Nat'l Labor Relations Bd. v. Ingredion Inc.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 6, 2019 Decided July 19, 2019

No. 18-1155

NATIONAL LABOR RELATIONS BOARD,

PETITIONER

v.

INGREDION INCORPORATED, D/B/A PENFORD PRODUCTS CO.,

RESPONDENT

LOCAL 100G, BAKERY, CONFECTIONERY, TOBACCO WORKERS

AND GRAIN MILLERS INTERNATIONAL UNION, AFL-CIO, CLC,

INTERVENOR

Consolidated with 18-1244

On Petition for Review and Cross-Application

for Enforcement of an Order of

the National Labor Relations Board

Brian J. Paul argued the cause for petitioner Ingredion

Incorporated. With him on the briefs were Stuart R. Buttrick,

Ryan J. Funk, Jeffrey P. Justman, and Kyle J. Essley.

Eric Weitz, Attorney, National Labor Relations Board,

argued the cause for respondent National Labor Relations

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Board. With him on the brief were Peter B. Robb, General

Counsel, David S. Habenstreit, Assistant General Counsel, and

Usha Dheenan, Supervisory Attorney.

Before: ROGERS, SRINIVASAN, and WILKINS, Circuit

Judges.

Opinion for the court by Circuit Judge ROGERS.

ROGERS, Circuit Judge: Ingredion, Inc. petitions for

review of the Decision and Order of the National Labor

Relations Board on the ground that five of the Board’s findings,

including that Ingredion violated the National Labor Relations

Act (“the Act”) by dealing directly with employees and

denigrating a union in the eyes of employees, are unsupported

by substantial evidence. We conclude that Ingredion fails to

meet its burden in this regard. We further conclude that

Ingredion’s contentions that the Board violated its due process

rights and improperly imposed a notice-reading remedy lack

merit. Accordingly, we deny the petition and grant the Board’s

cross-application for enforcement of its Order.

I.

Ingredion is a multinational corn starch manufacturing

company. In March 2015, it acquired a corn processing plant

in Cedar Rapids, Iowa. Approximately 165 of the plant’s

employees were represented by a local division of the Bakery,

Confectionery, Tobacco Workers, and Grain Millers

International Union, AFL-CIO (“the Union”). Ingredion

recognized the Union and assumed the existing collective

bargaining agreement (“CBA”), which was scheduled to expire

on August 1, 2015. On June 1, 2015, Ingredion and the Union

commenced negotiations for a new CBA. The Union proposed

to modify the existing CBA in several ways. Ingredion

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proposed to start from scratch with an entirely new CBA in

both substance and form. The parties had not reached an

agreement as of August 18, when Ingredion declared that they

were at impasse and presented its “last, best, and final offer.”

After rejecting the Union’s counteroffer of September 10,

Ingredion unilaterally implemented the terms of its final offer

on September 14, 2015. Ten days later, the Union filed charges

with the Board alleging that Ingredion had engaged in

numerous unfair labor practices proscribed by Section 8(a)(1)

and (5) of the Act, 29 U.S.C. § 158(a)(1), (5). The Board’s

General Counsel issued a complaint against Ingredion in

January 2016.

Section 8(a)(1) and Section 8(a)(5) define unfair labor

practices in overlapping terms. Section 8(a)(1) provides that it

is “an unfair labor practice for an employer to interfere with,

restrain, or coerce employees in the exercise of” their right to

bargain collectively. Id. § 158(a)(1). Section 8(a)(5) provides

that it is “an unfair labor practice for an employer to refuse to

bargain collectively with the representatives of his employees.”

Id. § 158(a)(5). Because a refusal to bargain necessarily

interferes with bargaining, “an employer who violates section

8(a)(5) also, derivatively, violates section 8(a)(1).” Exxon

Chem. Co. v. NLRB, 386 F.3d 1160, 1164 (D.C. Cir. 2004).

