Opposition Brief — Advanced Stretchforming International, Inc. v. National Labor Relations Board

2001

No. 00-1829

In the Supreme Court of the Gnited States’ |

ADVANCED STRETCHFORMING INTERNATIONAL, INC.,

PETITIONER

NATIONAL LABOR RELATIONS BOARD, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE

NATIONAL LABOR RELATIONS BOARD

IN OPPOSITION

THEODORE B. OLSON

Solicitor General

ARTHUR F. ROSENFELD Counsel of Record

General Counsel Department of Justice

JoHN H. FERGUSON Washington, D.C. 20530-0001

Associate General Counsel (202) 514-2217

NORTON J. COME

Deputy Associate General

Counsel

JOHN EMAD ARBAB

Attorney

National Labor Relations

Board

Washington, D.C. 20570

QUESTION PRESENTED

Whether, under NLRB v. Burns International Se-

curity Services, Inc., 406 U.S. 272 (1972), a successor

employer has the right to fix the initial employment

terms for its predecessor’s employees when the suc-

cessor, immediately prior to hiring those employees,

unlawfully states that there would be “no union” at the

new company.

(I)

TABLE OF CONTENTS

Page

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Feat CTA OR occcacconcnedescsoscsscsscesoscsnssenasassesssassresspeccsnsscossesosssssassscooasses 1

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COMCIUBION. .c<caccccececscccsscsccssscsassnssosssssscasscssascsscscessssccasssesssssassosccceseoes 17

TABLE OF AUTHORITIES

Cases:

Armco, Inc., 298 N.L.R.B. 416 (1990) .....cssescseseseerereneneneens 16

Armco, Inc. v. NLRB, 832 F.2d 357 (6th Cir.

1987), cert. denied, 486 U.S. 1042 (1988) .....ssesecseseesereeenee 14

Capital Cleaning Contractors, Inc. v. NLRB, 147

F.3d 999 (D.C. Cir. 1998) ....ccccsscsssssssesenssenensssesersrenseees 2,13, 14

Fall River Dyeing & Finishing Corp. v. NLRB,

BRO 155, BT (1B) ncccnssccccccsccsscesossccscsnssssrescooescsccensensceses 2,10, 11

Kallmann v. NLRB, 640 F.2d 1094 (9th Cir.

TOBL) .accacsaccccscsecscacccescascesscscsassosscsscsssscssressessssssososssssccecsecsscrsosess 8,15

New Breed Leasing Corp. v. NLRB, 111 F.3d

1460 (9th Cir.), cert. denied, 522 U.S. 948 (1997) ............. 8

NLRB v. Burns Int'l Sec. Servs., Inc., 406 U.S.

BE IID cecissceresnsnssnscesnnncsscusssnsconensasenonsesenssssnneninasenis 2,4,9, 11,12

NLRB v. Staten Island Hotel Ltd. P’ship, 101

F.3d 858 (2d Cir. 1996) .........cccccssssscssssssssssssecceeecececnesessssensers 15

Pace Indus., Inc. v. NLRB, 118 F.3d 585 (8th Cir.

1997), cert. denied, 523 U.S. 1020 (1998) ........ecseeseereeseees ll

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

ee i Fe cceneipeepenuadeboiounie 12

SEC v. Chenery Corp., 318 U.S. 80 (1943) .....-s.cseeeeeens 7

Spruce Up Corp., 209 N.L.R.B. 194 (1974), enforced,

by 529 F.2d 516 (4th Cir. 1975) ..ca.cccscssscesnsesseenneeneenee 5

State Distrib. Co., 282 N.L.R.B. 1048 (1987) 0.0... 6,7

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

Cir. 1991), cert. denied, 503 U.S. 936 (1992) .......... 7.11, 15-16

(IIT)

IV

Statute:

Page

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

et seq.:

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§ 8(d), 29 U.S.C. 158(d)

Jn the Supreme Court of the Gnited States

No. 00-1829

ADVANCED STRETCHFORMING INTERNATIONAL, INC.,

PETITIONER

VU.

