# Appendix — Deklewa v. National Labor Relations Board

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385019_2022%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 1988
- **Citation:** 488 U.S. 889

## Text

Pa
mone) Supreme Court, US.
88 oy 4 0 FILED
JUL LL 1988
JOSEPH F. SPANIOL, JR,
eeaemuaaed CLERK FER
No.
In the

Supreme Court of the Cited States

October Term, 1988

JOHN DEKLEWA, THEODORE DEKLEWA and
ROBERT DEKLEWA, d/b/a/ JOHN DEKLEWA &
SONS and/or JOHN DEKLEWA & SONS, INC.,

Petitioners,
v.
NATIONAL LABOR RELATIONS BOARD,
Respondent.

PETITION FoR WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

PETITIONERS’ APPENDIX

CHARLES R. VOLK
Counsel of Record

JOHN A. MCCREARY, JR.

VOLK, FRANKOVITCH, ANETAKIS,
RECHT, ROBERTSON & HELLERSTEDT

Three Gateway Center
15th Floor East
Pittsburgh, PA 15222
(412) 392-2300

Counsel for Petitioners

i
TABLE OF CONTENTS
Stipulation of Facts and Joint Motion

to Transfer Proceedings Directly
to the Board, April 30, 1984

ES ree

Opinion of the Court of Appeals,

Po ae a

Notice of Judgment by the

Court of Appeals, April 12, 1988 ........

Decision and Order of the National
Labor Relations Board, February 20, 1987

Page

la

UNITED STATES OF AMERICA
BEFORE THE
NATIONAL LABOR RELATIONS BOARD
REGION SIX

JOHN DEKLEWA, )
THEODORE DEKLEWA

AND ROBERT DEKLEWA, d/b/a
JOHN DEKLEWA & SONS and/or
JOHN DEKLEWA & SONS, INC.

and

INTERNATIONAL ASSOCIATION
OF BRIDGE, STRUCTURAL

AND ORNAMENTAL IRON
WORKERS, LOCAL 3, AFL-CIO

> Case 6-CA-16819

STIPULATION OF FACTS AND
JOINT MOTION TO TRANSFER PROCEEDING
DIRECTLY TO THE BOARD

COMES NOW John Deklewa, Theodore Deklewa and
Robert Deklewa d/b/a John Deklewa & Sons (herein called
Respondent Deklewa & Sons) and/or John Deklewa &
Sons, Inc., (herein called Respondent Deklewa, Inc.,)
International Association of Bridge, Structural and Orna-
mental Iron Workers, Local 3, AFL-CIO, (herein called the
Union,) and Counsel for the General Counsel, being aii the
parties to this proceeding, and hereby enter into this Stipu-
lation of Facts and jointly petition the Board, in order to
effectuate the purposes of the Act and to avoid unnecessary
costs and delay, to exercise its powers under Section
102.50 of the Rules and Regulations of the National Labor

2a

Relations Board, Series 8, as amended, and to transfer this
proceeding to the Board.

1. The parties agree that the charges, Complaint and
Notice of Hearing, Answer to Complaint, and this “Stipu-
lation of Facts” with attached exhibits, constitute the
entire record in this case, and that no oral testimony is
necessary or desired by any of the parties. The parties
further stipulate that they waive 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 a decision by an Administrative Law
Judge. The parties also stipulate and agree that they desire
to submit this case directly to the Board for findings of
fact, conclusions of law, and a decision and order. In the
event the Board grants this joint petition, the parties
request that the Board set a time for the filing of briefs.

2. Upon a charge filed by the Union on October 14,
1983, receipt of which is hereby acknowledged by Respon-
dent Deklewa & Sons and Respondent Deklewa, Inc. and
upon an amended charge filed by the Union on November
22, 1983, receipt of which is hereby acknowledged by
Respondent Deklewa & Sons and Respondent Deklewa,
Inc., the General Counsel of the National Labor Relations
Board (herein called the Board), by the Regional Director
for Region Six, acting pursuant to authority granted in
Section 10(b) of the National Labor Relations Act, as
amended, 29 U.S.C., Section 151, et seq., (herein called the
Act), and Section 102.15 of the Board’s Rules and Regula-
tions, Series 8, as amended, issued a Complaint against
Respondent Deklewa & Sons and Respondent Deklewa,
Inc. on November 28, 1983, together with a Notice of
Hearing thereon. True copies of the aforesaid Complaint
and Notice of Hearing were duly served by certified mail

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upon Respondent Deklewa & Sons and Respondent
Deklewa, Inc. and the Union on November 8, 1983. An
Answer to the aforesaid Complaint was duly served on the
Regional Director for Region Six and the Union’s desig-
nated representative on December 6, 1983. Upon a second
amended charge filed by the Union on March 8, 1984,
receipt of which is hereby acknowledged by Respondent
Deklewa & Sons and Respondent Deklewa, Inc., an
Amendment to Complaint issued against Respondent
Deklewa & Sons and Respondent Deklewa, Inc. True cop-
ies of the aforesaid Amendment to Complaint were duly
served by certified mail upon Respondent Deklewa & Sons
and Respondent Deklewa, Inc. and the Union on March 9,
1984. [Exhibits identified here have not been included in
this Appendix].

3. (a) At all times material herein, Respondent
Deklewa, Inc., a Pennsylvania corporation, with an office
and place of business at 1273 Washington Pike, P.O. Box
158, Bridgeville, Pennsylvania, has been engaged in the
business of heavy construction, and, in this regard,
Respondent Deklewa, Inc. has been, and is party to,
collective-bargaining agreements with labor organizations
other than the Union, including the Heavy Engineering,
Railroad Contracting, Heavy Construction and Utilities
Construction Agreement with the Laborers’ District Coun-
cil of Western Pennsylvania.

(b) At all times material herein, Respondent
Deklewa & Sons, a partnership, with an office and place of
business located at 1273 Washington Pike, P.O. Box 158,
Bridgeville, Pennsylvania, has been engaged in the busi-
ness of construction of commercial and industrial build-
ings and has been in signed agreement with various labor

4a

organizations which represents various crafts involved in
building construction.

(c) During the 12-month period ending October 31,
1983, Respondent Deklewa, Inc., in the course and con-
duct of its business operations described above in para-
graph 2(a), purchased and received at its Bridgeville, Penn-
sylvania, facility, products, goods and materials valued in
excess of $50,000 directly from points outside the Com-
monwealth of Pennsylvania.

(d) During the 12-month period ending October 31,
1983, Respondent Deklewa & Sons, in the course and con-
duct of its business operations described above in para-
graph 2(b), purchased and received at its Bridgeville, Penn-
sylvania, facility, products, goods and materials valued in
excess of $50,000 directly from points outside the Com-
monwealth of Pennsylvania.

4. (a) At all times material herein, Respondent
Deklewa, Inc. and Respondent Deklewa & Sons have been
affiliated business enterprises with interrelated officers,
ownership, directors, management and supervision, have
jointly formulated and administered labor policy affecting
employees of said operations, have shared common prem-
ises and facilities, have provided services for, and made
sales to, each other, have interchanged personnel with each
other and have held themselves out to the public as a
single integrated business enterprise. The above single inte-
grated business enterprise was not established as, and does
not constitute, a “double-breasted” operation. Respondent
Deklewa, Inc. was established in 1983 for financial pur-
poses and not to avoid any collective-bargaining obliga-
tion. However, Respondent Deklewa, Inc. at all times
material herein has engaged only in heavy construction

Sa

while Respondent Deklewa & Sons has engaged only in
building construction.

(b) By virtue of the operations described above in
subparagraph 4(a), Respondent Deklewa, Inc. and Respon-
dent Deklewa & Sons, herein collectively called Respon-
dent, are now, and have been at all times material herein, a
single employer within the meaning of the Act.

5. (a) Respondent Deklewa, Inc. is now, and has been,
at all times material herein, an employer engaged in com-
merce within the meaning of Section 2(2), (6) and (7) of the
Act.

(b) Respondent Deklewa & Sons is now, and has
been, at all times material herein, an employer engaged in
commerce within the meaning of Section 2(2), (6) and (7)
of the Act.

6. The Charging Party is now, and has been at all
times material herein, a labor organization within the
meaning of Section 2(5) of the Act.

7. At all times material herein, the following named
persons occupied the positions set forth opposite their
respective names and are now, and have been at all times
material herein, supervisors of respective Respondents, as
well as Respondent within the meaning of Section 2(11) of
the Act and agents of respective Respondents, as well as
Respondent within the meaning of Section 2(13) of the
Act.

6a

John Deklewa —President Respondent Deklewa,
Inc. and Partner, Deklewa &
Sons

Theodore Deklewa—Vice President and Treasurer,
Respondent Deklewa, Inc. and
Partner, Deklewa & Sons

Robert Deklewa —Vice President and Secretary,
Respondent Deklewa, Inc. and
Partner, Deklewa & Sons

8. The Iron Workers Employer Association of West-
ern Pennsylvania, Inc., herein called the Association, has
been an organization composed of employers engaged in
the construction industry, and which exists for the Pur-
pose, inter alia, of representing its employer-members in
negotiating and administering collective-bargaining agree-
ments with the International Association of Bridge, Struc-
tural and Ornamental Iron Workers, Local No. 3, AFL-
CIO.

9. The Association and the Union have been parties to
successive collective-bargaining agreements, referred to as
the Iron Workers Agreement, for at least the past 30 years,
the most recent of which is effective June |, 1982 through
May 31, 1985, for all employees in the classifications
described in Section 2 of said Agreement. The current Iren
Worker Agreement is attached hereto as Exhibit 2. [No
Exhibits have been included in this Appendix].

10. A copy of the current by-laws of the Association is
attached hereto as Exhibit 3.

11. The membership roster of the Association as of
March 1983, is attached hereto as Exhibit 4.

7a

12. On June 24, 1960, Respondent John Deklewa &
Sons entered into a pre-hire agreement with the Union,
wherein the Respondent agreed to be bound by the provi-
sions of the Iron Worker Agreement. A copy of the above-
described pre-hire agreement is attached hereto as Exhibit
ae

13. During the period June 24, 1960, through October
|, 1980, Respondent Deklewa & Sons, as a separate entity
and not by virtue of any membership in the Association,
executed the successive Iron Worker Agreements including
the Agreement effective June 1, 1979 through May 31,
1982, and with respect to those construction projects
wherein it directly employed employees in classifications
described in the respective Iron Worker Agreement, relied
exclusively upon the auspices of the Union’s hiring hall as
the sole source of its workforce and which workforce was
comprised of actual members of the Union as their chosen
collective bargaining representative. On the projects in
question during the aforementioned period the Respon-
dent Deklewa & Sons adhered to the terms of the then
current Iron Worker Agreement, including inter alia, pay-
ing the union wage scale to its iron worker unit employees
and making contributions to the various benefit funds as
required by the labor agreements. An analysis of appropri-
ate records reveal that during this period, Respondent did
not regularly move its iron worker unit employees from
job to job, and that a majority of said employees were
hired on a jobsite-to-jobsite basis. On many of the projects
engaged in by Respondent during this period, Respondent
did not directly hire iron workers but used subcontractors
signatory to the Iron Worker Agreement.

14. On June 1, 1980, Respondent Deklewa & Sons
filed an application for membership in the Association,

———«2,

8a

which application was shortly thereafter, upon action by
the Association’s Board of Directors, accepted by the Asso-
ciation. A copy of the aforementioned Application for
Membership is attached hereto as Exhibit 6.

15. On January 16, 1981, Respondent Deklewa &
Sons executed the Association’s Designation of Bargaining

Agent Agreement, a copy of which is attached hereto as
Exhibit 7.

16. During the period June 1, 1980, through May 31,
1982, Respondent Deklewa & Sons continued, with respect
to those construction projects wherein it directly employed
employees in the classification described in the 1979-1982
Iron Workers Agreement, to rely upon the auspices of the
Union’s hiring hall as the source of its workforce and
which workforce was comprised of actual members of the
Union or employees who voluntarily adopted the Union as
their chosen collective-bargaining representative. An anal-
ysis of appropriate records reveals that a majority of said
employees were employed on a jobsite-to-jobsite basis but
that on each jobsite the Union was the majority represen-
tative of Respondent’s iron worker unit employees.

17. Pursuant to Respondent John Deklewa & Son’s |
Designation of Bargaining Agent Agreement, the Associa-
tion negotiated the 1982-1985 Iron Worker Agreement on
behalf of Respondent and other members of the Associa-
tion, and by virtue of its membership in the Association,
Respondent agreed to be bound to the terms of the 1982-
1985 Iron Worker Agreement. Respondent executed the t
1982-1985 Iron Worker Agreement.

18. In the course of bargaining for the 1982-1985 Iron
Worker Agreement, the Association notified the Union of
the members, including Respondent to be bound by the

lla

exclusively referred to the jobsite under the auspices of the
Union’s hiring hall and all employees employed in the
classification were members of the Union. An analysis of
the records reveal that out of the total number of iron
worker unit emplyees directly employed in the above
projects there was no continuity of workforce from job to
job on a regular basis involving a numerical majority of
employees engaged in unit work as set forth in Section 2 of
the Iron Workers Agreement. The U.S. Air Project, which
was completed in April, 1983, was the last project in which
Respondent directly employed employees in the classifica-
tion of the Iron Workers Agreement.

