National Labor Relations Board v. Oklahoma Fixture Co.

F I L E D
United States Court of Appeals
Tenth Circuit
SEP 10 2003
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT PATRICK FISHER
Clerk
NATIONAL LABOR RELATIONS
BOARD,
Petitioner,
No. 01-9518
v. (National Labor Relations Board)
(No. 16-CA-16265)
OKLAHOMA FIXTURE COMPANY;
OKLAHOMA INSTALLATION
COMPANY,
Respondents.
ORDER AND JUDGMENT *
Before O’BRIEN, Circuit Judge, McWILLIAMS and BRORBY, Senior Circuit
Judges.
The National Labor Relations Board (“NLRB”) seeks enforcement of its
order against Oklahoma Fixture Company (“OFC”) and Oklahoma Installation
Company (“OIC”) reported at 333 NLRB No. 95 (2001). In that order, the NLRB
determined OFC and OIC violated Sections 8(a)(5) and (1) of the Unfair Labor
*
This order and judgment is not binding precedent except under the
doctrines of law of the case, res judicata and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
Act (29 U.S.C. § 158(a)(5) and (1)) by failing to abide by a collective bargaining
agreement and refusing to provide the Carpenters District Council of North
Central Texas, affiliated with United Brotherhood of Carpenters and Joiners of
America, AFL-CIO (“the Union”) with information relating to company labor
practices in the Union’s jurisdiction. We exercise jurisdiction under 29 U.S.C. §
160(e) and deny enforcement.
OFC contends the NLRB erred in concluding it was bound by a terminated
master collective bargaining agreement it never signed, simply because it had
signed a separate “me too” agreement 1 twenty years prior. It also maintains
NLRB violated its due process rights by deciding the case on a theory not alleged
in the complaint. If OFC was not contractually bound by a collective bargaining
agreement with the Union, NLRB’s finding of unfair labor practices cannot stand.
1
“Me too” agreements allow smaller employers to obtain the benefits of the
master collective bargaining agreement negotiated by the principal employers in
the industry without bearing the burden and expense of such negotiations and
without assigning their bargaining rights to a collective bargaining representative.
Thus, the independent employer is assured that (1) it will not be
subject to a contract containing more onerous conditions than are
applicable to its competitors, (2) it will obtain whatever protections
or advantages the industry collective bargaining agreement provides
other employers, (3) it will be saved the cost of expensive
negotiations, and . . . (4) it will be covered by an agreement
whenever the rest of the industry is covered and not subject to an
agreement whenever the rest of the industry is not.
Arizona Laborers, Teamsters & Cement Masons Local 395 Health & Welfare
Trust Fund v. Conquer Cartage Co., 753 F.2d 1512, 1518 (9th Cir. 1985).
-2-
BACKGROUND
The facts are undisputed. OFC is an Oklahoma corporation that
manufactures and installs fixtures and custom woodwork in retail stores
throughout the United States. OIC, formed in May 1987, installs most of the
fixtures manufactured by OFC. No appeal was taken from NLRB’s finding that
OIC was the alter ego of OFC. As OFC’s alter ego, OIC is bound to OFC’s “me-
too” agreement to the same extent OFC is bound.
In July 1975, the North Texas Contractors Association (“NTCA”) and the
Union negotiated a collective bargaining agreement, effective July 30, 1975,
through April 30, 1978 (“Master Agreement”). The Master Agreement was self-
described as a contract between NTCA “on behalf of members who have assigned
their bargaining rights” and the Union. On July 7, 1975, before the finalization of
the Master Agreement, OFC signed a “me-too” agreement 2 with the Union,
2
The “me-too” agreement, drafted by the Union, is a one page contract that
states, in pertinent part, as follows:
The Company, who has not given their [sic] bargaining rights to the
North Texas Contractors Association, and the Union recognize the
negotiated agreement between the North Texas Contractors
Association and the Carpenters District Council of North Central
Texas as the agreement between the Company and the Union. The
parties agree to keep this agreement in full force and effect until an
agreement has been reached between the negotiating parties.
The Company agrees to pay the wages now in effect and also agrees
to pay retroactive to May 1, 1975, the wages finally agreed upon in
the negotiations going on at the present time. Then the terms and
conditions of that agreement will be in effect.
-3-
consenting to be bound by the Master Agreement that would ultimately result
from negotiations between the Union and NTCA. The “me-too” agreement
specifically acknowledged that OFC did not assign its bargaining rights to NTCA.
It focused on wages and benefit contributions but did not discuss duration or
termination.
The Master Agreement contained a duration clause, stipulating that after
April 30, 1978, it would become an annual contract that “either party” could
terminate upon proper notice. Starting around April 30, 1978, NTCA and the
Union negotiated several successive collective bargaining agreements that
replaced the Master Agreement. NTCA terminated the last of these successive
agreements on April 30, 1984. It thereafter negotiated an entirely new agreement
with the Union, effective August 23, 1984. 3 A new “me-too” agreement was
never obtained from OFC.
