890 F.3d 1100
D.C. Cir.2018Background
- PCMC created a subsidiary, PMMC, to perform Maersk maintenance & repair (M&R) work at Oakland, Long Beach, and Tacoma because Sealand’s sale to Maersk required IAM recognition and PCMC was bound to ILWU under the PCL&CA.
- From 2002–2005 PMMC (recognizing IAM) performed M&R at Oakland and Tacoma; PCMC (recognizing ILWU) performed other work. Maersk solicited bids in late 2004; PCMC’s lower bid—driven by lower labor costs tied to ILWU’s coast‑wide system—won.
- PMMC notified IAM it would cease operations effective April 1, 2005; PMMC laid off ~100 M&R mechanics; PCMC hired 76 (and later 6) of them but required ILWU membership under its CBA.
- IAM and the NLRB General Counsel alleged unfair labor practices; the ALJ largely recommended dismissal, but the NLRB found PCMC/PMMC (stipulated single employer) violated §8(a)(5) by failing to bargain and found ILWU violated §8(b)(1)(A) and (2) by accepting employer recognition when IAM remained the appropriate representative.
- PCMC/PMMC later settled with employees; ILWU sought review of the NLRB order in D.C. Circuit, challenging (1) employer’s duty to bargain, (2) exclusion of accretion evidence (whether employees accreted into ILWU unit), and (3) the remedy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the employer have a §8(a)(5)/§8(d) duty to bargain with IAM before shutting down PMMC and transferring work? | ILWU: The decision was a core entrepreneurial/economic choice (no bargaining duty); PCMC merely closed PMMC for business reasons. | NLRB: The transfer was primarily labor‑cost driven and PCMC/PMMC stipulated they were a single employer, so duty to bargain applied. | Held: Duty to bargain existed and was violated; transfer was labor‑cost based and the single‑employer stipulation compelled bargaining. |
| Were the former PMMC M&R mechanics accreted into ILWU’s West Coast bargaining unit? | ILWU: The mechanics merged by accretion into ILWU’s unit (post‑change integration supports accretion). | NLRB: Historical IAM representation, employee continuity, and employer’s unilateral changes preclude finding accretion. | Held: No accretion; substantial evidence supports IAM as continuing appropriate representative and Board properly discounted unilateral changes. |
| Did ILWU violate §8(b)(1)(A) and §8(b)(2) by accepting recognition and enforcing union‑security? | ILWU: Acceptance of recognition was lawful because employer’s change was a business decision and/or accretion occurred. | NLRB: Because IAM remained the proper rep, ILWU unlawfully accepted recognition and applied union‑security, coercing employees. | Held: ILWU violated §8(b)(1)(A) and §8(b)(2). |
| Is the NLRB remedy improper given PCMC/PMMC settled with employees (potential double recovery)? | ILWU: Remedy produces a windfall because employer already paid ~$130,000 per employee in settlement. | NLRB: Remedy stands; ILWU failed to raise this issue before the Board and may raise offset at compliance stage. | Held: Court declined to consider remedy challenge (procedurally barred under §10(e)); ILWU may raise offsets in compliance proceedings. |
Key Cases Cited
- First Nat’l Maint. Corp. v. NLRB, 452 U.S. 666 (Sup. Ct.) (employer need not bargain over purely entrepreneurial decisions; bargaining required where decision affects terms/conditions of employment)
- Fibreboard Paper Prods. Corp. v. NLRB, 379 U.S. 203 (Sup. Ct.) (replacing unit employees with independent contractor doing same work is subject of mandatory bargaining)
- S. Prairie Constr. Co. v. Local No. 627, 425 U.S. 800 (Sup. Ct.) (bargaining‑unit appropriateness analyzed separately from single‑employer status)
- Int’l Ladies’ Garment Workers’ Union v. NLRB, 366 U.S. 731 (Sup. Ct.) (union breaches §8(b)(1)(A) when it asserts exclusive bargaining authority without uncoerced majority support)
- Local Lodge No. 1424 v. NLRB, 362 U.S. 411 (Sup. Ct.) (§8(b)(2) prohibits imposing union‑security for a union that lacks majority status)
- Regal Cinemas, Inc. v. NLRB, 317 F.3d 300 (D.C. Cir.) (transfer of unchanged work to different employees triggers bargaining duty when change is labor‑cost driven)
- AG Comm’ns Sys. Corp. v. NLRB, 563 F.3d 418 (9th Cir.) (merger/merging companies may be a core business decision outside bargaining where not primarily labor‑cost driven)
- RC Aluminum Indus., Inc. v. NLRB, 326 F.3d 235 (D.C. Cir.) (single‑employer features relevant to bargaining obligations)