East Bay Automotive Council v. National Labor Relations Board

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
EAST BAY AUTOMOTIVE COUNCIL 
AND ITS AFFILIATED LOCAL UNIONS:
DISTRICT LODGE NO. 190; LOCAL
LODGE NO. 1546; INT’L.
ASSOCIATION OF MACHINISTS &
AEROSPACE WORKERS, AFL-CIO;
AUTO, MARINE & SPECIALTY
PAINTERS UNION, LOCAL NO. 1176;
TEAMSTERS AUTOMOTIVE EMPLOYEES
UNION, LOC. 78; INT’L. No. 04-74997
BROTHERHOOD OF TEAMSTERS,
CHAUFFEURS, WAREHOUSEMEN &  NLRB No.
HELPERS OF AMERICA, AFL-CIO, 32-CA-17424
Petitioner,
M & M AUTOMOTIVE GROUP, INC.,
D/B/A BROADWAY VOLKSWAGEN,
Intervenor,
v.
NATIONAL LABOR RELATIONS
BOARD,
Respondent.

NATIONAL LABOR RELATIONS 
BOARD,
Petitioner, No. 04-75871
v.  NLRB No.
M & M AUTOMOTIVE GROUP, INC., 32-CA-17424
D/B/A BROADWAY VOLKSWAGEN,
Respondent.

4291
4292 EAST BAY AUTOMOTIVE v. NLRB
M & M AUTOMOTIVE GROUP, INC., 
D/B/A BROADWAY VOLKSWAGEN,
Petitioner,
EAST BAY AUTOMOTIVE MACHINISTS No. 05-71144

UNION LODGE 1546, NLRB No.
Intervenor, 32-CA-17424
v. OPINION
NATIONAL LABOR RELATIONS
BOARD,
Respondent.

On Petition for Review of an Order of the
National Labor Relations Board
Argued and Submitted
October 17, 2006—San Francisco, California
Filed April 16, 2007
Before: Robert R. Beezer, Diarmuid F. O’Scannlain, and
Stephen S. Trott, Circuit Judges.
Opinion by Judge O’Scannlain
EAST BAY AUTOMOTIVE v. NLRB 4295
COUNSEL
Robert G. Hulteng, San Francisco, California, argued the case
and was on the briefs for petitioner-intervenor M&M Auto-
motive Group, Inc.; Denise C. Barton and Michael G. Ped-
hirney, Littler Mendelson, P.C., were also on the briefs.
David A. Rosenfeld, Alameda, California, argued the case and
was on the briefs for petitioner-intervenor East Bay Automo-
tive Council, et al.; Caren P. Sencer, Weinberg, Roger &
Rosenfeld, was also on the briefs.
David A. Fleischer, Washington, D.C., argued the case and
was on the brief for petitioner-respondent National Labor
Relations Board; Arthur F. Rosenfeld, John E. Higgins Junior,
Aileen Armstrong, and Meredith L. Jason, National Labor
Relations Board, were also on the brief.
4296 EAST BAY AUTOMOTIVE v. NLRB
OPINION
O’SCANNLAIN, Circuit Judge:
We must decide whether to enforce an affirmative bargain-
ing order issued by the National Labor Relations Board after
nearly eight years of litigation involving an automotive dealer
and a union in Oakland, California.
I
East Bay Automotive Council and its affiliated local unions
(“the Union”), and M&M Automotive Group, Inc., d/b/a
Broadway Volkswagen (“the Employer”), appeal the National
Labor Relations Board’s (“the Board”) decision to issue an
affirmative bargaining order pursuant to a labor dispute
between the Union and the Employer. The Board seeks
enforcement of its order.
The Employer is an automotive dealer in Oakland, Califor-
nia. On December 15, 1997, the Union was certified as the
exclusive collective bargaining representative of approxi-
mately 16 service and parts department employees at the
dealer. On January 20, 1998, the parties began collective bar-
gaining for their first contract. During the year 1998, the par-
ties met on approximately 12 occasions. The Union was
represented at the bargaining table by business representatives
Don Crosatto, Craig Andrews, Ron Paredes, and by employee
representatives Tim Finnerty and Gunnar Peterson. The
Employer was represented by its owners, Mike Murphy and
Bill Martin. The final meeting between the parties was
November 19, 1998. By that time, Martin had died, and Mur-
phy attended the session alone.
