Petition — NLRB v. Amax Coal Co.

Supreme Court brief1981

Ask Donna

What actually matters in this document.

Text

¢ ”. n

euprere vou? ut Ss.

QFE S

80 2,6 92 OCT 27 1980

MICH AFL REOAK JR., CLERK

In the Supreme Court of the |

OCTOBER TERM, 1980

NATIONAL LABOR RELATIONS BOARD, FETITIONER

Vv.

AMAX COAL COMPANY, A DIVISION OF AMAX, INC., ET AL.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

THIRD CIRCUIT

WADE H. MCCREE, JR.

Solicitor General

ANDREW J. LEVANDER

Assistant to the Solicitor General

Department of Justice

Washington, D.C. 20580

WILLIAM A. LUBBERS (202) 683-2217

General Counsel

JOHN E. HIGGINS, JR.

Deputy General Counsel

ROBERT E. ALLEN ;

Acting Associate General Counsel

NORTON J. COME

Deputy Associate General Counsel

LINDA SHER

Assistant General Counsel

RICHARD B. BADER

Attorney

National Labor Relations Board

Washington, D.C. 20570

Gn the Supreme Court of the Hnited States

OCTOBER TERM, 1980

No.

NATIONAL I,ABOR RELATIONS BOARD, PETITIONER

Vv.

AMAX COAL COMPANY, A DIVISION OF AMAX,

INC., ET AL.*

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

THIRD CIRCUIT

QUESTION PRESENTED

Whether the management-appointed trustee of a jointly

administered multi-employer trust fund established under

Section 302(c)(5) of the Labor-Management Relations Act

of 1947, 29 U.S.C. 186(¢)(5), is a collective bargaining rep-

resentative within the meaning of Section 8(b)(1)(B) of the

National Labor Relations Act, 29 U.S.C. 158(b)(1)(B).

* The other parties to this case are the United Mine Workers of

America, Local No. 1854 and the United Mine Workers of America.

The Union has also filed a petition for a writ of certiorari to review the

judgment in this case. See United Mine Workers of America, Local

No. 1854 v. NLRB, No. 80-289 (filed Aug. 26, 1980). Question 1 of that

petition presents the same question that is presented here.

Ill

TABLE OF CONTENTS

Page

se ices) 6 win a ows 6 ab aie6 swede 1

ae kis 5 bee ck 6 see > boss Bice deans 1

a, bee Ca ds die oak vee Bb waco 1

Statement ....... Sneek cade Me adds 0 000 aPiway ee. 1

Reasons for granting the petition ................ 8

ee i, acc cee wccsoeturecases 18

I aa edb a bias tech cs base csv eee eess la

ES TEE OR 9 OA 33a

ee eae oh 5 wk wikia ud de oss ob ceviaes 4la

ee ee Sek oa nok bake oh 6 dkeas sete cv ees 43a

es on Sa cia sch m bine se hoe « 228a

TABLE OF AUTHORITIES

Cases:

Allied Chemical Workers v. Pittsburgh Plate

I CE REM, BIDE 0 a's bcc uk ee'cv ce cvwe 15

American Broadcasting Companies v. Writers

Guild of America, West, Inc., 487 U.S. 411 .. 14, 17

Arroyo v. United States, 359 U.S. 419....... 2, 11

Associated General Contractors of Essex

County, Inc. v. Laborers International

CME ME od ies ccbs0 dee cveseece 7

Blankenship v. Boyle, 329 F. Supp. 1089, aff'd

OS er 2, 3, 10

Blassie v. Kroger Co., 345 F.2d 58 .......... 16

Cutaiar v. Marshall, 590 F.2d 523 .......... 12

Denver Metropolitan Ass’n of Plumbing Con-

tractors v. Journeyman Plumbers Local

Bi NONE on ccc sincadeccses 11, 16

Florida Power & Light Co. v. IBEW, Local

EE TN ee ke sacdsecsicees 14

Ford Motor Co. v. NLRB, 441 U.S. 488...... 15

Gooding v. United States, 416 U.S. 480...... 9

PREVIOUS PAGE WAS BLANK |

Cases—Continued: Page

Isbrandtsen Co. v. Johnson, 348 U.S. 779.... 9

Lamb v. Carey, 498 F.2d 789..........0e008 10, 15

Miniard v. Lewis, 387 F.2d 864 ............. 13

Morgan v. Laborers Pension Trust Fund, 433

i MG ED SAin'k s oR cao Re cae Miawa ck Bie e's 14

Nachman Corp. v. Pension Benefit Guaranty

Corp., No. 78-1557 (May 12, 1980)......... 3

NLRB v. Construction & General Laborers’

Union Local 1140, 577 F.2d 16 ............ 13

NLRB v. Insurance Agents, 361 U.S. 477.... i7

Owen v. City of Independence, No. 78-1779

CBOE. TE, TP vinake Sbakeea aca ntab edison 9

Rehmar v. Smith, 555 F.2d 1862 ............ 15

Sheet Metal Workers’ International Associa-

tion, 234 N.L.R.B. 1238, petition for review

pending sub nom. Central Florida Sheet-

metal Contractors Ass’n v. NLRB, No.

PE clad un Ls cadena ms shea ee tae 6, 16

Toensing v. Brown, 528 F.2d 69............. 13, 15

United Marine Division, ILA v. Essex Trans-

portation Co., 216 F.2d 410 ............... 13

United States v. Ryan, 350 U.S. 299......... 2, 15

Walsh v. Schlecht, 429 U.S. 401 ............. 2

Statutes:

Employee Retirement Income Security Act of

1974, Pub. L. No. 93-406, 88 Stat. 829

(ERISA), 29 U.S.C. 1001 et seq. .......... 1, 3, 8

Section 404(a), 29 U.S.C. 1104(a)........ 3

Section 404(a)(1), 29 U.S.C. 1104(a)(1)... 3, 11

Section 404(a)(1)(E), 29 U.S.C.

SRE ein ahd vd wees has caps a tad 3

Section 405, 29 U.S.C. 1105............. 11

Section 405(a), 29 U.S.C. 1105(a)........ 11

Statutes—Continued: Page

Section 405(a)(3), 29 U.S.C. 1105(a)(3) ... 17

Section 405(b)(1)(A), 29 U.S.C.

SRO is sas bea kh Sek vs KS ue 17, 24la

Section 406(b)(2), 29 U.S.C. 1106(b)(2)... 3, 11

Section 407, 29 U.S.C. 1107............. 3

Section 409, 29 U.S.C. 1109...... 11, 235a, 255a

Labor-Management Relations Act of 1947

(LMRA), 29 U.S.C. 141 et seg. ............ 1

Section 302, 29 U.S.C. 186 ......... 1, 15, 231la

Section 302(c)(5), 29 U.S.C. 186(c)(5) ....1, 8, 9,

10, 11, 17, 232a-233a

Section 302(c)(5)(A), 29 U.S.C.

SIEM 6 k's ook 6S Ras sade se 2, 232a-233a

Section 302(c)(5)(B), 29 U.S.C.

(SIA SPR RRA a a a 2, 4, 9, 233a

Section 302(c)(5)(C), 29 U.S.C.

Pe PT re Se 2, 233a

Multiemployer and Pension Plan Amendments

Act of 1980, Pub. L. No. 96-364 (Sept. 30,

SUR CAA i Rs hanes UA RRS Ow CAG) 00a NU Oxkns ee 12

National Labor Relations Act (NLRA), 29

RE Pe A ON, Sea red chs one ues se ibe. 1

Section 8(a)(5), 29 U.S.C. 158(a)(5) ...-.. 17

Section 8(b)(1)(B), 29 U.S.C. 158(b)(1)(B). .4,05, 7,

8, 9, 14, 17

Section 8(b)(3), 29 U.S.C. 158(b)(3) ...... 4, 5, 7,

17, 228a

Section 8(b)(4)(A), 29 U.S.C. 158(b)(4(A) . 4, 5

Section 8(d), 29 U.S.C. 158(d)........ 17, 228a

Section 8(e), 29 U.S.C. 158(e) ......... 5, 228a

Miscellaneous:

ABA Labor Relations Law (1977)............ 16

Bogert, Trusts and Trustees (2d rev. ed.

SEE AUN ss Onibns dake ecnsebadretechcsbons 9

Miscellaneous—Continued: Page

Department of Labor, Pension and Welfare

Benefit Programs: Study of Multi-

Employer Plans (1979) ..........0eeeeeees 16

H. R. Conf. Rep. No. 510, 80th Cong., ist

RS BRR re Pee Lie Raceem eae 11

H. R. Conf. Rep. No. 93-1280, 93d Cong., 2d

SN, CAE os nc BE Sak ck eek ke (DRIER aA Ota be 12

H. R. Rep. No. 245, 80th Cong., Ist Sess.

~tnie” * SEs ot o Cerbdnvin evdvdks sp ebbese aay 10, 14

H. R. Rep. No. 96-869 (Pt. 1), 96th Cong., 2d -

SN, GHEE nb ccd adin ic c's se ee «Cerin teks 16

Restatement (Second) of Trusts (1959) ....... 9

Scott, The Fiduciary Principle, 37 Calif. L.

MeN PE ih nds ch ol bess ous euch seks 9

II Scott, Trusts (ded. 1956)............005. 9

S. Rep. No. 105, 80th Cong., 1st Sess. (1947) .. 14

93 Cong. Rec. (1947):

fee re Pa rer erre 11

ACTER chs 449s wSewnes vtsenn cde ccus 14

i ES. {eit chic he ke cavs duesdapn 11

i Deis dit cae os ensetod babe okt 10, 11

126 Cong. Rec:

H7902 (daily ed. Aug. 26, 1980) ......... 13

$10104 (daily ed. July 29, 1980) ......... 12

The Solicitor General, on behalf of the National Labor

Relations Board, petitions for a writ of certiorari to re-

view the judgment of the United States Court of Appeals

for the Third Circuit in this case.

OPINIONS BELOW

The opinion of the court of appeals (App. A, infra, la-

32a) is reported at 614 F.2d 872. The decision and order of

the National Labor Relations Board (App. D, infra, 43a-

227a) are reported at 238 N.L.R.B. No. 214.

JURISDICTION

The judgment of the court of appeals (App. B, infra,

33a—40a) was entered on April 3, 1980. A petition for re-

hearing was denied on May 29, 1980 (App. C, infra, 4la-

42a). On September 18, 1980, Mr. Justice Brennan ex-

tended the time within which to file a petition for a writ of

certiorari to and including October 26, 1980. The jurisdic-

tion of this Court is invoked under 28 U.S.C. 1254(1).

STATUTE INVOLVED

The relevant provisions of the National Labor Relations

Act, 29 U.S.C. 151 et seq.; the Labor-Management Rela-

tions Act of 1947, 29 U.S.C. 141 et seqg.; and the Employee

Retirement Income Security Act of 1974, 29 U.S.C. 1001

et seq., are set forth at App. E, infra, 228a—255a.

STATEMENT

1. a. In 1947, Congress first began to regulate pension

and other welfare funds. Although Section 302 of the

Labor-Management Relations Act of 1947 (“LMRA”), 29

U.S.C. 186, generally prohibits employer payments to any

representative of his employees, Section 302(c)(5), 29

U.S.C. 186(c)(5), permits employer contributions to a wel-

fare trust fund provided that the fund satisfies various re-

quirements. For example, qualifying welfare funds must

be in the form of a trust. See 29 U.S.C. 186(c)(5)(A). The

fund can provide only certain types of benefits for employ-

ees and their families and dependents,' and the basis for

such payments must be specified in a written, detailed

agreement with the employer. See 29 U.S.C. 186(c)(5)(A)

and (B). The fund must also be audited annually, and the

results of the audit must be made available to all in-

terested persons. 29 U.S.C. 186(c)(5). Furthermore, pen-

sion or annuity funds are to be kept in a trust separate

from other welfare funds. 29 U.S.C. 186(c)(5)(C).

In addition to these requirements, Section 302(c)(5)(B)

directs that “employees and employers [be] equally repre-

sented in the administration of such fund, together with

such neutral persons as the representatives of the em-

ployers and the representatives of employees may agree

upon * * *.” 29 U.S.C. 186(c)(5)(B).2 This provision re-

flects congressional concern “with the possible abuse by

union officers of the power which they might achieve if

welfare funds were left to their sole control.” Arroyo v.

United States, 359 U.S. 419, 425-426 (1959). See also

Walsh v. Schlecht, 429 U.S. 401, 410-411 (1977); United

States v. Ryan, 350 U.S. 299, 304-307 (1956). By requir-

ing equal representation with regard to the trustees, Con-

gress sought “to isolate such welfare funds from labor-

management politics” and to ensure that the funds are op-

erated solely for the benefit of the employees, rather than

as “‘a war chest * * * for the union.’” Blankenship v.

1 The trust funds are limited to paying “for medical or hospital care,

pensions on retirement or death of employees, compensation for in-

juries or illness resulting from occupational activity or insurance to

provide any of the foregoing, or unemployment benefits or life insur-

ance, disability and sickness insurance, or accident insurance.” 29

U.S.C. 186(¢)(5)(A).

2 If, in the absence of a neutral trustee, the employee and employer

trustees deadlock, Section 302(c)5)(B) further provides that the trus-

tees may select a neutral arbiter or “in the event of their failure to

agree within a reasonable length of time, an impartial umpire to decide

such dispute shall, on petition of either group, be appointed by the

district court of the United States for the district where the trust fund

has its principal office * * *.” 29 U.S.C. 186(c)5)\B).

Boyle, 329 F. Supp. 1089, 1094-1095 (D.D.C. 1971), aff’d

mem., 511 F.2d 447 (D.C. Cir. 1975).

b. In 1974, Congress enacied a comprehensive scheme

of pension and welfare fund regulation. The Employee Re-

tirement Income Security Act of 1974 (“ERISA”), Pub. L.

No. 93-406, 88 Stat. 829, codified at 29 U.S.C. 1001 et

seq., sets forth detailed requirements concerning the crea-

tion, administration, and termination of pension and wel-

fare funds. See generally Nachman Corp. v. Pension

Benefit Guaranty Corp., No. 78-1557 (May 12, 1980). In

particular, Part 4 of Title I of ERISA imposes various

duties and restrictions on the trustees of such pension

funds, and limits or prohibits certain types of transactions.

Thus, Section 404(a) of ERISA, 29 U.S.C. 1104(a), es-

tablishes a prudent man standard of care for all trust

fiduciaries, and requires that “a fiduciary shall discharge

his duties with respect to a plan solely in the interest of

the participants and beneficiaries.” 29 U.S.C. 1104(a)(1).

Similarly, Section 406(b)(2) xf ERISA prohibits a trustee

from “act{ing] in any transa. .‘on involving the plan on be-

half of a party (or represent[ing] a party) whose interests

are adverse to the interests of the plan or the interests of

its participants or beneficiaries.” 29 U.S.C. 1106(b)(2).

And Sections 406(a)(1)(E) and 407 limit the amount and

kinds of employer property and securities that a trust may

acquire. See 29 U.S.C. 1106(a)(1)(E) and 1107.

2. Amax Coal Company, a Division of Amax, Inc., is in

the business of mining coal, primarily in deep shaft

bituminous mines located in the midwestern United

States. It bargains with the United Mine Workers of

America (“the Union”) for its midwestern mines as a

member of the Bituminous Coal Operators Association

(“BCOA”), a nationwide multi-employer group. In 1972,

Amax opened the Belle Ayr Mine in Wyoming, its first

sub-bituminous surface mine. Although that mine, like

most western surface mines, did not become a member of

BCOA, Amax and the Union agreed to a contract regard-

ing the Belle Ayr Mine, which was patterned after the

BCOA national contract (App. A, infra, 3a; App. D,

infra, 76a—79a).

In January 1975, after the western surface mine con-

tracts, including the Belle Ayr Mine Contract, had ex-

pired,* the Union struck the Belle Ayr Mine and other

employers. Amax resisted the Union’s attempts to compel

establishment of a multi-employer bargaining group,‘ and

in February 1975, the Union, after learning that the

Board’s Regional Director was preparing to issue a com-

plaint, began separate negotiations with Amax with re-

gard to the Belle Ayr Mine. These negotiations were un-

productive, however, and, by mid-March 1975, the parties

had reached an impasse on several points. In particular,

the Union insisted that Amax continue to make its pension

and welfare contributions to the Union’s existing national

pension and welfare trust funds.5 On March 17, 1975,

Amax resumed operation of the Belle Ayr Mine under the

terms of its last contract offer. Although sporadic negotia-

tions occurred during the next year, no agreement was

ever reached (App. A, infra, 4a—7a; App. D, infra, 46a-

52a, 80a-—125a).

3. The Board unanimously concluded that the Union did

not violate Sections 8(b)(1)(B) and 8(b)(3) of the National

Labor Relations Act (““NLRA”), 29 U.S.C. 158(b)(1)(B)

and (b)(3), by bargaining to impasse and striking in sup-

* These contracts, as well as the BCOA national contract, were

originally scheduled to expire on November 12, 1974, but had been ex-

tended for two months (App. A, infra, 3a-4a; App. D, infra, 46a-50a).

* The Board found that, insofar as the strike was designed to compel

Amax to bargain through a multi-employer group, the Union had vio-

lated Sections 8(b)(1)(B) and 8(b)(4)(A) of the National Labor Relations

Act, 29 U.S.C. 158(b)(1)(B) and (b)(4)(A). See App. D, infra, 45a-56a.

The court of appeals affirmed this finding (App. A, infra, 7a—12a),

which is not before this Court.

