Opposition Brief — Banknote Corp. of America v. National Labor Relations Board

upreme Court. U.S.

e422 we

No. 96-706 ~~ ; JAN 6 1997

CLERK

i.

In the Supreme Court of the United States

OCTOBER TERM, 1996

BANKNOTE CORPORATION OF

AMERICA, INC., PETITIONER

Vv.

NATIONAL LABOR RELATIONS BOARD

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

BRIEF FOR THE

NATIONAL LABOR RELATIONS BOARD

IN OPPOSITION

WALTER DELLINGER

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

JOHN EMAD ARBAB

Attorney

National Labor Relations Board

Washington, D.C. 20570

\%

*

¢

QUESTIONS PRESENTED

1. Whether petitioner, a successor employer which

began operations with a full workforce comprised

primarily of employees who had worked for the prede-

cessor employer, violated Section 8(a) (5) of the Na-

tional Labor Relations Act, 29 U.S.C. 158(a) (5),

by subsequently changing the employees’ terms and

conditions of employment without bargaining with

the unions representing those employees.

2. Whether the Board exceeded its statutory au-

thority in ordering make-whole relief for the violation

in this case.

(I)

TABLE OF CONTENTS

Page

EEE ee RS TIO fen 1

ae La A, ON PINE Dt RS a 1

a inoue ieaninendandanes ; 2

Argument. ...........<2....« RFT Re CT APOE COO a BAST ee 5

RETESET JR ADSI RRR SD A SIRE go 17

TABLE OF AUTHORITIES

Cases:

ABF Freight System, Inc. Vv. NLRB, 510 U.S. 317

FG IONS TESS SE Oe a RITE POL aS eC a 16

Adickes Vv. Kress & Co., 398 U.S. 144 (1970) .......... 14

Blitz Maintenance, Inc., 297 N.L.R.B. 1005, en-

forced mem., 919 F.2d 141 (6th Cir. 1990)........ 15

Fall River Dyeing & Finishing Corp. v. NLRB,

cE 5 REITs ap 6, 7-8, 9, 10

Houston Building Service, Inc., 296 N.L.R.B. 808

(1989), enforced, 936 F.2d 178 (5th Cir. 1991),

cert. denied, 502 U.S. 1090 (1992) 0.0.0.0... 15

H.K. Porter Co. v. NLRB, 397 U.S. 99 (1970)........ 15

NLBEB Vv. Burns Int'l Security Servs., Inc., 406 U.S.

a uasitadeuman 6, 8, 15, 16

NLRB v. Columbian Enameling & Stamping Co.,

RE ee an 12

NLRB Vv. Dent, 584 F.2d 844 (9th Cir. 1976)........ 16

NLRB Vv. Houston Building Service, Inc., 936 F.2d

178 (5th Cir. 1991), cert. denied, 502 U.S. 1090

SS REESE i a a eS eC 12, 13

NLRB v. Wayne Convalescent Center, Inc., 465

GR I MARE I, BPTI oc ivcicipenerceccensedereeconenceceeness 12, 13

Royal Midtown Chrysler Plymouth, Inc., 296

Sag ge REE See 13

Taft Broadcasting Co., 163 N.L.R.B. 475 (1967),

enforced sub nom. American Federation of Tele-

vision & Radio Artists v. NLRB, 395 F.2d 622

I eines 15

Yee V. City of Escondido, 503 U.S. 519 (1992)...... 14

(111)

Statutes and rule: Page

National Labor Relations Act, 29 U.S.C. 1651

et seq.:

§ 8(a) (1), 29 U.S.C. 158 (a) (1) ......................... 3

§ 8(a) (5), 29 U.S.C. 168 (a) (5) ....................... 8, 5, 7,9

ea Se ee IE CD incntntorcnjecericcephiesinninenincs 15

DE Bie Ges ROP OURD mincthsdetitinenissnientteratnenns 5, 7,9

Sup. Ct. R.:

ERR cores Pa HS OMI Ostet eB ON 13

BED ED. sh ktedoadidicnr neds eedaaneancaee 13

In the Suprene Court of the United States

OCTOBER TERM, 1996

No. 96-706

BANKNOTE. CORPORATION OF

AMERICA, INC., PETITIONER

OP

NATIONAL LABOR RELATIONS BOARD

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

BRIEF FOR THE

NATIONAL LABOR RELATIONS BOARD

IN OPPOSITION

OPINIONS BELOW

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

1-34) is reported at 84 F.3d 637. The decision and

order of the National Labor Relations Board (Pet.

