Delta Sandblasting Company Inc v. NLRB ( 2020 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DELTA SANDBLASTING COMPANY, No. 18-73097
INC.,
Petitioner, NLRB Nos.
20-CA-176434
v. 32-CA-180490
NATIONAL LABOR RELATIONS
BOARD,
Respondent,
DISTRICT COUNCIL 16 OF THE
INTERNATIONAL UNION OF PAINTERS
AND ALLIED TRADES,
Respondent-Intervenor.
2 DELTA SANDBLASTING V. NLRB
NATIONAL LABOR RELATIONS No. 18-73305
BOARD,
Petitioner, NLRB Nos.
20-CA-176434
INTERNATIONAL UNION OF PAINTERS 32-CA-180490
AND ALLIED TRADES, DISTRICT
COUNCIL 16,
Petitioner-Intervenor, OPINION
v.
DELTA SANDBLASTING COMPANY,
INC.,
Respondent.
On Petition for Review of an Order of the
National Labor Relations Board
Argued and Submitted March 6, 2020
San Francisco, California
Filed August 11, 2020
Before: KIM MCLANE WARDLAW, MILAN D.
SMITH, JR., and PATRICK J. BUMATAY, Circuit
Judges.
Opinion by Judge Milan D. Smith, Jr.;
Dissent by Judge Bumatay
DELTA SANDBLASTING V. NLRB 3
SUMMARY *
Labor Law
The panel denied Delta Sandblasting Company, Inc.’s
petition for review, and granted the National Labor Relations
Board’s cross-petition for enforcement of its order ruling
that Delta committed an unfair labor practice when it
decreased its employees’ hourly pension contribution rate to
the Pacific Coast Shipyards Pension Fund without first
notifying or bargaining with their union.
Specifically, Delta argued that the Board erred in ruling
that Section 302(c)(5)(B) of the Labor Management
Relations Act did not prohibit Delta from making pension
contributions to the Pension Fund according to the rates
contained within a schedule (Schedule A) that the Board
found was incorporated into the collective bargaining
agreement (CBA) between Delta and the Union.
The panel held that substantial evidence supported the
Board’s finding that Schedule A was incorporated into the
CBA in December 2014. Further, the panel affirmed the
Board’s conclusion that the CBA, which incorporated
Schedule A, met Section 302’s requirements. The panel held
that the Board properly ruled that Section 302’s requirement
of a “written agreement” defining pension contributions was
satisfied here. Finally, the panel held that Delta’s failure to
notify or bargain with its union over the pension contribution
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
4 DELTA SANDBLASTING V. NLRB
rate decrease was an unfair labor practice under Sections
8(a)(1) and 8(a)(5) of the National Labor Relations Act.
Dissenting, Judge Bumatay would hold that the Board
owed a reasoned explanation for its departure from the
administrative law judge (“ALJ”)’s findings, and the Board
fell far short of that here. Judge Bumatay would grant
Delta’s petition for review and remand to the Board to
reassess its conclusion in light of the ALJ’s express finding
regarding the base pension rate of the CBA.
COUNSEL
Alan S. Levins (argued) and Courtney M. Osborn, Littler
Mendelson P.C., San Francisco, California, for
Petitioner/Respondent Delta Sandblasting Company, Inc.
Barbara A. Sheehy (argued) and Gregoire Sauter, Attorneys;
Usha Dheenan, Supervisory Attorney; David Habenstreit,
Acting Deputy Associate General Counsel; Alice B. Stock,
Associate General Counsel; Peter B. Robb, General
Counsel; National Labor Relations Board, Washington,
D.C.; for Respondent/Petitioner National Labor Relations
Board.
David A. Rosenfield (argued) and Caroline N. Cohen,
Weinberg Roger & Rosenfeld, Alameda, California, for
Respondent-Intervenor/Petitioner-Intervenor.
DELTA SANDBLASTING V. NLRB 5
OPINION
M. SMITH, Circuit Judge:
Petitioner Delta Sandblasting Company, Inc. (Delta)
appeals the National Labor Relations Board’s (the Board)
order ruling that it committed an unfair labor practice when,
in March 2016, it decreased its employees’ hourly pension
contribution rate to the Pacific Coast Shipyards Pension
Fund (the Pension Fund) without first notifying or
bargaining with their union (the Union). 1 Specifically, Delta
argues that the Board erred in ruling that Section
302(c)(5)(B) (Section 302) of the Labor Management
Relations Act (LMRA), 29 U.S.C. § 186(c)(5)(B), did not
prohibit Delta from making pension contributions to the
Pension Fund according to the rates contained within a
schedule (Schedule A) that the Board found was
incorporated into the collective bargaining agreement
(CBA) between Delta and the Union. 2
1
Delta’s employees are represented by Auto, Marine & Specialty
Painters Local 1176 (Local 1176). Local 1176 is an affiliate of District
Council 16 of the International Union of Painters and Allied Trades
(District Council), which first brought the charges in the underlying
NLRB case and has intervened in this appeal on behalf of the Board. For
simplicity, herein we use “the Union” to refer to both the District Council
and Local 1176, unless it is necessary to distinguish either entity.
2
Schedule A’s rates were paid by Delta as follows: (1) $8.18 per
hour from April 2014 through December 2014; and (2) $9.78 per hour
from January 2015 through December 2015. The record does not
indicate what pension contribution rates Delta paid between January
2009 and March 2014. While Delta paid at the rate of $11.38 per hour
in January and February 2016, the Board’s order deferred deciding
whether Delta’s payment of an additional $1.60 per hour in those two
months met the requirements of Section 302. Because the Board did not
6 DELTA SANDBLASTING V. NLRB
We deny Delta’s petition for review and grant the
Board’s cross-application for enforcement of its order. The
Board properly ruled that Section 302’s requirement of a
“written agreement” defining pension contributions was
satisfied here, and that Delta’s failure to notify or bargain
with its union over the pension contribution rate decrease
was an unfair labor practice under Sections 8(a)(1) and
8(a)(5) of the National Labor Relations Act (NLRA),
29 U.S.C. §§ 158(a)(1), (5).
FACTUAL AND PROCEDURAL BACKGROUND
I. Relevant Bargaining History
Delta is a Petaluma, California-based subcontractor that
provides marine vessel painting and sandblasting services.
During the period under review, Delta was owned and
operated by James “Bobby” Sanders, Sr. (Sanders), who
negotiated pension issues directly with the Union. José
Santana oversees the Union, has been responsible for
negotiating with Delta since 2008, and is a trustee of the
Pension Fund. The Union and Sanders negotiated in an
informal manner, often following the terms of the collective
bargaining agreement between the District Council and BAE
(a larger company for which Delta acted as a subcontractor).
