Exxel/Atmos Inc v. NLRB ( 1998 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 9, 1998 Decided June 26, 1998
No. 97-1417
Exxel/Atmos, Inc.,
Petitioner
v.
National Labor Relations Board,
Respondent
United Steelworkers of America,
Intervenor
Consolidated with
No. 97-1418
On Petitions for Review and Cross-Application for
Enforcement of Orders of the National Labor
Relations Board
Vincent J. Apruzzese argued the cause and filed the briefs
for petitioner.
David A. Fleischer, Senior Attorney, National Labor Rela-
tions Board, argued the cause for respondent. With him on
the brief were Linda Sher, Associate General Counsel, and
Aileen A. Armstrong, Deputy Associate General Counsel.
Margaret A. Gaines, Supervisory Attorney, entered an ap-
pearance.
Daniel M. Kovalik argued the cause for intervenor United
Steelworkers of America. With him on the brief were Lau-
rence Gold, David Silberman, and James Coppess.
Before: Wald, Sentelle, and Randolph, Circuit Judges.
Opinion for the Court filed by Circuit Judge Randolph.
Concurring opinion filed by Circuit Judge Sentelle.
Randolph, Circuit Judge: These are petitions by Exxel/At-
mos, Inc. to review, and cross-petitions by the National Labor
Relations Board to enforce, two orders issued in June 1997.
The Board issued the first of its orders on remand from our
decision in Exxel/Atmos, Inc. v. NLRB, 28 F.3d 1243 (D.C.
Cir. 1994). The second order dealt with events in late 1994
and early 1995, after the remand.
Exxel is a small New Jersey company manufacturing non-
gas aerosol delivery systems. In September 1990 the compa-
ny voluntarily recognized the United Steelworkers of Amer-
ica, AFL-CIO as the exclusive bargaining representative of
its production and maintenance employees. Nine months
later, in May 1991, Exxel refused the union's request to
bargain. The Board found that Exxel had thereby violated
s 8(a)(1) and (5) of the National Labor Relations Act, 29
U.S.C. s 158(a)(1) & (5). See Exxel-Atmos, Inc. ("Exxel I"),
309 N.L.R.B. 1024, 1024 (1992). Among other things, it
ordered Exxel to cease and desist from refusing to bargain
with the union and affirmatively "to recognize, meet and
bargain collectively in good faith" with the union upon re-
quest. Id. at 1024, 1033. This court upheld the Board's
findings of violations of the Act and enforced the cease and
desist order, but--on the basis of longstanding precedent in
this circuit--we refused to enforce the bargaining order and
remanded the case to the Board for a "clear explanation" of
"why a bargaining order, as opposed to the cease and desist
order standing alone, was justified in this case." Exxel/At-
mos, 28 F.3d at 1248-49; see Exxel/Atmos, Inc. v. NLRB, No.
93-1108 (D.C. Cir. Nov. 14, 1994) (enforcing Board's order in
part and remanding case in part).
The Board responded by reaffirming the bargaining order
in a June 1997 supplemental decision. See Exxel-Atmos,
Inc., 323 N.L.R.B. No. 159 (June 5, 1997). On the same date,
the Board issued another decision and order finding the
company guilty of additional unfair labor practices. On De-
cember 7, 1994, after our remand, Ronald Lemke, Exxel's
President, gave a speech to the production and maintenance
employees in which he explained the procedure for decertify-
ing the union and informed the employees that Exxel was
obligated to bargain with the union unless it was decertified.
Exxel also gave each of its employees a cash Christmas bonus
of $100 during the week of December 23. On January 10,
Exxel, pointing to signed letters to the Board from some
employees indicating that they no longer wished to be repre-
sented by the union, canceled all bargaining sessions with the
union, then scheduled for early 1995. Employees filed a
decertification petition on January 26, and thereafter Exxel
took the position that it was under no obligation to bargain
until a decertification election had been held. The Board
concluded that Lemke's speech, the Christmas bonus, and
Exxel's refusal to bargain violated s 8(a)(1) and (5) of the
Act. See Exxel-Atmos, Inc. ("Exxel II" ), 323 N.L.R.B. No.
