Opposition — Blue Grass Provision Co. v. National Labor Relations Board

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No. 80-1544

: MAY 26 1981

ALEXANDLT L. STEVAS,

In the Supreme Court of the Lnit dorstert o—

OCTOBER TERM, 1980

BLUE GRASS PROVISION Co., INC., PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE SIXTH CIRCUIT

BRIEF FOR THE NATIONAL LABOR RELATIONS BOARD

IN OPPOSITION

Wave H. McCree, JR.

Solicitor General

Department of Justice

Washington, D.C. 20530

(202) 633-2217

WILLIAM A. LUBBERS

General Counsel

Joun E. HiIGGINs, JR.

Deputy General Counsel

Rospert E. ALLEN

Acting Associate General Counsel

Norton J. COME

Deputy Associate General Counsel

LINDA SHER

Assistant General Counsel

JOHN H. FERGUSON

Attorney

National Labor Relations Board

Washington, D.C. 20570

QUESTION PRESENTED

Whether substantial evidence supports the Board’s find-

ing that petitioner terminated its delivery employees and

immediately and permanently subcontracted their work

without giving the Union prior notice or an opportunity to

bargain about the change and its effects.

TABLE OF CONTENTS

Page

Opinions below ... «oss s«sss0sss0n en eee l

SUTIOGIOUOM os cic s06s vce eb ene $cueccnceneee l

Statute involved ......0ssss essen ee eee l

SUMCCMCME oo ono vce cose bu ea ween een 2

Argument ....000e000000008 555 e sen 7

Concluaion .....+2ss00%ss ees soee eee 10

TABLE OF AUTHORITIES

Cases:

Adickes v. S.H. Kress & Co., 398 U.S. 144 ...... 8

Fibreboard Paper Products Corp. v. NLRB,

S79 U.S. BBS oc ecccucesasaeusuneneee 8

Firch Baking Co. v. NLRB, 479 F. 2d

732, cert. denied, 414 U.S. 1032 .......ceccees 9

First National Maintenance Corp. v. NLRB,

No. 80-544 (argued Apr. 21, 1981) ............ 8

Lane v. NLRB, 418 F. 2d 1208 .............0.. 7

Marshall Field & Co. v. NLRB, 318 U.S.

y re 8

NLRB vy. Crompton-Highland Mills, Inc.,

337 U.S. 217 onc cancseeeakes eee 10

NLRB vy. Crystal Springs Shirt Corp.,

637 F. 28 FD o..canueuueunn eeu 9

NLRB vy. J.P. Stevens & Co., 538 F. 2d

dh’ SPrwererererrrerrr Fe 9

NLRB v. Katz, MQ U3. 7H 6c 10

II]

PRECEDING PAGE WAS BLANK.

IV

Page

Cases—(Continued):

Universal Camera Corp. v. NLRB,

340 U.S. 474 . cccccensccestseee ee i)

Winn-Dixie Stores, Inc., 243 N.L.R.B. No.

151 (Aug. 2, 1979) ...csvecaseueesuaee eee )

Winn-Dixie Stores, Inc. v. NLRB,

@ 567 F. 20 1363. oc cccccessesseeeee S)

Statute:

National Labor Relations Act, 29 U.S.C.

151 et seq. :

Section 8(a)(1), 29 U.S.C. 158(a)(1) ....... 6,9

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

ISHAM) 2c easasvcdesueeee 6,7,8,9

Section 8(d)(3), 29 U.S.C. 158(d)(3) ........ 6

Section 8(d)(4), 29 U.S.C. 158(d)(4) ........ 6

Section 10(e), 29 U.S.C. 160(e) ............ 8

In the Supreme Court of the United States

OCTOBER TERM, 1980

No. 80-1544

BLUE GRASS PROVISION Co., INC., PETITIONER

v

NATIONAL LABOR RELATIONS BOARD

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE SIXTH CIRCUIT

BRIEF FOR THE NATIONAL LABOR RELATIONS BOARD

IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. 1-7) is reported

at 636 F. 2d 1127. The decision and order of the National

Labor Relations Board (Pet. App. 8-29) are reported at 238

N.L.R.B. 910.

