Engelhard Corp v. NLRB

Opinions of the United

2006 Decisions States Court of Appeals

for the Third Circuit

2-14-2006

Engelhard Corp v. NLRB

Precedential or Non-Precedential: Precedential

Docket No. 04-3034

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PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Nos. 04-3034 & 04-4366

ENGELHARD CORPORATION,

Petitioner/Cross Respondent

*LOCAL 1430, INTERNATIONAL

BROTHERHOOD OF ELECTRICAL WORKERS,

AFL-CIO

Intervener-Petitioner

v.

NATIONAL LABOR RELATIONS BOARD,

Respondent/Cross Petitioner

(*Amended in Accordance with Clerk’s Order dated 8/30/04)

Petition for Review and Cross-Application

For Enforcement of an Order of

The National Labor Relations Board

(No. 02-ca-32909; 02-ca-33080)

Argued September 29, 2005

Before: ALITO* and AMBRO, Circuit Judges,

RESTANI,** Judge

(Opinion filed: February 14, 2006)

Richard M. Escoffery, Esquire

Stanford G. Wilson, Esquire

Douglas H. Duerr, Esquire (Argued)

Elarbee, Thompson, Sapp & Wilson

229 Peachtree Street, N.E.

800 International Tower

Atlanta, GA 30303

Counsel for Petitioner/Cross Respondent

James B. Coppess, Esquire (Argued)

815 16th Street, N.W.

Washington, D.C. 20006

Robert D. Kurnick, Esquire

Sherman, Dunn, Cohen, Leifer & Yellig

1125 Fifteenth Street, N.W.

Washington, D.C. 20005

*

Then Judge, now Justice, Alito heard oral argument in

this case but was elevated to the United States Supreme Court

on January 31, 2006. The opinion is filed by a quorum of the

panel. 28 U.S.C. § 46(d).

**

Honorable Jane A. Restani, Chief Judge, United States

Court of International Trade, sitting by designation.

2

Counsel for Intervenor Petitioner

Arthur F. Rosenfeld

General Counsel

John E. Higgins, Jr.

Deputy General Counsel

John H. Ferguson

Associate General Counsel

Aileen A. Armstrong

Deputy Associate General Counsel

Robert J. Englehart, Esquire

Steven B. Goldstein, Esquire (Argued)

Meredith L. Jason, Esquire

National Labor Relations Board

1099 14th Street, N.W.

Washington, D.C. 20570

Counsel for Respondents/Cross Petitioner

OPINION OF THE COURT

AMBRO, Circuit Judge

This appeal arises from the final decision of the National

Labor Relations Board (the “NLRB”) interpreting a collective

bargaining agreement’s no-strike/no-lockout provision.

Engelhard Corporation (“Engelhard” or the “Company”),

relying on its interpretation of the provision, suspended thirty-

3

eight employees for holding a demonstration at its annual

shareholders’ meeting. For the reasons set out below, we agree

with the NLRB that Engelhard’s employees did not contravene

that provision. Thus, we deny the petition for review of the

Board’s decision that Engelhard’s suspension of the employees

violated subsections 8(a)(1) and (3) of the National Labor

Relations Act (the “NLRA”), and grant the NLRB’s application

for enforcement of that decision.

I. Factual and Procedural Background

Engelhard manufactures and distributes pigments and

film products at various locations throughout the United States.

Local 1430, International Brotherhood of Electrical Workers,

AFL-CIO (the “Union”) represents approximately 288

employees in five of Engelhard’s New York facilities, including

the plant located in Peekskill, New York. At all relevant times,

Engelhard’s Peekskill employees were covered by a collective

bargaining agreement (the “CBA”) binding both Engelhard and

the Union.