5 These funds had three trustees previously appointed in accordance

with Section 302(¢)(5)(B) of the LMRA: one selected by management,

one selected by the Union, and one neutral trustee. Amax through its

membership in the BCOA had participated in the selection of the

management-appointed trustee (App. D, infra, 57a, 135a-137a &

n.48).

port of its proposal that Amax continue to contribute to

the Union’s existing national pension and welfare trust

funds with regard to the Belle Ayr employees.* The Board

observed that proposals concerning employer contribu-

tions to employee benefits funds are unquestionably man-

datory subjects of bargaining (App. D, infra, 58a). The

Board rejected Amax’s claim that, notwithstanding the

otherwise mandatory nature of the Union’s trust fund pro-

posal, the Union’s insistence on an existing trust fund was

unlawful because it coerced Amax in its selection of a

collective-bargaining representative, that is, the pre-

selected management-appointed trustee of the Union’s

existing multi-employer trust fund. Affirming in relevant

part the decision of the administrative law judge, the

Board held that “the trust funds’ management trustee is

not a collective-bargaining representative within the

meaning of Section 8(b)(1)(B) of the Act” (App. D, infra,

57a).

The Board explained that the trustees of a jointly ad-

ministered, multi-employer trust fund are not collective-

bargaining representatives because such trustees “are

solely fiduciaries, owing undivided loyalty to the benefici-

® The Board also found that the Union did not violate Sections 8(b)(3)

and 8(e), 29 U.S.C. 158(b)(3) and (e), of the NLRA by insisting to im-

passe on a number of other contract clauses, including enabling, coal

lands, and successorship clauses (App. D, infra, 59a-63a, 171a-176a).

As indicated above, the Board further held that the Union violated

Section 8(b)(1)(B) and 8(b)(4)(A) of the NLRA, 29 U.S.C. 158(b)(1)(B)

and (b)(4)(A), by attempting to force Amax to join involuntarily a

multi-employer bargaining unit. See note 4, supra. In addition, the

Board found that the Union violated Sections 8(b)(3) and 8(e) by in-

sisting to impasse upon a leasing-licensing out clause that would have

required Amax to insist that all licensees or lessees of its coal lands

adhere to all of the terms of the collective bargaining agreement be-

tween Amax and the Union (App. D, infra, 65a, 176a-183a).

The court of appeals reversed the Board’s conclusion with regard to

the enabling and coai land clauses (App. A, infra, 16a-19a), and af-

firmed as to the successorship and leasing-licensing out clauses, the

multi-employer bargaining unit question and other issues (id. at 7a-

12a, 14a-16a, 19a-28a). Questions 2 and 3 of the petition for a writ of

certiorari in No. 80-289 (see note *, supra) seek review of the court of

appeals’ decision regarding the enabling and coal lands clauses and t).e

leasing and licensing out clause, respectively.

aries of such a plan” (App. D, infra, 58a). This distinction

had been fully explicated in the Board’s prior decision in

Sheet Metal Workers’ International Association, 234

N.L.R.B. 1238 (1978), petition for review pending sub

nom. Central Florida Sheetmetal Contractors Ass’n v.

NLRB, No. 79-2396 (5th Cir.) (cited with approval at

App. D, infra, 58a—59a):

[W]e conclude that the * * * trustees are not

collective-bargaining representatives within the

meaning of Section 8(b)(1)(B) of the [NLRA]. In ar-

riving at this conclusion, we note first that, by in-

sulating an employer from union interference in the

selection process, Section 8(b)(1)(B) ensures that an

employer may bargain through a freely chosen repre-

sentative that is completely faithful to his interests.

Indeed, an individual or entity that possesses duly

delegated authority to act as a bargaining agent must,

in conformity with the most basic principles of agency

law, follow the instructions and act in the sole inter-

est of his appointing party * * *. [HJowever, the trus-

tees of a joint trust fund * * * are required to act

solely in the interests of the beneficiaries of the trust

fund. The fiduciary obligations imposed on the trus-

tees are of overriding importance, and, although they

should, of course, carefully consider all recommenda-

tions submitted by the parties who have appointed

them, the trustees are bound to exercise their inde-

pendent judgment when making decisions with re-

spect to the administration of the trust fund. We

therefore conclude, in agreement with the weight of

judicial precedent on this issue, that there is nothing

in either the statute or its underlying legislative his-

tory to support the contention that Congress intended

that trust funds established pursuant to Section

302(c)(5) [of the LMRA] are. to deviate from the es-

tablished principle of trust law that a trustee must

always act in a manner that operates solely to the ad-

vantage of the beneficiaries.

234 N.L.R.B. at 1248 (footnote omitted). Since the trus-

tees of a fund established under Section 302(c)(5) of the

LMRA are not collective bargaining representatives, the

Union’s demand that Amax contribute to the existing trust

funds did not restrain or coerce Amax in violation of Sec-

tion 8(b)(1)(B), even though the management trustee of

the fund had previously been selected.” Accordingly, the

Board dismissed this portion of the complaint (App. D,

infra, 59a).

4. A two-judge panel of the court of appeals reversed

the Board’s determination regarding the status of

management-appointed trustees of a joint trust fund and

held that such trustees are collective bargaining repre-

sentatives covered by Section 8(b)(1)(B) of the NLRA.®

Relying on its prior decision in Associated General Con-

tractors of Essex County, Inc. v. Laborers International

Union, 559 F.2d 222, 227-228 (3d Cir. 1977), the court

stated (App. A, infra, 13a):

Naturally, the trustees of such a trust fund function

as fiduciaries for the funds’ beneficiaries but they also

serve as representatives of the parties who appoint

them. Insofar as it is consistent with their fiduciary

obligations, employer trustees are expected to ad-

vance the interests of the employer while employee

trustees are expected to further the concerns of the

union in the ongoing collective bargaining process be-

tween them.

The court of appeals accordingly concluded that the Union

had coerced Amax in its selection of a collective bargaining

representative and unlawfully refused to bargain insofar

as the Ur‘on had insisted on its proposal that Amax con-

tinue to contribute to the Union’s existing national trust

funds whose trustees had previously been selected (id. at

14a). Because, in the court’s view, the Union’s behavior

thus violated Sections 8(b)(1)(B) and 8(b)(3) of the NLRA,

the court ordered the Union to cease and desist from “in-

sisting to the point of impasse that Amax * * * participate

7 Likewise, the Union’s bargaining to impasse and striking over the

welfare and pension fund issue did not run afoul of its obligation to

bargain under Section 8(b)(3).

* Although Judge Gibbons heard oral argument in this case in the

court of appeals, he did not participate in the decision. See App. A,

infra, la n.*.

in the [Union’s] multi-employer pension and welfare

funds” (App. B, infra, 36a).

REASONS FOR GRANTING THE PETITION

This case presents an important question concerning the

role and duties of a trustee of a jointly-administered,

multi-employer trust fund established pursuant to Section

302(5) of the Labor-Management Relations Act of 1947

(“LMRA”), 29 U.S.C. 186(c)(5). The court of appeals has

held that a management-appointed trustee of such an em-

ployee trust fund owes his loyalty to management as well

as to the beneficiaries of the trust, and is therefore a col-

lective bargaining representative within the meaning of

Section 8(b)(1)(B) of the National Labor Relations Act

(“NLRA”), 29 U.S.C. 158(b)(1)(B). As a result, a union

cannot bargain to impasse and strike about employer con-

tributions to existing multi-employer trust funds, even

though the use and continuity of such trust funds are criti-

cal terms and conditions of employment. Moreover, the

court of appeals’ decision, if left standing, would compel

the Board for the first time to consider a trustee’s admin-

istration of pension and welfare funds as collective bar-

gaining under the NLRA.

This virtually unprecedented decision of the court of ap-

peals is erroneous in two respects. First, the language,

purpose, and legislative history of both the LMRA and the

Employee Retirement Income Security Act of 1974

(“ERISA”), 29 U.S.C. 1001 et seg., make clear that the

trustee of an employee pension or welfare fund is not to be

involved in labor-management competitics, but rather

owes a fiduciary duty exclusively to the beneficiaries of

the trust. Accordingly, the lower federal courts have gen-

erally rejected the conclusion of the court below that such

trustees represent the party that appoints them as well as

the trust beneficiaries. Moreover, even assuming that the

court of appeals has correctly concluded that such trustees

have a dual loyalty, it does not follow that a trustee is

therefore a collective bargaining representative within the

purview of Section 8(b)(1)(B). To the contrary, this Court

— a ae ct eee. ae

—_— — ae

has repeatedly recognized that Section 8(b)(1)(B) has a

limited scope and that a trustee is not ordinarily a collec-

tive bargaining representative. Because the erroneous de-

cision of the court below will have an immediate and sub-

stantial impact on collective bargaining involving millions

of employees and on the administration of billions of dol-

lars in trust fund assets, review by this Court is war-

ranted.

1. The court of appeals held that a management-

appointed trustee of an employee pension or welfare fund

is a collective bargaining representative under the labor

laws because Section 302(c)(5) of the LMRA requires a

trustee to represent the party that appointed him (i.e.,

the employer or the union) as well as the beneficiaries of

the trust. At the outset, we note that the principle of dual

loyalty created by the court of appeals is at odds with well

settled fiduciary law. The common law imposes a duty on a

trustee to “display throughout the administration of the

trust complete loyalty to the interests of the beneficiary

and [to] exclude all selfish interests and all consideration

of the interests of third persons.” Bogert, Trusts and

Trustees § 543 (2d rev. ed. 1978). See Restatement (Sec-

ond) of Trusts § 170(1) (1959); II Scott, Trusts § 170 (2d

ed. 1956); Scott, The Fiduciary Principle, 37 Calif. L.

Rev. 539 (1949). In light of this well-established principle,

the court of appeals should not have concluded that the

LMRA fundamentally alters the common law (now codified

in ERISA) regarding trustees unless Congress has un-

equivocally evidenced its intent to do so. See, e.g., Owen

v. City of Independence, No. 78-1779 (Apr. 16, 1980), slip

op. 14-15; Gooding v. United States, 416 U.S. 480, 457-

458 (1974); Isbrandtsen Co. v. Johnson, 343 U.S. 779, 783

(1952). Here, as we now demonstrate, neither the lan-

guage nor the legislative history of the LMRA supports

the decision below, and various provisions of ERISA ex-

pressly reject the principle of dual loyalty.

a. Section 302(c)(5)(B) requires that “employees and

employers [be] equally represented in the administration

of such [pension and welfare] fund[s].”” 29 U.S.C.

186(c)(5)(B). That language merely provides that manage-

ment and the union are entitled to appoint an equal

number of trustees. Nothing in Section 302(c)(5) further

indicates that Congress thereby abrogated the common

law duty of exclusive loyalty to the trust beneficiaries by

directing a trustee once appointed to continue represent-

ing the party that appointed him. To the contrary, neither

an employer nor a union can remove “its” trustee because

he fails to represent management or union views in ad-

ministering the trust. See Lamb v. Carey, 498 F.2d 789,

793-794 (D.C. Cir. 1974). Moreover, Section 302(¢)(5) as a

whole is “designed expressly to isolate such welfare funds

from labor-management politics * * * [and] designed not to

alter, but to reinforce ‘the most fundamental duty owed by

the trustee’: the duty of undivided loyalty to the benefici-

aries.” Blankenship v. Boyle, 329 F. Supp. 1089, 1094-

1095 (D.D.C. 1971), aff'd mem., 511 F.2d 447 (D.C.

Cir. 1975).®

Similarly, the legislative history shows that Section

302(c)(5) was enacted to ensure that employee trust funds

are operated solely for the benefit of the employees and to

remove the administration of such funds from the arena of

labor-management competition. As Senator Ball ex-

plained, “all we seek to do by the amendment [Section

302(c)(5)] is to make sure that the employees whose labor

builds this fund and who are really entitled to benefits

under it shall receive the benefits; that it is a trust fund,

and that, if necessary, they can go into court and obtain

the benefits to which they are entitled.” 98 Cong. Rec.

4753 (1947). Likewise, Senator Taft stated that the pur-

pose of Section 302(c)(5) was to prevent the fund from be-

coming “a war chest * * * for the union,” “to require that

the fund shall be established in definite, detailed form, in

the form of a trust fund,” and “to prevent the abuse of

welfare funds.” id. at 4746-4747. See also H.R. Rep. No.

245, 80th Cong., Ist Sess. 29, 78-79 (1947); H.R. Conf.

* For example, Section 302(c)(5) requires that the fund be estab-

lished in the form of a written, formal trust for the exclusive benefit of

the employees and their dependents, and that the decisive vote be cast

by neutral trustees, See pages 1-2, supra.

Rep. No. 510, 80th Cong., 1st Sess. 66-67 (1947); 93 Cong.

Rec. 3623 (1947) (remarks of Rep. Case); Arroyo v.

United States, 359 U.S. 419, 425-426 (1957). Nowhere,

however, did Congress expiess the view that Section

302(c)(5) was also intended to impose an additional duty of

representation on fund trustees in derogation of their

common law duty of loyalty to the trust beneficiaries. '°

b. In enacting ERISA in 1974, Congress reaffirmed that

fund trustees are to be held to strict fiduciary standards

inconsistent with the standard of dual loyalty adopted by

the court of appeals. See Denver Metropolitan Ass’n of

Plumbing Contractors v. Journeyman Plumbers Local

No. 8, 586 F.2d 1367, 1373-1375 (10th Cir. 1978). Thus,

Section 404(a)(1) of ERISA requires a trustee to “dis-

charge his duties * * * solely in the interest of the partici- |

pants and beneficiaries and * * * for the exclusive purpose

of * * * providing benefits to participants and their benefi-

ciaries * * *.” 29 U.S.C. 1104(a)(1) (emphasis supplied). In

addition, Section 406(b)(2) provides that a trustee may not

“act in any transaction involving the plan on behalf of a

party (or represent a party) whose interests are adverse

to the interests of the plan or the interests of its partici-

pants or beneficiaries.” 29 U.S.C. 1106(b)(2). And Section

405 of ERISA imposes an affirmative duty on each trustee

to prevent every other trustee of the same fund from

breaching their fiduciary duties, including their duty to act

solely on behalf of the trust beneficiaries. See 29 U.S.C.

1105(a).*!

1° Indeed, the primary concern underlying Section 302(c)(5) is the

prevention of union manipulation or exploitation of employee trust

funds. See 98 Cong. Rec. 4745-4747, 4751-4753 (1974); Arroyo v.

United States, supra. By requiring that union-appointed trustees con-

tinue to represent union interests, the rationale of the decision below

would frustrate Congress’ principal purpose.

11 We also note that, although the trustees are liable for their breach

of duty (29 U.S.C. 1109), “[tJhe appointing authority [i.e., the em-

ployers or the union) is not responsible for the acts of fiduciaries, un-

less upon some negligent selection theory.” Denver Metropolitan

Ass'n. of Plumbing Contractors v. Journeyman Plumbers Local No.

3, supra, 586 F.2d at 1375. Accordingly, a trustee is not an agent or

representative éf the appointing party.

It is thus apparent that the court of appeals erroneously

concluded that a management-appointed trustee repre-

sents both management and the trust beneficiaries. In-

deed, the House Conference Report accompanying ERISA

makes clear that Congress intended to prohibit a trustee

“from being put into a position where he has dual loyalties

and therefore he cannot act exclusively for the benefit of a

plan’s participants and beneficiaries.” H.R. Conf. Rep.

No. 93-1280, 93d Cong., 2d Sess. 309 (1974). See also

Cutaiar v. Marshall, 590 F.2d 528, 529-530 (3d

Cir. 1979). Furthermore, in amending ERISA in 1980 to

take into account the special and important problems of

multi-employer pension funds,!? the sponsors of the legis-

lation in both Houses of Congress expressly disapproved

the decision of the court of appeals in this case.**

ce. The decision of the court of appeals also conflicts in

principle with the decisions of other courts of appeals.

Consistent with the position of the Board and of the Secre-

12 The Multiemployer Pension Plan Amendments Act of 1980, Pub.

L. No. 96-364 (Sept. 30, 1980).

13 The following colloquy occurred during the Senate debates (126

Cong. Rec. S$10104 (daily ed. July 29, 1980):

“MR. RANDOLPH. * * * If the chairman of the committee is

agreeable, I wonder if I might address him to clarify a new point

which concerns me. Although this bill has added new and addi-

tional responsibilities of plan trustees, particularly under the

reorgnization provisions of the bill, is it not correct that this

legislation reaffirms the present law, that these plan trustees as

fiduciaries still have the sole responsibility, as I understand it, to

the beneficiaries of the plan? My concern is based partly on a

recent Court of Appeals decision, which I believe will be over-

turned on appeal, that apparently suggests that the trustee(s]

have some obligations to the parties who appoint them. I do not

believe that we in the Congress have ever expressed an intent

under ERISA or any other Federal law that an agency status

should or does exist between trustees and their appointers.”

* + * * *

“MR. WILLIAMS. I am happy to respond to the Senator from

West Virginia that that is the situation and that is correct. In all

instances the actions of the trustees must be made with the sole

tary of Labor,** several courts of appeals have concluded

that the trustees of Section 302(c)(5) employee funds owe a

duty of exclusive loyalty to the beneficiaries of the trust

and “do not act as representatives of either the employers

or the union.” Miniard v. Lewis, 387 F.2d 864, 865 n.5

(D.C. Cir. 1967). For example, in NLRB v. Construction

& General Laborers’ Union Lecal 1140, 577 F.2d 16, 20-21

(8th Cir. 1978), the court of appeals determined that

ERISA imposes a duty of loyalty on pension fund trustees,

and that insofar as the conduct of the union-appointed

trustee in that case “support[ed] the interests of a third

party (the Union) [,it] was beyond the scope of his author-

ity as a trustee.” Jd. at 21. See also Denver Metropolitan

Ass’n of Plumbing Contractors v. Journeyman Plumbers

Local No. 3, Supra, 586 F.2d at 1873-1375 (each employer

may not select a trustee for a multi-employer pension

fund); Toensing v. Brown, 528 F.2d 69, 72 (9th Cir. 1975)

(trustees must exercise independent judgment and are not

bound by recommendation of collective bargaining par-

ties); United Marine Division, ILA v. Essex Transporta-

tion Co., 216 F.2d 410, 412 (8d Cir. 1954) (trustees do not

interest of the plan’s beneficiaries in mind. That was, that is, and

that will be.”

