Opposition Brief — Ross Bros. Construction Co. v. National Labor Relations Board

Supreme Court brief1997

Ask Donna

What actually matters in this document.

Text

] Supreme Court st <. i

cae

ss, £ D

SEP 22 1997

No. cee | “ =

In the Supreme Court of the Giuted States

OCTOBER TERM, 1996

Ross BROTHERS CONSTRUCTION COMPANY, PETITIONER

NATIONAL LABOR RELATIONS BOARD, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

BRIEF FOR THE

NATIONAL LABOR RELATIONS BOARD

IN OPPOSITION

SETH P. WAXMAN

Acting Solicitor General

Department of Justice

Washington, D.C. 20530-0001

(202) 514-2217

FREDERICK L. FEINSTEIN

General Counsel

LINDA SHER

Associate General Counsel

NORTON J. COME

Deputy Associate General Counsel

National Labor Relations Board

Washington, D.C. 20570

QUESTIONS PRESENTED

1. Whether the National Labor Relations Board

reasonably concluded that it should rule on the merits

of the unfair labor practice charge brought in this

case, rather than defer the matter to the grievance

and arbitration procedure established by the collec-

tive bargaining agreement.

2. Whether petitioner violated Section 8(a)(5) and

(1) of the National Labor Relations Act by refusing

to honor the collective bargaining agreement that

the union had negotiated with a new employer

association.

(1)

TABLE OF CONTENTS

Page

IIE vccsditicenniinnancinnibesepenineceaanvenccsopesenonspenseones 1

ie sscidpeneenibnagiobineinaneinn 1

EN EE SE Oe 2

I Sia iinislathicdsinidanamicinnoniinseebneraswseceocssessiosesavscsese 8

es sbaampunenenneniebees 14

TABLE OF AUTHORITIES

Cases:

Collyer Insulated Wire, 192 N.L.R.B. 837 (1971) ...... 9, 12

NLRB v. Siebler Heating & Air Conditioning, Inc.,

eS OE BIDET vcvcccnssesncccscccccscsésavececcees 14

Nassau & Suffolk Contractors’ Ass’n, 118 N.L.R.B.

RSE A 12-13

Oak Cliff-Golman Baking Co., 207 N.L.R.B. 1063

(1973), enforced, 505 F.2d 1302 (5th Cir. 1974), cert.

I, Ge Gi, GI CEO? nccicncccscccccccnserecccscsessecees 6

Spann Building Maintenance Co., 275 N.L.R.B. 971

(1985), petition for review denied sub nom., Lewis

v. NLRB, 800 F.2d 818 (8th Cir. 1985), supple-

mented, 284 N.L.R.B. 66 (1987), 289 N.L.R.B. 915

aia scl asahiaasaepbiieansnneiatsncensasesessces 11

United Beef Co., 272 N.L.R.B. 66 (1984) ...............08. 11

United Technologies Corp., 268 N.L.R.B. 557

il circ linicanathbniieadinnigtadeisiinnedasennewencerss 9-10

Universal Camera Corp. v. NLRB, 340 U.S. 474

TE asdsinitinihanunbidbasbenpentueseocecoces 12

Universal Enterprises, Inc., 291 N.L.R.B. 670

tio asutignahdssonsencisbesdieseindannconiecsees 14

(III)

Statutes: Page

Labor Management Relations Act, 1947, 29 U.S.C. 141

et seq.:

Sa Se it BI sasicceenentnsicnanssrnenasiitennes i)

is Se Wt eas, IE ck cnsiotarin baddiapasaciebincanmavansieninadates 5

National Labor Relations Act, 29 U.S.C. 151 et seq.:

S Sta E), FO UA. TD cer cccsdeccctcsesinstansecvssanes 5-6

In the Supreme Court of the United States

OCTOBER TERM, 1996

No. 97-170

Ross BROTHERS CONSTRUCTION COMPANY, PETITIONER

Vv.

NATIONAL LABOR RELATIONS BOARD, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

BRIEF FOR THE

NATIONAL LABOR RELATIONS BOARD

IN OPPOSITION

OPINIONS BELOW

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

lla) is unpublished, but the judgment is noted at 113

F.3d 1235 (Table). The decision and order of the

National Labor Relations Board (Pet. App. 12a-14a)

and the decision of the administrative law judge (Pet.

