Petitioners Brief — Charles D. Bonanno Linen Service, Inc. v. NLRB

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Office-Supreme Court, US

Viis Dp *

No. 80-931 MAY 22 1981

EXANDER L. STEVAS,

IN THE CLERK ae

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.

ON WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT.

Brief for Charles D. Bonanno Linen Service, Inc.

SIDNEY A. COVEN, Counsel of Record,

JOSEPH E. LEPIE,

HOWARD I. WILGOREN,

LEPIE AND COVEN,

18 Tremont Street,

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 multiemployer bargaining unit violates the

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

ed, 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 purpose of negotiating in-

dividually with the union, and thereafter refusing to execute

the multiemployer 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

Opinions below

Jurisdiction

Applicable statutory provisions

Statement of the case

Summary of argument

Argument

I. Withdrawal from multiemployer bargaining upon

the occurrence of an impasse in collective bar-

gaining is not violative of the National Labor

Relations Act

A. Introduction

B. The position of the Board on withdrawal

from multiemployer bargaining

C. The fashioning of an ‘impasse doctrine’’ by

five courts of appeals

D. The Labor Board’s notion that an impasse

in bargaining is not an “unusual circum-

stance,’’ as enforced by the First Circuit, is

not supported by the realities of multi-

employer bargaining

II. The five courts of appeals acted within their au-

thority under the National Labor Relations Act

and decisions of this Court in fashioning the ‘“‘im-

passe doctrine”

Conclusion

oenrnt N! NH

ili

Table of Authorities Cited.

CASES.

Association of Motion Picture Producers, Inc.,

88 NLRB 1155 (1950) 10n.

Atlas Sheet Metal Works, Inc., 148 NLRB 27 (1964) 11

Carvel Co. v. NLRB, 560 F. 2d 1030 (1st Cir. 1977) 16n.

Charles D. Bonanno Linen Service, Inc., 243 NLRB

No. 140 (1979) 14, 27, 29n., 30

Connell Typesetting Company, 212 NLRB 918 (1974) 12

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

(8th Cir. 1972) 10n., 16, 17, 29n.

H & D, Inc. v. NLRB, — F. 2d — (9th Cir. October

8, 1980) 24, 29n.

Hearst Consolidated Publications, Inc., 156 NLRB 210

(1966), enf’d, 364 F. 2d 293 (2d Cir. 1966), cert.

denied, 385 U.S. 971 (1966) 26

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

enforcement denied, 500 F. 2d 181 (5th Cir. 1974) 13

Iron Workers, Local 103, 195 NLRB 980 (1972) 12n.

Jaime Andino d/b/a Jaime Andino Trucking v. NLRB,

619 F. 2d 147 (1st Cir. 1980) 16n.

Johnson Optical Co., 87 NLRB 539 (1949) 10n.

Morand Brothers Beverage Co., 91 NLRB 409

(1950), enf’d, 190 F. 2d 576 (7th Cir. 1951) 10n., 25

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

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

(1975) 10n., 16, 18, 29n., 30n., 32

NLRB v. Beck Engraving Co., Inc., 522 F. 2d 475

(3d Cir. 1975), cert. denied, 439 U.S. 1130

(1979) 10n., 16, 20, 21, 29n., 30n., 33, 34

NLRB v. Bonanno Linen Service, Inc., 630 F. 2d 25

(1st Cir. 1980) 11, 16, 25, 26

NLRB v. Brown, 380 U.S. 278 (1965) 7, 27, 36, 37

NLRB v. Field and Sons, Inc., 462 F. 2d 748 (1st Cir.

1972) 15n.

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

Cir. 1974) 10n., 16, 18, 26, 29n., 30n.

NLRB v. Hi-Way Billboards, Inc., 473 F. 2d 649 (5th

Cir. 1973) 17

NLRB v. Independent Association of Steel Fabricators,

Inc., 582 F. 2d 135 (2d Cir. 1978), cert. denied, 439

U.S. 1130 (1979) 10n., 16, 23, 29n., 30n.

NLRB v. Truck Drivers Local 449, 353 U.S. 87

(1957) 8, 9, 36

NLRB v. Weingarten, 420 U.S. 251 (1975) 37n.

Pacific Coast Association of Pulp and Paper

Manufacturers, 163 NLRB 892 (1967) 13, 26

Plumbers and Steamfitters Local 323 (PHC Mechanical

Contractors), 191 NLRB 592 (1971) 11, 13, 14, 26

Retail Associates, 120 NLRB 388

(1958) 10, 11, 13, 16, 18, 23, 26, 27

Sangamo Construction Co., 188 NLRB 159 (1971) 14, 26

Spun-Jee Corp., 171 NLRB 557 (1968) 12

Teamsters Local 717 (Ice Cream Council), 145 NLRB

865 (1964) 11,13

Tennessee Consolidated Coal Co., 187 NLRB 821

(1971) 9n.

The Evening News Association, 154 NLRB 1494 (1965),

enf’d sub nom. Detroit Newspaper Publishers

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

1967) 13-14, 26

Tulsa Sheet Metal Works, Inc., 149 NLRB 1487

(1964) 11

Typographic Services Co., 238 NLRB 1565 (1978) 12

U.S. Lingerie Corporation, 170 NLRB 750 (1968) 12

We Painters, Inc., 176 NLRB 944 (1969) 11

STATUTES.

28 U.S.C. § 1254(1) 2

29 U.S.C. § 141 30

29 U.S.C. § 151 et seq. 2

29 U.S.C. § 158(aX1) 2,5, 15n.

29 U.S.C. § 158(aX5) i, 2, 5, 6, 18, 15n.

29 U.S.C. § 160(e), (f) 37

MISCELLANEOUS.

Hickey and Sauntry, When is Employer Justified in

Leaving the Fold? Legal Times of Washington,

January 5, 1981 31n.

Levin and Jason, Multiemployer Withdrawal Bid Short

Circuited at the Impasse, 2 National Law Journal

No. 24, February 25, 1980 32

Murphy, Impasse and the Duty to Bargain in Good

Faith, 39 U. Pit. L. Rev. 1 (1977) 27

United States Department of Labor, Characteristics

of Major Collective Bargaining Agreements, January

1, 1978 12 (Bulletin 2065, April, 1980) 8n.

No. 80-931

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.

ON WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT.

Brief for Charles D. Bonanno Linen Service, Inc.

Opinions Below.

The opinion issued by the court of appeals is reported at

630 F. 2d 25 (1st Cir. 1980), and is reproduced in Appendix A

of the Petition for Certiorari. 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 the Petition for Certiorari. 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 Appendix C of the Petition for Cer-

tiorari.

Jurisdiction.

The judgment of the Court of Appeals for the First Circuit

was entered on September 12, 1980. On December 10, 1980,

Charles D. Bonanno Linen Service, Inc. filed its Petition for

Writ of Certiorari which was granted on March 9, 1981. The

jurisdiction of this Court is properly invoked pursuant to 28

U.S.C. § 1254(1).

Applicable Statutory Provisions.

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 em-

ployer—

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

the exercise of the rights guaranteed in section 157 of

this title; ...

(5) to refuse to bargain collectively with the represent-

atives of his employees, subject to the provisions of sec-

tion 159(a) of this title.

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 (J.A.

92-97, Jt. Ex. A, R. 16, 17).! Although the testimony adduced

1 “P.” references are to decisions printed in the Petition for Writ

of Certiorari; “‘J.A.’’ references are to portions of the record which

are printed in the Joint Appendix.

at the hearing before the Administrative Law Judge revealed

some disagreement as to details, there is no real disagree-

ment as to the essential facts. The facts as recited herein

were, in effect, adopted by the Administrative Law Judge

during the course of his decision (P. 54-60) and were not

disturbed in the subsequent proceedings.