Likewise, Representative Thompson stated (126 Cong. Rec. H7902

(daily ed. Aug. 26, 1980)):

“Although this bill has added important new responsibilities

for plan trustees, particularly under the reorganization provi-

sions, this legislation simply reaffirms the present law, that these

plan trustees as fiduciaries have sole responsibility to the par-

ticipants and beneficiaries of the plan. A recent Court of Appeals

decision, Amax Coal Company against NLRB which was wrongly

decided, apparently suggests that the trustees are collective bar-

gaining agents for the parties who appoint them. That is an er-

roneous interpretation of both ERISA and federal labor law and

does not reflect congressional intent.

14 The Secretary of Labor filed an amicus curiae brief with the Board

in this case and in Sheet Metal Workers’, supra, expressing the view

that “the fiduciary obligations imposed by ERISA are diametrically

opposed to the obligations of a collective-bargaining representative.”

234 N.L.R.B. at 1246. The Secretary also supports this petition for a

writ of certiorari.

act “as representatives of either union or employers”);

Morgan v. Laborers Pension Trust Fund, 433 F. Supp.

518, 5380 (N.D. Cal. 1977); Blankenship v. Boyle, supra.

Particularly in light of the serious and important ramifica-

tions of the court of appeals’ decision described below, this

divergence of views among the lower federal courts war-

rants this Court’s review.

2. Even assuming that trustees of an employee trust

fund owe some form of duty to the party that appoints

them, the court of appeals erroneously concluded that a

trustee is a collective bargaining representative within the

meaning of Section 8(b)(1)(B) of the NLRA. That statute

prohibits a union from restraining or coercing “an em-

ployer in the selection of his representatives for the pur-

poses of collective bargaining or the adjustment of griev-

ances.” 29 U.S.C. 158(b)(1)(B). As this Court concluded in

Florida Power & Light Co. v. IBEW, Local 641, 417 U.S.

790, 803 (1974), “[bJoth the language and the legislative

history of § 8(b)(1)(B) reflect a clearly focused congres-

sional concern with the protection of employers in the

selection of representatives to engage in two particular

and explicitly stated activities, namely collective bargain-

ing and the adjustment of grievances.” In other words,

Section 8(b)(1)(B) is a narrow provision designed solely to

ensure the undivided loyalty of an employer’s freely cho-

sen representatives while engaged in collective bargaining

and grievance adjustment. See 417 U.S. at 803-805;

American Broadcasting Companies v. Writers Guild of

America, West, Inc., 487 U.S. 411, 422-423, 429-431,

435-436 (1978); S. Rep. No. 105, 80th Cong., 1st Sess. 21

(1947); H.R. Rep. No. 245, 80th Cong., Ist Sess. 16-17

(1947); 98 Cong. Rec. 3837 (1947) (remarks of Sen. Taft).

Because, even in the court of appeals’ view, a trustee is

primarily obligated to represent the trust beneficiaries

and therefore cannot be completely loyal to the employer’s

interests or faithful to his orders, a trustee cannot be a

collective bargaining representative covered by Section

8(b)(1)(B). Furthermore, a trustee administers the re-

lationship between the beneficiaries, who may or may not

be employees, and the trust fund, and is not involved in

the mainstream of day-to-day labor-management relations.

And whereas the employer both directs and remunerates

traditional collective bargaining representatives, trustees

are paid by the trust and, at a minimum, are not bound by

the requests of their appointing party. See Toensing v.

Brown, supra, 528 F.2d at 72. In fact, a management-

appointed trustee can ignore the recommendations of

management and is not subject to removal. See Lamb v.

Carey, supra, 498 F.2d at 793-794. In sum, a trustee is

simply not a collective bargaining representative. See,

e.g., Rehmar v. Smith, 555 F.2d 1362, 1370 (9th Cir.

1976); Toensing v. Brown, supra; Miniard v. Lewis,

supra.

Indeed, on two occasions this Court has expressly rec-

ognized the distinction between collective bargaining rep-

resentatives and fund trustees. In United States v. Ryan,

350 U.S. 299 (1956), the Court held that the word “‘repre-

sentative’” in Section 302 of the LMRA is not limited

solely to “exclusive [i.e., collective] bargaining represent-

ative.” The Court pointed out that if Section 302 covered

only collective bargaining representatives, “[pJayments

made * * * to other individuals as trustees [of employee

welfare funds] would apparently be excluded from § 302.”

350 U.S. at 305. More recently, in Allied Chemical

Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157, 170

(1971), the Court observed that “the union’s role in the

administration of the fund is of a far different order from

its duties as collective-bargaining agent.”

3. The issue presented by this case is important. The

erronecus decision of the court of appeals will have a sub-

stantial adverse impact upon collective bargaining, trust

fund administration, and the administration of the NLRA.

Although a union may bargain to impasse and strike over

the price of a cup of coffee in an in-plant cafeteria (Ford

Motor Co. v. NLRB, 441 U.S. 488 (1979)), it may not,

under the court of appeals’ ruling, insist upon employer

contributions to an existing multi-employer trust fund.

But such funds, which cover more than 8.8 million employ-

ees and pensioners and total more than $22.7 billion in as-

sets,45 may operate in a more efficient and dependable

manner than a single-employer plan, and are often a criti-

cal term or condition of employment. See Sheet Metal

Workers’, supra, 234 N.L.R.B. at 1244. For example, in

industries like the construction trade in which employees

do not work continuously for one employer, a multi-

employer fund will often be the only means of ensuring

that an employee can continuously accumulate retirement

credits and enjoy continuity of benefits. See, e.g., Denver

Metropolitan Ass’n of Plumbing Contractors v. Plumbers

Local No. 3, supra, 586 F.2d at 1371, 1375; H.R. Rep. No.

96-869 (Pt. 1), 96th Cong., 2d Sess. 53 (1980) (a multi-

employer plan “enables a participant who moves from one

contributing employer to another, who might otherwise

not be eligible for benefits based on service with any one

employer, to receive a pension”).

Notwithstanding the obviously important nature of the

pension fund issue to employees, the court of appeals has

concluded that contributions to an existing multi-employer

fund are not a mandatory subject of bargaining and that

therefore each employer wields a non-bargainable veto

over his employees’ efforts to join a multi-employer plan.

The conclusion that each employer can select his own rep-

resentative trustee and demand a single-employer plan

would, however, jeopardize the creation of new multi-

employer plans and the continued existence of current

plans, thereby exposing employees to the higher costs, the

greater risks, and the lack of portability associated with

individual employer plans. See ABA Labor Relations Law

213-214 (1977); Denver Metropolitan Ass’n of Plumbing

Contractors v. Plumbers Local No. 3, supra, 586 F.2d at

1373-1375. See also Blassie v. Kroger Co., 345 F.2d 58, 72

(8th Cir. 1965) (contributing employer does not necessarily

15 See Department of Labor, Pension and Welfare Benefit Pro-

grams: Study of Multi-Employer Plans I-2, I-10, IV-5 (1979) (based

on 1975 figures). The number and size cf multi-employer funds is

growing. See id. at I-15 (predicting more than 16 million covered em-

ployees by 2000); H.R. Rep. No. 96-869 (Pt. 1), 96th Cong., 2d Sess.

51-57 (1980).

have the right to participate in the selection of the em-

ployer trustees).!®

Finally, the holding of the court of appeals that trust

fund administration constitutes “collective bargaining”

within the meaning of the NLRA would improperly thrust

the Board “‘into a new area of regulation which Congress

[has] not committed to it.’” Ford Motor Co. v. NLRB,

supra, 441 U.S. at 497, quoting from NLRB v. Insurance

Agents, 361 U.S. 477, 499 (1960). For the first time, the

actions of trustees in administering a fund would be sub-

ject to the duty of good faith bargaining set forth in Sec-

tions 8(a)(5), 8(b)(3), and 8(d) of the NLRA, 29 U.S.C.

158(a)(5), (b)(3), and (d). Consequently, the duty owed to

the trust beneficiaries might be diluted because a trustee

would be regulated by the Board, the Secretary of Labor,

and the courts, and would face the different and possibly

conflicting duties imposed by Section 8 of the NLRA, Sec-

tion 302(c)(5) of the LMRA, and ERISA.?7

16 In this case, 1786 of the 2009 employers who contribute to the

UMWA funds at issue are independent signatories and not members of

BCOA, which selected the employer trustee. The court of appeals’ de-

cision would thus preclude the UMWA from bargaining to impasse and

striking over the continued fund participation of more than 85% of the

contributing employers.

17 For example, Sections 405(a)(3) and 405(b)(1A) of ERISA re-

quire a trustee to prevent any other trustee from breaching his

fiduciary responsibilities to the employee beneficiaries. On the other

hand, it is a violation of Section 8(b)(1)(B) of the NLRA for a union

representative to interfere with the employer collective bargaining

agent’s performance of his duties in accordance with the employer’s

instructions. American Broadcasting Companies v. Writers Guild,

supra, 437 U.S. at 436. Thus, if trust fund administration is “collective

bargaining” as the court of appeals concluded, a trustee might well be

found to have committed an unfair labor practice merely by fulfilling

his obligations under ERISA.

°*?

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted.

WADE H. McCCREE, JR.

Solicitor General

ANDREW J. LEVANDER

Assistant to the Solicitor General

WILLIAM A. LUBBERS

General Counsel

JOHN E. HIGGINS, JR.

Deputy General Counsel

ROBERT E. ALLEN

Acting Associate General Counsel

NORTON J. COME

Deputy Associate General Counsel

LINDA SHER

Assistant General Counsel

RICHARD B. BADER

Attorney

National Labor Relations Board

OCTOBER 1980

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 78-2310

AMAX COAL COMPANY, a Division of AMAX, INC.,

Petitioner

NATIONAL LABOR RELATIONS BOARD,

Respondent

UNITED MINE WORKERS OF AMERICA,

LOCAL NO. 1854, and UNITED MINE

WORKERS OF AMERICA, Intervenors

No. 78-2489

UNITED MINE WORKERS OF AMERICA,

LOCAL NO. 1854 and UNITED MINE

WORKERS OF AMERICA. Petitioners

NATIONAL LABOR RELATIONS BOARD,

Respondent

AMAX COAL COMPANY, a Division of AMAX, INC.,

Intervenor

PETITIONS FOR REVIEW OF AN ORDER OF THE

NATIONAL LABOR RELATIONS BOARD and

CROSS-APPLICATION FOR ENFORCEMENT

Argued October 18, 1979

Befure GIBBO™S,* HIGGINBOTHAM, Circuit Judges

and ZIEGLER, District Judge**

(Filed February 1, 1980)

*Judge Gibbons did not participate in the decision of the Court, al-

thougn he heard oral argument.

**Honorable Donald E. Ziegler of the United States District Court

for the Western District of Pennsvivan‘a, sitting by designation.

OPiNION OF THE COURT

A. LEON HIGGINBOTHAM, JR., Circuit Judge

This case is before the Court upon the petitions of

Amax Coal Company, a division of Amax, Inc., (Amax or

the Company) and the United Mine Workers of America

(the Union or UMW.\) to review an order of the National

Labor Relations Board (the Board). The Board found

that the Union violated the National Labor Relations

Act, 29 U.S.C. §§151 et seq., (the Act) by threatening to

strike and by striking to coerce Amax into bargaining

trough a multi-employer group; by refusing to meet

ana bargain separately with Amax before February 3.

1975; by striking without first notifving the Federal Me-

diation and Conciliation Service about its dispute with

Amax; by bargaining to impasse and striking in support

of its demands that the Company agree to six contract

clauses in violation of Section 8(e) of the Act. 29 U.S.C.

§158(e). The Board also found that the Union did not

violate the Act by bargaining t© impasse upon several

other clauses that the Gene. 1l Counsel had alleged to be

nonmandatory or unlawful, and that neither party had

engaged in overall bad faith bargaining. Finally. the .

Board declined to decide whether the Union had violated

the Act by insisting upon several other contract clause

proposals because tie violations had not been alleged in

the complaint. The Company has intervened in the pro-

ceeding initiated by the Union; the Union has

intervened in, the proceeding initiated by the Company;

and the Board has filed a cross-application for entorce-

ment of ats order. The cases have been consolidated for

the purposes of briefing and argument.

Because we hold that the management trustee of

this Union's pension and welfare fund is a collective bar-

gaining representative within the meaning of Section

8b) 1)(B). we conclude that the Union violated the Act

by striking to obtain Amax’s participation in the fund

whose management trustec is not selected by Amax. We

also conclude that the Union bargained to impasse on

two clauses that were not mandatory subjects of bar-

yaining. Accordingly, the Company’s petition for review

will be granted and the Board's cross-application for en-

forcement of its order will be denied insofar as they re-

late to the trust fund representatives and to the “en-

abling” and “coal lands” clauses. The Union's petition

for review will be denied.

1. FACTUAL BACKGROUND

Amax Coal Company, a division of Amax, Inc., 1s in

the business of operating coal mines, primarily bitumi-

nous coal mines in the midwestern United States. It bar-

gains with the United Mine Workers of America (the

Union or the UMWA) for its midwestern mines as a

member of the Bituminous Coal Operators Association

(BCOA). In 1972, Amax opened the Belle Avr Mine in

Gillette. Wyoming, its first sub-bituminous surface

mine. and agreed to a contract with the Union covering

that mine. The contract contained most of the same

terms as the national BCOA contract. The BCOA con-

tract. and the similar contracts signed by the western

surface mines, were scheduled to terminate on Novem-

ber 12. 1974.

In 1974, the Union decided to seek contract terms

for the western mines that would depart significantly

from the BCOA's present contract terms. The Union

proposed that a multi-employer bargaining group be

formed by the western mining companies, Those com-

panies that agreed to bargain through a multi-emplover

association were to be granted sixty day extensions ol

their contracts. Amax’s request for this sixty day exten-

sion was rejected by the Union. Additionally, the Union

made clear that it viewed Amax as a member of the

multi-employer bargaining association and warned that

“li]f you don’t get into this association, you are going to

have problems everywhere. You know how coal miners

are.” App., at 38a. Amax thereafter filed the initial unfair

labor practice charge in this cas? alleging. inter alia.

that the Union's refusal to bargain separately with Amax

violated the Act.

Amax made two more unsuccessful attempts to ini-

tiate bargaining with the Union. On January 11. Amax

negotiators hand-delivered a new contract offer to

UMWA’'s General Counsel Joseph Yablonski in a last

minute effort to avoid the strike scheduled for the next

day. Yablonski refused even to meet with them and. on

January 12, the Union struck Amax and the other west-

ern mines as scheduled. On January 18, Amax sent the

Union a telegram requesting negotiations; this request

was ignored. Upon learning that the Board's General

Counsel intended to seek an injunction against the

Union’s conduct, Yablonski agreed to meet separately

with Amax and to submit to Amax the new contract pro-

posal that the Union had prepared for its other

negctiations. ' )

The parties held eight negotiating sessions between

February 3 and February 18. Although they reached

tentative agreements on more than forty items included

in the Union's proposal and the Union agreed to accom-

1. The proposal was submitted to Amax and to the

multi-employer bargaining group, the Peabody Group. on January

24, and to the Pittsburgh & Midway Coal Company (P & M) about a

week earlier. The Unioi had braken off negotiations with the Pea

body Group on January 15 because of lack of progress, but had con

tinued negotiating with P & M.

modate Amax on several items, the parties remained far

apart on many basic issues. Three more unsuccessful

meetings were held between February 26 and March 7.”

On March 14, Elkins Payne, Amax’s Vice-President,

and Daniel Gruender, Amax’s attorney, met with Daniel

Edelman, the Union’s negotiator, and presented him

with a complete contract proposal, which Payne stated

was Amax’s final offer.* Payne stated that this was a

package proposal, and that the Union must either accept

or reject the entire package. He also emphasized that

unless the Union agreed to accept the entire final pro-

posal by the close of the business day on March 17 Amax

would consider the proposal rejected and would ee

to implement its terms.

The Union’s bargaining council did not begin con-

sidering Amax’s proposal until the afternoon of March

17 and had not reached a final decision by the end of the

day. Amax considered the Union’s failure to accept the

proposal as a rejection. Within the next week, the Belle

Ayr Mine was again in operation under the terms of

Amax’s final proposal. On April 11, the Union formally

rejected Amax’s proposal.

The parties had only one negotiating session during

the three months following Amax’s implementation of

2. During the February 26 meeting, the Union submitted as its

new contract proposal the agreement it had reached with the Pea-

body Group on February 22. On March 4, the parties met with a fed-

eral mediator. The Union suggested that a “memorandum of under-

standing” be used to clarify the intent of some contractual

provisions and to accommodate any peculiar conditions at the Belle

Ayr mine. Amax Vice-President Elkins Payne met separately with

Union negotiator Daniel Edelman on March 7 io explore further the

possibility of using a “memorandum of understanding” to iron out

some of their differences.

3. The new proposal modified more than forty sections of

Amax’s previous proposal to conform to the Peabody contract and

changed additional sections to agree substantially with it. The re-

mainder of the new proposal was virtually unchanged and those

new items were minor.

its final proposal. Although all of the major issues were

discussed during this meeting on May 28. no progress

was made.! Neither party made anv concessions.

Following an unofficial discussion in June with

Amax Vice-President Roger Sonnemann, Yablonski sub-

mitted a new contract proposal to the Company on July

1, that contained concessions in almost everv area of dis-

pute. The new proposal did not, however, compromise

the Union's position on the termination date. the pen-

sion and welfare funds, or the reinstatement of strikers.

On July 17, Yablonski sent a telegram to Amax

Board Chairman lan MacGregor with a copy to Pavne.

expressing his frustration at having heard nothing fror

Amax’s negotiators since he had submitted the new con-

tract proposal. The telegram further stated that if no

agreement was reached by July 22, the date set for an

Amax stockholders meeting, the Union intended to file

antitrust charges against Amax with the Federal Trade

Commission. Payne agreed to meet with Yablonski on

July 21.

