Intl Brhd Elec 702 v. NLRB

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 19, 2000 Decided May 9, 2000

No. 99-1137

Local 702, International Brotherhood of

Electrical Workers, AFL-CIO,

Petitioner

v.

National Labor Relations Board,

Respondent

Central Illinois Public Service Company,

Intervenor

No. 99-1139

International Union of Operating Engineers,

Local 148, AFL-CIO,

Petitioner

v.

National Labor Relations Board,

Respondent

Central Illinois Public Service Company,

Intervenor

On Petitions for Review of an Order of the

National Labor Relations Board

Marilyn S. Teitelbaum argued the cause for the petitioners

in Nos. 99-1137 and 99-1139. Stacey A. Meyers was on brief

for Local 702, International Brotherhood of Electrical Work-

ers, AFL-CIO, the petitioner in No. 99-1137.

Cary Hammond and Greg A. Campbell were on brief for

petitioner International Union of Operating Engineers, Local

148, AFL-CIO in No. 99-1139.

Julie B. Broido, Attorney, National Labor Relations Board,

argued the cause for the respondent. Linda Sher, Associate

General Counsel, Aileen A. Armstrong, Deputy Associate

General Counsel, and Margaret A. Gaines, Attorney, Nation-

al Labor Relations Board were on brief for the respondent.

John D. Burgoyne, Deputy Associate General Counsel, Na-

tional Labor Relations Board, entered an appearance.

Stuart I. Cohen and Robert S. Seigel were on brief for

intervenor Central Illinois Public Service Company in Nos.

99-1137 and 99-1139.

Jonathan P. Hiatt, Larry Engelstein, James B. Coppess,

Victoria L. Bor and Sue D. Gunter were on brief for amici

curiae American Federation of Labor-Congress of Industrial

Organizations, International Brotherhood of Electrical Work-

ers and International Union of Operating Engineers in Nos.

99-1137 and 99-1139.

Robert E. Williams, Daniel V. Yager, Heather L. MacDou-

gall, Jan S. Amundson, Quentin Riegel, Stephen A. Bokat

and Robin S. Conrad on brief for the amici curiae LPA, Inc.,

National Association of Manufacturers and the Chamber of

Commerce of the United States of America in Nos. 99-1137

and 99-1139.

Before: Henderson, Randolph and Garland, Circuit

Judges.

Opinion for the court filed by Circuit Judge Henderson.

Karen LeCraft Henderson, Circuit Judge: Local 702 and

Local 148 of the International Brotherhood of Electrical

Workers, AFL-CIO (collectively Unions) challenge a decision

of the National Labor Relations Board (NLRB, Board) hold-

ing that the Central Illinois Public Service Company (CIPS)

did not commit an unfair labor practice when it locked out its

employees during contract negotiations. CIPS, 326 N.L.R.B.

No. 89, 1998 WL 600788 (Aug. 27, 1988). Reversing the

decision of the administrative law judge (ALJ), the Board

found that the lockout, implemented in response to the Un-

ions' "inside game" tactics, was not "inherently destructive of

employee rights," was justified by legitimate business inter-

ests and was not motivated by anti-union animus. Because

we conclude the Board's decision is in accord with the law and

supported by substantial evidence, we deny the Unions' peti-

tions for review.

I.

In April 1992 CIPS, a public utility which generates and

distributes electricity and gas in Illinois, began negotiating

with each of the Unions over contracts to succeed those

expiring in June 1992. When no agreement was reached by

March 1993 CIPS submitted a "final" offer to each of the

Unions, which each voted to reject. In lieu of striking, the

Unions decided to institute an "inside game" strategy under

which their members agreed to refuse to work voluntary

over-time and generally to "work-to-rule" (e.g., "adhering

strictly to all company safety and other rules; doing exactly

and only what they were told; reporting to work precisely on

time and parking work trucks at company facilities at day's

end (thus precluding employees from responding to after-

hours emergencies); presenting all grievances as a group;

advising non-employees to report unsafe conditions; and ad-

vising customers of their right to various company informa-

tion and of their right to have their meters checked annually

for accuracy," CIPS, slip op. at 1, 1998 WL 600788, at *1).

