This is a labor relations case in which the principal question is whether the petitioner, who seeks review and reversal of the National Labor Relations Board’s order, committed an unfair labor practice by an untimely withdrawal from a multi-employer bargaining unit, and by subsequent refusal to be bound by a collective bargaining agreement. Also at issue is whether petitioner’s failure to reinstate employees following a strike constitutes an unfair labor practice. The Board has cross-petitioned for enforcement of its order.
I.
Factual Background
Petitioner was a member of a multi-employer bargaining unit consisting of four members, PPG Industries, of Topeka, Kansas; Harding Glass of Topeka; Warner Glass Company of Topeka, and Harding Glass of Manhattan, Kansas. The organization was known as the Topeka Area Glazing Contractors Association. It represented its members in collective bargaining with Glaziers and Glassworkers Local Union No. 558. Hugo Townsend served as chairman of the Association's negotiating team, and Jack Zander headed negotiations for the Union.
On July 31, 1977, the then-current collective bargaining agreement was due to expire and the parties started negotiations on a new contract. They held meetings on July 20th, 26th, 27th and 29th. No agreement was reached and the Union went on strike August 1, 1977. However, Warner and the Union agreed orally that Warner’s employees would continue to work under the terms of the expired contract and that Warner would pay retroactively any wage increases negotiated by the Association. Thereafter, on October 20th, Warner and the Union apparently signed a written contract, wherein Warner agreed to begin paying a new wage scale, and agreed to other terms which were requested by the Union.
Other meetings between the Association and the Union took place on August 5th and 17th. • By mutual consent, a mediator from the United States Mediation and Conciliation Service started attending meetings on August 5th. The Administrative Law Judge found that:
On August 17, 1977, the Association presented further proposals. At that time, the parties were in disagreement over several substantial issues: wages, holidays, a surety bond, hiring hall, and rotation. Rotation involved a union proposal for sharing the work in slack times, rather than laying off employees. It was resisted by the Association and the Respondent, and particularly opposed by the management of the Manhattan branch, though Project Manager Galbraith testified that such a policy was normally followed at Manhattan. In addition, the Association was insisting that its proposals, including the Respondent’s position on rotation, be submitted to the Union membership for vote — a demand adamantly resisted by the Union representatives.
During the August 17 meeting, which concluded in a heated discussion regarding the rotation issue, Union representative Zander said, in apparent exasperation, that if it were not for Manhattan and the rotation issue, “we could settle this damn thing” and that it “might be better” if the Union negotiated separately with Manhattan.
Despite the position that had been taken at the meeting, the Union submitted the Association’s proposal to the membership for a vote on the evening of August 17th. The proposal was rejected by a vote of 16 to 1.
On August 22nd, Vic Galbraith, the Contract Manager for Harding Manhattan, telephoned Jack Zander, the Business Manager for the Union, who represented the Union during the negotiations. Bobby Atchison, Manager of Harding Topeka, participated in the call. Galbraith asked if Zander agreed that the negotiations were at a “standstill” and Zander replied that he guessed so. Galbraith then said that Har *1333 ding Manhattan should negotiate separately; Zander suggested a meeting to discuss the matter.
The next negotiation session was August 24th. At the beginning of the meeting, Galbraith handed Zander a letter from Joe Jones, Manager of Harding Manhattan. The letter informed the Union that Harding Manhattan was withdrawing from the multi-employer negotiations “because of the impasse and your suggestion.” Zander indicated that he did not know whether the withdrawal could be permitted, and left the meeting to telephone the Union’s attorney. Galbraith left the meeting while Zander was absent. No separate representative of Harding Manhattan was present at any further meetings between the Union and the Association. Zander returned and stated that the Union would not allow Harding Manhattan to withdraw. The meeting broke up without any discussion of substantive issues.
In response to a Union proposal of new language for a rotation clause, a meeting was held September 19th. Further meetings were held October 27th and November 3rd. Agreement was finally reached on November 3rd, and the Association and the Union entered into a new three-year contract. The agreement did not contain a rotation clause.