NATIONAL LABOR RELATIONS BOARD, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE

NATIONAL LABOR RELATIONS BOARD

IN OPPOSITION

OPINIONS BELOW

The amended opinion of the court of appeals (Pet.

App. la-24a) is reported at 233 F.3d 1176. The original

opinion of the court of appeals (Pet. App. 25a-48a) is

reported at 208 F.3d 801. The decision and order of the

National Labor Relations Board (Pet. App. 53a-67a),

and the decision of the administrative law judge (Pet.

App. 70a-100a), are reported at 323 N.L.R.B. 529.

JURISDICTION

The amended opinion of the court of appeals (Pet.

App. 2a) was issued on November 22, 2000. A petition

for rehearing was denied on February 7, 2001 (Pet.

App. 101a-102a). On April 23, 2001, Justice O’Connor

extended the time within which to file a petition for a

(1)

2

writ of certiorari to and including June 7, 2001, and the

petition was filed on that date. The jurisdiction of this

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

STATEMENT

1. Section 8(a)(5) of the National Labor Relations

Act (Act), 29 U.S.C. 158(a)(5), obligates an employer to

bargain collectively with the union that represents its

employees. That obligation also extends to the em-

ployer’s “successor.” Fall River Dyeing & Finishing

Corp. v. NLRB, 482 U.S. 27 (1987); NLRB v. Burns

Int'l Sec. Servs., Inc., 406 U.S. 272 (1972). A new em-

ployer is a successor to the former employer if (1) “sub-

stantial continuity” exists between the employers’ re-

spective enterprises and (2) a majority of the suc-

cessor’s employees had been employees of the prede-

cessor. Fall River Dyeing, 482 U.S. at 43, 46; Burns,

406 U.S. at 278-280 & n.4.

A successor is not bound to honor the predecessor’s

labor contract and, as a general rule, it is free to set the

initial terms upon which it will hire the predecessor's

employees. Burns, 406 U.S. at 291, 294. Where it is

“perfectly clear that the new employer plans to retain

all of the employees in the unit,” however, the successor

is obligated to “initially consult with the employees’

bargaining representative before he fixes terms.” /d. at

294-295. A successor also “loses the right unilaterally

to set the initial terms” if the successor “refuses to hire

its predecessor’s employees based upon anti-union ani-

mus.” Capital Cleaning Contractors, Inc. v. NLRB,

147 F.3d 999, 1008 (D.C. Cir. 1998).

2. Befure December 1, 1992, Aero Stretch, Inc.

(Aero) operated a manufacturing facility in Gardena,

California. Pet. App. 3a, 54a. Aero’s production and

maintenance employees were represented by Amalga-

3

mated Local Union No. 509, UAW. 7d. at 3a, 7la-72a.

Aero and the Union entered into a collective-bargaining

agreement effective from August 19, 1991 through

August 19, 1994. Jd. at 3a, 54a. On June 11, 1992, Aero

filed for bankruptcy protection but continued to operate

the plant and began to gradually lay off employees. Jd.

at 3a, 54a, 72a. On November 19, 1992, the bankruptcy

court auctioned Aero’s assets to Steven Brown, who

continued the plant’s operations. Jd. at 3a-4a, 73a. On

that date, the bankruptcy court ordered Aero to

terminate all of its employees by November 30. Jd. at

4a, 54a, 74a.

On November 30, 1992, Eric Cunningham, an Aero

official, acting on Brown’s instructions, held an em-

ployee meeting at the plant. Pet. App. 4a, 77a. Cun-

ningham informed the employees that the plant had

been purchased by a new company, that all employees

would be terminated from employment with Aero

effective at the end of the work day, and that, if they

were interested in working for the new company, the

employees should report to the plant the following

morning for a job interview. /d. at 4a, 77a-78a. During

the November 30 meeting, Cunningham also told the

employees that there would be “no union” at the new

company. /d. at 4a, 54a-55a, 83a.