The Unions began the inside game strategy on April 24, 1993

and continued to negotiate while carrying it out. At 4:00 a.m.

on May 20, 1993 CIPS instituted a lockout of all members of

the two locals. Negotiations continued during the lockout

and CIPS reached an agreement with Local 148 in June,

thereby ending the lockout of its members. Local 148 none-

theless remained off the job in support of Local 702. CIPS

ended the lockout of Local 702 on August 25, 1993, although

no contract agreement was reached until January 1994.

Each of the Unions filed unfair labor practice charges with

the NLRB, alleging violations of section 8(a)(1), (3) and (5) of

the National Labor Relations Act, 29 U.S.C. s 158(a)(1), (3),

(5). Following a hearing the ALJ judge issued a decision

dated May 20, 1996, which found that CIPS had violated all

three cited subsections. In relevant part, the ALJ's decision

concluded that the work-to-rule campaign constituted protect-

ed activity for which the lockout was intended as punishment

in violation of section 8(a)(3). In a 2-1 decision dated August

27, 1998 the Board reversed the ALJ on the section 8(a)(3)

lockout charge, concluding the lockout was instituted not out

of anti-union animus but with the dual "legitimate and sub-

stantial" business justifications of facilitating contract negoti-

ations and of countering the economic effects of the inside

game strategy. See CIPS, slip op. at 4-7, 1998 WL 600788, at

*6-10.

II.

The Unions challenge both the Board's interpretation of the

law and its factual findings. "The courts accord a very high

degree of deference to administrative adjudications by the

NLRB." United Steelworkers Local 14534 v. NLRB, 983

F.2d 240, 244 (D.C. Cir. 1993). "The Board has primary

responsibility for applying the general provisions of the [Na-

tional Labor Relations Act], and where its interpretation of

what the Act requires is reasonable, in light of the purposes

of the Act and the controlling precedent of the Supreme

Court, courts should respect its policy choices." United Food

& Commercial Workers Int'l Union v. NLRB, 880 F.2d 1422,

1428 (D.C. Cir. 1989) (citing Pattern Makers' League of N.

Am. v. NLRB, 473 U.S. 95 (1985); Automobile Salesmen's

Union Local 1095 v. NLRB, 711 F.2d 383 (D.C. Cir. 1983)).

"[W]ith respect to questions of fact," "the findings of the

Board ... if supported by substantial evidence on the record

considered as a whole shall be conclusive." 29 U.S.C.

s 160(e). "Where the Board has disagreed with the ALJ, as

occurred here, the standard of review with respect to the

substantiality of the evidence does not change." United Food

& Commercial Workers v. NLRB, 768 F.2d 1463, 1469-70

(D.C. Cir. 1985) (citing Universal Camera Corp. v. NLRB,

340 U.S. 474, 496 (1951); General Teamsters Local Union

No. 174 v. NLRB, 723 F.2d 966, 971 (D.C. Cir. 1983)).

Nevertheless, "cases have made clear that '[t]he findings and

decision of the [ALJ] form an important part of the "record"

on which [the] judgment of substantiality is to be based,'

International Brotherhood of Teamsters, Local No. 310 v.

NLRB, 587 F.2d 1176, 1180 (D.C. Cir. 1978), and that the

Board, when it disagrees with the ALJ, 'must make clear the

basis of its disagreement ...' General Teamsters, supra, 723

F.2d at 971." Id. at 1470 (alteration in original). In the end,

however, "[s]ince the Board is the agency entrusted by Con-

gress with the responsibility for making findings under the

statute, 'it is not precluded from reaching a result contrary to

that of the [ALJ] when there is substantial evidence in

support of each result,' " and " 'is free to substitute its

judgment for the [ALJ]'s.' " Carpenters Local 33 v. NLRB,

873 F.2d 316, 319 (D.C. Cir. 1989) (quoting Sign & Pictorial

U., Local 1175 v. NLRB, 419 F.2d 726, 734 (D.C. Cir. 1969)

(alteration in original)). Because we conclude the Board's

decision here was supported by substantial evidence and its

disagreement with the ALJ fully explained, we do not disturb

it.