On November 7, 1977, all the strikers reported for work. At Harding Manhattan, Jones refused to allow them to return to work on the ground that Manhattan had no contract with the Union. On November 20th, Jones and Galbraith offered the former strikers employment on terms and conditions less favorable than those contained in the new agreement. This offer was declined. At the hearing before the Administrative Law Judge, the company argued for the first time that it had hired permanent replacements for all of the strikers prior to November 7th, and that there were no openings available on that date. It was undisputed that Manhattan hired two employees on August 22nd and five more between September 19th and October 31st.
Following the presentation of evidence, including exhibits, before the Administrative Law Judge, a decision was reached and recommended remedies were set forth. The remedies were substantially accepted by the Board. Harding Manhattan was ordered, in part, to abide by the agreement, and to reinstate and make whole those employees who had requested reinstatement. Harding asks that the Board’s decision be reversed and that the order be denied enforcement. The argument of Harding is that it validly withdrew from negotiations, and therefore, it is not bound by the agreement. In the alternative, Harding argues that the strikers are not entitled to reinstatement or back pay.
II.
Was the Withdrawal of Harding-Manhattan Valid?
The position of Harding Manhattan is that there was an impasse, which, either by itself or in combination or with other circumstances, justified Manhattan’s withdrawal from multi-employer bargaining. The Administrative Law Judge and the Board found, however, that no impasse in negotiations had been reached. Nevertheless, Harding argues that this finding is not supported by substantial evidence on the record as a whole. It is unnecessary, in view of the disposition which we make, to resolve this question. We assume that the parties were at an impasse on August 24, 1977. Taft Broadcasting Company,
Multi-employer bargaining is approved expressly by the National Labor Relations Act, and is said to serve an important role in promoting labor peace.
NLRB v. Truck Drivers Local Union No. 449,
Manhattan Harding has not argued directly that the Union consented to withdrawal. It has been suggested that the Union, through Zander, invited the withdrawal. As noted above, Zander said on August 17th that it might be possible to reach a settlement if Harding Manhattan was not part of the negotiations. Thereafter, however, Zander offered only to discuss the matter further. When confronted with Manhattan’s withdrawal on August 24th, Zander unequivocally refused to consent to the withdrawal.
Where a union accepts benefits flowing from a withdrawal or proceeds to bargain individually without protest, it may be appropriate to infer consent to withdrawal.
Fairmont Foods Co. v. NLRB,
Manhattan’s withdrawal was permissible only if “unusual circumstances” were present. The Board’s position is that unusual circumstances arise only in extreme situations. The Board allows withdrawal if an employer is confronted with dire economic consequences, such as imminent bankruptcy. Joseph J. Callier, d/b/a Callier’s Custom Kitchens, 243 N.L.R.B. No. 143 (1979),
enforced in part, NLRB v. Callier, supra;
United States Lingerie Corp.,
In Hi-Way Billboards, Inc.,
*1335
In a case which preceded Hi-Way Billboards, Inc.,
supra,
the Eighth Circuit Court of Appeals relied on earlier Board decisions to find that impasse justified withdrawal.
Fairmont Foods Co. v. NLRB, supra.
It is to be noted that the court in
Fairmont Foods
held alternatively that the union had consented to the withdrawal. A careful reading of
NLRB v. Beck Engraving Co., Inc.,
The Second Circuit has held that impasse justifies unilateral withdrawal from multiemployer bargaining in
NLRB v. Independent Ass’n of Steel Fabricators,
The Ninth Circuit apparently has held that impasse alone justifies withdrawal from a multi-employer unit.
