Petition for a Writ of Certiorari — Bethlehem Steel Corp. v. Williamson

Step csse CONS? U. - a2 a2t, 68

a ——

OCTOBER TERM, 1973

No. 73- 120 4

UNITED STATES STEEL CORPORATION,

BETHLEHEM STEEL CORPORATION,

REPUBLIC STEEL CORPORATION,

JONES & LAUGHLIN STEEL CORPORATION,

YOUNGSTOWN SHEET AND TUBE COMPANY,

ARMCO STEEL CORPORATION,

INLAND STEEL CORPORATION and

NATIONAL STEEL CORPORATION,

Petitioners,

Vv.

NATIONAL LABOR RELATIONS BOARD and

UNITED MINE WORKERS OF AMERICA,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

NICHOLAS UNKOVIC

LEONARD L. SCHEINHOLTZ

EUGENE K. CONNORS

REED SMITH SHAW & MCCLAy

747 Union Trust Building

Pittsburgh, Pennsylvania 15219

Attorneys for Petitioners

oa SS

SMITH BROS.. LAW PRINTERS, 620 SECOND AVENUE. PITTSBURGH. PA. 15219

4

TABLE OF CONTENTS

OPINIONS BELOW ..........---:s cece eee rceeee 2

bidl s) ) y ¢ 6), ee ee ee ee a 2

QUESTION PRESENTED ........--------+::: 3

STATUTE INVOLVED .......------2eesseeree: 4

STATEMENT OF THE CASE ........-----:-:: 5

REASONS FOR GRANTING THE WRIT ........ 12

A. Denial Of Standing To The Steel Companies

Violates Federal Labor Law And Is In Direct

Conflict With Decisions Of This Court ....... 12

B. Denial Of Standing To The Steel Companies

Precludes Resolution Of The Direct Conflict

Between The Sixth Circuit And NLRB On The

Eighty Cent Clause’s Legality .........---- 14

C. Denial Of Standing To The Steel Companies

May Preclude Court Review Of The Legality

Of The Eighty Cent Clause As Presently Struc- .

tured And Future Eighty Cent Clauses ..... 15

‘2 we 81), ae enor a eee ced Se 17

ME A. s hook hes hoe ene ees Dae oe ee bee es 2a

RRR SS GOS hah Ae ere per ea et 4a

pa a es SE ae eee tee ee lla

TABLE OF CITATIONS

CASES PAGE

Association of Data Proccssing Service Organiza-

tions v. Camp., 397 U.S. 150, 154 >. | eee 13

Contractors Ass’n. of Phil. v. NLRB, 295 F.2d 526

(ae Oe SRD on cr a es oo eee ees 16

International Union, UMW, 188 NLRB 753 (1971). 2,8

International Union. UMW v. NLRB, 399 F.2d 977

sO’ Cir. 1908)... «5 - = ce ee eee aveces

International Union, UMW v. NLRB, 468 F.2d 1139

Te > a: | enn eae

International Union, UAW v. Scofield, 382 U.S. 205,

OW CHMOD univ ns beet nde rege eR eee ses

Jacobsen v. NLRB, 120 F.2d 96, 99-100 (3d Cir.

S| ER PP eee Oe ed ee

Lewis v. NLRB. 350 F.2d 801, 802 n.2 (D.C. Cir.

WN eas Peet a ae Oe see ee eR

Raymond O. Lewis, 148 NLRB 249, 52-4 (1964) ... 8

Retail Clerks Local 1059 v. NLRB, 348 F.2d 369,

970 (D.C. Cir. 1965) .....---eeeeceeer cece?

Retail Clerks Local 954 v. Rothman, 298 F.2d 330

(D.C. Civ. WOGB) «once cece veces cena neers 16

Riverton Coal Co. v. UMW, 453 F.2d 1035 (6th Cir.

1972). cert. denied, 407 U.S. 915 (1972) .... 8, 14

Street Employees Division 1267 v. Ordman, 320

F 2d 729 (D.C. Cir. 1963) ......- ee ees eres: 16

United Electrical Contractors Ass'n v. Ordman, 258

F.Supp. 758 (S.D.N.Y.) aff'd per curiam, 366

F.2d 776 (2d Cir. 1966), cert. denied 385 US.

OM S90 bo ie cca see Rees ERS 16

Vaca Vv. Sipes, 386 U.S. 171, 182 (Ree) ciwksnwee ee 16

STATUTES

28 U.S.C. £1254(1) (1970) .....-- eee eee eee 2

Section 8(e) of the National Labor Relations Act.

as amended, 29 U.S.C. $158(e) (1970) .....- 6, 8

Section 10(f) of the National Labor Relations Act,

as amended, 29 U.S.C. $160(f) (1970) ......

ee tL ee whe ae Sia 3. 4, 10, 11, 12, 13

Mle

IN THE

Supreme Court of the United States

OCTOBER TERM, 1973

UNITED STATES STEEL CORPORATION,

BETHLEHEM STEEL CORPORATION,

REPUBLIC STEEL CORPORATION,

JONES & LAUGHLIN STEEL CORPORATION,

YOUNGSTOWN SHEET AND TUBE COMPANY,

ARMCO STEEL CORPORATION,

INLAND STEEL CORPORATION and

NATIONAL STEEL CORPORATION,

Petitioners.

Vv.

NATIONAL LABOR RELATIONS BOARD and

UNITED MINE WORKERS OF AMERICA,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Petitioning steel companies pray for a writ of

certiorari to review a November 19, 1973 judgment-

order of the United States Court of Appeals for the

District of Columbia Circuit.

)

Je eC HON

OPINTONS BELOW

Tre wer RRO Maedgtrent-anier af Te Court of ap

panies (Ap AL rer) is unreported An earier decision

ad the caart af appaats at thas case | App BK ee fral is re

ported at A EA LL Te opnmonr of the Nationa

tator Nelatrons Board C Ap GL ee ne) is repertad at

LSA NLRB TNS

JURISDICTION

re Court of APPeals WAS

Pre rraadgtment-ondter of th

WTS The

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genwd an Nowerbder (2) 1

Cart is veka under OS US

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e, € eh)

ar sitetran of Thus

3

Question Presented,

QUESTION PRESENTED

Section 10(f) of the National Labor Relations Act

states that “person|s] aggrieved by a final order of the

Board” are entitled to court “review of such order.” The

National Labor Relations Board held the so-called Eighty

Cent Clause not unlawful, Petitioners, who were inter-

venors When this case was last before the court of ap-

peals, are parties to this clause’s present form, which,

in all essentials, is identical to the original clause.

Denial of standing will require Petitioners to pay the

clause’s penalties without court review of its legality,

will prevent resolution of the Sixth Circuit-Board con-

flict concerning its legality, and may preclude court re-

view concerning the legality of clauses based upon it.

Under these circumstances, the question presented is:

1. Are petitioning steel companies “person|s|

aggrieved by a final order of the Board” entitled to “re-

view of such order” under Section 10(f) of the National

Labor Relations Act?

4

Statute Involved.

STATUTE INVOLVED

Section 10(f) of the National Labor Relations Act,

as amended, 29 U.S.C. £160(f) (1970):

Any person aggrieved by a final order of the

‘Board granting or denying in whole or in part the

relief sought may obtain a review of such order in

any United States court of appeals in the circuit

wherein the unfair labor practice in question was

alleged to have been engaged in or wherein such

person resides or transacts business, or in the

United States Court of Appeals for the District of

Columbia, by filing in such a court a written peti-

tion praying that the order of the Board be modi-

fied or set aside. A copy of such petition shall be

forthwith transmitted by the clerk of the court to

the Board, and thereupon the aggrieved party shall

file in the court the record in the proceeding, certi-

fied by the Board, as provided in section 2112 of

Title 28. Upon the filing of such petition, the court

shall proceed in the same manner as in the case of

an application by the Board under subsection (3)

of this section, and shall have the same jurisdiction

to grant to the Board such temporary relief or re-

straining order as it deems just and proper, and in

like manner to make and enter a decree enforcing,

modifying. and enforcing as so modified, or setting

aside in whole or in part the order of the Board;

the findings of the Board with respect to questions

of fact if supported by substantial evidence on the

record considered as a whole shall in like manner

be conclusive.

s)

Statement of the Case.

STATEMENT OF THE CASE

On or about March 23, 1964, the International

Union, United Mine Workers of America (“UMW”) and

the Bituminous Coal Operators Association (“BCOA")

agreed to include the following clause in the National

Bituminous Coal Wage Agreement (“Agreement”) ef-

fective April 2, 1964:

During the life of this agreement there shall

be paid into [the union welfare fund] by each Oper-

ator signatory hereto the sum of forty cents (40

cents) per ton of two thousand ‘ 2000) pounds on

each ton of bituminous coal produced by such Oper-

ator for use or for sale. On all bituminous coal

procured or acquired by any signatory Operator

for use or for sale (i.e., all bituminous coal other

than that produced by such signatory Operator)

there shall, during the life of this Agreement, be

paid into such Fund by each such Operator signa-

tory hereto or by any subsidiary or affiliate of

such Operator signatory hereto the sum of eighty

cents (80 cents) per ton of two thousand (2000)

pounds on each ton of such bituminous coal so pro-

cured or acquired on which the aforesaid sum of

forty cents (40 cents) per ton had not been paid

into said Fund prior to such procurement or acquisi-

tion.

The clause is popularly referred to as the “Eighty

Cent Clause” because its original version provided that

a signatory to the Agreement purchasing or otherwise

acquiring any type of coal from a nonsignatory shall pay

a “royalty” of eighty cents for each ton of coal so ac-

quired into the UMW Welfare and Retirement Fund

(“UMW Fund”).

6

Statement of the Case.

Ir contrast to the eighty cent per ton “royalty” for

nonsignatory coal, the original Eighty Cent Clause re-

quired payment of only forty cents per ton into the

UMW Fund for coal either produced by a signatory it-

self, or acquired by one signatory from another. In the

latter case, only one forty cent per ton payment was re-

quired.

In April 1964, Dixie Mining Company (“Dixie”)

and Dan S. Davison, an individual acting for and on be-

half of Riverton Coal Company (“Riverton”), each filed

unfair labor practice charges with the NLRB against

the UMW, various UMW-affiliated districts, locals and

officers, and the BCOA. The fundamental! basis of these

charges is that the financial penalties imposed by the

Eighty Cent Clause restrain signatories from procuring

coal from nonsignatory sources, or, in other words, the

Eighty Cent Clause is a union signatory clause in viola-

tion of section 8(e) of the National Labor Relations

Act (“Act”), 29 U.S.C. $151, 158(e) (1970). Neither

Dixie nor Riverton were parties to the Eighty Cent

Clause.”

Dixie’s and Riverton’s unfair labor practice

charges, together with charges filed by two other par-

ties who did not participate actively in the case after

filing, were consolidated for hearing in the Fifth Region

1. The other unfair labor practice charges which

were filed stem from and consequently hinge upon a

finding of illegality under the National Labor Relations

Act’s section 8(e).

2. Dixie never became a party, but, because of ille-

gal pressure, Riverton later did. See note 3, infra.

7

Statement of the Case.

"e

{

of the National Labor Relations Board (“Board” or

“NLRB” ).

Petitioners herein (“Steel Companies”), which are

corporations principally engaged in the production and

sale of steel throughout the United States, became amici

curiae in the Eighty Cent Clause proceedings before the

Board.

These Steel Companies own and operate coal mines

for producing coke necessary for the manufacture of

steel, but, on occasion, require more coal, or coal of a

different kind, than their mines are capable of produc-

ing.

Like Dixie and Riverton, the Steel Companies were

not subject originally to the Eighty Cent Clause. In

1968, however, the Steel Companies executed a side

agreement providing, inter alia, that

{ijf during the life of the [A]greement all

questions concerning the iawfulness of the 80-cent

clause shall have been resolved in favor of such

clause by the court of last resort, the below named

employer to. whom such clause shall not have been

applicable, shall engage in good faith negotiations

... concerning what action may be appropriate be-

tween it and the UMWA under the then existing

circumstances.

Finally, in 1971, the UMW refused to agree to another

side agreement, and insisted that the Steel Companies

become fully subject to the current, but essentially un-

changed, Eighty Cent Clause. The Steel Companies did

so.

egy 1

8

Statement of the Case.

Riverton, one of the two active charging parties,

had dropped out of the NLRB proceedings in the mean-

time, to pursue a federal court damage action against

the UMW.*

On February 26, 1971, despite having found the

Eighty Cent Clause unlawful on two previous occas-

ions,t the Board, in a three-two decision, refused to

adopt its trial examiner's decision, ruled that the Eighty

Cent Clause was not unlawful under section 8(e) and

dismissed the applicable unfair labor practice charges.

International Union, UMW, 188 NLRB 753 (1971) (App.

C, infra).

On March 10, 1971, the D. C. Circuit, on its own mo-

tion, asserted jurisdiction of the NLRB proceedings con-

cerning the Eighty Cent Clause.

While the proceedings® before the D. C. Circuit

were pending, the present form of the Eighty Cent

Clause, to which the Steel Companies are subject, be-

came effective on November 12, 1971:

3. Ultimately, Riverton prevailed on its damage

claim, after the United States Court of Appeals for the

Sixth Circuit had held the Eighty Cent Clause unlawful

under 8(e). Riverton Coal Co. v. UMW, 453 F.2d 1035

(6th Cir. 1972), cert. denied, 407 U.S. 915 (1972).

4. Raymond O. Lewis, 148 NLRB 249, 52-4 (1964),

remanded on mootness grounds, sub nom. Lewis v.

NLRB, 350 F.2d 801, 802, n.2 (D.C. Cir. 1965) (legality

of Eighty Cent Clause decided by NLRB on petition of

UMW), and International Union, UMW, 165 NLRB 467

(1967), remanded sub nom. International Union, UMW

v. NLRB, 399 F.2d 977 (D.C. Cir. 1968).

5. The Steel Companies were intervenors before

the D.C. Circuit in this action.

9

Statement of the Case.

During the life of this agreement, each op-

erator signatory hereto shall pay into [the union

welfare fund| on each ton of two thousand (2,000)

pounds of bituminous coal produced by such opera-

tor for use or for sale an amount as follows: For

the period beginning November 12, 1971 and end-

ing November 11, 1972, 60 cents per ton on each

ton produced during the period; for the period be-

ginning November 12, 1972 and ending May 11,

1973, 65 cents per ton on each ton produced dur-

ing the period; for the period beginning May 12,

1973 and ending November 11, 1973, 70 cents per

ton on each ton produced during the period; for

the period beginning November 12, 1973 and end-

ing May 11, 1974, 75 cents per ton on each ton

produced during the period; and for the period be-

ginning May 12, 1974 and ending when this agree-

ment is terminated, as provided for by its terms, 80

cents per ton on each ton produced during the

period. On all bituminous coal procured or ac-

quired by any signatory operator for use or for

sale (i.e., all bituminous coal other than that pro-

duced by such signatory operator), there shall,

during the life of this agreement, be paid into such

Fund by each such signatory operator hereto or

any subsidiary or affiliate of such operator signa-

tory hereto an amount per ton which is equal to the

amount which would be payable hereunder if the

signatory operator had produced the coal for use

or sale plus forty cents (40¢) per ton on each ton

of such bituminous coal so procured or acquired

on which the amount per ton payable hereunder

10

Statement of the Case.

on coal produced for use or sale had not been paid

into said Fund prior to such procurement or acqui-

sition.

Only immaterial variations exist between the Eighty

Cent Clause’s original and current forms; all the

clause’s essentials remain unchanged. Excluding esca-

lation in royalties, for instance, the clause’s original

language is identical. Equally unchanged is the Eighty

Cent Clause’s forty cent per ton “royalty” differential

between nonsignatory and signatory coal. In fact, the

only change from the original Eighty Cent Clause was

an escalation of the royalties for nonsignatory and sig-

natory coal.

The D. C. Circuit, on October 2, 1972, decided that

it incorrectly had asserted jurisdiction, and dismissed

because no aggrieved person within the meaning of

10(f) of the Act had petitioned for review of the Feb-

ruary 26, 1971 decision. International Union, UMW v.

NLRB, 468 F.2d 1139 (D.C. Cir. 1972) (App. B, infra).

When Dixie, the sole remaining charging party,

chose not to petition for review of the Board’s February

26. 1971 decision, the Steel Companies petitioned the

D. C. Circuit for review of the decision on or about June

20, 1973.

The NLRB and the UMW, as intervening respond-

ent, thereafter moved to dismiss the petition. Their

position was that the Board's February 26, 1971 de-

cision decided the legality of nothing more than the

original Eighty Cent Clause, and, since the Steel Com-

panies were not subject to that clause, they were not

11

Statement of the Case.

persons aggrieved by the Board order within the mean-

ing of 10(f) of the Act.

On November 19, 1973, the D. C. Circuit entered a

per curiam order granting the NLRB’s motion and dis-

missing the Steel Companies’ petition (App. A, infra).

The Steel Companies seek a review of this decision

by praying for a writ of certiorari.

12

Reasons for Granting Writ.

REASONS FOR GRANTING THE WRIT

A. Denial Of Standing To The Steel Companies Vio-

lates Federal Labor Law And Is In Direct Conflict

With Decisions Of This Court.

Section 10(f) of the Act, in relevant part, pro-

vides:

(a|ny person aggrieved by a final order of the

Board .. . denying in whole or part the relief

sought may obtain a review of such order . .

in the United States Court of Appeals for the Dis-

trict of Columbia... .

On February 26, 1971, the Board held the Eighty

Cent Clause a valid union standards clause, and there-

fore not unlawful under 8(e) of the Act, for three rea-

sons: (1) the parties’ intent in adopting the clause was

to equalize the difference in wages and fringes generally

existing between signatories and nonsignatories; (2)

nonsignatory wages and fringes generally are lower

than those of signatories; and (3) the eighty cent pay-

ment extracted from signatories for nonsignatory coal

bore a reasonable relationship to the differential. Supra

at 188 NLRB 753-4 (App. C at 14a-15a).

