Publi-Inversiones De P.R., Inc. v. Nat'l Labor Relations Bd.

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 26, 2018 Decided March 30, 2018
No. 17-1102
PUBLI-INVERSIONES DE PUERTO RICO, INC., D/B/A EL VOCERO
DE PUERTO RICO,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
Consolidated with 17-1141
On Petition for Review and Cross-Application
for Enforcement of an Order of
the National Labor Relations Board
Alberto J. Bayouth-Montes argued the cause for petitioner.
With him on the briefs was Yldefonso López-Morales.
Kellie J. Isbell, Attorney, National Labor Relations Board,
argued the cause for respondent. With her on the brief were
Richard F. Griffin, Jr., General Counsel, John H. Ferguson,
Associate General Counsel, Linda Dreeben, Deputy Associate
General Counsel, and Julie B. Broido, Supervisory Attorney.
2
Before: GARLAND, Chief Judge, and SILBERMAN and
SENTELLE, Senior Circuit Judges.
Opinion for the Court filed by Senior Circuit Judge
SILBERMAN.
SILBERMAN, Senior Circuit Judge: Publi-Inversiones
Puerto Rico, Inc. (“PI”), purchased the equipment and
intellectual property of a bankrupt newspaper in a Chapter 7
asset sale. It subsequently hired some of the bankrupt
company’s employees and began to publish its own version of
the newspaper. The Unión de Periodistas, Artes Gráficas y
Ramas Anexas, Local 33225 – which had represented some
employees of the bankrupt company – alleged that PI was a
successor employer and thus violated Sections 8(a)(5) and (1) of
the National Labor Relations Act1 by refusing to recognize and
bargain with the union. The NLRB concluded that PI met the
legal standard for successorship, and ordered it to engage in
collective bargaining as required by the Act. PI petitions for
review, claiming that the changes it made to the publishing
business rebutted the Board’s finding of substantial continuity
between the two companies. It contends, moreover, that the
former employees it hired did not constitute a majority of the
relevant bargaining unit, primarily because it hired a number of
additional employees in part-time roles. We deny PI’s petition
and grant the Board’s cross-application for enforcement because
we think the Board’s finding of successorship is amply
supported.
1
29 U.S.C. § 158(a)(1), (5).
3
I.
For decades, Caribbean International News Corporation
generated and published a Spanish-language newspaper called
El Vocero at its facilities located in Puerto Rico. The company
also intermittently published several “magazines,” which it
printed on the same type of paper as El Vocero and distributed
along with that newspaper. It employed workers in thirteen
departments: administration, personnel, workshop, photography,
classified, circulation, reception, guards, editorial, sales,
accounting, press, and dispatch. It also paid external
organizations to provide subcontracted “inserters” – workers
who physically placed advertisements, sales flyers, and the
supplemental magazines into copies of El Vocero.
Since at least 1975, the union represented many of the
employees of Caribbean International. The bargaining unit, as
defined by the most recent collective bargaining agreement,
included all employees of Caribbean International with the
exception of certain specific positions, such as executives and
supervisors. But inserters were neither employees of the
company nor members of the bargaining unit.
In September 2013, Caribbean International filed for
bankruptcy, and several months later, the company was
liquidated under Chapter 7 of the Bankruptcy Code. PI
purchased its assets as the sole bidder at the public sale. Soon
thereafter, the new company notified employees that they could
apply for employment. PI explained changes in work rules,
compensation schemes, dress code, and other policies during the
application process and then hired approximately 100
employees. It is undisputed that 24 of these were bargaining-
4
unit members formerly employed by Caribbean International.
In all, 36 of the newly hired employees – including the 24
previous employees – occupied jobs that were included in the
previous bargaining unit. (Another group of employees held
positions that were clearly outside the bargaining unit, such as
managers, supervisors, administrative employees, salespersons,
and security guards.) Most important for this case, PI also hired,
as regular part-time employees, a group of inserters whose
number fluctuated between 27 and 51. If these part-timers were
included in the bargaining unit, the previous employees would
no longer constitute a majority.
El Vocero underwent some changes. PI updated the
newspaper’s logo, font, and color scheme, adopted a new
printing method, and added the slogan “La verdad no tiene
precio” (“Truth has no price”) to its cover page. It also began to
publish several new magazines. These included Mírame and
Zona Sport, which were sold separately for $2.50 apiece. Unlike
the previous newsprint “magazines” that Caribbean International
had inserted into El Vocero, these new magazines were printed
on glossy paper and included full-page, high-resolution action
photographs with headlines such as “UNA BESTIA LLAMADA
GRONK” (“A BEAST NAMED GRONK”). JA 584. PI also modified
the company’s organizational structure and reporting hierarchy
and changed the Board of Directors.
Less than a month after PI acquired the newspaper’s assets,
the union sent a letter attempting to schedule a meeting to
initiate negotiations on a new collective-bargaining agreement.