App. 35-56), and the decision of the administrative

law judge (Pet. App. 56-74), are reported at 315

N.L.R.B. 1041.

JURISDICTION

The judgment of the court of appeals was entered

on May 29, 1996. A petition for rehearing was denied

on August 1, 1996. Pet. App. 75-76. The petition for

(1)

2

a writ of certiorari was filed on October 30, 1996.

The jurisdiction of this Court is invoked under 28

U.S.C. 1254(1).

STATEMENT

1. Until 1990, American Banknote Company

(ABN) owned a high-security printing plant in

Suffern, New York. Pet. App. 4. Effective Febru-

ary 27, 1990, petitioner acquired the New York plant

from ABN. 7d. at 3. At the time of the acquisition,

ABN employed 100 production workers at the plant,

with 11 unions representing 11 separate bargaining

units. Jd. at 5, 37. On March 23, petitioner sent a

letter to the unions stating that it intended to hire

its initial workforce from the pool of employees then

working at the plant, but that it was not committing

itself to recognizing the unions or to honoring their

existing collective bargaining agreements with ABN.

Id. at 6, 37.

On April 11, 1990, petitioner’s president met with

representatives of all of the unions. Pet. App. 37. At

that meeting, the president informed the unions that

ABN would close the plant on April 18, that all for-

mer employees would receive applications for employ-

ment with petitioner, that petitioner’s officials would

interview former ABN employees on April 16 and

17, and that petitioner would reopen the plant on

April 19. 7d. at 6. The president also told the union

representatives that petitioner intended to establish

a more “flexible” operation at the plant, that em-

ployees would receive cross-training, and that their

1“High-security” printing involves the production of such

items as stocks, bonds, visas and traveler’s checks. Pet.

App. 4.

a es La Hl ik ear

3 \

existing health benefits would be continued for 60

days. Jd. at 6, 37-38. The president did not other-

wise discuss the employees’ terms and conditions of

employment at the April 11 meeting. /d. at 6.

Petitioner interviewed former ABN employees as

scheduled on April 16 and 17, 1990, and reopened the

plant on April 19 with a full workforce of 52 produc-

tion and maintenance employees, 50 of whom were

former ABN employees. Pet. App. 6-7. On April 23,

without first bargaining with the unions, petitioner

unilaterally changed the employees’ terms and condi-

tions of employment. Thereafter, all of the employees

were required to work the same hours, participate in

the same pension, vacation, and sick-pay plans, re-

ceive the same health and welfare benefits, and observe

new company holidays. /d. at 7.

2. Acting on unfair labor practice charges filed

by three of the 11 unions that represented the former

ABN employees (the Unions),? the General Counsel

of the National Labor Relations Board (Board) is-

sued a complaint against petitioner, alleging that it

violated Section 8(a)(5) and (1) of the National

Labor Relations Act (Act), 29 U.S.C. 158(a) (5) and

(1), by unilaterally changing the employees’ terms

and conditions of employment on April 23, 1990, with-

out first bargaining with the Unions. Pet. App. 7.

The Board, affirming the findings and conclusions

of the administrative law judge (Pet. App. 56-72),

* The three complaining unions were New York Lithogra-

phers & Photoengravers Union, #1-P, Graphic Communica-

tions International Union; District 15, International Associa-

tion of Machinists & Aerospace Workers; and Graphic

Communications International Union, Local 119B-43B, New

York. Pet. App. 3.

4

sustained the General Counsel’s complaint. Id. at 35-

49. To remedy petitioner’s unfair labor practice, the

Board ordered it, among other things, to rescind, on

the Unions’ request, the unilateral changes that it

implemented on April 28, 1990, to “make affected

employees whole” for any losses suffered as a result

of the unilateral changes, and to bargain with the

Unions upon their request. Pet. App. 49, 70-71.

