National Labor Relations Board v. Haberman Construction Company

*371 JERRE S. WILLIAMS, Circuit Judge,

with whom, RUBIN, KRAVITCH, HATCH-ETT, TATE, SAM D. JOHNSON and THOMAS A. CLARK, Circuit Judges, join, concurring in part and dissenting in part:

The Court in a thorough and scholarly presentation upholds the order of the National Labor Relations Board in full in finding appellant Haberman Construction Company violated §§ 8(a)(1), (3) and (5) of the National Labor Relations Act. I concur fully in that decision as set out in. parts I and II of the opinion. My dispute is wholly with part III in which the Court permits only a truncated and ineffectual remedy to the Board to cure the impact of the unfair labor practices committed by Haberman.

The statement of facts in the majority opinion is complete and objective. The key facts in evaluating the remedy are: 1. The company disavowed the collective agreement under which it was operating during its existence but not long before it was to expire. 2. The construction projects upon which the employed carpenters were working were also soon to end. 3. This employer did not have a steady workforce but hired on a project-by-project basis. The Court uses the soon-to-expire contract, the soon-to-end projects, and the project-by-project hiring to enable the employer to escape the full impact of the Board’s remedies for his unfair labor practices. It is at this point that I must part company and register this dissent.

No assertion is made that the Board had no legal power to act beyond the termination of the then current contract and the then current jobs. The Court correctly concedes that the Board does have such power. But applying such power in this case, the Court concludes, is punitive. This opinion will undertake to demonstrate that this exercise of power by the Board is not punitive but strives only to reconstruct the status quo as if the employer had not engaged in the unfair labor practices. This is the proper power for the Board to exercise in formulating its remedies. N. L. R. B. v. J. H. Rutter-Rex Mfg. Co., 396 U.S. 258, 263-65 , 90 S.Ct. 417, 420-421 , 24 L.Ed.2d 405 (1969).

The clearest way to see the impact of the refusal to allow the Board to extend its remedies beyond the contract expiration and the project terminations is to evaluate the situation of the employer if he had not breached the contract, refused to bargain, and discharged the employees, but had waited until the contract expired and the jobs were over. The Court relied upon the fact that the employer then could have discharged the employees, declared an “open shop”, hired employees for new projects and paid them without regard to union working conditions.

While factually true as far as it goes, this conclusion needs amplification. In the first place, the “discharge” of the employees from the concluded projects would have been no more than ending the work and paying off employees after the work is over. It had no relationship whatsoever to possible rehiring on later projects in a project-by-project situation. In the second place, the announcement that the company was going “open shop” itself would be an unfair labor practice if the company meant to guarantee there would be no union recognition and no collective bargaining. Assuming that the company knew it could not follow the classic definition of “open shop” and hire so as to insure there would not be a union majority, 1 the employer by declar *372 ing an open shop would be doing no more than declaring that there is now no binding contract and that it is going to offer its self-determined wages and working conditions. Under the law an employer has no power to select employees on the basis of union membership or attitudes toward unions or collective bargaining. He must consider all applicants regardless of their union affiliations, attitudes, or activities. 29 U.S.C. § 158 (a)(3) (1976); Local 357, Internat'l Bro. of Team., Etc. v. N. L. R. B., 365 U.S. 667 , 81 S.Ct. 835 , 6 L.Ed.2d 11 (1961).

This in turn means that there is no obligation to bargain on a new project only so long as the union lacks a majority. The employees hired will have the right to try to organize the project and gain a majority. If they do, the employer will be required to bargain with them collectively. They may use the usual self help devices in trying to organize the new project such as recognitional picketing, striking, the collecting of authorization cards, and petitioning for an election. See, e. g., N.L.R.B. v. Phil-Modes, Inc., 396 F.2d 131 (5th Cir. 1968); Smitley v. N.L.R.B., 327 F.2d 351 (9th Cir. 1964).

So it is that an employer in the construction industry in no way avoids his elemental obligations under the statute by hiring on a project-by-project basis. The fundamental protection of the rights of employees to organize and bargain collectively and not to be discriminated against because of their union activity or interest remains intact. 2

By refusing to extend the Board’s remedies beyond the expiration of the prior contract and the expiration of the prior projects, the Court leaves this employer in precisely the same situation he would have been in after such expiration if he had not committed the serious unfair labor practices revealed by this record. And the Court insists that going beyond allowing him this easy escape from his serious practices is punitive and therefore barred to the Board.