App. 15a-76a) are reported at 315 N.L.R.B. 538.

JURISDICTION

The judgment of the court of appeals was entered on

April 29, 1997. A petition for rehearing was denied on

July 14, 1997. Pet. App. 77a-78a. The petition for a

(1)

writ of certiorari was filed on July 28, 1997. The

jurisdiction of this Court is invoked under 28 U.S.C.

1254(1).

STATEMENT

1. At the relevant times, petitioner, an employer

engaged in general industrial contracting, was a

party to a national collective bargaining agreement

with the United Association of Journeymen & Ap-

prentices of the Plumbing and Pipefitting Industry

(United Association). That national agreement,

known as the National Industrial Maintenance Agree-

ment for the United States of America (NIMA), made

provision for wages, benefits, and other terms and

conditions of employment to be negotiated at the local

level by local unions and local employers’ associa-

tions. Pet. App. 19a, 21a.

Under Article VIII of the NIMA, wage rates paid

by an employer who was a party to the NIMA “shall

be those as set forth in the current labor agreement

of the affiliated Local Union where such work is to be

performed and shall be paid to all employees under the

terms of this Agreement unless otherwise modi-

fied by the National Maintenance Agreements Policy

Committee, Inc. [NMAPC].” Pet. App. 2la. Simi-

larly, under Article IX, various benefits were to be

paid in accordance with the labor agreement negoti-

ated by the local union. Jd. at 22a. Thus, under the

NIMA, an employer seeking the advantages of the

coverage of the NIMA contract was required to pay

the existing, negotiated wage structure in the local

area based on a labor agreement that the local union

negotiated with a local employers’ association,

whether or not that employer was itself a signatory

to the local labor agreement. Jd. at 28a-29a. Wage

rates could, however, be modified by the NMAPC, a

committee consisting of equal numbers of representa-

tives of employer and union members of the United

Association, which was established to resolve griev-

ances flowing from contract disputes. Jd. at 21a, 23a-

24a.

Under Article VI of the NIMA, grievances “other

than those pertaining to jurisdiction or general wage

rates on any work covered by [the agreement]” could

also be submitted to the NMAPC, if not resolved in a

more informal setting. Pet. App. 22a-23a. The failure

of the NMAPC to resolve such grievances constituted

a basis for submitting the question to the American

Arbitration Association for a binding decision. Jd. at

23a.

2. For several years, Plumbers Local 577, a local of

the United Association, bargained through the Tri-

State Building Trades Council (Trades Council) with

the Tri-State Building Contractors Association (Tri-

State) to establish the wages and benefits referred to

in NIMA Articles VIII and IX. Pet. App. 27a. Nego-

tiations between Tri-State and the Trades Council

were conducted in two rounds. In the first round,

representatives for the two sides bargained for a

single percentage or dollar amount increase in wages

and benefits to be uniformly applied, regardless of

craft. In the second round, individual unions bar-

gained with the appropriate specialty contractors on

all other terms and conditions affecting their particu-

lar relationship. Ibid. As a member of the Trades

Council, Local 577 had accepted the wages and bene-

fits negotiated in the Tri-State multicraft agreement,

and then incorporated those provisions into its own

local contract, which it negotiated with a separate

association, the Southern Ohio Mechanical Contrac-

tors Association. Jd. at 27a-28a. Petitioner was

bound by that contract. Jd. at 28a.

In March 1991, the Trades Council and Tri-State

agreed to commence negotiations for a successor

wage and benefit agreement to begin after the then-

current agreement expired on May 31, 1992. Pet. App.

29a. In May 1991, the members of Local 577 voted

down the increase which Tri-State had offered, and its

business manager gave notice to the Trades Council

and Tri-State that Local 577 was withdrawing bar-

gaining authorization from the Trades Council.’ Jd.

at 30a-3la. Local 577 indicated, however, that it would

continue to abide by the terms of the current agree-

ment until its expiration on May 31, 1992. Jbid.