Prior to 2014, Delta paid its employees more than BAE paid
its employees, which obviated the need for annual
renegotiations between Delta and the Union.
The dispute in this case arose in March 2016, when
Delta, without prior notice to the Union, ceased paying
address this issue in its order and the parties did not brief it on appeal,
we do not address it here. See Miller v. Fairchild Indus., Inc., 797 F.2d
727, 738 (9th Cir. 1986) (declining to consider claims not “specifically
and distinctly argued” in the appellate briefing).
DELTA SANDBLASTING V. NLRB 7
pension contributions in accordance with Schedule A, and
reduced its monthly contribution rate to $1.95 per hour. In a
letter to the Pension Fund explaining its reduced payment,
Delta stated, “[w]e do not have the money at this time to pay
the mandatory (critical status) amount due.”
The Board, the Union, and Delta (the Parties) agree that
the CBA between Delta and the Union expired on
August 31, 2015, and pursuant to well-established caselaw,
continues to govern the relationship between Delta and the
Union. See Litton Fin. Printing Div. v. NLRB, 501 U.S. 190,
198 (1991). In addition, the Parties agree that the CBA’s
Article 18.1 3 obligates Delta to make pension contributions
to the Pension Fund, and that, between December 2014 and
through the expiration of the CBA, Delta made those
contributions in accordance with the rates contained in
Schedule A. Relatedly, the Parties agree that, before 2009,
Delta made pension contributions at a rate of $1.95 per hour,
pursuant to a wage schedule contained within a previous
version of the CBA (the 2008 Schedule A). Finally, the
Parties agree that the Pension Fund declared itself in critical
status pursuant to the Pension Protection Act of 2006 (PPA),
29 U.S.C. § 1085, and that a rehabilitation plan (the
Rehabilitation Plan) for the Pension Fund, with annually
3
In pertinent part, Article 18.1 reads:
The Employer will pay the following . . . Pension
contributions to the applicable jointly administered
Trusts (i.e. . . . Pension – Pacific Coast Shipyards
Pension Fund) for all actual hours worked during the
term of this Agreement.
Pension
See Wage Schedule “A”
8 DELTA SANDBLASTING V. NLRB
updated pension contribution rate schedules, has been in
effect since 2008. 4
On appeal, Delta argues that the Board erred in rejecting
its argument that Section 302, which requires that pension
contributions be made pursuant to a “written agreement,”
prohibited it from paying pension contributions according to
Schedule A, and that Delta is only obligated by written
agreement to pay the 2008 pension contribution rate of $1.95
per hour. The Board and the Union, in contrast, argue that
the CBA, which they contend incorporated Schedule A in
2014, satisfies Section 302’s “written agreement”
requirement.
II. ALJ Decision
In response to the change in Delta’s pension contribution
rate, the District Council filed a charge against Delta with
the NLRB on May 16, 2016, and the NLRB’s General
Counsel filed a complaint soon after. 5 On September 15,
2017, the Administrative Law Judge (ALJ) concluded that
Delta’s unilateral pension rate reduction, made without
giving the Union notice or an opportunity to bargain,
constituted an unfair labor practice pursuant to
Sections 8(a)(1) and (5) of the NLRA.
4
The Rehabilitation Plan’s updated rate schedules for 2014 and
2015 match Schedule A’s pension contribution rates for 2014 and 2015.
While Schedule A does not specify pension contribution rates for years
beyond 2015, the Rehabilitation Plan’s schedules do.
5
The District Council, and later the NLRB General Counsel, also
alleged that Delta committed an unfair labor practice by failing to
execute a new collective bargaining agreement governing the years
2015–2018. This charge was rejected by the ALJ and the Board and is
not at issue in this appeal.
DELTA SANDBLASTING V. NLRB 9
The ALJ did not rule whether Delta’s pension
contributions before March 2016 violated Section 302’s
“written agreement” requirement. Instead, relying upon the
Board’s ruling in Quality House of Graphics, Inc.,
336 N.L.R.B. 497, 498–99 (2001), the ALJ held that,
irrespective of the legality of the pension contribution rates
pursuant to Section 302, Delta’s failure to notify and bargain
with the Union before decreasing its contribution rates was
an unfair labor practice. The ALJ ordered Delta to make “all
such delinquent contributions” that had not been made to the
Pension Fund since April 2016 and to continue making them
until it bargained with the Union in good faith to a contrary
agreement or a bona fide impasse. The ALJ allowed Delta
to “prove at compliance that resuming its surcharge
contributions would violate Section 302.”
III. Board Decision
The Union and Delta each filed exceptions to the ALJ’s
ruling. 6 On October 16, 2018, a three-member panel of the
Board (Chairman Ring, and Members McFerran and
Kaplan) adopted the ALJ’s “rulings, findings, and
conclusions as modified [in the Board’s decision and
order],” and agreed with the ALJ’s conclusion that Delta’s
unilateral pension contribution rate reduction was an unfair
labor practice. In contrast to the ALJ, the Board considered
and rejected Delta’s defense that payment of pension
contributions according to Schedule A was unlawful
pursuant to Section 302. 7 The Board found that Schedule A
6
The Union’s exceptions concerned the ALJ’s ruling on a different
issue that is not on appeal.
7
The Board also modified the ALJ’s remedial order, dating the
delinquent pension contributions back to March 2016, rather than April
2016.
10 DELTA SANDBLASTING V. NLRB
was incorporated into the CBA. Finally, the Board found
that, at the time of its expiration, the CBA obligated Delta to
make pension contributions at a rate of $9.78 per hour, and
left undecided whether Delta was required to pay rates
higher than that after the expiration of the CBA.
Delta timely petitioned for review of the Board’s order
pursuant to Section 10(f) of the NLRA. 8 The NLRB General
Counsel filed an application for enforcement of the Board’s
order on December 7, 2018. On December 31, 2018, the
District Council intervened in support of the General
Counsel. Delta’s petition and the NLRB General Counsel’s
application were consolidated on January 10, 2019.
JURISDICTION
The Board had jurisdiction over the underlying unfair
labor practice proceeding pursuant to 29 U.S.C. § 160(a).
We have jurisdiction over Delta’s petition for review and the
Board’s cross-application for enforcement, both timely,
pursuant to 29 U.S.C. § 160(e) and (f).
ANALYSIS
The Board rejected Delta’s Section 302 defense,
concluding that the CBA, which it found incorporated
Schedule A, met Section 302’s “written agreement”
requirement. On appeal, Delta argues that the Board’s
8
There is no defined time limitation for the filing of a petition for
review. Griffith Co. v. NLRB, 545 F.2d 1194, 1197 n.3 (9th Cir. 1976).