Article 28 of the CBA included a no-strike/no-lockout

provision that stated:

The Employer and the Union declare it to be their

intention to prevent any suspension of work due

to labor disputes during the term of this

Agreement. To carry out this intention, the

4

Employer agrees that there shall be no lockout of

any of its Employees or discrimination against

them because they have raised a dispute or

grievance. The Union agrees that it will not call,

participate in, or sanction, during the term of this

Agreement, any strike, boycott, picketing, work-

stoppage or slow-down whatsoever. The Union

further agrees that any Employee engaging in an

unauthorized strike, boycott, picketing, organized

work slowdown or stoppage, or any other type of

interference with the Employer’s business, shall

be subject to immediate discharge at the

discretion of the Employer with no recourse to the

grievance procedure contained herein.

However, the Employer agrees that it will not

hold the Union responsible for damages resulting

from any such unauthorized action if the Union

takes immediate action to advise all Employees

that such unauthorized action is unauthorized and

that Employees participating will by subject to

discipline, up to and including discharge.

The CBA was due to expire on June 30, 2000. In anticipation

of that expiration date, the Union and Engelhard held

negotiations for a successor agreement on March 8, 21, and 27.

The discussions broke off, however, prior to formalizing any

new agreement. The Union aspired to return to the bargaining

5

table. Indeed, in order to put pressure on the Company to

resume negotiations, the Union decided to picket Engelhard’s

May 4, 2000 shareholders’ meeting at the Sheraton Hotel in

Woodbridge, New Jersey, a location some fifty miles from

Engelhard’s plant in Peekskill.

On April 28, Union Business Agent Robert Meyer left a

message with Engelhard’s Senior Vice President to provide

notice of its plans to picket the shareholders’ meeting.

Engelhard’s Director of Human Resources, Joel Gray, returned

the call and informed Meyer that, in the Company’s view, the

proposed picketing violated the no-strike/no-lockout provision

of the CBA. The Union disagreed, stating that because Article

28 applied only to concerted activity resulting in a work

stoppage or affecting production, it did not cover the Union’s

peaceful picketing of the shareholders’ meeting. The same day,

Engelhard sent a letter to the Union, which Englehard posted at

the Peekskill plant, expressing its position that the planned

picketing violated Article 28 of the CBA. The letter further

warned that any employee who engaged in picketing at the

shareholders’ meeting would be subject to immediate discharge.

On May 4, approximately fifty Company employees

from its Peekskill plant, accompanied by fifteen to twenty non-

employees, participated in a demonstration outside the Sheraton

Hotel in Woodbridge. Of the fifty employees who took part in

the demonstration, only three were scheduled to work at the

time of the demonstration, and each of them had received

6

advance permission from the Company to miss work on May 4.

Some of the non-employees carried picket signs indicating that

the Union had filed unfair labor practice charges against

Engelhard while other non-employees distributed handbills

complaining that the Company had broken off contract

negotiations. None of the participants chanted, blew whistles or

otherwise made any noise. Rather, the demonstrators engaged

in a silent protest, obeying all of the rules given by the police.

The Peekskill employees stood next to the non-employee

picketers and handbill distributors for approximately one hour,

the duration of the protest.

Engelhard concedes it videotaped the demonstration.

According to Engelhard, it recorded the demonstration in the

event the participators attempted to disrupt the meeting or it

decided to seek an injunction. It is undisputed that no protester

disrupted the shareholders’ meeting or prevented individuals or

vehicles from either entering or exiting the hotel.

On May 12, Engelhard sent the Union a second letter

(which also was posted in the Peekskill plant). Among other

things, this communication declared that Engelhard intended to

take formal disciplinary action against both the employees who

participated in the demonstration and the Union for violating

Article 28 of the CBA.

Engelhard used the May 4 videotape recording to

identify those employees who participated in the demonstration,

7

and then suspended each of them for three days. The Union

filed grievances over the suspensions, which Engelhard refused

to arbitrate. It maintained that the grievances were not

arbitrable because the employees picketed in violation of the

CBA and thus had no recourse to its grievance procedures.