Charles D. Bonanno Linen Service, Inc. (hereinafter ‘“‘Bon-

anno’’) is a Massachusetts corporation and is engaged in the

laundering, rental and distribution of linen, uniforms and

related products (P. 54). The truckdrivers and helpers em-

ployed by Bonanno were represented by Teamsters Local

Union No. 25, International Brotherhood of Teamsters,

Chauffeurs, Warehousemen and Helpers of America (herein-

after the ‘“‘Union’’)(P. 55). Bonanno, in the past, had engaged

in collective bargaining with the Union as a member of the

New England Linen Supply Association (hereinafter the “‘As-

sociation’’),2 which was comprised of 10 employers engaged

in the linen service business (P. 55). Bonanno and the other

members of the Association each signed individual and iden-

tical agreements with the Union covering the period from

September 21, 1972 to April 18, 1975 (P. 55).

In accordance with that agreement the Union and Associa-

tion each gave notice of termination (J.A. 103, 104, Jt. Exs.

2, 3, R. 16, 17). Bonanno authorized the Association to

bargain with the Union in its behalf (P. 56).

Commencing in March, 1975, the Association and the

Union engaged in negotiations for a new agreement. After

several negotiating sessions a proposed contract which pro-

vided 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

2 The Association no longer exists. B ining between the

Union and former Association members has been on an individual

Company basis.

meeting proposed that its driver members be compensated on

a commission basis rather than on an hourly rate. This posi-

tion was rejected by the Association in accordance with its

prior negotiating position. On May 15, as stipulated by the

parties, an impasse in bargaining was reached over the issue

of the method of compensating drivers (P. 56; J.A. 94, Jt. Ex.

A, R. 16, 17).

On June 238, 1975, the Union called a selective strike

against Bonanno and most of the remaining Association

members locked out their drivers (P. 57). Subsequent

meetings were held over the course of several months, but

the parties were unable to resolve the continuing impasse (P.

56-57; J.A. 95, Jt. Ex. A, R. 16, 17).°

On November 21, 1975 Bonanno advised the Association

and the Union that it was withdrawing from the Association

(P. 58; J.A. 106, Jt. Ex. 4, R. 16, 17). Thereupon, the remain-

ing members of the Association terminated the lockout (P.

59).4

After several meetings without Bonanno, the Association

and Union reached an agreement on a new contract on April

13, 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 (J.A.

117, Jt. Ex. 7, R. 16, 17). By letter dated May 3, 1976,

Counsel for Bonanno advised the Union that Bonanno was

not bound by the agreement referred to in the Union’s letter

of April 29 (P. 60; J.A. 118, Jt. Ex. 8, R. 16, 17).

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

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

3 In testimony before the Administrative Law Judge evidence

was adduced that the Union met separately with two individual

members of the Association, ‘presumably in an effort to make a

separate settlement” (P. 57). There is no record evidence that

separate interim agreements were executed.

‘ The strike against Bonanno continued.

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

tive Law Judge, holding that Bonanno violated § 8(aX1) and

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

amended, 61 Stat. 136, 140, 29 U.S.C. § 158(aX1) and (5), by

refusing to execute the collective bargaining agreement

reached between the Association and the Union, 229 NLRB

629 (1977) (P. 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. Subse-

quently, the Board on August 6, 1979 issued a Supplemental

Decision adhering to the position taken in its earlier decision

(P. 38).

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

(P. 18).5

Summary of Argument.

While multiemployer bargaining has become an accepted

method for the conduct of collective bargaining negotiations

between a union and a confederation of employers, the

salutary purposes achieved thereby are negated by the un-

even application of the law by the National Labor Relations

Board. The Board’s rules respecting multiemployer bargain-

ing are slanted against the employer. That form of voluntary

bargaining is thereby rendered untenable to employers.

5 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.

The Board held that Bonanno’s refusal to execute the

multiemployer agreement between the Association and the

Union, subsequent to its withdrawal from the Association

during an impasse in negotiations, was an unlawful refusal to

bargain within the meaning of § 8(aX(5) of the Act. The Board

maintains that an employer withdrawal, absent mutual con-

sent, from a multiemployer group, after the commencement

of negotiations, is ineffective unless justified by “unusual cir-

cumstances.” “Unusual circumstances” are limited, by the

Board, to two remote occurrences, namely pending bank-

ruptcy or significant fragmentation of the group as a result of

consensual withdrawals.

After taking diverse positions on the question of whether

an impasse in negotiations is an “‘unusual circumstance,” the

Board now steadfastly maintains that an impasse is not an

“unusual circumstance.” Such a conclusion conflicts with a

related postulate of law promulgated by the Board that the

rules respecting multiemployer bargaining are to apply

equally to unions and employers. But such evenhandedness is

belied by the Board’s sanction of a union’s right to negotiate

separate agreements with individual employer members of a

multiemployer group. Such an unequal application of with-

drawal rights does much to destroy the integrity of a multi-

employer group and renders bargaining in such a framework

futile, unattractive and meaningless.

Recognizing the Board’s inflexible approach, five circuit

courts of appeals have fashioned an “impasse doctrine”

which sanctions an employer’s right to withdraw upon the oc-

currence of an impasse in negotiations. This “impasse doc-

trine” adequately protects and balances the rights of all par-

ties bargaining in a multiemployer context.

The Board’s conclusion that an impasse in multiemployer

bargaining is not an “unusual circumstance” does not com-

port with the realities of bargaining within that framework

and endangers the continued viability of multiemployer

bargaining. By allowing a union to partially withdraw from

multiemployer bargaining and negotiate a separate agree-

ment, while refusing to allow employer withdrawal at im-

passe, the Board unfairly disturbs the delicate balance in

favor of the union. Such a view negates the Board’s ostensi-

ble equality of withdrawal standard, and involves the Board

in the balancing of economic weapons contrary to this

Court’s decision in NLRB v. Brown, 380 U.S. 278 (1965). In

addition, the sanctioning of a union’s right to enter into

separate interim agreements amounts to the rejection, at

least in part, of the existence of the multiemployer unit.

The Board’s characterization of an impasse as a “‘tem-

porary deadlock” or “hiatus” ignores the dynamics of

multiemployer bargaining. Unlike single employer-union

negotiations, an employer in the multiemployer context is

confronted, at impasse, not only with an adversarial union

but also with a competitor employer member of the group

who, having signed a separate agreement with the union, is

engaged in productive work while the remaining employer

members are enduring a strike. The result is a serious frac-

turing of the employer group and a breakdown of the uniform

approach to collective bargaining contemplated by employers

who voluntarily join a multiemployer group.

In order to effectuate the purposes of the Act, withdrawal

at impasse should be allowed, so that the Board’s policy of

equalizing withdrawal rights of both parties is effectuated.

Adoption of the “impasse doctrine” will have the salutary ef-

fect of insuring stability in collective bargaining. To do other-

wise would frustrate meaningful collective bargaining

because it requires an employer to remain indelibly tied to

fruitless multiemployer bargaining long after that process of

collective bargaining has ceased to function productively.

The decision of the First Circuit essentially held that the

Board’s decision was entitled to enforcement out of

deference to its presumed expertise. As this Court has recog-

nized, Congress intended that the courts of appeals serve a

meaningful role in the development of our federal labor

policy. It is submitted that the Board’s refusal to find that an

impasse in multiemployer bargaining constitutes an “unusual

circumstance” rests upon an erroneous legal foundation.

Conversely, the decisions of the five circuit courts, which

have fashioned the “impasse doctrine,” fairly balance the

conflicting interests presented by the instant case. The ‘‘im-

passe doctrine,’ which allows employer withdrawal from a

multiemployer bargaining unit upon the occurrence of an im-

passe in negotiations, should now be adopted by this Court.

Argument.

I. WITHDRAWAL FROM MULTIEMPLOYER BARGAINING UPON THE

OCCURRENCE OF AN IMPASSE IN COLLECTIVE BARGAINING IS

Not VIOLATIVE OF THE NATIONAL LABOR RELATIONS ACT.