See NLRB v. Associated Shower Door Co., Inc.,
The courts which have endorsed withdrawal based on impasse alone have, nevertheless, recognized the importance of multiemployer bargaining to labor peace, and the resulting desirability of stability in multiemployer units. See NLRB v. Truck Drivers Local Union No. 449, supra. Those courts have found that the need for stability of bargaining units is outweighed by other considerations on impasse. The courts have focused primarily on the union’s right to, in effect, withdraw by entering into separate agreements with individual employers, on the perceived futility of insisting that employers remain in the unit after impasse, and on the danger that, after impasse, the union will enter into separate agreements with individual employers and then unfairly “whipsaw” remaining employers by use of selective strikes.
After careful consideration of the views of the courts which have found impasse alone to be sufficient for withdrawal, we are persuaded that the better view is that impasse alone does not justify withdrawal. Our view is supported by the decisions of courts which have considered whether impasse, in combination with other circumstances, justifies withdrawal.
In
NLRB
v.
Hi-Way Billboards, Inc.,
*1336
With regard to separate agreements between a union and individual members of multi-employer bargaining units, the Board now takes the view that interim agreements do not seek to fragment the unit, but rather affirm its continued viability. Examples of such holdings are Joseph J. Callier, d/b/a Callier’s Custom Kitchens, supra; Charles D. Bonanno Linen Service, Inc., 243 N.L.R.B. No. 140 (1979),
enforcement granted,
The Board has also taken the position that where a union and a member of a multi-employer unit enter into a separate permanent agreement, both the union and the company violate the N. L. R. A. unless they obtain the consent of the other members of the employer unit. Teamsters Union Local No. 378, 243 N.L.R.B. No. 138 (1979); Joseph J. Callier, d/b/a Callier’s Custom Kitchens,
supra.
This rule appears to be a departure from the Board’s previous position that the consents of the union and the individual employer were sufficient.
See
Charles D. Bonnano Linen Service, Inc.,
supra,
243 N.L.R.B. No. 140, n. 6.
But see
Local Union No. 103,
The Board, however, continues to take the view that the fact that some members of a multi-employer unit have withdrawn does not necessarily justify additional withdrawals by other members. Tobey Fine Papers of Kansas City,
supra.
The Board permits withdrawal when a unit becomes so fragmented that it is no longer viable. Typographic Service Co., 238 N.L.R.B. No. 211 (1978); Connell Typesetting Co.,
supra.
The Fifth Circuit has approved the Board’s rules as striking a fair balance between “an individual party’s legitimate interest in striking its own separate bargain against the parties’ and the public’s legitimate interest in achieving the benefits afforded by continued multi-employer bargaining *
One other circuit has recently considered the Board’s rules in this area. 1 In NLRB v. Charles D. Bonanno Linen Service, Inc., supra, the First Circuit suggests that in refusing to accept the Board’s rules in this area, the courts have improperly attempted to weigh the bargaining strength of the parties and to catalogue the economic weapons available to each. Furthermore, the court suggests that the courts have over-estimated the impact of interim agreements in fragmenting or weakening a bargaining unit. Because no interim agreements had been negotiated in Bonanno, the court did not find it necessary to rule on the question in that case. The only justification for withdrawal that was advanced was the existence of a bargaining impasse. The court ruled that impasse alone does not justify withdrawal. We agree.
The First Circuit in Bonanno observed that the whipsaw impact of interim agreements and selective strikes does not have a logical connection with impasse; impasse can exist without any whipsaw effect occurring, as was true in the Bonanno case. Conversely, a union may engage in strikes and enter into interim agreements even though negotiations have not reached impasse. Most of the concerns which the courts have voiced in relation to impasse are actually related to separate contracts and selective strikes. There is no reason to *1337 hold that impasse alone triggers a right to withdraw that is actually based on other concerns. The court in Bonanno points out that impasse may be manipulated by a party desiring to withdraw. Also, impasse is difficult to define.