At the conclusion of the negotiations, the parties had come
to tentative agreements but had not reached a contract. During
the negotiations, the Employer unilaterally and without
informing the Union gave wage increases and promotions to
EAST BAY AUTOMOTIVE v. NLRB 4297
a number of employees. The parties stipulate that wage
increases to Damien Ferrara, Charlie O’Neal, Pedro Ramos,
Jason Espinal and Donny Gouvaia were granted without noti-
fying the Union verbally or in writing of any intention to
grant such increase. Although the Employer contends there
was at least imperfect communication to the Union as to the
wage increase granted to Fernando Arcos, the Board found
that there had been no notice of intent to grant the increase
given to the Union by the Employer in Arcos’s case. In all,
the Employer granted six employees unilateral wage increases
neither authorized by contract nor produced through negotia-
tion with the Union.
There is no evidence in the record that the Employer took
any formal step to inform the Union of the wage changes
either before or after they were made. One employee, Charlie
O’Neal, did testify that he informed Tim Finnerty of his pay
raise within a few days of receiving it. There is no evidence
that O’Neal informed Finnerty either of the circumstances
surrounding his raise or of his promotion.
During this same time period five of the six employees
named above received new job titles in addition to raises.
Specifically, Ferrara’s job title was changed from “gofer” to
“apprentice detailer”; O’Neal’s job title was changed from
“back counter” to “assistant parts manager”; Ramos’s job title
was changed from “detailer” to “head detailer”; Arcos’s job
title was changed from “installer” to “apprentice technician”;
and Gouvaia’s job title was changed from “parts driver” to
“parts counter apprentice.” There is no evidence in the record
that the Union knew of any of these job title changes. The
Employer concedes that “[a]t no time before, during, or after
bargaining did the Employer use formal classifications or job
titles.”
On February 4, 1999, the Employer received a petition
signed by 11 of the 16 unit employees stating that they no lon-
ger wanted to be represented by the Union. Among the sign-
4298 EAST BAY AUTOMOTIVE v. NLRB
ers were Ferrara, O’Neal, Gouvaia, Arcos, and Ramos. On
February 9, the Employer’s counsel sent a letter to the Union
stating that the Employer had received objective evidence that
a majority of the unit employees no longer wished to be repre-
sented by the Union. The letter went on to state that the
Employer therefore had good faith doubt that the Union still
represented the unit employees, and that the Employer was
withdrawing recognition from the Union and would not
undertake further bargaining with it. On May 29, 1999, the
Union made a request for information connected with the bar-
gaining, such as a list of current employees and their rates of
pay. The Employer declined to furnish any of the requested
information, as it contended that it had lawfully withdrawn
recognition from the Union.
On May 6, 1999, the Union filed charges of unfair labor
practices with the Board, prompting the General Counsel of
the Board to issue a complaint alleging that the Employer had
violated section 8(a)(5) and (1) of the National Labor Rela-
tions Act (“the Act”), 29 U.S.C. §§ 151-59. After a hearing,
the ALJ found that the Employer had violated sections 8(a)(5)
and (1) by unilaterally promoting one employee, Gouvaia, and
granting him a wage increase. The ALJ found that allegations
of similar unlawful conduct with respect to Ferrara, O’Neal,
Arcos and Ramos were time-barred by section 10(b) of the
Act, 29 U.S.C. § 160(b), because the Union knew or should
have known of such conduct more than six months before it
filed the charge. The ALJ attributed such knowledge or con-
structive knowledge to the Union on the basis of O’Neal’s
informing Finnerty of his own wage increase. The ALJ also
found that the Employer had lawfully granted a wage increase
to Espinal. Finally, the ALJ concluded that the single viola-
tion found did not taint the anti-union petition signed by a
majority of the unit employees, and that the Employer had
therefore lawfully withdrawn recognition from the Union, and
was not required to furnish it with the requested information,
on the basis of the petition.
EAST BAY AUTOMOTIVE v. NLRB 4299
After the General Counsel and the Union filed exceptions,
a three-member panel of the Board found that the record did
not support the ALJ’s finding that the Union knew or should
have known of the raises and promotions more than six
months before it filed its complaint. Accordingly, the Board
found that the allegations were not barred by section 10(b),
and that the Employer violated section 8(a)(5) and (1) of the
Act by such conduct. The Board further found that these vio-
lations tainted the employee petition and that the Employer
therefore violated section 8(a)(5) and (1) of the Act by relying
upon the tainted petition to withdraw recognition from the
Union and to refuse to furnish relevant information to the
Union. On September 24, 2004, the Board ordered the
Employer to cease and desist from the unlawful conduct and
to take affirmative action, including bargaining with the
Union, to remedy its unfair labor practices.
