Petition for Writ of Certiorari — United Retail Workers Union, Local 881 v. National Labor Relations Board

Supreme Court, U.S.

85-1446 FiLED

FEB 28 1988

No. JOSEPH F. SPANIOL, UR.

IN THE

Supreme Court of the United States

OCTOBER TERM, 1985

UNITED RETAIL WORKERS UNION, LOCAL 88],

CHARTERED BY THE UNITED Foop AND

COMMERCIAL WORKERS INTERNATIONAL UNION,

- Petitioner,

NATIONAL LABOR RELATIONS BOARD AND

MAY DEPARTMENT STORES Co.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

GEORGE MURPHY

EDWARD WENDEL

1775 K Street, N.W.

Washington, D.C. 20006

MARSHA S. BERZON

177 Post Street

San Francisco, CA 94108

DAVID M. SILBERMAN

LAURENCE GOLD

(Counsel of Record)

815 16th Street, N.W.

Washington, D.C. 20006

(202) 637-5390

WILSON - EPES PRINTING Co.. INC. - 789-0096 - WASHINGTON. D.C. 20001

@ eh 00

QUESTION PRESENTED

The Court of Appeals in this case upheld the Nationai

Labor Relations Board’s rule announced in Amoco Pro-

duction Co., 262 NLRB 1240 (1982), which permits an

employer whose employees are represented by an inde-

pendent union to cease bargaining with that union if the

independent affiliates with an international union unless

non-members are permitted to vote in the independent

union’s internal affiliation election. Thereafter in NLRB

v. Financial Institution Employees, ——~ U.S. ——— (No.

84-1493, Feb. 26, 1986), this Court held that the NLRB

“exceeded its authority under the Act’ in adopting the

Amoco rule. The question presented here, therefore, is:

Should the decision of the court below be vacated

and remanded for reconsideration in light of this

Court’s subsequent decision in NLRB v. Financial

Institution Employees?

(i)

TABLE OF CONTENTS

Page

OPINIONS BELOW l

JURISDICTION l

STATUTES INVOLVED 2

STATEMENT OF THE CASE 2

Statement of Facts 2

Prior Proceedings j

REASONS FOR GRANTING THE PETITION 5

CONCLUSION 7

TABLE OF AUTHORITIES

Cases:

NLRB v. Financial Institution Emplo SS

U.S. —— (No. 84-1493: Feb. 26. 1986) 6-7

Statutes:

National Labor Relations Act, as amended, 29

U.S.C. § 151 et seq.:

§$ 8(a) (5), 29 U.S.C. § 158(a) (5) 5

(iii)

IN THE

Supreme Court of the United States

OCTOBER TERM, 1985

UNITED RETAIL WORKERS UNION, LOCAL 881,

CHARTERED BY THE UNITED FOOD AND

COMMERCIAL WORKERS INTERNATIONAL UNION,

Petitioner,

Va

NATIONAL LABOR RELATIONS BOARD AND

MAY DEPARTMENT STORES Co.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

United Retail Workers Union Local! 881 petitions this

Court to issue a writ of certiorari to the United States

Court of Appeals for the Seventh Circuit to enable this

Court to review the Seventh Circuit’s decision and judg-

ment in United Retail Workers Local 881 v. NLRB, C.A.

7, No. 84-2000.

OPINIONS BELOW

The opinion of the United States Court of Appeals for

the Seventh Circuit is not yet reported and is reprinted

in the Appendix to this petition at App. la-27a. The

decision of the National Labor Relations Board is re-

ported at 268 NLRB 979 and is reprinted at App. 28a-

34a.

JURISDICTION

The decision of the Court of Appeals was rendered on

October 1, 1985. On December 15, 1985, Justice Stevens

entered an order extending the time for filing this peti-

yd

tion to and including February 28, 1966. App. 35a. This

Court has jurisdiction under 28 U.S.C. § 1254/1).

STATUTES INVOLVED

The statutory provisions involved here are reprinted

in Appendix D to this Petition, App. 36a-37a.

STATEMENT OF THE CASE

Statement of Facts

Until November, 1981, the United Retail Workers Un-

ion (“URW”) was an independent national union com-

posed of approximately 20,000 members divided into four

local unions in two states. URW represented employees

of eleven employers in separate bargaining units; URW

bargained for and administered a collective bargaining

agreement for each unit.

Among the units represented by URW in 1981 was a

unit composed of employees of the respondent May De-

partment Stores at its ten Chicago locations and a second

unit of May’s employees at its Decatur, Illinois store.

The two units combined covered 1,292 employees. Pur-

suant to a valid union security clause in the URW-May

collective bargaining agreements, al] bargaining-unit em-

ployees, other than those who were only probationary em-

ployees, were members of the URW. As of July, 1981,

of May's 1,292 bargaining unit employees, only 78 were

probationary employees and not members of the URW.

In the Spring of 1981, the elected officers of URW—

acting pursuant to an authorization from the elected

presidents of the four URW locals—negotiated a merger

agreement with the United Food and Commercial Work-

ers International Union (“UFCW”). Under that agree-

ment, URW would, as URW Local 891, become a “union

within a unio,” retaining its name and autonomy.

Thus, URW Local 881 would negotiate and ratify its own

collective bargaining agreements, elect its own officers,

manage its own finances, and continue its own special

programs and benefits.

In July, 1981, URW conducted a referendum on whether

Lo ratify the merger agreement. Prior to that vote a spe-

cial conference was held for all union stewards to explain

the agreement and special merger meetings were held for

all employees represented by URW. Ballots were then

mailed to all URW members and to those probationary

employees in bargaining units who would complete thei:

probationary period by July 31, 1981 (‘the date the

balloting was to begin) and who had applied for URW

membership as of July 10, 1981 (when the ballots were

mailed). In all, ballots were mailed to 20,458 of the

22,412 employees URW represented, including 1.214 of

the 1,292 May employees represented by URW.

By a vote of 6,823 to 2,344—nearly 3 to 1—the URW

members voted in favor of the merger. Pursuant to this

overwhelming mandate of the URW members, the merger

agreement was signed on October 19, 1981 by URW’s

officers, and became effective November 1, 1981. URW

Local 881 assumed all the property and obligations of

URW and continued to operate out of the same offices as

had URW. The officers and members of the Board of

Governors continued to govern URW Local 881 as its

officers and General Executive Board, and the dues

charged by URW continued unchanged after the merger.

On September 24, 1981, following the merger referen-

dum, Fred Burki, National Executive Director of URW.

wrote a letter formally advising May of the merger. in-

cluding the final vote totals. Mr. Burki explained in de-

tail the limited impact of the merger:

1. On November 1, 1981, the URW will become

United Retail Workers Union Local No. 881. affil-

iated with che United Food and Commercial Workers

International Union. At that time there will be no

change in the officers of the URW or in its organiza-

tional structure. The present leadership in the URW

will remain in office, by virtue of the affiliation vote,

for a period of three years. After three years, an

election of officers will be conducted under nomina-

tion and secret ballot procedures set out in the Lan-

drum-Griffin Act.

2. As a local of the UFCW, the URW will re-

main independent and autonomous. It will elect its

own officers and select its own stewards. The URW

will continue to make all decisions regarding collec-

tive bargaining, grievance handling and arbitration.

There will be no change in current collective bar-

gaining agreements. Contract ratification procedures

will remain the same; members affected by an agree-

ment will continue to take part in a ratification vote.

Negotiation committees will be selected by the URW

in accordance with its long-standing procedures.

In response to the Union's letter, May announced that

effective upon the date of the merger, May would no

longer abide by its collective bargaining agreements with

URW, process grievances submitted by URW, transmit

dues and initiation fees to URW or otherwise recognize

the Union as the representative of May’s employees. May

purported to take this action because of what it claimed

were “substantial differences between an independent

URW] and [its] new identity as a local of the |UFCW)|”

and a lack of a “clear mandate by |URW]| membership

for affiliation.”

Prior Proceedings

After receiving May’s letter, URW filed an unfair

labor practice charge with the National Labor Relations

Board (“NLRB” or “the Board”) alleging that May had

violated £ 8(a) (5) of the National Labor Relations Act,

29 U.S.C. § 158(a! (5) (“NLRA” or “the Act”), by ceas-

ing to abide by its collective bargaining agreements and

by withdrawing recognition from, and refusing to bar-

gain with, the Union. On December 13, 1981, following

an investigation, the General Counsel issued a complaint

against May.

