Engelhard Corp v. NLRB ( 2006 )

Opinions of the United
2006 Decisions States Court of Appeals
for the Third Circuit
2-14-2006
Engelhard Corp v. NLRB
Precedential or Non-Precedential: Precedential
Docket No. 04-3034
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 04-3034 & 04-4366
ENGELHARD CORPORATION,
Petitioner/Cross Respondent
*LOCAL 1430, INTERNATIONAL
BROTHERHOOD OF ELECTRICAL WORKERS,
AFL-CIO
Intervener-Petitioner
v.
NATIONAL LABOR RELATIONS BOARD,
Respondent/Cross Petitioner
(*Amended in Accordance with Clerk’s Order dated 8/30/04)
Petition for Review and Cross-Application
For Enforcement of an Order of
The National Labor Relations Board
(No. 02-ca-32909; 02-ca-33080)
Argued September 29, 2005
Before: ALITO* and AMBRO, Circuit Judges,
RESTANI,** Judge
(Opinion filed: February 14, 2006)
Richard M. Escoffery, Esquire
Stanford G. Wilson, Esquire
Douglas H. Duerr, Esquire (Argued)
Elarbee, Thompson, Sapp & Wilson
229 Peachtree Street, N.E.
800 International Tower
Atlanta, GA 30303
Counsel for Petitioner/Cross Respondent
James B. Coppess, Esquire (Argued)
815 16th Street, N.W.
Washington, D.C. 20006
Robert D. Kurnick, Esquire
Sherman, Dunn, Cohen, Leifer & Yellig
1125 Fifteenth Street, N.W.
Washington, D.C. 20005
*
Then Judge, now Justice, Alito heard oral argument in
this case but was elevated to the United States Supreme Court
on January 31, 2006. The opinion is filed by a quorum of the
panel. 28 U.S.C. § 46(d).
**
Honorable Jane A. Restani, Chief Judge, United States
Court of International Trade, sitting by designation.
2
Counsel for Intervenor Petitioner
Arthur F. Rosenfeld
General Counsel
John E. Higgins, Jr.
Deputy General Counsel
John H. Ferguson
Associate General Counsel
Aileen A. Armstrong
Deputy Associate General Counsel
Robert J. Englehart, Esquire
Steven B. Goldstein, Esquire (Argued)
Meredith L. Jason, Esquire
National Labor Relations Board
1099 14th Street, N.W.
Washington, D.C. 20570
Counsel for Respondents/Cross Petitioner
OPINION OF THE COURT
AMBRO, Circuit Judge
This appeal arises from the final decision of the National
Labor Relations Board (the “NLRB”) interpreting a collective
bargaining agreement’s no-strike/no-lockout provision.
Engelhard Corporation (“Engelhard” or the “Company”),
relying on its interpretation of the provision, suspended thirty-
3
eight employees for holding a demonstration at its annual
shareholders’ meeting. For the reasons set out below, we agree
with the NLRB that Engelhard’s employees did not contravene
that provision. Thus, we deny the petition for review of the
Board’s decision that Engelhard’s suspension of the employees
violated subsections 8(a)(1) and (3) of the National Labor
Relations Act (the “NLRA”), and grant the NLRB’s application
for enforcement of that decision.
I. Factual and Procedural Background
Engelhard manufactures and distributes pigments and
film products at various locations throughout the United States.
Local 1430, International Brotherhood of Electrical Workers,
AFL-CIO (the “Union”) represents approximately 288
employees in five of Engelhard’s New York facilities, including
the plant located in Peekskill, New York. At all relevant times,
Engelhard’s Peekskill employees were covered by a collective
bargaining agreement (the “CBA”) binding both Engelhard and
the Union.
