Petition — Charles D. Bonanno Linen Service, Inc. v. NLRB

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Supreme Court, U.S.

s 0 _ 9 3 1 FILED

10 1980

No. MICHAEL RODAK, JR., CLERK

IN THE

Supreme Court of the United States.

OcTOBER TERM, 1980.

CHARLES D. BONANNO LINEN

SERVICE, INC.,

PETITIONER,

Vv.

NATIONAL LABOR RELATIONS BOARD

AND

TEAMSTERS LOCAL UNION NO. 25,

INTERNATIONAL BROTHERHOOD OF

TEAMSTERS, CHAUFFEURS,

WAREHOUSEMEN AND HELPERS OF

AMERICA,

RESPONDENTS.

PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE FIRST CIRCUIT.

SipNeEY A. Coven, Counsel of Record,

JOSEPH E. LEPIE,

Howarp I. WILGOREN,

LEPIE AND COVEN,

18 Tremont Street,

Suite 618,

Boston, Massachusetts 02108.

(617) 523-8240

Counsel for Petitioner.

ADDISON C. GETCHELL & SON, INC. - THE LAWYERS’ PRINTER - BOSTON

Question Presented.

Did the court below err in holding that an employer

member of a multi-employer bargaining unit violates the

National Labor Relations Act, 61 Stat. 140 (1947), as

amended, 29 U.S.C. § 158(a\(5), by unilaterally withdrawing

from said unit upon the occurrence of an impasse in collective

bargaining negotiations, for the purposes of negotiating in-

dividually with the union, and thereafter refusing to execute

the multi-employer agreement, where such an opinion is con-

trary to the decision of five circuit courts of appeals on the

same issue?

Table of Contents.

Question presented i

Table of contents ii

Table of authorities cited ii

Opinions below 1

Jurisdiction 2

Applicable statutory provision 2

Statement of the case 2

Reasons for granting the writ 5

Conclusion 17

Appendix A 18

Appendix B 38

Appendix C 53

Decision of the Administrative Law Judge 53

Decision of the National Labor Relations Board 70

Table of Authorities Cited.

CASES.

Charles D. Bonanno Linen Service Inc., 243 NLRB

140 (1979) 6, 7, 10, 16

Connell Typesetting Co., 212 NLRB 918, 921 (1974) 7

Evening News Association, 154 NLRB 1494 (1965)

enforced sub. nom., Detroit Newspaper Publishers

Association v. NLRB, 372 F. 2d 569 (6th Cir. 1967) 7,15

Fairmont Foods Co. v. NLRB, 471 F. 2d 1170 (8th

Cir. 1972) 8

N.L.R.B. v. Associated Shower Door Co., Inc., 512

F. 2d 230 (9¢: Cir. 1975), cert. denied, 423 U.S.

893 (1975) 9,10

iii

N.L.R.B. v. Beck Engraving Co., 522 F. 2d 475

(3d Cir. 1975) 9,10, 11,15

NLRB v. Bonanno, — F. 2d — (1980) 1,6

NLRB v. Brown et al., 380 U.S. 278 (1965) 16

NLRB v. General Electric, 418 F. 2d 736 (2d Cir.

1969) 9

NLRB v. Hi-Way Billboards, Inc., 500 F. 2d 181 (5th

Cir. 1974) 7, 8, 10

N.L.R.B. v. Independent Association of Steel

Fabricators, 582 F. 2d 135 (2d Cir. 1978), cert.

denied, 439 U.S. 1130 (1979) 9,10, 13

N.L.R.B. v. Truck Drivers Union Locai 449, 353 U.S.

87 (1957) 5, 6, 14, 16

Plumbers Union No. 323, 191 NLRB 592 (1971) 9

Retail Associates Inc., 120 NLRB 388 (1958) 7,8, 15

Sangamo Construction Co., 188 NLRB 159 (1971) 9

Spun-Jee Corp., 171 NLRB 557 (1968) 7

Typographic Service Co., 238 NLRB No. 211 (1978) 7

U.S. Lingerie Corp., 170 NLRB 750 (1968) 7

STATUTES.

28 U.S.C. § 1254(1) 2

29 U.S.C. § 151 et seq. 2

29 U.S.C. § 158(aX1) 2,4

29 U.S.C. § 158(aX5) 2,4,8

29 U.S.C. § 160(eXf)

OTHER AUTHORITIES.

Characteristics of Major Collective Bargaining

Agreements: 12 (Bulletin 2065 April 1980)

January 1, 1978 5

No.

IN THE

Supreme Court of the United States.

OcTOBER TERM, 1980.

CHARLES D. BONANNO LINEN

SERVICE, INC.,

PETITIONER,

NATIONAL LABOR RELATIONS BOARD

AND

TEAMSTERS LOCAL UNION NO. 25,

INTERNATIONAL BROTHERHOOD OF

TEAMSTERS, CHAUFFEURS,

WAREHOUSEMEN AND HELPERS OF

AMERICA,

RESPONDENTS.

PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE FIRST CIRCUIT.

Charles D. Bonanno Linen Service, Inc. prays that a writ of

certiorari issue to review the judgment of the United States

Court of Appeals for the First Circuit in the above entitled

case.

Opinions Below.

The opinion issued by the court of appeals is reported at —

F. 2d — (1st Cir. 1980), and is reproduced in Appendix A of

this petition. The Supplemental Decision and Order of the

National Labor Relations Board was issued on August 6,

1979, is reported at 243 NLRB No. 140, and is reproduced in

Appendix B of this petition. The National Labor Relations

Board’s initial Decision and Order was issued on June 29,

1977, is reported at 229 NLRB 629 and is reproduced in Ap-

pendix C of this petition.

Jurisdiction.

The court of appeals issued its opinion enforcing the order

of the National Labor Relations Board on September 12,

1980. This Court has jurisdiction pursuant to 28 U.S.C. §

1254(1).

Applicable Statutory Provision.

The statute involved is the National Labor Relations Act,

as amended 61 Stat. 136, 713 Stat. 519, 29 U.S.C. § 151 et

seq. The relevant sections are 29 U.S.C. 158(aX1) and (5). The

pertinent text is as follows:

§ 8(a) It shall be an unfair labor practice for an employer—

(1) to interfere with, restrain, or coerce employees in the

exercise of the rights guaranteed in section 7; ...

(5) to refuse to bargain collectively with the representatives

of his employees, subject to the provisions of section 9(a).

Statement of the Case.

On October 27, 1976, the parties agreed to stipulate to most

of the essential facts which relate to the instant matter.

Although the testimony adduced at the hearing before the

Administrative Law Judge revealed some disagreement as to

details, there is no real disagreement as to the essential facts.

The facts as recited herein were, in effect, adopted by the Ad-

ministrative Law Judge during the course of his decision,

(Appendix C) and were not disturbed in the subsequent pro-

ceedings.

The New England Linen Supply Association (hereinafter

“the Association”) was a group of twelve employers engaged

in the linen supply and service industry who joined together

for the purpose of engaging in collective bargaining with

Teamsters Local Union No. 25 (hereinafter ‘‘the Union’’)! on

a multi-employer basis. Charles D. Bonanno Linen Service,

Inc., (hereinafter ‘‘Bonanno”) had been a member of the

Association for several years. Bonanno was a signatory to a

collective bargaining agreement covering the period from

September 21, 1972 to April 18, 1975.

In accordance with that agreement the Union and Associa-

tion each gave notice of termination. Bonanno authorized the

Association to bargain with the Union in its behalf.

Commencing in April, 1975, the Association and the Union

engaged in negotiations for the purpose of executing a new

agreement. After several negotiating sessions a proposed

contract which provided for compensation of employees on

an hourly basis was submitted to the Union membership for

ratification. After the employees rejected that contract, the

Union at the next meeting proposed that its driver members

be compensated on a commission basis rather than on an

hourly rate. This position was rejected by the Association in

accordance with its prior negotiating position. On May 15 an

impasse in bargaining was reached over the issue of the

method of compensating drivers.

On June 23, 1975 the Union called a selective strike against

Bonanno and the remaining Association members locked out

their drivers. Subsequent meetings were held, but the parties

were unable to resolve the continuing impasse.?

1The Association no longer exists. Bargaining between the

Union and former Association members has been on an individual

Company basis.

2In testimony before the Administrative Law Judge evidence

was adduced that the Union met separately with two individual

members of the Association. There is no record evidence that

separate interim agreements were executed.

On November 21, 1975 Bonanno advised the Association

and the Union that it was withdrawing from the Association.

Thereupon, the remaining members of the Association ter-

minated the lockout.’

After several meetings without Bonanno the Association

and Union reached an agreement on a new contract on April

18, 1976. By letter dated April 29, 1976, the Union for the

first time informed Bonanno that it considered Bonanno to be

bound by the agreement reached with the Association. By let-

ter dated May 3, 1976, Counsel for Bonanno advised the

Union that Bonanno was not bound by the agreement re-

ferred to in the Union’s letter of April 29.

As a result of an unfair labor practice charge filed by the

Union, the National Labor Relations Board (hereinafter ‘‘the

Board’’) summarily affirmed the decision of an Administra-

tive Law Judge, holding that Bonanno violated Section 8(a\1)

and (5) of the National Labor Relations Act, (“‘the Act’’) as

amended, 61 Stat. 136, 140, 29 U.S.C. 158(a\1) and (5), by re-

fusing to execute the collective bargaining agreement

reached between the Association and the Union 229 NLRB

629 (1977) (Appendix C. 70).

Thereafter, Bonanno applied for review and the Board ap-

plied for enforcement of its Order to the United States Court

of Appeals for the First Circuit (Case No. 77-1279). After

Bonanno had filed its brief, the Board filed, and the court

granted, a motion for leave to withdraw the certified list filed

in lieu of record in order to reconsider its decision.

The Board sought enforcement of its Supplemental Deci-

sion and Order with the Court of Appeals for the First Cir-

cuit. The court of appeals enforced the decision of the Board.‘

3 The strike against Bonanno is still in effect.

4 On October 6, 1980 the First Circuit entered an order staying

its decree until entry of the final decision of this Court upon a peti-

tion for writ of certiorari to be filed by Bonanno.

Reasons for Granting the Writ.

The decision by the Court of Appeals for the First Circuit

below conflicts with the decisions of five other circuit courts®

on the question of whether an employer may withdraw from a

multi-employer bargaining unit upon the occurrence of an im-

passe in collective bargaining negotiations.

A decision by this Court is necessary to resolve the extant

conflict among the circuits in order that a uniform federal law

be established on the issue. A decision by this Court uphold-

ing the reasoning of the five circuit courts which have re-

solved the issue contra to the First Circuit will have the

salutary effect of balancing the conflicting legitimate inter-

ests of employers and unions, by allowing an employer to

withdraw from multi-employer bargaining once it becomes

clear that bargaining within that framework has become

nothing more than an exercise in futility.®

Multi-employer bargaining has been recognized as “‘a vital

factor in the effectuation of the national policy of promoting

labor peace through strengthened collective bargaining.”

Labor Board v. Truck Drivers Union Local 449, 353 U.S. 87

at 95 (1957). In the main both employers and unions derive

substantial benefits from bargaining in this manner. As the

court of appeals stated in its decision herein:

5 NLRB v. Independent Association of Steel Fabricators, 582 F.

2d 135 (2d Cir. 1978), cert. denied, 439 U.S. 1130 (1979); NLRB v.

Beck Engraving Co., 522 F. 2d 475 (3d Cir. 1975); NLRB v. Hi-Way

Billboards, Inc., 500 F. 2d 181 (5th Cir. 1974); Fairmont Foods Co.

v. NLRB, 471 F. 2d 1170 (8th Cir. 1972); NLRB v. Associated

Shower Door Co., Inc., 512 F. 2d 230 (9th Cir. 1975), cert. denied,

423 U.S. 893 (1975).

6 According to the United States Department of Labor, in its

study of contracts covering 1,000 or more employees, there are 648

multi-employer bargaining agreements, covering more than three

million employees. United States Department of Labor, Character-

istics of Major Collective Bargaining Agreements, 12 (Bulletin 2065,

April, 1980) January 1, 1978.

Multi-employer bargaining offers advantages to both

management and labor. It enables smaller employers to

bargain ‘‘on an equal basis with a large union” and avoid

“competitive disadvantages resulting from non-uniform

contractual terms” NLRB v. Truck Driver Local 449,

353 U.S. 87, 96 (1957). At the same time, it facilitates the

development of industry-wide, worker benefit programs

that employers otherwise might be unable to provide. . .

Finally, by permitting the union and employers to con-

centrate their bargaining resources on the negotiation of

a single contract, multi-employer bargaining enhances

the efficiency of the collective bargaining process and

thereby reduces industrial strife. NLRB v. Bonanno, —

F. 2d — (1st Cir. 1980) (Appendix A. 21-22).

However, as demonstrated by this case, the aforemen-

tioned desirable results of multi-employer bargaining can not

always be achieved. In fact, subsequent ‘o the occurrence of

an impasse in negotiations between the Association and the

Union, almost eleven months passed before agreement be-

tween the parties was reached. During this breakdown in

negotiations Bonanno was subjected to a selective strike by

the Union and, as a result, most of the remaining members of

the Association locked out their drivers. Faced with this

stalemate in bargaining Bonanno, after six months of the

status quo, concluded that the salutary purposes of multi-

employer bargaining had been destroyed by the continuing

impasse in negotiations. Therefore, on November 21, 1975,

Bonanno advised the Union and Association that it was re-

voking its prior authorization to the Association to bargain on

its behalf and would henceforth bargain directly with the

Union.

Bonanno’s withdrawal from the Association raises the

question as to what circumstances will warrant an employer’s

withdrawal from multi-employer bargaining once negotia-

tions have commenced. The Board’s view of the right of

withdrawal which was adopted in Retail Associates, Inc., 120

NLRB 388, 395 (1958) is as follows: Once negotiations be-

tween the multi-employer group and union have commenced,

an employer’s withdrawal from the group is untimely and in-

effective unless justified by “‘unusual circumstances,” or by

consent granted by the union. The Board has narrowly con-

strued those unusual circumstances which will justify with-

_drawal during negotiations between a multi-employer group

and a union. Such action is sanctioned in but two instances. If

an employer can demonstrate that it is faced with dire finan-

cial circumstances, circumstances in which the very existence

of an employer as a viable business entity has ceased or is

about to cease, such as impending bankruptcy, the with-

drawal will not violate the Act. See: Hi-Way Billboards, Inc.,

206 NLRB 22, 23 (1973); U.S. Lingerie Corporation, 170

NLRB 750, 751 (1968); Spun-Jee Corp., 171 NLRB 557, 558

(1968). The Board will also find unusual circumstances justi-

fying unilateral withdrawal on a showing that the multi-

employer group has been significantly dissipated by reason of

consensual withdrawals. The Board reasons that further uni-

lateral withdrawals will not significantly affect public or pri-

vate interests in effective multi-employer bargaining. See:

Connell Typesetting Company, 212 NLRB 918, 921 (1974);

Typographic Service Co., 288 NLRB No. 211 (1978).