On December 1, 1992, Brown incorporated petitioner

Advanced Stretchforming International, Inc. Pet. App.

4a, 54a. On December 1, Brown and Cunningham inter-

viewed the former Aero bargaining unit employees who

came to the plant seeking employment. /d. at 4a, 55a,

74a. Brown informed the applicants that employment

with petitioner would be on different terms than those

provided by Aero’s labor contract with the Union, and

he required each applicant to sign a written statement

reflecting that understanding. Jd. at 4a-5a, 55a.

4

Also on December 1, petitioner hired eight of the

former Aero bargaining unit employees, and did not

hire employees from any other source at that time. Pet.

App. 5a, 55a, 74a. Of the eight employees hired, peti-

tioner continued to pay four of them at their existing

hourly wage rate; four others were hired at different

wage rates. Jd. at 5a, 55a, 79a. Petitioner reduced or

eliminated the employees’ benefits, such as holidays

and medical benefits. Jd. at 55a, 79a. Employing that

staff, petitioner immediately began to complete Aero’s

work in progress and to prepare for new similar work.

Id. at 74a.

On December 8, 7, and 11, 1992, the Union sent certi-

fied letters to petitioner demanding that it recognize

the Union as the employees’ bargaining representative.

Pet. App. 5a, 74a. On December 14, 1992, petitioner

conducted a poll of the employees respecting their de-

sire for continued representation by the Union. The

result of the poll was unfavorable to the Union. Z/d. at

5a, 74a, 85a. The same day, petitioner advised the

Union in writing that it did not recognize the Union as

the employees’ bargaining representative. Jd. at 5a; see

also id. at 58a-59a, 74a, 85a.

3. On April 30, 1993, acting on a charge filed by the

Union, the General Counsel of the National Labor

Relations Board (Board) issued a complaint alleging

that petitioner was a successor employer to Aero and

that petitioner had committed numerous violations of

the Act. Pet. App. 5a, 71a. After a hearing, an admini-

strative law judge (ALJ) sustained the complaint in

part. Jd. at 70a-96a. The ALJ found that, under NLRB

v. Burns International Security Services, Inc., 406 U.S.

272 (1972), petitioner was a successor employer to Aero

(Pet. App. 75a), and that Cunningham was acting as

petitioner’s agent when he made the “no union” state-

initial iil

5

ment during the in-plant meeting with Aero’s em-

ployees on November 30, 1992 (id. at 83a-84a). The

ALJ found that, by issuing the “no union” statement,

petitioner violated Section 8(a)(1) of the Act, 29 U.S.C.

158(a)(1). Pet. App. 91a." The ALJ noted the “ex-

treme[]” “likelihood that the ‘no union’ statement would

signal employees that their continued employment was

dependent upon the abandonment of their Union

adherence.” Jd. at 90a.

The ALJ further found that, as a Burns successor,

petitioner was obligated to recognize and bargain with

the Union as the representative of the former Aero

employees. Pet. App. 84a. He further found that peti-

tioner had committed unfair labor practices by refusing

on December 14 to recognize the Union and conducting

an employee poll in violation of the Act. Id. at 89a, 91a-

92a. The ALJ dismissed the complaint, however, inso-

far as it alleged that petitioner violated Section 8(a)(5)

and (1) by setting initial employment terms for the

former Aero employees on December 1 without first

bargaining with the Union. Jd. at 75a- 88a, 92a.

4. The Board affirmed in part and reversed in part.

Pet. App. 53a-67a. The Board affirmed the ALJ’s find-

ings, which were not contested by petitioner, that the

“no union” statement, polling of unit employees, and re-

fusal to recognize the Union constituted unfair labor

practices. Jd. at 55a & n.4. The Board further found

1 The Act makes it an unfair labor practice for an employer “to

interfere with, restrain, or coerce employees in the exercise of”

their “right * * * to bargain collectively through representatives

of their own choosing.” 29 U.S.C. 157, 158(a)(1).

