Pacemaker Yacht Company, a Division of Mission Marine, Inc. v. National Labor Relations Board , 663 F.2d 455 ( 1981 )

OPINION OP THE COURT

SEITZ, Chief Judge.

Pacemaker Yacht Company (the Company) petitions for review of a final order of the National Labor Relations Board (the Board) directing the Company to cease and desist from restraining or coercing employees in the exercise of rights protected by section 7 of the National Labor Relations Act, 29 U.S.C. § 157 (1976), and to reinstate employees who had been fired for striking. The Board has cross-applied for enforcement of its order. This court has jurisdiction under 29 U.S.C. § 160(e) & (f) (1976).

I.

In 1978, the Company and Teamsters Union 158 (the Union) were parties to a collective bargaining agreement covering employees at two plants in New Jersey. The agreement required the Company to contribute forty cents per hour worked by each employee to the Teamsters Health and Welfare Fund of Philadelphia and Vicinity— Local 158. The Fund retained an independent insurance carrier to underwrite employee health and welfare benefits. The Company was not involved in the administration of the Fund, and at all times fulfilled its obligation under the collective bargaining agreement.

In early 1978, the Fund failed to pay premiums to the insurance carrier, and consequently the underwriter refused to pay the claims of the employee beneficiaries. On June 20, 1978, most employees at both plants went on strike in protest of the Fund’s delinquency. Throughout the day, Union officials advised striking employees that the work stoppage violated the collective bargaining agreement and urged them to return to work. The Company mailed a notice to all employees advising them that the strike violated Article X of the collective bargaining agreement, which prohibited “all strikes, picketing ... or other interruption of the Company’s operations,” and stating that any employee who failed to report to the next shift would “be considered to have quit his job” and would be permanently replaced. One hundred and twenty-six employees who continued to strike after receiving this notice were discharged. The Union submitted a grievance on behalf of these employees, which proceeded to arbitration pursuant to the collective bargaining agreement. The arbitrator found that the strike violated Article X of the collective bargaining agreement but ruled that the discharge penalty was too severe, and ordered the Company to reinstate all strikers except those who instigated the strike. The Company complied with the award, and reinstated all but twenty employees who were identified as instigators in a subsequent grievance procedure.

The Union filed an unfair labor practice charge against the Company, alleging that the discharges restrained employees in their exercise of protected activity in violation of section 8(a)(1) of the Act. The administrative law judge dismissed the complaint, finding that the employees had waived their right to strike in Article X. The Board disagreed, and held that the no-strike clause in Article X did not waive employees’ right to strike over the Fund’s failure to pay insurance premiums. The Board examined the collective bargaining agreement and extrinsic evidence and concluded that “the union could not have made a clear and unmistakable waiver of the employees’ right to strike to put pressure on the Fund since the parties never foresaw the possibility of such a situation.” Pacemaker Yacht Co., 253 N.L.R.B. No. 95, 1980-81 Labor L.Rep. (CCH) 1117,733, at 28,579. Consequently, the Board found that the discharges violated section 8(a)(1) and ordered the Company to reinstate the employees with full seniority and backpay. The Company petitioned for review of that order and the Board cross-applied for enforcement.

II.

The Company urges that the Board’s order should not be enforced for three reasons. First, the Company disputes the Board’s finding that the no-strike clause in Article X of the collective bargaining agreement did not constitute a waiver of the right to strike over the Fund’s failure to pay premiums to the insurance carrier. Second, it argues that the Board erred in failing to defer to the arbitrator’s award in accordance with the standards established in Spielberg Manufacturing Co., 112 N.L. R.B. 1080 (1955). Finally, the Company contends that the strike was not protected activity under section 7 of the Act because the work stoppage involved a matter beyond its control. Because we find the waiver issue dispositive, it is unnecessary to address the Company’s other arguments.

III.