JURISDICTION

The judgment of the court of appeals was entered on

December 9, 1980. The petition for a writ of certiorari was

filed on March 6, 1981. The jurisdiction 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., are set forth at Pet. App. 30-32.

2

STATEMENT

1. Petitioner Blue Grass Provision Co., Inc. is engaged in

the processing and wholesale distribution of meat products

at its Covington, Kentucky facility (Pet. App. 14; A. 45-

47).' For many years, Blue Grass entered into successive

collective bargaining agreements with the Union? covering

its truckdrivers (Pet. App. 15; A. 34-35). During the 1974-

1977 contract, Blue Grass employed five truck drivers, four

of whom had from 20 to 28 years of service (Pet. App. 16; A.

36-38). The fifth driver, Scudder, had 10 years of service.

Because of a lack of work, he was placed on layoff status

and worked as a relief driver when the other drivers were

absent or on vacation (Pet. App. 16; A. 37).

In 1975, without notice to the Union, petitioner began

using an independent contractor to perform Scudder’s relief

driver work. In late 1975, in response toa grievance filed by

Scudder, an arbitrator determined that Blue Grass had

violated the contract by assigning Scudder’s duties to non-

unit personnel, and ordered appropriate relief (Pet. App.

16; A. 24, 42).

In November 1976, the Union notified petitioner of its

desire to terminate the 1974-1977 contract, scheduled to

expire on January 31, 1977, and requested a meeting to

negotiate a new agreement (Pet. App. 16; A. 28). There-

after, in a telephone conversation with Company President

William Rice on or about January 14, Union Business

Agent Fred Batsche requested that negotiations be delayed

and the current contract extended for 30 days until

industry-wide negotiations were completed; Batsche noted

that in the past petitioner had agreed to a contract that was

“A.” refers to the appendix in the court of appeals.

?Truck Drivers, Chauffeurs and Helpers Local Union No. 100, affil-

iated with the International Brotherhood of Teamsters, Chauffeurs,

Warehousemen and Helpers of America. /

3

similar to that worked out with the major meat packing

firms in the area (Pet. App. 17; A. 78, 79). Rice agreed only

to extend the contract 11 days—-to February 11, 1977 (Pet.

App. 17; A. 27, 29, 79). Contemporaneously, Rice began

contacting outside carriers to inquire about subcontracting

the drivers’ work (Pet. App. 17; A. 32-33, 40-41, 53-54).

Prior to his first meeting with the Union, Rice determined

that one carrier’s proposal was too expensive (Pet. App. 17;

A. 32-33, 53-54), and that a second carrier was interested in

taking over petitioner’s delivery work (A. 55-56, 40).

On January 25, Rice and Batsche held their first negotiat-

ing session (Pet. App. 18; A. 27, 80). Batsche gave Ricea set

of the Union’s written contract proposals, incuding one that

would have banned subcontracting (Pet. App. 18: A. 26,

80). Rice reviewed the proposals, asked several questions,

complained about the overall cost of the package, and

asked for additional time to study the proposals (Pet. App.

18; A. 80-82). Rice and Batsche did not discuss subcontract-

ing at this negotiating session, nor did Rice mention that he

had contacted or was negotiating with an outside carrier to

make petitioner’s deliveries (Pet. App. 22, 18: A. 81-82.

99-100).

On January 28, President Rice and Business Agent

Batsche met again to discuss the contract (Pet. App. 18; A.

82). Rice informed Batsche that he wanted to negotiate a

contract that would protect the Company's drivers so “that

they could retire through attrition” as he was “contemplating

getting out of the trucking business” (Pet. App. 18; A. 83).

Batsche replied that “at this point” he could not agree to this

proposal (ibid.), and inquired specifically whether Rice

proposed to recall the relief driver, Scudder, to full time

Status when one of the regular drivers retired. After Rice

stated emphatically that he would not recall Scudder from

layoff, Batsche said that he could not accept a contract

under which bargaining rights would be lost through attri-

tion (Pet. App. 18; A. 83-84, 101). The meeting ended when

4

Rice told Batsche that, if the Union would not agree to

eliminate the unit through attrition, petitioner could not

reach a contract. Batsche asked if Rice was refusing to

negotiate further; Rice replied that he was. Batsche then

asked Rice to reconsider, but left the meeting with the

understanding that Rice would not change his position

(Pet. App. 19; A. 70, 85-86).