However, the Board has maintained that the occurrence of

an impasse in negotiations is not an ‘‘unusual circumstance”

justifying withdrawal. See, e.g., Hi-Way Billboards, Inc., 206

NLRB 22 (1973); Charles D. Bonanno Linen Service, Inc.,

243 NLRB No. 140 (1979) (Appendix B. 41). In so doing they

have characterized impasse as only a temporary “deadlock”

or “hiatus” in negotiations. In view of the foregoing, the

Board held that Bonanno’s withdrawal from the Association

was ineffectiye, and its subsequent refusal to execute the

collective bargaining agreement violated § 8(aX5) of the Act.

Aside from the First Circuit, all of the courts of appeals

which have considered the issue have concluded that an im-

passe in multi-employer bargaining is an unusual circum-

stance within the meaning of Retail Associates, supra. In

each case the courts held that an employer’s unilateral with-

drawal from group bargaining was justified.’ As the Eighth

Circuit held in Fairmont Foods Company v. NLRB, 471 F. 2d

1170, 1172 (8th Cir. 1972):

When an impasse in negotiations is reached, with-

drawal by a member of a multi-employer bargaining

group is excused (citations omitted). This means, of

course, that it cannot be bound by a subsequent agree-

ment between a union, having knowledge of the with-

drawal, and the other employers.

In NLRB v. Hi-Way Billboards, Inc., 500 F. 2d 181 (5th

Cir. 1974), the court disagreed with the Board and joined the

Fairmont Court in concluding that an employer’s withdrawal

from multi-employer bargaining on the reaching of an im-

passe was justified. The court viewed the Board’s decision as

follows:

“We are impressed with the cogency of the Board’s

reasoning insofar as the Board’s decision would protect

the interests of the Union and of the employees in the

multi-employer unit. But we have doubts about the fair-

ness of the decision to the employer members of the

unit.”” Supra at 183.

The Second, Third and Ninth Circuits have all concluded, in

agreement with the Fifth and Eighth Circuits, that the occur-

rence of an impasse does justify an employer’s unilateral

7 Such an action does not necessarily extinguish an employer’s

a obligation. After withdrawal an employer would nor-

2 | — with the union on an individual basis, as Bonanno of-

fered to do in this case.

withdrawal! from a multi-employer bargaining group. NLRB

v. Independent Association of Steel Fabricators, Inc., 582 F.

2d 135, 146 (2d Cir. 1978), cert. denied, 439 U.S. 1130 (1979);

NLRB v. Beck Engraving Company, 522 F. 2d 475, 483 (3d

Cir. 1975); NLRB v. Associated Shower Door Co., Inc., 512 F.

2d 230, 232 (9th Cir. 1975), cert. denied, 423 U.S. 893 (1975).

In the context of multi-employer collective bargaining a

union has at its disposal the ability to create severe fragmen-

tation of the multi-employer group. Upon the occurrence of

an impasse in bargaining it is permissible for a union to

engage in separate negotiations with individual employer

members of the group leading to execution of separate in-

terim agreements.® In effect, the Board has held that a union

may withdraw from multi-employer negotiations with re-

spect to one or more employers and negotiate separate in-

terim agreements with those employers. Plumbers Union No.

323, 191 NLRB 592 (1971);° Sangamo Construction Co., 188

NLRB 159 (1971). Such agreements engender a de facto with-

drawal of employer signatories from the multi-employer

group.

® Although the Board professes a desire to apply the rules con-

cerning withdrawal equail — among union and employers in the

multi-employer context, pm News Association, etc., 154

NLRB 1494 (1965), enforced sub. nom., Detroit Newspaper

Publishers Association v. NLRB, 372 F. 2d 569 (6th Cir. 1967) such

an evenhanded policy breaks down by the sanctioning of a union’s

right to negotiate separate interim agreements with some mem-

bers of the multi-employer group. By contrast, it would be an un-

fair labor practice for an employer to deal directly with an individ-

ual union where unions join together for bargaining .

NLRB v. General Electric, 418 F. 2d 736 (2d Cir. 1969).

® Unlike the situation in Plumbers Union No. 323, 191 NLRB 592

(1971) the Union here struck Bonanno alone, presumably in an ef-

fort to “‘. .. exert pressure on a single employer or to whipsaw the

Association by picking off individual employer members ...”

supra at 596. After impasse the Union attempted to fragment the

Association by engaging in a selective strike against Bonanno, and

The Board has concluded that such agreements prevent

significant fragmentation of the multi-employer group,

rather than cause such fragmentation, and tend to facilitate

the breaking of an impasse. Charles D. Bonanno Linen Ser-

vice, Inc., 248 NLRB No. 140 (1979), (Appendix B. 51). Such a

conclusion by the Board patently ignores the realities of

multi-employer bargaining. The execution of such agree-

ments in fact causes considerable fragmentation and weaken-

ing of the unity and strength of the multi-employer group.

See, e.g., NLRB v. Hi-Way Billboards, Inc., supra at 183;

NLRB v. Beck Engraving Co., supra at 482-3; NLRB v. In-

dependent Association of Steel Fabricators, supra at 147;

NLRB vy. Associated Shower Door, supra at 232. Those em-

ployers who execute interim agreements are producing or op-

erating their businesses while their competitors, the remain-

ing members of the multi-employer group, remain mired in a

continuing labor dispute. Moreover, such interim agreements

often grant concessions which the other employers are un-

willing to grant. In sum, interim agreements fragment the

unit, even if such agreements are temporary, allowing some

employers to avoid the hardship of a strike and forcing others

to lose the benefits of the composite strength for which the

multi-employer group was created.

The courts which have considered the issue (with the excep-

tion of the First Circuit) have uniformly concluded that in

balancing the conflicting legitimate interests of the parties in

the multi-employer bargaining context, an employer must be

allowed to withdraw from a multi-employer group upon im-

passe. These courts concluded that such an “impasse doc-

trine’’ is necessary in order to offset the powe~ of a union to

subsequently by holding separate meetings with individual Associa-

tion members presumabiy in an effort to negotiate separate

agreements. See: NLRB v. Beck Engraving Co., 522 F. 2d 475, 483

(3d Cir. 1975); Fairmont Foods Co. v. NLRB, 471 F. 2d 1170, 1174

n.1 (8th Cir. 1972); NLRB v. Callier, — F. 2d —, — (8th Cir. 1980).

destroy the effectiveness of such a group by negotiating

separate interim agreements. The position of these courts

was succinctly summarized by the Third Circuit in NLRB v.

Beck Engraving Co., 522 F. 2d 475, 482-3 (3d Cir. 1975) as

follows:

As we have noted, the Board has enunciated the even-

handed principle that its regulations for withdrawal

from multi-employer bargaining units are the same for

unions and employers. The Evening News Association,

supra, 154 NLRB at 1501 (1965). Its subsequent deci-

sions have reflected an effort to effectuate this policy.

For example, the Board has held in a series of opinions

that a union may withdraw from a multi-employer bar-

gaining unit with respect to one or more, but not all,

employers if the withdrawal is timely and unequivocal.

Pacific Coast Association, 163 NLRB No. 129, pp.

892-899 at 896 (1967); Hearst Consolidated Publications,

Inc., 156 NLRB No. 16, 210-212 (1965) enforced sub

nom., Publishers Association of New York City v. NLRB,

364 F. 2d 293 (2d Cir.), cert. denied, 385 U.S. 971 (1966)

... The Evening News Association, 154 NLRB No. 121,

1494 (1965), enforced sub nom., Detroit Newspaper

Publishers Association v. NLRB, 372 F. 2d 569, 572 (6th

Cir. 1967). In substance these cases merely apply the

Retail Associates rule, supra, 120 NLRB 393-395, to the

union as well as the employer.

But the Board has not contented itself with this ap-

proach. Instead, it has given its imprimatur to the

union’s negotiation of interim, separate agreements with

individual members of the multi-employer bargaining

unit. P. H. C. Mechanical Contractors, 191 NLRB No.

121, pp. 592-596 (1971); Sangamo Construction Com-

pany, 188 NLRB No. 26, 159-163 (1971). The undeniable

import of this policy is that the union may reach agree-

ments with one or more employers of the bargaining unit

and then whipsaw the remaining employers of the bar-

gaining unit. It is not sufficient to say, as the Board

does, that such an arrangement does not preclude an in-

dividual employer from reaching an individual and in-

terim accord with the uw. »n. Rather, the point is that

each individual agreement strengthens the union’s hand

vis a vis those employers who continue to bargain within

the unit. Moreover, allowing individual negotiations

even on an interim basis is tantamount to a rejection of

the existence of the multi-employer bargaining unit. We

believe it inconsistent to say that the union and some em-

ployers may act on an individual basis while other em-

ployers within the same unit, relegated to this posture by

the union’s refusal to negotiate with them on an individ-

ual basis, must adhere to group bargaining. The union,

under the Board’s own policy, should not have been

given two weapons for its economic arsenal (i.e. the

selective strike and individual negotiations) while the

employers are given only one (viz., the lockout). We be-

lieve that the Board’s approval of individual, interim

agreements during multi-employer bargaining and with-

out requiring withdrawal from the multi-employer bar-

gaining unit is sufficient cause for according the em-

ployer an equivalent right. See: Fairmont Foods Co. v.

NLREB, 471 F. 2d 1170 at 1174, n.1 (8th Cir. 1972). More-

over, the Board’s decisions and its stated policy of apply-

ing its rules equally to both Union and employer require

us also to conclude that a negotiating impasse justifies an

employer’s unilateral withdrawal from the multi-em-

ployer bargaining unit.

We therefore, join the Ninth, Fifth and Eighth Circuits

and hold that a negotiating impasse justifies unilateral

withdrawal from a multi-employer bargaining unit.

NLRB vy. Associated Shower Door Co., Inc., 512 F. 2d

230 at 232 (9th Cir. 1975), petition for cert. filed 44

U.S.L.W. 3062 (U.S. July 28, 1975) (No. 75-127); NLRB

v. Hi-Way Billboards, Inz., 500 F. 2d 181 at 183-184 (5th

Cir. 1975); Fairmont Foods Co. v. NLRB, supra, at 471

F. 2d 1170 at 1172-1173 and 1174, n.1. (Emphasis sup-

plied.)

Prior to the decision by the First Circuit here, the Second

Circuit joined its sister circuits in sanctioning an employer’s

unilateral withdrawal from a multi-employer group once an

impasse in negotiations had been reached. In NLRB v. In-

dependent Association of Steel Fabricators, 582 F. 2d 135 (2d

Cir. 1978) the court concluded that:

The rule against untimely withdrawal is designed to

prescrve the stability of multi-employer bargaining

which would be impaired if an employer could withdraw

whenever it found the results of such bargaining uncon-

genial or if it felt that it could use the threat of with-

drawal as bargaining leverage ... By the same token,

however, the objectives of collective bargaining would be

ill served by compelling employers to remain in the bar-

gaining unit once it becomes clear that no progress is be-

ing made within that framework. Thus, all the circuits

which have addressed the issue have concluded that a

genuine impasse in negotiations will justify an

employer’s unilateral withdrawal from multi-employer

bargaining. (Citations omitted), supra at 146.!°

Bonanno attempted to reach an agreement with the Union

within the framework of the Association. Despite the target-

10 In the most recent circuit court pronouncement on the issue,

the Ninth Circuit, reaffirmed its conclusion that an impasse in

ining justifies an ag gy unilateral withdrawal from

multi-employer eo : D, Inc. v. NLRB, — F. 2d —, No.

79-7198, 105 LRRM 3070 (9th Cir. October 8, 1980). The Ninth Cir-

cuit stated in H & D,

Recently, this court declared in Authorized Air Conditioning

Co. v. NLRB, 606 F. 2d 899 (9th Cir. 1979), citing cases from

ing of it by the Union for a selective strike, Bonanno endeav-

ored for more than six months after the onset of an impasse

between the parties to come to terms with the Union within

the context of group bargaining. It was only after Bonanno

realized the futility of such efforts that its withdrawal from

the Association was effectuated.!! Having endured the im-

passe and projonged selective strike for a substantial period

of time, it appeared to Bonanno that the efficiency and effec-

tiveness of bargaining through the Association as con-

templated by this Court in NLRB v. Truck Drivers, 353 U.S.

87, 95 (1957) had been seriously diminished. Moreover, con-

trary to this Court’s hope that multi-employer bargaining

would lead to the reduction of industrial strife and “‘the effec-

tuation of the national labor policy of promoting labor peace

through strengthened collective bargaining,” supra, at 95,

the selective strike against Bonanno and the impasse con-

tinued for six months. In view of the situation, Bonanno ef-

fectuated its withdrawal from the Association. '?

the Second, Third, Fifth, Eighth and Ninth Circuits that ‘‘(t)he

Courts of Appeals have consistently recognized an im in

negotiations as justification for a unilateral withdrawal from a

multi-employer unit.” 606 F. 2d at 907. While the Board argues

on this appeal that its position, considering the competing

policy considerations, is compelling and entitled to judicial ac-

copeance, and that in recent cases the courts’ misconceptions

of the Board’s rulings have been clarified, these contentions

are not persuasive and appear to be disposed of in NLRB v. As-

sociated Shower Door Co., 512 F. 2d 230, 232, 88 LRRM 3024

(9th Cir. 1975), and NLRB v. Beck Engraving Co., 522 F. 2d

475, 90 LRRM 2089 (8rd Cir. 1975). We find no cogent reason

at this time to challenge the eo taken by this court in

Authorized Air Conditvoning Co.v. NLRB, supra. —«

1 By letter dated November 21, 1975 to the Association’s

negotiating committee, a ones which was sent to Herbert Salter,

the Union's Representative, Bonanno gave notice of revocation of

its bargaining authorization previously granted to the Association,

and its intent to engage in t negotiations with the Union.

‘2 This course of action was in accord with the state of the law as

enunciated by the decisions of the courts in NLRB v. Beck Engrav-

ing Co., supra; NLRB v. Associated Shower Door, supra; NLEB vy.

Hv-Way Billboards, Inc., supra; Fairmont Foods Co. v. NLRB,

supra.

As found by the Administrative Law Judge, before Bonan-

no withdrew two otlier employer members of the Association

secretly were in contact with the union “presumably in an ef-

fort to make a separate settlement.’’ (Appendix C. 57). Not-

withstanding those contacts no interim agreements were ex-

ecuted in this case.

It is submitted that an employer’s right to withdraw from a

multi-employer group should not be made contingent upon

the exercise 'y a union of its admitted right to negotiate sepa-

rate interim agreements. Rather, in order to insure effectua-

tion of the Board’s stated principle that its regulations for

withdrawal from multi-employer bargaining units are to be

applied equally to unions and employers, The Evening News

Association, 154 NLRB at 1501 (1965), it is logical to con-

clude that in response to a union’s right to negotiate separate

interim agreements upon the occurrence of impasse, an em-

ployer should be granted a concomitant right to withdraw

from a multi-employer group.

In NLRB v. Beck Engraving Co., 522 F. 2d 475 (8d Cir.

