Parsons Electric, LLC v. NLRB

United States Court of Appeals
For the Eighth Circuit
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No. 14-3239
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Parsons Electric, LLC
lllllllllllllllllllllPetitioner
v.
National Labor Relations Board
lllllllllllllllllllllRespondent
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No. 14-3562
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National Labor Relations Board
lllllllllllllllllllllPetitioner
v.
Parsons Electric, LLC
lllllllllllllllllllllRespondent
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National Labor Relations Board
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Submitted: October 21, 2015
Filed: February 9, 2016
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Before WOLLMAN, BEAM, and GRUENDER, Circuit Judges.
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WOLLMAN, Circuit Judge.
Parsons Electric, LLC petitions for review of an order of the National Labor
Relations Board. The Board concluded that Parsons engaged in an unfair labor
practice in violation of sections 8(a)(1) and (5), 29 U.S.C. § 158(a)(1), (5), of the
National Labor Relations Act (Act), 29 U.S.C. §§ 151-169, when it unilaterally
changed the written employee-break policy set forth in its employee handbook
without first notifying the International Brotherhood of Electrical Workers, Local No.
110 (Union) and affording the Union an opportunity to bargain.1 The Board cross-
petitions for enforcement of its order. We deny the petition for review and enforce
the Board’s order.
Parsons, an electrical subcontractor, is located in the Twin Cities area and does
business throughout the United States. The Union is the exclusive collective-
bargaining representative for Parsons electricians, foremen, and general foremen in
the greater St. Paul, Minnesota, area. In 2003, Parsons authorized the St. Paul
Chapter of the National Electrical Contractors Association (Association) to act as its
“bargaining representative for all matters contained in or pertaining to” the collective-
bargaining agreement (CBA) with the Union. Although the CBA was silent on the
issue of employee breaks, Parsons had separately maintained a written employee-
break policy that applied to employees represented by the Union since at least January
2005 (2005 Break Policy). The 2005 Break Policy provided:
1
The Board also concluded that Parsons violated the Act by unreasonably
delaying compliance with the Union’s request for information. Because Parsons does
not contest this determination, we enforce the Board’s order as to this issue without
further comment.
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It is the policy of Parsons Electric to provide all hourly personnel with
a 15 minute break in the morning and a 15 minute break in the afternoon
of each workday. Each jobsite will establish specific break policies as
part of the jobsite expectations and the policy may be materially
different than the standard break duration described above. Under no
circumstances are these breaks to be substituted for a reduced work day
without permission from Parsons President.
The 2005 Break Policy was incorporated into the Parsons employee handbook in
2009. Parsons maintained the employee handbook under the CBA’s management-
rights clause, which permitted Parsons to implement workplace rules and regulations
so long as they were not inconsistent with the terms of the CBA. In February 2012,
Parsons replaced the 2005 Break Policy with a new policy (2012 Break Policy),
which stated:
Parsons Electric abides by the applicable collective bargaining
agreements and laws with respect to all breaks. In the absence of
specific provisions for breaks in the collective bargaining agreement,
Parsons may establish specific break policies as part of the jobsite
expectations.
When the 2012 Break Policy was adopted, the CBA was still silent on the issue of
employee breaks. The 2012 Break Policy was incorporated into the Parsons
employee handbook in 2013, with no notice being given to the Union.
In April 2013, more than a year after the 2012 Break Policy was adopted, a
number of Parsons employees reported to the Union that Parsons had not been
permitting afternoon breaks or early departures in lieu of breaks. In response to the
Union’s request for clarification, Parsons informed the Union that it had revised its
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written employee-break policy as described above.2 The Union then filed its unfair-
labor-practice charge.
In April 2014, an administrative law judge (ALJ) held a hearing, at which the
parties presented conflicting testimony and other evidence on two questions: (1)
whether Parsons had maintained a past practice of offering an afternoon break or
early departure and (2) whether that practice was actually changed by the 2012
revision to the employee-break policy. The ALJ concluded that Parsons had engaged
in an unfair labor practice as charged by unilaterally changing the employee-break
policy set forth in its employee handbook, reasoning that, “regardless [of] whether
[Parsons] actually modified employee hours, the . . . . change related to a term and
condition of employment, which in turn is a mandatory subject of bargaining
notwithstanding . . . past practice.” On review, the Board affirmed the ALJ’s rulings,
findings, and conclusions, with certain modifications, and it ordered Parsons to
rescind the 2012 Break Policy. Parsons’s petition for review argues that there is not
substantial evidence on the record as a whole to support the Board’s finding that
Parsons violated the Act. Parsons also argues that, because it delegated its bargaining
authority to the Association, it could not have bargained with the Union regarding the
employee-break policy.
We will uphold the Board’s decision on review if it correctly applied the law
and if its factual findings are supported by substantial evidence on the record as a
whole. Litton Microwave Cooking Prods. v. NLRB, 949 F.2d 249, 251 (8th Cir.
