Respondents Brief — Oak Harbor Freight Lines, Inc., Petitioner v. National Labor Relations Board

No. 17-531

In the

Supreme Court of the United States

OAK HARBOR FREIGHT LINES, INC.,

Petitioner,

v.

NATIONAL LABOR RELATIONS BOARD,

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of A ppeals for the DC Circuit

BRIEF IN OPPOSITION FOR INTERVENORS FOR

RESPONDENT TEAMSTERS LOCAL NUMBERS 81,

174, 231, 252, 324, 483, 589, 690, 760, 763, 839 AND 962

Thomas A. Leahy

Counsel of Record

Reid, McCarthy, Ballew

& Leahy, L.L.P.

100 West Harrison Street

North Tower, Suite 300

Seattle, Washington 98119

(206) 285-3610

tom@rmbllaw.com

Attorneys for Intervenors for

Respondent Teamsters Local

Numbers 81, 174, 231, 252, 324,

483, 589, 690, 760, 763, 839 and 962

276309

A

(800) 274-3321 • (800) 359-6859

i

QUESTION PRESENTED

Should the Supreme Court accept review of a

unanimous Court of Appeals decision that upheld a

unanimous NLRB decision that was rational, consistent

with the National Labor Relations Act, and based on

substantial evidence?

ii

PARTIES TO THE PROCEEDINGS AND

CORPORATE DISCLOSURE STATEMENT

The Petitioner is Oak Harbor Freight Lines, Inc.

The Respondent is the National Labor Relations Board.

Teamsters Local Numbers 81, 174, 231, 252, 324, 483,

589, 690, 760, 763, 839, and 962 (“Teamsters” or “Union”)

are Intervenors for Respondent (as they were in the

proceeding before the United States Court of Appeals for

the District of Columbia Circuit).

Teamsters Local Numbers 81, 174, 231, 252, 324,

483, 589, 690, 760, 763, 839, and 962 are all employee

organizations under 29 USC § 1002(4) and therefore there

are no corporate parents and no publicly held corporation

owns 10% or more of their stock.

iii

TABLE OF CONTENTS

Page

QUESTION PRESENTED . . . . . . . . . . . . . . . . . . . . . . . . i

PA R T I E S T O T H E P R O C E E D I N G S

A N D C OR P OR AT E DI S CL O SU R E

STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii

TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . iii

TABLE OF CITED AUTHORITIES . . . . . . . . . . . . . . . vi

STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . . . . 1

A. Procedural History . . . . . . . . . . . . . . . . . . . . . . . . 3

B. Background Facts. . . . . . . . . . . . . . . . . . . . . . . . . . 5

1.

The Collective Bargaining Agreement,

the Trust Funds, and the Subscription

Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

2.

The Union Goes on Strike and Oak

Harbor Unilaterally Ceases Making

Contributions to All Trust Funds . . . . . . . . 6

3.

The OWT Responds Differently than

the Other Trusts to Oak Harbor’s

Uni lateral Cessation of Mak ing

Trust Fund Contributions, Because It

Has No Subscription Agreement . . . . . . . . . 7

iv

Table of Contents

Page

4.

The Parties Agree on Proposal for

Crossovers, But Not for Returning

Strikers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

5.

The Union Ends the Str ike and

Oak Harbor Unilaterally Changes

Benefits, Relying upon an Admitted

“Misstatement” by Payne . . . . . . . . . . . . . . . 9

6.

Despite Claims by Oak Harbor, It is

Undisputed that the Parties Had No

Agreement on Benefits for Returning

Strikers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

7.

T he Un ion Ma de Cle a r t o Oa k

Harbor that they Had to Apply the

Status Quo to Returning Striking

Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

8.

Despite the Parties Not Being at

Impasse, Oak Harbor Unilaterally

Implemented the Company Medical

Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

9.

Coverage by OWT Was the Status

Quo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

v

Table of Contents

Page

REASONS FOR DENYING THE WRIT . . . . . . . . . . 14

I.

OA K H A R BOR’ S CERT IOR A RI

PETITION DOES NOT PRESENT

SU BSTA NTI A L QUESTIONS FOR

SUPREME COURT REVIEW . . . . . . . . . . . . . 14

A. Oak Harbor Does Not Raise any

Novel Legal Questions Related to

Its Unilateral Implementation of

Its Company Health Care Plan . . . . . . . . . 14

B. T he Cou r t of Appea ls P roperly

Rejected Oak Harbor’s Equitable

Estoppel Argument . . . . . . . . . . . . . . . . . . . 18

1.

