Opposition Brief — Pace Industries, Inc. v. National Labor Relations Board

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FEB 9g 1996

No. 97-952

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In the Supreme Court of the Gnited States

OCTOBER TERM, 1997

PACE INDUSTRIES, INC., D/B/A

PRECISION INDUSTRIES, INC., ET AL., PETITIONERS

Vv.

NATIONAL LABOR RELATIONS BOARD

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

BRIEF FOR THE

NATIONAL LABOR RELATIONS BOARD

IN OPPOSITION

SETH P. WAXMAN

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

JOHN EMAD ARBAB

Attorney

National Labor Relations Board

Washington, D.C. 20570

QUESTION PRESENTED

The National Labor Relations Board found that

petitioner, a successor employer, unlawfully engaged

in discriminatory hiring practices to avoid incurring

a legal obligation to recognize and bargain with the

union that represented its predecessor’s employees.

The question presented is whether the Board acted

within its remedial authority in ordering petitioner

to recognize and bargain with the union.

(I)

TABLE OF CONTENTS

Page

I 1

ESSE SES SRR OE ee ee ee 1

Rah eRe daca ccttlasid adie dhs caciadtbascnadersadeeeeseeoe 2

ESET SER on ls Says Cea 9

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TABLE OF AUTHORITIES

Cases:

Be-Lo Stores v. NLRB, 126 F.3d 268 (4th Cir.

I aah idaienadteniibinitnb chi sidatiiesentbineanatarcaanedsccener 16, 18

Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691

Co FESS RSIS SRE aS esate eg ea 11, 15

Elastic Stop Nut Div. of Harvard Indus. v.

NLRB, 921 F.2d 1275 (D.C. Cir. 1990) .........00.000.. 2

Fall River Dyeing & Finishing Corp. v. NLRB,

| 2, 13

Howard Johnson Co. v. Detroit Local Jt. Exec.

Pt IE I OD iii sanin cece ccancceesines 2

International Ladies’ Garment Workers’ Union v.

Quality Mfg. Co., 420 U.S. 276 (1975) ....cccccccscsosess 10

Kungys v. United States, 485 U.S. 759 (1988) ........ 11

Lee Lumber & Bldg. Material Corp. v. NLRB,

117 F.3d 1464 (D.C. Cir. 1997) ...............ccccocccesseeeee 16

Marshall Field & Co. v. NLRB, 318 U.S. 253

SN aN idlhdlhaeicichinciiidadcencisina stgeisedchunieditined¥sducesdsnrace 10

Massachusetts v. Sheppard, 468 U.S. 981 (1984) . 11

NLRB v. Burns Int'l Security Servs., Inc., 406

SPE EE SIE disci tnicracinsseish-bauisiedecnevesdinnscocanecxcsecces 2

NLRB v. Gissel Packing Co., 395 U.S. 575

CP sacbeehagesdbdisipabinasetiavish<diskitheascesctinunnsancésecee. 11, 16, 17

NLRB v. Gordon, 792 F.2d 29 (2d Cir.), cert.

Genied, 479 U.S. 981 (1986) ...............cc.cccccsecsessesees 18

NLRB v. Horizons Hotel Corp., 49 F.3d 795

I as 2

(IIT)

Cases—Continued: Page

NLRB v. LaVerdiere’s Enters., 933 F.2d

ROG CRA Sy NOG Bish eactestoscctsmsactiditeiesesendoees 16

NLRB v. Marion Rohr Corp., 714 F.2d 228

Cd CR . IDG) sicicsevis satis hen inctnchiictacdpucaandtinasineee 16

NLRB v. Seven-Up Bottling Co., 344 U.S. 344

CHOUD .ccicsicsonssensnsssitassebieonaissomissciethideenhnisnithoiovse ass in

NLRB v. So-Lo Foods, Inc., 985 F.2d 123 (4th

CRP. TID scssisacsnisineitnicigiteienpninaninictoanisbansiseibetnersn 11

NLRB v. Thill, Inc., 980 F.2d 1137 (7th Cir.