Assuming, without deciding, that the strike at issue was protected activity under section 7 of the Act, we start with the proposition that generally employees may, through the collective bargaining process, waive the right to engage in this protected activity. Mastro Plastics Corp. v. NLRB, 350 U.S. 270, 280, 76 S.Ct. 349, 356, 100 L.Ed. 309 (1956). We have cautioned, however, that such a waiver must be “clear and unmistakable and that explicit language will not be read expansively.” Delaware Coca-Cola Bottling Co. v. General Teamsters Local 326, 624 F.2d 1182, 1187-88 (3d Cir. 1980).

In Delaware Coca-Cola, we held that a single, broad, generally-worded no-strike clause does not constitute a clear and unmistakable waiver of the right of employees to engage in a sympathy strike. 624 F.2d at 1187. Our holding was squarely grounded upon the application of the principle of coterminous interpretation to a single express no-strike clause. Under this rule of contract interpretation, a no-strike clause is presumed to be no broader than the arbitration clause in a collective bargaining agreement. See Gateway Coal Co. v. United Mine Workers, 414 U.S. 368, 382, 94 S.Ct. 629, 639, 38 L.Ed.2d 583 (1974). Underlying this presumption is the theory that a no-strike clause is generally a quid pro quo for an arbitration clause. See Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 455, 77 S.Ct. 912, 917, 1 L.Ed.2d 972 (1957). In Delaware Coca-Cola, we were unable to find any extrinsic evidence indicating that the parties had intended the no-strike clause to be broader than the arbitration clause and thus held that since the sympathy strike was not arbitrable, it was not barred by the no-strike clause.

The principle of coterminous interpretation, however, is not a rule of law, but merely a tool of contract interpretation, see W-I Canteen Service Inc. v. NLRB, 606 F.2d 738, 744 (7th Cir. 1979), which “must be applied to the facts of each case,” Delaware Coca-Cola, 624 F.2d at 1187.

The collective bargaining agreement at issue contained two separate no-strike clauses.

ARTICLE IX

GRIEVANCE PROCEDURE

9.1 Should difference arise between the Company and its employees or between the Company and the Union as to the interpretation or application of the provisions of this Agreement, there shall be no suspension or stoppage of work and an earnest effort shall be made to settle such differences immediately or in the manner described below, [grievance procedures follow]

ARTICLE X

NO STRIKES OR LOCKOUT

10.1 So long as this Agreement is in effect, the Company agrees that there shall be no lockouts and the Union agrees that there will be no strikes, picketing, slow downs, deliberate curtailment of production, work stoppages of any kind or other interruption of the Company’s operations. In the event one or more employees fail to abide by the provisions of this article, the Company retains full right to take any disciplinary action it deems necessary, including discharge. 10.2 In the event that there is any disagreement as to whether or not the employee has participated in such conduct, then this shall be deemed to be a grievance to be settled in accordance with Article IX.

The Board acknowledged that “the no-strike clause embodied in Article X is more comprehensive in scope than that in Article IX, and was not given as a quid pro quo for the grievance and arbitration procedure. ...” Pacemaker Yacht Co., 1980-81 Labor L.Rep. (CCH) 1117, 733, at 23,580. Nonetheless, the Board concluded that the “absence of evidence that the parties either considered or discussed whether the no-strike clause would cover the situation which arose here indicates that no clear and unmistakable waiver of the right to strike over the Fund’s inaction occurred.” Id. Even apart from the general rule that courts “owe no particular deference to the Board” on matters of contract interpretation, Dow Chemical Co. v. NLRB, 636 F.2d 1352, 1358 (3d Cir. 1980), we believe that the Board erred as a matter of law in concluding that Article X did not bar the strike over the Fund’s delinquency.

When limited by the principle of coterminous interpretation, a no-strike clause encompasses only arbitrable disputes. Therefore, a claim that the collective bargaining agreement waives the right to strike over a particular nonarbitrable dispute must be established clearly and unmistakably in order to rebut the presumption that the employees’ waiver is no greater than the employer’s obligation under the arbitration clause. When, however, a no-strike clause is not limited by the arbitration clause, the employer need not introduce evidence that the parties intended the no-strike clause to prohibit precisely the type of strike that actually occurred. All that is required is that a comprehensive waiver extending beyond the arbitration clause be “clear and unmistakable.” See W-I Canteen Service, Inc. v. NLRB, 606 F.2d 738, 745 (7th Cir. 1979) (rejecting “a rigid requirement that a no-strike clause contain the specific term ‘sympathy strike’ ” to waive employee’s right to engage in sympathy strike, where no-strike clause expressly extended beyond arbitration clause).