A. Introduction.

Multiemployer bargaining has become an accepted method

for the conduct of collective bargaining negotiations between

a union and a confederation of employers. NLRB v. Truck

Drivers Local 449, 353 U.S. 87, 94-96 (1957).®

The salutary purposes which may be achieved by this

method of collective bargaining are well documented. Con-

gress in its deliberations on the Taft-Hartley Act in 1947

® According to the United States Department of Labor in its

study of collective bargaining agreements covering 1,000 or more

employees, there are 648 multiemployer bargaining agreements,

covering more than three million employees. United States Depart-

ment of Labor, Characteristics of Major Collective Bargaining

Agreements, January 1, 1978, 12 (Bulletin 2065, April, 1980).

recognized the utility of bargaining on this basis when a pro-

posal to ban industry-wide bargaining was rejected.

This Court too has had occasion to examine, and approve,

the virtues of multiemployer bargaining. Thus, in NLRB v.

Truck Drivers Local 449, 353 U.S. 87 (1957), the court con-

cluded that multiemployer bargaining offers advantages to

both management and labor. Such a mechanism for bargain-

ing allows an employer to bargain ‘‘on an equal basis with a

large union’”’ and to avoid “the competitive disadvantages

resulting from nonuniform contractual terms.” Id. at 96.

Moreover, multiemployer bargaining permits the union and

employer to marshall their resources with a view toward the

negotiation of a single collective bargaining agreement. As a

result, the process is, in the main, more effective and efficient

and industrial discord is reduced. This Court has therefore

concluded that multiemployer bargaining is a ‘‘vital factor in

the effectuation of the national policy of promoting labor

peace through strengthened collective bargaining.”’ Id. at 95.

Yet, under the present state of the law as promulgated by

the National Labor Relations Board the future of multiem-

ployer collective bargaining is seriously threatened. The

Board’s uneven application of its rule respecting multiem-

ployer bargaining whereby it refuses to sanction employer

withdrawal from multiemployer bargaining upon the occur-

rence of an impasse in bargaining, if allowed to stand, will

undermine an employer’s voluntary determination’ that such

a forum for bargaining is in its best interest. Multiemployer

units are created upon the voluntary consent of the parties. If

employers perceive that the Board’s rules respecting multi-

employer bargaining are slanted, they will be reluctant to

enter into such a consensual arrangement.

7 Tennessee Consolidated Coal Co., 187 NLRB 821 (1971).

Conversely, the “impasse doctrine,’ fashioned by five

courts of appeals,* which allows withdrawal upon an impasse

in bargaining, fairly protects the interests of both parties to

multiemployer bargaining and insures that the guidelines

established by the Board will be uniformly applied. Approval

of this doctrine will insure the continued viability of

multiemployer bargaining.

B. The Position of the Board on Withdrawal

from Multiemployer Bargaining.

The Board’s conclusion that Bonanno’s refusal to execute

the collective bargaining agreement executed between the

Union and the Association violated the Act was grounded on

its view that Bonanno’s withdrawal was ineffective (P. 51).

In Retail Associates, 120 NLRB 388 (1958), the Board

established the rules governing withdrawal rights of parties

to multiemployer bargaining units. Simply put, once negotia-

tions between the multiemployer group and the union have

commenced, neither party may withdraw unless by mutual

consent or unless “unusual circumstances” otherwise ex-

cused the untimely withdrawal. 120 NLRB at 394.°

8 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., Inc., 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).

* Prior to its decision in Retail Associates, the Board espoused a

rule quite different from the one it now seeks to impose. Associa-

tion of Motion Picture Producers, Inc., 88 NLRB 1155 (1950);

Johnson Optical Co., 87 NLRB 539 (1949). In Morand Brothers

Beverage Co., 91 NLRB 409 (1950), enf'd, 190 F. 2d 576 (7th Cir.

1951), the Board held that “employers [have] unlimited freedom

unilaterally to fashion the scope of, or to completely destroy

multiemployer bargaining at their will or fancy.”’ Jd. at 418. A con-

comitant right was also recognized as being reposed in a union.

The scope of the term “unusual circumstances” was not

defined by the Board in its Retail Associates decision. Subse-

quent Board decisions further clouded the issue by initially

implying that an impasse in bargaining was not an “unusual

circumstance,” Teamsters Local 717 (Ice Cream Council), 145

NLRB 865 (1964), only to later suggest the opposite conclu-

sion. Plumbers and Steamfitters Local 323 (PHC Mechanical

Contractcr), 191 NLRB 592 (1971). See NLRB v. Bonanno,

630 F. 2d 25, 35 (1st Cir. 1980) (P. 24).

In We Painters, Inc., 176 NLRB 944 (1969), the Trial Ex-

aminer, affirmed by the Board, held that unilateral

withdrawal by an employer after impasse must be une-

quivocal and accompanied by notice of the union.

An impasse in bargaining having been reached, a

withdrawal of bargaining authorization [from the

multiemployer group] would in my opinion have been

timely. 176 NLRB at 965.

In Atlas Sheet Metal Works, Inc., 148 NLRB 27 (1964),

bargaining between the employer’s group and the union had

reached an impasse. Thereafter the employer notified both

the union and the employer’s group that it was withdrawing

from multiemployer bargaining. The union did not object

either to the withdrawal or to the fact that the employer’s

representative was resigning from the group’s bargaining

committee and was being replaced. The Board upheld the em-

ployer’s unilateral withdrawal from multiemployer bargain-

ing after an impasse had been reached.

In Tulsa Sheet Metal Works, Inc., 149 NLRB 1487 (1964),

the Board clearly indicated approval of unilateral withdrawal

from multiemployer bargaining upon impasse:

When group bargaining is the pattern, while it is not

presumed that the identity of each individual employer

participant becomes merged into a single group identity

to the extent that, in all circumstances, its freedom to

condition or delimit its acceptance of the final bargaining

product is forfeited, its freedom to withdraw while group

negotiations are in progress must, of necessity, be severe-

ly circumscribed, and normally would require it to bar-

gain only through its designated bargaining agent in

good faith to a point of agreement or impasse, foreclosing

full exposure of remaining issues to the moderating in-

fluences of the bargaining table. 149 NLRB at 1500 (em-

phasis added).?°

While the Board has recognized that certain ‘‘unusual cir-

cumstances” may require a balancing of competing interests

thereby allowing an employer to withdraw after the com-

mencement of negotiations, it has severely limited those in-

stances where withdrawal will be sanctioned. Withdrawal is

allowed by the Board in but two instances. Where an

employer can demonstrate that it is faced with dire economic

circumstances, such as impending bankruptcy, withdrawal

from group bargaining will not violate the Act. U.S. Lingerie

Corporation, 170 NLRB 750, 751 (1968); Spun-Jee Corp., 171

NLRB 557, 558 (1968). The only other situation which con-

stitutes “unusual circumstances,” in the Board’s view, is

where the multiemployer group has been significantly

fragmented as a result of consensual withdrawals. Connell

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

Typographic Services Co., 288 NLRB 1565 (1978).

Bonanno withdrew from the Association more than six

months after the onset of an impasse in negotiations, and

after enduring a prolonged strike. These facts squarely raise

the issue as to whether an employer is justified in withdraw-

10 See also Iron Workers, Local 103, 195 NLRB 980 (1972),

wherein the Board strongly implied that once an impasse is

reached in negotiations, an employer may withdraw from

multiemployer bargaining without the consent of the union.

ing from group bargaining once an impasse in negotiations is

reached under the standard set forth by the Board in its

Retail Associates decision.

The Board resolved its seemingly contradictory cases (com-

pare Teamsters Local 717 (Ice Cream Council), 145 NLRB

865 (1964), with Plumbers and Steamfitters Local 323 (PHC

Mechanical Contractors), 191 NLRB 592 (1971)) on the ques-

tion of whether an impasse in negotiations constitutes an

“unusual circumstance” in Hi-Way Billboards, Inc., 206

NLRB 22 (1973), enforcement denied, 500 F. 2d 181 (5th Cir.

1974). In Hi-Way Billboards the Board concluded that an im-

passe in bargaining was not an “‘unusual circumstance,” and

therefore employer withdrawal from multiemployer bargain- .

ing at that time was not justified. The Board based its finding

on its view that an “impasse cannot be said to be an unex-

pected, unforseen, or unusual event in the process of negotia-

tions.” Hi-Way Billboards, 206 NLRB at 23. Rather, an im-

passe was characterized as a temporary “‘deadlock”’ or hiatus

in negotiations.