3. The court of appeals enforced the Board’s order.

Pet. App. 1-34. The court noted that “it has long

been held that under certain circumstances a ‘suc-

cessor’ employer may be required to presume that the

representative of a bargaining unit continues to enjoy

the support of a majority of the employees in that

unit and’ to negotiate with the unit’s bargaining rep-

resentative.” Jd. at 10. Although an ordinary suc-

cessor “may unilaterally set the initial terms and

conditions of employment,” thereafter the successor

must “‘recognize and bargain with the representative

of the predecessor’s employees.” Jd. at 11.

The court rejected petitioner’s argument that it

had. no. duty to: bargain in the absence of a bargain-

ing demand: by the Uniens. Pet. App. 33. The court

reasoned that, because this case involves “a rapid

transition period with the immediate hiring of a full

employee complement,” rather than a gradual tran-

sition, “the absence of a bargaining demand * * *

does not preclude a finding of a duty to bargain on

the part of [petitioner].” Jd. at 21. The court ex-

plained that a prolonged transition period may create

“considerable doubt as to whether a union that en-

joyed the support of a majority of a predecessor’s

bargaining unit continues to do so under the suc-

cessor’s operation.” Jd. at 18. Here, by contrast,

ee nner

$

because petitioner “hired its full complement of em-

ployees at once, shortly after the change in ownership

of the business * * * the fact that the majority of

the employees in each bargaining unit were former

ABN employees ‘was immediately clear to ([peti-

tioner].” Ibid. Given the rapid transition from ABN’s

to petitioner’s ownership, and petitioner’s employ-

ment of a workforce comprised primarily of ABN’s

employees, petitioner had no basis for assuming that

the Unions no longer represented the employees’ inter-

ests. Because petitioner could “easily discern its obli-

gation” te bargain with the Unions, the court con-

cluded that there was “no reason to adopt [peti-

tioner’s] formalistic [see 84 F.3d at 646, misquoted

at Pet. App. 18] approach” of awaiting a bargaining

demand, because “‘the requirement of a [bargaining]

demand would have supplied it with no additional

certainty regarding this obligation.” Zbid.

ARGUMENT

The decision below is correct, and it does not con-

flict with any decision of this Court or of any other

court of appeals. Further review is therefore not

warranted.

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

tions Act, 29 U.S.C. 158(a)(5), obligates an .em-

ployer “to bargain collectively with the representa-

tives of his employees, subject to the provisions of

section 9(a).” Section 9(a), 29 U.S.C. 159(a), pro-

vides, in relevant part, that a union “designated or

selected for the purposes of collective bargaining by

the majority of the employees in a unit appropriate

for such purposes” is the “exclusive representative []

of all the employees in such unit.”

6

An employer’s legal obligation to bargain with the

union that represents its employees may extend to

that employer’s “successor.” Fall River Dyeing &

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

v. Burns Int'l Security Servs., Inc., 406 U.S. 272

(1972). A new employer is a successor to the former

employer if there is “substantial continuity” between

the employers’ respective enterprises. Fall River Dye-

ing, 482 U.S. at 43; Burns, 406 U.S. at 280 & n.4.

The “ ‘triggering’ fact for the bargaining obligation”

is “th[e] composition of the successor’s work force,”

Fall River Dyeing, 482 U.S. at 46; thus, if a majority

of the successor’s employees were employed by the

predecessor, the successor is obligated to bargain with

the union that represents those employees, provided

that the bargaining unit continues to be an appro-

priate one under the successor’s operations. Jd. at 46

& n.12; Burns, 406 U.S. at 278-279, 280. A successor

employer is not legally bound to honor the predeces-

sor’s labor contract, and, as a general rule, is free to

set the initial terms upon which it will hire the prede-

cessor’s employees. Burns, 406 U.S. at 291, 294.°

Having unilaterally set initial terms, however, the

successor is obligated to bargain with the union be-

fore making further changes to the employees’ terms

and conditions of employment. See id. at 295.

Applying those settled principles, the court of ap-

peals affirmed the Board’s finding that petitioner was

a legal successor to ABN, Pet. App. 10-13, 36, and

that conclusion is not disputed here. Petitioner was

’ Only a so-called “perfectly clear” successor—i.e., a suc-

cessor who had made it “perfectly clear” from the outset that

it plans to retain all (or, perhaps, substantially all) of the

predecessor’s employees, see Burns, 406 U.S. at 294-295—is

not free unilaterally to set initial terms.

