Richmond Recording Corp. v. N.L.R.B.

• Decision Date: 01 February 1988
• Docket Number: I,86-3050 and 86-3158,No. 2043,Nos. 86-2056,AFL-CI,2043,s. 86-2056
• Citation: 836 F.2d 289
• Parties: 127 L.R.R.M. (BNA) 2148, 108 Lab.Cas. P 10,288 RICHMOND RECORDING CORP. d/b/a P.R.C. Recording Co., Petitioner-Cross- Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross-Petitioner, and International Bhd. of Elec. Workers, Local Unionntervening Respondent-Petitioner.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 289

836 F.2d 289

127 L.R.R.M. (BNA) 2148, 108 Lab.Cas. P 10,288

RICHMOND RECORDING CORP. d/b/a P.R.C. Recording Co. Petitioner-Cross- Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross-Petitioner and International Bhd. of Elec. Workers, Local Union No. 2043 AFL-CIO, Intervening Respondent-Petitioner.

Nos. 86-2056, 86-3050 and 86-3158.

United States Court of Appeals Seventh Circuit.

Argued Sept. 24, 1987.

Decided Dec. 16, 1987.

Rehearing and Rehearing En Banc Denied Feb. 1, 1988.

Frank H. Stewart, Taft, Stettinius & Hollister, Cincinnati, Ohio, Jerry A. Spicer, Snyder, Rakay & Spicer, Dayton, Ohio, for petitioner-cross-respondent.

Mark McCarty, N.L.R.B., Washington, D.C., for respondent-cross-petitioner.

Before BAUER, Chief Judge, KANNE, Circuit Judge, and ESCHBACH, Senior Circuit Judge.

ESCHBACH, Senior Circuit Judge.

In this case, Richmond Recording Company, doing business here as PRC Recording Company ("PRC"), petitions for review of an order by the National Labor Relations Board ("NLRB"). In its order, the NLRB found that PRC violated Sec. 8(a)(1) and (5) of the National Labor Relations Act, 29 U.S.C. Sec. 158(a)(1) and (5), by unilaterally implementing its contract proposals before negotiations with its employee union had reached an impasse. The NLRB also found a violation of Sec. 8(a)(1) because PRC threatened to retreat to a regressive bargaining posture if the union refused the company's "final offer." In addition, the NLRB found that PRC violated Sec. 8(a)(1) and (3) when it refused to reinstate the unfair labor practice strikers after they had made an unconditional offer to return to work. In response to PRC's petition for review, the NLRB cross-petitions for enforcement of its order. PRC's employee union, the International Brotherhood of Electrical Workers, Local Union No. 2043, is an intervening respondent-petitioner. It petitions for review of the portion of the NLRB's order upholding the discharge of twenty-four striking employees. We deny PRC's petition for review and the union's intervening petition for review, and grant the NLRB's cross-application for enforcement of its order.

I

PRC Recording Company manufactures, sells and distributes phonograph records and tapes. Its employee union is divided into two divisions: a record division and a tape division. PRC's collective bargaining agreement with the record division was due to expire April 30, 1982, and on May 1, 1982 with the tape division. The parties began renegotiating the terms of its contracts with the separate divisions prior to the expiration date of the first contract, but had not reached a new agreement by April 30, 1982. On April 30, the company's chief negotiator presented his last proposal, which he labeled his "final offer," and stated that the parties would be "back to square one" if this offer was rejected and followed by a strike. On May 1, the Union rejected this "final offer," but acquiesced to the company's request that the parties meet again on May 5.

The negotiations of May 5 did not prove to be more productive. In the morning session, the parties reached a stalemate. During the lunch break, PRC's Industrial Relations Director, Robert Jewell, went to the plant to implement unilaterally the company's proposal on job classifications. Up to that time, the employees had been divided into several job classifications, which were further subdivided into several labor grades. During contract negotiations, PRC proposed combining these job classifications so that PRC could reassign employees to new combinations more easily. However, at the time that Jewell implemented the new system, the parties had not yet reached an agreement on this proposal. While the parties were at lunch, Jewell physically destroyed the former job classification system, a manual system consisting of magnetic tapes combined with a computer tape system, as well as the record of the employees' seniority under that system. PRC did not reveal to the union Jewell's activities that day.

After lunch, when the bargaining began anew, PRC's chief negotiator declared that the parties were at an impasse. The union's chief negotiator refuted this, declaring the union's flexibility. Later that day, the union presented a new proposal which the company rejected. At 8:00 p.m., the company telephoned various employees and directed them to work in the new job classifications beginning the next day.

On May 6 and 7, some of the employees worked jobs that differed from their usual assignments. On May 8, the union voted against the tentative agreements because of PRC's unilateral implementation of its new job classifications. PRC again declared that an impasse had occurred and on May 11 unilaterally implemented the remainder of its proposals, including its wage reduction plan. On May 13, the union went on strike because of the May 6 and May 11 implementation of the company's proposals.