Under its Hi-Way Billboards decision, the Board found

Bonanno’s withdrawal from the Association to be ineffective.

Therefore its refusal to execute the collective bargaining

agreement agreed to between the Union and the Association

was, in the Board’s opinion, violative of § 8(a(5) of the Act (P.

41),"!

It is submitted that the Board’s rule prohibiting employer

withdrawal at impasse contravenes two related policy deci-

sions it has applied to multiemployer bargaining. The first

line of cases articulates a policy that there should be equality

of withdrawal rights. Pacific Coast Association of Pulp and

Paper Manufacturers, 163 NLRB 892 (1967); The Evening

11 Tt should be pointed out that by withdrawing from the Associa-

tion Bonanno did not intend to extinguish its then existing bargain-

ing obligation. Rather, Bonanno only intended to negotiate on an

individual basis directly with the Union (J.A. 106, Jt. Ex. 4, R. 16,

17).

News Association, 154 NLRB 1494, 1496-1497 (1965), enj’d

sub nom. Detroit Newspaper Publishers Association v.

NLBB, 372 F. 2d 569 (6th Cir. 1967). The second related prin-

ciple enunciated by the Board authorizes a union, after com-

mencement of negotiations, to partially withdraw from

multiemployer bargaining by entering into separate interim

agreements with one or more employer members. At the

same time, the union is allowed to insist on negotiating with

the remaining employers in the multiemployer unit on a

group basis. See, e.g., Plumbers and Steam/fitters Local 323

(PHC Mechanical Contractors), 191 NLRB 592 (1971);

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

With respect to equal treatment of both employers and

unions who are party to multiemployer bargaining, the

Board’s egalitarian view is clearly stated in Evening News

Association, 154 NLRB 1494, 1496 (1965), as follows: ‘In

principle there is no basis for different treatment of union

and employer withdrawals from multi-employer bargaining

units.” Yet, the Board has not adhered to the evenhanded

principle it laid down in Evening News Association. Rather, it

has created an imbalance by allowing a union to engender a

partial or de facto withdrawal from multiemployer bargain-

ing. Thus, the Board sanctions a union’s right to enter into

separate agreements with individual employers while requir-

ing that other employers must continue to bargain as part of

the multiemployer unit. The Board contends that such

agreements may prevent significant unit fragmentation

rather than cause it and do tend to facilitate the breaking of

impasse.*? Charles D. Bonanno Linen Service, Inc., 243

NLRB No. 140 (1979) (P. 51). As will be examined in more

12 The question might be asked why, if that is true, permitting

one of the members of the group to withdraw after a lengthy im-

passe and to bargain separately might not equally serve the same

purpose.

detail, such a conclusion does not comport with the realities

of multiemployer bargaining.

As illustrated, the Board has engaged in substantial regula-

tion of multiemployer bargaining. While professing a desire

to devise rules that will apply uniformly to all parties, the

Board has steadfastly held to its position that an impasse in

bargaining will not justify withdrawal by an employer from a

multiemployer bargaining group. This inflexible position

tends to weaken the process of collective bargaining, and

seriously interferes with the national labor policy of pro-

moting industrial peace through effective collective bargain-

ing. The stability of multiemployer bargaining is rendered

suspect by the Board’s slavish adherence to the rules respect-

ing withdrawal rights of the parties. While unions are free to

abandon multiemployer bargaining at a critical moment,

employers must, under the Board’s postulation of the law, re-

main wedded to the multiemployer group under the same cir-

cumstances. Such an unequal policy does much to destroy the

integrity of multiemployer bargaining and makes this vehicle

for bargaining far less attractive to employers considering

entering into, or continuing in, such a framework for collec-

tive bargaining in the future.

C. The Fashioning of an “Impasse Doctrine”’ by

Five Courts of Appeals.

As a result of the Board’s inflexible approach, five circuit

courts of appeals'* have fashioned an “impasse doctrine”

holding that an impasse in multiemployer bargaining con-

13 In prior decisions the First Circuit indicated approval of the

“impasse doctrine.” In NLRB v. Field and Sons, Inc., 462 F. 2d

748 (1st Cir. 1972), the Board sought enforcement of an order

against the employer for violation of § 8(aX1) and (5) of the Act for

refusing to sign a collective bargaining agreement negotiated by a

multiemployer bargaining association from which the employer

had resigned one week prior to the execution of the collective

bargaining agreement. While denying enforcement of the Board’s

order on procedural grounds, the court stated that, ‘“‘we do not see

stitutes an ‘‘unusual circumstance’”’ within the meaning of the

Board’s Retail Associates decision. NLRB v. Independent

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

1978); NLRB v. Beck Engraving Company, 522 F. 2d 475 (3d

Cir. 1975), cert. denied, 439 U.S. 1130 (1979); NLRB v.

Associated Shower Door Co., Inc., 512 F. 2d 230 (9th Cir.

1975), cert. denied, 423 U.S. 893 (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); but see

NLRB v. Bonanno Linen Service, Inc., 630 F. 2d 25 (1st Cir.

1980) (P. 18). In each of these cases, the courts have con-

cluded that a negotiating impasse justifies unilateral

withdrawal from a multiemployer bargaining unit. NLRB v.

Independent Association of Steel Fabricators, supra at 146;

NLRB v. Beck Engraving, supra at 482-483; NLRB v.

Associated Shower Door, supra at 232; NLRB v. Hi-Way

Billboards, supra at 183-184; Fairmont Foods v. NLRB,

supra at 1172-1174 n.1.

The first opportunity for judicial review of the Board’s re-

jection of impasse as an “‘unusual circumstance” came in

Fairmont Foods Co. v. NLRB, 471 F. 2d 1170 (8th Cir. 1972).

In that case, the Court of Appeals for the Eighth Circuit con-

sidered the issue as to whether a valid impasse justified the

employer’s unilateral withdrawal from group bargaining and

stated:

When an impasse in negotiations is reached, with-

drawal by a member of a multiemployer bargaining

why an undertaking to engage in multi-employer bargaining is an

irrevocable agreement under all circumstances.” Jd. at 750. And in

Jaime Andino d/b/a Jaime Andino Trucking v. NLRB, 619 F. 2d

147, 151 (1st Cir. 1980), the First Circuit, citing Carvel Co. v.

NLRB, 560 F. 2d 1030, 1035 (1st Cir. 1977), and Fairmont Foods

Co. v. NLRB, 471 F. 2d 1170, 1172-1173 (8th Cir. 1972), while find-

ing that no impasse had been reached, stated that an impasse is an

unusual circumstance justifying withdrawal, supra at 151.

group is excused. See Morand Bros. Beverage Co., 91

N.L.R.B. 409, 26 L.R.R.M. 1501, 1506 (1950), enforced,

190 F. 2d 576 (7th Cir. 1951); ef: Ice Cream Council, Inc.,

145 N.L.R.B. 865, 870, 55 L.R.R.M. 1059, 1061 (1964).

This means, of course, that it cannot be bound by a

subsequent agreement between a union, having

knowledge of the withdrawal, and the other employers.

Id. at 1172-1173.

The court went on to say that “[bJecause an impasse had

been reached, Fairmont’s withdrawal was timely. It there-

fore was not a violation of 8(aX5) and (1) of the Act to refuse

to be bound by an agreement reached by the Union and the

multiemployer group after withdrawal with the Union’s

knowledge.”’ Jd. at 1173. Thus, in essential terms, it may be

said that Fairmont Foods, supra, stands for the proposition

that a member of a multiemployer unit may withdraw from

that bargaining unit when an impasse is reached in negotia-

tions.

NLRB v. Hi-Way Billboards, Inc., 473 F. 2d 649 (5th Cir.

19738) deals directly with the issue of whether an employer

may unilaterally withdraw from group bargaining because of

an impasse in negotiations.