An administrative law judge determined, after conducting

an evidentiary hearing, that Ingredion had committed several

violations of Section 8(a). As relevant here, the ALJ found that

Ingredion had violated Section 8(a)(1) by “denigrating the

Union” in the eyes of employees and by “threatening

employees that they would lose their jobs if they went on

strike.” Ingredion, Inc., No. 18-CA-160654, slip op. at 58–59,

2016 WL 4501993 (NLRB Div. of Judges Aug. 26, 2016)

(“ALJ Decision”). He further found that Ingredion had violated

Section 8(a)(5) (and, derivatively, Section 8(a)(1)) by dealing

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with employees directly rather than through the Union, by

unilaterally implementing new terms and conditions of

employment without first reaching an overall impasse in

bargaining, and by failing to respond in a timely manner to a

Union request for information. Id. at 58.

The Board affirmed with respect to all five violations.

Ingredion, Inc., 366 NLRB No. 74, slip op. at 1–2 & nn.1–3

(May 1, 2018) (“Decision”). It directed Ingredion to cease and

desist from its violations of the Act, rescind the unilaterally

implemented terms and conditions of employment, and

compensate employees for losses incurred as a result of its

violations. Id. at 2–3 (“Order”). In addition, the Board ordered

Ingredion to have its chief negotiator, Ken Meadows, read a

notice describing these remedies to assembled employees “or

permit a Board agent, in the presence of Meadows and other

corporate officials responsible for labor relations, to read the

notice to employees.” Id. at 3. One Board Member dissented

from the latter portion of the Order. See Decision at 1 n.2.

II.

The Board’s factual findings are conclusive “if supported

by substantial evidence on the record considered as a whole.”

29 U.S.C. § 160(e); see, e.g., Elastic Stop Nut Div. of Harvard

Indus., Inc. v. NLRB, 921 F.2d 1275, 1279 (D.C. Cir. 1990)

(citing Universal Camera Corp. v. NLRB, 340 U.S. 474, 487–

88 (1951)). Substantial evidence “means such relevant

evidence as a reasonable mind might accept as adequate to

support a conclusion.” E.g., Universal Camera, 340 U.S. at

477 (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229

(1938)); King Soopers, Inc. v. NLRB, 859 F.3d 23, 29 (D.C.

Cir. 2017). The court, consequently, must affirm the Board’s

findings unless “no reasonable factfinder” could find as it did.

Alden Leeds, Inc. v. NLRB, 812 F.3d 159, 165 (D.C. Cir. 2016)

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(quoting Bally’s Park Place, Inc. v. NLRB, 646 F.3d 929, 935

(D.C. Cir. 2011)). The court’s assessment of the Board’s

decision occurs in light of Congress’s broad delegation to the

Board to carry out the Act, see, e.g., NLRB v. Curtin Matheson

Sci., Inc., 494 U.S. 775, 786 (1990); Allied Mech. Servs., Inc.

v. NLRB, 668 F.3d 758, 764–65 (D.C. Cir. 2012), and

recognition that matters involving the interpretation of

incidents between management and labor will often turn on the

Board’s assessment of events in light of its expertise in the area

of labor relations, see, e.g., Republic Aviation Corp. v. NLRB,

324 U.S. 793, 800 (1945); United Servs. Auto. Ass’n v. NLRB,

387 F.3d 908, 913 (D.C. Cir. 2004).

1. Direct dealing. The Board found that Ingredion

engaged in direct dealing with employees when its chief

negotiator, Ken Meadows, first visited the plant on April 6,

2015. Decision at 1 n.1. Ingredion acknowledges that

Meadows spoke to at least five employees during that visit but

maintains that his “impromptu conversations” with them were

too “brief and general” to constitute direct dealing. See Pet’r’s

Br. 38–41.

Section 9(a) of the Act obligates an employer to treat union

officials as “the exclusive representatives of [its] employees.”

29 U.S.C. § 159(a). The Supreme Court has held that this

obligation includes “the negative duty to treat with no other.”

Medo Photo Supply Corp. v. NLRB, 321 U.S. 678, 683–84

(1944) (quoting NLRB v. Jones & Laughlin Steel Corp., 301

U.S. 1, 44 (1937)). It is therefore “an infringement of the Act

for the employer to disregard the bargaining representative by

negotiating with individual employees, whether a majority or a

minority, with respect to wages, hours and working

conditions.” Id. at 684.