The Teamsters Never Waived

Their Right to Bargain about

Contributions to the OWT . . . . . . . . . . 18

2. OWT Never Refused Contributions

for the Entire Unit . . . . . . . . . . . . . . . . 20

C. T h e r e Wa s No A g r e e m e n t t o

Place Returning Strikers Under

the Company Medical Plan . . . . . . . . . . . . . 23

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

vi

TABLE OF CITED AUTHORITIES

Page

Cases:

Allentown Mack Sales & Service v. NLRB,

522 U.S. 359 (1998) . . . . . . . . . . . . . . . . . . . . . . . passim

Angelica Healthcare Services,

284 NLRB 844 (1987) . . . . . . . . . . . . . . . . . . . . . . . . . 15

ATC Petroleum, Inc. v. Sanders,

860 F.2d 1104 (D.C. Circ. 1988) . . . . . . . . . . . . . . . . . 21

Bottom Line Enterprises,

302 NLRB 373 (1991) . . . . . . . . . . . . . . . . . . . . . . . . . 15

Fall River Dyeing & Finishing Corp. v. NLRB,

482 U.S. 27 (1987) . . . . . . . . . . . . . . . . . . . . . . . . passim

Hankins Lumber Company,

316 NLRB 837 (1995) . . . . . . . . . . . . . . . . . . . . . . . . . 15

Manitowoc Ice, Inc.,

344 NLRB 1222 (2005) . . . . . . . . . . . . . . . . . . . . . 18, 19

Metro Edison Co. v. NLRB,

460 U.S. 693 (1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

NLRB v. Katz,

369 U.S. 736 (1962) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

NLRB v. Noel Canning,

134 S. Ct. 2550 (2014) . . . . . . . . . . . . . . . . . . . . . . . . . . 4

vii

Cited Authorities

Page

Oak Harbor Freight Lines, Inc.

and Teamsters Locals 81, et. al.,

361 NLRB No. 82 (2014) . . . . . . . . . . . . . . . . . . . . 1, 4, 8

RBE Electronics of S.D.,

320 NLRB 80 (1995) . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Universal Camera Corp. v. NLRB,

340 U.S. 474 (1951) . . . . . . . . . . . . . . . . . . . . . . . . passim

Vincent Industrial Plastics Inc.,

328 NLRB 300 (1999) . . . . . . . . . . . . . . . . . . . . . . 14, 15

1

STATEMENT OF THE CASE

Despite claims by Oak Harbor, the remaining portions

of this case, for which Oak Harbor is seeking review,

are not novel and do not merit further review. This case

merely upholds longstanding NLRB precedent related to

collective bargaining and waiver—which both the NLRB

and D.C. Circuit Court of Appeals properly followed. In

addition, as described in Allentown Mack Sales & Service

v. NLRB, 522 U.S. 359, 364 (1998):

Courts must defer to the requirements imposed

by the Board if they are ‘rational and consistent

with the Act,’ Fall River Dyeing & Finishing

Corp. v. NLRB, 482 U.S. 27, 42, 96 L. Ed. 2d

22, 107 S.Ct. 2225 (1987), and if the Board’s

‘explication is not inadequate, irrational or

arbitrary,’ NLRB v. Erie Resistor Corp., 373

U.S. 221, 236, 10 L. Ed. 2d 308, 83 S. Ct. 1139

(1963).

Moreover, the Courts must defer to the NLRB’s

conclusions if they are supported by substantial evidence.

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

27, 42 (1987); Universal Camera Corp. v. NLRB, 340 U.S.

474 (1951). With such a strong deferral requirement, in

addition to the facts, this case is simply not appropriate

for Supreme Court review.

Most of the arguments that Oak Harbor raises in its

Petition for Certiorari were already rejected by the NLRB

(in a three-to-zero decision, 361 NLRB No. 82 (2014)1 and

1. Which incorporated by reference NLRB Decision 358 NLRB

No. 41 (May 16, 2012) .

2

the Court of Appeals (in another three-to-zero decision).

The arguments were once again rejected by the Court of

Appeals when it denied Oak Harbor’s request for an en

banc hearing, and its request for stay of mandate (pending

filing of petition for writ of certiorari).

And yes, as Oak Harbor claims, healthcare is

important. But that is why employers—such as Oak

Harbor—must follow longstanding NLRB precedent and

not take away healthcare from employees without first

bargaining to impasse—which is exactly what Oak Harbor

did to violate the Act in this case.

The basic case law about bargaining and waiver that

the Court of Appeals relied upon is decades old. E.g.,

NLRB v. Katz, 369 U.S. 736 (1962); Metro Edison Co. v.

NLRB, 460 U.S. 693 (1983). And Oak Harbor completely

misframes the issue by trying to claim it only had two

choices2: (1) employees go without healthcare coverage, or

(2) Oak Harbor had to unilaterally implement a Company

healthcare plan before the parties reached impasse. But

these are not the only two choices. The other choice that

Oak Harbor had—the legal and proper choice—was to

maintain the status quo and apply the Oregon Warehouse

Trust (OWT) healthcare plan to the proper Oregon

employees and continue to contribute to the OWT; and

not unilaterally implement the Company medical plan

for all employees; and continue to bargain. Therefore, the

cases Oak Harbor cites to support its economic exigency

arguments are not analogous to this case, which is why

the Supreme Court should not review it. There is not a

split in the Circuits or conflict with the Supreme Court

that would affect this case.

2. Related to employees covered by the OWT.

3

In fact, if Oak Harbor would have followed the

law, maintained the status quo, and continued to abide

by the OWT—which longstanding federal precedent

requires—there would be no Unfair Labor Practice

(ULP). Consequently, there is nothing legally unique or

special here.

In the end, Oak Harbor tries to create issues for the

Supreme Court to review by misframing the issue and

misleading the Court. This is unfortunate.