, . «+ Ps . ‘ : +4

Board ipon the parties agreement oO stipulate

ind waive an orai hearing. Almost two years later,

February 17, 1984, the Board ij ied its Decisio1

Jrder After a brief summary of the facts. the Boa

_— ‘ded a legal ar , seshinal

proviaead a iePal a Aisi] wnicn

follow

lue proce safeguard As announced in Amo

Production Co., 262 NLRB 1240 (1982), er)

reads in its totality

mn

Be is n ; case, all u mplovees have not

iccorded these rights, we find tha e affilia-

\ mproper. Respond therefore, did )

ite Se ym S(ai(5) and (1) of the A when }

refused to bargain with United Retail Workers

Union | Ca SS], chartered D\ United Food and

Commercial Workers Union, AFL-CIO, CLC

Ana

refused to comply with the provisions of the collec-

, - . at : . ; lL, . : : 7 »*

1,2 bargaining agreements noted herein in effe

with United Retail Workers Union. as thev would

N

{)}

apply to Local N

atel re 33a-34a

URW petitioned the United States Court of Appeals

for the Seventh Circuit for review of the NLRB’s decisio:

and order. On October 1, 1985, that court rendered

opinion sustaining the NLRB’s decision and dismissi

the petition for review.

REASONS FOR GRANTING THE PETITION

The question presented by this case was stated by

iower court as follows:

The issue on appeal is whether it was a permiss

construction of the National Labor Relations

for the Board to hold that the Employer

no duty to bargain with the post-merger union

aT)

ati

Ing

ible

Act

had

be-

6

cause the URW had excluded from the merger vote

those employees in the bargaining unit who were not

members of the UFW. [App. 2a. |]

That court acknowledged that this question is one on

which “two federal courts of appeals . . . have split,”

and that “the Supreme Court has granted certiorari in

one of the cases.” App. 2a.

On February 26, 1986, this Court decided the case to

which the court below referred, NLRB v. Financial In-

stitution Employees, , U.S. (No. 84-1493). This

Court there “h[e]ld that the Board exceeded its author-

ity under the Act in requiring that non-union employees

be allowed to vote for affiliation before it would order the

employer to bargain with the affiliated union.” Slip op. at

16. The Financial Employees Court rejected the Board’s

contention that requiring non-members to vote in affilia-

tion elections is necessary to protect the right of such

individuals te select a bargaining representative, con-

cluding that “the Act establishes a specific election pro-

cedure to decide whether the employees desire a change

in a certified union’s representative status’ and that “the

Act gives the Board no authority to require unions to

follow other procedures in adopting organizational

changes.” Slip op. at 11. And this Court likewise re-

jected the Board’s contention that requiring a vote of all

unit employees on affiliation issues would promote in-

dustrial stability as the Court found that “|t]he Act

assumes that stable bargaining relationships are best

maintained by allowing an affiliated union to continue

representing a bargaining unit unless the Board finds

that the affiliation raises a question of representation.”

Slip op. at 16.

The decision below, which sustains the NLRB’s rule

requiring that non-members be accorded the right to vote

in internal union affiliation elections is directly contrary

to this Court’s decision in Financial Employees. Accord-

ingly, the Seventh Circuit’s decision herein should be

‘7

‘

summarily reversed and the case remanded to that court

for further proceedings consistent with this Court’s

Financial Employees decision.

CONCLUSION

For the foregoing reasons, the Court should grant the

petition for writ of certiorari in this case, vacate the

judgment below, and remand the case for reconsideration

in light of this Court’s decision in NLRB vy. Financial

Institution Employees, —— USS. (No. 84-1493;

Feb. 26, 1986).

Respectfully submitted,

GEORGE MURPHY

EDWARD WENDEL

1775 K Street, N.W.

Washington, D.C. 20006

MARSHA S. BERZON

177 Post Street

San Francisco, CA 94108

DAVID M. SILBERMAN

LAURENCE GOLD

(Counsel of Record)

815 16th Street, N.W.

Washington, D.C. 20006

(202) 637-5390

APPENDICES

la

APPENDIX A

U.S. COURT OF APPEALS

SEVENTH CIRCUIT

(CHICAGO)

No. 84-2000

UNITED RETAIL WORKERS UNION LOCAL 881,

CHARTERED BY UNITED FOOD AND

COMMERCIAL WORKERS INTERNATIONAL UNION,

AFL-CIO

V.

NATIONAL LABOR RELATIONS BOARD,

and MAY DEPARTMENT STORES COMPANY,

VENTURE STORES DIVISION,

Intervenor-Respondent

/

October 1, 1985

Before BAUER and ESCHBACH, Circuit Judges, and

PELL, Senior Circuit Judge.

PELL, Senior Circuit Judge: Petitioner, United Re-

tail Workers Union Local 881, petitions this court to

review an order of the National Labor Relations Board

(the Board), which held that the employer, May Depart-

ment Stores (the Employer) did not commit an unfair

labor practice by refusing to bargain with petitioner.

Petitioner is the entity created by a merger agreement

between the United Retail Workers Union (URW) and

the United Food and Commercial! Workers International

ee

2a

Union (UFCW). The Employer’s refusal to bargain fol-

lowed a vote by the URW members of the bargaining unit

to merge with the UFCW. Bargaining unit employees

who were not members of the URW could not vote in the

merger election.

The issue on appeal is whether it was a permissible

construction of the National Labor Relations Act (the

Act) for the Board to hold that the Employer had no

duty to bargain with the post-merger union because the

URW had excluded from the merger vote those employees

in the bargaining unit who were not members of the

URW. The two federal courts of appeals that have ad-

dressed the Board’s rule in the context of an affiliation

election have split on the issue, compare Financial In-

stitution Employees, Local No. 1182 v. N.L.R.B., 752 F.2d

356, 116 LRRM 3409 (9th Cir. 1984), cert. granted, 105

S Ct. 2318 (1985), with Local Union No. 4-14, Oil Work-

ers International Union v. N.L.R.B., 721 F.2d 150, 114

LRRM 3676 (5th Cir. 1983), and, as noted, the Su-

preme Court has granted certiorari in one of the cases.

I. THE FACTS

The parties are in complete agreement about the facts.

Prior to November 1,-1982, the URW was a national in-

dependent union, with four local units and approximately

20,500 members. In total, the URW represented 22,400

employees of eleven different employers. In other words,

just less than 2,000 of the represented employees were not

union members. Two of the four local units consisted

solely of stores owned by the Employer. The two locals

represented 1,292 employees, of whom seventy-eight were

not union members. The collective bargaining agreement

between the URW and the Employer contained a union

security clause; thus, all employees had to become union

members within thirty-one days after their employment

began.

eS "

3a

Negotiations for a merger agreement between the URW

and the UFCW began in 1981. According to the Agree-

ment and Resolution of the two organizations, petitioner

would retain the “United Retail Workers” name, manage

its own finances, negotiate and ratify its own contract,

elect its own officers, and continue its own special pro-

grams and benefits. At the same time, however, petitioner

would be subject to the UCFW constitution. Furthermore,

four non-independent administrative districts within pe-

titioner’s organization would replace the four local URW

units, with election of officers on an at-large basis and

not solely within each unit. All active URW members and

all those who would finish their probationary period and

apply for membership before the election date were eligi-

ble to vote in the election.

The URW then mailed to each member, but not to non-

union employees, a copy of the merger agreement, a bal-

lot, and a notice of meeting. A number of merger meet-

ings occurred, from which the URW did not exclude non-

union employees. The URW sent out 20,548 ballots. Of

the 9,235 members who voted, 6,823 favored the merger,

and 2,344 opposed it. The URW did not apportion the

vote totals among the four local units. After the election,

the URW and UFCW signed the merger agreement. In

a letter, an officer of the URW informed the Employer

that the post-election entity, although affiliated with the

UCFW, would undergo no change in officers or organiza-

tional structure and would remain independent and auton-

omous with respect to collective bargaining, grievances,

and arbitration. Petitioner would also maintain the

URW’s contract-ratification procedures.

Thereafter, the Employer refused to recognize peti-

tioner and refused to abide by its collective bargaining

agreement with the URW, which did not expire for

nearly eighteen more months. The other employers of

URW members did not take similar action. In withdraw-

ing recognition, the Employer relied upon the URW’s ex-

4a

clusion of nonmembers from the merger vote and the fail-

ure of the URW to provide unit-by-unit election results

so that the Employer could ascertain whether a majority

of its union employees favored the merger.

Petitioner then filed unfair labor practice charges

against the Employer, alleging violations of sections

8(a) (5) and 8(a) (1) of the Act. 29 U.S.C. § 158(a) (5)

and (1). The Board held, in accord with its decision in

Amoco Production Co., 262 NLRB 1240, 110 LRRM 1419

(1982). see Part II, infra, that the exclusion of nonmem-

bers from the election rendered the merger improper for

lack of sufficient due process safeguards. May Depart-

ment Stores Co., 268 NLRB 979, 115 LRRM 1136 (1984).

