Olinkraft, Inc. v. N.L.R.B.
| Decision Date | 28 January 1982 |
| Docket Number | No. 80-3895,80-3895 |
| Citation | 666 F.2d 302 |
| Parties | 109 L.R.R.M. (BNA) 2573, 93 Lab.Cas. P 13,245 OLINKRAFT, INC., Petitioner, Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Cross-Petitioner. . Unit A * |
| Court | U.S. Court of Appeals — Fifth Circuit |
Peyton Lacy, Jr., West Monroe, La., G. Phillip Shuler, III, David L. McComb, New Orleans, La., John Hemrick, West Monroe, La., for petitioner, cross-respondent.
Elliott Moore, Deputy Associate Gen. Counsel, Vivian A. Miller, N. L. R. B., Washington, D. C., for respondent, cross-petitioner.
Petition for Review and Cross Application for Enforcement of an Order of the National Labor Relations Board.
Before BROWN and GARZA, Circuit Judges, and BEER **, Judge.
This controversy originated in a charge filed by the United Paperworkers International Union (Union) in January, 1980, alleging that Olinkraft, Inc. (Olinkraft) violated the National Labor Relations Act, 29 U.S.C. § 151 et seq., by unilaterally subcontracting work that could have been performed by bargaining unit employees. Following issuance of a complaint and a subsequent hearing, the ALJ concluded that the subcontracting was unlawful. The NLRB issued a Decision and Order on September 30, 1980, adopting the findings of the ALJ. Olinkraft filed a petition for review of the order, and the Board has cross-applied for enforcement of its order. For the reasons set forth below, we enforce in part, deny in part, and remand to the Board for issuance of a new order consistent with this opinion.
Olinkraft owns and operates a paper mill in West Monroe, Louisiana, and its production and maintenance employees are represented for purposes of collective bargaining by the Union. Each year at Christmas, the mill shuts down for several days, an event called the "cold outage", primarily to perform maintenance on equipment that cannot be accomplished during normal operations. The 1979 Christmas outage, lasting from December 24-29, is the source of this controversy.
Although the regular maintenance employees are usually scheduled to work long hours during a Christmas outage, the remaining necessary work is assigned to subcontractors to ensure completion during the shutdown. This annual procedure has typically created disagreements with the Union. In 1979, Olinkraft carefully planned the outage, lining up many of the subcontractors and scheduling its own employees for 12-hour days during the outage period. On December 17, 1979, Olinkraft met with a Union committee and handed over a list of some 50 to 60 "overload jobs" it believed necessary to subcontract. The committee examined the list and demanded that some of the work be given to Union members.
Olinkraft urges that this Union committee is, and has been for years, the bargaining unit regarding the subcontracting to be done during the cold outages. Prior to 1971, all capital improvement work was contracted out, but that year the Union bargained for a Capital Appropriations Request Crew (CAR Crew) to perform new construction for overload maintenance work. The provisions establishing the CAR Crew also set up the committee to review new construction assignments to outside contractors. From 1971 through 1978, numerous grievances protesting the subcontracting of maintenance work were filed. In 1978, Olinkraft settled the backlog of grievances by paying a sum of money and executing an agreement that it would meet with the CAR Committee seven days prior to subcontracting work to inform the Union of its intention to bring in outside contractors. No representative from the International Union attends CAR Committee meetings.
At the December 17, 1979, committee meeting the Union told the management representative that it appeared that the majority of the work orders were for routine maintenance work. Testimony indicated that the Union local president stated that it would take some time to distinguish the routine maintenance jobs from the new construction work and to review which new construction jobs could be performed by Union employees. Olinkraft's company manager replied that the company had already begun subcontracting, and that a certain amount of "lead time" was required to obtain the workers needed to do the jobs. The Union then informed Olinkraft that grievances would be filed, and no further discussions took place between Olinkraft and the Union. That day, subcontractors began one of the jobs, but most jobs began December 24 and continued until December 29.
The Union argues that many of the jobs performed by subcontractors could have been done by unit employees when the plant was operational, and also that subcontractors performed jobs that had not been included in the packet given to the CAR Committee. The Board found, in agreement with the ALJ and the Union, that Olinkraft had unlawfully contracted out unit work without affording the collective bargaining representative adequate, timely notice and an opportunity to bargain.