Nonetheless, the Court of Appeals properly followed

NLRB precedent and upheld the NLRB, which it must

do unless the NLRB decision was irrational, inconsistent

with the National Labor Relations Act (NLRA), or not

based on substantial evidence. See Allentown Mack, 522

U.S. at 364; Fall River Dyeing, 482 U.S. at 42; Universal

Camera Corp., 340 U.S. 474.

A. Procedural History

A trial was held before an administrative law judge

of the NLRB in July of 2010 after the Union filed unfair

labor practice charges related to Oak Harbor’s unilateral

cessation of contributions to the Trust Funds and

implementation of its Company healthcare plan (as well

as other ULPs). The ALJ issued his decision on January

5, 2011, to which the parties filed exceptions and crossexceptions with the NLRB.

On May 16, 2012, the NLRB issued its decision for this

case, 358 NLRB No. 41 (2012), which ultimately ended up

in proceedings before the Court of Appeals for the District

of Columbia in 2014. But in 2014 the Supreme Court

4

issued NLRB v. Noel Canning, 134 S.Ct. 2550 on June

26. At the time of Decision 358 NLRB No. 41 in 2012, the

National Labor Relations Board had two persons whose

appointments had been constitutionally challenged. Noel

Canning held that the challenged appointments were not

valid.

Therefore, on August 1, 2014, before ruling on the

merits of the case, the Court of Appeals for the District

of Columbia vacated and remanded NLRB Decision 358

NLRB No. 41 (2012) to the NLRB for further proceedings.

The NLRB then issued Decision 361 NLRB No. 82 on

October 31, 2014, which incorporated by reference the

earlier Decision 358 NLRB No. 41 (2012). All the parties

appealed the NLRB decision and the same case eventually

returned to the Court of Appeals for the District of

Columbia again.

The Court of Appeals issued its decision on the merits

of this case on May 2, 2017. Then the Court of Appeals

denied Oak Harbor’s request for an en banc hearing on

July 7, 2017. Finally, the Court of Appeals denied Oak

Harbor’s request for stay of mandate pending filing of

petition for writ of certiorari on August 10, 2017. The

petition for a writ of certiorari was filed on October 4,

2017, and placed on the docket on October 10, 2017.

5

B. Background Facts

1.

The Collective Bargaining Agreement, the

Trust Funds, and the Subscription Agreements

Oak Harbor and the Union were last party to a

collective bargaining agreement in effect from November

1, 2004 through October 31, 2007.3

The CBA requires Oak Harbor to contribute to four

Teamsters Taft-Hartley benefits Trusts: the Western

Conference of Teamsters Pension Trust (WCTPT),

Washington Teamsters Welfare Trust (WTWT), Retirees

Welfare Trust (RWT), and the Oregon Welfare Trust

(OWT). 4

In order to comply with the CBA and make contributions

to three of the trusts, the WCTPT, WTWT, and the RWT

require Oak Harbor and the Union to sign a number of

forms provided by the Trusts, called “Employer/Union

Certifications” (EU) by the WCTPT (pension) and

“Subscription Agreements” (SA) by the WTWT (current

employee medical) and the RWT (retiree medical).

The OWT, which is the main trust at issue for the

petition for this writ of certiorari, provides medical,

dental and vision benefits, together with retiree medical

3. Absent contrary indication in the text, the term “Teamsters”

or “Union” subsumes all of the local unions listed on the title page

of the collective bargaining agreement.

4. A “Taft-Hartley” trust is governed by a board consisting of

equal numbers of employer and union trustees. It is not a trust fund

run solely by a labor union.

6

benefits. Notably, the parties did not sign—nor does the

OWT require—an SA or an EU.

Generally, the EUs and the SAs contain language

that requires a written labor agreement to be in effect

that calls for contributions, and the labor agreement must

conform to the Trustees’ policies governing the acceptance

of those contributions. The EUs and the SAs also prohibit

discrimination among members of the bargaining unit

with respect to the payment of contributions, and provide

for continued contributions after expiration of the

underlying collective bargaining agreement, subject to a

five-day notice of cancellation.

For nearly a year following contract expiration on

October 31, 2007, Oak Harbor continued to forward, and

the benefits trusts continued to accept, the contributions

required under the expired CBA.

2.

The Union Goes on Strike and Oak Harbor

Unilaterally Ceases Making Contributions To

All Trust Funds

On September 22, 2008, the Union commenced a strike

at all of the Oak Harbor terminals covered by the ’04-’07

collective bargaining agreement.

The next day, Oak Harbor’s lead negotiator, John

Payne, notified all of the Teamsters locals of Oak Harbor’s

intent to cancel its obligation to contribute to the WTWT,

WCTPT, and the OWT. On September 26, 2008, Payne

similarly notified all of the Union leaders of the Company’s

intent to cancel contributions to the RWT.

7

Payne also informed all the Trusts that Oak Harbor

wished to continue to make contributions on behalf of

“crossover” employees, whom Payne defined as those

who “did not join the strike, but chose instead, to cross

the picket line and continue working . . . .” However,

Payne told the trusts that Oak Harbor did not intend

to make contributions on behalf of new-hire “strike

replacements.” Payne also asked each Trust whether it

would continue to accept contributions for crossovers, but

not strike replacements. Payne made the inquiry because

he knew that the Teamsters Trusts routinely required

contributions on behalf of everyone doing bargaining

unit work, and that discriminating between crossover

employees and strike replacement employees would violate

Trust rules. See, JA 0487, lines 18-24; JA 0488, lines 21-24.