LODE): scosisstdivchieersiptacten shniuscdeliinookinentiiantualssusionitin evs 15

New Breed Leasing Corp., 317 N.L.R.B. 1011 (1995),

enforced, 111 F.3d 1460 (9th Cir.), cert. denied,

RES BCR waves iis scnssiinscccocthapenastaapneesianss 3

Peoples Gas System, Inc. v. NLRB, 629 F.2d

OE CET: GR Re eace cacscscthapudinceiguareticaccenmsisetetnivese 11

Phelps Dodge Corp. v. NLRB, 313 U.S. 177

COOGEE) sciatica ieee ado s sicesverssrenipsnanse 8

Pioneer Inn Assocs., 228 N.L.R.B. 1263 (1977),

enforced, 578 F.2d 835 (9th Cir. 1978) ...............008 13

Red Oaks Nursing Home, Inc. v. NLRB, 633

Fe GOD Cie Ga Te cnc cchndicanced cincncaskensticuticéneesss 16

Texas Petrochemicals Corp. v. NLRB, 923 F.2d

SOB CGR CO TD asi ike cbscesentes cteasanicatechanseatskscceess 16

U.S. Marine Corp., 293 N.L.R.B. 669 (1989),

enforced, 944 F.2d 1305 (7th Cir. 1991), cert.

denied, 506 U.S. GBG-(AGOR) o.s.ccceccsescsccsscsccescscsscnees 3

Virginia Elec. & Power Co. v. NLRB, 319 US.

GD CI ich eh Si occ ws cansnactanetiiabacnceess 19

Woelke & Romero Framing, Inc. v. NLRB, 456

UB Ce Ca ahs eteresastneee 10

Yee v. City of Escondido, 503 U.S. 519 (1992) ........ 12

Statutes and regulation: Page

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

et seq.:

§ 8(a)(1), 29 U.S.C. 158(a)(1) ........cccccseeeeeereeeeeees 5

§ 8(a)(3), 29 U.S.C. 158(a)(8) .............ceecceeeeeeeeees 2,5

§ S(aNXG), 20 UBC. WSELEND) .......0.....0ccrccrccccceoee 2,5

© TCR), BO A. COO) Sn ciiecccscscccescccccccccsccceseses 9, 10

BD CTR. TORE) cecisseisessovescisscssecscinsocsccecoseess 10

Gn the Supreme Court of the United States

OCTOBER TERM, 1997

No. 97-952

PACE INDUSTRIES, INC., D/B/A

PRECISION INDUSTRIES, INC., ET AL., PETITIONERS

Vv.

NATIONAL LABOR RELATIONS BOARD

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

BRIEF FOR THE

NATIONAL LABOR RELATIONS BOARD

IN OPPOSITION

OPINIONS BELOW

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

A17) is reported at 118 F.3d 585. The decision and

order of the National Labor Relations Board (Pet.

App. A18-A28), and the decision of the administrative

law judge (Pet. App. A28-A206), are reported at 320

N.L.R.B. 661.

JURISDICTION

The judgment of the court of appeals was entered on

July 1, 1997. A petition for rehearing was denied

on September 8, 1997. Pet. App. A207. The petition

for a writ of certiorari was filed on December 8, 1997

(1)

: |

(a Monday). The jurisdiction of this Court is invoked

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

STATEMENT

1. It is settled law that, where there is “substan-

tial continuity” between the business enterprises of a

previous employer and a new employer, the new

employer is a “successor” to the old employer. A suc-

cessor employer is obligated by Section 8(a)(5) of

the National Labor Relations Act (Act), 29 U.S.C.

158(a)(5), to recognize and bargain with the union that

represented its predecessor’s employees, if a majority

of the successor’s workforce formerly was employed

by its predecessor.’

Although a successor employer is not legally obli-

gated to hire its predecessor’s employees, refusing to

hire those former employees for the purpose of

avoiding the obligation to recognize and bargain with

the union violates Section 8(a)(8) of the Act, 29 U.S.C.

158(a)(3).2, A successor employer that engages in such

unlawful hiring discrimination against the predeces-

sor’s employees also violates Section 8(a)(5) if it

refuses to recognize and bargain with the union that

represented the predecessor’s employees.*

The remedies for such violations are well estab-

lished. The “appropriate remedy” for failure to bar-

1 See Fall River Dyeing & Finishing Corp. v. NLRB, 482

U.S. 27, 41, 48 (1987); NLRB v. Burns Int'l Security Servs.,

Inc., 406 U.S. 272, 280-281 & n.4. (1972).

2 Fall River, 482 U.S. at 40; Burns, 272 U.S. at 280-281 &

n.5. See also Howard Johnson Co. v. Detroit Local Jt. Exec.

Bd., 417 U.S. 249, 261-262 & n.8 (1974).

- §% See, e.g., NLRB v. Horizons Hotel Corp., 49 F.3d 795, 806

(1st Cir. 1995); Elastic Stop Nut Div. of Harvard Indus. v.

NLRB, 921 F.2d 1275, 1282 (D.C. Cir. 1990).

|

3

gain generally consists of “restoration of the previ-

ously existing employment terms, the status quo

ante,” and enforcement of the “obligation to bargain”

before new changes can be made.‘ Similarly, where a

successor has engaged in unlawful hiring discrimina-

tion to avoid its bargaining obligation, the Board acts

within its remedial authority in ordering the succes-

sor to recognize and bargain with the union, and to

rescind unilateral changes in employment terms

pending good-faith negotiations with the union or an

impasse in bargaining.°

2. Petitioner Pace Industries, Inc., d/b/a Precision

Industries, Inc., manufactures aluminum die castings.

