Adcock v. FREIGHTLINER LLC

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

RONNIE ADCOCK; TIMOTHY 

COCHRANE; THOMAS COCHRANE;

KATHERINE IVEY; KRISTI JONES,

Plaintiffs-Appellants,

v.

FREIGHTLINER LLC; INTERNATIONAL

UNION, UNITED AUTOMOBILE AND

AGRICULTURAL IMPLEMENT WORKERS  No. 06-2287

OF AMERICA,

Defendants-Appellees.

NATIONAL LABOR RELATIONS

BOARD,

Amicus Curiae.



Appeal from the United States District Court

for the Western District of North Carolina, at Charlotte.

Graham C. Mullen, Senior District Judge.

(3:06-cv-00032)

Argued: October 28, 2008

Decided: December 23, 2008

Before TRAXLER and KING, Circuit Judges,

and HAMILTON, Senior Circuit Judge.

Affirmed by published opinion. Senior Judge Hamilton wrote

the opinion, in which Judge Traxler and Judge King joined.

2 ADCOCK v. FREIGHTLINER LLC

COUNSEL

ARGUED: William L. Messenger, NATIONAL RIGHT TO

WORK LEGAL FOUNDATION, Springfield, Virginia, for

Appellants. William Lawrence Rikard, Jr., PARKER, POE,

ADAMS & BERNSTEIN, L.L.P., Charlotte, North Carolina;

Stephen P. Berzon, ALTSHULER & BERZON, San Fran-

cisco, California, for Appellees. ON BRIEF: Philip M. Van

Hoy, Stephen Dunn, VAN HOY, REUTLINGER, ADAMS &

DUNN, Charlotte, North Carolina, for Appellants. Eric D.

Welsh, Kristin R. Poolos, PARKER, POE, ADAMS &

BERNSTEIN, L.L.P., Charlotte, North Carolina, for Appellee

Freightliner LLC. Danielle Leonard, ALTSHULER & BER-

ZON, San Francisco, California; George N. Davies, NAKA-

MURA, QUINN & WALLS, Birmingham, Alabama; Daniel

W. Sherrick, General Counsel, Jeffrey D. Sodko, Associate

General Counsel, INTERNATIONAL UNION, UAW,

Detroit, Michigan; Seth Cohen, SMITH, JAMES, ROWLETT

& COHEN, L.L.P., Greensboro, North Carolina, for Appellee

International Union, United Automobile and Agricultural

Implement Workers of America. Ronald Meisburg, General

Counsel, John E. Higgins, Jr., Deputy General Counsel, John

H. Ferguson, Associate General Counsel, Margery E. Lieber,

Deputy Associate General Counsel, Eric G. Moskowitz,

Assistant General Counsel, Laura Bandini, Senior Attorney,

NATIONAL LABOR RELATIONS BOARD, Washington,

D.C., for Amicus Curiae.

OPINION

HAMILTON, Senior Circuit Judge:

With certain exceptions not applicable in this case, § 302 of

the Labor Management Relations Act (LMRA) prohibits,

among other things, an employer from "pay[ing], lend[ing], or

deliver[ing] . . . any money or other thing of value" to a labor

ADCOCK v. FREIGHTLINER LLC 3

union or labor union representative. 29 U.S.C. § 186(a). The

issue presented in this appeal is whether Freightliner LLC

(Freightliner) delivered "money or other thing[s] of value" to

the International Union, United Automobile and Agricultural

Implement Workers of America (the Union) pursuant to a

card check agreement with the Union, wherein Freightliner

agreed, among other things, to: (1) require some of its

employees to attend, on paid company time, Union presenta-

tions explaining the card check agreement; (2) provide the

Union reasonable access to nonwork areas in company plants

to allow Union representatives to meet with employees; and

(3) refrain from making negative comments about the Union

during organizing campaigns. For the reasons stated below,

we conclude that the district court correctly determined that

Freightliner did not deliver a "thing of value" to the Union in

violation of § 302. Accordingly, we affirm.