Little was accomplished at the negotiations on Jul

21 and 22. Amax continued to reject all but a tew rela-

tively minor items in the Union's new proposal. On the

afternoon of July 22. the Union filed charges with the

FTC; Union representatives also picketed Amax’s

stockholders meeting and voiced their complaints about

the negotiations during the meeting. Although negotia-

tions resumed on August 7 and 8, they again proved

unproductive. On August 18 and 19 Yablonski and

4. The Union would not compromise its demand for a common

expiration date with the Peabody contract or its insistence on the

Union's multi-emplover pension fund. Amax's position was that the

Union should be interested in the level of benefits. and that the ad-

ministrative arrangements should be lett .o the Compaiy. Both p.u

ties disagreed on the question ot reinstating strikers. and Amax con

tinued to object to the clauses in the Peabody contract that it

believed to be unlawful.

Payne exchanged telegrams accusing each other of re-

sponsibility for the negotiating deadlock.

Negotiations continued sporadically through the fall

and winter of 1975. On November 14 the Union made a

new contract offer containing more concessions. The

parties made no progress toward an agreement, howev-

er, and negotiations ended in February, 1976 amid re-

ciprocal accusations of bad faith.

II], COLLECTIVE BARGAINING REPRESENTATIVES

A. Coercion of Amax to Join the Peabody Group

Section 8(b)(1)(B) makes it an unfair labor practice

for a union “to restrain or coerce .. . an employer in the

selection of his representatives for the purposes of

collective bargaining... .” 29 U.S.C. §158(b)(1)(B). The

Board found that “by attempting to compel [Amexj to re-

linquish its right to negotiate independently and instead

negotiate through a multi-employer association, the

Union engaged in a classic example of the type of con-

duct which Congress sought to proscribe in enacting

Section 8(b)(1)(B) of the Act.” 238 N.L.R.B. No. 214 at

12-13. (footnote omitted). Substantial evidence supports

this conclusion.

On November 2, 1974, Arnold Miller, the Union’s

President, sent identical letters to each of the twelve

western mining companies whose employees were rep-

resented by the Union, explaining the Union’s new ap-

proach to western bargaining and proposing that the

mining companies execute ‘‘a single successor

Sub-bituminous and Lignite Agreement.” App., at 353a

(iii). The letters also stated, “Contingent upon your as-

sent to our proposal, the UMWA offers to exiend the

present Agreement with your company for a period of

sixty days beyond November 12, 1974.” Id.

On November 6, Hollie Hopper, Amax’s President,

responded that Amax would be unable to bargain with

the Union until the Board disposed of a representation

petition at the Belle Avr Mine filed by another union. A

few days later. Amax Vice President Payne telephoned

Miller’s assistant, Ed James. to confirm this position.

Payne told James that Amax preferred to bargain inde-

pendently for the Belle Ayr Mine, and asked whether it

could receive the sixty day contract extension without

joining the multi-employer group. James replied that

unless Amax joined the employer association it would

not get the two month extension; but he promised to

look into the possibility of extending Amax’s contract

until after the pending representation election. The

Union subsequently notified Amax that it would extend

the contract thirty days, to December 12.

On November 23, the day after the UMWA won the

representation election at the Beile Ayr Mine, Payne

drafted a letter to the Union, for Hopper’s signature, to

explain the conditions under which Amax would consid-

er joining the multi-emplover association, the Peabody

group.” However, because he felt he could better explain

in person, his concerns over the amount of influence

Amax would exert within the Peabody Group, Payne ar-

ranged for a meeting with Union officials instead of

mailing the letter.

On November 25, Payne and Hopper met with

James and UMWA's General Counsel, Yablonski. Pavne

explained that Amax was reluctant to join the Peabody

Group because it elt that the Group's voting procedures

were unfair to it.” At the end of the meeting Pavne said

that after Amax discusses its problems with the Peabody

5. Four of the western mining companies had agreed to the

Union's proposal and formed a multi-emplover bargaining group.

called “the Peabody Group”, after its largest member. the Peabody

Coal Company.

6. Voting in the Peabody Group was weighted according to the

amount of coal currently produced by each mine. Amax’'s vote

would be based on its current output of about 500.000 tons. even

though it would be producing almost 20 million tons before the con-

tract term ended.

Group. it would notify the Union whether or not it would

join the Peabody Group. Later that day. Payne mailed

the letter he had drafted on November 23. without

changing the date on the letter. The letter stated that

Amax was “considering participation” in the Peabody

Group, and requested that Miller sign and return a copy

of the letter thus indicating his agreement with the fol-

lowing three conditions: another extension of Amax’s

contract to January 12, 1975; an individually executed

contract covering only the Belle Ayr unit; and the reten-

tion of Amax’s right to bargain independently in the fu-

ture. App.. at 362a-63a. The letter stated further that

after Miller's confirmation was received, Amax would

contact the Peabody Group in order to “resolve any other

problems” relating to Amax joining the Group. After

signing the November 23 letter, Miller telegraphed

Amax that he had signed the “letter of agreement” and

was extending Amax’s contract to Januarv 12, 1975.

After receiving Miller’s telegram, Payne informed

Yablonski that Amax had been unable to come to terms

with the Peabody Group and thus intended to bargain

separately for the Belle Ayr Mine. The Company and

Union representatives then discussed their respective

contract objectives, and Amax agreed to provide infor-

mation requested by the Union. At the conclusion of the

meeting. Amax Vice President Sonnemann reiterat d

Amax’s decision to bargain independently. Yablonski ac-

knowledged this statement by nodding his head.

Payne wrote to Yablonski the next day confirming

the tentative arrangements made at the meeting con-

cerning the upcoming neyotiations for the Belle Ayr

Mine. Having received no reply to his letter, Payne

phoned Yablonski on December 30 and was informed

that Yablonski considered Amax to be a member of the

Peabody Group.’ Payne immediately telegraphed

7 Neyotiations between the Union and the Peabody Group be-

yun on December 20. 1974. The Union presented no evidence that

the Peabody Group ever claimed to represent Amax.

10a

Yablonski that Amux intended to “bargain with the

UMWA for the Belle Ayr Mine operation independent-

ly.” App., at 368a.

On January 6, 1975, a UMWA delegation headed by

International Vice President Michael Trbovich met with

Amax’s bargaining team. Each party’s proposal differed

substantially from the others’ and each sought signifi-

cant changes fre the terms of the 1971 contract. After

discussing the Union proposal, the meeting adjourned.

James :arketti, Director of western organizing for

the Union, opened the January 7 meeting by announc-

ing that the Union would not negotiate a separate con-

tract for the Belle Ayr Mine and that they were meeting

separately with Amax for informational purposes only

and not to negotiate. He stated that Amax would be

bound by any contract executed by the Peabody Group.

An argument on this question ensued, after which the

parties agreed to review Amax's proposals without

waiving their positions on bargaining. At the end of the

meeting, Marketti stated that the Union would strike

Amax when the contract extension expired January 12

unless the Union reached agreerment with the Peabody

Group, and he warned Payne, “If you don’t get into this

association, you are going to have problems everywhere.

You know how coal miners are.’ In response to an in-

quiry whether this was a threat to strike Amax’s mid-

western mines, Trbovich staced, “You know exactly

what we are talking about.” App., at 38a, 64a. On Janu-

ary 8, Yablonski confirmed by letter the Union's refusal

to bargain separately wit.: Amax stating:

The UMWA expressly and unequivocally rejects

your purported withdrawal from the Peabody

Group, and we expect you to be bound by any agree-

ment which we may reach in those negotiations.

App., at 368a(ii).

Despite this, the Union argues that its conduct was

lawful because it contends Amax joined the Peabody

lla

Group on November 23 and thereafter failed to serve

adequate notice of withdrawal prior to the commence-

ment of multi-employer negotiations on December 20,

1974. We disagree.

First, the test of membership in a multi-employer

bargaining group is whether the employer has “indicat-

ed from the outset an unequivocal intention to be bound

in collective bargaining by group rather than individual

action.” NLRB v. Dover Tavern Owners’ Assn, 412 F.2d

725. 727 (3d Cir. 1969) quoting Western States Region-

al Council No. 3 v. NLRB, 398 F.2d 770, 773 (D.C.Cir.

1968). The Board tound that the November 23 letter did

not indicate an unequivocal intention to be bound by

vroup action since it predicated Amax’s participation in

the Peabody Group on two independent conditions: 1)

that Miller agree to the three conditions stated in the let-

ter and 2) that the Peabody Group agree to a satisfactory

arrangement for allocation of voting rights within the

Group. The second condition was not fulfilled. The

Board's findings are supported by substantial evidence.

Second, the Board found that even if Amax agreed

to be bound by the multi-employer negotiations on No-

vember 23, Payne’s December 18 letter plainly stated

Amax’s intention to bargain individually with the Union

for a separate contract covering only the Belle Ayr mine.

Since Amax clearly disassociated itself from the Peabody

Group in timely fashion, the Union’s subsequent strike,

which was designed to force Amax to join the Peabody

Group, violated Sections 8(b)(1)(B) and 8(b)(4)(A).® 29

U.S.C. §§158(b)(1)(B), 158(b)(4)(A).

Finally, substantial evidence supports the Board's

conclusion that the Union's refusal to negotiate with

Amax from January 7, 1975 to February 3, 1975, while

% Section 8(b»4A) proscribes strikes and other coercive

conduct by Unions where “an object thereof is: (A) forcing or re-

quiring any employer... to join anv... employer organization ....”

29 U.S.C. §1580h 4 (A).

12a

insisting that Amax would be bound by the Peabody ne-

gotiations. violated Section 8(b)(3). 29 U.S.¢

§ 158(b 03).

B. Teust Fund Representatives

Amax argues that the Union’s conduct in insisting

to impasse and striking subsequently to obtain Amax’s

participation in the Union's pension and welfare trust

funds. whose management trustee is not selected by

Amax, is coercion in the selection of a representative for

the purposes of collective bargaining in violation of Sec-

tions 8(b)¢1)(B) and 8(b)(3). We are thus asked to de-

cide whether employer trustees of a Section 302(c)

Taft-Hartley Trust are collective bargaining representa-

tives within the meaning of Sectign 8(b)(1)(B). The

Board, relying on its decision in Cen.ral Florida Sheet

Metal Contractors Assoc., Inc., 234 N.L.R.B. No. 162

(1978). held that the trust fund’s management trustee is

not a collective bargaining representative within the

meaning af Section 8(b)(1)(B).

In Central Florida, the Board concluded that the

trustees of a jointly administered, multi-emplover trust

fund are solely fiduciaries, owing undivided loyalty to

the beneficiaries of such a plan, and are not, therefore.

collective ‘bargaining representatives. The Board ex-

pressly referred to and rejected this Court's decision in

Associated Contractors of Essex County, Inc. v. Labor-

ers Int. Union, 559 F.2d 222 (3d Cir. 1977). 234 NLRB

at 1247 n.31.

In Associated Contractors, this Court considered

whether the Taft-Hartley Act’s objective of equal repre-

sentation by employer and employee trustees on the

board of welfare and pension funds “is thwarted when

the employer trustees represent two rival associations.”

559 F.2d at 223. We held that the equal representation

clause was violated when trustees, representing a rival

association not a party to the original trust agreement.

13a

were added to the board without the consent of the origi-

nal employer association. The amendments in that case

were found to create the potential for abuse and combi-

nation of alliances placing the union in a dominant posi-

tion — four were union trustees, two were original em-

ployer trustees, and two were employer rival trustees.

This Court, through Judge Rosenn, reviewed the

law of equal representation. Relying on Arroyo v. United

States, 359 U.S. 419, 425-26 (1959), we noted that Sec-

tion 302 was enacted to prevent “the possible abuse by

union officials of the power which they might achieve if

welfare funds were left to their sole control.” 559 F.2d at

226. Thus, the requirement of equal employer-employee

representation in the joint administration of trust funds

was central to the congressional scheme set forth in Sec-

tion 302. The Court stated:

The starting point for analysis must be the can-

did recognition that the relationship between em-

ployer and employee trustees of an employee benefit

trust fund is quasi-adversarial in nature. Naturally,

the trustees of such a trust fund function as fidu-

ciaries for the funds’ beneficiaries but they also

serve as representatives of the parties who appoint

them. Insofar as it is consistent with their fiduciary

obligations, employer trustees are expected to ad-

vance the interests of the employer while employee

trustees are expected to further the concerns of the

union in the ongoing collective bargaining process

between them. See Lamb v. Carey, 162 U.S.

App.D.C. 247, 498 F.2d 789, 793 (1974); Toensing

v. Brown, 374 F.Supp. 191 (N.D.Cal. 1974), affd,

528 F.2d 69 (9th Cir. 1975); Goetz, Developing Fed-

eral Labor Law of Welfare and Pension Plans, 55

Cornell L.Rev. 901, 921 et seq. (1970). The trust-

ees’ efforts to improve the position of the parties

they represent are completely legitimate—indeed,

they are essential to the operation of section

14a

302(c)(5). Congress envisioned the conflict of views

of employer and employee as a distilling process

which would provide safeguards against trust fund

corruption.

559 F.2d at 227-28.

The logic and holding of this court’s opinion in As-

sociated Contractors are equally applicable to the facts

of this case. Accordingly, we hold that the Union's con-

duct in insisting to impasse and striking to obtain

Amax’s participation in the Union's pension and trust

fund violates Sections 8(b)(1)(B) and 8(b)(3).

C. Joint Training Committee

The Board concluded that the Union did not violate

Section 8(b)(1)(B) or 8(b)(3) by insisting to impasse for

the establishment of a committee to develop adequate

safety training programs for employees. Amax argues

that because the Joint Training Committee would have

members appointed by other western mining compa-

nies, the Union’s demand for the committee was an at-

tempt to coerce Amax in the choice of its collective bar-

gaining representatives. Because the Committee's

function is merely advisory, they are not collective bar-

gaining representatives within Section 8(b)(1)(B).

Article XV of the Union’s January 27 contract pro-

posal provided for the establishment of a Joint Western

Surface Mining Industry Training Committee composed

of three union representatives and three employer repre-

sentatives “appointed by the Employers.” It further pro-

vided that each side would also assign a full time

“trained representative” to assist “the Committee and

the employers signatory hereto in developing and imple-

menting the various training programs provided for

herein.” The Article also set forth the types of training

programs required with minimum standards for each.

specifically providing that each program “shall be devel-

oped by the Employer [Amax].” App., at 105a.

15a

The Board reasonably concluded that since the con-

tract clause specifically reserved to the particular em-

ployer involved the right to develop the actual training

program to be implemented at its mine the function of

the Joint Committee must be merely advisory. Although

the training programs referred to in Article XV, Sections

(b) - (f) of the Union proposals are to have certain mini-

mum standards, they are all programs in which Amax

was in control, with power to put the programs into ef-

fect or not. The training representatives have no power

to do more than advise and recommend.

Amax also raises the same issues with regard to the

Mine Health and Safety Committee. Article III(c) states,

“(T]he Union and Employer shall jointly establish and

fund a course of health and safety training for members

of the Mine Health and Safety Committee . . . The train-

ing program shall be established by the Joint Western

Surface Mining Industry Training Committee.” App., at

106a. The Board concluded that Article III(c)(2), even if

not properly before it, should be interpreted consistently

with Article XV and thus there is no question that the

committee members are not collective bargaining

agents. Moreover, the Safety Committee is composed of

employees chosen by the Union and Section 8(b)(1)(B)

prevents the Union from interfering in the selection of

the employer’s bargaining representative—not the

union’s. Accordingly, we will not disturb the Board's or-

der on this issue.

D. The District Agreements

Article I of the Union's contract proposal would

have carried forward any District Agreements to which

Amax was a party.® Amax argues that this clause vio-

lates Section 8(b)(1)(B) because it requires Amax to ac-

cept as its bargaining representative persons represent-

9. District Agreements are local agreements between a district

of the Union and a local group of employers.

l6a

ing associa..ons of other employers in other units who

negotiated or would negotiate changes in the District

Agreements. The Board concluded that the Union had

not insisted on this clause to impasse and therefore there

was no violation. Substantial evidence supports this

finding.

On January 6, Amax negotiators objected to this

proposal believing it would bind Amax to agreements ne-

gotiated by other employers in the area, the contents of

which Amax had no knowledge. On February 26, how-

ever, Union negotiator Edelman produced copies of the

District Agreements for the Amax negotiators and as-

sured them that since Amax was not a party to any of

them, the proposed contract clause would have no effect

upon Amax. During his March 7 meeting with Payne,

Edelman offered to reduce this assurance to writing in

the form of a memorandum of understanding that would

be included as an addendum to the contract. Although

the Union left the proposed clause on the table until No-

vember 14, there was almost no further discussion of it,

and neither party thereafter indicated that it was a sig-

nificant problem.

III. NONMANDATORY CONTRACT PROPOSALS

A. Coal Lands and Enabling Clauses

Amax argues that the Union barzained to impasse

on two clauses that were not mandatory subjects of bar-

gaining and thus violated Sections 8(a)(5) and 8(b)(3).

The Enabling Clause would require Amax, during the

term of the Belle Ayr contract, to agree to the same con-

tract terms for any of its other sub-bituminous mines

whose employees selected the UMWA to bargain for

them.'° The Coal Lands clause made it clear that Amax

10. The Enabling Clause provided:

This agreement. . . covers the sub-bituminous coal or lig-

nite mines owned or operated by [Amax].

17a

would have to do this for other facilities whether they

were already in operation at the time the Belle Ayr con-

tract was signed or were acquired and put into produc-

tion during the term of the Belle Ayr contract.'' The Ad-

ministrative Law Judge (ALJ) held the two clauses were

nonmandatory subjects of bargaining. Relying on its de-

cision in UMWA and Lone Star Steel Co. and Surface In-

dustries, Inc., 231 N.L.R.B. No. 88 (1977), the Board

disagreed and held the clauses to be mandatory subjects

and held that the Union's insistence to impasse on them

was not in violation of 8(b)(3). It stated:

In view of the foregoing, we conclude that both

the enabling clause and the application-of-contract

clause merely seek to preserve the employment

opportunities of the employees in the existing unit

by ensuring that the employees of any other opera-

tion put into production by the Charging Party dur-

ing the term of the proposed agreement, for whom

the Union has obtained bargaining rights, will re-

ceive the same wages and benefits as the employees

NOTE 10 — (Continued)

In the November proposal, the coal lands clause was deleted entire-

ly and the Enabling Clause was changed to read:

This agreement covers [Amax's} Belle Ayr Mine and

all other western sub-bituminous and lignite mines, coal

lands, coal producing and coal preparation facilities,

owned or operated or held under lease by it, or by any sub-

sidiary or affiliate at the date of this Agreement, or which

may hereafter (during the term of this Agreement) be put

into production or use on the leases attached hereto as Ad-

dendum A.

