The opinion
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 12, 2001 Decided January 4, 2002
No. 00-1426
Pall Corporation,
Petitioner
v.
National Labor Relations Board,
Respondent
United Automobile, Aerospace and Agricultural Implement
Workers of America, UAW, AFL-CIO Local 365,
Intervenor
Petition for Review and Cross-Application for Enforcement
of an Order of the National Labor Relations Board
Thomas W. Budd argued the cause for petitioner. With
him on the briefs was G. Peter Clark.
Daniel V. Yager, Heather L. MacDougall and Joseph E.
Santucci Jr. were on the brief of amici curiae Council on
Labor Law Equality and LPA, Inc. in support of petitioner.
Charles I. Cohen entered an appearance.
David A. Fleischer, Senior Attorney, National Labor Rela-
tions Board, argued the cause for respondent. With him on
the brief were Arthur F. Rosenfeld, General Counsel, John
H. Ferguson, Associate General Counsel, and Aileen A. Arm-
strong, Deputy Associate General Counsel. David S. Haben-
streit, Attorney, entered an appearance.
Craig Becker argued the cause and filed the brief for
intervenor United Automobile, Aerospace and Agricultural
Implement Workers of America, UAW, AFL-CIO, Local 365.
Eugene G. Eisner entered an appearance.
Before: Ginsburg, Chief Judge, Henderson, Circuit Judge,
and Williams, Senior Circuit Judge.
Opinion for the Court filed by Chief Judge Ginsburg.
Ginsburg, Chief Judge: Pall Biomedical Products Co.
agreed to recognize Local 365, United Auto Workers, as the
representative of employees at a new Pall facility not covered
by an existing collective bargaining agreement (CBA) be-
tween Pall and the Union if unit work began to be performed
there. Under the agreement Pall would recognize the Union
upon a showing of majority support without first requiring
that the Union prevail in an election conducted by the Nation-
al Labor Relations Board. The central issue in this case is
whether, as the Board concluded, the agreement concerns a
mandatory subject of bargaining. We hold that it does not
because the manner by which a union may achieve recogni-
tion as the representative of employees outside the bargain-
ing unit is not a mandatory subject of bargaining. Therefore,
Pall's revocation of the agreement was not an unfair labor
practice.
I. Background
Pall operates manufacturing facilities at East Hills, Glen
Cove, and Port Washington, New York. Local 365 has long
represented the production and maintenance employees at
East Hills and Glen Cove. In 1990, before the Port Washing-
ton facility opened, the Union and Pall entered into an
agreement that seemingly guaranteed the Union recognition
at that facility in the event that unit work were ever to be
performed there:
The Employer agrees that in the event that it employs
one (1) or more employees performing bargaining unit
work at the Employer's facility in Port Washington, NY,
the Employer will extend recognition over such Employ-
ees to Local 365, UAW. After extension of recognition
the Employer and Union will meet to discuss the terms
and conditions of employment for such employees.
Pall Biomedical Prods. Corp., 331 N.L.R.B. No. 192 at 1
(Aug. 31, 2000) (Decision). The Board, however, following its
decision in Houston Div. of the Kroger Co., 219 N.L.R.B. 388
(1975), "construed the agreement at issue as requiring the
showing of majority support before it may be properly ap-
plied," id. at 3, and the parties do not challenge that aspect of
the decision. So glossed, the 1990 Agreement simply re-
quires Pall to forego its right to a Board-conducted election to
determine whether the Union enjoys majority support among
the employees at Port Washington.
In 1994 the Union became aware that Pall was moving to
Port Washington certain laboratory equipment that had been
operated by bargaining unit employees at Glen Cove. The
Union also learned that Pall was hiring new employees at
Port Washington for jobs that had titles and duties similar to
those of jobs in the bargaining unit. The Union therefore
asked to visit Port Washington in order to determine whether
bargaining unit work was being performed there. Pall re-
fused, taking the position that the 1990 Agreement was no
longer in effect, alternatively giving notice of its revocation of
the Agreement, and stating that "to gain representation
rights ... at the Port Washington facility, [the Union] will
have to go through the normal process of ... filing a repre-
sentation petition with the [Board]." The Union then filed an
unfair labor practice charge, which the parties settled in 1995
when Pall reaffirmed the 1990 Agreement and agreed to give
the union access to the Port Washington facility.
