West Penn Power Co. v. N.L.R.B.

Citation394 F.3d 233
Decision Date12 January 2005
Docket NumberNo. 03-2139.,No. 03-1984.,03-1984.,03-2139.
PartiesWEST PENN POWER COMPANY and The Potomac Edison Company D/B/A Allegheny Power And Allegheny Energy Supply Company, LLC, A Single Employer, And Their Agent Allegheny Energy Service Corporation, Petitioners, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Utility Workers Union of America, Local 102, AFL-CIO, Intervenor. National Labor Relations Board, Petitioner, Utility Workers Union of America, Local 102, AFL-CIO, Intervenor, v. West Penn Power Company and The Potomac Edison Company D/B/A Allegheny Power And Allegheny Energy Supply Company, Llc, A Single Employer, And Their Agent Allegheny Energy Service Corporation, Respondents.
CourtUnited States Courts of Appeals. United States Court of Appeals (4th Circuit)

ARGUED: John Clark Unkovic, Reed Smith, L.L.P., Pittsburgh, Pennsylvania, for West Penn Power Company, Potomac Edison Power Company, and Allegheny Energy Service Corporation. Joan Elizabeth Hoyte, Office of the General, National Labor Relations Board, Washington, D.C., for the Board. Burton E. Rosenthal, Segal, Roitman & Coleman, Boston, Massachusetts, for Intervenor. ON BRIEF: Arthur J. Chmiel, Allegheny Energy, Fairmont, West Virginia; Darren P. O'Neill, Reed Smith, L.L.P., Pittsburgh, Pennsylvania, for West Penn Power Company, Potomac Edison Power Company, and Allegheny Energy Service Corporation. Arthur F. Rosenfeld, General, John E. Higgins, Jr., Deputy General, John H. Ferguson, Associate General, Aileen A. Armstrong, Deputy Associate General, Robert J. Englehart, Supervisory Attorney, National Labor Relations Board, Washington, D.C., for the Board. Stephanie R. Pratt, Segal, Roitman & Coleman, Boston, Massachusetts, for Intervenor.

Before NIEMEYER, MICHAEL, and GREGORY, Circuit Judges.

Petition for review denied in part and granted in part, and partial remand ordered; cross-application for enforcement granted in part and denied in part. Judge MICHAEL wrote the majority opinion, in which Judge GREGORY joined. Judge NIEMEYER wrote a dissenting opinion.

OPINION

MICHAEL, Circuit Judge:

This case is before us on the petition of West Penn Power Company and the Potomac Edison Company d/b/a Allegheny Power, Allegheny Energy Supply Company, LLC, and their agent Allegheny Energy Service Corporation (together, Allegheny Power or the Company) to review an order of the National Labor Relations Board (NLRB or the Board). The Board has filed a cross-application for enforcement of its order. The Utility Workers Union of America, System Local 102, AFL-CIO (the Union) has intervened on behalf of the Board. The Board determined that Allegheny Power violated section 8(a)(1) and (5) of the National Labor Relations Act (the NLRA or the Act), 29 U.S.C. § 158(a)(1) and (5), by failing to provide the Union with information about the Company's use of outside contractors for bargaining unit work. We conclude that the Board is correct in its decision to order the Company to produce requested information on incidents of contracting (also referred to as subcontracting), including the use of a contractor for a special meter installation project. Further consideration by the Board is warranted, however, with respect to the Union's request for contractor cost data, and we remand for this limited purpose. We therefore enforce the Board's order except to the extent that it requires the production of cost data.

I.
A.

Allegheny Power generates electricity and distributes it to customers in parts of several states, including Pennsylvania, Maryland, West Virginia, and Virginia. Since the late 1930s the Company has had collective bargaining agreements with the Union, which represents a unit of approximately 1200 employees. The Union employees work at two dozen service centers, several power stations, and two general shops run by the Company in the four states mentioned above. The Company's use of contractors for regular work has been a subject of bargaining for many years. In a November 1977 Memorandum of Agreement (1977 side agreement) the Company agreed to "amplify" the information provided to the Union in the Company's "Quarterly Contract Work Report." J.A. 280. The 1977 side agreement obligates the Company "to furnish [the Union with] the names of all contractors performing ordinary maintenance and repair work" together with a description of the work and its location. J.A. 280. Though not mentioned in the side agreement, the start and finish dates of the work were included in the disclosures. For many years, or until about mid-1998, the Company provided the Union with contractor work information on a quarterly basis at the level of detail just described.

