International Brotherhood of Boilermakers v. NLRB

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 6, 2022 Decided March 7, 2023

No. 21-1209

INTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIP

BUILDERS, BLACKSMITHS, FORGERS AND HELPERS, LOCAL

627,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

HAWAIIAN DREDGING CONSTRUCTION COMPANY, INC.,

INTERVENOR

On Petition for Review of an Order

of the National Labor Relations Board

David A. Rosenfeld argued the cause for petitioner. With

him on the briefs was Michaela F. Posner.

Joel A. Heller, Attorney, National Labor Relations Board,

argued the cause for respondent. With him on the brief were

Jennifer A. Abruzzo, General Counsel, Ruth E. Burdick, Deputy

Associate General Counsel, David Habenstreit, Assistant

General Counsel, and Usha Dheenan, Supervisory Attorney.

2

Barry W. Marr was on the brief for intervenor Hawaiian

Dredging Construction Company, Inc. in support of

respondent. Megumi Sakae entered an appearance.

Before: MILLETT, KATSAS and WALKER, Circuit Judges.

Opinion for the Court filed by Circuit Judge WALKER.

WALKER, Circuit Judge: More than a decade ago,

Hawaiian Dredging Construction Company and a Hawaiian

chapter of the Boilermakers union failed to renew a collective

bargaining agreement. Hawaiian Dredging then discharged

Boilermakers welders who were covered by the now-expired

agreement. The Boilermakers thought those discharges were

an “unfair labor practice” under the National Labor Relations

Act, 29 U.S.C. § 158(a), and asked the National Labor

Relations Board to weigh in.

Originally, the Board sided with the Boilermakers. But

Hawaiian Dredging asked this court to review that decision,

and we remanded to the Board to reconsider.

The Board then changed its view and concluded that no

unfair practice occurred. Now the Union takes its turn in

petitioning us for review.

Because the Board’s new decision was supported by

substantial evidence and correctly applied established law, we

deny the Union’s petition.

3

I

A

Hawaiian Dredging is Hawaii’s “largest general

contractor.” JA 1. To staff its construction jobs, it relies on

union employees. According to officials at the company, it

has a decades-old policy of performing craft work only when it

has a “prehire” agreement with a union.

Unique to the construction industry, prehire agreements

are collective bargaining agreements that permit a construction

company to contract with a union before it hires any union

workers. See 29 U.S.C. § 158(f); NLRB v. Iron Workers, 434

U.S. 335, 337-38 (1978). The union typically operates a

“hiring hall” from which an employer may hire union workers

on a project-by-project basis. See, e.g., Boilermakers Local

No. 374 v. NLRB, 852 F.2d 1353, 1355 (D.C. Cir. 1988).

Unlike a typical collective bargaining agreement, a prehire

agreement is formed with a union that need not enjoy majority

support from the employer’s current employees. See 29

U.S.C. §§ 159(a), 158(f). As a result, construction employers

are not required to bargain in good faith with a union after a

prehire agreement expires. See Iron Workers, 434 U.S. at

345-46. Once a prehire agreement expires, either party can

walk away.

For years, Hawaiian Dredging employed welders through

a prehire agreement with the International Brotherhood of

Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and

Helpers. When that agreement expired, the parties tried to

reach a new deal. Hawaiian Dredging continued to employ its

Boilermakers welders while it attempted to negotiate a new

agreement, but negotiations stalled. Once it became clear that

4

the relationship between the parties had ended, Hawaiian

Dredging suspended its welding projects and discharged

thirteen Boilermakers welders.1

Hawaiian Dredging then entered a new prehire agreement

with a different union, the United Plumbers and Pipefitters

Union, Local 675. Under this new agreement, Hawaiian

Dredging offered the discharged Boilermakers welders a path

back to employment. If the welders met the Pipefitters’

referral requirements — including a welding exam — they

could go back to work for Hawaiian Dredging. Eight of the

thirteen welders eventually did just that.

The Boilermakers union disapproved of the way Hawaiian

Dredging treated its welders. It claimed that Hawaiian

Dredging had discriminated against them for being

Boilermakers. But Hawaiian Dredging denies that. It says

the welders were fired because it had a neutral policy of

employing craft workers only when it has a prehire agreement

in place.

Unsatisfied with that explanation, the Boilermakers union

took its case to the National Labor Relations Board, accusing

Hawaiian Dredging of unfair labor practices under the National

Labor Relations Act. It alleged that Hawaiian Dredging’s

treatment of the welders violated §§ 8(a)(1) and 8(a)(3) of the

Act. See 29 U.S.C. §§ 158(a)(1), (a)(3), 157.

Section 8(a)(1) says employers cannot “interfere with,

restrain, or coerce employees in the exercise of the rights

1

Although the record suggests that Hawaiian Dredging may have

fired fourteen welders, JA 362-75, the charge before the Board

complained of only thirteen of those firings, JA 260-61.

Accordingly, we discuss the thirteen employees relevant to the

charge.

