# National Labor Relations Board v. Sheridan Creations, Inc. > Court of Appeals for the Second Circuit · March 16, 1966 · 357 F.2d 245 URL: https://www.frixlaw.com/law-library/cases/9451377 ## Case - **Full name:** NATIONAL LABOR RELATIONS BOARD, Petitioner, v. SHERIDAN CREATIONS, INC., Respondents - **Court:** Court of Appeals for the Second Circuit - **Decided:** March 16, 1966 - **Citations:** 357 F.2d 245; 61 L.R.R.M. (BNA) 2586; 1966 U.S. App. LEXIS 6843 - **Precedential status:** Published - **Opinion:** Dissent by Lumbard - **Judges:** Lumbard, Smith, Levet - **Cited by:** 52 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9451377 ## Opinion text LUMBARD, Chief Judge (dissenting) : The sole issue before us is the appropriateness of the Board’s rigid rule that withdrawal from a multi-employer bargaining unit, once negotiations have begun, is untimely and ineffective regardless of bad faith or a showing that there has been an adverse effect upon the bargaining process. In my opinion, withdrawal should be permitted at any time in the absence of evidence that it was in bad faith or that it was unfair to any of the other participants in the negotiations. By their nature multi-employer bargaining units are voluntary and consensual. NLRB v. Sklar, 316 F.2d 145 (6 Cir. 1963). Only recently the Board declared: “It is because the multiem-ployer unit is rooted in consent that the Board has always permitted an employer to withdraw from such a unit for any reason at a proper time and by giving proper notice. The Board has considered material to permitting withdrawal only the 'time and manner’ of the withdrawal request * * * Important practical considerations demonstrate the wisdom of leaving intact the freedom of the parties to form and dissolve, to modify and adapt, multiemployer units.” The Evening News Association, 154 NLRB No. 121 , pp. 4, 8 (1965). I agree with the Board’s view that it must be alert to prevent an employer from gaining the advantages of group bargaining without accepting the burden of being bound by whatever decision the group arrives at, and to protect a party which bargains in reliance upon the composition of the unit. To that end it is well settled that the intention of a party to *249 withdraw from a multi-employer bargaining unit must be unequivocal and exercised at an appropriate time. E. g., NLRB v. Jeffries Banknote Co., 281 F.2d 893 (9 Cir. 1960); The Kroger Co., 148 NLRB No. 69 (1964); Walker Electric Co., 142 NLRB 1214 (1963). But is does not follow and certainly it is not “well-settled,” as the Board stated in its opinion in this case, that withdrawal after negotiations have begun is per se untimely. The only case relied upon by the Board, Kroger Co., supra, did not state such a flat rule; cited no authority for such a rule; and was decided on the basis of a very careful factual discussion. Nor was Walker Electric Co., decided solely on the basis of an untimely withdrawal. “But even more important than the timing aspect,” the opinion noted, “is the secrecy and want of good faith.” 142 NLRB 1214 , 1221 (1963). The only prior cases which purported to follow the rule adopted in this case were Retail Associates, Inc., 120 NLRB 388 (1958) and C & M Construction Co., 147 NLRB 843 (1964). But in both cases the rule was dictum — in Retail Associates the Board found the withdrawal was in bad faith after an extensive factual analysis and in C & M Construction Co. the union consented to it. In my view, we should adhere to the procedure originally established by the Board of inquiring whether the withdrawal was in good faith, 1 and not harmful to the other parties. This is the investigation which it has been able to make in the past and the appropriateness of which it recently reaffirmed: “A careful analysis of precedent reveals that variations in facts and circumstances preclude a per se approach, and demonstrates that the ultimate determination with respect to timely withdrawal must turn upon a discriminating evaluation of all attendant facts and circumstances.” Tulsa Sheet Metal Works, Inc., 149 NLRB No. 120 , p. 16 (1964) 2 The Hearing Examiner found that the withdrawal of Sheridan from the unit was in good faith and was based on the desire of a majority of its fbur employees not to be represented by the union. When the employees informed respondent in December that three of them wished to leave the union an officer of the Knitwear Association informed Sheridan that it could not withdraw at that time because of the existing union contract. After negotiations began the employees reminded Sheridan of their desire not to remain in the union and shortly thereafter it filed a representation petition and attempted to withdraw from the Association. The union has not claimed during any of the proceedings that it had a majority in Sheridan’s unit nor suggested that the loss was the result of any unfair practice. The withdrawal here was not a bargaining stratagem or the result of dissatisfaction with the course of the negotiations. Cf. Universal Insulation Corp., 149 NLRB No. 124 (1964); Tulsa Sheet Metal Works, supra. The withdrawal does not appear to have prejudiced the union in any manner in its bargaining tactics — there were three negotiating sessions in the month following the withdrawal. Compare Walker Electric Co., supra, where the president of the respondent continued to participate in the negotiations after his “withdrawal” and Detroit Window Cleaners Union, 126 NLRB 63 (1960) where the union did not know *250 of the purported withdrawal until after the contract was completed. Because the record is so clear on this matter I do not think that a remand is necessary to determine whether the union suffered any disadvantage from the withdrawal even though the issue was not considered either by the Board, which thought a flat rule should be applied, or by the Hearing Examiner, who was concerned solely with the issue of good faith on the part of the employer. Neither potential instability of the bargaining process nor administrative convenience requires substituting a flat rule prohibiting withdrawal after negotiations have begun in place of an inquiry as to bad faith and possible harmful effects. When the possible disruption of the bargaining process occurs the Board has been fully able to correct the abuse. Administrative convenience, desirable as it surely is, cannot justify introduction of a rigid rule in these circumstances. See, Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 198 , 61 S.Ct. 845 , 85 L.Ed. 1271 (1941). Not only does the Board’s proposed rule put an unnecessary limitation upon the voluntary nature of multi-employer units but it conflicts with the policy so forcefully expressed in International Ladies’ Garment Workers Union, AFL-CIO v. NLRB, 366 U.S. 731 , 81 S.Ct. 1603 , 6 L.Ed.2d 1762 (1961) that an employer should not bargain with a non-representative union. If an employer has not withdrawn from a multi-employer bargaining unit, and if such a unit is appropriate, it may be proper to allow or even require him to bargain with a union which has a majority in the overall unit but not among his employees. But the policy of not permitting an employer to bargain with a union which does not represent the choice of his employees furnishes strong reason for allowing withdrawal from the multi-employer unit in the absence of any showing of actual harm to the collective bargaining process or lack of good faith. The rule approved by the majority is unnecessary, and this case amply demonstrates its unsoundness. There being no evidence of bad faith by the employer or any harmful effect of its withdrawal from the voluntarily formed unit, I would deny enforcement. . The majority’s insistence that good faith is always irrelevant to a charge of a violation of § 8(a) (1) is misplaced. NLRB v. Erie Resistor Corp., 373 U.S. 221 , 83 S.Ct. 1139 , 10 L.Ed.2d 308 (1963). As the Supreme Court made clear last term, NLRB v. Brown, 380 U.S. 278 , 85 S.Ct. 980 , 13 L.Ed.2d 839 (1965), the employer’s motivation is irrelevant only where the conduct is “demonstratively destructive of employee rights and is not justified by the service of significant or important business ends.” The two cases from this circuit cited by the majority are not inconsistent with that view. . This case-by-case approach to problems in the field of multi-employer bargaining has some court approval. Retail Clerks Union No. 1550 v. NLRB, 117 U.S.App. D.C. 191, 330 F.2d 210 (1964). --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9451377. Public record. Not legal advice.