Nat'l Labor Relations Bd. v. Ingredion Inc. , 930 F.3d 509 ( 2019 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 6, 2019 Decided July 19, 2019
No. 18-1155
NATIONAL LABOR RELATIONS BOARD,
PETITIONER
v.
INGREDION INCORPORATED, D/B/A PENFORD PRODUCTS CO.,
RESPONDENT
LOCAL 100G, BAKERY, CONFECTIONERY, TOBACCO WORKERS
AND GRAIN MILLERS INTERNATIONAL UNION, AFL-CIO, CLC,
INTERVENOR
Consolidated with 18-1244
On Petition for Review and Cross-Application
for Enforcement of an Order of
the National Labor Relations Board
Brian J. Paul argued the cause for petitioner Ingredion
Incorporated. With him on the briefs were Stuart R. Buttrick,
Ryan J. Funk, Jeffrey P. Justman, and Kyle J. Essley.
Eric Weitz, Attorney, National Labor Relations Board,
argued the cause for respondent National Labor Relations
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Board. With him on the brief were Peter B. Robb, General
Counsel, David S. Habenstreit, Assistant General Counsel, and
Usha Dheenan, Supervisory Attorney.
Before: ROGERS, SRINIVASAN, and WILKINS, Circuit
Judges.
Opinion for the court by Circuit Judge ROGERS.
ROGERS, Circuit Judge: Ingredion, Inc. petitions for
review of the Decision and Order of the National Labor
Relations Board on the ground that five of the Board’s findings,
including that Ingredion violated the National Labor Relations
Act (“the Act”) by dealing directly with employees and
denigrating a union in the eyes of employees, are unsupported
by substantial evidence. We conclude that Ingredion fails to
meet its burden in this regard. We further conclude that
Ingredion’s contentions that the Board violated its due process
rights and improperly imposed a notice-reading remedy lack
merit. Accordingly, we deny the petition and grant the Board’s
cross-application for enforcement of its Order.
I.
Ingredion is a multinational corn starch manufacturing
company. In March 2015, it acquired a corn processing plant
in Cedar Rapids, Iowa. Approximately 165 of the plant’s
employees were represented by a local division of the Bakery,
Confectionery, Tobacco Workers, and Grain Millers
International Union, AFL-CIO (“the Union”). Ingredion
recognized the Union and assumed the existing collective
bargaining agreement (“CBA”), which was scheduled to expire
on August 1, 2015. On June 1, 2015, Ingredion and the Union
commenced negotiations for a new CBA. The Union proposed
to modify the existing CBA in several ways. Ingredion
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proposed to start from scratch with an entirely new CBA in
both substance and form. The parties had not reached an
agreement as of August 18, when Ingredion declared that they
were at impasse and presented its “last, best, and final offer.”
After rejecting the Union’s counteroffer of September 10,
Ingredion unilaterally implemented the terms of its final offer
on September 14, 2015. Ten days later, the Union filed charges
with the Board alleging that Ingredion had engaged in
numerous unfair labor practices proscribed by Section 8(a)(1)
and (5) of the Act, 29 U.S.C. § 158(a)(1), (5). The Board’s
General Counsel issued a complaint against Ingredion in
January 2016.
Section 8(a)(1) and Section 8(a)(5) define unfair labor
practices in overlapping terms. Section 8(a)(1) provides that it
is “an unfair labor practice for an employer to interfere with,
restrain, or coerce employees in the exercise of” their right to
bargain collectively. Id. § 158(a)(1). Section 8(a)(5) provides
that it is “an unfair labor practice for an employer to refuse to
bargain collectively with the representatives of his employees.”
Id. § 158(a)(5). Because a refusal to bargain necessarily
interferes with bargaining, “an employer who violates section
8(a)(5) also, derivatively, violates section 8(a)(1).” Exxon
Chem. Co. v. NLRB, 386 F.3d 1160, 1164 (D.C. Cir. 2004).