An examination of the collective bargaining agreement, “read as a whole and in light of the law relating to it when made,” Mastro Plastics Corp. v. NLRB, 350 U.S. 270, 279, 76 S.Ct. 349, 356, 100 L.Ed. 309 (1956), establishes such a clear and unmistakable waiver. First, the language of Article X plainly prohibits all “strikes, picketing ... or other interruption of the Company’s operations.” It is apparent that the no-strike pledge in Article X was given in exchange for the Company’s no-lockout pledge. It is also clear that the parties intended Article IX to bar strikes over arbitrable disputes and Article X to bar strikes over all other disputes. There is no reason not to give this language its “ordinary and reasonable meaning.” Penn Packing Co. v. Amalgamated Meat Cutters, Local 195, 497 F.2d 888, 891 (3d Cir. 1974). Indeed, a contrary interpretation would seem to render the no-strike clause in Article X a nullity. Since the no-strike clause in Article IX alone bars strikes over arbitrable disputes, Article X must be construed to bar nonarbitrable disputes — including unforeseeable disputes. We reject the Board’s interpretation in favor of the “settled rule of contract interpretation that contract language should not be interpreted to render the contract promise illusory or meaningless.” Retail Clerks Local 455 v. NLRB, 510 F.2d 802, 806 n.15 (D.C.Cir. 1975).

Extrinsic evidence provides additional support for our interpretation of the no-strike clause. Recognizing the “danger inherent in utilizing [evidence about the conduct of the parties at the time of the strike] because it may not reflect the parties’ intention at the time of the execution of the contract,” Delaware Coca-Cola, 624 F.2d at 1189, we note that the Union officials consistently advised employees that their action violated the no-strike clause in the collective bargaining agreement. The Union also apparently conceded this point before the arbitrator. Unlike the ambiguous extrinsic evidence considered in Delaware Coca-Cola, 624 F.2d at 1189-90, the statements of Union officials here, who had signed the collective bargaining agreement, leave little doubt that they regarded the strike as a violation of the collective bargaining agreement.

Although the Union’s statements must be considered in light of the fact that the strike resulted from employee dissatisfaction over the Union’s administration of the Fund, we believe they are entitled to some probative value. Cf. Iowa Beef Processors v. Amalgamated Meat Cutters, 597 F.2d 1138, 1144 (8th Cir.), cert. denied, 444 U.S. 840, 100 S.Ct. 79, 62 L.Ed.2d 52 (1979) (finding statements by union officials that strike violated no-strike clause probative of contractual intent where agreement required union to declare all strikes unauthorized).

Finally, the state of the law at the time the agreement was executed supports the inference that by including two separate no-strike clauses the parties intended to bar strikes over both arbitrable and nonarbitrable disputes. At the time the contract was negotiated, the principle of coterminous interpretation had been adopted by the Board and by at least one court. See Gary Hobart Water Corp. v. NLRB, 210 N.L.R.B. 742 (1974), enforced, 511 F.2d 284, 288 (7th Cir.), cert. denied, 423 U.S. 925 (1975).¹ From this we infer that the inclusion of two no-strike clauses, one expressly tied to the arbitration clause and one prohibiting all strikes, was intended to waive the employees’ right to strike over unforeseeable disputes, including the dispute over the Fund’s failure to pay insurance premiums.