On a petition for enforcement of the Board’s bargaining

order, the court concluded that a ‘‘genuine impasse in the

bargaining was reached by the Association and the Union im-

mediately prior to the Company’s withdrawal from the multi-

employer bargaining unit,” 473 F. 2d at 655, and remanded

the case to the Board “‘so that it may be given the first oppor-

tunity to decide whether an impasse such as found here ex-

cuses the Company from withdrawing from the multi-

employer bargaining unit.” Id. at 655.

On remand, 206 NLRB 22 (1973), the Board discussed the

issue of impasse and concluded for the first time that ‘‘an

employer may not unilaterally withdraw from a multi-

employer bargaining unit solely because an impasse in

negotiations has been reached.” Jd. at 22. The Board then

cited Retail Associates, supra, as controlling and held that “a

genuine impasse in negotiations between a union and a multi-

employer bargaining association does not constitute an

‘unusual circumstance’ within the meaning of that term as

applied by us in cases subsequent to Retail Associates.” Id. at

23. The Board went on to reaffirm its original order.

The Board once again petitioned the U.S. Court of Appeals

for the Fifth Circuit for enforcement of its order. NLRB v.

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

denying enforcement of the Board’s order, the court of ap-

peals discussed the essential inequality of bargaining rights

that has resulted from the uneven application of the Board’s

rules governing withdrawal from multiemployer bargaining.

The court concluded that the union had an unfair advantage

in multiemployer negotiations by reason of the fact that the

Board permitted unions to enter into an agreement with one

member of an employers’ association and then to whipsaw

the remaining members of the multiemployer bargaining

unit. The court determined that “‘enforcement of the Board’s

order would be unfair to the Company.” Jd. at 184.

The next case to discuss this issue was NLRB v. Associated

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

denied, 423 U.S. 893 (1975). The facts, stated briefly, are as

follows: During the course of negotiations over a new con-

tract, the multiemployer bargaining association and the

union reached an impasse. The union then notified the asso-

ciation that it was going to strike. Subsequently, the com-

pany informed the association that it was withdrawing, but

did not inform the union of the withdrawal. Two weeks later,

the company sent telegrams to both the association and the

union stating that it was withdrawing from the association.

Shortly thereafter the union informed the association that it

was not accepting the company’s withdrawal. The union then

sent a letter to the company stating that it did not consent to

its withdrawal from multiemployer bargaining and that the

company would be bound by any agreement entered into by

the association and the union. The company continued its par-

ticipation in the multiemployer negotiations. An agreement

was reached between the association and the union, but the

company refused to comply with said contract, relying upon

its purported withdrawal from the association.

In its decision reviewing the Board’s finding of a § 8(aX5)

violation, the Ninth Circuit addressed itself to the Board’s

position that the company’s withdrawal was ineffective be-

cause once collective bargaining involving a multiemployer

unit has begun, neither the employer group nor an individual

employer nor the union may withdraw from such bargaining

without the consent of the opposing party, absent unusual

circumstances. In adopting a position contrary to that of the

Board, the court reasoned as follows:!4

The Board has held that a union which has commenced

collective bargaining with a multi-employer unit may

withdraw from the multi-employer unit with respect to

one or more employers while continuing multi-employer

bargaining with those employers remaining in the multi-

ple unit. Pacific Coast Association of Pulp and Paper

Manufacturers, 163 N.L.R.B. 892, 895-896 (1967). Since

the Board has committed itself to preserving the equality

of withdrawal rights in the multi-employer unit situation,

see The Evening News Association, 154 N.L.R.B. 1494,

14 The court, however, ordered enforcement of the Board’s order

on the grounds that though the employer’s withdrawal was effec-

tive when tendered, the subsequent conduct of the parties (i.e., par-

ticipating in further multiemployer negotiations) constituted a

retraction of the withdrawal and a reestablishment of the bargain-

ing unit.

1495-1497 (1965), enforced sub. nom. Detroit Newspaper

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

Cir. 1967), it seems only fair that, when an impasse is

reached and a union then engages in selective picketing

and enters into substantial individual agreements with

employers who had been members of the multi-employer

unit, the withdrawal of the remaining members of the

unit, if unequivocally cor:municated, should be permit-

ted. [Citations omitted.]

Were the rule otherwise, a union could reach an agree-

ment with one or more employers and then whipsaw the

remaining members of the significantly fragmented and

weakened multi-employer unit. [Citations omitted.] Here

the Companies were entitled to, and did by clear written

notice, withdraw from the Association. Jd. at 232 (em-

phasis added).

The Third Circuit has also concluded, on facts substantially

similar to those in the instant case, that once an impasse in

multiemployer bargaining has been reached, withdrawal is

allowed. NLRB v. Beck Engraving Co., Inc., 522 F. 2d 475 (3d

Cir. 1975). The specific issue addressed by the Third Circuit

was whether an impasse in contract negotiations is an

“unusual circumstance”’ which justified the withdrawal of a

company from a multiemployer bargaining association. The

Board argued, in accordance with its recent decisions, that

the “unusual circumstances” exception should be limited to

two situations: (1) extreme financial hardship threatening the

existence of the employer as a viable business entity; and (2)

fragmentation or dissipation of the multiemployer bargaining

unit. The Board contended that neither of these situations ex-

isted in the Beck matter. The court did not agree with the

Board’s contention, and concluded that the “unusual cir-

cumstances” exception should not be so limited. In so con-

cluding, the Beck court reasoned as follows:'5

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 N.L.R.B. 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, em-

ployers if the withdrawal is timely and unequivocal.

Pacific Coast Association, 163 N.L.R.B. No. 129, pp.

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

Inc., 156 N.L.R.B., 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,

87 S.Ct. 509, 17 L.Ed.2d 435 (1966); The Evening News

Association, 154 NLRB No. 121, 1494, 1501 (1965), en-

forced sub nom., Detroit Newspaper Publishers Associa-

tion v. NLRB, 372 F.2d 569, 572 (6th Cir. 1967). In sub-

stance, 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

18 NLRB v. Beck Engraving Co., Inc., 522 F. 2d 475, 482-483 (3d

Cir. 1975).

agreements with one or more employers of the bargaining

unit and then whipsaw the remaining employers of the

bargaining unit.

It is not sufficient to say, as the Board does, that such

an arrangement does not preclude an individual em-

ployer from reaching an individual and interim accord

with the union. 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 exist-

ence of the multi-employer bargaining unit. We believe it

inconsistent to say that the union and some employers

may act on an individual basis while other employers

within the same unit, relegated to this posture by the

union’s refusal to negotiate with them on an individual

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.

NLRB, 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-

employer bargaining unit.

We, therefore, join the Ninth, Fifth, and Eighth Cir-

cuits and hold that a negotiating impasse justifies uni-

lateral withdrawal from a multi-employer bargaining

unit, NLRB v. 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 23, 1975) (No. 75-127); NLRB

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

Cir. 1974); ... Fairmont Foods Co. v. NLRB, supra at

1172-1173 and 1174, n.1. (Emphasis added.)

In NLRB v. Independent Association of Steel Fabricators,

Inc., 582 F. 2d 135 (2d Cir. 1978), the Board, on appeal to the

Second Circuit for enforcement of its bargaining order,

argued essentially that no impasse existed when the em-

ployer withdrew from multiemployer bargaining. The Board

further argued that an impasse in bargaining is merely a

“hiatus in negotiations” and is not such an unusual circum-

stance within the meaning of its Retail Associates, supra,

decision. The court, joining the four other circuit courts

which had decided the issue, disagreed with the Board, hold-

ing that an impasse was in fact present, and such an impasse

constitutes special circumstances justifying an employer’s

withdrawal from multiemployer bargaining. In so doing the

court recognized the substantial deleterious effect the un-

checked power of a union to negotiate individually with mem-

bers of a multiemployer unit has on the continuing viability of

the multiemployer group. Absent the employer’s concomitant

ability to withdraw from multiemployer bargaining upon im-

passe, the court adeptly pointed out the adverse conse-

quences on the multiemployer unit which follow when the

union engages in individual bargaining. ‘“‘[I]ts [the union’s]

willingness to negotiate separately with several members had

something of a whipsaw effect on the remaining members

who watched certain of their withdrawing competitors

resume business while they themselves were still in the

throes of an economic strike.” 582 F. 2d at 147.