Some of the courts have suggested that it is futile to insist on continued participation in a multi-employer unit after impasse. We disagree. The fact that impasse occurs at one or more points in negotiations does not mean that an employer association and a union will not ultimately reach agreement. During the impasse, changed circumstances or economic pressures arising from strikes, lockouts, or sheer lapse of time, may cause adjustments which result in eventual agreement. In addition, the recognized importance of multi-employer units to labor peace must be considered. At least so long as other circumstances do not render it unfair or destructive to insist on continued membership in a multi-employer unit, we do not view impasse as a situation justifying withdrawal.
Harding Manhattan maintains in this appeal that the agreement with Warner Glass is an additional circumstance to which this court ought to give considerable weight in determining whether the withdrawal was permissible. But the effect of the Warner Glass agreement is not properly before us. As previously noted, the Union went on strike August 1, 1977. At about that same time, the Union and Warner Glass entered into an oral agreement and Warner’s employees remained at work. Neither Harding Manhattan nor any of the other Association members ever expressed any protest or concern over the Warner Glass agreement. When Harding Manhattan submitted its notice of withdrawal on August 24th, that letter referred only to the impasse and the Union suggestion. Later, in response to the Board’s request for a “complete written account of the facts” and a statement of Harding’s position, Harding Manhattan did not once mention the Warner Glass agreement in its two page reply letter.
Nor was the argument ever presented to the Administrative Law Judge or the Board. As a result, the record is devoid of any information important to consideration of the Warner Glass agreement. The record shows that out of a total of twenty-one or twenty-two Union employees in the bargaining unit, Warner Glass employed only four. There is no evidence in the record regarding what impact on the other three unit members was created, if any, as a result of the fact that Warner Glass continued to work during the strike. Furthermore, the Board distinguishes between permanent and interim agreements. Such an element was not explored below and we are unable to make a fact determination for the first time in this court on the record which is before us. 2 Therefore, in order to find for Harding Manhattan on this point, we would have to hold that any separate agreement with a member of a multi-employer group, whether interim or permanent, regardless of actual impact on the other unit members, and in spite of a lack of protest from any unit member, justifies withdrawal on impasse as a matter of law.
Because the Warner Glass agreement is advanced before this court as an afterthought, we need not and do not decide whether or not separate agreements justify withdrawal on impasse. In
NLRB v. Custom Wood Specialties, Inc.,
may be considered to be an after-thought * * *. It cannot reasonably be considered the reason for the withdrawal. *1338 NLRB v. Central Plumbing Co.,492 F.2d 1252 , 1254, n. 3 (6th Cir. 1974); NLRB v. Tulsa Sheet Metal Works, Inc.,367 F.2d 55 (10th Cir. 1966). * * *
Based on the cited authorities from other circuits, we conclude that the soundness of a withdrawal from a multiemployer unit is to be tested by considering the actual motivation of the employer seeking to withdraw from the unit. The record in this case lacks any showing that respondent’s departure from the bargaining unit was motivated by anything other than * * * the certification petition.622 F.2d at 385 .
In NLRB v. Tulsa Sheet Metal Works, Inc., supra, this court rejected the argument that an employer’s refusal to be bound by a union-employer association contract was justified by two illegal clauses in the contract. The clauses had not been raised at the time of the withdrawal, but were raised later as an after-thought.
Therefore, we decline to consider the argument that the Warner Glass agreement, coupled with impasse, justified the withdrawal of Harding Manhattan. We have already reached the conclusion that impasse alone does not justify withdrawal from a multi-employer unit. Accordingly, we uphold the Board’s finding that Harding Manhattan’s withdrawal was in violation of § 8(a)(1) and (5) of the N. L. R. A.
III.
Was the Order of Reinstatement and Back Pay Valid?
Harding Manhattan argues that even if its withdrawal from the bargaining unit violated the N. L. R. A., the strike did not thereby become an unfair labor practice strike. Since the strikers were replaced before the strike ended, it is Harding’s position that they are not entitled to reinstatement. In addition, Harding argues that the award of back pay in this case is punitive and ought not to be enforced.