11. The Coal Lands Clause provided:

(f). . . this agreement covers the operator of all coal lands. coal

_ producing and coal preparation facilities owned or held under

lease by [Amax], or by any subsidiary or affiliate at the date of

this agreement or acquired during its term which may hereaf-

ter (during the term of this agreement) be put into production

or use.

18a

at the Belle Ayr Mine. In this manner, as the Board

noted in Lone Star Steel Company. both clauses

serve to “removie] the economic incentive which

might otherwise encourage |the Charging Party] to

transfer. . . work to other mines under its control.”

Thus, it is manifest that both of the disputed propos-

als have a vital effect upon the terms and conditions

of employment of the employees at the Beile Ayr

Mine and therefore constitute mandatory subjects

for bargaining.

App., at 49a (iii) - (iv).

We cannot agree. Wii .!:er these clauses are man-

datory subjects of bargaining depends on whether they

come within the area of “wages, hours and other terms

and conditions of employment.” See NLRB v. Wooster

Division of Borg-Warner Corp., 356 U.S. 342, 349

(1958). Unlike wages and conditions of employment,

the scope of the certified bargaining unit is not a manda-

tory subject and insistence to the point of impasse on re-

striction or expansion of the bargaining unit is an unfair

labor practice. Hess Oil & Chemical Corp. v. NLRB, 415

F.2d 440 (5th Cir. 1969), cert. denied, 397 U.S. 916

(1970). The clauses at issue here would require Amax to

conduct negotiations on a basis broader than the certi-

fied unit. They would require Amax to bargain about

wages and other conditions of employment of employees

in other units.. While the Union has a valid concern in

protecting the employees against a shift of production to

another mine in order to evade the Union's standards

and wages at Belle Ayr, the clause here refers to all new

operations and is much broader than necessary to ac-

complish this goal. Indeed the clause requires that the

agreement be put into effect in toto elsewhere, includ-

ing the non-economic provisions that have no bearing on

unit employees.

We have reviewed the record and also conclude that

there are sufficient facts to support the finding that the

19a

clauses were bargained to impasse. Although there is a

fine line between work preservation and bargaining unit

expansion, the ALJ was correct in finding a violation of

Section 8(b)(3) and thus the Board’s order on this issue

will not be enforced.

B. The Exemptions Clause; the 1950 Pension Trust;

the Exclusion of Local 1854

Amax argues that the Union violated Section

8(b)(3) by insisting to impasse that Amax accept its pro-

posed exemptions clause, that Amax contribute to the

Union's 1950 Pension Fund, and that Local 1854 not be

a signatory party to the contract. These issues are plainly

not before this Court, however, because the Board de-

clined to decide either whether the parties reached im-

passe on these issues, or whether there would be a viola-

tion even if they did reach impasse on them. The only

question before the Court with respect to these proposals

is whether the Board abused its discretion in declining to

decide these issues because the General Counsel did not

include them in the complaint. In the circumstances of

this case the Board’s refusal to decide these issues was

well within its broad discretion to control the fairness of

its own proceedings.

The facts are as follows. The complaint in this case

aileged violations of Section 8(b)(3) for insisting to im-

passe on nonmandatory proposals, and then specifically

stated each proposed clause that was alleged to have

been insisted to impasse; the three clauses at issue here

were not mentioned.

Paragraph 17(k) of the complaint alleged bad-faith

bargaining. During the first two days of the hearings the

Union objected to evidence that was being offered to

show certain contract proposals as nonmandatory, but

had not been so alleged in the complaint. Because of the

quantity and complexity of the issues involved, the ALJ

made it very clear that the Charging Party, Amax, and

20a

the General Counsel would be strictly limited to the alle-

gations in the complaint. Thereatter, the General Coun-

sel’s motion to amend the complaint specifically to

include additional illegal and nonmandatory contract

proposals was granted. These three disputed clauses

were not in this amendment. The General Counsel was

also permitted to amend paragraph 17(k) to allege over-

all bad-faith bargaining. However, paragraph 17(k) was

not amended for the purpose of being a catchall for alle-

gations not specifically named in the complaint as

nonmandatory subjects. Thus paragraph 17(k) of the

Board’s complaint reads:

Respondent has refused to bargain in good faith

with the employer, has engaged in surface bargain-

ing, has negotiated with the emplover in bad faith,

has exhibited a predetermined resolve not to agree

to any proposal but their own, and has insisted upon

including nonmandatory and unlawful clAuses in

any collective bargaining agreement.

Although evidence was received on the Union's bar-

gaining position about these proposals, these issues

were not fully litigated. Thus, under the circumstances,

it was not unreasonable for the ALJ to conclude that the

Union had not received adequate noiice and to decide

these issues would deny the Union a fair trial. See

Boyle’s Famous Corned Beef Co. v. NLRB, 400 F.2d 154,

163 (8th Cir. 1968) (“General Counsel’s position. . .

would not be consonant with administrative due process

or fundamental fairness [because]. . . [where] specific

acts violative of the section are enumerated, the proof

and subsequent findings should be limited to those mat-

ters, absent amendment.” )

IV. CONTRACT PROPOSALS VIOLATIVE OF SEC-

TION &e)

Section 8(b)(4)(A) makes it an unfair labor practice

for a union to engage in a strike or other coercive con-

2la

duct where “ an object thereof is . . . forcing or requiring

any employer to enter intu any agreement” which is pro-

hibited by Section 8(e). A union violates its bargaining

duty under Section 8(b)(3) if it insists to impasse that an

employer agree to a clause which violates Section 8(e).

See NLRB v. Wooster Division of Borg-Warner, 356 U.S.

342, 349 (1958). The Board found that the union bar-

gained to impasse and struck in support of six proposed

clauses which the Board found to violate Section 8(e).

Section 8(e) makes it “an unfair labor practice for

any labor organization and any employer to enter into

any contract or agreement. . . whereby such employer

ceases or refrains or agrees. . . to cease doing business

with any other person.” In determining whether the par-

ticular clauses here violate Sections 8(e) and 8(b)(4), we

must inquire into “whether, under all the surrounding

circumstances, the Union’s objective was preservation

of work for |[Amax’s] employees, or whether the agree-

ments and boycott were tactically calculated to satisfy

union objectives elsewhere.” National Woodwork Mfrs.

Assoc. v. NLRB, 386 U.S. 612, 644 (1967).

A. Successorship Clause

The Union proposed a clause that would require

Amax to condition any sale or conveyance of its oper-

ations upon the successor’s assumption of Amax’s

obligations under the agreement. This “successorship

clause” provided:

{[Tj}his Agreement shall be binding upon all signa-

tories hereto and their successors and assigns. In

consideration of the Union’s execution of this

Agreement, each Employer promises that its oper-

ations covered by this Agreement shall not be sold,

conveyed, or otherwise transferred or assigned to

any successor without first securing the agreement

of the successor to assume the Employer's

obligations under this agreement. Provided that the

22a

k:mplover shall not be a guarantor or be held liable

for any breach by the successor or assignee of its

obligations, and the UMWA will look exclusively to

the successor or assignee for compliance with the

terms of this Agreement.

The Board concluded that this proposal was lawful,

both because the transfer of a portion of Amax mining

operations to a successor does not constitute “doing

business” within the meaning of Section 8(e), and be-

cause the effect of the clause was primary.

The phrase “doing business” refers to a continuing

business relationship which is capable of being discon-

tinued by one employer in order to force another employ-

er to accede to union demands. National Woodwork

Mfrs. A-soc. v. NLRB, 386 U.S. at 619-633. Thus, as

noted earlier, Section 8(c) was designed to protect neu-

tral employers and their employees, not involved in a la-

bor dispute, from being pressured to assist a union in a

dispute with another employer.

Here, it is clear that the sale by Amax of all or part of

its business operations would involve no continuing rela-

tionship with the purchaser. There is therefore no possi-

bility of involving Amax in a labor dispute between the

purchaser and its employees.

Amax argues, however, that the trading of dormant

coal land is a common practice in the coal industry and

that the successorship clause would affect adversely

Amax’s freedom to carry on this allegedly necessary ac-

tivity. The ALJ found otherwise:

Amax. . . operates several mines in the mid-

west, not covered by the contract negotiations in-

volved in this case, but operates only one western

mine, the Belle Avr Mine. However, Amax owns or

leases substantially more parcels of coal land than

those which make up the Belle Ayr Mine and its

midwestern mines. Amax continually purchases

coal lands but “seldom sells” coal lands, rather it

23a

continually trades coal lands which it owns or leases

for coal lands owned or leased by other coal produc-

ers. The reason for this is that, since many of the

parcels or coal leases acquired by Amax are small

and noncontiguous, it is essential for Amax to trade

these parcels for others in order to put together a

large enough contiguous block of land to support a

“viable mining plan,” one which will enable Amax

to use its land .o produce coal. In this regard, the

record establishes that Amax does not use its coal

lands to produce or process coal unless the area is

large enough to support 15 or 20 years of mining op-

erations. It is a fair inference, from the aforesaid

circumstances, that Amax’s trading of its coal

lands involves noncontiguous parcels not used by

Amax to produce or process coal since they do not

constitute a “viable mining plan.” It is also a fair

inference that coal lands which constitute a viable

mining plan such as the parcels which comprise the

Beile Ayr Mine and other facilities which are being

used to produce or process coal are seldom if ever

traded by Amax.

App.. at 122a. (emphasis added).

After reviewing the record, we conclude that the

ALJ’s findings regarding the frequency and nature of

lands traded by Amax are supported by substantial

evidence. '*

12. The Company's attempt to stretch the Enabling and Coal

Lands clauses to apply the Successorship clause to Amax's dormant

coal lands must fail. Under the Enabling and Coal Lands clauses.

the contract would only become effective with respect to those coal

lands which Amax put “into production” during the.term of the con-

‘tract, and then only after the UMWA became the recognized bar-

gaining representative at the new facility, a development which ob-

viously cannot occur until Amax has employees working there. And

as Amax concedes, until its trading of coal lands has successfully

resulted in a “viable mining plan,” it has “no reason to hire miners

to dig coal.” Brief at 35.

24a

Moreover, even if the convevance of a portion of

Amax’s coal mining operations, which is restricted by

this clause, constituted “doing business” within the

meaning of Section 8(c), the successorship clause is

nonetheless lawful because its effect is primary. The

clause was clearly designed to assure that Amax’s own

employees would retain their current contractual bene-

fits in the event that their place of employment is sold to

a new employer. The only obligation which the clause

would place on Amax is to secure the purchaser’s agree-

ment to adopt the contract before Amax sells the mining

operation to the purchaser — that is, while the employ-

ees are still Amax’s employees. Once the mining opera-

tion is actually transferred, the clause would permit the

Union to seek compliance only from the new employer,

who wou:d have stepped into Amax’s shoes and thus be-

come the primary employer of Amax’s former employees

covered by the contract. In short, since this clause

serves to benefit only Amax’s own employees, and does

not seek to enlist Amax’s aid in affecting the labor rela-

tions of anyone who is not the employer of those same

employees, the effect of the clause is primary.'”

B. “Leasing-Licensing Out” Clause

The Union next challenges the Board’s ruling that

the proposed “leasing-licensing out” clause violated Sec-

tion 8(e) because a transfer under the clause constituted

“doing business” within the meaning of Section 8(e).

13. Because the complaint in this case did not specifically al-

lege that the Successorship clause was a nonmandatory bargaining

subject apart from its legality under Section 8(e), the ALJ made no

finding with respect to that question. The Company's exceptions to

the Board relating to the ALJ's findings with respect to the

Successorship clause do not question this issue, and because it filed

no motion for reconsideration with the Board challenging the

Board’s subsequent failure to deal with it, Section 10(e), 29 U.S.C.

§ 160(e), of the Act precludes the Company from raising the issue in

this Court.

25a

Additionally, the Union argues; that even if such a-trans-

fer comes within Section 8(e), it is lawful because, by

the very nature of the coal mining business, it is a pri-

mary work perservation clause.

The Board’s conclusion is correct. The two restric-

tions on licensing out coal operations effectively control

the labor relations of the licensee employer and benefit

union members generally rather than Amax’s own em-

ployees. The union members required to perform do not

have to come from Amax. Thus the clause forces the li-

censee employer to abide by the union recognition por-

tion of the contract. it serves only the union’s organizing

interests and does not protect the Amax employees’ work

standards.

On the “doing business” issue of Section 8(e), it is

clear that the clause requires a continuing relationship

between Amax and the licensee employer that would

permit the Union to force Amax to pressure the licensee

employer to comply with Union’s future demands. Since

the clause forbids Amax from licensing out coal mining

operations absent compliance with the contract terms

for the licensee’s employees, Amax would be obliged to

discontinue the licensing agreement if the licensee ever

stopped recognizing the Union or abiding by the other

terrns of the Union’s contract with Amax.

C. Coal Transportation Clause

The coal transportation clause provided that Amax

could subcontract the transportation of its coal “only to a

contractor employing members of the UMWA under

their agreement.” The Board adopted the ruling of the

ALJ that the Union violated Sections 8(b)(4) and 8(b)(3)

by insisting to impasse and striking to obtain Amax’s

agreement to its coal transportation clause. We agree.

The clause requires that the subcontractor shall not

only agree to provide its employees with the economic

benefits of the contract, but to adhere to the

noneconomic terms as well. It also provides that Amax

*-?

26a

may contract out only to contractors who employ Union

members. To that extent, the clause seeks to aid UMWA

members generally rather than those union members

employed at the Belle Ayr Mine. The continuance of the

relationship between the signatory employer and any

contractor depends on the contractor’s decision- to em-

ploy UMWA as his employees’ bargaining representative

and not on the contractor’s maintenance of union wage

scales or conditions. Its effect is therefore secondary and

unlawful.'* See A. Duie Pyle, Inc. v. NLRB, 383 F.2d

772, 777-78 (3d Cir. 1967), cert. denied, 390 U.S. 905

(1968).

D. Repair and Maintenance Work

The ALJ found and the Board agreed that the

Union’s Repair and Maintenance Work Clause proposal

violated Section 8(e). The proposal prohibited contract-

ing out repair and maintenance work customarily per-

formed by classified employees at the mine or central

shop unless the work was performed under a manufac-

turer’s warranty or the employer did not have available

equipment or regular employees with necessary skills

available to perform the work at the mine or central

shop, “provided, however, that the work, shall be per-

formed by UMWA members to the extent and in the

manner permitted by law.” App., at 134a. The Board’s

decision will be enforced, for as this Court stated in A.

Duie Pyle, Inc. v. NLRB, 383 F.2d at 777-78:

The present provisions, to the extent that they

require the subcontractees to become employees

and members of the union, therefore must also be

14. The Union argues that the unlawful portion of the clause is

severable from the balance of the clause and therefore only that

phrase should be stricken. However, since there are no executed

contract terms here, there is no illegal agreement to render void and

no need to determine whether or not a portion of any contract clause

can be lawfully preserved.

27a

declared invalid. As in the case of secondary boy-

cotts generally, a union may not employ a collective

bargaining agreement with one employer as a

means of effectuating its object to coerce another

employer to unionize. Nor may it by this means seek

to coerce self-employed persons to become union

members. Congress had made this clear by

§8(b)(4)(A) which prohibits secondary boycotts

with an object of “forcing or requiring any employer

or self-employed person to join any labor * * * organ-

ization.” *.”.”

E. Construction Clause

The union proposed a clause that would permit

“construction of mine or mine related facilities” to be

“performed by such outside contractors as are designat-

ed by the Employer.” It provided, however, that when

such work was contracted out, it would be “under the ju-

risdiction of the UMWA” unless “UMWA contractors

qualified to do the work are not available.” Additionally,

the Union’s proposal specified that if a dispute arose over

Amax’s use of a non-UMWA contractor, Amax would

have the burden of proving “that the UMWA contractors

qualified to do the work are not available.” .

For the reasons given in connection with the “coal

transportation” and “leasing-licensing out” clauses, the

ALJ concluded that this clause was a “union signatory”

agreement which violated Section 8(e). We agree. This

clause prohibits Amax from subcontracting to a

non-U MWA subcontractor even if he maintains working

conditions equivalent to Amax’s. It only serves the

union’s own interest in making sure the subcontractor

recognizes the Union, and does not provide any benefit

to Amax’s employees.

F. Work Jurisdiction Clause

The Union’s work jurisdiction clause specified that

“contracting, subcontracting, leasing and subleasing

28a

and consiruction work” wouid be “conducted in accord-

ance with” the requirements of other clauses. The Board

found that to the extent that this clause would require

Amax to comply with the other clauses found to be il-

legal, the work jurisdiction clause was equally unlawful.

We agree. Since the work jurisdiction clause incorpo-

rates the other illegal clauses, it likewise violates Section

8(e).

V. FAILURE TO NOTIFY THE FEDERAL MEDIATION

AND CONCILIATION SERVICE

Section 8(d)(1) prohibits a party to a collective bar-

gaining agreement from modifying or terminating the

agreement without serving written notice on the other

party sixty days prior to the expiration date. Sections

8(d)(3) and (4) require a party to a collective bargaining

agreement to notify the Federal Mediation and Concilia-

tion Service (F MCS) within thirty days after such notice

of the existence of a dispute and to refrain from striking

within the sixty days after such notice has been given.

Although Section 8(d)(1) specifically mentions written

notice and Section 8(d)(3) does not, the FMCS regula-

tions do require written notice. 29 C.F.R. §1402.1.