3.

The OWT Responds Differently than the Other

Trusts to Oak Harbor’s Unilateral Cessation

of Making Trust Fund Contributions, Because

It Has No Subscription Agreement

Each of the Trusts sent responsive letters informing

Payne that the Trust would not accept contributions as

proposed in Payne’s letters. The letters from the WCTPT,

the WTWT and the RWT made reference to the absence

of an EU or SA as a basis for declining to accept Payne’s

proposed contributions. The letter from the OWT,

however, stated that it would not accept contributions for

crossover employees.

Therefore, the OWT knew exactly what it was doing—

refusing contributions for only part of the unit—which it

had to do under trust policy.

8

4.

The Parties Agree on Proposal for Crossovers,

But Not For Returning Strikers

The Teamsters agreed to escrow WCTPT and RWT

contributions for crossover employees during the strike.

However, it is likewise undisputed that, as the ALJ found

(and affirmed by NLRB), Hobart’s agreement related only

to crossover employees during the strike and that there

was no agreement of any kind with respect to terms and

conditions of employment for employees who returned

to work after the strike ended. See Oak Harbor Freight

Lines, Inc. and Teamsters Locals 81, et. al, 361 NLRB

No. 82 (2014); incorporated by reference, 358 NLRB No.

41 (2012). Hobart was the lead negotiator for the Union.

Pay ne ultimately conceded as much on cross

examination:

Q. And, in fact, when you went to the October 9 th

meeting when you sought agreement from Mr.

Hobart with respect to, well, what do we do,

what do we do with crossovers, you were actually

referring to this October 3rd letter, correct?

A. That’s correct.

Q. And you got agreement on this October 3rd letter?

A. That’s correct.

Q. And that agreement was only with respect to

crossover employees?

A. That’s correct.

9

Q. It had nothing to do with returning strikers?

A. That’s correct.

See, JA 0455, line 22 to JA 0456, line 8.

5.

The Union Ends the Strike and Oak Harbor

Unilaterally Changes Benefits, Relying upon

an Admitted “Misstatement” by Payne

On February 12, 2009, Hobart sent an unconditional

offer to return to work to Payne on behalf of all of the

signatory Unions.

On February 17, 2009, the parties met to discuss

details surrounding the return to work. Toward the end

of the meeting, Payne gave Hobart a letter. In the letter

Payne never claimed that the Union had waived bargaining

in the EUs and SAs or that the Company was entitled to

act unilaterally. To the contrary, Payne acknowledged a

continuing status quo obligation and contended that the

only reason the Company could not maintain it was the

trusts’ unwillingness to accept contributions. JA 09470948. He then justified placing returning strikers under a

Company medical plan and stripping them of their pension

and retiree medical benefits on the basis of an alleged

agreement with the Union.

Hobart reacted with surprise and anger, telling

Payne that “[he didn’t] agree with this” and it was “totally

unacceptable.” See, JA 0391, lines 15-17 (Payne: Hobart

said he was in “complete disagreement”); JA 0206,

line 18 to JA 0207, line 2 (Hobart: “I was very much in

disagreement and anger and didn’t believe that that was

status quo”).

10

6.

Despite Claims by Oak Harbor, It is Undisputed

that the Parties Had No Agreement on Benefits

for Returning Strikers

In dramatic testimony, Payne conceded on redirect

examination that his second letter dated February

17, 2009, is a “misstatement.” JA 0535, lines 10-15. In

particular, Payne ultimately conceded that the Union

never agreed to any changes to the contractually-required

benefits for “returning strikers,” as the letter wrongly

claims. See, JA 0534, lines 14-22. Payne stated:

I used returning strikers over and over in this

memo and it was a misstatement when I said

what I said about early October ’08. In that

discussion with Al Hobart and I and Buck was

there and Hicks, that that was crossovers.

See, JA 0535, lines 11-15.

In the ensuing months, Pay ne reiterated his

misstatement over and over, including in declarations

under penalty of perjury submitted to Region 19 and

position statements. See, JA 0546, line 7 to JA 0547, line

8; JA 0540, line 20 to JA 0542, line 7; JA 0543, lines 4-25.

7.

The Union Made Clear to Oak Harbor that they

Had To Apply the Status Quo to Returning

Striking Employees

On February 18, 2009, Hobart sent Payne a letter

stating the Union’s position and proposing a mechanism for

resuming participation in all of the benefits Trusts. Hobart

informed Payne that it was the Union’s position that

federal law required that the strikers be returned to work

“without the Company making any unilateral changes in

11

the established terms and conditions of employment as

reflected in the parties’ expired bargaining agreement.”

Hobart also proposed, on the basis of attached e-mails

from the administrative offices for the trusts, that the

parties execute an “interim agreement” and EUs and

SAs sufficient to resume participation in the trusts. JA

1124-1128.

On February 25, 2009, Hobart sent Payne a letter

noting that strikers had begun to return to work and

that the Company refusing to maintain the benefits as

reflected in the contract was unlawful. On that same

day, Payne sent Hobart a letter claiming that the Union’s

request that the Company sign an “Interim Agreement”

to recommence participation in the Trusts constituted

the placing of conditions on the Union’s offer to return

to work. Payne also told Hobart that the Company would

unilaterally apply the terms of Payne’s February 17 letter

to the returning strikers regarding pension, health and

welfare, and retirees health and welfare.