2 The ALJ concluded that petitioner was not a Burns “perfectly

clear” successor as the Board has defined that term. Pet. App.

75a-76a, 8la-82a (citing Spruce Up Corp., 209 N.L.R.B. 194 (1974),

enforced, 529 F.2d 516 (4th Cir. 1975) (Table).

ee

6

that petitioner violated Section 8(a)(5) and (1) “by uni-

laterally changing its employees’ wages and other

terms and conditions of employment at the time of their

hire.” Jd. at 54a. The Board observed that there

existed a “well-established exception to the right of a

Burns successor to set initial terms and conditions of

employment,” namely, that “an employer * * * that

unlawfully discriminates in its hiring in order to evade

its obligations as a successor does not have the Burns

right to set initial terms of employment without first

consulting with the Union.” Jd. at 57a. The “funda-

mental premise” of this “forfeiture doctrine,” the Board

explained, is that “it would be contrary to statutory

policy to ‘confer Burns rights on an employer that has

not conducted itself like a lawful Burns successor be-

cause it has unlawfully blocked the process by which

the obligations and rights of such a successor are

incurred.’” Jd. at 58a (quoting State Distributing Co.,

282 N.L.R.B. 1048, 1049 (1987)).

Noting the uncontested fact that petitioner “was a

Burns successor bound to recognize the Union when

plant operations resumed on December 1,” the Board

explained that, “[a]t the time of successorship * * *

[petitioner] did not conduct itself like a lawful Burns

successor.” Pet. App. 58a. Rather, petitioner “unlaw-

fully declared through Cunningham to all Aero em-

ployees that there would ¥e no union for those whom it

hired.” Jbid. “This statement,” the Board explained,

“was a clearly unlawful message to empioyees that

[petitioner] would not permit them to be represented

by a union.” Jd. at 55a. The Board further explained

that “(njothing in Burns suggests that an employer

may impose such an unlawful condition and still retain

the unilateral right to determine other legitimate initial

terms and conditions of employment.” Id. at 59a.

7

Rather, the Board concluded that “[a] statement that

there will be no union serves the same end as a refusal

to hire employees from the predecessor’s unionized

work force,” for it “‘block[{s] the process by which the

obligations and rights of such a successor are in-

curred.’” Ibid. (quoting State Distributing Co., supra).

As a remedy, the Board ordered petitioner, “on re-

quest of the Union, to rescind any changes in em-

ployees’ terms and conditions of employment uni-

laterally effectuated and to make the employees whole

by remitting all wages and benefits that would have

been paid absent [petitioner’s] unlawful conduct, until

[petitioner] negotiates in good faith with the Union to

agreement or to impasse.” Pet. App. 60a. The Board

explained that such a remedy is “designed to prevent

[petitioner] from taking advantage of its wrongdoing to

the detriment of the employees,” and that a “return to

the status quo ante at least allows the bargaining

process to get under way.” Jbid. (quoting U.S. Marine

Corp. v. NLRB, 944 F.2d 1305, 1822-1323 (7th Cir. 1991)

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

5. a. The court of appeals granted in part and

remanded in part the Board’s petition for enforcement.

Pet. App. la-13a.° The court of appeals granted sum-

mary enforcement of the Board’s uncontested findings

that petitioner committed unfair labor practices by

making the “no union” statement, conducting the union

3 Initially, a divided panel of the court of appeals had upheld

the Board’s order on the ground that petitioner was a “perfectly

clear” successor to Aero, and therefore was not free to unilaterally

set initial terms of employment. Pet. App. 33a-35a. Because the

court of appeals upheld the Board’s unfair labor practice finding on

a theory not invoked by the agency, the Board filed a petition for

rehearing and rehearing en banc. /d. at 2a; see generally SEC v.

Chenery Corp., 318 U.S. 80 (1948).

