Starcon, Inc. v. N.L.R.B.

• Decision Date: 04 May 1999
• Docket Number: AFL-CI,I,Nos. 97-2709,97-3020,s. 97-2709
• Citation: 176 F.3d 948
• Parties: 161 L.R.R.M. (BNA) 2233, 138 Lab.Cas. P 10,425 STARCON, INC., Petitioner, Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Cross-Petitioner, and International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmith, Forgers and Helpers,ntervening Respondent, Cross-Petitioner.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 948

176 F.3d 948

161 L.R.R.M. (BNA) 2233, 138 Lab.Cas. P 10,425

STARCON, INC., Petitioner, Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Cross-Petitioner and International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmith, Forgers and Helpers AFL-CIO, Intervening Respondent, Cross-Petitioner.

Nos. 97-2709, 97-3020.

United States Court of Appeals Seventh Circuit.

Argued March 31, 1999.

Decided May 4, 1999.

Cameron Pierce, J. Roy Weathersby (argued), Littler Mendelson, Atlanta, GA, for Petitioner, Cross-Respondent.

Elizabeth Kinney, National Labor Relations Board, Chicago, IL, John D. Burgoyne, Rachel Gartner (argued), National Labor Relations Board, Appellate Court, Enforcement Litigation, Washington, DC, for Intervening Respondent, Cross-Petitioner National Labor Relations Board.

Michael T. Manley, G. Gordon Atcheson, Blake & Uhlig, Kansas City, KS, for Intervening Respondent, Cross-Petitioner International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmith, Forgers and Helpers, AFL-CIO.

Before POSNER, Chief Judge, and FLAUM and MANION, Circuit Judges.

POSNER, Chief Judge.

The Labor Board asks us to enforce, and the employer, Starcon, asks us to set aside, the Board's order finding that Starcon violated the National Labor Relations Act by discriminating against applicants for employment on the basis of their intent to organize Starcon's workforce. 29 U.S.C. § 158(a); Starcon, Inc., 323 N.L.R.B. 977 (1997). The case involves the practice called "salting," held protected by the Act in NLRB v. Town & Country Electric, Inc., 516 U.S. 85, 116 S.Ct. 450, 133 L.Ed.2d 371 (1995). The term refers to union organizers' applying for jobs with nonunion employers with the aim of organizing the employer's workforce. Actually the proximate aim, in this case as commonly, is to precipitate an unfair labor practice proceeding that will result in heavy backpay costs to the employer and weaken his ability to fight future organizing efforts (since his freedom of action will be limited by the cease and desist order that the Board will enter). See Herbert R. Northrup, " 'Salting' the Contractors' Labor Force: Construction Unions Organizing With NLRB Assistance," 14 J. Lab. Res. 469, 471-73 (1993); Note, "Organizing Worth Its Salt: The Protected Status of Paid Union Organizers," 108 Harv. L. Rev. 1341, 1345-46 (1995). The applicants went out of their way to identify themselves to Starcon as "voluntary union organizers," which they would hardly have done had they thought they had a chance to organize Starcon's employees. Their self-identification made it much more likely that Starcon would refuse to hire them and would take other measures to prevent them from organizing its employees.

A modest-sized, privately owned company, Starcon does maintenance and repair work on midwestern petrochemical refineries. Some of its work consists of "turnaround" projects, in which the refinery is shut down while the repair work is done. For obvious reasons this work is done "round the clock, with the consequence that when Starcon has a turnaround project its labor needs soar. In 1994 it was hired to do two such projects, and it began advertising for workers with the relevant experience. The boilermakers" union rounded up a number of its members to serve as voluntary union organizers, and on June 27 Starcon received in the mail job applications from 80 of them. Starcon returned the applications to the senders, stating that it didn't accept applications through the mail--that any applicant would have to appear in person for an interview in Starcon's office in Manhattan, Illinois. This was a new policy, and there was substantial evidence unnecessary to detail that it was motivated by Starcon's desire not to hire workers who would set about to organize the workforce and, if successful in doing so, force the company to bargain collectively with the union. Some of the organizers did apply in person, but all but two of these were turned down and those two were treated in a discriminatory fashion after being hired.

Starcon emphasizes that more than two weeks before the flood of applications from the union organizers hit, it had signed a contract with a company called BE & K to subcontract some of the turnaround work to that company. The contract did not, however, require Starcon to subcontract any of the work--it just gave Starcon the option to "request from the Contractor services as deemed necessary from time to time, and the Contractor will provide such services" according to specified terms that included a wage far higher than Starcon's advertised pay for workers. Given the wage differential, it is no surprise that Starcon continued trying to hire workers for the turnaround projects--provided they weren't union organizers. BE & K did supply Starcon with a number of workers for these projects, but only after Starcon turned away the union organizers who were willing to work for the lower, advertised rate of pay. Apparently Starcon regarded BE & K as a backup source of labor supply should Starcon not be able to hire all the workers it needed. So had it not been for Starcon's hostility to the union, it would have hired at least some of the 80 union-organizer applicants in preference to farming out the work to BE & K at a higher cost.

The big issue, made such by a decision of the Sixth Circuit in a very similar case also involving mass salting by the boilermakers' union, NLRB v. Fluor Daniel, Inc., 161 F.3d 953 (6th Cir.1998), is whether the Board was required to "match" the organizer applicants to the job openings, that is, to prove that they really were the people whom Starcon would have hired for the jobs for which it had openings had these applicants not been connected with a union. The Board takes the position that if, as it was entitled to find here on the basis of the evidence presented to it, the employer refuses for an improper motive even to consider hiring an applicant, the violation of the Act is complete at that point. KRI Constructors, Inc., 290 N.L.R.B. 802 (1988); cf. E & L Transport Co. v. NLRB, 85 F.3d 1258, 1271 (7th Cir.1996). It is unclear whether, as the Fourth Circuit deems essential to the validity of "refusal to consider" liability, Ultrasystems Western Constructors, Inc. v. NLRB, 18 F.3d 251, 255-56 (4th Cir.1994), the Board must also find that there was an actual vacancy for which the employer refused to consider the applicant.

At argument the Board's lawyer disclaimed any suggestion that the "refusal to consider" theory entitles all the applicants whom the employer refuses to consider to reinstatement and backpay. For suppose, even if there were a vacancy, that these applicants were unqualified to fill it and so would never have been hired even if they wore "Right to Work" buttons rather than "VUO" buttons. Then they would not have been harmed by the company's bad motive and so could not get any kind of remedy. The Sixth Circuit has now held that the issue of injury to the individual applicants cannot thus be postponed to the remedial stage; there is no violation without an injury. "It cannot be an unfair labor practice merely for an employer to harbor animus against union members applying for jobs that do not...