Opposition Brief — North Bay Development Disabilities Services, Inc. v. National Labor Relations Board

a

a

wat

Iu the Supreme Court of the United Staten ORK

OCTOBER TERM, 1990

f

NORTH BAY DEVELOPMENT DISABILITIES

SERVICES, INc., D/B/A NorTH BAY

REGIONAL CENTER, PETITIONER

Vv.

NATIONAL LABOR RELATIONS BOARD

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATLS COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR

THE NATIONAL LABOR RELATIONS BOARD

IN OPPOSITION

KENNETH W. STARR

Solicitor General

Department of Justice

JERRY M. HUNTER Washington, D.C. 20530

General Counsel (202) 514-2217

D. RANDALL FRYE

Acting Deputy General Counsel

ROBERT E. ALLEN

Associate General Counsel

NORTON J. COME

Deputy Associate General Counsel

LINDA SHER

Assistant General Counsel

PETER WINKLER

Attorney

National Labor Relations Board

Washington, D.C. 20570

SNE TENST EEEGE

QUESTION PRESENTED

Whether the National Labor Relations Board rea-

sonably concluded that the amount of an agency shop

fee is not a mandatory subject of bargaining and

therefore the Union did not violate Section 8(b) (3)

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

158(b) (3), by refusing the employer’s request for

financial information pertaining to the amount of

that fee.

(1)

TABLE OF CONTENTS

Page

ce Tens haesuubndecieeamcnisbmenes 1

i Ts ceieninealinrsimeinoscbmeasenuinen 2

Seo sacbbeedensssinecensamenniedenpdppiceneioia 2

Argument Ne D2 a pnberdininneuieeonisanavtes 5

I saaea petiicsctcausaveumeenonkt 11

TABLE OF AUTHORITIES

Cases:

Allied Chem. Workers Local Union No. 1 Vv. Pitts-

burgh Plate Glass Co., 404 U.S. 157 (1971)... 6,9

Brooks v. NLRB, 348 U.S. 96 (1954) ........00000....... 10

Communications Workers v. Beck, 487 U.S. 735

ee oe alee cand veaaincchlsaed 2,4, 6

Detroit Edison Co. v. NLRB, 440 U.S. 301

a nsshuiiusshadinnt 5

Fall River Dyeing & Finishing Corp. v. NLRB,

A cs pabsonenbabeensaennns 10

Ford Motor Co. v. NLRB, 441 U.S. 488 (1979)... 5,9

Helmsley-Spear, Inc., 275 N.L.R.B. 262 (1985) .... 10

Local 13, Detroit Newspaper Printing Union V.

NLRB, 598 F.2d 267 (D.C. Cir. 1979) ............... 5

Metal Workers Alliance, Inc., 172 N.L.R.B. 815

a ep co I ea ieee OP cI aR NN Se eI 8

NLRB v. American Nat’l Ins. Co., 343 U.S. 395

ES ER EELS RLS OR RE ee OEE SE ee ee 8

NLRB vy. Financial Inst. Employees, 475 U.S. 192

A CRT aR, Sere SL EA OR 6, 8

NLRB y. General Motors, 373 U.S. 734 (1963)... 7

NLRB vy. Wooster Div. of Borg-Warner Corp.,

8) Ian Sele nek omeoe cea 5, 6

Pattern Makers League v. NLRB, 473 U.S. 95

Re a a rt ee a eR 8

United Steelworkers vy. Sadlowski, 457 U.S. 102

Tita so Le spubeaaicacdenimanaas 8

Western Massachusetts Elec. Co. v. NLRB, 573

op a 8 EER CR sane eee 5

(111)

IV

Statutes: : Page

National Labor Relations Act, 29 U.S.C. 151

et seq.:

$ 8(a) (3), 29 U.S.C. 168 (a) (8) ........................ 8

§ 8(b) (3), 29 U.S.C. 158 (b) (3) 2.222222. 3

Ee ik ei | | re Se 5, 6, 7, 9

Iu the Suprene Court of the United States

OCTOBER TERM, 1990

No. 90-594

NORTH BAY DEVELOPMENT DISABILITIES

SERVICES, INc., D/B/A NORTH BAY

REGIONAL CENTER, PETITIONER

Ue

NATIONAL LABOR RELATIONS BOARD

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR

THE NATIONAL LABOR RELATIONS BOARD

IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 1la-

7a) is reported at 905 F.2d 476. The decision and

order of the National Labor Relations Board (Pet.

