Lead Opinion
Opinion for the court filed by Circuit Judge ROGERS.
Dissenting opinion filed by Circuit Judge STEPHEN F. WILLIAMS.
Petitioner Leach Corporation seeks review of an order of the National Labor Relations Board finding Leach liable for unfair labor practices under §§ 8(a)(5) & (1) of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(5) & (1), in connection with its relocation of a manufacturing operation.
I.
Leach manufactures relay devices, a type of electronic switch used primarily in the aerospace industry. It had a longstanding collective bargaining relationship with the Union covering production and maintenance employees at a manufacturing facility known as the Los Angeles Relay Division (“Los Angeles”). The outstanding collective bargaining contract extended through October 22, 1991.
Relay production at Los Angeles, laid out over 14 buildings, operated according to a relatively inefficient manufacturing method known as “batch” production. In 1990, Leach decided to change its relay manufacturing process from the batch method to the more flexible and efficient “just-in-time” system. Due to physical limitations at the Los Angeles site, however, the company elected to close the plant and relocate the relay division to a pre-existing Leach facility in Buena Park, 19 miles away. Leach notified the Union in February 1991 of the plans to transfer the relay division, advising that the closure and relocation would commence in July and be completed in September. During the period leading up to the move, representatives of Leach and the Union met several times to discuss the new operation. At a March 20 meeting, Leach informed the Union that it would not extend the collective bargaining contract to Los Angeles employees who relocated to Buena Park due to the different nature of relay production there, and Leach denied the Union’s request to view the Buena Park premises. At each of these meetings, the Union also requested that Leach recognize it as the representative of relocating employees, and Leach refused. On June 26, Leach denied the Union’s request for the names, departments and positions of the employees to be relocated.
The relocation process commenced on July 3, when the first 35 Los Angeles workers began work at Buena Parlq and continued until completion on September 17. In all, approximately 280 of the 340 Los Angeles unit employees had been transferred. Except for the 35 employees who relocated on July 3, the record does not reveal the number of employees transferred on any particular date. When the relocation was complete, the new relay production line at Buena Park consisted entirely of former Los Angeles relay workers, and the old facility was closed.
On January 21, 1992, the Union filed a charge with the Board alleging that Leach had unlawfully repudiated the contract and withdrawn recognition of the Union in violation of §§ 8(a)(5) & (1). An Administrative Law Judge (“ALJ”) found that the Buena Park relay operation was substantially the same as production at Los Angeles, notwithstanding the different manufacturing methodology at Buena Park and the concomitant need for worker retraining.
The Board reversed the ALJ’s decision on the § 10(b) time-bar, ruling that the limitations period began at the earliest on September 17 — “the date the transfer process was substantially completed.” Id. at 991. Rejecting Leach’s argument that § 10(b) was triggered prior to the relocation, the Board noted that “a statement of intent or threat to commit an unfair labor practice does not start the statutory six months running. The running of the limitations period can begin only when the unfair labor practice occurs.” Id. at 991 & n. 7 (internal quotations and citations omitted). The Board emphasized that the § 10(b) period begins to run “only when a party has clear and unequivocal notice of a violation of the Act,” and that the party asserting the § 10(b) defense bears the burden of demonstrating such notice. Id. at 991.
Applying this principle to Leach’s relocation, the Board determined that Leach had failed to show that the Union “had knowledge of the facts necessary to support a ripe unfair labor practice charge on July 3,” when the relocation began. Id. In reaching this conclusion, the Board looked to the point at which Leach could be found to have committed an unfair labor practice. When an employer relocates a business, the Board has held that an existing contract remains in effect if (1) transferees from the old plant comprise a “substantial percentage” of employees in the relevant bargaining unit at the new plant, and (2) operations at the new facility are “substantially the same” as those at the old plant. Rock Bottom, Stores, Inc.,
The Board treated the gradual relocation of Leach’s Los Angeles employees to the preexisting Buena Park facility, where approximately 100 non-union workers were already employed, as a situation governed by Harte. Thus, it determined that Leach became obligated to recognize the Union and the contract at Buena Park only when the relocation had been substantially completed. Consequently, “on this record,” § 10(b) could not be triggered until that point, as only then would “sufficient facts [be] in existence to sustain a finding of an unfair labor practice.”
Leach contends that the Board erred in determining when the § 10(b) limitation period commenced to run with respect to the Union’s non-recognition and refusal-to-bargain charges. The Board’s interpretation of § 10(b), provided it is reasonable, is entitled to judicial deference. See Drug Plastics & Glass Co., Inc. v. NLRB,
Leach first maintains that the Board erred in ruling that § 10(b) could not be activated by the company’s unequivocal notice of intent to commit an unfair labor practice in the future. Leach relies primarily on United States Postal Service Marina Mail Processing Center,
The Board rejected this argument, describing Leach’s reliance on Postal Service as “misplaced”:
The 10(b) standard that was employed in Postal Service applies to discriminatory discharge cases, but not to situations like those at issue here, involving contract repudiation and refusal to bargain.
