Van Dorn Plastic Machinery Co. v. N.L.R.B.

• Decision Date: 01 August 1989
• Docket Number: Nos. 87-6359 and 88-5128,s. 87-6359 and 88-5128
• Citation: 881 F.2d 302
• Parties: 132 L.R.R.M. (BNA) 2200, 113 Lab.Cas. P 11,547 VAN DORN PLASTIC MACHINERY COMPANY, Petitioner-Cross Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross Petitioner.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 302

881 F.2d 302

132 L.R.R.M. (BNA) 2200, 113 Lab.Cas. P 11,547

VAN DORN PLASTIC MACHINERY COMPANY, Petitioner-Cross Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross Petitioner.

Nos. 87-6359 and 88-5128.

United States Court of Appeals, Sixth Circuit.

Argued Oct. 7, 1988.

Decided Aug. 1, 1989.

Keith A. Ashmus, argued, Gregory A. Jacobs, Thompson, Hine & Flory, James A. Marx, Cleveland, Ohio, for petitioner-cross respondent.

Aileen A. Armstrong, John C. Truesdale, Executive Secretary, N.L.R.B., Washington, D.C., Paul Spielberg, Christopher Young, argued, Frederick C. Calatrello, N.L.R.B., Region 8, Cleveland, Ohio, for respondent-cross petitioner.

Before: KENNEDY, KRUPANSKY and BOGGS, Circuit Judges.

KRUPANSKY, Circuit Judge.

The petitioner-appellant, Van Dorn Plastic Machinery Company (Van Dorn), has appealed a decision and order of the National Labor Relations Board (Board), reported at 286 N.L.R.B. No. 117, 128 L.R.R.M. (BNA) 1265, 1987-88 NLRB Dec. (CCH) p 19,112 (1987), which concluded that Van Dorn had violated sections 8(a)(5) and (1) of the National Labor Relations Act by unilaterally changing the paid lunch period offered to specific union employees and ordered Van Dorn to pay back wages as a result of this violation. The NLRB, respondent-cross petitioner, has applied to this court for enforcement of its decision and order.

On December 14, 1982, the Board had ordered Van Dorn to bargain with District 54 of the International Association of Machinists and Aerospace Workers (Union) as the duly elected representative of the majority of Van Dorn's production and maintenance employees and to desist, inter alia, from interrogating employees and informing them that it would not recognize the Union as their bargaining agent in violation of section 8(a)(1) of the National Labor Relations Act (Act), 29 U.S.C. Sec. 158(a)(1); from refusing to bargain with the duly certified representative of its production and maintenance employees in violation of section 8(a)(5) of the Act, 29 U.S.C. Sec. 158(a)(5); and from unilaterally abolishing a paid lunch period afforded to some thirty-five employees in violation of section 8(a)(5) of the Act, 29 U.S.C. Sec. 158(a)(5). On appeal, this court affirmed the Board's decision on all issues with the exception of the issue joined in the instant appeal. Van Dorn Plastic Mach. Co. v. N.L.R.B., 736 F.2d 343 (6th Cir.1984), enforcing in part, remanding in part, 265 N.L.R.B. 864, 112 L.R.R.M. (BNA) 1408, 1982-83 NLRB Dec. (CCH) p 15,496 (1982), cert. denied, 469 U.S. 1208, 105 S.Ct. 1173, 84 L.Ed.2d 323 (1985).

Upon considering Van Dorn's justification for unilaterally changing the working conditions here in controversy, ostensibly as a "business necessity," and the Board's narrowly interpreted distinction between that stipulated term and the term "compelling economic considerations," this court on the initial appeal was prompted to remand the case to the Board with the following comments:

Prior to certification but after the election Van Dorn eliminated paid lunch periods for approximately 35 employees without offering to bargain on this issue with the Union. At the initial administrative hearing on the complaint, General Counsel for the Board and Van Dorn's counsel stipulated in writing that the change was made "due to business necessity." Van Dorn agrees that its paid lunch policy is "a condition of employment" and that it acted unilaterally. However, it takes the position that the stipulation brought it within a recognized exception to the bargaining requirement, which permits unilateral changes based on "compelling economic considerations." See Mike O'Connor Chevrolet-Buick-GMC Co., Inc., 209 NLRB 701, 703 (1974), enf. denied on other grounds, 512 F.2d 684 (8th Cir.1975). The ALJ construed the stipulated reason for the change in lunch policy--"business ecessity"--as the equivalent of "compelling economic considerations." Thus, he excused Van Dorn from bargaining on the change, while requiring it to bargain on the effects of the change.