Based on these generalized findings, the Board’s

order concerning the Eighty Cent Clause can be — and

probably will be — read to apply, either in its en-

tirety or as controlling precedent, to the clause’s cur-

rent version, with its immaterial differences.

If the current Eighty Cent Clause is valid — either

because its validity was determined on February 26,

1971. or because that decision is used as precedent to

reach the same conclusion — the Steel Companies are

required by its terms to pay repeated, economically

15

Reasons for Granting Writ.

prohibitive penalties on all coal purchased or otherwise

acquired from nonsignatories. These penalties also have

the obvious effect of restraining the Steel Companies

from dealing with nonsignatories with whom they have

dealt in the past.

Under these circumstances, the Steel Companies

are “person[s] aggrieved” by the Board’s February 26,

1971 decision, have*standing to petition to review that

decision under 10(f) of the Act, and the D. C. Circuit

violated federal labor law by dismissing their petition.

The D. C. Circuit’s failure to recognize the Steel Com-

panies as aggrieved persons also directly conflicts with

this Court’s policy and rationale in such cases as ASsso-

ciation of Data Processing Service Organizations v.

Camp., 397 U.S. 150, 154 (1970):

Where statutes are concerned, the trend is to-

ward enlargement of the class of people who may

protest administrative action. The whole drive for

enlarging the category of aggrieved “persons” is

symptomatic of that trend.

and International Union, UAW v. Scofield, 382 U.S. 205,

219 (1965) :

[The aggrieved person review standard of sec-

tion 10(f) ] serves the “public interest” by guaran-

teeing that the Board interpretation of the relevant —

provisions accords with the intent of Congress. —

[Footnote omitted. |

See also Retail Clerks Local 1059 v. NLRB, 348 F.2d

369, 370 (D.C. Cir. 1965) :

[S]tanding to appeal an administrative order

as a “person aggrieved’ [under 10(f)] arises if

14

Reasons for Granting Writ.

there is an adverse effect in fact, and does not...

require an injury cognizable at law or equity. [Cita-

tions omitted. |

B. Denial Of Standing To The Steel Companies Pre-

cludes Resolution Of The Direct Conflict Between

The Sixth Circuit And NLRB On The Eighty Cent

Clause’s Legality.

Denial of the Steel Companies’ standing to petition

for review of the Board’s February 26, 1971 decision up-

holding the Eighty Cent Clause’s legality permits that

decision to stand. without the benefit of court review,

in direct conflict with the decision by the United States

Court of Appeals for the Sixth Circuit in Riverton Coal

Co. v. UMW, 453 F.2d 1035 (6th Cir. 1972), cert. denied,

407 U.S. 915 (1972). That case held that the Eighty

Cent Clause is an unlawful, invalid union signatory de-

vice violative of section 8:e) of the Act:

(Tjhe District Court specifically found that

‘an object” of the 1964 strike was to force Riverton

to sign the agreement containing the eighty cent

penalty clause. Another object was to compel River-

ton and Davison to cease doing business with, and

to cease using the products of, other coal producers

who were nonsignatories. The foreseeable purpose

of the eighty cent clause was “the unionization of

some non-union employers.”

It is clear that Section 8(b) (4) of the Act for-

bids strike action if “an object” is to force an em-

ployer to do any of the things prohibited by Section

8(e). The statute does not mention primary object

15

Reasons for Granting Writ.

or purpose. If any object of the strike is forbidden

by Section 8(b) (4), it is a secondary boycott. It is

not necessary to find that it was the sole object.

N.L.R.B. v. Denver Bldg. & Const. Trades Council,

341 U.S. 675, 71 S.Ct. 943, 95 L.Ed. 1284 (1951).

In our view, the Board decisions holding the

two clauses to be illegal, appear to be better

reasoned decisions. Seven Board members have

held the eighty-cent clause invalid. Only three

Board members and no trial examiner have held

otherwise. Supra at 453 F.2d 1040, 1041.

As explained above, the only other person with

standing to seek review of the Board’s decision is

Dixie, but that charging party is financially unable or

otherwise unwilling to petition if the Steel Companies’

standing to do so is denied.

C. Denial Of Standing To The Steel Companies May

Preclude Court Review Of The Legality Of The

Eighty Cent Clause As Presently Structured And

Future Eighty Cent Clauses.

Denying standing to the Steel Companies could

preclude court review—by anyone—concerning the

legality of both the Eighty Cent Clause’s current and

future versions which are based upon and functionally

indistinguishable from the 1964 clause.

If standing to petition the Board’s February 26,

1971 decision is denied, the Steel Companies will be

forced to begin again and file new unfair labor practice

EGO ANNE ALG MLM

*

ay

Neasors for Gnrartiag Ware

eharges under the Act, alleging the ulegality of the

Righty Geat Clause's present form ©

at vt as conceivable and perhaps proballe-that

the NUNES General Counsel, relying upon the Boar's

erroneous, bat controlling Pebruary 28. LOTT decision,

WH pefasxe fo issue a complaint based on unfair labor

PRACKIOS CHANPES comeertungs current and future forms

af the Baghty Cent Clause Such a refusal by the Gen-

eral Qounael would be subject to no review whatsoever

Vaow © Stees S88 FS TTL. ISD (LOST), citing with ap-

eroad Catfad Nlectnead Contractors ass'k 0. Ondman,

DAS Fe Supp TAS CSUN LY. 1963). aga per cena, 368

BONG TTH OAT Cie 1988), cert. denied. SS US. 1028

LYMAT) See also Contractors ass'n of PAU 0. NUNB,

DW KAA AMG EMG Cir LYGL) | Street Semwoyees Division

Stet & Orndran, LO Badd TIO (DAC. Cir, 1963), Retaw

(Yerds Loo 88) 0 Notheran, 2S Fad BW CD.C. Air

LORD). and Jaoodeer eo NEAR, 120 Fld 96, 99-100 (Sd

Cie Usd)

& The logical effect of the D.C. Cireuit decision

for whieh a writ af certiorart and review are sought is

to reguite potentially endless litigation over the legal:

ity af clauses every time they are changed in some ite

audatantial manner

Conclusion, :

;

CONCLUSION k

For the foregoing reasons, this petition for a writ

of certiorari should be granted, fs

Respectfully submitted,

NICHOLAS UNKOVIC

LEONARD L. SCHEINHOLTZ

EUGENE K,. CONNORS

Reep SMITH SHAW & MCCLAY

747 Union Trust Building

Pittsburgh, Pennsylvania 15219

Attorneys for Petitioners

@ a aie

la

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1973

No. 73-

UNITED STATES STEEL CORPORATION, BETH-

LEHEM STEEL CORPORATION, REPUBLIC STEEL

CORPORATION, JONES & LAUGHLIN STEEL COR-

PORATION, YOUNGSTOWN SHEET AND TUBE

COMPANY, ARMCO STEEL CORPORATION, IN-

LAND STEEL CORPORATION and NATIONAL

STEEL CORPORATION,

Petitioners,

V.

NATIONAL LABOR RELATIONS BOARD and

UNITED MINE WORKERS OF AMERICA,

Respondents.

APPENDICES TO PETITION FOR WRIT OF

CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE DISTRICT OF

COLUMBIA CIRCUIT

Appendix A—Judgment-Order of the Court of Ap-

peals, No. 73-1700 (Nov. 19, 1973) ‘unreported).

Appendix B—Opinion of the Court of Appeals, 468

F.2d 1139 (D.C. Cir. Oct. 2, 1972).

Appendix C—Order of the National Labor Rela-

tions Board, 188 NLRB 753 (Feb. 26, 1971).

= iwt

2a

APPENDIX A

November 19, 1973 Judgment-Order of the

Court of Appeals

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 73-1700

September Term, 1973

UNITED STATES STEEL CORPORATION, BETH-

LEHEM STEEL CORPORATION, REPUBLIC STEEL

CORPORATION, JONES & LAUGHLIN STEEL COR-

PORATION, YOUNGSTOWN SHEET AND TUBE

COMPANY, ARMCO STEEL CORPORATION, IN-

LAND STEEL CORPORATION and NATIONAL

STEEL CORPORATION,

Petitioners

Vv.

NATIONAL LABOR RELATIONS BOARD,

Respondent

UNITED MINE WORKERS OF AMERICA,

Intervenor

BEFORE: BASTIAN, Senior Circuit Judge and TAMM,

Circuit Judge.

3a

Judgment — Order of the Court of Appeals.

Order

On consideration of respondent’s motion to dis-

miss petition for review and of the response in opposi-

tion thereto, it is

ORDERED by the Court that the aforesaid motion is

granted and the petition for review herein is dismissed,

and it is

FURTHER ORDERED by the Court that the motion to

dismiss of intervenor, the United Mine Workers, is dis-

missed as moot.

Per Curiam

Se ial

OEE DES ORT TL IN LN ONLI INL IY ae oe mE NTN Dee De ne ee

| REVI TE

4a

APPENDIX B

October 2, 1972 Opinion of the Court of Appeals

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 21,129

INTERNATIONAL UNION, UNITED MINE WORKERS OF

AMERICA, ITS DISTRICTS 17 AND 28, AND ITS LOCALS 6594

AND 6937, PETITIONERS

v.

NATIONAL LABOR RELATIONS BOARD, RESPONDENT

DIxIE MINING COMPANY, DAN S. DAVISON,

UNITED STATES STEEL CORPORATION, ET AL., INTERVENORS

No. 21,226

NATIONAL LABOR RELATIONS BOARD, PETITIONER

v.

BITUMINOUS COAL OPERATORS ASSOCIATION, RESPONDENT

INTERNATIONAL UNION, UNITED MINE WORKERS OF

AMERICA, DISTRICTS 17 & 28, AND LOCALS 6594 & 6937,

UNITED STATES STEEL CORPORATION, ET AL.,

INTERVENORS

No. 23,947

DIXIE MINING COMPANY, PETITIONERS

Vv.

NATIONAL LABOR RELATIONS BOARD, RESPONDENT

W. A. BorLe, GEORGE J. TITLER AND JOHN OWENS, AS

AGENTS FOR INTERNATIONAL UNION, UMW, AND AS

MEMBERS OF JOINT INDUSTRY CONTRACT COMMITTEE,

INTERVENORS

Petitions to Review an Order of the

National Labor Relations Board

Decided October 2, 1972

ee ee ae

5a

Opinion of the Court of Appeals.

Before BAZELON, Chief Judge and WRIGHT and

TAMM, Circuit Judges.

PER CURIAM: These consolidated appeals in this

continuing litigation! challenge certain provisions of

the National Bituminous Coal Agreement as violative of

Section 8(e) of the National Labor Relations Act.? For

the reasons stated below, we dismiss all appeals for lack

of a justiciable case or controversy and want of juris-

diction.

I. No. 23,947

In 1958 the United Mine Workers and the Bitumi-

nous Coal Operators Association amended the National

Bituminous Coal Wage Agreement by inserting a so-

called “Protective Wage Clause’ (PWC). The clause

provides, in relevant part: “* © * [T]he Operators agree

that all bituminous coal mined, produced, or prepared

by them, or any of them, or procured or acquired by

1. See Int. Union, United Mine Workers v. NLRB,

130 U.S. App.D.C. 244, 399 F.2d 977 (1968).

2. Section 8ie), 29 U.S.C. § 158/e) (1970', pro-

vides, in relevant part:

“It shall be an unfair labor practice for any

labor organization and any employer to enter into

any contract or agreement, express or implied,

whereby such employer ceases or refrains or agrees

to cease or refrain from handling, using, selling,

transporting or otherwise dealing in any of the

products of any other employer, or to cease doing

business with any other person, and any contract

or agreement entered into heretofore or hereafter

containing such an agreement shall be to such ex-

tent unenforcible and void[.] * * *”

~

PANE IRI TY RANE TANT A A, \

DF CQO PER MT IE, om Ing Rar

6a

Opinion of the Court of Appeals.

them or any of them under a subcontract arrangement,

shall be or shall have been mined or produced under

terms and conditions which are as favorable to the

employees as those provided for in this Contract.”

Independent coal producers challenged this clause

before the Labor Board, and in 1963 the Board held that

it was a “union standards clause” in violation of Section

8(e). See Raymond O. Lewis, W. A. Boyle and John

Owens, 144 NLRB 228 (1963). When review was sought

in this court, we pointed out that the Board’s decision

preceded several of our decisions permitting union

standards clauses so long as they were “germane to the

economic integrity of the principal work unit.’” See,

e.g., Orange Belt District Council of Painters No. 48 v.

NLRB, 117 U.S.App.D.C. 233, 237, 328 F.2d 534, 538

(1964): Truck Drivers Union Local No. 413 v. NLRB,

118 U.S.App.D.C. 149, 334 F.2d 539 (1964). Cf. National

Woodwork Manufacturers Assn. v. NLRB, 386 U.S. 612

(1967). We therefore remanded the case to the Board

for further consideration. Lewis v. NLRB, 122 U.S.App.

D.C. 18, 350 F.2d 801 (1965). On remand the Board set

the case for hearing before a trial examiner and, upon

receipt of the trie! examiner’s report, dismissed the

complaint See W. A. Boyle, George J. Titler and John

Owens, 179 NLRB 479 (1969). Petitioners now seek

review of that dismissal.

In our view, this case is moot. On November 4, 1959,

one week before the effective date of Section 8(e), the

Joint Industry Contract Committee suspended operation

of the PWC and the clause has not been enforced since.

Moreover, shortly after the Board first declared the

PWC illegal it was replaced in the National Bituminous

SN a AG Re eee

Ta

Opinion of the Court of Appeals.

Coal Wage Agreement by the so-called ‘‘80-cent clause.’”"

Thus the PWC presently appears in no contract and has

no effect on the primary conduct of any party. “When

events during the pendency of the appeal have elimi-

nated any possibility that the court’s order may grant

meaningful relief affecting the controversy that pre-

cipitated the litigation, applicable doctrine permits, and

judicial administration generally calls for, dismissal of

the appeal.’ Alton & Southern Ry. Co. v. Int. Assn. of

Machinists & Aerospace Workers, U.S.App.D.C.

: F.2d ; (No. 24,217, decided

April 11, 1972) (slip opinion at 9'. We therefore think

the issue of the PWC’s validity lacks the immediacy of a

live controversy calling for judicial resolution. See, e.g.,

SEC v. Medical Committee for Human Rights, 404 U.S.

403 (1972). If the union subsequently attempts to insert

the PWC in a later contract or if some party later at-

tempts to assert rights derived from the PWC, there

will be time enough then to consider the difficult issues

which it poses. Cf. Golden v. Zwickler, 394 U.S. 103

(1969).

II. Nos. 21,129 & 21,226

As indicated above, when the PWC was first de-

clared illegal the union and coal producers quickly

moved to replace it with the so-called ‘‘80-cent clause”’

which provided, in effect, for an 80-cent royalty to the

union welfare fund for each ton of coal purchased from

a non-union coal producer.! Independent mine operators

3. See note 4 infra.

4. The 80-cent clause provides, in relevant part:

“During the life of this agreement there shall

be paid into [the union welfare fund] by each oper-

ator signatory hereto the sum of forty cents (40c)

ahs hl y

PICO AWARDEES OLSEN YPM PIERS OA PM RY a

Seon net

Poteet

NSE I OTOP ITN

A

8a

Opinion of the Court of Appeals.

again challenged this clause as violative of Section 8(e),

and the Board initially upheld their claim and issued a

cease and desist order. See Int. Union, United Mine

Workers, 165 NLRB 467 (1967). The union’s petition

for review ‘No. 21,129) and the Board’s cross-petition

for enforcement (No. 21,226) were then consolidated in

this court, and in Int. Union, United Mine Workers v.

NLRB, 130 U.S.App.D.C. 244, 399 F.2d 977 (1968), we

denied enforcement and remanded the case so the Board

could consider whether the 80-cent clause functioned as

a lawful surrogate for the PWC.

Pursuant to this remand,°® the trial examiner held

additional hearings and filed proposed findings of fact

and conclusions of law holding once again that the 80-

cent clause violated Section 8(e). Thereupon the Board

reversed both the trial examiner and its previous deci-

sion and dismissed the complaint. See Int. Union, United

per ton of two thousand (2,000) pounds on each

ton of bituminous coal produced by such Operator

for use or for sale. On all bituminous coal procured

or acquired by any signatory Operator for use or

for sale, (i.e., all bituminous coal other than that

produced by such signatory Operator) there shall,

during the life of this agreement, be paid into such

Fund by each such Operator signatory hereto or by

any subsidiary or affiliate of such Operator signa-

tory hereto the sum of eighty cents (80¢) per ton

of two thousand (2,000) pounds on each ton of such

bituminous coal so procured or acquired on which

the aforesaid sum of forty cents (40¢) per ton

had not been-paid into said Fund prior to such pro-

curement or acquisition. * * *”

5. On July 21, 1970, acting pursuant to a petition

by the union, we recalled our mandate solely for the

purpose of directing the Board to complete its recon-

sideration by Dec. 1, 1970.

9a

Opinion of the Court of Appeals.

Mine Workers, 188 NLRB No. 121 (1971). With the

cases in this posture we ordered, sua sponte, that Nos.

21,129 and 21,226 be consolidated with No. 23,947 (the

PWC case) for review.

Shortly after this court’s consolidation order, Dixie

Mining Company, one of the charging parties, moved to

vacate the order and, when this motion was denied. sug-

gested a rehearing en banc. Although en banc rehearing

was also denied, the court noted that the jurisdictional

issues raised by Dixie Mining Company “may be consid-

ered by the panel when the cases are heard on the

merits * * *.’”’ We have now given careful consideration

to these issues, and we conclude that we lack jurisdic-

tion in Nos. 21,129 and 21,226.