In a letter dated February 26, 2009, Hobart rejected

Payne’s claim that the Union was placing conditions

on its offer to return to work, but renewed the Union’s

unconditional offer to return to clear up any confusion or

misunderstanding.

8.

Despite the Parties Not Being at Impasse,

Oak Harbor Unilaterally Implemented the

Company Medical Plan

Ignoring the Union’s objections, the Company

unilaterally implemented the provisions of Payne’s letter

as soon as the strikers returned to work on February 26,

2009. Significantly, Payne did not argue that the unilateral

implementation was justified by an impasse, contending

12

instead that the Union had impermissibly placed conditions

on its offer to return to work.

And in other voluminous correspondence between

Oak Harbor and the Union during and after the strike,

Oak Harbor likewise never claimed that the parties were

at impasse, in whole or in part. Hobart testified, without

rebuttal, that the Company never declared an impasse,

either before or after the strike. See, JA 0215, lines 1822. After some initial evasion, Payne ultimately admitted

that the Company never used the words “impasse” or

“unilateral” and that he never told Hobart that he believed

the Company was privileged to act unilaterally. See, JA

0484, line 1 to JA 0485, line 8.

Despite ongoing discussions about whether the

Employer was going to argue impasse, Oak Harbor

didn’t reveal until almost the end of the NLRB hearing

that it had a right to argue impasse. Thereafter, the

ALJ rejected Payne’s claim that an impasse defense was

subsumed within affirmative defenses 8 and/or 9 of Oak

Harbor’s Answer and denied Payne’s eleventh-hour motion

to amend the Company’s Answer. See, JA 0626, line 7 to

JA 0627, line 10. 5

Nonetheless, all the evidence indicates that the

parties were not at good faith impasse (on a single issue

or overall). 6

5. The ALJ correctly concluded that an impasse affirmative

defense was not subsumed within Affirmative Defenses 8 and 9 of

Oak Harbor’s Fourth Amended Answer. See, JA 0806-0816. Neither

of the affirmative defenses alleges impasse, nor do they even hint at

Oak Harbor’s Selective Impasse Argument.

6. Without waiving the Union’s argument that Oak Harbor’s

impasse arguments should not even be considered.

13

9.

Coverage by OWT Was the Status Quo

The status quo for Oregon employees in the bargaining

unit was to be covered by the OWT for medical, and Oak

Harbor to make contributions on behalf of everyone in

the bargaining unit (who was eligible for the OWT). Oak

Harbor unilaterally changed the status quo by refusing

to pay contributions to the OWT, and only offering to

pay for crossovers—only part of the bargaining unit.

The Trust could not, of course, accept contributions for

only part of the unit. In the end, Oak Harbor wrongfully

tried to create a new status quo after it made its unlawful

unilateral changes.

Notably, the OWT does not issue a subscription

agreement, nor does it require that unions or participating

employers sign one. This is undisputed. As a consequence,

the language in the EUs and SAs that formed the basis of

the NLRB’s waiver finding for the WCTPT, the WTWT,

and the RWT does not exist with the OWT. Therefore,

the Union never waived bargaining and Oak Harbor was

required to continue contributing to the OWT on behalf

of members of Oregon locals when the strike ended in

February, 2009.

Consequently, in its petition, Oak Harbor misrepresents

the OWT’s requirements by wrongfully lumping it together

with the other trusts (WTWT, RWT, and WCTPT).

So any claim by Oak Harbor that the OWT refused

contributions for the entire bargaining unit is incorrect.7

7. And after the strike Oak Harbor has never offered to make

contributions for the entire bargaining unit. The Teamsters placed

Oak Harbor on notice that it was violating the Act when it filed a

ULP after Oak Harbor stopped contributing to the OWT.

14

The WTWT, RWT, and WCTPT may have also refused

contributions, but that was for lack of an SA, which Oak

Harbor cancelled.

REASONS FOR DENYING THE WRIT

I.

OAK HARBOR’S CERTIORARI PETITION DOES

NOT PRESENT SUBSTANTIAL QUESTIONS

FOR SUPREME COURT REVIEW

A . Oak Ha rbor Does Not Raise any Novel

Legal Questions Related to Its Unilateral

Implementation of Its Company Health Care

Plan

To begin with, the Court of Appeals decision was

proper because it reached solid conclusions that were

rational, consistent with the NLRA, and based on

substantial evidence (as was the NLRB decision in this

case). See Allentown Mack, 522 U.S. at 364; Fall River

Dyeing, 482 U.S. at 42; Universal Camera Corp., 340 U.S.

474. Therefore, this case is not a proper vehicle for review.

Oak Harbor argues that it was entitled to separately

implement its benefits changes and eliminations because it

was faced with exigent circumstances in February, 2009.

But it wasn’t.