8

representation poll, and refusing to bargain with the

Union. /d. at 6a. The court of appeals further upheld

the Board’s conclusion that petitioner violated Section

8(a)(5) and (1) by “failling] to consult with the Union

before imposing terms.” /d. at 10a. The court found

that, “as a practical matter,” the “no union” “statement

‘blocked the process by which the obligations of a

successor are incurred’ in a manner similar to the dis-

criminatory hiring practices to which the forfeiture

doctrine previously has been applied.” Jd. at 9a, 10a.

On the question of remedy, however, the court of ap-

peals remanded the case to the Board for further

proceedings. Pet. App. 10a-13a. The court of appeals

observed that the evidentiary record in this case was

“equivocal” as to “what would have happened had [peti-

tioner] recognized and bargained with the Union.” /d.

at 12a-13a. The court explained that, as a general rule,

“the Board’s grant of back pay based on the pre-

decessor Union’s pay scale restores as nearly as possi-

ble the employment situation that would have oc-

curred,” absent the violation of the Act. Jd. at lla

(quoting New Breed Leasing Corp. v. NLRB, 111 F.3d

1460, 1468-1469 (9th Cir.), cert. denied, 522 U.S. 948

(1997)). The court added, however, that where “ [t]he

facts demonstrate that [the successor] would not have

agreed to union demands to pay the higher rate,’ the

successor may not be required ‘to pay the higher rate

beyond a period allowing for a reasonable time of

bargaining.’” Jbid. (quoting Kallmann v. NLRB, 640

F.2d 1094, 1103 (9th Cir. 1981) (bracketed material

added by court of appeals)). “Because the record was

not fully developed on this point,” the court remanded

the case to the Board “to permit [petitioner] and the

UAW to present evidence on whether [petitioner]

would have bargained to impasse and imposed terms,

—S

9

even had [petitioner] honored its obligation to bargain

with the Union.” Jd. at 13a.

b. Judge O’Scannlain coneurred in part and dis-

sented in part. Pet. App. 138a-24a. He concurred in the

court’s enforcement of the Board’s order of prospective

relief, id. at 14a, but took the view that “the Board’s

award of back pay under the terms of the collective

bargaining agreement of [petitioner’s] predecessor vio-

lates the holding of [Burns],” and “constitutes a penalty

well in excess of the Board’s legal authority.” /bid.

ARGUMENT

1. Addressing an issue of first impression, the court

of appeals properly held that petitioner forfeited its

right under NLRB v. Burns International Security

Services, Inc., 406 U.S. 272 (1972), to set the initial

terms of employment when it made the “no union”

statement. It is undisputed that petitioner, as a suc-

cessor employer to Aero, was obligated by Section

8(a)(5) of the Act to recognize and bargain with the

Union when petitioner initially began operating the

former Aero facility with a work force comprised en-

tirely of employees from the former Aero bargaining

unit. Burns, 406 U.S. at 278-279, 280-281; see Pet. App.

7a, 58a, 75a, 84a. Rather than honor that obligation,

petitioner unlawfully stated to the former Aero em-

ployees that there would be “no union” at the new

company. /d. at 6a, 55a, 83a. As the Board found, peti-

tioner’s statement sent “a clearly unlawful message to

employees that [petitioner] would not permit them to

be represented by a union” (id. at 55a), and “blatantly

coerce[d] employees in the exercise of their Section 7

right to bargain collectively through a representative of

their own choosing.” Jd. at 59a.

ee ee ee ey

10

This Court has recognized that, “after being hired by

anew company * * * employees initially will be

concerned primarily with maintaining their new jobs.”

Such employees “might be inclined to shun support for

their former union, especially if they believe that such

support will jeopardize their jobs with the successor.”