1975), the court concluded that an impasse in bargaining

justifies withdrawal despite the lack of evidence in that case

that the union had attempted to negotiate any separate in-

terim agreements. In so doing the Beck court stated:

The employer’s right to withdraw during a bargaining

impasse cannot be made contingent upon the union’s

prior exercise of its right to negotiate individual interim

agreements. The rights of the parties should accrue

simultaneously based upon the occurrence of an event

which neither can manipulate (e.g., impasse). Were the

rule otherwise, the party whose right accrues first would

be given a tremendous bargaining advantage and lever-

age. Supra at 483.

The decision of the First Circuit adopts the Board’s conclu-

sion that an impasse in bargaining is not an “unusual circum-

stance’’ within the meaning of Retail Associates. However,

while rejecting the decisions of its five sister circuit courts

and its own prior leanings,'* the First Circuit nonetheless

recognized that a union’s unrestricted right to negotiate

separate interim agreements necessarily weakens the em-

ployer’s ability to resist the union’s economic pressures.

“Withdrawal by unit members and their negotiation of

separate contracts obviously would reduce the efficiency of

the bargaining process.” NLRB v. Bonanno, — F. 2d — (1st

Cir. 1980). (Appendix A. 22).

The First Circuit concedes that: ‘“‘employers have no direct

means of countering the union’s ability to negotiate in-

dividual agreements.” (Appendix A. 31). Despite recognition

of the adverse impact of separate interim agreements on

multi-employer bargaining, the court, in contravention of the

unanimity of the other circuit court decisions on the issue has

nonetheless chosen to adopt the Board’s view. In the main

the court’s holding is grounded upon its belief that under the

circumstances the proper course of action would be to defer

to the Board’s “specialized judgment.”’ (Appendix A. 36).

While it is true thac judicial review is limited, NLRB v.

T'ruck Drivers Local 449, 353 U.S. 87, 96 (1957), that does

“not mean that the balance struck by the Board is immune

from judicial examination and reversal in proper cases.”

Labor Board v. Brown, 380 U.S. 278 (1965).

Courts have a statutory obligation to set aside Board deci-

sions which rest upon an erroneous legal conclusion. 29

U.S.C. § 160(eXf). As this Court stated in Brown, at 292:

(Where, as here, the review is not of a question of fact,

but of a judgment as to the proper balance to be struck

between conflicting interests, ‘(t]he deference owed to

an expert tribunal cannot be allowed to slip into a judicial

inertia which results in the unauthorized assumption by

an agency of major policy decisions properly made by

18 See NLRB v. Field and Sons, 462 F. 2d 748 (1st Cir. 1972);

Jaime Andino d/b/a Jaime Andino Trucking v. NLRB, — F. 2d —,

No. 79-1133, Slip op. at 8 (1st Cir. April 25, 1980).

Congress.” American Shipbuilding Co. v. Labor Board,

post at 318.

Courts must of course, set aside Board decisions which

rest on “‘an erroneous legal foundation.” Labor Board v.

Babcock and Wilcox, supra, at 112-113. Congress has not

given the Board untrammeled authority to catalogue

which economic devices shall be deemed freighted with

indicia of unlawful intent. Labor Board v. Insurance

Agents, supra at 498.

All of the circuit courts, with the notable exception of the

First Circuit, have accepted this Court’s directive and have

fulfilled their obligation of judicial review of the Board’s deci-

sions on the issue presented by this case. They have con-

cluded that a balancing of ‘‘conflicting interests” in multi-

employer bargaining mandates that an employer be granted

a right to withdraw at impasse.

A decision by this Court is necessary to resolve the conflict

among the circuits created by the decision by the First Cir-

cuit below. Such a decision upholding an employer’s

withdrawal will resolve the issue with finality. It will also in-

sure that the Board’s professed desire to equalize the regula-

tions governing union and employer withdrawal rights from

multi-employer bargaining will be effectuated.

Conclusion.

For the reasons set forth above, this Court should issue a

writ of certiorari to review the decision of the court below

and after granting such a writ, to reverse the decision of the

First Circuit Court of Appeals.

Respectfully submitted,

SIDNEY A. COVEN,

Counsel of Record,

JOSEPH E. LEPIE,

HOWARD I. WILGOREN,

LEPIE AND COVEN,

18 Tremont Street,

Boston, Massachusetts 02108.

(617) 523-8240

Appendix A.

United States Court of Appeals

For the First Cireuit P

No. 79-1524

NATIONAL LABOR RELATIONS BOARD,

PETITIONER,

and

TEAMSTERS LOCAL UNION NO. 25,

INTERNATIONAL BROTHERHOOD OF TEAMSTERS,

CHAUFFEURS, WAREHOUSEMEN AND HELPERS

OF AMERICA,

INTERVENOR,

CHARLES D. BONANNO LINEN SERVICE, INC.,

RESPONDENT.

ON APPLICATION FOR ENFORCEMENT OF AN ORDER

OF THE NATIONAL LABOR RELATIONS BOARD

Before

CAMPBELL and BownEs, Circuit Judges,

and Davis, Judge.*

John G. Elligers, Attorney with whom William A. Lubbers,

General Counsel, John E. Higgins, Jr., Deputy General Counsel,

Robert E. Allen, Acting Associate General Counsel, Elliott Moore,

Deputy Associate General Counsel, and Standau E. Weinbrecht,

Attorney, were on brief for petitioner.

Sidney A. Coven, with whom Howard I. Wilgoren, and Lepie and

Coven were on brief, for respondent.

James T. Grady, with whom Gabriel O. Dumont, Jr., and Grady

and McDonald were on brief, for intervenor.

September 12, 1980

* Of the United States Court of Claims, sitting by designation.

Bownes, Circuit Judge.

Pursuant to § 10(e) of the National Labor Relations Act, 29

U.S.C. § 160(e), the National Labor Relations Board (the

Board) petitions for enforcement of a decision! which it con-

cedes is contrary to the pronouncements of five circuit

courts. At issue is whether the occurrence of an impasse in

the course of collective bargaining enables an employer uni-

laterally to withdraw from a multiemployer bargaining unit

and thereafter negotiate with the union on an individual

basis. Rejecting the various court decisions indicating other-

wise as misguided, the Board concluded that an employer’s

withdrawal upon occurrence of a bargaining impasse is unjus-

tified and violative of §§ 8(aX5) and (1) of the Act. In so hold-

ing, the Board reaffirmed a position to which it has tena-

ciously adhered since 1973. For the reasons set forth below,

we enforce the Board’s order.

The factual findings of the Administrative Law Judge are

undisputed. Charles D. Bonanno Linen Service, Inc. (Bonan-

no) is a Massachusetts corporation engaged in the launder-

ing, rental and distribution of linen products. The truck

drivers and helpers employed by Bonanno, as well as by other

linen supply companies in the area, have been represented by

the Teamsters Local Union No. 25 (the Union). For the pur-

pose of negotiating with the Union concerning the terms of

1 The Board actually filed two decisions in this case. The first,

issued on May 12, 1977 and reported at 229 NLRB 629 (1977), was

a summary affirmance of the Administrative Law Judge’s opinion

and order. The Board subsequently sought leave to reconsider its

decision, and for that reason we suspended the respondent’s peti-

tion for review on October 26, 1977. On August 6, 1979, the Board

affirmed its initial opinion in a supplemental decision, reported at

243 NLRB No. 140, 1979-80 CCH NLRB 4 16,090 (1979), enforce-

ment of which is now sought.

employment of these workers, Bonanno for several years has

joined with nine of its competitors in a multiemployer unit

called the New England Linen Supply Association (the

Association). Bonanno was a signatory to the most recent

contract negotiated between the Association and the Union,

which covered the period from September 21, 1972 to April

18, 1975. On February 19, 1975, Bonanno authorized the

Association’s negotiating committee to represent it in the an-

ticipated negotiations for a new contract, and Bonanno’s

president became a member of that committee.

The Union and the Association held bargaining sessions

throughout March and April of 1975. On April 30; a proposed

contract was agreed upon by the negotiators, but was re-

jected by the Union members four days later. By May 15, the

parties had reached an impasse over the issue of compensa-

tion: the Union demanded that the employees be paid on a

commission basis, while the Association insisted that they

continue to receive payment at an hourly rate. When several

s ent meetings proved unsuccessful in breaking the im-

passe, the Union on June 23 initiated a selective strike

against Bonanno. In response, most of the Association

members locked out their drivers. The stalemate continued

throughout the summer, with the negotiators unable to agree

upon a method of payment during their sporadic meetings.

During this time, two employers secretly conferred with the

Union, “presumably in an effort to make a separate settle-

ment.” No such agreement, however, was executed, nor was

there any evidence that these contacts even reached the level

of negotiations.

On November 21, by which time it had hired permanent

replacements for all of its striking drivers, Bonanno notified

the Association by letter that it was “withdrawing from the

Association with specific respect to negotiations at this time

because of an ongoing impasse with Teamsters Local 25.’’ On

the same day, Bonanno mailed a copy of its revocation letter

to the Union and read it over the phone to a Union represent-

ative. Shortly thereafter, the Association terminated the

lockout and informed the Union that it wished to continue

negotiations on a multiemployer basis. Several negotiating

sessions were conducted between December and April. On

April 18, 1976, the Union abandoned its demand for payment

by commission and accepted a management offer of a revised

hourly wage rate. With this development, the parties quickly

reached agreement on a new contract, dated April 23, 1976,

and given retroactive effect to April 18, 1975.

On April 9, 1976, the Union filed the present action, alleg-

ing that Bonanno’s purported withdrawal from the multiem-

ployer bargaining unit constituted an unfair labor practice.

By letter dated April 29, 1976, the Union for the first time in-

formed Bonanno that the Union had never consented to its

withdrawal and therefore considered Bonanno to be bound by

the settlement just reached. Bonanno denied it was bound by

the contract in a reply letter dated May 3, 1976.

Il.

Crucial to any examination of the right of withdrawal from

a multiemployer bargaining arrangement is an understand-

ing of the private and public interests served by such an ar-

rangement and the extent to which those interests would be

undermined were a party free at any time to withdraw from

the multiemployer unit. Multiemployer bargaining offers ad-

vantages to both management and labor. It enables smaller

employers to bargain “‘on an equal basis with a large union”’

and avoid “the competitive disadvantages resulting from

nonuniform contractual terms.” NLRB v. Truck Drivers

Local 449, 358 U.S. 87, 96 (1957). At the same time, it facili-

tates the development of industry-wide, worker benefit pro-

grams that employers otherwise might be unable to provide.

More generally, multiemployer bargaining encourages both

sides to adopt a flexible attitude during negotiations; as the

Board explains, employers can make concessions ‘‘without

fear that other employers will refuse to make similar conces-

sions to achieve a competitive advantage,” and a union can

act similarly ‘without fear that the employees will be dissat-

isfied at not receiving the same benefits which the union

might win from other employers.” Brief at 10. Finally, by

permitting the union and employers to concentrate their bar-

gaining resources on the negotiation of a single contract,

multiemployer bargaining enhances the efficiency and effec-

tiveness of the collective bargaining process and thereby re-

duces industrial strife. For these reasons, Congress has rec-

ognized multiemployer bargaining as ‘‘a vital factor in the ef-

fectuation of the national policy of promoting ‘abor peace

through strengthened collective bargaining.” NLRB v.

Truck Drivers Local 449, 353 U.S. at 95.

It is apparent that, absent some constraints on the parties’

freedom to withdraw from a multiemployer unit during the

course of negotiations, the utility of this bargaining process

would be substantially undermined. Withdrawal by unit

members and their negotiation of separate contracts obvious-

ly would reduce the efficiency of the bargaining process. Per-

haps more importantly, if the withdrawing members were

successful in obtaining more favorable contractual terms,

their competitive advantage would encourage additional de-

fections. In order to forestall such withdrawals, the unit’s

bargaining representative likely would adopt a more extreme

position and a more intransigent approach, thereby diminish-

ing the likelihood of a prompt and peaceful settlement. At the

same time, a flat prohibition on withdrawal from a multiem-

ployer unit during negotiations would be equally trouble-

some: such a rule would subvert each employer's interest in

controlling its own labor relations, would cause injustice

whenever an employer developed a unique situation requiring

individualized treatment, and would undermine the multiem-

ployer bargaining process itself by discouraging involvement

therein.

In an effort to balance these competing concerns, the

Board in Retail Associates, Inc., 120 NLRB 388 (1958), pre-

scribed guidelines to govern withdrawal from multiemployer

bargaining. Under these rules, an employer or union is free to

withdraw from the multiemployer unit for any reason prior to

the date set for renegotiation of the existing contract or the

date on which negotiations actually commence, provided ade-

quate written notice is given. Once negotiations towards a

new contract have begun, however, a party may only

withdraw if “‘mutual consent” is given or if “‘unusual cir-

cumstances” exist. /d. at 395 (dictum). This approach affords

each party an opportunity to rescind its consent to multiem-

ployer bargaining, but restricts unilateral withdrawal during

the period when such action would jeopardize the viability

and effectiveness of the bargaining process. Even then,

however, a necessary measure of flexibility is provided by the

“mutual consent” and “unusual circumstances” exceptions.

We have recently endorsed the Retail Associates approach to

multiemployer withdrawal.? See Carvel Co. v. NLRB, 560

F.2d 1030, 1034-35 (1st Cir. 1977), cert. denied, 434 U.S.

1065 (1978); accord, e.g., McAx Sign Co., Inc. v. NLRB, 576

F.2d 62, 67-68 (5th Cir. 1978), cert. denied, 439 U.S. 1116

(1979); NLRB v. Sheridan Creations, Inc., 357 F.2d 245,

247-48 (1966), cert. denied, 385 U.S. 1005 (1967).

Since its delineation of the Retail Associates guidelines, the

Board, with judicial approval, has consistently found “un-

® Although in NLRB v. Field & Sons, Inc., 462 F.2d 748, 749-50

Get ~ oe we expressed some hesitation ———s the word

i i) Board’s approach, we ntly disapproved of thi

dictum in Carvel Co. v. NLRB, 560 F.2d at 1088.

usual circumstances” to exist in two situations: where ex-

treme financial pressures, such as impending bankruptcy,

have threatened an employer’s existence,? and where the

bargaining unit has been substantially fragmented, such as

through consensual withdrawals.* Whether the ‘‘unusual cir-

cumstances” exception also encompasses a bargaining im-

passe — the issue presented here — has invoked a more

varied response. For many years, the Board failed to provide

a clear-cut answer, first implying that impasse would not

justify unilateral withdrawal, see Ice Cream, Frozen Custard

Indus. Employees, 145 NLRB 865, 870 (1964), only to sug-

gest later that it would. See Plumbers & Steam/fitters Local

823, 191 NLRB 592, 592 n.1 (1971). In 1973, however, the

Board unequivocally ruled that a bargaining impasse was not

an “unusual circumstance” within the Retail Associates

guidelines. Hi-Way Billboards, Inc., 206 NLRB 22 (1973), en-

forcement denied, 500 F.2d 181 (5th Cir. 1974). It reasoned

that an impasse did not signify tlie end of collective bargain-

ing, but rather was a foreseeable stage in the bargaining

process — ‘‘akin to a hiatus in negotiations” — which per-

3 See, e.g., Atlas Electrical Service Co., 176 NLRB 827, 830

(1969); Spun-Jee Corp., 171 NLRB 557, 558 (1968); United States

Lingerie Corp., 170 NLRB 750, 751 (1968). Compare, e.g., Univer-

sal Insulation Corp., 149 NLRB 1397, 1403 (1964), enforced, 361

F.2d 406 (6th Cir. 1966) (mere economic hardship resulting from

multiemployer agreement not grounds for withdrawal).

