United Retail Workers Union Local 881 by United Food and Commercial Workers Intern. Union, AFL-CIO v. N.L.R.B.

• Decision Date: 01 October 1985
• Docket Number: AFL-CI,No. 84-2000,P,84-2000
• Citation: 774 F.2d 752
• Parties: 120 L.R.R.M. (BNA) 2729, 54 USLW 2213, 103 Lab.Cas. P 11,578 UNITED RETAIL WORKERS UNION LOCAL 881, chartered by United Food and Commercial Workers International Union,etitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, May Department Stores Company, Venture Stores Division, Intervenor-Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 752

774 F.2d 752

120 L.R.R.M. (BNA) 2729, 54 USLW 2213,

103 Lab.Cas. P 11,578

UNITED RETAIL WORKERS UNION LOCAL 881, chartered by United Food and Commercial Workers International Union AFL-CIO, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent May Department Stores Company, Venture Stores Division Intervenor-Respondent.

No. 84-2000.

United States Court of Appeals Seventh Circuit.

Argued April 16, 1985.

Decided Oct. 1, 1985.

Marshal S. Berzon, Altshuler & Berzon, San Francisco, Cal., for petitioner.

John Ferguson, Elliott Moore, Washington, D.C., for N.L.R.B. Francis X. Grossi, Jr., Chicago, Ill., for intervenor-respondent.

Before BAUER and ESCHBACH, Circuit Judges, and PELL, Senior Circuit Judge.

PELL, Senior Circuit Judge.

Petitioner, United Retail Workers Union Local 881, petitions this court to review an order of the National Labor Relations Board (the Board), which held that the employer, May Department Stores (the Employer) did not commit an unfair labor practice by refusing to bargain with petitioner. Petitioner is the entity created by a merger agreement between the United Retail Workers Union (URW) and the United Food and Commercial Workers International Union (UFCW). The Employer's refusal to bargain followed a vote by the URW members of the bargaining unit to merge with the UFCW. Bargaining unit employees who were not members of the URW could not vote in the merger election.

The issue on appeal is whether it was a permissible construction of the National Labor Relations Act (the Act) for the Board to hold that the Employer had no duty to bargain with the post-merger union because the URW had excluded from the merger vote those employees in the bargaining unit who were not members of the URW. The two federal courts of appeals that have addressed the Board's rule in the context of an affiliation election have split on the issue, compare Financial Institution Employees, Local No. 1182 v. N.L.R.B., 752 F.2d 356 (9th Cir.1984), cert. granted, --- U.S. ----, 105 S.Ct. 2318, 85 L.Ed.2d 838 (1985), with Local Union No. 4-14, Oil Workers International Union v. N.L.R.B., 721 F.2d 150 (5th Cir.1983), and, as noted, the Supreme Court has granted certiorari in one of the cases.

I. THE FACTS

The parties are in complete agreement about the facts. Prior to November 1, 1982, the URW was a national independent union, with four local units and approximately 20,500 members. In total, the URW represented 22,400 employees of eleven different employers. In other words, just less than 2,000 of the represented employees were not union members. Two of the four local units consisted solely of stores owned by the Employer. The two locals represented 1,292 employees, of whom seventy-eight were not union members. The collective bargaining agreement between the URW and the Employer contained a union security clause; thus, all employees had to become union members within thirty-one days after their employment began.

Negotiations for a merger agreement between the URW and the UFCW began in 1981. According to the Agreement and Resolution of the two organizations, petitioner would retain the "United Retail Workers" name, manage its own finances, negotiate and ratify its own contract, elect its own officers, and continue its own special programs and benefits. At the same time, however, petitioner would be subject to the UFCW constitution. Furthermore, four non-independent administrative districts within petitioner's organization would replace the four local URW units, with election of officers on an at-large basis and not solely within each unit. All active URW members and all those who would finish their probationary period and apply for membership before the election date were eligible to vote in the election.

The URW then mailed to each member, but not to non-union employees, a copy of the merger agreement, a ballot, and a notice of meeting. A number of merger meetings occurred, from which the URW did not exclude non-union employees. The URW sent out 20,548 ballots. Of the 9,235 members who voted, 6,823 favored the merger, and 2,344 opposed it. The URW did not apportion the vote totals among the four local units. After the election, the URW and UFCW signed the merger agreement. In a letter, an officer of the URW informed the Employer that the post-election entity, although affiliated with the UCFW, would undergo no change in officers or organizational structure and would remain independent and autonomous with respect to collective bargaining, grievances, and arbitration. Petitioner would also maintain the URW's contract-ratification procedures.