The Union followed up by filing unfair labor practice

charges with the NLRB. The NLRB’s general counsel issued

a consolidated complaint alleging that Engelhard had committed

a variety of unfair labor practices in violation of subsections

8(a)(1) and (3) of the NLRA, 29 U.S.C. § 158(a)(1), (3).

Engelhard filed an answer to that complaint, denying all

charges. At the conclusion of an evidentiary hearing, an

administrative law judge (ALJ) issued a decision holding that it

violated subsection 8(a)(1) of the NLRA by threatening

employees with discharge if they engaged in Union activity and

surveilling employees engaged in Union activity. The ALJ also

ruled that Engelhard violated subsection 8(a)(3) of the NLRA

by suspending employees for participating in a Union

demonstration at the Company’s annual shareholders’ meeting.

Timely exceptions were filed by Engelhard to the NLRB, which

issued an opinion, over one dissent, affirming the ALJ. This

appeal followed.1

1

The NLRB exercised jurisdiction over this proceeding

under 29 U.S.C. § 160(a) and (b). Its decision was a final order

with respect to all the parties. 29 U.S.C. § 160(c). Because the

alleged unfair labor practice occurred within this Circuit, we

8

II. Standard of Review

Whether Article 28 of the CBA waived the employees’

right to picket Engelhard’s shareholders’ meeting turns

exclusively on the interpretation of the parties’ labor contract.

While we review the NLRB’s findings of fact under a

deferential standard and thus “accept the Board’s factual

determinations and reasonable inferences derived [therefrom] .

. . if they are supported by substantial evidence,” Citizens

Publ’g & Printing Co. v. NLRB, 263 F.3d 224, 232 (3d Cir.

2001) (internal citation and quotations omitted); see also 29

U.S.C. § 160(e) (“The findings of the Board with respect to

questions of fact if supported by substantial evidence on the

record considered as a whole shall be conclusive.”), we “‘owe

no particular deference to the Board on matters of contract

interpretation.” Pacemaker Yacht Co. v. NLRB, 663 F.2d 455,

458 (3d Cir. 1981) (quoting Dow Chemical Co. v. NLRB, 636

F.2d 1352, 1358 (3d Cir. 1980)). Accordingly, we construe de

novo the language of Article 28 of the CBA.

III. Merits

Section 7 of the NLRA grants employees the “right to

self-organization, to form, join, or assist labor organizations . .

. and to engage in . . . concerted activities for the purpose of

collective bargaining or other mutual aid or protection.” 29

exercise jurisdiction pursuant to 29 U.S.C. § 160(e) and (f).

9

U.S.C. § 157. Section 8 states that it is an unfair labor practice

for an employer “to interfere with, restrain, or coerce

employees” in the exercise of their Section 7 rights, 29 U.S.C.

§ 158(a)(1), or to discriminate with “regard to hire or tenure or

employment or any term or condition of employment to . . .

discourage membership in any labor organization.” 29 U.S.C.

§ 158(a)(3). Indeed, it is well-settled that “Section 7 of the

NLRA protects the right of employees to observe lawful picket

lines.” Int’l Bhd. of Elec. Workers, Local 803, AFL-CIO v.

NLRB, 826 F.2d 1283, 1287 (3d Cir. 1987).

It is equally well settled that the statutory right to strike

may be waived in a collective bargaining agreement. See NLRB

v. Allis-Chalmers Mfg. Co., 388 U.S. 175, 180 (1967); Mastro

Plastics Corp. v. NLRB, 350 U.S. 270, 290 (1956); NLRB v.

Rockaway News Supply Co., 345 U.S. 71, 73 (1953); Delaware

Coca-Cola Bottling Co. v. Gen. Teamsters Local Union 326,

624 F.2d 1182, 1184 (3d Cir. 1980). Any waiver of the

employees’ right to engage in this activity, however, must be

“clear and unmistakable.” Metro. Edison Co. v. NLRB, 663

F.2d 478, 482 (3d Cir. 1981); see also United Steelworkers v.