4 See, e.g., NLRB v. Southwestern Colorado Contractors’ Ass’n,

447 F.2d 968, 969-70 (10th Cir. 1971); Typographic Service Co., 238

NLRB No. 211, 1978-79 CCH NLRB 4 15,096 (1978); Connell

T ing Co., 212 NLRB 918, 921 (1974).

though the Board apparently has never so held, several courts

have also found ‘‘unusual circumstances” in instances where the

negotiating committee does not fairly represent the interests of an

employer. See NLRB v. Siebler Heating & Air Conditioning, Inc.,

563 F.2d 366, 371 (8th Cir. 1977), cert. denied, 437 U.S. 911 (1978);

‘iota Unelko Corp., 71 Lab. Cas. 413,764 (7th Cir. 1973)

ictum).

mitted the parties to “‘resort to forms of economic persuasion

to establish the primacy of their negotiating position.” Jd. at

28. A rule permitting unilateral withdrawal upon impasse,

the Board added, would “‘herald the demise of multiemployer

bargaining,’ since a member could avoid its bargaining

obligations by purposefully creating an impasse whenever “‘it

was dissatisfied with the impending agreement.” Id. at

23-24. Notwithstanding the Fifth Circuit’s refusal to enforce

the Hi-Way Billboards decision, 500 F.2d 181 (5th Cir. 1974),

as well as subsequent expressions of judicial disapproval, the

Board has tenaciously adhered to this position ever since’ and

has provided a spirited defense thereof in the instant case.

243 NLRB No. 140, 1979-80 CCH NLRB 4 16,090 (1979).

As the Board concedes, there are a number of appellate

decisions that conclude, after analysis, that the occurrence of

a genuine impasse does justify an employer’s unilateral with-

drawal from a multiemployer bargaining unit.® See NLRB v.

Independent Ass’n of Steel Fabricators, Inc., 582 F.2d 135,

146 (2d Cir. 1978), cert. denied, 439 U.S. 1130 (1979); NLRB

v. Beck Engraving Co., Inc., 522 F.2d 475, 483 (3d Cir. 1975);

NLRB v. Associated Shower Door Co., Inc., 512 F.2d 230, 232

(9th Cir.), cert. denied, 423 U.S. 893 (1975) (dictum); NLAB v.

5 See, e.g., Seattle Auto Glass, 246 NLRB No. 21, 1979-80 CCH

NLRB 4 16,366 (1979); Golden Bear Motors, Inc., 245 NLRB No.

30, 1979-80 CCH NLRB 4 16,315 (1979); Marine Machine Works,

Inc., 248 NLRB No. 141, 1979-80 CCH NLRB { 16,089 (1979);

Florida Fire Sprinklers, Inc., 2837 NLRB 1034, 1035 (1978); Bill

Cook Buick, Inc., 224 NLRB 1094, 1096 (1976).

6 In addition, there are several cases — including one of our own

— that express the same view in dictum, citing without analysis to

one or more of the cases listed in the text. See Jaime Andino d/b/a

Jaime Andino Trucking v. NLRB, No. 79-1133, slip op. at 8 (1st

Cir. April 25, 1980); Authorized Air Conditioning Co., Inc. v.

NLRB, 606 F.2d 899, 907 (9th Cir. 1979), cert. denied, 48 U.S.L.W.

3626 (April 1, 1980); NLRB v. Acme Wire Works, Inc., 582 F.2d

153, 156-57 (2d Cir. 1978).

Hi-Way Billboards, Inc., 500 F.2d 181, 183-84 (5th Cir.

1974); Fairmont Foods Co. v. NLRB, 471 F.2d 1170, 1172

(8th Cir. 1972) (alternative holding). In fact, in its supplemen-

tal decision below, the Board endeavored at some length to

rebut this line of cases as misguided and unpersuasive. Upon

close analysis, however, all but one of these cases prove inap-

posite to, or otherwise distinguishable from, the situation at

hand.

III.

Fairmont Foods Co. v. NLRB, 471 F.2d 1170 (8th Cir.

1972) — the first case to rule that an impasse justifies

withdrawal — was decided prior to the Board’s Hi-Way

Billboards decision, at a time when its pronouncements on

this issue were ambiguous and even contradictory. The court

reached this conclusion, in the course of rejecting the Board’s

factual determination that no impasse existed, by relying on

Morand Bros. Beverage Co., 91 NLRB 409 (1950), enforced in

part, 190 F.2d 576 (7th Cir. 1951) — a decision which the

Board below characterized as ‘‘no longer valid.’’? More im-

portantly, the Board in Fairmont Foods had adopted the trial

examiner’s rulings which themselves suggested that an im-

passe would justify withdrawal. 196 NLRB 849, 856 (1972).

In reaching the same result, therefore, the Eighth Circuit

’ —— that the withdrawal rights of unions and employers

should be at least similar if not coextensive, the Board in Morand

accorded to unions the right to withdraw upon impasse after noting

that, under its prior decisions, employers had “unlimited freedom”

to withdraw “‘at any time ... at their will or fancy.” 91 NLRB at

418. The Board subsequently abandoned this hands-off approach in

Retail Associates.

The Fairmont Foods court also relied, erroneously, on Ice Cream,

Frozen Custard Indus. Employees, 145 NLRB 865 (1964). The

Board’s decision there, although ambiguous, suggested that an

employer could withdraw upon impasse only if the union con-

sented, id. at 870 — a position first enunciated in Retail Associates.

was merely articulating its perception of Board policy in ef-

fect at the time — a policy which the Board subsequently

revamped in Hi-Way Billboards.

Three of the four remaining cases involved very similar fac-

tual settings. In NLRB v. Hi-Way Billboards, Inc., 500 F.2d

181 (5th Cir. 1974), a negotiating impasse had been reached,

a strike had been called, and the union had signed ‘‘interim”’

agreements with several members of the multiemployer unit.

These agreements permitted the several employers to

resume operations but required them to adhere to any unit-

wide contract ultimately negotiated. The same circumstances

existed in NLRB v. Associated Shower Door Co., Inc., 512

F.2d 230 (9th Cir.), cert. denied, 423 U.S. 893 (1975), and

NLRB v. Independent Ass’n of Steel Fabricators, Inc., 582

F.2d 135 (2d Cir. 1978), cert. denied, 439 U.S. 1150 (1979),

except that the individual agreements negotiated by the sev-

eral employers were not interim in nature, but were final con-

tracts designed to remain in effect regardless of the outcome

of the group bargaining. In each case, a second group of

multiemployer members asserted a right to withdraw unilat-

erally from the unit in response to such agreements; in each

case, the court rejected the Board’s ruling and held that the

employers were entitled to withdraw and thus were not

bound by the subsequently negotiated multiemployer agree-

ment.®

Employing a similar analysis, the courts concluded in

essence that a contrary result would be unfair to the

employers comprising the bargaining unit.® Crucial to this as-

8 In Associated Shower Door, however, the Ninth Circuit en-

forced the decision on alternative grounds, agreeing with the

Board’s conclusion that the withdrawing members’ subsequent

conduct constituted a “‘retraction’’ of their withdrawals. 512 F.2d

at 232-33.

9 See NLRB v. Associated Shower Door Co., Inc., 512 F.2d at 232

(‘‘it seems only fair’’ that withdrawal should be allowed under the

sessment was the Board policy that, once negotiations have

begun, ‘‘a union may withdraw from a multi-employer unit

with respect to one or more employers while continuing

multi-employer bargaining with those employers remaining

in the multiple unit.”” NLRB v. Hi-Way Billboards, Inc., 500

F.2d at 183.1° One concern was that this policy appeared to

undercut the principle espoused in Evening News Assoc., 154

NLRB 1494 (1965), enforced sub. nom., Detroit Newspaper

Publishers Assoc. v. NLRB, 372 F.2d 569 (6th Cir. 1967), that

all rules governing the right of withdrawal in the multiem-

ployer context would be applied equally among employers

and unions. But the greater concern was the impact of this

policy on the remaining members of the multiemployer

group, ‘who watched certain of their withdrawing competi-

tors resume business while they themselves were still in the

throes of an economic strike.”” NLRB v. Independent Ass’n of

Steel Fabricators, Inc., 582 F.2d at 147. The anticipated

result of this arrangement, which all three courts deemed

unacceptable, was that ‘‘a union could reach an agreement

with one or more employers and then whipsaw the remaining

members of the significantly fragmented and weakened

multi-employer unit.” NLRB v. Associated Shower Door Co.,

Inc., 512 F.2d at 232, quoted in NLRB v. Independent Ass’n

of Steel Fabricators, Inc., 582 F.2d at 147 n.21; accord,

circumstances); NLRB v. Hi-Way Billboards, Inc., 500 F.2d at 183

(‘‘we have doubts about the fairness of the decision to the employer

members of the unit’).

10 The Hi-Way Billboards and Associated Shower Door courts er-

roneously relied on Pacific Coast Ass’n of Pulp & Paper Manufs.,

163 NLRB 892 (1967), to support this proposition. There, the

Board merely upheld the right of unions to withdraw prior to the

start of negotiations — a straightforward application of the Retail

Associates guidelines. The quoted statement is nonetheless an ac-

curate description of Board policy, with one qualification which we

discuss below. See nn. 16 & 17 infra.

NLRB v. Hi-Way Billboards, Inc., 500 F.2d at 183. At bot-

tom, then, was a dissatisfaction with a perceived imbalance in

relative bargaining strength.'! In NLRB v. Beck Engraving

Co., Inc., 522 F.2d 475 (8d Cir. 1975), a case we discuss infra,

the Third Circuit articulated this concern most emphatically:

“The union, under the Board’s own policy, should not have

been given two weapons for its economic arsenal (i.e. the

selective strike and individual negotiations) while the

employers are given only one (viz., the lockout).” Id. at 483.

Although acknowledging that its decision would “contribute

. to instability within the context of multi-employer

bargaining,’’ id., the Beck court deemed it necessary, as did

the other courts, to correct this imbalance by supplying the

employers with a second weapon: the ability to withdraw

from a multiemployer group upon impasse.!?

For several reasons, we feel the approach adopted by these

four courts is questionable. First, the Supreme Court has in-

dicated that the legitimacy of any particular bargaining tactic

11 As an alternative basis for its conclusion that impasse justifies

withdrawal, the Steel Fabricators court indicated that ‘‘the objec-

tives of collective bargaining would be ill-served by compelling

employers to remain in the bargaining unit once it becomes clear

that no progress is being made within that framework.”’ 582 F.2d

at 146. This result-oriented approach sacrifices the long-term value

of stable multiemployer bargaining to the immediate goal of ex-

pediting the collective bargaining process. See Note, 45 Brooklyn

L. Rev. 1283, 1305, 1317-18 (1979). It also, contrary to the Board’s

opinion, regards impasse as an unexpected and aberr* nt occur-

rence which signifies an irretrievable collapse in negotiations,

rather than as a predictable, often temporary, and occasionally

purposefully created stage in the bargaining process. Given the

public and private interests served by multiemployer bargaining

and the Board’s expertise, we consider the Second Circuit’s

rationale an insufficient justification by itself to override the

Board’s considered judgment.

12 The court in Beck suggested that the Board might prefer to ef-

fect an alternative equilibrium by forbidding unions from

negotiating individual agreements. 522 F.2d at 484 n.15.

or weapon should be based solely on the pertinent statutory

provisions, and not on any assessment of relative bargaining

strength.'* As a result, the balance of economic power

arguably should have little bearing on the question whether

impasse justifies withdrawal.'* Second, even if a cataloguing

of economic weapons were appropriate, the final tallies

reached here are incomplete. The Beck court’s two-to-one

tabulation ignores, on the one hand, a union’s ability to in-

stitute consumer picketing and to engage i. “harassing tac-

tics,” NLRB v. Insurance Agents’ Int’l Union, 361 U.S. 477,

480-81 (1960), and on the other an emplever’s ability, inter

alia, to “legitimately blunt the effectiveness of an anticipated

strike by stockpiling inventories, readjusting contract sched-

ules, or transferring work from one plant to another ....”

NLRB v. Brown, 380 U.S. 278, 283 (1965).!° The balancing

undertaken is thus somewhat imprecise.

18 See American Ship Building Co. v. NLRB, 380 U.S. 300, 317

(1965) (the Act does not “give the Board a general authority to

assess the relative economic power of the adversaries in the

bargaining process and to deny weapons to one party or the other

because of its assessment of that party’s bargaining power.”’);

NLRB v. Brown, 380 U.S. 278 (1965); NLRB v. Insurance Agents’

Int'l Union, 361 U.S. 477, 490, 497 (1960). This restriction, de-

signed to effectuate the congressional intent that the Board not

control the substantive terms of any collective bargaining agree-

ment, id. at 485-87, apparently encompasses judicial actions as

well: the Court in Insurance Agents indicated that the ‘‘substantive

solution” of the parties’ differences should be ‘‘unrestricted by any

governmental power.” Id. at 488.

14 See Murphy, Impasse and the Duty to Bargain in Good Faith,

39 U. Pitt. L. Rev. 1, 60 (1977); Comment, 17 B.C. Indus. & Com.

L. Rev. 525, 536-37 (1976).

16 The sole employer weapon mentioned by the courts — the

lockout — is itself a multi-faceted device. Not only can the

nonstruck members of a multiemployer unit lock out their

eniployees as a defense to a whipsaw strike against other unit

inembers, NLRB v. Truck Drivers Local 449, 353 U.S. 87 (1957),

but the struck members can hire permanent replacements, NLRB

Of course, the additional weapons in the employer arsenal

are useful primarily in resisting a strike, and the fact remains

that employers have no direct means of countering the

union’s ability to negotiate individual agreements. But upon

analysis, we question whether this right of the union — at

least as currently defined by the Board — constitutes as for-

midable a weapon, and creates as marked a disparity in

bargaining power, as the courts suggest. Contrary to the im-

plication in Associated Shower Door, 512 F.2d at 232, and Hi-

Way Billboards, 500 F.2d at 183, the Board has not granted

the unions unlimited withdrawal rights. Rather, the economic

weapon at stake consists solely of the union’s ability to

negotiate ‘‘interim’’ agreements!* — temporary settlements

v. Mackay Radio & Tel. Co., 304 U.S. 333, 345-46 (1938), and the

nonstruck members can hire temporary replacements, NLRB v.

Brown, 380 U.S. 278 (1965), thereby resuming normal operations.

Moreover, even in the absence of a strike, all employers can use the

lockout offensively to exert economic pressure on a union.

American Ship Building Co. v. NLRB, 380 U.S. 300 (1964).

16 To be distinguished are ‘‘separate” agreements, defined as

final contracts entirely divorced from the multiemployer process.