An administrative law judge determined, after conducting
an evidentiary hearing, that Ingredion had committed several
violations of Section 8(a). As relevant here, the ALJ found that
Ingredion had violated Section 8(a)(1) by “denigrating the
Union” in the eyes of employees and by “threatening
employees that they would lose their jobs if they went on
strike.” Ingredion, Inc., No. 18-CA-160654, slip op. at 58–59,
2016 WL 4501993 (NLRB Div. of Judges Aug. 26, 2016)
(“ALJ Decision”). He further found that Ingredion had violated
Section 8(a)(5) (and, derivatively, Section 8(a)(1)) by dealing
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with employees directly rather than through the Union, by
unilaterally implementing new terms and conditions of
employment without first reaching an overall impasse in
bargaining, and by failing to respond in a timely manner to a
Union request for information. Id. at 58.
The Board affirmed with respect to all five violations.
Ingredion, Inc., 366 NLRB No. 74, slip op. at 1–2 & nn.1–3
(May 1, 2018) (“Decision”). It directed Ingredion to cease and
desist from its violations of the Act, rescind the unilaterally
implemented terms and conditions of employment, and
compensate employees for losses incurred as a result of its
violations. Id. at 2–3 (“Order”). In addition, the Board ordered
Ingredion to have its chief negotiator, Ken Meadows, read a
notice describing these remedies to assembled employees “or
permit a Board agent, in the presence of Meadows and other
corporate officials responsible for labor relations, to read the
notice to employees.” Id. at 3. One Board Member dissented
from the latter portion of the Order. See Decision at 1 n.2.
II.
The Board’s factual findings are conclusive “if supported
by substantial evidence on the record considered as a whole.”
29 U.S.C. § 160(e); see, e.g., Elastic Stop Nut Div. of Harvard
Indus., Inc. v. NLRB, 921 F.2d 1275, 1279 (D.C. Cir. 1990)
(citing Universal Camera Corp. v. NLRB, 340 U.S. 474, 487–
88 (1951)). Substantial evidence “means such relevant
evidence as a reasonable mind might accept as adequate to
support a conclusion.” E.g., Universal Camera, 340 U.S. at
477 (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229
(1938)); King Soopers, Inc. v. NLRB, 859 F.3d 23, 29 (D.C.
Cir. 2017). The court, consequently, must affirm the Board’s
findings unless “no reasonable factfinder” could find as it did.
Alden Leeds, Inc. v. NLRB, 812 F.3d 159, 165 (D.C. Cir. 2016)
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(quoting Bally’s Park Place, Inc. v. NLRB, 646 F.3d 929, 935
(D.C. Cir. 2011)). The court’s assessment of the Board’s
decision occurs in light of Congress’s broad delegation to the
Board to carry out the Act, see, e.g., NLRB v. Curtin Matheson
Sci., Inc., 494 U.S. 775, 786 (1990); Allied Mech. Servs., Inc.
v. NLRB, 668 F.3d 758, 764–65 (D.C. Cir. 2012), and
recognition that matters involving the interpretation of
incidents between management and labor will often turn on the
Board’s assessment of events in light of its expertise in the area
of labor relations, see, e.g., Republic Aviation Corp. v. NLRB,
324 U.S. 793, 800 (1945); United Servs. Auto. Ass’n v. NLRB,
387 F.3d 908, 913 (D.C. Cir. 2004).
1. Direct dealing. The Board found that Ingredion
engaged in direct dealing with employees when its chief
negotiator, Ken Meadows, first visited the plant on April 6,
2015. Decision at 1 n.1. Ingredion acknowledges that
Meadows spoke to at least five employees during that visit but
maintains that his “impromptu conversations” with them were
too “brief and general” to constitute direct dealing. See Pet’r’s
Br. 38–41.
Section 9(a) of the Act obligates an employer to treat union
officials as “the exclusive representatives of [its] employees.”
29 U.S.C. § 159(a). The Supreme Court has held that this
obligation includes “the negative duty to treat with no other.”
Medo Photo Supply Corp. v. NLRB, 321 U.S. 678, 683–84
(1944) (quoting NLRB v. Jones & Laughlin Steel Corp., 301
U.S. 1, 44 (1937)). It is therefore “an infringement of the Act
for the employer to disregard the bargaining representative by
negotiating with individual employees, whether a majority or a
minority, with respect to wages, hours and working
conditions.” Id. at 684.