In September, 1995 the Union twice visited Port Washing-
ton, after which it demanded recognition as the representa-
tive of the employees there and requested certain information
assertedly relevant to their representation. Pall refused such
recognition and denied the Union's request for a third visit.
The Union then accused Pall of "unilaterally revok[ing]" the
1990 Agreement, requested more information, claimed that
Port Washington was an accretion to the existing bargaining
unit, and filed a new unfair labor practice charge. At this
point Pall withdrew from the 1995 settlement, "reaffirmed its
previous revocation" of the 1990 Agreement, and refused to
provide any information.
The Union charged, among other things, that Pall had
violated ss 8(a)(1) & (5) of the National Labor Relations Act
by: (1) revoking the 1990 Agreement; (2) refusing to grant
the Union access to Port Washington; and (3) refusing to
provide the requested information. An Administrative Law
Judge determined that, because the Agreement does not
concern a mandatory subject of bargaining, Pall's revocation
was not an unfair labor practice. Further, Pall's refusals to
provide access and information were not unfair labor prac-
tices because the Union's demands were premised upon its
having the right to enforce the Agreement. See Decision at
1.
The Board reversed the ALJ's determination that the
Agreement does not concern a mandatory subject of bargain-
ing and ordered Pall to provide some of the information
sought by the Union. The Board affirmed the decision of the
ALJ insofar as he had denied the Union access to the Port
Washington facility and the rest of the information it had
sought. Pall petitioned for review of the adverse aspects of
the Board's order, the Board cross-applied for enforcement of
its order, and the Union intervened in support of the Board.
II. Analysis
Pall contends first that the 1990 Agreement does not
concern a mandatory subject of bargaining. Pall then argues
that its refusal to provide the information requested by the
Union was not an unfair labor practice.
A. Mandatory Subject of Bargaining
Section 8(a)(5) of the Act makes it an unfair labor practice
for an employer "to refuse to bargain collectively with the
representatives of his employees." 29 U.S.C. s 158(a)(5).
Section 8(d) limits the scope of that obligation to bargaining
about "wages, hours, and other terms and conditions of
employment," 29 U.S.C. s 158(d), but that is not to say the
parties may not also bargain about other, so-called permissive
subjects of bargaining. See NLRB v. Wooster Div. of Borg-
Warner Corp., 356 U.S. 342, 349 (1958). Section 8(d) also
provides that "where there is in effect a collective bargaining
contract ... the duty to bargain collectively shall also mean
that no party to such contract shall terminate or modify such
contract ...." More particularly, "an employer [is prohibit-
ed] from altering contractual terms concerning mandatory
subjects of bargaining during the life of a collective bargain-
ing agreement without the consent of the union." Int'l
Union, UAW v. NLRB, 765 F.2d 175, 180 (D.C. Cir. 1985);
see also Allied Chem. & Alkali Workers, Local Union No. 1
v. Pittsburgh Plate Glass Co., 404 U.S. 157, 185-88 (1971)
(PPG). The Act does not prohibit, however, the unilateral
change of terms concerning permissive subjects. PPG, 404
U.S. at 187-88.