The Board has disapproved of a union’s negotiation of separate

contracts with group members, considering such conduct an-

tithetical to and destructive of the multiemployer bargaining proc-

ess. As a result, in most cases where one or more group members

have reached separate agreements with the union, the Board has

permitted the remaining members to withdraw. See, ¢.g.,

Typographic Service Co., 238 NLRB No. 211, 1978-79 CCH NLRB

{ 15,096, at 28,319 (1978); Connell Typesetting Co., 212 NLRB 918,

921 (1974). The exception consists of situations where the union’s

conduct neither “‘proves an intention to destroy, [njor necessarily

causes the fragmentation of, a multiemployer unit.”’ Tobey Fine

Papers, 245 NLRB No. 181, 1979-80 CCH NLRB 16,330, at

30,539 (1979). Significantly, the Board has recently held that an

employer’s ability to negotiate a separate agreement is dependent

on the consent of the multiemployer group. Teamsters Local 378,

243 NLRB No. 138, 1979-80 CCH NLRB { 16,087 (1979). The

employers can thus effectively prevent any of their members from

defecting in the first place — an alternative that ensures the con-

tinued viability of the multiemployer group.

that will be superseded by any unit-wide contract ultimately

negotiated.!” There is little doubt that, through the selective

use of this device in combination with a general strike, a

union is capable of exerting some degree of uneven economic

pressure — a whipsaw effect — on certain employers. But

there is much to be said for the Board’s position. As demon-

strated by the lawfulness of such weapons as the selective

17 In the Board’s view, interim agreements neither fragment nor

significantly weaken the multiemployer unit, and indeed do not

represent withdrawals at all, since the signatories retain a vested

interest in the outcome of group negotiations. Of course, even the

Board has acknowledged that a party to such an agreement, having

alleviated its immediate concerns and quite possibly enjoying a

competitive surge relative to its struck counterparts, is less likely

to push for a prompt settlement or otherwise share the group’s

bargaining strategies, see Connell Typesetting Co., 212 NLRB at

921; in that sense, its strength at the negotiating table will have

diminished. But by promising adherence to the ultimate unit-wide

contract, a signatory cannot ignore entirely the ongoing negotia-

tions. For this reason, we cannot subscribe to the Third Circuit’s

view that “allowing individual negotiations even on an interim

basis is tantamount to a rejection of the existence of the multi-

employer bargaining unit.”” NLRB v. Beck Engraving Co., Inc., 522

F.2d at 483. Although interim agreements may not enhance the in-

tegrity of ba bargaining unit, they seem unlikely to undermine it

significantly.

Interim agreements are considered useful in facilitating the

breaking of a stalemate and in providing a safety valve for

employers particularly vulnerable to strike pressure. The Board

has thus sanctioned the use of these arguments and has barred

other employers from unilaterally withdrawing from the bargain-

ing unit in response thereto. See, e.g., Joseph J. Callier d/b/a

Callier’s Custom Kitchens, 243 NLRB No. 143, 1979-80 CCH

NLRB { 16,104, at 30,135 (1979); Sangamo Constr. Co., 188 NLRB

159, 160 (1971). The Board has also ted, however, that an

“unusual circumstance” permitting bes» mean might arise even

here if interim agreements are negotiated on such a scale or on

such terms as to evidence an intention on the union’s part to frag-

ment the bargaining unit. See, e.g., Connell Typesetting Co., 212

NLRB at 921; Comment, 44 Fordham L. Rev. 1256, 1265 (1976).

strike, the uneven application of economic pressure per se is

not inconsistent with multiemployer bargaining. In addition,

the whipsaw effect resulting from a general strike coupled

with one or more interim agreements corresponds closely to

that arising from a selective strike followed by a partial

employer lockout.!* Because courts have seen no reason to

fashion an additional weapon for employers in the latter in-

stance, we question the necessity of doing so in the former.

But regardless of the propriety of the analytical approach

adopted in Hi-Way Billboards, Shower Door, and Steel

Fabricators, it is apparent that the three decisions hinged on

the belief that the negotiation of individual agreements had

unfairly tipped the balance of bargaining power, and not on

any conviction that impasse alone justifies unilateral

withdrawal.'® This critical element is absent in the present

case; as the Board stated, ‘‘no interim agreements were

made or even attempted.”’ Accordingly, these three decisions

do not control our analysis.

By contrast, the Beck case is squarely on point. One

member of a multiemployer unit there attempted to

withdraw following the occurrence of an impasse and a selec-

tive strike. Notwithstanding that the union had made no at-

tempt to negotiate individual agreements,”° the court upheld

the employer’s withdrawal. It reasoned:

18 Those employers who sign interim agreements and resume

operations are in an analogous position to those who refuse to join

a lockout and thereby remain in operation. And significantly, just

as the latter group could prevent any whipsaw by engaging in the

lockout, the former group could do so by refusing to negotiate such

agreements.

19 See Murphy, Impasse and the Duty to Bargain in Good Faith,

39 U. Pitt. L. Rev. 1, 57 (1977); Comment, 44 Fordham L. Rev.

1256, 1264, 1266 (1976).

20 One member had withdrawn earlier, but with the consent of

both the group and the union. 522 F.2d at 478.

The employer’s right to withdraw during a bargaining

impasse cannot be made contingent upon the union’s

prior exercise of its right to negotiate individual interim

agreements. The rights of the parties should accrue

simultaneously based upon the occurrence of an event

which neither can manipulate (e.g., impasse). Were the

rule otherwise, the party whose right accrues first would

be given a tremendous bargaining advantage and lever-

age.

522 F.2d at 483. For several reasons, we find this rationale

unpersuasive.

First, contrary to the court’s premise, the Board has not in

the past conditioned the ability of a union to negotiate interim

agreements upon the existence of a bargaining impasse. The

Board sanctioned the use of such agreements in Sangamo

Constr. Co., 188 NLRB 159 (1971), for example, notwith-

standing the absence of any finding that an impasse had oc-

curred. Jd. at 160 (“bargaining did continue during the

operative period”).24 Even if some right of withdrawal is

necessary to counterbalance the union’s ability to negotiate

interim agreements, therefore, there is little reason to link it

to the existence of an impasse.** Second, the court’s charac-

21 We express neither approval nor seegereres of the result

reached in mo Constr. Co., 188 NLRB 159 (1971), as the mat-

ter is not now before us.

22 Instead, the exercise of that right logically should be con-

tingent upon the actual creation of such agreements. The Beck

court’s concern that, if the union’s right “‘accrues first”’ it will gain

“a tremendous ining power and leverage” over the employer

group, seems ayn ‘ , noted above, ey: agreements do

not significantly impai integrity o bargaining unit.

Moreover, unlike aa pelea as a selective strike which can be

deployed unilaterally, the union needs at least one consenting

to implement these agreements. Therefore, the union’s ability to

threaten to negotiate interim agreements should augment its

bargaining power only minimally, if at all, especially if employers

are able to withdraw upon agreement actually being peeahed.

And the Board could amen reject any measure that ——

to counteract such incremental leverage by sacrificing the stability

of the multiemployer unit.

terization of an impasse as an event that neither party can

“manipulate” appears unrealistic, or at least the Board could

permissibly so conclude. It is true that a party’s general adop-

tion of a “take it or leave it” attitude would violate the

statutory obligation to bargain in good faith. See generally

NLRB v. Insurance Agents’ Int’l Union, 361 U.S. at 483-87.

But the Act expressly provides that the “obligation [to

bargain collectively] does not compel either party to agree to

a proposal or require the making of a concession.” 29 U.S.C.

§ 158(d). We thus think it within the power of an employer or

union in many cases to cause a stalemate, as by adhering to a

position known to be unacceptable to the other side. To the

extent this is possible, the Beck rule provides a party with a

means of withdrawing whenever the impending agreement

proves objectionable.** Third, because a precise formula for

determining when a genuine impasse occurs has not been —

and perhaps cannot be — formulated,** tying the right of

withdrawal to this event can only lead to confusion concern-

ing the rights of the parties. Finally, we feel that the Beck

decision, and indeed the other cases as well, fail to accord suf-

23 See Note, 45 a L. Rev. 1283, 1318 (1979); Comment, 17

B.C. Indus. & Com. L. Rev. 525, 539-40 & n.133 (1976).

*4 One widely accepted definition of im is ‘‘a state of facts in

which the parties, despite the best of faith, are simply deadlocked.”

NLRB v. Tex-Tan, Inc., 318 F.2d 472, 482 (5th Cir. 1963). The

Board has fleshed out the term somewhat, indicating that whether

an impasse has occurred depends on such factors as “(t]he bargain-

ing history, the good faith of the parties in negotiations, the length

of the negotiations, the importance of the issue or issues as to

which there is disagreement, [and] the contemporaneous

understanding of the parties as to the state of negotiations. Taft

Broadcasting Co., 163 NLRB 475, 478 (1967), enforced, 395 F.2d

622 (D.C. Cir. 1968). Nonetheless, the decisional process remains at

best an exercise of ‘‘judgment,”’ id., and a worst ‘‘a visceral reac-

tion of the trial examiner and the Board to the record.” Stewart &

Engeman, Jmpasse, Collective Bargaining and Action, 39 U. Cin.

L. Rev. 233, 241 (1970).

ficient weight to the policy of preserving the stability of

multiemployer bargaining — a “vital factor’ in promoting

labor peace. NLRB v. Truck Drivers Local 449, 353 U.S. at

95. The Board could find that any rule permitting unilateral

withdrawal upon impasse unnecessarily increases the oppor-

tunities for the dissolution of such bargaining units and

thereby undermines an effective tool of labor relations.

Congress “intended to leave to the Board’s specialized

judgment the inevitable questions concerning multi-employer

bargaining [which are] bound to arise ....” Jd. at 96. Asa

result, the Board’s ‘‘balancing of the conflicting legitimate in-

terests [is] subject to limited judicial review.” Jd. (footnote

omitted).*5 In the present case, we think the Board has struck

a reasonable balance in concluding that impasse alone does

not justify unilateral withdrawal.

IV.

Bonanno’s remaining contention — that the Union con-

sented to or otherwise acquiesced in its withdrawal — can be

dismissed more summarily. In support thereof, Bonanno

notes that the Union (1) did not explicitly object to its an-

nounced withdrawal on November 21, 1975, (2) continued to

negotiate with the Association representatives, at one point

inquiring as to who had replaced Bonanno on the committee,

and (3) did not formally protest the attempted withdrawal un-

til April 29, 1976, more than two weeks after a unit-wide

agreement had been reached. These facts provide an insuffi-

cient basis to disturb the trial examiner’s findings. A union is

“under no duty to ‘protest’ [an employer’s attempted

withdrawal] in any formal manner ....’’ NLRB v. John J.

*° A reviewing court’s principal task is to ensure that the ad-

ministrative decision is not “inconsistent with a statutory mandate

{and does not] frustrate the co ional policy underlying a

statute.” NLRB v. Brown, 380 U.S. at 291.

Corbett Press, Inc., 401 F.2d 673, 675 (2d Cir. 1968). Here,

the Union representative responded that he would have to

consult with the Union attorney — certainly an indication

more of opposition than of acquiescence. And although the

Union’s course of conduct can evidence implied consent, such

conduct “usually must involve a course of affirmative action

clearly antithetical to” the claim that no withdrawal has oc-

curred. I.C. Refrigeration Service, 200 NLRB 687, 689

(1972). In the present case, that the Union made no attempt

to negotiate individually with Bonanno, see id., that a unit-

wide agreement was not reached shortly after Bonanno’s ac-

tion, compare, e.g., Fairmont Foods Co. v. NLRB, 471 F.2d

at 1173, and that the Union filed unfair labor practice

charges on April 9, 1976 with respect thereto, all serve to

negate any suggestion of Union acquiescence in Bonanno’s

untimely and — we rule — unlawful attempt to withdraw

from the Association.

Enforcement granted.

CAMPBELL, Circuit Judge (Concurring). While I join in the

ultimate conclusion of the court, namely, that “the Board has

struck a reasonable balance in concluding that impasse alone

does not justify unilateral withdrawal’ (emphasis added), I

emphasize that we are not here presented with the question

whether, after the occurrence of both an impasse and the

negotiation of interim agreements, an employer may unilat-

erally withdraw from a multi-employer group; accordingly, I

would express no opinion on the resolution of the latter ques-

tion, and do not join in the court’s dicta on this interesting but

nonessential matter.

Appendix B.

FJPMT

243 NLRB No. 140 D—4660

Medford, MA

UNITED STATES OF AMERICA

BEFORE THE NATIONAL LABOR RELATIONS BOARD

CHARLES D. BONANNO LINEN SERVIC.2, INC.

and Case 1—CA—11628

TEAMSTERS LOCAL UNION NO. 25,

INTERNATIONAL BROTHERHOOD OF

TEAMSTERS, CHAUFFEURS,

WAREHOUSEMEN AND HELPERS OF

AMERICA

SUPPLEMENTAL DECISION AND ORDER

On May 12, 1977, the National Labor Relations Board

issued its Decision and Order in the above-entitled pro-

ceeding,’ finding that the Respondent violated Section 8(a\5)

and (1) of the Act by refusing to execute a collective-bargain-

ing agreement reached between Teamsters Local No. 25 (the

Union) and the New England Linen Supply Association (the

Group).? In so finding, the Board adopted the Administrative

Law Judge’s Decision in which he found that the

1 229 NLRB 629 (1977).

2 The Respondent is in the business of laundering and renting

uniforms and linens. It has been a member of the Group which has

negotiated with the Union for several years. Before the last con-

tract expired in April 1975, negotiations were duly opened for a

243 NLRB No. 140

Respondent’s untimely withdrawal from the multiemployer

Group was not justified. The Administrative Law Judge

relied on Hi-Way Billboards, Inc.,* in holding that the ex-

istence of a bargaining impasse is not an “unusual cir-

cumstance”’ within the meaning of Retail Associates, Inc.* He

specifically noted that four courts of appeal had rejected the

Board’s position that a bargaining impasse does not con-

stitute such an unusual circumstance as to justify an

employer’s unilateral withdrawal from group bargaining.

The Administrative Law Judge concluded, however, that he

was bound by the Hi-Way Billboards rule of the Board.

In light of the holdings of the several courts of appeal®

which have formulated an “impasse doctrine” enabling an

new agreement and the Respondent authorized the Group to

bargain in its behalf. The Respondent participated in the negotia-

tions. Impasse was reached in May 1975 over whether the

employees would be paid on a commission basis or remain on

wages. Thereafter, in June 1975, the Union called a selective strike

against the Respondent, and most of the Group responded by lock-

ing out their employees. After some 5 months during which the

situation remained static, with all efforts to break the impasse fail-

ing, the Respondent withdrew from the Group. The remaining

Group members then terminated the lockout and negotiations

resumed with the Respondent absent. In April 1976, when the

Union dropped its demand for compensation by commission, an

agreement was reached. The Union thereafter informed the

Respondent that it had not consented to the withdrawal and thus

considered the Respondent bound by the terms of the agreement

reached with the Group. The Respondent denied that it was bound

and refused to execute the agreement.

$206 NRLB 22 (1973).

4120 NLRB 388 (1958),

5 N.L.R.B. v. Beck Engraving Co., Inc., 522 F.2d 475 (3d Cir.

1975); N.L.R.B. v. Associated Shower Door Co., Inc., et al., 512

F.2d 230 (9th Cir. 1975); N.L.R.B. v. Hi-Way Billboards, Inc., 500

F.2d 181 (5th Cir. 1974); and Fairmont Foods Company v.