 6
Under Board precedent, an employer violates Section
8(a)(1) and (5) of the Act if it “attempt[s] to arm itself for
upcoming negotiations” by directly “soliciting the sentiment of
the employees on a subject to be discussed at the bargaining
table.” Harris-Teeter Super Mkts., Inc., 310 N.L.R.B. 216, 217
(1993); see Obie Pac., Inc., 196 N.L.R.B. 458, 458–59 (1972).
For example, the employer in Harris-Teeter exercised a
contractual right to temporarily change its employees’ work
schedule amid ongoing negotiations with the union and then
asked the employees if they “liked the change” or had other
comments about it. 310 N.L.R.B. at 216. The Board held that
this solicitation of employee views on a subject of negotiation
violated Section 8(a)(1) and (5) because it “usurp[ed] the
[u]nion’s function.” Id. at 217.
The record shows that less than two months before the start
of negotiations with the Union over a new collective bargaining
agreement, Meadows spent approximately 25 minutes
speaking with employees about subjects that were to be
addressed during the negotiations. He criticized the work
schedules and health insurance benefits provided by the
existing CBA and asked what the employees hoped to see in a
new agreement. They expressed interest in a wage raise of 3 to
3.5 percent, an increased pension multiplier, different work
schedules, more vacation days, and health insurance coverage
for early retirees. Meadows told the employees that any wage
increase would be “in the range of 2 to 2.5 percent,” that the
health insurance policy would be changed, and that the pension
multiplier would not be increased because “pensions were a
thing of the past and ‘would probably be going away.’” ALJ
Decision at 7, 37–38 (quoting Hr’g Tr. 61 (Apr. 18, 2016)).
Employees who had worked at the plant and been represented
by the Union for decades testified that they had never had a
manager or supervisor approach them to discuss contract
negotiations prior to Ingredion’s takeover of the plant.
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Ingredion does not dispute that Meadows had direct
contact with employees and solicited their views about key
terms in soon-to-be-commenced bargaining with the Union.
Whether such contact is too brief or informal to constitute a
violation of Section 8(a)(1) and (5) is the type of on-the-ground
assessment that “implicates [the Board’s] expertise in labor
relations,” United Servs., 387 F.3d at 913 (alteration in
original) (quoting NLRB v. City Disposal Sys., Inc., 465 U.S.
822, 829 (1984)). Ingredion points to nothing in the record
considered as a whole that would cause the court to doubt the
reasonableness of the Board’s finding. The Board’s finding
rests on substantial evidence that Meadows’ conduct
“undermine[d] the exclusive agency relationship” between the
Union and its members, Obie Pac., 196 N.L.R.B. at 459,
illustrating one of the ills Congress sought to guard against by
enacting Sections 8(a) and 9(a) of the Act, 29 U.S.C. §§ 158(a),
159(a).
2. Denigration of the Union. The Board found that one
of Ingredion’s managers unlawfully denigrated the Union in
the eyes of employees by falsely representing that it was
unwilling to negotiate on certain subjects. See Decision at 1
n.1. Ingredion contends that the manager did not violate the
Act because he made only “a non-actionable statement of
opinion, not a ‘threat of reprisal or force or promise of
benefit.’” Pet’r’s Br. 44 (quoting NLRB v. Gissel Packing Co.,
395 U.S. 575, 618 (1969)).
Section 8(a)(1) of the Act makes it unlawful for an
employer to “interfere with, restrain, or coerce employees”
with respect to collective bargaining. 29 U.S.C. § 158(a)(1).
Section 8(c), however, permits an employer to express a
“view[], argument, or opinion” about bargaining so long as it
does not threaten or coerce the employees. Id. § 158(c). In
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Gissel Packing, 395 U.S. at 620, the Supreme Court
distinguished the statements of opinion protected under Section
8(c) from “coercive . . . overstatements” that an employer “has
reason to believe will mislead his employees.”