II
Both the Union and the Employer filed petitions for review
from the Board’s order. The Union brings its appeal on two
grounds. First, it argues that the Board made insufficient find-
ings with respect to certain employees. Second, it argues that
the Board ought to have ruled that the only legitimate means
for withdrawing recognition is a Board-certified election. We
address each in turn.
A
The Union contends that the Board’s decision and order
were erroneous insofar as the Board declined to make find-
ings concerning the legality of the job reclassifications as well
as of the legality of the wage increases granted to Espinal and
O’Neal. The Board concluded that such findings were not
necessary to its decision and order, and would merely have
been cumulative.
[1] The Board’s power to fashion remedies is “a broad dis-
cretionary one, subject to limited judicial review.” Fibreboard
4300 EAST BAY AUTOMOTIVE v. NLRB
Paper Prods. Corp. v. NLRB, 379 U.S. 203, 216 (1964) (“The
Board’s order will not be disturbed 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 the
Act”) (internal quotation marks and citations omitted). The
Union contends that further findings would have enabled the
Board to expand the scope of its order, or in the alternative
that the rationale for the Board’s decision would be bolstered
by further findings. The Union makes no argument to suggest
that the Board was attempting to achieve ends other than
those envisioned by the Act.
[2] We are satisfied that the Board did not err in declining
to make findings with respect to particular employees. It had
a rational basis for so declining, having concluded that further
findings would be cumulative and would not alter its remedial
order. See Chamber of Commerce v. NLRB, 574 F.2d 457,
463 (9th Cir. 1978). Given the Board’s broad discretionary
authority in fashioning remedies, the Union has not shown the
requisite deviation from the Act’s purposes that would permit
this court to disturb the Board’s order with respect to Espinal
and O’Neal.
B
[3] The Union’s contention that a Board-certified election
is the only method by which an employer can withdraw rec-
ognition from a union is without merit. Indeed, the Union’s
reply brief itself avers that this issue need not be reached to
decide the case before us. Moreover, the Union can cite no
decision of the Board or of any court supporting its conten-
tion. Rather, its reply brief directs us to a case suggesting only
that Board-conducted elections are the “preferred” method for
selecting union representation. See NLRB v. Peninsula Ass’n
for Retarded Children & Adults, 627 F.2d 202, 204-05 (9th
Cir. 1980); cf. Allentown Mack Sales & Serv., Inc. v. NLRB,
522 U.S. 359, 361 (1998) (“Under longstanding precedent of
the [Board], an employer who believes that an incumbent
EAST BAY AUTOMOTIVE v. NLRB 4301
union no longer enjoys the support of a majority of its
employees has three options: to request a formal, Board-
supervised election, to withdraw recognition from the union
and refuse to bargain, or to conduct an internal poll of
employee support for the union.”); Levitz Furniture Co., 333
N.L.R.B. 717, 725-26 (2001).
[4] Accordingly, because a Board-certified election is not
the only legitimate method for withdrawing recognition from
a Union, it was not error for the Board to decline to require
one here.
III
The Employer raises three arguments in its challenge to the
Board’s order. First, it contends that the Board’s reversal of
the ALJ’s determination that most of the allegations here were
time-barred because of the Union’s actual or constructive
knowledge was not supported by substantial evidence. Sec-
ond, the Employer contends that the Board erred in finding a
causal relationship between its unilateral actions and the
employees’ subsequent expression of dissatisfaction with the
Union. Third, the Employer argues that the Board abused its
discretion by issuing an affirmative bargaining order, in light
of the lengthy period of time between the filing of the Union’s
complaint and the Board’s decision and of the allegedly insuf-
ficient gravity of the violations found.
A
We “will uphold a decision by the Board if its findings of
fact are supported by substantial evidence and if it correctly
applied the law.” Lucas v. NLRB, 333 F.3d 927, 931(9th Cir.
2003). We defer to the Board’s interpretation and application
of the Act, as long as the Board’s interpretation is “reasonable
and not precluded by Supreme Court precedent.” NLRB v.
Advanced Stretchforming Int’l, Inc., 233 F.3d 1176, 1180 (9th
Cir. 2000).
4302 EAST BAY AUTOMOTIVE v. NLRB
[5] The Employer urges upon us a “heightened scrutiny”
beyond the substantial evidence standard on the grounds that
here the Board’s findings overturned those of the ALJ, but
this approach is not supported by the cases on which it relies.
See Penasquitos Village, 565 F.2d 1074, 1076 (9th Cir. 1977)
(recognizing that “[t]he substantial evidence standard is not
modified in any way when the Board and its examiner dis-
agree”) (internal quotation marks and citation omitted). We
review the Board’s findings as to the actual or constructive
knowledge of the Union, therefore, under the usual substantial
evidence standard, notwithstanding its having disagreed with
the ALJ’s initial determination.
