National Labor Relations Board v. Solutia, Inc.

United States Court of Appeals
For the First Circuit
No. 12-1129
NATIONAL LABOR RELATIONS BOARD,
Petitioner,
v.
SOLUTIA, INC.,
Respondent.
UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL UNION, Local
414C/International Chemical Workers Union Council,
Intervenor.
No. 12-1174
UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL UNION, Local
414C/International Chemical Workers Union Council,
Petitioner,
v.
NATIONAL LABOR RELATIONS BOARD,
Respondent.
SOLUTIA, INC.,
Intervenor.
APPLICATION FOR ENFORCEMENT AND PETITIONS FOR REVIEW
OF A FINAL ORDER OF THE NATIONAL LABOR RELATIONS BOARD
Before
Lynch, Chief Judge,
Boudin, Circuit Judge,
and McConnell,* District Judge.
Zachary R. Henige, with whom Robert J. Englehart, Supervisor
Attorney, Lafe E. Solomon, Acting General Counsel, Celeste J.
Mattina, Deputy General Counsel, John H. Ferguson, Associate
General Counsel, and Linda Dreeben, Deputy Associate General
Counsel, were on brief, for the National Labor Relations Board.
Hugh F. Murray, III, with whom Murtha Cullina, LLP was on
brief, for Solutia, Inc.
Randall Vehar, with whom Robert W. Lowrey, David Rome, and
Pyle Rome Ehrenberg, P.C. were on brief, for United Food &
Commercial Workers International Union, Local 414C.
November 2, 2012
*
Of the District of Rhode Island, sitting by designation.
LYNCH, Chief Judge. This labor case comes from the
intersection of an employer's desire to become more competitive by
reducing costs and achieving greater efficiencies by consolidating
two lab operations into one, and its obligations under national
labor law to bargain with the union representing the affected
employees.
The National Labor Relations Board petitions for
enforcement of its 2011 order finding that Solutia, Inc. had
violated sections 8(a)(1) and (5) of the National Labor Relations
Act ("the Act"), 29 U.S.C. § 158(a)(1), (5). The order required
Solutia to return to United Food and Commercial Workers
International Union Local 414C certain work that Solutia had
transferred in 2009 to another part of its worksite and to
employees represented by another union.
Solutia cross-petitions for review of the Board's order,
and Local 414C has intervened in support of portions of the Board's
order. Local 414C also petitions for review, attacking that part
of the Board's order finding that Solutia did not violate its
collective bargaining agreement ("CBA") with Local 414C. On this
point, Solutia has intervened in support of the Board.
At issue here are the legal consequences of Solutia's
decision to consolidate two of its product testing labs at
different locations on its worksite into one lab, which resulted in
a reduction in positions and in Local 414C losing jurisdiction over
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lab testing work that its members had previously performed.
Solutia refused to bargain this decision with Local 414C,
considering it to be a management prerogative. The Board found
that the lab work transfer decision involved a mandatory subject of
bargaining, so that Solutia's refusal to bargain violated the Act.
It also found that the recognition clause in the CBA between
Solutia and Local 414C did not, as the Union alleged, prohibit the
work transfer without Local 414C's consent. Solutia now challenges
the former finding, while Local 414C challenges the latter. Both
parties also allege errors in the Board's remedial order.
The Board made no error of law in reaching its decision,
and its findings were supported by substantial evidence in the
record. We grant the Board's petition for enforcement of its order
and deny Solutia's cross-petition for review. We deny Local 414C's
petition for review. While there are reasons for some concern
about the remedial order, there are further administrative remedial
processes through which those concerns may be addressed.
I.
A. Factual Background
The facts giving rise to this case are largely
undisputed.
1. The Indian Orchard Site
The relevant events took place at the 250-acre industrial
"Indian Orchard Site" in Springfield, Massachusetts. A review of
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the Site's history is necessary to understanding how this case
arose.
Historically, two companies operated two separate plants
on the Site. The plant on the west side was known as the Bircham
Bend Plant, and the one on the east side was known as the
Springfield Plant. The chemical workers' union, Local 414C,
represented the Bircham Bend Plant employees, while the electrical
workers' union, Local 288, represented the Springfield Plant
employees.1 A chain-link fence separated the two sides of the
Site.
By 1963, Monsanto had acquired both plants on the Site,
and it continued to operate them as separate facilities for many
years, including keeping the fence up. The two unions continued to
represent employees on their respective sides of the Site. In
1982, Monsanto consolidated certain salaried employees and
departments onto the east side of the Site, and it took down the
fence. This consolidation, however, did not result in job or work
losses for hourly (union) employees on the west side. After the
consolidation, Local 414C continued to represent west side hourly
employees and Local 288 continued to represent east side hourly
employees.
1
Each of these unions has undergone various changes in its
affiliations over the years, but for the purposes of this case it
is only necessary to know that each side of the Site was
represented by a different union local.
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Also in 1982, Monsanto and Local 414C renegotiated their
CBA, which resulted in a change to the recognition clause. The
1982 clause read:
A unit comprising of all hourly rated
employees, excluding executives, office and
clerical employees, guards, professional
employees and supervisors as set forth in the
National Labor Relations Board Certification
of Representatives dated October 26, 1950, for
the then existing Bircham Bend Plant. This
recognition clause shall be unaffected by any
future consolidation of the plants at the
Indian Orchard Site.
Monsanto had proposed adding the first underlined clause; Local
414C agreed to that clause on the condition that Monsanto accept
the second underlined sentence. This same language remained in
Local 414C's CBA through the version adopted by Local 414C and
Solutia in 2006, which was the version in effect when the events at
issue occurred.2
In the years after the consolidation, Monsanto bargained
with the two unions when it made changes that would affect the work
2
Local 288's 1982 CBA was not in evidence. Local 288's 2006
CBA does include a recognition clause with a geographical
signifier, although its language is somewhat different from Local
414C's:
The Company recognizes [Local 288] as the sole collective
bargaining agent for all production, maintenance, service and
research employees, excluding [certain positions not at issue
here]. The terms "employee" and "employees" as used in this
Agreement shall include only those employees at that portion
of the Indian Orchard Plant formerly known as the Springfield
Plant for whom [Local 288] is recognized as collective
bargaining agent as set forth in this Section.
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available to union employees. For instance, when Monsanto built a
new building that straddled the line between the east and west
sides, it negotiated a "Memo of Understanding" signed by both
unions that designated the building as "geographically neutral" and
that allowed both unions' employees to work there. When Monsanto
built two new buildings on the east side and one on the west side,
it negotiated another tri-party agreement in which all three
buildings were also designated "geographically neutral," with the
maintenance to be performed by union members from the side where
each building was located. And in 1994, Monsanto bargained for a
"Memo of Understanding" with Local 288 that provided for the
transfer of certain sample testing work from a Local 288 lab to a
Local 414C lab.3
In 1997, Monsanto spun off its chemical manufacturing arm
into a new affiliate, Solutia. Solutia took charge of the Site and
maintained CBAs with Local 414C and Local 288. In 2006, Solutia
negotiated a new agreement with each union that superseded the
previous agreement as to the three newest buildings. These
agreements allowed union employees to "cross lines" and perform
maintenance, storage, and utility work in any of the three
3
The parties dispute whether this 1994 agreement also
involved management negotiations with Local 414C. One of Local
414C's former presidents testified that when Monsanto raised the
issue with the Union, Local 414C agreed to accept any work that
Monsanto might transfer to the west side, but there was no evidence
in the record that formal bargaining took place.
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buildings, regardless of which union had historically performed
those functions. The agreements also required Solutia to allocate
future staffing for the three buildings evenly among the unions.
They did not change the allocation of any production or lab work.