Thereafter, the Employer refused to recognize petitioner and refused to abide by its collective bargaining agreement with the URW, which did not expire for nearly eighteen more months. The other employers of URW members did not take similar action. In withdrawing recognition, the Employer relied upon the URW's exclusion of nonmembers from the merger vote and the failure of the URW to provide unit-by-unit election results so that the Employer could ascertain whether a majority of its union employees favored the merger.

Petitioner then filed unfair labor practice charges against the Employer, alleging violations of sections 8(a)(5) and 8(a)(1) of the Act. 29 U.S.C. Sec. 158(a)(5) and (1). The Board held, in accord with its decision in Amoco Production Co., 262 N.L.R.B. 1240 (1982), see Part II, infra, that the exclusion of nonmembers from the election rendered the merger improper for lack of sufficient due process safeguards. May Department Stores Co., 268 N.L.R.B. 979 (1984). Therefore, the Board concluded that the Employer did not violate the Act by refusing to bargain with petitioner and by refusing to honor the existing contract.

Petitioner filed a timely appeal. Despite the fact that the present case involves a merger, petitioner does not attempt to escape the application of Amoco, which involved an affiliation, upon the basis of any factual distinction. Instead, petitioner maintains that two independent reasons mandate the rejection of Amoco. First, petitioner argues that the Board's already existing rule--that an employer need not bargain with a post-election union unless the union is merely a continuation of the old union with a new name and not a substantially different organization--adequately protects employees' representational interests. Thus, petitioner asserts the nonmember voting rule is "invalid as an entirely gratuitous interference with internal union affairs." Petitioner asserts that the merger is an internal union affair, effectively indistinguishable from other matters such as strike votes and contract ratifications, from which, the Board has held, unions may exclude nonmembers' participation.

Second, petitioner claims that, because the numerical outcome could not have changed even had all nonmember employees voted against the merger, the Board's own outcome determinative rule for Board-conducted representation elections should apply. Under the "outcome determinative" rule, mandated by the Landrum Griffin Act, 29 U.S.C. Sec. 482(c), the Board will not overturn a representation election unless it determines that an election without improprieties would have resulted in a different outcome. Petitioner maintains that the same rule should apply here because merger elections are, in a sense, substitutes for representation elections. Finally, petitioner claims that Amoco is internally inconsistent. Petitioner points out that the rule requires a union to allow all unit employees to vote in a merger election, just as in a representation election, because both types of elections implicate the same employee rights. Simultaneously, however, the Board refuses to apply the outcome determinative test to the merger context, somehow differentiating between merger elections and representation elections.

In contrast to petitioner's position, the Board contends that its Amoco rule is a permissible construction of the Act, consistent with the Act's fundamental guarantees. The Board maintains that the Amoco rule strikes a reasonable balance of the conflicting legitimate interests at stake. Therefore, in light of the broad deference due to the Board's determinations, the Board contends that we must deny the petition.

II. THE HISTORY OF THE AMOCO RULE

In 1975, the Board, by a vote of two-to-one, adopted an administrative law judge's recommended order requiring Amoco Production Company to recognize and bargain with a union and to cease and desist from certain unfair labor practices. Amoco Production Co., 220 N.L.R.B. 861 (1975). The originally independent, Board-certified union voted to affiliate with an international. No non-union employees in the bargaining unit could vote in the election, although union organizers permitted them to participate in the discussions concerning the election and informed them that they could vote merely by becoming union members. Of the 480 employees in the unit, 383 received ballots. By a vote of 214-71, the employees voted in favor of affiliation. Thus, the margin of victory for the affiliation, 143 votes, was greater than the number of non-union employees who were ineligible to vote, of which there were ninety-seven. Nevertheless, the company refused to recognize petitioner and repudiated the collective bargaining agreement.

The Board held the company to its contract, relying upon the fact that participation by the non-union employees would not have altered the result. Id. at 864. The Board further noted that there was neither any procedural challenge to the manner in which the union ran the actual voting nor any employee complaints concerning the affiliation. Id. The Board found that the international was the successor to the independent and held that the change in affiliation did not relieve the company of its bargaining obligation. The Board also observed that, if it voided the merger election, the employees would...