21. On September 21, 1983, Respondent in writing,
advised the Association that it resigned its membership in
the Association. Said resignation was made pursuant to
Section 11(a) of the Association’s By-laws and was made
90 days prior to either (1) the date of notice of renewal,
modification, termination or change of any collective-
bargaining agreement to which the member is bound, or
(2) the date agreed upon between the Association and any
labor organization for commencement of multi-employer
collective-bargaining negotiations for the renewal, modifi-
cation, termination, or change of any such agreement to
which the member is bound. On the date Respondent
advised the Association of its resignation, Respondent had
no Outstanding dues, assessments or other monetary obli-
gations to the Association. The Association has not
opposed Respondent’s resignation from the Association
but the Association considers Respondent bound to the
terms of the 1982-1985 Iron Worker Agreement.

22. By letter dated September 21, 1983, a copy of
which is attached hereto as Exhibit 8, Respondent notified

12a

the Union that it was repudiating the Iron Workers Agree-
ment (Exhibit 2) and withdrawing recognition from the
Union.

23. On September 21, 1983, Respondent was not
engaged in any construction projects wherein it directly
employed employees in classifications set forth in Section
2 of the 1982-1985 Iron Workers Agreement, and since
that date, Respondent has not engaged in any construction
projects wherein it has directly employed employees in the
classifications set forth in Section 2 of the 1982-1985 Iron
Workers Agreement.

24. By letter dated September 27, 1983, a copy of
which is attached hereto as Exhibit 9, the Union advised
Respondent that it objected to Respondent’s resignation
from the Association as the basis for its repudiation of the
1982-1985 Iron Workers Agreement and its withdrawal of
recognition from the Union. By letter dated October 4,
1983, a copy of which is attached hereto as Exhibit 10,
Respondent reaffirmed its position that it was free to repu-
diate the 1982-1985 Iron Workers Agreement.

25. On September 30, 1983, the Union filed a griev-
ance with the Association, Grievance No. U108327C,
alleging that Respondent violated Section 47—Subcon-
tracting—of the 1982-1985 Iron Workers Agreement with
respect to Respondent’s project known as the Chippewa
Township Water and Sewage Treatment Authority job
which was started September 7, 1983, and was completed
on December 14, 1983. With respect to this job, Respon-
dent did not directly employ any employees in the classifi-
cations set forth in Section 2 of the 1982-1985 Iron Work-
ers Agreement but rather subcontracted this work of tieing
reinforcing rods to another employer, who was in signed
agreement with the Laborers Union for that type of work.

13a

By letter dated October 3, 1983, a copy of which is
attached hereto as Exhibit 11, the Association advised
Respondent of the filing of the grievance by the Union and
of what it believed was Respondent’s obligations pursuant
to the relevant grievance arbitration procedures of the Iron
Workers Agreement. To date, Respondent by virtue of
resignation from the Association and its repudiation of the
1982-1985 Iron Workers Agreement, has taken the posi-
tion that the dispute is not arbitrable. Further action on
the grievance has been held in abeyance pending the out-
come of this case.

14a

26. This Stipulation of Facts is made without
prejudice to any objection that any party may have as to
the materiality or relevancy of any facts stated herein.

Lk Se oe ee |

JOHN DEKLEWA, SR.
AND JOHN DEKLEWA,
JR., d/b/a JOHN
DEKLEWA & SONS and/
or JOHN DEKLEWA &
SONS, INC.

By CHARLES R. VOLK, attorney

(Name and Title)

1 RIVERFRONT CENTER

(Street)

PITTSBURGH, PA 15222

cS BE Re a rr a ae er ay ie

Date

INTERNATIONAL
ASSOCIATION OF
BRIDGE, STRUCTURAL
AND ORNAMENTAL
IRON WORKERS,
LOCAL 3, AFL-CIO

a ae we ee ae es a eS ie ie a ee ge Oe

(Name and Title)
1708 Law & FINANCE BLDG.

(City and State)

Counsel for the General Counsel
National Labor Relations Board, Region Six
1501 William S. Moorhead Federal Building

1000 Liberty Avenue

Pittsburgh, Pennsylvania 15222

15a

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 87-3121

INTERNATIONAL ASSOCIATION OF BRIDGE,
STRUCTURAL AND ORNAMENTAL IRON
WORKERS, LOCAL 3,

Petitioner
Vv.

NATIONAL LABOR RELATIONS BOARD,

Respondent

John Deklewa, Theodore Deklewa and Robert Deklewa,
d/b/a John Deklewa & Sons and/or John Deklewa &
Sons, Inc.,

Intervenors

No. 87-3192

JOHN DEKLEWA, THEODORE DEKLEWA and
ROBERT DEKLEWA, d/b/a JOHN DEKLEWA &
SONS and/or JOHN DEKLEWA & SONS, INC.,

Petitioners
Vv.
NATIONAL LABOR RELATIONS BOARD,

Respondent

INTERNATIONAL ASSOCIATION OF BRIDGE,
STRUCTURAL AND ORNAMENTAL IRON
WORKERS LOCAL 3,

Intervenor

l6a

No. 87-3231

JOHN DEKLEWA, THEODORE DEKLEWA and
ROBERT DEKLEWA, d/b/a JOHN DEKLEWA &
SONS and/or JOHN DEKLEWA & SONS, INC.,

Respondent

Vi

NATIONAL LABOR RELATIONS BOARD,

Petitioner

INTERNATIONAL ASSOCIATION OF BRIDGE,
STRUCTURAL AND ORNAMENTAL IRON
WORKERS, LOCAL 3,

Intervenor

On Petition for Review from
National Labor Relations Board
Board Nos. 6-CA-16819 and 6-CA-16819(1)

Argued Wednesday October 21, 1987

BEFORE: HIGGINBOTHAM, SCIRICA
and GARTH, Circuit Judges

(Opinion filed April 12, 1988)

STANFORD A. SEGAL

GATZ, COHEN, SEGAL & KOERNER, P.A.
1708 Law & Finance Building
Pittsburgh, Pennsylvania 15219

17a

LAURENCE COHEN
ROBERT KURNICK
SHERMAN, DUNN, COHEN,
LIEFER & COUNTS, P.C.
1125 15th Street, N.W., Suite 801
Washington, D.C. 20005

LAURENCE GOLD (ARGUED)
DavipD SILBERMAN

815 16th Street, N.W.
Washington, D.C. 20006

Victor VAN BouRG

VAN BOURG, WEINBERG, ROGER &
ROSENFIELD

875 Battery Street - Third Floor

San Francisco, California 94111

Attorneys for Appellant/Petitioner
Local 3, International Association of
Bridge, Structural and Ornamental
Iron Workers

CHARLES R. VOLK (ARGUED)

JOHN A. McCreary, JR.

VOLK, FRANKOVITCH, ANETAKIS,
RECHT ROBERTSON & HELLERSTEDT

Three Gateway Center

15th Floor East

Pittsburgh, Pennsylvania 15222

Attorneys for Appellant/Petitioner
John Deklewa & Sons, et al.

18a

ROSEMARY M. COLLYER,

General Counsel
JOHN E. Hiaains, Jr.,

Deputy General Counsel!
Rosert E. ALLEN,

Associate General Counsel
ELtiott Moore,

Deputy Associate General Counsel
JOHN H. FERGUSON,

Deputy Assistant General Counsel
LINDA DREEBEN,

Supervisory Attorney
Patrick J. SzyMANsK! (Argued)
1717 Pennsylvania Avenue, N.W.
Washington, D.C. 20570

Attorney for Appellee/Respondent
National Labor Relations Board

CHARLES E. MURPHY
PHILIP A. MISCIMARRA
RONALD TURNER
MURPHY, SMITH & POLK
Two First National Plaza
Twenty-Fourth Floor
Chicago, Illinois 60603

Attorneys for Amicus Curiae
Associated General Contractors of
America

GERARD C. SMETANA

RUBERRY, PHARES, ABRAMSON & FOX
One East Wacker Drive

Chicago, Illinois 60601

Attorneys for Amicus Curiae

Council on Labor Law Equality

19a

Epwin Vieira, Jr.

Rossit D. ALSTON, Jr.

8001 Braddock Road, Suite 600
Springfield, Virginia 22160

Attorneys for Amicus Curiae
National Right to
Work Legal Defense Foundation

20a

OPINION OF THE COURT

GARTH, Circuit Judge:

On this appeal, the Union (Local 3, International
Association of Bridge, Structural and Ornamental Iron-
workers) and the Company (John Deklewa & Sons) seek
review of an order entered by the National Labor Rela-
tions Board (“Board”) on February 20, 1987.' That order,
which overturned an earlier rule (the R.J. Smith rule?
promulgated by the board, held that: (1) pre-hire agree-
ments sanctioned under § 8(f) of the National Labor Kela-
tions Act (“the Act”), 29 U.S.C. § 158(f), are not voidable
at will; (2) that the employer, John Deklewa & Sons
(“Deklewa” or “the Company”) committed an unfair labor
practice in violation of § 8(a)(5) of the Act, 29 U.S.C.
158(a\(S), when it repudiated its pre-hire agreement with
the International Association of Bridge Structural and
Ornamental Iron Workers, Local 3, AFL-CIO (“the
Union”); (3) that Deklewa’s obligation to bargain with the
Union, because it was based on the pre-hire agreement,
expired with that agreement; and (4) that these holdings
should be applied retroactively. The Board has cross-
petitioned for enforcement of its February 20, 1987 order.

Both the Union and the Company in petitioning for
review of the Board’s order challenge different features of
the Board’s rulling. Deklewa contends that the Board erred
in finding that pre-hire agreements were not unilateraly
voidable. The Union, while agreeing with the Board that
pre-hire agreements should not be unilaterally voidable,

'The Board's decision is reported at 282 NLRB No. 184, 124
LRRM 1190 (1987).

See R. J. Smith Construction Co., 191 NLRB 693 (1971), enforce-
ment denied sub nom. Operating Engineers Locai 150 v. NLRB, 480
F.2d 1186 (D. C. Cir. 1973).

2la

claims the Board erred in holding that an employer's duty
to bargain with the Union terminates upon the expiration
date of the pre-hire agreement.

Deklewa is engaged in the construction business. In
June 1960, although not a member of the Ironworker
Employers Association of Western Pennsylvania (the
“Association”), Deklewa agreed to be bound by the agree-
ment between the Association and the Ironworkers Union.
Deklewa adhered to each successive agreement between
the Association and the Union, for a twenty year period
between June 24, 1960 and October 1, 1980. In October
1980, Deklewa joined the Association as a member. The
pre-hire agreement in dispute covered the years 1982 to
1985.

Deklewa has engaged in a number of projects which
required ironworkers. When it performed the work itself.
Deklewa hired inronworkers through the union hiring hall.
When Deklewa engaged subcontractors, it subcontracted
only to companies bound by the same union agreement. In
September 1983, during the term of the 1982-1985 agree-
ment, Deklewa resigned from the Association and notified
the Union that it was repudiating the agreement. Deklewa
then subcontracted iron work to an employer who-was not
a party to the Union agreement. On October 14, 1983, the
Union filed the instant unfair labor practice charge.

The Board agreed to hear the case based on a stipu-
lated set of facts. As we have noted, the Board, in a ruling
which reversed its prior construction of the Act, held that
Deklewa had violated § 8(a)(5) of the Act by unilaterally
repudiating the 1982-1985 agreement, but further held that
after the agreement had expired in 1985, Deklewa was not

22a

obligated to bargain with the Union. The board also held
that its decision would apply to Deklewa’s case and to all
cases then pending as well as all cases in the future.

The Board based its decision on a detailed examina-
tion of the legislative history of the Act and in particular
§ 8(f). In order to understand the Board’s order and to
provide the context in which to analyze its decision, we
too, turn to the legislative history of § 8(f).

Il.
A.

Section 9(a) of the Act, 29 U.S.C. § 159(a) provides
that “a representative ... designated or selected for the
purposes of collective bargaining by the majority of the
employees in a unit... shall be the exclusive representa-
tive of all the employees in such unit for the purposes of
collective bargaining...” Section 8(a)(5) of the Act
imposes upon an employer whose employees “designate or
select” an exclusive representative, the “duty to bargain
collectively with the representative of his employees.” 29
U.S.C. § 158(a)(5). The Act does not provide for the
method by which the employees choose their representa-
tive. However, employees may compel recognition of their
designated union representative as their exclusive bargain-
ing agent by prevailing in an election and by certification
of the union by the NLRB. 29 U.S.C. § 159(b),(c).

The majority status of a union as the exclusive repre-
sentative of the employees, once established, is irrebut-
tably presumed for a reasonable period of time.’ Upon the
expiration of a collective bargaining agreement, the

3See Brooks v. NLRB, 348 U.S. 96 (1954); Toltec Metals, Inc., v.
NLRB, 490 F.2d 1122 (3d Cir. 1974).

23a

employer may not withdraw recognition of the union uni-
lateraly unless it has reasonable, good faith grounds for
believing that the union has lost its majority status. NLRB
v. Gissel Packing Co., 395 U.S. 575, 597 n.11 (1969);
NLRB y. Leatherwood Drilling Co., 513 F.2d 270 (Sth
Cir.), cert. denied, 423 U.S. 1016 (1975); NLRB vy. Frick
and Co., 423 F.2d 1327, 1331 (3d Cir. 1970).

As is apparent from the statute and the case law con-
struing it, the Act assumes that a stable group of employees
who are capable of designating a union representative or
participating in a certification election are employed by
management in a continuing work relationship.* This
assumption works well for employer-employee relations in
manufacturing and in many other fields of endeavor; it
does not work well in the construction field. In the con-
struction industry, work typically varies by the season and
the size of the project. Workers do not usually remain at a
single job site long enough to designate a union representa-
tive. Moreover, because of the mobility of the construction
industry workforce, elections and Board certification many
times prove impracticable.