The Board’s remedies are punitive only if the employer’s, unfair practices made no change in the situation of the union and the employees which carries its impact beyond the expiration of the contract and the prior projects. Yet, the impact of the employer’s unfair practices does extend beyond that time and does have a serious continuing effect. The employer has prejudiced the entire situation with respect to his future business activities and the hiring of employees by the actions which he took. We should not close our eyes to whatever impact the employer’s unfair labor practices had after the contract expired and the projects ended.

The heavy lingering effect of the employer’s unfair labor practices is manifest. This employer has by his actions told his present and future employees that he cannot be trusted to bargain with the union even though he is lawfully bound to do so and that he may well discriminate against union employees in his future conduct. The Court labors under a misapprehension. The employees involved did not quit because they did not like to work under nonunion working conditions. They were discharged, as the Court concedes, because the employer’s unfair labor practices (1) created intolerable conditions of employment and (2) constituted conduct to discourage union membership. This employer has committed these offenses. For an employee who was a union member or inclined toward union membership to go to work for this employer after the commission of these offenses would require acceptance that the employer has *373 tainted the work relationship and can reasonably be expected to engage in conduct which discriminates against union membership and creates intolerable working conditions for those who are union members. Why? Because he has already done so even in a'situation where under contract he was bound to do otherwise.

The Court attempts to avoid the significance of the impact of the constructive discharge on the employees by asserting that they were not guaranteed steady employment by the employer and that in any event they would not work for wages and working conditions short of the union requirements.

Neither assumption is warranted. The Court undertakes to establish the proposition that none of the past employees of Haberman could be expected to be hired on new projects. Recent NLRB cases such as Hageman Underground Construction, 253 N.L.R.B. No. 7 (1980), 3 make a distinction between construction contractors who have a “stable” workforce and those who hire on a project-by-project basis. It is accurate that the Board properly referred to the Haberman case in Hageman as a case involving project-by-project hiring.

Next, the Court goes to Dee Cee Floor Covering, Inc., 232 N.L.R.B. 421 (1977), and notes that there was no likelihood of the union’s obtaining a majority on the specific project involved in that case. Then it concludes that this is true in the instant case also. Succinctly, the position is that there are only two alternatives in the construction industry. Either there is a steady workforce of regular employees or there is no possibility of continuity of employment at all.

There is no justification in the law for such an either/or requirement. Dee Cee Floor Covering involved an employer who committed an unfair labor practice by announcing that he would not hire union employees for a large new project when there were no projects currently going on, there was no contract in effect, and there was no proof of carryover of employees. In contrast, in this case the Board found specifically and accurately, without dispute, that a number of employees of Haberman at the time of the unfair labor practices “enjoyed continued employment with Respondent over several projects.” Haberman Construction Co., 236 N.L.R.B. 79 , n.3 (1978). This finding, coupled with the fact that the employer by law had no right to discriminate against union employees in hiring for new projects, justifies the Board’s conclusion that “there is a distinct possibility that, absent its discrimination, Respondent would have retained, transferred, or rehired at least some of the discriminatees for new projects.” Id. at 79 . (Emphasis added).

The Court usurps the function of the Board when it concludes that prior employees of Haberman would not have worked for Haberman on new projects absent the unfair labor practices. This conclusion is supported by saying that the employees quit because Haberman would no longer pay the union pension benefits. But as is pointed out above, the employees did not quit; they were discharged. We do not know what their attitude would have been to offers of employment if there had been no discrimination and the employees could be confident that the employer would obey the law.

The employees had at least the right to consider if they would accept employment free of employer anti-union coercion and to apply if they would. That right was destroyed by the employer’s unfair labor practices. Without the Board’s order, the likelihood that Haberman would offer employment to the employees it discharged is nil. Further, the employees frequently hired by the employer in the past had the right to hope that they could organize the next projects and then require bargaining, since the employer could not discriminate against the union in hiring and tenure policies. They had the right to be considered for work in the hope that they could get the pension benefits later through bargaining by establishing a majority at the projects. *374 And they had the right to engage in organizational activities including picketing and striking to accomplish these objectives. These lawful employee/job applicant opportunities were destroyed by the unfair labor practices of the employer.