Section 8(a)(3) of the National Labor Relations Act pro-

vides in relevant part: "It shall be an unfair labor practice for

an employer ... (3) by discrimination in regard to hire or

tenure of employment or any term or condition of employ-

ment to encourage or discourage membership in any labor

organization:...." 29 U.S.C. s 158(a)(3). In NLRB v. Great

Dane Trailers, 388 U.S. 26 (1967), the United States Supreme

Court construed its precedent to establish a comprehensive

framework for analyzing allegations of a section 8(a)(3) viola-

tion:

The statutory language 'discrimination * * * to * * *

discourage' means that the finding of a violation normally

turns on whether the discriminatory conduct was moti-

vated by an antiunion purpose. American Ship Build-

ing Co. v. National Labor Relations Board, 380 U.S. 300,

85 S.Ct. 955 (1965). It was upon the motivation element

that the Court of Appeals based its decision not to grant

enforcement, and it is to that element which we now

turn. In three recent opinions we considered employer

motivation in the context of asserted s 8(a)(3) violations.

American Ship Building Co. v. National Labor Rela-

tions Board, supra; National Labor Relations Board v.

Brown, 380 U.S. 278, 85 S.Ct. 980, 13 L.Ed.2d 839 (1965);

and National Labor Relations Board v. Erie Resistor

Corp., [373 U.S. 221, 227, 83 S.Ct. 1139, 1144-45, 10

L.Ed.2d 308 (1963)]. We noted in Erie Resistor, supra,

373 U.S. at 227, 83 S.Ct. at 1144, that proof of an

antiunion motivation may make unlawful certain employ-

er conduct which would in other circumstances be lawful.

Some conduct, however, is so 'inherently destructive of

employee interests' that it may be deemed proscribed

without need for proof of an underlying improper motive.

National Labor Relations Board v. Brown, supra, 380

U.S., at 287, 85 S.Ct. at 986, American Ship Building Co.

v. National Labor Relations Board, supra, 380 U.S. at

311, 85 S.Ct. at 963. That is, some conduct carries with

it 'unavoidable consequences which the employer not only

foresaw but which he must have intended' and thus bears

'its own indicia of intent.' National Labor Relations

Board v. Erie Resistor Corp., supra, at 228, 231, 83 S.Ct.

at 1145-1147. If the conduct in question falls within this

'inherently destructive' category, the employer has the

burden of explaining away, justifying or characterizing

'his actions as something different than they appear on

their face,' and if he fails, 'an unfair labor practice charge

is made out.' Id., at 228, 83 S.Ct. at 1145. And even if

the employer does come forward with counter explana-

tions for his conduct in this situation, the Board may

nevertheless draw an inference of improper motive from

the conduct itself and exercise its duty to strike the

proper balance between the asserted business justifica-

tions and the invasion of employee rights in light of the

Act and its policy. Id., at 229, 83 S.Ct. at 1145. On the

other hand, when 'the resulting harm to employee rights

is * * * comparatively slight, and a substantial and

legitimate business end is served, the employers' conduct

is prima facie lawful,' and an affirmative showing of

improper motivation must be made. National Labor

Relations Board v. Brown, supra, 380 U.S. at 289, 85

S.Ct. at 987; American Ship Building Co. v. National

Labor Relations Board, supra, 380 U.S. at 311-313, 85

S.Ct. at 963-964.

388 U.S. at 33-34. Applying this framework, the Board found

that the CIPS lockout did not violate section 8(a)(3).