Solutia also reached a separate agreement with Local 414C
in 2006 that gave Local 414C jurisdiction over a new product line
that was being produced on the west side. This agreement
specifically stated that Local 414C was being granted jurisdiction
"[b]ased on the current location of the [production] operation" and
"only for any period of time in which" Solutia chose to locate
production on the west side.
The Bircham Bend Plant historically produced resins, and
Solutia continues to manufacture resins at that plant. The
Springfield Plant historically used these resins to produce Saflex
(or its equivalent), a strong clear plastic sheet that is used in
making safety glass. Solutia continues to produce Saflex at the
Springfield Plant. At the relevant times, the Bircham Bend Plant
included a stand-alone building known as the West Control Lab
("WCL"), in which employees performed quality control testing and
analysis on the resins produced on the west side.4 WCL employees
also performed testing on adhesives for an unrelated company,
4
Under the 1994 agreement between Monsanto and Local 288, the
WCL also tested certain east side products.
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Cytec, a "guest operation" under contract with Solutia. Local 414C
represented the employees in the WCL.
Meanwhile, on the east side, the Springfield Plant
included within its main building another lab, the Saflex Control
Lab ("SCL"), in which employees performed testing on east side
products. Employees in the SCL were represented by Local 288.
2. The Lab Work Transfer Dispute
In July 2008, Solutia began to consider consolidating lab
work on all products produced at the Site into one location, the
SCL. Solutia anticipated that consolidating the lab work would
allow it to reduce staffing levels and thus reduce labor costs by
$249,000 per year. It would also provide more work for SCL
employees, whom the company thought were underutilized. Solutia
also expected that moving its testing operations out of the WCL
would cause Cytec to become responsible for all of the costs of
operating that building, or if Cytec chose to move its testing
operations elsewhere, the building could be shut down and there
would be no operating costs. The transition would simply involve
moving existing equipment from the WCL to the SCL, without
requiring additional capital purchases. Finally, the company
believed that consolidation would increase the SCL lab workers'
skills because they would become knowledgeable about all stages of
the testing process, not just the stage performed on their side of
the Site. The company concluded that moving all testing to the SCL
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would mean that work formerly performed by Local 414C employees
would have to be transferred to Local 288 employees.
On March 4, 2009, Solutia management presented the
consolidation plan to representatives of Local 414C. The union
recorder's notes from this meeting reflect that the company stated
the consolidation was being "put[] on [the] table but needs to be
worked out." Joseph Coppola, Solutia's human resources director,
testified that as of March 4, 2009, the decision to go through with
the consolidation was already final on the local level but was
awaiting approval from higher-level management. He also stated
that as of this date, Solutia had already determined that it did
not have to bargain the decision to consolidate with Local 414C.
The next day, Local 414C representatives met with
management again and expressed their view that, under the terms of
Local 414C's CBA, Solutia did not have a right to consolidate the
lab work without first obtaining Local 414C's consent.
During March 2009, Coppola met more than once with Robert
Bellerive, Local 414C's president, to discuss the work transfer,
but the Union and the company could not agree on whether the CBA
authorized the transfer without Union consent. On May 7, 2009,
Bellerive and Thomas Humiston, the Union's treasurer, sent a letter
to Coppola requesting that the company provide the Union with the
CBA language it was relying on to conclude that it had the right to
transfer unilaterally the lab work. The letter further stated
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that, "[s]hould the union agree with the company's decision to take
this action after reviewing the information that has been requested
in this letter, the union demands to bargain this issue with the
company." The letter maintained Local 414C's position that the
unilateral work transfer was a violation of the CBA.
On May 27, 2009, Coppola met with Local 414C
representatives and reiterated that Solutia had made the decision
to consolidate the lab work. He also stated that it was Solutia's
position that it did not have to bargain that decision. Coppola
informed the representatives that the transfer would result in the
elimination of four Local 414C unit positions. He then stated,
"[f]or the record," that the company had suggested that its lawyers
and the Union's lawyers meet, but the Union had refused. Bellerive
testified that he had contacted the international union's president
about attorneys getting involved and that he was told the union's
attorneys would only intervene at the arbitration stage, after
negotiations had taken place between the company and the local.
Two days later, on May 29, 2009, Coppola sent a letter to
Local 414C that confirmed his statements from the May 27 meeting
and informed the Union that all Solutia testing at the WCL would
cease by August 31, 2009. Coppola also stated that work
transferred to the SCL would "necessarily" be performed by Local
288 employees because of the terms of Solutia's CBA with Local 288.
He denied that the work transfer violated Local 414C's CBA and
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asserted that the decision could be made unilaterally because it
fell within the CBA's "management rights" provision. Finally,
Coppola wrote that Solutia would "discuss . . . any reasonable
proposals [the Union] may have" with regard to the Local 414C
workers "affected by" the transfer, though it would not bargain
over the transfer decision itself.
On June 16, 2009, Solutia provided formal written notice
to Local 414C that four positions in the WCL would be eliminated on
August 2, 2009. On July 18, 2009, Solutia entered into a new CBA
with Local 288 that altered the qualifications and job descriptions
for SCL employees in anticipation of the consolidation.
The lab consolidation began on August 3, 2009, and was
completed within two weeks. The transition involved moving
equipment from the WCL to the SCL and making some construction
modifications to enlarge the SCL.
Although Solutia eliminated the WCL lab positions, it did
not lay off any Local 414C personnel. Some of the former WCL
employees elected retirement; others bid into production jobs
(which were considered less desirable because they were more
physically demanding); and others began performing testing work for
Cytec at another location on the Site. Since the transfer, testing
work has not been performed in the WCL building.
On October 1, 2009, Solutia and Local 414C entered into
a new CBA. The parties dispute whether the CBA negotiations
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included any bargaining over the effects of the lab work transfer
decision, but it appears undisputed that the CBA negotiations did
not include bargaining over the decision itself.
B. Procedural Background
On June 2, 2009, after Solutia confirmed by letter that
it would not bargain the work transfer decision, Local 414C filed
an unfair labor practice charge with NLRB's regional office,
alleging that Solutia had violated the Act by unilaterally
modifying the CBA and unilaterally transferring work out of the
bargaining unit. The next day, Local 414C also filed a grievance
with Solutia alleging a violation of the CBA. On June 19, 2009,
Solutia denied Local 414C's grievance, for the same reasons as it
had stated in its May 29 letter. Local 414C later dropped the
grievance to pursue relief through its unfair labor practice
charge.
On December 31, 2009, NLRB's General Counsel issued a
complaint against Solutia. The case was tried before an
administrative law judge ("ALJ") on April 8 and 9, 2010. The ALJ
issued his decision on July 30, 2010. His specific findings and
conclusions will be detailed below as relevant to each issue in the
present petitions. In short, however, the ALJ found that Solutia
(1) did not violate the CBA, but (2) did violate the Act by
refusing to provide an opportunity to bargain over a mandatory
subject of bargaining. As remedies, the ALJ ordered Solutia to
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take the following actions: (1) restore the WCL to the status quo
ante as of August 1, 2009; (2) offer full reinstatement to current
or former WCL employees who had been reassigned or had retired as
a result of the consolidation, and "make whole" any such employees
who had lost earnings or benefits as a result; (3) remit
contributions Solutia would have made on such employees' behalf to
retirement, 401(k), and/or health care funds; (4) reimburse Local
414C for union dues that would have been deducted from such
employees' salaries; (5) bargain with Local 414C before
implementing any similar changes in the future;5 and (6) post
notice at the Site.
Solutia filed exceptions to the ALJ's decision and
remedies with the Board, and NLRB's General Counsel and Local 414C
filed cross-exceptions. On July 15, 2011, a three-member panel of
the Board issued its decision and order adopting the ALJ's decision
in all relevant respects.6
On January 23, 2012, NLRB petitioned this court for
enforcement of its July 15, 2011 order. Solutia cross-petitioned
for review of the order on February 2, 2012. That same day, Local
5
This element appears in the ALJ's "Remedy" section, but it
does not appear in the "Order" section. The Order does require
Solutia to cease and desist from "[f]ailing and refusing to
bargain" with Local 414C over the lab transfer decision and its
effects.