Article 28 of the CBA included a no-strike/no-lockout
provision that stated:
The Employer and the Union declare it to be their
intention to prevent any suspension of work due
to labor disputes during the term of this
Agreement. To carry out this intention, the
4
Employer agrees that there shall be no lockout of
any of its Employees or discrimination against
them because they have raised a dispute or
grievance. The Union agrees that it will not call,
participate in, or sanction, during the term of this
Agreement, any strike, boycott, picketing, work-
stoppage or slow-down whatsoever. The Union
further agrees that any Employee engaging in an
unauthorized strike, boycott, picketing, organized
work slowdown or stoppage, or any other type of
interference with the Employer’s business, shall
be subject to immediate discharge at the
discretion of the Employer with no recourse to the
grievance procedure contained herein.
However, the Employer agrees that it will not
hold the Union responsible for damages resulting
from any such unauthorized action if the Union
takes immediate action to advise all Employees
that such unauthorized action is unauthorized and
that Employees participating will by subject to
discipline, up to and including discharge.
The CBA was due to expire on June 30, 2000. In anticipation
of that expiration date, the Union and Engelhard held
negotiations for a successor agreement on March 8, 21, and 27.
The discussions broke off, however, prior to formalizing any
new agreement. The Union aspired to return to the bargaining
5
table. Indeed, in order to put pressure on the Company to
resume negotiations, the Union decided to picket Engelhard’s
May 4, 2000 shareholders’ meeting at the Sheraton Hotel in
Woodbridge, New Jersey, a location some fifty miles from
Engelhard’s plant in Peekskill.
On April 28, Union Business Agent Robert Meyer left a
message with Engelhard’s Senior Vice President to provide
notice of its plans to picket the shareholders’ meeting.
Engelhard’s Director of Human Resources, Joel Gray, returned
the call and informed Meyer that, in the Company’s view, the
proposed picketing violated the no-strike/no-lockout provision
of the CBA. The Union disagreed, stating that because Article
28 applied only to concerted activity resulting in a work
stoppage or affecting production, it did not cover the Union’s
peaceful picketing of the shareholders’ meeting. The same day,
Engelhard sent a letter to the Union, which Englehard posted at
the Peekskill plant, expressing its position that the planned
picketing violated Article 28 of the CBA. The letter further
warned that any employee who engaged in picketing at the
shareholders’ meeting would be subject to immediate discharge.
On May 4, approximately fifty Company employees
from its Peekskill plant, accompanied by fifteen to twenty non-
employees, participated in a demonstration outside the Sheraton
Hotel in Woodbridge. Of the fifty employees who took part in
the demonstration, only three were scheduled to work at the
time of the demonstration, and each of them had received
6
advance permission from the Company to miss work on May 4.
Some of the non-employees carried picket signs indicating that
the Union had filed unfair labor practice charges against
Engelhard while other non-employees distributed handbills
complaining that the Company had broken off contract
negotiations. None of the participants chanted, blew whistles or
otherwise made any noise. Rather, the demonstrators engaged
in a silent protest, obeying all of the rules given by the police.
The Peekskill employees stood next to the non-employee
picketers and handbill distributors for approximately one hour,
the duration of the protest.
Engelhard concedes it videotaped the demonstration.
According to Engelhard, it recorded the demonstration in the
event the participators attempted to disrupt the meeting or it
decided to seek an injunction. It is undisputed that no protester
disrupted the shareholders’ meeting or prevented individuals or
vehicles from either entering or exiting the hotel.
On May 12, Engelhard sent the Union a second letter
(which also was posted in the Peekskill plant). Among other
things, this communication declared that Engelhard intended to
take formal disciplinary action against both the employees who
participated in the demonstration and the Union for violating
Article 28 of the CBA.
Engelhard used the May 4 videotape recording to
identify those employees who participated in the demonstration,
7
and then suspended each of them for three days. The Union
filed grievances over the suspensions, which Engelhard refused
to arbitrate. It maintained that the grievances were not
arbitrable because the employees picketed in violation of the
CBA and thus had no recourse to its grievance procedures.