The Board found that the UMWA failed to give oral

or written notice to the FMCS as required by Section

8(d)(3) and therefore violated Section 8(b)(3) of the Act

by striking without complying with Section 8(d). The

UMWA argues that there was implicit written notice,

that even if no written notice was given, none is required

under the statute, that oral notice was given, and that

even if no oral notice was given, actual knowledge of the

‘dispute is sufficient. Substantial evidence supports the

findings that there was no written or oral notice.

On September 11, 1974 and October 17, 1974, the

Union notified the Federal Mediation and Conciliation

Service by letter that it was terminating the 1971 Na-

tional Bituminous Coal Wage Agreement and that it in-

29a

tended to bargain with the employers who were parties

to those agreements, either as members of the relevant

employers’ association or as independent signatories. At-

tachments to the letter of September 11, 1974 specifical-

ly referred to the Union’s negotiations with the BCOA —

the employer association that negotiated the National Bi-

tuminous Coal Wage Agreement — and with the Associ-

ation of Bituminous Contractors and included sample

form letters addressed to “All Independent Signatories”

of the 1971 Agreement and the 1972 Coal Mine Con-

struction Agreement. Nothing was said, however, con-

cerning the existence of a contractual dispute between

the Union and Amax over the Belle Ayr Mine. The

Union concedes that its letter and attachments never

specifically mention the dispute with Amax over the

Belle Ayr Mine. Brief of UMWA at 69. It argues, howev-

er, that Section 8(d)(3) does not require written notice.

Nonetheless, even if this were a correct interpretation of

Section 8(d)(3), there is virtually no evidence to support

the Union’s allegation of oral notification. The evidence

referred to only indicates an informal chat between an

FMCS mediator and Yablonski without specific mention

of Belle Ayr. As a result, the Board was correct to con-

chude that it was unnecessary to decide whether written

notice was required because no oral notice had been

given.

Finally, the Union argues that even if it failed to

give the FMCS any notice of the Belle Ayr dispute, Sec-

tion 8(d)(3) is satisfied if the FMCS independently ob-

tained “actual knowledge” of the dispute from other

sources. We disagree. Nothing m the statute or in the

relevant case law relieves the Union of its statutory duty

to notify the FMCS. The purpose of Section 8(d)3) is “to

increase the likelihood that the mediation services will

have sufficient time to intervene. The method Congress

chose to serve this purpose was to assign to one party,

the initiating party, a fixed and definite responsibility for

30a

notifying the mediation services.” Hooker Chemicals &

Plastics Corp. v. NLRB, 573 F.2d 965, 970 (7th Cir.

1978). This purpose is not fulfilled when the FMCS hap-

pens to find out about a dispute on its own.

VI. OVERALL FAILURE TO BARGAIN IN GOOD

FAITH

Amax charged the Union with a failure to bargain in

good faith and the Union raised the same claim against

Amax as an affirmative defense. The Board held that

neither party had engaged in bad faith bargaining. Ex-

cept for that conduct which we found to constitute viola-

tions of the Act, we conclude that as to the remaining

issues the Board’s finding that neither party engaged in

bad faith bargaining is supported by substantial

evidence.

VII.

For the foregoing reasons the company’s petition for

review will be granted and enlorcement of the Board’s

order will be denied insofar as it relates to the trust fund

representatives and to the “enabling” and “coal lands”

clauses. The Union’s petition for review will be denied.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

3la

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 78-2310

AMAX COAL COMPANY, A Division of AM AX, INC.,

Petitioner

NATIONAL LABOR RELATIONS BOARD,

Respondent

UNITED MINE WORKERS OF AMERICA,

LOCAL NO. 1854, and

UNITED MINE WORKERS OF AMERICA,

Intervenors

No. 78-2489

UNITED MINEWORKERS OF AMERICA,

LOCAL NO. 1854 and

UNITED MINE WORKERS OF AMERICA,

Petitioners

NATIONAL LABOR RELATIONS BOARD,

Respondent

AMAX COAL COMPANY, A Division of AMAX, INC..,

Intervenor

PETITIONS FOR REVIEW OF AN ORDER OF THE

NATIONAL LABOR RELATIONS BOARD and

CROSS-APPLICATION FOR ENFORCEMENT

32a

Argued October 18, 1979

Before: GIBBONS,* HIGGINBOTHAM, Circuit Judges

and ZIEGLER, District Judge**

ORDER AMENDING SLIP OPINION

It is ordered that the slip opinion in the above-

entitled cases filed February 1, 1980, be amended as

follows:

Page 2 - insert “PHILIP M. PRINCE, ESQUIRE”

after “DANIEL F. GRUENDER, ESQUIRE (Argued).”

By the Court:

A. LEON HIGGINBOTHAM, JR.

Circuit Judge

Dated: February 12, 1980

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

*Judge Gibbons did not participate in the decision of the court, al-

though he heard oral argument.

**Honorable Donald E. Ziegler of the United States District Court

for the Western District of Pennsylvania, sitting by designation.

33a

APPENDIX B

Iu the United States Court of Appeals

FOR THE THIRD CIRCUIT

No. 78-2310

AMAX COAL COMPANY, A DIVISION OF AMAX, INC.,

PETITIONER

Vv.

NATIONAL LABOR RELATIONS BOARD, RESPONDENT

UNITED MINE WORKERS OF AMERICA, LOCAL No. 1854,

AND UNITED MINE WORKERS OF AMERICA, INTERVENORS

~~ "No, 78-2489

UNITED MINE WORKERS OF AMERICA, LOCAL No. 1854

AND UNITED MINE WORKERS OF AMERICA, PETITIONERS,

Vv.

NATIONAL LABOR RELATIONS BOARD, RESPONDENT

AMAX COAL COMPANY, A DIVISION OF AMAX, INC., IN-

TERVENOR.

JUDGMENT

Before: GIBBONS, * HIGGINBOTHAM, Circuit Judges and

ZIEGLER, District Judge**

*Judge Gibbons did not participate in the decision of the Court, al-

though he heard oral argument.

** Honorable Donald E. Ziegler of the United States District Court

for the Western District of Pennsylvania, sitting by designation.

34a

THIS CAUSE came on to be heard upon petitions filed

by United Mine Workers of America, and United Mine

Workers of America, Local 1854, and Amax Coal Com-

pany, to review an order of the National Labor Relations

Board issued against United Mine Workers of America,

Local No. 1854, and United Mine Workers of America,

their officers, agents, and representatives on Sep-

tember 29, 1978, and upon a cross-application filed by the

National Labor Relations Board to enforce said Order.

The Court heard argument of respective counsel on Oc-

tober 18, 1979, and has considered the briefs and tran-

script of record filed in this cause. On February 1, 1980,

the Court being fully advised in the premises, handed

down its decision granting the company’s petition for re-

view; denying enforcement of the Board’s order as it re-

lates to the trust fund representatives and to the “en-

abling” and “coal lands” clauses and denying the Union’s

petition for review. In conformity therewith, it is hereby

ORDERED AND ADJUDGED by the Court that:

Petitioners, United Mine Workers of America and

United Mine Workers of America, Local 1854, their offi-

cers, agents, and representatives, shall:

1. Cease and desist from:

(a) Refusing to bargain collectively with Amax Coal

Company by failing to give notice of the existence of any

dispute between it and the Company, involving the bar-

gaining unit described hereinabove, to the Federal Media-

tion and Conciliation Service as required by Section 8(d)(3)

of the Act, and by failing to continue in full force and ef-

fect without resorting to strike all the terms and condi-

tions of any existing contract pursuant to Section 8(d)(4) of

the National Labor Relations Act (hereinafter called the

Act).

(b) Engaging in, calling or causing the employees in

the appropriate unit described hereinabove to engaged in a

strike for the purpose of modifying or terminating a

collective-bargaining agreement, without first having

complied with the requirements of Section 8(d) of the Act.

35a

in the selection of its representatives for the purpose of

negotiating a collective-bargaining agreement covering the

bargaining unit described herein.

(d) Engaging in, calling or causing the employees in

the appropriate unit described herein to engage in, a

strike in order to compel Amax Coal Company to bargain

through a multiemployer association.

(e) Refusing to bargain collectively by failing and re-

fusing to meet with Amax Coal Company for the purpose

of negotiating a collective-bargaining agreement covering

the bargaining unit described hereinabove.

(f) Refusing to bargain collectively by insisting to the

point of impasse that Amax Coal Company accept the fol-

lowing clauses: leasing, subleasing, and licensing out of

coal lands; contracting and subcontracting of the transpor-

tation of coal; contracting and subcontracting of repair and

maintenance work; construction work; and work jurisdic-

tion, all of which are prohibited by Section 8(e) of the Act,

in any collective-bargaining agreement covering the em-

ployees in the bargaining unit described hereinabove.

(g) Refusing to bargain collectively with Amax Coal

Company by striking for the purpose of forcing inclusion of

the following clauses: leasing, subleasing, and licensing

out of coal lands; contracting and subcontracting of the

transportation of coal; contracting and subcontracting of

repair and maintenance work; construction work; and

work jurisdiction, all of which are prohibited by Section

8(e) of the Act, in any collective-bargaining agreement

covering employees in the bargaining unit described

hereinabove.

(h) Refusing to bargain collectively by insisting to the

point of impasse that Amax Coal Company accept the fol-

lowing clauses: enabling an application of contract to coal

lands, which are nonmandatory subjects of bargaining.

(i) Inducing or encouraging any individuals employed

by Amax Coal Company to engage in a strike or refusal in

the course of his employment to use, manufacture, proc-

36a

ess, transport, or otherwise handle or work on any goods,

articles, materials, or commodities, or to perform any

services or threatening, coercing, or restraining Amax

Coal Company by picketing or causing a work stoppage, or

otherwise, where, in either case, an object thereof is to

force or require Amax Coal Company, in connection with

its Belle Ayr Mine, to enter into any contract or agree-

ment containing the above-described clauses, which are

prohibited by Section 8(e) of the Act.

(j) Restraining or coercing Amax Coal Company in

the selection of its collective bargaining representative by

insisting to the point of impasse that Amax Coal Company

participate in the UMWA’s multi-employer pension and

welfare funds.

(k) Restraining or coercing employees in the exercise

of their rights guaranteed Section 7 of the Act.

2. Take the following affirmative action designed to ef-

fectuate the policies of the Act:

(a) Post at their business offices and meeting halls

copies of the attached notice marked “Appendix.” Copies

of said notice, on forms to be provided by the. Regional

Director for Region 27, (Denver, Colorado) of the National

Labor Relations Board shall, after being duly signed by

representatives of Petitioners, be posted by Petitioners

immediately upon receipt thereof, and be maintained by

them for 60 consecutive days thereafter, in conspicuous

places, including all places where notices to members are

customarily posted. Reasonable steps shall be taken by

Petitioners to insure that said notices are not altered, de-

faced or covered by any other material.

(b) Sign and mail sufficient copies of said notice to the

Regional Director for forwarding to Amax Coal Company

for information and, if it is willing, for posting by it in all

locations where notices to its employees in the unit de-

scribed hereinabove are customarily posted.

within 20 days from the date of this judgment what steps

Petitioners have taken to comply herewith.

37a

IT IS FURTHER ORDERED that each party shall bear

its own costs.

By THE COURT

/s/

A Leon Higginbotham

Circuit Judge

DATED: APRIL 3, 1980

38a

APPENDIX

NOTICE TO MEMBERS

POSTED PURSUANT TO A JUDGMENT OF THE

UNITED STATES COURT OF APPEALS ENFORCING

AN ORDER OF THE NATIONAL LABOR RELA-

TIONS BOARD

An Agency of the United States Government

WE WILL NOT refuse to bargain collectively with

Amax Coal Company by failing to give notice of the exist-

ence of any dispute between United Mine Workers of

America, Local No. 1854, and United Mine Workers of

America, and the Company, involving the bargaining unit

described below, to the Federal Mediation and Concilia-

tion Service as required by Section 8(d)(3) of the Act, and

by failing to continue in full force and effect without re-

sorting to strike all the terms and conditions of any exist-

ing contract pursuant to Section 8(d)(4) of the Act. The

bargaining unit is:

All production and maintenance employees employed

by the Amax Coal Company, at its Belle Ayr Mine

near Gillette, Wyoming; but excluding office clerical

employees, professional employees, guards and

supervisors as defined in the Act.

WE WILL NOT engage in, call, or cause the employees

in the appropriate unit described above to engage in, a

strike for the purpose of modifying or terminating a

collective-bargaining agreement, without first having

complied with the requirements of Section 8(d) of the Act.

WE WILL NOT restrain or coerce the Amax Coal Com-

pany in the selection of its representatives for the purpose

of negotiating a collective-bargaining agreement covering

the bargaining unit described above.

WE WILL NOT engage in, call, or cause the employees

in the aforesaid appropriate unit to engage in, a strike in

order to compel Amax Coal Company to bargain through a

multiemployer association.

° 39a

WE WILL NOT refuse to bargain collectively by failing

and refusing to meet with Amax Coal Company for the

purpose of negotiating a collective-bargaining agreement

covering the aforestated bargaining unit.

WE WILL NOT refuse to bargain collectively by in-

sisting to the point of impasse that Amax Coal Company

accept the following clauses: leasing, subleasing, and li-

censing out of coal lands; contracting and subcontracting of

the transportation of coal; contracting and subcontracting

of repair and maintenance work; construction work; and

work jurisdiction, all of which are prohibited by Section

8(e) of the Act, in any collective-bargaining agreement

covering the employees in the aforestated bargaining unit.

WE WILL NOT refuse to bargain collectively with

Amax Coal Company by striking for the purpose of forcing

inclusion of the following clauses: leasing, subleasing, and

licensing out of coal lands; contracting and subcontracting

of the transportation of coal; contracting and subcontract-

ing of repair and maintenance work; construction work;

and work jurisdiction, all of which are prohibited by Sec-

tion 8(e) of the Act, in any collective-bargaining agree-

ment covering employees in the aforestated bargaining

unit.

WE WILL NOT refuse to bargain collectively by in-

sisting to the point of impasse that Amax Coal Company

accept the following clauses: enabling an application of

contract to coal lands, which are nonmandatory subjects of

bargaining.

WE WILL NOT induce or encourage any individuals

employed by Amax Coal Company to engage in a strike or

refusal in the course of his employment to use, manufac-

ture, process, transport, or otherwise handle or work on

any goods, articles, materials, or commodities, or to per-

form any services or threatening, coercing, or restraining

Amax Coal Company by picketing or causing a work stop-

page, or otherwise, where; in either case, an object

thereof is to force or require Amax Coal Company, in con-

nection with its Belle Ayr Mine, to enter into any contract

°-.

40a

or agreement containing the above-described clauses

which are prohibited by Section 8(e) of the Act.

WE WILL NOT restrain or coerce Amax Coal Company

in the selection of its collective bargaining representative .

by insisting to the point of impasse that Amax Coal Com-

pany participate in the UMWA’s multi-employer pension

and welfare funds.

WE WILL NOT restrain or coerce employees in the

exercise of their rights guaranteed under Section 7 of the

Act.

UNITED MINE WORKERS OF AMERICA,

LOCAL No. 1854

(Labor Organization)

Dated By

(Representative) (Title)

UNITED MINE WORKERS OF AMERICA

(Labor Organization)

Dated By is

(Representative) (Title)

This is an official notice and must not be defaced by any-

one.

This notice must remain posted for 60 consecutive days

from the date of posting and must not be altered, defaced,

or covered by any other material. Any questions concern-

ing this notice or compliance with its provisions may be

directed to the Board’s Office, U.S. Custom House, Room

260, 721 19th Street, Denver, Colorado 80202, Telephone

303-837-3551.

4la

APPENDIX C

Yu the United States Court of Appeals

FoR THE THIRD CIRCUIT

No. 78-2310 and 78-2489

AMAX COAL COMPANY, ETC., PETITIONER

Vv.

NATIONAL LABOR RELATIONS BOARD, RESPONDENT;

UNITED MINE WORKERS OF AMERICA, LOCAL No. 1854,

AND UNITED MINE WORKERS OF AMERICA, INTERVENORS

No. 78-2310

UNITED MINE WORKERS OF AMERICA,

LOCAL No. 1854 AND UNITED MINE WORKERS OF

AMERICA, PETITIONERS

Vv.

NATIONAL LABOR RELATIONS BOARD, RESPONDENTS;

AMAX COAL COMPANY, ETC., INTERVENOR

No. 78-2489

SUR PETITION FOR REHEARING

Present: SEITZ, Chief Judge, ALDISERT, ADAMS,

ROSENN, HUNTER, WEIS, GARTH, HIGGIN-

42a

BOTHAM, Circuit Judges and ZIEGLER, District

Judge.*

The petition for rehearing filed by

National Labor Relations Board in the above entitled

case having been submitted to the judges who participated

in the decision of this court and to all the other available

circuit judges of the circuit in regular active service, and

no judge who concurred in the decision having asked for

rehearing, and a majority of the circuit judges of the cir-

cuit in regular active service not having voted for rehear-

ing the court in banc, the petition for rehearing is denied.

By THE CouRT, /s/

A Leon Higginbotham

Circuit Judge

DATED: May 29, 1980

*Hon. Donald E. Ziegler of the U.S. District Court for the Western

District of Pennsylvania, sitting by designation.

Judges Gibbons and Sloviter did not participate in the disposition of

this Petition for Rehearing.

43a

APPENDIX D

UNITED STATES OF AMERICA BEFORE

THE NATIONAL LABOR RELATIONS BOARD

Cases 27-CB-900 and 27-CC-571

UNITED MINE WORKERS OF AMERICA, LOCAL No. 1854

AND UNITED MINE WORKERS OF AMERICA

and

AMAX COAL COMPANY, A DIVISION OF AMAX, INC.

DECISION AND ORDER

On March 22, 1977, Administrative Law Judge Jerrold

H. Shapiro issued the attached Decision in this proceed-

ing. Thereafter, the Charging Party and the Respondents

filed exceptions and supporting briefs, the General Coun-

sel filed cross-exceptions and a brief in support thereof,

the Charging Party filed a reply brief, the Respondents

filed an answering brief, and the Secretary of Labor filed

an amicus curiae brief.