6
The panel made only two minor changes: it revised the ALJ's
ordered method for computing interest, and it revised some
specifics in the order for posting notice.
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414C moved to intervene on the Board's behalf; that motion was
granted on February 16, 2012.
Meanwhile, also on February 2, 2012, Local 414C filed its
petition for review of the July 15, 2011 order. Solutia moved to
intervene on the Board's behalf on February 22, 2012, and that
motion was granted on March 7, 2012.
On March 14, 2012, this court granted NLRB's motion to
consolidate the two cases.
II.
We begin by addressing the Board's finding that Solutia
violated sections 8(a)(1) and (5) of the Act, 29 U.S.C.
§ 158(a)(1), (5), which is the subject of the Board's petition for
enforcement and Solutia's cross-petition for review. We conclude
that the Board did not err in the standard it applied in reaching
its decision and that its findings were supported by substantial
evidence.
A. Standard of Review
The Board's factual findings are conclusive on this court
if they are "supported by substantial evidence on the record
considered as a whole." 29 U.S.C. § 160(e). This court will
uphold the Board's construction of the Act so long as the
interpretation is "reasonably defensible." Pan Am. Grain Co. v.
NLRB, 558 F.3d 22, 26 (1st Cir. 2009) (quoting Ford Motor Co. v.
NLRB, 441 U.S. 488, 497 (1979)) (internal quotation marks omitted).
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B. Mandatory Subject of Bargaining
Solutia first seeks to prevent enforcement of the Board's
order by arguing that the Board's determination that Solutia failed
to provide an opportunity to bargain over a mandatory subject of
bargaining was reached using an incorrect legal standard and that
it was not supported by substantial evidence. The applicable
standard turns on the nature of Solutia's decision and whether it
was about a "term or condition of employment" subject to mandatory
bargaining.
Section 8(a)(5) of the Act makes it an unfair labor
practice for an employer to refuse to bargain collectively with its
employees' representatives, see 29 U.S.C. § 158(a)(5), and section
8(a)(1) makes it an unfair labor practice for an employer to
interfere with any of an employee's rights under the Act, see id.§ 158(a)(1). The duty to bargain collectively comprises, in part,
"the performance of the mutual obligation of the employer and the
representative of the employees to meet at reasonable times and
confer in good faith with respect to wages, hours, and other terms
and conditions of employment." Id. § 158(d). Under the Act, an
employer's decisions about "wages, hours, and other terms and
conditions of employment" are mandatory subjects of bargaining.
NLRB v. Wooster Div. of Borg-Warner Corp., 356 U.S. 342, 349
(1958). An employer violates section 8(a)(5) when it makes a
unilateral change to a term or condition of employment without
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first bargaining to impasse with the union. Litton Fin. Printing
Div. v. NLRB, 501 U.S. 190, 198 (1991). The Board receives
"considerable deference" in its determinations of what constitutes
a "term or condition" of employment. Ford Motor Co., 441 U.S. at
495.
Solutia contends that transferring the lab work was a
change in the scope or direction of its business and that the Board
should have used the tests set forth in First National Maintenance
Corp. v. NLRB, 452 U.S. 666 (1981), and Dubuque Packing Co., 303
N.L.R.B. 386 (1991), enforced sub nom. United Food & Commercial
Workers Int'l Union, Local No. 150-A v. NLRB, 1 F.3d 24 (D.C. Cir.
1993). In contrast, the Board found that the transfer was not a
change in direction or scope of the enterprise, but a movement of
the same unit work to different employees within the same facility,
which is not covered by Dubuque and which is a mandatory subject of
bargaining.
In First National, the Supreme Court identified three
categories of management decisions: those that are "almost
exclusively" about an aspect of the employment relationship, such
as decisions affecting work rules and production quotas; those that
"have only an indirect and attenuated impact on the employment
relationship," such as decisions about advertising and product
design; and those that have a "direct impact on employment" but
"ha[ve] as [their] focus only the economic profitability" of the
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company. 452 U.S. at 677. This third type of decision includes
those that involve "a change in the scope and direction of the
enterprise." Id. When it comes to decisions in the third
category, the Court stated that bargaining should be mandatory
"only if the benefit, for labor-management relations and the
collective-bargaining process, outweighs the burden placed on the
conduct of the business." Id. at 679.
In Dubuque, the Board established a test for deciding
"whether a decision to relocate unit work is a mandatory subject of
bargaining," holding that such a decision was within the third
First National category. 303 N.L.R.B. at 390. The Board held that
the initial burden in a relocation case rests with NLRB's General
Counsel, who must "establish that the employer's decision involved
a relocation of unit work unaccompanied by a basic change in the
nature of the employer's operation." Id. at 391. If the General
Counsel meets that burden, a prima facie case has been established
that the relocation is a mandatory subject of bargaining. Id. The
employer can then make out a defense to the prima facie case by
showing that (1) "labor costs (direct and/or indirect) were not a
factor in the decision"; or (2) "even if labor costs were a factor
. . . , the union could not have offered labor cost concessions
that could have changed the employer's decision to relocate." Id.
However, if an employer's transfer of work outside the
bargaining unit is in the nature of an "allocation" rather than a
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"relocation," the Board has held that the decision is subject to
mandatory bargaining regardless of whether it focuses on the
company's profitability. See, e.g., Westinghouse Elec. Corp., 313
N.L.R.B. 452, 453 (1993). The Board derives this principle from
the Supreme Court's decision in Fibreboard Paper Products Corp. v.
NLRB, 379 U.S. 203 (1964), in which Justice Stewart's influential
concurrence7 identified "assignment of work among potentially
eligible groups within the plant" as a matter "recognized as [a]
subject[] of compulsory bargaining." Id. at 224 (Stewart, J.,
concurring).
The Board has interpreted this rule in a case that bears
a striking resemblance to Solutia's. In Westinghouse Electric
Corp., 313 N.L.R.B. 452, the employer made a unilateral decision to
close a laboratory on the west side of its facility and consolidate
the work in a more modern and efficient laboratory on the east
side, whose workers were represented by a different bargaining
unit. Id. at 452. The Board in Westinghouse concluded that "a
shift of work from a group of employees in one building on an
employer's corporate premises to a group of employees in another
employer-owned building at the same site is not the kind of
7
The Court relied in significant part on Justice Stewart's
Fibreboard concurrence when it formulated its rule in First
National. See 452 U.S. at 676-79.
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relocation which we dealt with in Dubuque."8 Id. at 453. Rather,
in this situation -- where there was no change in the scope or
direction of the business, the type of work being performed, or the
site where the work was performed -- the decision was necessarily
a mandatory subject of bargaining. Id. Relying on Westinghouse,
the Board in this case concluded that Solutia's work transfer was
an allocation decision subject to mandatory bargaining.9
Solutia argues that it was error for the Board to apply
the Westinghouse rule because, as a factual matter, the lab work
transfer did constitute a change in the scope or direction of
Solutia's business. This difference, it argues, should have
triggered the Dubuque burden-shifting analysis. The argument
fails. There is substantial evidence to support the Board's
conclusion that the lab work transfer at the Site did not
constitute a change in the scope or direction of Solutia's
8
In Dubuque, the employer had relocated work from a facility
in Iowa to a facility in Illinois. 303 N.L.R.B. at 387.