The Union followed up by filing unfair labor practice
charges with the NLRB. The NLRB’s general counsel issued
a consolidated complaint alleging that Engelhard had committed
a variety of unfair labor practices in violation of subsections
8(a)(1) and (3) of the NLRA, 29 U.S.C. § 158(a)(1), (3).
Engelhard filed an answer to that complaint, denying all
charges. At the conclusion of an evidentiary hearing, an
administrative law judge (ALJ) issued a decision holding that it
violated subsection 8(a)(1) of the NLRA by threatening
employees with discharge if they engaged in Union activity and
surveilling employees engaged in Union activity. The ALJ also
ruled that Engelhard violated subsection 8(a)(3) of the NLRA
by suspending employees for participating in a Union
demonstration at the Company’s annual shareholders’ meeting.
Timely exceptions were filed by Engelhard to the NLRB, which
issued an opinion, over one dissent, affirming the ALJ. This
appeal followed.1
1
The NLRB exercised jurisdiction over this proceeding
under 29 U.S.C. § 160(a) and (b). Its decision was a final order
with respect to all the parties. 29 U.S.C. § 160(c). Because the
alleged unfair labor practice occurred within this Circuit, we
8
II. Standard of Review
Whether Article 28 of the CBA waived the employees’
right to picket Engelhard’s shareholders’ meeting turns
exclusively on the interpretation of the parties’ labor contract.
While we review the NLRB’s findings of fact under a
deferential standard and thus “accept the Board’s factual
determinations and reasonable inferences derived [therefrom] .
. . if they are supported by substantial evidence,” Citizens
Publ’g & Printing Co. v. NLRB, 263 F.3d 224, 232 (3d Cir.
2001) (internal citation and quotations omitted); see also 29
U.S.C. § 160(e) (“The findings of the Board with respect to
questions of fact if supported by substantial evidence on the
record considered as a whole shall be conclusive.”), we “‘owe
no particular deference to the Board on matters of contract
interpretation.” Pacemaker Yacht Co. v. NLRB, 663 F.2d 455,
458 (3d Cir. 1981) (quoting Dow Chemical Co. v. NLRB, 636
F.2d 1352, 1358 (3d Cir. 1980)). Accordingly, we construe de
novo the language of Article 28 of the CBA.
III. Merits
Section 7 of the NLRA grants employees the “right to
self-organization, to form, join, or assist labor organizations . .
. and to engage in . . . concerted activities for the purpose of
collective bargaining or other mutual aid or protection.” 29
exercise jurisdiction pursuant to 29 U.S.C. § 160(e) and (f).
9
U.S.C. § 157. Section 8 states that it is an unfair labor practice
for an employer “to interfere with, restrain, or coerce
employees” in the exercise of their Section 7 rights, 29 U.S.C.
§ 158(a)(1), or to discriminate with “regard to hire or tenure or
employment or any term or condition of employment to . . .
discourage membership in any labor organization.” 29 U.S.C.
§ 158(a)(3). Indeed, it is well-settled that “Section 7 of the
NLRA protects the right of employees to observe lawful picket
lines.” Int’l Bhd. of Elec. Workers, Local 803, AFL-CIO v.
NLRB, 826 F.2d 1283, 1287 (3d Cir. 1987).
It is equally well settled that the statutory right to strike
may be waived in a collective bargaining agreement. See NLRB
v. Allis-Chalmers Mfg. Co., 388 U.S. 175, 180 (1967); Mastro
Plastics Corp. v. NLRB, 350 U.S. 270, 290 (1956); NLRB v.
Rockaway News Supply Co., 345 U.S. 71, 73 (1953); Delaware
Coca-Cola Bottling Co. v. Gen. Teamsters Local Union 326,
624 F.2d 1182, 1184 (3d Cir. 1980). Any waiver of the
employees’ right to engage in this activity, however, must be
“clear and unmistakable.” Metro. Edison Co. v. NLRB, 663
F.2d 478, 482 (3d Cir. 1981); see also United Steelworkers v.