1991). “Substantial evidence is such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.” Miss. Transp., Inc. v. NLRB, 33 F.3d
972, 977 (8th Cir. 1994) (citations omitted). “Where either of two inferences may
2
The parties appear to agree that Parsons regularly allowed morning breaks
both before and after it adopted the 2012 Break Policy. Because the parties focus
their arguments on whether the 2012 Break Policy affected afternoon breaks and early
departures, we limit our discussion to those arguments.
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reasonably be drawn from the facts, and the Board finds one of the inferences to be
true, we are bound by the Board’s finding even if [we] would have made a different
choice were the matter before us de novo.” Litton Microwave, 949 F.2d at 252; see
also Arkansas v. Oklahoma, 503 U.S. 91, 113 (1992) (observing that a reviewing
court “should not supplant [an] agency’s findings merely by identifying alternative
findings that could be supported by substantial evidence”).
Section 8(a)(1) makes it an unfair labor practice for an employer “to interfere
with, restrain, or coerce employees in the exercise of” their rights under the Act. 29
U.S.C. § 158(a)(1). Section 8(a)(5) makes it an unfair labor practice for an employer
“to refuse to bargain collectively with the representatives of his employees.” Id.
§ 158(a)(5). An employer violates these sections if, prior to reaching an impasse in
bargaining with a union, it makes a unilateral change in existing terms or conditions
of employment. See Litton Microwave, 949 F.2d at 251. The terms and conditions
of employment include employee breaks, even when the subject of employee breaks
is not set forth in a CBA. See Rangaire Co., 309 N.L.R.B. 1043, 1043 (1992)
(concluding that employee breaks are a mandatory subject of bargaining and that
unilateral elimination of an extra fifteen-minute paid lunch break for the
Thanksgiving holiday was a material, substantial, and significant change in unit
employees’ wages and working conditions), aff’d mem., 9 F.3d 104 (5th Cir. 1993).
Unilateral changes in the terms and conditions of employment are generally
prohibited because they circumvent the employer’s duty to negotiate and interfere
with the objectives of the Act. See Litton Microwave, 949 F.2d at 251.
Notwithstanding these pronouncements, the Board has determined that not every
unilateral change in the terms and conditions of employment violates the Act. Rather,
such a unilateral change must be “material, substantial, and significant” before it is
found to violate the Act. Rangaire Co., 309 N.L.R.B. at 1043 (citation omitted).
As the agency with “the primary responsibility [for] marking out the
scope . . . of the statutory duty to bargain,” the Board’s construction of the Act is
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“entitled to considerable deference” and must be upheld if it is “reasonably
defensible.” Ford Motor Co. v. NLRB, 441 U.S. 488, 495, 496-97 (1979). We will
not reject the Board’s interpretation of the Act “merely because [we] might prefer
another view of the statute.” Id. at 497; see also Chevron, U.S.A., Inc. v. Nat. Res.
Def. Council, Inc., 467 U.S. 837, 843 (1984) (noting that when Congress has not
directly spoken on the precise issue, the question for the reviewing court is whether
the agency’s position “is based on a permissible construction of the statute”).
Parsons does not dispute that when it replaced the 2005 Break Policy with the
2012 Break Policy, it unilaterally revised the language of the break policy without
notifying the Union or affording it an opportunity to bargain. It argues, however, that
its actions did not violate the Act because the revision to the break-policy language
did not constitute a material, substantial, or significant change in the terms and
conditions of employment. We disagree.
The 2005 Break Policy set forth a specific, concrete standard by which
employee breaks would be measured. It set forth a default rule under which
employees were generally entitled to a fifteen-minute break in the morning and either
a fifteen-minute break or early departure in the afternoon—and it fixed employee
expectations accordingly. To be sure, Parsons retained discretion to override the two-
break standard if the particular “jobsite expectations” so required, but under the 2005
Break Policy, that discretion would be exercised as an exception to the default rule.
The 2012 Break Policy, by contrast, eliminated the default rule with respect to
employee breaks and instead granted Parsons unfettered discretion to determine
whether employee breaks would be permitted at all and, if they were permitted, when
they would occur and how long they would last. Although the 2012 Break Policy
assured employees that Parsons would abide by any employee-break policy included
in the CBA, the CBA was silent on the matter of employee breaks, leaving employees
with no expectations and Parsons with absolute discretion. As the Board observed,
“[i]nstead of an expectation that they [would] have a morning break and an afternoon
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break or, alternatively, early departure, employees [were] . . . bound by [the 2012
Break Policy,] which diminishe[d] the role of breaks as a term of employment” and
left “the daily decision up to the unfettered discretion the [jobsite] supervisor.” Given
the considerable deference we owe to the Board’s assessment of materiality, we
conclude that the Board reasonably determined that Parsons effected a material
unilateral change to its terms and conditions of employment when it adopted the 2012
Break Policy. See Ford Motor Co., 441 U.S. at 501 (deferring to the Board’s
determination that an increase in the prices of in-plant food services was not “too
trivial” to qualify as a material unilateral change in the terms and conditions of
employment because “even minor increases in the cost of meals can amount to a
substantial sum of money over time”); Litton Microwave, 949 F.2d at 252 (deferring
to Board’s conclusion that discontinuing an additional thirty minutes’ paid lunch
break at Christmas was a material change in the terms and conditions of
employment). In light of this conclusion, we reject Parsons’s related argument that
the 2012 Break Policy was a mere clarification of the 2005 Break Policy. Cf. Allied
Mech. Servs., Inc., 320 N.L.R.B. 32, 32 (1995) (concluding that there was no
violation of the Act when an employer issued a written clarification of an existing pay
policy set forth in the employee handbook), enforced, 113 F.3d 623 (6th Cir. 1997).