The Board first concluded that "the lockout in the instant

case, standing alone, cannot be considered inherently destruc-

tive of employee rights," based on the Supreme Court's

holding in American Ship Bldg. that "a lockout for the

purpose of applying pressure on a union during a bargaining

dispute is not 'one of those acts which are demonstrably so

destructive of collective bargaining that the Board need not

inquire into employer motivation.' " CIPS, slip op. at 3, 1998

WL 600788, at *4 (quoting American Ship Bldg., 380 U.S. at

309); see also slip op. at 3, 1998 WL 600788, at *4 (noting

even in Brown, where employer took "additional step of

hiring temporary replacements after the lockout to continue

operations," Supreme Court "found that such conduct is not

inherently destructive of employee rights"). The Board

therefore determined "to treat [the lockout] as having a

'comparatively slight' impact on employee rights and apply

the second Great Dane test to determine the lockout's legali-

ty." CIPS, slip op. at 4, 1998 WL 600788, at *5. We agree

with the Board's analysis. The Supreme Court made it clear

in American Ship Bldg., as the Board observed, that a

lockout "does not fall into that category of cases arising under

s 8(a)(3) in which the Board may truncate its inquiry into

employer motivation." 380 U.S. at 312.1 Thus, the Board

__________

1 Local 702 contends the Board was required to "analyz[e] the

specific facts in this case," in order to make the "inherently

destructive" determination. See Local 702 Brief at 39-44. The

Supreme Court decisions indicate, however, that an across-the-

board lockout "as a means to bring economic pressure to bear in

support of the employer's bargaining position," 380 U.S. at 308, is

categorically not "inherently destructive." See American Ship

Bldg., 380 U.S. at 310-12 ("Nor is the lockout one of those acts

which are demonstrably so destructive of collective bargaining that

the Board need not inquire into employer motivation, as might be

the case, for example, if an employer permanently discharged his

unionized staff and replaced them with employees known to be

possessed of a violent antiunion animus.... This is not to deny

that there are some practices which are inherently so prejudicial to

union interests and so devoid of significant economic justification

that no specific evidence of intent to discourage union membership

or other antiunion animus is required. In some cases, it may be

that the employer's conduct carries with it an inference of unlawful

intention so compelling that it is justifiable to disbelieve the employ-

er's protestations of innocent purpose.... But this lockout does

not fall into that category of cases arising under s 8(a)(3) in which

the Board may truncate its inquiry into employer motivation.");

Brown, 380 U.S. at 284. ("[W]e do not see how the continued

operations of respondents and their use of temporary replacements

imply hostile motivation any more than the lockout itself; nor do we

see how they are inherently more destructive of employee rights.").

Thus, the "specific facts" come into play only in the subsequent

correctly concluded that under the Great Dane framework

the Board must inquire "whether the Respondent possessed a

legitimate and substantial business justification for the lock-

out." CIPS, slip op. at 4, 1998 WL 600788, at *5. The Board

reasonably found that CIPS had two such justifications.

The first objective the Board attributed to CIPS was "to

force the Unions to cease their inside game activities." CIPS,

slip op. at 4, 1998 WL 600788, at *5. Noting that the strike

that prompted the lockout in Brown was "also an economic

bargaining weapon in support of contract demands and no

less protected than the inside game that the judge found was

protected in this case," the Board concluded that the lockout

was a legitimate defense against the Unions' "inside game

weapon" deployed as part of "economic warfare in the midst

of bargaining negotiations with the hope of securing agree-

ment on their terms for new contracts." CIPS, slip op. at 4,

1998 WL 600788, at *5. Applying the standard of review set

forth above, we find the Board's conclusion--that CIPS's

defensive use of the lockout here against the Unions' inside

game was as justified as the lockout in Brown aimed at the

employees' economic strike--to be "reasonable, in light of the

purposes of the Act and the controlling precedent of the

Supreme Court," United Food, 880 F.2d at 1428. According-

ly, we defer to the Board's policy choice. Id.

We also agree that the second business objective the Board

identified--"resolution of issues that were dividing the parties

in their bargaining negotiations," CIPS, slip op. at 4, 1998 WL

600788, at *6--was a legitimate one and supported by the

evidence. The Board found as a fact that in implementing

the lockout CIPS "sought resolution of issues that were

dividing the parties in their bargaining negotiations," CIPS,

slip op. at 4, 1998 WL 600788, at *6, based on the text of

letters CIPS's chief executive officer sent the members of

each of the Unions on May 20, 1993, the day the lockout

began. The bulk of each letter outlined the contract conces-

sions CIPS made in its final offer and the chronology of

__________

inquiries whether the particular lockout has a legitimate business

justification and whether it was motivated by anti-union animus.

negotiations, culminating in the inside game. In addition, the

letter to Local 702 members stressed that union negotiators

had continually rejected CIPS's urging to place its offers

before the membership and was accompanied by an analysis

of the differences between the previous contract and CIPS's

final offer of a new one.2 The letters to Local 148 explained

the Company's position on the one apparent sticking point in

negotiations (the transfer of six union positions to manage-

ment). Each letter closed with the following language:

Like you, I am anxious to bring these issues to a

successful conclusion and have you back at your jobs at

the earliest possible date. I sincerely regret the disrup-

tion this decision will bring into your lives. My hope is

that this aspect of our labor dispute is short-lived.

