SKS Die Casting & Machining, Inc. v. N.L.R.B.

• Decision Date: 13 August 1991
• Docket Number: Nos. 89-70324,91-70377,s. 89-70324
• Parties: 138 L.R.R.M. (BNA) 2246, 119 Lab.Cas. P 10,881 SKS DIE CASTING & MACHINING, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, NATIONAL LABOR RELATIONS BOARD, Petitioner, v. SKS DIE CASTING & MACHINING, INC., Respondent.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 984

941 F.2d 984

138 L.R.R.M. (BNA) 2246, 119 Lab.Cas. P 10,881

SKS DIE CASTING & MACHINING, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, NATIONAL LABOR RELATIONS BOARD, Petitioner, v. SKS DIE CASTING & MACHINING, INC., Respondent.

Nos. 89-70324, 91-70377.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Dec. 12, 1990.

Decided Aug. 13, 1991.

Michael W. O'Neil, Orinda, Cal., for petitioner-cross-respondent.

David A. Fleischer, N.L.R.B., Washington, D.C., for respondent-cross-petitioner.

Appeal from the National Labor Relations Board.

Before GOODWIN, ALDISERT ^* and KOZINSKI, Circuit Judges.

GOODWIN, Circuit Judge:

This petition for review and cross-application for enforcement arises out of a controversy between SKS Die Casting & Machining, Inc. and Bay Area District Lodge No. 115, International Association of Machinists and Aerospace Workers, AFL-CIO ("the Union"), the union representing SKS' employees. The controversy arose after SKS encountered financial difficulties and sought to renegotiate its existing contract with the Union. SKS proposed a two-tiered wage structure, in which existing employees would receive wages at or near their existing rates, but new production employees would receive wages approximately half those of existing production employees. The Union opposed SKS' two-tiered wage proposal. After several weeks' discussion between the parties, SKS informed the Union that it had filed for bankruptcy and had asked the bankruptcy court for permission to reject the existing collective bargaining agreement. The bankruptcy court initially refused to permit such rejection, but after negotiations between the parties for approximately a month produced no result, the bankruptcy court permitted SKS to reject the collective bargaining agreement. In response to the company's rejection of the collective bargaining agreement, the Union began a strike on May 5, 1986. ¹

The events which are the primary focus of this appeal occurred between May 5 and May 13. On May 5, SKS president Jerome Keating posted on the company's front door a list of the wages he was willing to pay each striking employee. The document listed wages only for workers who had been employed at the time the strike began, and it therefore made no mention of SKS' proposed lower wage rate for newly hired workers or workers who might be recalled from lay-off. Many of the picketing strikers expressed a willingness to return to work at the posted rates, and they asked their union representative to confirm that Keating was willing to pay those wages. Keating then appeared on the picket line and confirmed his willingness to do so. The pickets reiterated their willingness to return to work for those wage rates.

On May 9, Union representative Daniel Borrero sent the following letter to Keating:

The information that I received from you is that you are willing to pay the wages you have posted on the front door of S.K.S. Also, you stated that you are willing to negotiate with the Union.

The Union is willing to negotiate immediately and have our members return to work under the posted wages, while we continue to negotiate a new Contract.

I am available at your convenience.

On May 11, Keating wrote back, stating that the company was not interested in meeting for negotiations "at this time." In response to Keating's letter, the Union filed a charge with the National Labor Relations Board alleging that SKS had committed various violations of the National Labor Relations Act, 29 U.S.C. §§ 151-169 (1988), (hereinafter "NLRA" or "the Act"). The Regional Director of the National Labor Relations Board then filed a complaint against SKS. The Administrative Law Judge (ALJ) issued a decision in which it found that SKS had committed some, but not all, of the alleged unfair labor practices. Both parties appealed to the NLRB.

On March 16, 1987, prior to resolution of that appeal, the strikers made a second offer to return to work. The parties agree that this offer was unconditional. SKS responded by stating that it would afford the strikers "all of the legal rights to which they are entitled as economic strikers." Because of SKS' response, the Board's Regional Director filed an additional complaint alleging that SKS had violated the NLRA by refusing to reinstate unfair labor practice strikers following their unconditional offer to return on March 16, 1987. The Board consolidated this second complaint with the pending appeal.

The Board found that SKS had committed unfair labor practices and imposed reinstatement and back-pay remedies. We enforce the order in part, reverse in part, and remand.