158, slip op. at 3 (June 5, 1997). As a remedy, the Board
again, inter alia, ordered Exxel both to cease and desist from
refusing to bargain and affirmatively to bargain with the
union upon request. See id.I
We shall deal first with the Board's decision in Exxel II,
and Lemke's speech. Employer speech or conduct violates
s 8(a)(1) if it "interfere[s] with, restrain[s], or coerce[s] em-
ployees" in their decision whether to decertify the union. 29
U.S.C. s 158(a)(1). On the other hand, the "expressing of
any views, argument, or opinion, or the dissemination thereof,
whether in written, printed, graphic, or visual form, shall not
constitute or be evidence of an unfair labor practice ... if
such expression contains no threat of reprisal or force or
promise of benefit." 29 U.S.C. s 158(c).
The Board's explanation for finding a s 8(a)(1) violation in
Lemke's speech consists of the following (323 N.L.R.B. No.
158, slip op. at 2):
In his unsolicited speech, the Respondent's president,
Lemke, provided the unit employees with instructions on
how to decertify the Union. In doing so, the Respondent
unlawfully instigated the decertification petition among
its employees in violation of Section 8(a)(1) of the Act.*
_______
* Weisser Optical Co., 274 NLRB 961 (1985), and cases cited
therein.
The text tells us nothing. It merely recites the Board's
conclusion that the speech was "unlawful." The Board's
rationale, therefore, must be contained in the footnote sug-
gesting that Lemke's speech was indistinguishable from the
employer conduct condemned in Weisser Optical and "the
cases cited therein."
In Weisser Optical, the Board found a s 8(a)(1) violation
because the company provided more than "ministerial aid" to
its employees in filing a decertification petition. A company
official had asked an employee to initiate and solicit signa-
tures for a decertification petition among the rank-and-file,
"explaining that he wanted to rid the [company] of the
Union." 274 N.L.R.B. at 961. When the employee agreed,
the official gave him a booklet containing instructions and
sample language to be used in gathering evidence of employ-
ee interest. See id. The employee then apparently aban-
doned the idea, so management approached a second employ-
ee "about getting something started." Id. (internal quotation
marks omitted). After a meeting at which the company
expressed its belief that no "third party" was needed to work
out any differences the employees might have with the com-
pany, the first employee immediately began soliciting signa-
tures for a decertification petition. See id. The petition
arrived at the Board only a few days later. See id. Such
"unsolicited involvement with the showing of interest peti-
tion," held the Board, "constituted far more than ministerial
aid" and hence violated s 8(a)(1) of the Act.
The "cases cited therein," in Weisser Optical that is, turn
out to be only one case--Silver Spur Casino, 270 N.L.R.B.
1067 (1984).1 There, the employer had suggested to an
employee--at work and in phone calls to her at her home--
that a decertification petition ought to circulate among the
employees. See id. at 1071-72. The employer provided her
with language to use in the petition, approved a draft, told the
employee how to circulate it and among whom, gave her
instructions on getting it signed and dated, and told her
where to send it. See id. When a different employee
approached the employer with concerns about a union, the
employer provided similar assistance for a second petition.
See id. at 1072. The employer then mailed both petitions to
the Board. See id. The ALJ held that the employer's
actions violated s 8(a)(1) because they "constitute[d] far more
than the mere ministerial aid such as the Board might not
find unlawful." Id. The Board upheld the ALJ's conclusion,
stating that the employer "unlawfully encouraged and assist-
ed the employees in repudiating the Union." Id. at 1067.