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Under Board precedent, an employer violates Section

8(a)(1) and (5) of the Act if it “attempt[s] to arm itself for

upcoming negotiations” by directly “soliciting the sentiment of

the employees on a subject to be discussed at the bargaining

table.” Harris-Teeter Super Mkts., Inc., 310 NLRB 216, 217

(1993); see Obie Pac., Inc., 196 NLRB 458, 458–59 (1972).

For example, the employer in Harris-Teeter exercised a

contractual right to temporarily change its employees’ work

schedule amid ongoing negotiations with the union and then

asked the employees if they “liked the change” or had other

comments about it. 310 NLRB at 216. The Board held that

this solicitation of employee views on a subject of negotiation

violated Section 8(a)(1) and (5) because it “usurp[ed] the

[u]nion’s function.” Id. at 217.

The record shows that less than two months before the start

of negotiations with the Union over a new collective bargaining

agreement, Meadows spent approximately 25 minutes

speaking with employees about subjects that were to be

addressed during the negotiations. He criticized the work

schedules and health insurance benefits provided by the

existing CBA and asked what the employees hoped to see in a

new agreement. They expressed interest in a wage raise of 3 to

3.5 percent, an increased pension multiplier, different work

schedules, more vacation days, and health insurance coverage

for early retirees. Meadows told the employees that any wage

increase would be “in the range of 2 to 2.5 percent,” that the

health insurance policy would be changed, and that the pension

multiplier would not be increased because “pensions were a

thing of the past and ‘would probably be going away.’” ALJ

Decision at 7, 37–38 (quoting Hr’g Tr. 61 (Apr. 18, 2016)).

Employees who had worked at the plant and been represented

by the Union for decades testified that they had never had a

manager or supervisor approach them to discuss contract

negotiations prior to Ingredion’s takeover of the plant.

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Ingredion does not dispute that Meadows had direct

contact with employees and solicited their views about key

terms in soon-to-be-commenced bargaining with the Union.

Whether such contact is too brief or informal to constitute a

violation of Section 8(a)(1) and (5) is the type of on-the-ground

assessment that “implicates [the Board’s] expertise in labor

relations,” United Servs., 387 F.3d at 913 (alteration in

original) (quoting NLRB v. City Disposal Sys., Inc., 465 U.S.

822, 829 (1984)). Ingredion points to nothing in the record

considered as a whole that would cause the court to doubt the

reasonableness of the Board’s finding. The Board’s finding

rests on substantial evidence that Meadows’ conduct

“undermine[d] the exclusive agency relationship” between the

Union and its members, Obie Pac., 196 NLRB at 459,

illustrating one of the ills Congress sought to guard against by

enacting Sections 8(a) and 9(a) of the Act, 29 U.S.C. §§ 158(a),

159(a).

2. Denigration of the Union. The Board found that one

of Ingredion’s managers unlawfully denigrated the Union in

the eyes of employees by falsely representing that it was

unwilling to negotiate on certain subjects. See Decision at 1

n.1. Ingredion contends that the manager did not violate the

Act because he made only “a non-actionable statement of

opinion, not a ‘threat of reprisal or force or promise of

benefit.’” Pet’r’s Br. 44 (quoting NLRB v. Gissel Packing Co.,

395 U.S. 575, 618 (1969)).

Section 8(a)(1) of the Act makes it unlawful for an

employer to “interfere with, restrain, or coerce employees”

with respect to collective bargaining. 29 U.S.C. § 158(a)(1).

Section 8(c), however, permits an employer to express a

“view[], argument, or opinion” about bargaining so long as it

does not threaten or coerce the employees. Id. § 158(c). In

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Gissel Packing, 395 U.S. at 620, the Supreme Court

distinguished the statements of opinion protected under Section

8(c) from “coercive . . . overstatements” that an employer “has

reason to believe will mislead his employees.”

