Oak Harbor Freight Lines, Inc. v. National Labor Relations Board

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 23, 2017 Decided May 2, 2017
No. 14-1226
OAK HARBOR FREIGHT LINES, INC.,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
TEAMSTERS 174 AND TEAMSTERS LOCAL NUMBERS 81, 174,
231, 252, 324, 483, 589, 690, 760, 763, 839, AND 962,
INTERVENORS
Consolidated with 14-1273, 15-1002
On Petitions for Review and Cross-Application
for Enforcement of an Order of
the National Labor Relations Board
Peter N. Kirsanow argued the cause for petitioner Oak
Harbor Freight Lines, Inc. With him on the briefs were John M.
Payne and Selena C. Smith. Patrick O. Peters entered an
appearance.
Thomas A. Leahy argued the cause and filed the briefs for
petitioner Teamsters Union Local 174, et al.
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Jared D. Cantor, Attorney, National Labor Relations Board,
argued the cause for respondent. With him on the brief were
Richard F. Griffin, Jr., General Counsel, John H. Ferguson,
Associate General Counsel, Linda Dreeben, Deputy Associate
General Counsel, and Usha Dheenan, Supervisory Attorney.
Peter N. Kirsanow, John M. Payne, and Selena C. Smith
were on the brief for intervenor Oak Harbor Freight Lines, Inc.
Thomas A. Leahy was on the brief for intervenors Teamsters
Local 174, et al.
Before: GARLAND, Chief Judge, ROGERS, Circuit Judge,
and WILLIAMS, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge ROGERS.
ROGERS, Circuit Judge: The National Labor Relations Act
requires employers to bargain in good faith “with respect to
wages, hours, and other terms and conditions of employment.”
29 U.S.C. § 158(a)(5), (d). Upon the expiration of a collective
bargaining agreement, the parties to that agreement have an
ongoing obligation to maintain the “status quo” as to all
mandatory subjects of bargaining until they reach a new
agreement or an impasse. NLRB v. Katz, 369 U.S. 736, 743
(1962); Laborers Health & Welfare Tr. Fund for N. Cal. v.
Advanced Lightweight Concrete Co., 484 U.S. 539, 544 n.6
(1988); Triple A Fire Prot., Inc., 315 NLRB 409, 414 (1994).
Absent an impasse, unilateral action changing the status quo of
a mandatory subject of bargaining violates Section 8(a)(5) of the
Act as a “circumvention of the duty to negotiate.” Katz, 369
U.S. at 743. Pension and healthcare benefits are mandatory
subjects of bargaining. See Allied Chem. & Alkali Workers of
Am., Local Union No. 1 v. Pittsburgh Plate Glass Co., Chem.
Div., 404 U.S. 157, 180 (1971). Both requirements are
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implicated here.
Oak Harbor Freight Lines, Inc. and several locals of the
Teamsters Union established four health benefit and pension
trusts, so-called “Taft-Hartley” trusts, as part of their collective
bargaining agreement. Under that agreement, Oak Harbor was
required to make monthly contributions to the trusts. When the
agreement expired and no new agreement was reached after a
year, Union employees went on strike. When Oak Harbor
ceased making contributions to the trusts, the Union filed unfair
labor practice charges. The National Labor Relations Board
ruled the Union had waived its right to bargain over the
cancellation of contributions in subscription agreements to three
of the trusts after the collective bargaining agreement expired,
and Oak Harbor, having failed to prove a fourth subscription
agreement existed or other basis to find a union waiver, violated
Sections (8)(a)(5) and (1) of the National Labor Relations Act
by ceasing to make payments to the fourth trust. The Board also
ruled that Oak Harbor’s unilateral imposition of its medical plan
after the strike ended violated the Act. Both Oak Harbor and the
Union filed petitions for review of the Board’s Decision and
Order. For the following reasons, we deny the petitions for
review and grant the Board’s cross-application to enforce its
Order.
