Southern Power Co. v. National Labor Relations Board

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Decided January 6, 2012

No. 10-1410

SOUTHERN POWER COMPANY,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

Consolidated with 11-1003

On Petition for Review and Cross-Application for

Enforcement of an Order of the National Labor Relations

Board

Michael D. Kaufman, Seth T. Ford, and M. Jefferson

Starling, III were on the briefs for petitioner.

John H. Ferguson, Associate General Counsel, Linda

Dreeben, Deputy Associate General Counsel, Robert J.

Englehart, Supervisory Attorney, and Michael D. Berkheimer,

Attorney, were on the brief for respondent. Daniel A. Blitz,

Attorney, entered an appearance.

Before: SENTELLE, Chief Judge, TATEL, Circuit Judge,

and EDWARDS, Senior Circuit Judge.

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PER CURIAM: Petitioner Southern Power owns the four

electricity generating plants involved in this case. Until 2008,

Southern Power staffed the four facilities by contracting with

Alabama Power at one of the plants and Georgia Power at the

three others. Both had exclusive bargaining representatives:

the International Brotherhood of Electrical Workers (IBEW)

Local 84 represented operation technicians at the Georgia

Power–operated plants; IBEW System Council U-19 on

behalf of sub-local, Local 801-1, represented the operation

technicians at the Alabama Power–operated plant. On January

25, 2008, Southern Power terminated its service agreement

with Georgia Power and Alabama Power, taking over the four

plants’ operations. Local 84 and Local 801-1 requested

recognition, contending that Southern Power qualified as a

successor employer to Georgia Power and Alabama Power.

When Southern Power refused to recognize and bargain with

the unions, each filed charges with the National Labor

Relations Board (NLRB).

After a hearing, the administrative law judge found that

Southern Power violated sections 8(a)(1) and (5) of the

National Labor Relations Act (NLRA), ordering it to

recognize and bargain with Local 84 and Local 801-1. The

ALJ also found that the three-plant bargaining unit

represented by Local 84 was inappropriate and therefore

ordered Southern Power to bargain with Local 84 in three

single-plant units. On March 20, 2009, acting with only two

sitting members, the Board issued an order affirming the

ALJ’s findings “as modified,” agreeing that Southern Power

was a successor, but finding, contrary to the ALJ, that the

Georgia Power three-plant bargaining unit was proper given

the unit’s group bargaining history. S. Power Co., 353

N.L.R.B. No. 116, 2009 WL 837873, at *2 (Mar. 20, 2009).

Southern Power petitioned for review, and we remanded the

case to the NLRB in light of New Process Steel, L.P. v.

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NLRB, 130 S. Ct. 2635 (2010), which held that an NLRB

panel must have at least three members to exercise the

Board’s authority. On November 30, 2010, a three-member

panel of the Board, after “consider[ing] the [ALJ’s] decision

and the record,” decided to “affirm the [ALJ’s] rulings,

findings, and conclusions and to adopt the recommended

Order to the extent and for the reasons stated” in the March 20

Order, which it incorporated by reference. S. Power Co., 356

N.L.R.B. No. 43, 2010 WL 4929683, at *1 (Nov. 30, 2010).

Southern Power now asks us to vacate the Board’s

November 30 Order. We lack jurisdiction to consider two of

Southern Power’s arguments, another is time-barred, and two

others fail on the merits. Accordingly, we deny Southern

Power’s petition for review and grant the Board’s cross-

application for enforcement.

Southern Power first argues that the speed with which the

Board reached its decision and the purportedly confusing

language of its order demonstrate that it “arbitrarily rushed to

judgment to affirm its improper two-member decision.” Pet’r

Br. 25. Under NLRA Section 10(e), however, we lack

jurisdiction to consider this argument because Southern

Power failed to raise it before the Board by filing a motion for

reconsideration. See 29 U.S.C. § 160(e), (f) (“[n]o objection

that has not been urged before the Board . . . shall be

considered by the court” absent “extraordinary

circumstances”); Int’l Ladies’ Garment Workers’ Union v.

Quality Mfg. Co., 420 U.S. 276, 281 n.3 (1975) (holding that,

pursuant to section 160(e), court “may not” consider

respondent’s objection “that it was denied procedural due

process” because respondent failed to raise the objection

before the Board by “fil[ing] a petition for reconsideration”).

For the same reason, we lack jurisdiction to consider Southern

Power’s argument that the Order will increase the risk that

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Southern Power will violate a settlement agreement between

its parent company and the Federal Energy Regulatory

Commission.

Next, Southern Power argues that the Board erred in

rejecting its argument that Georgia Power and Alabama

Power’s original recognition of the unions was unlawful.

