The Painting Contractor, LLC v. Nat'l Labor Relations Bd.

• Decision Date: 20 January 2023
• Docket Number: 22-1079,1111
• Parties: THE PAINTING CONTRACTOR, LLC, Petitioner /Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent /Cross-Petitioner. Date Event Apia 23, 2019 May 7, 2019 June 5, 2019
• Court: U.S. Court of Appeals — Sixth Circuit

THE PAINTING CONTRACTOR, LLC, Petitioner /Cross-Respondent,
v.
NATIONAL LABOR RELATIONS BOARD, Respondent /Cross-Petitioner.

Nos. 22-1079, 1111

United States Court of Appeals, Sixth Circuit

January 20, 2023

NOT RECOMMENDED FOR PUBLICATION

ON PETITION FOR REVIEW AND CROSS APPLICATION FOR ENFORCEMENT OF AN ORDER OF THE NATIONAL LABOR RELATIONS BOARD

Before: BATCHELDER, BUSH, and DAVIS, Circuit Judges.

OPINION

DAVIS, CIRCUIT JUDGE.

The Painting Contractor, LLC ("TPC") petitions for review of an Order of the National Labor Relations Board (the "Board") finding that TPC violated the National Labor Relations Act ("NLRA" or the "Act"). The Board cross-petitions for enforcement of its Order. The proceedings below centered on TPC's allegedly unlawful refusal to adhere to a collective bargaining agreement ("CBA") which was negotiated to tentative agreement on May 28, 2019 and which it executed on June 5, 2019. For the reasons set forth below, the court AFFIRMS in part and VACATES in part the Board's final Order, and REMANDS for further proceedings.

I.

TPC is a commercial and industrial painting contractor in the Greater Cincinnati area. Between 2016 and 2019, TPC was party to a multiemployer bargaining unit represented by the Greater Cincinnati Painting Contractors Association ("the Association"). It is undisputed that TPC

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was a member of the Association, but the parties now dispute whether TPC validly withdrew from the Association before a new CBA was reached in mid-2019.

The Board issued an Order finding that TPC violated the NLRA by failing to adhere to the terms of a CBA reached by the Union and the Association on May 28, 2019. The Union represents painters and drywall finishers in and around Cincinnati, previously including employees of TPC. Union membership is composed of employees of companies that are members of the Association. The Union intervened in this appeal.

This dispute concerns TPC's attempt to withdraw from the Association and negotiate with the Union independently. The Board's precedents make clear that unions and employers alike must adhere to strict procedural requirements to lawfully exit multiemployer bargaining arrangements. Retail Assocs., Inc., 120 N.L.R.B. 388, 393 (1958) (stating that the right of withdrawal is not "free and uninhibited"). Specifically, a party's withdrawal from multiemployer bargaining is effective only if it is timely and unequivocal. Id. (explaining that the timeliness requirement is met where withdrawal occurs prior to the date set by the CBA for modification or before the date on which negotiations are set to commence). Moreover, the Board generally does not permit withdrawal once bargaining negotiations have commenced absent mutual consent or "unusual circumstances."^[1] Id. at 395. These procedural requirements reflect the Act's core policy purpose, which is to "foster and maintain stability in bargaining relationships." Midland Elec. Contracting Corp. & United Elec. Workers of Am., IUJAT, Loc. 363, 365 NLRB No. 87, 2016-17 NLRB Dec. P 16321 (June 6, 2017) (citing Retail Assocs., 120 NLRB at 393), enforced, 774 Fed.Appx. 85 (3d Cir. 2019).

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II.

The Association and the Union were parties to a CBA effective from May 1, 2016 to May 1, 2019 (the "Old CBA"). Among other things, the Old CBA provided a mechanism for member contractors to withdraw from the Association and then independently negotiate with the Union after doing so. That provision, Article 19 of the Old CBA, reads as follows:

Any contractor that decides to withdraw from [the Association] and negotiate [with the Union] separately, may only do so at the expiration of this Agreement, provided such contractor provides . . . written notice to the Union and the Association at least 3 days before any extension of this Agreement is executed by the Association

(Emphasis added). The Old CBA also included a no-strike provision codified under Article 18. The no-strike clause provided that "[n]either the Union nor any employee shall take part in, cause, or aid any strikes[,] slowdown, picketing, or other impeding or interference with the operations of the Employer during the terms of this Agreement." The Union's lead negotiator testified below that "based on this no strike clause, [union members] could not be on strike while [the Old CBA] was in effect."

The Union and the Association bargained for a successor to the Old CBA, or the "New CBA," from February 11, 2019 through May 28, 2019. During the negotiations, the Association and the Union reached three successive "proposed tentative agreements," which were then submitted to the Union's rank-and-file members for their approval (or "ratification"). With each tentative agreement, the parties also expressly agreed to extend-and thus continue to be bound by-the Old CBA pending the Union members' approval of a New CBA. Union members rejected the first two proposals before ultimately ratifying the third proposal. Below are pertinent details concerning each proposed agreement as well as TPC's actions to withdraw from the multiemployer bargaining agreement in the midst of the negotiations.

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The First Tentative Agreement ("TA1")

The Union and the Association reached TA1 on or about April 23, 2019. TA1 states that it is a "proposed Tentative Agreement for Ratification." (Emphasis added). The Union and the Association agreed to extend the Old CBA - and thus to remain bound by its terms - through May 14, 2019, pending ratification by members of the bargaining unit (the "First Extension Agreement"). Union members rejected TA1 on or about May 7, 2019. The Union informed the Association that "membership rejected TA1" and sought to continue negotiations for "a new tentative agreement that Union membership would ratify."

The Second Tentative Agreement ("TA2")

After the Union members rejected TA1, the parties met on May 13, 2019 to continue bargaining for a new proposed agreement. The negotiations failed on that date. During the administrative hearing, a Union leader testified that the Union "ended up figuring we were going to go on strike on the 14th" - upon expiration of the Old CBA - because of the parties' inability to agree on a proposal. The parties averted a strike, however, when they successfully crafted TA2 on May 14, 2019. The Union agreed to "take this proposal . . . to the members for a ratification vote" on that same date and canceled the strike.

Like TA1, TA2 stated in large letters that it was a "proposed Tentative Agreement for Ratification." (Emphasis added). The parties also formally agreed to extend the Old CBA through May 23, 2019 (the "Second Extension Agreement") specifically "to allow the Union's members to vote" on TA2. The Second Extension Agreement set forth the following:

The [Association and the Union] are currently bound by a [CBA] . . . effective through April 30, 2019.

The parties believe that it would be mutually beneficial for the agreement to remain effective through . . . May 23, 2019.

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Therefore, the parties agree that the current [CBA] shall be extended and shall remain in effect until . . . May 23, 2019.

In the event the Union ratifies a new [CBA] prior to the expiration of this Contract Extension Agreement, the Association agrees that all economic improvements . . . negotiated in the new [CBA] shall be paid retroactive[ly to May 1, 2019], and the retroactive improvements must be paid to the employees no later than two weeks after the Union ratifies said new [CBA].

(Emphasis added). Hence, under the Second Extension Agreement, the Union and the Association agreed to remain bound by the Old CBA until May 23, 2019 - unless the members of the Union ratified a new CBA before then.

TPC's Article 19 Notice of Withdrawal

On May 17, 2019, TPC informed the Union and the Association that it intended to invoke its rights under Article 19 of the Old CBA - which authorized withdrawal from the multiemployer bargaining unit...