I.
Oak Harbor is a freight transportation company operating
throughout the northwestern United States. Since at least 1992,
local Teamsters unions (together, “the Union”) have represented
Oak Harbor employees based in Washington, Oregon, and
Idaho, engaging in joint bargaining for a single collective
bargaining agreement. As relevant, the latest collective
bargaining agreement was effective from November 1, 2004
until October 31, 2007. It required Oak Harbor to make
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monthly contributions to four “Taft-Hartley” trusts for employee
health benefits and pensions, 29 U.S.C. § 186(c)(5), and set the
contribution rate for each trust.
Negotiations for a new collective bargaining agreement
began in August 2007. More than a year later, the parties still
had not reached a new agreement, and on September 22, 2008,
Union employees went on strike. Oak Harbor sent letters to the
Union and to the four trusts, notifying them of its intent to cease
making contributions to the trusts five days after the notices
were received. The letters to three trusts — Washington
Teamsters Welfare Trust, the Western Conference of Teamsters
Pension Trust Fund, and the Retirees Welfare Trust —
referenced cancellation provisions in the trust subscription
agreements or employer-union pension certifications
(collectively, “subscription agreements”). The cancellation
provision in the Retirees Welfare Trust’s subscription agreement
stated:
Upon expiration of the current or any subsequent
bargaining agreement requiring contributions, the
employer agrees to continue to contribute to the trust in
the same manner and amount as required in the most
recent expired bargaining agreement until such time as
the [employer or union] either notifies the other party
in writing . . . of its intent to cancel such obligation five
days after receipt of notice or enter[s] into a successor
bargaining agreement.
The cancellation provisions for the other two trusts were
virtually identical. With respect to the fourth trust — the
Oregon Warehouseman’s Trust — Oak Harbor wrote:
We are not certain whether Oak Harbor Freight Lines
has a subscription agreement with the Oregon
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Warehouseman’s Trust, which contains a Notice to
Cancel Provision. If such a provision exists in a
Subscription Agreement signed by Oak Harbor Freight
Lines, please be advised that this constitutes Notice of
Intent to Cancel.
Letter from John M. Payne, Esq. (Sept. 23, 2008). Five days
after receipt of the letters, Oak Harbor ceased contributions to
the four trusts.
During the strike, Oak Harbor hired strike replacements,
which included “crossover employees,” i.e., Union members
who crossed the picket line. It considered itself obligated to
continue making trust payments for the crossovers during the
strike. When informed the trusts would not accept contributions
on behalf of only these Union members, Oak Harbor proposed
that for the duration of the strike it would make pension
contributions to an escrow account and “temporarily cover its
crossovers” under Oak Harbor’s medical plan. Mem. from John
M. Payne, Esq., to Union Representatives Al Hobart, Buck
Holliday, and Ken Thompson (Oct. 3, 2008). The Union agreed.
Then, on February 17, 2009, five days after the Union extended
an unconditional offer for its members to return to work, Oak
Harbor proposed “to continue the [February 17] status quo
regarding wages and benefits” for the returning strikers; that is,
the interim strike arrangement would continue for all employees:
pension contributions would be paid to escrow accounts and
medical coverage would be provided under Oak Harbor’s
medical plan. The Union disagreed with Oak Harbor’s
understanding of its “status quo” obligation and countered with
a proposal for an “interim agreement” with the trusts in order to
allow trust contributions to resume during negotiations for a new
collective bargaining agreement. Oak Harbor refused, and when
strikers returned to work on February 26, 2009, Oak Harbor
unilaterally imposed the terms in its February 17th letter.
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The Union filed unfair labor practice charges with the
Board in light of Oak Harbor’s cessation of trust payments and
unilateral imposition of its medical plan after the strike ended.