The most salient fact about the 80-cent clause cases

is that no party has yet appealed from the Board's sec-

ond supplemental! decision dismissing the Section 8/e)

complaint. Accordingly, there is no party aggrieved

properly before this court within the meaning of Sec-

tion 10/f) of the Act which delineates our appellate

jurisdiction over the Board.® Clearly the union is not

6. Section 10'f), 29 U.S.C. ¢ 160‘f) ‘1970), pro-

vides, in relevant part:

“Any person aggrieved by a final order of the

Board granting or denying in whole or in part the

relief sought may obtain a review of such order in

any United States court of appeals in the circuit

wherein the unfair labor practice in question was

alleged to have been engaged in or wherein such

person resides or transacts business, or in the

United States Court of Appeals for the District of

Columbia, by filing in such a court a written peti-

tion praying that the order of the Board be modi-

fied or set aside. * * *”’

10a

Opinion of the Court of Appeals.

aggrieved by the Board’s order inasmuch as the Board's

dismissal of the complaint was the action the union it-

self requested. The charging parties were aggrieved,

but they have not as yet decided to file an appeal and

obviously we cannot compel them to do so.

To be sure, this court had jurisdiction over the 80-

cent clause cases when the union appealed from the

Board’s initial unfair labor practice finding. But our

unqualified remand in that case operated to divest us

of jurisdiction. Sce NLRB v. Wilder Manufacturing Co.,

—— U.S.App. D.C. ——, 454 F.2d 995 (1971); Greater

Boston Television Corp. v. FCC, —— U.S.App.D.C. ’

F.2d —— (Nos. 17,785, 17,788, 23,154, 23,159 &

23,172, decided December 29, 1971). Having lost juris-

diction, absent extraordinary circumstances we cannot

now regain it until a proper appeal has been perfected.

Accordingly, Nos. 21,129 and 21,226, as well as No. 23,-

947, must be dismissed.

So ordered.

lia

APPENDIX C

Opinion and Order of the

National Labor Relations Board

UNITED STATES OF AMERICA

BEFORE THE NATIONAL LABOR RELATIONS BOARD

INTERNATIONAL UNION, UNITED MINE

WORKERS OF AMERICA

and

BITUMINOUS COAL OPERATORS ASSOCIATION

Case 5-CE-8

and

DIXIE MINING COMPANY

UNITED MINE WORKERS OF AMERICA AND ITS

DISTRICT 17

Cases 5-CE-9-1 thru 2 5-CC-282-1 thru 2 ‘formerly

Cases 9-CE-12-1 thru 2 9-CC-342-1 thru 2)

and

DAN S. DAVISON

UNITED MINE WORKERS OF AMERICA, ITS

DISTRICT 17, ITS DISTRICT 28, ITS LOCAL 6594,

ITS LOCAL 6937, R. R. HUMPHREY AND CARSON

HIBBITTS

and

AMES COAL COMPANY AND BUCHANAN COUNTY

COAL CORPORATION

Case 5-CC-294 (formerly Cases 9-CC-347-1 thru 7)

Tape y cee

lla

Opinion and Onder of the NLRB.

Supplemental Decision and Order

On June te. 1967, the National Labor Relations

Rowind inaved tts Decision and Order in the above-en-

Titled proceeding. concluding, infer alia, that the S0-

cont proviston tn the (964 amendments to the National

Piturnous Coal Wage Agreement of 1950 is an agree-

mont pootibited Oy Seetion Ste), and ordering Respond-

ets to cease and desiat from Cal maintaining, enfore-

MA OP RIVEn effect to the clause and Cb) entering into,

VAAL CAI ving effeet to. or enforcing any other

Contract OP aAgpeomient, expressed or implied, whereby

AY gnatory operator ceases or refrains, or agrees to

eee cor pefrain, Poon handling, using, selling, trans-

porting. or otherwise dealing in any of the products of

any other emplover, or from doing business with any

other peraon, tn violation af Seetion Ste) of the Act!

On July 2. 1S, the United States Court of Appeals

tor the Diatriet of Columbia Cireuit remanded the case

ty the Rowed for (urther consideration © Subsequently

the Bown pursuant to the court's remand, remanded

the care to the Regtonal Director for Region 5 with in-

atruetionsa that a hearing be held before a Trial Exami-

her for the purposes of entering findings and conclu-

stone and Co pecomimend an appropriate order, after

Hearing evidence on (hee issues which are set forth in

the attached Trial Examiner's Decision,

On November 27, 1970, Trial Examiner Samuel M

Super iaaved Nin decision in the above-entitled proceed-

ihe, finding Chat Respondents had engaged in the un-

1 WAN NLR 407

2 SO Rd OTT

13a

Opinion and Order of the N.L.R.B.

fair labor practices alleged in the complaint and recom-

mending that the Board reaffirm its conclusions and

order as set forth in the original proceeding, 165 NLRB

467. Thereafter, the General Counsel, Respondent

United Mine Workers, Charging Party Dixie Mining

Company, and Charging Party Dan S. Davison filed ex-

ceptions to the Trial Examiner's Decision and support-

ing briefs.’

The Board has reviewed the rulings of the Trial

examiner at the hearing and finds that no prejudicial

error Was committed. The rulings are hereby affirmed.!

The Board has considered the Trial Examiner's Deci-

sion, the exceptions and briefs, its earlier Decision. the

court's remand order, and the entire record in this case,

8. Thereafter, several steel producing companies

‘United States Steel Corporation; Bethlehem Steel Cor-

oration; Jones & Langhiin Steel Corporation; Republic

Steel Corporation; C F & T Steel Corporation; Inland

Steel Corporation; and Youngstown Sheet and Tube

Corporation) filed a request for leave to file exceptions,

the time for filing having expired, together with excep-

tion and a supporting brief. The request for leave to

file these exceptions is hereby denied as these com-

panies are not parties to the proceeding before the

Board, However, the Board has determined that the

brief is in the nature of an amicus curiae brief and has

considered it on that basis.

4. The remanded hearing was opened by Trial Ex-

aminer Paul E, Weil, After 2 days of hearings Trial Ex-

aminer Weil disqualified himself. The evidence received

by him on August 25 and 26 was stipulated into the rec-

ord when the hearing was resumed on September 16,

1970, Our review and affirmance of the rulings of the

Trial Examiner include the rulings of both Trial Exam-

iner Weil and Trial Examiner Singer.

i aaa ie lh el et |

t

”

axe th

PP OL Le PEE OS OD Yn ED

(Gorse is aliat ta |

l4a

Opinion and Order of the N.L.R.B.

and hereby adopts the findings, conclusions, and recom-

mendations of the Trial Examiner as modified herein-

after.

The Court of Appeals remanded this case to the

Board for further consideration as to the intent of the

parties in agreeing to the 80-cent clause and for a de-

termination as to the validity of the 80-cent clause as 4

substitute for the Protective Wage Clause ‘PWC), the

union standards clause which it replaced.® In agree-

ment with the Trial Examiner we find that the evidence

in this case establishes: (1) that the intent of the par-

ties in adopting the 80-cent clause was to equalize the

differences in the costs of wage and fringe benefits gen-

erally existing between mines signatory to the National

Bituminous Coal Wage Agreement and those which are

not in order to protect the work opportunities and

standards provided UMW members employed by signa-

tory operators; (2) that wage, fringe, and working

condition standards of employees in nonsignatory mines

are generally lower than those established in the Na-

tional Bituminous Coal Wage Agreement; and (3) that

the 80-cent payment to which signatories are obligated

on nonsignatory coal purchases bears a reasonable re-

lationship to the wage and fringe benefit differentials

between employees of signatory and nonsignatory oper-

5. In essence the PWC provided that operators

agreed that all bituminous coal mined, produced, or

prepared by them, or any of them, be acquired by them,

or any of them, under a subcontract arrangement shall

be or shall have been mined or produced under terms

and conditions which are as favorable to the employees

as those provided for in the contract.

CO SN FD Te emt RR,

15a

Opinion and Order of the N.L.R.B.

ators. In making this third finding we find in agree-

ment with the Trial Examiner that this relationship is

to be determined by the hourly wages and the fringe

benefits received by the employees and not by the unit

costs, or per ton costs, of production as urged by the

General Counsel and the Charging Parties.“ On the

basis of these findings, we conclude that the 80-cent

clause functions as a union standards clause in protect-

ing and preserving the work of employees working

under the UMW agreement and the standards under

which such work is performed by removing the eco-

nomic incentive to subcontract such work stemming

6. However, even if we were to resolve the issue

on the basis of the per ton labor cost we would still find

that the differential between signatory and nonsigna-

tory operators bears a reasonable relationship to the

wage and fringe benefit differential in terms of the

“broad equation” suggested by the Court of Appeals. In

doing so we agree with the Trial Examiner that Dixie

witness Abraham’s analysis is defective, for the rea-

sons stated by the Trial Examiner, and with the Gen-

eral Counsel and Charging Parties that the Trial Exam-

iner’s analysis is defective in that he fails to take into

account the fact that nonsignatory mines are, in gen-

eral, less efficient than signatory mines. However, while

both Abraham’s analysis and the Trial Examiner's anal-

ysis are defective, the extent of the defects in each

analysis cannot be determined and therefore the precise

per ton costs cannot be ascertained. Despite this diffi-

culty. the two differing results tend to establish the

possible range within which the actual cost would be

found. We note that the figure agreed to by the parties

to the national agreement is very near the midpoint of

the range. Thus, although the data available is impre-

cise. we conclude that even on the basis of per ton costs

the differential agreed to by the parties bears a reason-

able relationship to the actual difference in costs.

LEAR AER LAIN nome §

OT ath en sa a

16a

Opinion and Order of the N.L.R.B.

from the lower wage and fringe benefit costs of non-

signatory mines. In the light of that conclusion we do

not agree with, and therefore do not adopt, the Trial

Examiner’s conclusion that because there exists a

multiplicity of bargaining units under the UMW agree-

ment “the 80-cent clause was neither intended to func-

tion, nor functioned, to protect work ‘fairly claimable’

by a particular bargaining unit.”

The validity of a union standards clause lies in the

fact that it removes the economic incentive to subcon-

tract unit work to employers maintaining substandard

conditions of employment which enable such employers

to perform the work at cheaper labor costs. By removal

of the economic incentive, a union standards clause

protects and preserves unit work precisely to the ex-

tent that the economic incentive to subcontracting is

the compelling consideration. Under any union stan-

dards clause, the signatory employer is not restrained

from subcontracting work to employers in another bar-

gaining unit covered by similar wage contractual pro-

visions. Such subcontracts may of course be made for

other than economic reasons; however, the fact that

such subcontracting is permitted does not detract from

the fact that the object of such clause is to preserve

and protect unit work. This was as true of the PWC as

it is of the 80-cent clause. Accordingly. we find that the

existence of a multiplicity of bargaining units does not

preclude the 80-cent clause from functioning as a union

standards clause as it was intended to do.*

7. Member Jenkins does not adopt any inference

that. so far as the clause and the Welfare Fund are con-

cerned, there is a “multiplicity of bargaining units.”

> na wae nr eee

17a

Opinion and Order of the N.L.R.B.

Nor do we find the other considerations relied upon

by the Trial Examiner as militating against our con-

clusion. The fact that some signatories have ceased

buying coal from nonsignatories in order to avoid the

80-cent payment imposed by the contract merely bears

out the fact the clause does in fact remove the eco-

nomic incentive to purchase coal mined under substan-

dard conditions of employment. This is, of course, a

valid function of a union standards clause. Nor, as we

noted in Galligan, does the fact that some nonsignatory

operators may have been encouraged to become signa-

tories to improve the marketability of their coal detract

from the validity of the clause.* Similarly, the fact

that the clause as written would appear to impose an

80-cent payment on coal purchased from Mid-Continent

Coal Company, shown on the record to maintain rough-

ly comparable standards, is not a sufficient basis for

finding the clause to be unlawful. The record shows

that the contracting parties decided upon the imposi-

tion of the 80-cent payment on coal on which the 40-

cent-per-ton royalty has not been paid as a means of

equalizing the costs of production of coal whether or

not it was produced under the contract and that the

80-cent payment does in general equalize such costs.

It is to be expected that a broad equation designed to

equalize costs in an industry of diverse production units

8. If such operators after becoming signatories

failed. with either UMW approval or acquiescence, to

establish or maintain union standards the clause might

be viewed as a union signatory clause as applied to

them. However, as the Trial Examiner found, the record

does not support Dixie Mining Company’s contention

that the UMW authorized any signatory operator to

do less than comply with the terms of the agreement.

Ft OIE ELIYA LIL LORE LE ELIOT

a ides aided aoe at eee

18a

Opinion and Order of the N.L.R.B.

will not bear exactly equally upon every one in the

industry. Moreover, insofar as this record shows, only

one nonsignatory operator, Mid-Continent, can be said

to maintain standards roughly comparable to the stan-

dards established in the UMW agreement. And while

it is true that the clause can be read as imposing an 80-

cent payment on coal purchased from Mid-Continent,

the record also shows that Mid-Continent does not sell

coal to signatories to the instant agreement as it sells

all of its coal to steel companies.” Accordingly, we are

unwilling to find that the evidence concerning Mid-Con-

tinent and possible application of the 80-cent clause

to purchase from it requires a finding that the clause,

which in other respects functions as a union standards

clause for the ostensible purpose of preserving and

protecting unit work, is invalid.

Finally, there remains the question of whether the

failure of the clause to distinguish between “supple-

mental” (coal of a type or quality which could not be

produced by the purchasing signatory or by a signa-

tory in his bargaining unit) and “substitute” (coal

which could be produced from the properties of the

purchasing signatory or from those controlled by other

signatories in his bargaining unit) coal requires a find-

ing that it is not limited to preserving work germane

9. The steel company contracts with the UMW do

contain a clause providing that if during the life of the

agreement the 80-cent clause is found lawful by the

court of last resort the steel companies will bargain with

the UMW as to what action may be appropriate under

the then existing contract.

19a

Opinion and Order of the N.L.R.B.

to the economic integrity of the unit.!° The record does

not contain any evidence which would show that the

incidence of the purchase of supplemental coal is other

than de minimis. Accordingly, for the reasons stated in

Galligan, we conclude that the possible application of

the 80-cent clause to supplemental coal is insufficient

to establish that the parties entered into the clause for

a secondary object or that the failure to distinguish

between substitute coal and supplemental coal gives

the clause wider application than necessary to preserve

and protect unit work and standards.!!

Accordingly, we find that the 80-cent clause does

not contravene Section 8(e), and we shall dismiss the

complaint.!=

10. As the decisions in Gelliqan make clear, it is

only with respect to this issue that the scope of the

bargaining unit or units becomes relevant to a determi-

nation of whether a union standards clause may be

said to protect work beyond or outside of a particular

bargaining unit.

11. While Member Kennedy views the conclusions

reached in this case warranted on the facts adduced un-

der the limited scope of the record, he would limit the

decision to the peculiar facts of this case.

12. As the allegations of Sec. 8 (b) (4) (i), (ii) (A)

and (b) violations are dependent on our finding that

the 80-cent clause violates Sec. 8(¢!. we shall also dis-

miss these allegations of the complaint.

adie coat |

VO MUAY ROPES POLLEN Ee Pe

tet at a Se edna ot Re

20a

Opinion and Order of the N.L.R.B.

ORDER

Pursuant to Section 10(c) of the National Labor

Relations Act, as amended, and upon the entire record

in this case, the National Labor Relations Board here-

by orders that the complaint herein be, and it hereby is,

dismissed in its entirety.

Dated, Washington, D.C. Feb. 26, 1971

JOHN H. FANNING, Member

HOWARD JENKINS, JR., Member

RALPH E. KENNEDY, Member

[SEAL] NATIONAL LABOR RELATIONS BOARD

CHAIRMAN MILLER and MEMBER BROWN, dissenting:

We cannot agree with our colleagues that the clause

in dispute is lawful. We are dealing here with Section

8(e), which requires that we construe contractual lan-

guage adopted by the parties. The lawfulness of the

clause does not depend upon the parties’ subjective in-

tent in executing the clause or upon their conduct in

enforcing it, although the latter is properly our con-

cern under Section 8(b) (4) (A). Thus, where the prac-

tical effect of contractual language comprehends a pro-

hibited objective which is not merely incidental to pro-

tection of the employees of the contracting employer.!*

it is unlawful even though not enforced in an illegal

fashion. Conversely, a clause may be lawful on its face

13. “The touchstone is whether the agreement or

its maintenance is addressed to the labor relations of

the contracting employer vis-a-vis his own employees.”

National Woodwork Manufacturers Association, et al. v

N.L.R.B., 386 U.S. 612.

boar Si cinema)

21a

Opinion and Order of the N.L.R.B. ;

but the conduct of the parties may reveal an under-

standing and interpretation which is outside the statu-

tory protection.!+

We are persuaded that the 80-cent clause is an im- ©

plied union signatory clause, and not a union standards

clause as found by our colleagues. Clearly, as the Mid-

Continent example demonstrates, signatories are re-

quired to make the 80-cent payment on coal purchased

from nonsignatories even though the wage and fringe

benefit standards of the nonsignatory may be compa-

rable to or even better than those established in the

UMW contract,!* while no such payment is imposed on ~

coal purchased from signatories. This view is strength- :

ened by the fact that the clause operates to prohibit the ~

contracting employers from purchasing even supple- E

mentary coal, that is, coal of a type or quantity which ~

could not be produced by their own employees. At least

PORE tee ee

14. See the general discussion of principles in

Local Union No. 26, Sheet Metal Workers (Reno Em- |

ployers Council), 168 NLRB 893, 898-899.