NLRB, 536 F.2d 550, 555 (3d Cir. 1976) (“a waiver of a
statutory right must be clearly and unmistakably established, .
. . and express language will not be read expansively”). “The
extent of the waiver . . . turns upon the proper interpretation of
the particular contract . . . [which] must be read as a whole and
in light of the law relating to it when made.” Delaware
Coca-Cola, 624 F.2d at 1184 (citing Food Fair Stores, Inc. v.
10
NLRB, 491 F.2d 388, 395 (3d Cir. 1974) (additional citations
and quotations omitted)).
Thus, any analysis of the waiver issue must begin with an
identification of the no-strike obligation in the parties’ contract
and a determination of its scope. As we recognized in
Delaware Coca-Cola, the complexity of the waiver
determination is compounded by the fact that “the union’s
no-strike obligation may be created in one of two ways: by
implication from the arbitration clause or by an express clause
in the contract.” 624 F.2d at 1185. We are concerned here
solely with the scope of an express no-strike obligation in the
CBA (which includes a picketing prohibition).
Engelhard argues that the plain meaning of the third
sentence of Article 28 – “The Union agrees that it will not call,
participate in, or sanction, during the term of this Agreement,
any strike, boycott, picketing, work-stoppage or slow-down
whatsoever.” – is a “clear and unmistakable waiver” of the
Union’s Section 7 right to picket. Forgoing any “picketing . . .
whatsoever,” the argument continues, includes not only
Englehard’s facilities but also its annual shareholders’ meeting.
Moreover, because the Union’s picketing was unauthorized, it
follows that Engelhard’s acts of threatening employees with
discipline, videotaping the demonstration, and suspending
employees who participated in the demonstration, do not
constitute unfair labor practices. Put another way, Engelhard’s
position is that its threats, surveillance and suspensions did not
11
violate subsections 8(a)(1) and (3) of the NLRA because the
Union’s picketing constituted unprotected activity.
The NLRB rejected Engelhard’s contentions and held
that the language and structure of Article 28 demonstrate that
the Union did not clearly and unmistakably waive the
employees’ right to engage in picketing of the Company’s
meeting of shareholders. This conclusion relies heavily on the
first sentence of Article 28, which states that the parties “declare
it to be their intention to prevent any suspension of work due to
labor disputes.” According to the Board, that statement of
intent “qualifies and informs” both the no-picketing obligation
that the Union agreed to undertake in Article 28’s third sentence
and the no-lockout obligation of Engelhard in Article 28’s
second sentence. Indeed, subsequent to the parties’ declaration
that it was “their intention to prevent any suspension of work
due to labor disputes,” Article 28 provides that “[t]o carry out
this intention, the Employer agrees that there shall be no lockout
of any of its Employees . . . ,” while “[t]he Union agrees that it
will not call, participate in, or sanction . . . . any . . . picketing.”
(Emphasis added.) Thus, while Article 28 waives the
employees’ right to engage in any picketing that does, or could
reasonably be expected to, result in a suspension of work, it
does not waive the employees’ right to engage in picketing that
does not, or could not reasonably be expected to, lead to a
suspension of work at an Engelhard facility.
The NLRB further reasoned that the state of the law
12
when the Union and Engelhard negotiated Article 28 of the
CBA provides additional support for the conclusion that the
Company failed to carry its burden2 of showing that the Union
clearly and unmistakably waived the employees’ right to engage
in picketing the shareholders’ meeting. See Mastro Plastics
Corp., 350 U.S. at 279 (holding that collective-bargaining
agreement “must be read as a whole and in light of the law
relating to it when it was made”). This is because there is no
dispute that the “clear and unmistakable” waiver standard was
well established long before the Union and Engelhard
negotiated the July 1997 CBA. See Delaware Coca-Cola, 624
F.2d at 1187-88 (noting that the general rule is that a “waiver
must be clear and unmistakable and that explicit language must
not be read expansively”). In this context, both Engelhard and
the Union “presumably knew that unambiguous contractual
language would have been necessary to create an absolute
prohibition against picketing.” NLRB Br. at 24. Accordingly,
“the parties surely would not have used the suspension of work
language in Article 28 if their intent was to foreclose picketing
that did not involve a suspension of work.” Id. at 24-25
(internal quotations omitted).