Therefore, the Board concluded that the Employer did

not violate the Act by refusing to bargain with petitioner

and by refusing to honor the existing contract.

Petitioner filed a timely appeal. Despite the fact that

the present case involves a merger, petitioner does not

attempt to escape the application of Amoco, which in-

volved an affiliation, upon the basis of any factual dis-

tinction. Instead, petitioner maintains that two independ-

ent reasons mandate the rejection of Amoco. First, peti-

tioner argues the Board’s already existing rule—that an

employer need not bargain with a post-election union un-

less the union is merely a continuation of the old union

with a new name and not a substantially different or-

ganization—adequately protects employees’ representa-

tional interests. Thus, petitioner asserts the nonmember

voting rule is “invalid as an entirely gratuitous inter-

ference with internal union affairs.” Petitioner asserts

that the merger is an internal union affair, effectively in-

distinguishable from other matters such as strike votes

and contract ratifications, from which, the Board has held,

unions may exclude nonmembers’ participation.

Second, petitioner claims that, because the numerical

outcome could not have changed even had all nonmember

employees voted against the merger, the Board’s own out-

a

5a

come determinative rule for Board-conducted representa-

tion elections should apply. Under the “outcome deter-

minative” rule, mandated by the Landrum-Griffin Act,

19 U.S.C. § 482(c) the Board will not overturn a repre-

sentation election unless it determines that an election

without improprieties would have resulted in a different

outcome. Petitioner maintains that the same rule should

apply here because merger elections are, in a sense, sub-

stitutes for representation elections. Finally, petitioner

claims that Amoco is internally inconsistent. Petitioner

points out that the rule requires a union to allow all unit

employees to vote in a merger election, just as in a repre-

sentation election, because both types of elections impli-

cate the same employee rights. Simultaneously, however,

the Board refuses to apply the outcome determinative

test to the merger context, somehow differentiating be-

tween merger elections and representation elections.

In contrast to petitioner’s position, the Board contends

that its Amoco rule is a permissible construction of the

Act, consistent with the Act’s fundamental guarantees.

The Board maintains that the Amoco rule strikes a rea-

sonable balance of the conflicting legitimate interests at

stake. Therefore, in light of the broad deference due to

the Board’s determinations, the Board contends that we

must deny the petition.

Il. THE HISTORY OF THE AMOCO RULE

In 1975, the Board, by a vote of two-to-one, adopted an

administrative law judge’s recommended order requiring

Amoco Production Company to recognize and bargain

with a union and to cease and desist from certain unfair

labor practices. Amoco Production Co., 220 N.L.R.B. 861,

90 LRRM 1434 (1975). The originally independent,

Board-certified union voted to affiliate with an interna-

tional. No non-union employees in the bargaining unit

could vote in the election, although union organizers per- ,

mitted them to participate in the discussions concerning

6a

the election and informed them that they could vote

merely by becoming union members. Of the 480 employ-

ees in the unit, 383 received ballots. By a vote of 214-71,

the employees voted in favor of affiliation. Thus, the

margin of victory for the affiliation, 143 votes, was

greater than the number of nonunion employees who were

ineligible to vote, of which three were ninety-seven. Nev-

ertheless, the company refused to recognize petitioner

and repudiated the collective bargaining agreement.

The Board held the company to its contract, relying

upon the fact that participation by the non-union em-

ployees would not have altered the result. Id. at 864.

The Board further noted that there was neither any pro-

cedural challenge to the manner in which the union ran

the actual voting nor any employee complaints concern-

ing the affiliation. Id. The Board found that the inter-

national was the successor to the independent and held

that the change in affiliation did not relieve the company

of its bargaining obligation. The Board also observed

that, if it voided the merger election, the employees would

have no union representation at all because the independ-

ent had ceased to exist after affiliation. Id. at 865.

The dissent maintained that the entire electoral proc-

ess was fundamentally flawed because the “essence of de-

mocracy” is to give an opportunity to participate to all

people affected by an electoral decision. Id. at 862 (Mem-

ber Jenkins, dissenting). The dissent also rejected the

majority’s reliance upon the fact that there was an in-

sufficient number of non-union employees to change the

result of the election.

Exclusion of some of this electorate from the right

to vote inhibits their participation in the electoral

process, a participation which, through discussion

and interchange of views may affect the attitudes

and votes of others who are permitted to vote. Thus

————————

7a

the effects of the exclusion cannot be measured by a

mere numerical tally.

Id.

The company then appealed to the United States Court

of Appeals for the Fifth Circuit. In the meantime, how-

ever, the Board changed its position with respect to

affiliation elections and required unions to allow all unit

members to vote before the Board would amend the un-

ion’s certification as bargaining representative. Jasper

Seating Co., 231 NLRB 1025, 96 LRRM 1195 (1977).

Consequently, the Board requested the Fifth Circuit to

remand the Amoco case to the Board for further consid-

eration. By a three-to-two vote, the Board then affirmed

its earlier Amoco decision, reversing Jasper Seating Co.

and holding, for two reasons, that an affiliation vote lim-

ited to union members does not relieve an employer from

its duty to bargain with a certified union. Amoco Pro-

duction Co., 239 NLRB 1195, 100 LRRM 1127 (1979).

First, the Board declared that an affiliation is basically

an internal union affair. The Board stated that an affil-

iation “does not create a new organization, nor does it

result in the dissolution of an already existing organiza-

tion.” Id. The Board also noted that there were a vari-

ety of reasons why an employee might favor affiliation

and that only union members would be subject to any

new constitution imposed by the new parent union. Id.

at 1195 & n.4. The Board emphasized that a decision to

affiliate does not alter the existing collective bargaining

agreement. Id. at 1195. Consequently, the Board con-

cluded, affiliation election procedures are internal union

matters over which the Board has no authority, provided

that the election procedures otherwise satisfy basic due

process requirements.

The second rationale for the Board’s decision relied

upon the fact that nonmembers sufficiently concerned

about an affiliation election could simply join the union

to participate in the vote. Id. In that respect, affiliations

8a

do not differ from other internal matters, such as strike

votes, contract ratification, and the election of union

officers, stewards, and negotiators, in all of which cases

the Board has allowed exclusion of nonmembers. The

Board also identified the following facts as important:

no employee complained about the election procedures or

disputed the results; the bylaws, of which all employees

were aware when deciding where to join the union, ex-

plicitly limited the ability to vote to union employees;

and, “while not dispositive of the issue, the 97 non-

members could not have affected the overwheiming vote

in favor of affiliation.” Id.

In a concurring opinion, one member of the majority

agreed with the result solely because he concluded that

the question of affiliation “is a matter of exclusive con-

cern to the union members . . . so long as the union did

not improperly deny membership to [any| employees.”

Id. at 1197 (Member Truesdale, concurring). Member

Jenkins again dissented, maintaining that the exclusion

of nonmembers established that the election “did not

meet the minimum strictures of due process.” Id. He

also claimed that the majority’s reliance upon the fact

that interested employees could join the union if they

wished to vote irrored the employees’ section 7 rights to

refrain from union activity. Id. at 1198; 29 U.S.C.

$157. Member Penello also dissented, but upon different

grounds. He maintained that the affiliation of a 382-

member independent with a 200,000-member interna-

tional “resulted in a substantial change in the identity

of the employees’ bargaining representative.” Id. This

change raised a “question concerning representation,”

which only a Board-conducted election, open to all em-

ployees, could resolve. Id.

The company’s subsequent appeal to the Fifth Circuit

resulted in a further remand of the case to the Board.

Amoco Production Co. v. N.L.R.B., 613 F.2d 107, 103

LRRM 2810 (5th Cir. 1980). The court noted that, un-

Ee

9a

der established precedent, the employer had no duty to

bargain with the post-affiliation entity unless the entity

was a valid successor to the independent union. Id. at

110. Successorship status turns upon whether the new

entity is “‘a continuation of the old union under a new

name or... a substantially different organization?’ ”

Id. at 112, quoting J. Ray McDermott & Co. v. N.L.R.B.,

571 F.2d 850, 98 LRRM 2191 (5th Cir. 1978), cert.

denied, 439 U.S. 893, 99 LRRM 2657. The court then

questioned the factual basis for the Board’s conclusion,

in its initial opinion, that there was a valid successor-

ship established, id. at 110-11, and noted that the Board's

second decision contained no discussion of the successor-

ship issue, id. at 111. The court concluded that, because

it could not determine why the Board had decided that

the international was a successor union, the court would

remand the decision to the Board to make a factual de-

termination of successorship.