The Board has held that an employer violates Section

8(a)(1) by “misrepresent[ing] the [u]nion’s bargaining

positions” in a way that “tends to undermine” employee

support for the union. Miller Waste Mills, Inc., 334 NLRB 466,

467–68 (2001), enforced, 315 F.3d 951 (8th Cir. 2003); see

Faro Screen Process, Inc., 362 NLRB 718, 718–19 (2015). In

Miller Waste Mills, for example, the employer sent employees

a letter that “blamed the [u]nion for preventing the employees

from receiving their customary annual wage increase,” 334

NLRB at 467, even though the employer “believed that the

[u]nion had given its blessing to a wage increase,” id. at 479.

The Board ruled that the letter violated Section 8(a)(1) because

it caused the employees to lose faith in their union

representatives and thus interfered with their ability to bargain

collectively. Id. at 467.

The record shows that Ingredion’s manager told an

employee in early July not to sign his retirement papers because

“there was a better contract coming” and he “would like the

retirement that [Ingredion] was going to propose.” ALJ

Decision at 30. The manager also told the employee not to “let

a few people in the union body sway what [he] want[ed] to do.”

Id. (quoting Hr’g Tr. 727 (Apr. 21, 2016)). The manager

claimed that Ingredion’s chief labor negotiator, Meadows, had

given him permission to discuss the topic with employees. Id.

The record further shows that shortly after speaking with

the first employee, this manager approached another employee

who was considering retirement and told him to contact his

union representatives and “have them get a hold of the

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company and start negotiating.” Id. (quoting Hr’g Tr. 740 (Apr.

21, 2016)). In fact, the parties had already held three

bargaining sessions and had scheduled additional sessions for

the entire week of July 27. Id. at 11–13. The manager told this

second employee the “pension is negotiable, the hours, wages

are negotiable, everything is negotiable.” Id. at 30 (quoting

Hr’g Tr. 740). The second employee testified that after

conferring with the first employee, he concluded that Ingredion

had “‘a lot to give’” them, that “the Union was not telling

[them] everything,” and that the parties “needed to get together

and negotiate.” Id. at 31 (quoting Hr’g Tr. 741).

Ingredion’s contention that the manager’s statements were

non-threatening, see Pet’r’s Br. 44, misunderstands the nature

of its violation. The Board did not find that the statements were

threatening, but rather that they were misleading. See Decision

at 1 n.1. The record evidence supports the Board’s finding that

Ingredion violated Section 8(a)(1) by misrepresenting the

Union’s position in a way that tended to cause employees to

lose faith in the Union.

3. Impasse. The Board found that Ingredion violated

Section 8(a)(1) and (5) of the Act by unilaterally implementing

new terms and conditions of employment when “the parties had

not reached an overall impasse in bargaining.” Id. at 1.

Ingredion contends that it bargained with the Union to a valid

impasse over a single issue, namely the format of the new

CBA. See Pet’r’s Br. 20–22. Here, Ingredion simply ignores

record evidence to the contrary.

It is well established that “an employer commits an unfair

labor practice if, without bargaining to impasse, it effects a

unilateral change of an existing term or condition of

employment.” Litton Fin. Printing Div. v. NLRB, 501 U.S.

190, 198 (1991); see, e.g., Wayneview Care Ctr. v. NLRB, 664

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F.3d 341, 347 (D.C. Cir. 2011). An impasse occurs “when

‘good faith negotiations have exhausted the prospects of

concluding an agreement.’” Wayneview, 664 F.3d at 347

(quoting Taft Broad. Co., 163 NLRB 475, 478 (1967)). A party

claiming impasse based on a single critical issue has the burden

of showing “there can be no progress on any aspect of the

negotiations until the impasse relating to the critical issue is

resolved.” Id. at 350 (quoting CalMat Co., 331 NLRB 1084,

1097 (2000)).