7

free unilaterally to set initial terms on which it

would hire the former ABN employees, and it did

so. Id. at 6. However, as the court of appeals cor-

rectly held, id. at 21-22, petitioner violated Section

8(a) (5) of the Act when, on April 23, 1990, it made

further changes in the employees’ terms and condi-

tions of employment without bargaining with the

Unions. The court of appeals observed that, under

this Court’s precedents, “the composition of the suc-

cessor’s work force alone may in some circumstances

be sufficient to trigger an employer’s duty to bargain.”

Pet. App. 20 (citing Fall River Dyeing, 482 U.S.

at 46). Applying that principle here, the court held

that petitioner’s duty to bargain “attached as of

April 19, 1990, when [petitioner] hired its employees.

[Petitioner] was thereafter no longer free to act

unilaterally with respect to mandatory subjects of

collective bargaining, and [petitioner’s] imposition of

new terms and conditions of employment on April 23

was unlawful.” Pet. App. 21-22.

b. Petitioner’s contention (Pet. 9-24) that a bar-

gaining demand from the Unions was necessary to

trigger its obligation to bargain, and that the court

of appeals’ decision to the contrary creates a deci-

sional conflict, is without merit. A successor em-

ployer’s obligation to bargain with the union that

represents its predecessor’s employees flows from Sec-

tions 8(a)(5) and 9(a)} of the Act. See pp. 5-6,

supra. Neither statutory provision requires an out-

standing bargaining demand as a condition precedent

to a successor’s bargaining obligation. Rather, the

“ ‘triggering’ fact” that creates the bargaining obliga-

tion is the successor’s hiring of a workforce the ma-

jority of which were unionized employees of the

predecessor. Fall River Dyeiny, 482 U.S. at 46 &

8

n.12. Here, petitioner’s bargaining obligation was

triggered on April 19, when petitioner had hired vir-

tually all of its workforce from among ABN’s union-

ized employees. Thus, petitioner’s position on that

date was akin to that of an employer confronted with

a newly selected bargaining representative; such an

employer is not free thereafter to change conditions

of employment without bargaining with the union.

Contrary to petitioner’s contention (Pet. 11-12,

15), neither Burns nor Fall River Dyeing requires a

bargaining demand in order to trigger petitioner’s

duty to bargain in this case. Burns involved a suc-

cessor employer that began providing security serv-

ices at an aircraft plant one day after the predeces-

sor’s service contract expired. On its first day of

operations, the successor employer in Burns, like peti-

tioner in this case, had in place its entire workforce,

a majority of which had worked for the predecessor,

and the predecessor’s employees had recently voted

for union representation in a Board election. 406

U.S. at 274-275. The Court held that the suecessor’s

obligation to bargain with the union “mature[d]”

when “it had selected its force of guards,” for, at that

point, it was “evident” that “the bargaining repre-

sentative represents a majority of the employees in

the unit as required by §$9(a) of the Act.” ZJd. at

295; see also id. at 278-279. Although the union had

made a demand for reeognition upon the successor

some two weeks after it had begun operations (id. at

275-276), the Court’s holding did not condition the

existence of the successor’s bargaining obligation

upon that demand; rather, the Court stated that,

“where the bargaining unit remains unchanged and

@ majority of the employees hired by the new em-

9

ployer are represented by a recently certified bargain-

ing agent there is little basis for faulting the Board’s

implementation of the express mandates of § 8(a) (5)

and § 9(a) by ordering the employer to bargain with

the incumbent union.” Jd. at 281. In Fall River

Dyeing, the Court reaffirmed the central holding of

Burns, explaining: “In Burns, the Court determined

that the successor had an obligation to bargain with

the union because a majority of its employees had

been employed by [the predecessor]. The ‘triggering’

fact for the bargaining obligation was this composi-

tion of the successor’s work force.” 482 U.S. at 46

(citation omitted).