Pet. App. A2, A44.° In October 1988, petitioner pur-

chased from Universal Die Casting, Inc. (UDC) two

plants in Arkansas, one in Little Rock and the other

in Malvern. Id. at A2, A38, A46. At the time of the

purchase, the International Union, United Automo-

4 U.S. Marine Corp. v. NLRB, 944 F.2d 1305, 1322 (7th Cir.

1991) (en banc), cert. denied, 503 U.S. 936 (1992). See also New

Breed Leasing Corp. v. NLRB, 111 F.3d 1460, 1467-1469 (9th

Cir.), cert. denied, 118 S. Ct. 366 (1997).

5 See, e.g., New Breed Leasing Corp., 317 N.L.R.B. 1011,

1011 & n.3, 1027 (1995), enforced, 111 F.3d 1460 (9th Cir.), cert.

denied, 118 S. Ct. 366 (1997); U.S. Marine Corp., 293 N.L.R.B.

669, 672, 673 (1989), enforced, 944 F.2d 1305 (7th Cir. 1991) (en

banc), cert. denied, 503 U.S. 936 (1992).

6 In addition to Pace Industries, Inc., d/b/a Precision Indus-

tries, Inc., two other entities are named as petitioners: Pace

Industries, Inc., d/b/a General Precision Tool & Die, Inc., and

Pace Industries, Inc., d/b/a Automatic Castings, Inc. See Pet. 1.

Because these three entities constitute a single employer for

purposes of the National Labor Relations Act (Pet. App. A194

and because the nominal distinctions among them je“of no

material significance here, we refer to the three entities,

collectively, as “petitioner.”

ART

4

bile, Aerospace and Agricultural Implement Workers

of America (Union) represented a bargaining unit

consisting of all production and maintenance employ-

ees at UDC’s Malvern plant. Jd. at A2, A38, A194.

UDC and the Union previously had negotiated a

three-year collective-bargaining agreement, effective

through May 6, 1989. Jd. at A39. The employees at

UDC’s Little Rock plant, however, were not repre-

sented by a union. Jd. at A2.

On October 14, 1988, UDC ceased operations at the

Malvern plant and discharged the employees. Pet.

App. A3, A47. Petitioner, as the new owner of the

plant, then solicited job applications from the general

public, requiring UDC’s former Malvern employees

to submit applications if they wished to continue their

employment at the plant. Jd. at A3, A160. To restaff

the Malvern plant, petitioner, at a cost of about

$100,000, implemented an elaborate hiring procedure,

interrupting production and jeopardizing commit-

ments to customers. Jd. at A3. The hiring process,

which took six to eight weeks to complete, required

applicants to submit to various aptitude tests, skills

tests, and a physical examination, including a back x-

ray. Id. at A3-A5, A161, A163, A165-A168, A173.

Although 103 of UDC’s former Malvern employees

submitted applications, petitioner hired only 22 of

them, a numerical minority of its workforce at the

Malvern plant. Jd. at A6, A24, A47, A163.

By contrast, the non-union Little Rock plant did

not close for restaffing; instead, petitioner vested the

plant manager with complete discretion in deciding

whom to hire. With virtually no review of their ap-

plications, and without requiring any testing or

physical examination, the plant manager hired almost

all of UDC’s former Little Rock employees, based on

|

5

his personal knowledge of the applicants. Pet. App.

A3, A5, A161. On and after October 14, petitioner

unilaterally altered the employment terms of the

employees in the Malvern bargaining unit without

prior notice to or bargaining with the Union. Id. at

A193, A195.

3. On May 25, 1989, acting on charges filed by the

Union, the General Counsel of the National Labor

Relations Board (Board) issued a complaint against

petitioner. Pet. App. A29. As later amended, the com-

plaint alleged that, in violation of Section 8(a)(1), (3),

and (5) of the Act, 29 U.S.C. 158(a)(1), (8), and (5), peti-

tioner had discriminatorily refused to hire former

UDC employees at the Malvern plant because they

were represented by the Union, had refused to recog-

nize and bargain with the Union as the representative

of the employees in the Malvern bargaining unit, and

had unilaterally altered the Malvern employees’

terms and conditions of employment without bargain-

ing with the Union. Pet. App. A29-A30, A32.