9
The Board also argues before this court that the work
transfer was a mandatory subject of bargaining under two other
theories. First, it argues that when labor costs are a factor in
a mixed-motive layoff decision, that decision is a mandatory
subject of bargaining. See Pan Am. Grain Co. v. NLRB, 558 F.3d 22,
27-28 (1st Cir. 2009) (citing NLRB precedent to this effect and
affirming Board's decision that employer was required to bargain
over layoffs motivated in part by labor costs and in part by
modernization). Second, it asserts that where an employer's
economic motives for layoffs are separable from any change in the
scope of the business's operation, the decision to make layoffs is
a mandatory subject of bargaining. Because these theories were not
part of the ALJ's or Board's decisions, we do not review them.
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business, and thus that the Westinghouse rule, rather than the
Dubuque analysis, was the applicable standard.
Solutia's scope-or-direction argument rests on its
factual assertion that consolidating the lab work in the SCL was a
fundamental change to the way in which its products would be tested
at the Site. Solutia's evidence before the Board does not come
close to compelling this conclusion, and largely undercuts it. The
evidence shows that the company did not plan for SCL employees to
perform more or different tests than those formerly performed in
the WCL; rather, Solutia expected that having SCL employees test
both west side and east side products would improve their ability
to "troubleshoot and respond to problems," and a primary motivation
was a reduction in the number of jobs needed to perform the tests.
The Board could easily conclude that this sort of skill improvement
does not represent a fundamental change in the company's
operations.
Additionally, Solutia's documents, as well as testimony
from its plant manager, David Lahr, showed that employees in the
consolidated SCL would use the same equipment that had been used in
the WCL. In fact, a WCL employee trained the people who were to
instruct the SCL employees on how to perform the tests, suggesting
that there was no substantive difference between how the WCL
employees had tested resins before the consolidation and how the
SCL employees were expected to test them afterward. Solutia is
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still producing all of the same products at the Site as it did
before August 2009. Now it merely has different (and fewer)
employees performing the quality and safety testing on those
products.
The Board did not err in applying the Westinghouse rule
in this case.10
10
The Board also concluded that even if the Dubuque analysis
had applied, the outcome of the case would have been the same.
Solutia argues that, under a properly applied Dubuque analysis,
there would not have been substantial evidence to support a finding
of statutory violation. Solutia asserts that it made out the
Dubuque defense because the kinds of labor savings it anticipated
from the work transfer were not of the kind properly considered
under First National, and thus "labor costs" as such were not a
factor in its decision. And even if labor costs were a factor, it
argues, the Union could not have offered any concessions to change
Solutia's decision. Although we hold that the Board was not
required to apply the Dubuque analysis, we agree with the Board's
conclusion that Solutia would fare no better under Dubuque.
There is substantial evidence to support a finding that the
General Counsel made out a prima facie case for mandatory
bargaining under Dubuque. As described in the text, the Board
could have found that Solutia's work transfer did not involve a
change in the scope or direction of its business, and the company
did "relocate" work out of the bargaining unit. See Dubuque, 303
N.L.R.B. at 391.
Solutia's argument that labor costs were not a factor in its
decision is contradicted by the record. Coppola specifically
testified that labor costs played a role in the consolidation
decision. Solutia expected to save almost $250,000 in salaries
from eliminating WCL positions. Solutia also anticipated that the
work transfer would remedy the underutilization of the SCL workers,
which the company considered a labor cost issue. First National
contemplated that "labor costs" would include not just per-person
costs such as wages but also elements such as "size of workforce
and production goals." Furniture Rentors of Am., Inc. v. NLRB, 36
F.3d 1240, 1249 (3d Cir. 1994).
Solutia does not point to any specific evidence supporting its
contention that there were no possible concessions Local 414C could
have offered to change its decision, relying instead on its own
asserted reasons for why it decided to consolidate work in the SCL.
-22-
Solutia then argues that the Board, by relying on
Westinghouse, incorrectly created a "virtual per se rule" for work
consolidation cases that is incompatible with the balancing
approach of First National. Solutia relies on Furniture Rentors of
America, Inc. v. NLRB, 36 F.3d 1240 (3d Cir. 1994), and NLRB v.
Wehr Constructors, Inc., 159 F.3d 946 (6th Cir. 1998), for the
proposition that the Board cannot rely on Westinghouse here because
it must perform the First National balancing anew in every case
that involves a third-category decision. We disagree. Solutia's
reading of these cases is inaccurate. Both involved employers'
decisions to subcontract, and both denied enforcement of NLRB
orders that broadly applied Fibreboard to such decisions without
looking to the business circumstances that attended them. See
Furniture Rentors, 36 F.3d at 1247-50; Wehr Constructors, 159 F.3d
at 951-55. Neither case implied that the Board could not look to
its own precedent in determining whether a specific type of factual
situation had previously resulted in a finding of a mandatory duty
to bargain. The Board's reliance on Westinghouse in Solutia's case
The Board rightly pointed out that Solutia bore the burden on this
issue, and the evidence does not compel a finding that the Board
was wrong to conclude that Solutia failed to meet its burden. See
Comar, Inc., 349 N.L.R.B. 342, 359 (2007) (finding that employer's
"self-serving and conclusory testimony" that decision could not
have been altered by bargaining was "insufficient to establish"
that changes at issue were not a mandatory subject of bargaining,
and citing cases).
-23-
was much narrower than the Board's reliance on Fibreboard in either
of the cases that Solutia cites.
Here, the Board did attend to the facts of Solutia's
case, and based on the record, it concluded that Solutia's actions
fell within the category of reallocation decisions subject to the
mandatory duty to bargain. See, e.g., Regal Cinemas, Inc. v. NLRB,
317 F.3d 300, 310-12 (D.C. Cir. 2003) (approving application of
Westinghouse analysis to work allocation decision that did not
involve a change in the nature of the work, and rejecting argument
that Board's use of Westinghouse created a per se rule);
Westinghouse, 313 N.L.R.B. at 453; Holmes & Narver, 309 N.L.R.B.
146, 147 (1992) ("[O]ur decision here does not purport to establish
a rule as to all layoffs. We are dealing with layoffs that are
made in connection with a decision to continue doing the same work
with essentially the same technology, but to do it with fewer
employees by virtue of giving some of the employees more work
assignments."). The findings underlying this determination were
supported by the record, and the Westinghouse interpretation of the
mandatory duty to bargain is reasonably defensible. See Regal
Cinemas, 317 F.3d at 312.
C. Purported Waiver by the Union of the Right to Bargain and
Adequacy of Opportunity to Bargain
Solutia next argues that it cannot be liable under the
Act because Local 414C waived its right to bargain the work
-24-
transfer decision and Solutia fulfilled its statutory obligation to
bargain the effects of that decision. We conclude that there is
substantial evidence to support the Board's findings that Local
414C had not waived its right to bargain and that Solutia had
failed to provide an adequate opportunity to bargain the effects.
1. Bargaining the Decision
"If an employer gives a union advance notice of its
intention to make a change to a term or condition of employment,
'it is incumbent upon the [u]nion to act with due diligence in
requesting bargaining' in order to avoid waiving any of its claims
under the NLRA." Regal Cinemas, 317 F.3d at 314 (alteration in
original) (quoting Golden Bay Freight Lines, 267 N.L.R.B. 1073,
1080 (1983)). However, "[a] union is 'not required to go through
the motions of requesting bargaining[]' . . . if it is clear that
an employer has made its decision and will not negotiate." Id.(quoting Gratiot Cmty. Hosp., 312 N.L.R.B. 1075, 1080 (1993)).
Neither party contests these basic principles; their disagreements
are about whether Local 414C met the first standard and/or falls
into the exception stated by the second standard.
Solutia contends that Local 414C waived its right to
bargain the work transfer decision because the Union did not
request decision bargaining. Solutia argues that Local 414C
insisted, from the time it learned about the proposed
consolidation, that the work transfer would violate the CBA, and
-25-
thus the Union did not even attempt to bargain the decision.