15. The 80-cent payment is imposed on coal on ©

which the normal 40-cent-per-ton royalty has not been —

paid into the UMW welfare fund. Of course, such 40-

cent payment is made only on coal mined under UMW ©

contracts. Were the clause to require the 80-cent pay- ©

ment on all coal purchased from producers who main-

tain conditions of employment less favorable to em- —

ployees than those established in the UMW contract, a |

different answer might be required. Accordingly, it is ©

clear that notwithstanding Mid-Continent’s working

conditions, the 80-cent payment would have to be made

if the signatory employers made purchases from that ~

firm, and since it is used merely as an example of the

application of the clause it is immaterial that in fact

Mid-Continent sells only to steel companies.

22a

Opinion and Order of the N.L.R.B.

to that extent the clause has a secondary thrust ex-

tending beyond the protection of area standards, or the

preservation of unit work or of work fairly claimable

by the employees covered by the contract. Accordingly,

even though we accept the Trial Examiner’s findings

that the parties adopted the clause in order to equalize

the wage and fringe benefit costs of signatories and

nonsignatories, we must find that the parties have

failed to embody their purpose in language that oper-

ates in a lawful manner.!® Therefore, notwithstanding

the holding of the Galligan decision and other related

prior holdings, we would find the clause herein to be

violative of Section 8(e).

Dated, Washington, D.C. Feb. 26, 1971.

EDWARD B. MILLER, Chairman

GERALD A. BROWN, Member

NATIONAL LABOR RELATIONS BOARD

16. We agree with the Trial Examiner that:

The evidence adduced in the remand proceeding

does not detract from the findings and conclusions of

the Board in the earlier proceeding, premised upon the

Board’s undisturbed determination that the various

bargaining units (and not a single industry-wide unit)

are the sole units for which the Union may seek to pre-

serve work opportunities and standards. The record

developed in the instant hearing was devoted to an in-

quiry on the wage and fringe benefit differentials be-

tween signatory and nonsignatory mines and also the

intent of the parties in adopting the 80-cent clause,

rather than to the secondary impact of the clause.

23a

Trial Examiner’s Supplemental Decision.

Trial Examiner’s Supplemental Decision

STATEMENT OF THE CASE

SAMUEL M. SINGER, Trial Examiner: This proceed-

ing was tried before me in Washington, D.C. on various

dates between August 25 and September 29, 1970, pur- —

EN TING

POOL ODE

suant to an Order of the Board, issued April 24, 1970, |

reopening the record for the purpose of receiving evi- |

dence on issues enumerated in its order.!

All parties appeared and were afforded full oppor- :

tunity to be heard and to examine and cross-examine ?

witnesses. Their briefs were received on October 23,

1970.-

Upon the entire record, the briefs, and my obser-

vation of the testimonial demeanor of the witnesses, I

make the following:

1. The remanded hearing, originally opened by

another Trial Examiner on August 25, was closed on

August 27, 1970, after that Trial Examiner disqualified

himself. The evidence received by him on August 25

and 26 was stipulated into the record when the hearing ©

resumed on September 16, 1970.

2. The post-hearing motion of Mid-Continent Coal

and Coke Company to file a brief amicus is hereby

granted. Evidence relating to Mid-Continent’s opera-

tion was received at the remanded hearing.

3. Transcript corrected by my orders dated No-

vember 9 and 19, 1970.

24a

Trial Examiner’s Supplemental Decision.

SUPPLEMENTAL FINDINGS OF FACT

A. BACKGROUND AND HISTORY OF THE PROCEEDING;

THE ISSUES INVOLVED

1. Introduction

The basic issue in this proceeding concerns the

legality, under Section 8(e) of the Act, of the ‘‘80-cent

clause’’ incorporated into the National Bituminous Coal

Wage Agreement of 1950 ‘as amended in 1964), suc-

cessor to the Protective Wage Clause established in that

Agreement.+ The 80-cent clause in essence requires a

signatory to the National Agreement to pay 80 cents a

ton royalty into the United Mine Workers (“UMW”)

Welfare and Retirement Fund on all bituminous coal

‘‘purchased or acquired” for use or sale from nonsigna-

tory operators; the welfare-retirement royalty is only

40 cents per ton for coal produced by or acquired from

signatories.°

4. Section 10/e), the so-called hot-cargo provision,

makes it an unfair labor practice for a labor organiza-

tion and employer “‘to enter into any contract or agree-

ment, express or implied. whereby such employer ceases

or refrains or agrees to cease or refrain from handling,

using, selling, transporting or otherwise dealing in any

of the products of any other employer, or to cease do-

ing business with any other person.”

5. Insofar as here pertinent, the 80-cent clause,

effective April 2, 1964, provides:

During the life of this agreement there shall be

paid into such Fund by each Operator signatory

hereto the sum of forty cents (40 cents) per ton

of two thousand (2000) pounds on each ton of bi-

tuminous coal produced by such Operator for use

or for sale. On all bituminous coal procured or ac-

quired by any signatory Operator for use or for

25a

Trial Examiner’s Supplemental Decision.

The Protective Wage Clause (“PWC”), incorpo-

rated into the National Agreement in 1958, required

that all coal mined or procured by signatories through

subcontracts “be mined or produced under terms and

conditions which are as favorable to the employees as

those provided for in this contract.”* Both clauses have

been the subject of long and intensive litigation before

the Board, the United States Court of Appeals for the

District of Columbia Circuit, and in civil actions before

United States District Courts. As presently indicated,

the Board considered PWC in three proceedings, con-

cluding in the first two that it was not lawful and in

sale (i.e., all bituminous coal other than that pro-

duced by such signatory Operator) there shall, dur-

ing the life of this Agreement, be paid into such

Fund by each such Operator signatory hereto or

by any subsidiary or affiliate of such Operator sig-

natory hereto the sum of eighty cents (80 cents)

r ton of two thousand (2000) pounds on each ton

of such bituminous coal so procured or acquired on

which the aforesaid sum of forty cents (40 cents)

per ton had not been paid into said Fund prior to

such procurement or acquisition.

6. Insofar as pertinent, the Protective Wage

Clause read: “It is recognized that when signatory op-

erators mine, prepare, or procure or acquire under sub-

contract arrangements, bituminous coal mined under

terms and conditions less favorable than those provided

for in this contract, they deprive employees of employ-

ment opportunities, employment conditions and other

benefits which these employees are entitled to have

safeguarded, stabilized and protected. Accordingly, the

Operators agree that all bituminous coal mined, pro-

duced, or prepared by them, of any of them . . . under

a subcontract arrangement, shall be or shall have been

mined or produced under terms and conditions which

are as favorable to the employees as those provided for

in this Contract.”

ORIEN MO es |

POWERS GLE ILE IEE LLL IE LLL IRIS EM

MOONE

a merry,

2ba

Tradl Rouminer’s Supplemental Decision.

the Chird that it waa) ‘The SQceont clause was twice con-

mitered by the Board and both times found unlawful.

The Court of Appeals has reviewed each of the clauses

onee, edeh time remanding the proceeding for the re-

coipt of additional evidence and for further considera-

tions ‘Phe considerable litigation involved and the divi-

mion of the Board itactt on the posed issues attest to the

COMMpIONTEY and cloreneas of the questions involved.>

~ Por non Roard cases in which PWC and the

SO cent clatter were involved or commented on see, eg.

Lew Bennington, 297 Supp. 815, 821-825 CED.

Tenn): Lewis e. Pennington, 400 F.2d 806 (CA. 6);

Ramsey 0. UAEW., 269 Supp. 388 (ED. Tenn). See

vlao CMW. oe Pennington, qa U.S, 657. In Riverton

Coal Company oe UMW, Civil Action Nos, 5805 and

OTIO, the United States Diatrict Court for the Southern

Diatriot of Ohto (WD), recently determined that Riv-

erton (an affiliate of Charging Party Davison) was not

entitled to damapes auntalnes from the 80-cent clause;

Judge Hogan coneluded that that clause did not run

“afoul of Seetion Sce) of the Act. The District Court's

Tindinge and conclusions are not binding in this proceed-

ing WoW. Wallwork Fargo, Inc, 128 NLRB O1, 1138,

th ah

8 Counsel for all partios are to be commended for

the oomprehenaive and helpful briefs submitted, particu-

larly in view of the limited time afforded to prepare

thom in order to help meet the deadline set by the Court

of Appeals for completion of these proceedings. In ad-

dition to the over 2,000 pa of testimony adduced in

the original and remanded hearings, the record includes

voluminous exhibita much of it) economic and

ntatintionl data

27a

Trial Examiner's Supplemental Decision.

2. History of the Procecdings

In its first decision on PWC, issued August 27,

1963, a 3-member panel of the Board (one member

dissenting) held that PWC contravened Section 8(e) of

the Act. Raymond O, Lewis, et al. (Arthur J. Galli-

gan), 144 NLRB 228." On September 20, 1963, the Board

denied a motion to reconsider that decision en banc, in-

dicating it had been “unable to arrive at a majority de-

cision disposing of the matter."' Thereafter, another

motion was filed by UMW, requesting the Board to de-

clare valid and lawful the then recently negotiated 80-

cent clause, which, it was alleged, “fully and completely

supplants and supersedes” PWC. On August 7, 1964,

the Board (one member dissenting) held, on the basis of

a stipulated record, that the 80-cent clause was like-

wise illegal and, accordingly, denied the Union's re-

quest that it be adjudged in compliance with the order

entered in 144 NLRB 228. See Galligan, 148 NLRB 249.

Rejecting the Union's contention that the 80-cent clause

was “lawful because its purpose is to preserve and pro-

tect the work of employees in the industry-wide unit”

(148 NLRB at 253), the majority stated that on the

basis of the “statements of the negotiating parties as

to the purpose and impact of the clause, and in view of

the economic and industrial realities obtaining in the

coal mining industry as set forth in the stipulated rec-

ord, we find that the clause imposes a substantial hard-

ship upon Signatory Operators who procure or acquire

9. Hereafter referred to as Galligan.

10. See Trial Examiner A. Bruce Hunt's Decision

rs the original hearing in this case, 165 NLRB 467, 471,

n. 6.

aT ELON ECORI OM LEO MELIEE ed

28a

Trial Examiner’s Supplemental Decision.

coal from nonsignatory sources, a penalty which is not

imposed if they procure or acquire coal from other sig-

natory Operators.” (Jd. at 252-53.) Accordingly, the

Board concluded that “realistically appraised [the 80-

cent clause] is nothing more than an implied union sig-

natory agreement restricting subcontracting of work

to operators under contract with the UMW, without re-

gard to unit considerations.” (Id. at 255). The dissent-

ing member (Member Jenkins) would have held the 80-

cent clause valid as a lawful work-preservation and un-

ion-standards clause since, in his view, the object of

the clause was to restrict purchases from and subcon-

tracting to operators “who can produce more cheaply

because of lower wages and lower standards of benefits”

and since the clause “does assure that a welfare fund

royalty will be paid on all coal the production of which

is subcontracted by any Signatory Employer as well as

upon coal produced by that Employer itself.” (id. at

257.)

The Board again reviewed the legality of the 80-

cent clause in the instant proceeding, after a hearing

conducted by Trial Examiner A. Bruce Hunt.'! As

Trial Examiner Hunt noted in his decision, he and the

11. The main charging parties in this case are

Dixie Mining Company (‘Dixie’), a nonsignatory, and

Dan S. Davison (“Davison”), a signatory to the ‘Na-

tional Agreement. The latter signed the National Agree-

ment negotiated between UMW and the Bituminous

Coal Operators Association (“BCOA”) after separate

“negotiations.” The unfair labor pracitce charges filed

by Davison with the Ninth Region of the Board were

consolidated with others filed with the Fifth Region.

The instant proceeding will sometimes be referred to

as Dixie.

29a

Trial Examiner’s Supplemental Decision.

parties had been “advised” that the Board did not “re-

gard” the decision in 148 NLRB 249, supra, based on a

stipulated record, “as finally disposing of” the issue.

(165 NLRB 467, 470.) ) On March 17, 1966, the Board,

affirming the Trial Examiner, reaffirmed its previous

determination in 148 NLRB 249 that the 80-cent clause

was unlawful under Section 8(e) of the Act, stating

that: “construed in the light of the economic realities

of the bituminous coal industry, the clause constitutes

an implied agreement between the Union and signatory

operators that the signatory operators will purchase

coal only from other signatory operators.” (165 NLRB

at 467). The Board also said (/d. at 468):

under the clause in this case, a producer could pur-

chase coal from any signatory operator, regardless

of whether the latter is within the producer's own

employer association (bargaining unit), without

being required to make the 80-cent payment. There-

fore, since the operators from whom he might ob-

tain additional coal — be it supplemental or sub-

stitute — without the penalty are not limited to

those within the unit, the clause cannot be said to

preserve work opportunities for employees in that

unit. Nor does the 80-cent penalty clause qualify as

a wage-standards provision designed to prevent the

undermining of established working conditions in

the principal work unit . . . because a penalty is im-

posed whenever unit work is subcontracted to non-

signatory operators without regard to the wage

standards of such employers.'=

———

12. The Board in the instant case (Divie), as pre-

viously in Galligan, found the appropriate units to

Pepe | eel ee ieee |

30a

Trial Examiner’s Supplemental Decision.

Member Jenkins again dissented for the reasons he

previously stated in Galligan, emphasizing that in his

view “there exists a single industry-wide bargaining

unit for welfare fund matters.” that the majority’s con-

clusion does not comport with prior Board holdings

that “the disruption of long-established business re-

lationships was a circumstance sufficient to establish

an unlawful secondary object within the intent of Sec-

tion 8(e),” and that the Board’s decision “can stand

only if in determining the legality of the clause we sub-

stitute our judgment for that of the Union as to what

the amount of compensation to the welfare fund should

be to equalize the wage standards throughout the in-

dustry and protect the integrity of the industrywide

welfare fund.” (165 NLRB at 469.)'*

be a multiemployer association unit .eg., BCOA)

or a single employer unit (e.g., Davison, supra, fn. 11)

“for which separate negotiations are conducted with

UMW” (Dixie, 165 NLRB at 468), rejecting the Union’s

contention that all signatories to the National Agree-

ments (BCOA, other associations such as Southern Coal

Producers Association, and independent operators) con-

stitute a single unit. simply because the agreements

they signed (national agreements) contained uniform

terms. See also Galligan, 148 NLRB 249, 254; and 179

NLRB No. 80, infra.) The issue of validity of the

Board's unit determination is not presented in this re-

mand proceeding.

13. In addition to finding that the Union and

BCOA violated Section 8(e) by entering into the 80-

cent clause, the majority found that the Union violated

the secondary boycott prohibitions of Section 8(b) (4)

(ii) (A) and (B) of the Act by inducing and encourag-

ing employees to strike and by threatening, coercing,

and restraining employers with objects of forcing or

requiring said employers to become signatories to the

80-cent clause.

toa FE we

3la

Trial Examiner’s Supplemental Decision.

In the meantime, the Galligan case, involving le-

gality of PWC, came up for review before the Court of

Appeals for the District of Columbia (350 F. 2d 801).

In a decision issued August 4, 1965, the Court (per Chief

Judge Bazelon) remanded the case to the Board for

further consideration “in light of |other| recent cases”

by that court upholding the legality of union-standards

clauses so long as they were “germane to the economic

integrity of the principal work unit” or sought “to

protect and preserve the work and standards [the

union} has bargained for.” (350 F.2d at 802.) After a

supplemental hearing on the question, Trial Examiner

Frederick U. Reel on June 20, 1967 issued his decision

finding PWC lawful and recommending dismissal of

the complaint. (179 NLRB No. 80) Based on the record

before him, Trial Examiner Reel concluded that “The

A A MP ETE TENEE SR TLE ARO, SLMS TE PN PR POO PSOE

el ae et

avowed purpose of . . . the Protective Wage Clause is —

directed at restoring employment opportunities to em-

ployees covered by the contract which they were losing ©

because cheaper labor was making it more profitable

to signatory operators to buy cheap coal than to pro-

duce their own. ... [T]he Protective Wage Clause bears —

more than an incidental relationship to protecting the ;

work standards set in the basic agreement... . [I]t |

operates to encourage. but not to compel, the unorgan- —

ized segment of the industry to become signatory to the ©

agreement.”

Thereafter, on June 2, 1968, the District of Colum-

bia Circuit remanded to the Board the instant ( Dixie)

case involving the 80-cent clause which had come for

review before it. The Court (per Chief Judge Bazelon).

taking cognizance of Trial Examiner Reel's decision in »

32a

Trial Examiner’s Supplemental Decision.

Galligan (referred to in the Court’s opinion as Boyle).

which was then pending before the Board, and Member

Jenkins’ dissenting opinion in Galligan (supra, 148

NLRB at 256), stated (399 F. 2d at 980-81) :

Since the 80-cent clause is by everyone’s admission

and our characterization a substitute for the union

standards clause, it is the Board’s responsibility

to carefully consider whether, in fact, it functions

as one. If it is a union standards clause and the

Board affirms Boyle, the 80-cent union standards

clause would seem to be a valid provision. Con-

ceivably the parties could have agreed on a money

figure which in their judgment represents a broad

equation for the difference in standards throughout

an industry of diverse production units.

It is true that the Board found that this was

not a union standards clause “because a penalty is

imposed whenever unit work is subcontracted to

nonsignatory employers.” But the Board's conclu-

sion is not backstopped by the type of factual sup-

port developed by the Examiner in Boyle. It also

appears contrary to the result in Boyle, which sug:

gests that most nonsignatories have subunion

wage, fringe and working condition standards.

2 * * * * *

In view of these facts, and the history of the

Union’s efforts to deal with the problem of substi-

tute coal through a union standards clause and its

substitute 80-cent clause, the Board should have

made a full inquiry into (1: the intent of the parties

making this agreement, and (2) its validity as a

surrogate union standards clause.