On remand for consideration of the successorship issue,

the Board, instead, changed its position concerning the

ability of a certified union to exclude nonmember em-

ployees from an affiliation election. The Board majority,

in a three-to-two decision, labeled the exclusion issue a

“threshold question . . . for, if the affiliation election

were improper, the question of successorship would be

moot.” Amoco Production Co., 262 NLRB 1240, 1241,

110 LRRM 1419 (1982). The Board then determined

that basic notions of due process required that affiliation

elections to open to all employees, including nonmembers.

Id. The Board reasoned that the question of affiliation is

not a solely internal union matter because, after affilia-

tion, the union will inevitably call upon the Board either

to find an unfair labor practice if the employer refuses

to bargain or to amend the union’s certification. The

concomitant invocation of Board processes requires the

Board to assure that the election meets due process re-

quirements. Id. The Board equated the affiliation deci-

10a

sion with the initial certification process and declared

that affiliation differs from such internal matters as

strike votes and contract ratifications because only the

affiliation decision “directly impacts upon matters within

the breadth of the Act and results in an undermining of

the Board’s own election and certification procedures.”

Id. The Board asserted that the opportunity for non-

member employees to join the union before the election

did not satisfy due process because section 7 of the Act

gives employees the right to refrain from union activities.

Id. Finally, as to the argument that inclusion of all

employees would not have changed the outcome, the

Board repeated Member Jenkins’ dissent from the first

decision in the case: “the effects of the exclusion cannot

be measured by a mere numerical tally.” Id. n.12. In

conclusion, the Board declared that the employer did not

commit any unfair labor practice by refusing to bargain

with the post-affiliation union and held that due process

requires that an affiliation election be open to all em-

ployees. Id. at 1241.

The two dissenters reasserted the rationales proffered

in the first two Board decisions in the case. First, not-

ing that it was the union’s internal rule to require mem-

bership as a prerequisite to being able to vote in an affil-

iation election, the dissenters continue¢ to maintain that

such an election is an internal union matter in which the

Board should not interfere. Jd. at 1242 (Members Fan-

ning and Zimmerman, dissenting). They also claimed

that the matters previously recognized as internal, such

as contract ratifications and strike votes, have at least as

much impaci upon nonmembers as an affiliation election,

and yet the majority did not even question the exclusion

of nonmembers in those situations. Id. The dissenters

saw no tension between the exclusion of a nonmember

and an employee’s section 7 right to refrain from union

activity: “If he has not joined, and was not unfairly

barred from doing so, ke is responsible for his own dis-

lla

enfranchisement.” Id. If he has demonstrated no in-

terest in internal union affairs by not joining, then the

union should have no obligation to “solicit his views”

concerning affiliation. Id. The dissenters maintained

that the unionized employees are those most affected by

an affiliation and that any effects upon nonmembers are

indirect. They again noted that the outcome would not

have changed had the nonmembers had the opportunity to

vote. Id. at 1243 n.21.

The Fifth Circuit affirmed the Board’s order. Local

Union No. 4-14, Oil Workers International Union v.

N.L.R.B., 721 F.2d 150, 114 LRRM 3676 (5th Cir.

1983). Initially, the court acknowledged that “ ‘Con-

gress has entrusted the Board with a wide degree of dis-

cretion in establishing the procedures and safeguards

necessary to ensure the fair and free choice of bargaining

representatives by employees.’” Id. at 153, quoting

N.L.R.B. v. A.J. Tower Co., 329 U.S. 324, 330, 19

LRRM 2128 (1946). The court also remarked that the

Board’s collective experience could justify a change in its

position. The court then noted the Board’s prior vacilla-

tions on the issue and found “clearly articulated reason-

able grounds” for the Board’s new position. Id. The

court concluded:

[Wie are unable to say that the general feeling that

now requires the participation of nonunion members

in an affiliation election is irrational or inconsistent

with the Act, or that it is beyond the wide discretion

of the Board to establish procedures in an affiliation

election that will ensure the fair and free choice of

the bargaining representatives of all the employees.

Id. at 152-53.

III. THE NINTH CIRCUIT DECISION

The United States Court of Appeals for the Ninth Cir-

cuit has held, in a two-to-one decision, that the Amoco

rule is irrational and inconsistent with the Act. Finan-

12a

cial Institution Employees, Local No. 1182 v. N.L.R.B.

752 F.2d 356, 116 LRRM 3409 (9th Cir. 1984) (F.LE.),

rehearing denied, 750 F.2d 757, 118 LRRM 2208, cert.

granted, 105 S.Ct. 2318 (1985). In the F.I.E. case, an

independent union sought affiliation with an interna-

tional union, with the affiliation vote confined to union

members. Only 2,624 of the 4,800 unit employees were

union members. Of the union members, only 1,980 voted;

1,206 voted for affiliation and 774 voted against it. After

finding continuity between the pre- and _ post-affiliation

unions, the Board amended the union’s certification.

Seattle-First National Bank, 241 NLRB 751, 100 LRRM

1564 (1979). When the employer then refused to bar-

gain the Board found the employer guilty of an unfair

labor practice. Financial Institution Employees, 245

NLRB 700, 102 LRRM 1368 (1979). After the Board

adopted its new Amoco rule, however, it reversed itself

in this case as well. Reasoning that the exclusion of non-

members violates fundamental due process standards, the

Board revoked the amended certification and dismissed

the unfair labor practice charge against the employer.

Seattle-First National Bank, 265 NLRB 426, 111 LRRM

1637 (1982).

The Ninth Circuit reversed, noting that, prior to

Amoco, the Board had undertaken two inquiries when ex-

amining affiliation election. First, the Board had always

required that unions conduct the elections with sufficient

due process protections to ensure that the results accu-

rately reflected the wishes of a majority of the union

members. 752 F.2d at 360-61. The new rule now re-

quires, as a threshold due process requirement, that all

employees participate, thereby importing a consideration

of the nonmembers’ section 7 rights into the due process

inquiry. Id. The second inquiry, not altered by Amoco, is

whether there is a continuity of representation between

the pre- and post-affiliation unions, an inquiry which ad-

dresses the section 7 interests of both members and non-

13a

members. Id. at 361. If continuity exists, then the Board

has traditionally considered an affiliation to be an inter-

nal union affair. Id.

The court disapproved of the Amoco rule for three

reasons. First, it held that the “rule violates a long-

standing federal policy avoiding unnecessary interference

in internal union affairs.” Id. at 362. The court’s rea-

soning on this issue was somewhat confusing. At the

outset of its opinion, the court rejected the Board’s as-

sertion that affiliations are rarely simply internal mat-

ters, stating that some affiliations have such minimal

effect upon nonmembers that they could be nothing but

internal union affairs, while conceding that others have

significant external effects upon nonmembers. Id. n.9.

The difference in effect usually depends upon the amount

of authority ceded to the international, which is the sub-

ject of the continuity inquiry. Id. Nevertheless, because

the continuity inquiry adequately protected nonmembers’

rights, the court determined that “al! affiliation decisions

[are] internal union affairs.” Id. The court conceded

that the Board could interfere with internal matters if

the questioned union rule “significantly impinges on a

policy of the NLRA.” Id. The court also conceded that

the Board could interfere with internal matters if the

questioned union rule “significantly impinges on a policy

of the NLRA.” Id. at 363. The court then concluded

that the Amoco rule interferes with an internal union

practice that impairs no statutory labor policy: ‘Under

the new rule, by requiring a unit-wide vote even when

continuity exists between a pre- and post-affiliation union,

the Board inevitably interferes in internal union affairs

without justification.” Id. at 364.

Second the court concluded that the new rule contra-

venes “the strong national policy of maintaining stability

in the bargaining representative to achieve the NLRA’s

primary purpose preserving industrial peace.” Id. The

Board contrasted, for example, the Board’s section 9(c)

l4a

decertification procedures, under which the Board wil

not consider a decertification petition unless at least

thirty percent of the employees sign the petition. 29

C.F.R. § 101.18, with the new rule, which effectively de-

certifies the post-election union without any examination

“into the character of the union or its support among

employees.” Id. at 365. The Amoco rule thus allows an

employer to avoid a contract, without any indication that

the union has lost its majority status, if the union affil-

iates without the participation of all employees.

Finally, the court held that the new rule is irrational

for two reasons. First, the previous procedures ade-

quately protect both all employees’ rights to be repre-

sented only by an entity approved by a majority of the

unit’s employees and union members’ rights to run in-

ternal affairs without outside interference. Id. at 366.

The continuity requirement adequately protects non-

members’ section 7 rights, and, if a sizeable percentage

of the employees become disenchanted, they retain the

right to petition for decertification. Id. Second, the

court determined that the Board’s notions of “funda-

mental due process” for a:! employees does not support

the new rule. Id. at 367. Previously, the due process in-

quiry only looked at the effect of voting procedures upon

union members’ rights to manage internal union affairs,

while the continuity inquiry protected nonmembers’

rights. Furthermore, the court maintained, the new rule

is duplicative because, if the Board determines after an

Amoco-imposed unit-wide election that there is a question

of continuity raised by the affiliation, the Board would

then conduct a formal unitwide representation election.