As a consequence, this situation presented problems
for both management and its employees. The employers
sought accurate estimates of their labor costs when they
bid on projects.’ Having a guaranteed union contract was
virtually a sine qua non toward meeting this goal. On the
other hand, employees in the construction industry desired
all the benefits of union reprsentation that were available

+See generally, Fall River Dyeing § Finishing Corp. v. NLRB, 107
S. Ct. 2225, 2238 n.15 (1987)

‘See S. Rep. No. 187, 86th Cong., Ist Sess. 28 (1959), reprinted in |
Legislative History of the Labor-Management Reporting and Disclosure
Act of 1959, at 424 (G.P.O. 1959) (“Leg. History”).

24a

to workers in other fields.* In an attempt to satisfy both of
these interests, a pre-hire agreement practice developed in
the construction industry. A pre-hire agreement is a con-
tract agreed to by an employer and a union before the
workers to be covered by the contract have been hired.
Roberts’ Dictionary of Industrial Relations, Third Edition
562 (1986). See also 29 U.S.C. 158(f).

With respect to industries other than the construction
industry, the Board had determined that pre-hire agree-
ments were illegal because they designated an exclusive
union representative of the eraployees before an election
had been held and before the union’s majority status had
been tested. Thus, when the Board assumed jurisdiction
over the construction industry,’ it was required to address
the day to day practices of an industry whose oeprations
violated the Act as interpreted and administered by the
Board. Accordingly, the Board applied the general prohibi-
tion against pre-hire agreements to the construction indus-
try and suggested that the industry petition Congress for an
exception. See generally NLRB y. Irvin, 475 F.2d 1265,
1267 (3d Cir. 1973) Daniel Hamm Drayage Co., Inc., 84
NLRB 458, 460 (1949) enfd 185 F.2d 1020 (Sth Cir. 1951).

B.

Thus begin an eight year effort which culminated in a
number of amendments, including the addition of § 8(f), to
the NLRA in 1959. It provides:

It shall not be an unfair labor practice . . . for an
employer engaged primarily in the building and con-
struction industry to make an agreement covering

S/d.
’Ozark Dam Contractors, 77 NLRB 1136 (1948): Carpenters Local
74 (Watson's Specialty), 80 NLRB 533 (1948).

25a

employees engaged (or who, upon their employment,
will be engaged) in the building and construction
industry with a labor organization of which building
and construction industry employees are mem-
bers... because (1) the majority status of such labor
organization has not been established under the provi-
sions of section 9 of the Act prior to the making of
such agreement... Provided...That any [such]
agreement shall not be a bar to a petition [for a repre-
sentation election] filed pursuant to section 9(c)....

29 U.S.C. 158(f)

Other subsections of 8(f) which we have not quoted,
allow construction industry pre-hire agreements to contain
unin security Clauses; exclusive hiring hall provisions; and
job referral requirements. At the same time as § 8(f) was
enacted, Congress also added 8(b)(7)(C) which, inter alia,
prevents a union from picketing in order to force an
employer to sign a prehire agreement.

Some of the effects of these statutory changes are
clear—employers and unions in the construction industry
are permitted to enter into pre-hire agreements which des-
ignate the union as the exclusive representative of a com-
pany’s employees without a formal election, and the
employees, now union members, may at any time vote to
decertify the union as their exclusive representative utiliz-
ing the formal Board procedures. Two issues, however,
were not resolved by § 8(f): (1) whether during its term a
§ 8(f) agreement is as binding and enforceable as any other
union agreement, and (2) whether a § 8(f) agreement
requires an employer’to bargain with the union as the
employees’ “exclusive representative” after the pre-hire
agreement has expired.

26a

In the typical employer union context, the employer is
bound to bargain with the exclusive representative even
after the contract has expired. In such as case, recognition
of the union can only be withdrawn if the employer has a
reasonable, good faith elief that the union does not
represent a majority of the employees. NLRB v. Gissel
Packing Co., 395 U.S. 575, 597 n.11 (1969); NLRB v.
Leatherwood Drilling Co., 513 F.2d 270 (Sth Cir.), cert.
denied, 423 U.S. 1016 (1975); NLRB y. Frick and Co., 423
F.2d 1327, 1331 (3d Cir. 1970). After the expiration of a
collective bargaining agreement both parties, the employer
and the union, are not free from the strictures of the agree-
ment until an “impasse” in negotiations is reached. See
generally, N.L.R.B. v. Katz, 369 U.S. 736 (1962); Taft
Broadcasting Co. v. AFTRA, 163 NLRB 475 (1967). The
employer is then free to impose terms on the employees,
and the employees in turn, may then picket, strike or exert
other forms of pressure.

In R.J. Smith Construction Co., 191 NLRB 693
(1971), enf. denied sub nom. Local No. 150, International
Union of Operating Engineers v. NLRB, 480 F.2d 1186
(D.C. Cir. 1973), and Ruttman Construction Co., 191
NLRB 701 (1971), the Board interpreted § 8(f) to mean
that a “pre-hire agreement is merely a preliminary step
that contemplates further action for the development of a
full bargaining relationship.” Ruttmann, 191 NLRB at
702. The Board held that until that “‘further action”
occurred, either party was free to repudiate the agreement.

Ruttmann followed the rule which the Board had
announced in R.J. Smith explaining:

Congress enacted Section 8(f) of the Act in recognition
of special conditions that existed in the construction
industry. These special conditions included the fact

27a

that employers not only needed an assurance that
skilled labor would be available but needed a basis for
estimating labor costs in bidding on construction con-
tracts. Employees, on the other hand, were often
denied the benefits of union representation because of
the temporary and sporadic nature of their employ-
ment. It is clear, however, that in enacting Section 8(f)
to assist in resolving such problems, Congress merely
permitted parties to enter into such pre-hire agree-
ments without violating the Act. It does not mean that
a failure to abide by such an agreement is automati-
cally a refusal to bargain. In essence, therefore, this
pre-hire agreement is merely a preliminary step that
contemplates further action or the development of a
full bargaining relationship: such actions may include
the execution of a supplemental agreement for certain
projects or covering a certain area and the hiring of
employees who are usually referred by the union or
unions with whom there is a pre-hire agreement.

Ruttmann, 191 NLRB at 702, 77 LRRM at 1498 (footnote
omitted).

The R.J. Smith rule was rejected by the D.C. Circuit
when that court denied enforcement in Local No. 150
International Union of Operating Engineers v. NLRB, 480
F.2d 1186 (D.C. Cir. 1973) denying enforcement of R.J.
Smith Construction Co., 191 NLRB 693 (1971). However,
despite the rejection of the R.J. Smith rule in Local 150,
the Board continued to adhere to the R.J. Smith pre-hire
doctrine. Hence, it was not surprising that some three
years after Local 150 had been decided, the same issue
surfaced in the same circuit in Local Union 103 Interna-
tional Association of Bridge Structural Ornamental Iron
Workers v. NLRB 535 F.2d 87 (D.C. Circuit 1976). As
could be anticipated, the Local 103 court followed the

28a.

precedent announced in Local 150 and once again rejected
the R.J. Smith rule. The Local 103 ruling, however, was
reversed by the Supreme Court in NLRB vy. Local 103,
International Association of Bridge and Ornamental Iron
Workers (Higdon Construction Co.), 434 U.S. 335, 341
(1978).

In Higdon, the Supreme Court reviewed and upheld
the Board’s R.J. Smith rule concluding “that the Board’s
construction of the Act, although perhaps not the only
tenable one, is an acceptable reading of the statutory lan-
guage and a reasonable implementation of the purposes of
the relevant statutory sections.” /d. at 341.

Subsequent case law developed a complex, fact-
specific analysis for determining what types of further
actions would “convert” a § 8(f) pre-hire agreement into a
full bargaining relationship under § 9(a). The complexities
of the conversion analysis led to what the Board termed in
its present Deklewa ruling “fractious litigation.” 282
NLRB at ___., 124 LRRM at 1193. To forestall such liti-
gation, the Board undertook a reconsideration of the R.J.
Smith rule. Its reconsideration resulted inthe interpreta-
tion of § 8(f) which the Board seeks to enforce today by its
cross-application.

Ill.
A.

In the instant case, the employer, Deklewa, unilater-
ally repudiated its pre-hire agreement with the Union. The
Union then filed an unfair labor practice charge with the
Board, asserting that Deklewa was not free to repudiate its
agreement. The Union’s unfair labor practice charge
against Deklewa became the vehicle for the Board’s recon-
sideration of the R.J. Smith rule. The Board ultimately

29a

concluded that the R./J. Smith rule had proved inadequate,
and that in practice the rule served to defeat the very
interests that the Act and § 8(f) were designed to protect.

The Board then fashioned a new interpretation of
§ 8(f) which sought to accommodate both employers’ and
employees’ interests. In response to the construction
industry employees’ concerns, that R.J. Smith permitted
management to void pre-hire agreements at will, the Board
held that § 8(f) agreements were no longer unilaterally
voidable, and that until expiration they would be enforced
by the Board. The Board also responded to construction
industry employers’ complaints that the “conversion doc-
trine’’, by which a pre-hire agreement is converted into a
standard collective bargaining agreement, effectively oper-
ated to force them, unlike all other employers, to bargain
with a union whose majority status had never been estab-
lished. The Board in its present order, which we review
here, abandoned the “conversion doctrine,” and held that
§ 8(f) pre-hire agreements were only enforceable during the
term of the agreement and could not be converted into
traditional collective bargaining agreements with lingering
rights and obligations absent an election and certification.

With respect to the specific case before it, the Board
ordered Deklewa to make whole any employees that may
have suffered losses as a result of Deklewa’s failure to
adhere to the pre-hire agreement until the expiration of the
agreement in 1985. However, the Board declined to extend
this make whole remedy beyond the expiration of the
agreement. Thus, Deklewa was not held responsible for
any losses which may have occured after the pre-hire
agreement’s expiration date. Not surprisingly, both
Deklewa and the Union have challenged this decision and
have petitioned for review.

30a
B.

In reviewing the Board’s interpretation of the Act, this
court must determine if the Board’s interpretation is rea-
sonable. Slaughter v. NLRB, 794 F.2d 120 (3d Cir. 1986).
Only “{i]nterpretations of the Act that are inconsistent
with the statutory mandate, that frustrate the congressional
policy, or that rest on an erroneous legal foundation” must
be set aside. Jd. at 125.

Given the deferential standard of review afforded the
Board’s interpretation of the Act, both Deklewa and the
Union face a heavy burden unless as Deklewa at least
claims, our established standard has given way to a defini-
tive and independent interpretation of § 8(f) by the
Supreme Court and is thus inapplicable in this proceeding.
Deklewa argues that in two decisions interpreting § 8(f),
NLRB v. Ironworkers Local 103 (Higdon Construction
Co.), 434 U.S. 335 (1978) and Jim McNeff, Inc. v. Todd,
461 U.S. 260 (1983), the Supreme Court adopted the
Board’s construction as expressed in R.J. Smith as its own.
Deklewa then contends that the Board is bound by the
standard announced in those rulings.

Deklewa’s argument is flawed. In neither case has the
Supreme Court adopted the Board’s R.J. Smith interpreta-
tion of § 8(f) as definitive and binding. Indeed in Higdon,
as we have previously observed, the Supreme Court
expressly noted that:

We have concluded that the Board’s construction of
the Act, although perhaps not the only tenable one, is
an acceptable reading of the statutory language and a
reasonable implementation of the purposes of the rele-
vant statutory provisions.

3la

434 U.S. at 341. The Supreme Court thus made clear that
it was merely reviewing the Board’s interpretation of § 8(f)
and not substituting its own judgment or prescribing its
own interpretation of the statute:

The Board’s resolution of the conflicting claims in
this case represents a defensible construction of the
statute and is entitled to considerable deference.
Courts may prefer a different application of the rele-
vant sections, but “[t]he function of striking that bal-
ance to effectuate national labor policy is often a diffi-
cult and delicate responsibility, which the Congress
committed primarily to the National Labor Relations
Board, subject to limited judicial review.” NLRB vy.
Truck Drivers, 353 U.S. 87,96 (1957); NLRB v. Insur-
ance Agents, 361 U.S. 477, 499 (1960). Of course, “rec-
ognition of the appropriate sphere of the administra-
tive power... obviously cannot exclude all judicial
review of the Board’s actions” Jbid....In American
Ship Building Co. v. NLRB, 380 U.S. 300, 318 (1965),
the Court was “unable to find that any fair construc-
tion of the provisions relied upon by the Board... can
support its finding of an unfair labor practice. . . [T]he
role assumed by the Board... [was] fundamentally
inconsistent with the structure of the Act and the func-
tion of the sections relied upon.’ As we have
explained, this is not the case here.

434 USS. at 350.

While McNeff is not as explicit as Higdon in making
clear that the Supreme Court was merely reviewing the
Board’s interpretation and not establishing one of its own,
nowhere in the McNeff opinion does the Court hold that
the statute requires § 8(f) agreements to be voidable. Fur-
thermore, McNeff relies very heavily upon Higdon which
did make clear that the Court was doing no more than

32a

holding that the Board’s reading of the act was reasonable.
In addition, the issue of repudiation was not before the
Court in McNeff, as the parties in the McNeff case were
litigating over monies allegedly due pursuant to a contract
that had not been repudiated.