On March 6, 1992, Local 577 invited a newly formed

multi-employer bargaining group, the Mechanical

Contractors Association of Southeastern Ohio

(Southeastern), to negotiate a collective bargaining

agreement that would establish the general wage

rates applicable under the NIMA. After bargaining

sessions taking place over two days, Local 577 and

Southeastern entered into a five-year agreement,

effective June 1, 1992. Pet. App. 3la. That agreement

established two different wage rates, for commercial

contract work and for industrial work, and raised the

hourly wage for industrial work by $3.09 per hour in

the first year, followed by $1 per hour increases in the

second and third years. Jd. at 32a.

| The ground rules for the negotiations permitted any

member of either the Trades Council or Tri-State unilaterally

to withdraw from the negotiations and to give notice that it

would no longer be a party to any ultimate agreement. Pet.

App. 29a-30a, 47a.

————————

Petitioner refused to pay its employees the new

industrial wage rate. Instead, on June 8, 1992, peti-

tioner filed a grievance with the NMAPC, protesting

the new wage rate. Petitioner requested in particu-

lar that the NIMA bring the wage rate covering Local

577 in line with wages for other building trades crafts

in the area. Pet. App. 38a-36a, 51a-52a.° Local 577, in

turn, asked the United Association for assistance in

the grievance filed by petitioner, by bringing peti-

tioner’s refusal to pay the new contract rate before

the NMAPC. Id. at 38a-39a, 52a. As of the date of the

National Labor Relations Board’s hearing in this

case, in May 1993, the NMAPC had not formally acted

upon either petitioner’s grievance or Local 577’s

complaint to the United Association. J/d. at 39a, 55a-

56a.

On August 11, 1992, Local 577 filed an action

against petitioner in district court, under Section 301

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

185, based on petitioner’s failure to pay wages and

benefits under the new agreement. That action is

still pending. Pet. App. 4a.

3. On November 30, 1992, the United Association

filed an unfair labor practice charge with the National

Labor Relations Board (Board), which forms the

basis for the present proceeding. Pet. App. 4a. After

a hearing, an administrative law judge (ALJ) con-

cluded that petitioner violated Section 8(a)(5) and (1)

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

2 Petitioner asserted that the wage package of the Local

577-Southeastern agreement represented an increase of $3.09,

whereas all other local unions had agreed to the Trades

Council/Tri-State negotiated increase of $1.50 plus a 12-cent per

hour drug testing fee. Pet. App. 34a.

158(a)(5) and (1), by unilaterally refusing to pay wages

and benefits that it was obligated to pay under the

terms of the Local 577-Southeastern agreement. The

ALJ explained that, because petitioner conceded that

it was bound by the NIMA obligation to pay the wage

rates established in the collective-bargaining agree-

ment negotiated by the local union, “there was a

prima facie case of repudiation” of that contract obli-

gation when petitioner failed “to pay the wage rates

under the new contract.” Pet. App. 48a. The ALJ

reasoned that petitioner’s “clear repudiation of the

contract wage provision is not just a mere breach of

the contract, but amounts * * * to the striking ofa

death blow to the contract as a whole, and is thus, in

reality a basic repudiation of the bargaining relation-

ship.” Jd. at 42a (quoting Oak Cliff-Golman Baking

Co., 207 N.L.R.B. 1063, 1064 (1973), enforced, 505 F.2d

1302 (5th Cir. 1974), cert. denied, 423 U.S. 826 (1975)).

The ALJ rejected petitioner’s defense that the con-

tract between Local 577 and Southeastern was invalid

because it was not the result of arm’s length bar-

gaining. Pet. App. 48a-5la. The ALJ noted that there

was “no evidence adduced” that any of the members of

Southeastern were not engaged in industrial plumb-

ing contracting, which is the subject of the wage rate

to which petitioner objects. Jd. at 45a. The ALJ also

found no evidence of discriminatory motive, discrimi-

natory application of the new contract, or conflict of

interest. Jbid. He also noted that 30 other contrac-

tors had signed the new agreement. /d. at 45a-46a.