Neither Weisser Optical nor Silver Spur help to explain the
Board's conclusion in this case. Whatever the precise mean-
ing of "ministerial aid," neither decision goes so far as to hold
that an employer violates s 8(a)(1) merely through state-
__________
1 Weisser Optical also contained citations to Texas Elec. Coop.,
197 N.L.R.B. 10 (1972), and Craftool Mfg. Co., 229 N.L.R.B. 634(1977). The Board cited those cases, however, not to explain when
an employer violates s 8(a)(1) by assisting employees in filing a
decertification petition, but rather to support its statement that
reliance on a tainted decertification petition is no defense to a
withdrawal-of-recognition charge. See Weisser Optical, 274
N.L.R.B. at 962.
ments informing employees of the decertification process.
The Board explicitly rejected such a reading of s 8(a)(1) in
Lee Lumber & Bldg. Material Corp., 306 N.L.R.B. 408 (1992).
The employer there had called a meeting and pointed out the
disadvantages of switching to a union-proposed pension plan.
See id. at 408. In response to employee questions about how
to get rid of the union, the employer gave the employees
general information about the decertification process and the
location of the Board's office, adding that any decertification
petition "would have to be filed soon." Id. The Board
thought the employer's statements caused concern among the
employees and triggered the filing of a decertification peti-
tion. See id. at 410. Even so, it held that this did not make
the statements unlawful under s 8(a)(1). "It is clear that,
under Section 8(c), an employer may lawfully furnish accurate
information ... if it does so without making threats or
promises of benefits.... Otherwise lawful statements do not
become unlawful ... [under s 8(a)(1) ] merely because they
have the effect (intended or otherwise) of causing employees
to abandon their support for a union." Id. at 409-10 (foot-
notes omitted). The employer's motive and the actual effect
of its statements are irrelevant. See id. at 409. Instead, "the
test is whether the employer's statements may reasonably be
said to have tended to interfere with employees' exercise of
their Section 7 rights." Id. (footnote omitted); see also
Lucky 7 Limousine, 312 N.L.R.B. 770, 804 (1993).
Lemke's speech did not offend this standard. Lemke, and
hence Exxel, doubtless intended to do more than merely
make a public service announcement. It is fair to assume
they hoped the employees would act on the information. But
Lee Lumber makes the motivation of the employer irrelevant.
As to the content of the speech, the part with which the
Board took issue simply informed Exxel's employees that a
decertification procedure existed for employees who decided
they no longer wanted to be represented by a union.2 For all
__________
2 The Board focused on the following portion of Lemke's
speech:
we know, the employees were already aware of this. After
briefly (and accurately) explaining the procedure, Lemke said
that anybody "who wants more information ... can call the
Labor Board to get more details about how to file for [a
decertification] election." J.A. 61. He also left copies of the
Board's address and phone number in the meeting room.
Before concluding, Lemke told the employees, "The decision
about whether to file a petition with the Labor Board for a
Decertification Election is entirely up to you. The Company
will not take any action against anyone because he has or has
not signed a petition." J.A. 61. We presume the Board saw
something coercive or threatening in these statements, but
we are unable to detect anything of the sort. Unlike the
employers in Weisser Optical and Silver Spur, who arguably
pressured individual employees to participate in the decertifi-
cation process, Lemke delivered his speech to Exxel's em-
ployees collectively. Moreover, his statements were remark-
ably similar to those in Lee Lumber, doubtless because an
attorney for the company wrote the speech. Short of saying
nothing at all, it is hard to see how Lemke could have been
more careful about not interfering with the employees' free
__________
What if we don't want a union? Is there anything we can do
about it? Yes. The Labor Board has a procedure called a
Decertification Election. This would allow the employees to
vote, in a secret ballot election, on whether you truly want the
union to represent you. The Board will conduct a Decertifica-
tion Election if 30% of the employees take or send a petition to
the Labor Board stating that they do not want the union to
represent them. Anybody who wants more information about
this procedure can call the Labor Board to get more details
about how to file for an election. I will leave copies of the
Labor Board's address and telephone number here in this
room. I want to say as clearly as I possibly can that the
Company intends to comply with the law and with the court's
order [in Exxel I]. The decision about whether to file a
petition with the Labor Board for a Decertification Election is
entirely up to you. The Company will not take any action
against anyone because he has or has not signed a petition.