Instead, according to the principles of laches, we ask that “the party
challenging the timeliness of a petition must show that more time has
elapsed than reasonably necessary and that it was prejudiced by the
delay.” Id. Here, Delta’s petition was filed within 60 days of the Board’s
order. The Board and Union do not challenge its timeliness.
DELTA SANDBLASTING V. NLRB 11
finding that the CBA incorporated Schedule A was not based
upon substantial evidence. Instead, Delta argues, the 2008
Schedule A, which provides a rate of $1.95 per hour, was the
last-agreed pension contribution schedule. Moreover, Delta
argues that, even if we were to consider Schedule A as part
of the CBA, it does not satisfy Section 302.
Below, we analyze the Board’s factual finding that
Schedule A was incorporated into the CBA using the
substantial evidence standard of review. We then review de
novo the Board’s legal conclusion that the CBA,
incorporating Schedule A, satisfied Section 302.
I. The Board’s finding that Schedule A was
incorporated into the CBA
The NLRA authorizes the Board to make findings of fact
and conclusions from the record, 29 U.S.C. § 160(c), and to
review the ALJ’s findings of fact de novo, see Penasquitos
Vill., Inc. v. NLRB, 565 F.2d 1074, 1076 (9th Cir. 1977)
(citing Universal Camera Corp. v. NLRB, 340 U.S. 474, 496
(1951)). While the Board is empowered to review an ALJ’s
credibility findings de novo, according to Board policy it
avoids doing so unless the “clear preponderance of all the
relevant evidence” convinces the Board the findings are
incorrect. Anja Eng’g Corp. v. NLRB, 685 F.2d 292, 295 n.8
(9th Cir. 1982) (emphasis added) (citing Standard Dry Wall
Prods., 91 N.L.R.B. 544, 544–45 (1950), enforced, 188 F.2d
362 (3d Cir. 1951)), overruled on other grounds by Raley’s,
Inc. v. NLRB, 725 F.2d 1204, 1206 (9th Cir. 1984).
In contrast, we uphold the Board’s factual findings if
they are supported by substantial evidence. Glendale
Assocs., Ltd. v. NLRB¸ 347 F.3d 1145, 1151 (9th Cir. 2003).
“‘Substantial evidence’ is ‘more than a mere scintilla, but
less than a preponderance.’” NLRB v. Int’l Bhd. of Elec.
12 DELTA SANDBLASTING V. NLRB
Workers, Local 48, 345 F.3d 1049, 1053–54 (9th Cir. 2003)
(quoting Mayes v. Massanari, 276 F.3d 453, 459 (9th Cir.
2001)). Concerning factual findings, “[a] reviewing court
may not displace the NLRB’s choice between two fairly
conflicting views, even though the court would justifiably
have made a different choice had the matter been before it
de novo.” Walnut Creek Honda Assocs. 2, Inc. v. NLRB,
89 F.3d 645, 648 (9th Cir. 1996) (quoting Retlaw Broad. Co.
v. NLRB, 53 F.3d 1002, 1005 (9th Cir. 1995)). The Board’s
credibility findings are entitled to special deference and may
only be rejected when a clear preponderance of the evidence
shows that they are incorrect. See United Nurses Ass’ns of
Cal. v. NLRB, 871 F.3d 767, 777 (9th Cir. 2017) (“A court
will not reverse the Board’s credibility determinations unless
they are ‘inherently incredible or patently unreasonable.’”
(quoting Retlaw, 53 F.3d at 1006)).
Substantial evidence in the record supports the Board’s
finding that Schedule A was incorporated into the CBA by
Sanders and Santana in December 2014. Before the ALJ,
Santana testified, and the ALJ did not discredit, that he
inserted Schedule A into the CBA and that Sanders agreed
to Schedule A at a December 1, 2014 meeting. Santana
testified that during the meeting, Sanders asked him to
modify the start date on the schedule from July 1, 2014 to
December 1, 2014, which he did. Moreover, Schedule A
was produced by Delta before the ALJ, and Sanders’s wife,
Joyce Sanders, 9 testified that Sanders gave her Schedule A,
which she used to make pension contribution payments for
nearly two years. The record contains an email from Joyce
Sanders confirming that “a new contract was agreed upon
effective 12/1/14 . . . this resulted in five days using the old
rate and two days using the new rate.” The testimony of
9
Joyce Sanders also worked as the treasurer and secretary for Delta.
DELTA SANDBLASTING V. NLRB 13
Robert Sanders, Jr. also confirms that a new agreement was
reached between Sanders and Santana in 2014. 10
As a means of explaining its nearly two years of
voluntarily paying pension contributions according to
Schedule A, Delta argues that it mistakenly believed that the
payments were required by the Rehabilitation Plan. 11 Delta
also points out that Sanders did not sign or initial Schedule
A itself—only Santana initialed it. Moreover, Schedule A
lacks page numbers, while the 2008 Schedule A is correctly
numbered. But beyond pointing out minor flaws in the
documentation stemming from the informal dealings
between Delta and the Union, 12 Delta provides little
evidence contradicting the Board’s finding that Schedule A
was incorporated into the CBA in December 2014. At most,
it offers Robert Sanders Jr.’s conclusory statement, based not
on his personal knowledge of the negotiations but on his
10
Because Sanders died in May 2016, his son, Robert Sanders, Jr.,
who also worked for Delta, testified before the ALJ.
11
While it is outside the scope of our disposition of this case, we
disagree that this belief was mistaken. See 29 U.S.C.
§§ 1085(e)(3)(C)(i), (ii) (requiring pension funds to impose
rehabilitation plan payment schedules where the employer and union do
not adopt them voluntarily). Moreover, Delta does not explain why its
mistaken belief did not also lead Sanders to sign Schedule A. Delta’s
argument that Sanders mistakenly believed that he was obligated to pay
the Rehabilitation Plan’s scheduled rates supports the Board’s finding
that Sanders agreed to those same rates in December 2014 as part of
Schedule A.
12
Delta’s proffered version of the CBA suffers from similar defects.
For example, the 2008 Schedule A lacks a dated signature, and by its
own terms only applies to the years 2007 and 2008. Moreover, Sanders
Jr. testified that the 2008 Schedule A originated from previous collective
bargaining agreements with the Union and was not physically included
in the CBA.
14 DELTA SANDBLASTING V. NLRB
review of the file, that the 2008 Schedule A still governed
the relationship between Delta and the Union. 13
We recognize that the ALJ found that the CBA’s
Article 18.1 “provides for a base rate of $1.95 per hour.” 14
In our view, the Board’s finding that Schedule A was
incorporated into the CBA, made as part of a decision
affirming the ALJ, does not contradict the ALJ’s finding
regarding the base rate that the Parties agree applied in 2008.