On January 31, Batsche met with the drivers and

informed them of petitioner’s proposal to eliminate their

jobs through attrition. Batsche also advised the relief driver,

Scudder, that the Company did not plan to recall him from

layoff but intended instead to have a subcontractor do his

work. The drivers then voted to strike at the February 11

expiration of the extension agreement (Pet. App. 19; A.

86-87).

On February 7, President Rice, upon the advice of his

attorney, called Business Agent Batsche to make sure that

he understood petitioner’s position (Pet. App. 19; A. 65).

On this occasion, as on January 28, the only subcontracting

proposal advanced by Rice to the Union called for the

full-time drivers to continue working until they retired, and

for a subcontractor to take over the unit work as it became

available through attrition (Pet. App. 22, 18-19; A. 87-88,

55-56). At the end of the telephone call, Batsche asked Rice

if he was refusing to negotiate further, and Rice confirmed

that he was (Pet. App. 19; A. 43, 65-66). Following this

conversation, however, Rice concluded that he had “laid an

egg in saying that I did not wish to negotiate” (A. 66). The

next day, February 8, Rice sent Batsche a letter indicating

that petitioner was interested in further negotiations and

hoped Batsche would “offer some alternatives to our plight”

(Pet. App. 20; A. 25, 42-43, 67). This letter was delivered to

the Union’s office on February 10, but was not seen by

Batsche until some time later (Pet. App. 20; A. 88-89).

5

Following his February 7 conversation with Batsche,

Rice made arrangements for a subcontractor to supply

drivers for petitioner’s trucks on February 14 if an agree-

ment were not worked out with the Union by the time the

contract expired on February 11 (A. 67-69). At the close of

business on February 11, Rice informed the four full time

drivers that “they were through” (Pet. App. 20; A. 38, 43);

the Union learned of the discharges from the employees (A.

89-90). On Monday, February 14, a subcontractor, Kent

Express, began making deliveries in petitioner’s trucks (Pet.

App. 20; A. 38-39, 69-70).3

At no time during the negotiations with the Union did

petitioner ever propose terminating its drivers immediately

and permanently subcontracting their work; its only

proposal had been to subcontract each driver’s work as he

retired (Pet. App. 22, 18-20; A. 87-90). On the evening of

February 14, following their discharge and replacement by

the subcontractor, the employees met with their union

representatives. On the following day, they began picketing

Blue Gress (Pet. App. 20; A. 97-98, 102-103). Thereafter, the

Union refused to pursue further negotiations until peti-

tioner “put the unit back as it was” (Pet. App. 20 n.6; A.

105).

2. On the foregoing facts, the administrative law judge

rejected petitioner's contention that it gave proper notice

that it was considering subcontracting the drivers’ work and

bargained to impasse with the Union before implementing

its proposals (Pet. App. 20-21). The administrative law

judge found that petitioner gave notice “only of its desire to

subcontract out unit work over a period of time as the unit

‘Prior to the termination of the drivers and the subcontracting of

their work, petitioner owned two trucks and leased three others; some-

time after February I1, petitioner purchased the three trucks it had

previously leased (Pet. App. 20; A. 43-44, 68-70).

6

employees retired” and never notified the Union “that it

would immediately and permanently subcontract out all its

unit delivery work and discharge its drivers upon the termi-

nation of the extension agreement on February 11, 1977”

(Pet. App. 22). Noting petitioner’s letter of February 8

inviting further negotiations, the administrative law judge

found that the parties “had not even reached any impasse on

the issue of eventual or gradual subcontracting” (Pet. App.