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guaranteed” by the Act, 29 U.S.C. § 158(a)(1), including the

right to form a union and collectively bargain, 29 U.S.C. § 157.

Section 8(a)(3) says employers cannot “discourage

membership in” a union. 29 U.S.C. § 158(a)(3). Taken

together, those provisions make it unlawful to “discharge . . . a

worker because of union activity.” NLRB v. Transportation

Management Corp., 462 U.S. 393, 394 (1983).

B

Initially, an Administrative Law Judge found that no unfair

practice occurred. She reasoned that Hawaiian Dredging’s

asserted practice of staffing craft workers only when a prehire

agreement is in place was “a legitimate business justification”

for the discharges. Hawaiian Dredging Construction Co., 362

NLRB 81, 104 (2015) (Hawaiian Dredging I).

The Board reviewed the ALJ’s determination and

reversed, with one member dissenting. Id. at 87-88. It found

that Hawaiian Dredging could not rely on its asserted neutral

policy because, on several occasions, it had continued to

employ the Boilermakers welders after a prehire agreement

expired and while negotiations for a new agreement were

ongoing. Id. at 84.

This court reversed. We held that the Board gave

“inappropriate emphasis to the gap periods” when Hawaiian

Dredging continued to employ Boilermakers welders in the

absence of a prehire agreement. Hawaiian Dredging

Construction Co. v. NLRB, 857 F.3d 877, 884 (D.C. Cir. 2017).

We noted that the Board failed to engage with the reasoning of

the dissenting Board member, who argued that the short

periods of continued employment could be explained by

Hawaiian Dredging’s “long history of bridging such hiatus

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periods cooperatively” while negotiations with the union were

ongoing. Id. (cleaned up).

On remand, the Board changed its view. It found that

Hawaiian Dredging’s actions were the result of a legitimate

business practice — the company’s prehire policy — and not

anti-union discrimination. Hawaiian Dredging Construction

Co., 368 NLRB No. 7, at 6 (2019) (Hawaiian Dredging II).

The Boilermakers then petitioned us for review.

II

Our review of Board decisions is deferential. “[W]e must

uphold the judgment of the Board unless its findings are

unsupported by substantial evidence, or it acted arbitrarily or

otherwise erred in applying established law to the facts of the

case.” Wendt Corp. v. NLRB, 26 F.4th 1002, 1008 (D.C. Cir.

2022) (cleaned up).

A Board decision is arbitrary if it “entirely failed to

consider an important aspect of the problem or offered an

explanation for its decision that runs counter to the evidence

before” it. Hawaiian Dredging Construction Co. v. NLRB,

857 F.3d 877, 881 (D.C. Cir. 2017) (cleaned up). “Substantial

evidence . . . is such relevant evidence as a reasonable mind

might accept as adequate to support a conclusion.” Oak

Harbor Freight Lines, Inc. v. NLRB, 855 F.3d 436, 440 (D.C.

Cir. 2017) (cleaned up).

III

The Board concluded that Hawaiian Dredging did not

commit an unfair labor practice when it discharged the

Boilermakers welders because of a neutral, non-discriminatory

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policy of only hiring welders under a prehire agreement with a

union. Under our deferential standard of review, we deny the

petition challenging that decision.2

A

When an employer fires an employee protected by the

National Labor Relations Act, the Board may use one or both

of two tests to decide whether anti-union motive explains the

firing. See 29 U.S.C. §§ 158(a)(1), (a)(3), 157. Here, the

Board applied both.

One test derives from the Board’s decision in Wright Line,

251 NLRB 1083 (1980). Under Wright Line, the General

Counsel of the Board (who prosecutes cases on behalf of the

charging party) must make an initial showing that a discharge

was the result of an anti-union motive. Id. at 1089; see also

NLRB v. Transportation Management Corp., 462 U.S. 393,

395 (1983). If he does, an employer can rebut that showing

with a “legitimate business reason” for the discharge. Wright

Line, 251 NLRB at 1088.

The other test derives from the Supreme Court’s decision

in NLRB v. Great Dane Trailers, Inc., 388 U.S. 26 (1967).

Under Great Dane, an anti-union motive can be inferred when

an employer’s action “is so inherently destructive of employee

interests that it may be deemed proscribed without need for

2

The Boilermakers raise a separate argument that Hawaiian

Dredging violated § 8(a)(1) in a manner distinct from the

discrimination covered by § 8(a)(3), see Petitioner’s Br. 46-47, but

we lack jurisdiction to address that argument because it was not

raised to the Board on remand. See Woelke & Romero Framing,

Inc. v. NLRB, 456 U.S. 645, 666 (1982) (“the Court of Appeals lacks

jurisdiction to review objections that were not urged before the

Board”).