Solutia also maintains that there was insufficient evidence to
support the Board's conclusion that Local 414C did not have to
demand bargaining because Solutia presented the decision as
non-negotiable.
The Board's conclusion that Local 414C timely requested
to bargain the work transfer decision rests primarily on Local
414C's letter of May 7, 2009.11 The Union's letter maintains its
previously stated position that the work transfer would violate the
CBA, but it also states that in the event Local 414C "agree[s] with
the company's decision to take this action," the Union "demands to
bargain this issue." This language is fairly susceptible of two
readings: (1) if the Union agrees that the transfer would not
violate the CBA, then it demands to bargain the entire "issue"
(both decision and effects); or (2) if the Union agrees that
management has authority to make the decision unilaterally, then it
demands to bargain the effects. Solutia assumes that this second
reading is required and supports its argument. We do not address
that because the Board's reading is adequately grounded in the
record.
11
The Board found that the record was unclear as to whether
the Union, via Bellerive's meetings with Coppola, had requested
bargaining before that date.
-26-
The Board apparently adopted the first meaning, and
Solutia has not pointed to evidence showing that the second meaning
is the only correct one. Bellerive testified that at the March 5,
2009 meeting with management and in his meetings with Coppola
before the May 7 letter, he repeatedly told Coppola that the work
transfer decision was a "negotiable item" that should be addressed
in upcoming CBA negotiations. While the position that Bellerive
communicated to Coppola relied on CBA bargaining rather than on a
separate statutory duty to bargain, it was clear that Local 414C
was asking to bargain regarding the decision. Bellerive's
testimony supports the Board's conclusion that the May 7 letter
meant that the Union was demanding to bargain the decision in the
event it agreed that the CBA did not otherwise prohibit the
transfer.
To support its argument, Solutia highlights a line in the
notes from the May 27, 2009 meeting, in which Bellerive stated that
he did not "want the company to tell employees the Union is
negotiating." But this statement does not shed light on the issue
of whether the Union had demanded decision or effects bargaining,
or both, or neither. In fact, it would be reasonable to infer
that, given the Union's insistence that Solutia could not make the
decision unilaterally, the Union did not want the company to
suggest to employees that the Union had acquiesced in the decision
and was already bargaining the effects.
-27-
The authorities relied on by both Solutia and the Board
do not address a situation in which one reason for a union's
purported failure to request decision bargaining is the union's
clearly communicated position that the decision is prohibited
regardless of bargaining. At least one court has held that under
somewhat similar circumstances, there was no waiver. See Patent
Office Prof'l Ass'n v. Fed. Labor Relations Auth., 872 F.2d 451,
455-56 (D.C. Cir. 1989) (holding that federal employee union's
request to employer agency that agency halt decision pending a
determination of its lawfulness "did not waive [the union's] right
to bargain, as much as initiate it"). Based on Bellerive's
testimony and the text of the May 7 letter, there was substantial
evidence for the Board to conclude that Local 414C requested
decision bargaining.12
12
There is some authority to suggest that, even if the May 7
letter were not by itself considered a demand for decision
bargaining, Local 414C's unfair labor practice charge of June 2,
2009 could constitute a bargaining demand, to the extent it
clarified the letter. See RC Aluminum Indus., Inc. v. NLRB, 326
F.3d 235, 243 (D.C. Cir. 2003) (noting that "[a] line of Board
cases holds that the filing of an unfair labor practice charge may
cure an inadequate request and give rise to a valid bargaining
demand"); cf. Patent Office Prof'l Ass'n v. Fed. Labor Relations
Auth., 872 F.2d 451, 455-56 (D.C. Cir. 1989) (holding that union's
filing of an unfair labor practice charge after informing employer
that it believed employer's action to be contrary to law put
employer on notice that union would seek to bargain the action).
The Board's decision in this case adverted briefly to this
possibility, stating that Local 414C had requested decision
bargaining "both by its May 7 letter to [Solutia] and by its
subsequent unfair labor practice charge and grievance." The Board
does not pursue this line of argument in its petition for
enforcement.
-28-
Moreover, even if Solutia were correct that the May 7
letter cannot be read as a demand for decision bargaining, there is
ample evidence to support the Board's conclusion that Local 414C
did not need to request decision bargaining because the decision
was presented as a "fait accompli." See Regal Cinemas, 317 F.3d at
314 (quoting Int'l Ladies' Garment Workers Union v. NLRB, 463 F.2d
907, 919 (D.C. Cir. 1972)). Coppola testified that the company had
decided before March 2009 that it had no duty to, and would not,
bargain the work transfer decision with Local 414C. Lahr also
testified that the decision was final at least as of May 7, 2009.
During the May 27, 2009 meeting, Solutia announced to the Union
that it did not believe it had an obligation to bargain the
decision, but both Bellerive's and Coppola's testimony suggests
that Coppola had already communicated to Bellerive during their
meetings in March that the company believed the CBA authorized a
unilateral work transfer. This evidence supports the conclusion
that any request to bargain the decision would have been futile.
Solutia counters that, although it had determined that it
had no duty to bargain even before informing the Union of the plan,
it did not confirm this position with the Union until late May, and
Local 414C had not requested decision bargaining before then. It
is true that in order for a situation to fall within the "fait
accompli" exception, it must be "clear" to the union that the
employer will not negotiate. Id. Substantial evidence supports
-29-
the Board's conclusion that Solutia's position was clear to Local
414C before the May 29 letter. Coppola himself testified that in
March 2009 he and Bellerive "basically confirmed [their]
disagreement, as to the company's right to move the work."
Furthermore, even if Solutia's position had not been confirmed
before May 29, 2009, we do not accept its proposition that the
period between March 4, 2009 (when Local 414C first learned of the
work transfer plan) and May 29, 2009 (when it definitively learned
that the plan was a fait accompli) was so long as to cause the
Union to waive its right to bargain the decision. Cf. G. Heileman
Brewing Co. v. NLRB, 879 F.2d 1526, 1532 (7th Cir. 1989) (union's
delay of one month before requesting bargaining, while
"unnecessar[y]," did not trigger waiver).
Finally, Solutia argues that the "management rights"
clause in its CBA with Local 414C waived the Union's right to
bargain the decision.13 That provision reads:
The Union recognizes that subject to the
provisions of this Agreement, the operation of
the plant, including but not limited to the
right to employ, promote, lay-off, discipline
or discharge for just cause, and to judge the
qualifications and competency of all
employees, are reserved by and vested in the
Company.
13
Solutia refers to this argument in only one paragraph of its
brief before this court. We bypass whether Solutia's brief has
waived the issue and deal with it on the merits.
-30-
This was a primary argument Solutia advanced before the ALJ and
Board, but a secondary argument in its petition to this court. The
Board concluded that the management rights clause did not cover the
type of decision at issue here and thus could not preclude the
Union's right to bargain the decision.
It is difficult, from our perspective, to know why
Solutia acted with such assurance that it had no obligation to
bargain the decision. Coppola's belief that Solutia did not have
to bargain the decision was based on consulting Local 414C's and
Local 288's CBAs. The CBA language was cited in Solutia's May 29,
2009 letter to Local 414C and in Solutia's denial of Local 414C's
grievance. Just as the Union relied on the CBA for its insistence
that Solutia could not transfer the work, Solutia relied on the CBA
for its insistence that it could.14
Under the rule in this circuit set forth in Bath Marine
Draftsmen's Ass'n v. NLRB, 475 F.3d 14, 25 (1st Cir. 2007), the
standard for evaluating a CBA-based defense to a section 8(a)(5)
claim is the "contract coverage" test. That test looks to whether
the parties have negotiated a provision in their CBA that
14
In its brief to this court, Solutia makes the confusing
suggestion that the management rights clause "combine[s]" with
Local 414C's actions to result in a waiver of the right to bargain
the decision. But see NLRB v. U.S. Postal Serv., 8 F.3d 832, 836
(D.C. Cir. 1993) (noting that contract coverage and waiver are
"analytically distinct" because, if a subject is covered by a CBA,
the union is deemed to have exercised its right to bargain that
subject and thus cannot be said to have waived the right).