The Board has considered the record and the attached

Decision in light of the exceptions and briefs’ and has de-

cided to affirm the rulings, findings,? and conclusions® of

1The requests for oral argument submitted by the Respondents and

the Charging Party are hereby denied as the record, the exceptions,

and the briefs adequately set forth the issues and positions of the par-

ties.

2Subsequent to the issuance of the Administrative Law Judge’s De-

cision herein, the Board issued its Decision in United Mine Workers of

America (Lone Star Steel Company and Surface Industries, Inc.) , 231

NLRB No. 88 (1977), wherein it found, inter alia, that the “successor-

ship clause” at issue in this proceeding did not fall within the proscrip-

tion of Sec. 8(e) of the Act. Accordingly, in adopting the Administra-

tive Law Judge’s finding regarding that clause, we additionally rely on

our Decision in Lone Star Steel Company, supra.

In the portion of his Decision entitled “The Joint Western Surface

Mining Industry Training Committee” the Administrative Law Judge

at times inadvertently referred to art. XV(a) as art. II(a). The Admin-

istrative Law Judge’s Decision is hereby accordingly amended.

*We adopt the Administrative Law Judge’s conclusion in sec.

III,C,8,(c) of his Decision that the Union did not violate Sec. 8(b\(3) of

44a

the Administrative Law Judge only to the extent consist-

ent herewith, and to adopt his recommended Order as

modified.

the Act with regard to the district agreements contract proposal be-

cause, assumir.7 this clause to be a nonmandatory subject of bargain-

ing, the recor. ‘idence does not show that Respondent insisted on

this issue to the point of impasse.

We adopt the Administrative Law Judge’s conclusion contained in

sec. III,C,7 (c) of his Decision that the evidence fails to establish that

Amax engaged in overall bad-faith bargaining and that the Union’s as-

serted defense on this ground is thus without merit. See Times Pub-

lishing Company, 72 NLRB 676, 682 (1947). We find it unnecessary,

however, to pass on Amax’s bargaining posture during October,

November, and December 1975, since in the circumstances here the

events occurring during this time, whatever their character, could not

be viewed as retroactively excusing the Respondents’ prior unlawful

conduct. Since we find it unnecessary to pass on these events we of

course decline to consider the applicability of N.L.R.B. v. Alva Allen

Industries, Inc., 369 F.2d 310 (C.A. 8, 1966), and related cases cited

by the Administrative Law Judge.

Although the Administrative Law Judge found that the Re-

spondents’ conduct, when viewed as a whole, did not violate its statut-

ory obligation to bargain in good faith, he commented, in sec. 7(b) of

his Decision, that the Respondents’ conduct in first threatening and

later filing a complaint with the Federal Trade Commission, alleging

that the Charging Party had violated the antitrust laws, was “rep-

rehensible” and “the type of conduct which directly obstructs or in-

hibits the actual process of discussion at the bargaining table.” We are

unable to agree with such a characterization of the Respondents’ con-

duct and therefore disavow those comments. The Board has consist-

ently held that its enforcement of the Act should accommodate the

“right to all persons to litigate their claims in court.” See Glaziers and

Glassworkers, Local Union 767 (Sierra Glass Service, Inc.), 228

NLRB 365 (1977); United Aircraft Corporation (Pratt and Whitney Di-

vision), 192 NLRB 382 (1971); and cases cited therein. We are unable

to perceive any legitimate distinction as to why our accommodation of

that right should be any different than accommodating the right of par-

ties to file a complaint with another administrative agency.

There is now pending before the Board a petition in Case 27-RC-

5342, filed by another labor organization (New Acme) subsequent to

the hearing in this matter. In that case, New Acme seeks to represent

the employees at the Belle Ayr Mine and both the Union involved

herein and another labor organization (Operating Engineers) have in-

tervened. In the instant case, the Administrative Law Judge’s Conclu-

sion of Law 4 provides that the United Mine Workers of America,

45a

1. The General Counsel and the Charging Party contend

that the Respondents violated Section 8(b)(1)(B) of the Act

by threatening to strike the Charging Party in order to

compel it to bargain through a multiemployer association.

They additionally contend that the strike that did, in fact,

occur herein was motivated by the same object and,

therefore, that it was violative of Section 8(b)(1)(B) and

8(b)(4)(i) and (ii)(A) of the Act. The Administrative Law

Judge concluded that by predicating an extension of the

Charging Party’s existing contract upon its agreement to

enter into multiemployer bargaining, the Respondents im-

plicitly threatened to strike the Charging Party upon the

expiration of the then-existing contract. He viewed such

conduct as an attempt to coerce the Charging Party in the

selection of its collective-bargaining representative and

thus he found that the Respondents had violated the Act

as alleged, insofar as the threat was concerned. He further

found, however, that the strike which occurred herein on

January 12, 1975, was not motivated by a desire to compel

the Charging Party to bargain through a multiemployer

association and, therefore, he dismissed that portion of the

complaint. For the reasons expressed hereinafter, we

agree with the Administrative Law Judge that the Re-

spondents violated Section 8(b)(1)(B) of the Act by

threatening to strike the Charging Party unless it agreed

to bargain through a multiemployer association. Contrary

to the Administrative Law Judge, however, we find merit

in the position of the General Counsel and the Charging

Party that the strike which subsequently occurred was

violative of Section 8(b)(1)(B) and 8(b)(4)(i) and (ii)(A) of

the Act.

Local 1854, has been at all times material herein, and is, the exclusive

collective-bargaining representative of the employees employed at the

Belle Ayr Mine. In view of the pending petition referred to above,

however, it is clear that at the present time the question of whether

the Union is the exclusive bargaining representative of the aforesaid

employees remains unresolved. Accordingly, we have amended Con-

clusion of Law 4 to provide that at all times material herein the Union

has been the exclusive collective-bargaining representative of the em-

ployees at the Belle Ayr Mine.

46a

On November 2, 1974, Arnold Miller, the president of

Respondent United Mine Workers of America, hereinafter

referred to as the Union, sent identical letters to approxi-

mately 12 western coal mine operators, including the

Charging Party, with whom the Union had agreements,

pronosing that they form a multiemployer bargaining as-

soci..tion in order to negotiate a single agreement covering

those miners. The letter further stated that “contingent

upon your assert to our proposal, the UMWA offers to ex-

tend the present Agreement with your company for a

period of sixty days beyond November 12, 1974.”

Four of the employers who were signatories to contracts

with the Union—Energy Fuels Corporation, Kemmerer

Coal Company, Usibelli Coal Mine, Inc., and the Peabody

Coal Company (hereinafter referred to as the Peabody

Group)—agreed to bargain as a multiemployer associa-

tion, provided that each would be able to sign a separate

agreement. Thereafter, as promised, the Union granted to

each of these employers a 60-day extension of their then-

existing agreements. On November 6, 1974, the Charging

Party’s president, Hopper, replied tu the Union’s proposal

by indicating that a pending representation petition at the

Belle Ayr Mine would have to be resolved prior to its tak-

ing any action regarding the negotiation of a new agree-

ment.‘ Shortly thereafter, Elkins Payne, the Charging

Party’s vice president of administration and employee re-

lations, essentially reiterated that position in a telephone

conversation with Edgar James, an assistant to the

Union’s president. During this conversation, Payne also

indicated that, although the Charging Party would rather

*On September 12, 1974, the Internationai Union of Progressive

Mine Workers filed a representation petition seeking to represent the

Charging Party’s employees at the Belle Ayr Mine. Shortly thereafter,

Respondent United Mine Workers, Local 1854 (hereinafter referred to

as Local 1854), intervened in that proceeding.

On November 22, 1974, an election was conducted at the Belle Ayr

Mine, in which Local 1854 emerged victorious. Consequently, on De-

cember 9, 1974, Local 1854 was certified as the bargaining representa-

tive for the production and maintenance employees at the Charging

Party’s Belle Ayr Mine.

* >.

47a

bargain independently of the Peabody Group, it nonethe-

less wished to receive the contract extension that had been

granted to the employers who comprised the association.

As related by Payne, James’ response emphasized that,

“(Ujnless we [Amax] got in the association, we weren’t

going to get any extension, and that everybody wanted

the extension, but nobody wanted to be in the associa-

tion.” James concluded the conversation, however, by

stating that, in view of the pending representation case at

the Belle Ayr Mine, he would discuss the matter of an ex-

tension with the Union’s general counsel.

On November 10, 1974, the Union’s president, Miller,

notified the Charging Party of the following:

UMWA unilaterally agrees to extend current collec-

tive bargaining agreement covering your Belle Ayr

Mine to 12:01 a.m. December 12, 1974.

On November 23, 1974, the day after Local 1854’s victory

in the election at the Belle Ayr Mine, Payne prepared a

draft of a letter to Miller, which indicated that after Local

1854’s certification by the Board the Charging Party would

be prepared to commence negotiations. In addition, the

letter stated:

We have been advised from your office that the

U.M.W.A. has offered a further extension of the cur-

rent agreement to January 12, 1975, provided we par-

ticipate in bargaining with other companies under a

single agent selected by such companies. Solely in

order to expedite the negotiation of an agreement, we

are considering participation in such as arrangement

providing our understanding of your proposal, as re-

lated to Amax Coal, is correct. [Fmphasis supplied. ]

* * * * *

If you agree that our understanding is in accord with

your proposal, please sign below and return the copy

to me. Upon receipt of confirmation I will contact the

designated agent to resolve any other problems which

may arise relating to our participation. Due to the

time constraints facing us, your immediate response

will be greatly appreciated.

48a

Because he was unable to articulate precisely the

Charging Party’s concern over the amount of influence

that it would exert within the Peabody Group, however,

Payne did not mail the letter at that time. Instead, he ar-

ranged for a meeting to be held between himself and

Joseph Yablonski, the Union’s general counsel, on

November 25, 1974. Also in attendance at that meeting

were the Charging Party’s president, Hopper, and Edgar

James for the Union. At that meeting, Payne indicated

that the Charging Party was reluctant to join the Peabody

Group because the voting rights of the members would be

determined on the basis of the amount of coal being pro-

duced at the time negotiations commenced. Since the

Charging Party’s production was expected to rise appreci-

ably over the term of the contemplated agreement, it was

hesitant to agree to such a system. While the Union’s rep-

resentatives indicated that they perceived the legitimacy

of the Charging Party’s concern, they expressed the view

that the Charging Party would have to resolve this prob-

lem with the other members of the association. At the con-

clusion of the meeting, the Charging Party’s representa-

tives indicated that, subsequent to the resolution of this

issue, they would notify the Union as to whether they

would join the Peabody Group. Immediately following this

discussion, the Charging Party mailed the letter referred

to above. Subsequent to receiving this letter, Miller

signed it as requested and notified the Charging Party by

telegram that the Respondents would begin negotiations

in mid-December 1974, and that the existing agreement at

the Belle Ayr Mine was extended until January 12, 1975.

On or about December 10, 1974, Payne telephoned

Yablonski and told him that the Charging Party had been

unable to resolve its differences with the Peabody Group

and consequently that it intended to bargain independ-

ently. During the conversation they agreed to meet on De-

cember 17, 1974, in order to discuss this matter further.

Shortly after the meeting began on that date, Payne reit-

erated that the Charging Party intended to negotiate its

own contract. In addition, Sonnemann, another of the

Charging Party’s representatives, stated, in unequivocal

49a

terms, that the Charging Party was not a member of the

Peabody Group. The record reveals that Yablonski did not

object to either of those statements. The following day,

December 18, 1974, Payne wrote a letter to Yablonski,

stating, in part:

In accordance with our discussion in your office on

Tuesday, December 17, 1974, we are confirming our

tentative understanding with regard to the forth-

coming negotiations between Amax Coal Company

and the UMWA regarding a wage agreement covering

production and maintenance employees at our exist-

ing Belle Ayr Mine, Gillette, Wyoming.

Shortly afterward, on December 20, 1974, the Union

began negotiations with the Peabody Group. On

January 6, 1975, representatives from the Union and the

Charging Party met to discuss a comprehensive proposal

that the Union had prepared pursuant to its preliminary

discussions with the Peabody Group. At that meeting, the

parties exchanged proposals and then proceeded to devote

the majority of the discussion that followed to a review of

the Union’s contract proposal. At the conclusion of the

meeting, the parties agreed to meet again the following

evening.

At the start of the meetiny held on January 7, 1975,

James Marketti, the Union’s director of western organiz-

ing, who was not present at the previous meeting, in-

formed the Charging Party’s representatives that it was

not the Union’s intention to negotiate a contract covering

solely the Belle Ayr Mine and that the Union was meeting

with them for informational purposes only. In this regard,

he indicated that, insofar as the Union was concerned, the

Charging Party was a member of the Peabody Group.

Consequently, he stated that the Union would only

negotiate with it as a member of that group and that any

agreement entered into between the Union and the Pea-

body Group would bind the Charging Party. He further

indicated that if the Union did not reach an agreement

with the Peabody Group by January 12, 1975 (the date the

agreement at the Belle Ayr Mine had been extended to),

the Union would strike the Charging Party, inasmuch as

50a

the employees would not work without a contract. In addi-

tion, he warned Payne, who was the Charging Party’s

chief representative at this meeting, that “If you don’t get

into this association, you are going to have problems

everywhere. You know how coal miners are.” When one of

the Charging Party’s representatives inquired as to -

whether this remark was intended as a threat to strike the

Charging Party’s midwestern mines (which were covered

by the National Bituminous Coal Wage Agreement of

1974), Michael Trbovich, another member of the Union’s

negotiating committee, responded by stating, “Come on,

Elkins, you have been in this business for how many

years. You know exactly what we are talking about.” Fi-

nally, at the conclusion of the meeting, when the Charging

Party’s representatives asked if the Union was refusing to

bargain with them, the union negotiators essentially reit-

erated their views with respect to the Charging Party’s

membership in the Peabody Group. They did agree, how-

ever, to notify Payne the following day regarding the pos-

sibility of negotiating separately with the Charging Party.

As promised, the following day the Union responded in

the form of a letter written by Yablonski. In that letter,

which was delivered to Payne, he indicated that the Union

adhered to the position that the Charging Party was a

member of the Peabody Group, that its attempt at with-

drawal was untimely, and that it would therefore be bound

by any agreement that the Union negotiated with the Pea-

body Group. Payne responded by disputing all of the

above-stated assertions.

On the evening of January 11, 1975, the Charging Party

attempted to avert the strike that the Union had indicated

would occur the following day by delivering a new contract

proposal to the Union. Although Yablonski accepted the

proposal, he advised the Charging Party’s representatives

that his acceptance did not “constitute an agreement to

bargain separately” and he refused to discuss the proposal

at that time. The following day, January 12, 1975, the

Union launched a strike against the Charging Party and all

the other western coal operators whose employees it rep-

5la

resented. On January 15, 1975, the Union temporarily

ceased negotiations with the Peabody Group, but con-

tinued meeting with the Pittsburgh and Midway Coal

Company, an employer who chose to pursue an individual

course of bargaining. Shortly thereafter, on January 18,

1975, Payne sent a telegram to the Union’s Western Bar-

gaining Council requesting that separate negotiations be-

tween the parties begin no later than January 20, 1975. A

reply from the Union was never received. Finally, on Feb-

ruary 3, 1975, after being notified that the Board General

Counsel intended to issue a complaint in this proceeding,

the Union began separate negotiations with the Charging

Party.

After a careful review of all the foregoing facts, we find,

in agreement with the Administrative Law Judge, that the

letter drafted by the Charging Party on November 23,

1974, but not submitted until after the November 25,

1974, meeting with the Union’s general counsel, does not

indicate the “unequivocal intention to be bound in collec-

tive bargaining by group rather than individual action,”

which the Board requires before it finds that an employer

is obligated to accept the results of multiemployer negotia-

tions.5 On the contrary, we view the above-mentioned let-

ter, as did the Administrative Law Judge, as predicating

the Charging Party’s participation in the Peabody Group

upon the occurrence of two conditions precedent. The first

condition was met when Miller signed and returned the

Charging Party’s letter of November 23, 1974, and

thereby confirmed that the Charging Party’s perception of

the Union’s proposal was correct. However, the second

condition—that the Charging Party resolve the question

of its status within the Peabody Group—was never met,

and the Charging Party promptly notified the Union of

that fact on December 10, 1975.

5 Custom Color Contractors, 226 NLRB 851 (1976), enfd. sub nom.

N.L.R.B. v. Beckham, Inc., 564 F.2d 190 (C.A. 5, 1977); see also Bill

O’Grady Carpet Service, Inc., 185 NLRB 587 (1970); Korner Kafe,

Inc., 156 NLRB 1157 (1966).

52a

Furthermore, we additionally agree with the Adminis-

trative Law Judge’s finding that assuming arguendo, the

Charging Party did, in fact, commit itself to bargain

through the Peabody. Group, it extricated itself from the

obligation to engage in multiemployer bargaining in timely

fashion. In arriving at that finding, we note, as did the

Administrative Law Judge, that on both December 10 and

17, 1974, the Charging Party’s representatives unequivoc-

ally expressed its intention to negotiate individually.

Within the context of these unambiguous oral assertions,

we view the Charging Party’s letter of December 18, 1974,

which was sent prior to the commencement of the Union’s

negotiations with the Peabody Group, as constituting

“adequate written notice” of withdrawal under the Board’s

rule in Retail Associates, Inc.®

After disposing of the threshold question of whether the

Charging Party was, in fact, a member of the Peabody ~

Group, the Administrative Law Judge concluded that

Miller’s letter of November 2, 1974, offering to extend the

existing agreement only upon the condition that the

Charging Party accede to its request to bargain through a

multiemployer association, was an attempt to coerce the

Charging Party in its selection of a collective-bargaining

representative. Thus, he found the Respondents’ conduct

violative of Section 8(b)(1)(B) of the Act.”