The ALJ also rejected petitioner’s argument that

the Board should defer to the NIMA’s grievance pro-

cedure for resolution of the parties’ dispute, rather

than exercise its jurisdiction to rule on the United

Association’s unfair labor practice charge. Noting

that Article VI of the NIMA excludes from the con-

-tract grievance procedure grievances “pertaining to

* * * general wage rates,” the ALJ first concluded

that deferral should be denied because the question

whether petitioner was required to pay the new wage

rates negotiated by Local 577, “having been clearly

excluded, is not even arguably covered by the contract

grievance procedure.” Pet. App. 54a-55a.

The ALJ found further that, even if the wage rates

were grievable, petitioner had “failed to comply with

step 5 of the grievance procedure,” which provides

that the failure of the NMAPC to reach a decision

“shall constitute a basis for a submittal of the ques-

tion to the American Arbitration Association for a

binding decision.” Pet. App. 55a. As the NMAPC had

taken no action on petitioner’s grievance in 11

months, the ALJ concluded that “there has been a

failure of NMAPC to reach a decision.” Jd. at 56a.

The ALJ subsequently reiterated his conclusion that

petitioner “has rested on its oars for 11 months

following submission of its protest against the Local

577 new wage structure,” and suggested that peti-

tioner “is apparently content with NMAPC’s inac-

tion,” given that petitioner was obligated to pay the

wages negotiated by Local 577 unless and until they

were modified by the NMAPC. /7d. at 59a. The ALJ

summarized by stating that deferral should not be

ordered “because the party seeking Board deferral

[petitioner] is not acting with diligence in securing

the exceptional rights it seeks pursuant to the

contract on which it depends.” Jd. at 60a.

4. The Board affirmed the ALJ’s findings and con-

clusions, and adopted his recommended order. Pet.

App. 12a-14a. That order, inter alia, requires peti-

tioner to cease and desist from the unfair labor

—~ a

practices found, and to reimburse its United Associa-

tion employees and Local 577 for any losses they may

have suffered as a result of petitioner’s failure to pay

the wages and benefits specified in the Local 577-

Southeastern contract. Jd. at 7la-73a.

5. The court of appeals, in an unpublished per

curiam opinion, enforced the Board’s order. Pet. App.

la-lla. The court concluded that, since the NIMA did

not provide for arbitration of wage disputes and

petitioner did not pursue its claim to arbitration, the

Board did not abuse its discretion in declining to defer

the dispute to the contract grievance and arbitration

procedure. Jd. at 7a-8a. The court also ruled that the

Board did not err in rejecting petitioner’s claim that

Local 577 and Southeastern had not engaged in arm’s

length bargaining. /d. at 8a.

ARGUMENT

1. Petitioner argues (Pet. 11-26) that the National

Labor Relations Board erred in exercising its unfair

labor practice jurisdiction over this dispute, and

should have deferred to the outcome of the grievance

procedure invoked by petitioner in protesting the new

wage rates set by the agreement between Local 577

and Southeastern. The ALJ, the Board, and the court

of appeals correctly concluded, however, that deferral

was not appropriate or required on the facts of this

case, in light of inaction on the grievance and peti-

tioner’s failure to pursue the matter to arbitration.”

3 Petitioner argues (Pet. 11) that it “sought to invoke the

grievance processes for final and binding arbitration under

Article VI to determine if [Southeastern] were a valid body

with which a valid local agreement could be negotiated with

Local 577 and if the contract they negotiated would be

recognized as a valid local agreement under NIMA,” and that

ee a a ee |

In Collyer Insulated Wire, 192 N.L.R.B. 837 (1971),

the Board, in the exercise of its discretion and in

order to effectuate the statutory policy favoring vol-

untary settlement of labor disputes through arbitral

processes (see 29 U.S.C. 173(d)), held that it would de-

cline to decide disputes involving the interpretation of

contract terms which were capable of resolution

under the contract grievance and arbitration proce-

dure, but instead would require the parties to submit

such disputes to the contract procedure. In United

the ALJ erred in treating this case as purely a dispute over

wages. It makes no difference in this case, however, whether

the ALJ may have erred to the extent that he appears to have

concluded that petitioner was protesting only the wage rates

set out in the Southeastern agreement. The ALJ reasonably

read petitioner’s June 8, 1992 letter to the NMAPC as com-

plaining in principal part about the high rates set for industrial

work in the Southeastern agreement. See Pet. App. 54a-55a.