The Board has held that an employer violates Section
8(a)(1) by “misrepresent[ing] the [u]nion’s bargaining
positions” in a way that “tends to undermine” employee
support for the union. Miller Waste Mills, Inc., 334 N.L.R.B. 466,
467–68 (2001), enforced, 315 F.3d 951 (8th Cir. 2003); see
Faro Screen Process, Inc., 362 N.L.R.B. 718, 718–19 (2015). In
Miller Waste Mills, for example, the employer sent employees
a letter that “blamed the [u]nion for preventing the employees
from receiving their customary annual wage increase,” 334
N.L.R.B. at 467, even though the employer “believed that the
[u]nion had given its blessing to a wage increase,” id. at 479.
The Board ruled that the letter violated Section 8(a)(1) because
it caused the employees to lose faith in their union
representatives and thus interfered with their ability to bargain
collectively. Id. at 467.
The record shows that Ingredion’s manager told an
employee in early July not to sign his retirement papers because
“there was a better contract coming” and he “would like the
retirement that [Ingredion] was going to propose.” ALJ
Decision at 30. The manager also told the employee not to “let
a few people in the union body sway what [he] want[ed] to do.”
Id. (quoting Hr’g Tr. 727 (Apr. 21, 2016)). The manager
claimed that Ingredion’s chief labor negotiator, Meadows, had
given him permission to discuss the topic with employees. Id.
The record further shows that shortly after speaking with
the first employee, this manager approached another employee
who was considering retirement and told him to contact his
union representatives and “have them get a hold of the
9
company and start negotiating.” Id. (quoting Hr’g Tr. 740 (Apr.
21, 2016)). In fact, the parties had already held three
bargaining sessions and had scheduled additional sessions for
the entire week of July 27. Id. at 11–13. The manager told this
second employee the “pension is negotiable, the hours, wages
are negotiable, everything is negotiable.” Id. at 30 (quoting
Hr’g Tr. 740). The second employee testified that after
conferring with the first employee, he concluded that Ingredion
had “‘a lot to give’” them, that “the Union was not telling
[them] everything,” and that the parties “needed to get together
and negotiate.” Id. at 31 (quoting Hr’g Tr. 741).
Ingredion’s contention that the manager’s statements were
non-threatening, see Pet’r’s Br. 44, misunderstands the nature
of its violation. The Board did not find that the statements were
threatening, but rather that they were misleading. See Decision
at 1 n.1. The record evidence supports the Board’s finding that
Ingredion violated Section 8(a)(1) by misrepresenting the
Union’s position in a way that tended to cause employees to
lose faith in the Union.
3. Impasse. The Board found that Ingredion violated
Section 8(a)(1) and (5) of the Act by unilaterally implementing
new terms and conditions of employment when “the parties had
not reached an overall impasse in bargaining.” Id. at 1.
Ingredion contends that it bargained with the Union to a valid
impasse over a single issue, namely the format of the new
CBA. See Pet’r’s Br. 20–22. Here, Ingredion simply ignores
record evidence to the contrary.
It is well established that “an employer commits an unfair
labor practice if, without bargaining to impasse, it effects a
unilateral change of an existing term or condition of
employment.” Litton Fin. Printing Div. v. NLRB, 501 U.S.
190, 198 (1991); see, e.g., Wayneview Care Ctr. v. NLRB, 664
10
F.3d 341, 347 (D.C. Cir. 2011). An impasse occurs “when
‘good faith negotiations have exhausted the prospects of
concluding an agreement.’” Wayneview, 664 F.3d at 347
(quoting Taft Broad. Co., 163 N.L.R.B. 475, 478 (1967)). A party
claiming impasse based on a single critical issue has the burden
of showing “there can be no progress on any aspect of the
negotiations until the impasse relating to the critical issue is
resolved.” Id. at 350 (quoting CalMat Co., 331 N.L.R.B. 1084,
1097 (2000)).