[6] The record shows that only one employee shared
knowledge of his wage increase with any other employee.
Further, the Board’s finding that the promotions were not
“open and obvious” is supported by the Employer’s admission
that formal job titles and classifications were not used consis-
tently in the workplace. The record might support inferences
other than those drawn by the Board, but under our deferential
standard of review that would not be sufficient to reverse the
Board’s decision. Substantial evidence supports the Board’s
judgment that the Union did not have actual or constructive
knowledge of the unilateral promotions and wage increases
extended to the employees as to whom the Board made find-
ings.
B
[7] The Employer further argues that the Board erred by
finding that the Employer’s unilateral granting of pay
increases and promotions was causally connected to the
employees’ expression of disenchantment with the Union. We
disagree. The Board properly considered four factors in deter-
mining that the unfair labor practices had tainted the signa-
tures on the employee petition expressing dissatisfaction with
the union: (1) the length of time between the unfair practices
and the withdrawal of recognition; (2) the nature of the viola-
EAST BAY AUTOMOTIVE v. NLRB 4303
tions, including the possibility for a detrimental or lasting
effect on employees; (3) the tendency of the violation to cause
employee disaffection; and (4) the effect of the unlawful con-
duct on employees’ morale, organizational activities, and
membership in the union. Master Slack Corp., 271 N.L.R.B.
78, 84 (1984).
[8] Considering the lapse of time, the last unilateral change
occurred only one month before the petition—a proximity that
increases the likelihood of causation. Further, the affected
employees here included a majority of the petition’s signato-
ries. See AT Sys. W., Inc., 341 N.L.R.B. 57 (2004). As to the
remaining factors, both logic and precedent dictate that unilat-
eral action with respect to wages is likely to have a long-
lasting effect on employee support for a union because each
paycheck reminds them of the likely irrelevance of the union.
Penn Tank Lines, Inc., 336 N.L.R.B. 1066, 1067 (2001)
(“Where unlawful employer conduct shows employees that
their union is irrelevant in preserving or increasing their
wages, the possibility of a detrimental or long-lasting effect
on employee support for the union is clear.”); see also May
Dept. Stores Co. v. NLRB, 326 U.S. 376, 385 (1945) (“Such
unilateral action minimizes the influence of organized bar-
gaining. It interferes with the right of self-organization by
emphasizing to the employees that there is no necessity for a
collective bargaining agent.”).
C
Finally, the Employer challenges the bargaining order as an
extreme remedy that is unjustified in this case because
employees would be denied their freedom of choice in orga-
nizing and because the violations found here are not suffi-
ciently serious to warrant such relief. Additionally, the
Employer relies heavily on the argument that the Board’s own
delay in resolving this case forecloses the option of imposing
an affirmative bargaining order.
4304 EAST BAY AUTOMOTIVE v. NLRB
[9] We have recognized that affirmative bargaining orders
are an appropriate remedy even where it has been shown that
a union has lost majority support among employees. La.-Pac.
Corp. v. NLRB, 858 F.2d 576, 578 (9th Cir. 1988) ; NLRB v.
Geigy Co., 211 F.2d 553, 558 (9th Cir. 1954). Further, it
would be inappropriate to upset the Board’s order in light of
a loss of employee support that was brought about by the very
wrongs being remedied. And while the Board’s delay of sev-
eral years in issuing the panel’s decision was indeed deplor-
able, in our court changed circumstances during intervals of
adjudication “have been held irrelevant to the adjudication of
enforcement proceedings.” NLRB v. Bakers of Paris, Inc., 929
F.2d 1427, 1448 (9th Cir. 1991) (citing NLRB v. Buckley
Broad. Corp., 891 F.2d 230, 234-35 (9th Cir. 1989)); see also
Seattle-First Nat’l Bank v. NLRB, 892 F.2d 792, 795 (9th Cir.
1989); L’Eggs Prods., Inc. v. NLRB, 619 F.2d 1337, 1352-53
(9th Cir. 1980).
[10] Accordingly, we conclude that the Board did not abuse
its broad remedial discretion in issuing an affirmative bargain-
ing order. See Sever v. NLRB, 231 F.3d 1156, 1165 (9th Cir.
2000).
IV
For the foregoing reasons, we reject both the Union’s and
the Employer’s arguments that the Board’s remedy in this
case is either inadequate or inappropriate. Therefore, the peti-
tions for review are DENIED and the Board’s petition is
GRANTED and the Board’s Order shall be ENFORCED.