Although the letter (id. at 34a-36a) referred to Local 577’s

having abandoned both the Trades Council and its collective

bargaining partner, Tri-States, the bulk of the letter protested

the amount of the wage increase provided in the agreement.

Also, the letter did not request the NMAPC to invalidate the

agreement, but only to modify the amount of the wage in-

crease. Nor did the ALJ overlook that, even if the Southeast-

ern agreement were a valid local agreement, “there [was] still a

question of whether the NIMA Policy Committee [would] re-

duce the [wage] rate [petitioner] must pay pursuant to Article

VIII.” Pet. 12. The ALJ recognized that, since Article VIII

permitted the NMAPC to modify the wage rates in a local

agreement, “the Board might well entertain deferral based

upon the language of article VIII * * * and the essential

thrust of fpetitioner’s] June 8 protest to NMAPC concerning

the high wage rates.” Pet. App. 59a. Nevertheless, the ALJ

concluded that Board deferral to the contract procedure would

not be appropriate in this case because “(t]here has been 11

months of NIMA inaction and 11 months of [petitioner’s] failing

to pursue the matter.” Jbid.

Technologies Corp., 268 N.L.R.B. 557, 559 (1984), the

Board reaffirmed and extended that policy, and stated

that it would be “contrary to the basic principles of

the [National Labor Relations] Act for the Board to

jump into the fray prior to an honest attempt by the

parties to resolve their disputes through [the arbi-

tral] machinery.” The Board cautioned, however, that

its policy of deferral was designed to prevent the

parties from “ignor[ing] their agreement and * * *

petition[ing] [the] Board in the first instance for

remedial relief,” ibid. (emphasis added), and it noted

that “deferral is not akin to abdication”; “[i]t is

merely the prudent exercise of restraint, a postpone-

ment of the use of the Board’s processes to give the

parties’ own dispute resolution machinery a chance to

succeed.” Jd. at 560.

On the facts of this case, the ALJ concluded that

the parties’ grievance mechanism had failed its

“chance to succeed,” and that petitioner had aban-

doned its opportunity under the NIMA to pursue to

arbitration its effort to seek modification of the new

wage rates. The ALJ noted that, despite “11 months

of NIMA inaction” on petitioner’s protest, petitioner

had “rested on its oars” by failing to pursue the mat-

ter further. Pet. App. 59a. Given that petitioner was

obligated under the NIMA to pay the wage rates

established by the local agreement unless and until

those rates were altered by the NMAPC, the ALJ

found it reasonable to conclude that petitioner was

“apparently content with NMAPC’s inaction in the

disposition of its June 8, 1992 protest.” Jbid.

Thus, this case is not like United Technologies,

where the Board declined to “jump into the fray”

before the parties gave their arbitral machinery a

chance to succeed. Nor is the Board’s decision not to

defer to arbitration in this case contrary to its

decision in either Spann Building Maintenance Co..

275 N.L.R.B. 971 (1985), petition for review denied sub

nom., Lewis v. NLRB, 800 F.2d 818 (8th Cir. 1986),

supplemental Board decision, 284 N.L.R.B. 470 (1987),

supplemented, 289 N.L.R.B. 915 (1988), or United Beef

Co., 272 N.L.R.B. 66 (1984). Although the Board found

on the facts of those cases that, despite delays in

proceeding to arbitration, deferral to the grievance-

arbitration procedure was still appropriate, it reaf-

firmed in both cases the principle that it would

exercise jurisdiction over a dispute which has not

“with reasonable promptness * * * either been

resolved by amicable settlement in the grievance

procedure or submitted promptly to arbitration.” See

Spann, 284 N.L.R.B. at 470; United Beef, 272

N.L.R.B. at 68-69. Thus, the difference between the

decision in this case and the decisions in Spann and

United Beef turns on the Board’s evaluation of the

particular facts, rather than on a difference in legal

principle.