By the mid-1990s Allegheny Power was interested in reducing costs associated with the use of outside contractors for regular maintenance and repair work. The Union, on the other hand, was concerned that the Company's increasing use of contractors would lead to job losses for its membership. The Union's concern was heightened in 1996 when the Company proposed to lay off ninety-six bargaining unit employees at locations in Pennsylvania. When the parties negotiated a new labor agreement in 1996 (effective May 1, 1996, to May 1, 1999), they included two provisions to address these concerns. First, a "Contract Work" provision allowed the Company to continue using outside contractors, but obligated the Company to "maintain[ ] a basic operating and maintenance force of sufficient size to take care of the expected regular work." J.A. 251. Second, a "Resource Sharing" provision permitted the Company to temporarily reassign regular employees to any company location where their services were needed. The Company was required to follow a particular "order of preference" in making reassignments: local employees were used first, employees in contiguous locations were used next, and those in non-contiguous locations were used last. Contractors were employed only if none of the regular employee groups just listed was sufficient to meet the demands of a job. Together, these provisions were intended to maintain stable employment for bargaining unit employees, minimize costs for the Company, and reduce the use of outside contractors. (In October 1997 the parties agreed to extend their May 1996 labor contract through April 30, 2001.)

In the mid-1990s the trend toward deregulation prompted Allegheny Power to alter its corporate structure. Previously, Allegheny Power was made up of one parent company with three operating utility companies, each engaged in the generation and distribution of electricity. The restructuring consolidated operations into two business units, one for generation and one for distribution; a separate service corporation performs administrative functions for the operational units. According to the Company, the corporate reorganization led to changes in its hiring and record keeping practices with respect to contractors. Instead of hiring contractors on a "time and material basis," the Company began hiring them on a "project basis," paying a flat sum for each job. J.A. 209. At the same time, the Company began keeping records on contracting at a corporate center rather than at individual service centers or facilities. Finally, in about mid-1998 Allegheny Power changed the format and substance of the contractor reports provided to the Union, making less information available.

B.

The first information request at issue stems from Allegheny Power's switch to the new contractor report format in mid-1998. The new report form had spaces for listing the name of the contractor, the type of work, its location, and the number of workers. In practice, however, the Company noted only a broad description of the type of work, and it usually wrote down "as needed" in the column calling for the number of workers. Moreover, the new form had no space for reporting a project's start and end dates. Union president William J. Sterner believed that the new reports were deplorably inadequate, and he telephoned his complaints to the Company's director of employee relations, Robert N. Kemerer, on three or four occasions in 1999. Sterner pointed out to Kemerer that the reports were incomplete and lacking in detail. Sterner also emphasized to Kemerer that in order to "enforce the contract," the Union "needed to know what was going on out there as far as contracting was concerned." J.A. 134. After Sterner's telephone requests yielded no information, the Union made seven written requests to the Company between September 1999 and January 2001, pointing out that information on contracting was incomplete, inadequate, untimely, or missing altogether.

The Union first wrote Allegheny Power about the contractor report problem on September 22, 1999. The letter noted that the second quarter reports were incomplete and that reports were missing for many (seventeen out of twenty-three) of the union-represented service centers. The Union requested complete information, stating that it was necessary "for the Union to protect the interests of [its] members." J.A. 277. When the Company failed to respond, the Union wrote again on November 1, 1999, requesting a complete set of contractor reports for the first three quarters of 1999. Finally, on January 17, 2000, Debra J. West, who had replaced Kemerer as employee relations director, supplied the Union with contractor reports for the third quarter of 1999, showing contract work at a few locations. West asserted that the Company had supplied "the most complete data" it had and that it had satisfied its reporting obligations under the 1977 side agreement. J.A. 279.

In a March 7, 2000, letter to the Company, the Union complained again that the contractor reports had routinely been "many months late." J.A. 281. The Union pointed out that the 1977 side agreement did not limit the Union's contractual and statutory rights to request information about contracting. The Union noted that there...

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