J.A. 61.
choice and yet still informed them of the availability of the
decertification procedure.
At any rate, since the Board chose not to explain why it
believed the speech constituted "unlawful instigation," its
citation to a clearly distinguishable precedent is not enough to
warrant sustaining its conclusion that Exxel violated
s 8(a)(1).
II
On the Wednesday or Thursday before Christmas 1994,
each employee received from Exxel a $100 bill contained in a
greeting card signed by Exxel's management. The Board,
pointing out that the " 'Christmas bonus' was related to the
increased sales performance of [Exxel's] employees in 1994,"
found that the bonus "constitutes wages, and as such, is a
proper subject for collective bargaining." Exxel-Atmos, 323
N.L.R.B. No. 158, slip op. at 3. Exxel did not bargain with
the union before awarding the bonus and so the Board
concluded that the company violated s 8(a)(1) and (5). See
id.3
The Board's conclusion lacks substantial evidence. The Act
requires employers to bargain collectively with unions over
"wages, hours, and other terms and conditions of employ-
ment." 29 U.S.C. s 158(d). A "Christmas bonus ... be-
comes an element of wages and, therefore, a term and
condition of employment that cannot be altered unilaterally"
if it is "tied to other remuneration and paid regularly over an
extended period." International Bhd. of Elec. Workers Local
1466 v. NLRB, 795 F.2d 150, 153 (D.C. Cir. 1986). The bonus
here was not tied to the wages of the employees. It was
linked neither to seniority nor to each employee's individual
__________
3 Notably, the Board did not rest its conclusion that the Act
was violated on a finding that Exxel presented the bonus with the
intent of demonstrating to its employees "that the Union was
irrelevant," or as part of a "concerted strategy to weaken and
discredit the union in the eyes of the employees." Microimage
Display Div. of Xidex Corp. v. NLRB, 924 F.2d 245, 253 (D.C. Cir.
1991) (citation and quotation marks omitted). Such a finding would
be subject to a very different analysis.
performance. And, perhaps most telling, there is no evidence
that Exxel had ever paid such a bonus to its employees in the
past. See id. (Christmas bonus found to be "a part of the
employees' wages" where it was "a regular practice going
back some forty years"); 5 Theodore Kheel, Labor Law
s 19.04, at 19-18 to -19 (1997) (cases finding bonuses to be
wages "have primarily relied on the regularity of the payment
over a sufficient period of time"); Sykel Enters., Inc., 324
N.L.R.B. No. 171, slip op. at 3-4 (Nov. 7, 1997) (crucial
question in determining whether Christmas bonus constitutes
wages is whether employer's pattern of paying bonus in past
has justified employees' expectations that they could count on
receiving it as part of wages in future as well).
In short, the record plainly shows that the bonus was a
seasonal gift. The previous Christmas, Exxel had hosted a
buffet luncheon party for its employees. The next year it
gave them cash because it was the first year Exxel had
turned a profit. That did not transform the $100 bonus into
"an integral part of [Exxel's] wage structure." Niles-Be-
ment-Pond Co., 97 N.L.R.B. 165, 166-67 (1951).
III
This brings us to Exxel's refusal to bargain with the union
in early 1995. In enforcing the Board's cease and desist
order in Exxel I, we ordered Exxel to "[c]ease and desist
from ... [w]ithdrawing recognition from and refusing to meet
and bargain collectively with" the union. Exxel/Atmos, Inc.