The litigation that followed was protracted. Al-

though a hearing was originally scheduled for Novem-

ber 13, 1989 (Pet. App. A31), the parties were unable to

agree on the terms of a protective order, and the

hearing was adjourned to permit the General Counsel

to pursue a subpoena enforcement action against peti-

tioner in federal district court. Ibid. After the entry

of a consent decree by the district court and the

General Counsel’s review of the subpoenaed material,

the General Counsel filed an amended complaint on

June 22, 1990. Id. at A32. From September 17, 1990, to

November 19, 1991, the administrative law judge

(ALJ) took 15 solid weeks of testimony, producing a

transcript of 13,000 pages. Jd. at A338. After review of

what concededly had become a “monumental” record

6

(id. at A36), the parties submitted briefs to the ALJ

on October 5, 1992.

a. On May 4, 1993, the ALJ issued a decision, find-

ing that petitioner had violated the Act, as alleged.

Pet. App. A29-A206. The ALJ concluded that peti-

tioner was a successor employer to UDC, in that

there was “substantial continuity” between peti-

tioner’s operations and those of UDC at the Malvern

plant. Jd. at A190. Accordingly, petitioner was under

a duty not to avoid its obligation to bargain with the

union by discriminating against former employees.

Yet the ALJ found that petitioner had done precisely

that: “(T]he purpose of the Malvern screening proce-

dure,” the ALJ found, “was to get rid of the Union,”

and “the proffered business reasons for the Malvern

screening process were totally false and pretextual.”

Id. at 179; see also id. at A182-A183. Although peti-

tioner had attempted to mask its purpose with an

elaborate screening procedure, the net effect was that

petitioner had “refused to hire * * * 62 former

Malvern UDC employees because they had been

represented by the Union, and [because] their hiring

by [petitioner] was feared to have necessitated

recognition and bargaining with the Union.” Id. at

A186.

7 The anti-union motivation was evident not merely from

the fact that screening procedures were imposed at the union

plant in Malvern but not the non-union plant in Little Rock,

but also from the manner in which the screening process

operated. Former workers at the Malvern plant were rejected

for omissions in their applications even though new hires had

similar omissions in their applications (Pet. App. Al2, A164-

165), other reasons for rejecting former employees appeared

pretextual (id. at Al2-A13, A173, A174), and the entire process

of testing was set up in a manner that “enabled [petitioner] to

———ee

7

The ALJ further found that, “had it not been for the

fear that it might have had to recognize and bargain

with the Union, * * * [petitioner] would have

continued in place the entire complement of former

UDC employees.” Pet. App. A189. Addressing the

possibility of new hires, the ALJ also concluded that

“but for the discriminatory hiring procedure, the

Union’s presumption of majority status would have

continued” among the employees in the Malvern bar-

gaining unit. Jd. at A191.

Based on these findings, the ALJ concluded that

petitioner’s refusal to recognize and bargain with the

Union, and its unilateral changes to the terms of

employment, violated Section 8(a)(1) and (5) of the Act.

Pet. App. A192-A193, A195. The ALJ therefore re-

commended that petitioner reinstate the victims of

discriminatory hiring with full backpay (id. at A195-

A197), and that petitioner be required to recognize

and bargain with the Union (id. at 197).

b. Petitioner filed 282 objections to the ALJ’s

findings and conclusions with the Board, and a 100-

plus page brief in support of its objections. On

January 3, 1996, the Board issued a decision affirming

the ALJ’s findings and conclusions, with certain

modifications that are not relevant here. Pet. App.

A18-A28. The Board agreed with the ALJ that, in”

implementing the hiring procedure at the Malvern

plant, “[petitioner’s] purpose * * * [was] simply to

make sure that former UDC employees did not make

up a majority of its work force, and thereby to avoid

incurring the duty to recognize and bargain with the

Union.” Jd. at A24. The Board adopted the ALJ’s

arbitrarily control the ratio of UDC and non-UDC applicants

hired” (id. at A174-A175).

8

recommended remedial order (id. at A19, A27), which

requires petitioner to offer reinstatement to specified

victims of discrimination; to give them back pay and

other make-whole relief; to bargain with the Union as

the representative of the employees in the bargaining

unit at the Malvern plant; and to rescind the unilat-

eral changes in the terms of employment for the

Malvern bargaining unit “until [petitioner] negoti-

ates in good faith with the Union to agreement or to

impasse.” Jd. at A199-A201.

4. Petitioner sought judicial review of the Board’s

order, and the Board cross-petitioned for enforce-

ment. The court of appeals denied the petition for

review, and granted the petition for enforcement. Pet.

App. Al-A17. ,

The court concluded that substantial evidence sup-

ports the Board’s finding that petitioner instituted

the hiring procedure at the Malvern plant in order to

avoid an obligation to recognize and bargain with the

Union. Pet. App. A9, A10-A15. Rejecting petitioner’s

contention that the remedy fashioned by the Board

“exceeds its authority,” the court explained that

“(t]he goal of a remedial order is to restore ‘the

situation, as nearly as possible, to that which would

have obtained but for the [unfair labor practices].’”