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

U.S. 27, 40 (1987); see also Pet. App. 58a. Petitioner’s

“no union” threat allowed it to capitalize upon those

well-recognized employee predilections. As the ALJ

observed, coming as it did “in the course of informing

employees for the first time about the certainty of a

continued operation and immediately in advance of the

initial selection of employees for the new entity,” the

“no union” threat signaled the employees in the Aero

unit that “their continued employment was dependent

upon the abandonment of their Union adherence.” /d.

at 89a-90a.* Accordingly, petitioner’s actions effectively

assured that its bargaining obligation under Burns

would be rendered a nullity.

Like the successor who engages in unlawful hiring

discrimination, petitioner’s illegal “no union” threat

“blocked the process” by which its bargaining obliga-

tion would have been made effective. See Pet. App. 9a-

10a, 57a-59a. The successor that engages in hiring dis-

crimination seeks to assure that a numerical majority of

its work force will not be comprised of the pre-

4 As the Board noted (Pet. App. 58a-59a), petitioner reinforced

its coercive “no union” message by conducting an unlawful em-

ployee poll on December 14 and refusing to recognize the Union.

The negative outcome of the unlawful poll served to provide an

ostensible air of legitimacy to petitioner’s “no union” stance. The

refusal to recognize the Union further demonstrated to the former

Aero employees that it would be futile for them to attempt to

exercise their Section 7 right to bargain collectively.

11

decessor’s employees, thereby allowing the successor to

“block[] the process” by which the obligation to bargain

with the incumbent union would otherwise attach. Fall

River Dyeing, 482 U.S. at 46 & n.12; Burns, 406 U.S. at

278-279, 280-281; see, e.g., U.S. Marine Corp. v. NLRB,

944 F.2d 1305, 1316-1319 (7th Cir. 1991) (en banc), cert.

denied, 503 U.S. 936 (1992); Pace Indus., Inc. v. NLRB,

118 F.3d 585, 587-593 (8th Cir. 1997), cert. denied, 523

U.S. 1020 (1998). Similarly, by issuing the “no union”

threat, petitioner sought to “block[] the process” by

which its obligation to bargain with the Union might, as

a practical matter, have been made effective. In those

circumstances, the Board properly concluded that peti-

tioner forfeited its right under Burns to set initial

terms of employment.

2. Petitioner contends (Pet. 13-17) that this Court’s

review is warranted because the court of appeals’ de-

cision conflicts with Burns. Petitioner argues that,

although the successor employer in Burns had com-

mitted an unfair labor practice by recognizing and

assisting a rival to the incumbent union, 406 U.S. at

274-277, the Court upheld only the Board’s ordering

that the successor employer bargain with the incum-

bent union, id. at 281, while recognizing the successor’s

right to set initial terms of employment, id. at 294. The

Court in Burns did not address, however, the Board’s

remedial authority when a successor employer unlaw-

fully departs from the legal framework that the Court

set forth in Burns. Nor did the Court address the

effect of the successor’s unlawful recognition of the

rival union upon its right to set initial employment

terms. As the Board correctly explained, although a

successor ordinarily possesses a right unilaterally to set

initial terms (ibid.), “{nJothing in Burns suggests” that

a successor may avail itself of the right recognized in

12

Burns and, at the same time, impose “an unlawful

condition” of employment on the predecessor’s em-

ployees. Pet. App. 59a. Rather, that Burns right “must

be understood in the context of a successor employer

that will recognize the affected unit employees’

collective-bargaining representative and enter into

good-faith negotiations with that union about those

terms and conditions.” /d. at 58a.

Thus, as Burns itself recognizes, a successor’s right

to set initial employment terms is but one aspect of the

panoply of rights and obligations of a successor under

the system of collective bargaining established by the

Act. See 406 U.S. at 277-296. While a successor acts

within its rights in rejecting the predecessor’s collec-

tive bargaining agreement and, ordinarily, in setting

initial terms, the successor, concomitantly, must recog-

nize and bargain with the incumbent union with respect

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

ployment. See id. at 280-281, 291, 294; see also 29

U.S.C. 158(d). That legal framework necessarily con-

templates that, through the process of good-faith

collective negotiations with the incumbent union, terms

of employment which the successor may choose to

initially set unilaterally will be subject to alteration,

and that different terms may ultimately be incor-

porated into a new collective bargaining agreement.