N.L.R.B., 471 F.2d 1170 (8th Cir. 1972). Since the May 1977 De-

cision and Order in the instant case the second circuit has joined its

employer to withdraw unilaterally from a multiemployer bar-

gaining unit, the Board, sua sponte, has decided to reconsider

the instant case. For reasons to be set forth beiow we have

concluded that this case was correctly decided and we hereby

affirm our conclusion that the Respondent violated Section

8(a)(5) and (1) of the Act by refusing to execute the contract

reached between the Union and the Group which represented

the Respondent.

The basic rules governing withdrawal from multiemployer

bargaining associations were set forth in Retail Associates.

Absent mutual consent® or unusual circumstances, neither an

employer nor a union may withdraw except upon unequivocal

written notice prior to the date set by the contract for modifi-

cation or the agreed-upon date to begin multiemployer nego-

tiations. The Board has since held that these rules are to be

applied equally to both employers and unions.’ With respect

to partial withdrawal, a union may, upon timely notice, con-

sent to an individual employer’s withdrawal and continue

multiemployer bargaining unless the remaining employers

exercise, in a timely fashion, their right to withdraw from the

fragmented unit.®

“sister Circuits’’ in holding that an impasse will justify a party's

unilateral withdrawal from multiemployer units. N.L.R.B. v. In-

rage om Association of Steel Fabricators, Inc., 582 F.2d 135 (2d

ir. ;

6 While the Group’s position on the Respondent’s withdrawal is

not at issue in this proceeding, an employer who wishes to perfect

an untimely withdrawal must secure the consent of both the union

and the multiemployer association of which it has been a member.

See Teamsters Union Local No. 378 ag aes A ile Dealers

Association), 243 NLRB No. 138 (1979). Member Murphy was not a

signatory to the es Automobile Association decision

and, in any event, does not find it applicable or relevant to the issue

now before the Board.

7 The Evening News Association, etc., 154 NLRB 1494 (1965).

8 Pacific Coast Association of Pulp and Paper Manufacturers,

163 N 892 (1967).

For withdrawals after negotiations have begun, the Board

has limited the ‘unusual circumstance” exception to cases in

which “‘the very existence of an employer as a viable business

entity has ceased or is about to cease’” and to cases where con-

sensual employer withdrawals through separate bargaining

have so depleted a unit that it would be “unfair and harmful

to the collective-bargaining process” not to permit one or

more of the remaining employers to withdraw.

As to whether a bargaining impasse alone is sufficient to

warrant withdrawal, our position, which we now reaffirm, is

set forth in Hi-Way Billboards, supra. We there held that

there is nothing so extreme about impasse as to make it an

unusual circumstance which is destructive of group bargain-

ing. An impasse is only a temporary “deadlock” or “hiatus”

in negotiations which in almost all cases is eventually broken,

either through a change of mind or the application of

economic force. Indeed, an impasse may be brought about in-

tentionally by one or both parties as a device to further,

rather than destroy, the bargaining process. Suspension of

the process as a result of an impasse may provide time for

reflection and a cooling of tempers; it may be used to

demonstrate the depth of a party’s commitment to a position

taken in the bargaining; or it may increase economic pressure

on one or both sides, and thus increase the desire for agree-

ment. For example, impasse permits the employer to place in-

to effect those wage increases or benefits it has theretofore

offered, an action (or the possibility of it) which may substan-

tially shift the bargaining positions of the parties. In these

and other possible uses of impasse as a bargaining tactic, the

emphasis is toward achieving agreement rather than causing

a permanent disruption of the relation. And much the same

® Hi-Way Billboards, Inc., supra at 23.

ann Typesetting Company, et al., 212 NLRB 918, 921

may be true even of impasses which arrive without being in-

tended by either side. Consequently, there is little warrant

for regarding an impasse as a rupture of the bargaining rela-

tion which leaves the parties free to go their own ways. For

these reasons, we held that it would not effectuate the policies

of the Act to permit an employer to withdraw from a

multiemployer unit solely because a bargaining impasse has

been reached.

The courts of appeal that have rejected this position have

not, in our view, focused exclusively on the impact of impasse

on the collective-bargaining process. We suggest that the

courts have seized on the impasse concept as a means of ad-

dressing two other important problems that can arise in the

multiemployer context; namely, unit fragmentation and im-

balances in relative bargaining strength.'! After reviewing

the court decisions in question, we shall synthesize our views

on union and employer obligations at impasse. We shall treat,

in particular, the impact of interim agreements following im-

passe on multiemployer bargaining dynamics.

In Fairmont Foods Company, supra, the court excused an

employer’s withdrawal from a multiemployer bargaining unit

after negotiations had begun but before an agreement had

been reached.!? Additionally, the court found evidence of

union consent to Fairmont’s withdrawal in the fact that the

union was willing to negotiate during impasse with other

association members. It was “particularly incongruous,” the

11 For a scholarly recognition and discussion of this point, see

Murphy, “Impasse and the Duty To Bargain in Good Faith,” 39 U.

of Pittsburgh L. Rev. 1, at pp. 50-60 (1977).

12 The court relied on Morand Brothers Beverage Co., et al., 91

NLRB 409 (1950), enfd. 190 F.2d 576 (7th Cir. 1951). The Board’s

holding in this case predated Retail Associates, supra, and is no

longer valid.

court suggested, that the Board had not found acquiescence

in the withdrawal in light of interim agreements, intended to

be merged later into the associationwide agreement, between

the union and three other employers.

The Fifth Circuit, in Hi-Way Billboards, Inc., supra, ac-

cepted the Board’s reasoning on the impact of impasse only

insofar as our decision protected the interests of the union

and of the employees in the multiemployer unit. The court ex-

pressed doubts, however, as to the “fairness” of the Board’s

policy of not permitting unilateral employer withdrawal at

impasse. The court relied on Pacific Coast Associates, supra,

in finding Board support for a union’s withdrawing with

respect to some employers while it continues a multiemployer

relationship with a now depleted association.!* The Fifth Cir-

cuit disapproved, on equitable grounds, of the Board-

sanctioned opportunity, taken in Hi-Way Billboards, Inc., for

a union to reach interim agreements with some employers

and then to whipsaw those employers remaining in the

association.

The third court to consider withdrawal rights at impasse

was the Ninth Circuit in Associated Shower Door Co., Inc.,

supra.'4 The court, following the Fifth and Eighth Circuits,

relied on Pacific Coast and The Evening News Association,

13 With all due respect, we note that the court misread Pacific

Coast. As indicated, supra, we allowed union withdrawal in that

case because timely notice was given prior to the start of negotia-

tions. Pacific Coast would not in any case lead to whipsawing, since

we also held that individual employers are also free to withdraw

prior to negotiations.

4 After os ce the union signed interim agreements with

several members of the association after those members had

sought out the union, requesting separate settlements based on the

union’s last offer. The union agreed and included “most favored

nation’’ clauses in the separate agreements. When the association

finally settled with the union it got less favorable terms than the

employer-members who had signed the separate agreements.

supra, as to equality of withdrawal rights, and reasoned that

(at 512 F.2d at 232):

[I]t seems only fair that, when an impasse is reached and

a union then engages in selective picketing and enters in-

to substantial individual agreements with employers who

had been members of the multiemployer unit, the with-

drawal of the remaining members of the unit, if une-

quivocally communicated, should be permitted.

Otherwise, the court stated the union could sign individual

agreements with some employers and then subject the re-

maining members of the “significantly fragmented and

weakened multiemployer unit’”’ to whipsawing. The court

thus designed a fairness rationale which viewed the Board as

having violated its own policy of preserving the equality of

withdrawal rights in multiemployer situations.

In Beck Engraving Co., supra, the Third Circuit found that

an impasse reached in multiemployer bargaining constituted

an unusual circumstance under Retail Associates and thus

justified the respondent’s unilateral withdrawal.'® The

court’s analysis did not directly confront the Board’s Hi-Way

Billboards rationale. The Third Circuit agreed with the

Shower Door decision that the Board has, in its post-Retail

Associates decisions, deviated from its policy of applying its

rules in an even-handed manner. Since the Board has ap-

proved a union’s negotiation of interim agreements with in-

16 When a bargaining impasse was reached during negotiations

for a new contract, the union began a selective strike. Then the

union, the association, and an individual employer agreed to that

employer’s withdrawal from the unit. Thereafter, more employers

were struck. The respondent’s employees withdrew from the union

and returned to work and the respondent then announced its

withdrawal from the association. Shortly thereafter the union and

the association reached agreement on a new contract which the

respondent then refused to sign.

dividual members of a multiemployer group,'* we have, ac-

cording to the court, effectively given permission to unions to

whipsaw those employers who do not sign such agreements.

The Beck court stated that allowing interim agreements

strengthens a union’s hand vis-a-vis the employers who con-

tinue to bargain within the unit. This it found tantamount to a

rejection of the existence of the multiemployer unit since it is

inconsistent to say that the union and some employers may

act on an individual basis while other employers in the same

unit, relegated to this position by the union’s refusal to nego-

tiate with them on an individual basis, must adhere to group

bargaining. The court concludes that the Board’s approval of

individual interim agreements during multiemployer bargain-

ing and without requiring withdrawal from the multiem- |

ployer unit is sufficient cause for according the remaining

employers an equivalent right—unilateral withdrawal after

impasse. !?

The court rejected the Board’s contention that since the

union did not attempt to negotiate interim agreements the

above rationale would not apply. It held that the employer’s

16 Plumbers and Steamfitters Union No. 323 (P.H.C. Mechanical

Contractors), 191 NLRB 592 (1971), and Sangamo Construction

Company, 188 NLRB 159 (1971).

17 The court employed a balancing test with respect to what it

termed ‘“‘economic weapons,” taking its cue from N.L.R.B. v.

Truck Drivers Local Union No. 449, International Brotherhood of

Teamsters, Chauffeurs, Warehousemen and Helpers of America,

A.F.L. [Buffalo Linen Supply Co.], 353 U.S. 87 (1957). There the

Supreme Court held that nonstruck members of a multiemployer

bargaining unit ceuld utilize a general lockout as a defense to a

selective strike. Since the Third Circuit asserts that in P.H.C.

Mechanical Contractors and Sangamo, supra, the Board has sanc-

tioned a “second” weapon for a union in addition to the selective

strike, this resulting new imbalance requires the grant of a corre-

sponding “‘second” weapon for each employer in a multiemployer

unit.

right to withdraw unilaterally cannot be made contingent on

the union’s exercise of its concomitant right. The court held

that, if they are equal rights, they should accrue

simultaneously based upon the occurrence of an event which

neither party can manipulate, i.e., impasse. Otherwise stated,

the court, the party whose right accrues first would have a

“tremendous bargaining advantage and leverage.”

After acknowledging that its ruling would add to the in-

stability of group bargaining, contrary to what the Retail

Associates rules sought to accomplish, the court nevertheless

found that the interest in preserving the balance of power in

multiemployer bargaining outweighs the loss of stability. The

court went on to suggest that if the Board were to “return”

to the Retail Associates rules by disapproving of individual in-

terim agreements the courts might well respond by disallow-

ing unilateral withdrawal by employers after impasse.'®

III

The foregoing summary reveals, in our view, a history of

judicial reluctance to deal directly with the Board’s approach

to the impact of a bargaining impasse on multiemployer

negotiations. Our concern has been with the dynamics of im-

passe, the potentialities for renewed unitwide bargaining,

and thus with the stability of multiemployer units. The courts

have focused on the Board’s approval of individual interim

agreements or substantial arguments having been entered in-

to, and viewed the result as contrary to the principle of even-

handed application of Board rules for withdrawal frorn

multiemployer units. Further, the Board’s “departure,” in

the words of the Beck court, from Retail Associates and its

progeny has disturbed a balance of economic weapons be-

tween a union and the employer-members of a multiemployer

unit. The courts have responded by creating an equitable im-

18 N.L.R.B. v. Beck Engraving Co., 522 F.2d at 484.

passe doctrine designed to redress the asserted imbalance by

finding that impasse or impasse plus interim agreements or

“substantial’’ agreements as in Associated Shower Door con-

stitutes an unusual circumstance sufficient to justify

unilateral withdrawal by an employer.

We respectfully disagree with the Third Circuit’s charac-

terization of a bargaining impasse as an occurrence which

neither party can manipulate. We reaffirm our belief that

“fiJn the overall ongoing process of collective bargaining, [im-

passe] is merely a point at which the parties cease to negoti-

ate and often resort to forms of economic persuasion to

establish the primacy of their negotiating position.”!® The

Board is of the view, for the reasons set forth below, that we

fulfill our statutory obligation to promote effective collective

bargaining by permitting a union to negotiate, after impasse,

true interim agreements with individual members of a multi-

employer unit without thereby creating new withdrawal

rights in the remaining employers.

Since all the courts have stressed the importance of postim-

passe agreements between the union and individual em-

ployer-members of a multiemployer unit, it is vital to under-

stand what kinds of agreements the Board has approved. In

Sangamo, supra, the interim agreement continued the re-

cently expired contract until a new associationwide contract

was negotiated, at which time the employer was to adopt its

terms and conditions and grant any wage increases retroac-

tively. The Board, in dismissing charges that the employer

and the union, respectively, violated Sections 8(aX5) and 8

(bX3), held that the interim agreement had no significantly

adverse impact on the integrity of the multiemployer unit.

The agreement did not derogate the unit’s bargaining author-

ity nor did it place the early signer outside the coverage of the

19 Hi-Way Billboards, Inc., 206 NLRB at 23.

ultimate associationwide contract. In P.H.C. Mechanical

Contractors, supra, the interim agreement contained the

same terms that had been offered to and rejected by the asso-

ciation. As in Sangamo, the early signer was bound to become

a party to the eventual unit contract. Thus, in both cases,

since the early signers maintained a vested interest in the

outcome of final union-association negotiations, the multiem-

ployer unit was neither fragmented nor significantly weak-

ened.

We distinguish, in the multiemployer bargaining context,

between interim agreements which contemplate adherence

to a final unitwide contract and are thus not antithetical to

group bargaining and individual agreements which are clear-

ly inconsistent with, and destructive of, group bargaining.

An example of the latter type of agreement is found in

Typographic Service Co.?° A panel majority, Chairman Fan-

ning dissenting on the facts, there held that employer-

members of a multiemployer bargaining unit did not violate

Section 8(aX(5) by unilaterally withdrawing after impasse and

the negotiation of separate contracts with several other

employer-members.”! The Board found that the union’s con-

duct “effectively fragmented and destroyed the integrity of

the bargaining unit’’ and thus fell within the ‘unusual cir-

20 238 NLRB No. 211 (1978).