v. NLRB, No. 93-1108 (D.C. Cir. Nov. 14, 1994) (enforcing
Board's order in part and remanding case in part). It was
"utterly clear" that our order put Exxel under an affirmative
obligation to bargain with the union as of November 30, 1994,
the date our mandate issued. Caterair Int'l v. NLRB, 22
F.3d 1114, 1123 (D.C. Cir. 1994).4 Even so, Exxel did next to
__________
4 An affirmative bargaining order and an order requiring an
employer to "cease and desist" from refusing to bargain do not have
the same consequences. Under settled Board practice, only the
former carries with it a decertification bar, preventing the employer
from challenging the union's majority status for a reasonable period
nothing. It held no bargaining sessions with the union in the
weeks leading up to January 10. And when on that date
Exxel learned of an impending decertification effort on the
part of some of its employees--it is unclear whether Exxel
knew exactly how many employees supported the effort, but
it is clear that no decertification petition had been filed at
that time--it promptly canceled all planned bargaining ses-
sions with the union, including one scheduled for the next
day. We acknowledge that under some circumstances an
employer may suspend bargaining if it "can show, by 'clear,
cogent and convincing' evidence, either that the union has lost
majority support or that the employer has a reasonable, good-
faith doubt of continuing majority support." Microimage
Display Div. of Xidex Corp. v. NLRB, 924 F.2d 245, 253
(D.C. Cir. 1991) (citation omitted). We also recognize that
Exxel twice requested by letter, once on January 10 and
again on January 30, that the Board inform it whether a
majority of Exxel's employees had petitioned for decertifica-
tion, and that the Board refused the request. But none of
this excused Exxel from complying with our order. Exxel
should have bargained with the union as soon as was prac-
tically possible following the issuance of our mandate. At the
very least, it should have gone ahead with the scheduled
bargaining sessions until January 26, when a formal decertifi-
cation petition was filed. See, e.g., St. Agnes Med. Ctr. v.
NLRB, 871 F.2d 137, 146 (D.C. Cir. 1989); Allied Indus.
Workers, Local Union No. 289 v. NLRB, 476 F.2d 868, 881
(D.C. Cir. 1973); NLRB v. New Assocs., 35 F.3d 828, 833-35
(3d Cir. 1994). Exxel's refusal to do so constituted a direct
violation of our order and hence was clearly unlawful.
As a remedy for Exxel's recalcitrance, the Board once
again issued a bargaining order. Relying on our decision in
Exxel I, the company argues that the Board failed to justify
the bargaining order. But there is an essential difference
between the two cases: here, Exxel never contested the
propriety of the bargaining order in the proceedings before
__________
of time. See, e.g., Exxel/Atmos, 28 F.3d at 1248; Caterair, 22 F.3d
at 1121-22 & n.4.
the Board. Accordingly, under s 10(e) of the Act, Exxel
waived any right it had to object to the order before this
court. See 29 U.S.C. s 160(e) ("No objection that has not
been urged before the Board ... shall be considered by the
court...."); Woelke & Romero Framing, Inc. v. NLRB, 456
U.S. 645, 666 (1982) (failure to "object[ ] to the Board's
decision in a petition for reconsideration or rehearing ...
prevents consideration of the question by the courts"); Quaz-
ite v. NLRB, 87 F.3d 493, 497-98 (D.C. Cir. 1996) (refusing to
consider employer's argument that Board did not adequately
explain need for bargaining order because employer did not
raise objection before Board). It is of no moment that the
Board neglected to invoke s 10(e) in its brief to this court.
Section 10(e) "speaks to courts, not parties," and the Board
cannot waive its jurisdictional requirements simply by ne-
glecting to mention them before us. EEOC v. FLRA, 476
U.S. 19, 23 (1986) (per curiam).5
The petition for review in No. 97-1417 is granted in part
and denied in part. Enforcement of the Board's order is
denied on the speech and bonus questions in No. 97-1417.
The remainder of the Board's order in No. 97-1417 is en-
forced. The petition for review in No. 97-1418, and the
Board's cross-application for enforcement, are dismissed. See
note 5, supra.
So ordered.
__________
5 Because we enforce the Board's June 5, 1997, bargaining
order in Exxel II, there is no need for us to consider whether the
Board's supplemental opinion adequately supported the original
bargaining order issued by the Board in Exxel I. The two bargain-
ing orders are effectively identical.