Id. Finally, the court found unpersuasive the Board’s

contention that, because affiliations usually result in

amendments to certifications, the integrity of Board

processes would be questioned without the new rule. The

court “failfed] to see how imposing a non-Board-super-

vised election, even when no representation question

15a

arises, enhances the integrity of the Board’s certification

and election procedures.” Id. (footnote omitted).

In dissent, Judge Wright found the new rule neither

irrational nor inconsistent with the Act. Id. at 368

(Wright, J., dissenting). The judge relied upon the

Fifth Circuit’s opinion, a desire to avoid an “unwar-

ranted” intercircuit conflict over the rationality of the

Board’s decision, and the broad deference due to the

Board. Id. at 368-69. For similar reasons, six judges

dissented from the subsequent denial of the employer’s

petition for rehearing with suggestion for rehearing en

bane. Financial Institution Employees, Local No. 1182

v. N.L.R.B., 750 F.2d 757, 118 LRRM 2208 (9th Cir.

1984).

The Supreme Court has granted the separate petitions

for certiorari filed by the Board, N.L.R.B. v. Financial

Institution Employees, Local 1182, No. 84-1493, 53 LW

3799 (1985), and the employer, Seattle-First National

Bank v. Financial Institution Employees, Local 1182,

No. 84-1509, 53 LW 3799 (1985). Despite the Supreme

Court’s decision to grant certiorari, however, we have

determined, for two reasons, to resolve the present dis-

pute at this time. First, our decision might finally re-

solve this case should the parties seek no further review,

thus making further delay unnecessary. Second, it is

conceivable that the Supreme Court might not resolve

the precise issue before us. Significantly, the question

raised in the present case with respect to the Board’s

failure to impose an outcome determinative limitation

upon the Amoco rule is wholly absent from the F.E.I.

case. In the latter case, the number of employees ex-

cluded from the vote vastly exceeded the margin of vic-

tory by which the affiliation election carried. Thus, even

if the Supreme Court were to agree with the Board’s

position in the F.J.E. case, we would still have to deter-

mine whether the Board’s decision not to apply the out-

l6a

come determinative test to affiliation elections is justifi-

able.

Finally, we note that the validity of the Amoco rule is

also presently before the United States Court of Appeals

for the District of Columbia Circuit. United Food and

Commercial Workers International Union Local 568 v.

N.L.R.B., petition for review docketed, No. 84-1243

(D.C. Cir. June 14, 1984) (reviewing F’.W. Woolworth

Co., 268 NLRB 805, 115 LRRM 1120 (1984) ).

IV. THE INTERNAL UNION AFFAIR ISSUE

Petitioner contends that a merger election is an in-

ternal union affair. Traditionally, the Board, with court

approval, has taken a deferential approach to internal

union affairs, intervening only when a particular proce-

dure does not meet “adequate due process standards.”

See, e.g., United Steelworkers v. Sadlowski, 457 U.S. 102,

110 LRRM 2609 (1982) (campaign contributions by

nonmembers in election of union officers); N.L.R.B. v.

Boeing Co., 412 U.S. 67, 883 LRRM 2262 (1973) (union

discipline) ; Scofield v. N.L.R.B., 394 U.S. 423, 70 LRRM

3105 (1969) (limits on piece work); N.L.R.B. v. Allis-

Chalmers Manufacturing Co., 388 U.S. 175, 65 LRRM

2449 (1967) (union discipline) ; Amoco Production Co.,

262 NLRB at 1241 (Board distinguishes affiliations from

strike votes, contract ratifications, and choice of contract

negotiators, into which, the Board concedes, it normally

would not intrude). In its Amoco decision, however, the

Board determined that an affiliation election is not a

solely internal union matter because of its impact upon

the Board’s certification process. We must determine

whether the Board’s characterization of affiliation and

merger elections is sustainable.

Our appellate function in the present case is a nar-

row one. The Act confers upon the Board the authority

to implement and interpret the Act. See N.L.R.B. v. In-

surance Agents’ International Union, 361 U.S. 477, 499,

17a

45 LRRM 2704 (1960). Thus, as long as the Board’s ex-

plication of a rule “is not inadequate, irrational or arbi-

trary,” we must sustain its position. N.L.R.B. v. Erie

Resistor Corp., 373 U.S. 221, 236, 53 LRRM 2121

(1963). As the Supreme Court has recently stated, in

an analogous context, if the Act

has not directly addressed the precise question at is-

sue, the court does not simply impose its own con-

struction of the statute, as would be necessary in

the absence of an administrative interpretation.

Rather, if the statute is silent or ambiguous with re-

spect to the issue, the question for the court is

whether the agency’s answer is based on a permis-

sible construction of the statute.

. . . Sometimes the legislative delegation [of author-

ity] to an agency on a particular question is im-

plicit rather than explicit. In such a case, a court

may not substitute its own construction of a statu-

tory provision for a reasonable interpretation made

by the administrator of an agency.

We have long recognized that considerable weight

should be accorded to an executive department’s con-

struction of a statutory scheme it is entrusted to ad-

minister, and the principle of deference to adminis-

trative interpretations “has been consistently fol-

lowed by this Court whenever decision as to the

meaning or reach of a statute has involved reconcil-

ing conflicting policies. .. .’”

Chevron, U.S.A., Inc. v. Natural Resources Defense Coun-

cil, Inc., 104 S.Ct. 2778, 2782-83 (1984) (footnotes omit-

ted), quoting United States v. Shimer, 367 U.S. 374, 382

(1961).

The present case requires just such a reconciliation of

conflicting statutory policies. The parties agree that the

two fundamental labor policies involved are, first, stability

in bargaining relations and industrial peace and, second,

18a

free choice and majority rule in the determination of a

unit’s bargaining agent. See N.L.R.B. v. Food Employers

Council, Inc., 399 F.2d 501, 504, 69 LRRM 2077 (9th

Cir. 1968). The act includes a number of provisions de-

signed to limit labor strife and instability. E.g., § 8(b)

(7) (A), 29 U.S.C. § 158(b) (7) (A) (prohibits recogni-

tional picketing where unit employees already are repre-

sented by a recognized union); § 8(b) (7) (B), 29 U.S.C.

§ 158(b) (7) (B) (bars recognitional picketing for one

year after a valid election); § 9(c) (3), 29 U.S.C. § 159

(c) (3) (prohibits election in unit that has had an elec-

tion within previous year). See generally N.L.R.B. v.

A. J. Tower Co., 329 U.S. at 331. The Board has adopted

a number of other rules to achieve the same end. Brooks

v. N.L.R.B., 348 U.S. 96, 35 LRRM 2158 (1954) (Board

may invest union with an irrebuttable presumption of

majority status for one year after certification) ; Pioneer

Inn Associates v. N.L.R.B., 578 F.2d 835, 839, 99 LRRM

2354 (9th Cir. 1978) (upholding “contract bar” rule that

Board will not conduct decertification election during life

of contract even if majority of employees withdraws sup-

port from union); 29 C.F.R. § 101.18 (1984) (decertifi-

cation petition requires support of at least thirty percent

of employees). The Amoco rule implicates the stability

policy by threatening to destroy an established bargain-

ing relationship.

The interest in employee free choice of bargaining rep-

resentatives is also one of the fundamental policies under-

lying the Act. For instance, section 7 states:

Employees shall have the right to self-organization,

to form, join or assist labor organizations, to bargain

collectively through representative of their own choos-

ing, and to engage in other concerted activities for

the purpose of collective bargaining or other mutual

aid or protection, and shall also have the right to

refrain from any or all such activities...

19a

29 U.S.C. § 157 (emphasis added). Furthermore, section

9(a) of the Act provides:

Representatives designated or selected for the pur-

poses of collective bargaining by a majority of the

employees in a unit appropriate for such purposes,

shall be the exclusive representatives of all the em-

ployees in such unit for purposes of collective bar-

gaining in respect to rates of pay, wages, hours of

employment or other conditions of employment.

29 U.S.C. $ 159(a)}. The exclusive character of the bar-

gaining representative requires the union to represent

the interests of these employees who choose to exercise

their section 7 right to refrain from union activities.

N.L.R.B. v. Allis-Chalmers Manufacturing Co., 388 U.S.

at 180. The impact of the Amoco rule upon the free choice

interest is obvious.