Whatever their current disputes, the parties agree that the
$1.95 rate applied in 2008, so the ALJ’s finding is
unsurprising. And because the ALJ expressly decided not to
consider the merits of Delta’s Section 302 defense, it had no
occasion to make findings concerning Schedule A’s
incorporation into the CBA. Since Schedule A was
immaterial to the ALJ’s ruling that Delta committed an
unfair labor practice, the ALJ did not accept or reject the
argument that Schedule A was incorporated into the CBA in
2014, and did not make any credibility findings as to the
testimony on that point. 15 Moreover, the ALJ included in
13
We note that Delta’s version of events does not account for the
automatic surcharge payments, calculated as a percentage of its monthly
pension contributions, that it concedes that the PPA would have
mandated that it pay to the Pension Fund if, as it argues, it never agreed
to pay heightened pension contribution rates. See 29 U.S.C.
§ 1085(e)(7).
14
Article 18.1 of the CBA does not specify a pension contribution
rate. Instead, it refers to a “Wage Schedule ‘A.’” While the ALJ does
not explain this finding, we assume, for the sake of argument, that the
ALJ gleaned the $1.95 rate from the 2008 Schedule A.
15
While the ALJ explicitly discredited a portion of Santana’s
testimony concerning the negotiation of a different agreement not at
issue on appeal, the ALJ did not discredit Santana’s testimony regarding
Schedule A.
DELTA SANDBLASTING V. NLRB 15
her factual findings portions of Santana’s account of the
CBA negotiation that occurred in December 2014, including
Santana’s testimony that Sanders agreed to raise wages to
match the then-current BAE contract, from which Schedule
A was copied. We thus see no contradiction.
Even assuming arguendo that the Board contradicted the
ALJ on this point, we would still uphold the Board’s finding.
We recognize that “[o]ur [substantial evidence standard] is
more ‘searching’ in instances where the Board’s findings or
conclusions are contrary to those of the ALJ.” Plaza Auto
Ctr., Inc. v. NLRB, 664 F.3d 286, 291 (9th Cir. 2011)
(quoting United Steel Workers of Am. AFL-CIO-CSC v.
NLRB, 482 F.3d 1112, 1117 (9th Cir. 2007)). But even under
this more searching form of review, we still ultimately apply
the substantial evidence standard when reviewing the
Board’s factual findings. See Penasquitos Vill., 565 F.2d at
1076 (citing Universal Camera, 340 U.S. at 496). We
review most critically the Board’s rejection of the ALJ’s
credibility findings or factual findings that rely upon live
testimony. Id. at 1078–80. In contrast to these testimonial
inferences, “a Court of Appeals must abide by the Board’s
derivative inferences, if drawn from not discredited
testimony, unless those inferences are ‘irrational,’ ‘tenuous’
or ‘unwarranted.’” Id. at 1079 (citations omitted)).
Here, the ALJ’s finding that $1.95 was the contractual
base pension contribution rate was not itself a credibility
finding, and it is not clear what the ALJ relied upon in
reaching that conclusion. Moreover, because the ALJ
deferred deciding whether Delta’s payment of heightened
rates would violate Section 302, the ALJ did not even
mention, let alone make any findings concerning, Schedule
A’s incorporation into the CBA.
16 DELTA SANDBLASTING V. NLRB
Meanwhile, the Board, after affirming with
modifications the ALJ’s findings and ruling, concluded that
Schedule A was incorporated into the CBA. In doing so, the
Board referred to the testimony of Santana and Joyce
Sanders, Delta’s own payment history, and Joyce Sanders’s
email to the Pension Fund explaining the payment decrease
in March 2016. Beyond that evidence, we note Joyce
Sanders’s email and Robert Sanders, Jr.’s testimony, which
both recognize that Delta and the Union reached a new
agreement in 2014. In addition, Delta cannot point to any
support in the record, beyond the equivocal testimony of
Robert Sanders, Jr., that the $1.95 rate, which was originally
negotiated in 2007 or earlier, still applies. Overall, we
conclude that, even when considered under a more critical
eye, the Board’s finding that Schedule A was incorporated
into the CBA in December 2014 was supported by
substantial evidence. 16
II. The Board’s conclusion that Section 302 was satisfied
by the CBA
While we defer to the Board’s interpretation of the
NLRA as long as it is reasonably defensible, see United
Nurses, 871 F.3d at 777, we review de novo the Board’s
interpretations of statutes other than the NLRA, Hoffman
Plastic Compounds, Inc. v. NLRB, 535 U.S. 137, 144 (2002),
16
Our colleague in dissent argues that the Board did not sufficiently
justify its finding that Schedule A was incorporated into the CBA. We
disagree—as described above, the Board’s ruling made amply clear the
basis for its finding. Among other things, the Board was convinced (as
are we) by the undisputed testimony of Delta’s secretary and treasurer
Joyce Sanders, who stated that Sanders provided her with Schedule A
and that she used it to pay pension contributions for nearly two years.
DELTA SANDBLASTING V. NLRB 17
such as the LMRA. 17 Thus, we review de novo the Board’s
conclusion that the CBA satisfied Section 302.
We affirm the Board’s conclusion that the CBA, which
incorporated Schedule A, met Section 302’s requirements.
The LMRA prohibits payments by employers to unions.
29 U.S.C. § 186(a). However, that general prohibition is
subject to several exceptions, including for pension
contributions to a trust fund where, in pertinent part, “the
detailed basis on which such payments are to be made is
specified in a written agreement with the employer.”
29 U.S.C. § 186(c)(5)(B). Section 302’s requirement is
designed to protect employees’ pensions by preventing the
misuse of pension funds by union officials and employers:
“The reason for the rigid structure of Section 302 is to insure
that employer contributions are only for a proper purpose
and to insure that the benefits from the established fund
reach only the proper parties.” Guthart v. White, 263 F.3d
1099, 1102 (9th Cir. 2001) (quoting Thurber v. W. Conf. of
Teamsters Pension Plan, 542 F.2d 1106, 1108 (9th Cir.
1976)). In Guthart, we recognized that a variety of written
agreements other than collective bargaining agreements,
including pre-hire agreements and the pension fund’s trust
agreement, can satisfy Section 302. Guthart, 263 F.3d
at 1103–04; see also Hinson v. NLRB, 428 F.2d 133, 139
(8th Cir. 1970) (Section 302 “does not comprehend solely a
collective bargaining agreement to the exclusion of any other
possible written agreement.”).
17
The Board can consider a Section 302 defense to a charge of an
unfair labor practice, even though the Board is not empowered to
administer the LMRA. See BASF Wyandotte Corp., 274 N.L.R.B. 978,
979 (1985), enforced, 798 F.2d 849 (5th Cir. 1986).
18 DELTA SANDBLASTING V. NLRB
Additional court and agency authorities recognize that
Section 302 can be satisfied by many different forms of
written agreements. See Bricklayers Local 21 of Ill.