An administrative law judge (“ALJ”) found no unfair labor
practice by Oak Harbor in ceasing to make contributions to the
trusts in view of the subscription agreements, but concluded Oak
Harbor’s unilateral action placing Union employees under its
medical plan after the strike ended violated Sections 8(a)(5) and
(l) of the Act. Both parties appealed. The Board adopted the
ALJ’s finding and conclusions on Union waiver except with
regard to Oak Harbor’s cessation of payments to the Oregon
Warehouseman’s Trust. As to that trust, the Board found Oak
Harbor had failed to prove there was a subscription agreement
or present other evidence that the Union had clearly and
unmistakably waived its right to bargain over the cancellation of
contributions. It ordered Oak Harbor, upon the Union’s request,
to make all post-strike payments to the Oregon Warehouseman’s
Trust, restore the pre-strike status quo for health care benefits,
and reimburse employees, with interest, for any expenses
resulting from the failure to make the required payments to that
trust. The Union and Oak Harbor petition for review of the
Board’s Decision and Order.
II.
The Union challenges the Board’s finding that it clearly and
unmistakably waived its right to bargain over cancellation of
contributions to the three trusts. It maintains that the Board
inappropriately considered extrinsic evidence to the expired
collective bargaining agreement when it looked to the terms of
the subscription agreements, and that those agreements were
only “ministerial” documents incapable of demonstration of the
Union’s clear and unmistakable waiver. The court will uphold
the decision of the Board unless it was arbitrary or capricious or
contrary to law, and as long as its findings of fact are supported
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by substantial evidence in the record as a whole. Wayneview
Care Ctr. v. NLRB, 664 F.3d 341, 348 (D.C. Cir. 2011); Pirlott
v. NLRB, 522 F.3d 423, 432 (D.C. Cir. 2008). Substantial
evidence, which is “more than a mere scintilla,” is “such
relevant evidence as a reasonable mind might accept as adequate
to support a conclusion.” Consol. Edison Co. of N.Y. v. NLRB,
305 U.S. 197, 217 (1938); see also Universal Camera Corp. v.
NLRB, 340 U.S. 474, 477 (1951).
The Board properly concluded that the Union waived its
statutory rights to receive and bargain over continued
contributions to the Washington Teamsters Welfare Trust, the
Retirees Welfare Trust, and the Western Conference of
Teamsters Pension Trust Fund. Applying its own test, the Board
determined that the subscription agreements for those trusts
“clearly and unmistakably” authorized Oak Harbor to cease trust
contributions upon expiration of the collective bargaining
agreement after five days’ notice. Under this court’s precedent,
when an “employer acts pursuant to a claim of right under the
parties’ agreement, the resolution of that refusal to bargain
charge rests on an interpretation of the contract at issue.” NLRB
v.United States Postal Ser., 8 F.3d 832, 837 (D.C. Cir. 1993).
Although the Board has declined to adopt this view of the law,
see, e.g., Enloe Medical Center v. NLRB, 433 F.3d 834, 837–38
(D.C. Cir. 2005), this non-acquiescence issue does not matter
here. No party raises the “contract coverage” issue, the Union
maintains that the Board misapplied its own precedent, and the
court would reach the same result regardless of which doctrine
is applied. Contrary to the Union’s contention that the Board
erred in considering the extrinsic evidence of the subscription
agreements but failing to consider its “extrinsic evidence” that
the cancellation terms were not the product of bargaining, the
Board properly concluded that considering the Union’s
additional evidence would not have changed its analysis or
outcome.
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The Union contends that the Board misapplied its own
waiver precedent. In Cauthorne Trucking, the Board found a
clear and unmistakable waiver of a union’s right to bargain over
contributions to trust funds after the expiration of the collective
bargaining agreement where the subscription agreement stated:
It is understood and agreed that at the expiration of any
particular collective bargaining agreement by and
between the Union and [the employer,] any Company’s
obligation under this Pension Trust Agreement shall
terminate unless, in a new collective bargaining
agreement, such obligation shall be continued.