I

A

Freightliner owns several production facilities in North

Carolina, including the Mt. Holly Truck Manufacturing Plant

(Mt. Holly), the Gastonia Parts Manufacturing Plant (Gasto-

nia), the Cleveland Truck Manufacturing Plant (Cleveland

Truck), the Cleveland Parts Distribution Center (Cleveland

Parts), the Thomas Built Buses Manufacturing Plant (Thomas

Built), and the Freightliner Custom Chassis Manufacturing

Plant (Custom Chassis). As of March 2002, the Union was the

exclusive bargaining representative only of the employees at

Mt. Holly. Around this time, the Union sought to organize

and become the exclusive bargaining representative of the

employees at Freightliner’s other facilities in North Carolina,

which were nonunion.

Negotiations between Freightliner and the Union ensued,

which resulted in the signing of two agreements in December

2002. The first agreement (the Card Check Agreement) out-

4 ADCOCK v. FREIGHTLINER LLC

lined the ground rules for the organizing campaigns. In the

Card Check Agreement, Freightliner agreed with respect to

each bargaining unit to forego a National Labor Relations

Board election if a majority of the bargaining unit employees

chose the Union as their exclusive bargaining representative

by signing authorization cards. As part of the Card Check

Agreement, Freightliner also agreed to: (1) require some of its

employees to attend, on paid company time, Union presenta-

tions explaining the Card Check Agreement; (2) provide the

Union reasonable access to nonwork areas in company plants

to allow Union representatives to meet with employees; and

(3) refrain from making negative comments about the Union

during the organizing campaigns.1

The second agreement signed by the parties was a precon-

1

Typically, a "card check" or "neutrality" agreement is an agreement

between the employer and the union "in which they agree that (a) the

employer will not speak for or against the union (neutrality) and/or (b) the

employer will recognize the union if it can get signed authorization cards

from a majority of the unit members (card-check)." Matthew T. Bodie,

The Market for Union Services: Reframing the Debate, 94 Va. L. Rev. In

Br. 23, 26-27 (2008). Neutrality agreements have been upheld by this and

other courts. See Amalgamated Clothing & Textile Workers Union, AFL-

CIO v. Facetglas, Inc., 845 F.2d 1250, 1253 (4th Cir. 1988) (holding neu-

trality and nondiscrimination provisions of election agreement enforceable

under § 301 of the LMRA as "an agreement between an employer and a

labor organization significant to the maintenance of labor peace between

them") (citation and internal quotation marks omitted); see also AK Steel

Corp. v. United Steelworkers, 163 F.3d 403, 406 (6th Cir. 1998) (uphold-

ing agreement preventing an employer from "demean[ing] the Union as an

organization or its representatives as individuals" and interpretation pre-

venting anti-union communication by employer); Hotel & Rest. Employ-

ees Union Local 217 v. J.P. Morgan Hotel, 996 F.2d 561, 563 (2d Cir.

1993) (upholding agreement preventing an employer from interfering with

union organizing effort or mounting a campaign with its employees oppos-

ing the union). Like the Card Check Agreement in this case, card check

agreements typically include a provision allowing the union "access to the

employer’s physical property." James J. Brudney, Neutrality Agreements

and Card Check Recognition: Prospects for Changing Paradigms, 90

Iowa L. Rev. 819, 826 (2005).

