Unbelievable, Inc. v. N.L.R.B.
| Decision Date | 18 July 1997 |
| Docket Number | AFL-CI,I,No. 96-1209,96-1209 |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
| Parties | 155 L.R.R.M. (BNA) 2833, 326 U.S.App.D.C. 194, 134 Lab.Cas. P 10,043 UNBELIEVABLE, INC., d/b/a Frontier Hotel & Casino, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Professional, Clerical & Miscellaneous Employees Local 995 and International Union of Operating Engineers, Local 501,ntervenors. |
On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board.
Michael A. Taylor, Washington, DC, argued the cause for petitioner, with whom Celeste M. Wasielewski was on the briefs.
Daniel Michalski, Attorney, National Labor Relations Board, Washington, DC, argued the cause for respondent, with whom Linda R. Sher, Associate General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel, and Frederick C. Havard, Supervisory Attorney, were on the brief.
Adam N. Stern, Los Angeles, CA, argued the cause and filed the joint brief for intervenors. Lewis N. Levy entered an appearance.
Before: WALD, GINSBURG, and ROGERS, Circuit Judges.
Opinion for the Court filed by Circuit Judge GINSBURG.
The National Labor Relations Board determined that the Frontier Hotel & Casino committed an unfair labor practice by engaging in surface bargaining with two unions. The Board ordered the Frontier to reimburse the unions for their negotiation costs and to pay the litigation costs--primarily attorney's fees--incurred by both the unions and the NLRB General Counsel. The employer petitions for review, arguing that the Board erred in assessing negotiation costs, that the Board lacks the power to assess litigation costs, and that if the Board does have the power to assess litigation costs, then it erred in assessing them in this case. The Board cross-applies for enforcement of its order. We deny the petition and enforce the order with respect to the payment of the unions' negotiation costs, but grant the petition and deny enforcement with respect to the employer's payment of litigation costs.
Unbelievable, Inc., purchased the Frontier Hotel & Casino, located on the Las Vegas Strip, in 1988. The International Brotherhood of Teamsters and the International Union of Operating Engineers each represented certain groups of employees at the Frontier. Although the contracts between the Unions and the Frontier's previous owner had expired in 1987, Unbelievable continued to implement the terms of the expired contracts for some time. In April 1989, however, Unbelievable imposed new contract terms upon the two groups of employees represented by the Teamsters.
In May 1990 Unbelievable hired Joel I. Keiler to negotiate new contracts with both Unions. Keiler has long had a troubled history. He was briefly suspended from the practice of law in the District of Columbia, see Matter of Keiler, 380 A.2d 119 (D.C.1977), and he has run afoul of the Board on several occasions. See, e.g., Pepsi-Cola Bottling Co., 315 N.L.R.B. 882 (1994); CWI of Maryland, Inc., 321 N.L.R.B. No. 101, 1996 WL 395875 (1996). In March 1995 Keiler was suspended from practicing before the Board for one year because of his misconduct in representing another Las Vegas casino. See In re Joel I. Keiler, 316 N.L.R.B. 763. See also NLRB v. Unbelievable, Inc., 71 F.3d 1434 (9th Cir.1995) ().
After Unbelievable hired him, Keiler asked the Federal Mediation and Conciliation Service to set up meetings between the Company and the Unions. Keiler and the mediator each left messages for Robert Fox, who represented the Operating Engineers, and for Richard Thomas, who represented the Teamsters, but they were unable to set up a meeting. Although the Company had not yet informed the Unions that Keiler represented it, he sent letters to both Fox and Thomas in late June complaining about their lack of response to his overtures. He enclosed with the letters proposed contracts and wrote that if they did not contact him in order to arrange a bargaining session by August 1, then the Frontier would implement the proposed terms unilaterally.
The proposed contracts were significantly less attractive to the Unions than were their previous contracts. For example, the Company proposed to reduce the wages of some Teamsters to $6.50 per hour from $11.92 per hour, and to cut by 5% the wages of most employees represented by the Operating Engineers. Both proposed contracts would have made it difficult for an employee ever to receive holiday or vacation pay, eliminated the pension plan, and substituted a new health plan for those of the Unions.