Id. at A15-A16 (quoting Phelps Dodge Corp. v. NLRB,

313 U.S. 177, 194 (1941); bracketed material added by

court of appeals). “Ordering [petitioner] to offer rein-

statement and backpay to the discriminatees is

directly aimed at and fulfills that purpose,” the court

concluded. Ibid.

The court similarly concluded that the remedy of

“[rjescinding the unilateral changes in employment

conditions likewise comports with the policies of the

Act.” Pet. App. Al6. “In fashioning the order,” the

9

court observed, “the ALJ correctly presumed that

without the discriminatory hiring practices the

union’s majority status would have continued, which

in turn would have required that [petitioner] bargain

with the union before making changes in employment

terms.” Jd. at A16-A17.

ARGUMENT

Before this Court, petitioner does not challenge the

Board’s findings that petitioner engaged in unfair

labor practices. Nor does petitioner question the

Board’s general remedial authority to require a

successor employer, like petitioner, to bargain with

the union where, as here, the employer engaged in

hiring discrimination in an unlawful attempt to avoid

a legal duty to bargain. Rather, petitioner’s sole con-

tention (Pet. 5-6) is that the court of appeals should

not have enforced the Board’s bargaining order in this

case because of “changed circumstances” occurring

between the closure of the Malvern plant in October

1988 and the court of appeals’ issuance of its decision

in July 1997. That fact-bound claim was not properly

preserved, is without merit, and does not implicate a

division in circuit authority. Accordingly, further

review is not warranted.

1. As an initial matter, petitioner’s claim of

“changed circumstances” is jurisdictionally barred

by Section 10(e) of the Act, 29 U.S.C. 160(e). Section

10(e) provides that “[nJo objection that has not been

urged before the Board * * * shall be considered by

the [reviewing] court, unless the failure or neglect to

urge such objection shall be excused because of ex-

traordinary circumstances.” 29 U.S.C. 160(e). Peti-

tioner did not object to the issuance of a bargaining

order on the basis of “changed circumstances” before

10

the Board at any time prior to the Board’s issuance of

its January 1996 decision. Nor did petitioner raise

such an objection by filing a motion for reconsidera-

tion with the Board at’ any time thereafter. See Pet.

App. A18, A27, A200; 29 C.F.R. 102.48(d)(1). Instead,

petitioner raised that objection for the first time in

the court of appeals (which declined to address it).

Pet. App. A15-A17; see also Pet. 3-4. Because peti-

tioner failed to raise its changed circumstances con-

tention before the Board (by motion for reconsidera-

tion or otherwise), Section 10(e) precludes this

Court—as it precluded the court below—from ad-

dressing the argument now. See Woelke & Romero

Framing, Inc. v. NLRB, 456 U.S. 645, 665-666 (1982);

International Ladies’ Garment Workers’ Union v.

Quality Mfg. Co., 420 U.S. 276, 281 n.3 (1975).°

8 Petitioner errs in suggesting (Pet. 4 n.2) that Section

10(e)’s jurisdictional bar is inapplicable here because Section

10(e) “is not a limitation on the equity powers of the courts of

appeals in determining the appropriateness of a particular

remedy.” Nothing in the text of Section 10(e) creates an ex-

ception for remedial objections. To the contrary, Section 10(e)

jurisdictionally bars judicial consideration of any “objection that

has not been urged before the Board,” language that by its

plain terms includes “objections” to the remedy selected.

Indeed, this Court has so construed Section 10(e). See NLRB

v. Seven-Up Bottling Co., 344 U.S. 344, 350 (1953) (objection to

remedy barred by Section 10(e) where objection was not raised

before the Board); Marshall Field & Co. v. NLRB, 318 U.S.

253, 255-256 (1943). Petitioner also suggests (Pet. 4 n.2) that

Section 10(e) is inapplicable to this case because, “by definition,

‘changed circumstances’ occur subsequent to the Board’s action

and * * * could not have been presented before the Board.”

But petitioner effectively concedes that the changed circum-

stances at issue here arose before the Board issued its decision,

since petitioner argues (Pet. 5, 6) that the increase in the size

of the Malvern workforce was “largely attributable” to Board

11

Besides, even if petitioner’s “changed circum-

stances” argument were not jurisdictionally barred,

review by this Court would still be unwarranted.

Petitioner’s “changed. circumstances” «claim is, fact-

bound, see Massachusetts v. Sheppard, 468 U.S. 981,

988 n.5 (1984), and was addressed by neither the Board

nor the court below. See Pet. 3 (“the Court of Appeals

failed to address whether the NLRB’s bargaining

order should be enforced in light of the changed cir-

cumstances”). This Court ordinarily does not, and

should not, consider a question that was not decided

by the court below. See Capital Cities Cable, Inc. v.