256 NLRB at 722. The Union attempts to show that the
subscription agreements here were “ministerial” and “therefore
not indicative of a bargained-for waiver,” Union Pet’r’s Br. 34,
relying on Schmidt-Tiago Construction Company, 286 NLRB
342 (1987), and American Distributing Company, 264 NLRB
1413 (1982). It also questions the precedential force of
Cauthorne Trucking.
The Union maintains that the cancellation provisions for
the three “Taft-Hartley” trusts are better compared to the
subscription agreements in Schmidt-Tiago and American
Distributing where the Board concluded the text was
ambiguous. An examination of those precedents reveals no
error by the Board. In Schmidt-Tiago, the subscription
agreement stated that the employer and union “certify that a
written labor agreement is in effect between the parties
providing for contributions to the [Trust Fund],” and that the
employer and union “agree to be bound by the [collective
bargaining agreement] and the [subscription agreement] as now
constituted or as hereinafter amended.” 286 NLRB at 365. The
Board found the agreement “does not on its face, as in
Cauthorne Trucking, specifically state that [the employer’s]
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obligation to contribute to the pension trust fund ends with the
expiration of the current collective-bargaining contract.” Id. at
366. Similarly, in American Distributing, where the
subscription agreement stated, “[t]he undersigned employer and
[u]nion hereby certify that a written pension agreement (in most
cases a Teamsters collective bargaining agreement) is in effect
between the parties providing for contributions to the [Trust
Fund],” the Board found no unmistakable waiver of bargaining
after the expiration of the collective bargaining agreement; the
Board explained that “[s]uch language [did] no more than
ministerially attach to the enabling collective-bargaining
agreement for verification and collection purposes.” 264 NLRB
at 1415. Given the plain terms of the cancellation provisions in
the subscription agreements for the three trusts, there can be no
serious disagreement that the Board properly concluded these
cancellation provisions on their face were more like that in
Cauthorne Trucking, 256 NLRB at 722, than in the two cases on
which the Union relies.
To the extent the Union correctly points out that the Board
has applied Cauthorne Trucking “narrowly,” The Finley
Hospital, 359 NLRB 156, 159 n.5 (2012), that is not the same as
questioning its precedential value. Rather, the Board has
explained that it will find a clear and unmistakable waiver of the
right to bargain over the cancellation of trust payments only
where there is explicit contract language authorizing an
employer to cancel its obligations. Id. at 157–158. The three
subscription agreements did just that. There is no merit to the
Union’s view that a ministerial subscription agreement cannot
constitute a valid waiver. As the Board stated, “even assuming
that the cancellation language had been dictated by the Funds
and was not specifically bargained over by the parties, the
signed documents establish that the Unions waived their right to
bargain” over cancellation of contributions to the three trusts.
Board Decision and Order, 1 n.2.
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III.
Oak Harbor’s challenges to the Board’s Decision and Order
are also unpersuasive.
A.
Regarding trust contributions, the Board, as noted, has
determined that waiver of the right to bargain must be shown to
be clear and unmistakable. Provena St. Joseph Med. Ctr., 350
NLRB 808, 810 (2007); see Metro. Edison Co. v. NLRB, 460
U.S. 693, 708 (1983). Oak Harbor, as the party claiming waiver,
had the burden of proof. Good Samaritan Hosp., 335 NLRB
901, 918 (2001). The ALJ apparently inferred the existence of
a subscription agreement for the Oregon Warehouseman’s Trust
based on the existence of subscription agreements for the other
three trusts. But the Board’s contrary finding is supported by
substantial evidence in the record. There was no evidence that
a fourth subscription agreement actually existed, which, absent
other grounds for waiver, was necessary to find that the Union
had clearly and unmistakably waived its right to bargain over the
cancellation of contributions to the Oregon Warehouseman’s
Trust. Oak Harbor attempted to demonstrate the Union’s waiver
through the testimony of its attorney John Payne, but his
testimony was hardly dispositive. He testified one Oregon
Warehouseman’s Trust employee had told him: “I believe we
have a subscription agreement,” and another told him she was
“almost sure” there was a subscription agreement, “but I’ll have
to double check, but we almost always do require one.” Neither
was there evidence that the Oregon Warehouseman’s Trust
expressly denied the existence of a subscription agreement to
Oak Harbor. On the other hand, Oak Harbor does not maintain
that it ever received a copy of a subscription agreement from the
Oregon Warehouseman’s Trust or any confirmation one existed
beyond the trust’s general practice that agreements typically
existed.