Apprenticeship and Training Program v. Banner
Restoration, Inc., 385 F.3d 761, 770 (7th Cir. 2004) (noting
that pension contribution obligations have been “enforced in
a variety of circumstances, absent a signature to a current
collective bargaining agreement”); Concord Metal, Inc., 298
N.L.R.B. 1096, 1096 (1990) (“[T]he Board has consistently
held that an expired contract, under which the obligation to
make payments to the fringe benefit funds arose, is sufficient
to meet the ‘written agreement’ requirement of [Section
302].”); Carpenters’ Dist. Council of St. Louis, 276 N.L.R.B.
682, 692 (1985) (finding that a collective bargaining
agreement that referenced a trust agreement detailing how
payments were to be made satisfied the LMRA); Richmond
Homes, Inc., 245 N.L.R.B. 1205, 1213 (1979) (stating that a
“trust fund agreement separate and apart from the collective-
bargaining agreement would surely satisfy the statutory
prerequisite,” and that multiple documents can be read
together to meet the requirements of the LMRA (quoting
Hinson, 428 F.2d at 139)).
Here, we need not look beyond the CBA; the parties
agree that Article 18.1 of the CBA obligates Delta to make
pension contributions to the Pension Fund, and the Board
found, based on substantial evidence, that the CBA
incorporated the rates in Schedule A. We agree with the
Board that the requirements of Section 302 were met by the
CBA.
The cases that Delta relies upon to argue that Section 302
was violated illustrate the CBA’s sufficiency here. We have
held that Section 302 was violated when an employer made
pension contributions on behalf of employees not included
DELTA SANDBLASTING V. NLRB 19
within the scope of the applicable collective bargaining
agreement or any other written agreement. See Guthart,
263 F.3d at 1103–05 (holding that payment of benefits to
nonunion employee not covered by the collective bargaining
agreement or trust agreement violated Section 302);
Thurber, 542 F.2d at 1109 (holding that a pension
contribution to cure a lapse in employment, where it
contravened the terms of the collective bargaining
agreement, was a violation of Section 302). But here, the
Parties do not dispute that the CBA called for pension
contributions and covered Delta’s employees.
Other cases that Delta relies upon involve a complete
absence of any written agreement between the employer and
a union—a point not at issue here, because, as the Parties
concede, the CBA, whose terms still bind the Delta and the
Union, clearly obligates Delta to make pension contributions
on behalf of its employees. See Moglia v. Geoghegan,
403 F.2d 110, 117–18 (2d Cir. 1968) (holding that
Section 302 was violated where “[a]ppellant conceded . . .
that at no time relevant . . . there was a collective bargaining
agreement or any written agreement” between the employer
and the union); R.V. Cloud Co., Inc. v. W. Conf. of Teamsters
Pension Trust Fund, 566 F. Supp. 1426, 1428–29 (N.D. Cal.
1983) (same); Carter v. CMTA-Molders & Allied Workers
Health & Welfare Tr., 563 F. Supp. 244, 247–48 (N.D. Cal.
1983) (holding that Section 302 was violated where there
was no written agreement and the pension contributions
were implied solely from the parties course of dealing).
Even Delta does not argue that it is not obligated to make
any pension contributions.
In Maxwell v. Lucky Constr. Co., 710 F.2d 1395, 1398
(9th Cir. 1983) and Waggoner v. Dallaire, 649 F.2d 1362,
1366 (9th Cir. 1981) we ruled that Section 302 cannot be
20 DELTA SANDBLASTING V. NLRB
satisfied by an oral modification of a written agreement, a
circumstance also not at issue here. See also Pierce Cty.
Hotel Emps. and Rest. Emps. Health Tr. v. Elks Lodge,
B.P.O.E. No. 1450, 827 F.2d 1324, 1328 (9th Cir. 1987)
(Section 302 prohibits oral modifications of prior written
agreement establishing benefit contributions); Nw. Adm’rs,
Inc. v. B.V. & B.R., Inc., 813 F.2d 223, 226–27 (9th Cir.
1987) (oral or tacit agreements are not considered when
interpreting the meaning of a pension contribution
agreement); Kemmis v. McGoldrick, 706 F.2d 993, 996–97
(9th Cir. 1983) (district court erred in using oral
understandings to interpret benefit provisions in labor
contract); San Pedro Fishermen’s Welfare Tr. Fund Local
33 v. Di Bernardo, 664 F.2d 1344, 1345 (9th Cir. 1982) (oral
modifications and strike settlement agreement did not
modify trust fund agreement). Joyce Sanders, the Delta
employee in charge of making pension contributions,
admitted that she paid the controverted contributions in
accordance with the written Schedule A, which Delta itself
produced.
Notably, many of the cases that Delta relies upon directly
contradict its inflexible reading of Section 302’s
requirements. See Paddack v. Dave Christensen, Inc.,
745 F.2d 1254, 1263–64 (9th Cir. 1984) (payments did not
violate Section 302 where collective bargaining agreement
did not “explicit[ly] incorporat[e]” trust agreements
containing pension contribution obligations, but employer’s
record of pension contributions demonstrated the intent of
the parties to be bound by trust agreements); Alvares v.
Erickson, 514 F.2d 156, 161 (9th Cir. 1975) (construing
collective bargaining agreement and referenced trust
agreement as one “contract” for purposes of LMRA);
Hinson, 428 F.2d at 139 (holding that Section 302 “does not
comprehend solely a collective bargaining agreement to the
DELTA SANDBLASTING V. NLRB 21
exclusion of any other possible written agreement”); Made 4
Film, Inc., 337 N.L.R.B. 1152, 1152 n.2 (2002) (rejecting
argument that pension contributions made pursuant to an
expired collective bargaining agreement violated Section
302). Even under Delta’s rigid view of Section 302’s
requirements, however, the written CBA at issue here, which
the Board correctly found incorporated the written Schedule
A, would pass muster.
Bricklayers, Masons and Plasterers International Union
of America, Local Union No. 15, Orlando, Florida v. Stuart
Plastering Co., Inc. (“Bricklayers”), 512 F.2d 1017 (5th Cir.
1975), another case cited by Delta, demonstrates the
awkwardness of Delta’s Section 302 defense under these
circumstances. In Bricklayers, the court ruled that, because
the applicable collective bargaining agreement required the
employer to make pension contributions, along with other
fringe benefits, to an unspecified “health and welfare fund,”
the agreement violated the LMRA. Id. at 1026, 1029. While
the collective bargaining agreement contained a payment
schedule, the court emphasized that the union had not set up
any kind of fund to receive pension benefits, and that union
officials had skimmed benefit contributions for their own
personal use. Id. at 1027–28, 1027 n.14. Importantly, the
court interpreted Section 302’s “written agreement”
requirement as primarily concerned with the trust fund’s
structure and documentation, rather than the amount of
payments to the trust fund: “[A]lthough the amount of
required payments may form the focus of a union’s interest
in fringe benefit funds, that limited perspective does not
epitomize the congressional concern that led to the
enactment of Section 302.” Id. at 1027 (emphasis added).
Rather, Section 302 was intended to prevent the “loose
management of fringe benefit funds,” id. at 1028, and to
“guarantee that payments made by employers were used to
22 DELTA SANDBLASTING V. NLRB
provide employees with the benefits to which they were
entitled under a collective bargaining agreement,” id.
at 1025.
Here, the purpose, destination, and mandatory nature of
the pension contributions are not at issue. The CBA
specifically designates the Pension Fund to receive Delta’s
pension contributions, and there is no dispute concerning the
Pension Fund’s structure, management, or conformity with
29 U.S.C. § 186(c)(5). Instead, Delta argues that
Section 302 shields it from paying into a duly constituted
Pension Fund the amounts that Delta itself once recognized,
and that we agree, were “mandatory”. We agree with the
Board’s rejection of Delta’s Section 302 defense and hold
that the CBA meets Section 302’s “written agreement”
requirement. 18
III. The Board’s conclusion that Delta committed an
unfair labor practice
We affirm the Board’s finding that Delta committed an
unfair labor practice. Section 8(a)(5) makes it unlawful “for
an employer . . . to refuse to bargain collectively with the
representatives of his employees.” 29 U.S.C. § 158(a)(5). A
violation of Section 8(a)(5) produces a derivative violation
of Section 8(a)(1). Local Joint Exec. Bd. of Las Vegas v.
NLRB, 540 F.3d 1072, 1078 n.8 (9th Cir. 2008).
When a collective bargaining agreement expires, its
terms remain in effect by operation of law, defining the
status quo as to wages and working conditions. Litton,
18
Because we affirm the Board based on our conclusion that the
CBA satisfies Section 302, we do not decide today whether the
Rehabilitation Plan, on its own, would have satisfied Section 302.
DELTA SANDBLASTING V. NLRB 23
501 U.S. at 198; NLRB v. Carilli, 648 F.2d 1206, 1214 (9th
Cir. 1981); see also Triple A Fire Prot., Inc., 315 N.L.R.B.
409, 414 (1994). An employer must maintain the status quo
until it agrees on a new contract with the Union or the
bargaining parties reach a good-faith impasse. Litton,
501 U.S. at 198. “Because contributions to an employee
pension trust fund constitute a mandatory bargaining
subject, an employer may not make unilateral changes in
pension fund contributions.” Am. Distrib. Co. v. NLRB,
715 F.2d 446, 449 (9th Cir. 1983); see also Laborers Health
& Welfare Tr. Fund for N. Cal. v. Advanced Lightweight
Concrete Co., 779 F.2d 497, 500 (9th Cir. 1985).
Here, it is undisputed that, as of the expiration of the
CBA and pursuant to Schedule A, Delta made monthly
pension contributions at a rate of $9.78. In March 2016,
without previous notice or bargaining, Delta decreased its
pension contribution rate to $1.95. Delta clearly committed
an unlawful labor practice when it lowered its pension
contributions without notifying or bargaining with the
Union.
CONCLUSION
The Board’s rejection of Delta’s claim that Section 302
prevents it from making pension contributions according to
Schedule A was sound as a matter of law and supported by
substantial evidence in the record. Likewise, its conclusion
that Delta’s failure to notify or bargain with the Union before
decreasing its pension contribution was an unfair labor
practice was correct. Accordingly, we DENY Delta’s
petition for review and GRANT the Board’s application for
enforcement.
PETITION DENIED, APPLICATION GRANTED.
BUMATAY, Circuit Judge, dissenting:
Contrary to the findings of the administrative law judge,
the National Labor Relations Board found an undated,
unsigned, standalone document with contested origins
enforceable against Delta Sandblasting Company, Inc. in a
labor dispute with its union. Given its suspect provenance
and the lack of any traditional indicia of contract formation
here, the Board’s conclusion is questionable to say the least.
Yet, the Board’s decision is ultimately entitled to deference,
see 29 U.S.C. § 160(e), and I respect its ability to make this
determination. I nonetheless dissent because, as our
precedent shows, the Board owes a reasoned explanation for
its departure from the ALJ’s findings and it fell far short of
that here.
I.
We uphold the Board’s orders only if it “correctly
applied the law and its factual findings are supported by
substantial evidence.” Glendale Assocs., Ltd. v. NLRB¸
347 F.3d 1145, 1151 (9th Cir. 2003). “Substantial evidence
is more than a mere scintilla, but less than a preponderance.”
NLRB v. Int’l Bhd. of Elec. Workers, Local 48, AFL CIO,
345 F.3d 1049, 1053–54 (9th Cir. 2003) (simplified).
“Our review is more searching in instances where the
Board’s findings or conclusions are contrary to those of the
ALJ.” Plaza Auto Ctr., Inc. v. NLRB, 664 F.3d 286, 291 (9th
Cir. 2011); see also Penasquitos Vill., Inc. v. NLRB,
565 F.2d 1074, 1078 (9th Cir. 1977) (“[E]ven when the
record contains independent, credited evidence supportive of
the Board’s decision, a reviewing court will review more
critically the Board’s findings of fact if they are contrary to
the administrative law judge’s factual conclusions.”). This
is because “when taken alone,” evidence may be
“substantial” and, therefore, support the Board’s decision,
DELTA SANDBLASTING V. NLRB 25
but it is often insufficient when “the trial examiner has, on
the basis of the witnesses’ demeanor, made credibility
determinations contrary to the Board’s position.”
Penasquitos Vill., 565 F.2d at 1078. Accordingly, the
Board’s findings may not be supported by “substantial
evidence” when “an impartial, experienced examiner who
has observed the witnesses and lived with the case has drawn
conclusions different from the Board’s.” Plaza Auto Ctr.,
664 F.3d at 291 (citing Universal Camera Corp. v. NLRB,
340 U.S. 474, 496 (1951)).
When the Board has disagreed with the ALJ’s
conclusions or findings, we have remanded to the Board to
provide “a reasoned explanation” for its rejection of the
ALJ’s credibility and factual findings. Plaza Auto Ctr.,
664 F.3d at 295; see also Traction Wholesale Ctr. Co. v.
NLRB, 216 F.3d 92, 101 (D.C. Cir. 2000) (“Of course, the
Board is free to substitute its judgment for the ALJ’s, but
when the Board reverses an ALJ it must make clear the basis
of its disagreement.”) (simplified); cf. Maka v. INS, 904 F.2d
1351, 1355 (9th Cir. 1990) (“When the [agency] rejects the
credibility findings of the ALJ, it must state its reasons for
doing so, and the reasons must be based on substantial
evidence.”) (simplified). Without this explanation, we are
left with large gaps in the Board’s reasoning and cannot
satisfy our duty to ensure “substantial evidence” supports its
conclusions in light of the whole record.
II.
Delta is a small, family-run business with between 6 and
15 employees. It performs marine sandblasting and painting
services in the San Francisco Bay Area. Its past president
and owner was James “Bobby” Sanders, Sr., and its treasurer
and secretary was his wife, Joyce Sanders. When Bobby Sr.
passed away in May 2016, his son, Bob Sanders, Jr., took
26 DELTA SANDBLASTING V. NLRB
over as president of the company. Delta’s workers are
represented by Auto, Marine & Specialty Painters Local
1176 (the “Union”) with José Santana as one of its directors.
Beginning in 2008, Delta and the Union entered a collective
bargaining agreement (or “CBA”) setting the terms of
wages, pensions, health benefits and other conditions. The
agreement expired on August 31, 2015.
Delta and the Union agree on several aspects of the
agreement. First, both understand that Delta is obligated to
contribute to the Union’s pension fund under the agreement.
Next, both concur that that pension rate is governed by a
“Wage Schedule ‘A’” incorporated into the agreement.
Finally, they both agree that, in December 2014, they
renegotiated certain terms of the agreement to cover the
period between December 1, 2014 and August 31, 2015.
Disagreements begin from here. On one side, Delta
argues that the December 2014 agreement altered only wage
rates, not pension rates, so its pension contribution remained
set by the original 2008 Schedule A (the “2008 Schedule
A”). This 2008 Schedule A calls for a pension rate of $1.95
per hour. On the other hand, the Union contends that Delta
agreed to a new pension rate, incorporated through a new
Schedule A (the “2014 Schedule A”), which set pension
rates at $8.18 for 2014 and $9.78 for 2015.
The question of whether the 2014 Schedule A was
incorporated into the CBA is central to this case. Under the
Board’s rationale, the answer determines whether Delta
engaged in unfair labor practices by reducing its pension
contribution to $1.95 in March 2016. If the parties never
agreed to the 2014 Schedule A, then requiring Delta to pay
the increased pension rates might violate § 302 of the Labor
Management Relations Act. Under that law, employer
contributions to a labor organization are forbidden unless a
DELTA SANDBLASTING V. NLRB 27
written agreement specifies the basis on which the payments
are made. 29 U.S.C. § 186(c)(5)(B). Accordingly, the
Schedule A’s incorporation is a necessary predicate for Delta
owing the Union the higher pension rates.
A.
The battle of the Schedule As was front and center before
the ALJ. At the outset, Santana’s testimony was used to
introduce and validate the 2014 Schedule A as part of the
overall contract. But Delta immediately challenged the
document’s authenticity and incorporation into the CBA. 1
In response, the ALJ explicitly recognized that the
incorporation of the 2014 Schedule A was squarely “an issue
of credibility” and she would “figure . . . out” the “question
of competing documents.”
The ALJ heard testimony from Santana, who explained
that he created the 2014 Schedule A and, although Sanders
Sr. did not sign or initial the document, he agreed to it at a
December 2014 meeting. The ALJ also presided over the
testimonies of Sanders Jr., who directly denied the new
Schedule A’s incorporation, and Ms. Sanders, who
explained she had received the new Schedule A from her
husband, but it was not attached to the renegotiated CBA.
In the end, the ALJ rejected the Union’s contention that
the 2014 Schedule A’s increased pension rates were
incorporated into the CBA. In her detailed findings of fact,
the ALJ observed that Delta was obligated to contribute to
the pension fund “[p]ursuant to the Expired Contract,” and
1
After Delta’s objection, the General Counsel of the Board admitted
that the Schedule A was produced separately from the overall contract
but sought to admit them together as one.
28 DELTA SANDBLASTING V. NLRB
held “[s]pecifically, the agreement [. . .] provides for a base
contribution rate of $1.95 per hour”—the contribution rate
of the original 2008 Schedule A. Accordingly, the ALJ
unambiguously found that the 2014 Schedule A was neither
incorporated into the CBA nor binding on Delta. Otherwise,
the ALJ would have necessarily concluded that the base
pension rates were $8.18 in 2014 and $9.78 in 2015—not
$1.95. So true to her word, the ALJ resolved the “question
of the competing documents.” 2
The ALJ expressly noted that the above findings
incorporated her credibility determinations. Although not
explicitly discrediting Santana’s version of events, the ALJ
ignored his claim that Sanders Sr. agreed to the 2014
Schedule A. In fact, the ALJ’s opinion doesn’t mention the
2014 Schedule A at all. If the ALJ found Santana believable
on this front, then the higher pension rate would have
necessarily been mandated by the new agreement. Notably,
the ALJ expressly discredited Santana’s testimony regarding
a subsequent contract negotiation with Delta that occurred
only two months after the December 2014 meeting.
On appeal, the Board reversed the ALJ’s finding and
concluded that the 2014 Schedule A’s rates were in fact
“incorporated into the 2008–2015 CBA.” Delta
Sandblasting Co., Inc., 367 N.L.R.B. No. 17, slip op. at 2
(2018). The Board devoted only a single footnote to explain
this finding. Id. at n.6. The Board relied on Santana’s
2
The ALJ ultimately found on behalf of the Union, explaining that,
regardless of the CBA’s obligations, Delta was still required to pay the
higher pension rates because of a mandatory rehabilitation plan adopted
by the pension to alleviate its critical underfunded status. The Board
disagreed with this rationale. Accordingly, I do not address the ALJ’s
legal conclusion here—only its factual finding that the 2014 Schedule A
was not incorporated into the CBA.
DELTA SANDBLASTING V. NLRB 29
testimony that he “inserted” the 2014 Schedule A into the
contract, and that Sanders Sr. executed it afterwards. The
Board also relied on Ms. Sanders testimony that she was
“familiar” with the 2014 Schedule A and identified it as a
“rate sheet,” which contained the amounts that Delta was
required to pay. Id. The Board acknowledged the unusual
circumstance that the rate sheet was unattached to the CBA
and that Sanders Sr. “simply handed” it to Ms. Sanders, but
believed that her “identification of [the 2014] Schedule A as
. . . containing the pension contribution . . . paid by [Delta]
bolster[ed] the conclusion that . . . [Delta] treated [it] as part
of its collective-bargaining agreement with the Union.” Id.