Parson also contends that the 2012 Break Policy did not constitute a material
unilateral change in the terms and conditions of employment because it merely
clarified an existing practice, namely that Parsons had historically exercised its
discretion to either allow afternoon breaks—or not—depending on jobsite
circumstances. In rejecting this assertion, the Board credited evidence and testimony
that, prior to 2012, the typical practice at Parsons jobsites was to follow the default
standard set forth in the 2005 Break Policy. The Board noted in particular that, with
respect to afternoon breaks, Parsons Superintendent Brad Bacon testified that prior
to the adoption of the 2012 Break Policy, “[t]he general practice was the bigger
projects driven by the customer or the general [contractor, employees] would
probably take a break,” while “[o]n the smaller projects, [employees] left at 3:15”
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instead of taking an afternoon break. The Board also credited the testimony of
several long-term Parsons employees, each of whom testified that, prior to the
adoption of the 2012 Break Policy, it had been Parsons’s standard practice to allow
employees to take an afternoon break or to leave early in lieu of that break.3 Parsons
argues that because the record includes testimony and evidence that detracts from the
Board’s findings, the Board’s determination that the 2012 Break Policy did not clarify
an existing practice was not supported by substantial evidence. But the issue here is
whether substantial evidence supports the Board’s conclusion, not whether evidence
exists to support Parsons’s alternative view. See Arkansas v. Oklahoma, 503 U.S. at
113 (“The court should not supplant the agency’s findings merely by identifying
alternative findings that could be supported by substantial evidence.”). As set forth
above, we will affirm as long as the Board correctly applied the law and its factual
findings are supported by substantial evidence on the record as a whole. See Nichols
Aluminum, LLC v. NLRB, 797 F.3d 548, 553 (8th Cir. 2015). The Board evaluated
the entire record in this case, weighed the conflicting testimony and other evidence,
and rejected the evidence that may have supported Parsons’s position. That we might
have reached a different decision had the matter been before us de novo is not
controlling. The Board’s findings were supported by substantial evidence on the
record as a whole. Accordingly, we conclude that the Board reasonably rejected
Parsons’s assertion that the 2012 Break Policy merely clarified existing practice.
Finally, Parsons contends that because it authorized the Association to act as
its representative in negotiations with the Union, it was prohibited from bargaining
directly with the Union prior to the revision of its employee-break policy. Parsons
3
Specifically, Matthew Ohmann testified that the long-established industry
standard was for employees to take afternoon breaks or leave early. Scott LaPlante
and Mark Weiss each testified that in his experience, employees either took afternoon
breaks or left early. The record also included testimony and other evidence about the
practice at several Parsons projects prior to February 2012, and on most of those
projects, employees either took afternoon breaks or left early.
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authorized the Association to act on its behalf “for all matters contained in or
pertaining to” the CBA. Because the CBA was silent with respect to Parsons’s
employee-break policy and this dispute was unique to Parsons, we are not persuaded
that Parsons delegated authority to the Association to negotiate employee-break
policy on its behalf and was thus prohibited from bargaining directly on this matter.
See NLRB v. Miller Brewing Co., 408 F.2d 12, 15 (9th Cir. 1969) (“While
multi-employer bargaining units are conducive to industrial peace and are favored by
national policy, this preference is not incompatible with union negotiations with an
individual member of an association on matters unique to that member.” (citation
omitted)); Statler Hilton Hotel, 191 N.L.R.B. 283, 285 (1971) (“Under settled law,
. . . individual bargaining, limited as it is to a matter of particular concern to [one]
employer, is not precluded by the existence of a multiemployer unit since it is neither
inconsistent with, nor destructive of, the principle of group bargaining.”), enforced
mem., No. 72-1067, 1972 WL 3080 (D.C. Cir. Dec. 7, 1972). Moreover, as noted by
the Board, the undisputed evidence established that Parsons negotiated directly with
the Union on an employee-reimbursement issue in 2013. In any event, Parsons’s
agreement with the Association did not authorize it to unilaterally change the terms
and conditions of employment. Instead, under that agreement, Parsons was required
to act through the Association to negotiate with the Union over proposed changes in
working conditions.
In sum, substantial evidence supports the Board’s finding that Parsons violated
the Act by unilaterally modifying its employee-break policy without notifying the
Union or affording it an opportunity to bargain. The Board also reasonably rejected
Parsons’s contentions that the 2012 Break Policy merely clarified the 2005 Break
Policy and existing practice. Finally, we reject Parsons’s assertion that it was
authorized to unilaterally change its employee-break policy because it lacked
authority to bargain directly with the Union. The petition for review is denied and the
Board’s order is enforced.
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