ADCOCK v. FREIGHTLINER LLC 5

ditions agreement (the Preconditions Agreement). In the Pre-

conditions Agreement, the Union made commitments as to its

conduct if it were recognized as the exclusive bargaining rep-

resentative of Freightliner’s employees. Notably, the Union

agreed that: (1) there would be "separate consideration in

terms and conditions of employment for each Business Unit

because of industry differences (trucks, parts, busses, fire and

rescue, chassis) including competitive wage and benefits

packages within comparative product markets"; (2) there

would be "no guaranteed employment or transfer rights

between Business Units or Plants"; (3) there would be "no

provisions for severance pay . . . in the event of a layoff or

plant closure"; (4) there would be "no strikes during the term

of any collectively bargained agreement"; (5) there would be

"no subcontracting prohibitions, provided economics reflect

non-competitiveness"; (6) future "benefits cost increases, in

excess of normal inflation, will be shared between the Com-

pany and the employees proportionately at a rate to be deter-

mined between the Company and its employees"; and (7) in

consideration of Freightliner’s financial turnaround objec-

tives, there would be "no wage adjustments provided at any

newly organized facility prior to mid-2003." (J.A. 17-18).

The ensuing organizing campaigns at Gastonia, Cleveland

Truck, and Cleveland Parts resulted in the Union becoming

the exclusive bargaining representative at these facilities in

the first part of 2003. In June 2003, Freightliner and the

Union, on behalf of the Mt. Holly employees, entered into a

collective bargaining agreement (CBA), which provided,

among other things, that: (1) there would be no increase in

employee wages for the first three years of the CBA; (2) the

employees’ profit sharing bonus would be canceled; and (3)

the employees would increase their share of employee benefit

payments. In December 2003, Freightliner and the Union, on

behalf of the employees at the Gastonia, Cleveland Truck, and

Cleveland Parts facilities, entered into CBAs.

In March 2004, a majority of the employees at Thomas

Built signed authorization cards choosing the Union as their

6 ADCOCK v. FREIGHTLINER LLC

exclusive bargaining representative. Consequently, Freight-

liner recognized the Union as the exclusive bargaining repre-

sentative of these employees. On April 14, 2004, Jeff Ward,

a Thomas Built employee, filed unfair labor practice charges

against the Union and Freightliner. After reviewing these

charges, General Counsel for the NLRB issued a complaint on

October 13, 2004 alleging that Freightliner and the Union vio-

lated the National Labor Relations Act (NLRA), 29 U.S.C.

§ 151 et seq., by "bargaining and entering into an agreement

regarding employee terms and conditions of employment

prior to the [Union] enjoying the support of a majority of

employees." (J.A. 29). The complaint also alleged that

Freightliner violated the NLRA by assisting the Union with

the solicitation of union authorization cards from employees

at Thomas Built and by recognizing the Union at Thomas

Built when, in fact, the Union did not represent "an uncoerced

majority of employees." (J.A. 29).

On March 17, 2005, the NLRB, the Union, and Freightliner

settled the unfair labor practice charges filed by General

Counsel for the NLRB. The terms of the settlement agreement

included that: (1) Freightliner and the Union would cease giv-

ing effect to the Preconditions Agreement at all Freightliner

facilities; (2) Freightliner would cease assisting the Union

with the solicitation of union authorization cards from

employees at Thomas Built; and (3) Freightliner would not

recognize the Union at Thomas Built unless the Union was

"certified by the NLRB." (J.A. 30).

B

On January 24, 2006, four employees of Gastonia and one

employee of Cleveland Truck filed this class action against

Freightliner and the Union in the United States District Court

for the Western District of North Carolina. The complaint

alleged four claims under the Racketeer Influenced and Cor-

rupt Organizations Act (RICO), 18 U.S.C. §§ 1961-1968. The

racketeering activity alleged in each of the four counts con-

ADCOCK v. FREIGHTLINER LLC 7

sists of violations of § 302 of the LMRA.2 According to the

complaint, Freightliner violated § 302 when it: (1) required

some of its employees to attend on paid company time Union

presentations explaining the Card Check Agreement; (2) pro-

vided the Union reasonable access to nonwork areas in com-

pany plants to allow Union representatives to meet with

employees; and (3) agreed to refrain from making negative

comments about the Union during the organizing campaigns.