The record shows that although the Union’s proposals
used the format of the existing CBA and Ingredion’s proposals
used a different format, this did not prevent the parties from
proceeding to negotiate and reach agreement on some material
issues. For example, the Union added to its June 29 proposal
certain provisions initially proposed by Ingredion regarding
union elections, seniority, and paid time off. Compare Union
Proposal of June 29, art. II, §§ 2, 4; art. V, § 1; art. VIII, § 3,
with Ingredion Proposal of June 1, art. III, §§ 1, 3; art. V, § 1;
art. XIV, § 4. Similarly, Ingredion added to its July 28 and 29
proposals certain elements of the existing CBA that the Union
wanted to retain. Compare Ingredion Proposal of July 28, art.
XX, § 3, and Ingredion Proposal of July 29, art. XI, §§ 5–6,
with CBA art. IV, §§ 11–12; art. X, § 1(g). In addition, the
parties created and exchanged summaries that compared the
substantive terms of their proposals despite the differences in
format. Moreover, at the time Ingredion declared impasse,
major economic issues had received little attention from the
parties: Ingredion had made only a single wage proposal, the
Union had not made “any specific proposal regarding wages,”
and there had “been relatively little discussion regarding other
important economic issues such as health insurance and
retirement benefits.” ALJ Decision at 48. For that reason, the
Board concluded that “further discussion of the substantive
terms may well have resulted in the parties compromising with
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respect to the format and language of a new agreement.” Id. A
review of the record as a whole, then, shows substantial
evidence to support the Board’s finding that although the
format of the new contract was a “major issue[],” id., it did not
create an overall impasse, see Decision at 1 (adopting ALJ
Decision at 47–49).
4. Delay in providing requested information. Ingredion
promptly responded to most of the Union’s requests for
information but took eleven weeks to provide three items of
pension-related information. The Board found that this delay
was unreasonable and therefore violated Section 8(a)(1) and
(5). See id. at 1 n.1. Ingredion maintains that it “made a
‘reasonable good-faith effort’” to produce the items “‘as
promptly as circumstances allow[ed].’” Pet’r’s Br. 48
(alteration in original) (quoting Good Life Beverage Co., 312
N.L.R.B. 1060, 1062 n.9 (1993)).
“The duty to bargain collectively” imposed by Section
8(a)(5) “includes a duty to provide relevant information needed
by a labor union for the proper performance of its duties as the
employees’ bargaining representative.” Detroit Edison Co. v.
NLRB, 440 U.S. 301, 303 (1979). “An employer violates the
Act not only by refusing to provide such relevant information
but also by not providing it in a timely manner.” Brewers &
Maltsters, Local Union No. 6 v. NLRB, 414 F.3d 36, 45 (D.C.
Cir. 2005). Under Board precedent, an unjustified delay of
seven weeks may constitute a violation of Section 8(a)(1) and
(5). See, e.g., Woodland Clinic, 331 N.L.R.B. 735, 737 (2000);
Bundy Corp., 292 N.L.R.B. 671, 672 (1989).
The record shows that Ingredion’s contemporaneous
explanation for the delay differs from the explanation it
presented to the court. Meadows did not tell the Union that the
information would be difficult or time-consuming to retrieve,
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see Pet’r’s Br. 48, 50, but rather that Ingredion might not
provide pension-related information because it intended to
discontinue the existing pension plan. See ALJ Decision at 12.
This was not a valid reason for delaying compliance with an
information request; regardless of what Ingredion intended, it
had an obligation to provide the information in a timely manner
because it was relevant to the Union’s proposals. See Country
Ford Trucks, Inc. v. NLRB, 229 F.3d 1184, 1191 (D.C. Cir.
2000). Given Ingredion’s inadequate and changing
explanation for the delay, the Board was entitled to conclude
that the delay was unreasonable. See Decision at 1 n.1
(adopting ALJ Decision at 36–37).
5. Threats of job loss. The Board found that Ingredion
violated Section 8(a)(1) of the Act when one of its managers
told employees discussing a potential strike, “You boys, you
might want to think long and hard about walking out on these
people. They’ve got the deep pockets and lots of plants that
make the same thing you do. You may not get back in the door
if you go out.” ALJ Decision at 32 (quoting Hr’g Tr. 38 (Apr.
18, 2016)). Ingredion characterizes this as “a truthful statement
that one potential consequence of a strike is job loss.” Pet’r’s
Br. 47.