The record shows that although the Union’s proposals

used the format of the existing CBA and Ingredion’s proposals

used a different format, this did not prevent the parties from

proceeding to negotiate and reach agreement on some material

issues. For example, the Union added to its June 29 proposal

certain provisions initially proposed by Ingredion regarding

union elections, seniority, and paid time off. Compare Union

Proposal of June 29, art. II, §§ 2, 4; art. V, § 1; art. VIII, § 3,

with Ingredion Proposal of June 1, art. III, §§ 1, 3; art. V, § 1;

art. XIV, § 4. Similarly, Ingredion added to its July 28 and 29

proposals certain elements of the existing CBA that the Union

wanted to retain. Compare Ingredion Proposal of July 28, art.

XX, § 3, and Ingredion Proposal of July 29, art. XI, §§ 5–6,

with CBA art. IV, §§ 11–12; art. X, § 1(g). In addition, the

parties created and exchanged summaries that compared the

substantive terms of their proposals despite the differences in

format. Moreover, at the time Ingredion declared impasse,

major economic issues had received little attention from the

parties: Ingredion had made only a single wage proposal, the

Union had not made “any specific proposal regarding wages,”

and there had “been relatively little discussion regarding other

important economic issues such as health insurance and

retirement benefits.” ALJ Decision at 48. For that reason, the

Board concluded that “further discussion of the substantive

terms may well have resulted in the parties compromising with

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respect to the format and language of a new agreement.” Id. A

review of the record as a whole, then, shows substantial

evidence to support the Board’s finding that although the

format of the new contract was a “major issue[],” id., it did not

create an overall impasse, see Decision at 1 (adopting ALJ

Decision at 47–49).

4. Delay in providing requested information. Ingredion

promptly responded to most of the Union’s requests for

information but took eleven weeks to provide three items of

pension-related information. The Board found that this delay

was unreasonable and therefore violated Section 8(a)(1) and

(5). See id. at 1 n.1. Ingredion maintains that it “made a

‘reasonable good-faith effort’” to produce the items “‘as

promptly as circumstances allow[ed].’” Pet’r’s Br. 48

(alteration in original) (quoting Good Life Beverage Co., 312

NLRB 1060, 1062 n.9 (1993)).

“The duty to bargain collectively” imposed by Section

8(a)(5) “includes a duty to provide relevant information needed

by a labor union for the proper performance of its duties as the

employees’ bargaining representative.” Detroit Edison Co. v.

NLRB, 440 U.S. 301, 303 (1979). “An employer violates the

Act not only by refusing to provide such relevant information

but also by not providing it in a timely manner.” Brewers &

Maltsters, Local Union No. 6 v. NLRB, 414 F.3d 36, 45 (D.C.

Cir. 2005). Under Board precedent, an unjustified delay of

seven weeks may constitute a violation of Section 8(a)(1) and

(5). See, e.g., Woodland Clinic, 331 NLRB 735, 737 (2000);

Bundy Corp., 292 NLRB 671, 672 (1989).

The record shows that Ingredion’s contemporaneous

explanation for the delay differs from the explanation it

presented to the court. Meadows did not tell the Union that the

information would be difficult or time-consuming to retrieve,

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see Pet’r’s Br. 48, 50, but rather that Ingredion might not

provide pension-related information because it intended to

discontinue the existing pension plan. See ALJ Decision at 12.

This was not a valid reason for delaying compliance with an

information request; regardless of what Ingredion intended, it

had an obligation to provide the information in a timely manner

because it was relevant to the Union’s proposals. See Country

Ford Trucks, Inc. v. NLRB, 229 F.3d 1184, 1191 (D.C. Cir.

2000). Given Ingredion’s inadequate and changing

explanation for the delay, the Board was entitled to conclude

that the delay was unreasonable. See Decision at 1 n.1

(adopting ALJ Decision at 36–37).

5. Threats of job loss. The Board found that Ingredion

violated Section 8(a)(1) of the Act when one of its managers

told employees discussing a potential strike, “You boys, you

might want to think long and hard about walking out on these

people. They’ve got the deep pockets and lots of plants that

make the same thing you do. You may not get back in the door

if you go out.” ALJ Decision at 32 (quoting Hr’g Tr. 38 (Apr.

18, 2016)). Ingredion characterizes this as “a truthful statement

that one potential consequence of a strike is job loss.” Pet’r’s

Br. 47.