23). He further found that, even assuming the negotiations

were at impasse on this issue, “it would not change the

result” since “any bargaining over the proposed gradual

subcontracting of unit work overa period of time, cannot be

deemed to have satisfied [petitioner’s] obligation to bargain

about the very different proposition of the immediate sub-

contracting of a// unit work” (ibid.). Accordingly, the

administrative law judge concluded, inter alia, that peti-

tioner violated Section 8 (a)(5) and (1) of the National

Labor Relations Act by unilaterally subcontracting out all

its truckdriving work, thereby eliminating the entire bar-

gaining unit, without giving the Union notice and an oppor-

tunity to bargain about the change (ibid.).

The Board affirmed the administrative law judge’s rul-

ings, findings and conclusions, and ordered petitioner, inter

alia, to cease subcontracting its delivery operations “with-

out prior notice to or bargaining with the Union” (Pet. App.

10), to restore its delivery operations, to reinstate and make

whole for lost pay all unit employees discharged on Febru-

ary I1, and to bargain in good faith with the Union regard-

ing any future subcontracting of unit delivery work (Pet.

App. 10-11, 28-29).4

*The Board found, contrary to the administrative law judge (Pet.

App. 24-26), that it was unnecessary to decide whether petitioner had

terminated the contract without complying with the 30-day mediation

and 60-day bargaining requirement set forth in Section 8(d)(3) and (4)

of the Act since the scope of the remedy for this alleged violation is

7

3. On review, the court of appeals concluded that the

Board’s findings were supported by substantial evidence

and, accordingly, enforced the Board’s order (Pet. App.

1-7). In rejecting petitoner’s contention that it had given

adequate notice of its intentions and had bargained to

impasse over its subcontracting proposal, the court

observed that, while the term “impasse” is not subject to

precise definition, at a minimum “it encompasses the notion

that both sides are aware of precisely what is at issue and

that they have made more than a perfunctory attempt to

reach a resolution” (Pet. App. 5). The court’s examination

of the record failed to uncover any evidence that petitioner

ever unequivocally informed the Union of an intention “to

subcontract work on a definite date” (ibid.) and revealed

instead that there was “considerable doubt whether the

Union ever understood [that petitioner] meant to terminate

the bargaining unit upon expiration of the contract * * *”

(Pet. App. 6). The meetings between the parties were, said

the court, “at best preliminary sparring matches,” a conclu-

sion reinforced by petitioner’s “own letter of February 8

evidencing its willingness to talk further with the [U]nion”

(ibid.).5

ARGUMENT

1. The first question presented in the petition (Pet. I)—

whether an employer’s decision to terminate a portion of its

operations for economic reasons is a mandatory subject of

essentially identical to the remedy imposed for the Section 8(a)(5)

violation found by the Board (Pet. App. 9-10 n.4). Member Murphy

would have found petitioner liable for the additional violation (ibid.).

‘Similarly, the court rejected petitioner's contention that its subcon-

tracting of bargaining unit work was equivalent to a lockout in support

of its bargaining demands (see Pet. App. 6-7, distinguishing Lane v.

NLRB, 418 F. 2d 1208 (D.C. Cir. 1969)), and found further that

petitioner had failed to advance legitimate and substantial business

justifications comparable to those advanced by the employer in Lane

(Pet. App. 6-7).

8

bargaining under Section 8(a)(5) of the Act—is not prop-

erly raised here. In the proceedings before the Board, peti-

tioner did not dispute that it was obliged to bargain with the

Union before contracting out its delivery operations and

terminating its drivers; instead petitioner contended that it

had satisfied its obligation by giving the Union notice and

an opportunity to bargain about the proposal (Pet. App.

20-21). Accordingly, Section 10(e) of the Act, 29 U.S.C.

160(e), precludes petitioner from challenging in this Court

its obligation to bargain. Marshall Field & Co. v. NLRB,

318 U.S. 253, 255-256 (1943). Moreover, petitioner did not

question its duty to bargain before the court of appeals (Pet.

App. 4), and where issues are neither raised before nor

decided by a court of appeals, this Court ordinarily will not

consider them. Adickes v. S.H. Kress & Co., 398 U.S. 144,

147 n.2 (1970).