The rules regarding reinstatement following strikes are well-established. Economic strikers are entitled to reinstatement unless the employer can demonstrate that there were legitimate and substantial business justifications for a refusal to reinstate.
NLRB v. Fleetwood Trailer Co.,
Unfair labor practice strikers are entitled to reinstatement regardless of whether or not they have been replaced.
NLRB v. International Van Lines,
What is the nature of the impact which unfair practices need to have in order to transform an economic strike into an unfair labor practices strike? This court has said that the unfair labor practices must be one of the operative causes of the strike.
Head Division, AMF, Inc. v. NLRB, supra; NLRB v. Wichita Television Corp.,
In the case before us, the strike began solely as an economic one. On August 1st the work stoppage was called by the Union due to the fact that no agreement had been reached following discussions. The action was taken in the hope of pressuring the Association to accept Union terms. In light of the analysis above, the withdrawal of Harding Manhattan on August 24th was clearly an unfair labor practice. Harding argues that the economic strike would have continued regardless of the withdrawal until November 7th. The testimony of Union Representative Zander supports this contention. Harding contends that as a result, the strike was solely an economic strike, at least until November 7th. Harding also maintains that all strikers were permanently replaced before November 7th, so they were not entitled to reinstatement on that date.
From a review of the record we find that substantial evidence supports the Board’s determination that the strike became an unfair labor strike when Harding Manhattan withdrew from negotiations. On that occasion, the unlawful refusal to bargain became at least as significant from the viewpoint of Harding Manhattan employees as the effort to obtain favorable economic terms. Thus, the Board could infer that the refusal to bargain became an operative cause of the strike against Harding Manhattan as of the date of the withdrawal. NLRB v. Johnson Sheet Metal, Inc., supra, was a case similar in many respects to the one which we now consider. There we sustained a similar Board finding, and we are persuaded that the same result should obtain here. 3
The Administrative Law Judge and the Board found that the two replacements hired August 22nd were hired in anticipation of the August 24th withdrawal. In light of the timing and the conversation between Galbraith and Zander on August 22nd, this inference is supported by the record. It is undisputed that all of the other replacements were hired after August 24th. Thus, the Harding Manhattan employees were entitled to reinstatement when they reported for work on November 7th.
Finally, it is argued by Petitioner that the award of back pay is punitive for the reason that Harding Manhattan offered the strikers work under the terms of the old contract on November 20th. But the Board held that the November 20th offer was invalid in view of the fact that Harding Manhattan was bound by the new contract. The strikers were not obligated to accept work under terms and conditions inferior to those which they were entitled to in order to protect their rights under the Act. As the Board points out, the employees were under a duty to minimize their damages. The award of reinstatement and back pay is, therefore, not punitive and is fully in accord with the Act. This is the reasoning of the Labor Board and we agree with it.
The petition for review filed by Harding Glass is dismissed, and the cross-application for enforcement is, therefore, granted. 4
Notes
. In
NLRB v. Callier,
. The Board maintains that the written agreement executed in October, 1977 was understood to be temporary, pending execution of an agreement with the Association. Harding argues that on its face, the contract is for three years and is not temporary. However, the document in the record is unsigned and does not even specify who the contracting parties are.
. Although no express finding was made, the Administrative Law Judge apparently also found that Harding did not carry its burden of proof to demonstrate that legitimate and substantial business reasons justified the refusal to reinstate. Thus, the Administrative Law Judge apparently found that regardless of whether the strike was an economic or unfair labor practices strike on November 7th, Harding did not demonstrate that the refusal to reinstate was based on the hiring of permanent replacements. It is true that Harding’s former employees were told that they could not return to work because there was no contract with the Union. The fact that replacements were hired was not raised until the hearing before the Administrative Law Judge. We need not decide whether Harding failed to carry its burden on this point in light of the disposition reached.
.
The Charles D. Bonanno Linen Service, Inc. v. National Labor Relations Board, et
al., — U.S. —,