Having rejected Deklewa’s argument that the Supreme
Court has adopted the R.J. Smith rule as its own, our task
now requires us to review the Board’s new § 8(f) interpreta-
tion to determine if it is reasonable and consistent with the
Board's statutory mandate. We are mindful in so doing
that while the Board’s earlier interpretation of § 8(f) was
sustained as reasonable by the Supreme Court (Higdon,
434 U.S. at 350), that interpretation did not preclude the
Board from fashioning a more effective rule, once it deter-
mined that its earlier R.J. Smith rule was not serving its
designed purpose. As decisional law has made clear, it is
not the function of the courts to interpret § 8(f), nor is any
initial interpretation of one act made by the Board to be
deemed “frozen in concrete.” See Mosey Manufacturing
Co., Inc. v. NLRB, 701 F.2d 610, 612 (7th Cir. 1983) (dis-
cussing changes by the Board in various election rulings).
Rather, our function as a reviewing court is to determine
the reasonableness of the present reading of § 8(f), regard-
less of any earlier pronouncement made by the Board.

In fulfilling that function, we are fortunate here in
having the benefit of the Board’s explanation of its earlier
adoption of the R.J. Smith doctrine; its extensive reasons
for overruling that doctrine; and its persuasive analysis of
Congress’ intent and objectives which has now led the
Board to restructure its § 8(f) interpretation. 282 NLBR at
__., 124 LRRM at 1190-93. Because we are obliged to
refer to both the R.J. Smith rule adopted by an earlier
Board and the Dek/ewa rule adopted by the present Board

33a

we will identify the particular Board by reference to either
the “R.J. Smith Board” or the “Deklewa Board.”

IV.

The Deklewa Board characterized the R.J. Smith
Board’s action as follows:

Past consideration of 8(f)'s statutory language and
legislative history has been brief. In R.J. Smith, the
Board merely recited the aforementioned congres-
sional language recognizing the contempory contrac-
tual practice in the construction industry and the rea-
sons for that practice. Then, after quoting Section 8(f)
in full, the Board summarily identified the second pro-
viso as the linchpin to interpreting the entire section
and concluded that the proviso must have meant that
Congress intended to permit testing an 8(f) signatory
union’s majority status during a contract term either
by election or by litigation of refusal to bargain
charges.

282 NLRB at __., 124 LRRM at 1190.* The Deklewa
Board in its re-examination of § 8(f) identified a number of
significant problems with the earlier rule announced by the
R.J. Smith Board. The Deklewa Board noted that there is
no support in the legislative history or the language of the
statute for the interpretation of § 8(f) that the R.J. Smith
Board declared. More specifically, the Deklewa Board con-
cluded that there is no support in the legislative history or
the text of the act for allowing either party to unilaterally
repudiate a § 8(f) agreement. The Dek/ewa Board observed

*The relevant text of § 8(f) has been reproduced in Section IIB. of
this opinion. The second proviso of § 8(f) permits a representation
election, pursuant to § 9c) of the Act, to take place during the pendency
of a pre-hire agreement.

34a

“if the legislative history and statutory lan-
guage ... indicate anything, it is an intent by Congress to
legitimate and make enforceable the array of construction
industry bargaining, referral, hiring, and employment prac-
tices that the Board previously found to be unlawful, and
thus unenforceable under the Act.” 282 NLRB at __, 124
LRRM at 1191.

Because we must review the Deklewa Board’s actions
for its reasonableness. we think it appropriate to quote
those portions of the Deklewa Board’s opinion which
explain in detail why the R.J. Smith rule can no longer be
sustained. Among other things, the Deklewa Board stated:

We find that this law now often operates in a matter
[sic] that contradicts the apparent congressional
intent. For example, current law views an 8(f) agree-
ment as merely a nonbinding and unenforceable pre-
liminary step to the ultimate establishment of a collec-
tive-bargaining agreement that can be recognized and
enforced under the Act. There is no express language
in the legislative history or the text of the act declaring
a congressional view that such collectible-bargaining
agreements, specifically authorized by the Act, are
nonbinding, unenforceable, or subject to repudiation
at will. Congress plainly mandated that 8(f) agree-
ments be voluntary. Yet, contrary to the assertion in
Ruttmann and R.J. Smith, it simply does not neces-
sarily follow that because an 8(f) agreement can only
be entered into voluntarily either party to the agree-
ment is unfettered in its right “voluntarily” to repudi-
ate the agreement.

35a

In this regard, we believe that there has also been a
critical distortion of the significance of the second pro-
viso to Section 8(f) and its role in preserving employee
free choice. It is clear that the proviso permits inquiry
into a union’s majority status during a contract term.
There is, however, a significant distinction between
permitting such an inquiry through the Board’s repre-
sentation processes—the mechanism expressly men-
tioned in the provision—and permitting unilateral
anticipatory repudiation of a collective-bargaining
agreement prior to resolution of an inquiry in unfair
labor practice proceedings. Because such a right of
unilateral repudiation is so antithetical to traditional
principles of collective-bargaining under the Act, it
seems likely that Congress would have expressly
stated such a right if it intended to create one.

282 NLRB at , 124 LRRM at 1191 (footnotes omitted).

The Deklewa Board identified the overarching objec-
tives of the Act as promotion and protection of employee
free choice and labor relations stability. It then tested the
R.J. Smith rule by the degree to which it satisfied those
objectives. In holding that the R.J. Smith rule failed this
test. the Deklewa Board went on to state:

[The] pivotal argument in R.J. Smith is simply
wrong. A rule granting unilateral repudiation rights to
an employer whe voluntarily enters into a collective-
bargaining agreement is not a necessary predicate for
advancement of the employee free choice principles
embodied in the second proviso. ...{U]nder current
8(f) law, an employer’s decision to repudiate may be
based on the employer’s own economic considera-
tions, without reference to or concern for the employ-
ees’ desire to continue the status quo. Even if the

36a

employer has a legitimate question as to its employ-
ees’ representational desires, Congress has expressly
provided an electoral mechanism for testing them.
Accordingly, in our view, it is more anomalous to
hold, as in R.J. Smith, that a proviso enacted to pre-
serve employees’ right to choose, change, or reject
their own collective-bargaining representative can
serve as a basis for an employer unilaterally to repudi-
ate a voluntary collective-bargaining agreement for
any reason it chooses.

* *

The Board’s decision in R.J. Smith and its con-
version doctrine fare no better when measured against
the congressional objective of fostering labor relations
stability in the construction industry. First, it is obvi-
ous that a rule that sanctions unilateral contract repu-
diation and the inevitable disruptions that result is not
conducive to labor relations stability. The Board in
R.J. Smith did not even allude to such potential for
disruptions, nor did it attempt to reconcile this poten-
tial with Congress’ desire in enacting 8(f) for preserv-
ing contracts in the construction industry. Indeed,
although we now view R.J. Smith and its progeny as a
failed attempt to effectuate free choice, we also find
that this attempt unnecessarily deemphasized stability
in the industry.

282 NLRB at __, 124 LRRM at 1192 (footnotes omitted).

In short, the Deklewa Board concluded:

In summary, we conclude that the Board’s 8(f)
law, as it currently operates, does not comport fully
with Section 8(f)’s text and legislative history, is not
the best way to advance employee free choice and
labor relations stability in the construction industry,

er a

37a

and entails evidentiary determinations that are inex-
act, impractical and generally insufficient to support
the conclusions they purport to demonstrate. Accord-
ingly, we overrule R.J. Smith....

282 NLRB at __, 124 LRRM at 1193.

Having found the R.J. Smith rule inadequate to serve
the Congressional intent and purposes of § 8(f); the
Deklewa Board then discussed those alternatives which
satisfy the protection of employee free choice and labor
relations stability. To achieve those purposes, the Deklewa
Board rules that a § 8(f) pre-hire agreement was to bind the
parties for its duration but upon expiration of such a pre-
hire agreement, all collective bargaining obligations would
cease. In so ruling, the Dek/ewa Board also provided that a
§ 8(f) agreement could not be converted into a § 9(a) agree-
ment, i.e., that a union which was a representative pursu-
ant to a § 8(f) pre-hire agreement, could not be converted
into a traditional exclusive representative with majority
status with whom the employer was required to bargain,
absent an election and certification.

The Deklewa Board, obviously recognizing that
agency re-interpretations of the Act are not undertaken
lightly and that in order to be justified, a more appropriate
balance must be struck between the Congressional policies
embodied in § 8(f) and the Act as a whole, took pains to
explain the reasons for its change of mind. We reproduce
that statement here:

We have not merely parsed the case precedent and
legislative history in order to arrive at yet another
‘tenable’ construction of the statutory language.
Rather, consistent with our mission as the administra-
tive agency responsible for enforcing the NLRA, we

38a

have applied our cumulative individual and institu-
tional experience and expertise toward achieving, con-
sistent with our interpretation of the legislative intent,
what we perceive to be a better application of the
statute. Given the present state of the law in this area,
we see no alternative but to exercise our prerogative to
do so. Admittedly, we have not been able in this one
decision to anticipate every ramification of the princi-
ples we announce today. Nor do we deem it wise to
attempt to do so, since we hope to be afforded the
latitude to employ, as we have in the past, the fine
crucible of case-by-case experience in which to test
and refine these principles, and which the administra-
tive process itself makes possible.

282 NLRB at __ n. 40, 124 LRRM at 1194 n. 40.

The Board then summarized the actions which it had

taken in its reformulation of § 8(f):

282 NLRB at

[The] basic principles we advance today provide
an overall framework for the interpretation and appli-
cation of Section 8(f) which will enable parties to 8(f)
agreements and employees to know their respective
rights, privileges, and obligations at all stages in their
relationship. When parties enter into an 8(f) agree-
ment, they will be required by virtue of Section 8(a)(5)
and Section 8(b)(3), to comply with that agreement
unless the employees vote, in a Board-conducted elec-
tion to reject (decertify) or change their bargaining
representative. Neither employers nor unions who are
party to 8(f) agreements will be free unilaterally to
repudiate such agreements. During its term, an 8(f)
contract will not act as a bar to petitions pursuant to
Section 9(c) or (e).

, 124 LRRM at 1194.

39a

Having analyzed the Deklewa Board’s reasons for
rejecting the R.J. Smith rule and its reasons for adopting
the Deklewa rule we cannot say that the Board’s actions in
both regards were unreasonable. Neither the Company nor
the Union has demonstrated by their arguments that the
Board’s Deklewa interpretation of § 8(f) is inconsistent
with the Congressional mandate or that it would frustrate,
rather than further, congressional policy. See Slaughter v.
NLRB, 794 F.2d 120 (3d Cir. 1986). Whle it is true that the
Board’s new interpretation varies from its prior interpreta-
tion, that variance is not fatal so long as the interpretation
is reasonable and consistent with the Act. As the Supreme
Court has instructed in Higdon “‘an administrative agency
is not disqualified from changing its mind.” Higdon, 434
U.S. at 351.’

Our independent analysis of both the legislative his-
tory and the text of the statute itself, reveals no viable
ground on which to challenge the reasonableness of the
Board’s Deklewa interpretation. In reviewing the Deklewa
Board’s analysis, we are satisfied that the Board, by steer-
ing a middle course, reasonably balanced the interests of
labor and management. “The function of striking that bal-
ance to effectuate National Labor Policy is often a difficult
and delicate responsibility, which Congress committed pri-
marily to the National Labor Relations Board, subject to
limited judicial review,” NLRB vy. Truck Drivers Union,
353 U.S. 87, 96 (1957). Reviewed under our Slaughter'°

*As Justice Frankfurter once commented: “Wisdom too often never
comes, and so one ought not to reject it merely because it comes late.”
Henslee v. Union Planters National Bank and Trust Co., 335 U.S. 595,
600 (1949) (Frankfurter, J., dissenting).

Slaughter v. NLRB, 794 F.2d 120 (3d Cir. 1986), and see Part III.
B. supra.

40a

standard, the Board’s new interpretation must be
sustained.

¥s

The final issue raised by the parties is the Board’s
decision to apply its new interpretation to this case and to
all pending cases at whatever stage.'' The parties disagree
as to whether this new rule, announced by the Board in
Deklewa may be applied retroactively.

After setting forth its new interpretation of § 8(f), the
Board confronted the final issue of whether or not its new
rule should be applied retroactively. The Board noted that
its usual practice was to apply new policies and standards
to all cases no matter what stage in the litigation they had
reached. 282 NLRB at __, 124 LRRM at 1198. Although
the Board noted that its new interpretation represented a
“sharp departure” from the R.J. Smith rule, it nevertheless
determined that a retroactive application of this rule was
appropriate.

A.

As with all legal issues, we first determine our stan-
dard of review. At the outset we observe that Deklewa and
the Associated General Contractors of America, which
filed a brief as amicus curiae, urge that we review the
retroactivity issue using an abuse of discretion standard.
The Union, in its reply brief, apparently agrees with that
standard. Reply Brief of Union at 17. We have been unable
to discern from the brief filed by the Board, any suggested
standard of review respecting just the issue of retroactivity.
In any event, none of the parties have cited us to any

11282 NLRB at —__, 124 LRRM at 1198.

Ee ne ee

4la

caselaw which would inform us as to the standard we
should employ.