-31-
establishes the parties' rights regarding an otherwise mandatory
bargaining subject.15 Id.; see NLRB v. U.S. Postal Serv., 8 F.3d
832, 836 (D.C. Cir. 1993). The Board, applying the contract
coverage test, found that the plain language of the clause and the
parties' bargaining history demonstrated that the lab work transfer
was not within the coverage of the management rights clause. It
determined that there was no sound arguable basis for Solutia's
interpretation of the clause.
The parties have not briefed the question of what
standard of review we should apply to the question of contract
coverage and the Board's interpretation of the CBA.16 Regardless
of whether we interpret Solutia and Local 414C's CBA de novo17 or
15
The Board noted that Solutia's defense would also fail under
NLRB's more stringent "clear and unmistakable" waiver test, Provena
Hosps., 350 N.L.R.B. 808 (2007), but we do not address that finding
because it does not apply the controlling test in this circuit.
16
The Board has limited authority to interpret a CBA in order
to resolve a section 8(a)(5) defense. See Bath Marine, 475 F.3d at
25; U.S. Postal Serv., 8 F.3d at 837. However, federal labor laws
establish that courts and arbitrators generally are the primary
interpreters of labor contracts. See U.S. Postal Serv., 8 F.3d at
837. This court has implied that the Board's interpretation of a
CBA in the section 8(a)(5) context should be subject to de novo
review. See Bath Marine, 475 F.3d at 25. But see id. at 29-30(Lynch, J., concurring in the judgment) (noting that Bath Marine
did not actually involve a section 8(a)(5) claim and disputing that
the imposition of de novo review was justified in that case).
17
We have stated elsewhere that our interpretation of a labor
contract under the Labor Management Relations Act, 29 U.S.C. § 141et seq., is de novo. Coffin v. Bowater Inc., 501 F.3d 80, 97 (1st
Cir. 2007). However, that case arose from an appeal in a putative
class action suit, id. at 83, and did not involve any question of
administrative deference.
-32-
apply some form of deference to the Board's decision,18 we reach the
same conclusion in this case. The management rights clause did not
authorize Solutia's unilateral work transfer.
"In determining whether a subject is covered by a CBA,
. . . we will consider whether the parties bargained over the
mandatory subject at issue." Bath Marine, 475 F.3d at 25. The
plain language of the management rights clause would not suggest to
any reader that the geographical allocation of work had been one of
the bargaining topics when Solutia and Local 414C negotiated this
clause. As the Board noted, the illustrative list of
"operation[s]" reserved to management under the clause describes
decisions of only one type: "routine employment actions" concerning
individual employees, such as promotions and discipline. See Regal
Cinemas, 317 F.3d at 312-13 (management rights clause that reserved
employer's right to "introduce new or improved work methods . . .
processes and procedures" and "change or eliminate existing . . .
procedures or work," id. at 312 (alterations in original), did not
cover employer's decision to remove work from bargaining unit
employees and reassign it to managers). The language of the
management rights clause clearly does not encompass cross-plant
18
The Board's conclusion that the management rights clause did
not cover the lab work transfer was not based solely on the
contract language. It also took into account the parties'
bargaining history. The Board's findings in this regard were
supported by substantial evidence. So the question of whether
there should be any deference may depend on the justification for
the Board's decision.
-33-
work consolidation and elimination of unit positions. Compare U.S.
Postal Serv., 8 F.3d at 838 (management rights clause reserved to
employer the right "[t]o determine the methods, means and personnel
by which [its] operations are to be conducted" (second alteration
in original)).
Further, the bargaining history shows that Solutia (and
its predecessor, Monsanto19) had previously bargained similar issues
under the same management rights language. Solutia's bargained
2006 agreement with Local 414C regarding the new product line
included an explicit provision addressing Solutia's future right to
remove work assigned to the west side, which Solutia would not have
needed to include if it believed that such a move were already
authorized by the CBA. The series of agreements between Monsanto
and both unions regarding work in the new buildings, as well as the
agreements between Solutia and the unions regarding the ability to
"cross lines," provide additional evidence of the employer's
beliefs about the scope of the management rights clause.20 See
19
The management rights clause has been part of Local 414C's
CBA since at least 1979.
20
The 1994 agreement between Monsanto and Local 288 represents
an instance of bargaining over the precise type of action at issue
here: removing work from one unit and transferring it to the other
unit. This agreement was, of course, governed by Local 288's CBA
rather than Local 414C's. Nonetheless, the 1994 agreement provides
evidence of the employer's historical understanding that cross-Site
work allocation was a subject of negotiation with the unions.
Bellerive's testimony indicates that, although Monsanto did not
formally bargain the 1994 work transfer decision with Local 414C,
Monsanto did discuss the decision with the Union and the Union
-34-
Regal Cinemas, 317 F.3d at 313 (noting that bargaining history did
not support employer's interpretation of management rights clause
and concluding that, in light of language and history, it would not
"conclude that a union would knowingly agree to a clause that would
effectively permit the employer to unilaterally extinguish the
bargaining unit altogether").
In sum, neither the language of the clause nor the
bargaining history support the conclusion that the employer and the
Union had already bargained to give the company unilateral control
over the mandatory subject of allocation of work to different units
within the plant. Solutia has failed to make out a contractual
defense to its violation of the statutory duty to bargain the work
transfer decision.
2. Adequate Opportunity for Bargaining the Effects
Solutia next argues that the Board's determination that
Solutia failed to provide Local 414C with an adequate opportunity
to bargain the effects of the work transfer decision was
unsupported by substantial evidence. Solutia agrees that it had an
obligation under the Act to bargain the effects, but it denies that
it failed to offer an opportunity to do so. This is a closer
question.
expressed its willingness to take on additional work provided that
the company would supply additional help if needed.
-35-
The Board's finding that Solutia had not satisfied its
statutory duty to bargain the effects was largely based on the
finding that Solutia had not satisfied its duty to bargain the
decision. The Board argues to us that, in the absence of an offer
to bargain the decision, any offer to bargain the effects would
have been insufficient, because an employer cannot satisfy the
latter obligation without first satisfying the former. It cites
its own precedent in Dan Dee West Virginia Corp., 180 N.L.R.B. 534(1970), which stands for a different proposition: that an employer
cannot use a union's refusal to bargain effects as a defense when
there is an ongoing dispute about the employer's obligation to
bargain the decision. See id. at 539. The Supreme Court has
recognized that the duty to bargain a decision and the duty to
bargain its effects are two separate obligations under the Act.
See First National, 452 U.S. at 677 n.15, 686 (holding that
employer had no obligation to bargain decision but did have an
obligation to bargain the effects of the decision).
We are far from convinced that a per se rule, operating
regardless of the underlying facts, as argued by the Board, is
defensible. We also disagree with the Board's assertion that this
circuit has previously adopted such a rule.21 Nevertheless, on the
21
The Board cites Soule Glass & Glazing Co. v. NLRB, 652 F.2d
1055, 1088 (1st Cir. 1981), abrogated on other grounds by NLRB v.
Curtin Matheson Scientific, Inc., 494 U.S. 775 (1990), for our
purported adoption of a per se rule. The Board far overreads the
case. Soule Glass merely states the basic proposition that "[t]he
-36-
particular facts of this case, there was substantial evidence to
support the conclusion that Solutia failed to provide Local 414C
with a meaningful opportunity to bargain the effects, apart from
any proposed per se rule.