App. 632-33, 644-48. Given their focus and tenor (concen-

trating on the course and substance of negotiations and

CIPS's eagerness to resolve the contract dispute), we con-

clude the letters constitute substantial evidence in support of

the Board's finding "that a purpose of the lockout was to

affect the outcome of negotiations between the Respondent

and the Unions." CIPS, slip op. at 5, 1998 WL 600788, at *7.

We therefore uphold the Board's consequent determination

"that application of economic pressure in support of this

bargaining position constitutes a legitimate and substantial

business justification for the lockout within the meaning of

Great Dane." CIPS, slip op. at 5, 1998 WL 600788, at *7.

Finally, having found two substantial and legitimate busi-

ness objectives, the Board undertook the third inquiry of the

Great Dane framework: asking whether the Unions had

made an "affirmative showing of improper motivation," such

as through "evidence indicating that the lockout was intended

to 'discourage union membership' or that was [sic] used 'in

the service of designs inimical to the process of collective

bargaining.' " CIPS, slip op. at 6, 1998 WL 600788, at *9

(quoting American Ship Bldg., 380 U.S. at 308, 312-313).

__________

2 According to the ALJ, a similar analysis was included with the

letters to Local 148 members, CIPS, ALJ Dec. 23 [App. 806], but it

does not appear in the appendix filed with the court.

The Board reasonably found "that 'not only is there absent in

[sic] the record any independent evidence of improper motive,

but the record contains positive evidence of the [Respon-

dent's] good faith.' " CIPS, slip op. at 7, 1998 WL 600788, at

*10 (quoting Brown, 380 U.S. at 290). As examples of such

evidence, the Board pointed to CIPS's long and stable bar-

gaining relationship with the Unions and its lengthy, good

faith attempts to reach a contract here, including its clearly

expressed desire in the May 20, 1993 letter to resolve differ-

ences and resume business as usual as soon as possible. We

conclude the Board's historic and continuing good faith deal-

ing with the Union, combined with the absence of affirmative

evidence showing anti-union animus, sufficiently supports the

Board's finding here.

Despite the Board's faithful adherence to Great Dane and

its predecessors and specific factual findings, the Unions

challenge the Board's decision on two grounds: (1) precedent

precludes the Board's finding that CIPS's use of the lockout

as an economic defense to the Unions' economic inside game

weapon was in furtherance of a permissible business interest

and (2) the finding of no anti-union animus on CIPS's part is

belied by the record. We find neither argument a basis for

overturning the Board's determination.

First, the Unions contend the Board's acceptance of the

economic defense justification is contrary to Supreme Court

precedent which, the Unions maintain, requires finding the

lockout unlawful because it was intended to curtail "protect-

ed" activity, namely the inside game tactics. As the Board

correctly observed, however, that activity may be protected

does not insulate it from counteraction by an employer.

CIPS, slip op. at 4, 1998 WL 600788, at *5 (noting: "To hold

that it is not a legitimate business justification for the Re-

spondent to defend against this weapon with a lockout in

order to force the Unions to yield, ignores the Court's obser-

vation in American Ship that the 'right to bargain collectively

does not entail any "right" to insist on one's position free

from economic disadvantage.' ") (quoting 380 U.S. at 309); see

Machinists v. Wisconsin Employment Relations Comm'n,

427 U.S. 132, 152-53 (1976) ("[E]ven were the activity pre-

sented in the instant case 'protected' activity within the

meaning of s 7, economic weapons were available to counter

the Union's refusal to work overtime, e.g., a lockout....")

(citing American Ship Bldg.) (footnote omitted). The strikes

in both American Ship Bldg. and Brown, as the Board noted,

were also protected activities--yet the employers' responsive

lockouts in those cases were upheld by the Supreme Court.

We see no reason to treat differently the lockout here which

was implemented in response to the inside game strategy that

the Unions adopted as an alternative to a strike.