From July 1975 through 1985, OFC employed workers within the Union’s
jurisdiction and made payments to the Union’s health and welfare pension
programs at the rate provided by the Master Agreement and successor agreements.
(Wages and benefits are then listed.) (R., tab 7, ex. 11.)
3
The record is unclear whether the Master Agreement was terminated in
1978, upon the Union and NTCA negotiating and entering into successor
agreements, or in 1984 when one of these successor agreements was terminated.
Regardless, it appears the Master Agreement was terminated before 1987, when
OIC began performing work in the Union’s jurisdiction.
-4-
OFC performed no work in the jurisdiction from 1985 to 1995, and thus had no
obligation to make Union payments. After resuming work in the jurisdiction in
1995, OFC, under protest that it was not legally obligated to do so, continued
payments to the Union. OIC has performed work in the Union’s jurisdiction since
its creation in May 1987, but neither OIC nor OFC informed the Union of OIC’s
activities or made payments to the Union on behalf of OIC. In May 1993, the
Union requested information from OFC regarding its relationship with OIC.
OFC did not provide the requested information. Thereafter, the Union filed a
charge with NLRB against OFC alleging violations of the National Labor
Relations Act. NLRB’s General Counsel investigated and issued a complaint,
specifically asserting that OFC, and OIC as its alter ego, were bound by all
successor contracts negotiated between the Union and NTCA. 4 The Union
similarly asserted in letters and briefs that OFC and OIC were bound by the
successor agreements because of the automatic renewal clause in the Master
Agreement. OFC responded to this specific allegation contained in the General
Counsel’s complaint and in the Union’s briefs.
4
The complaint, submitted by NLRB’s general counsel, alleged OFC
“agreed to be bound by a collective bargaining agreement between the Union and
[NTCA], effective May 1, 1973, through April 30, 1975, and to be bound by
future agreements negotiated between the Union and NTCA.” (Emphasis added).
The complaint did not allege OFC was still bound by the Master Agreement that
was no longer in effect for its signatories.
-5-
Since the facts relating to that allegation (OFC & OIC were bound to
successor agreements) were not in dispute, the parties waived a trial before an
administrative law judge and submitted the case on stipulated facts directly to the
NLRB. A two-to-one majority of the NLRB held the “me-too” agreement did not
bind OFC to the successor agreements. 5 Instead, the NLRB majority, sua sponte
and inexplicably, decided OFC’s obligations continued under the Master
Agreement even though it was terminated between NTCA and the Union, at the
latest in 1984.
DISCUSSION
A. Master Agreement
We generally afford “great weight” to NLRB’s legal determinations and
uphold those within reasonable bounds. National Labor Relations Bd. v.
Oklahoma Fixture Co., 295 F.3d 1143, 1145 (10th Cir. 2002)(quoting National
Labor Relations Bd. v. Greater Kansas City Roofing, 2 F.3d 1047, 1051 (10th Cir.
1993)). However, we review de novo NLRB’s contract interpretations. See
Litton Fin. Printing Div., a Div. of Litton Bus. Sys., Inc. v. NLRB, 501 U.S. 190,
203 (1991).
The issue before us—whether signing a “me-too” agreement perpetually
binds an employer to a terminated master agreement, which it did not sign—is a
5
No appeal was taken from that holding.
-6-
question of first impression in this Court. At least two other circuits have
addressed this issue, and we find their decisions instructive. See Wilson & Sons
Heating & Plumbing, Inc. v. National Labor Relations Bd., 971 F.2d 758 (D.C.
Cir. 1992); C.E.K. Indus. Mech. Contractors, Inc. v. NLRB, 921 F.2d 350 (1st Cir.
1990).
Wilson is the most compelling because its facts are similar to those before
us. There, the company agreed to be bound by current master agreements between
a union and a multi-employer association by signing annual letters of assent,
similar to a “me-too” agreement, but never assigned its bargaining rights to the
association. Wilson, 971 F.2d at 759. The master agreement was linguistically
ambiguous as to whether it applied only to its signatories or if it also
encompassed those signing letters of assent. Id. at 761. The letter of assent
further confused the issue because it bound the company not only to the master
agreement, but also to any revisions or amendments. Id. at 760. The master
agreements stipulated they would automatically renew each year, absent proper
notice to terminate. Id. At the end of the term of one of these master agreements,
the multi-employer association prevented automatic renewal by giving notice of
termination; it then negotiated a new agreement. Because the company that
signed the letter of assent did not give notice of intent to terminate the agreement,
the NLRB held the company was bound by the master agreement for another year,
-7-
even though that master agreement was no longer binding on its signatories, i.e.,
the union and the members of the multi-employer association. Id.Reviewing the contract de novo, as instructed by Litton, the court refused to
enforce NLRB’s order, holding the master agreement’s automatic renewal clause
and notice requirement applied only to the master agreement signatories, not to
those who signed letters of assent. Id. Further, the court concluded the automatic
renewal clause could not bind the company to another term because the union and
multi-employer association had terminated the master agreement and renegotiated
a different contract. “It would surely be anomalous to bind the company to the
terms of an agreement that no longer existed.” Id. Although the court considered
“this structural anomaly may well be enough” to find in favor of the employer, the
court also looked at extrinsic evidence of intent due to the master agreement and
letter of assent’s “linguistic ambiguity.” Id. at 761. Of significance to the court
was the company’s refusal to sign the new contract, even though it abided by the
wage rates and benefit terms contained in it. Id. Additionally, the union
originally told the company it was not bound by the new master agreement. Id.Here, similar to Wilson, the Master Agreement had been terminated by its
signatories. Like the D.C. Circuit, we conclude the “structural anomaly” of
attempting to bind OFC to a terminated agreement is not justified by contract
language in the “me-too” agreement.