The NLRB and the Court of Appeals followed

longstanding NLRB precedent related to exigent

circumstances. For example, the rules governing

implementing particular terms separate from the overall

contract are summarized in Vincent Industrial Plastics

Inc., 328 NLRB 300 (1999). There, the Board explained

that when the parties are in negotiations for a CBA “an

15

employer’s obligation to refrain from unilateral changes

encompasses a duty to refrain from implementation

unless and until an overall impasse has been reached

on bargaining for the agreement as a whole.” Id., at 300

citing Bottom Line Enterprises, 302 NLRB 373, 374

(1991)(emphasis added). And there is no dispute that the

parties were not at impasse.

There are only “two limited exceptions” to this general

rule: when a union engages in bargaining delay tactics

and “when economic exigencies compel prompt action.”

Vincent Industrial Plastics, supra, at 300 quoting Bottom

Line, supra, at 374. Economic exigencies sufficient to

trigger the exception must be “extraordinary events which

are ‘an unforeseen occurrence, having a major economic

effect [requiring] the company to take immediate

action.’” Vincent Industrial, supra, at 300 quoting RBE

Electronics of S.D., 320 NLRB 80, 81 (1995), quoting

Hankins Lumber Company, 316 NLRB 837, 838 (1995),

quoting Angelica Healthcare Services, 284 NLRB 844,

852-853 (1987). Proving an entitlement to the economic

exigency exception requires that the employer meet a

“heavy burden.” RBE Electronics of S.D., 320 NLRB 80,

81 (1995). In particular, the employer has the burden of

proving:

. . . that its proposed changes were “compelled,”

the employer must additionally demonstrate

that the exigency was caused by external

events, was beyond the employer’s control, or

was not reasonably foreseeable.

Vincent Industr ial , supra , at 301 quoting RBE

Electronics, 320 NLRB at 82 (emphasis added).

16

But Oak Harbor cannot carry the “heavy burden” of

establishing that the allegedly exigent circumstances in

February, 2009 were “caused by external events, [were]

beyond the employer’s control, or [were] not reasonably

foreseeable.” Especially with the OWT, which did not

require any additional documents or actions for Oak

Harbor to start making contributions again.

In fact, Oak Harbor could easily have recommenced

the status quo at any time it wanted. For the OWT, all Oak

Harbor needed to do was to start making contributions

again on behalf of the entire bargaining unit. JA 0344,

lines 3-15; JA 0346, lines 4-13; JA 0353, lines 12-25.

Indeed, Oak Harbor’s John Payne, who is their lead

spokesperson and attorney, ultimately admitted that

it was his client’s obduracy that prevented a return to

the pre-strike status quo, not any position taken by the

Trusts. See, JA 0530, lines 15-20. This demonstrates that

the circumstances were not “caused by external events,

…beyond the employer’s control;” they were a convenient

excuse for Oak Harbor to evade its legal obligations.

Under Oak Harbor’s arguments, employers could

always create economic exigencies by simply refusing

to apply the status quo current healthcare plan for its

employees, and then argue that they must unilaterally

implement a different Company plan, otherwise its

employees won’t have healthcare coverage. This is, of

course, absurd. And not the standard in any court.

In the end, Oak Harbor only had to follow the law and

maintain the status quo: Which entailed contributing to

the OWT and covering the appropriate employees with the

17

OWT and not implementing its Company medical plan for

all employees. The parties were not at overall impasse or

even at impasse on healthcare. So Oak Harbor could not

implement under any standard in any court or jurisdiction.

And the Union never refused to bargain—it was only

insisting on keeping the status quo. By not applying

the OWT to the appropriate employees and unilaterally

implementing its Company medical plan, Oak Harbor

was forcing the Union to bargain to return to the status

quo—which is unlawful.

Moreover, the Court of Appeals did not create new law

when it ruled, it just found that the cases that Oak Harbor

relied on to support its arguments were not analogous

or applicable to the facts of this case. Consequently, Oak

Harbor cannot meet its burden to establish an economic

exigency under any recognized standard, jurisdiction, or

court. And even assuming there is a split in the circuits,

based on the facts of this case Oak Harbor cannot establish

extenuating circumstances or a compelling business

justification to justify violating the Act.

Notably, Oak Harbor lost its argument at the Court

of Appeals on economic exigency because the facts didn’t

support it—it didn’t meet its burden of proof. It fails to

meet the burden of proof under any standard. The Court

of Appeals correctly deferred to the NLRB. See Allentown

Mack, 522 U.S. at 364; Fall River Dyeing, 482 U.S. at

42; Universal Camera Corp., 340 U.S. 474. Therefore,

this case is certainly not appropriate for Supreme Court

review.

18

B. The Court of Appeals Properly Rejected Oak

Harbor’s Equitable Estoppel Argument

1.

The Teamsters Never Waived Their Right

to Bargain about Contributions to the

OWT

Oak Harbor mischaracterizes the Court’s decision

related to its equitable estoppel arguments. To begin with,

as discussed in greater detail below, the Union did not

act as if the Oregon Trust was subject to a Subscription

Agreement. In addition, the Court relied on several

different factors and reasons to deny Oak Harbor’s

equitable estoppel arguments—relying on sound NLRB

principles and arguments.

Again, there is nothing new or novel in the Court’s

decision related to its denial of Oak Harbor’s equitable

estoppel arguments. The Court did not just rely on the

fact that “Oak Harbor had not presented ‘affirmative

evidence that the Union had informed Oak Harbor that

the subscription agreement existed’” as stated by Oak

Harbor, to deny its equitable estoppel arguments. The

Court followed proper precedent related to Oak Harbor’s

equitable estoppel arguments.