An affiliation or merger election limited to union mem-

bers presents particularly acute tensions between these

conflicting policies. If the Board refuses to amend its

certification or find an unfair labor practice should an

employer refuse to bargain with the post-merger entity,

it is most likely that the bargaining relationship will

cease. On the other hand, if the Board permits the post-

merger entity to represent all unit employees upon the

basis of an exclusive election, a substantial possibility

exists that a majority of the unit-wide work force would

not favor that representation. To resolve the tensions pre-

sented by merger cases, the Board has resorted to a two-

part test, as delineated above. First, the Board inquires

whether the election procedures included adequate due

process safeguards. Second, if the procedures are suffi-

cient, the Board determines whether continuity exists be-

tween the pre- and post-merger organizations. The pres-

ent case concerns only the first step of the Board’s

inquiry: As a matter of due process, Amoco requires a

union to allow all employees in a bargaining unit to vote

in the merger election.

20a

Preliminarily, petitioner contends that, because the

Amoco rule represents an allegedly sharp change of

agency course, the agency “bears the burden of fully

justifying the necessity for its shift in position.” In sup-

port of its contention, the union cites Atchison, Topeka &

Santa Fe Ry v. Witchita Board of Trade, 412 U.S. 800

(1973), in which the Court stated that an agency must

clearly explain its departure from a “settled course of

behavior.” Id. at 807-08. Yet, as the history of the

Amoco case demonstrates, see Part II, supra, the Board’s

approach to the affiliation issue has been anything but

settled. In an effort to resolve an unsettled area of its

jurisprudence the Board has now established its Amoco

rule. As the United States Court of Appeals for the

Ninth Circuit has stated, with reference to an area as

fraught with indecision as is the affiliation issue, “the

Board may alter its standards provided that its new rules

are both rational and consistent with the Act.” N.L.R.B.

v. Best Products Co., 765 F.2d 903, 118 LRRM 3265, No.

84-7645, slip op. at 15 (9th Cir. July 10, 1985). Thus, as

long as the Amoco rule is rational and consistent with the

Act, we will uphold it notwithstanding that the new rule

resolves an unsettled area of union election law.

To comply with the limited review mandated by Chev-

ron, see page [17a], supra, we must give special deference

to Board rules related to the choice of a bargaining rep-

resentative: “as a matter of policy ‘the soundness of an

election rule is not the business of the reviewing court.’ ”

N.L.R.B. v. Tom Wood Datsun, Inc., 767 F.2d 350, 119

LRRM 3415, No. 84-2264, slip op. at 5 (7th Cir. July 11,

1985), quoting Mosey Manufacturing Co. v. N.L.R.B.,

701 F.2d 610, 615, 112 LRRM 2822 (7th Cir. 1983) (en

banc). Petitioner contends that the Amoco rule is not an

election rule, but is, instead, an unwarranted intrusion

by the Board into an internal union affair. Included in

petitioner’s contention, however, is a presupposition that

a merger is an internal union affair. Yet, that is precisely

the question presented by this petition. The Amoco rule

<<<

2la

that a merger is not a solely internal union affair repre-

sents a balancing of the stability and free choice interests.

We must determine whether the Board’s balancing of the

interests and conclusion that mergers are not solely in-

ternal union affairs reflect a reasonable construction of

the Act. Beth Israel Hospital v. N.L.R.B., 437 U.S. 483,

501, 98 LRRM 2727 (1978).

In Board-conducted representation elections, the Board

has delineated a fairly elaborate set of procedures to be

followed. In Amoco, the Board has merely redefined what

it will consider to be adequate due process in the context

of union-run merger elections. As a matter of internal

union structure, a merger is virtually indistinguishable

from other matters that the Board holds to be internal

union affairs; a merger affects the relationship between

a union and its members in such the same way as con-

tract ratifications and elections of union officers. In one

crucial aspect, however, a merger election differs from

the other internal union affairs: Its effects are not limited

to the relationship between a union and its members.

Instead, it has external ramifications. For example, after

an affiliation or merger, a union inevitably seeks an

amendment to its certification, as in Amoco, or files un-

fair labor practice charges with the Board, as in the

present case. Thus, because petitioner invoked the ex-

ternal authority of the Board in an attempt to establish

that the employer had committed an unfair labor prac-

tice, the Board could rationally require an additional

indicium of unit-wide majority support for the merger,

while avoiding the imposition of the entire set of pro-

cedures required in a Board-conducted election. The addi-

tional indicium that Amoco requires is that all unit

employees have the opportunity to vote.

We consider Amoco’s limited procedural imposition

upon the union’s ability to conduct an election to be a

rational balancing of the conflicting interests in stability

and free choice. Furthermore, the imposition of the unit-

22a

wide eligibility requirement reconciles the union’s dual

status as a voluntary organization and as a certified or

recognized bargaining agent. See R. Williams, NLRB

Regulation of Union Bargaining Rights when Affiliation

Changes 24 (U. Pa. 1982). We do not suggest that

Amoco is the only rational balance that the Board could

have reached. The Board’s pronouncements are not sub-

ject to such an exacting standard. We hold only that the

Board’s conclusion that a merger election is not a solely

internal union affair is rational, consistent with the Act,

and not arbitrary.

We decline to agree with the approach adopted by the

Ninth Cireuit in the F.J.E. case for much the same rea-

sons that Judge Wright offered in his dissent from that

opinion. The majority in F./.E. set forth three reasons

for rejecting Amoco. First, the rule unnecessarily inter-

feres with internal union affairs. 752 F.2d at 362-64. As

we have just concluded, however, we find that the Board’s

holding that a merger is not a solely internal union

affair is rational and consistent with the Act. See id.

at 368-6 (Wright, J., dissenting). Second, the Ninth Cir-

cuit found that the rule contradicted the policy of pro-

moting stability in the bargaining representative. Id. at

364-66. Yet, as Judge Wright noted, Amoco will not

increase instability because, “|u]nder the new rule, non-

members may not force affiliation [or merger] because

the decision to hold an affiliation election remains the

province of the union. The Board’s rule will promote

stability more effectively than did its former position.”

Id. at 369 (Wright, J., dissenting). (‘As we point out

subsequently herein the firm establishment of the Amoco

rule, if followed by unions, might result in less post-

merger litigation, and less industrial instability, than

under prior Board approaches). Finally, the F.J.E. ma-

jority asserted that the new rule was irrational because

previously followed procedures adequately protected all

relevant interests. Id. at 366. On this issue, we find our-

selves in complete agreement with Judge Wright: “The

a

23a

adequacy of the old procedure is irrelevant. We should

instead determine whether the new rule is rational and

consistent with the Act. The merit or sufficiency of the

previous rule should not control.” Id. at 369 (Wright, J.,

dissenting).

Because a merger election is not solely internal, the

Board was free to pass upon the propriety of the election

procedures followed by the union. Its determination that

all unit members must vote before it will sanction the

results of an affiliation election is a reasonable accom-

modation of the conflicting policies present in this case.

Consequently, we must sustain the Board’s action in this

case, provided that we reject petitioner’s next claim.

V. THE OUTCOME DETERMINATIVE TEST

Petitioner claims that, even if we sustain the Board’s

universal suffrage requirement, we must reverse the

Board’s disposition of this case because of the failure of

the Board to apply an outcome determinative limitation

to the Amoco rule. Petitioner notes that, in Board-con-

ducted representation elections, the Board will not over-

turn the election results unless the alleged errors in tab-

ulation or voting procedures could have affected the out-

come. See N.L.R.B. v. Speedway Petroleum, Division of

Emro Marketing Co., 768 F.2d 151, 119 LRRM 3366,

No. 84-2838, slip op. at 4 (7th Cir. July 17, 1985). Be-

cause a merger election is, in effect, a substitute for a

representation election, which explains the Board’s in-

volvement in the regulation of merger elections, see Part

IV, supra, petitioner asserts that the Board must apply

the same outcome determinative test. Furthermore, pe-

titioner claims that the Board failed to offer “any ex-

planation of consequence” for refusing to apply the

limitation.

Petitioner’s final contention is clearly without merit.

The Board did proffer a justification for its refusal to

apply an outcome determinative limitation when it an-

24a

nounced the Amoco rule. The justification was that “the

effects of the exclusion cannot be measured by a mere

numerical tally.” 262 NLRB at 1241. Surely, this view

is a rational assessment of the effects of a group exclu-

sion upon the outcome of an election. With the knowl-

edge that the union has forbidden them from voting, non-

members have little incentive to air their views about the

merits of a merger. Consequently, conflicting analyses of

the proposed merger remain unarticulated. The resultant

distortion of the election atmosphere easily could affect

the votes of union members; exposure to confiicting views

could either spur otherwise abstaining members to vote

or convince voting union members to change their minds.