Instead of the employees finding themselves free to consider whether they would be willing to work at less than full union working conditions either because they needed employment or because they hoped in the future to organize the business, the employer through his unfair labor practices notified the employees that he would discharge them for union activity, that he would breach collective bargaining agreements, that he would refuse to bargain, and that he would make working conditions intolerable for union employees. That basic employer attitude which the Board is trying to remedy by its order is not at all eliminated by the expiration of the earlier contract and the ending of the earlier projects. The employer is allowed to exculpate himself merely by the passage of a short period of time with the expiration of a collective agreement and the ending of work projects.

When this employer committed the unfair labor practices his actions were in the face of the even more stringent situation where he was bound not only by law but by contract not to do so. This was a strong anti-union message to employees and job seekers. There is nothing in the National Labor Relations Act nor in the jurisprudence of the Board and courts which justifies saying that an employer may so easily avoid the impact of such unfair labor practices. To allow him to bear no further responsibility is to thwart the valid concerns of those who work for him or wish to do so.

As a result of the unfair labor practices in this case, the employees are faced with a wholly distorted situation in making a decision as to whether to apply for employment in new projects with this employer. The possibility of actually being hired, let alone the prospect of gaining a majority on the next projects, which normally was a good chance because past projects did have union majority, has been all but destroyed by the employer’s action. It would be foolish for these employees, innocent of any wrongdoing, now to assume that they have nothing to fear from an employer who has acted as this employer acted just a few months before. It is not enough to limit the Board to saying he should not have done it, and then allow only a brief and transitory remedy.

The Board in fashioning its remedy said that the only way it can make these employees whole for the violations of the law which have been committed to their disadvantage is to require that they be given the opportunity to be hired on future projects and to be awarded back pay for their losses. All parties are agreed that the pre-hire contract, converted to a collective bargaining agreement, has expired and its terms are no longer in effect. The Board concedes that this is so. 4 Establishing the back pay liability for these employees requires the determination of whether they would have been given the opportunity to work 5 and what their pay would have been absent employer unfair labor practices. The Board may very well have difficulty establishing the fact that they would have been hired

of the panel decision but had not taken this position earlier in its original brief to the Court. *375 and the amount of back pay because there is unavoidable conjecture about what they would have gotten if they had gone to work on future projects and whether projects would have been organized or not. 6

But that is not for this Court to decide. All this Court is called upon to decide is whether the Board should undertake to make these employees whole from the effect of the unfair labor practices. The Court does not allow the Board even to try to make them whole. The excised order it sanctions ignores that they were discharged and that the conduct of the employer made clear they were unwelcome in the future. The issues of which employees are to be reinstated and the amount of back pay are not before us.

The Board also includes in its order the obligation on the employer to bargain collectively. This is a standard order in situations where a bargaining relationship was established and it is shown to be destroyed because of the unfair labor practices of the employer. We should not draw a speculative conclusion that the employees would not have obtained a majority in the future projects. The employer made it impossible for them to do so through his unfair labor practices. Orders to bargain collectively when the employer has destroyed the union majority through unfair labor practices are the usual Board remedy. N.L.R.B. v. Warren Co., Inc., 350 U.S. 107, 112 , 76 S.Ct. 185, 188 , 100 L.Ed. 96 (1955); N.L.R.B. v. Alterman Transport Lines, Inc., 587 F.2d 212, 228 (5th Cir. 1979); N.L.R.B. v. Poultry Enterprises, Inc., 207 F.2d 522, 525 (5th Cir. 1953). Dee Cee Fioor Covering is in no way contrary to such an order. In this case the employer destroyed the collective bargaining relationship while it was in existence. This was not the Dee Cee Floor Covering situation. The employer cannot now escape the collective bargaining relationship by saying it might have escaped such a relationship if it had not violated the statute. It might or it might not have. But its unfair labor practice precluded the continuation or reestablishment of the bargaining relationship by destroying continuation in employment.

It is true we do not presume a union majority on each new project in a project-by-project hiring situation. But the Court in this case presumes a lack of majority. The presumption is correct but only because the employer’s unfair labor practices made it so. Yet the Court authorizes the employer to act exactly as if he had not prejudiced the situation of prospective employees by his violations of law. The only way to remedy the alteration of the status quo by the employer’s unfair labor practices is to issue a bargaining order which compels bargaining until the effects of the employer’s unfair labor practices no longer have a significant impact. This is elementary law under the National Labor Relations Act. Gorman, Basic Text on Labor Law 532-39 (1976).