Because nearly ten years have passed since the unions were

recognized, NLRA Section 10(b)—requiring any challenges

to the initial majority status of a union to be made within six

months of its recognition—bars this claim. See 29 U.S.C.

§ 160(b) (“no complaint shall issue based upon any unfair

labor practice occurring more than six months prior to the

filing of the charge with the Board”); Raymond F. Kravis Ctr.

for the Performing Arts, Inc. v. NLRB, 550 F.3d 1183, 189–90

(D.C. Cir. 2008) (rejecting defense based on the impropriety

of union’s original majority status because “[t]he six-month

time period for challenging Local 623’s alleged lack of

majority support in 1992 and 1998 passed long before

[employer] first raised this challenge”).

Southern Power next challenges the Board’s

successorship finding, arguing that no substantial continuity

of enterprise existed between it and either Georgia Power or

Alabama Power. Under the NLRA, a successor employer

must recognize and bargain with its predecessor’s union. Fall

River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 41

(1987). An employer is a successor where “the majority of its

employees were employed by its predecessor” and there is

“substantial continuity” between the enterprises. Id. at 41, 43.

In deciding whether substantial continuity exists, the Board

examines

whether the business of both employers is essentially

the same; whether the employees of the new

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company are doing the same jobs in the same

working conditions under the same supervisors; and

whether the new entity has the same production

process, produces the same products, and basically

has the same body of customers.

Id. at 43. The Board assesses all of these factors “from the

perspective of the employees involved.” Cmty. Hosps. of

Cent. Cal. v. NLRB, 335 F.3d 1079, 1083 (D.C. Cir. 2003).

The substantial continuity inquiry is fact-based, and we must

uphold the Board’s factual findings if supported by substantial

evidence. Id. at 1082–83. That standard is amply satisfied

here. Southern Power has stipulated to most of the relevant

factors identified by the Supreme Court for evaluating

substantial continuity: that former Alabama Power and

Georgia Power employees at each of the four plants

constituted a majority—indeed, all—of its work force when it

assumed operation, and that these employees continued,

without hiatus, doing the same job under the same managers

with only minor changes to the terms and conditions of their

employment.

None of Southern Power’s objections undercut the

Board’s factual findings. First, Southern Power contends that

it “did not purchase or acquire stock, assets or equipment of

Alabama Power or Georgia Power.” Pet’r Br. 38. This is, of

course, true: Southern Power acquired no assets because it

already owned them. Its relationship to Georgia Power and

Alabama Power is thus even closer than that of a new

company that purchases its predecessor’s assets. Second,

Southern Power contends that it “is fundamentally different

from Alabama Power and Georgia Power in both size and

operation.” Id. at 40. Yet differences in company size have

little impact on continuity within a particular plant and thus

on whether the employees “view their job situations as

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essentially unaltered.” Fall River, 482 U.S. at 43. As the

Board found, and as the record amply demonstrates, the

working conditions in the plants and the circumstances from

“the employee’s perspective,” id., remained virtually identical

after Southern Power’s takeover. Third, Southern Power

contends that the record lacks adequate evidence that the

employees expected continued representation because “the

employees knew that Southern Power was not unionized.”

Pet’r Br. 44. But this is of no moment: “The fact that the

employees took ‘non-union’ jobs does not establish that they

no longer wanted union representation.” Siemens Bldg.

Techs., Inc., 345 N.L.R.B. 1108, 1109 (2005). Substantial

continuity itself, rather than the successor’s union status or the

impossibility of procuring a different union job, creates

legitimate expectations of continued representation. See Fall

River, 482 U.S. at 39–40 (“If the employees find themselves

in a new enterprise that substantially resembles the old, but

without their chosen bargaining representative, they may well

feel that their choice of a union is subject to the vagaries of an

enterprise’s transformation. This feeling is not conducive to

industrial peace.”).

Finally, Southern Power argues that to the extent we find

in the Board’s favor, we should deem a single-plant

bargaining unit, rather than the three-plant unit the Board

approved, “the most appropriate unit” for the plants

previously staffed by Georgia Power. Pet’r Br. 44. We,

however, owe great deference to the Board’s selection of

bargaining units, and the Board “need only select an

appropriate unit, not the most appropriate unit.” Dean

Transp., Inc. v. NLRB, 551 F.3d 1055, 1063 (D.C. Cir. 2009)

(internal quotation marks omitted). Here, the same collective-

bargaining agreement covered employees at all three plants

from the time their positions were created. The Board

appropriately attached significant weight to this group

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bargaining history, and Southern Power presented no

“compelling circumstances” to overcome the resulting

presumption of appropriateness. See Cmty. Hosps., 335 F.3d

at 1085 (internal quotation marks omitted).

For the foregoing reasons, we deny the petition for

review and grant the Board’s cross-application for

enforcement.

So ordered.