More specifically, Oak Harbor is overstating what

the Court of Appeals held. The Court of Appeals is not

requiring that there be affirmative conduct to establish

an equitable estoppel defense. The Court of Appeals

was merely distinguishing Manitowoc Ice, Inc., 344

NLRB 1222 (2005) (and other cases) from the current

case (which was cited by Oak Harbor). The Manitowoc

case had affirmative conduct and the present case does

not. The NLRB and the Court of Appeals simply stated

19

that the facts in the present case don’t match the facts of

Manitowoc, so Manitowoc doesn’t apply.

Therefore, the Court of Appeals didn’t apply the

wrong argument or reveal a split in the circuits. It was

merely responding to the arguments and cases that Oak

Harbor used to support its equitable estoppel argument.

The Court of Appeals found that the facts of the present

case are different than the facts of Manitowoc—or the

other cases that Oak Harbor cited to support its estoppel

arguments. That is, the Court of Appeals simply rejected

Oak Harbor’s arguments on a factual or burden of proof

basis where Oak Harbor argued the facts of the current

case are similar to Manitowoc (or to the other cases it

cited).

Notably, there were several reasons to deny Oak

Harbor’s equitable estoppel arguments. To begin with, the

OWT does not issue a subscription agreement, nor does it

require that unions or participating employers sign one.

This is undisputed. Therefore, the Union never waived

bargaining and Oak Harbor was required to continue

contributing to the OWT on behalf of members of Oregon

locals when the strike ended in February, 2009. It is Oak

Harbor’s burden to establish waiver—but it can’t in this

case. And it can’t in this case because not only does Oak

Harbor have to produce a subscription agreement—which

it can’t—it needs to produce a subscription agreement

with waiver/cancellation language—which it also can’t.

Put another way, Oak Harbor cannot properly establish

waiver only by showing that there was a subscription

agreement—it must also show the subscription agreement

had a waiver. And there is no evidence that anyone

from Northwest or the OWT told Oak Harbor that the

subscription agreement had waiver language. In fact, the

20

OWT could not even confirm that there was a subscription

agreement, let alone waiver. This lack of confirmation

and lack of actual agreement put Oak Harbor on proper

notice that it could not establish that the Union waived

bargaining.

And even John Payne admitted to Region 19 of the

NLRB that, “[i]f no such Subscription Agreement exists,

then [his] notice to cancel was legally void.” JA 0637 (April

29, 2009 letter to Region 19). The Court should reject any

attempt by Oak Harbor to repudiate this representation.

2.

OWT Never Refused Contributions for the

Entire Unit

Unlike the other trusts, it is undisputed that the OWT

does not require an SA and has never refused contributions

for the entire bargaining unit (before or after the strike).

Yes, the OWT refused contributions for crossovers,

but that was based on trust rules of selectivity and the

requirement that the OWT cannot accept contributions

for only part of the bargaining unit—as Oak Harbor was

proposing with only contributing for crossovers. See, JA

0976, JA 0347, lines 10-24. 8

So any claim by Oak Harbor that it was confused by

the OWT refusing contributions for the entire bargaining

unit is invalid. In fact, Trust Administrator Mark Coles

gave undisputed testimony that the OWT would have

8. In a letter to John Payne related to crossovers, Mr. Buckley,

the attorney for the OWT, even asked “What basis is there, if any,

for the employer making contributions on some employees and not

on others?” JA 1156.

21

continued to accept contributions even after receiving

Payne’s cancellation letter (JA 0964) because OWT did not

have a subscription agreement providing for cancellation.

See, JA 0346, lines 4-13.9 Thus, Oak Harbor’s claim that

Coles did not get permission to collect Oak Harbor’s

contributions until one week before trial is incorrect. The

OWT place no new conditions on Oak Harbor to continue

making contributions. JA 1124-1127.

Consequently, it was not reasonable for Oak Harbor

to rely on the OWT’s refusal to accept contributions only

for crossovers10 as an indication that there was an SA.11

In fact, Oak Harbor should have known there was no SA

because the OWT responded differently than the other

trusts to Oak Harbor’s proposal related to contributions

only for crossovers.

While the letters from the WCTPT, the WTWT and

the RWT made reference to the absence of an EU or

SA as a basis for declining to accept Payne’s proposed

contributions, the letter from the OWT made no such

reference in its refusal, saying only that the Trust “will

9. Coles did confirm that the OWT would accept retroactive

contributions from Oak Harbor if ordered by the ALJ. See, JA 0351.

However, this basis for accepting contributions came after, and was

supplemental to, Coles’s earlier testimony that the OWT could have

continued to accept contributions even after Payne’s cancellation

letter. See, JA 0346, lines 4-13, JA 0964.

10. And there could be no crossovers after the strike ended—

only employees.

11. Which is why ATC Petroleum, Inc. v. Sanders, 860 F.2d

1104 (D.C. Circ. 1988) and related cases are distinguishable and not

helpful to Oak Harbor.

22

not accept employer contributions for those employees

that you describe as ‘crossovers’ . . . .” See, JA 0974. The

request was denied because the OWT could not accept

contributions for only part of the bargaining unit as

proposed by Payne—not because there was no SA. See,

JA 0347, lines 10-24; JA 0974.