Olinkraft primarily argues that no evidence of adverse impact on unit employees was established by the Union. During the 1979 Christmas outage, all unit employees were scheduled for the same amount of work as in past years, and in fact worked more hours than in past outages. Olinkraft points out that the Board's decision (i) reveals an inability to establish conclusively any adverse impact and (ii) even concedes that the evidence did not establish the amount of earnings supposedly lost by unit employees.
From this foundation, Olinkraft argues that the type of subcontracting that causes no replacement of any unit employee, no change in condition of employment, and no impairment of employment security or work opportunities, does not give rise to a bargaining obligation.
In Town & Country Manufacturing Co. v. NLRB, 316 F.2d 846 (5th Cir. 1963), this Court held that a company which contracted out work in part to rid itself of a union violated the NLRA, 29 U.S.C. § 158 et seq. However, we were careful not to say that the company is under a duty to agree with the Union that the work may not be contracted out if after reasonable bargaining the company adheres to its decision to conduct its business in that way. (We) merely ... hold that the company, rescinding its plan of contracting out its hauling work and reinstating its employees, as ordered by the Board must in good faith bargain with the Union which has been certified as employees' representative, upon the question whether the company should not return to its former method of doing its hauling with its own employees.
316 F.2d at 847. Shortly after that opinion, the Supreme Court addressed the duty to bargain with regard to contracting out work:
Experience illustrates that contracting out in one form or another has been brought, widely and successfully, within the collective bargaining framework....
We are thus not expanding the scope of mandatory bargaining to hold, as we do now, that the type of "contracting out" involved in this case-the replacement of employees in the existing bargaining unit with those of an independent contractor to do the same work under similar conditions of employment-is a statutory subject of collective bargaining under (NLRA) § 8(d).
Fibreboard Corp. v. NLRB, 379 U.S. 203, 211, 215, 85 S.Ct. 398, 403, 405, 13 L.Ed.2d 233, 239, 241 (1964). Thus the contours of our analysis begin to emerge-contracting out work is sometimes a statutory subject of collective bargaining. The Board, in Westinghouse Electric Corp., 150 N.L.R.B. 1574, ----, 58 L.R.R.M. 1257 (1965), specifically set forth the factors to be considered in the determination of the employer's duty to bargain concerning contracting out work:
(W)here the Board has found unilateral contracting out of unit work to be violative of Section 8(a)(5) and (1), it has invariably appeared that the contracting out involves a departure from previously established operating procedures, effected a change in conditions of employment, or resulted in a significant impairment of job tenure, employment security, or reasonably anticipated work opportunities for those in the bargaining unit.
This test was applied by the court in AMCAR Division v. N.L.R.B., 596 F.2d 1344, 1349 (8th Cir. 1979). While the company in that suit maintained that its own unit employees were lacking in both skill and numbers to complete the required work during an annual two-week shutdown, "these arguments cannot be used to defeat the employees' right to notice and an opportunity to bargain if, in fact, the employees are adversely affected by the decision to contract the work out." 596 F.2d at 1349. On four of the five jobs contracted out by AMCAR, there was substantial evidence to support the Board's finding that the NLRA was violated. However, on a fifth project, the Board failed to prove adverse impact on the bargaining unit. 596 F.2d at 1350-51. A foundational prerequisite is thus established for the obligation of the employer to bargain before contracting out work, namely the existence of some adverse impact.
The Board adopted the findings of facts and conclusions of the ALJ. No disagreement existed as to the facts underlying this controversy, and the dispute centered around whether the CAR Committee was to be a sounding board for all subcontracting, including new construction, refurbishing, and routine maintenance. The Union's primary contention was that the 1979 Christmas outage subcontracts were entered into either without giving prior notice to the Union, or without giving adequate timely notice, and in either case without affording an opportunity to bargain. Olinkraft contended that it met with the Union, gave the 7-day required notice, discussed the subcontracting, and thus fulfilled its bargaining obligations.
The ALJ was "impressed", perhaps too impressed, by the testimony of the president of the...
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