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The Board reasonably concluded that, at most, there was
speculation based on an asserted usual practice to have a
subscription agreement that one existed for the Oregon
Warehouseman’s Trust, but no evidence specific to that Trust.
Indeed, even the evidence of the Oregon Warehouseman’s
Trust’s general practice was called into question; an Oregon
Warehouseman’s Trust administrator testified that the trust did
not generally require a subscription agreement. Although the
parties’ expired collective bargaining agreement required Oak
Harbor to make monthly contributions to four trusts, it did not
require that there be subscription agreements with the trusts,
much less that they include a cancellation provision. Oak
Harbor’s notice of cancellation letter to the Oregon
Warehouseman’s Trust confirms the speculative nature as to the
evidence of the existence of a subscription agreement. Absent
evidence to support a finding that a fourth subscription
agreement existed, much less that it existed and contained an
unequivocal cancellation provision like that in the subscription
agreements for the other three trusts, Oak Harbor failed to meet
its burden to show the Union had clearly and unmistakably
waived its right to bargain on contributions to the Oregon
Warehouseman’s Trust.
Oak Harbor’s other attempts to block the Union’s right to
bargain also fail. The Board reasonably rejected its argument
that the Union was estopped from challenging the existence of
a fourth subscription agreement. As Oak Harbor sees it, because
the Union never informed it that there was no subscription
agreement for the Oregon Warehouseman’s Trust, the Union is
“in no position to now benefit by [its] silence and [its]
acquiescence and seek retroactive contributions.” Oak Harbor
Pet’r’s Br. 23. But this is not affirmative evidence that the
Union had informed Oak Harbor that the subscription agreement
existed, and the Board precedent on which Oak Harbor relies is
inapposite. In Manitowoc Ice, Inc., 344 NLRB 1222, 1224
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(2005), the Board found estoppel based on the union’s repeated
acquiescence to the employer’s unilateral changes to the
employer’s profit-sharing plan as a management prerogative. Id.The union had repeatedly raised the issue of profit-sharing
during negotiations, the employer had repeatedly rejected the
union’s proposal to guarantee profit-sharing, and the union had
ultimately agreed to a collective bargaining agreement that did
not address the profit-sharing plan. Id. at 1223. The Board
concluded that there was “a clear understanding that the
profit-sharing plan would remain a management prerogative,
and that the Union, by its conduct . . . bargained away its interest
in the plan.” Id. at 1224 (internal quotations omitted). By
contrast, no evidence exists here as would show that the Union
discussed and “bargained away” its interest in maintaining
contributions to the Oregon Warehouseman’s Trust. Nor did the
Union fail to object contemporaneously that Oak Harbor was not
bargaining in good faith.
Lehigh Portland Cement Co., 286 NLRB 1366, 1383
(1987), does not advance Oak Harbor’s estoppel claim. There,
the employer took action over the course of a year consistent
with its acceptance of a merger of two unions, including dealing
with the representatives of the newly-merged union. The Board
found that the employer was estopped from challenging the
validity of the merger a year later because “the [e]mployer knew
of the merger and behaved in a way which encouraged justified
reliance by the Union.” Id. Likewise, in Alpha Associates and
Union of Needletrades, 344 NLRB 782 (2005), the employer
was estopped from challenging the validity of the union in light
of the employer’s “voluntary recognition of the [u]nion” and its
“conduct of bargaining with the [u]nion for more than a year
prior to its repudiation of the bargaining agreement,” id. at 783.