This case is factually different from both Spann

and United Beef in significant respects. In both

United Beef and Spann, the charging party before

the Board originally initiated the private-resolution

mechanism through his union. In United Beef, the

Board expressed concern that the union was seeking

to avoid the unfavorable consequences of the arbitral

and grievance machinery that it had invoked, see 272

N.L.R.B. at 68; in Spann, the Board concluded that,

once the union invoked the grievance-arbitration

mechanism, that process should be allowed to run its

course, see 275 N.L.R.B. at 972. In this case, by con-

trast, petitioner first invoked the NMAPC’s griev-

ance mechanism, and the ALJ expressed concern that

petitioner was attempting to delay a resolution by the

Board of the charge filed by the United Association

by “not acting with diligence” on its grievance. See

Pet. App. 60a. Nothing in Collyer suggests that the

Board is required to defer to the contract grievance

and arbitration procedure in a dispute in which the

charged party has not been diligent in pursuing

its arbitration remedy. Indeed, the Collyer deferral

policy expressly provides that the Board will deter-

mine the dispute where it “has not, with reasonable

promptness * * * either been resolved by amicable

settlement in the grievance procedure or submitted

promptly to arbitration.” Collyer, 192 N.L.R.B. at

843.

2. Petitioner further contends (Pet. 27-29) that the

Board erred in requiring it to be bound by the con-

tract that Local 577 negotiated with Southeastern

because the principal negotiators on behalf of South-

eastern owed “duties of loyalty to the Union [that]

conflicted with their duties on behalf of [petitioner]

and the other Industrial contractors.” The ALJ and

the Board found that there was no conflict of loyalty,

and that the parties had engaged in arm’s length

bargaining (Pet. App. 13a, 45a-46a); that finding was

upheld by the court of appeals (id. at 8a-9a). That

factual issue does not warrant review by this Court.

Universal Camera Corp. v. NLRB, 340 U.S. 474, 490-

491 (1951).

In any event, the record fully supports the Board’s

finding that the contract was negotiated in good faith

and at arm’s length. The fact that several principals

of Southeastern were also members of Local 577 is

not of overriding significance, for it is not uncommon

in the construction industry for contractors to retain

their union membership. See Nassau & Suffolk Con~ - - --

tractors’ Ass’n, 118 N.L.R.B. 174, 184 (1957) (recogniz-

ing that this practice is not unlawful, so long as the

union does not attempt to exert unlawful influence

upon the employer/union member and the employer/

union member is not involved in union affairs to any

significant degree). As the ALJ noted, the only rec-

ord evidence regarding the ability of contractor/union

members to work as journeymen plumbers (and thus

enjoy the enhanced wages and benefits provided by the

Southeastern agreement) was that, if they abandoned

or severely limited their contracting function, they

could be referred to jobs from the bottom of the Local

o77 eligibility list. Pet: App. 3la n.7, 45a. Nor is

there anything suspect in the fact that Local 577 and

Southeastern came to an agreement a-short period of

time, or that the agreement established a separate

rate for industrial contractors (including petitioner)

that was higher than that for commercial work. The

ALJ specifically found, based on the record before

him, that “[t]he speed of execution and prior negotia-

tions leading to the new contract does not constitute

evidence of bad faith, discrimination, or overreach-

ing.” Jd. at 46a. The ALJ also noted that there was

no evidence adduced that any of the six contracting

organizations that formed Southeastern were not

engaged in industrial, as well as commercial, plumb-

ing work, and that more than 30 other contractors

working in the area signed the Southeastern agree-

ment. Jd. at 45a-46a.

Petitioner relies (Pet. 27-29) on court and Board

cases holding that an employer may lawfully with-

draw from a multi-employer bargaining unit when the

evidence establishes that the employer’s interests are

not fairly represented by the association, or where

— - the union is attempting to “whipsaw” employers into

an agreement by fragmenting the employer associa-

tion. See NLRB vy. Siebler Heating & Air Con-

ditioning, Inc., 563 F.2d 366, 370-371 (8th Cir. 1977);

Universal Enterprises, Inc., 291 N.L.R.B. 670, 671,

676-677 (1988). On the facts of this case, however, the

ALJ found that the new contract was negotiated in

good faith and at arm’s length. Pet. App. 44a. That

finding, which was sustained by the Board and the

court of appeals, presents no legal issue warranting

this Court’s review.

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted.