Polycon Industries, Inc. v. National Labor Relations Board , 821 F.3d 905 ( 2016 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 15-3675, 15-3859
POLYCON INDUSTRIES, INC.,
Petitioner, Cross-Respondent,
v.
NATIONAL LABOR RELATIONS BOARD,
Respondent, Cross-Petitioner.
____________________
Petition for Review and Cross-Application for Enforcement of an
Order of the National Labor Relations Board.
No. 13-CA-104249
____________________
ARGUED APRIL 19, 2016— DECIDED MAY 9, 2016
____________________
Before BAUER, POSNER, and FLAUM, Circuit Judges.
POSNER, Circuit Judge. Polycon Industries, of Merrillville
Indiana (a town in the northwestern corner of the state), is a
manufacturer of plastic bottles and containers. Steven A.
Johnson, a lawyer in the town, represented Polycon in collec-
tive bargaining with a Teamsters local (Teamsters Local Un-
ion No. 142) and in the ensuing litigation now before us;
Polycon’s brief describes Johnson as “Polycon’s representa-
tive.” In a decision reported at 363 N.L.R.B. No. 31 (Oct. 29,
2 Nos. 15-3675, 15-3859
2015), the National Labor Relations Board determined that
the company had violated sections 8(a)(1) and (5) of the Na-
tional Labor Relations Act, 29 U.S.C. § 158(a)(1), (5), which
prohibit unfair labor practices in interstate commerce, by re-
fusing to sign a collective bargaining agreement after agree-
ing to its terms.
In October 2010, shortly after the Board had certified the
union as the exclusive representative of Polycon’s produc-
tion and warehouse employees in collective bargaining with
Polycon, the union and the company began protracted nego-
tiations over what terms to include in a collective bargaining
agreement. By January 2013 the parties had largely agreed
on those terms. But in March, the agreement not yet signed,
attorney Johnson asked that a clause requiring employees to
belong to the union (a “union shop” or “union security”
clause) be revised to reflect the fact that a year earlier Indi-
ana had passed a right-to-work law, Ind. Code 22-6-6-8, pro-
hibiting such clauses. After further negotiations the union
suggested adding to the union-shop clause a statement that
the clause “will not be implemented so long as the Indiana
Right-To-Work statute remains in effect.” On May 3 attorney
Johnson replied that the proposed new language was “fine”
and asked the union to send him a complete final version of
the agreement, which he would “review and, assuming that
it is consistent with our agreement, forward to the client for
signing.”
Four days later (May 7) the union emailed Johnson a
copy of the collective bargaining agreement with the new
language—and two days after that Johnson replied that Pol-
ycon would not sign the agreement. The refusal was not be-
cause of any inconsistency between the copy and what he’d
Nos. 15-3675, 15-3859 3
agreed upon with the union but because employees of Poly-
con were circulating a petition to decertify the union as their
collective bargaining representative. Johnson’s reply, or
more precisely the conduct by Polycon that the reply report-
ed (refusal to sign the agreement mailed by the union), vio-
lated the National Labor Relations Act. For once the parties
agreed on the terms of the collective bargaining agreement,
as they had done on May 3 when Johnson notified the union
that the union’s addition to the collective bargaining agree-
ment was “fine,” they were obligated to execute, which is to
say sign, “a written contract incorporating any agreement
reached if requested by either party.” 29 U.S.C. § 158(d); see
H.J. Heinz Co. v. NLRB, 311 U.S. 514, 523–26 (1941); Capitol-
Hustling Co. v. NLRB, 671 F.2d 237, 240–45 (7th Cir. 1982);
Windward Teachers Association, 346 N.L.R.B. 1148, 1150–51
(2006). The union had requested the company’s signature on
May 7 when it sent Johnson the text of the collective bargain-
ing agreement containing the new language to which he’d
agreed as Polycon’s representative. In refusing to sign the
agreement Polycon thus failed to comply with a request that
the law obligated it to grant.
Desperately Polycon argues that under Indiana law there
was no meeting of the minds on May 3. But Polycon had
failed to cite Indiana law to the Labor Board—a fatal defect,
29 U.S.C. § 160(e)—and anyway state contract law is inappli-
cable to the interpretation and enforcement of collective bar-
gaining agreements within the Board’s jurisdiction. E.g., Al-
lis-Chalmers Corp. v. Lueck, 471 U.S. 202, 211–12 (1985); Capi-
tol-Hustling Co. v. NLRB, supra, 671 F.2d at 242.
Once a collective bargaining agreement takes effect,
moreover, the union enjoys a conclusive presumption of ma-
4 Nos. 15-3675, 15-3859
jority support until either the agreement’s end date or three
years from the agreement’s effective date, whichever is earli-
er, even if a decertification petition is filed, as it was in this
case. See Auciello Iron Works, Inc. v. NLRB, 517 U.S. 781, 786
(1996), and cases and text cited there. The decertification pe-
tition may have been signed by a majority of the employees
as early as May 9, and by May 22 clearly commanded a ma-
jority, but either date was too late for Polycon to repudiate a
collective bargaining agreement to which the company had
agreed on May 3. Flying Dutchman Park, Inc., 329 N.L.R.B.
414, 414–17 (1999).
Even if Polycon had simply proposed an agreement and
no final agreement had been reached, its conduct would
have been problematic, because the “withdrawal of a pro-
posal by an employer without good cause is evidence of a
lack of good faith bargaining by the employer in violation of
Section 8(a) of the Act where the proposal has been tenta-
tively agreed upon or acceptance by the Union appears to be
imminent.” Mead Corp. v. NLRB, 697 F.2d 1013, 1022 (11th
Cir. 1983); see 29 U.S.C. § 158(a)(5). Mead was an “appears to
be imminent” case, and the court upheld the Labor Board’s
finding of bad faith. The present case is an even stronger
case for the union, since it had accepted Johnson’s proposed
change regarding right to work, and with that acceptance
union and management had an agreement.
And so the Board, in the order before us that Polycon
challenges, has directed Polycon to sign the agreement and
comply with its terms until it expires. The order is so clearly
correct that Polycon’s challenge borders on the frivolous. As
the Supreme Court said in H.J. Heinz Co. v. NLRB, supra, 311
U.S. at 526, an employer’s “refusal to honor, with his signa-
Nos. 15-3675, 15-3859 5
ture, the agreement which he has made with a labor organi-
zation, discredits the organization, impairs the bargaining
process and tends to frustrate the aim of the statute to secure
industrial peace through collective bargaining.”
Attorney Johnson insists that not his but Polycon’s ap-
proval of the new language was required before the parties
could be deemed to have approved it. But he provides no
evidence, his own or Polycon’s, that he hadn’t been author-
ized to speak for the company when he told the union that
the suggested addition was fine. Polycon could have asked
for correction of any material mistakes before signing the
contract but could not refuse to review and sign it because of
the mere possibility that it contained a mistake.
The Board’s order is
ENFORCED.