Either way, the presentation of alternative opinions might

iead union employees to adopt the viewpoints presented by

non-union unit members and thus extend the influence of

the non-union employees beyond their numerical repre-

sentation within the bargaining unit. Although the con-

texts are different, we find that the pronouncements of

the Supreme Court relative to group exclusions from jury

service capture the manner in which group exclusions

from an election can have effects greater than the mere

number of excluded voters. See, e.g., Peters v. Kiff, 407

U.S. 493, 503-04 (1972) (opinion of Marshall, J.) (ex-

clusion of blacks for jury service “deprives the jury of

a perspective on human events that may have unsuspected

importance in any case that may be presented’’) ; Ballard

v. United States, 329 U.S. 187, 193-94 (1964) (exclusion

of women from juries eliminates “the subtle interplay of

influence” from the jury room).

Even apart from the effect of the exclusion of nonmem-

bers upon the conduct of union employees, we hesitate to

‘endorse the election of a union that has deliberately dis-

enfranchised an entire group of otherwise eligible voters.

Notions of participatory democracy lie at the very center

of the Act, and full participation is impossible to achieve

if entire segments of a given electorate do not receive

the opportunity to vote. Consequently, we consider the

25a

Board’s statement that “the effects of the exclusion can-

not be measured by a mere numerical tally” to be an

“explanation of consequence” for the rule.

Petitioner’s argument that the fact that the Board

applies an outcome determinative test to its own repre-

sentative test to its own representation elections somehow

renders irrational the Board’s decision not to apply the

same test to union-run merger elections is also without

merit. Petitioner correctly asserts that the product of

both a Board representation election and a union affilia-

tion election is the same: to determine an exclusive bar-

gaining representative. Yet, there is no logical reason

why the Board must analyze the results of the two types

of elections in an identical fashion, just as there is no

requirement that the entity running the election must ob-

serve the same procedures. We have described above how

the procedures required in an election depend upon

whether the Board or the union runs the election. Rather

than requiring unions to conform to all the procedural

safeguards found in a Board-run election, the Board only

requires that the union provide every employee an op-

portunity to register his or her opinion. It is not fatally

inconsistent for the Board to apply different rules to fun-

damentally different procedures, even though the result

of both procedures determines the exclusive bargaining

agent for an employee unit.

Further, a significant, apples-oranges, distinction ex-

ists between the two types of elections. No group of em-

ployees within the appropriate unit is disenfranchised.

Those who assert they are in the unit may cast a ballot

even though it may be challenged. It is the challenged

votes, nevertheless votes, which are not counted if their

numbers would not be determinative of the outcome. The

several distinctions between the two procedural mecha-

nisms dispose of the contention that the Board must im-

pose the same mode of analysis in both contexts.

26a

According to petitioner, the independent union ceased

to exist after the merger. Thus, the decision effectively

to void the election would leave the employees without

representation, at least temporarily. Petitioner complains

about this “draconian” result. If the Board was correct,

however, about its resolution of the internal union affairs

issue, and we already have held that it was, the petitioner

is to blame for not allowing the non-union employees to

vote. Although a majority of the unit employees had

agreed to representation by the independent, the inde-

pendent no longer exists. Furthermore, the Board reason-

ably concluded that, because non-union employees did not

vote, no recognizable majority of the union employees had

agreed to representation by the post-election entity.

Therefore, petitioner cannot invoke Board processes to

force the Employer to bargain with it.

Two considerations deprive the allegedly draconian re-

sult of much of its sting. First, in the particular employ-

ment relationship at issue in the present case, nothing

prevents petitioner from attempting to reorganize the

Employer’s work force. If petitioner succeeds in obtain-

ing an indication of majority support, and the Employer

refuses to recognize it, petitioner can compel a unit-wide,

Board-conducted election, with binding results. Second,

on a systemic level, the Amoco rule should result in a

decrease in the amount of limitation on merger issues.

Under Amoco, a union is certain to include all unit em-

ployees in a merger vote. If the vote carries, employers

faced with certain majority support for the post-merger

organization might be dissuaded from further contesting

the validity of the merger.

It is on the systemic level that an outcome determina-

tive limitation upon Amoco would divest the rule of its

efficacy. If a union knew that it could disenfranchise

nonmember employees and still have the results stand,

provided the margin of victory was greater than the

number of disenfranchised employees, there would be some

27a

incentive to continue to exclude nonmembers. If, on the

other hand, the majority were not sufficiently large, there

would have to be a unit-wide election, again run by the

union. Even after such an election, if the question of the

continuity of the post-merger union arose, a third elec-

tion, this one conducted by the Board, would take place.

The Board’s refusal to impose an outcome determinative

limitation eliminates the incentive for a union to gamble

by disenfranchising the nonmember employees in the first

instance. As such, the Board’s refusal to limit Amoco

rationally implements the fundamental NLRA policy of

employee democracy.

IV. CONCLUSION

We have considered all the arguments of petitioner

and find them to be without merit. Accordingly, the pe-

tition for review is Denied.

28a

APPENDIX B

UNITED STATES OF AMERICA

BEFORE THE

NATIONAL LABOR RELATIONS BOARD

Cases 18-CA-21660 and 13-CA-21696

MAY DEPARTMENT STORES COMPANY, VENTURE STORES

DIVISION and UNITED RETAIL WORKERS UNION LOCAL

No. 881, CHARTERED BY UNITED FooD AND COMMERCIAL

WORKERS INTERNATIONAL UNION, AFL-CIO, CLC

17 February 1984

DECISION AND ORDER

By CHAIRMAN DOTSON AND MEMBERS

HUNTER AND DENNIS

Upon charges and an amended charge filed by United

Retail Workers Union, Local No. 881, chartered by

United Food and Commercial Workers International

Union, AFL-CIO, CLC, herein called the Union, the

General Counsel of the National Labor Relations Board,

by the Regional Director for Region 13, issued an order

consolidating cases, and a consolidated complaint and

notice of hearing on 18 December 1981, against May

Department Stores Company, Venture Stores Division,

herein called the Respondent. The complaint alleges that

the Respondent has engaged in and is engaging in cer-

tain unfair labor practices affecting commerce within the

meaning of Sections 8(a) (5) and (1) and 2(6) and (7)

ee a

29a

of the National Labor Relations Act, as amended. Copies

of the charges and the consolidated complaint and notice

of hearing were duly served on the parties. The Respond-

ent filed an answer to the complaint, denying that it had

committed any unfair labor practices.

Thereafter, the Respondent, the Union, and counsel for

the General Counsel entered into a stipulation of facts

and jointly petitioned the Board to transfer this proceed-

ing directly to the Board for findings of fact, conclusions

of law, and a decision and order. The parties stipulated

that they waived a hearing before an administrative law

judge, the making of findings of fact and conclusions of

law by an administrative law judge, and the issuance of

an administrative law judge’s decision. The parties also

agreed that no oral testimony was necesasry or desired

by any of the parties, and that the charges, the com-

plaint, the answer, and the stipulation of facts, including

attached exhibits, constituted the entire record in the

case. The parties, however, reserved the right to object

to the materiality, relevancy, or competence of any of the

stipulated facts.

On 23 April 1982 the Board issued its order approv-

ing the stipulation and transferring the proceeding to

the Board. Thereafter, the General Counsel, the Respond-

ent, and the Union filed briefs which have been duly con-

sidered by the Board.'

The National Labor Relations Board has delegated its

authority in this proceeding to a three-member panel.

The Board has considered the entire record herein as

well as the briefs filed by the parties, and makes the

following

1 The Respondent filed a “Motion To Supplement the Record,” the

General Counsel filed a motion in opposition to the Respondent’s

motion, and the Respondent filed a reply to the General Counsel’s

opposition. In view of our disposition herein, we deny these

motions, as this additional evidence would have no effect on the

outcome of this proceeding.

30a

FINDINGS OF FACT

I. THE BUSINESS OF THE RESPONDENT

May Department Stores Company, Venture Stores Di-

vision, is a Delaware corporation engaged in the retail

sale and distribution of general merchandise at various

store locations in the States of Illinois and Indiana, with

its offices and principal place of business located at St.

Ann, Missouri. During the 1981 calendar year, a repre-

sentative period, the Respondent, in the course and con-

duct of its business, derived gross revenues in excess of

$500,000 and received in excess of $50,000 from retail

sales within the States of Illinois and Indiana, of general

merchandise, which it purchased and caused to be trans-

ported to the States of Illinois and Indiana directly from

points located outside those States.

The Respondent admits, and we find, that it is an em-

ployer engaged in commerce within the meaning of Sec-

tion 2(2), (6), and (7) of the Act.

II. THE LABOR ORGANIZATIONS INVOLVED

United Retail Workers Union and United Food and

Commercial Workers International Union, AFL-CIO,

CLC, are labor organizations within the meaning of Sec-

tion 2(5) of the Act.