The Board found that the stipulation did not satisfy the "compelling economic considerations" exception. On appeal Van Dorn argues that the stipulation was binding, and giving the words their ordinary meaning, clearly brought its action within the exception. It is not clear from this record what the parties intended when they entered into the stipulation. However, a stipulation once entered into should be construed to give it legal effect. National Audubon Society, Inc. v. Watt, 678 F.2d 299, 307 (D.C.Cir.1982). A remand is necessary to determine the correct interpretation of the stipulation. Van Dorn proceeded on the assumption that the stipulation relieved it of the duty to justify its failure to bargain on the change in lunch periods. The ALJ so construed the stipulation. If the stipulation is found to be ambiguous the Board must consider extrinsic evidence of the intention of the parties in entering into it. If the Board finds from such evidence that no agreement was actually reached and that the stipulation is a nullity, then fairness requires that Van Dorn be given an opportunity to establish "compelling economic considerations." In considering this question the Board would be required to categorize the lunch period action within the holding of First Nat'l Maintenance Corp., 452 U.S. 666, 101 S.Ct. 2573, 69 L.Ed.2d 318 [ (1981) ] (a decision which is "almost exclusively 'an aspect of the relationship' between employer and employee" must be bargained but a decision which only has an "indirect and attenuated impact on the relationship" or is made to preserve the business and involves a fundamental change in scope or directions need not be bargained).

Van Dorn Plastic Mach. Co. v. N.L.R.B., 736 F.2d at 348-49.

The case was submitted for remand disposition by the Board. Van Dorn moved for summary judgment, arguing that the term "business necessity" was the equivalent of "compelling economic considerations" and, accordingly, it was entitled to judgment as a matter of law. On January 2, 1987, the Board denied Van Dorn's motion, and instead concluded that the affidavits submitted by the parties demonstrated that there had been no meeting of the minds between Van Dorn and the General Counsel as to the intended meaning of the term "business necessity." The Board thereupon referred the matter to an Administrative Law Judge (ALJ) for further proceedings, pursuant to this court's instructions in Van Dorn Plastic Mach.Co., to afford Van Dorn the opportunity to demonstrate that "compelling economic considerations" had justified the unilateral change in the paid lunch policy.

After conducting hearings and considering the evidence presented by the parties, the ALJ determined that Van Dorn had proved no "compelling economic considerations" which would have justified its decision to eliminate the paid lunch policy of its thirty-five affected employees. The Board adopted the findings of the ALJ and concluded that Van Dorn had violated its duty to bargain by unilaterally altering its paid lunch policy. The Board thereupon entered an order requiring Van Dorn to restore the paid lunch policy upon the Union's request and to cease and desist from such unfair labor practices. The Board further directed Van Dorn to reimburse the involved thirty-five employees their back wages accrued from October 7, 1976, the date it had implemented the controversial lunch policy, until such time as Van Dorn had bargained in good faith with the union to resolve the issue. The order also required Van Dorn to post an appropriate notice detailing the above described violation.

Van Dorn filed a timely petition for review of the Bo rd's order; the Board filed a timely cross petition for enforcement of its order.

On appeal, Van Dorn has argued that the Board erred in concluding that the stipulation between Van Dorn and the General Counsel interpreting the term "business necessity" was a nullity because there had been no meeting of the minds. "Interpretation of the stipulation is primarily a matter of ascertaining the intent of the parties. The intent of the parties in turn is a question of fact to be determined by the district court based on the evidence before it." WO Co. v. Benjamin Franklin Corp., 562 F.2d 1339, 1344 (1st Cir.1977); cf. N.L.R.B. v. International Credit Serv., 651 F.2d 1172, 1173-74 (6th Cir.1981) (published order) ("The existence of an agreement is a question of fact...."); N.L.R.B. v. Truckdrivers, Chauffeurs & Helpers, Local Union No. 100, 532 F.2d 569, 571 (6th Cir.) ("Whether or not an agreement has been reached between the parties is a question of fact for the Board to determine...."), cert. denied, 429 U.S. 859, 97 S.Ct. 160, 50 L.Ed.2d 137 (1976). "[S]tipulations, like other contracts, must be interpreted in light of the circumstances under which the agreement was made." National Audubon Soc'y, Inc. v. Watt, 678 F.2d 299, 307 (D.C.Cir.1982) (same), cited in Van Dorn Mach. Co., 736 F.2d at 349; Rice v. Glad Hands, Inc., 750 F.2d 434, 438 (5th Cir.1985) (citing Chouest v. A & P Boat Rentals, Inc., 472 F.2d 1026, 1028-29 (5th Cir.), cert. denied sub nom. Travelers Ins. Co. v. Chouest, 412 U.S. 949, 93 S.Ct. 3012, 37 L.Ed.2d 1002 (1973)). See generally 3 A. Corbin, Corbin on Contracts, Sec. 545, at 164 (1960).

Statements by one party to the other as to the meaning of words or as to the terms of agreement, made in the course of their preliminary negotiation, are relevant and admissible to show what each of them had reason to understand by the words eventually embalmed in the "integration".... If they show that no common meaning was given to the words ..., the only remedy to be granted is refusal of enforcement....

3 A. Corbin, Corbin on Contracts Sec. 543, at 138 n. 89 (1960); see also 1 id. Secs. 106 & 107 (1963).

In the instant case, the NLRB, pursuant to the instructions from this court, considered the affidavits of Van...