In agreeing with the Administrative Law Judge that the

Respondents violated Section 8(b)(1)(B) of the Act by at-

*120 NLRB 388 (1958); see also The Carvel Company, 226 NLRB

111 (1976).

™The Administrative Law Judge noted that while, on its face, the

language contained in Miller’s letter does not constitute restraint or

coercion within the meaning of Section 8(b)(1)(B), words that are

otherwise permissible may have a coercive effect within the context in

which they are utilized. See Local 901, International Brotherhood of

Teamsters, etc. [Editorial El Imperial, Inc.| v. Raymond J. Com-

pton, Reg. Dir., 291 F.2d 798, 797 (C.A. 1, 1961); see also Dizisteel

Buildings, Inc., 186 NLRB 393, 395 (1970). Under the circumstances

involved in this case, where the Union has a tradition, embodied within

its constitution, of engaging in a work stoppage at the expiration of an

agreement the Administrative Law Judge viewed the letter as a threat

53a

tempting to coerce the Charging Party in its selection of a

collective-bargaining representative, we rely on facts that

were found, but not considered by him, and on undenied

testimony in the record which, in our view, supports that

finding. Specifically, we find persuasive several state-

ments that were made by union representatives at the

meeting held on January 7, 1975, and the contents of the

letter that Yablonski sent to Payne the following day. As

noted above, at the meeting held on that date, Marketti

indicated that the Union viewed the Charging Party as a

member of the Peabody Group and thus, if the Union did

not reach an agreement with that group by January 12,

1975, the Charging Party would be subjected to a strike at

its Belle Ayr Mine. In addition, Marketti’s statement —“If

you don’t get into this association, you will have problems

everywhere ....”—when considered in the context of

Trbovich’s remarks, can reasonably be interpreted as a

threat to strike the Charging Party’s midwestern mines,

for which an agreement had already been reached. While

Yablonski’s letter of January 8, 1975, does not contain any

explicit references to a strike, by reiterating that the

Union considered the Charging Party to be a member of

the Peabody Group and expected it to be bound by any

agreement that was reached w’ 1 that group, it is clear

that the letter fostered the impression that the Union

sanctioned the statements made by its representatives the

previous day.

to strike the Charging Party immediately upon the termination of the

then-existing agreement, unless the Charging Party agreed to bargain

through the Peabody Group.

In addition, the Administrative Law Judge found that the 30-day

contract extension granted to the Charging Party on November 10,

1974, was insufficient to cure the effects of the above threat. He con-

cluded that the above-noted statements of Edgar James, in a telephone

conversation with Payne, immediately prior to the granting of the ex-

tension, were “reasonably calculated to lead Amax to believe that the

reason its current agreement was extended 30 days was related to the

question concerning representation caused by the election petition and

that otherwise its failure to join the Peabody Group would have re-

sulted in an immediate strike.”

54a

In our opinion, when these additional facts are consid-

ered in conjunction with the Union’s letter of November 2,

1974, it is evident that the Union sought to dictate to

Amax who its collective-bargaining representative would

be. Under the circumstances present herein, we feel that

the Union’s course of conduct “was designed to exert some

restraint or coercion ... over and above a mere attempt

at persuasion in a free market place of ideas.’”® Indeed, by

attempting to compel the Charging Party to relinquish its

right to negotiate independently and instead negotiate

through a multiemployer association, the Union engaged

in a classic example of the type of conduct which Congress

sought to proscribe in enacting Section 8(b)(1)(B) of the

Act.® Accordingly, on the basis of all of the foregoing, we

find, in agreement with the Administrative Law Judge,

that the Respondents violated Section 8(b)(1)(B) of the Act

by threatening to strike the Charging Party unless it

agreed to bargain through the Peabody Group.

However, contrary to the Administrative Law Judge,

we also find that from January 12 to February 3, 1975, the

Respondents’ strike was motivated inter alia, by a desire

to compel the Charging Party to bargain as a member of

the Peabody Group and, therefore, violated Section

8(b)(1)(B) and 8(b)(4)(i) and (ii)(A) of the Act.?° In arriving

8 Sheet Metal Workers International Association, Local Union No.

59, 227 NLRB 520 (1976); International Ladies’ Garment Workers’

Union, AFL—CIO, et al. (Slate Belt Apparel Contractors Associa-

tion, Inc.), 122 NLRB 13890 (1959), enforcement denied 274 F.2d 376

(C.A. 3, 1960); Paddock Pools of California, Inc. et al., 120 NLRB 249

(1958).

*In explaining this Section, Senator Taft stated: “Under this provi-

sion it would be impossible for a union to say to a company, ‘We will

not bargain with you unless you appoint your national employers’ as-

sociation as your agent so that we can bargain nationally.’” II Leg.

Hist. 1012 (1947).

1°Tn pertinent part Sec. 8(b)(4)(i) and (ii A) of the Act provides: “(b)

It shall be an unfair labor practice for a labor organization or its

agents—(4)(1) to engage in. . . a strike. . . or (ii) to threaten, coerce,

or restrain any person engaged in commerce . . . where in either case

an aint thereof is: (A) er or Beast any employer . . . to join

any ... employer organization .

55a

at this finding, we view the strike as being, at least in

part, a culmination of the unlawful conduct we have fully

detailed above. In this regard, we rely principally upon

the fact that on January 7, 1975, a union representative

informed the Charging Party that it was required to

negotiate as a member of the Peabody Group and that it

would be subjected to a strike on January 12, if, prior to

that time, the Union had not reached an accord with the

negotiators for the Peabody Group. In addition, we also

rely on the fact that on January 11, 1975, the day prior to

the threatened strike, the Union persisted in its refusal to

negotiate separately with the Charging Party and con-

tinued to insist that it negotiate through the Peabody

Group. Thus, the Charging Party was placed in a position

whereby, although it was faced with the threat of an im-

pending strike, it was nevertheless precluded from bar-

gaining with the Union. It is clear, then, that the only way

the Charging Party could have hoped to have any input

into averting, or limiting the duration of, the strike would

have been to waive its statutory right to select its own

bargaining representative and acquiesce in the Union’s

demand to bargain through the Peabody Group.

Unlike the Administrative Law Judge, we also find that

the Union’s conduct subsequent to the commencement of

the strike serves to establish the existence of a proscribed

objective.1! In this connection, we note that on

January 18, 1975, the Charging Party submitted yet

another request for negotiations regarding the Belle Ayr

Mine, to which the Union failed to respond. We view such

conduct in light of the fact that on January 15, 1975, the

Union suspended negotiations with the Peabody Group,

11See Glass Workers Local 1892, Brotherhood of Painters, Pa-

perhangere, and Decorators of America, AFL—CIO (Frank J.

Rooney, Inc.), 141 NLRB 107 (1963), where, in finding a violation of

Sec. 8(b)(4)(A) of the Act, the Board reaffirmed the principle first

stated in International Ladies’ Garment Workers’ Union, AFL—CIO

(Coed Collar Company), 187 NLRB 1698 (1962), that “Uniawful moti-

vation in picketing situations, as intent in discharge cases . . . must be

ascertained from the context of preceding and subsequent as well as

attendant circumstances.”

56a

citing the slight progress that had been made up until that

point, but nonetheless continued to meet with Pittsburgh

and Midway Coal Company, another employer who, like

the Charging Party, had elected to pursue independent

negotiations. Thus, despite the fact that negotiations were

stalled with the Peabody Group and even though the

Union was continuing its efforts to reach an agreement

with another employer which was not a member of the

Peabody Group, it nevertheless refused to acknowledge

the Charging Party’s request to bargain. Under these cir-

cumstances, the only inference to be drawn from the

Union’s conduct is that, during this period, it was con-

tinuing its effort to compel the Charging Party to bargain

through the Peabody Group. Finally, we note that it was

only after learning that a complaint was about to issue in

this proceeding that the Union began independent negotia-

tions with the Charging Party on February 3, 1975.

It is, of course, true that by launching a strike against

all of the western coal operators at the expiration of their

existing agreements, the Union was motivated by entirely

lawful economic considerations. However, insofar as the

strike against the Charging Party was concerned, we are

persuaded that the foregoing evidence convincingly dem-

onstrates that it was also motivated by the Union’s desire

to compel the Charging Party to bargain through the Pea-

body Group. The fact that one of the objectives of the

strike was lawful does not, in any way, diminish the fact

that the other objective was unlawful.'* Accordingly, we

find that, from January 12, 1975, to February 3, 1975, the

Respondents struck the Charging Party with the objective

of forcing it to engage in multiemployer bargaining and,

therefore, violated Section 8(b)(1)(B) and 8(b)(4)(i) and

(ii)(A) of the Act.1%

12 International Longshoremen’s and Warehousemen’s Union, Local

8; International Longshoremen’s and Warehousemen’s Union, Local

92; and International Longshoremen’s and Warehousemen's Union

(General Ore, Inc.), 126 NLRB 172 (1960).

13 We agree with the finding made by the Administrative Law Judge

in sec. III,C,6, on his Decision that the Respondents also violated Sec.

57a

2. The General Counsel and the Charging Party also al-

lege that the Respondents’ conduct in insisting to impasse

and striking to obtain the Charging Party’s participation

in the Union’s pension and welfare trust funds (hereinafter

referred to as the trust funds), the management trustee of

which is not selected by the Charging Party, is action con-

stituting coercion in the selection of a representative for

the purposes of collective bargaining in violation of Section

8(b)(1)(B) and 8(b)(3) of the Act. The Administrative Law

Judge concluded, however, that the trust funds’ manage-

ment trustee is not a collective-bargaining representative

within the meaning of Section 8(b)(1)(B) of the Act and,

therefore, dismissed that portion of the complaint. We

agree with the Administrative Law Judge.

The relevant facts, which are fully set forth in the Ad-

ministrative Law Judge’s Decision, may be briefly sum-

marized as follows:

The trust funds are jointly administered, multiemployer

trusts, established pursuant to the dictates of Section

302(c)(5) of the Labor-Management Relations Act. In

order to comply with the “equal representation” require-

ment of that Section, the trust funds are administered by

three trustees, one appointed by the Union, one appointed

by the participating employers, and a neutral trustee

selected by the two other trustees. The provisions of the

Union’s 1974 “Benefit Plan and Trust” defines the trustees

as fiduciaries within the meaning of the Employee Retire-

ment Income Security Act of 1974. In addition, the benefit

plan clearly delineates the major eligibility requirements

for each category of beneficiaries, the benefit level, and

the amount of employer contributions that are to be allo-

cated to the various classes of beneficiaries. Notwith-

standing those limits on their authority, however, the

trustees are empowered to, inter alia: (1) provide health

benefits to any participant who is also receiving pension

8(bX(3) of the Act by refusing to meet and bargain with the Charging

Party, but conclude that the evidence shows that this violation oc-

curred from approximately January 7 to February 3, 1975, and not

from December 18, 1974, to February 3, 1975, as found by him.

58a

benefits and who “is not earning more than an amount to

be determined by the trustees”; (2) render a final determi-

nation as to all issues concerning eligibility for pension

benefits; (3) in the event the assets of the 1974 benefit

trust beceme insufficient to pay the scheduled benefits,

suspend or reduce the benefits to a level which, in their

judgment, can be borne by the assets of said trust; and (4)

“determine whether employers have violated their con-

tractual obligations and, if so, to pursue legal remedies on

behalf of the beneficiaries.”

Within his Decision, the Administrative Law Judge

noted initially that the Union’s proposal regarding the

trust funds, inasmuch as it seeks to require the Charging

Party to contribute funds into a health and retirement

program for its employees, is undisputably a mandatory

subject of bargaining. Then, as noted above, he rejected

the contention that, notwithstanding the mandatory na-

ture of the proposal, the Charging Party is immune from

economic pressure directed at compelling its participation

in the trust funds on the ground that the trustees are

collective-bargaining representatives within the meaning

of the Act. In so doing, he relied, not only upon the

fiduciary obligations imposed on the trustees by the Em-

ployee Retirement Income Security Act, but also upon

several decisions rendered by various Federal courts, all

of which suggest that the trustees of a trust fund estab-

lished pursuant to Section 302(c)(5) do not possess the at-

tributes of a collective-bargaining representative.

Following the issuance of the Administrative Law

Judge’s Decision in this case, the Board issued its Decision

in Sheet Metal Workers’ International Association and

Edward J. Carlough (Central Florida Sheetmetal Con-

tractors Association, Inc.).'* In that case, after carefully

considering many of the same principles discussed by the

Administrative Law Judge herein, the Board concluded

that the trustees of a jointly administered, multiemployer

trust fund are solely fiduciaries, owing undivided loyalty

to the beneficiaries of such a plan, and are not, therefore,

14234 NLRB No. 162 (1978).

59a

collective-bargaining representatives within the meaning

of Section 8(b)(1)(B) of the Act. Accordingly, insofar as it

is consistent with our Decision in Central Florida, supra,

we adopt the Administrative Law Judge’s finding herein

that the Respondents did not violate Section 8(b)(1)(B) and

8(b)(3) of the Act by insisting to impasse and striking to

obtain the Charging Party’s participation in the trust

funds, which, of necessity, required it to accept a pre-

selected management trustee as its representative in the

funds’ administration.*5 We shall dismiss, therefore, this

portion of the complaint.

3. The General Counsel and the Charging Party further

contend that the Respondents violated Section 8(b)(3) of

the Act by insisting to impasse upon the “Enabling” and

“Application of this Contract to the Employer’s Coal

Lands” clauses, which they allege to be nonmandatory

subjects of bargaining. The Administrative Law Judge

concluded that both clauses are, in fact, nonmandatory

subjects of bargaining, since, in his view, they seek to re-

quire the Charging Party to bargain “on a basis broader

15Tn adopting the Administrative Law Judge’s findings, we do not

adopt his analysis of the Board’s decisions in Jacobs Transfer, Inc.,

227 NLRB 1231 (1977); L & M Carpet Contractors, Inc., 218 NLRB

802 (1975); United Brotherhood of Carpenters and Joiners of America,

Local #1913, AFL—CIO, et al. (Fixtures Unlimited), 218 NLRB 363

(1974), enfd. in part, reversed in relevant part, and modified in part

531 F.2d 424 (C.A. 9, 1976); and Local 80, Sheet Metal Workers Inter-

national Association, AFL—CIO, et al. acter Inc.), 161

NLRB 229 (1966).

In all of the above cases, the Board has found the trustees of a trust

fund which has been established by a collective-bargaining agreement

to be the agents of each of the parties to the collective-bargaining

agreement.

The Administrative Law Judge viewed those decisions as implicitly

indicating the Board’s recognition that the trustees cannot possibly act

as the collective-bargaining representatives of their appointing parties

in administering such a trust fund. However, the issue of the trustees’

status as they perform their “discretionary functions in the internal

administration of the trust” was not before the Board in those cases

and, consequently, we do not rely on them in reaching our decision

herein. See Central Florida, supra at fn. 30.

60a

than the certified unit.” Accordingly, he found that Re-

spondents had violated the Act as alleged. For the reasons

expressed hereinafter, we disagree with the findings and

conclusions of the Administrative Law Judge.

Briefly, the facts with respect to this issue may be

summarized as follows:

On January 6, 1975, the Union included the following

two clauses as part of its initial proposal:

Article I, Enabling Clause

This agreement . . . covers the sub-bituminous coal or

lignite mines owned or operated by [Amax].

Article II, Application of this Contract to the Em-

ployer’s Coal Lands.

(f) . . . this agreement covers the operation of all the

coal lands, coal producing and coal preparation

facilities owned or held under lease by [Amax], or by

any subsidiary or affiliate at the date of this agree-

ment or acquired during its term which may hereafter

(during the term of this agreement) be put into pro-

duction or use.

At the meeting held on the above date, the Charging

Party’s representatives objected to both of these clauses

on the ground that they encompassed facilities other than

the Belle Ayr Mine. In response to these objections, Yab-

lonski, on January 9, 1975, sent a letter to the Charging

Party stating, “Your assertion that the UMWA has at-

tempted to bargain for Amax operations other than Belle

Ayr is plainly without foundation. The standard UMWA

accretion clauses—known as ‘Application of contract to

coal lands’-— merely commits an employer who agrees to it

to apply the terms of that agreement to any new mining

operations which may be developed during the life of the

agreement and the UMWA is either recognized or cer-

tified as the collective bargaining representative of that

operation.” Thereafter, on July 1, 1975, the Union for-

malized this interpretation by amending the enabling

clause to indicate that the agreement was intended to

cover other subbituminous or lignite mines owned or oper-

ated by the Charging Party “provided that the UMWA is

6la

the bargaining representative of the employees at such

mines.” Similarly, the “Application of this Contract to the

Employer’s Coal Lands” clause (hereinafter referred to as

the application-of-contract clause or the coal lands clause)

was amended to provide that the agreement was to be

applied only to mines “at which the UMWA is established

as the bargaining representative for the employees.” Fi-

nally, on November 14, 1975, in the face of the Charging

Party’s adamant objection to both clauses, the Union de-

leted the application-of-contract clause and modified the

enabling clause so that it clearly applied to only the Belle

Ayr Mine. However, in doing so, the Union took the posi-

tion that the Belle Ayr Mine encompassed all mining that

would be undertaken by the Charging Party on its present

leases in Campbell County, Wyoming, which at the time of

the hearing 2mounted to several thousand acres.

The Administrative Law Judge viewed the two above-

stated proposals as “after acquired or additional facility”

clauses, similar to the one involved in Houston Division of

the Kroger Co.!® While acknowledging that, in light of the

Board’s Decision in Kroger, supra, such a clause is a valid

contractual provision which the parties may voluntarily in-

clude in an agreement, he nevertheless concluded that

both clauses involved in the instant proceeding are non-

mandatory subjects of bargaining. This conclusion was

predicated on his determination that the Respondents’

objective in demanding the two disputed proposals was to

merge the existing unit into an employerwide unit. In the

Administrative Law Judge’s view, the integrity of the

bargaining unit precluded his finding that a contract pro-

posal seeking the enlargement of an existing unit was a

mandatory subject of bargaining.

As indicated in footno

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.