III. THE ALLEGED UNFAIR LABOR PRACTICES

A. Introduction

In 1978, the Respondent recognized United Retail

Workers Union (URW) as the collective-bargaining rep-

resentative of its employees in the following unit:

(a) All employees employed in Respondent’s op-

erations at the following locations: 1) 9449 Skokie

Boulevard, Skokie, Illinois; 2) 116 South Waukegan,

Deerfield, Illinois; 3) 444 East Rand Road, Arling-

3la

ton Heights, Illinois; 4) 521 East North Avenue,

Glendale Heights, Illinois; 5) 125 West 87th Street,

Chicago, Illinois; 6) 11440 South Halsted Street,

Chicago, Illinois; 7) 7601 South Cicero Avenue, Chi-

cago, Illinois; 8) 6063 Broadway, Merriville, In-

diana; 9) 1311 Golf Road, Schamburg, Illinois; and

10) 1740 North Kostner, Chicago, Illinois, but ex-

cluding all managers and other employees defined as

supervisors, trainees (to a maximum of six per

store) and department managers, office clerical em-

ployees, security personnel (including guards and

watchmen), professional employees and craftsmen

performing work in said stores, but who are not part

of the facility’s normal employee complement. [{ Here-

inafter the Chicago stores. |

(b) All employees employed in Respondent’s op-

erations located at 2800 North Water Street, De-

catur, Illinois, but excluding all managers and other

employees defined as supervisors, trainees (to a

maximum of six per store) and department man-

agers, office clerical employees, security personnel

(including guards and watchmen), professional em-

ployees and craftsmen performing work in said

store, but who are not part of the facility’s normal

employee complement. [Hereinafter the Decatur

store. |

The Respondent and the URW entered into their in-

itial collective-bargaining agreement for the Chicago

stores in June 1978, and for the Decatur store in July

1978. The most recent collective-bargaining agreement

for the ‘Chicago stores is effective by its terms from 21

July 1980 through 24 July 1983. The most recent collec-

tive-bargaining agreement for the Decatur store is ef-

fective by its terms from 1 January 1981 through 31

December 1983. The Respondent terminated both agree-

ments effective 1 November 1981.

aa ii i

32a

B. The Union Affiliation Election

In June 1981, the presidents of URW’s four locals

unanimously agreed to seek affiliation with United Food

and Commercial Workers International Union, AFL-CIO,

CLC (UFCW). During July 1981, URW held meetings

for the membership of its local unions regarding the pro-

posed affiliation. Each meeting was open to all URW

members.*

The following individuals were eligible to vote in the

affiliation election:

(a) All active URW members on the payroll of an

employer under contract with URW as of the last pay-

roll date prior to 31 July 1981; and

(b) Nonmembers employed by an employer under con-

tract with URW as of the last payroil date prior to 31

July 1981: (1) who had not completed but would com-

plete their 30-day probationary period before 31 July and

(2) from whom URW had received a membership appli-

cation before 31 July 1981.

On or about 31 July 1981 Walenze Direct Mail, on be-

half of URW, mailed instructions and ballots for a mail

ballot referendum on the affiliation to 20,548 individuals

fitting the eligibility requirements. Of this number,

9,235 ballots were timely returned and tabulated. The

results showed that 6,823 votes were cast for, and 2,344

against, affiliation. There were 68 invalid votes.*

2 As of 31 October 1981, the 4 locals of URW represented approxi-

mately 22,400 employees, of whom approximately 20,500 were URW

members.

3 The Respondent has approximately 1,292 unit employees, 1,214

of whom were eligible to vote. Of the ballots sent to Respondent’s

employees, 389 were returned and tabulated. No determination of

how these baliots from employees in either of the two units herein

were cast is available.

ee Ff

33a

On or about 21 August 1981 officials of URW informed

Respondent of the results of the mail ballot referendum.

in subsequent correspondence Respondent agreed to honor

its bargaining agreements with URW until 1 November

1981, the date UFCW granted a charter to URW as its

Local No. 881.

C. The Respondent’s Refusal to Bargain

Since on or about 1 November 1981 the Respondent

has:

(a) Refused to recognize and bargain with Local No.

881 as the exclusive collective-bargaining representative

for the employees of its Chicago and Decatur stores.

(b) Refused to process grievances with Local No. 881

arising on or after 1 November 1981 in accordance with

article IX of the current collective-bargaining agree-

ments.

(ec) Refused to grant Local No. 881 representatives

access to its stores for purposes of administering the

collective-bargaining agreements in accordance with sec-

tion 8.5 of the current collective-bargaining agreements.

(d) Refused to transmit to Local No. 881 union dues

and initiation fees as called for by section 8.2 of the

current collective-bargaining agreements.

(e) Refused to enforce the union membership require-

‘ment relative to Local No. 881 as set forth in section

8.1 of the current collective-bargaining agreements.

(f) Refused to submit the names and addresses of new

hires in accordance with section 8.1(D) of the current

collective-bargaining agreements.

CONCLUSIONS OF LAW

We find merit in Respondent’s contentions that the

election herein was conducted with insufficient due proc-

ess safeguards. As announced in Amoco Production Co.,

34a

262 NLRB 1240 (1982), a critical element of an affilia-

tion election is that all unit employees, whether union

members or not, be permitted to participate and vote in

the affiliation election. Because, in this case, all unit

employees have not been accorded these rights, we find

that the affiliation was improper. The Respondent, there-

fore, did not violate Section 8(a) (5) and (1) of the Act

when it refused to bargain with United Retail Workers

Union Local No. 881, chartered by United Food and

Commercial Workers Union, AFL-CIO, CLC, and refused

to comply with the provisions of the collective-bargaining

agreements noted therein in effect with United Retail

Workers Union, as they would apply to Local No. 881.

ORDER

The National Labor Relations Board orders the consoli-

dated complaint dismissed.

35a

APPENDIX C

SUPREME COURT OF THE UNITED STATES

No. A-479

UNITED RETAIL WORKERS LOCAL 881,

Applicant,

Ve

NATIONAL LABOR RELATIONS BOARD and

MAY DEPARTMENT STORES

ORDER EXTENDING TIME TO FILE PETITION

FOR WRIT OF CERTIORARI

UPON CONSIDERATION of the application of counsel for

petitioner,

IT Is ORDERED that the time for filing a petition for

writ of certiorari in the above-entitled cause be, and

the same is hereby, extended to and including February

28, 1936.

s’ John Paul Stevens

Associate Justice of the Supreme

Court of the United States

Dated this 18th

day of December, 1985.

36a

APPENDIX D

The National Labor Relations Act, as amended, 29

U.S.C. § 151 et seqg., provides in pertinent part as follows:

Sec. 8, 29 U.S.C. § 158:

(a) It shall be an unfair labor practice for an

employer—

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

resentatives of his employees, subject to the provi-

sions of section 9(a).

Sec. 9, 29 U.S.C. § 159:

(a) Representatives designated or selected for the

purposes of collective bargaining by the majority of

the employees in a unit appropriate for such pur-

poses, shall be the exclusive representatives of all the

employees in such unit for the purposes of collective

bargaining in respect to rates of pay, wages, hours

of employment, or other conditions of employment:

Provided, That any individual employee or a group

of employees shall have the right at any time to

present grievances to their employer and to have such

grievances adjusted, without the intervention of the

bargaining representative, as long as the adjustment

‘is not inconsistent with the terms of a collective bar-

gaining contract or agreement then in effect: Pro-

vided further, That the bargaining representative has

been given opportunity to be present at such adjust-

ment.

(ec) (1) Whenever a petition shall have been filed,

in accordance with such regulations as may be pre-

scribed by the Board—

(A) by an employee or group of employees or

any individual or labor organization acting in

their behalf alleging that a substantial number

of employees (i) wish to be represented for col-

lective bargaining and that their employer de-

Ja

clines to recognize their representative as the

representative defined in subsection (a) of this

section, or (ii) assert that the individual or

labor organization, which has been certified or is

being currently recognized by their employer as

the bargaining representative, is no longer a rep-

resentative as defined in subsection (a) of this

section ; or

(B) by an employer, alleging that one or more

individuals or labor organizations have presented

to him a claim to be recognized as the represent-

ative defined in subsection (a) of this section;

the Board shall investigate such petition and if it

has reasonable cause to believe that a question of

representation affecting commerce exists shall pro-

vide for an appropriate hearing upon due notice.

Such hearing may be conducted by an officer or em-

ployee of the regionai office, who shall not make any

recommendations with respect thereto. If the Board

finds upon the record of such hearing that such a

question of representation exists, it shall direct an

election by secret ballot and shall certify the results

thereof.