33a

Trial Examiner’s Supplemental Decision.

On November 4, 1969, a majority of the Board

affirmed Trial Examiner Reel’s decision in Galligan, up-

holding his finding that PWC was valid and lawful. 179

NLRB No. 80.!+ The Board stated:

The Court of Appeals remanded this case to

the Board for consideration of certain issues in the

light of the Board's characterization of the Protec-

tive Wage Clause as “‘a union standards clause” and

the Court’s holding in certain decisions that “such

a clause would not ordinarily violate 8(e) so long

as it was germane to the economic integrity of the

principal work unit; or sought to protect and pre-

serve the work and standards [the Union] has bar-

gained for.” (citation omitted! In view of the Trial

Examiner's findings and conclusions on the issues

remanded to him which we find are supported by

the record in this case, we find that the Protective

Wage Clause was adopted by the contracting par-

ties in order to protect and preserve the “unit

work” of employees covered by the contract by

precluding the subcontracting of “unit work” to

operators who did not maintain union standards.

14. The lead opinion was signed by Members Fan-

ning and Brown; Member Jenkins concurred, relying on

his earlier (then dissenting) opinion in Galligan ‘supra,

148 NLRB 249) that PWC (predecessor of the 80-cent

clause) “had a work protection object and did not vio-

late the Act.” The then Chairman (McCulloch) dis-

sented, being of the view that the General Counsel had

adduced sufficient evidence to show a prima facie case

that PWC had prohibited objectives and that it was up

to Respondents to rebut this by establishing work-

preservation and work-standards functions. An appeal

from the Board's decision is pending before the District

of Columbia Circuit. sub nom, Dixie Mining Company v.

N.L.R.B., No. 23,947.

TMD

34a

Trial Examiner’s Supplemental Decision.

In conformity with the Court’s decision in the in-

stant (Dixie) case, the Board on April 24, 1970 ordered

that the record be reopened and a hearing be held by a

Trial Examiner to receive evidence on the following

three issues:

(1) the intent of the parties in adopting the 80-cent

clause

(2) whether the wage, fringe and working condi-

tion standards of employees of nonsignatory

coal operators are generally lower than those

established under the National Bituminous

Coal Wage Agreement; and

(3) whether the 80-cent payment bears a reason-

able relationship to such differential as may

exist.

The Board further directed that, unless the parties

waived their rights thereto, the Trial Examiner enter

findings and conclusions, and make appropriate recom-

mendations, based on the evidence received in the re-

manded hearing, the record previously made, and the

opinion of the Court of Appeals.

B. THE REMANDED ISSUES

1. Introduction

In accordance with the Board’s remand order, evi-

dence was adduced in the reopened hearing bearing on

(1) intent of the parties in adopting the 80-cent clause ;

(2) the differentials, if any, in wages, fringe and work-

ing standards “generally” prevailing among signatory

and nonsignatory employees; and (3) reasonableness of

35a

Trial Examiner’s Supplemental Decision.

the 80-cent payment (to the UMW Welfare Fund: to

such differential as may exist. All three issues appear

to be interrelated—all bearing on the objective of the

80-cent clause. Thus, as to (2) and (3), if the differen-

tials in wages and benefits approximate 80 cents, then

a reasonable relationship is established warranting the

inference that the object of the 80-cent clause was to

preserve work and protect work standards by equalizing

labor costs and benefits in the two sectors of the coal

industry (signatory and nonsignatory mines). On the

other hand, if the differentials are significantly lower,

it may properly be inferred that a penalty was contem-

plated to compel nonsignatories to sign the National

Agreement or else, cease doing business with the sig-

natories.

As indicated below (sec. B. 2) the evidence on “‘in-

tent” is largely confined to the testimony of UMW of-

ficial (John Owens) concerning the negotiations lead-

ing to the inclusion of the 80-cent clause in the April

1964 UMW-BCOA collective agreement. As also indi-

cated. based on that testimony (to the extent credited)

and the generally well-known economic facts of the

coal industry when the clause was adopted, it is found

that the 80-cent clause was intended to offset differ-

ences in wages and fringe benefits generally existing

between signatory and nonsignatory operators in order

to preserve the work opportunities and standards of

UMW members and employees covered by the National

Agreement with BCOA and other operators in the coal

industry. As further indicated (sec. B. 3 and 4), the evi-

dence on the differentials involved and their relation-

ship to the 80-cent payments consists largely of eco-

'

5

TEN PITT PA ENTE MIT GUST ST PET Saas |

PMOL NONLIAL i I AL GED

36a

Trial Examiner’s Supplemental Decision.

nomic and statistical data and, to some extent, of tes-

timony of witnesses. While all parties agree that there

are demonstrable differentials, they differ as to the

magnitude thereof and as to whether the 80-cent clause

is a reasonable equalizer. For reasons to be indicated,

it is found that although no precise figures are ascer-

tainable, the differentials between signatory and non-

signatory wages and benefits, particularly during the

most relevant period here in question (1962-1963) —

just prior to adoption of the clause involved — closely .

approximated 80 cents.

In my considered opinion, these findings on the

remanded issues are not, however, dispositive of the

ultimate i3sue in this case, namely, whether the 80-cent

clause is a valid work-preservation and union standards

clause or an invalid signatory clause, aimed at eliminat-

ing or restricting signatory subcontracting to, and pur-

chases from, nonsignateries. The Board’s order directs

me to make findings aud conclusions based on the rec-

ords developed in both this and in the original hearing,

in the light of applicable legal principles. As I see it,

the record developed in the reopened hearing relates

primarily to only one of the findings of Trial Examiner

Hunt (approved by the Board), viz, that there was

no evidence in the original record that “th> Union’s

initial proposal, or the contract figure of 80 cents,

or any Other figure could be reasonable compensation”’

to the Union for differences between signatory and non-

signatory wages and benefits to support UMW’s “con-

tention that the 80-cent provision is intended to pro-

tect employees’ job opportunities.” (165 NLRB at 476-

477.) Since it is here now found that “reasonable com-

37a

Trial Examiner’s Supplemental Decision.

pensation” did exist to justify a finding that work

preservation (as well as union standards protection)

‘was an objective, I must still pass on the question

whether the 80-cent clause fails to meet the test of

validity on other grounds. Trial Examiner Hunt and

the Board found the clause illegal on the grounds: (1)

even if qualifying as a work-preservation and union-

standards provision, the 80-cent clause was aimed at

protecting UMW members generally rather than mem-

bers of particular bargaining units; (2) the 80-cent

“penalty” was imposed “whenever unit work is subcon-

tracted to nonsignatory operators without regard to

the wage standards of such employers” (165 NLRB at

468); and (3) that, viewed in the light of “the eco-

nomics of the bituminous coal industry,” the clause

has foreseeable and serious secondary effects “causing

nonsignatories to become signatories or to lose signa-

tories as a market for their coal.’ (165 NLRB at 477.)

The Court of Appeals did not reach any of these ques-

tions; nor would it have had to if it were found that

the 80-cent payment had no reasonable relationship to

the wage and benefit differentials between signatory

and nonsignatory mines. For reasons to be shown (sec.

C) the evidence introduced in the renewed hearing for-

tifies the correctness of the original Board decision

that the 80-cent clause does not meet the test of validity,

principally because it was designed to function, and

functions, to protect work opportunities and standards

beyond the established bargaining units. Under Board

law, the units for which a union may lawfully seek such

protection are confined to the appropriate units for

collective bargaining established under Section 9 of

the Act.

38a

Trial Examiner’s Supplemental Decision.

2. INTENT OF THE PARTIES IN ADOPTING

THE 80-CENT CLAUSE

As Trial Examiner Hunt found (165 NLRB at 471-

472), the UMW-BCOA negotiations on the 1964 col-

lective agreement began in December 1963, about 4

months after the Board initially found PWC invalid,

and terminated on March 23, 1964. Only UMW Secre-

tary-Treasurer John Owens testified on the genesis of

the 80-cent clause in the original hearing. According to

Owens, the three union negotiators first discussed

among themselves a proposal to demand $1 a ton

royalty on nonsignatory coal. Owens testified that the

“purpose” of the proposal was “to preserve as far as

possible the job opportunities of our members under

the terms of the contract ard to prevent as far as

possible .. . contracting or subcontracting out of work

by coal operators that signed the agreement.” Further,

according to Owens, the three BCOA representatives

“absolutely” opposed the Union's demand. Ultimately,

the operators agreed to the Union's reduced 80-cent

proposal in lieu of PWC. According to Owens, the Union

believed that this figure would ‘‘reasonably compensate

‘the members] for work lost and protect their equity

in the Welfare Fund.” Trial Examiner Hunt found that

Owens’ testimony “shed[s] little, if any, light on the

details of the negotiations which resulted in adoption

of the 80-cent provision.” (165 NLRB at 471-72.)1°

15. Trial Examiner Hunt believed that Owens had

“seithheld information concerning the negotiations” and

characterized him as “not a candid witness.” (165

NLRB at 472.)

LL Sa TI at ED

39a

Trial Examiner’s Supplemental Decision.

At the remand hearing, Owens again was the only wit-

ness to testify on the 80-cent clause.'‘' This time, Owens

supplied more details, including the economic considera-

tions which led to the Union's initial $1 proposal and

the manner in which the $1 figure was computed. As be-

fore, Owens stressed the work-opportunity objective of

the clause, stating that “the primary purpose of it

was to protect the wage standard of the coal miners who

were signatory ccal operators and the work opportunity

that provided for [sic] under the contract; and to pro-

tect the fringe benefits; and to build up an equity

when these men are superannuated and they become

so they can no longer labor in the coal mines... .”

He explained that when (in August 1963) the Board

declared PWC “‘illegal’’ it was decided ‘“‘to negotiate

a new section that would protect our people” from sig-

natory operators’ practices of “leasing, subleasing and

buying coal from nonsignatory operators’ and, to this

extent, “keeping their mines idle.’’ According to Owens.

the ‘‘sub-leasing and sub-contracting” signatories were

paying $7 to $10 a day less wages than called for in the

previous (1958) collective agreement and were avoiding

the 40-cent per ton royalty provided therein. He also

testified that these arrangements “destroyed the work

time” of the Union miners and so idled them that their

work days in 1963 dropped to less than 200 days.

16. Although, as indicated, at least two other

Union and several BCOA representatives participated

in the negotiations, unexplainedly none was called to

testify; Respondent BCOA and Charging Parties called

no one to contradict Owens.

Pt SERIA GELLER NL EVI OLE EOG IE ALLIES DAE TE FL ERIM,

40a

Trial Rvaminer's Supplemental Decision,

An to the SL royalty tnitially proposed by the

Uivion, Owens Coutified that the figure was computed as

follows CL) the average wage coat differential between

signatory and nonaignatory coal was $7 to $10 per day;

(2) the average welfare payment differential, deter-

Mined by multiplying 40 conta by I (the average tons

per man day mine output), waa $5.60; (3) adding a $9

va dlay wage cifferential Ga figure between ST and $10)

to the $0.60 welfare differential amounted to approxi

mately St per day; and (4) the resulting $14 dif-

Ferenoe Hh econt wan the equivalont of $1 per ton,

Contencding that Owens in the original hearing was

ntrangely ailont about the mathematioal computation

Which allegedly led the Union to propose the $1 fig-

ure. although ample opportunity to deseribe this had

been afforded him, Dixte characterizes: Owens’ expla-

nation (be p aD) ae an “ad hoe rationalization.” Gen-

eral Counmel and Daviaon likewise attack Owens’ credi-

bility, combemeing Chat tie testimony was “just as in-

credible! at (hte hearing: ain the first, On the other

Hoan the Union contends that OQwens was not spe-

cifiealiy waked how the St or SO-cent figure was de-

rived dn Che original hearing. Loam of the view that

Owontn bad more than ample opportanity to expound

the mathomationl banaia for the $1 figure in answer to

Hho many quentions propounded him on the origin: of

the Union's royalty propomal to Be that as it may

i Tlowever, contrary to Dixie's Chr 30) and

Daviaonia Cb 1) atupggrestion that the mathematical

formula Wao firat advaneed at the instant hearing, years

atier (he Cinat, Ht appearn as General Counsel in’ his

brief (pp TY) concedes, that the formula was described

in tho Ulaton’a exceptions to Trial Examiner Hunt's: de

eltion, filed in April 166

mom pears outa ee

dla

Trial Examiner's Supplemental Decision.

Whether or not the mathematical formula Owens ex-

pleated is an atterthought — one thing is clear: Owens,

Who had been associated with UMW since 1901 (the

past two decades as its secretary-treasurer), was suf-

ficiently tamiliar with wages generally being paid in

the coal industry to make a realistic estimate of labor

cost Without resorting to statistical sources or elaborate

economic analysis, He has been one of the Union's three

chief negotiators and has participated in all except one

national wage conference since 1921. His year-round

duties include consulting with all types of coal operators

and famiharizing himself with trade publications and

yovernmental data dealing with the industry. He re-

ceives from UMW District representatives periodic re-

ports on working conditions at nonsignatory as well as

Signatory mines, Iam convinced that whether or not

Owens actually went through the process of devising

the formula about which he testified prior to proposing

the $1 (and later 80-cent) proposal, is immaterial.

Tam equally convinced, as Owens testified, that in

making its $1 proposal in the negotiations (it was first

made in January 1964), the Union was very much con-

cerned with the problem of preventing signatory pro-

ducers from subcontracting work to nonsignatories, in-

cluding producers to whom signatories sublease their

lands, The problem was by no means new. As Trial Ex-

aminer Hunt noted in his decision, “The practice of

operators who are signatories to agreements with the

Union in purchasing coal, called ‘subcontracting’ or

‘contracting out,” has long been a matter of concern to

the Union.” (165 NLRB at 471.) Trial Examiner Hunt

detailed the various clauses incorporated in contracts

SLE IO TIO Oe

PAE KE SPOSIEOY I

“we

OLGA LRT TON EO IGE

Peng POET,

42a

Trial Examiner's Supplemental Decision.

since 1941 to meet the problem — ranging from out-

right bans against subcontracting to the Protective

Wage Clause restricting subcontracting to operators

meeting Union standards — the latter invalidated by

the Board in August 1963. The economic facts which

could reasonably prompt the Union to propose a clause

protecting the work opportunities of its members, as a

substitute for PWC, were well known to Union and in-

dustry. The Board itself took notice of some in its 1963

Galligan decision, supra, 144 NLRB 228 — including the

fact that employment in the industry “has very signifi-

cantly declined,” that there is ever-increasing idleness,

that inter-producer purchases are common, and that

“labor constitutes the principal cost item.” (144 NLRB

at 228) As shown below (sec. B 3. a. (i!), shortly be-

fore the 1964 negotiations here involved, a published in-

dustry wage survey's showed an existing $1.13 per

hour wage differential ($9.04 for an 8-hour day) be-

tween union and nonunion aderground employees; and

a $1.25 per hour ‘or $10 per day) differential for those

in surface mines. The same survey also showed signi-

cant differentials in regard to fringe benefits such as

vacations. Owens testified that he was aware of these

wage and fringe spreads. Whether or not he was, his

proposal ‘as an industry-wide cost-differential equali-

zer) appeared to be reasonable from the Union’s point

of view and was substantiated, at least in hindsight, by

the facts.

18. Industry Wage Survey, Bituminous Coal Min-

ing, infra, fn. 20, issued September 1963.

43a

Trial Examiner’s Supplemental Decision.

Under these circumstances, it is not surprising, as

Owens indicated, that the Union's $1 or 80-cent proposal

was not the subject of debate in the UMW-BCOA 1964

negotiations. At the outset, the operators opposed it, ex-

pressing the view that “it was illegal because the Na-

tional Labor Relations Board had said the Protective

Wage Clause was illegal.”” Nor did they apparently re-

quest the Union to “explain’”’ its reason or basis for the

proposal. Owens testified that the Union and BCOA of-

ficials haa been discussing the economic problems | in-

cluding existing labor cost differentials) prompting the

Union proposal on many prior occasions and that there

was no need to detail them during the negotiations. I be-

lieve him. Furthermore, Owens indicated that BCOA

was not too concerned about the 80-cent clause as such,

its primary interest being the cost of the “entire pack-

age” (including the 80-cent clause) to be contained in

the negotiated contract, as to which BCOA addressed

itself (as always in the past) in the final stages of the

negotiations; and that it was not until then that BCOA

finally accepted the 80-cent figure ‘reduced from $1)

as a compromise. It is reasonable to assume that in ac-

quiescing to the Union’s proposal, the industry repre-

sentatives were as acquainted with the economic facts,

including industry-wide labor cost differentials, as were

the Union representatives. I so find.

Based on all of the foregoing, including Owens’ tes-

timony as to the genesis of the 80-cent clause and the

generally well-known economic facts of the bituminous

coal industry at the time of adoption of the clause, I

find and conclude that the 80-cent clause was intended

(1) to offset the differences in wages and fringe bene-

fits generally existing between signatory and nonsigna-

44a

Trial Examiner’s Supplemental Decision.

tory operators in the industry — thereby equalizing

existing work standards between these groups; (2) to

preserve the jobs, and thereby protect work opportuni-

ties and standards of UMW members employed by all

signatory operators; and ‘3) to substitute ‘or serve as

a “surrogate”) for the PWC in the predecessor collec-

tive agreement, which at the time of substitution had

been declared illegal by the Board.