21 After a bargaining impasse, all employer-members placed into

effect their last proposal. The following day the union struck 17

employers. The union then offered to end the strike against any

employer who would reinstate the terms of the expired contract

which provided for continuation of its terms until new terms were

—— upon. Seven employers accepted this offer. The union then

offered one of these employers a choice between executing a con-

tract based on an eventual associationwide contract or an agree-

ment based on union contracts with employers, not members, of

the unit. A second employer-member received a union offer to sign

one of two contract pro , both of which differed from the asso-

ciation’s proposals. At this point the 10 employer-members who did

not sign the interim agreements announced their withdrawal.

cumstances” exception of Retail Associates. The union of-

fered to conclude its “‘interim’”’ agreements with final agree-

ments which differed not only from each other but also from

proposals made during the preimpasse bargaining stage.

Further, acceptance of the final offers made to individual

employer-members would have rendered impossible a final

agreement binding on all unit members.??

An interim agreement is thus appropriate to the extent it

facilitates the breaking of impasse and the resumption of

unitwide collective bargaining with all employers maintain-

ing an equivalent stake in the final outcome. As in Sangamo

and P.H.C. Mechanical Contractors, and unlike Typographic

Service Co., such an agreement is one which establishes

terms and conditions of employment for one or more em-

ployer-members pending the outcome of renewed group bar-

gaining. Any resulting group agreement would then apply to

all employers, including each signer of an interim agreement.

Acceptance of this commitment will preclude a finding that

the early signers had withdrawn from the unit. We disagree

with the courts who have viewed such temporary economic

pressure on remaining group members as inconsistent with

the concept of multiemployer bargaining units or with the

Board’s rules based on Retail Associates and its progeny.

With all due respect to the Third Circuit we disagree with

its analysis of what factors are to be balanced in the multiem-

ployer bargaining context and its conclusion as to how that

balance is to be struck. Beginning with the Supreme Court’s

admonition that the Act does not constitute the Board as an

“arbiter of the sort of economic weapons the parties can use

22 Chairman Fanning notes that neither of these separate con-

tracts was entered into. The “negotiation” his colleagues refer to

could accurately be characterized as an exploratory tactic

- calculated to get the parties back to multiemployer bargaining, in

effect an appropriate ‘‘dynamic” of impasse.

in seeking to gain acceptance of their bargaining

demands,’’? we reemphasize that, absent proof of unlawful

motivation, parties have great leeway in exerting concurrent

economic pressure on each other. As summarized in our Hi-

Way Billboards decision, following a genuine impasse the

union can call for a strike; the employer can engage in a

lockout, make unilateral changes in working conditions if

they are consistent with the offers the union has rejected, or

hire replacements to counter the loss of striking employees.*4

The Beck court, choosing to focus on only some of these op-

tions, granted withdrawal rights to employers in response to

what it perceived as a two-to-one “weapons” imbalance in

favor of the Union.?5

However, the Board’s statutory mandate is to balance, not

economic weapons, but ‘conflicting legitimate interests.’’°

We view the exercise of this responsibility as a complex un-

23 N.L.R.B. v. Insurance Agents’ International Union, AFL-CIO

[Prudential Insurance Co.], 361 U.S. 477, 497 (1960):

[T]he use of economic pressure by the parties to a labor

dispute is not a grudging exception to some policy of com-

pletely academic 5; a ion enjoined by the Act; it is part and

arcel of the process of collective bargaining.

24 See Hi-Way Billboards, Inc., Bea at 23.

25 In examining the options available to a the Beck

court, and the others noted herein, were unable to consider the

Board’s recent decision in Olympia Automobile Dealers Associa-

tion, su; where the Board recognized that, even in the absence

of a finding of entation, a multiemployer association has the

right to object to the negotiation of a separate, final agreement be-

tween the union and an employer-member and can prevent the

defection of one of its members by filing a refusal-to-bargain

charge with the Board. This approach, rather than allowing the re-

maining employers to withdraw from the association and thereby

destroy group ining, stabilizes group bargaining by allowing

the association members to insist that parties remain in the unit in

accordance with their original commitment. See also fn. 6, supra.

26 Buffalo Linen Supply Co., supra at 96.

dertaking not readily, if at all, amenable to simple arithmetic

calculations.

We have considered carefully the implications for multiem-

ployer bargaining of interim agreements negotiated during

impasse and conclude that such agreements may prevent

significant unit fragmentation rather than cause it and do

tend to facilitate the breaking of impasse. Interim agree-

ments of the type deemed appropriate under our standards

discussed supra are calculated to further, not destroy, unit

integrity inasmuch as they preserve a continuing mutual in-

terest by all employer-members in a fina) associationwide

contract.27 The provisions of the Act itself, rather than

relative bargaining strengths, are the determinative factors

in assessing the legality of particular forms of economic

pressure.

In the instant case no interim agreements were made or

even attempted. Considering the facts as described above in

footnote 2, including the achievement of the multiemployer

bargaining objective to continue the method of driver-pay on

wage basis, and the supportive action that the lockout af-

forded the Respondent during the strike against it, we see no

reason to allow the Respondent to withdraw from the multi-

employer unit in untimely fashion. In the circumstances it is

appropriate that the Respondent execute the contract ulti-

mately achieved by the other unit members. Accordingly, we

hereby affirm the original panel decision finding that the

Respondent violated Section 8(aX5) of the Act.

27 This is our response to contentions that a union’s negotiation

of an interim agreement is either ‘“‘tantamount”’ to rejection of the

existence of a multiemployer unit, or a consent to withdrawal.

ORDER

Pursuant to Section 10(c) of the National Labor Relations

Act, as amended, the National Labor Relations Board hereby

affirms as its Order the Order heretofore entered in this pro-

ceeding on May 12, 1977 (229 NLRB 629).

Dated, Washington, D.C. August 6, 1979

John H. Fanning, Chairman

Howard Jenkins, Jr., Member

John A. Pennello, Member

Betty Southard Murphy, Member

John C. Truesdale, Member

NATIONAL LABOR RELATIONS BOARD

(SEAL)

Appendix C.

JD-833-76

Medford, MA

UNITED STATES OF AMERICA

BEFORE THE NATIONAL LABOR RELATIONS BOARD

DIVISION OF JUDGES

CHARLES D. BONANNO LINEN

SERVICE, INC.

and Case No. 1-CA-11,628

TEAMSTERS LOCAL UNION NO. 25,

INTERNATIONAL BROTHERHOOD OF

TEAMSTERS, CHAUFFEURS,

WAREHOUSEMEN AND HELPERS OF

AMERICA

Francis X. McDonough, Esq.,

Boston, MA, for the

General Counsel.

Sidney A. Coven, Esq.

(Lepie & Coven), Boston,

MA, for the Respondent.

Alan J. McDonald, Esq.

(Grady & McDonald), Boston,

MA, of the Charging Party.

DECISION

Statement of the Case

JAMES M. FITZPATRICK, Administrative Law Judge:

The main question in this case is whether one employer, of a

group negotiating with a union, may, by leaving the group

during a bargaining impasse, avoid obligations under the con-

tract later agreed on between the Union and the remainder of

the group. As set out hereinafter I find the withdrawing

employer is bound by the contract because circumstances

were not so unusual as to justify withdrawal where the Union

has not consented.

The case arises from unfair labor practice charges filed

April 9, 1976 by Teamsters Local Union No. 25, International

Brotherhood of Teamsters, Chauffeurs, Warehousemen and

Helpers of America (the Union). A complaint based on the

charges issued May 20, 1976 alleging that Charles D. Bonan-

no Linen Service, Inc. (Bonanno) engaged in unfair labor

practices within the meaning of Section 8(aX5) and (1) of the

Act by refusing to execute a collective bargainng agreement

negotiated between the Union and a group of employers after

Bonanno purported to withdraw from the group. Bonanno

answered, admitting jurisdictional allegations, the authority

of the group to bargain on behalf of member employers, in-

cluding Bonanno, and the attempt of Bonanno to revoke that

authority. Bonanno denied the balance of the allegations, in-

cluding legal conclusions that it engaged in unfair labor prac-

tices. The case was tried before me at Boston, Massachusetts

on August 30, 1976.

Based on the entire record, including my observation of the

witnesses, and consideration of excellent briefs from the par-

ties, I make the following:

Findings of Fact

I. The Employers Involved

Bonanno is a Massachusetts corporation engaged at Med-

ford, Massachusetts in the laundering, rental and distribution

of linen, uniforms, and related products. In the operation of

its business it annually receives at its Medford plant from

points outside Massachusetts chemicals, linens and other

fabrics valued over $50,000. Its annual gross receipts exceed

$500,000. The complaint alleges, the answer admits, and I

find, that Bonanno is an employer engaged in commerce

within the meaning of the Act.

The New England Linen Supply Association (the Group) is

comprised of 10 employers, including Bonanno, engaged in

the linen service business.

II. The Labor Relations

A. Background

The Union is a labor organization within the meaning of

Section 2(5) of the Act. It represents the truckdrivers and

helpers employed by Group members. The parties stipulate

that the employees so represented constitute an appropriate

bargaining unit.

For some years past the 10 employers referred to above

have negotiated as a group with the Union respecting the

terms of employment of their drivers and helpers. On

September 21, 1972 they signed individual and identical

agreements with the Union which were to remain in effect

until April 18, 1975 and thereafter until amended by mutual

agreement or terminated in accordance with a provision that

“either party desiring to amend or terminate the contract

shall on or after February 15, 1975 notify the other party in

writing of said intention.”

1 The other nine are Bristol Coat & Apron Service Co., Loyal

Crown Linen Service, Inc., Delaney Linen Service, Inc., Federal

National Linen Service Co., Independent Leasing Corporation,

Gilman Towel Supply Co., Inc., Morgan Services, Inc., Norfolk

County Linen Service and Standard Linen Service.

B. Negotiations for a Current Contract

On about February 19, 1975 Bonanno authorized the Group

to bargain collectively on its behalf with the Union, and

subsequently, such bargaining took place. On March 14,

1975, apparently in anticipation of possible termination of the

existing agreements but without formal notification thereof,

the Union and the Group met for their first negotiating ses-

sion looking toward a new agreement. Thereafter they held

further negotiating meetings on March 19 and 26, April 1, 3,

11, 13, 14, 16, 17 and 30. In the meantime, on April 18 the

Union by letter notified each member of the Group that it was

giving 60-day notice of termination pursuant to the terms of

the 1972 agreements. On April 23, 1975 the attorney

representing the Group by letter offered to meet with the

Union for the purpose of negotiating a new agreement.

On April 30, 1975 the negotiators reached agreement, sub-

ject to ratification by the employees, which provided for com-

pensation to employees on an hourly basis. On May 4, 1975

the employees voted to reject the contract.

The negotiators next met on May 12 at which time the

Union proposed that employees be compensated on a commis-

sion basis rather than at an hourly rate. Group negotiators re-

jected this proposal, adhering to the position previously

taken. The negotiators again met on May 15 and the Union

again insisted on pay on a commission basis. Management

negotiators again rejected the proposal, advising the Union

that they would accept a strike rather than concede on the

issue. At a further session on May 20 the positions of the par-

ties remained unchanged. It is undisputed that an impasse on

this issue had been reached on May 15. A further meeting on

June 18 was unsuccessful in breaking the impasse.

C. The Strike and Lockout

On June 23, 1975, the impasse continuing, the Union called

a selective strike against Bonanno in which all of its drivers

participated. At the time of the hearing that strike was still in

effect. The fact that the Union struck only Bonanno is not a

circumstance which justified Bonanno’s later withdrawal

from the Group. Selective strikes are a legitimate tactic for

exerting economic pressure. Their occurrence does not

relieve a struck employer of his obligation to bargain with the

Union. See Beck Engraving Co., 213 NLRB 53, 54-55 (1974),

enf. den. 522 F. 2d 475 (C.A. 3, 1975); State Electric Service,

Inc., 198 NLRB 592, 593 (1972); Hi-Way Billboards, Inc., 206

NLRB 22, 23 (1973), supplementing 191 NLRB 244, enf. den.

500 F. 2d 181 (C.A. 5, 1974).

After the strike began, most of the other employers in the

Group locked out their drivers, thus presenting a united front

to the Union. The parties continued to meet, however, in an

effort to reach an agreement. Negotiating sessions were held

on July 22, August 15 and September 2, 1975. But impasse

continued on the issue of method of payment to drivers.

The Union argues that because some employers during

strategy sessions urged that a sky-high wage offer be made in

an effort to break the impasse, a tactic which Bonanno op-

posed, a potential break in the impasse was apparent and

therefore continuation of the impasse should not be viewed as

a legitimate reason for Bonanno withdrawing from group

bargaining. There is no merit to this contention. Remarks

made during strategy sessions could have only the most

speculative impact on the actual bargaining situation.

Of greater significance is the fact that before Bonanno

withdrew two other employers in the Group secretly had been

in direct touch with the Union, presumably in an effort to

make a separate settlement.? Nothing came of these secret

2 Nothing in the record suggests that it was the Union that made

the secret overtures. In any case, the Union did not make any

agreement with the wayward employers.

contacts. Whether they reached the level of negotiations does

not appear. In the circumstances I find the Group was not

thereby fractured in a manner warranting withdrawal by

others in the Group. See Ice Cream, etc., Workers Union

Local 717 (Ice Cream Council), 145 NLRB 865, 870 (1964).

D. The Respondent’s Withdrawal

from the Group

On November 21, 1975, the strike and lockout still being in

effect and the impasse continuing, Bonanno revoked its prior

authorization to the Group to bargain on its behalf, stating,

“The Company is withdrawing from the Association with

specific respect to negotiations at this time because of an

ongoing impasse with Teamsters Local 25.” Bonanno in-

dicated it would engage in bargaining directly with the

Union. A copy of its revocation letter was mailed to the Union

on November 21 and that same day read to a union represent-

ative over the telephone.

Between commencement of the strike on June 23 and the

notice of withdrawal on November 21 Bonanno hired perma-

nent replacements for all of its striking drivers. Thus, from

its point of view there was less reason than earlier to con-

tinue with group bargaining. But the difference in personnel

was not such a circumstance as would justify withdrawal

from the Group because the hiring of replacements was a

logical outgrowth of the strike and a normal management ef-

fort to survive. N.L.R.B. v. MacKay Radio & Tel. Co., 304

U.S. 333 (19388). Use of such normal measures are not

“‘unusual circumstances” which justify withdrawal from

group bargaining.

Bonanno strongly urges that the ongoing impasse was an

unusual circumstance justifying its withdrawal from the

Group in accordance with the Board’s decision in Retail

Associates, Inc., 120 NLRB 388, 393-395. It especially relies

on four Court of Appeal decisions so holding. See N.L.R.B. v.

Beck Engraving, Co., 522 F. 2d 475 (C.A. 3, 1975); N.L.R.B.

v. Associated Shower Door Co., Inc., 512 F. 2d 230 (C.A. 9,

1975); N.L.R.B. v. Hi-Way Billboards, Inc., 500 F. 2d 181

(C.A. 5, 1974); and Fairmont Foods Co. v. N.L.R.B., 471 F.

2d 1170 (C.A. 8, 1972). See also the dictum of the First Cir-

cuit in N.L.R.B. v. Field and Sons, Inc., 462 F. 2d 748 (1972).

The General Counsel and the Union point out that the

Board has not followed the line taken by the Courts of Ap-

peal. Under Board law a bargaining impasse does not consti-

tute such an unusual circumstance as to justify an employer’s

unilateral withdrawal from group bargaining. See Hi-Way

Billboards, Inc., 206 NLRB 22 on remand from N.L.R.B. v.