Although no-strike clauses are common in collective
bargaining agreements, see Mastro Plastics Corp., 350 U.S. at
2
See Mastro Plastics Corp., 350 U.S. at 277 (whether a
work stoppage is unprotected because it violates a no-strike
clause is an affirmative defense).
13
280 (stating “collective-bargaining contracts frequently have
included certain waivers of the employees’ right to strike”),
cases of our Court interpreting those provisions are few in
number and not particularly on point. This is because our Court
has never been tasked with resolving a factually analogous case
involving a union’s claim that certain concerted activity – be it
striking, boycotting, or picketing – is exempt from a broad no-
strike provision on the basis that the activity at issue did not,
and was not reasonably likely to, lead to a work stoppage.
Engelhard nevertheless relies heavily on International
Brotherhood of Electrical Workers, Local 803, AFL-CIO v.
NLRB, 826 F.2d 1283 (3d Cir. 1987), where we interpreted a
no-strike/no-lockout provision of a collective bargaining
agreement negotiated between a union (Local 803) and its
employer (Metropolitan) to prohibit sympathy strikes.3 In that
case, a crew of Metropolitan employees, represented by the
3
This provision of the Metropolitan-Local 803 collective
bargaining agreement stated:
The Brotherhood and its members agree that
during the term of this agreement there shall be
no strikes or walkouts by the Brotherhood or its
members, and the Company agrees that there
shall be no lockouts of the Brotherhood or its
members, it being the desire of both parties to
provide uninterrupted and continuous service to
the public.
Int’l Bhd. of Elec. Workers, 826 F.2d at 1290.
14
Local 803 and assigned to preform work at a particular site,
refused to enter that site and complete a work assignment when
confronted by a different union’s picket line. 826 F.2d at 1285.
Metropolitan advised Local 803 that a continuing refusal by its
members to cross the picket line would result in disciplinary
action, including suspensions. Id. In response, the union filed
a charge against Metropolitan alleging that the company’s
disciplinary threats had interfered with, restrained, and coerced
the employees in the exercise of their rights under Section 7 of
the NLRA. Id. Metropolitan maintained that, by agreeing to a
broad no-strike clause in its labor contract, Local 803 had
clearly and unmistakably waived its employees’ rights to
engage in the sympathy strike. Id. The union disagreed,
asserting that the clear and unmistakable standard requires more
than a broad statement of waiver. Id. at 1290.
Our Court dismissed Local 803’s contention that “a
broad no-strike claim can never constitute a clear and
unmistakable waiver of the right of employees to honor a picket
line.” Id. at 1290-91. We subsequently rejected the Local’s
argument that the particular no-strike agreement in its contract
with Metropolitan did not clearly and unmistakably waive its
members’ right to honor stranger picket lines.
[I]n addition to the expression in the no-strike
clause of “the desire of both parties to provide
uninterrupted and continuous service to the
public,” . . . “the contract contains other
15
references to the need for . . . [Metropolitan] to
provide continuous service to its customers.” . . .
The parties’ repeated expression of their mutual
purposes to maintain service without interruption,
in conjunction with the functional independence
of Article XI, is thus consistent with the view that
the no-strike clause encompasses all actions,
including sympathy strikes, that would frustrate
that purpose. . . . Indeed, a fair reading of the
collective bargaining agreement as a whole
establishes an intention to waive the employees’
right to engage in sympathy strikes.
Id. at 1295-96 (emphasis added).