App. 8a-25a) are reported at 287 N.L.R.B. 1223.

The order of the National Labor Relations Board

denying a request for stay and motion for reconsid-

eration (Pet. App. 27a-28a) and an order of the Na-

tional Labor Relations Board correcting that order

(Pet. App. 26a) are unreported.

(1)

2

JURISDICTION

The judgment of the court of appeals was entered

on June 15, 1990. On August 30, 1990, Chief Justice

Rehnquist granted an extension of time to and in-

cluding October 5, 1990, within which to file a peti-

tion for a writ of certiorari, and the petition was

filed on that date. The jurisdiction of this Court is

invoked under 28 U.S.C. 1254(1).

STATEMENT

1. In October 1986, petitioner and the Social Ser-

vices Union, Local 535, Service Employees Interna-

tional Union, AFL-CIO (the Union), executed a

collective-bargaining agreement that required covered

employees either to join the Union or to pay an

“agency fee’ to cover the costs of union representa-

tion.’ Under the agreement, the amount of the

agency fee was to be negotiated between petitioner

and the Union. Pet. App. 12a-13a. Petitioner pro-

posed an agency fee equal to 20% of the periodic

dues paid by Union members, and requested that if

the Union found this amount unacceptable, it supply

to petitioner a “detailed breakdown of all revenues

and expenditures” of the Union and its parent Inter-

national for the current and previous three years.

Id. at 14a-15a.

' An agency shop fee is the amount non-member employees

subject to a union security contract are required to pay the

union in lieu of dues. That amount may not exceed the em-

ployees’ pro rata share of the union’s costs of performing

such activities as collective bargaining, contract administra-

tion, and grievance adjustment as exclusive representative of

the employees. Communication Workers v. Beck, 487 US.

735, 762-763 (1988).

a ee

3

When the Union did not agree to the 20% figure

and refused to furnish the requested information, pe-

titioner invoked the collective bargaining agreement’s

arbitration clause. Pet. App. 15a-l6a. Petitioner

also filed an unfair labor practice charge against the

Union, alleging that the Union’s refusal to furnish

the requested information violated Section 8(b) (3)

of the National Labor Relations Act (the Act), 29

U.S.C. 158(b) (3). The General Counsel of the Na-

tional Labor Relations Board issued a complaint

against the Union based on that charge. Pet. App.

2a, 10a.

2. The administrative law judge held that “fees

imposed by labor organizations are part of their in-

ternal relations with employees[,] and * * * are

* * * no[t] a mandatory subject of bargaining.” Pet.

App. 19a. He ordered the complaint dismissed. The

Board agreed, concluding that “the amount of agency

fees is a nonmandatory subject of bargaining and

that it is not transformed into a mandatory subject

by virtue of the parties’ agreement to bargain con-

cerning it.” Jd. at 9a n.1, 17a-19a. Since “the duty

to provide information is coextensive with the statu-

tory duty to bargain concerning mandatory subjects”

only, the Board also concluded that the Union had no

duty to furnish the requested information. /d. at 8a-

9a & n.1, 24a-25a. The Board adopted the recom-

mended order of the administrative law judge and

dismissed the complaint.

3. The court of appeals affirmed the Board’s deci-

sion and denied the petition for review. Pet. App. 7a.

The court first pointed out its “narrow” scope of re-

view in light of the Board’s “special expertise” in

determining whether a matter falls within the

“terms and conditions of employment” and is there-

4

fore subject to mandatory bargaining. Jd. at 3a.

The court concluded that the Board’s position was

“reasonably defensible” because “the amount of an

agency fee concerns primarily the relationship be-

tween the union and the non-member employee,” and

not the relationship between the employer and its em-

ployees. Jd. at 4a.