Hi-Way Billboards, Inc., supra; and Goodsell & Vocke, Inc.,

223 NLRB No. 12 (slip op. p. 13). The position taken by the

Board is, of course binding on me. Insurance Agents’ Interna-

tional Union, 119 NLRB 768, 773. Accordingly, I find the cir-

cumstance of an ongoing impasse to be an insufficient reason

for Bonanno to have withdrawn from the Group. According-

ly, unless the Union went along with the withdrawal (a sub-

ject discussed later herein) Bonanno had a continuing duty to

participate in group bargaining, a duty which it violated by

withdrawing.

E. The Continuing Negotiations

Shortly after the withdrawal a Group representative in-

formed the Union by letter dated November 24, 1975 that he

understood the Union had been notified that Bonanno had

withdrawn. The letter stated that the remainder of the Group

would continue to negotiate with the Union and announced

that the lockout by the remaining members was being ter-

minated.

Thereafter the Group without Bonanno met with the Union

and negotiated further on December 1, 1975, February 4,

April 5 and April 13, 1976.%

On April 13, 1976 the Union dropped its demand for com-

pensation by commission and accepted a management offer

of a revised hourly wage rate. With this development, agree-

ment was finally reached on a new contract.

F. The Union’s Claim on Bonanno

Although the Union had not communicated with Bonanno

since its withdrawal, other than to file unfair labor practice

charges on April 9, after it reached agreement with the

Group on April 13, it claimed that Bonanno also was bound by

the terms of the contract bargained. By letter of April 29,

1976, the Union informed Bonanno that the Union at no time

had consented to its withdrawal, that it considered Bonanno

to be a member of the Group and bound by the settlement

reached. On May 3, 1976 Bonanno’s attorney replied to the

Union by letter denying it was bound by the agreement

reached.

G. Union, Consent, Acquiescence

and Estoppel

Bonanno contends that even if its withdrawal was untimely

and unjustified by unusual circumstances, the Union has gone

along with the withdrawal by consenting or acquiescing to it,

and in any case should not now be heard to object to it.

1. Consent or acquiescence

As to consent, it is clear the Union did not specifically con-

sent at the time of withdrawal. When Charles Bonanno read

the withdrawal letter to union field representative Herbert

3On April 9 the Union filed the instant unfair labor practice

charges against Bonanno.

Salter over the telephone on November 21, 1975, Salter made

no comment other than to indicate he would wait to see a

copy of the letter before confirming the telephone call and he

would probably consult the Union’s attorney. This could not

reasonably be understood as consent to what Bonanno was

doing but only as acknowledgement of notice that he was do-

ing it.

Up to that point Charles Bonanno had been a member of

the employer bargaining committee. At the first negotiating

meeting following withdrawal Union President William Mc-

Carthy inquired as to who had replaced Charles Bonanno on

the employer bargaining committee. He thus recognized that

Bonanno was in fact not actively participating in the continu-

ing negotiations. But it was not more than that. It did not

amount to an agreement with Bonanno’s legal position that it

could withdraw anymore than continuing negotiations with

the balance of the Group amounted to consent to Bonanno’s

absence. To hold otherwise would give every dissident in

group bargaining the power to ruin collective bargaining for

all others involved. By negotiating with the balance of the

Group and recognizing that Charles Bonanno was no longer

on the bargaining committee, the Union only acknowledged

the de facto situation.

No futher reference to Bonanno’s absence occurred until

the final session on April 13. At that meeting, after agree-

ment was reached on contract terms, an attorney for the

Group asked, “‘What about pending litigation?” He was refer-

ring to collateral litigation including an antitrust suit by the

Union against the Group, an injunction suit by the Group

against the Union, and unemployment compensation cases.

He apparently did not intend to include the instant unfair

labor practice charges which Bonanno had filed April 9

because the Group attorneys were unaware of them. Herbert

Salter, speaking for the Union, responded that, “... we

would probably wash all the pending litigation—this does not

include Bonanno, they are separate now and not in the

group.” At that time Bonanno was not represented in the

pending litigation by the attorneys for the Group, but was

separately represented by the attorneys who later appeared

for it in the Board proceeding.

Salter’s response acknowledged the long established de fac-

to separation of Bonanno from the Group. But he could not

have meant to release Bonanno from its duty to bargain with

the group. Section 8(aX1), and (5) unfair labor practice

charges based on Bonanno’s refusal to bargain with the

Group had been filed only 4 days earlier and are still pending

in this proceeding. They stand as a constant union assertion

that Bonanno is bound to Group bargaining. Respecting the

other pending litigation, Salter’s response is ambiguous when

applied to Bonanno.‘ Such ambiguity should be construed in a

manner consistent with the Union’s position in the pending

unfair labor practice charges. On April 29 the Union sent

Bonanno a letter denying it had ever consented to its

withdrawal and asserting it was bound to the negotiated con-

tract.

Considering the above circumstances I find that the Union

did not, directly or by implication, consent to, nor acquiesce

in, Bonanno’s withdrawal from Group bargaining. See Fatr-

mont Foods Company, 196 NLRB 849; John J. Corbett Press,

Inc., 163 NLRB 154, 158 fn. 14; The Carvel Company, et al.,

226 NLRB No. 18, fn. 8 (slip op., p. 6), 98 LRRM 1157, 1160.

‘It is not clear how the Union could wash out its antitrust suit

against all except Bonanno, nor why it would want to leave Bonan-

= as the only surviving plaintiff in an injunction suit against the

nion.

2. Estoppel

Bonanno also contends that the Union (and the General

Counsel) should not now be heard to object to the withdrawal

because (a) for months following the withdrawal the Union

remained silent and did not affirmatively object (b) the Union

continued bargaining with the balance of the Group, and (c)

following the withdrawal the Union accepted the beneficial

consequences of the withdrawal, namely, termination of the

lockout by other employers in the Group. The Board has

already rejected these contentions in Fairmont Foods Com-

pany, supra.

In sum, I find that Bonanno was obliged to bargain with the

Group, that its attempt to withdraw while negotiations were

in progress was not timely nor justified by the circumstances,

including the ongoing impasse and the selective strike, and

since the withdrawal the Union has neither consented to nor

acquiesced in the withdrawal nor should it be estopped now

from claiming that Bonanno is bound to the agreement

reached with the Group. Bonanno’s refusal to honor that

agreement is, and has been, a breach of its duty to bargain in

good faith and is an unfair labor practice within the meaning

of Section 8(aX5) and (1) of the Act.

III. The Effect of the Unfair Labor

Practices Upon Commerce

The activities of Bonanno set forth in section II, above, oc-

curring in connection with its operations described in section

I, above, have a close, intimate, and substantial relationship

to trade, traffic, and commerce among the several states and

tend to lead to labor disputes burdening and obstructing com-

merce and the free flow of commerce.

Conclusions of Law

1. Bonanno is an employer within the meaning of Section

2(2) and is engaged in commerce within the meaning of Sec-

tion 2(6) and (7) of the Act.

2. The Union is a labor organization within the meaning of

Section 2(5) of the Act.

3. The Union is, and has been at all material times, the ex-

clusive bargaining representative of the employees of Bonan-

no in the following appropriate unit:

All linen supply truck drivers and helpers employed by

members of the New England Linen Supply Association,

exclusive of all other employees, office clerical em-

ployees, guards and all supervisors as defined in Section

2(11) of the Act.

4. By its refusal to adopt the agreement reached between

the Union and the Group bargaining on behalf of members of

the New England Linen Supply Association, and by its re-

fusal to give effect to the terms and conditions contained

therein, Bonanno engaged in, and is engaging in, unfair labor

practices within the meaning of Section 8(aX5) and (1) of the

Act.

5. The aforesaid unfair labor practices affect commerce

within the meaning of Section 2(6) and (7) of the Act.

The Remedy

Having found that Bonanno has engaged in certain unfair

labor practices, I recommend it cease and desist therefrom

and take certain affirmative action that I find necessary to ef-

fectuate the policies of the Act. In this connection Bonanno

should immediately sign and implement the agreement

reached between the Union and the Group, and, as urged by

the General Counsel in his brief, apply it retroactively to

April 13, 1976, making its employees whole for any loss of

earnings suffered since then as a result of its failure to apply

the agreement. See the Carvel Company, et al., 226 NLRB

No. 18. Backpay is to be computed in the manner set forth in

F. W. Woolworth Company, 90 NLRB 289 (1950), with in-

terest thereon at 6 percent calculated according to the for-

mula set forth in Isis Plumbing & Heating Co., 1388 NLRB

716 (1962). Nothing herein is to be construed as requiring

Bonanno to recoup wages or benefits already received by its

employees. Bonanno should also preserve and make available

to Board agents, upon request, all pertinent records and data

necessary in analyzing and determining whatever backpay

may be due. It should also post appropriate notices at its Med-

ford, Massachusetts facilities.

Upon the foregoing findings of fact, conclusions of law, and

the entire record, and pursuant to Section 10(c) of the Act, I

hereby issue the following recorimended:®

ORDER

Respondent Bonanno, its officers, agents, successors and

assigns, shall:

1. Cease and desist from:

(a) Refusing to bargain collectively with Teamsters

Local Union No. 25, International Brotherhood of Team-

sters, Chauffeurs, Warehousemen and Helpers of America,

as the exclusive bargaining representative of its employees in

the appropriate unit described herein.

5 In the event no exceptions are ‘iled as provided by Section

102.46 of the Rules and Regulations of the National Reker Rela-

tions Board, the findings, conclusions, and recommended Order

herein shall, as provided in Section 102.48 of the Rules and Regula-

tions, be adopted by the Board and become its findings, conclu-

sions, and Order, and all objections thereto shall be deemed waived

for all purposes.

(b) Refusing to sign and to implement the 1976-79

linen supply agreement reached between the above Union

and the Group representing employer members of the New

England Linen Supply Association with respect to its

employees in the appropriate unit described herein.

restraining, or coercing employees in the exercise of their

rights under the National Labor Relations Act, as amended.

2. Take the following affirmative action which will effec-

tuate the policies of the Act:

(a) Forthwith sign and implement the above-

described agreement and give retroactive effect thereto from

April 13, 1976.

(b) Make whole its employees in the above-described

bargaining unit for any loss of pay or other employment

benefits they may have suffered by reason of its refusal to

sign and implement the aforesaid agreement, in the manner

set forth in the section entitled ‘The Remedy”’.

Board or its agents for examination and copying all payroll

records, social security payment records, timecards, person-

nel records and reports, and all other records necessary to

analyze the amount of backpay due under the terms of this

Order.

(d) Post at its place of business in Medford,

Massachusetts, copies of the attached notice marked “Ap-

pendix”. Copies of said notice, on forms provided by the

Regional Director for Region 1, after being duly signed by

6 In the event the Board’s Order is enforced by a Judgment of the

United States Court of Appeals, the words in the notice reading

“POSTED BY ORDER OF THE NATIONAL LABOR RELA-

TIONS BOARD” shall read ‘“‘POSTED PURSUANT TO A JUDG-

MENT OF THE UNITED STATES COURT OF APPEALS EN-

FORCING AN ORDER OF THE NATIONAL LABOR RELA-

TIONS BOARD.”

Respondent Bonanno’s representative, shall be posted by it

immediately upon receipt thereof and be maintained by it for

60 consecutive days thereafter in conspicuous piaces, in-

cluding all places where notices to employees are customarily

posted. Reasonable steps shall be taken by it to insure that

said notices are not altered, defaced, or covered by any other

material.

(e) Notify the Regional Director for Region 1, in

writing, within 20 days from the date hereof, what steps it

has taken to comply herewith.

Dated, Washington, D. C., Dec. 20, 1976.

/s/_ James M. Fitzpatrick

Administrative Law Judge

APPENDIX

FORM NLRB-4727 JD-833-76

(9-69)

[SEAL] NOTICE TO [SEAL]

EMPLOYEES

POSTED BY ORDER OF THE

NATIONAL LABOR RELATIONS BOARD

AN AGENCY OF THE

UNITED STATES GOVERNMENT

WE WILL NOT refuse to bargain with TEAMSTERS

LOCAL UNION NO. 25, INTERNATIONAL BROTHER-

HOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSE-

MEN AND HELPERS OF AMERICA, by refusing to sign

and implement the 1976-79 contract between the Union and

member employers of the New England Linen Supply

Association.

WE WILL NOT in any like or related manner interfere with,

restrain, or coerce our employees in the exercise of their

rights under the National Labor Relations Act, as amended.

WE WILL forthwith sign and implement the above-men-

tioned contract and give retroactive effect thereto, from

April 13, 1976.

WE WILL make whole our employees in the bargaining unit

for any loss of pay or other employment benefits they may

have suffered by reason of our refusal to sign and to imple-

ment the aforesaid collective bargaining agreement.

CHARLES D. BONANNO LINEN

SERVICE, INC.

(Employer)

Dated By

(Representative) (Title)

THIS IS AN OFFICIAL NOTICE AND MUST

NOT BE DEFACED BY ANYONE

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 concerning this

notice or compliance with its provisions may be directed to

the Board’s Office, 12th Floor - Keystone Building, 99 High

Street, Boston, Mass. 02110. Telephone (617) 223-3348.

FJM

229 NLRB No. 108 D—2197

Medford, Mass.

UNITED STATES OF AMERICA

BEFORE THE NATIONAL LABOR RELATIONS BOARD

CHARLES D. BONANNO LINEN SERVICE, INC.

and Case 1—CA—11628

TEAMSTERS LOCAL UNION NO. 25,

INTERNATIONAL BROTHERHOOD OF

TEAMSTERS, CHAUFFEURS,

WAREHOUSEMEN AND HELPERS OF

AMERICA

DECISION AND ORDER

On December 20, 1976, Administrative Law Judge James

M. Fitzpatrick issued the attached Decision in this pro-

ceeding. Thereafter, Respondent filed exceptions and a sup-

porting brief, the Charging Party filed cross-exceptions and a

supporting brief and also a brief in opposition to the Respond-

ent’s exceptions, and the General Counsel filed a brief in sup-

port of the Administrative Law Judge’s Decision.

Pursuant to the provisions of Section 3(b) of the National

Labor Relations Act, as amended, the National Labor Rela-

tions Board has delegated its authority in this proceeding to a

three-member panel.

The Board has considered the record and the attached Deci-

sion in light of the exceptions and briefs and has decided to

229 NLRB No. 108

affirm the rulings, findings, and conclusions of the Ad-

ministrative Law Judge and to adopt his recommended

Order.

ORDER

Pursuant to Section 10(c) of the National Labor Relations

Act, as amended, the National Labor Relations Board adopts

as its Order the recommended Order of the Administrative

Law Judge and hereby orders that the Respondent, Charles

D. Bonanno Linen Service, Inc., Medford, Massachusetts, its

officers, agents, successors, and assigns, shall take the action

set forth in said recommended Order.

Dated, Washington, D.C. May 12, 1977

John H. Fanning, Chairman

Howard Jenkins, Jr., Member

Betty Southard Murphy, Member

NATIONAL LABOR RELATIONS BOARD

(SEAL)

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.