The Second Circuit therefore joined the four other circuit

courts in holding that an impasse in bargaining constitutes

such an unusual circumstance as to justify unilateral with-

drawal by an employer from a multiemployer unit. In reach-

ing this conclusion the Second Circuit said:

In this circuit, we have never directly ruled on an ac-

tual impasse situation as it affects the withdrawal rights

of a member of a multi-employer bargaining unit... .

The policy considerations involved are easy to formulate

but difficult to reconcile. The rule against untimely with-

drawal is designed to preserve the stability of multi-em-

ployer bargaining which would be impaired if an em-

ployer could withdraw whenever it found the results of

such bargaining uncongenial or if it felt that it could use

the threat of withdrawal as bargaining leverage. See

N.L.R.B. v. Sheridan Creations, Inc., supra, 357 F.2d at

248. By the same token, however, the objectives of col-

lective bargaining would be ill-served by compelling em-

ployers to remain in the bargaining unit once it becomes

clear that no progress is being made within that frame-

work. Thus, all the circuits which have addressed the

issue have concluded that a genuine impasse in negotia-

tions will justify an employer’s unilateral withdrawal

from multi-employer bargaining. 582 F.2d at 146 (cita-

tions omitted).

A recent decision of the Ninth Circuit, on the issue, was

rendered in H & D, Inc. v. NLRB, — F. 2d — (9th Cir. Oc-

tober 8, 1980). In this decision the court adhered to its earlier

holdings that an impasse in bargaining justifies employer

withdrawal. The court stated:

Recently, this court declared in Authorized Air Condi-

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

citing cases from the Second, Third, Fifth, Eighth and

Ninth Circuits, that ‘‘[t]he Courts of Appeals have con-

sistently recognized an impasse in negotiations as justifi-

cation 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

decisions is compelling and entitled to judicial accept-

ance, and that in recent cases the courts’ misconceptions

of the Board’s rulings have been clarified, these conten-

tions are not persuasive and appear to be disposed of in

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

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

2d 475 (3d Cir. 1975). We find no cogent reason at this

time to challenge the position taken by this court in

Authorized Air Conditioning Co. v. NLRB, supra at

907-908.

Thus, all of the courts of appeals which have considered the

question, with the notable exception of the First Circuit, have

concluded that the Board’s refusal to view an impasse as an

“unusual circumstance” is unsound. Rather, these courts

have fashioned an impasse doctrine which adequately pro-

tects the rights of all parties bargaining in a multiemployer

context. Just as the Board originally granted a union the

right to withdraw after an impasse in bargaining in order to

give it equal rights vis-a-vis the employer, Morand Brothers

Beverage Co., 91 NLRB 409 (1950), enf’d, 190 F. 2d 576 (7th

Cir. 1951), the judiciary, with the exception of the First Cir-

cuit, has found it necessary, in balancing the equities, to

grant the employer the right of withdrawal at impasse, to in-

sure equality vis-a-vis the union. See NLRB v. Bonanno, 630

F. 2d 25, 30 n.7 (1st Cir. 1980) (P. 26).

D. The Labor Board’s Notion that an Impasse in Bargain-

ing Is Not an “Unusual Circumstance,” as Enforced by

the First Circuit, Is Not Supported by the Realities of

Multiemployer Bargaining.

The Board’s view, as supported by the First Circuit below,

that an impasse is not an “‘unusual circumstance”’ under its

Retail Associates decision does not comport with the realities

of multiemployer collective bargaining, and has the practical

effect of jeopardizing the viability and effectiveness of

bargaining on a group basis. While the Board professes a

desire to apply its rules regarding withdrawal equally to

employers and unions, The Evening News Association, 154

NLRB 1494 (1965), enf'd sub nom. Detroit Newspaper

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

1967) Hearst Consolidated Publications, Inc., 156 NLRB 210

(1966), enf'd, 364 F. 2d 293 (2d Cir. 1966), cert. denied, 385

U.S. 971 (1966); Pacific Coast Association, 163 NLRB 892

(1967), equal treatment is denied by the Board’s sanction of a

union’s right to negotiate separate interim agreements with

individual employer members of a multiemployer group.

Sangamo Construction Co., 188 NLRB 159 (1971); Plumbers

and Steamfitters Union No. 323 (P.H.C. Mechanical Contrac-

tors), 191 NLRB 592 (1971). Moreover, the Board’s conclu-

sions with respect to the impact of an impasse in negotiations

on multiemployer bargaining do not consider the practical ef-

fects of such an occurrence on the dynamics of group

bargaining.

As set forth above, the Board has stated that, once negotia-

tions have begun, a union may withdraw from multiemployer

bargaining with respect to one or more employers, while con-

tinuing multiemployer bargaining with those employers re-

maining in the group. Pacific Coast Association, 163 NLRB

892 (1967); see also NLRB v. Hi-Way Billboards, Inc., 500 F.

2d 181, 183 (5th Cir. 1974); NLRB v. Bonanno, 630 F. 2d 25,

31 n. 10 (1st Cir. 1980) (P. 28). Such a policy unfairly tips the

delicate balance existing in multiemployer bargaining in

favor of a union and represents a significant departure from

the Board’s ostensible equality of withdrawal standard. By

adopting such a policy the Board creates an imbalance of

economic weapons contrary to this Court’s decision in NLRB

v. Brown, 380 U.S. 278 (1965).1®

This policy protects the interests of the union but is in-

equitable to employers. On the one hand, the Board sanctions

the right of a union to, in effect, reject the existence of the

multiemployer bargaining unit. On the other hand, however,

the employer is held, without choice, to be bound by the

results of the multiemployer bargaining. “The policy of the

Board does tend to favor the union. The Board apparently

sees these interim agreements as a legitimate bargaining

weapon that the union may resort to without creating new

withdrawal rights in the remaining employers, so long as the

agreements are not so numerous that the multi-employer

group becomes completely fragmented.” Murphy, Jmpasse

and the Duty to Bargain in Good Faith,’”’ 39 U. Pitt. L. Rev.

1, 57-58 (1977).

The Board has characterized an impasse in bargaining as

only a temporary “deadlock” or “hiatus” in negotiating.

Charles D. Bonanno Linen Service, Inc., 243 NLRB No. 140,

slip op. at 4 (1979) (P. 41). It therefore concludes, ipso facto,

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

stance” within the meaning of the Retail Associates

guideline.

The Board’s characterization of an impasse in multiem-

ployer bargaining patently ignores the realities on negoti-

ations in this context. It is submitted that an impasse is in-

deed an “unusual circumstance” in multiemployer bargain-

ing. The Board’s limited definition of “unusual cir-

cumstance”’ improperly fails to give due consideration to the

16 In Brown, this Court concluded that the Labor Board should

not be the “ ‘arbiter of the sort of economic weapons the parties

can use in seeking to gain acceptance of their bargaining

demands.’ ”’ 380 U.S. at 283.

effects of an impasse in the multiemployer context. In the

context of bargaining between a single employer and union,

an impasse may be, as the Board contends, only a ‘“‘tempo-

rary deadlock” in negotiations in which each side may use

economic force against the other. The union may engage in

an economic strike or seek to involve consumers through the

use of picketing or handbilling. The employer may hire re-

placements for its striking employees, or it may seek to

transfer work to allies. But in virtually every confrontation of

this kind it is the single employer versus the single union.

Conversely, in the multiemployer setting, the frustration of

the impasse is exacerbated by the involvement of other com-

petitor employers. The impasse is or may be between em-

ployer members of the multiemployer unit as a result of con-

flicting priorities, as much as between the unit collectively

and the union. Moreover, a union’s use of interim agreements

(as sanctioned by the Board) seriously fractures the group

and conflicts with the uniform approach to collective bargain-

ing sought by employers in engaging in bargaining on a

group basis. Therefore, once an impasse is reached, each in-

dividual employer is confronted not only with its own dispute

with the union, but also with conflicting priorities held by

other employer members of the multiemployer unit. In addi-

tion, the execution of separate agreements by the union whip-

saws the remaining employer members, who must, under the

Board’s view, watch the strike end at competitors’ businesses

and sustain a competitive disadvantage as those competitors

resume business operations. An employer, faced with this

two-pronged dilemma, would nonetheless be required by the

Board to remain in the multiemployer unit until such time as

it is faced with “dire economic circumstances” which

threaten its continued existence.