Our independent research reveals that with specific
reference to a Board’s ruling on retroactivity, the Second
Circuit has held that “‘while we are of course not bound by
the Board’s views on retroactive application, we should
defer to them absent some manifest injustice.” NLRB y.
Semco Printing Center, Inc., 721 F.2d 886, 8892 (2d Cir.
1983). We agree with the Semco standard, particularly
since it comports with our oft spoken view that in matters
involving interpretation of the Act, the Board is entitled to.
deference.'? See e.g. E. I. Dupont DeNemours and Co.
(Chestnut Run) v. NLRB, 733 F.2d 296, 297 (3d Cir. 1984).
While a decision to hoid a new rule retroactive is not
strictly a question of statutory interpretation, we are never-
theless persuaded that when the Board changes a rule and
makes it retroactive, particularly when the Board assigns
as its reasons for doing so the furtherance of the funda-
mental statutory policies of employee free choice and labor
relations stability, the Board should be entitled to exercise
its broadest power. See e.g. Mosey Manufacturing Co., Inc.
v. NLRB, 701 F.2d 610, 612 (7th Cir. 1983). Thus, unless
the Board’s retroactive application results in manifest
injustice, we will uphold the Board’s order.

B.

In the present case the Board recognized all interests
of all parties. It identified each interest and related the
interests involved to the purposes of the Act. The Board

"The result we reach today, would have been the same had we
adopted the abuse of discretion standard, as urged upon us by Deklewa,
the Union, and the amicus. In light of the Board’s analysis and reason-
ing, we would be hard-pressed to hold that the Board’s retroactivity
decision was not an appropriate exercise of its discretion.

42a

considered the Act’s policies of employee free choice and
labor relations stability, and it examined the problems that
would be entailed if it applied the now disclaimed R.J.
Smith rule to pending § 8(f) cases. The Board, employing
the retroactivity analysis of SEC v. Chenery, 332 U.S. 194
(1947), balanced the claimed ill effects of retroactivity
against the “mischief of producing a result which is con-
trary to a statutory design or to Iegal and equitable princi-
ples.” Jd. at 203, and concluded:

[T]he statutory benefits from the announced
changes in 8(f) law for employees, employers and
unions in the construction industry far outweigh any
hardships resulting from immediate imposition of
those changes. Consequently, we will apply the
Board’s new 8(f) principles to this case and to all
pending cases in whatever stage.

282 NLRB at __, 124 LRRM at 1198.

We cannot perceive any “manifest injustice” which
would indicate that we should not defer to the Board’s
reasoning on this issue. As the Board noted, a party such as
Deklewa who relied on the R.J. Smith rule did so at its
own risk, because once conversion occurred, the § 8(f)
agreement would be automatically binding. The particular
facts of this case aptly demonstrate this possibility.

Nor would our result be different if we engaged in an independent
analysis under SEC v. Chenery Corp., 332 U.S. 194 (1947) or Chevron vy.
Huson, 404 U.S. 97 (1971). The five factor analysis of Chenery 1s sub-
stantively no different than the three factor analysis of Chevron. Che-
nery, however, has been applied exclusively to administrative agency
adjudications, the same context in which this case has arisen. See e.g. E.
L. Weigand Division v. NLRB, 650 F.d 463, 471 (3d Cir. 1981) Huson
on the other hand, appears to have been applied exclusively to judicial
adjudications. As noted above, however, on this record an independent
analysis under either test would reach the same result here.

43a

In 1980, Deklewa became a member of the Iron Work-
ers Employer Association of Western Pennsylvania, Inc.
(“the Association’) an organization composed of approxi-
mately 35 construction industry employers. In so doing,
pursuant to a doctrine established by the Board in 1978,
known as the merger doctrine’? the relevant unit of
employees for determining the majority status of a Union
was not those employees specifically employed by Deklewa
but was rather all other employees who where hired under
the Association’s agreement with the Union.

The factors which would have established the multi-
employer unit of employees as having obtained majority
status plainly appear on the stipulated record submitted by
the parties to the Board and which is before us now.'4

This merger doctrine was established by the Board in Amado
Electric, 238 NLRB 37, 99 LRRM 1453 (1978); and Authorized Air
Conditioning Company, 236 NLRB 131, 98 LRRM 1538 (1978). enfd
on other grounds, 606 F.2d 899 (9th Cir. 1979), cert. denied, 445 U.S.
950 (1980). The essence of the rule held that:

{[W]hen a single employer joins a multi-employer association
and adopts that associations’ collective bargaining agreement,
the single employer's unit “merges” into the multi-employer
unit when the requisite inquiry into majority support occurs in
that multi-employer unit.

Deklewa, 282 NLRB at __. 124 LRRM at 1189 § n. 14.

'+Among the factors which appear of record are: |. a union security
clause in the agreement between the Association and the Union (App. at
44): 2. actual union membership of a majority of the employees (App. at
31); and 3. all job reterrals came from the Union’s hiring hall. (App. at
30).

A True Copy:

Teste:

Clerk of the United States Court of Appeals
for the Third Circuit
(Continued on next page)

44a

Thus, even under the old R.J. Smith rule it appears
entirely likely that the Board would have held that
Deklewa was not free to repudiate its agreement with the
Union.

Moreover, as the Board correctly points out in apply-
ing its new interpretation of § 8(f) to Deklewa’s case, it has
done nothing more than hold Deklewa and the Union to
the terms and conditions of the § 8(f) contract into which
they voluntarily entered. It was with these considerations
in mind that the Board held Deklewa and all pending
cases, subject to the new § 8(f) principles now adopted. We
find no manifest injustice in that decision.

VI.

Thus, both Deklewa’s and the Union’s petitions for
review will be denied and the Board’s cross-application for
enforcement will be granted.

(Continued)
(A.O. U.S. Cou:ts. G.M.C. Printing, Phila., Pa. 215-568-4264)

a

45a

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

April 12, 1988

Stanford A. Segal, Esq.

TO: (Laurence Gold, Esq.

(David M. Silberman, Esq.
(Aileen A. Armstrong, Esq.*
(Patrick Szymanski, Esq.
(Linda J. Dreeben, Esq.
Charles R. Volk, Esq.
Philip A. Miscimarra, Esq.
Gerard C. Smetana, Esq.
Rossie D. Alston, Jr., Esq.

NOTICE OF JUDGMENT

This Court’s opinion was filed and Judgment was
entered today in case Nos. 87-3121, 87-3192, 87-3231 and
copies are enclosed herewith.

PETITION FOR REHEARING (FRAP 40)

Your attention is specifically directed to Chapter VIII
B of the Court’s Internal Operating Procedures.

B. Rehearing In Banc.

Rehearing in banc is not favored and ordinarily will
not be ordered except

(1) where consideration by the full court is neces-
sary to secure or maintain uniformity of its decisions,
or

(2) where the proceeding involves a question of
exceptional importance.

This Court does not ordinarily grant rehearing in
banc where the panel’s statement of the law is correct

46a

and the controverted issue is solely the application of
the law to the circumstances of the case.

Nor, except in rare cases, has the court granted rehear-
ing in banc where the case was decided by a judgment
order, a memorandum opinion, or unpublished per curiam
opinion.

When a petition for rehearing has been filed by a party
as provided by FRAP 35(b) or 40(a), unless the petition for
panel rehearing under 40(a) states explicitly it does not
request in banc hearing under 35(b), it is presumed that
such petition requests both panel rehearing and rehearing
in banc.

0-J

Rev. 9-85
sa Direct Dial 597-3135
*bill of costs form attached

Filing
Time

Statement
of Counsel

47a

A petition may be filed within 14 days after
entry of judgment. No extension will be
granted save for the most compelling rea-
sons. The petition must be received in the
Clerk’s office within the 14 day period.

The petition shall state with particularity
the points of law or fact which in the opin-
ion of the petitioner the court has over-
looked or misapprehended and shall con-
tain such argument in support of the
petition as the petitioner desires to present.
No answer to a petition for rehearing will
be received unless requested by the court.
Oral argument in support of the petition
will not be permitted.

Where the party petitioning for rehearing in
banc is represented by counsel, the petition
shall contain, so far as is pertinent, the fol-
lowing statement of counsel:

“I express a belief, based on a rea-
soned and studied professional judg-
ment, that the panel decision is contra-
ry to decisions of the United States
Court of Appeals for the Third Circuit
or the Supreme Court of the United
States, and that consideration by the
full court is necessary to secure and
maintain uniformity of decisions in
this Court, to-wit, the panel’s decision
is contrary to the decision of this Court
or the Supreme Court in [citing specifi-
cally the case or cases],

Form

Number of
Copies

Rev. 9-85

48a

Or, that this appeal involves a question
of exceptional importance, to-wit [set forth
in one sentence].”

Counsel is reminded that sanctions may be
imposed for the filing of a frivolous petition
for rehearing. See Fed. R. App. P. 46(c).

The 15 page limit allowed by the Rule shall
be observed.

An original and 14 copies of a petition for
rehearing before the Court in banc is re-
quired.

An original and 3 copies of a petition for
rehearing before the original panel is re-
quired.

Attachments

Filing
Time

Form

Issuance
Time

Enclosures
Rev. 5/86

49a

Rule 22.1

Attach to each petition for rehearing a copy
of the judgment, order or decision of the
Court as to which rehearing is sought and
any memorandum or opinion of the court
Stating the reasons therefor.

Bill of Costs (FRAP 39)

A party to whom costs are allowed, who
desires taxation of costs, shall file a bill of
costs within 14 days after judgment. The
bill of costs must be received in the Clerk’s
office within the 14 day period.

Counsel desiring to have costs taxed against
the unsuccessful party under Rule 39,
FRAP is requested to furnish an itemized
and verified statement from the printer
showing the actual costs per page for repro-
ducing the brief and appendix (if any).
Proof of service of the bill of costs must be
attached to the bill.

Mandate (FRAP 41)

The mandate is issued 21 days after judg-
ment. A timely petition for rehearing will
stay the issuance. If the petition is denied,
the mandate will issue 7 days later. A mo-
tion for stay of mandate should be prompt-
ly filed if parties intend to file a petition for
writ of certiorari to the Supreme Court of
the United States.

SALLY MRVOs,
Clerk

50a

UNITED STATES OF AMERICA
BEFORE THE
NATIONAL LABOR RELATIONS BOARD

JOHN DEKLEWA, ;
THEODORE DEKLEWA

AND ROBERT DEKLEWA, d/b/a
JOHN DEKLEWA & SONS and/or
JOHN DEKLEWA & SONS, INC.

and

INTERNATIONAL ASSOCIATION
OF BRIDGE, STRUCTURAL
AND ORNAMENTAL IRON
WORKERS, LOCAL 3, AFL-CIO /

> Case 6-CA-16819

DECISION AND ORDER

The issue presented here is whether the Respondent
violated Section 8(a)(5) and (1) of the National Labor
Relations Act by repudiating its collective-bargaining
agreement entered into with the Union under the provi-
sions of Section 8(f) of the Act, and by withdrawing recog-
nition from the Union. In addition, this case generally
raises important questions concerning the Board’s inter-
pretation of Section 8(f). For the reasons set forth below,
we have decided that it is necessary {o modify current
Board law regarding Section 8(f) in order to serve better
the policies and purposes of the Act f applied to the
unique circumstances of construction industry labor
relations.

Upon charges filed by the Union, the General Counsel
of the Board issued a complaint and notice of hearing 28
November 1983 and an amendment to complaint 9 March

Sla

1984 against the Respondent. The complaint alleged that
the Respondent had engaged in and was engaging in unfair
labor practices affecting commerce within the meaning of
Section 8(a)(5) and (1) and Section 2(6) and (7) of the Act
by repudiating its collective-bargaining agreement with the
Union and by withdrawing recognition from the Union.

Copies of the charges and complaint were duly served
on the Respondent and Union. On 6 December 1983 the
Respondent filed its answer to the complaint denying the
commission of any unfair labor practices.

On 3 May 1984 the Respondent, the Union, and the
General Counsel filed with the Board a Stipulation of Facts
with attached exhibits, and moved to transfer this proceed-
ing to the Board.

The parties agreed that the stipulation and exhibits
constitute the entire record in this case and that no oral
testimony is necessary or desired to be introduced by any
of the parties. The parties waived a hearing before an
administrative law judge and the issuance of a decision
and recommended order by an administrative law judge,
and they stated a desire to submit this case directly to the
Board for findings of fact, conclusions of law, and a Deci-
sion and Order.

On 15 October 1984 the Board issued an Order grant-
ing the motion, approving the stipulation, and transferring
the proceeding to the Board. On 3 February 1986 the
Board scheduled oral argument in this proceeding and
related cases' because they presented important issues in
the administration of the Act. The notice of hearing stated
that the Board would entertain argument on the issues

'Reliable Electric Co., Case 27-CA-8682; Viola Industries-Elevator
Division, Inc. and its alter ego Viola Industries, Case 5-CA-15990.

ean nn ee a ee

52a

raised under Section 8(f) of the Act by the several cases,
with particular emphasis on the following questions:

(1) Whether a Section 8(f) contract/relationship can
attain the status of a Section 9 contract/relationship
absent certification or voluntary recognition, and, if
so, what evidence is sufficient to attain such status;

(2) To what extent should the Board’s contract bar
rules and presumptions of majority status apply in the
construction business; and

(3) How do the above questions apply in a multi-
employer context with specific reference to appropri-
ate unit issues and the nature of the employer's
workforce (i.e., permanent and stable or project by
project).

An order and supplement to notice of hearing issued 12
March 1986.

On 24 March 1986 the Respondent, the General
Counsel, the Union, the American Federation of Labor _
and Congress of Industrial Organizations, the AFL-CIO’s
Building and Construction Trades Department, the Inter-
national Brotherhood of Teamsters, Chauffeurs, Ware-
housemen and Helpers of America, the Associated Build-
ers and Contractors, Inc., the Council on Labor Law
Equality, and the National Right to Work Legal Defense
Foundation, Inc.? presented oral argument before the
Board. The parties and the amici curiae have filed briefs
and statements of position.