Although an employer may communicate “what [it]
reasonably believes will be the likely economic consequences”
of a labor strike, Gissel Packing, 395 U.S. at 619, it violates
Section 8(a)(1) if it makes “coercive statements that threaten
employees with job loss or plant closure in retaliation for
protected union activities,” Care One at Madison Ave., LLC v.
NLRB, 832 F.3d 351, 360 (D.C. Cir. 2016) (quoting
Progressive Elec., Inc. v. NLRB, 453 F.3d 538, 544 (D.C. Cir.
2006)).
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The Board reasonably found that the statement was not an
“honest forecast[]” based on “economic realities,” Gissel
Packing, 395 U.S. at 619–20, but a threat to terminate
employees for exercising their right to strike. See Care One,
832 F.3d at 360–61. Further, Ingredion’s view that the Board
lacked jurisdiction over the relevant allegation in the General
Counsel’s complaint because it “was not ‘closely related’ to the
claims in the [Union’s] first amended charge,” Pet’r’s Br. 45
(quoting Precision Concrete v. NLRB, 334 F.3d 88, 91–92
(D.C. Cir. 2003)), is meritless. The complaint alleged that in
July 2015, the manager “threatened employees that they would
never return to work if they went on strike,” Second Am. to
Compl. 2. This is closely related to the Union’s charge that
“[s]ince about April 6, 2015, [Ingredion] threaten[ed]
employees with replacement if they d[id] not agree to” its
proposals, First Am. Charge. See G.W. Galloway Co. v. NLRB,
856 F.2d 275, 280 (D.C. Cir. 1988). Further, in suggesting the
Board did not address this allegation, see Pet’r’s Br. 45,
Ingredion overlooks that the Board affirmed the ALJ’s findings
except as specified otherwise, never disavowed the ALJ’s
finding that the statement was an unlawful threat, and ordered
Ingredion to stop “[t]hreatening employees that they might lose
their jobs if they went on strike,” Order at 2; see Decision at 1
& nn.1–2.
To the extent Ingredion’s challenge morphs into a due
process objection, this too fails. Ingredion maintains it did not
have a meaningful opportunity to respond to the unlawful-
threats allegation because it was added to the complaint just
two days before the administrative hearing. See Pet’r’s Br. 51–
52. Yet the record shows Ingredion received a “full and fair
opportunity to litigate the matter,” and in any event Ingredion
points to no prejudice. See Davis Supermarkets, Inc. v. NLRB,
2 F.3d 1162, 1169 (D.C. Cir. 1993). Thus, Ingredion has
14
shown no basis for reversing the Board’s findings of unfair
labor practices.
III.
Ingredion objects to the Board’s remedial Order on two
grounds. First, it maintains it was denied due process by the
provision rescinding all discipline imposed pursuant to
unilaterally implemented terms and conditions because the
complaint did not specifically request such a remedy. See
Pet’r’s Br. 53–54. This is meritless. Ingredion was on notice
that the remedy was in play because the complaint asked the
Board to compensate employees “for any losses they have
suffered as a result of the unilateral implementation” of new
terms and conditions. Compl. 8.
Second, Ingredion objects to the provision directing that
Meadows read a notice describing Ingredion’s legal obligations
to assembled employees “or permit a Board agent, in the
presence of Meadows and other corporate officials responsible
for labor relations, to read the notice to employees,” Order at
3. The Board’s broad discretion to fashion remedies for
violations of the Act, see, e.g., Fibreboard Paper Prods. Corp.
v. NLRB, 379 U.S. 203, 216–17 (1964), allows it to impose this
“extraordinary remedy,” Decision at 1 n.2 (Member Emanuel,
dissenting), where “upper management has been directly
involved in multiple violations of the Act,” Veritas Health
Servs., Inc. v. NLRB, 895 F.3d 69, 86 (D.C. Cir. 2018). Here,
Ingredion’s chief negotiator played a central role in several
violations of the Act, so the Board did not abuse its discretion
by imposing the remedy.
Accordingly, we deny the petition for review and grant the
Board’s cross-application for enforcement of its Order.