The Board apparently seeks to engraft a new limitation on the well-established ability of employees to waive their right to strike. Implicit in the Board’s opinion is the notion that a general no-strike clause may never waive the right to strike over unspecified, nonarbitrable disputes. Although some may read our decision in Delaware Coca-Cola this broadly, see Note, Express No-Strike Clause Agreements, 67 Va. L.Rev. 729, 746 n.82 (1981), we decline to do so. The practical consequence of the Board’s position is apparent here. Because a strike over the Fund’s delinquency was unforeseeable at the time of the contract negotiations, under the Board’s view, employees would have been incapable of waiving the right to strike over this dispute at all. We believe there is no basis for limiting employees’ ability to waive the right to strike over nonarbitrable disputes simply because they were unforeseeable at the time the contract was negotiated. Cf. United Steelworkers of America v. Warrior and Gulf Navigation Co., 363 U.S. 574, 578-80, 80 S.Ct. 1347, 1350-51, 4 L.Ed.2d 1409 (1960) (a collective bargaining agreement “is a generalized code to govern a myriad of cases which the draftsmen cannot wholly anticipate.”).

Freedom of contract is the “fundamental premise” on which the National Labor Relations Act is based. H.K. Porter Co. v. NLRB, 397 U.S. 99, 108, 90 S.Ct. 821, 826, 25 L.Ed.2d 146 (1970). Absent a contractual provision in irreconcilable conflict with federal labor policy, neither courts nor the Board may modify or nullify substantive contractual provisions. See Armco Steel Corp. v. NLRB, 344 F.2d 621, 624-25 (6th Cir. 1965).² The waiver of the right to strike over the dispute at issue here violates no principle of labor law and indeed may encourage industrial peace. See Mastro Plastics Co. v. NLRB, 350 U.S. 270, 280, 76 S.Ct. 349, 356, 100 L.Ed. 309 (1956) (“[w]aivers [of the right to strike] contribute to the normal flow of commerce and to the maintenance of regular production schedules.”). Moreover, to require specific enumeration in a no-strike clause of all possible nonarbitrable disputes that might result in a work stoppage would place an unjustified obstacle on the ability of employers to bargain for an across-the-board no-strike clause and on the employees’ ability to gain concessions in return for such a pledge. An employer who bargains for such a clause would never be certain that employees would not strike over some unforeseeable dispufte, and employees, in turn, would have less to offer during contract negotiations. No federal labor policy supports such a restriction on party autonomy in the collective bargaining process.

We thus hold that the general no-strike clause in Article X of the collective bargaining agreement, not limited by the arbitration clause, constitutes a waiver of the employees’ right to strike over the Fund’s failure to pay insurance premiums.

IV.

The Company’s petition for review will be granted and the Board’s cross-application for enforcement will be denied.

1 . We do not view our decision today as inconsistent with subsequent Board decisions construing waiver provisions in collective bargaining agreements. In International Union of Operating Engineers (Davis-McKee), 238 N.L.R.B. 652 (1978), the Board held that a broad no-strike clause did not ban sympathy strikes. In that decision, however, the Board relied on the “presumption . . . that when the union gives up the right to strike in return for the employer’s obligation to submit disputes to arbitration, it does so only with respect to those disputes which are arbitrable.” Id. at 654. No such presumption is warranted here. This case resembles American Cyanamid Co., 246 N.L.R.B. No. 17, 1979-80 NLRB Dec. (CCH) H 16,354 in which the Board found that the existence of two separate no-strike clauses “suggests that . . . the broad, no-strike provisions in the ‘Strikes and Lockouts’ article were not the quid pro quo for [the Union’s] agreement to arbitrate disputes, but were an' independent undertaking by the Union in return for Respondent’s no-lockout pledge.” Id. at 30,600.

2 . We are not confronted here with an asserted waiver of the right to strike over an employer’s unfair labor practices. Cf. Mastro Plastics Co. v. NLRB, 350 U.S. 270, 76 S.Ct. 346, 100 L.Ed. 309 (1956) (finding strong policy against unfair labor practices and the right of employees to select their own bargaining representatives preeludes implied waiver of right to strike over unfair labor practices). We also note that in this case the employer does not seek to enjoin a strike under § 301(a) of the Labor Management Relations Act, 29 U.S.C. § 184 (1976). See Buffalo Forge Co. v. United Steelworkers, 428 U.S. 397, 96 S.Ct. 3141, 49 L.Ed.2d 1022 (1976).