Moreover, the OWT never said there was definitely an

SA. In fact, if there was an SA or EU, Oak Harbor would

have known since it would have been required to sign it

(as it did for the WTWT (JA 0949); RWT (JA 0951); and

WCTPT (JA 0955). Notably, NWA gave a qualified answer

when asked about an SA for the OWT. Pet. App. 154(a)156(a), 213(a)-216(a), 258(a)-259(a). Oak Harbor was never

able to produce one—because there isn’t one. Therefore,

Oak Harbor should have known it did not have an SA for

the OWT, or gotten firm confirmation (which it didn’t).

In addition, Oak Harbor had no records of an SA for

the OWT despite having similar records for other Trusts.

JA 454-455, 588-589. This should have put Oak Harbor

on notice that it was likely that there was no subscription

agreement.

Therefore, Oak Harbor should have double-checked on

the existence of an SA before unilaterally ceasing to make

payments into the OWT—especially since Oak Harbor has

the burden to establish the existence of an SA with waiver

language. Oak Harbor, however, was put on proper notice

that there was no subscription agreement.

The Union was not part of the discussions when Oak

Harbor was asking NWA about an SA—those discussions

only involved Oak Harbor and NWA. Oak Harbor cannot

blame the Union for what happened in those discussions—

23

or for Oak Harbor’s failure to follow up and confirm the

existence of an SA for the OWT. Therefore, Oak Harbor

violated the Act when it unilaterally stopped making

contributions to the OWT and changed coverage for all

its employees to its Company medical plan.

Consequently, Oak Harbor didn’t establish the

necessary elements to prove equitable estoppel under

any standard in any court or jurisdiction—even assuming

there is a split. The Court didn’t apply a heightened,

different, or incorrect standard for evaluating Oak

Harbor’s equitable estoppel claim. The Court of Appeals

correctly deferred to the NLRB. See Allentown Mack, 522

U.S. at 364; Fall River Dyeing, 482 U.S. at 42; Universal

Camera Corp., 340 U.S. 474. Therefore, this case is

certainly not appropriate for Supreme Court review.

B. There Was No Agreement to Place Returning

Strikers Under the Company Medical Plan

Despite claims by Oak Harbor, it’s undisputed that the

parties never agreed to place returning strikers under

the Company medical plan. When the strikers returned

to work, Oak Harbor unilaterally placed them under the

Company medical plan, which forced the Union to file an

unfair labor practice charge. That is, Oak Harbor did

not return to the status quo for the returning striking

employees covered by the OWT, and by then applying the

Company medical plan to all employees, which is why the

Union filed the ULP.

In fact, Oak Harbor has already openly admitted

that there was no agreement on healthcare coverage

for returning strikers. Payne conceded this on cross

examination. See, JA 0455, line 22 to JA 0456, line 8.

24

Moreover, Payne also conceded on redirect examination

that his second letter dated February 17, 2009, where he

stated that there was an agreement on placing returning

strikers under a Company medical plan and stripping

them of the pension and retiree medical benefits, was

a “misstatement.” JA 0535, lines 10-15. In particular,

Payne ultimately conceded that the Union never agreed

to any changes to the contractually-required benefits for

“returning strikers,” as the letter wrongly claims. See,

JA 0534, lines 14-22, 535, lines 11-15.

Unfortunately, Payne reiterated his misstatement

over and over. See, JA 0546, line 7 to JA 0547, line 8. And

Oak Harbor is using this statement to claim the parties

had an agreement on benefits for returning strikers—they

didn’t.

Once again, Oak Harbor is putting forth this fiction

that Oak Harbor and the Union agreed on placing

returning strikers under the Company medical plan. But

as already described in great detail above, the parties had

no agreement to place the returning strikers under the

Company medical plan and/or to cut their benefits in any

manner. JA0423-0424, 1180-1182. The Union was clear on

this—and so was Oak Harbor.

Oak Harbor simply unilaterally cut benefits for

returning strikers and then forced the Union to bargain

back to status quo. This was the basis for the Union filing

the unfair labor practice charges, which both the NLRB

and the Court of Appeals found to be valid.

Because there was no meeting of the minds, the NLRB

properly ruled there was no agreement. Consequently,

there is no reason for Supreme Court review.

25

CONCLUSION

In sum, Oak Harbor’s Petition for Writ of Certiorari

should be denied because the remaining portions of this

case do not raise any novel issues, and the Court of Appeals

decision does not conflict with the Supreme Court or any

other Court of Appeals. Moreover, the Court of Appeals

decision was proper because it reached solid conclusions

that were rational, consistent with the NLRA, and based

on substantial evidence (as did the NLRB decision in this

case).

Dated this 11th day of December, 2017.

Respectfully Submitted,

Thomas A. Leahy

Counsel of Record

Reid, McCarthy, Ballew

& Leahy, L.L.P.

100 West Harrison Street

North Tower, Suite 300

Seattle, Washington 98119

(206) 285-3610

tom@rmbllaw.com

Attorneys for Intervenors for

Respondent Teamsters Local

Numbers 81, 174, 231, 252, 324,

483, 589, 690, 760, 763, 839 and 962