The complaint also alleges that the Union violated § 302

when it agreed to receive these alleged benefits. The five

employees (the Employees), for themselves and a proposed

class of Freightliner employees, sought damages for the

wages, benefits, and other terms of employment for which

they allegedly were deprived as a result of the alleged racke-

teering activity. The Employees also sought damages for the

dues that Freightliner’s employees paid to the Union because

they allegedly never received loyal collective bargaining rep-

resentation. Finally, the Employees sought treble damages

under 18 U.S.C. § 1964(c).

On November 9, 2006, the district court dismissed the com-

plaint for failure to properly allege a § 302 violation. See Fed.

R. Civ. P. 12(b)(6). According to the district court, the com-

plaint did not set forth allegations demonstrating that Freight-

liner delivered "‘things of value’" to the Union. (J.A. 62). The

Employees noted this timely appeal.

II

The Employees contend that the district court erred when

it determined that their complaint did not properly allege a

§ 302 violation. Our review of the district court’s Rule

12(b)(6) dismissal is de novo. Schatz v. Rosenberg, 943 F.2d

485, 489 (4th Cir. 1991). In conducting this review, we con-

strue the factual allegations of the complaint "in the light most

2

A violation of § 302 is one of the enumerated predicate racketeering

activities in the RICO statute. 18 U.S.C. § 1961(1)(c).

8 ADCOCK v. FREIGHTLINER LLC

favorable to plaintiff." Battlefield Builders, Inc. v. Swango,

743 F.2d 1060, 1062 (4th Cir. 1984). However, we are not

bound by the legal conclusions drawn in the complaint. Dist.

28, United Mine Workers of Am., Inc. v. Wellmore Coal

Corp., 609 F.2d 1083, 1085-86 (4th Cir. 1979). To survive a

Rule 12(b)(6) motion, "[f]actual allegations must be enough

to raise a right to relief above the speculative level," Bell Atl.

Corp. v. Twombly, 127 S. Ct. 1955, 1965 (2007), and the

complaint must have "enough facts to state a claim to relief

that is plausible on its face." Id. at 1974.

With certain exceptions not applicable in this case, § 302 of

the LMRA prohibits, among other things, an employer from

"pay[ing], lend[ing], or deliver[ing], or agree[ing] to pay,

lend, or deliver, any money or other thing of value" to a labor

union or a representative of such union. 29 U.S.C. § 186(a).

With these same inapplicable exceptions, the statute also pro-

hibits a labor union or union representative from receiving or

accepting "any money or other thing of value" from an

employer. Id. § 186(b). According to the Employees, Freight-

liner delivered "thing[s] of value" to the Union when it agreed

to: (1) require some of its employees to attend, on paid com-

pany time, Union presentations explaining the Card Check

Agreement; (2) provide the Union reasonable access to non-

work areas in company plants to allow Union representatives

to meet with employees; and (3) refrain from making negative

comments about the Union during the organizing campaigns.

As the Employees’ argument goes, because these concessions

made by Freightliner benefited the Union’s organizing efforts,

they were "thing[s] of value" under § 302, because a "thing of

value" means anything that has subjective value to the Union.

We agree with the district court that Freightliner did not

deliver "thing[s] of value" to the Union, as the phrase

"thing[s] of value" is used in § 302. First, the plain language

of the statute does not support the Employees’ position. In

determining the meaning of a statute, we examine the statute’s

plain language. United Seniors Ass’n, Inc. v. Social Sec.

ADCOCK v. FREIGHTLINER LLC 9

Admin., 423 F.3d 397, 402 (4th Cir. 2005). In doing so, we

look at "the language itself, the specific context in which that

language is used, and the broader context of the statute as a

whole." Robinson v. Shell Oil Co., 519 U.S. 337, 341 (1997).

