George Arakelian Farms, Inc. v. Agricultural Labor Relations Board , 40 Cal. 3d 654 ( 1985 )

LUCAS, J.

I respectfully dissent. The majority upholds the Agricultural Labor Relations Board’s (Board) award of “make-whole” relief, based upon its conclusion that petitioner’s refusal to bargain was not premised on a reasonable belief that it had a meritorious challenge to the integrity of the election which purportedly certified the United Farm Workers (UFW) as the employees’ bargaining representative. My review of the record indicates otherwise.

Rather than prolong this opinion with a factual recital of little interest or legal significance to anyone other than the parties hereto, I simply adopt that portion of Justice Kaufman’s now vacated opinion for the Court of Appeal, Fourth Appellate District, in this case which correctly disposed of the point:

“As stated most recently in Rivcom Corp. v. Agricultural Labor Relations Bd. (1983) 34 Cal.3d 743, 772 [195 Cal.Rptr. 651, 670 P.2d 305]: ‘[T]his court held in J. R. Norton [Co. (1979) 26 Cal.3d 1 (160 Cal.Rptr. 710, 603 P.2d 1306)] that the [make-whole] remedy may not be used when the employer commits a “technical” refusal to bargain as the only means to obtain judicial review of a colorable, good-faith challenge to union certification. If a sincere but unsuccessful challenge exposed the employer to liability for all gains prompt bargaining might have produced, . . . meritorious challenges, which serve the Act’s purposes, would be deterred.’

“In reconsidering the propriety of imposing the make-whole remedy in this case following the remand from [the Court of Appeal], the Board reviewed all four of Arakelian’s objections to the election, not just the access rule violations objection, and considering them separately, rejected each. As to the objection that, without regard to their merit, the Board agent had ruled invariably in favor of the UFW on each contested issue concerning the election arrangements, in some cases altering his previously announced decision to accommodate the union’s preferences, the Board stated; ‘Citing Melco Vineyards, 2 ALRB No. 14 (1976), the Executive Secretary dismissed this objection on the grounds that [Arakelian] failed to present evidence of bias, as a Board agent has discretion to set the time and place of an election, and setting an election over the specific objection of an employer does not constitute evidence of bias.’ (Italics added.)

“As to the objection the Board agent had given the appearance of bias by delaying the start of the pre-election conference for an hour and a half to accommodate the arrival of UFW representatives, by selecting a UFW organizer to act as interpreter when other interpreters were available and by making decisions as to the time, locations and number of observers for the election invariably in accordance with the UFW’s suggestions and without regard to their merit the Board stated: ‘The Executive Secretary dismissed the objection to the use of a UFW representative as an interpreter . . . and to the Board agent’s decision about the number of observers on the grounds that bias or the appearance of bias does not constitute grounds for setting aside an election unless it is shown to have affected the conduct or results of the election or to have impaired the validity of the balloting as a measure of employee choice, which [Arakelian] failed to show.’ (Italics added.)

“The remaining objections were also rejected on the ground there was no evidence they had aifected the election. The Board then concluded: ‘Upon reconsideration of these objections ... we conclude that [Arakelian’s] objections to the election are not substantial enough to support a reasonable, good faith belief “that the union would not have been freely selected by the employees as their bargaining representative had the election been properly conducted.” . . . Each objection was dismissed either for lack of supporting evidence or because it clashed with an established labor law principle. In refusing to bargain and pursuing its objections through litigation, [Arakelian] did not satisfy the requirement that its “litigation posture must have been reasonable at the time of the refusal to bargain.” ’ (Italics in original.)

“. . . [T]he Board’s imposition of the make-whole remedy in the circumstances shown here was patently not in keeping with either the letter or the spirit of the Norton decision. As the court in Norton took pains to say: ‘We emphasize that this holding [that a make-whole remedy is appropriate if the employer’s contesting the election was an elaborate pretense to avoid bargaining] does not imply that whenever the Board finds an employer has failed to present a prima facie case, and the finding is subsequently upheld by the courts, the Board may order make-whole relief. Such decision by hindsight would impermissibly deter judicial review of close cases that raise important issues concerning whether the election was conducted in a manner that truly protected the employees’ right of free choice.’ (J. R. Norton Co., supra, 26 Cal.3d at p. 39.)

“Except for the objection based on union violations of the access rule as to which a hearing had been granted, Arakelian’s objections were based primarily on alleged Board agent misconduct. Arakelian was contesting the propriety of the standard employed by the executive secretary and the Board to determine whether the asserted Board agent misconduct constituted a prima facie case for setting aside the election. At the time there was no California appellate decision on the question, and the standard employed by the executive secretary and the Board was not the standard applied to Board agent misconduct by the National Labor Relations Board (NLRB). In addition, the Norton decision had not yet come down; indeed, hearing in the Norton case had not been granted by the California Supreme Court at the time Arakelian’s petition for review was filed in this court, and Arakelian was also contending that a hearing on its objections was mandatory under section 1156.3, subdivision (c), of the ALRA . . . and that the Board’s routine imposition of a make-whole remedy was impermissible under the ALRA, both of which contentions raised significant issues of first impression later decided in Norton. [Fn. omitted.] Except for the happenstance that the Norton case reached the Supreme Court before review in this case had been completed, this case might well have been the one in which those issues were resolved.

“There is nothing in the record of this case indicating petitioner was contesting the election in bad faith or that its objections constituted a ‘frivolous election [challenge] pursued by [it] as a dilatory tactic designed to stifle self-organization by [its] employees.’ (J. R. Norton Co., supra, at p. 30.) On the contrary, the record demonstrates that petitioner’s objections raised three fundamental questions relating to election procedure and that Arakelian did everything within its power to expedite resolution of its election challenge. In the hearing on its access rule violations objection, it stipulated to the facts and in the unfair labor practice proceedings it agreed to have the matter transferred directly to the Board and again stipulated to the facts. It was the Board and UFW that suggested to this court [that] our review be held in abeyance pending the Supreme Court decision in the Norton case, and petitioner is in no way responsible for the subsequent delays in obtaining judicial review in this case.

“The Board’s implied conclusion that Arakelian’s objections to the election were pursued in bad faith and as a dilatory tactic is without evidentiary foundation and the imposition of the make-whole remedy in these circumstances is contrary to the Norton decision and inconsistent with the purposes of the ALRA.”

In addition to Justice Kaufman’s analysis, I observe that, as a practical matter, assessment of the make-whole remedy at this late date (the contested election was held in 1976) could potentially ruin Arakelian, yet much of the delay in adjudicating the issue was not attributable to that party. Under these unusual circumstances, strict application of the remedy should be excused or ameliorated.

For the foregoing reasons, I would annul the Board’s order requiring petitioner to make its employees whole for all losses sustained by reason of petitioner’s refusal to bargain.

Sabraw, J.,^* concurred.

* Assigned by the Acting Chairperson of the Judicial Council.