Peabody Coal Company v. National Labor Relations Board

BAILEY BROWN, Senior Circuit Judge,

concurring in part and dissenting in part.

I concur in the majority’s opinion except that portion reversing the Board’s decision that Peabody violated its duty to bargain when it unilaterally refused to extend benefit increases to the Will Scarlet clerks. Peabody’s refusal to grant the increases created a disparity in the treatment of the Will Scarlet clerks and other Peabody employees including other warehouse clerks. I believe that this disparity, explained only by the Will Scarlet clerks’ choice of the union, was a change in the condition of the clerks’ employment about which Peabody must bargain. I also believe, contrary to the majority’s reasoning, that limited bargaining over the benefit increases would not compromise or waive Peabody’s initial challenge to the union’s certification. The majority’s ruling contradicts the spirit and interpretations of the statute and provides an incentive for protracted delays in certification challenges. Therefore, I respectfully dissent.

The cases following the Supreme Court’s decision in NLRB v. Katz, 369 U.S. 736 , 82 S.Ct. 1107 , 8 L.Ed.2d 230 (1962), have given expansive meaning to the employer’s duty to bargain over the terms and conditions of employment. The employer’s duty is to maintain the dynamic status quo, effecting those changes that would have occurred absent the existence of the union. See Eastern Maine Medical Center v. NLRB, 658 F.2d 1, 8 (1st Cir.1981); NLRB v. Allied Production Corp., 548 F.2d 644, 653 (6th Cir.1977). If an employer, without bargaining, departs from established practices by withholding benefits or benefit increases otherwise reasonably expected, the employer violates § 8(a)(5). R. Gorman, Basic Text on Labor Law 450 (1976).

Although the decision to grant a particular benefit may rest ultimately with the *369 discretion of the employer, an employee may nevertheless form a reasonable expectation for the benefit based on past practices. This expectation, for the purposes of the duty to bargain, becomes part of the terms and conditions of employment. NLRB v. Ralph Printing & Lithog. Co., 433 F.2d 1058, 1062 (8th Cir.1970), cert. denied, 401 U.S. 925 , 91 S.Ct. 883 , 27 L.Ed.2d 829 (1971). Thus, a unilateral change occurs when a traditional Christmas bonus is cancelled, NLRB v. Exchange Parts, 339 F.2d 829, 831 (5th Cir.1965), or reduced, NLRB v. McCann Steel Co., 448 F.2d 277, 279 (6th Cir.1971). A wage increase announced or scheduled before a union election may also support a reasonable expectation. Failure to grant the increase without bargaining violates § 8(a)(5). Allied Production Corp., 548 F.2d at 653 .

On occasion, it may be difficult for an employer to determine what benefit increases are merely maintaining the status quo and what increases are a departure. The Board offers this reasonable rule:

An employer’s legal duty in deciding whether to grant benefits while a representation case is pending is to determine that question precisely as he would if a union were not in the picture. If the employer would have granted the benefits because of economic circumstances unrelated to union organization, the grant of those benefits will not violate the Act. On the other hand, if the employer’s course is altered by virtue of the union’s presence, then the employer has violated the Act, and this is true whether he confers benefits because of the union or withholds them because of the union.

McCormick Longmeadow Stone Co., 158 N.L.R.B. 1237 , 1242 (1966). But the difficulty of determining when an increase is consistent with the existing structure of wages and benefits does not excuse an employer from its duty to bargain. When faced with such indeterminacy, the clear solution is to give the union notice and an opportunity to bargain over the contemplated change. NLRB v. United Aircraft Corp., 490 F.2d 1105 , 1111 n. 6 (2d Cir.1973); Eastern Maine Medical Center v. NLRB, 658 F.2d 1 , 8 n. 6 (1st Cir.1981). An employer who does not choose this course, but makes unilateral changes without bargaining, runs the risk that it will later be held to have violated the duty to bargain. Allied Production Corp., 548 F.2d at 653 .