Although an employer may communicate “what [it]

reasonably believes will be the likely economic consequences”

of a labor strike, Gissel Packing, 395 U.S. at 619, it violates

Section 8(a)(1) if it makes “coercive statements that threaten

employees with job loss or plant closure in retaliation for

protected union activities,” Care One at Madison Ave., LLC v.

NLRB, 832 F.3d 351, 360 (D.C. Cir. 2016) (quoting

Progressive Elec., Inc. v. NLRB, 453 F.3d 538, 544 (D.C. Cir.

2006)).

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The Board reasonably found that the statement was not an

“honest forecast[]” based on “economic realities,” Gissel

Packing, 395 U.S. at 619–20, but a threat to terminate

employees for exercising their right to strike. See Care One,

832 F.3d at 360–61. Further, Ingredion’s view that the Board

lacked jurisdiction over the relevant allegation in the General

Counsel’s complaint because it “was not ‘closely related’ to the

claims in the [Union’s] first amended charge,” Pet’r’s Br. 45

(quoting Precision Concrete v. NLRB, 334 F.3d 88, 91–92

(D.C. Cir. 2003)), is meritless. The complaint alleged that in

July 2015, the manager “threatened employees that they would

never return to work if they went on strike,” Second Am. to

Compl. 2. This is closely related to the Union’s charge that

“[s]ince about April 6, 2015, [Ingredion] threaten[ed]

employees with replacement if they d[id] not agree to” its

proposals, First Am. Charge. See G.W. Galloway Co. v. NLRB,

856 F.2d 275, 280 (D.C. Cir. 1988). Further, in suggesting the

Board did not address this allegation, see Pet’r’s Br. 45,

Ingredion overlooks that the Board affirmed the ALJ’s findings

except as specified otherwise, never disavowed the ALJ’s

finding that the statement was an unlawful threat, and ordered

Ingredion to stop “[t]hreatening employees that they might lose

their jobs if they went on strike,” Order at 2; see Decision at 1

& nn.1–2.

To the extent Ingredion’s challenge morphs into a due

process objection, this too fails. Ingredion maintains it did not

have a meaningful opportunity to respond to the unlawful-

threats allegation because it was added to the complaint just

two days before the administrative hearing. See Pet’r’s Br. 51–

52. Yet the record shows Ingredion received a “full and fair

opportunity to litigate the matter,” and in any event Ingredion

points to no prejudice. See Davis Supermarkets, Inc. v. NLRB,

2 F.3d 1162, 1169 (D.C. Cir. 1993). Thus, Ingredion has

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shown no basis for reversing the Board’s findings of unfair

labor practices.

III.

Ingredion objects to the Board’s remedial Order on two

grounds. First, it maintains it was denied due process by the

provision rescinding all discipline imposed pursuant to

unilaterally implemented terms and conditions because the

complaint did not specifically request such a remedy. See

Pet’r’s Br. 53–54. This is meritless. Ingredion was on notice

that the remedy was in play because the complaint asked the

Board to compensate employees “for any losses they have

suffered as a result of the unilateral implementation” of new

terms and conditions. Compl. 8.

Second, Ingredion objects to the provision directing that

Meadows read a notice describing Ingredion’s legal obligations

to assembled employees “or permit a Board agent, in the

presence of Meadows and other corporate officials responsible

for labor relations, to read the notice to employees,” Order at

3. The Board’s broad discretion to fashion remedies for

violations of the Act, see, e.g., Fibreboard Paper Prods. Corp.

v. NLRB, 379 U.S. 203, 216–17 (1964), allows it to impose this

“extraordinary remedy,” Decision at 1 n.2 (Member Emanuel,

dissenting), where “upper management has been directly

involved in multiple violations of the Act,” Veritas Health

Servs., Inc. v. NLRB, 895 F.3d 69, 86 (D.C. Cir. 2018). Here,

Ingredion’s chief negotiator played a central role in several

violations of the Act, so the Board did not abuse its discretion

by imposing the remedy.

Accordingly, we deny the petition for review and grant the

Board’s cross-application for enforcement of its Order.