TruServ Corp. v. Nat'l Labor Relations Bd.

• Decision Date: 17 August 2001
• Docket Number: No. 00-1356,No. 293,I,293,00-1356
• Citation: 254 F.3d 1105
• Parties: (D.C. Cir. 2001) TruServ Corporation, f/k/a Cotter & Company, Petitioner v. National Labor Relations Board, Respondent Teamsters Local Unionntervenor
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1105

254 F.3d 1105 (D.C. Cir. 2001)

TruServ Corporation, f/k/a Cotter & Company, Petitioner v. National Labor Relations Board, Respondent

Teamsters Local Union No. 293, Intervenor

No. 00-1356

United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 19, 2001

Decided July 6, 2001

Corrected August 17, 2001

[Copyrighted Material Omitted]

[Copyrighted Material Omitted]

On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board

Frank W. Buck argued the cause for petitioner. On the briefs were Mark V. Webber and Kenneth D. Schwartz. Kathy B. Houlihan entered an appearance.

Usha Dheenan, Attorney, National Labor Relations Board, argued the cause for respondent. With her on the brief were Leonard R. Page, Acting General Counsel, John H. Ferguson, Associate General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel, and Charles Donnelly, Supervisory Attorney.

Basil William Mangano and John M. Masters were on the brief for intervenor Teamsters Local Union No. 293.

Before: Edwards, Chief Judge, Rogers and Garland, Circuit Judges.

Opinion for the Court filed by Circuit Judge Rogers.

Rogers, Circuit Judge:

TruServ Corporation (formerly Cotter & Co.) petitions for review of a decision and order by the National Labor Relations Board. See Cotter & Co., 331 N.L.R.B. No. 94 (July 19, 2000). TruServ challenges for lack of substantial evidence the Board's findings that it violated 8(a)(5) and (1) of the National Labor Relations Act, 29 U.S.C. 158(a)(1), (5) (1998), when it implemented terms and conditions of employment prior to reaching a genuine bargaining impasse, disciplined unit employees pursuant to unilaterally implemented work rules, and refused to process employee grievances. TruServ also seeks reversal or modification of the Board's remedial order, which it maintains appears to be punitive because the order would provide a windfall to the Union's health fund for healthcare claims paid by the company. We grant the petition on the issue of impasse because the Board's findings on that issue are not supported by substantial evidence; hence we do not reach TruServ's alternative contention that the Union had waived the right to bargain on work rules. We deny the petition's challenge to the processing of grievances. Because, however, the Board did not address Truserv's argument that the remedial order should allow for a set-off for health insurance payments made by TruServ, we remand that issue to the Board.

I.

TruServ Corporation manufactures and distributes hardware to various True Value Hardware stores. Teamsters Local 293 is the bargaining representative for the warehouse unit employees at the Company's Westlake facility.¹ A collective bargaining agreement, effective September 1, 1991, was due to expire on August 31, 1995. On July 20, 1995, the Company and the Union began negotiating for a successor bargaining agreement. At the outset, the Company expressed its concerns with the facility's efficiency and productivity, namely, that sales from the Westlake facility had decreased at a higher rate than sales for the Company as a whole, and that errors in filling orders at the Westlake facility had increased significantly.² After the Company's opening statement, the Union submitted a complete contract proposal on both economic and non-economic issues. Consistent with its past negotiations with the Union, the Company deferred discussion of "economic" (wages) issues until the end of the negotiations period, and on July 21, the parties agreed on a three-year term for the new agreement and on language for the employee grievance procedure. During the eight days of negotiations,³ the key issues discussed were (1) holidays, (2) the workweek, workday schedule, (3) healthcare, and (4) wages.

A. Holidays. The Company initially proposed to convert certain contractual holidays (especially the day after Thanksgiving) to "personal days," which the employees could use at other times, so that the warehouse could remain open to process the high volume of orders. The Union initially proposed to add two holidays to the ten existing contractual holidays, and to limit overtime on the days before and after a holiday. The Union later reduced its demands to one additional declared holiday and proposed to abandon its overtime proposal for working on holidays if the Company agreed to make concessions on overtime. The Company rejected the Union's proposal, offering instead to convert four declared holidays to personal days. On August 29, the Company further modified its proposal to require the conversion of only one holiday--the day after Thanksgiving. The Union conditioned acceptance on the Company's agreement to declare an additional holiday (Martin Luther King Day) a personal day. The Company showed no willingness to accept this condition.