Since there is no dispute that by revoking the 1990 Agree-
ment Pall altered the terms of the Agreement without the
consent of the Union, this case turns upon whether that
Agreement concerns a mandatory subject of bargaining. In
general, "only issues that settle an aspect of the relationship
between the employer and employees" are mandatory sub-
jects of bargaining. PPG, 404 U.S. at 178. An issue arising
from outside the bargaining unit may be a mandatory subject
of bargaining if it "vitally affects" the terms and conditions of
employment within the bargaining unit, id. at 179; lest the
obligation to bargain be extended beyond its statutory limit,
however, a proposal dealing with such a vital issue is a
mandatory subject of bargaining only if it is a "direct frontal
attack" upon the perceived problem. Local 24, Int'l Bhd. of
Teamsters v. Oliver, 358 U.S. 283, 294 (1959) ("The regula-
tions embody not the 'remote and indirect approach to the
subject of wages' perceived by the [lower court] but a direct
frontal attack upon a problem thought to threaten the mainte-
nance of the basic wage structure established by the collective
bargaining contract."); PPG, 404 U.S. at 178 n.18 (quoting
Oliver); Lone Star Steel Co. v. NLRB, 639 F.2d 545, 558
(10th Cir. 1980) ("[T]he Board did not properly observe the
two-prong requirement of Oliver that in order for a subject
involving employees outside the unit to be considered manda-
tory it must vitally affect the terms and conditions of employ-
ment or the job security of unit employees and must repre-
sent a direct frontal attack on the problem threatening such
interests").
In determining that the 1990 Agreement concerns a man-
datory subject of bargaining, the Board compared it to the
agreements it had held to concern mandatory subjects in
Kroger Co., 219 N.L.R.B. 388 (1975), and United Mine Work-
ers, 231 N.L.R.B. 573 (1977) (Lone Star Steel), enf. denied,
639 F.2d 545. Decision at 2-3. The Board recognized that
those agreements differed from the 1990 Agreement: The
agreement in Kroger provided that the employees in any
acquired stores would become part of the existing bargaining
unit. Id. The agreement in Lone Star Steel provided that
the employees in any acquired facilities would be bound by
the existing CBA. Id. at 3. While the agreement in Lone
Star Steel did not extend the bargaining unit to include the
employees in acquired facilities, it nonetheless "removed eco-
nomic incentives which might have otherwise encouraged the
employer to transfer the work out of the bargaining unit,"
and thus vitally affected the economic interests of employees
in the bargaining unit. Id.
In contrast, the Agreement here neither includes in the
bargaining unit the Port Washington employees doing bar-
gaining unit work nor extends to them the CBA in place at
East Hills and Glen Cove. The Board concluded that the
Agreement nonetheless concerns a mandatory subject of bar-
gaining because, like the agreements in Kroger and Lone Star
Steel, it discourages the transfer of work out of the existing
bargaining unit. Id. at 3-4.
The Board explained as follows why it thought the 1990
Agreement addresses the threat of work being transferred
out of the bargaining unit:
If [Pall] began performing bargaining unit work at Port
Washington, the Union would be in a position to protect
the interests of the existing unit employees by achieving
recognition as the bargaining representative of the Port
Washington employees and negotiating terms and condi-
tions of employment for them similar to those enjoyed by
East Hills and Glen Cove employees.
Id. at 4. If similar terms were negotiated, the Board contin-
ued, then labor costs at Port Washington would be similar to
those at East Hills and Glen Cove, and Pall would have no
incentive to transfer work to Port Washington. Id. Conse-
quently, the Board held, the 1990 Agreement "specifically
addressed" a concern that vitally affects the employees at
East Hills and Glen Cove. Id. at 4.
We review the Board's decision deferentially: "[B]ecause
the classification of bargaining subjects as terms or conditions
of employment is a matter concerning which the Board has
special expertise, its judgment as to what is a mandatory
bargaining subject is entitled to considerable deference."
Ford Motor Co. v. NLRB, 441 U.S. 488, 495 (1979). The
court must determine only "whether the Board's approach is
a reasonably defensible reading of the statute, one that is
consistent with the Supreme Court's decisions construing the
duty to bargain thereunder." United Food & Commercial
Workers Int'l Union v. NLRB, 880 F.2d 1422, 1432 (D.C. Cir.
1989). For the reasons given below, the decision under
review fails even this relatively lenient test.
Pall argues that, because the 1990 Agreement does not
require it to provide at Port Washington terms and conditions
similar to those at its other facilities, the Agreement: (1) does
not concern a subject that vitally affects the terms and
conditions of unit employees, and (2) is not a direct frontal
attack upon any problem facing those employees. Indeed,
Pall points out, under the Agreement the parties must negoti-
ate a CBA for the Port Washington employees from scratch.
And to the extent the resulting agreement--if and when an
agreement is reached--provides less generous terms than
those of the CBA for the East Hills and Glen Cove employ-
ees, it will not blunt Pall's incentive to transfer work out of
the bargaining unit.
The Board counters that the 1990 Agreement concerns a
mandatory subject of bargaining because it protects to some
extent against a transfer of work to Port Washington: "The
[1990] agreement, as the Board noted [in the Decision],
serves that goal by making it easier for the Union to seek to
negotiate a contract at Port Washington with economic provi-
sions similar to those in the contract covering the existing
bargaining unit ...." For its part, the Union similarly
argues that the Agreement responds to a threat to job
security and therefore concerns a mandatory subject of bar-
gaining. The Union stresses that, based upon the specific
facts underlying this case, the Board reasonably concluded
there was a real threat of work being transferred to Port
Washington.
Although both the Board and the Union are clear in stating
that the problem faced by unit employees is the potential
transfer of work to Port Washington, both ultimately recog-
nize that the 1990 Agreement does not actually address that
problem. As the Board put it, the Agreement "waiv[es] the
Company's right to insist on an election" and thereby "en-
ables such negotiations to begin promptly upon the Union's
presenting proof of majority status." Or as the Union states,
the effect of the 1990 Agreement is to create "an expedited
process for extending representation to Port Washington
employees."
We think the modest reach of the 1990 Agreement goes to
the heart of the matter. We may assume the Board and the
Union are correct that the transfer of bargaining unit work to
Port Washington would "vitally affect" the terms and condi-
tions of employment at East Hills and Glen Cove. See
Fibreboard Paper Prods. Corp. v. NLRB, 379 U.S. 203, 210-
15 (1964) (contracting out unit work a mandatory subject of
bargaining); Oliver, 358 U.S. at 293-95 (compensation of
owner-drivers outside of bargaining unit a mandatory subject
of bargaining in unit of non-owner drivers). But the 1990
Agreement is not a "direct frontal attack" upon that problem.
The Agreement neither prevents work from being transferred
nor approximates that result by extending the CBA to Port
Washington employees.
Rather, the Agreement has the single effect of allowing the
Union to achieve recognition at Port Washington without
winning a Board-conducted election. Yet, as we have seen (in
the block quotation at 7, above) the Board treated the 1990
Agreement as the de facto equivalent of an agreement ex-
tending a CBA to employees in new facilities. An agreement
providing for a CBA automatically to extend to employees in
a new facility is significantly different, however, from a mere
recognition agreement, which dispenses with a Board election.
The former is indeed a "direct frontal attack" upon the issue
of work being transferred out of the bargaining unit; the
latter is at most a way of expediting recognition of the Union.
We say "at most" because whether avoiding an election
would expedite significantly the onset of bargaining is itself
uncertain. At oral argument counsel for the Board conceded
that certification of the result of an uncontested election
occurs "pretty fast" and that even disputed election issues are
typically resolved in "several months." Counsel for the Un-
ion, on the other hand, said the resolution of an election
dispute could take years, during which the employer would
not be obligated to bargain. Counsel did not dispute, howev-
er, that an employer intent upon avoiding its obligation to
bargain could equally well contest a card count done pursuant
to a recognition agreement.
Even if a card count would substantially expedite recogni-
tion, the Union would still have to negotiate a CBA, which
might or might not equalize labor costs between the new and
the old plants. Thus, even expedited recognition is only the
first step toward equalizing labor costs and thereby prevent-
ing the transfer of work. For this reason, we conclude that
prescribing the manner of recognition at a new facility is not
"a direct frontal attack" upon the problem of transfer of work
facing employees at already organized facilities, see Oliver,
358 U.S. at 294; Lone Star Steel, 639 F.2d at 558; therefore
the 1990 Agreement does not concern a mandatory subject of
bargaining.
Before closing, we pause to note an argument raised by the
Union but not relied upon by the Board: The Union contends
that the subject of bargaining at issue in this case is not how
the Union might achieve recognition but "the terms of em-
ployment of Port Washington employees." Here the Union
points out that it sought "but was unable to secure the
Employer's agreement" to include Port Washington employ-
ees in the existing bargaining unit and to extend the CBA to
Port Washington employees. The Union goes on to argue
that
the retrospective analysis of subjects of bargaining pro-
posed by the Employer is unworkable because the par-
ties must be able to determine in advance whether a
subject is a mandatory subject of bargaining and cannot
wait to see what agreement result [sic] from the bargain-
ing.
We reject the Union's approach for three reasons. First, it
is too easily manipulated; a party could make virtually any
issue a mandatory subject of bargaining simply by showing
that it sought more than it achieved. Second, the Supreme
Court in PPG and Oliver gave no indication that negotiation
history is relevant to whether an agreement concerns a
mandatory subject of bargaining. Finally, we doubt seriously
that an approach that determines the subject of an agreement
by looking at the text of the agreement is "unworkable."
What the Union calls the "retrospective analysis"--al-
though retrospection plays no part in it--certainly seems to
have been workable in this case: the Union raised an issue--
extending the CBA to Port Washington--over which the
employer was obligated to bargain. The employer rejected
the proposal but the Union did not resort to self-help. In-
stead one side or the other made a proposal--that the em-
ployer forego its right to an election--over which bargaining
was merely permissive. There was no ambiguity at any stage
about the parties' rights, and nothing "unworkable" about the
process.
In conclusion, we hold that the decision of the Board is
inconsistent with the relevant Supreme Court decisions con-
struing the duty to bargain under the Act. Even if we
assume that the transfer of work to Port Washington would
"vitally affect" the East Hills and Glen Cove employees, we
cannot conclude that the 1990 Agreement, which merely
expedites recognition of the Union at Port Washington, is a
"direct frontal attack" upon that problem. Because the
Agreement is not a "direct frontal attack" upon the problem
of work transfer, under Oliver and PPG it is not a mandatory
subject of bargaining and, consequently, Pall did not commit
an unfair labor practice by unilaterally modifying it.
B. Refusal to Provide Information
The Board determined that the Union had a right to
certain information solely because that information was
deemed relevant to the enforcement and administration of the
1990 Agreement. Decision at 6. The Board did not explicit-
ly state that this aspect of its decision was dependent upon its
prior holding that the Agreement concerns a mandatory
subject of bargaining, but that is how we understand its
reasoning. So, it seems, do the parties. Neither the Board
nor the Union argues that Pall's refusal to provide informa-
tion was an unfair labor practice even if the Agreement
concerns only a permissive subject of bargaining. On the
contrary, the Union implies that it was not: "Because the
agreement addressed a mandatory subject, it follows that the
Union had a right to information needed to utilize the agree-
ment." Our holding that Pall's revocation of the 1990 Agree-
ment was not an unfair labor practice therefore requires us
also to reject the Board's conclusion that Pall violated the Act
when it refused to provide the information requested by the
Union.
III. Conclusion
The 1990 Agreement concerns the manner in which the
Union could achieve recognition at Port Washington, which is
not a mandatory subject of bargaining. It follows that nei-
ther Pall's revocation of the Agreement nor its refusal to
provide the information requested by the Union was an unfair
labor practice. Accordingly, Pall's petition for review is
granted and the Board's application for enforcement is de-
nied.
So ordered.