3. DIFFERENTIALS IN WAGE, FRINGE AND WORKING

CONDITION STANDARDS BETWEEN EMPLOYEES OF

SIGNATORY AND NONSIGNATORY OPERATORS

a. The evidence

(i) Wages. It is undisputed that during the period

here involved differentials in average earnings and

benefits existed generally as between signatory and non-

signatory mines; only the extent of these differentials is

in question. While some testimony was adduced on the

prevailing industry-wide differentials, this testimony is

unreliable since it is vague, general, and inconsistent;

furthermore, it is unsupported by documentary evi-

dence.'” The record does include official government-

19. Thus, Dixie witness Ratliff only testified that

he was “aware” that some differentials existed during

the years 1962-1967; at the same time he insisted that

the wages in the company with which he was associated

were “very similar” to the union wage level. Dixie part-

ner Holcomb testified that during 1964-65. a $10 differ-

ential existed between his own wages ($16) and the

union scale ($26); his further testimony that current

union and nonunion wages “are approximately the

same” due to the competitive labor market is unsup-

ported by objective evidence, including economic stud-

ies, and I do not credit it.

45a

Trial Examiner’s Supplemental Decision.

published data which permit a fair comparison of the

average wage rates in unionized (signatory) and non-

unionized (nonsignatory! mines during the years 1962-

1963 and 1967. Thus, a wage survey on the bituminous

coal industry covering industry-wide wages ‘union and

nonunion), issued by the Bureau of Labor Statistics of

the United States Department of Labor (General Coun-

sel’s Exhibit 4R)2" shows the following industry-wide

wages and wage differentials in November 1962 ‘and it

is fair to assume in all of 1962 and 1963) :=""

20. Industry Wage Survey, Bituminous Coal Min-

ing, November 1962. Bureau of Labor Statistics, United

States Department of Labor ‘ United States Government

Printing Office, September 1963. Tables 3 and 26'. The

survey is based on a sample consisting of 27 percent of

bituminous coal mines in the country, employing 10 or

more workers. It covers mines employing 52 percent of

all workers in the industry. ‘See General Counsel’s Ex-

hibit 4R. pp. 57-58.) Over 80 percent of the workers

covered by the study were employed in mines covered by

collective agreements. About 98 percent of the unionized

miners were employed in signatory mines ‘i.e., mines

under contract with UMW). ‘See p. 3 of General Coun-

sel’s Exhibit 4R; see also General Counsel's brief p. 5

and Dixie brief p. 27. n. 35.)

20a. In the absence of testimony or evidence to

the contrary, it is fair to assume that nonunion earn-

ings in 1963 were not notably different than in Novem-

ber 1962. Owens testified that union wage increases

came only with the 1964 agreement and this is supported

by data in General Counsel’s Exhibit 3R. p. 10. In any

event, there was no narrowing of the wage differentials

by January 1967. See table 2 above.

Ox APPLE RS UT NEL ET SR RT HRN ON ER rE ee Balak kae |

46a

Trial Examiner’s Supplemental Decision.

Table 1—Wages and Wage Differentials

(November 1962)

Union Nonunion Differential

Type of Mine Hourly Hourly (Hourly)

Underground $3.11 $1.98 $1.13

Surface 3.37 2.12 1.25

A later wage survey (General Counsel’s Exhibit

5R) shows that while both union and nonunion industry-

wide wages had risen in January 1967, the differential

for underground mines ($1.13) remained the same, al-

though it increased somewhat for surface mines (from

$1.25 to $1.44 per hour).2! The 1967 survey shows:

21. See Industry Wage Survey, Bituminous Coal

Mining, January 1967, Bureau of Labor Statistics,

United States Department of Labor, (United States

Government Printing Office, February 1968), Tables 3

and 36. The two Industry Wage Surveys (tables 1 and

2 herein) show earnings in two sectors of the bitumi-

nous coal mining industry: (1) underground mines and

(2) surface mines. Although both sets of data are pre-

sented in this Decision, it is clear that the earnings (and

labor costs) in underground mines are far more rep-

resentative of the industry as a whole than those in

surface mines. Underground mines employed 85 per-

cent of the workers covered by the 1962 survey and

slightly over 80 percent of those covered by the 1967

survey. (See General Counsel’s Exhibit 4R, p. 2, and

General Counsel’s Exhibit 5R, p. 2) I am accordingly,

relying primarily on wage data of underground mines

in forming conclusions concerning industry labor cost

differentials.

eee

47a

Trial Examiner’s Supplemental Decision.

Table 2—Wages and Wage Differentials

(January 1967)

DG RTA NO OTY LT oay |

Union Nonunion Differential

Type of Mine Hourly Hourly (Hourly)

Underground $3.52 $2.39 $1.13

Surface 3.80 2.36 1.44

It would appear that the wage differentials between

union (signatory) and nonunion (nonsignatory) mines

were even greater since the reported wage figures :

straight time hourly earnings, exclusive of premium pay

for such items as overtime and late shift work, which

normally are higher in union than nonunion mines. The

record indicates that UMW collective agreements pro-

vide significant benefits in these respects. (See General

Counsel’s Exhibit 3R, Wage Chronology, Bituminous

Coal Mines, 1933-1968, Bulletin No. 1558, Bureau of

Labor Statistics, United States Department of Labor.

United States Government Printing Office, July 1967.

15-16).

(ii) Fringe benefits. Although the evidence ad-

duced on fringe benefits (testimonial and documentary)

does not permit a finding as to precise differences be-

tween union (signatory) and nonunion (nonsignatory)

benefits, and certainly not as to the monetary value of

the differences, it is clear that the benefits provided by

the National Agreement are significantly higher. partic-

ularly with respect to retirement and pensions, the bene-

fits most directly involved here. The 40-cent per ton

royalty, to which signatories are obligated. pays for

such benefits as health and hospitalization, life insur-

ance, funeral benefits, and pensions. (See General Coun-

sel’s Exhibit 3R, pp. 18-20.) To be eligible, an employee

48a

Trial Examiner’s Supplemental Decision.

must have worked 20 years in the coal industry for sig-

natories or nonsignatories, as long as his last year of

employment was with a signatory.-> UMW retirees are

paid a flat sum (currently $150 a month), without re-

gard to length of service. The table below, based on

available published data, sets forth in comparative

fashion the extent to which certain benefits were pro-

vided by operators covered by UMW contracts and

those not so covered in November 1962 (generally pre-

vailing in 1962-1963) and in January 1967.°* As to

vacations, the 1967 Industry Wage Survey (p. 1) re-

veals that the large majority of all employees, signa-

tory and nonsignatory, were provided eight paid holi-

days a year and two weeks paid vacation. According

to the 1962 Industry Wage Survey ‘p. 10), “Most of

the workers not eligible for vacation payments were in

mines not having labor-management contract agree-

ments.”

While the published data do not give cost break-

down or value of the various benefits, there is some

testimony as to cost experience by three nonsignatories.

Dixie partner Holcomb testified that he provided hos-

pitalization, medical benefits, and life insurance which,

in 1964 and 1967, cost him 5 cents a ton. He also testi-

fied that the cost of a $200 per month pension starting

at age 60 would be 10 cents per ton, but he did not sub-

22. The “signatory last employment” provision

was recently held by the District of Columbia Circuit not

to provide a rational basis for denying benefits to ap-

plicants. Roark v. Boyle, Case No. 23138, decided Aug-

ust 14, 1970 (74 LRRM 3025).

23. Source: Industry Wage Surveys, supra, foot-

notes 20 and 21.

49a

Trial Examiner’s Supplemental Decision.

stantiate this figure by documentary or other credible

evidence; Dixie does not provide a retirement plan.

Dixie witness Ratliff testified that the company he op-

erated in 1962-1967 provided its 20 employees hospitali-

zation, accident insurance, and life insurance, but he

did not indicate their cost. He now operates a company

(Landmark Mining) whose collective agreement with

the Southern Labor Union calls for 10 cents per ton

“royalty” payment for health and medical coverage.

At the time of the hearing he was negotiating a ‘‘pen-

sion and retirement plan which will mean an increase

in the welfare royalty payments” to 25 cents a ton, but

this agreement “hasn't been consummated yet”; nor

did Ratliff describe the extent of coverage and retire-

ment benefits involved.

Sa coud |

50a

Trial Examiner’s Supplemental Decision.

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Trial Examiner’s Supplemental Decision.

The record does contain reliable evidence that Mid-

Continent Coal and Coke Co., a nonsignatory producer

supplying coal to signatories, maintains a welfare-

retirement plan, comparable to the UMW plan, under a

collective agreement with a labor organization known

as Redstone Workers Association.2+ In 1963-1965, the

plan was funded by a royalty payment of 12 to 14 cents

a ton; but eligible employees also contributed between

5 and 10 percent of the employer’s contribution. In addi-

tion to retirement, the plan provides for health and

medical benefits and life and accident insurance, as also

does the UMW plan. Unlike the latter, however, Mid-

Continent employee pension benefits vest after 5 years

employment. Several retirees presently draw benefits—

one, $140 a month after 10 years of service.

From all of the foregoing, it appears, and I find.

that although there are undoubtedly notable exceptions

(as in the case of Mid-Continent), the fringe benefits

(as well as wages: afforded employees of signatories to

the National Agreement were generally higher than

those afforded nonsignatory employees. Signatory bene-

fits were far broader in proportion of employees covered

as well as benefits extended. However, cost differences

of the fringe benefits are not really measurable in mone-

tary terms. Dixie concedes (brief, p. 33) that “if a

difference must be determined”’ the cost of at least one

of them, pensions, “which usually was not provided” by

nonsignatories, ranged between 10 and 15 cents a ton.

24. The wage rates provided in that agreement are

also comparable to, if not higher than, those provided in

the UMW (National) agreement. Additionally, Mid-

Continent gives its employees a production bonus which

in 1963 ranged between $250 and $350.

DAL ORD RY 4

52a

Trial Examiner’s Supplemental Decision.

Its witness Ratliff indicated that it is at least 15 cents.

As to wages, the record does show significant differen-

tials as between the signatory and nonsignatory sectors,

measurable in dollars and cents. These differentials

were $1.13 and $1.25 an hour for underground and sur-

face mines, respectively, in 1962-1963; and $1.13 and

$1.44 an hour, respectively, in 1967. Converted to a per

ton basis, Dixie, as hereafter noted (sec. B, 3. b. (iii),

contends that the differentials did not exceed 18 cents

a ton. However, as hereafter found (ibid), the per ton

wage differentials could have been as much as 56 cents

for underground and 28 cents for surface mines in 1962-

1963; and as much as 42 and 24 cents, respectively, in

1967.

b. Contentions

(i) Although conceding that “some differential

probably exists in wage and working condition stand-

ards between signatory and nonsignatory operators,”

Dixie contends (brief p. 20) that the “precise amount is

not ascertainable.” At the same time it admits (brief

p. 26) that “certain evidence and statistical techniques

ean be, and have in fact been, employed to obtain an

approximation of the wage and fringe benefit differences

upon which a judicial determination can be derived,”

but claims that those differences are much smaller than

is “suggested” by the 80-cent clause. Dixie also contends

that it is difficult to compare signatory and nonsignatory

wages and fringe benefits because, among other things:

(1) “contrary to the assumption of both the Board in its

remand order and the Court of Appeals, there is no

solitary wage figure for UMW members” since each of

the 27 UMW districts prescribe their own wage scales

(brief pp. 20-21! while the wage rates in most small

53a

Trial Examiner’s Supplemental Decision.

mines are “unitary” (brief 21); (2) that even the off-

cial published Government reports and statistical

studies (such as those previously referred to) show “a

variety of wage scales found in [both signatory and

nonsignatory|] mines with the wage paid very clearly

related to the output per man hours” (brief 24); that

testimony adduced at the instant and prior hearings

demonstrates that the Union had offered some of the

smaller independent operators entirely different (lower)

wage rates and less costly pension benefits than those

provided in the National Agreement (brief pp. 21-22) ;

and that the latter circumstance, together with the al-

leged claim that many signatories do not, in fact pay the

full 40-cent royalty called for in the National Agreement,

demonstrate that the contract wages and benefits fail to

reflect the true level of contract wages and work stand-

ards in signatory mines.

(ii) To begin with, it is indeed difficult to de-

termine the precise wage and fringe benefit differen-

tials as between individual operators in the bituminous

coal industry. signatory and nonsignatory. The multi-

plicity and variety of establishments, the competitive

nature of the industry, and the differences in methods

of operation add to this problem.*° However, the in-

25. In 1963, the year preceding inclusion of the

80-cent clause, there were over 6,000 establishments

with a total of 132,000 employees, of which two-thirds

were employed in large mines (employing 50 or more

men) and one-third in small mines. (General Counsel’s

Exhibit 2R. 4A) It is clear that the large mines enjoy

significant economic advantages over the small mines

due to their mechanization, closeness to coal prepara-

tion plants, and railroad loading points. Increasing

mechanization since World War II has resulted in the

development of small “truck’’ mines, which haul and

AAS NICER VG AA EET 1

LIMILERLN NVR BIG

oda

Trial Kwaminer's Supplemental Decision.

quiry directed by Che Board and Court in thin case re-

lates to the differentiala “yenerally’ ino existence be-

tween aipoatory and nonaignatory operators "a broad

equation tor the difference [Hf any) in standards

(hroupghout an induatey of diverse production units”

CUE W (Dinied, supra, S00 2d at O80). The Board

and Court premumably were of the view that in seeking

to equalize waged and work standards, UMW was not

obliged to look beyond the general industry picture,

knowing well that aeparate area-by-aren and employer-

byoemployer examination was impracticnble and be-

yond the Union's reasonable capacity. ’" Contrary to

well thelr eoal toa “ramp! Calvo known asa “tipple” or

proparition plant) ‘The ramp operator cleans and

coadern the cont and ahipa it directly to the consumer

Gee WEI Eew) by radiroad ear oor barge, some also

pradies Chet awn coal (See ‘Trial examiner Reel's de-

cinton in LT NER No 80, p. 6.) According: to UMW

Olfpows Hive, oeeiatant controller of the UMW Wel-

fare and Hetinement Mund, many of the ramp operators

whe Bip AtOrien

“) The aboveeatated considerations constrain me

lo vrejeet Charging Party Davinon's basic objection to

(he cntire approneh in thie inquiry. According to Davie

son Cbnief po i) the “walidity of the 80-cent clause in

Riverton’n contract depends upon whether the cliuse

wan addressed solely to labor relations of Riverton vis:

“ovis ite own employees.” (Riverton, a wholly-owned

aubaidiary of Davinon, buya and sella the coal; Davison

vetu oe ite oxelumive agent.) This means according to

Davinon that in order to eatablish validity of the

clause Ut oitat appear that Riverton’ nonsignatory

supplions Tack bad wage, fringe, and working condition

Handards generally lower than those provided in its

colloctive: agreement Cala the National Agreement)

with UIMAW Sines, aeeording to Davison, the evidence

Hitrodueed by General Counsel and Dixte “relating to

00a

Trial Rxaminer’s Supplemental Decision.

Dixie's claim, it is therefore not critical to this inquiry

that the wage scales in one UMW district vary from

those of another district?" that the particular pay

rates of one operator differ from those of another, or

even that the Union had allowed some independent op-

erators to operate at lower than contract wage rates.-*

Furthermore, Dixie's claim that most small mines have

“unitary” wage rates is not substantiated even by testi-

working conditions in the mining industry . . . obviously

do not establish the wage rates paid by Riverton’s sup-

pliers” (brief p. 25), it concludes that the validity of

the 80-cent clause has not been established. Davison

itself offered no data on these matters. Riverton Presi-

dent Louis A. Davison, who testified in this hearing,

stated that he had “no idea” of the wage scales and wel-

fare benefits at the mines operated on his lands from

which (among others) Riverton purchases coal.

27. The record shows that basic rates (uniform

annual increases ranging from $1 to $3 a day, added to

previously established contract rates) are in the first

instance negotiated at the national level, District rep-

resentatives and local coal operators in the various

UMW districts then get together and publish in bulle-

tins the specific dollar-and-cent rates for particular

job classifications reflecting the uniform nation-wide

wage increases, Wage rates for new classifications (as

for operations with new machinery) are worked out

jointly by District representatives and local operators,

subject to ultimate approval at the national level.

28. As hereafter shown (sec. B. 3. b. (iv)), this

claim is based on testimony of Dixie witnesses Holcomb

and Ratliff that a UMW District official (Hibbits) had

offered them “side agreements” (a “sweetheart” ar-

rangement) under which they would be permitted to

pay substantially lower welfare royalitics, as well as

wages, even though they signed the National Agree-

ment, Dixie's contention is not supported by credited

evidence.

EOL PIP OME YT POLL GID EEG MOI ‘Sx SEH, Se eccciaon, |

56a

Trial Examiner’s Supplemental Decision.

mony it relies on. Dixie partner Holcomb only testified

that “our average wages in 1964 were about $16 a day,”

implying that there was a variable range." He further

testified that current (1970) wages “would average

from $30 to $50 per day” (tr. 294), a generalized state-

ment he did not support by records; it is not given any

weight.

(iii) Dixie contends (brief pp. 28, 40, 52) that

in any event the hourly wage differentials shown in

the Industry Wage Surveys (General Counsel’s Exhibits

4R and 5R, supra) when converted into tonnage rates

for comparison with the 40-cent per ton welfare royalty

(the portion of the 80-cent payment designed to com-

pensate for lower nonsignatory wages) do not exceed

18 cents a ton. It accordingly claims that the 40-cent

figure, intended to offset differences in wages between

signatory and nonsignatory coal, is punitive rather

than compensatory. Dixie relies on an analysis ( Dixie

Exhibit 7R) prepared by an economist (Dixie witness

Abraham) purportedly showing that large mines (em-

ploying 50 or more employees, which he equates with

union or signatory mines) in 1963 paid an average of

$1.27 per ton in wages while small mines (employing

less than 50 employees, which he equates with nonunion

or nonsignatory mines) paid $1.09 per ton — a dif-

ference of only 18 cents. The key data in Abraham's

compuation are shown in the following table:

29. Holcomb testified that Dixie “contracts” its

labor to “foremen” who operate its lands, with Dixie

furnishing all equipment and bearing all costs, except

labor (e.g., engineering, repair, insurance, workmen’s

compensation) ; the foremen “usually . . . split equally”

with the men the labor fee received from Dixie “be-

cause” the men are members of the foremen’s families.