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proof of an underlying improper motive.” Id. at 33 (cleaned

up). By contrast, actions that are “comparatively slight”

infringements of employee interests do not give rise to that

conclusive inference. Id. at 34 (cleaned up). Instead, an

employer can rebut the charge of illegal discrimination by

demonstrating “legitimate and substantial business

justifications for” its action. Id. If it does so, the burden is

on the General Counsel to prove an anti-union motive. Id.

Under both tests, the search for an anti-union motive is the

touchstone of the analysis. If an anti-union motive cannot be

inferred from “inherently destructive” conduct, then the

General Counsel must prove that such a motive best explains

the employer’s action, rather than the legitimate business

justification alleged by the employer.

B

Applying both Wright Line and Great Dane, the Board

found that Hawaiian Dredging’s discharges were not the result

of an anti-union motive.

That conclusion rested on two findings. First, the Board

found that Hawaiian Dredging’s asserted

policy — conditioning craft work on a prehire

agreement — was “a legitimate and substantial business

justification for the discharges.” Hawaiian Dredging II, 368

NLRB No. 7, at 6 (2019). Second, it found that the discharges

were the result of that policy, and not some discriminatory

reason. Id. The General Counsel therefore failed to carry its

burden under either test.

To start, we agree with the Board that Hawaiian

Dredging demonstrated “a legitimate and substantial business

justification for” discharging the welders. Hawaiian

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Dredging II, 368 NLRB at 6. When a prehire agreement

expires, a construction employer has no continuing obligation

to maintain a bargaining relationship with a union. See NLRB

v. Iron Workers, 434 U.S. 335, 345-46 (1978). So, absent

other evidence, there is nothing discriminatory about a policy

that suspends work and discharges all employees when an

agreement expires. If anything, Hawaiian Dredging’s policy

promotes collective bargaining by ensuring that all of its

welding work is done pursuant to a prehire agreement.

We also conclude that substantial evidence supports the

Board’s factual finding that Hawaiian Dredging discharged the

welders because of its policy, and not for some discriminatory

reason. Hawaiian Dredging officials gave uncontroverted

testimony that it discharged the welders under the policy. See

Hawaiian Dredging I, 362 NLRB 81, 104.

The Boilermakers point to evidence that they say cuts

against the Board’s conclusion. But each argument fails to

persuade.

First, the Boilermakers point to short periods where

Hawaiian Dredging continued to employ Boilermakers welders

while no prehire agreement was in place. The Boilermakers

allege that these gap periods show that Hawaiian Dredging’s

asserted policy is pretextual. But the Board reasonably found

otherwise. As this court previously pointed out, Hawaiian

Dredging has a “long history of bridging . . . hiatus periods

cooperatively” by keeping union employees on the books while

attempting to negotiate a new prehire agreement. Hawaiian

Dredging Construction Co. v. NLRB, 857 F.3d 877, 884 (D.C.

Cir. 2017) (quoting Hawaiian Dredging I, 362 NLRB at 95

n.33); see also Hawaiian Dredging II, 368 NLRB at 4

(incorporating this court’s view into the Board’s decision).

That suggests the gap periods were not contrary to, but rather

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consistent with, Hawaiian Dredging’s longstanding policy and

practice.

Second, the Boilermakers point to a letter they received

from Hawaiian Dredging about the discharges. Hawaiian

Dredging wrote that it did “not intend to utilize members of the

Boilermaker’s Union for future work.” JA 360. The

Boilermakers say that the letter shows an anti-union motive.

But the Board concluded that the letter does not support that

theory when it’s read as a whole. Hawaiian Dredging II, 368

NLRB at 3-4. The letter explains that Hawaiian Dredging

planned to end its relationship with the Boilermakers because

its “prior agreement with the Union terminated.” JA 360; see

also Hawaiian Dredging, 857 F.3d at 885 (considering the

letter in context). So again, the Boilermakers’ evidence does

not show discriminatory intent.

Finally, the Boilermakers argue that Hawaiian Dredging

exhibited an anti-union motive when it discharged the

welders — completely terminating their employment —

instead of laying them off with the expectation of recall.

According to the Boilermakers, the welders would have been

able to return to work for Hawaiian Dredging more quickly had

they been laid off instead of discharged. Hawaiian Dredging

II, 368 NLRB at 5. However, given the context of Hawaiian

Dredging’s established policy of suspending all work in the

absence of a prehire agreement, and the Board’s factual finding

that there was no ‘practical difference’ between laying the

workers off and firing them, see Hawaiian Dredging II, 368

NLRB at 6 n.29, that choice between layoffs and discharges by

itself does not evidence discriminatory animus. As we have

explained, the question under Wright Line and Great Dane is

whether an employer’s action was due to an anti-union motive,

not whether an employer’s action adversely affected

employees. As long as it does not discriminate, an employer

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is free to decide between discharging and laying off its

employees without violating §§ 8(a)(1) and 8(a)(3) of the

National Labor Relations Act. That is so even when its

decision might disadvantage employees.

* * *

The Board’s decision correctly applied established law and

is supported by substantial evidence. We therefore deny the

petition for review.

So ordered.