In this case it is undisputed that the warehouse clerks at Peabody’s other mines received all the benefit increases now in issue. The record also shows that the dental and vision care benefits were to apply to “all active employees.” It is true that no evidence was submitted to support a finding that the benefits were consistent with a regular pattern in awarding benefits to Peabody’s employees. Yet the record does support, as the majority acknowledges, a finding of a broad departure in the treatment of the Will Scarlet clerks from that of other Peabody employees, especially other warehouse clerks. This disparity — justified by the employer as necessary to avoid bargaining with the union but also produced, as the majority accepts, by anti-union animus — is a clear failure to maintain the dynamic status quo. 1

The majority accepts the employer’s reasoning that refusing the increase simply maintained the clerks’ “existing wage structure.” The majority would limit this structure to increases an employee could expect to receive.based on a regular pattern in the receipt of the benefits. Yet an employee’s expectation of increases in benefits addressed to “all active employees” and received by employees holding exactly the same positions in other parts of the company, is at least as reasonable as an expectation based on prior practice. The employer’s obligation is to bargain in “good faith with respect to wages, hours, and other *370 terms or conditions of employment.” Katz, 369 U.S. at 742-43 , 82 S.Ct. at 1111 (emphasis added). 2 The conditions of employment include patterns of pay and benefits as between employees. Thus, a raise to maintain a pay differential between skilled and unskilled workers is an increase that maintains the status quo. NLRB v. Ralph Printing & Lithog. Co., 433 F.2d at 1062 . In this case, rather than maintain the position of the Will Scarlet clerks relative to other Peabody employees, the employer created a substantial disparity. Therefore, excluding the Will Scarlet clerks from company-wide benefits was a dramatic change in the condition of their employment in violation of § 8(a)(5).

Because Peabody, as I have argued above, changed the conditions of the clerks’ employment by withholding an otherwise general benefit increase, granting the increase would have maintained the dynamic status quo and no bargaining would have been required. See Ralph Printing & Lithog. Co., 433 F.2d at 1062 . The majority holds, however, that extending the benefits would constitute a unilateral change. Any bargaining over the benefits, the majority adds, would have jeopardized or waived Peabody’s objection to the union’s certification. This argument, which is not essential to the majority’s disposition of the § 8(a)(5) charge, lacks support in the case law and contradicts the policy of encouraging bargaining while recognition disputes are resolved.

The majority’s reliance on King Radio Corp. v. NLRB, 398 F.2d 14 (10th Cir.1968) is misplaced. In that case, the employer, after the election and immediately after the Board denied its certification objection, “recognized the Union as the certified bargaining representative of the employees in the unit and entered into negotiations with the Union.” Id. at 20 . Because the employer had dropped its legal challenge, recognized the union, and entered into negotiations, the court held that the employer waived any later objection to the union’s certification. In this case, Peabody initially refused to recognize the union and continued to assert its legal challenge to the union’s certification. King Radio, therefore, is no authority for the majority’s position that a company that maintains a legal challenge to a union’s certification will compromise that challenge by limited bargaining on interim changes pending resolution of the certification claims. 3

By lending credence to the waiver doctrine, the majority erects an unnecessary and unfortunate obstacle to the clear command of an employer’s duty to bargain. In Allied Production Corp., this court underscored the importance of an employer’s duty to bargain, an obligation that is not suspended pending legal challenges to a union’s status.

It is the election — the choice of the union as the employee’s bargaining representative — that gives rise to the employer’s duty to bargain. An employer’s objec *371 tions to certification do not relieve it of that duty.

548 F.2d at 653 (emphasis added). By requiring an employer to bargain as to changes in the terms and conditions of employment after an election of a union, the law discourages an employer from engaging in delays and actions intending to communicate to employees the futility of their organizing efforts. 4 It is inconsistent with this policy to hold, as the majority reasons, that an employer which fulfills its duty by limited bargaining over interim matters forecloses its objections to certification. By rejecting the waiver argument, our court would place a presumption in favor of bargaining, a position in line with national labor policy. 5 An employer could begin the bargaining process yet preserve its challenge to certification. By taking a contrary view, however, the majority offers employers a legal excuse to ignore the elected representatives of employees. This reduces the risk that an employer will be penalized for undercutting a union during the pend-ency of an attack on a union’s certification and further rewards the long delays that already mark such proceedings.