?The AFL-CIO, its Building and Construction Trades Department,
the Teamsters, the Associated Builders and Contractors, the Council on
Labor Law Equality, and the National Right to Work Legal Defense
Foundation appeared as amici curiae.

53a

On the basis of the stipulation, the briefs, and the oral
arguments, the Board makes the following

Findings of Fact

I. The Business of the Respondent

Respondent John Deklewa & Sons, Inc., a Pennsylva-
nia corporation, has an office in Bridgeville, Pennsylvania,
where it is engaged in the business of heavy construction.
Respondent John Deklewa & Sons, a partnership with an
office at the same location as the Respondent Corporation,
is engaged in the construction of commercial and indus-
trial buildings. In the operatior of their businesses, the
Respondents annually purchase and receive goods and
materials valued in excess of $50,000 directly from points
outside the Commonwealth of Pennsylvania.

It is admitted, and we find, that at all times material
here, the Respondents are employers within the meaning
of Section 2(2) of the Act, engaged in commerce and in
operations affecting commerce within the meaning of Sec-
tion 2(6) and (7) of the Act. Accordingly, we find that it
will effectuate the policies of the Act for the Board to assert
jurisdiction here. Further, the parties stipulate, and we
find, that the Respondents constitute a single employer
within the meaning of the Act.

Il. The Labor Organization Involved

The parties stipulate, and we find, that International
Association of Bridge, Structural and Ornamental Iron
Workers, Local 3, AFL-CIO, is a labor organization within
the meaning of Section 2(5) of the Act.

54a
III. The Alleged Unfair Labor Practices

A. The Stipulated Facts

As stated, the Respondent, John Deklewa & Sons, is
engaged in the construction of commercial and industrial
buildings. The Iron Workers Employer Association of
Western Pennsylvania, Inc. (the Association) is an organi-
zation composed of approximately 35 construction indus-
try employers. The Association represents its employer-
members in negotiating and administering collective-bar-
gaining agreements with the Union. The Association and
the Union have been parties to successive collective-bar-
gaining agreements for at least the past 30 years, the most
recent relevant contract having been effective 1 June 1982
through 31 May 1985.

On 24 June 1960 the Respondent entered into a
prehire agreement with the Union under which the
Respondent agreed to be bound by the provisions of the
contract between the Association and the Union. For the
next 20 years the Respondent executed and adhered to the
successive Association-Union collective-bargaining agree-
ments. The Respondent did so as a separate entity and not
by virtue of any membership in the multiemployer group.

In June 1980 the Respondent became a member of the
Association, and subsequently executed the 1982-1985
agreement with the Union. This contract had a 60-day
notice of termination provision, an exclusive hiring hall
provision, and a union-security clause. On 21 September
1983 the Respondent timely resigned its membership in
the Association. The Association has not opposed this res-
ignation, but it considers the Respondent bound to the
terms of the 1982-1985 agreement. On the same date that
it resigned from the Association, the Respondent notified

55a

the Union that it was repudiating the contract and with-
drawing recognition. The Respondent was not engaged in
any construction projects on 21 September 1983 on which
it directly employed employees covered by the 1982-1985
labor agreement, and from that date until the 3 May 1984
date of the parties’ stipulation the Respondent has not
directly employed any such employees.

By letter dated 27 September 1983, the Union
objected to the Respondent’s repudiation of the agreement
and withdrawal of recognition. The Union filed a griev-
ance on 30 September 1983 alleging that the Respondent
violated the subcontracting clause of the 1982-1985 agree-
ment in connection with a project that extended from 7
September to 14 December 1983. On 3 October 1983 the
Association advised the Respondent of the grievance and
of what it believed were the Respondent’s obligations
under the grievance-arbitration procedure of the 1982-
1985 agreement. The Respondent has taken the position
that the dispute is not arbitrable in view of its resignation
from the Association and its repudiation of the contract.
Further action on the grievance was held in abeyance
pending the outcome of this case.

The parties stipulated that from June 1960 until its
September 1983 repudiation: the Respondent relied exclu-
sively on the Union’s hiring hall for its ironworkers; all
these employees were union members; they were hired on
a jobsite-to-jobsite basis; and the Respondent adhered to
the terms of the applicable collective-bargaining agreement
on all its projects. On many of these projects the Respon-
dent did not hire ironworkers directly, but used subcon-
tractors who were signatory to the Union-Association
agreement.

56a

At all times material here, approximately 30 of the 35
members of the Association have, on a continual and regu-
lar basis, been engaged in projects requiring the direct
employment of employees covered by the Association- |
Union agreement. These employees have been members of
the Union or have adopted the Union as their collective-
bargaining representative. A majority of such employees
moved from job to job and from employment by one
member of the Association to another in response to work
opportunities. Between 1 June 1982 and the date of the
stipulation here, the Respondent engaged in three projects
on which it directly employed employees covered by the
1982-1985 agreement, the last of which was completed in
April 1983.

B. Section 8(f)
Section 8(f) of the Act reads as follows:

It shall not be an unfair labor practice under subsec-
tions (a) and (b) of this section for an employer
engaged primarily in the building and construction
industry to make an agreement covering employees
engaged (or who, upon their employment, will be
engaged) in the building and construction industry
with a labor organization of which building and con-
struction employees are members (not established,
maintained, or assisted by any action defined in sec-
tion 8(a) of this Act as an unfair labor practice)
because (1) the majority status of such labor organiza-
tion has not been established under the provisions of
section 9 of this Act prior to the making of such agree-
ment, or (2) such agreement requires as a condition of
employment, membership in such labor organization
after the seventh day following the beginning of such
employment or the effective date of the agreement,
whichever is later, or (3) such agreement requires the

! 57a

employer to notify such labor organization of oppor-
tunitites for employment with such employer, or gives
such labor organization an opportunity to refer quali-
fied applicants for such employment, or (4) such
agreement specifies minimum training or experience
qualifications for employment or provides for priority
in opportunities for employment based upon length of
service with such employer, in the industry or in the
particular geographical area: Provided, That nothing in
this subsection shall set aside the final proviso to sec-
tion 8(a)(3) of this Act: Provided further, That any
agreement which would be invalid, but for clause (1)
of this subsection, shall not be a bar to a petition filed
pursuant to section 9(c) or 9%e).

Positions of the Parties

The Board has asked the parties and amici to express
their views on the broad question of whether the Board
should continue to adhere, in whole or in part, to the
current body of law interpreting and applying Section 8(f).
Specific focus has been placed on the Board’s decision in
R. J. Smith Construction Co., 191 NLRB 693 (1971), enf.
denied sub nom. Operating Engineers Local 150 v. NLRB,
480 F.2d 1186 (D.C. Cir. 1973), and the associated “‘con-
version doctrine,” whereby an 8(f) relationship/agreement
can “convert” into a 9(a) relationship/agreement by means
other than a Board election or voluntary recognition.
Another concern has been the definition of appropriate
units in the construction industry, particularly where mul-
tiemployer associations are involved, for purposes of
assessing challenges to a union’s contract and representa-
tional claims.

The General Counsel urges adherence to R. J. Smith
and the conversion doctrine in both single employer and

i

58a

multiemployer cases. Accordingly, the General Counsel
contends that the Respondent violated Section 8(a)(5) and
(1) by repudiating the contract and withdrawing recogni-
tion because the Union enjoyed prior majority status in a
multiemployer unit. The ABC, the Council on Labor Law
Equity, and the National Right to Work Legal Defense
Foundation also urge adherence to the holding in R. J.
Smith, but they argue that the Board should adopt rules
providing that an 8(f) relationship/agreement can never
convert to 9(a) status in either single or multiemployer
units by means other than Board certification or voluntary
recognition. This rationale would result in dismissal of the
complaint here.? The AFL-CIO, its Building and Construc-
tion Trades Department, and the Teamsters argue that the
Board should overrule R. J. Smith and abandon the con-
version doctrine. They urge the Board to adopt the posi-
tion that Section 8(f) provides “an alternative means” by
which unions in the construction industry can obtain the
full status of exclusive representative within the meaning
of Section 9(a) in both single and multiemployer units.
Applied here, this rule of law would warrant finding a
Section 8(a)(5) violation by the Respondent.

Discussion and Conclusions

We have decided to overrule the Board’s decision in
R. J. Smith, to abandon the so-called conversion doctrine,
and to modify relevant unit scope rules in 8(f) cases. We
shall apply the following principles in 8(f) cases: (1) a col-
lective-bargaining agreement permitted by Section 8(f)

In addition to this argument, the Respondent contends that it was
privileged to withdraw recognition and repudiate the contract because it
employed no ironworkers from April through September 1983 and none
were employed when it resigned from the Association and repudiated
the contract.

59a

shall be enforceable through the mechanisms of Section
8(a)(5) and Section 8(b)(3); (2) such agreements will not
bar the processing of valid petitions filed pursuant to Sec-
tion 9(c) and Section 9(e); (3) in processing such petitions,
the appropriate unit normally will be the single employer’s
employees covered by the agreement; and (4) upon the
expiration of such agreements, the signatory union will
enjoy no presumption of majority status, and either party
may repudiate the 8(f) bargaining relationship.

In taking this action we recognize that the Supreme
Court has stated, concerning major portions of current &(f)
law, that “the Board’s construction of the Act, although
perhaps not the only tenable one, is an acceptable reading
of the statutory language and a reasonable implementation
of the relevant statutory sections.” NLRB y. Iron Workers
Local 103 (Higdon Contracting Co.), 434 U.S. 335 (1978)
(Higdon). It is our view, however, that the development of
the current law under R. J. Smith and Higdon has exposed
significant deficiencies. The principles we advance today
represent a more appropriate interpretation and applica-
tion of Section 8(f), and they will better serve the statutory
policies of protecting labor relations stability and
employee free choice in the construction industry.

Current State of Section 8(f) Law

The Board’s current law, first announced in R. J.
Smith, defines three stages in an &(f) relationship: precon-
version. when Section 8(f) principles apply: the conversion
process itself; and postconversion, when 9(a) principles are
applicable.

In R. J. Smith and a companion case, Ruttmann Con-
struction Co., 191 NLRB 701 (1971), the Board ruled that
an 8(f) agreement is “‘a preliminary step that contemplates

60a

further action for the development of a full bargaining
relationship.” Ruttmann, supra at 702. During this prelim-
inary step, the Board held, an 8(f) agreement confers no
presumption of majority status immunizing the signator)
union’s status as collective-bargaining representative from
challenge during the contract term. The agreement itself
also has no immunity. It can be repudiated by either party,
at any time, for any reason, and it cannot be enforced
through Section 8(a)(5) or Section 8(b)(3). An employer
signatory to an 8(f) agreement can test the union’s status
by unilaterally repudiating the agreement and litigating the
union’s status in an ensuing 8(a)(5) proceeding. Finally, the
express language of the second 8(f) proviso precludes rais-
ing an 8(f) agreement as a bar to a Board electoral test of
the union’s status.

Both R. J. Smith and Rutitmann indicated. however
that upon an appropriate showing an 8(f) relationship/
agreement can convert to a 9(a) relationshin/agreement.*
As developed in subsequent cases* conversion required a
showing that the signatory union enjoyed majority sup-
port, during a relevant period, among an appropriate unit
of the signatory employer's employees. The achievement
of majority support required no notice. no simultaneous
union claim of majority, and no assent by the employer to
complete the conversion process.

The Board has found various evidentiary showings
sufficient to establish the requisite “majority support” for
conversion. Findings of majority support have been based
on the presence of an enforced union-security clause,°

4R. J. Smith, supra at 695 fn. 5: Ruttmann, supra at 702.

‘See, e.g.. Irvin-McKelvy Co., 194 NLRB 52 (1971): Hageman
Underground Construction, 253 NLRB 60 (1980).

*Irvin-McKelvy Co., supra at 53.

6la

actual union membership of a majority of unit employes,’
as well as referrals from an exclusive hiring hall.* The
Board has also deemed relevant such evidence as an
employer's contribution to a union-adminisiered fringe
benefit fund? or employee statements and actions that indi-
cate union support.'?

Concerning the “relevant period” aspect of the con-
version process, the Board normally does not seek to deter-
mine whether the union enjoys majority support at the
time the agreement is repudiated.'' Rather, “[t}he relevant
period for a meaningful showing of majority support is
normally within the effective term of .‘1e applicable collec-
tive-bargaining agreement.” Construction Erectors, 265
NLRB 786, 787 fn. 11 (1982); see also Barwise Sheet Metal
Co. 199 NLRB 372, 378-379 (1972).'° While this is the
general rule, the relevant period has been found to be as
many as 10 years prior to the contract repudiation. See
Carrothers Construction Co., 258 NLRB 175 fn ' (1981)
(1976 repudiation found unlawful based on 1966 showing

Pacific Erectors, 256 NLRB 421, 424 (1981).
*Construction Erectors, 265 NLRB 786, 788 (1982).
*Davis Industries. 232 NLRB 946, 952 (1977).
4made Electr: 238 NLRB 37, 39 (1978).

"Issues concerning conversion can arise. of course. 1n a variety of
ways. We shall usually refer here however. only to the most common.
which ts repudiation.

'2In Hageman Underground Construction. 253 NLRB 60 (1980). an
administrative law judge found that the 8f) agreement ai issue had not
converted to a %a) agreement because 1! was not demonstrated that the
union enioved majority support at the treme o repudiation. The Board
reversed. retying on the fact that the unng# had achievea majority dur-
ing the contract term. It stated that “inquiring into the Union's majority
Status at the trme of the contra *'s repudiation would be both irrele-
vant and improper.” 253 NLRB at 62 (footnote omitted)

62a

of majority support).'? Finally. an important corollary to
these rules concerning the relevant period for the conver-
sion process is the rule that conversion can occur “within a
matter of days” of the initial 8(f) agreement, Pacific Inter-
com, supra at 191; indeed, it can occur immediately upon
the parties’ adoption of an 8(f) agreement, if. at the time of
adoption, the signator’ union enjoys majority support
among an existing employee complement. Wheeler Con-
struction Co., 219 NLRB 541, 542 (1975); cf. Carrothers
Construction Co., supra at 175 fn. 1.

As for the appropriate unit in determining whether
conversion has occurred, the Board has developed differ-
ent rules that apply depending on (1) th. nature of the
employer’s work force, and (2) whether the inquiry con-
cerns a single employer or a multiemployer context.
Regarding the nature of the work force. the Board has
distinguished between “permanent and stable” and “pro-
ject-by-project” work forces. See, generally, Dee Cee Floor
Covering, 232 NLRB 421 (1977); Precision Striping, 245
NLRB 169 (1979). If an empleyer utilizes a permanent and
stable work force, that entire work force will constitute the
appropriate unit for ascertaining whether the union enjoys
majority support. See, e.g., Construction Erectors, 265
NLRB 786 (1982). If the employer utilizes a project-by-
project work force, the Board will inquire into the union’s
majority support only on individual existing projects. See,
e.g.. Dee Cee Floor Covering, supra; Giordano Construction
Co., 256 NLRB 47 (1981).

All of the foregoing rules presume a single employer
unit. The Board’s inquiry into majority support varies
slightly in a multiemployer context. The Board has held

'3$ee also Pacific Intercom, 255 NLRB 184. 191 (1981) (1979 repu-
diation found unlawful based on 1972 showing of majority support).

63a

that when a single employer joins a multiemployer associa-
tion and adopts that association’s collective-bargaining
agreement, the single employer’s unit “merges” into the
multiemployer unit and the requisite inquiry into majority
support occurs in that multiemployer unit.'4

Under existing law, when the Board determines that
conversion has occurred, it holds that the 8(f) union
acquired immediate and complete 9(a) status, and any col-
lective-bargaining agreement in effect immediately
acquired the status of a collective-bargaining agreement
enforceable before the Board. Hageman Underground
Construction, 253 NLRB 60 (1980); Precision Striping,
supra. Accordingly, upon conversion, an employer is
“under the statutory duty to recognize and bargain with
the union as the employees’ exclusive representative,”
Davis Industries, 232 NLRB 946, 952 (1977), and it is
prohibited from repudiating the contract or withdrawing
recognition from the union. /rvin-McKelvy Co., supra at
53. From the time of conversion, the union enjoys “an
irrebuttable presumption of majority status for the dura-
tion of the agreement.”” Hageman, supra at 62. As is the
case with any 9(a) representative, the union also enjoys a

'44mado Electric, 238 NLRB 37 fn. | (1978); Authorized Air Condi-
tioning Co., 236 NLRB 131 fn. 2 (1978). Although the Board found that
the appropriate unit in each case was multiemployer in scope. it is
unclear whether these cases dispensed with the requirement of majority
support among the single employer’s employees as a predicate to
merger. As the Ninth Circuit correctly pointed out in enforcing Autho-
rized Air Conditioning on other grounds, the evidence demonstrated
that the Union enjoyed “majority support” in the single employer unit,
and the court specifically rejected the notion that the multiemployer
unit governed the inquiry’s scope. 606 F.2d 899 (9th Cir. 1979). The
same facts are also present in Amado Electric. We note that the Fifth
Circuit has also declined to apply the merger rules alluded to in Amado
and Authorized Air Conditioning. See Baton Rouge Building Trades
Council v. FE. C. Schafer, 657 F.2d 806 (Sth Cir. 1981).

64a

rebuttable presumption of majority status upon the con-
tract’s expiration. Finally, because the union enjoys an
irrebuttable presumption of majority status during the
contract’s term, the converted agreement serves as a bar to
any election petitions filed after conversion but during the
contract term. Cf. Albuquerque Insulation Contactor, 256
NLRB 61, 63 fn. 5 (1981).

The full effects of conversion are dependent, in part,
upon the nature of the employer’s work force and whether
the employer is part of a multiemployer association. For
example, if the conversion occurs where the employer
employs a permanent and stable work force, the union will
enjoy full 9(a) status at all existing and future jobsites. See,
e.g., Construction Erectors, supra.'5 If, however, the
employer employs a project-by-project work force, the req-
uisite showing of majority at one project will not carry
over to any other existing or future project. Dee Cee Floor
Covering, supra; Giordano Construction, supra. Accord-
ingly, the union (and the contract) will enjoy 9(a) status
only on the individual projects at which majority support
was demonstrated.

In multiemployer situations, rules are the same
regardless of the nature of the individual employer’s work
force. When conversion occurs and an employer joins a
multiemployer association (adopting that association’s
agreement with the union), the relevant unit becomes that
of the multiemployer association by application of the
merger doctrine. Amado Electric, supra; Authorized Air
Conditioning, supra. Section 9(a) status attaches to all

'SUnder this rule the Board presumes that the union’s showing of
majority support, which, as noted above, must be made in the perma-
nent and stable unit to achieve conversion, carries over to all other
present and future jobsites.

65a

existing and future projects. The particular character of the
individual employer’s unit of employees, even if hired on a
project-by-project basis, effectively becomes irrelevant
because all majority support inquiries focus on the mul-
tiemployer unit.

The Shortcomings of the Current Law

Based on our expertise and in light of our experience
in administering Section 8(f), we perceive several serious
shortcomings in current Board law. These perceptions
were reinforced at oral argument where both labor and
management representatives expressed broad-based dissat-
isfaction and frustration with the current state of the law
and the Board’s conversion doctrine in particular. It is our
view that the current 8(f) rules and procedures are substan-
tially flawed in three basic respects. First, the current law
does not fully square with either Section 8(f)’s legislative
history or that section’s actual wording. Second, the cur-
rent law inadequately serves the fundamental statutory
objectives of employee free choice and labor relations sta-
bility. Third, the frustration of statutory policies is
increased because of the administrative and litigational
difficulties created by the current law. Accordingly, we find
it both necessary and appropriate to abandon the Board’s
existing interpretation of Section 8(f).'®

The Legislative History and the Structure of Section 8(f)

In considering the 1959 amendments, Congress was
confronted with a situation in which the Board had

'’As reflected below, the current law’s shortcomings exist at all
three stages of the conversion process and in the rules defining appropri-
ate units. Because these flaws permeate the entire existing 8(f) analytic
scheme, we have determined that minor adjustments or changes to
current law would not be sufficient to rectify its deficiencies.

EEE ——E a oF 8 Sas

66a

departed from its pre-1948 practice under the Wagner Act
by asserting jurisdiction over construction industry
employers.'’ In so doing, the Board sought to apply princi-
ples that had been developed in a markedly different con-
text to an industry which, independently of the Act, had
established its own unique collective-bargaining prac-
tices.'§ It had become established practice in the construc-
tion industry for employers to recognize and enter into
collective-bargaining agreements with a construction
industry union for periods ranging from | to 3 years even
be ore any employees had been hired. S.Rep., 1 Leg. Hist.
423. Such agreements often contained union-security
clauses, exclusive referral provisions, and employee train-
ing and seniority requirements.'? Congress found two rea-
sons for this:

One reason for this practice is that it is necessary for
the employer to know his labor costs before making
the estimate upon which his bid will be based. A sec-
ond reason is that the employer must be able to have
available a supply of skilled craftsmen ready for quick
referral. A substantial majority of the skilled employ-
ees in this industry constitute a pool of such help
centered about their appropriate craft union.

S.Rep., 1 Leg. Hist. 424; see also H.Rep., 1 Leg. Hist. 777.7°

Another important characteristic of the industry was
sporadic employment relationships. In construction, an
employee or group of employees “typically works for many
employers and for none of them continuously. Jobs are

'7See, e.g., Ozark Dam Constructors, 77 NLRB 1136 (1948);
Carpenters Local 74 (Watson's Specialty), 80 NLRB 533 (1948).

'8See S.Rep. No. 187, | Leg. Hist. 423-425 (S.Rep.) and H.Rep. No.
741, 1 Leg. Hist. 777-778 (H.Rep.).

'9See, e.g., Daniel Hamm Drayage Co., 84 NLRB 458, 460 (1949).

20See also Higdon, supra at 348.

h.

67a

frequently of short duration, depending on various stages
of construction.” S.Rep., 1 Leg. Hist. 423. It was and, as
indicated by the facts of this case, remains typical for an
employee to be referred from a union hiring hall to one
employer for a number of days or weeks and, upon com-
pletion of the work, to return to the hiring hall for referral
to another employer.

As Congress stated, “serious problems” arose when
the Board began to apply the pre-1959 Act to these unique
practices and situations. S.Rep., 1 Leg. Hist. 423; H.Rep., |
Leg. Hist. 777. In a series of cases, the Board had found
unlawful the bargaining, referral, hiring, and employment
practices common in the industry.”! It also became clear
that, because of the short and sporadic periods of employ-
ment typical to the industry, “[rJepresentational elections
in a large segment of the industry are not feasible.” S.Rep.,
1 Leg. Hist. 451-452. Accordingly, when Congress consid-
ered the 1959 amendments it recognized that application
of the pre-1959 Act to the construction industry would
result in substantial instability in the industry by the inval-
idation of established industry practices while at the same
time employees in the industry would be deprived of both
the fruits of collective-bargaining as well as the freedom to
express their desires concerning union representation.

Section 8(f)’s text reveals the mechanisms Congress
chose to alleviate the “serious problems” it had identified.

21Chicago Freight Car, 83 NLRB 1163 (1949); Daniel Hamm Dray-
age Co., supra. Guy F. Atkinson Co., 90 NLRB 143 (1950). In Daniel
Hamm Drayage, the Board specifically rejected the employer's claim
that its reliance on the union-security and exclusive referral provisions
of its prehire agreement with the union was justified by the “general
custom and practice in the construction industry” by stating that “[t]he
argument should properly be addressed to Congress and not this
Board.” 84 NLRB at 460.

68a

In the body of Section 8(f) Congress expressly authorized
the negotiation, adoption, and implementation of collec-
tive-bargaining agreements in the construction industry
without initial reference to the union’s actual majority sta-
tus and expressly provided that such agreements could
contain 7-day union-security clauses, exclusive hiring-hall
referral procedures, and training and seniority require-
ments as hiring priorities. By so doing, Congress specifi-
cally sanctioned the established industry practices that the
Board had previously found unlawful.

In legitimating these practices, however, Congress was
mindful of employee free choice principles. In this regard,
the second proviso to Section 8(f) declares that an 8(f)
agreement “shall not be a bar to a petition filed pursuant to
section 9(c) or 9(e).” In that proviso, Congress sought to
assure that the rights and privileges accorded employers
and unions in the body of Section 8(f) would not operate to
thwart or undermine construction industry employees’
representational desires. In further protection of employee
free choice, Congress made clear its intention that the limi-
tations on coercive recognitional picketing contained in
Section 8(b)(7)(C), also added to the Act by the 1959
amendments, should apply to unions seeking to obtain an
8(f) agreement, notwithstanding any representational sta-
tus derived from an existing 8(f) agreement.”

Past consideration of 8(f)’s statutory language and leg-
islative history has been brief. In R. J. Smith, the Board
merely recited the aforementioned congressional language
recognizing the contemporary contractual practice in the
construction industry and the reasons for that practice.

22See H.Rep., 1 Leg. Hist. 946; 2 Leg. Hist. 1715 (remarks of Sen.
Kennedy).

69a

Then, after quoting Section 8(f) in full, the Board summa-
rily identified the second proviso as the iynch pin [sic] to
interpreting the entire section and concluded that the pro-
viso must have meant that Congress intended to permit
testing an 8(f) signatory union’s majority status during a
contract term either by election or by litigation of refusal to
bargain charges.?3 In Higdon, supra, the Supreme Court
focused narrowly on statutory language and legislative his-
tory supporting the view that a prehire agreement did not
permit the coercion of employee free choice by unlimited
picketing because an 8(f) union was not the “representative
of an employer’s employees” as that language is used in
Section 8(b)(7)(C).

As current 8(f) law has evolved since R. J. Smith and
Higdon on a case-by-case basis in various factual settings
often not contemplated in the seminal cases, there has
been no further significant attempt by the Board to recon-
cile it with Section 8(f)’s full text and entire legislative
history. We find that this law now often operates in a
manner that contradicts the apparent congressional intent.
For example, current law views an 8(f) agreement as
merely a nonbinding and unenforceable preliminary step
to the ultimate establishment of a collective-bargaining
agreement that can be recognized and enforced under the
Act. There is no express language in the legislative history
or the text of the Act declaring a congressional view that
such collective-bargaining agreements, specifically autho-
rized by the Act, are nonbinding, unenforceable, or subject
to repudiation at will. Congress plainly mandated that 8(f)
agreements be voluntary.”4 Yet, contrary to the assertion in

23R. J. Smith, supra at 694.

24See Higdon, supra at 346-347; Operating Enginic'y Local 542
(R. S. Noonan), 142 NLRB 1132, 1135 (1963), enfd. 331 F.2d 99 (3d Cir.
1964).

70a

Ruttmann and R. J. Smith, it simply does not necessarily
follow that because an 8(f) agreement can only be entered
into voluntarily either party to the agreement is unfettered
in its right “voluntarily” to repudiate the agreement. If the
legislative history and statutory language discussed above
indicate anything, it is an intent by Congress to legitimate
and make enforceable the array of construction industry
bargaining, referral, hiring, and employment practices that
the Board had previously found to be unlawful, and thus
unenforceable under the Act.?5

In this regard, we believe that there has also been a
critical distortion of the significance of the second proviso
to Section 8(f) and its role in preserving employee free
choice. It is clear that the proviso permits inquiry into a
union’s majority status during a contract term. There is,
however, a significant distinction between permitting such
an inquiry through the Board’s representational
processes—the mechanism expressly mentioned in the
proviso—and permitting unilateral anticipatory repudia-
tion of a collective-bargaining agreement prior to resolu-
tion of an inquiry in unfair labor practice proceedings.
Because such a right of unilateral repudiation is so anti-
thetical to traditional principles of collective-bargaining

*SCongress’ intent in the 1959 amendments to confer special con-
tractual privileges upon construction industry employers and unions, as
a result of that industry’s unique bargaining and employment practices,
is also reflected in Sec. 8(e) which, inter alia, authorizes the negotiation,
adoption, and implementation of contract provisions relating to sub-
contracting in the construction industry that are enforceable under the
Act, although such clauses would be unlawful outside the construction
industry. See generally Woelke & Romero Framing v. NLRB, 456 U.S.
645 (1982). In Higdon, the Court expressly recognized certain basic
parallels between Sec. 8(e) and &(f). 434 U.S. 349 fn. 11.

Tla

under the Act, it seems likely that Congress would have
expressly stated such a right if it intended to create one.”

A more defensible characterization of the second pro-
viso is that it operates as an “escape hatch” for employees
subject to unwanted representation imposed before they
were hired. This characterization is consistent with the
wording of the proviso itself in that its application presup-
poses the existence of an 8(f) agreement. The characteriza-
tion is also supported by the legislative history. In the
formational stages of an 8(f) relationship, when an
employer is just beginning to draw on the “pool of. . . help
centered about [the] appropriate craft union... [,]” Con-
gress believed that “[i]f the employer relies upon this pool
of skilled craftsmen, members of the union, there is no
doubt under these circumstances that the union will in fact
represent a majority of the employees actually hired.”
S.Rep., 2 Leg. Hist. 424. Congress was concerned, how-
ever, about employees’ ability to rid themselves of an
existing representative, or select an alternate one, once the
8(f) relationship was fully established. Thus, Congress
specified that an 8(f) agreement may not act as a bar to,
inter alia, decertification or rival union petitions.?’

Although the aforementioned legislative history indi-
cates certain assumptions about a union’s ability to
achieve majority support after executing an 8(f) agreement,
the legislative history and statutory language are devoid of

We note that Congress has recently expressed its preference
against the anticipatory unilateral repudiation of collective-bargaining
agreements by bankrupt employers in passing the 1984 Bankruptcy
Code Amendments, which effectively overruled the Supreme Court's
holding permitting repudiation in NLRB v. Bildisco & Bildisco, 465 U.S.
513 (1984).

"See H.Rep., 2 Leg. Hist. 808; S.Rep., | Leg. Hist. 452; Senate
Committee Analysis, | Leg. Hist. 947, 967.

|

72a

any indication that Congress contemplated the extraordi-
nary “conversion” of such nonbinding relationships into
full-fledged, wholly enforceable 9(a) relationships consti-
tuting an absolute bar to employees’ efforts to reject or to
change their collective-bargaining representative. In our
view, this particular aspect of the conversion doctrine con-
travenes Congress’ intent to provide employees with a
meaningful and readily available escape hatch.

Finally, the current 8(f) unit determination rules like-
wise fail to reflect the objectives Congress expressed in
enacting Section 8(f). First, current law draws a sharp dis-
tinction between “permanent and stable” and “project by
project” work forces.?8 Yet, Congress described the con-
struction industry generally as one that hires employees on
a project-by-project basis. That very characteristic was one
of the underlying reasons for Section 8(f)’s enactment.2°
The Board’s artificial bifurcation of the industry along
these lines, therefore, seems plainly contrary to Congress’
expressed view of the industry. Second, to the extent cur-
rent law applies the merger doctrine to section 8(f), and
thereby renders practically insignificant the representa-
tional desires of a single employer’s employees in multiem-
ployer associations, it places an additional obstacle in
the way of employees who wish to reject or change their
collective-bargaining representative. *°

8See generally Dee Cee Floor Covering, supra; Construction Erec-
tors, supra; Giordano Construction Co., supra.
°This characteristic of the industry still exists today. Indeed, at oral
argument several of the representstives. both management and labor,
stated that the Board’s distinction is unjustified and fails to comport
with the industry’s realities.
The views of the current Board may differ over the applicability of
the “merger doctrine” outside the construction industry. See Gibbs &
(Continued on next page)

73a

Employee Free Choice and Labor Relations Stability

Two of the overarching objectives of the National
Labor Relations Act are the promotion and protection of
employee free choice and labor relations stability. The spe-
cific legislative history of Section 8(f) reflects these same
generai objectives. Accordingly, the current Board law
must be measured by the degree to which it achieves an
appropriate balance between the dual congressional objec-
tives of promoting and maintaining employee free choice
principles and labor relations stability in the construction
industry.

As noted above, R. J. Smith is the foundation for
current law that an 8(f) agreement is unenforceable under
the Act and subject to unilateral repudiation at any time,
for any reason. In that decision, the Board sought to predi-
cate its holding on employee free choice principles by
stating:

Inasmuch as Congress clearly intended to permit a
test, by petition, of majority status and unit appropri-
ateness at any time during the contract, it would be
anomalous, indeed, to hold that Section 8(f) prohibits

(Continued)

Cox, Inc., 230 NLRB No. 110 (June 24, 1986). However, merger princi-
ples are clearly inappropriate in light of our interpretation of Sec. 8(f)
which holds that an 8(f) union enjoys no irrebuttable presumption of
majority status and Congress’ declaration in the second proviso that an
8(f) union’s representational authority is subject to challenge despite the
existence of a collective-bargaining agreement or an established bargain-
ing history. Thus, while we may disagree on the issue of whether a
nonconstruction industry employer and union can act together to merge
a single unit into a larger one, we can all agree that a construction
industry employe’ and union cannot, by merging the single employer
unit into a multiemployer one, act to effectively preclude a single
employer's employees from challenging their 8(f) union’s representa-
tional authority.

74a

examination of those questions in the litigation of
refusal-to-bargain charges.

191 NLRB at 694.

In our view, that pivotal argument in R. J. Smith is
simply wrong. A rule granting unilateral repudiation rights
to an employer who voluntarily enters into a collective-
bargaining agreement is not a necessary predicate for
advancement of the employee free choice principles
embodied in the second proviso. In the context of tradi-
tional 9(a) agreements, for example, the Board effectuates
employee free choice by limiting the election bar effect of a
contract to 3 years, but the irrebuttable presumption of a
union’s majority status and the enforceability of the con-
tract exist and continue for the contract’s full term. In
addition, under current 8(f) law, an employer's decision to
repudiate may be based on the employer's own economic
considerations, without reference to or concern for the
employees’ desire to continue the status quo. Even if the
employer has a legitimate question as to its employees’
representational desires, Congress has expressly provided
an electoral mechanism for testing them. Accordingly, in
our view, it is more anomalous to hold, as in R. J. Smith.
that a proviso enacted to preserve employees’ rights to
choose, change, or reject their own collective-bargaining
representative can serve as a basis for an employer unilat-
erally to repudiate a voluntary collective-bargaining agree-
ment for any reason it chooses."

*'We agree with our concurring colleague that R. J. Smith is essen-
tually flawed in that it fails to take into account the unique aspects of an
8(f) contract. Since Congress specifically provided that majority status is
not a prerequisite to signing an 8(f) agreement, it is unlikely that Con-
gress intended that the mere assertion of a lack of majority status would
be a defense to a refusal to maintain such an agreement. It simply does

(Continued on next page)

antiiiiaiil

75a

On the other hand, we view the current postconver-
sion rules as equally inconsistent with employee free
choice principles because those rules are too absolute in
protecting the union’s representative status. As we have
noted, conversion can occur “within a matter of days” of
the parties’ signing an 8(f) agreement,* and, if there is an
existing employee complement, conversion can be “imme-
diate” upon the contract's signing.*? Because that conver-
sion creates an irrebuttable majority presumption during
the contract term,™ any election petition is barred by oper-
ation of the Board’s contract-bar rules.** Accordingly, by
allowing almost instantaneous conversions with an accom-
panying contract bar, the conversion doctrine effectively
renders the second proviso nugatory. Such rules hardly
advance the objective of employee free choice.”

The Board's decision in R. J. Smith and its conversion
doctrine fare no better when measured against the congres-
sional objective of fostering labor relations stability in the
construction industry. First, it is obvious that a rule that

(Continued)
not follow that because Congress made agreements in the construction
industry easier to obtain, it intended them to be voidable at will
Rather, it appears to us that the Congress specified in the proviso the
means by which a party might withdraw from the contract, ic. through
the Board's election processes.

“Pacific Intercom, 255 NLRB 184, 191 (1981).

™ Wheeler Construction Co., 219 NLRB $41, 542 (1975). Cf. Car-
rothers Construction Co., supra at fn. 1.

“Hageman Underground Construction, supra at 62.

“Cf. Albuquerque Insulation Contractor, Inc., 256 NLRB 61. 63 fn.
5 (1981).

“Employee free choice is further diminished when the merger doc-
trine is applied to render irrelevant the representational desires of single
employer unit employees.

76a

sanctions unilateral contract repudiation and the inevita-
ble disruptions that result is not conducive to labor rela-
tions stability. The Board in R. J. Smith did not even
allude to such potential for disruptions, nor did it attempt
to reconcile this potential with Congress’ desire in enacting
8(f) for preserving contracts in the construction industry.
Indeed, although we now view R. J. Smith and its progeny
as a failed attempt to effectuate free choice, we also find
that this attempt unnecessarily deemphasized stability in
the industry.

Beyond R. J. Smith, however, the Board’s conversion
doctrine fails to foster industry stability in another impor-
tant way. An effective conversion can take place, without
notice, at virtually any time after the signing of an 8(f)
agreement, but it may take years of fractious litigation to
establish whether conversion actually did occur and, if so,
what unit of employees was involved. Therefore, neither
the parties to the agreement nor the employees working
under it can know with any degree of certainty what their
respective rights and obligations are at any given time.
Rules that create such a state of doubt and promote adver-
Saria: proceedings as a way to resolve that doubt do noth-
ing to effectuate the statutory policy of labor relations
stability.

The Current Law’s Practical Problems

The Board’s current interpretation and application of
Section 8(f) also give rise to serious practical ».oblems
with the reliability and relevance of evidence purporting to
establish majority status and with the protraction of litiga-
tion. In this regard, the conversion doctrine often requires
the Board to “look back” any number of years into a
relationship characterized by sporadic and shifting

77a

employment patterns to determine whether the union, at
any time, enjoyed majority support. This determination
must be made in adversarial litigation based on such fac-
tors as union membership rolls, the presence of an
enforced union-security clause, exclusive hiring hall refer-
rals, or union fringe benefit contribution records. The doc-
umentary evidence of such factors is often incomplete,
contradictory, or unavailable. In those situations, the cru-
cial determination may be made on the basis of individual
recollections as to employees’ representational wishes
years previously.*’

In addition, there remains a significant question as to
whether the presence of these evidentiary factors, individ-
ually or collectively, in the context of an 8(f) bargaining
relationship, justifies a finding of majority support sufh-
cient to make Section 9(a) fully applicable. As for union
membership, “[iJt is well established that union member-
ship is not always an accurate barometer of union sup-
port.” Authorized Air Conditioning Co. v. NLRB, 606 F.2d
899, 906 (9th Cir. 1979). The converse is also true in that
the absence of union membership does not necessarily
indicate a desire not to be represented by a union in

These practical difficulties are compounded when unit determina-
tion questions arise because even before a determination of whether
conversion occurred can take place, the parties must litigate, and the
Board must decide, whether the work force is permanent and stable or
project by project. The difficulties are illustrated by Construction Erec-
tors, 265 NLRB 786 (1982). There, grappling with “a myriad of exhib-
its,” the Board eventually determined that an employer who hired 47
individuals over an | 1-month period in monthly numbers ranging from
5 to 30 employed a permanent and stable work force based primarily on
evidence that 15 employees worked for 7 or more of the 11 months. We
cite these facts not in an effort to demonstrate that the Board’s decision
was “wrong” but rather to illustrate the complex and protracted nature
of the litigation required to resolve what is only a “preliminary issue”
under the conversion doctrine.

78a

collective-bargaining. See. e.g., John Ascuaga’s Nugget, 230
NLRB 275 fn. 1 (1977). Regarding union-security clauses,
at least one court has held that membership pursuant to a
union-security clause is insufficient to convert an 8(f) rela-
tionship to full 9(a) status. Precision Striping v. NLRB, 642
F.2d 1144, 1148 (9th Cir. 1981) (“A union security clause
operates ‘to compel new employees to join the union’
because union membership is the price for obtaining a
job.”) As for hiring hall referrals or fringe benefit contribu-
tions, the former may mean little because referrals cannot
lawfully be predicated on union preferences, and

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385019_2022%3A2. Public record. Not legal advice.