B. Workweek, Workday Schedule. The Company sought to implement a workweek, workday schedule that would shorten the turn-around time on receiving orders and allow it to deliver merchandise to its members in one day. The expiring agreement provided for a Monday through Friday schedule of five eight-hour days, and for time and onehalf on Saturdays and double time on Sundays. The Company proposed either a four-day, ten-hour or a five-day, eighthour week, with Saturdays and Sundays included as part of the regular work week (thus not requiring overtime). See Cotter & Co., 331 N.L.R.B. No. 94, slip op. at 8. The Union rejected this proposal; it opposed the idea of Saturdays and Sundays as ordinary workdays. On August 28, the Company modified its proposal; the new proposal called for a Sunday to Saturday workweek with either four ten-hour workdays or five eight-hour days; overtime would accrue after four tenhour days at 1.5 times the base rate for the fifth and sixth days, and double time on the seventh day. The "four tens" and "five eights" shifts would be filled first voluntarily and then by shift in accordance with seniority and ability. In response to the Company's modifications, the Union offered the following proposal: For inbound work (i.e., receiving and stocking merchandise), four ten-hour days or five eight-hour days, with weekend work voluntary; for outbound work, five eight-hour days or four ten-hour days, with weekend work at straight time. The Company responded that it would pay time and one-half beyond eight hours for the five eight-hour days, and beyond ten hours for the four ten-hour days, but refused to pay double time for the sixth day.

C. Health Care. The Company proposed that the Union abandon the Teamsters Fund and instead adopt the Company's health plan. The Union proposed to maintain the Teamsters Fund exclusively, with the Company paying the entire amount of cost increases to contributions to the Fund and eliminating employee co-payments. On August 28, the Company modified its offer, proposing inclusion of its plan as an option for employees. If employees chose the Company plan, the Company would pay twenty-five percent of the cost; if employees opted to stay in the Teamsters Fund, the Company would pay a predetermined monthly contribution per employee in the first year, and 75% of the cost of the Company's health plan in the second year. Although the Company later increased this amount, the Union continued to propose higher monthly contributions and elimination of employee copayments.

D. Wages. The Company had a two-tier, progressive wage structure: The bottom tier consisted of employees hired after August 27, 1985; the top tier was composed of employees hired before that date. The Union initially proposed a general increase of 75 cents per hour during each year of the contract; a merge of the two tiers by equalizing lower and top tier wage levels over the 3 years of the contract; and inclusion of employees in the Company's 401(k) program. See Cotter & Co., 331 N.L.R.B. No. 94, slip op. at 8. On August 28, the Company proposed a continued two-tier system, with an increase in bottom tier rates of 20 cents in each of the three years of the agreement, and an increase in top tier rates of 20 cents, 10 cents, and 10 cents in each of the three years, respectively. The Union counterproposed a merge of the two tiers over four years; a general wage increase of 65 cents in each year of the agreement; and deferred employee participation in the Company's 401(k) program until the second year of the agreement. The Union also withdrew its earlier proposal for double-time payment for overtime. The Company counteroffered an increase in bottom tier rates of 25 cents, 25 cents, and 20 cents, and in top tier rates of 25 cents, 15 cents, and 10 cents in each year of the agreement. On August 29, the parties again modified their proposals. The Union proposed a top tier wage increase of 60 cents in the first year and 55 cents in the second and third years; a merge of the two tiers over a five-year period; a reduction in shift premium; and deferred employee participation in the Company's 401(k) plan until the third year of the agreement. The Union also abandoned its earlier proposal to limit mandatory overtime. The Company counteroffered with wage increases of 30 cents, 30 cents, and 25 cents for the bottom tier, and 25 cents, 15 cents, and 10 cents for the top tier for the three years of the agreement. In response, the Union proposed maintaining the two-tier system in exchange for wage increases of 60 cents, 70 cents, and 80 cents over three years for the lower tier and 50 cents for each of the three years for the top tier. The Union also abandoned its request for employee participation in 401(k) plans and reduced its shift premium demand to 30 cents per hour, but its wage increase proposals remained over twice what the Company proposed.

In retrospect, the parties present conflicting accounts of the extent of progress in the negotiations, and of the degree to which the parties had exhausted their willingness...