Keiler and the Operating Engineers held three bargaining sessions from July to November. At the first meeting Fox told Keiler that the proposals were so outlandish that no union would ever agree to them and Keiler (according to Fox, whom the Board credited) responded that the Frontier's General Manager did not care and would not mind if the proposals led to a strike. Keiler did not consider the Union's counter-proposal, which closely paralleled the terms of the standard union contract in use on the Las Vegas Strip. Little happened at the second meeting. At the third meeting Keiler declared the two sides at an impasse and told Fox that the Company would implement its proposal, to which Fox responded that they were not at an impasse because the Company had not bargained in good faith. Keiler did later agree to retain the union's health and welfare plan, but on December 1, 1990 the Company implemented the other terms of its proposal.
Negotiations with the Teamsters followed a similar course. Of the discharge language in the proposal, Keiler said (according to Thomas, whom the Board credited), "It means we can virtually fire anybody for anything." Again Keiler indicated that the Frontier's General Manager wanted a strike so that he could replace the employees and get rid of the Unions. Keiler did agree to some changes--for example, in the vacation and holiday pay proposal--and the Union agreed to certain of the Company's minor proposals. After the union membership unanimously rejected the proposal in a secret ballot vote, Keiler told Thomas that the Frontier would implement its proposals unilaterally if the Teamsters did not accept them by November 1. Again Keiler later agreed that the Company would continue contributing to the Union's health insurance plan, and again on December 1 the Company implemented its other proposals.
The Unions filed unfair labor practice charges with the Board. After several days of hearings, an Administrative Law Judge issued findings and conclusions in May 1992. The ALJ held that the Company violated §§ 8(a)(1), (3), and (5) of the National Labor Relations Act, 29 U.S.C. §§ 151 et seq., by failing to bargain with the Unions in good faith and by unlawfully discharging a union supporter. The ALJ dismissed the charges that the Company had unlawfully withheld certain information from the Unions and that it had unlawfully withdrawn its health plan.
The charge that the Company had not bargained in good faith consumed the bulk of the hearing and of the ALJ's recommended order. Because he found that Keiler's testimony was not credible, the ALJ relied for his factual findings almost entirely upon the testimony of the General Counsel's witnesses. The ALJ concluded that Keiler's negotiation strategy was to reach an impasse so that the Company would be able to implement its proposals unilaterally and force the Unions into a strike. First, Keiler submitted a proposal that differed substantially from the previous contract and gave the Union only a month to respond to it. Second, the Company did not promptly inform the Unions that Keiler was representing it. Third, Keiler's use of the federal mediator "seems to [have been] designed only for the purpose of setting the foundation for an argument that it was the [Frontier] which was operating in good faith by first contacting the mediator." The ALJ, finding that Keiler, at the Frontier's direction, never really sought to reach agreement with the Unions, deemed the Company's conduct "classic surface bargaining."
The Board adopted the ALJ's factual findings and conclusions of law. Further, the Board held that it would require the Company to pay the Unions' negotiating expenses because the Company had "engaged in egregious and deliberate surface bargaining" with the Unions, which "unnecessarily diminished their economic strength." Unbelievable, Inc., 318 N.L.R.B. 857 (1995). The Board explained:
In cases of unusually aggravated misconduct ... where it may fairly be said that a respondent's substantial unfair labor practices have infected the core of a bargaining process to such an extent that their effects cannot be eliminated by the application of traditional remedies ... an order requiring the respondent to reimburse the charging party for negotiation expenses is warranted both to make the charging party whole for the resources that were wasted because of the unlawful conduct, and to restore the economic strength that is necessary to ensure a return to the status quo ante at the bargaining table.
Applying this standard to the ALJ's findings, the Board determined that through Keiler the Frontier had engaged in "deliberate and egregious bad faith conduct aimed at frustrating the bargaining process." Id. at 858. In particular, the Board stressed (1) Keiler's pre-negotiation conduct; (2) the wide gap between the status quo and the Company's initial proposals; and (3) Keiler's conduct at the bargaining table. The Board concluded that because Keiler "lost no opportunity to goad the Unions to strike," his "conduct rendered the bargaining between the parties merely a charade." Id. Accordingly, the Board ordered the Frontier to pay the...
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