Petitioner’s contention that, under Fall River Dye-

ing, petitioner has no bargaining obligation in the

absence of a demand by the Unions is incorrect. Fall

River Dyeing involved special rules governing a suc-

cessor’s obligation to bargain in the context of gradual

hiring during a prolonged start-up period, 482 U.S.

at 46-53, and those rules are inapposite to a case such

as this one involving a rapid start-up with a full

complement of employees. As the Fall River Dyeing

Court observed, where hiring occurs gradually, there

may be uncertainty as to the correct date for making

the assessment, on which the duty to bargain turns,

regarding whether a majority of a successor’s work-

force is comprised of the predecessor’s employees. /d.

at 47. The Court sustained the Board’s rule requiring

that, in the context of a gradual transition, the deter-

mination be made when the successor has hired a

“substantial and representative complement” of its

employees, as opposed to when the successor has hired

a full complement of employees. Jd. at 47-52. The

Court further concluded that “[t]he successor’s duty

10

to bargain at the ‘substantial and representative com-

plement’ date is triggered only when the union has

made a bargaining demand,” and that, “[u]nder the

‘continuing demand’ rule, when a union has made a

premature demand that has been rejected by the em-

ployer, this demand remains in force until the

moment when the employer attains the ‘substantial

and representative complement.’ ” Jd. at 52.

In the context of a Fall River Dyeing-type succes-

sorship, the requirement of a bargaining demand

serves a useful purpose. Where there has been “a

start-up period by the new employer while it gradu-

ally builds its operations and hires employees” (482

U.S. at 47), there is, correspondingly, a significant

period of time that elapses between the successor’s

initial resumption of operations and its hiring of a

“substantial and representative complement” of em-

ployees. During the interval leading up to the “sub-

stantial and representative complement” date, the

union lacks authority to act in its former capacity as

the bargaining representative of the unit employees;

further, during that interval, the successor may law-

fully alter the employees’ terms and conditions of

employment without bargaining with the union. In

these circumstances, the union, for practical reasons,

may well have lost interest in continuing to represent

the bargaining unit by the time the successor has

hired a “substantial and representative complement”

of employees. It is therefore reasonable, in such suc-

cessorships, to require the union, if in fact it remains

interested in representing the bargaining unit, to

manifest that continued interest by making a bar-

gaining demand upon the successor.

Different considerations apply, however, in a non-

Fall River successorship. Where, as here, the interval

—————

11

between the predecessor’s demise and the successor’s

resumption of operations is but a matter of days, and

the successor resumes operations with a full comple-

ment of employees, the union experiences only a brief

period of time during which it lacks authority to rep-

resent the bargaining unit. Further, where, as here,

the successor elects to operate the enterprise under

terms of employment that differ only minimally from

the predecessor’s, the fruits of the union’s contract

negotiations with the predecessor remain essentially

intact. In these circumstances, unlike in those pre-

sented by a Fall River Dyeing successorship, there is

little reason to question the union’s continued interest

in representing the bargaining unit. Accordingly, the

employer’s obligation not to make further unilateral

changes without bargaining with the union quickly

becomes manifest, and it would elevate form over

substance nonetheless to require the union to issue the

Successor a bargaining demand. See Pet. App. 18.

* Although petitioner asserts (Pet. 22-23) that “unions

often walk away from representation for a variety of business

reasons,” and that “six of the eleven unions at ABN did not

pursue representation of [petitioner’s] employees,” those

unions may well have concluded that establishment of a

meaningful bargaining relationship with petitioner was im-

probable in light of its unlawful unilateral changes. Petitioner

also asserts (ibid.) that it “reduced by half an already

small, balkanized ABN workforce,” and that “fa] union

could easily have decided it was not worth the trouble to

represent units with only a few employees.” However, as

petitioner acknowledges (Pet. 22), although the bargaining

unit represented by Machinists District 15 contained only

two employees after petitioner reopened the plant, nonetheless,

District 15 filed unfair labor practice charges against peti-

tioner in protest of its unilateral changes (Pet. App. 3),

thereby demonstrating that it had not abandoned representa-

tion of the unit.

12

In sum, the court of appeals correctly ruled, con-

sistent with Burns and Fall River Dyeing, that peti-

tioner’s obligation not to make unilateral changes

without bargaining was triggered by its hiring, on

April 19, of a full workforce a majority of which was

comprised of former ABN unionized employees, and

that that legal obligation did not depend on the pres-

ence of a bargaining demand by the Unions. See Pet.

App. 19.°

Contrary to petitioner’s contention (Pet. 12-18),

the decision below is also consistent with NLRB vy.