Sentelle, Circuit Judge, concurring: I join without reser-
vation in the Court's conclusion that under section 10(e) of the
Act, 29 U.S.C. s 160(e), we lack jurisdiction to review the
second bargaining order. I write separately to express my
hope (probably a vain one) that the Board will not find in our
declining any suggestion that we consider the reasoning in its
supplemental opinion adequate to support the extraordinary
remedy invoked in its original bargaining order in Exxel/At-
mos, Inc. v. NLRB, 28 F.3d 1243 (D.C. Cir. 1994). In Exxel,
we reiterated to the Board the well established law of this
Circuit that the issuance of a bargaining order is an extraor-
dinary, "somewhat punitive," remedy which "has the effect of
ensconcing the union as the employees' exclusive bargaining
representative and therefore carries with it the potential of
infringing upon employees' Section 7 rights." 28 F.3d at 1248
(citing Caterair Int'l v. NLRB, 22 F.3d 1114, 1122 (D.C. Cir.
1994)). Therefore, "we have time and again required the
Board to explain that it has balanced the often competing
interests of union protection and employee choice before
issuing a bargaining order." Exxel, 28 F.3d at 1248 (citing,
inter alia, Caterair, 22 F.3d at 1123). On remand, instead of
complying with its duty to balance, the Board, continuing in
the rogue behavior which we have noted time and again,
simply declared the appropriateness of its original remedy,
incredibly stating as its sole basis its prior decision in Cater-
air Int'l, 322 N.L.R.B. No. 11 (Aug. 27, 1996).
Lest there be any doubt, the Board's Caterair is the very
decision which we reversed, noting that we were ordering the
Board for the sixth time to cease engaging in its contuma-
cious behavior. See Caterair, 22 F.3d at 1123. Once again,
our orders and admonitions to the Board seem to have fallen
on deaf ears. Not only does it continue to engage in precisely
the process we have condemned in the past, but even cites in
support of this recalcitrant behavior the Caterair decision for
which we condemned it.
As I have previously suggested, I think we have been
overly gentle in our line of cases, including Caterair, rejecting
the Board's facile imposition of the extraordinary bargaining
orders remedy. See Lee Lumber & Bldg. Material Corp. v.
NLRB, 117 F.3d 1454, 1463-64 (D.C. Cir. 1997) (Sentelle, J.,
concurring). In no other area of our enlightened democratic
society would we permit an elitist bureaucracy to deprive
citizens of their rights as free actors on the theory that they
might have been so deceived by others of differing interests
that they cannot by their free choice determine their best
interests, but must be subjugated to the decision of an
administrative agency. Id. While we can conceive of a
commission regulating corporations tossing out the election of
a corporate board based on deceit practiced against the
shareholders, no one has ever suggested that such a commis-
sion could then impose indefinitely on the shareholders an
unelected board, on the rationale that shareholder votes
thereafter would be the product of "tainted" decisionmaking.
We might even imagine an election of a public official being
overturned because of fraud, but it is surely inconceivable
that a board or commission could then impose its own choice
of congressman, senator, or governor because of some con-
tinuing taint. Nonetheless, the NLRB persists in its elitist
belief that those of the working class cannot be trusted to
reject deceit on their own, and that, therefore, their benevo-
lent big brother must watch after them.
Were we not bound by stare decisis, I would find few if any
circumstances under which I would uphold a bargaining
order. However, I recognize that this Court is bound by
precedent. The time has long since come for the Board to
recognize not only the constraints of precedent, but its statu-
tory and constitutional duty to obey the law as interpreted by
the courts. Under 29 U.S.C. s 160, this Court has jurisdic-
tion to review the orders of the Board. On at least seven
occasions we have exercised that jurisdiction to tell the Board
that its routine imposition of remedial bargaining orders is
contrary to law. See cases collected in Lee Lumber, 117 F.3d
at 1461; Exxel, 28 F.3d at 1248. Eight is enough.