# Petition for a Writ of Certiorari — Bethlehem Steel Corp. v. Williamson > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385607_0264%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for a Writ of Certiorari - **Published:** January 1, 1973 - **Citation:** 411 U.S. 902 ## Text 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 \ genwd an Nowerbder (2) 1 Cart is veka under OS US me 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. ‘aseq Asoyeusisuou jUIdIed QOT B 07 paynduiosat 21am 33819A09 soho dwe jo sadeyusoied Aroyeusisuou ey “YS WqIYXG 8,jesunoy [v41suer) JO 09 pur GE soIqQey pus YP WqQIUXG 8,JesUNOD [B1sUE_H JO Fp puw CZ S2/qe} WOIZ PoAltop 190M Byep Vy, ‘sadA} Y}Oq SaaAOd ounsYy ( MWN) Asoyeusis ‘saul soBjuns 0} aunsiz puosss pue punoassspun 03 satdde (MWM-uou) Aroyeusisuou Japun sinsiy 4s1y , OF-ZP - €b-F9 — sue[g wjeueg ON oI-G 0OT 6-0 oot uOoIsUdg JUIUIITVOY 6T-TT 00T 9-2) OOT soueinsuy sydo1jse}eD 8h-LY Oot Go- 1% 00T aoUBINSUT [BOIPIN ¥G-L¥ Oot 8b-62 0OT aouBANsu] [BO1SING 8G-LP 00T 8h-62 oot aouBinsul UOTzyezITeyIdsoH 9ABIT HIS LT-9T 0O0T 8T-bI 00T soUBINSUT JUIPIOOY FY SsouHois ce-Le we O€-TZ —_ a0uBAINSsU] ‘JaqUIsUISIG pue YZ[VIH{ [VyUeplooy 8E-LP 00T 9-62 Oot [Broun 10 YW ‘soUBANSUT jI'T , MSUON “ds , ASUON 318 196 ( Arvnuve LOG] JoqQuorvon po1910,) soodopdurg Jo aAv UII jyoueg jo od Ay, spifauag abulsy 49410 PUD UoIsuad—§ 319D,L Sla 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 $1.09 per ton — a dif- ference of only 18 cents. The key data in Abraham's compuation are shown in the following table: 29. Holcomb testified that Dixie “contracts” its labor to “foremen” who operate its lands, with Dixie furnishing all equipment and bearing all costs, except labor (e.g., engineering, repair, insurance, workmen’s compensation) ; the foremen “usually . . . split equally” with the men the labor fee received from Dixie “be- cause” the men are members of the foremen’s families. + a AM aE dey Whe Pt oe # RA a PR DRE A tha ROE ‘alta: ‘UL MGIYXW sixiq JO Z IJOUJOOS IIS, , ‘[Boo Jo aatad ayy Aq ,,s}diad01 pue sjusuidiys jo anjea,, ay} Surptarp Aq (LT eury) s _,paataoo4 pue paddiys,, su0z jo soquinu 9a} JO azeUIT}S9 STY payndwos ay ‘snyy ‘£96T ‘$ ul paonpoid [woo [[e@ jo anjea AB{jOp ay4 Ajjuaredde st pt ‘weyeaqy sseuzim Aq asn 8} Jo Fe jquueu ay} wWosy “79-19 “dd ‘yz WaIyXG S,esUNOD [e19Us) Ul pouljop St U9} SIUL, Q ———_ 3 st (60° T$-L2 T$) E [eIjuaJasjip jo Junowy = Lz T$ 60'1$ (11-h) Uo, sad ys0o a3dBM SI 3 . 986'E8b$ ZGE'8ST$ (000) Saext0M jo sadem [BIOL v Db ¢ 22G I8E Z61'SPI (000) P,0e4 7 paddrys suo} sq Lt ‘ 8h r$ 8h bS uo} Jad [vod JO 901g # E 918°LOL'IS 09% 0G9S « (000$) = s}dia001 puv syueudrys jo onjeA 8 8 svat oldu svdO[dud 6F-0 yy d10UL 10 OC (uopunueN ) 3 (uoqiyy) OUT [TUS su9dy HL MQIUNG oINtG Fd ouyut v41v'y ‘ON WT & ($961) wounnatn9 wyuasafid s1s09 abum L“yrg awd — 4 9190, 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. 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