In any event, petitioner’s decision to utilize the employees

of a subcontractor to drive its delivery trucks is the kind of

proposed activity held to be a mandatory subject of bar-

gaining in Fibreboard Paper Products Corp. v. NLRB, 379

U.S. 203 (1964). The vitality of Fibreboard’s holding is not

questioned in First National Maintenance Corp. v. NLRB,

No. 80-544 (argued Apr. 21, 1981), which involves not the

replacement of employees by a subcontractor, but the deci-

sion to terminate a portion of an operation.

2. The second question presented in the petition (Pet.

1)—whether an employer who bargains with a union about

subcontracting unit work must reach impasse with the

union before implementing the decision—is also not prop-

erly raised here. This question, like the first, was not raised

before either the Board or the court of appeals; below,

petitioner argued simply that it had in fact bargained to

impasse (Pet. App. 5, 20-21).

—_

9

Furthermore, although the Board has expressed its

respectful disagreement with the Fifth Circuit on the ques-

tion whether an employer ordinarily must bargain to

impasse with a union before implementing proposals (com-

pare Winn-Dixie Stores, Inc. v. NLRB, 567 F. 2d 1343

(1978), with Winn-Dixie Stores, Inc.,243 N.L.R.B. No. 151

(Aug. 2, 1979)), the issues dividing the Board and the Fifth

Circuit are not presented here. Thus, whatever the extent of

an employer’s obligation to bargain, it is uncontroverted

that ata minimum anemployer normally must give a union

notice of its proposal and a reasonable opportunity to

bargain about it. Even in the Fifth Circuit, an employer

who implements changes substantially different from those

it discussed with the union fails to meet this minimum

requirement and accordingly violates Section 8(a)(5) and

(1). Winn-Dixie Stores, Inc. v. NLRB, supra, 567 F. 2d at

1349-1350.

Here, the administrative law judge found that petitioner,

by discharging its senior drivers and permanently subcon-

tracting their work, implemented a change substantially

different from its proposal to subcontract its delivery work

as each driver retired, and that petitioner never gave the

Union notice and an opportunity to bargain about this

change prior to its implementation (Pet. App. 21-24). The

only question for review, therefore, is whether this finding is

supported by substantial evidence. Such an evidentiary

determination, sustained by both the Board and the court of

appeals, does not warrant further review. Universal Camera

Corp. v. NLRB, 340 U.S. 474, 490-491 (1951). Inany event,

as shown in the Statement, the Board’s findings are amply

supported by the record and its legal conclusions are in

*See, e.g., NLRB v. Crystal Springs Shirt Corp., 637 F. 2d 399,

402-403 (Sth Cir. 1981); NLRB v. J.P. Stevens & Co., 538 F. 2d 1152,

1162-1164 (Sth Cir. 1976); Firch Baking Co. v. NLRB, 479 F. 2d 732,

735-736 (2d Cir.), cert. denied, 414 U.S. 1032 (1973).

10

accord with settled authority. NLRB v. Katz, 369 U.S. 736

(1962); NLRB v. Crompton-Highland Mills, Inc., 337 U.S.

217 (1949).’

CONCLUSION

The petition-for a writ of certiorari should be denied.

Respectfully submitted.

WADE H. McCreE, Jr.

Solicitor General

WILLIAM A. LUBBERS

General Counsel

JOHN E. HIG.iINs, JR.

Deputy General Counsel

ROBERT E. ALLEN

Acting Associate General Counsel

NORTON J. COME

Deputy Associate General Counsel

LINDA SHER

Assistant General Counsel

JOHN H. FERGUSON

Attorney

National Labor Relations Board

May 198]

’Contrary to petitioner's suggestion (Pet. 7, 10-11), this case does not

present the issue whether an employer may, without bargaining, lock

Out its employees for the sole purpose of bringing economic pressure to

bear in support of a legitimate bargaining position. Petitioner dis-

charged its drivers at the expiration of the contract (Pet. App. 24, 22, 20:

A. 38-43); it did not lock them out contingent on their accepting

petitioner's proposals to subcontract unit work as each driver retired

DO}J-1981-05