Crisp, 467 U.S. 691, 697 (1984) (“[W]e do not ordinarily

consider questions not specifically passed upon by the

lower court.”); cf. Kungys v. United States, 485 U.S

759, 773 n.6 (1988) (plurality opinion) (“it is not our

normal practice to consider fact-bound legal conse-

quences of contested district court findings not yet

delay. See also Pet. 3 (complaining that “(t]he final Board

decision was issued * * * nearly seven years after the charge

was filed”). Besides, even if the alleged “changed circum-

stances” arose after the Board issued its decision, they would be

of doubtful relevance with respect to the propriety of the

Board’s bargaining order, and should have been brought before

the Board on reconsideration in any event, since the Act vests

remedial discretion in the Board rather than the courts. See

NLRB vy. So-Lo Foods, Inc., 985 F.2d 123, 129 (4th Cir. 1992)

(court of appeals “will not generally consider evidence of

events subsequent to the Board’s decision during our review of

that decision”); see also Peoples Gas System, Inc. v. NLRB,

629 F.2d 35, 48 (D.C. Cir. 1980) (in determining whether to

issue a bargaining order pursuant to NLRB v. Gissel Packing

Co., 395 U.S. 575 (1969), “the Board should formulate its

remedy in light of * * * the conditions in the bargaining unit

at the time it renders its decision”).

12

reviewed by the court of appeals”); Yee v. City of

Escondido, 503 U.S. 519, 533 (1992).

2. Petitioner’s “changed circumstances” argu-

ment: is not only procedurally barred but substan-

tively meritless as well.

a. In essence, petitioner argues that requiring it

to bargain with the union was inappropriate because

the composition of the workforce changed substan-

tially after the Malvern plant closed. According to

petitioner, the plant had only 35 employees when it

closed in October 1988, and has more than 300 em-

ployees today. Pet. 5, 8. Both factual premises for

petitioner’s changed circumstances argument are

unsupported by the record.

With respect to petitioner’s argument that there

were “35 ‘active’ employees” in October 1988, the ALJ

correctly rejected that contention as “meaningless.”

Pet. App. A191. “84 former employee applicants * * *

were stipulated to have been employed by UDC on

October 14, 1988,” ibid., and as many as 103 former

Malvern employees applied for jobs with petitioner at

the Malvern plant, id. at A6.°

Petitioner’s assertion that the “Malvern plant em-

ployed about 300 workers” at the time of the Eighth

Circuit’s decision (Pet. 5, 8) is similarly unsupported.

The record is wholly silent as to the number of

employees working at the plant at that time. Hence,

® Petitioner nowhere explains why the number of “active”

workers at the moment of closure—a figure that excludes any

worker who was laid off or furloughed even the day before

closure—is the most appropriate starting point. Petitioner’s

unlawful discrimination against former employees was not

limited to those workers who were “active” on the last day of

operations, but rather extended to all former employees, in-

cluding those who had previously been laid off.

13

the factual premises for petitioner’s changed circum-

stances argument are not supported by the record.

b. Even if one were to assume that petitioner

employed 300 workers at the Malvern plant at the

time of the court of appeals’ decision in July 1997—

and there is no basis for any such assumption—that

purported fact, standing alone, would not require that

enforcement of the Board’s bargaining order be

declined. To the contrary, as the ALJ and the court of

appeals noted, but for the discriminatory hiring

procedure implemented by petitioner at the Malvern

plant in October 1988, the Union would have enjoyed a

continued presumption of majority status in the

Malvern bargaining unit when the plant reopened.

See Pet. App. A16, A191; see also Fall River Dyeing

& Finishing Corp. v. NLRB, 482 U.S. 27, 37-39 (1987)

(noting that unions are entitled to a “rebuttable

presumption of majority support” even where there is

a change in employers). That presumption of major-

ity status would have continued notwithstanding

increases in the size of the workforce, since new

hires are as likely to support the union as old ones.

See Pioneer Inn Assocs., 228 N.L.R.B. 1263, 1266

‘1977) (noting the rebuttable presumption that “new

employees will support the union in the same propor-

tion as those employees with more seniority”), en-

forced, 578 F.2d 835 (9th Cir. 1978). Thus, the

allegedly changed circumstances on which petitioner

seeks to rely were themselves a result of peti-

tioner’s unlawful discriminatory hiring procedures.”