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58a

Trial Examiner's Supplemental Decision.

Abraham's analysis appears to be defective in at least

one crucial respect. He assigns a single $4.48 average

selling price for the smail ‘union or signatory’ pro-

ducer and the large | nonunion or nonsignatory) pro-

ducer. However. the assumption that both types of pro-

ducers obtained identical prices for their output is con-

trary to record testimony. Dixie's own witness Holcomb

‘a nonsignatory: testified that “it was a well known

fact that they [purchasing agents; paid more money

for union coal than they did nonunion coal’; according

to Holeomb, Dixie’s average 1964 market price was

$4.10 a ton. ‘See Dixie Exhibit 10 and original hearing

transcript p. 660.) Dixie witness Ratliff (also a non-

signatory) testified that there was a difference in

prices obtained by truck operators ‘small operators,

see supra, fn. 25) and large operators (see original

hearing transcript p. 339); according to Ratliff, his

average selling price between January and April 1964

was $3.35 (original hearing transcript p. 332). The

$4.48 average price used by Abraham in his calculations

appears to be more representative of prices received by

large producers who, according to Abraham's own fig-

ures | Dixie Exhibit 7R), account for almost two-thirds

of coal shipments. Substituting, as the price of coal re-

ceived by small mines, Holcomb’s | Dixie) $4.10 and

Ratliff’s $3.35 per ton average selling price for the $4.48

figure used by Abraham would result in average per

ton differentials of 27 and 45 cents rather than the 18

cents computed by Abraham — i... assuming validity

of his method of calculations.

Another inaccuracy in the approach adopted by

Abraham is his equating “small” mines with nonunion

59a

Trial Examiner’s Supplemental Decision.

mines. The Industry Wage Survey of 1967 ‘General

Counsel's Exhibit 5R, p. 3) shows that 33 percent of the

“small” underground mines ‘less than 50 employees |

and a little more than 25 percent of the “small” surface

mines were in fact operating under collective-bargain-

ing agreements at that time. While there is no similar

published data for the 1963-64 period, it is reasonable

to assume that a proportion of these “small” mines were

also unionized at that time.

A more reliable method of determining the average

per ton wage differentials as between signatory and

nonsignatory mines would appear to be the more simple

procedure of dividing the average per man day wage by

the average per man day output, separately for union

(signatory) and nonunion ‘nonsignatory: mines, using

the official published November 1962 and January 1967

Industry Wage Surveys ‘supra, General Counsel's Ex-

hibits 4R and 5R). The following table. showing these

calculations, demonstrates that the average per ton

wage differentials between signatory and nonsignatory

mines in November 1962 (and it is fair to assume 1962-

1963) were 56 cents for underground mines ‘the domi-

nant segment of the coal industry! and 28 cents for sur-

face mines; and that the comparable differentials in

January 1967 were 42 and 24 cents, respectively.*"

30. None of the parties adduced any documentary

evidence from which more recent wage differentials

‘and also fringe benefit differentials) may be calcu-

lated. As previously indicated, the evidence as to post-

1967 wages and fringe benefits is confined to general

and uncorreborated testimony, which I consider too un-

reliable for predicating findings thereon.

|

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61la

Trial Examiner’s Supplemental Decision.

(iv) Relying on the testimony of its witnesses Hol-

comb (a Dixie partner) and Ratliff, both nonsigna-

tories operating in Pike County, Kentucky, Dixie con-

tends that some signatory operators are paying less

than the wages and 40 cents a ton royalty required by

the National Agreement. (Dixie brief pp. 30-31, 21-22)

Dixie thereby apparently seeks to show that the levels

of signatory wages and benefits were not the true

levels for purposes of comparison with nonsignatory

levels. According to Holcomb and Ratliff, a UMW Dis-

trict president (Hibbitts) in 1959 and 1963 in effect

offered them ‘“‘sweetheart” agreements, suggesting crea-

tion of a “sham” organization, whereby they could pay

less wages to employees and royalty to the UMW Wel-

fare Fund, if they signed the National Agreement. Hol-

comb testified that Hibbitts in 1959 offered to sign a

“side agreement” that would require him to pay a 15-

cent royalty. Ratliff testified that in addition to the

reduced (15-cent) royalty Hibbitts told him he would

have to pay only $15 per day wages. According to Rat-

liff, Hibbitts again approached him in 1963, this time

urging that he and other operators in Pike County form

a sham organization of the type then operating in near-

by Floyd County (Coal Associates, Inc.), which would

sign the National Agreement, but its members would

pay only the reduced royalty.

Hibbitts denied the “sweethearting” offers at-

tributed to him. He testified that he met with the Pike

County operators (including Ratliff and Holcomb) in

1959, but only to urge them to sign the 1958 National

Agreement; claiming they were truck operators unable

to compete with larger rail operators, they wanted to

See aest

62a

Trial Examiner’s Supplemental Decision.

sign separate and more favorable agreements;*! and

that he (Hibbitts) agreed only to give the operators

a letter to the effect that as signatories they would

be held responsible solely for royalty payments on coal

they actually mined, as distinguished from coal shipped,

for handling to their ramps or tipples. As to the 1963

encounter, Hibbitts admitted discussing the Coal Asso-

ciates organization, but indicated that it was Ratliff

who wanted to know how that organization operated

and the kind of agreement it had with UMW. Hibbitts

testified that Coal Associates was formed as a result

of a meeting called by the Kentucky Commissioner of

Labor and the truck operators to take steps to avoid

repetition of a strike triggered by the Welfare Fund's

cancellation of hospital benefits to employees of truck

operators for nonpayment of royalty funds; that the

Association was organized to insure that these small

operators made full royalty payments; and that mem-

pers of the Association either signed the National

Agreement separately or gave the Association au-

thority to sign for them — the usual procedure where

assoc ations are involved.

I credit Hibbitts’ testimony in preference to Hol-

comb’s and Ratliff’s for the following reasons: Hibbitts

impressed me as a candid and forthright witness; his

testimony is in part corroborated by that of Blizzard,

an official of the Fund, and by records of the Fund,

showing royalty collections and payments by Coal As-

sociates on behalf of member-operators; Hibbitts. as

District president, had no authority to negotiate a col-

21. Ratliff corroborated Hibbitts on this point; he

conceded secking a “more favorable” contract.

&

63a

Trial Examiner’s Supplemental Decision.

lective-bargaining agreement other than the National

Agreement; and Dixie called no officials or members

of Coal Associates to contradict Hibbitts’ testimony

concerning the origin, purpose, and operation of that

association.

Accordingly, I find that the record does not sup-

port Dixie’s contention that UMW had engaged in the

practice of “‘sweethearting,” whereby UMW would verb-

ally authorize signatory operators to pay less than

the contract royalty or wages. In this connection, it is

significant that Dixie did not attempt to adduce evi-

dence more recent than the alleged 7-and 11-year old

episodes relied on.

(v.) Finally, Dixie adduced considerable evidence

purporting to show that many signatories did not pay

the full 40-cent welfare royalty based on the tonnage

production reported by those signatories to state agen-

cies. According to Dixie (brief p. 30), a random study

of 2 percent of the operators signing the 1964 National

Agreement (348 or 20 percent of the 1,800 signatories)

showed that about 22 percent of the signatories paid

substantially (25 percent or more) less royalties than

required of them (Dixie Exhibits 30R and 31R). How-

ever, the testimony of Blizzard, assistant comptroller of

the UMW Welfare Fund. a forthright and credible wit-

32. See also Trial Examiner Reel's decision, 179

NLRB No. 80. p. 7; and Trial Examiner Hunt's decision,

165 NLRB at p. 474. (One or both incidents were raised

in the two prior proceedings.) Although attributing to

Hibbitts an offer to enter into an agreement different

from the National Agreement, Ratliff at this hearing

conceded he was under the “assumption” that Hibbitts

had no authority to make such offer.

CREM PRETO RRO

64a

Trial Examiner’s Supplemental Decision.

ness, establishes that discrepancies between tonnage

reports to state agencies and to the Welfare Fund are

accountable by a variety of reasons — including: (1)

the state reports are compiled on a calendar year basis

while the Fund’s reports to the U. S. Department of

Labor (Dixie’s source for comparing state tonnage re-

ports) are made on a fiscal year basis; (2) large signa-

tories frequently make lump sum royalty payments in

their own names on behalf of small signatories (such

as truck mines producing on their lands) and the latter

often duplicate tonnage reports to the states; (3) some

tonnage reports to the state are based on raw tonnage

production while payments to the Fund are made on

“clean” coal; (4) state tonnage reports normally cover

all of an operator’s production while reports to the

Fund exclude the operator’s mines not covered by the

UMW contract; (5) some operators are simply in ar-

rears or delinquent and have executed notes to make up

delinquencies, or, if contesting the payments, are liti-

gating liability; (6) some operators reporting tonnage

to states have failed to report production to the Fund

because they ceased to be signatories during the re-

porting year; and, finally (7), payments to the Fund

sometimes even exceed amounts due on the basis of

state tonnage reports because the payments cover prior

unreported production or past delinquency.

Tn any event, even assuming, arguendo, the accur-

acy of the state tonnage reports, Dixie now only claims

(brief p. 30, fn. 38) that 13 of the 348 companies sam-

pled were “seriously delinquent” in payments to the

UMW Welfare Fund in 1964-1967. According to Dixie,

the total amount of their delinquency during this 4-year

65a

Trial Examiner’s Supplemental Decision.

period was $296,559 ‘ Dixie Exhibit 30R), but the rec-

ord establishes (hearing transcript p. 1009) that in this

same period the Fund collected $86,309,620 from the 348

companies. The claimed delinquency, therefore consti-

tutes only .3 percent of the total obligation ‘$86,606,-

179) to the Fund — hardly sufficient to establish an ap-

preciable departure from the 40-cent payment require-

ment.

Accordingly, I reject Dixie’s contention with re-

spect to the alleged underpayments to the UMW Wel-

fare Fund, as well as its other contentions directed to

the claim that the signatory wage rates and fringe

benefits did not reflect the true level of rates, benefits,

and standards prevailing in signatory mines. For rea-

sons stated, I also reject its contention that the differ-

entials respecting these matters (as between signatory

and nonsignatory mines) were slight and insignificant.

4. THE REASONABLE RELATIONSHIP BETWEEN THE

WAGE. FRINGE AND WORKING CONDITION STAND-

ARDS AND THE 80-CENT CLAUSE

‘a’ As already found ‘supra, sec. B. 3. a.', the

average hourly wage differentials between signatory

and nonsignatory operators ranged from $1.13 to $1.25

in 1962-1963 and from $1.13 to $1.44 in 1967, depending

on whether underground or surface mines were in-

volved. If converted into cost per ton, the 1962-1963 dif-

ferentials were 56 cents for the predominant under-

ground type mines (employing over 80 percent of the

industry workforce) and 28 cents for the surface mines;

in 1967, the per ton cost differentials were 42 and 24

cents respectively. As also found, the fringe benefit dif-

my ENR

66a

Trial Examiner’s Supplemental Decision.

ferentials between signatories and nonsignatories, al-

though substantial, are not measurable in monetary

terms. let alone in cents per ton, although it appears

that the superior pension benefits provided by signa-

tories cost at least 15 cents a ton. To these must be

added the differentials for special benefits such as

premium pay for items like overtime and late shifts pro-

vided in signatory contracts, which, too, however, can-

not be evaluated.in monetary terms. All factors consid-

ered, I am convinged that the 80-cent clause does sub-

stantially equalize, and therefore bears a reasonable re-

lation to, the differentials in labor costs ‘wage, fringe

and work standards) as between signatory and non-

signatory operators. I so find.

(b) Dixie contends (brief p. 35) that “although

on an industry-average basis one might argue that

there is some relationship between the 80-cent and wage

and benefit difference[s].” those differences are not

meaningful because they fail to take into account dif-

ferences in productivity rates as between signatory and

nonsignatory producers, equating the two with large

and small producers (brief p. 40). According to Dixie,

“The higher the output per man hour achieved by a

company, the greater is the per hour cost of the 80-cent

penalty” ‘brief p. 35). Dixie would argue | brief p. 45)

that to the extent nonsignatory productivity was less

than that of the signatory, the labor cost differential is

reduced.

(ec) To begin with, I find merit in UMW’s position

(brief p. 24) that insofar as here relevant, the remand

in this case calls for a determination only (1) of the

67a

Trial Examiner’s Supplemental Decision.

differentials in wage and fringe benefits received by

employees of nonsignatories and “those established

under the National Bituminous Coal Wage Agreement” ;

and (2) whether the 80-cent clause “bears a reasonable

relationship” to those differentials. It is common knowl-

edge that one of the main goals of labor organizations

is to attempt to enhance the wages and work standards

of employees in the units they represent. In seeking to

achieve this objective it is not improper for a labor or-

ganization to strive for industry-wide uniformity in

work standards, so long as this does not, “by intent or

effect, compel the unorganized segment of the industry

to sign” the union’s collective agreement. Galligan,

supra, 179 NLRB No. 80. In negotiating its bargaining

contract with an employer or group of employers it is

too much to expect the union to go through the kind of

intricate economic analysis that Dixie, for example,

went through in this case (infra) to determine the vary-

ing productivity and efficiency figures of the numerous

mines in the industry.?* Nor, as UMW Secretary-Treas-

urer Owens testified, did it occur to UMW to do so here

in seeking to achieve its long-standing objective to ob-

tain uniform industry-wide wages and work standards

through the 80-cent royalty clause. As I construe the

remand, if the Union sought only to equalize the wage

and fringe differentials between the signatories in the

bargaining unit with those of nonsignatories outside it,

the Union's intent was primary and lawful

33. It is to be noted that Dixie’s economic analysis

was based on data appearing in General Counsel's Ex-

hibit 2R, a publication of the U. S. Department of Com-

merce which was issued in October 1966, almost 3 years

after the 80-cent clause was executed.

4

.

DE LPL Sete |

YO BREIE RIOT IR

(Win

Trial Moaminer's Supplemental Decision,

(1) In any event, this record does not permit an

vecurate evaluation of the true comparative productiv-

ity of sipnatorios and nonalgnatorions, To be sure, there

in testimony to the effect that large mines enjoy sig.

nificant economic advantages over amall mines because

of mechanization and closeness to coal preparation and

rallrond Jonding points. While these factors tend to

show that there are differences in efficiency and pro-

duetivity, the extent of these differences in not satisfac:

torily established In this connection it should be noted

that a substantial number of “small” mines (which

Dixie charseterizes ae relatively inefficient “nonunion”

mines) ave, in feet, signatories to the National Agree-

ment and presumably ean and do pay the wages and

fringe benefite preseribed in it, As already noted

(nupra, woo Th (bo) GD). about one-third of the em-

ployees in small underground mines and one-fourth in

amall surface mines are employed by signatories; and

many of the small mines regularly contribute the re-

quired 40-cent royalty to the UMW Welfare Fund either

in thei own names or in the names of larger signatory

purchasers Caupra, wee Hb tv)

Dixie relies on an analysis of its expert witness,

eoonomist Abraham, to show that there was a 22.6 per:

cont greater productivity in larger mines (characterized

as “union” or “signatory” mines employing 50 or more

employees!) Than in the amatier (“nonunion mines em-

ploying leas than 50 employees) Hut the vice in Abra-

hima productivity computation is, ae wie also previ-

ously shown in connection with our discussion on con-

versions of hourly wage rate differentials to tonnage

rate differentinia (wee, Ho 3. bo Gilt), that he errone-

ate Namen y

69a

Trial Examiner's Supplemental Decision.

ously assigns a single $4.48 selling price for both small

and large producers, The key element in Abraham's pro-

ductivity and conversion computations is the price of

coal. As shown, Dixie and Ratliff, “small” (nonsigna-

tory) operators, sold their coal at $4.10 and $3.35 a ton,

respectively, Employing Abraham's method of calcula-

tion, it appears, as the table below shows, that large

mine productivity was only 12.2 percent greater than

small mine productivity if Dixie's $4.10 price is substi-

tuted for Abraham's $4.48 figure; and that large mine

productivity was less (9.75 percent) than small mine

productivity if the $3.35 Ratliff price is substituted.

2S I TE OLA ILE SS OLLIE AI LIE SE LORIE

70a

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Trial Examiner’s Supplemental De

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vila

Trial Examiner’s Supplemental Decision.

It should be emphasized that the Dixie and Ratliff

prices are used in table 6 only to demonstrate the er-

ror in Abraham's 22.6 productivity differential. They

do not necessarily reflect the prices received by small

producers generally in the industry; the record is silent

as to specific average industry coal price obtained by

small producers.

Accordingly, I conclude that Dixie’s contention that

there was a 22.6 percent productivity differential be-

tween large (signatory) and small (nonsignatory) pro-

ducers is unsupported by credible and reliable evidence.

For reasons already stated, I find and conclude that

the 80-cent clause bears a reasonable relation to the dif-

ferential in per ton labor cost as between these two

sectors of the industry.

C. CONCLUSIONS

1. Introduction

As to the questions propounded by the Board’s re-

mand order I have found (1) that the intent of the

parties in adopting the 80-cent clause was to equalize

the differences in wages and fringe benefits generally

existing between signatory and nonsignatory mines in

order to protect the work opportunities and standards

provided UMW members employed by signatory Op-

CLAY SPORE RINE ACRE ORE. MOTLANTHE OES TO

erators; (2) that the wage, fringe and working condition ©

standards of employees in nonsignatory mines are

generally lower than those established under the Na-

tional Bituminous Coal Wage Agreement, and (3) that

the 80-cent payment to which signatories are obligated

on nonsignatory coal purchases bears a reasonable re-

72a

Trial Examiner’s Supplemental Decision.

lationship to the wage and fringe benefit differentials

between employees of signatory and nonsignatory op-

erators. However. as previously indicated (supra, sec.