The majority denies enforcement of the Board’s broad proscriptive order because the employer did not violate its duty to bargain over the benefit changes and because Menzie, the principal offender, is no longer with the company. I must disagree. For the reasons set forth above, I believe that the employer did violate § 8(a)(5) by refusing to consult with the union over the benefit changes. Moreover, the company’s refusal to grant the benefits, as the majority holds, was motivated by anti-union animus. The majority’s holding implies that the management which made the decision to withhold the benefits shared the anti-union animus evidenced by Menzie’s actions and statements. Therefore, Menzie’s removal does not eliminate a basis for the Board’s proscriptive order.

. In discussing the duty to bargain, the majority accepts the employer’s explanation that it refused to grant the increases because to grant the increases would be a unilateral change in the clerks’ employment conditions. Yet the majority later holds, in affirming the § 8(a)(3) violation, that the company was motivated not merely by its desire to test the union’s certification but by an anti-union animosity.

. An employer’s duty to bargain extends well beyond tie “existing wage structure” to broader patterns in the treatment of employees. Subcontracting work ordinarily performed within a plant, for example, is a mandatory subject of bargaining. Fibreboard Paper Prods. Corp., 379 U.S. 203 , 85 S.Ct. 398 , 13 L.Ed.2d 233 (1964).

. I also find unpersuasive the majority’s reliance on NLRB v. Blades Mfg. Corp., 344 F.2d 998 (8th Cir.1965). There the court stated in dictum that the employer could have prejudiced its position by meeting with employee representatives to adjust grievances. In that case, the employer was contending that an earlier election rejecting union representation, which the Board had set aside, was valid. Peabody’s refusal to bargain was not based on an earlier election that absolved it of the duty to bargain. Under our court’s decision in Allied Production Corp., 548 F.2d at 653 , an employer’s duty begins with the employee’s choice of union representation. For Peabody, no prior decision of the employees complicated its duty to bargain. Because of the strong policy supporting the duty to bargain, I believe it is incorrect to extend the court’s suggestion in Blade’s Mfg. from the particular facts of that case into a broad waiver doctrine. Where an employer has preserved its challenge to certification, the law should not punish that employer for consulting with a union prior to changing the conditions of employment.

. The dangers inherent in delay are increased where, as in this case, the employer may raise benefits for workers who are not members of the bargaining unit. See Eastern Maine Medical Center v. NLRB, 658 F.2d 1, 9 (1st Cir. 1981). The majority’s ruling would permit benefit increases even for similarly situated employees unless there was a showing of anti-union animus as to violate § 8(a)(3).

. The majority seeks to distinguish NLRB v. United Aircraft Co., 490 F.2d 1105 (2d Cir. 1973), from this case. There the employer argued that it was in a dilemma about scheduled wage increases: to grant the increase might amount to a unilateral change and to withhold the increase might constitute a unilateral change. The Second Circuit replied that the way out of the alleged dilemma was to offer to bargain with the union before doing anything. This decision is consistent with other cases that place a legal presumption in support of bargaining. The majority tries to escape this reasoning by arguing that a certification challenge was not present in United Aircraft. Yet the Second Circuit, in a subsequent case, held that the existence of a certification challenge does not alter the presumption in favor of bargaining. Catholic Medical Center v. NLRB, 589 F.2d 1166 , 1174 (2d Cir.1978). The majority also attempts to limit its reasoning in the instant case to changes which do not affect the existing conditions of employment. The majority’s treatment of the waiver doctrine, however, does not lend itself to such a narrow reading, for it implies that limited bargaining, even where there is a unilateral change in employment conditions, would prejudice or waive a certification challenge.