NLRB, 536 F.2d 550, 555 (3d Cir. 1976) (“a waiver of a

statutory right must be clearly and unmistakably established, .

. . and express language will not be read expansively”). “The

extent of the waiver . . . turns upon the proper interpretation of

the particular contract . . . [which] must be read as a whole and

in light of the law relating to it when made.” Delaware

Coca-Cola, 624 F.2d at 1184 (citing Food Fair Stores, Inc. v.

10

NLRB, 491 F.2d 388, 395 (3d Cir. 1974) (additional citations

and quotations omitted)).

Thus, any analysis of the waiver issue must begin with an

identification of the no-strike obligation in the parties’ contract

and a determination of its scope. As we recognized in

Delaware Coca-Cola, the complexity of the waiver

determination is compounded by the fact that “the union’s

no-strike obligation may be created in one of two ways: by

implication from the arbitration clause or by an express clause

in the contract.” 624 F.2d at 1185. We are concerned here

solely with the scope of an express no-strike obligation in the

CBA (which includes a picketing prohibition).

Engelhard argues that the plain meaning of the third

sentence of Article 28 – “The Union agrees that it will not call,

participate in, or sanction, during the term of this Agreement,

any strike, boycott, picketing, work-stoppage or slow-down

whatsoever.” – is a “clear and unmistakable waiver” of the

Union’s Section 7 right to picket. Forgoing any “picketing . . .

whatsoever,” the argument continues, includes not only

Englehard’s facilities but also its annual shareholders’ meeting.

Moreover, because the Union’s picketing was unauthorized, it

follows that Engelhard’s acts of threatening employees with

discipline, videotaping the demonstration, and suspending

employees who participated in the demonstration, do not

constitute unfair labor practices. Put another way, Engelhard’s

position is that its threats, surveillance and suspensions did not

11

violate subsections 8(a)(1) and (3) of the NLRA because the

Union’s picketing constituted unprotected activity.

The NLRB rejected Engelhard’s contentions and held

that the language and structure of Article 28 demonstrate that

the Union did not clearly and unmistakably waive the

employees’ right to engage in picketing of the Company’s

meeting of shareholders. This conclusion relies heavily on the

first sentence of Article 28, which states that the parties “declare

it to be their intention to prevent any suspension of work due to

labor disputes.” According to the Board, that statement of

intent “qualifies and informs” both the no-picketing obligation

that the Union agreed to undertake in Article 28’s third sentence

and the no-lockout obligation of Engelhard in Article 28’s

second sentence. Indeed, subsequent to the parties’ declaration

that it was “their intention to prevent any suspension of work

due to labor disputes,” Article 28 provides that “[t]o carry out

this intention, the Employer agrees that there shall be no lockout

of any of its Employees . . . ,” while “[t]he Union agrees that it

will not call, participate in, or sanction . . . . any . . . picketing.”

(Emphasis added.) Thus, while Article 28 waives the

employees’ right to engage in any picketing that does, or could

reasonably be expected to, result in a suspension of work, it

does not waive the employees’ right to engage in picketing that

does not, or could not reasonably be expected to, lead to a

suspension of work at an Engelhard facility.

The NLRB further reasoned that the state of the law

12

when the Union and Engelhard negotiated Article 28 of the

CBA provides additional support for the conclusion that the

Company failed to carry its burden2 of showing that the Union

clearly and unmistakably waived the employees’ right to engage

in picketing the shareholders’ meeting. See Mastro Plastics

Corp., 350 U.S. at 279 (holding that collective-bargaining

agreement “must be read as a whole and in light of the law

relating to it when it was made”). This is because there is no

dispute that the “clear and unmistakable” waiver standard was

well established long before the Union and Engelhard

negotiated the July 1997 CBA. See Delaware Coca-Cola, 624

F.2d at 1187-88 (noting that the general rule is that a “waiver

must be clear and unmistakable and that explicit language must

not be read expansively”). In this context, both Engelhard and

the Union “presumably knew that unambiguous contractual

language would have been necessary to create an absolute

prohibition against picketing.” NLRB Br. at 24. Accordingly,

“the parties surely would not have used the suspension of work

language in Article 28 if their intent was to foreclose picketing

that did not involve a suspension of work.” Id. at 24-25

(internal quotations omitted).