In this case, petitioner, by its own actions, upset that

bargaining dynamic: it sought the benefit of setting

initial terms while it evaded the obligation to bargain

with the Union, thereby breaking the linkage between

benefit and obligation that is required by the Act.

Thus, a remedial order limited only to an order to

refrain from committing future unfair labor practices,

as suggested by petitioner (Pet. 19), would do nothing

to restore the parties to the status quo ante. See

13

Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 194 (1941)

(purpose of remedial order is “a restoration of the

situation, as nearly as possible, to that which would

have obtained but for the illegal [conduct]”); see also

Pet. App. 7a n.2 (explaining that the forfeiture doctrine

does not act as a “penalty” but “merely places the

parties in the position where they would have been had

[petitioner] refrained from engaging in improper con-

duct”). Indeed, the result urged by petitioner would

permit employers such as petitioner to benefit from

their wrongdoing by insulating the employer’s initial

terms from modification through collective bargaining

until a court later forces the employer to comply with

the law.

3. Petitioner contends (Pet. 17-20) that the court of

appeals’ decision conflicts with Capital Cleaning

Contractors, Inc. v. NLRB, 147 F.3d 999 (D.C. Cir.

1998). That contention lacks merit. In Capital Clean-

ing, the District of Columbia Circuit “join[ed] every

other court to have considered the issue,” and held that

“when a successor refuses to hire its predecessor’s

employees based upon anti-union animus, the successor

loses the right unilaterally to set the initial terms and

conditions of employment; it must first bargain with the

union.” Jd. at 1008.° The District of Columbia Circuit

did not address whether, much less hold that, the “for-

feiture doctrine” applies only to that circumstance.

Indeed, the District of Columbia Circuit explained that

the employer’s “antiunion discrimination makes it diffi-

5 Petitioner therefore errs in contending (Pet. 22-23) that the

courts of appeals are confused whether the forfeiture doctrine is

ever appropriate. Petitioner cites no court that has accepted

its view, but rather relies on the views expressed by dissenting

judges on two courts of appeals.

14

cult to determine how many of its predecessor’s em-

ployees it would have hired,” and that the resulting

uncertainty is reasonably resolved against the suc-

cessor. /bid. That reasoning fully supports the court of

appeals’ decision in this case. Petitioner’s coercing of

the predecessor’s employees into abandoning the in-

cumbent union created a comparable uncertainty as to

what legitimate terms of employment would have

applied to the former Aero workers whom it hired on

December 1, had petitioner complied with its duty to

recognize and bargain with the Union.°

4. Petitioner contends (Pet. 20) that this Court’s re-

view is warranted to resolve a circuit “split over the

proper remedy under the forfeiture doctrine.” Peti-

tioner urges the Court to adopt the view of the Sixth

and District of Columbia Circuits, which have held that

any award of back pay is limited to a period of a “rea-

sonable time of bargaining.” Under that view, the

successor is “responsible for the pay difference for the

time which would have been required for bargaining”

where “the facts indicate[] that the employer would not

have agreed to union demands to pay the higher rate.”

Armco, Inc. v. NLRB, 832 F.2d 357, 365 (6th Cir. 1987),

cert. denied, 486 U.S. 1042 (1988); see also Capital

Cleaning Contractors, Inc., 147 F.3d at 1011 (relief

limited to “a period allowing for a reasonable time of

bargaining” when “there is no reason to believe that

[the successor] would have agreed to paying any more

6 Contrary to petitioner’s suggestion (Pet. 18), the court of ap-

peals did not hold that the forfeiture doctrine applies to “a suc-

cessor employer who commits any unfair labor practice during the

transition process.” Rather, the court limited the question before

it to “whether [petitioner’s] ‘no union’ statement” was sufficiently

similar to discriminatory hiring practices so as to warrant an appli-

cation of the forfeiture doctrine. Pet. App. 9a.