” Petitioner also complains (see, e.g., Pet. 6) that delays by

the Board in resolving this case contributed to the changed

circumstances. Much of that delay, however, was caused by

petitioner’s own litigation tactics. Substantial delays were im-

14

Accordingly, petitioner’s representation as to the

size of the Malvern workforce in July 1997 does not

constitute a “changed circumstance” that would have

rendered a bargainirig ordér inappropriate here.

3. Finally, there is no merit to petitioner’s sugges-

tion (Pet. 7-8) that the decision of the court of appeals,

by enforcing the Board’s bargaining order despite

allegedly “changed circumstances,” conflicts with the

decisions of other circuits.

As petitioner acknowledges (Pet. 3-4), the court of

appeals did not address whether “changed circum-

stances” might render the bargaining order inappro-

posed from the outset when petitioner and the General Counsel

were unable to negotiate an acceptable confidentiality agree-

ment. As a result of that impasse, the hearing originally

scheduled for November 13, 1989, was adjourned so the General

Counsel could pursue a subpoena enforcement action against

petitioner in federal district court. Pet. App. A31. After the

entry of a consent decree by the district court and review of

the subpoenaed materials, the General Counsel filed an

amended complaint on June 22, 1990. Jd. at A32. Then, from

September 17, 1990, to November 1991, the ALJ took testimony

in “[flifteen weekly sessions of often intensive, concentrated

litigation,” which were spread out as an “accommodation with

the schedules of all parties.” Jd. at A33. Because the resulting

record was “monumental”—the transcript alone spanned 13,000

pages—and because of “the complexity of the factual issues,”

the parties were granted until October 5, 1992 to file their post-

hearing briefs before the ALJ. Jd. at A36. After reviewing

those submissions (including petitioner’s 1,000-plus page brief)

the ALJ issued his decision on April 4, 1993. Id. at A36, A202.

On August 5, 1993, petitioner filed 282 exceptions to the ALJ’s

decision with the Board, and a 140-page brief in support there-

of; it filed a reply brief on October 8, 1993. After reviewing the

enormous record and the voluminous submissions of the parties,

the Board issued its decision about two years and three months

later, on January 3, 1996. Jd. at Al18.

ne

15

priate. See Pet. App. A15-A17. It is thus difficult to

see how the court’s decision can be inconsistent with

the “changed circumstances” decisions of any other

circuit. Nor,is, it,.at,all clear -how this, case-could

present an appropriate vehicle for resolving the as-

serted conflict, especially given the existence of the

jurisdictional bar. See pp. 9-11 & n.8; see also Capital

Cities Cable, Inc., 467 U.S. at 697 (Court ordinarily

will not review issues not expressly adjudicated by

the lower court).

Besides, even if the court of appeals had passed on

the changed circumstances argument (despite the

jurisdictional bar), there still would be no conflict:

The cases upon which petitioner relies (Pet. 7) are

simply inapposite. For example, in NLRB v. Thill,

Inc., 980 F.2d 1137 (7th Cir. 1992), the court declined

to enforce the Board’s bargaining order where, “as a

result of [the Board’s] own delay in deciding the com-

pany’s appeal,” seven years had elapsed between the

ALJ’s decision and that of the Board. Jd. at 1142.

Here, by contrast, less than two and one-half years

elapsed between the ALJ’s and the Board’s respective

decisions (see Pet. App. A18), and that time elapsed

not because of the Board’s inattentiveness but rather

because of the need to review a concededly “monumen-

tal” record and the monumental number of exceptions

—282 in all—that petitioner placed before the Board.

See Pet. App. A36; pp. 7-8, 13 n.10, supra. The other

cases cited by petitioner (Pet. 7) similarly involved

both a significantly greater passage of time than

occurred here and additional factors—including

16

manifest employee desire to avoid union representa-

tion—not present in this case.”

Similarly inapposite are the cases petitioner cites

(Pet. 8) as having declined to enforce the Board’s

bargaining orders based on employee turnover in the

bargaining unit. Those cases address so-called Gissel

orders (see NLRB v. Gissel Packing Co., 395 U.S. 575

(1969)).” Gissel orders require an employer to recog-

nize and bargain with the union even though the

union and the employer have not previously estab-

lished a relationship recognizing the union as the

employees’ bargaining representative. Such orders

are typically entered after the union loses an election,

11 See NLRB v. LaVerdiere’s Enters., 933 F.2d 1045, 1053-

1056 (1st Cir. 1991) (Pet. 7) (declining to enforce bargaining

order where employees were engaged in an “effort to bring

about a decertification vote,” the employer’s unfair labor prac-

tices were “insubstantial,” and there was an “inordinate delay”

of three and one-half years “while the ALJ’s decision was on

appeal to the Board”); Texas Petrochemicals Corp. v. NLRB,

923 F.2d 398, 403-406 (5th Cir. 1991) (Pet. 7) (staying enforce-

ment of bargaining order and remanding case to Board for a

decertification election based on “unreasonable” four year

delay between ALJ’s and Board’s decisions and an employee

petition indicating that “a majority of the employees * * *

were opposed to union representation”). See also Lee Lumber

& Bldg. Material Corp. v. NLRB, 117 F.3d 1454, 1462 (D.C.