Although no-strike clauses are common in collective

bargaining agreements, see Mastro Plastics Corp., 350 U.S. at

2

See Mastro Plastics Corp., 350 U.S. at 277 (whether a

work stoppage is unprotected because it violates a no-strike

clause is an affirmative defense).

13

280 (stating “collective-bargaining contracts frequently have

included certain waivers of the employees’ right to strike”),

cases of our Court interpreting those provisions are few in

number and not particularly on point. This is because our Court

has never been tasked with resolving a factually analogous case

involving a union’s claim that certain concerted activity – be it

striking, boycotting, or picketing – is exempt from a broad no-

strike provision on the basis that the activity at issue did not,

and was not reasonably likely to, lead to a work stoppage.

Engelhard nevertheless relies heavily on International

Brotherhood of Electrical Workers, Local 803, AFL-CIO v.

NLRB, 826 F.2d 1283 (3d Cir. 1987), where we interpreted a

no-strike/no-lockout provision of a collective bargaining

agreement negotiated between a union (Local 803) and its

employer (Metropolitan) to prohibit sympathy strikes.3 In that

case, a crew of Metropolitan employees, represented by the

3

This provision of the Metropolitan-Local 803 collective

bargaining agreement stated:

The Brotherhood and its members agree that

during the term of this agreement there shall be

no strikes or walkouts by the Brotherhood or its

members, and the Company agrees that there

shall be no lockouts of the Brotherhood or its

members, it being the desire of both parties to

provide uninterrupted and continuous service to

the public.

Int’l Bhd. of Elec. Workers, 826 F.2d at 1290.

14

Local 803 and assigned to preform work at a particular site,

refused to enter that site and complete a work assignment when

confronted by a different union’s picket line. 826 F.2d at 1285.

Metropolitan advised Local 803 that a continuing refusal by its

members to cross the picket line would result in disciplinary

action, including suspensions. Id. In response, the union filed

a charge against Metropolitan alleging that the company’s

disciplinary threats had interfered with, restrained, and coerced

the employees in the exercise of their rights under Section 7 of

the NLRA. Id. Metropolitan maintained that, by agreeing to a

broad no-strike clause in its labor contract, Local 803 had

clearly and unmistakably waived its employees’ rights to

engage in the sympathy strike. Id. The union disagreed,

asserting that the clear and unmistakable standard requires more

than a broad statement of waiver. Id. at 1290.

Our Court dismissed Local 803’s contention that “a

broad no-strike claim can never constitute a clear and

unmistakable waiver of the right of employees to honor a picket

line.” Id. at 1290-91. We subsequently rejected the Local’s

argument that the particular no-strike agreement in its contract

with Metropolitan did not clearly and unmistakably waive its

members’ right to honor stranger picket lines.

[I]n addition to the expression in the no-strike

clause of “the desire of both parties to provide

uninterrupted and continuous service to the

public,” . . . “the contract contains other

15

references to the need for . . . [Metropolitan] to

provide continuous service to its customers.” . . .

The parties’ repeated expression of their mutual

purposes to maintain service without interruption,

in conjunction with the functional independence

of Article XI, is thus consistent with the view that

the no-strike clause encompasses all actions,

including sympathy strikes, that would frustrate

that purpose. . . . Indeed, a fair reading of the

collective bargaining agreement as a whole

establishes an intention to waive the employees’

right to engage in sympathy strikes.

Id. at 1295-96 (emphasis added).