Recognizing the deleterious effects of an impasse on multi-

employer bargaining and the Board’s inadequate response

thereto, five circuit courts!” have concluded that an impasse

in multiemployer bargaining is in and of itself! an “unusual

circumstance” thereby justifying unilateral withdrawal. The

facts of the instant case are illustrative of the fallacy of the

Board’s impasse characterization. Thus, the parties reached

an impasse in bargaining on May 15, 1975 (P. 56; J.A. 94, Jt.

Ex. A, R. 16, 17). Subsequently, the Union engaged in a

selective strike against Bonanno commencing on June 23,

1975 (P. 57; J.A. 94, Jt. Ex. A, R. 16, 17). Bonanno endured

the continuing impasse for more than six months before ef-

fectuating its withdrawal from the Association (P. 58; J.A.

94-95, Jt. Ex. A, R. 16, 17). The impasse continued between

the Union and the Association for almost five more months

before a collective bargaining agreement was consummated

(P. 59-60; J.A. 95, Jt. Ex. A, R. 16, 17). Thus the “temporary

hiatus” occasioned by the impasse in bargaining had a dura-

tion of almost eleven months. Under these circumstances it

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

(9th Cir. 1975), cert. denied, 423 U.S. 893 (1975); NLRB v. Hi-Way

Billboards, Inc., 500 F. 2d 181, 183-184 (5th Cir. 1974); Fairmont

Foods Co. v. NLRB, 471 F. 2d 1170, 1172-1178, 1174 n.i.g. (8th Cir.

1972); NLRB v. Beck Engraving Co., 522 F. 2d 475, 483 (3d Cir.

1975); NLRB v. Independent Association of Steel Fabricators Inc.,

582 F. 2d 135, 146 (2d Cir. 1978).

18 The First Circuit asserted that ‘‘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.”’

630 F. 2d at 33. Contrary to the First Circuit’s decision, none of the

circuit court decisions have made the presence of interim

agreements a condition precedent to an employer’s withdrawal at

impasse. See NLRB v. Beck Engraving Co., 522 F. 2d 475, 482-483

(3d Cir. 1975); H & D, Inc. v. NLRB, — F. 2d —, —, 105 LRRM

3070, 3072 (9th Cir. 1980). The Board itself admitted as much in its

Supplemental Decision in the instant case. Charles D. Bonanno

Linen Service, Inc., 243 NLRB No. 140, slip op. at 7 (P. 39-40, n.5).

cannot be reasonably claimed by the Board that the impasse

was merely a temporary “hiatus” or ‘“‘deadlock”’ which can be

easily manipulated by either party. Charles D. Bonanno

Linen Service, Inc., 248 NLRB No. 140 (1979), slip op. at 4

(P. 41).

Under the Board’s rationale, Bonanno would have been re-

quired to endure, without any viable alternative, an impasse

of almost eleven months duration,’ as well as the possibility

that the separate meetings between the Union and individual

members of the Association might result in separate agree-

ments of potentially damaging effect. Under the circum-

stances the only equitable alternative available to Bonanno

was withdrawal from group bargaining. To require Bonanno

to continue as a member of the Association until such time as

it could no longer continue as a viable business entity?° would

hardly be in keeping with our national labor policy of reduc-

ing “industrial strife’ and providing peaceful resolution of

labor disputes. 29 U.S.C. § 141.

The Board’s conclusion that impasse does not constitute an

“unusual circumstance’”’ is further weakened by its authoriza-

tion of separate interim agreements between a union and in-

dividual employer members of a multiemployer group.”! The

19 That is, assuming that the impasse would have been broken at

that time had Bonanno not removed itself from the group negotia-

tion. It is, of course, not possible at this time to assess the effect of

Bonanno’s withdrawal on the bargaining climate and its impact on

the logjam in negotiations which existed at that time.

20 In effect, the Board would require Bonanno to face bankrupt-

cy before being permitted to withdraw. Of what avail then would be

the right of withdrawal?

21 See, e.g., NLRB v. Hi-Way Billboards, Inc., 500 F. 2d 181,

183 (5th Cir. 1974); NLRB v. Beck Engraving Co., 522 F. 2d 475,

482-483 (3d Cir. 1975); NLRB v. Independent Assocation of Steel

Fabricators, 582 F. 2d 135, 147 (2d Cir. 1978); NLRB v. Associated

Shower Door Co., 512 i. 2d 230, 232 (9th Cir. 1975). Even the First

Circuit below recognized the adverse impact of separate agree-

ments on the stability of multiemployer bargaining. The court

Board has held that a union which is engaged in multiem-

ployer negotiations may engender a de facto withdrawal from

the multiemployer unit by entering into separate agreements

with one or more members of the multiemployer group. At

the same time the union can insist on bargaining with the re-

maining employers on a multiemployer basis.

Negotiation of such agreements, according to the Board,

prevents significant fragmentation, rather than causes it,

and tends to facilitate the breaking of an impasse (P. 51).

However, the substantial injurious effect of separate

agreements has been well recognized by the courts of ap-

peals. The practical effect of separate agreements on the

viability of the multiemployer group was described by one

commentator as follows:??

The ability to negotiate interim agreements with

weaker members of the association results in a ‘‘whip-

sawing” of those members which the union refused to

bargain with. These remaining employers have no paral-

lel means of fragmenting the union!? but are subject to

being isolated and thus further pressured into acquies-

cing to the union in negotiations. ...

While it is true that the interim agreements help break

the negotiating logjam, they do so by increasing the pres-

sure on the resisting employers, a tactic for which the

employers, practically speaking, have no counterweight.

In most cases, the employers not signing interim agree-

stated that ‘‘[w]ithdrawal by unit members and their negotiation of

separate contracts obviously would reduce the efficiency of the

bargaining process.” 630 F. 2d at 28.

22 See also Hickey and Sauntry, When Is Employer Justified In

Leaving The Fold? Legal Times of Washington, January 5, 1981 at

9-11:

Under the board’s rule, employers who have committed them-

selves to multi-employer bargaining must watch helplessly

while the union picks off its weakest members, destroying the

efficiency of multi-employer bargaining. As a practical mat-

ments will be those whose insistence on certain collective

bargaining positions has actually resulted in impasse.

Negotiation of interim agreements, even if the signa-

tories thereto are later to be bound by the final agree-

ment, unduly pressures the remaining employers to ac-

cede to the union’s demand since many times the interim

agreements include concessions over and above those

the non-signatories are willing to give. Additionally, the

signatories of the interim agreements are producing or

operating while the isolated members, competitors of the

signatories, are still engaged in a work stoppage or labor

dispute.

12 In fact even where the union is an association or con-

ference board of locals, it would be an unfair labor practice for

the employers to attempt to deal with the locals directly.

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

1969). Levin and Jason, Multiemployer Withdrawal Bid Short

Circuited at the Impasse, 2 National Law Journal No. 24,

February 25, 1980 at 25.

Five circuit courts have concluded that the Board’s policy is

fundamentally inequitable. The courts have found that in-

dividual interim agreements have a substantial “whipsaw”’

effect on the remaining members of the multiemployer unit.

Once interim agreements are signed, the multiemployer unit

becomes significantly weakened and fragmented. NLRB v.

Associated Shower Door, supra.