It is true that the Union did not challenge the cancellation
of contributions to the Oregon Warehouseman’s Trust on the
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ground there was no subscription agreement, but it did challenge
Oak Harbor’s cancellation of contributions to all four trusts less
than a month after the strike ended when it filed unfair labor
charges. There is no history of Union acquiescence or an
element of surprise in the Union’s position that Oak Harbor
violated the Act when it ceased to make contributions to the four
trusts. Oak Harbor’s consistent position that it validly cancelled
its contributions to the Oregon Warehouseman’s Trust, in turn,
presents no bar to the Union’s challenges.
The Board also properly found there was no evidence that
a “mutual mistake” prevented the Union from challenging the
cessation of contributions to the Oregon Warehouseman’s Trust.
Oak Harbor’s reasoning follows its estoppel argument and is
equally unpersuasive. Its reliance on Americana Healthcare
Center, 273 NLRB 1728 (1985), is misplaced. There, the Board
referred to a mutual mistake only in reaching the conclusion that
terms inadvertently omitted from a collective bargaining
agreement could be read into the final document, and in ruling
that the collective bargaining agreement’s “zipper clause”
therefore could not be invoked by the employer. Id. at 1733; see
also NLRB v. Americana Healthcare Ctr., 782 F.2d 941, 945
(11th Cir. 1986). The record shows no similar circumstances
here.
B.
As to the unilateral action of imposing its medical plan on
employees after the strike ended, in some cases economic
exigency may justify an employer’s unilateral change, but this
is not one of them. Oak Harbor contends that it was merely
applying the status quo in order to assure that returning
employees had health benefits, and that by February 2009, the
status quo had changed as a result of the parties’ arrangement
for crossover employees to be covered by Oak Harbor’s medical
plan. The record shows, however, that the agreement on
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crossover employees during the strike was temporary and that
Oak Harbor itself described it as an “interim measure pending
the outcome of bargaining and of the strike.” Mem. from John
M. Payne, Esq., to Union Representatives Hobart, Holliday and
Thompson (Oct. 3, 2008).
Alternatively, Oak Harbor contends that it was justified in
unilaterally placing Union workers on its medical plan because
the parties had reached an impasse or Oak Harbor faced an
economic exigency. These defenses were properly rejected by
the Board. “A bargaining impasse . . . occurs when good faith
negotiations have exhausted the prospects of concluding an
agreement, leading both parties to believe that they are at the
end of their rope.” TruServ Corp. v. NLRB, 254 F.3d 1105,
1114 (D.C. Cir. 2001) (internal quotations and citation omitted).
Typically, the parties must have reached an impasse as to overall
bargaining: “[i]mpasse over a single issue” will create an overall
bargaining impasse only if that issue “is of such overriding
importance that it frustrates the progress of further
negotiations.” Laurel Bay Health & Rehab. Ctr., 353 NLRB
232, 232 (2008) (internal quotations and citations omitted).
The Board found that there was no overall impasse to
negotiations in February 2009, a finding Oak Harbor does not
challenge. Nor does Oak Harbor suggest that the matter of
health insurance was of such “overriding importance” that its
unilateral action was justified in the absence of an overall
impasse. The Board also could properly reject Oak Harbor’s
position that an economic exigency authorized it to act
unilaterally, finding that Oak Harbor failed to show that it faced
an economic exigency that posed a “heavy burden” and
“require[d] prompt implementation” to justify its conduct at the
end of the strike. Vincent Indus. Plastics, Inc. v. NLRB, 209
F.3d 727, 734 (D.C. Cir. 2000).
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Accordingly, we deny the petitions for review, and we grant
the Board’s cross-application to enforce its Order.