Under the plain language of the statute, the concessions

made by Freightliner in the Card Check Agreement do not

involve the payment or delivery of a "thing of value." The

concessions provided by Freightliner all involve permitting

the Union access to employees during an organizing cam-

paign. Such concessions do not involve the delivery of either

tangible or intangible items to the Union. A vacuum salesman

who is permitted by a company to make a sales pitch to

employees does not receive a thing of value from the com-

pany. So, too, is the case of a company that allows a union

access to its employees during an organizing campaign. In

such situations, no "thing[s] of value" are delivered by the

company. Rather, all that is involved is the establishment of

mutually acceptable ground rules, for the sales pitch in the

case of the vacuum salesman, and the organizing campaign in

the case of the union.

Our reading of the statute is consistent with the purposes of

§ 302. The Supreme Court has noted that § 302 was enacted

to curb abuses that Congress felt were "inimical to the integ-

rity of the collective bargaining process." Arroyo v. United

States, 359 U.S. 419, 425 (1959). In particular, Congress was

"concerned with corruption of collective bargaining through

bribery of employee representatives by employers, with extor-

tion by employee representatives, and with the possible abuse

by union officers of the power which they might achieve if

welfare funds were left to their sole control." Id. at 425-26

(footnotes omitted); see also Turner v. Local Union No. 302,

Int’l Bhd. of Teamsters, 604 F.2d 1219, 1227 (9th Cir. 1979)

("The dominant purpose of § 302 is to prevent employers

from tampering with the loyalty of union officials and to pre-

vent union officials from extorting tribute from employers.").

Thus, § 302 is aimed at preventing "bribery, extortion and

10 ADCOCK v. FREIGHTLINER LLC

other corrupt practices conducted in secret." Caterpillar, Inc.

v. Int’l Union, United Auto., Aerospace & Agric. Implement

Workers of Am., 107 F.3d 1052, 1057 (3d Cir. 1997) (en

banc).

In this case, the concessions made by Freightliner do not

involve bribery or other corrupt practices. By no stretch of the

imagination are the concessions a means of bribing represen-

tatives of the Union; indeed, no representative of the Union

personally benefited from these concessions. Rather, the con-

cessions serve the interests of both Freightliner and the Union,

as they eliminate the potential for hostile organizing cam-

paigns in the workplace. In this sense, the concessions cer-

tainly are not inimical to the collective bargaining process.

Our interpretation of the phrase "thing of value" also is but-

tressed by § 302’s penalty provision. Under § 302’s penalty

provision, the severity of the sentence is dictated by the mon-

etary value of the thing delivered by the employer or received

by the union. A person who willfully violates § 302 is guilty

of a felony unless the value of the money or thing involved

does not exceed $1,000, in which case the person is guilty of

a misdemeanor. Thus, Congress clearly intended § 302’s

"thing of value" to have at least some ascertainable value. In

this case, unquestionably, the concessions made by Freight-

liner, which simply involved allowing the Union access to

Freightliner’s employees, have no such whatsoever.3

We also note that our reading of § 302 is consistent with a

decision on similar facts from the Third Circuit. In Hotel

Employees & Rest. Employees Union, Local 57 v. Sage Hos-

pitality Res., LLC, 390 F.3d 206, (3d Cir. 2006), an employer

and a labor union signed an agreement which contained a

3

Because the concessions made by Freightliner have no ascertainable

value, we need not decide the extent to which intangible items may have

value under § 302 or any other criminal statute prohibiting the delivery,

conveyance, or acceptance of a "thing of value."

ADCOCK v. FREIGHTLINER LLC 11

series of provisions, including one that provided for a card

check procedure, whereby the union would present cards

requesting union representation signed by a majority of the

employer’s employees and the employer would provide a cur-

rent list of employees and valid signature samples. Id. at 209.

One of the arguments raised on appeal by the employer was

that the agreement was void because it required the employer

to deliver "thing[s] of value" to the union in violation of

§ 302. Id. at 218. In rejecting this argument, the court noted:

Not surprisingly, Sage is unable to provide any legal

support for the remarkable assertion that entering

into a valid labor agreement governing recognition

of a labor union amounts to illegal labor bribery.