It also requested information about the new company’s
organizational structure and its employees. The company
responded by declining to either begin negotiations or provide
the requested information. The union then filed a charge that the
company had violated the NLRA by refusing to bargain as a
5
successor and by “blacklisting” unit employees of the
predecessor because of their support for the union. The NLRB’s
Regional Director dismissed both of these claims, finding that
the evidence was insufficient to support either. The union
appealed the decision, and on remand from the General
Counsel’s Office of Appeals, the dismissal of the successorship
claims was withdrawn.
In October 2015, the General Counsel filed a complaint. An
administrative law judge found that PI was, in fact, a successor
to Caribbean International under the applicable legal standards
and, therefore, the company had violated the Act by refusing to
negotiate with or provide information to the union. The Board
affirmed the findings and recommendations of the
administrative law judge. (Upon the motion of its General
Counsel, the Board issued an order modifying the scope of the
union’s bargaining unit to explicitly exclude the inserters.) PI
refused to bargain and filed its petition for review.
II.
The Supreme Court has endorsed the Board’s presumption
of majority support for a union when three criteria of
successorship are met: “substantial continuity” between the two
enterprises, the presence within the bargaining unit of a majority
of employees who had previously worked for the predecessor,
and the existence of an ongoing demand for collective
bargaining on the part of the union. Fall River Dyeing &
Finishing Corp. v. NLRB, 482 U.S. 27, 42-54 (1987). The
union’s continuing demand in this case is undisputed.
Although Petitioner makes much of superficial changes in
its business model, we are quite unimpressed. Certainly that it
changed the Board of Directors, adopted a new title for reporters
6
(. . . “mega-reporters”), purchased a new copy machine, and
adopted a new motto for the paper cannot possibly be thought
the kind of business changes that defeat a finding of continuity.
Petitioner’s slightly more substantial argument is that its
hiring of regular part-time inserters, relatively unskilled workers
who insert advertisements and magazines into the folds of the
paper, expands the number of employees in the previous
bargaining unit so that a majority are new employees. (It will be
recalled that the previous owner had also used inserters, but they
were provided by an independent contractor.) As we noted, if
the inserters were combined with the 24 former unit members,
the total number is 86, so that the former unit members would
no longer be a majority – a Fall River successorship
requirement.
Petitioner’s difficulty is that the Board is never required to
determine the most appropriate unit, only an appropriate unit.
Serramonte Oldsmobile, Inc. v. NLRB, 86 F.3d 227, 236 (D.C.
Cir. 1996); see also Blue Man Vegas, LLC v. NLRB, 529 F.3d
417, 420-23 (D.C. Cir. 2008). The inserters work under
significantly different conditions. They are less skilled part-time
employees, not even covered under the company’s health plan.
Indeed, their wages are almost 50 percent lower than the lowest
paid prior unit employee. Credited testimony before the ALJ
revealed they were not even permitted to speak to the full-time
employees. It is, therefore, rather obvious that the Board, if it
were deciding this case initially – not as a successorship – could
easily conclude that an appropriate unit could exclude the part-
time inserters even without the prior bargaining history. Blue
Man Vegas, 529 F.3d at 421. But prior bargaining history,
either in an initial representation case or a successorship case, is
an additional factor the Board is entitled to consider in
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determining whether a unit is an appropriate unit,2 and “[i]n
most cases, a historical unit will be found appropriate if the
predecessor employer recognized it, even if the unit would not
be appropriate under Board standards if it were being organized
for the first time.” Trident Seafoods, 101 F.3d at 118. Indeed,
in Trident, the only one of three units challenged by the
successor employer that we concluded was clearly inappropriate
was a group of processors whose only distinction from other
processors (represented by a different union) was their place of
hire.3
The Board’s counsel suggested that in a successorship case
the Board’s standard for determining whether a unit is
appropriate is less exacting than in an initial representation case.
But we think in any case – whether involving a successor or not
– if a unit sought by a union has a prior bargaining history the
Board can, legitimately, weigh that factor heavily. In other
words, in a successorship case, as in any representation case, a
historical unit can be rejected only if “truly inappropriate.”
Blue Man Vegas, 529 F.3d at 421; see also Trident Seafoods,
101 F.3d at 118.
* * *
2
See, e.g., Blue Man Vegas, 529 F.3d at 421 (citing Trident
Seafoods, 101 F.3d at 118 n.11; Agri Processor Co., Inc. v. NLRB, 514
F.3d 1, 9 (D.C. Cir. 2008); NLRB v. Lundy Packing Co., 68 F.3d 1577,
1580 (4th Cir. 1995)).
3
That reflected the rivalry between unions located in Seattle and
those based in Alaska. See Tyree v. Edwards, 287 F.Supp. 589, 590-
91 (D. Alaska 1968), aff’d, 393 U.S. 405 (1969).
8
Because the Board’s determination that PI met the criteria
of successorship was supported by substantial evidence, we
deny PI’s Petition for Review and grant the Board’s Cross-
Application for Enforcement.4
So ordered.
4
We find no merit in Petitioners’ allegations of bias on the part
of the Board or objections to the Board’s April 25 correction of its
March 10 Decision and Order.