We also believe the Board's endorsement of the economic

defense justification is, contrary to the Unions' insistence,

consistent with its own precedent. The Unions rely most

heavily here on the Board's decisions in Riverside Cement

Co., 296 N.L.R.B. 840 (1989), Thrift Drug Co, 204 N.L.R.B. 41

(1973), and Carlson Roofing, 245 N.L.R.B. 13 (1979). The

Board reasonably distinguished Riverside on the ground that

the action taken there was not in furtherance of "lawful

bargaining" but was an attempt to implement "a unilateral

change in the employees' contractual terms of employment"

by requiring employees to furnish specific personal tools

which, under their collective bargaining agreement, they were

expressly exempted from furnishing. CIPS, slip op. at 6-7

n.20, 1998 WL 600788, at *15 n.20. Any worker who did not

provide his own tools was locked out. In finding a section

8(a)(3) violation, the Riverside Board stressed that the "denial

of work was limited to only those employees who engaged in

action they were entitled to take under the contract" and

therefore "was not a lawful lockout," which is "generally

permissible in anticipation of a strike or in support of an

employer's legitimate bargaining position." 296 N.L.R.B. at

841. Similarly, in Thrift Drug Co., the Board found a section

8(a)(3) violation where the employer suspended a single pick-

eting employee solely on the ground the employee "was

unlawfully selected for suspension because of her activities on

behalf of the Union." 204 N.L.R.B. at 41. In contrast to

Riverside and Thrift Drug, the lockout here was directed

unit-wide, not to specific employees engaged in specific acts.

Finally, Carlson Roofing is inapposite because the Board's

finding that the lockout there violated section 8(a)(3) was

overturned on review by the Seventh Circuit. See Carlson

Roofing Co. v. NLRB, 627 F.2d 77, 82 (7th Cir. 1980).

The Unions also argue that the Board ignored the ALJ's

credibility determinations and findings regarding the true

motive behind the lockout. The Board, however, expressly

accepted the ALJ's finding that the lockout was implemented

"in reprisal" for the inside game, ALJ Decision at 22, 1998

WL 600788, at *35, CIPS, slip op. at 2, 1998 WL 600788, at

*2, but then found the motive was "not ... impermissible,"

CIPS, slip op. at 4, 1998 WL 600788, at *5. The ALJ based

his motive finding on statements by company management

that it would have "preferred" and been "better off with" a

strike or lockout than with the inside game strategy, under

which unit employees "were getting the best of both worlds"

by "putting pressure on the Company while still getting their

paycheck for the daytime work." ALJ Dec. at 65 [App. 848].

Neither this testimony nor the finding itself is at odds with

the Board's finding that CIPS implemented the lockout as an

economic response to the inside game, which CIPS viewed as

economically injurious. The Board's principal factual dispute

with the ALJ was on how to construe the text of the May 20,

1993 letters and the Board decision sufficiently explains its

differing, and we believe more defensible, interpretation of

the letters' language. See Mathews Readymix, Inc. v.

NLRB, 165 F.3d 74, 77 (D.C. Cir. 1999) ("Board's findings of

fact are conclusive if supported by substantial evidence,"

provided it "make clear the basis of its disagreement" when

reversing ALJ) (citing Avecor, Inc. v. NLRB, 931 F.2d 924,

928 (D.C. Cir. 1991); United Food & Commercial Workers

Int'l Union, Local 152 v. NLRB, 768 F.2d 1463, 1470 (D.C.

Cir. 1985)).

Finally, Local 128 challenges the Board's finding that its

members were locked out in order to obtain a contract on the

ground that agreement on a contract with Local 128 (as

distinct from Local 702) was imminent. We accept the

Board's finding as supported by the facts. The record estab-

lishes that Local 128 acted in unison with Local 207 in

planning and implementing the inside game and that, even

after CIPS terminated the lockout of Local 128, its members

stayed away from work in support of Local 702 (as they might

well have done ab initio if CIPS had not locked them out). It

was therefore not unreasonable for CIPS and the Board to

treat the two locals as a single bargaining force. In fact,

given the unified actions of the two locals, lockout of only one

might well have suggested unlawful discrimination under the

Board's decisions in Riverside and Thrift Drug. See supra p.

12.

For the preceding reasons, the Unions' petitions for review

are

Denied.