The court rejected petitioner’s argument that the

Board’s decision was inconsistent with Communica-

tion Workers v. Beck, 487 U.S. 735 (1988). Noting

that the Beck case “arose from a dispute between an

employee and a union,” and did not involve the issue

of mandatory bargaining, Pet. App. 5a, the court

read the case as “support[ing] the Board’s position:

because an agency fee must be based upon a union’s

representational expenses, it does not make sense to

force a union to bargain with an employer over the

amount of the fee, lest the resulting figure reflect

the parties’ relative bargaining strengths rather than

the amount chargeable by some objective standard.”

Ibid.

Finally, the court agreed with the Board that the

parties’ agreement to bargain over the agency fee

did not make it a mandatory subject, and that, be-

cause it was not a mandatory subject, the Union’s

refusal to furnish the requested information was not

a violation of the Act. Pet. App. 6a.

5

ARGUMENT

The amount of an agency shop fee concerns pri-

marily the relationship between a union and non-

member employees, not the relationship between an

employer and its employees. Thus, that amount is

not a term or condition of employment subject to

mandatory bargaining. The decision of the court of

appeals is correct and does not conflict with any de-

cision of this Court or any other court of appeals.

Accordingly, review by this Court is not warranted.

1. The National Labor Relations Act limits the

subjects of mandatory collective bargaining to

“wages, hours and other terms and conditions of em-

pioyment.” See Section 8(d) of the Act, 29 U.S.C.

158(d). “As to other matters, however, each party

is free to bargain or not to bargain.” NLRB vy.

Wooster Div. of Borg-Warner Corp., 356 U.S. 342,

349 (1958). This Court has recognized the Board’s

“special expertise” in determining what is, and what

is not, a mandatory subject. Ford Motor Co. v. NLRB,

441 U.S. 488, 495 (1979) (the determination “l[ies]

at the heart of the Board’s function’). Thus, the

2 The duty to bargain includes the obligation to provide

necessary information that is relevant to issues about which

the parties are «bligated te bargain. Detroit Edison Co. Vv.

NLRB, 440 U.S. 301, 317-320 (1979); Local 12, Detroit

Newspaper Printing Union v. NLRB, 598 F.2d 267, 270 (D.C.

Cir. 1979). However, because the duty to furnish informa-

tion derives from the duty to bargain, there is no duty to

furnish information concerning topics that are not manda-

tory subjects of bargaining. Western Massachusetts Elec.

Co. Vv. NLRB, 573 F.2d 101, 109-110 (1st Cir. 1978). Thus,

contrary to petitioner’s assertion (Pet. 9), the central issue

of this case is whether or not the amount of an agency fee is

a non-mandatory subject of bargaining.

6

Court will defer to the Board’s decisions if they are

“reasonably defensible.” Jd. at 497.

Although Section 8(d) “does not immutably fix a

list of subjects for mandatory bargaining,” Allied

Chem. Workers Local Union No. 1 (Chemical Work-

ers) y. Pittsburgh Plate Glass Co., 404 U.S. 157,

178 (1971), the list is limited to “issues that set-

tle an aspect of the relationship between employer

and employees.” Ibid. Matters that involve relations

between employees and the union are not terms and

conditions of employment. See ibid; Borg-Warner,

356 U.S. at 350. In this case, the amount of money

paid by employees to compensate the Union for

its efforts in their behalf is a matter that con-

cerns the relationship between the Union and the em-

ployees and has little, if anything, to do with the rela-

tionship between petitioner and its employees. There-

fore, the court of appeals correctly deferred to the

Board’s determination that the amount of the agency

shop fee was not a mandatory bargaining subject.

The Board’s conclusion is especially reasonable in

light of the “policy Congress incorporated into the

Act against outside interference in union decision-

making.” NLRB vy. Financial Inst. Employees, 475

U.S. 192, 204 (1986).