There are many reasons why this argument makes no

sense, including the language of section 302 itself,

which proscribes agreements to "pay, lend, or deliver

. . . any money or other thing of value." The agree-

ment here involves no payment, loan, or delivery of

anything. The fact that a Neutrality Agreement—like

any other labor arbitration agreement—benefits both

parties with efficiency and cost saving does not

transform it into a payment or delivery of some ben-

efit. Furthermore, any benefit to the union inherent

in a more efficient resolution of recognition disputes

does not constitute a "thing of value" within the

meaning of the statute.

Id. at 219. We agree with the Third Circuit that an agreement

setting forth ground rules to keep an organizing campaign

peaceful does not involve the delivery of a "thing of value" to

a union.

The Employees’ real beef in this case seems to be with the

concessions made by the Union in the Preconditions Agree-

ment. However, the Union’s concessions in the Preconditions

Agreement do not bring § 302 into play, because § 302 only

prevents employers from delivering (and the union or union

12 ADCOCK v. FREIGHTLINER LLC

representatives from accepting or receiving) "thing[s] of

value." Pursuant to the Preconditions Agreement, Freightliner

did not deliver anything to the Union, and the Union did not

extort anything.

With that said, it is important to note that adequate reme-

dies under the NLRA are available to employees, allowing

them to challenge agreements similar to the two agreements

in this case, though the available remedies do not include the

treble damages that are available under RICO. Sections

8(a)(2) and 8(b)(1)(A) of the NLRA, 29 U.S.C. §§ 158(a)(2)

and (b)(1)(A), prohibit, in certain circumstances, the negotia-

tion of a CBA establishing wages, fringe benefits, and other

terms and conditions of employment before the union receives

the support of a majority of bargaining unit employees. The

NLRA also separately prohibits employers from improperly

coercing employees with regard to their right to choose or

reject union representation. See id. §§ 158(a)(1) and (2).4 In

4

The NLRB, as well as this court, has held that allowing unions to

address employees on company property and company time does not,

without some further evidence of coercion, violate the NLRA. See Tecum-

seh Corrugated Box Co., 333 NLRB 1, 6 (2001) ("As to Tecumseh’s con-

duct in allowing the Teamsters to address its employees on company time

and property, the Board has long held that such conduct, without more,

does not amount to unlawful assistance within the meaning of section

8(a)(2) of the Act."); Longchamps, Inc., 205 NLRB 1025, 1031 (1973)

("[T]he use of company time and property does not, per se, establish

unlawful employer support and assistance."); see also Kimbrell v. NLRB,

290 F.2d 799, 802 (4th Cir. 1961) ("The petitioners stress particularly the

circumstances that the employer gave permission to the union to address

the employees during working hours, for which the employees were paid,

and that the employer accepted the card check without a formal election

as evidence of the majority choice of the union and speedily negotiated a

union contract. These are of course circumstances to be taken into account

in making an ultimate finding but they are not conclusive, for it has been

frequently held that they do not constitute per se violations of the statute

in the absence of coercion, interference or restraint."). The fact intensive

inquiry conducted by the NLRB to resolve access issues under the NLRA

ADCOCK v. FREIGHTLINER LLC 13

this case, unfair labor practice charges containing such allega-

tions concerning Thomas Built were, in fact, filed against

Freightliner and the Union and were settled to the satisfaction

of the NLRB. The availability of such adequate remedies

severely undermines the Employees’ attempt to stretch § 302

beyond its limits. We simply cannot apply § 302 in a manner

inconsistent with both the statute’s plain language and Con-

gress’ intent in passing the statute.

III

For the reasons stated herein, the judgment of the district

court is affirmed.

AFFIRMED

can lead to different results depending on the circumstances presented.

Compare Vernitron Elec. Components, Inc., 221 NLRB 464, 465 (1975)

(finding access amounted to unlawful assistance) with Tecumseh Corru-

gated Box Co., 333 NLRB at 6 (dismissing complaint alleging improper

access).