Beginning in May 20, PRC hired permanent replacements for the striking employees and completed its hiring by June 25. On June 28, the union telegrammed the company, tendering the employees' unconditional offer to return to work. The next day, PRC responded by promising to reinstate strikers as the positions became available. On July 13, the union again telegrammed its unconditional offer to return to work, and the company began offering piecemeal reinstatement to striking employees. By January 1983, all of the striking employees, except those discharged for strike misconduct, were offered reinstatement.

The NLRB obtained jurisdiction under 29 U.S.C. Sec. 160(c). In its order, the NLRB found that the company violated Sec. 8(a)(1) and (5) of the National Labor Relations Act, 29 U.S.C. Sec. 158(a)(1) and (5), by unilaterally implementing its job classification proposal before the proposal was approved by the union, or an impasse had been reached. The NLRB held that the resulting strike by PRC employees thus constituted an unfair labor practice strike. The NLRB also found that PRC violated Sec. 8(a)(3) and (1) of the Act by refusing to reinstate these unfair labor practice strikers after they had made an unconditional offer to return to work. PRC was also found guilty of violating Sec. 8(a)(1) because it threatened to withdraw its contract proposal and substitute a less desirable offer if the union rejected the proposal.

However, the NLRB dismissed the union's allegation that the company unlawfully discharged 21 striking employees. It also found, in disagreement with the administrative law judge, that three additional workers had been lawfully discharged.

II

In order to be upheld, the NLRB's findings must be supported by substantial evidence on the record as a whole. See Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 465, 95 L.Ed. 456 (1951) (elucidating Congressional directive that court must review NLRB's decision by looking at the entirety of the record to ensure that the decision was based on substantial evidence); Electri-Flex Co. v. NLRB, 570 F.2d 1327, 1331 (7th Cir.), cert. denied, 439 U.S. 911, 99 S.Ct. 280, 58 L.Ed. 256 (1978). Our analysis of the record indicates that an impasse did not occur prior to the time the company implemented its job classification system.

By unilaterally changing the job classification system before an impasse had been reached, the company violated Sec. 8(a)(1) and (5) of the Act. Sections 8(a)(1) and (5) provide, respectively, that it is an unfair labor practice for an employer "to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this title," 29 U.S.C. Sec. 158(a)(1), and for an employer "to refuse to bargain collectively with the representatives of his employees, subject to the provisions of section 159(a)," 29 U.S.C. Sec. 158(a)(5).

An employer violates these two sections if he unilaterally changes a condition of employment that is under negotiation before bargaining has reached an impasse. See, e.g., NLRB v. Katz, 369 U.S. 736, 743, 82 S.Ct. 1107, 1111, 8 L.Ed.2d 230 (1962) (stating that such action "is a circumvention of the duty to negotiate which frustrates the objectives of Sec. 8(a)(5) much as does a flat refusal"); Electri-Flex Co. v. NLRB, 570 F.2d at 1337-38; Carpenter Sprinkler Corp. v. NLRB, 605 F.2d 60, 64 (2d Cir.1979); Saunders House v. NLRB, 719 F.2d 683, 686 (3d Cir.1983), cert. denied, 466 U.S. 958, 104 S.Ct. 2170, 80 L.Ed.2d 554 (1984). However, after an impasse has been reached, the employer can implement changes unilaterally as long as the changes were previously offered to the union. See Huck Mfg. Co. v. NLRB, 693 F.2d 1176, 1186 (5th Cir.1982) (pointing out that "when impasse occurs, the employer is free to implement changes in employment terms unilaterally so long as the changes have been previously offered to the Union during bargaining").

The determination of when an impasse exists is a question of fact, see Saunders House v. NLRB, 719 F.2d at 687-88. Because of the subjectivity involved in deciding when an impasse has occurred, its existence is an inquiry "particularly amenable to the expertise of the Board as fact finder." Huck Mfg. Co., 693 F.2d at 1186. See also Carpenter Sprinkler Co. v. NLRB, 605 F.2d at 65; Dallas Gen. Drivers v. NLRB, 355 F.2d 842, 844-45 (D.C.Cir.1966).

In essence, an impasse occurs when the parties are deadlocked. See, e.g., Huck Mfg. Co., 693 F.2d at 1186; American Fed'n of Television and Radio Artists, 395 F.2d 622, 627 (D.C.Cir.1968). The NLRB may determine that an impasse exists "[w]here good faith bargaining has not resolved a key issue and where there are no definite plans for further efforts to break the deadlock." Dallas Gen. Drivers v. NLRB, 355 F.2d at 845.

PRC unilaterally implemented its new job classification scheme before the parties had reached an impasse. The company's Industrial Relations Director irrevocably destroyed the old system during the lunch hiatus on May 5, even...