There is, of course, no way actually to restore the situation which existed when the employer committed the unfair labor practices. There are too many variables as to the future actions and attitudes on the part of both employees and employer. It follows that someone must bear the losses brought about by the inability wholly to restore the status quo. The compelling iro *376 ny of the Court’s view is that it does not place the losses upon the wrongdoer but instead upon those who were the victims.

The Court properly reminds us that the “remedial power of the Board is ‘a broad and discretionary one, subject to limited judicial review.’ Fibreboard Corp. v. N.L.R.B., 379 U.S. 203, 216 [ 85 S.Ct. 398, 406 , 13 L.Ed.2d 233 ] (1964).” It is well to add the early admonition of the Supreme Court that a remedial order may not be overturned “unless it can be shown that the order is a patent attempt to achieve ends other than those which can fairly be said to effectuate the policies of the Act.” Virginia Electric & Power Co. v. N.L.R.B., 319 U.S. 533, 540 , 63 S.Ct. 1214, 1218 , 87 L.Ed. 1568 (1943). With all due respect such a showing is not even close to being made in this case. Since it is clear the impact of employer’s actions persists in this construction industry context, the remedies are not punitive but designed only to do the best that can be done to reconstruct the status quo.

These employees are entitled to this remedy and the public is entitled to the vindication of its statutory policy until the vestiges of employer’s unfair labor practices have been dissipated. The order of the National Labor Relations Board in this case should be enforced in full.

. The original meaning of “open shop” was a business where the employer announced he would not deal with a union regardless of union majority and usually carried with it the further *372 implication that any employee who joined a union would be discharged. Taft, Organized Labor and American History, p. 360-1 (1964). The National Labor Relations Act, of course, outlawed such open shops. 29 U.S.C. § 8 (a)(1), (3), (5). Yet note the close parallel of this employer’s unfair labor practices to the classic “open shop” concept.

. The purpose of the 1959 amendment contained in § 8(f), 29 U.S.C. § 158 (f), providing for pre-hire agreements, was to add to the rights of employees to organize and bargain collectively in the building construction industry, not to take any rights away from them. Gorman, Basic Text on Labor Law 667-8 (1976). While the collective bargaining agreement involved in this case began as a pre-hire agreement under § 8(f), at the current stage of this case pre-hire agreements are irrelevant. See fn. 4, infra.

. See also Corrugated Structures, Inc., 252 N.L. R.B. No. 79 (1980); Land Equipment, Inc., 248 N.L.R.B. No. 98 (1980); Precision Striping, Inc., 245 N.L.R.B. No. 34 (1979).

. The panel opinion required the pre-hire agreement’s terms to be carried over into the new projects but the Board order did not do so. The Board order stated:

The Administrative Law Judge includes a brief statement in the remedy section which arguably suggests that he is ordering Respondent to comply with Union-AGC agreements which succeed the 1974-77 agreement. However, it is clear from the terms of his Order, which we are adopting in relevant part, that Respondent need not honor any such agreement unless it agrees to do so after bargaining with the Union.

236 N.L.R.B. at 79, n.2. The Board in its en banc brief attempted to uphold the conclusion

. The Board did not automatically require that all prior employees who quit be reinstated. The Board saved for the compliance stage the determination of which employees would have otherwise been rehired. In the last sentence of its opinion, the Board stated:

[T]he determination of which employees, if any, would have continued in Respondent’s employment and for how long can best be made at the compliance stage of the proceedings, to which we defer the matter.

236 N.L.R.B. at 79.

. The order of the Administrative Law Judge, adopted by the Board with modification, must be read and evaluated carefully. As the Board indicated in its statement quoted above in footnote 4, the order could be read as a requirement that the terms of the existing contract would be continued after it expired, and that all employees were entitled to reinstatement. But that order was directed at the situation of a contract assumed to be still in effect and of projects which were still going on. Reinstatement in those projects and backpay awards under that contract obviously were justified. Of course, at that time, the purpose of couching the order in those terms was to entitle them to back pay in accordance with the contract terms then in existence before the projects were over. The Board’s decision makes clear that the Administrative Law Judge’s order is to be read this way and not as requiring the terms of the expired contract to be carried over into new projects. Further, the Board makes clear that after the projects expired the order does not apply to employees who would not have been hired again even if there had been no unfair labor practices in the past and if the employer in hiring did not discriminate on the basis of union membership, activity, or sympathy among the prospective employees.