Wayne Convalescent Center, Inc,, 465 F.2d 1039 (6th

Cir. 1972), and NLRB v. Houston Building Service,

Inc., 936 F.2d 178 (5th Cir. 1991), cert. denied, 502

U.S. 1090 (1992). In Wayne Convalescent Center,

the court held that the successor acted lawfully in

establishing initial terms of employment without first

bargaining with \..e union, and that the successor was

not justified in refusing, on the basis of an alleged

good-faith doubt as to the union’s majority status, to

honor the union’s subsequent demand for recognition

5 Petitioner’s reliance (Pet. 11, 21) on NLRB v. Columbian

Enameling & Stamping Co., 306 U.S. 292 (1939), is mis-

placed. In that case, which did not involve a successorship,

the Court held that the employer did not violate the NLRA

in refusing to negotiate with federal labor conciliators

during a strike called by the union, because there was “no

evidence that the Union gave to the employer, through the

conciliators or otherwise, any indication of its willingness to

bargain or that [the employer] knew that [the conciliators]

represented the Union.” Jd. at 298. While some manifesta- 5

tion of a union’s “willingness to bargain’ may be necessary

to a finding that an employer unlawfully refused to bargain

with the union in the setting of an ongoing work stoppage,

this case does not involve a work stoppage, nor any other

reason to believe that the Unions were unwilling to bargain.

iiacteieiiiiiidiitaiaaiiiaiiaaiadiasiiiiiaial

b3

and execution of the contract previously negotiated

with the predecessor. 465 F.2d at 1042-1044. This

case does not involve any challenge to petitioner’s

unilaterally adopted initial terms, nor any good-faith

doubt as to the fact that a majority of petitioner’s

employees had worked for ABN.

In Houston Building Service, the court stated that,

where a majority of the employees in “a representa-

tive workforce” of the successor was employed by the

predecessor, the successor is obligated to bargain with

the union that represents those employees, “assuming

that the union has made a bargaining demand.” 936

F.2d at 180. The court, however, had no occasion to

consider whether a successor’s unilateral changes may

be unlawful even in the absence of a bargaining de-

mand, given that the union in that case had made

such a demand. [bid.*

2. Petitioner also contends (Pet. 24-28) that the

Board exceeded its statutory authority in fashioning

the remedy in this case, insofar as the Board ordered

petitioner to make employees whole for losses suffered

as a result of its unlawful unilateral changes. Peti-

tioner’s claim, however, is not properly presented,

and, in any event, lacks merit.

Petitioner did not initially challenge the Board’s

remedy on appeal. It was not until petitioner filed

@ petition for rehearing in the court of appeals that

it contended that the Board exceeded its authority in

ordering a make-whole remedy. The court of appeals

denied the petition. Pet. App. 75-76. The court of

* Petitioner also suggests (Pet. 13). that the Board’s deci-

sion in this case is inconsistent with its decision in Royal

Midtown Chrysler Plymouth, Inc., 296 N.L.R.B. 1089 (1989).

Any such inconsistency would not, however, warrant this

Court’s intervention. Cf. Sup. Ct. R. 10(a) and (c).

14

appeals has not ruled on the remedial issue, and this

Court should decline to review it without “the benefit

of developed arguments on both sides and lower court

opinions squarely addressing the question.” Yee v.

City of Escondido, 503 U.S. 519, 538 (1992) ; see also

Adickes v. Kress & Co., 398 U.S. 144, 147 n.2 (1970).

In any event, petitioner’s challenge to the remedy

the Board ordered is without merit. Because peti-

tioner succeeded to ABN’s bargaining obligation on

April 19, 1990, it then stood in the shoes of its prede-

cessor, and thereafter was subject, as ABN would have

been, to all prevailing collectively bargained employer

obligations. While petitioner had the right unilater-

ally to change any initial terms and conditions of

employment on which it opened for business on April

19, the court of appeals held that “[petitioner]

established only two ‘initial’ terms here: that it would

continue employee health benefits for sixty days, and

that it would introduce greater ‘flexibility’ in the

workplace.” Pet. App. 22 n.5. Thus, on April 19,

the prevailing terms were virtually identical to ABN’s,

Petitioner then unlawfully altered the prevailing

terms on April 23." The Board, in an effort to restore

the pre-April 23 status quo, ordered petitioner to

rescind any unilateral changes that it had not an-

nounced prior to opening on April 19, and to make

the unit employees whole for any losses suffered as

a result of those changes. Pet. App. 49, 70-71. Such

make-whole relief is a routine, reasonable exercise

7 Petitioner on April 23 instituted, inter alia, a new health

and welfare benefits program, and thus did not even “act

consistently with its pre-April 19 announcement to employees

that the predecessor’s health benefits would continue in effect

for 60 days.” Pet. App. 49 n.9.