Solutia's argument that it did provide a meaningful
opportunity first relies on Local 414C's alleged failure to request
effects bargaining and its failure to respond to Solutia's letter
of May 29, 2009, which stated that Solutia would "discuss . . . any
reasonable proposals [Local 414C] may have" with regard to the
Local 414C workers "affected by" the transfer. However, this
argument overlooks the Union's May 7, 2009 letter, which stated
that, should the Union "agree with the company's decision to take
this action," the Union "demands to bargain this issue." The Board
could reasonably find that this statement referred to bargaining
both the decision and the effects or to bargaining the effects
only. Under either interpretation, the May 7 letter would
establish a demand for effects bargaining, at least once the CBA
issue was resolved. As it happened, the CBA issue was not resolved
until the parties litigated it before the Board.
employer must bargain with respect to the decision to remove work
from bargaining unit employees, not merely its effects on the
employees." Id. (citing Fibreboard, 379 U.S. at 209). It says
nothing about the order in which the employer must perform the
bargaining, nor does it suggest that a violation of the duty to
bargain a decision automatically precludes an employer from
fulfilling the duty to bargain effects. It simply recognizes the
fact that decision bargaining and effects bargaining are two
separate duties.
-37-
Solutia falls back to an argument that certain
negotiations in September 2009, which occurred in connection with
Solutia and Local 414C's new CBA, actually constituted effects
bargaining as to the work transfer of August 2009. The evidence
supports a conclusion that the CBA-related negotiations were not in
the nature of effects bargaining.
For instance, during the CBA negotiations Solutia
proposed to "make whole" the employees who had been forced to take
a temporary pay cut while training for the new positions into which
they had transferred after the WCL closure. But Lahr testified
that the purpose of this proposal was to encourage the bargaining
committee to recommend ratification of the new CBA, and that the
Union made clear that its acceptance of this proposal was not meant
to resolve the unfair labor practice charge then pending on the
work transfer issue. Gary Bordeau, a former WCL employee,
testified that he had filed a grievance regarding these training
wages and that the grievance was resolved through negotiations,
suggesting that the "make whole" proposal was linked to this
separate dispute. Finally, neither party suggested that the
September 2009 negotiations touched upon the remedial issues
ultimately addressed by the Board, such as the treatment of WCL
employees who had retired rather than transferred. There was
substantial evidence that the CBA transactions were part of a
-38-
separate set of negotiations that did not constitute effects
bargaining specifically as to the lab work transfer dispute.
Finally, Solutia contends that the effects of the work
transfer decision were largely determined by the CBA, and so no
additional effects bargaining was necessary. This is essentially
a "contract coverage" defense. But because Solutia's unilateral
movement of Local 414C unit work across the geographic boundary was
not authorized by the management rights provision, the general
provisions of the CBA regarding the job bidding process could not
have constituted ex ante bargaining over the effects of this type
of decision.
III.
Local 414C petitions for review of that part of the
Board's order finding that Solutia did not violate the CBA, as
opposed to its bargaining obligations under the Act. The Union
seeks review of this aspect of the decision despite the finding
against Solutia on the statutory ground because, if there were a
CBA violation, Local 414C would have to give its consent in order
for Solutia to keep the lab work at the SCL, instead of the Union
merely receiving the opportunity to bargain. We find no error in
the Board's conclusion and deny Local 414C's petition.
-39-
A. Unit Modification
Local 414C argues that the lab work transfer constituted
an impermissible midterm modification of the scope of the
bargaining unit. Unit modification is a permissive, not mandatory,
subject of bargaining. Local 666, Int'l Alliance of Theatrical
Stage Emps. & Moving Pictures Mach. Operators v. NLRB, 904 F.2d 47,
50 (D.C. Cir. 1990). Permissive subjects cannot be bargained to
impasse or unilaterally implemented; the consent of the other party
is required to alter agreements on these subjects. See id.;
Wackenhut Corp., 345 N.L.R.B. 850, 852 (2005).
Local 414C's argument rests largely on the word "for" in
its CBA's recognition clause: "A unit comprising of all hourly
rated employees . . . for the then existing, Bircham Bend Plant."
Local 414C argues that "for" must mean that its unit is not defined
solely by geography (i.e., all employees who perform work on the
west side of the Site) but also by function (i.e., all employees
who perform work that contributes to the items produced on the west
side of the Site). It argues that the work transfer necessarily
modified the scope of its bargaining unit because the transfer took
work under Local 414C's jurisdiction -- that is, quality and safety
testing "for" resin products produced at the Bircham Bend Plant --
and reassigned that work to Local 288. The Union maintains that
the resin testing was still "for" the Bircham Bend Plant despite
being moved to the Springfield Plant location.
-40-
The Board found that Solutia's decision to transfer the
work to Local 288 employees in the SCL did not modify the scope of
the bargaining unit because the unit was geographically defined:
the recognition clause says nothing about the type of work to be
performed by Local 414C employees and refers only to the location
where the work will be performed. The Board characterizes Local
414C's reliance on the difference between "for" and "at" as a
"distinction without difference."
In applying CBAs to work transfer disputes, courts and
NLRB have distinguished between "jurisdictional" clauses that
define the assignment of work to union members and "scope" clauses
that define who is included in the bargaining unit. Local 666, 904
F.2d at 50. The former type of clause addresses a mandatory
subject of bargaining, while the latter addresses a permissive
subject. Id. If a work transfer affects a unit's jurisdiction but
not its scope, then the transfer does not constitute a unit
modification. In such a case, the union's consent is not required
and the parties may bargain to impasse over the transfer. Id.
There was substantial evidence, based on the CBA itself
and on the history of the Site, to support the Board's conclusion
that the transfer of work to the SCL did not modify the scope of
Local 414C's unit. The wording and structure of the clause did not
require the Board to give the word "for" the construction on which
-41-
Local 414C insists. In fact, the Union puts more weight on this
one word than it can bear.
The word "for" does not itself substitute for a
definition of particular tasks assigned to the Local 414C unit.22
If the parties had intended in the CBA to define the unit by the
types of tasks it performs, they could have done so. Instead,
reading the recognition clause against the background of how the
Site had been operated since the 1960s, it is far more reasonable
to conclude that the clause defined the scope of the unit
geographically, since the two unions at the Site had always been
separated primarily by their location rather than by the nature of
their work.
The 2006 agreement between Local 414C and Solutia
regarding the new product line reinforces this understanding, as it
described the grant of jurisdiction in purely geographic terms.
Local 414C would have jurisdiction over the new production work
"[b]ased on the current location of the [production] operation" and
"only for any period of time in which" Solutia chose to locate
production on the west side. The emphasis on the west side
location in this agreement undercuts the argument that the parties
22
Indeed, to the extent that the resins produced on the west
side are used to manufacture Saflex on the east side, it could be
argued that all work at the Site (other than the Cytec contract
work) is "for" the Springfield Plant, not "for" the Bircham Bend
Plant.
-42-
understood the unit's scope in functional terms. Additionally,
Bellerive testified that Local 414C employees had only ever
performed work on the east side under the terms of specific
agreements with the employer. These agreements, bargained with
Monsanto and Solutia at various points since 1982, demonstrate a
pattern of work allocation negotiations that were based on the
geography of the Site. The evidence does not show that the Union
had ever before claimed jurisdiction over work located on the east
side based on that work being "for" the Bircham Bend Plant.23
The Board supportably found that the lab work transfer
did not make any change to the geographical scope of the unit, and
thus that the transfer at issue here was not of the type that
constitutes a unit modification.