Despite Engelhard’s contentions to the contrary,

International Brotherhood is not controlling here. Our Court

was not asked to determine whether Local 803’s sympathy

strike did, or could reasonably be expected to, result in an

interruption or suspension of Metropolitan’s service to the

public. Such an inquiry was entirely unnecessary because it was

undisputed that the employees’ refusal to cross a sister union’s

picket line and complete their work assignments resulted in an

interruption in Metropolitan’s service.

Indeed, a discerning read of International Brotherhood

16

reveals that its reasoning supports the result we reach here, for

it refused to read broad contractual language in isolation.

Rather, it closely examined the language and structure of the

contract before it and ruled that the particular strike at issue –

Local 803’s sympathy strike – conflicted with the parties’

mutual intent “to provide uninterrupted and continuous service.”

Simply stated, International Brotherhood is on all fours with the

Board’s position that the appropriate inquiry here is whether the

Union’s May 4 picket of an off-site shareholders’ meeting

conflicted with the parties’ mutual intent “to prevent work

stoppages.” Silver State Disposal Serv., 326 NLRB 84, 86

(1998) (quoting Elec. Workers Local 1395 v. NLRB, 797 F.2d

1027, 1036 (D.C. Cir. 1986) (In interpreting a no-strike/no-

lockout provision, “the parties’ actual intent governs, ‘whether

that intent is established by the language of the clause itself, by

the inferences drawn from the contract as a whole, or by

extrinsic evidence.’”).4

With the prohibition against reading express language

expansively, see United Steelworkers, 536 F.2d at 555, and the

reasoning of International Brotherhood in mind, we agree with

the Board that the parties’ mutual statement of intent in the first

sentence of Article 28 to prevent the stoppage of work due to

labor disputes qualifies and informs the parties’ mutual

undertakings in the second and third sentences. It is particularly

4

As the parties have not presented any extrinsic evidence,

we rely exclusively on the language of Article 28.

17

relevant that the parties expressly stated their intention to

prevent the suspension of work and explained that it is “[t]o

carry out this intention” that they undertook the various

commitments stated in the remainder of Article 28. This

unqualified expression of the mutual purpose to prevent work

stoppages is consistent with the view that the no-strike clause

includes all actions, including pickets, that would frustrate that

purpose.

But when work is not stopped, nor even impeded, Article

28’s picketing prohibition is not in play. Indeed, any attempt to

read Article 28’s third sentence in isolation renders the first

sentence, which lays out the purpose for the entire article,

meaningless and runs contrary to the well established principles

of contract construction – to read, if possible, all provisions of

a contract together as a harmonious whole. See Ludwig Honold

Mfg. Co. v. Fletcher, 405 F.2d 1123, 1130 n.31 (3d Cir. 1969)

(district court erred “in isolating one phrase of the . . . clause to

reach its conclusion that the contract language was clear and

unambiguous”); Restatement (Second) of Contracts: Rules In

Aid of Interpretation § 202 cmt. d (“Meaning is inevitably

dependent on context. A word changes meaning when it

becomes part of a sentence, the sentence when it becomes part

of a paragraph.”).5

5

Further supporting our conclusion is that the explanatory

language in the first and second sentences of Article 28 spawns

ambiguity concerning the breadth of the “no picketing

18

* * * * *

Because the Union’s activity at the shareholders’ meeting

could not reasonably have been expected to, and in fact did not,

lead to the suspension of any work at the Peekskill plant, we

hold that activity was not prohibited by Article 28 of the CBA.

Accordingly, we deny Engelhard’s petition for review and grant

the NLRB’s application for enforcement.

whatsoever” prohibition. As a practical matter, an ambiguous

provision (standing alone) can never amount to a clear and

unmistakable waiver. See NLRB v. Gen. Tire & Rubber Co.,

795 F.2d 585, 588 (6th Cir. 1986) (ambiguous language in

bargaining agreement is insufficient to demonstrate waiver).

19