Despite Engelhard’s contentions to the contrary,
International Brotherhood is not controlling here. Our Court
was not asked to determine whether Local 803’s sympathy
strike did, or could reasonably be expected to, result in an
interruption or suspension of Metropolitan’s service to the
public. Such an inquiry was entirely unnecessary because it was
undisputed that the employees’ refusal to cross a sister union’s
picket line and complete their work assignments resulted in an
interruption in Metropolitan’s service.
Indeed, a discerning read of International Brotherhood
16
reveals that its reasoning supports the result we reach here, for
it refused to read broad contractual language in isolation.
Rather, it closely examined the language and structure of the
contract before it and ruled that the particular strike at issue –
Local 803’s sympathy strike – conflicted with the parties’
mutual intent “to provide uninterrupted and continuous service.”
Simply stated, International Brotherhood is on all fours with the
Board’s position that the appropriate inquiry here is whether the
Union’s May 4 picket of an off-site shareholders’ meeting
conflicted with the parties’ mutual intent “to prevent work
stoppages.” Silver State Disposal Serv., 326 N.L.R.B. 84, 86
(1998) (quoting Elec. Workers Local 1395 v. NLRB, 797 F.2d
1027, 1036 (D.C. Cir. 1986) (In interpreting a no-strike/no-
lockout provision, “the parties’ actual intent governs, ‘whether
that intent is established by the language of the clause itself, by
the inferences drawn from the contract as a whole, or by
extrinsic evidence.’”).4
With the prohibition against reading express language
expansively, see United Steelworkers, 536 F.2d at 555, and the
reasoning of International Brotherhood in mind, we agree with
the Board that the parties’ mutual statement of intent in the first
sentence of Article 28 to prevent the stoppage of work due to
labor disputes qualifies and informs the parties’ mutual
undertakings in the second and third sentences. It is particularly
4
As the parties have not presented any extrinsic evidence,
we rely exclusively on the language of Article 28.
17
relevant that the parties expressly stated their intention to
prevent the suspension of work and explained that it is “[t]o
carry out this intention” that they undertook the various
commitments stated in the remainder of Article 28. This
unqualified expression of the mutual purpose to prevent work
stoppages is consistent with the view that the no-strike clause
includes all actions, including pickets, that would frustrate that
purpose.
But when work is not stopped, nor even impeded, Article
28’s picketing prohibition is not in play. Indeed, any attempt to
read Article 28’s third sentence in isolation renders the first
sentence, which lays out the purpose for the entire article,
meaningless and runs contrary to the well established principles
of contract construction – to read, if possible, all provisions of
a contract together as a harmonious whole. See Ludwig Honold
Mfg. Co. v. Fletcher, 405 F.2d 1123, 1130 n.31 (3d Cir. 1969)
(district court erred “in isolating one phrase of the . . . clause to
reach its conclusion that the contract language was clear and
unambiguous”); Restatement (Second) of Contracts: Rules In
Aid of Interpretation § 202 cmt. d (“Meaning is inevitably
dependent on context. A word changes meaning when it
becomes part of a sentence, the sentence when it becomes part
of a paragraph.”).5
5
Further supporting our conclusion is that the explanatory
language in the first and second sentences of Article 28 spawns
ambiguity concerning the breadth of the “no picketing
18
* * * * *
Because the Union’s activity at the shareholders’ meeting
could not reasonably have been expected to, and in fact did not,
lead to the suspension of any work at the Peekskill plant, we
hold that activity was not prohibited by Article 28 of the CBA.
Accordingly, we deny Engelhard’s petition for review and grant
the NLRB’s application for enforcement.
whatsoever” prohibition. As a practical matter, an ambiguous
provision (standing alone) can never amount to a clear and
unmistakable waiver. See NLRB v. Gen. Tire & Rubber Co.,
795 F.2d 585, 588 (6th Cir. 1986) (ambiguous language in
bargaining agreement is insufficient to demonstrate waiver).
19