B. Contract Modification
The Union also argues that the lab work transfer
effectively modified the "consolidation" language that was added to
the recognition clause in 1982: "This recognition clause shall be
unaffected by any future consolidation of the plants at the Indian
23
The fact that Local 288's recognition clause contains the
word "at" instead of "for" ("The term[] 'employee' . . . shall
include only those employees at that portion of the Indian Orchard
Plant formerly known as the Springfield Plant") is of no moment.
Again, such a small word cannot support such a broad
interpretation, particularly in the historical context of the Site.
Local 288's CBA is only relevant in that it provides additional
evidence of a Site-wide system in which union jurisdiction was
defined by geography rather than by the nature of the work.
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Orchard Site." Local 414C insists that this clause is "work
preservation" or "protection" language that prevents the employer
from moving work from the west side to the east side without Local
414C's consent. Solutia, on the other hand, interpreted the clause
as permitting the transfer of work across sides of the Site so long
as the transfer did not involve a modification of Local 414C's
unit. On Solutia's understanding, the import of the consolidation
clause was to prevent work at the Bircham Bend Plant from being
performed by anyone other than Local 414C employees, not to prevent
the employer from moving particular tasks from one side of the Site
to the other.
Once an employer and a union agree on a CBA, one party
may not unilaterally modify that CBA without the other's consent
during the term of the CBA. 29 U.S.C. § 158(d); Bath Marine, 475
F.3d at 20. In determining whether an employer's action
constitutes a prohibited midterm modification of a CBA, the Board
must ask whether the employer had a "sound arguable basis" for
interpreting the CBA as it did. Bath Marine, 475 F.3d at 22.
Local 414C argues that Solutia's interpretation of the
clause lacked a sound arguable basis because it was contrary to the
plain language of the clause as well as the parties' bargaining
history, and it would render the clause meaningless because it
would be duplicative of the "for the then existing Bircham Bend
Plant" language.
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The Board found that Solutia had a sound arguable basis
for its interpretation, based on both the CBA's language and past
practice. The Board took a different lesson from the parties'
bargaining history than the one advocated by the Union. It
reasoned that previous issues regarding "crossing lines" (most
often involving employees rather than tasks crossing over) had been
addressed by bargaining, so Solutia at most would have inferred
that it had an obligation under the CBA to bargain, not an
obligation to get Local 414C's consent. The Board also denied that
Solutia's reading would render the clause meaningless, because if
Solutia were to make a work transfer decision that did in fact
modify the scope of the unit, then the consolidation language would
prohibit the transfer unless the Union consented. The Board's
finding is well supported in the record.
As the Board found, the history of negotiations over
cross-Site work would not have required Solutia to conclude that
the CBA prohibited the transfer of tasks from one unit to another
without Local 414C's consent. If anything, the history suggests
that Solutia had an obligation to bargain over changes to work
allocation -- as the Board in fact found when it determined that
Solutia had violated section 8(a)(5) of the Act. The historical
understanding that Local 414C was the "west side" union and Local
288 was the "east side" union would have supported a reasonable
interpretation that moving a task from west to east, without moving
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any employees, would be a subject of bargaining with the Union,
since it would maintain each union's representation of all
employees on its respective side.
As to the redundancy argument, while Local 414C did show
that Solutia's interpretation was not the only possible one, the
Board correctly found that the Union's evidence was not enough to
overcome the deferential "sound arguable basis" standard.
IV.
Finally, we address both Solutia's and Local 414C's
attacks on the Board's remedial order. We conclude that many of
these challenges are premature and the remaining ones are without
merit.
Section 10(c) of the Act empowers the Board to issue "an
order requiring [an entity found to be in violation of the Act] to
cease and desist from such unfair labor practice" and to "take such
affirmative action . . . as will effectuate the policies" of the
Act. 29 U.S.C. § 160(c). The Board has "wide discretion" in
selecting remedies, Pan Am. Grain, 558 F.3d at 26 (quoting NLRB v.
Mount Desert Island Hosp., 695 F.2d 634, 642 (1st Cir. 1982)), and
this court will enforce the Board's chosen remedies "unless it can
be shown that the order is a patent attempt to achieve ends other
than those which can fairly be said to effectuate the policies of
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the Act," id. (quoting NLRB v. Otis Hosp., 545 F.2d 252, 257 (1st
Cir. 1976)) (internal quotation marks omitted).
Solutia alleges the following errors in the Board's
remedies: (1) the Board stated an improper standard for determining
whether former WCL employees who retired after the work transfer
would be entitled to reinstatement and back pay; (2) the order to
make payments to "health care funds" could result in a windfall to
some employees; and (3) it was improper to order Solutia to
reimburse Local 414C for lost union dues.
Local 414C challenges the Board's denial of the following
cross-exceptions that the Union filed to the ALJ's recommended
remedies24: (1) the make-whole remedy should have included a
requirement that retired employees who are reinstated need not pay
back their lump-sum pension distributions, or at least a
requirement that Solutia assume any adverse tax consequences of
such paybacks; (2) the ALJ should have held that Solutia waived its
right to present any evidence at the compliance stage regarding
whether it would be unduly burdensome to re-open the WCL; and (3)
the remedies should have included an affirmative order for Solutia
24
Although Local 414C initially frames its remedy argument as
a procedural challenge based on insufficient explanations under the
Administrative Procedure Act, 5 U.S.C. § 557(c)(3)(A), the Union in
fact argues that the remedy was substantively incorrect for the
three reasons stated.
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to bargain any future proposal to again close the WCL or transfer
the WCL lab work to the SCL.
Solutia's objections (1) and (2), as well as Local 414C's
objection (1), are premature. The Board may reserve issues
regarding individual employees' entitlements to certain remedies,
such as back pay, until a post-enforcement compliance proceeding.
See Holyoke Visiting Nurses Ass'n v. NLRB, 11 F.3d 302, 308 (1st
Cir. 1993). In this case, the Board specifically noted that "all
parties agreed to defer fully litigating" the specifics of the
reinstatement and make-whole remedies until the compliance stage.
Because the parties "rested with the understanding that full
litigation of the reinstatement and make whole issues would be
deferred to compliance," the record is incomplete with regard to
these issues, and as such, this court will not decide them.
The remaining three objections may be addressed at this
stage, although they can be dispatched quickly.
First, Solutia's objection (3) is without merit.
Reimbursement of lost union dues is an accepted form of remedy.
See, e.g., Baltimore Sun Co., 335 N.L.R.B. 163, 170 (2001); Ogle
Protection Serv., Inc., 183 N.L.R.B. 682, 682-83 (1970), enforced
sub nom. NLRB v. Ogle Prot. Serv., Inc., 444 F.2d 502 (6th Cir.
1971). Under NLRB precedent, such an order is interpreted as
requiring the employer to subtract the union dues reimbursement
from the back pay otherwise owed to affected workers, not as
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requiring the employer to pay the union out of its own funds. See
Ogle Protection, 183 N.L.R.B. at 683. This obviates Solutia's
argument that it cannot legally pay money to a union.
Next, Local 414C's objection (2) also fails. The Board
noted that Solutia had not presented evidence of undue hardship at
the complaint hearing and limited any undue hardship evidence at
the compliance hearing to that which was unknown or unavailable at
the complaint stage. This limitation already addresses Local
414C's apparent fear that Solutia will get a second bite at the
undue hardship apple, and it was not inconsistent with the purposes
of the Act for the Board to leave the door open to newly discovered
evidence on this important topic.
Finally, Local 414C's objection (3) is unnecessary. The
Board's finding that transferring the lab work is a mandatory
subject of bargaining means that Solutia will already have an
obligation to bargain any further attempt to transfer the work,
with or without a specific bargaining order. A bargaining order
would not change Solutia's obligations, nor prevent it from
eventually bargaining to impasse and implementing the transfer.
V.
The National Labor Relations Board's petition for
enforcement is granted. Solutia's cross-petition for review is
denied. Local 414C's petition for review is denied.
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