Instead of raising a red flag, the Board found that the 2014
Schedule A’s storage as a “stand-alone document” supported
Santana’s contention that it was a “rate sheet that could be
inserted into the contract.” Id. (emphasis added). 3
The Board’s footnote didn’t acknowledge that it was
rejecting the ALJ’s conclusion regarding the base pension
rate. Making matters more perplexing, the Board apparently
didn’t even realize it was reversing the ALJ’s conclusion.
Instead, it inexplicably claimed it was “affirm[ing] the
[ALJ’s] finding” on the incorporation of the 2014 Schedule
A’s pension rates. Id. This could not be so since the ALJ
didn’t even mention the 2014 Schedule A in her ruling.
As the majority acknowledges, by its own established
policy, the Board should not overrule an ALJ’s credibility
3
It is odd that the Board predicated its finding of incorporation on
the underwhelming testimony that the document “could” be inserted into
the contract. Nor does it address the obvious contradiction in its findings
between Santana saying that he “inserted” the 2014 Schedule A into the
contract and his belief that it merely “could be inserted.” The Board also
didn’t explain why it chose to credit Santana, when the ALJ explicitly
discredited him in other aspects of his testimony.
30 DELTA SANDBLASTING V. NLRB
findings unless the “clear preponderance of all the relevant
evidence” convinces the Board that the ALJ was incorrect.
Anja Engineering Corp. v. NLRB, 685 F.2d 292, 295 n.8 (9th
Cir. 1982); cf. Andrzejewski v. FAA, 563 F.3d 796, 799 (9th
Cir. 2009) (“Where an ALJ chooses to credit one set of
witnesses’ version of events over another, he has made an
implicit credibility determination to which the NTSB must
defer ‘in the absence of any arbitrariness, capriciousness or
other compelling reasons.’”). Here, the Board overturned
the ALJ’s express finding that the agreement’s base pension
rate was $1.95. And it did so without even acknowledging
the ALJ’s finding, let alone explaining how the “clear
preponderance” of all the evidence shows the ALJ was
wrong. Accordingly, in rejecting the ALJ’s finding without
explanation, the Board violated its own policy. This alone
warrants a remand.
While I’m ultimately agnostic as to whether Delta agreed
to the 2014 Schedule A, the Board’s footnote explanation
falls far short of the “reasoned explanation” expected here.
See Plaza Auto Ctr., 664 F.3d at 295. Accordingly, I would
grant the petition and remand to the Board to reassess its
conclusion in light of the ALJ’s express finding regarding
the base pension rate of the CBA.
B.
Perhaps acknowledging the weaknesses of the Board’s
justification, the majority bolsters the case with additional
facts and inferences not relied on by the Board itself. See,
e.g., Maj. Op. at 12–13 (relying on (1) Santana’s second-
hand account of Sanders Sr.’s instructions to him regarding
the 2014 Schedule A; (2) an ambiguous email from
Ms. Sanders referring to a “new contract” with a “new rate”
DELTA SANDBLASTING V. NLRB 31
as of December 1, 2014; 4 and (3) testimony from Sanders
Jr. that a new agreement was reached in 2014). Much of this
evidence is unexceptional as it is uncontested that Delta and
the Union entered into a renewed contract beginning on
December 1, 2014; the point of contention here is whether
new pension rates were made part of that agreement.
More importantly, however, it was the Board’s duty, not
ours, to scour the record and apportion probative weight to
the competing evidence. NLRB v. Reeves Rubber Co.,
153 F.2d 340, 342 (9th Cir. 1946) (“[The] Board tries the
facts and the reviewing court goes into facts only to find
whether or not, as a matter of law, there is substance to the
evidence upon which the Board has made its findings.”).
Yet, the majority does so anyway, retrying the case by
balancing the evidence at hand. But in doing so, it dismisses
inconvenient facts as “minor flaws,” such as Santana’s
inexplicable claim that Sanders Sr. asked Santana to initial
the new Schedule A, but failed to do so himself. Maj. Op.
at 13. And it overlooks odd explanations such as Santana’s
assertion that he created the new contract with the 2014
Schedule A, but that his assistant forgot to put a page number
on the new document and that he doesn’t know why it wasn’t
4
I find the majority’s reliance on this evidence particularly
perplexing. If the majority speculates that the email’s reference to a
“new rate” shows that Delta agreed to pay an increased pension rate on
December 1, 2014, that would make no sense. Delta had been paying
the same Schedule A pension rate of $8.18 since April 2014—over eight
months at the time. Accordingly, there was no pension rate change on
December 1, 2014, regardless of whether the new Schedule A was
incorporated. On the other hand, if Delta’s version of events was true—
that Sanders Sr. agreed to a new wage rate at the December 2014
meeting, then this email could just as easily be referring to a new wage
rate, which would bolster Delta’s position, not the Union’s. But our
speculations are no substitute for the Board’s consideration of this
evidence in the first instance.
32 DELTA SANDBLASTING V. NLRB
included with the signed version of the CBA sent to Delta.
The majority also doesn’t acknowledge Santana’s admission
that the “only real issue” in the December 2014 agreement is
“wages”—not pension rates. Moreover, while the majority
readily accepts the testimony of Santana, whom the ALJ
explicitly discredited in other aspects of his testimony, it
completely discounts Sander Jr.’s emphatic testimony that
the new pension rates were not part of the December 2014
deal. Maj. Op. at 16.
To be clear, my concern with the majority’s approach
does not stem from disagreements with the inferences it
draws. For example, I agree that Sanders Sr. had every
reason to sign onto the new Schedule A since Delta was
already paying the increased pension rates under the
(allegedly mistaken) belief it was mandated by the pension
fund’s rehabilitation plan. Maj. Op. at 13 n.11. But,
“[u]nless a trier of fact does the balancing, courts on appeal
can only speculate.” Deutscher v. Whitley, 991 F.2d 605,
607 (9th Cir. 1993), superseded on reh’g sub nom.
Deutscher v. Angelone, 16 F.3d 981 (9th Cir. 1994).
I point to the flaws in the evidence here only to
demonstrate that we, as appellate reviewers, shouldn’t
engage in this type of evidentiary balancing in the first
instance. Regardless of our own views of the evidence, the
Board’s decision should stand on its own. Instead, the
majority’s defense of the Board’s decision violates the
“well-established [rule] that an agency’s action must be
upheld, if at all, on the basis articulated by the agency itself.”
United Steel Workers of Am. AFL-CIO-CLC v. NLRB,
482 F.3d 1112, 1116 (9th Cir. 2007) (simplified). While the
majority certainly makes a stronger case than the Board, that
is not our role. We should have remanded to require the
Board to better explain its conclusions.
DELTA SANDBLASTING V. NLRB 33
***
The Board failed to adequately address its rejection of
the ALJ’s findings here. By not doing so, it violated its own
policy. Given these serious problems, our court should not
be giving our imprimatur to the Board’s decision. For this
reason, I respectfully dissent.