Cir. 1997) (Pet. 7) (remanding case to the Board for an ex-

planation of “why an affirmative bargaining order is necessary

given the facts of this case,” where “[t]his entire incident arose

seven years ago, the unfair labor practices in question were

relatively slight, and the employees twice indicated that they

were unhappy with the Union”).

2 See Be-Lo Stores v. NLRB, 126 F.3d 268, 274-275, 282-283

(4th Cir. 1997); NLRB v. Marion Rohr Corp., 714 F.2d 228,

230-231 (2d Cir. 1983); Red Oaks Nursing Home, Inc. v. NLRB,

633 F.2d 503, 507, 510 (7th Cir. 1980).

17

but the election is invalidated as tainted by the

employer’s unfair labor practices. If the Board con-

cludes that a new election—because of the lasting

effects of the unfair labor practices—cannot: be fairly

held, the Board may decline to hold a new election.

Rather, based on other evidence that a majority of the

employees desire union representation, the Board

may, under Gissel, impose a bargaining order instead:

“If the Board finds that the possibility of erasing the

effects of past practices and of ensuring a fair election

(or a fair rerun) by the use of traditional remedies,

though present, is slight and that employee sentiment

once expressed through cards would, on balance, be

better protected by a bargaining order, then such an

order should issue.” 395 U.S. at 614-615.

Thus, the concern that earlier unfair labor prac-

tices may taint a new election and render it unfair

will ordinarily justify the imposition of a bargaining

order instead. In the context of such Gissel bargain-

ing orders, some courts have held that the interven-

ing departure of many of the employees who were

subjected to the unfair labor practices is a relevant

consideration in determining whether it is possible to

hold a fair election, which would obviate the need to

rely on less certain means, such as authorization

cards, of ascertaining the employees’ desires. How-

ever, that reasoning cannot apply outside the Gissel

context where, as here, the union was recognized by

the predecessor employer as the bargaining repre-

sentative of the employees and, absent the unfair

labor practices, the union likewise would have been

recognized by the successor as well. In such a case,

there is no doubt that the employees had duly chosen

to be represented by the union, as the result of an

election held under the predecessor employer, or an

18

established bargaining relationship between the

predecessor employer and the union, unmistakably

attests. In such a situation, the problem of choosing

between an election and some less reliable means of

ascertaining the employees’ desires is not present.

The Board thus acts reasonably in reestablishing the

state of affairs preceding the unfair labor practices by

requiring the successor employer to recognize and

bargain with the union, as the successor employer

was legally obligated to do absent its unfair labor

practices.

Finally, the employee turnover cases upon which

petitioner relies are also inapposite because they in-

volve employee turnover that resulted from ordinary

attrition. Indeed, in Be-Lo Stores v. NLRB, 126 F.3d

268 (4th Cir. 1997)—the primary case upon which

petitioner relies (Pet. 8)—the court specifically noted

that employee turnover is a relevant consideration in

Gissel cases to the extent it is attributable to “normal

attrition.” 126 F.3d at 282. That holding cannot prop-

erly be extended to cases, like this one, in which

employee attrition resulted from the unfair labor

practice itself. NLRB v. Gordon, 792 F.2d 29, 34 (2d

Cir.) (employee turnover “not a factor that mitigates

against a [Gissel] bargaining order” where “caused by

the very unfair labor practices sought to be reme-

died”), cert. denied, 479 U.S. 931 (1986). Indeed, such

an extension would reward the employer for mis-

conduct. Having succeeded in driving union em-

ployees from the firm through unfair labor practices,

the employer could oppose an NLRB bargaining order

on the ground that—because few victims of the unfair

labor practices remain—a fair election can be held.

Surely the Board acts within its discretion when it

refuses to reward the employer for its unfair prac-

19

tices with an election to which the employer is not

otherwise entitled. As this Court has explained, a

Board remedy “which deprives an employer of advan-

tages accruing from a particular method of subvert-

ing the Act, is a permissible method of effectuating

the statutory policy.” Virginia Elec. & Power Cc. v.

NLRB, 319 U.S. 533, 541 (1943).

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted.

SETH P. WAXMAN

Solicitor General

FREDERICK L. FEINSTEIN

General Counsel

LINDA SHER

Associate General Counsel

NORTON J. COME

Deputy Associate General Counsel

JOHN EMAD ARBAB

Attorney

National Labor Relations Board

FEBRUARY 1998