2. Petitioner’s contentions to the contrary lack

merit. Petitioner principally contends (Pet. 8-9, 13-

17) that the court of appeals’ decision conflicts with

Communications Workers vy. Beck, 487 U.S. 735

(1988). This contention is incorrect. Beck held that

an agency fee may not exceed an individual non-

member’s proportional share of the union’s expenses

‘“serymane to collective bargaining, contract admin-

istration, and grievance adjustment.” 487 U.S. at

745. As the court of appeals correctly observed, that

decision “has no direct bearing on this case, * * * be-

7

cause it arose from a dispute between an employee

and a union over the amount of the agency fee, and

did not raise the issue of whether the amount is a

subject of mandatory bargaining between a union

and an employer.” Pet. App. 5a. Moreover, as the

court of appeals cogently noted, the Board’s decision

is consonant with Beck’s holding that an agency fee

cannot exceed a union’s representational expenses.

“[I]t does not make sense,” the court said, “to force

a union to bargain with an employer over the amount

of the fee,” for then “the parties’ relative bargaining

strengths,” rather than an “objective standard,” be-

come determinative of the amount. Jbid.

Petitioner also incorrectly contends (Pet. 10) that

Borg-Warner and other cases relied upon by the

court of appeals are inapposite because they involved

the relationship of a union to its members, while

this case involves non-members. Borg-Warner, Chem-

ical Workers, and the other cases relied on below

hold that the scope of Section 8(d) is limited to mat-

ters that concern the relationship between the em-

ployer and its employees. Those cases draw no dis-

tinction between members and non-members. Piainly,

the amount of money non-members must pay a union

to represent them pertains primarily to the relation-

ship between employees and the union, and not be-

tween the employees and their employer. The cases

on which the court of appeals’ opinion is based fully

support its conclusion.

Petitioner contends (Pet. 13), again erroneously,

that since the question whether or not to have an

agency fee is a mandatory subject of bargaining

under NLRB vy. General Motors, 373 U.S. 734, 745

(1963), “the entire matter is open to negotiation,”

including, presumably, the amount of any such fee.

If this argument had merit, then the amount of union

8

dues would also be a mandatory bargaining subject.

However, both member’s dues and the amount a union

will spend on representation are quintessentially “in-

ternal union matter[s] of no proper concern to the

employer.” Pet. App. 5a. See Financial Inst. Em-

ployees, 475 U.S. at 204 n.11 (Congress rejected pro-

posal that would have allowed Board to regulate

dues); Metal Workers Alliance, Inc., 172 N.L.R.B.

815, 815-816 (1968) (fees imposed by labor orga-

nizations subject to Board scrutiny “only in limited

situations’) ; see also United Steelworkers v. Sadlow-

ski, 457 U.S. 102, 117 (1982) (unions should be free

to operate their own affairs). No different conclu-

sion is required because a union may not fully pro-

tect the rights of non-members. The Court made

plain in Financial Inst. Employees that the Board

is not empowered to monitor more closely union

internal policies on the ground that the “statutory

scheme does not adequately protect [nen-members’]

interests.” 475 U.S. at 205-206 (Board could not

require non-member voting in union-conducted affilia-

tion election). Cf. Pattern Makers League v. NLRB,

473 U.S. 95, 106 (1985) (Section 8(a)(3) of the

Act “protects the employment rights of * * * the

worker who never assumed full union membership” ).’

* Petitioner asserts that the decision below “suggest[s]

that collective bargaining as to the amount of agency fees is

unlawful,” and that the decision is thus at odds with NLRB

v. American Nat'l Ins. Co., 343 U.S. 395 (1952). Pet. 11.

The decision below contains no such suggestion; it considers

not whether the parties may bargain over the amount of an

agency fee, but whether they must. And American Nat'l Ins.

does not bear on that issue. Its holding—that the extent of

management’s retention of certain functions and prerogatives

relating to its employees is a “condition of employment”

9

Nor is there merit to petitioner’s assertion (Pet.

11, 20, 22, 23, 24) that the amount of agency fees

became a mandatory bargaining subject “[b]ecause

Petitioner * * * and the union had an express agree-

ment to negotiate over the agency shop fee and to

terminate any dispute in arbitration.” Pet. 23. This

Court rejected that argument in Chemical Work-

ers, holding instead that a unilateral modification of

(and refusal to negotiate over) contractual terms “is

a prohibited unfair labor practice only when it

changes a term that is a mandatory rather than a

permissible subject of bargaining.” 404 U.S. at 185.

Chemical Workers added that “[b]y once bargaining

and agreeing on a permissive subject, the parties

* * * do not make the subject a mandatory topic of

future bargaining”; rather, Section 8(d) has a “more

specialized purpose than merely promoting general

contract compliance.” 404 U.S. at 187.*

Petitioner also mistakenly relies (Pet. 12-23) on

Ford Motor Co. v. NLRB, 441 U.S. 488 (1979),

where the Court affirmed a Board determination that

the prices at in-plant cafeterias and vending machines

constituted a mandatory subject of bargaining. In

fact, Ford Motor supports the Board’s position here,

as it illustrates the kind of issue that directly impli-

cates the employer/employee relationship, as opposed

to the union/employee relationship at issue in ‘this

case. The “determinative aspect” of Ford Motor, Pet.

subject to mandatory bargaining—sheds no light on the

status under the Act of matters involving the relationship of

the union to the employees it represents.

‘The Court noted that “[t]he remedy for a unilateral mid-

term modification to a permissive term lies in an action for

breach of contract, * * * not in an unfair-labor-practice pro-

ceeding.” 404 U.S. at 188.

10

_22, was not, as petitioner asserts, that the parties

had bargained over the issue before. Rather, it was

that such prices “are matters of deep concern to work-

ers” and are “germane to the working environment,”

and that “‘substantial” and “recurring disputes” arise

over them that are well suited to resolution through

collective bargaining. 441 U.S. at 498-499.°

Finally, there is no merit to the claim (Pet. 17-18)

that, under the court of appeals’ holding, petitioner

would be guilty of an unfair labor practice for with-

holding from an employee’s pay an excessive agency

fee or for firing an employee who fails to pay such a

fee. As the court of appeals noted (Pet. App. 5a-6a),

an employer does not commit an unfair.labor practice

in those circumstances “‘unless [it] had reason to be-

lieve that the fee was unlawful.” See Helmsley-

Spear, Inc., 275 N.L.R.B. 262, 268 (1985) (em-

ployer did not violate the Act by discharging employee

pursuant to union’s unlawful request where employer

lacked reasonable ground to believe that request was

unlawfully motivated).° Helmsley-Spear illustrates

5 Similarly incorrect is petitioner’s suggestion that the

amount of the fee is an “aspect of the employment relation-

ship” because the agency fee is taken “out of wages which

would otherwise be paid to [non-mémber employees] by

their employer.” Pet. 21. As explained above, regular mer:-

ber dues are not part of the employment relationship, al-

though they too are typically withheld by the employer.

® Moreover, as the court of appeals noted, the Board has

not yet addressed “the means by which an employee may

properly challenge the level of an agency fee.” Pet. App. 6a.

The Board may reasonably conclude on this point that the

employer should not become the representative of its em-

ployees’ interests. Cf. Fall River Dyeing & Finishing Corp.

v. NLRB, 482 U.S. 27, 50 n.16 (1987), quoting Brooks v.

NLRB, 348 U.S. 96, 103 (1954) (“inimical”’ to “industrial

11

once more that the amount of the fee concerns the

employees’ relationship with the union and has little

to do with their relationship with the employer. The

Board was eminently justified in determining that

the agency fee was not a mandatory subject of col-

lective bargaining.’

CONCLUSION

The petition for a writ of certiorari should be de-

nied.

Respectfully submitted.

KENNETH W. STARR -

Solicitor General

JERRY M. HUNTER

General Counsel

D. RANDALL FRYE

Acting Deputy General Counsel

ROBERT E. ALLEN

Associate General Counsel

NORTON J. COME

Deputy Associate General Counsel

LINDA SHER

Assistant General Counsel i

PETER WINKLER

Attorney

National Labor Relations Board

JANUARY 1991

peace” to allow employers to assert and rely ou employees’

rights).

7 The amicus curiae brief of Karen Fuller, an employee of

petitioner, reiterates petitioner’s arguments and reflects the

same erroneous reading of General Motors, Beck and the

other cases discussed herein.

WU. S. GOVERNMENT PRINTING OFFICE, 1991 282061 202865