I. General Standard of Review

This court must uphold a decision of the NLRB "if its factual findings are supported by substantial evidence and if it has correctly applied the law." NLRB v. Champ Corp., 913 F.2d 639 (9th Cir.1990); see also 29 U.S.C. § 160(e) (1988) (NLRB findings of fact shall be conclusive "if supported by substantial evidence on the record considered as a whole."). This court determines whether NLRB findings are supported by substantial evidence based on a review of all the evidence in the record, including both the evidence that supports and the evidence that detracts from the findings. See Universal Camera Corp. v. NLRB, 340 U.S. 474, 487-88, 71 S.Ct. 456, 463-65, 95 L.Ed. 456 (1951); NLRB v. Tomco Communications, Inc., 567 F.2d 871, 876-77 (9th Cir.1978). A reviewing court may not "displace the [NLRB]'s choice between two fairly conflicting views, even though the court would justifiably have made a different choice had the matter been before it de novo." Universal Camera, 340 U.S. at 488, 71 S.Ct. at 465.

II. Unconditional Offer to Return to Work

An employer is required to reinstate economic strikers who make an unconditional offer to return to work, provided the employer does not have legitimate and substantial business justification for the refusal to reinstate the strikers. Mid-County Transit Mix, Inc., 264 NLRB 782, 789 (1982). The ALJ held that SKS did not violate this rule. The holding was based on the ALJ's finding that the Union's May 9 offer to return to work was conditioned on SKS abandoning its two-tiered wage proposal and agreeing to pay all Union "members" the posted wages, including any non-striking members on lay off who might some day be rehired. The Board reversed.

The substantial evidence standard of review applies to our review of the Board's finding that the Union's May 9 letter was an unconditional offer to return to work. Resolving how the parties understood the words of the offer requires an understanding of the factual context in which the offer was made. To the extent that the question involves drawing inferences from undisputed facts, it is similar to other questions involving inferences in which this court has applied the substantial evidence standard of review. See, e.g., Brooks Cameras, Inc., 691 F.2d at 915, 919 (applying the substantial evidence standard to the question of an employer's motive behind an employee discharge, where the Board's findings in part relied on drawing inferences from underlying facts).

Where the Board has reversed an ALJ's finding of fact, as it did on the question whether the return to work offer was unconditional, this court still applies the substantial evidence standard of review to the findings of the Board, not to the findings of the ALJ. The ALJ's contrary findings are one factor that we consider in evaluating whether the Board's findings are supported by substantial evidence. See NLRB v. Brooks Cameras, Inc., 691 F.2d 912, 915 (9th Cir.1982); see also Universal Camera Corp., 340 U.S. at 496, 71 S.Ct. at 468 (although the substantial evidence standard is not modified when the Board reverses the ALJ, the "evidence supporting a conclusion may be less substantial" when the Board has reversed the examiner who observed the witnesses); Tomco Communications, Inc., 567 F.2d at 877 (taking into consideration, in determining substantiality of evidence, that the Board diverged from the ALJ's findings on matters of credibility).

The significance of the ALJ's report "depends largely on the importance of credibility in the particular case." Universal Camera, 340 U.S. at 496, 71 S.Ct. at 469. In contrast, on matters involving inferences from facts rather than determinations of credibility, this court defers to the Board, without giving special weight to the ALJ. See Brooks Cameras, Inc. at 915 ("As to derivative inferences, our deference is to the Board and not the administrative law judge. 'Board members are presumed to have broad experience and expertise in labor-management relations. Further, it is the Board to which Congress has delegated administration of the Act. The Board, therefore, is viewed as particularly capable of drawing inferences from the facts of a labor dispute.' ") (quoting Penasquitos Village, Inc. v. NLRB, 565 F.2d 1074, 1079 (9th Cir.1977)).

We note at the outset that this issue does not turn primarily on resolving a credibility dispute, which would lend greater weight to the ALJ's findings. Rather, the dispute primarily involves inferences drawn from essentially undisputed underlying facts, where our deference is to the Board.

The controversy over whether the Union made an unconditional offer to return to work centers on inferences drawn from the use of the word "members" in Borrero's May 9 letter. SKS asserts that this term represented a Union demand that SKS abandon its proposal for two-tiered wage rates and pay the posted rate to all Union members, including any members on lay-off who might be recalled at a future time.

The Board found that the letter's reference to "members" included only the Union strikers. Accordingly, the Union's May 9 offer to have the strikers return to work at the posted rates mirrored SKS's offer to take back the strikers and was therefore unconditional. Alternatively, the Board found that even if ...