Moreover, the Board’s suggestion that interim agreements

further unit integrity (P. 51) ignores the realities of

multiemployer bargaining. And while in many instances

these agreements have the effect of breaking an impasse, it is

ter, they are bound to a bargaining strategy developed on the

understanding that they would present a united front to the

union and may have made concessions at the bargaining table

which might not have been made had the departing employers

not been present.

submitted that such a result occurs because one or more em-

ployers have abandoned the multiemployer group. By strik-

ing separate deals these employers have diminished the

strength of the multiemployer group. Further erosion of the

group’s resolve occurs when the remaining members see one

or more competitors, who formerly were allied with them in

the multiemployer group, resume their business operation,

while they must contend with a continued work stoppage. It

is this inequitable situation which the courts have sought to

rectify by granting an employer an equivalent right to

withdraw upon impasse.

The Board attempts to differentiate between interim

agreements which contemplate adherence to a final associa-

tion-wide contract, and separate agreements, which do not,

contending that since signers of interim agreements retain a

vested interest in the outcome of final union-association

negotiations, the unit is neither fragmented nor significantly

weakened (P. 48-49). It is submitted that such an analysis is

superficial at best, representing a distinction without a differ-

ence. In each circumstance an employer is breaking away

from the group to bargain individually with the union. In each

instance the employer has struck out on its own, taking posi-

tions that are antithetical to those of the multiemployer

group. The employer who signs the interim agreement re-

ceives immediate benefits that are denied to the remaining

members of the multiemployer group who remain enmeshed

in a labor dispute with the union. While it is true that em-

ployers who sign interim agreements become bound by the

agreement ultimately negotiated, it is an inescapable conclu-

sion that the practical effect of their independent actions is to

significantly dilute the strength of the multiemployer unit.

These employers in effect have, by signing interim agree-

ments with the union, effected a de facto withdrawal from the

multiemployer group. As the Beck court stated: “[A]llowing

individual negotiations even on an interim basis is tanta-

mount to a rejection of the existence of the multi-emplover

bargaining unit.”’ 522 F. 2d at 483 (emphasis added).

While there is evidence that the Union, prior to Bonanno’s

withdrawal, met secretly with two employer members of the

Association “presumably in an effort to make a separate set-

tlement” (P. 57), apparently no separate agreements were

consummated. Despite the absence of any such agreements

this Court is urged to adopt the ‘‘impasse doctrine” fashioned

by the Second, Third, Fifth, Eighth and Ninth Circuit Courts

of Appeals. As the Third Circuit stated in NLRB v. Beck En-

graving Co., 522 F. 2d 475, 483-484 (3d Cir. 1975),

The employer’s right to withdraw during an impasse

cannot be made contingent upon the union’s prior exer-

cise of its right to negotiate individual interim agree-

ments. The rights of the parties should accrue simultane-

ously 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 tre-

mendous bargaining advantage and leverage. We recog-

nize that, to some extent, basing the right of withdrawal

upon the existence of an impasse rather than of individ-

ual negotiations contributes to instability within the con-

text of multi-employer bargaining. Certainly, that is the

result in this case. But we cannot avoid the conclusion

that this additional incremental instability, however un-

favorable to the policy aimed at stabilization of these

units, is a necessary concomitant of ensuring that the

parties have equal rights and that the existence and im-

plementation of such rights do not grant unfair advan-

tage to either party. (Emphasis added.)

None of the circuit court decisions require the actual execu-

tion of interim agreements as a requisite for finding that an

impasse in bargaining justifies withdrawal (see footnote 18,

supra). Accordingly, the absence of any evidence on the

record that interim agreements were entered into herein is

immaterial.

In balancing the conflicting legitimate interests of

employers and union participants in multiemployer bargain-

ing, and in order to insure that the Board’s stated policy of

equalizing withdrawal rights of both parties in a multi-

employer relationship, this Court should adopt the ‘‘impasse

doctrine” fashioned by five circuit courts of appeals. Such a

decision will have the salutary effect of insuring stability in

collective bargaining.

It should be emphasized that multiemployer bargaining is

based on consent of the parties. Once a withdrawal is effec-

tuated, bargaining continues on an individualized basis and

therefore the purposes of the National Labor Relations Act

will continue to be promoted. Labor peace is better served by

allowing withdrawals rather than by requiring inflexible

adherence to a multiemployer unit long after meaningful col-

lective bargaining within that framework has become

nothing more than an exercise in futility.

Bonanno’s withdrawal prompted an end to the lockout and

subsequently the successful conclusion of an agreement be-

tween the Association and the Union. By so withdrawing,

Bonanno did not seek to sever its bargaining relationship

with the Union. Rather, Bonanno merely sought to meet its

obligation under the Act to bargain in good faith on an in-

dividual! basis. It is submitted that effectuation of collective

bargaining would be better served by allowing withdrawal at

impasse. The alternative propounded by the Board would

frustrate meaningful collective bargaining because it re-

quires an employer to remain indelibly tied to fruitless

multiemployer bargaining long after the process of collective

bargaining has ceased to function.

II. THE FivE Courts OF APPEALS ACTED WITHIN THEIR

AUTHORITY UNDER THE NATIONAL LABOR RELATIONS ACT

AND DECISIONS OF THIS COURT IN FASHIONING THE ‘‘IMPASSE

DOCTRINE.”

While the decision of the First Circuit below seeks to

distinguish the decisions of the five courts of appeals which

have fashioned the “impasse doctrine,”’ the court’s decision

to enforce the Board’s order appears to be based upon its

view that the Board’s rationale is entitled to deference. The

court stated:

Congress ‘intended to leave to the Board’s specialized

judgment the inevitable questions concerning multi-

employer bargaining [which are] bound to arise .. .’’ Id.

at 96 [citing NLRB v. Truck Drivers Local 449, 353 U.S.

87 (1957)]. As a result, the Board’s “balancing of the con-

flicting legitimate interests [is] subject to limited judicial

review.” Id. (footnote omitted). In the present case, we

think the Board has struck a reasonable balance in con-

cluding that impasse alone does not justify unilateral

withdrawal. 630 F. 2d at 35 (P. 36) (emphasis added)

(footnote omitted).

The First Circuit then, essentially concluded that the deci-

sion of the Board was entitled to approval out of deference to

its presumed expertise. While it is true that judicial review is

limited, see, e.g., NLRB v. Truck 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,

290-291 (1965).?8

23 As noted above (p. 10, n.9, and pp. 11-13), the Board’s position

on the question of impasse has hardly been consistent, thus dis-

counting any claim of expertise superior to that of the circuit

courts in balancing the conflicting legitimate interests presented

by the instant case.

Congress has mandated that the courts of appeals serve an

important role in the development of our federal labor policy.

29 U.S.C. § 160(e) and (f). Under this framework the circuit

courts are empowered to enforce, modify, or set aside orders

of the Board. In defining the proper role of the courts in cases

such as this, which involve a question of law, this Court in

Labor Board v. Brown, 380 U.S. 278, 292 (1965) stated:*4

[W]here, 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

Congress.” American Ship Building 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 & Wilcox Co., supra, at 112-113. Con-

gress 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.

In the exercise of the mandate of Congress and this Court

to give particular scrutiny to Board decisions which, as in this

case, “balance conflicting interests’”’ and rest on an “er-

24 As this Court held in NLRB v. Weingarten, 420 U.S. 251

(1975), in cases such as this which involve the balancing of conflict-

ing interests, before the Board’s decision is entitled to deference

the Board must demonstrate that it ‘“‘has reached a fair and rea-

soned balance upon a question within its special competence.” Jd.

at 267. It is submitted that the Board’s result in this case fails to

achieve a reasonable balance of the “‘conflicting interests of labor

and management” with respect to multiemployer bargaining. /d.

roneous legal foundation,” five circuit courts have deter-

mined that an employer should be accorded a right to with-

draw at impasse. Those decisions have logically concluded

that a balancing of conflicting legitimate interesis in the

multiemployer bargaining context requires such a result. The

Board in the instant case has failed to articulate any valid

reason why these decisions are now untenable. Therefore, it

is respectfully submitted that the “impasse doctrine”

fashioned by five circuit courts (and initially given at least

passing acceptance by the First Circuit) should now be

adopted by this Court.

Conclusion.

For the reasons set forth above, it is respectfully submitted

that the judgment of the court below should be reversed.

Respectfully submitted,