ciepeemnernrneteniniitiaiiiniiaiiiaiaameiiaiiiaiiiiiailil

15

of the Board’s remedial authority. See, e.g., Blitz

Maintenance, Inc., 297 N.L.R.B. 1005, 1005 n.2, 1010,

enforced mem., 919 F.2d 141 (6th Cir. 1990) ; Hous-

ton Building Service, Inc., 296 N.L.R.B. 808, 814-

815 (1989), enforced, 986 F.2d 178 (5th Cir. 1991),

cert. denied, 502 U.S. 1090 (1992).

There is no merit to petitioner’s contention (Pet.

24, 25-26) that the Board’s make-whole order effec-

tively binds it to the terms of ABN’s labor contracts,

in contravention of Section 8(d) of the Act. Section

8(d), 29 U.S.C. 158(d), provides, in relevant part,

that the obligation to bargain collectively “does not

compel either party to agree to a proposal or require

the making of a concession.” See also H.K. Porter

Co. v. NLRB, 397 U.S. 99 (1970). The Board’s

remedy is consistent with that principle, for petitioner

itself, when it opened for business on April 19 with-

out having made any substantial changes in the pre-

vailing terms of employment, elected to adopt the bulk

of ABN’s employment terms. Moreover, the Board’s

order requires petitioner to continue to observe its

chosen terms only until it has bargained with the

Unions for new terms. See Pet. App. 71. If, after

good-faith negotiations, the parties reach a bargain-

ing impasse, petitioner will be free unilaterally to

implement changes that are “reasonably compre-

hended within [its] pre-impasse proposals.” Taft

Broadcasting Co., 163 N.L.R.B. 475, 478 (1967),

enforced sub nom. American Federation of Television

& Radio Artists v. NLRB, 395 F.2d 622 (D.C. Cir.

1968).

Petitioner further errs in contending (Pet. 26, 28)

that the Board’s remedy is inconsistent with Burns,

supra. There, the Court declined to enforce the

16

Board’s make-whole remedy because, in the circum-

stances of that case, the Court found it “difficult to

understand how [the successor] could be said to have |

changed unilaterally any pre-existing term or condi-

tion of employment without bargaining when it had

* * * no outstanding terms and conditions of employ-

ment from which a change could be inferred.” 406

U.S. at 294-296. Burns dealt with the terms on which

the successor initially hired its employees. Here, by

contrast, petitioner had already completed its hiring,

had “outstanding” employment terms in place before

April 28, and its unilateral changes on that date were

a clear departure from those terms. Because the

Board’s remedial determinations “merit the greatest

deference,” ABF Freight System, Inc. v. NLRB, 510

U.S. 317, 324 (1994), the court of appeals correctly

enforced the Board’s order.®

8 Contrary to petitioner’s suggestion (Pet. 26), the decision

below is not inconsistent with NLRB v. Dent, 534 F.2d 844

(9th Cir. 1976). There, the Board found that the successor

unlawfully unilaterally lowered the employees’ wages, and

the Board ordered it to pay the employees backpay based

on their former wage rate. Jd. at 845. The court agreed

with the Board that the successor’s unilateral changes con- 7

stituted an unfair labor practice (id. at 846), but declined |

to enforce the Board’s backpay award because the court

found it “clear,” on the facts presented, that “the [successor] i

would not have agreed to the wage rates which had existed

under the previous contract.” Jd. at 847. Here, by contrast,

petitioners effectively assented to ABN’s wage rates and con-

tinued to apply them when it reopened the plant on April 19

with a full complement of employees.

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17

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted.

WALTER DELLINGER

Acting 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

JANUARY 1997

® ues. GOVERNMEKT PRINTING OFFICE; 1997 417722 40230