B. 1), these findings are not dispositive of the ultimate

issue of whether the 80-cent clause is a valid work-

preservation and union-standards clause and not an in-

valid union-signatory clause. As noied, the record de-

veloped in the reopened hearing in the main relates

to only one of the Board’s findings in the original hear-

ing — the finding that there was no record evidence

that “the Union’s initial proposal, or contract figure of

80 cents, or any other figure would be reasonable com-

pensation” for differences between signatory and non-

signatory wages and benefits to support UMW’’s conten-

tion that the clause was “intended to protect em-

ployees’ job opportunities” (165 NLRB at 476-477).

Having now found that “reasonable compensation” did

exist, it must still be determined (in accordance with

the Board’s direction that findings and conclusions be

made in the light of the prior record and applicable law)

whether the 80-cent clause fails to meet the test of

validity on other grounds, including those previously

adverted to in the Board’s prior decision. but which

the Court of Appeals did not reach. It is apparent from

the Court’s opinion that if it appeared that the 80-cent

payment provision did not represent “a broad equation

for the difference in standards,” the clause could not

qualify as ‘‘a surrogate union standards clause” (399

F. 2d at 980-981) ;°4

34. The Court stressed that. “Conceivably the par-

ties could have agreed on a money figure which in their

judgment represents a broad equation for the difference

in standards” and took note of dissenting Member

73a

Trial Examiner’s Supplemental Decision.

it was accordingly unnecessary for the Court to pass on

the grounds previously relied on by the Board to invali-

date the clause before deciding whether the 80-cent

clause was a reasonable equalizer, the major issue posed

by the remand.

In reaching my conclusions, I deem myself bound

by the Board's findings of fact in the earlier proceeding,

except to the extent they may require qualification or

modification in light of the additional evidence adduced

in the remand hearing. I also deem myself bound by the

legal guidelines and principles enunciated by the Board

in its earlier decision, since, insofar as appears, the

Court of Appeals disturbed none.

2. Qualification of the 80-cent clause as a work-

protection and union-standards provision

In National Woodwork Manufacturers Assn. v.

N.L.R.B., 386 U.S. 612, 645, the Supreme Court stated

that in determining whether a contractual clause has a

lawful primary work-protection objective “{t]he touch-

stone is whether the agreement or its maintenance is

addressed to the labor relations of the contracting em-

ployer vis-a-vis his own employees.” In Meat & High-

way Drivers, Local 710 (Wilson & Co.) v. N.L.R.B., 335

F. 2d 709, 713 (C.A.D.C.), the Court stated “[rJesolu-

tion of the difficult issue of primary versus secondary

activity .. . involves consideration of two factors: (1)

Jenkins’ view that “it would appear that, in the absence

of additions] evidence, the clause should be regarded

as no less than an effort to protect work standards by

equalizing the labor costs between employees of signa-

tories and nonsignatories.”’ (399 F.2d at 980.)

T4a

Trial Examiner's Supplemental Decision.

jobs fairly claimable by the bargaining unit, and (2)

preservation of those jobs for the bargaining unit. If

the jobs are fairly claimable by the unit. they may...

be protected by provision for, and implementation of,

no-subeontracting or union standards clauses in the

bargaining agreements.’ On the other hand, if the jobs

are not “fairly claimable by the bargaining unit,” the

contractual provision is unlawful since it is deemed to

be “tactically calculated to satisfy objectives else-

where.” National Woodwork, supra, 386 U.S. at 644.

See also District No. 9, 1.4.M. (Greater St. Louis Auto-

motive Trimmers, etc.) v. N.L.R.B., 315 F. 2d 33, 36

(C.A.D.C.); Orange Belt District Council of Painters

(Calhown Druwall Co.) v. N.L.R.B., 328 F. 2d 534, 538

(C.A.D.C.). Of paramount consideration, therefore, is

the scope of the bargaining unit and whether the con-

tractual provision was designed to benefit only employ-

ees in the primary unit. See Lewis (Galligan), supra,

350 F. 2d at 802.

It is clear that the key factor in the Board’s pre-

vious (June 1967) determination that the 80-cent clause

was an unlawful secondary provision is its finding that

the bargaining units here consist of various multiem-

ployer groups (BCOA, Southern Coal Producers Asso-

ciation, etc.) and individual operators (Riverton, etc.)

with which UMW executed separate collective agree-

ments. As the Board stated (165 NLRB at 468, fn. 8),

“It is .. . apparent that our holding that the 80-

cent clause is unlawful is founded specifically upon the

finding that there exists in the bituminous coal indus-

try a multiplicity of collective-bargaining units.” The

Board specifically rejected the contention that a single

det

--

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Trial Examiner’s Supplemental Decision.

industry-wide unit, encompassing all employees of all

signatories to the National Agreement, was appropriate

(165 NLRB at 467, 468, 475) — a finding not disturbed

by the Court of Appeals and not reopened on remand.*°

The critical inquiry, then, is whether the 80-cent clause

was intended to “function” and “functions” (U.M.W.

(Dixie), supra, 399 F. 2d at 980) as a work-protection

and union-standards clause to protect groups broader

than the established bargaining units. If the clause was

designed to operate, or operates, “to aid union [UMW!

members generally, rather than members of the unit,” it

is an unlawful secondary clause. Meat ¢ Highway Driv-

ers (Wilson & Co.), supra, 335 F. 2d at 716.

Specifically, the Board found that the 80-cent

clause was not a lawful work-protection clause because

it was not intended to preserve, and did not operate

to preserve, the work opportunities of the employees in

particular units. Thus, the Board pointed out that a sig-

natory was free under the collective agreement (i.e., he

is not required to make the 80-cent payment) to ful-

fill his requirements for coal by purchasing from other

signatories, including those outside his bargaining unit.

thereby prejudicing rather than enhancing the work

opportunities of his unit employees (165 NLRB at 468.

477). It also found that the 80-cent clause. by its ex-

press terms, applies to all coal purchases including ‘“‘sup-

plemental” coal (i.e., coal qualitatively or quantitatively

35. Addressing itself to the contention that ‘‘the

contract is coextensive with the work unit, because the

same contrect, although negotiated with different bar-

gaining units, covers the entire industry,” the Court

said. “{|w e need not reach the question of unit size

at this time” U.M.W. (Dixie), supra, 399 F. 2d at 980.

76a

Trial Examiner's Supplemental Decision.

beyond the signatory purchaser’s capacity to produce)

which is not “fairly claimable’” by the unit; thus, for

example, it was found that Riverton, an individual sig-

uatory whose employees comprise a separate unit, was

required to make the 80-cent payment on coal purchases

needed to fulfill contractual commitments even though

employees in the Riverton unit could not possibly pro-

duce the coal since Riverton had operated to the limit

of its capacity. (165 NLRB at 477.)

As to the contention that the 80-cent clause was a

valid wage-standards or union-standards provision, the

Board held that it ‘does not qualify as [such] because a

penalty is imposed whenever unit work is subcontracted

to nonsignatory operators without regard to the wage

standards of such employers.” (165 NLRB at 468) .°°

Finally, the Board held that the 80-cent provision

was “really aimed at nonsignatory sellers,” finding that

the “clause has caused some nonsignatory operators to

sign the UMW agreement in order to continue selling

their coal to signatories, and caused some signatory

operators to cease purchasing coal from nonsignatories

in order to avoid the 80-cent penalty which would be

imposed under the contract if they continued to make

such purchases.” (165 NLRB at 467, 477). Thus, the

36. It is this feature that readily distinguishes

PWC, now ruled valid by the Board (see Galligan, 179

NLRB No. 80, supra, sec. A. 2). PWC only requires

that all coal procured by a signatory ‘“‘be mined or pro-

duced under terms and conditions which are as favor-

able to the employees as those provided for” in the Na-

tional Agreement; no monetary penalty or other restric-

tions are placed on coal produced under terms equal to,

or better than, those of the purchasing operator.

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Trial Examiner’s Supplemental Decision.

Board found (id. at 473-474); (1) that Riverton, an

individual signatory which had been purchasing non-

signatory coal before the 80-cent clause went into effect,

ceased such purchases thereafter because it could not

afford to make the 80-cent payment, and that Riverton

cancelled all leases with nonsignatory suppliers (to

whom it had leased its mining properties), negotiating

new leases only with operators who became signatories;

(2) that Davison Fuel and Dock Company. Riverton’s

parent company and as such bound by iae National

Agreement as an “affiliate” of a signatory, ceased pur-

chasing coal from a nonsignatory (Ford Coal Company).

settling the latter’s breach of contract claim for $15,000;

(3) that Dixie, a nonsignatory, which had sold 40 per-

cent of its coal to signatories prior to the advent of the

80-cent clause, since ceased selling coal to signatories,

one such purchaser (Republic Coal & Coke Co.) can-

celling its contract with Dixie because it claimed its

profit margin was insufficient to absorb any part of the

80-cent payment; (4) that United Colliers, Inc., a non-

signatory, was informed by its only signatory purchaser

that the latter would no longer purchase nonsignatory

coal “because of the 80-cent provision’; (5) that

13 of the 15 members of Harlan County Coal Operators

Association, who refused to sign the 1964 agreement

because they could not meet the 80-cent payment, con-

tinues to sell only about half their coal to signatories;

and (6) that Union official Hibbitts, in his 1959 and 1963

attempts to persuade Dixie partner Holeomb and coal

operator Ratliff to sign the National Agreement (see

supra, sec. B. 3. b. (iv) ), admitted telling the two opera-

tors that he was “well aware” of the small mines’ finan-

cial inability to comply with the 80-cent payment. but

See

wes

(Sa

Trial Examiner’s Supplemental Decision.

that he (Hibbitts) states that he could not negotiate

any agreement other than the National.

The evidence adduced in the remand proceeding

does not detract from the findings and conclusions of the

Board in the earlier proceeding, premised upon the

Board’s undisturbed determination that the various bar-

gaining units (and not a single industry-wide unit) are

the sole units for which the Union may seek to preserve

work opportunities and standards. The record developed

in the instant hearing was devoted to an inquiry on the

wage and fringe benefit differentials between signa-

tory and nonsignatory mines and also the intent of the

parties in adopting the 80-cent clause, rather than

to the secondary impact of the clause. Nonetheless, some

of the evidence adduced tends to fortify the conclusions

previously reached in this case. Thus, it was demon-

strated that if the 80-cent clause were applied to signa-

tories who have been purchasing 3 unique type of coal

(“supplemental” coal) produced by Mid-Continent Coal

& Coke Co. (a nonsignatory whose employees are affili-

ated with an independent union), those signatory pur-

chasers would be subject to 80-cent payments even

though their employees did not, and could not. produce

that special coal. Furthermore, it was established that

Mid-Continent’s wages and fringe benefits, including its

nension plan (supra, sec. B. 3. a (ii)) were at least

comparable. if not superior, to those provided in the

National Agreement. Under the circumstances, it is

clear. and I find, that the Mid-Continent production was

not “fairly claimable” by the signatory bargaining units;

nor could the 80-cent provision serve to enhance union

standards as against Mid-Continent. Additionally, UMW

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Trial Examiner’s Supplemental Decision.

Secretary-Treasurer Owens’ testimony in the reopened

hearing establishes that the intent of the 80-cent clause

was to aid UMW members generally (i.e., employees of

all signatories to the National Agreement! rather than

members of a particular bargaining unit. As already

found (supra, sec. B. 1), his testimony makes it clear

that in embarking upon the negotiations leading to the

80-cent clause, the Union was intent on protecting and

preserving uniform industry-wide wages and standards,

in line with UMW’s historic objective to secure uniform

wages and standards among all operators. According

to Owens. the integrity of the Welfare Fund, adminis-

tered on a nationwide basis, was another primary ob-

jective.

Based on the guidelines and principles set forth in

the Board’s earlier decision, which were left intact by

the Court of Appeals, I conclude that the 80-cent clause

was neither intended to function, nor functioned, to pro-

tect work “fairly claimable” by a particular bargaining

unit. Accordingly. under established Board law the

clause was not “germane to the economic integrity of

the principal work unit” (Orange Belt District Council

‘Calhoun Drywall Co.) v. N.L.R.B., 328 F. 2d 534, 538

(C.A.D.C.)) and must be regarded as an unlawful sec-

ondary clause within the intendment of Section 8(e)

of the Act. I so find.

3. Respondents’ contention regarding the appropriate

unit governing application of Section 8/(e) of

the Act

As pointed out in the Board’s earlier decision in

this case (165 NLRB at 475-476), both UMW and BCOA

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Trial Examiner’s Supplemental Decision.

challenged the Board’s determination, first made in

August 1963 (Galligan, supra, 148 NLRB 249, 253-255),

that the units for which the Union could lawfully seek

work protection are those appropriate for collective bar-

gaining as established under Section 9 of the Act. In the

cited Galligan case, the Board rejected the contention

that the 80-cent clause was “lawful because its purpose

is to preserve and protect the work of employees in the

industrywide contract unit.” (148 NLRB at 253). Not-

ing that UMW negotiates separately with various sig-

natory operators and multiemployer associations, it con-

cluded that “the UMW national contract covers a multi-

plicity of bargaining units rather than a single industry-

wide unit.” and that “under the normal tests applied

by the Board in making bargaining-unit determinations

. an industrywide unit has not been established by

the parties.” (id at 254). The Board reaffirmed its de-

termination in its June 1967 decision in the instant pro-

ceeding. where it also rejected a Union contention (re-

flected in Member Jenkins’ dissenting view in Galligan

and reiterated in this case) that at the very least “there

exists a single industrywide bargaining unit for welfare

fund purposes.” ‘165 NLRB at 476). This view is bot-

tomed on the claim that the employees of all signatories

chere in the Fund's benefits and that they have a com-

mon and primary interest in assuring that royalty pay-

ments are made on all coal obtained or used by signa-

tories. A majority of the Board rejected this view, ad-

hering to its previous conclusion that “the units which

control the determination of the primary or secondary

nature of subcontracting clauses are those units found

by the Board under its customary standards to be ap-

propriate for collective-bargaining purposes.” (165

Sla

Trial Examiner’s Supplemental Decision.

NLRB at 468!. The Court of Appeals took note of Mem-

ber Jenkins’ views. but, as previously noted, stated that

it “need not reach the question of unit size at this time.”

(399 F. 2d at 980).

While the lawfulness of subcontracting restrictions

under Section 8(e) should, and does, ordinarily turn

on appropriate bargaining unit issues under Section 9 of

the Act, equating work and bargaining units for all

8(e) purposes could in some circumstances be viewed as

unrealistic. The record in this case, particularly as de-

veloped in the remand hearing, demonstrates that the

separate agreements executed by UMW with associa-

tions (like BCOA) and independent operators (like

Riverton), engaged in the commercial field, contain uni-

form terms and conditions of employment. Trial Exami-

ner Hunt had noted in his decision (165 NLRB at 470)

that the contract negotiations in the bituminous coal

industry have followed the same pattern for at least

two decades: UMW first negotiates the “National Bitu-

minous Coal Wage Agreement” with BCOA. then pre-

sents the terms of that agreement to other associations,

and later ‘“‘seek[s| the signatures of as many operators

as possible to that contract and no other written agree-

ment.” Trial Examiner Hunt had found that “there are

(in this industry] numerous bargaining units .. . some

so small as to consist of few employees.” (165 NLRB

at 475). It is now apparent that the Union seeks and ob-

tains what is in effect a uniform nationwide agreement.

although signed separately unit by unit. It is now also

apparent from the history of the 1964 negotiations, as

detailed by Union Official Owens, that in pressing for

its 80-cent clause, the Union, as well as BCOA, looked

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Trial Examiner’s Supplemental Decision.

beyond the immediate BCOA bargaining unit. Both

Union and BCOA were very much mindful of the eco-

nomic facts facing the industry, including diminution of

employment in signatory mines, the practice of signa-

tory subcontracting to nonunion mines, the desirability

of equalizing labor costs as between signatories and non-

signatories, and the need to protect the integrity of

the Welfare Fund. It may thus now. upon the supple-

mental record, reasonably be argued that the Union

in its meetings with BCOA was bargaining for terms

and work conditions (including the welfare standard

and payment) to be applicable to all signatories (BCOA

and those who would later sign uniform contracts).

As we have seen, the 80-cent clause was designed to

protect the standards thus negotiated against threat of

loss and undermining by signatories purchasing non-

signatory coal. As it turned out. the 80-cent payment

upon which the parties compromised bears a reason-

abie relationship to the wage and fringe differentials

that existed between the signatory and nonsignatory

sectors. (supra, sec. B. 3 and 4). And it is noteworthy

that in its remand order the Board itself expressly

directed that the differentials be ascertained on an in-

dustry-wide rather than unit-by-unit basis.

Despite the above-stated considerations, it would

appear that no choice is left to the Trial Examiner but

to find that Respondent UMW and BCOA, by entering

into the agreement containing the 80-cent clause, have

engaged in unfair labor practices. in violation of Sec-

tion Sie) of the Act, based upon the Board’s existing

determination (binding upon me) that the primary

units governing application of Section 8:e) are the bar-

Save

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Trial Examiner’s Supplemental Decision.

gaining units established under Section 9 of the Act.3*

In other words, under existing Board law the work unit

for which UMW could seek job and standard protection

cannot be a unit wider than an appropriate bargaining

unit. Since the S0-cent clause was intended to preserve,

and operates to preserve, work opportunities and stand-

ards beyond such bargaining units (i.e., on an industry-

wide basis), it is an unlawful secondary agreement,

violative of Section 8(e) of the Act.

Thi

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