-8-
We need not examine extrinsic facts because neither the Master Agreement
nor the “me-too” agreement is ambiguous as to duration. Although the Master
Agreement’s duration clause did not define the phrase “either party,” its
introduction clearly stated it was an agreement between the Union and NTCA
members. OFC was not an NTCA member and it did not assign its bargaining
rights to NTCA; thus, it was not a party to the 1975 Master Agreement. The “me
too” agreement refers to the Master Agreement and no other. It contains no
language even remotely suggesting it has vitality independent of the Master
Agreement. Whether it bound OFC to amendments, revisions, or successor
agreements seems unlikely, but could possibly be debatable. 6 Neither ambiguous
nor debatable is the effect of the 1984 termination. When the Master Agreement
was terminated (whether unilaterally by NTCA or by the parties’ mutual
agreement), OFC’s “me too” obligations, whatever they were, dissolved. The
point of contract interpretation is to give meaning to the parties’ express intention
at the inception of their agreement, not to further one of the parties’ unilateral
interests, post hoc. We reject as irrelevant the argument that OFC did not
expressly terminate its “me too” obligations by giving proper notice as prescribed
6
For years following the 1975 Master Agreement, OFC paid wages and
pension contributions at the rate provided in the successor agreements, which
were in excess of those listed in the Master Agreement. The union accepted the
higher payments. Even if debatable, it is of no practical significance since the
NLRB determined OFC was not bound by the successor agreements.
-9-
in the Master Agreement (a point disputed by OFC). It strikes us as patently
hollow and singularly unnecessary to give notice that one no longer considers
itself bound to a terminated agreement.
In determining OFC was bound by the Master Agreement until it formally
gave notice to terminate, NLRB relied upon C.E.K. That reliance is untenable. In
C.E.K. it appears the court did not review the contract de novo as the Supreme
Court later required. 7 See Litton, 501 U.S. at 202-03. Moreover, the facts are
dissimilar. In C.E.K., the employer signed the actual master agreement, not
merely a “me-too” agreement. C.E.K., 921 F.2d at 352.
In other cases where courts found the employer to be bound by automatic
renewal clauses or new agreements, the employer signed a collective bargaining
agreement consenting to be bound by successor agreements and failed to give the
requisite notice of termination, 8 the employer signed a letter of assent that
contained specific termination requirements that the employer did not follow, 9 the
The court seemed to defer to NLRB’s interpretation, saying, “[w]e find,
7
however, that even under a less deferential posture, the Board’s analysis of the
contract is reasonable and supported by the evidence. Therefore, we agree with
the Board’s conclusion that the Agreement remained in force with respect to
CEK.” C.E.K., 921 F.2d at 356. Accepting NLRB’s analysis, if reasonable and
supported by the evidence, is deferential—not de novo—review.
Laborers’ Pension Fund v. Blackmore Sewer Constr., Inc., 298 F.3d 6008
(7th Cir. 2002).
9
Nelson Elec. v. National Labor Relations Bd., 638 F.2d 965 (6th Cir.
1989).
-10-
employer assigned its bargaining rights to a multi-employer association, 10 and the
employer did not follow the requirements of the letter of assent by providing
notice of termination of its assigned bargaining rights to the multi-employer
association. 11
We conclude “that the master agreement’s renewal clause was not enough
to bind [OFC] to another [term] under the circumstances.” Wilson, 971 F.2d at
759. Because OFC was not bound by the Master Agreement, neither was its alter
ego, OIC. Consequently we set aside NLRB’s order.
B. Due Process Violation
OFC maintains NLRB violated its due process rights by deciding the case
on a legal theory not presented in the complaint. Because OFC has prevailed on
the merits, it is unnecessary to reach that issue.
Local 257, Int’l Bhd. of Elec. Workers, AFL-CIO v. Grimm, 786 F.2d 34210
(8th Cir. 1986).
11
National Labor Relations Bd. v. Black, 709 F.2d 939 (5th Cir. 1983).
-11-
CONCLUSION
Oklahoma Fixture Company is not bound by the terminated 1975 Master
Agreement. Accordingly, we DENY enforcement of National Labor Relations
Board’s order of April 4, 2001.
Entered by the Court:
TERRENCE L. O’BRIEN
United States Circuit Judge
-12-