15

than it had to for labor”). Petitioner further contends

(Pet. 20) that the Second, Seventh, and Ninth Circuits

hold that the Board may “award back pay according to

the terms of the prior [collective bargaining agreement]

for the entire period from the date of the unfair labor

practice until the successor employer reaches or would

have reached a new agreement or an impasse with the

predecessor’s employees.”

This case, however, is not an appropriate vehicle to

resolve whatever tension exists on that issue, because

the court of appeals remanded the case to the Board in

order to permit petitioner to establish that any back

pay award should be limited to a period “allowing for a

reasonable time of bargaining.” Pet. App. 10a, lla

(quoting Kallmann v. NLRB, 640 F.2d 1094, 1103 (9th

Cir. 1981)). On remand, the Board must “permit [peti-

tioner] and the UAW to present evidence on whether

[petitioner] would have bargained to impasse and

imposed terms, even had [petitioner] honored its obliga-

tion to bargain with the Union.” Jd. at 13a. Hence, this

case is in an interlocutory posture in which the court of

appeals’ decision permits petitioner on remand to ob-

tain the limitation on relief that it seeks, if a more fully

developed record shows that such limitation is factually

appropriate. The outcome of the remand proceeding

would again be subject to review by the court of

appeals. It would therefore be premature for this

Court to undertake to address, at this juncture in the

case, the appropriate remedy under the forfeiture

doctrine.’

7 Moreover, it is not clear that the Second and Seventh Circuits

have rejected the “reasonable time of bargaining” rule sought by

petitioner. In neither NLRB v. Staten Island Hotel Ltd.

Partnership, 101 F.3d 858 (2d Cir. 1996) (per curiam), nor U.S.

16

5. Petitioner finally asserts (Pet. 23-25) that the

court of appeals’ decision will discourage successor

employers from attempting to revive a failing business

because they may learn many years after the fact that

they are bound to the terms of the predecessor’s labor

agreement. As previously discussed, however, the

court of appeals’ decision merely prevents petitioner

from benefitting from its unlawful conduct. The court’s

decision does not bind petitioner to its predecessor's

labor agreement, but simply applies its terms for a

limited period of time as a baseline for awarding relief.

Moreover, it is unpersuasive for petitioner now to

complain (Pet. 25) that the court of appeals unfairly

“foisted” on petitioner its predecessor’s labor agree-

ment ten years after petitioner took over Aero’s busi-

ness. In November 1994, the ALJ issued his decision

finding that petitioner had issued the illegal “no union”

threat, had conducted an unlawful poll, and had unlaw-

fully refused to recognize and bargain with the Union.

Pet. App. 70a-96a. Petitioner has never contested those

findings, id. at 6a, 53a, and has never commenced bar-

gaining with the Union. Indeed, had petitioner reached

agreement (or impasse) with the Union through good-

faith bargaining, petitioner might have established an

empirical basis for determining that it would not have

agreed to employment terms more favorable than it

initially set. See Armco, Inc., 298 N.L.R.B. 416 (1990).

Thus, petitioner has heretofore failed to avail itself of

ample opportunity to limit its litigation exposure in this

case, and it may still succeed in doing so in the pro-

Marine Corp. v. NLRB, supra, cited by petitioner (Pet. 20), did the

court of appeals expressly consider and reject the propriety of

imposing a “reasonable period of bargaining” limitation on the

Board’s award of relief.

17

ceedings on remand that the court of appeals has

ordered.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

THEODORE B. OLSON

Solicitor General

ARTHUR F. ROSENFELD

General Counsel

JOHN H. FERGUSON

Associate General Counsel

NORTON J. COME

Deputy Associate General

Counsel ta

JOHN EMAD ARBAB

Attorney

National Labor Relations

Board

SEPTEMBER 2001