In addition, the Board’s decision not to apply Postal Service in the relocation context was reasonable. Postal Service itself emphasized that the Board did not “consider or discuss, what, if any implications” its notice rule might have in other contexts. See Postal Service,
Despite Leach’s contention, neither Armco, Inc. v. NLRB,
In the alternative, Leach contends that the § 10(b) period began to run on July 3, when 35 Los Angeles workers began work at Buena Park. Leach challenges the Board’s application of Harte’s “substantial completion” test in the context of the Buena Park relocation. Leach finds significant the fact that in Harte the transferees were initially outnumbered by new hires who were not subjects of the old contract, while the relevant Buena Park bargaining unit — workers on the relay manufacturing line — was comprised solely of Los Angeles transferees from the outset. In other words, Leach maintains that unlike Harte there was no new workforce to dilute the transferee workers’ complement at Buena Park, and therefore Harte’s substantial completion requirement is inapplicable to Buena Park because it was evident on July 3 that the “substantial percentage” requirement had already been met.
This argument relies on an implicit but incorrect assumption that the Union had access to sufficient information about the Bue-na Park operation to evaluate Leach’s bargaining obligations. In fact, the record is devoid of evidence that the Union knew what lay in store for relay production at Buena Park, what the appropriate bargaining unit might eventually look like, or whence its employees might ultimately come. At most, the record indicates that Leach told the Union that a majority of Los Angeles workers would be rehired at Buena Park, and that relays would be manufactured there under a just-in-time production method.
For the same reasons, Leach’s contention that the Board’s rule is inconsistent with Marine Optical, Inc.,
Although some tension exists between the cases, Marine Optical and the Board’s decision in the instant case are hardly irreconcil-able; nor do we accept Leach’s argument that the Board’s decision here was unreasonable. Marine Optical did not involve any issue as to the timeliness of the unfair labor practice charge under § 10(b); the Board’s decision instead focused on the company’s challenge to the union’s majority status at the new facility, where transferees were outnumbered by new hires.
III.
Leach also contends that the Board erred on the merits in concluding that it violated the Act by withdrawing recognition from the Union and repudiating the Los Angeles collective bargaining contract when it moved operations to Buena Park. The test for continuity of operations in relocation cases has been likened to that used in the similar context of successorship. See Central Soya Co., Inc. v. NLRB,
As noted, an existing contract will follow a plant relocation provided that transferees comprise a “substantial percentage” of employees in the new plant’s bargaining unit and the new plant’s operations are “substantially the same” as those at the predecessor. Rock Bottom Stores, Inc.,
Leach maintains that its implementation of just-in-time production at Buena Park fundamentally altered the nature of its relay production operations. The ALJ, whose findings and conclusions were adopted by the Board, rejected this position after reviewing testimony on the “batch” and “just-in-time” processes. While acknowledging that just-in-time differs in several ways from the obsolete batch method used at the Los Angeles plant, the ALJ nevertheless concluded that these differences did not alter the fundamental nature of the relay operation. Instead, the judge found that the employees were readily retrained, that the end products and interim components handled by employees were identical at both plants, and that taken together, “[j]ust-in-time simply changes the way in which the product goes through the various assembly steps.”
Leach contends that the ALJ erred by not specifically finding that employee perceptions of their job situation were unchanged by the just-in-time process. As Leach notes, in the successorship area the court has required the Board to identify an explicit connection between operational changes and their effect on employee attitudes; simply enumerating changes without comment is insufficient. See United Mine Workers,
Leach also maintains that the ALJ’s finding of continuity between the two operations is unsupported by substantial evidence. Leach identifies several changes in the Bue-na Park workers’ responsibilities and maintains that they significantly altered the overall character of the employees’’work environment. In particular, Leach points to the fact that just-in-time required employees to be “cross-trained,” that the new production method required employees to learn and perform multiple operations as opposed to repeating a. single operation, that job classifications were changed and expanded at Buena Park, and that some employees learned to operate some new machines.
The record, however, provides ample support for the Board’s conclusion that the basic character of the work environment was not fundamentally changed by the relocation to Buena Park. See 312 N.L.R.B. at 995-96. Buena Park relay workers performed the same work on the same or similar equipment, produced the same products, and worked under the same supervision as they had done at Los Angeles. Although the just-in-time method required all workers to be more flexible at Buena Park and some workers were given new job responsibilities, those changes were not so great as to outweigh the essential continuity of the workers’ job content. See United Food & Comm’l Workers v. NLRB,
Accordingly, we deny the petition for review and grant the Board’s cross-application for enforcement of its order.
Notes
. Leach Corp. & Int’l Ass’n of Machinists and Aerospace Workers,
. The International Association of Machinists and Aerospace Workers, District Lodge 94, Local Lodge 102, AFL-CIO represented the Los Ange-les workers and has intervened in support of the Board.
. The Union had filed the refusal to provide information charge earlier, on November 21. Leach took no exceptions to the ALJ’s finding, which the Board then approved, and Leach has not contested it here. See
. Section 10(b) provides that "[N]o complaint shall issue based on any unfair labor practice occurring more than six months prior to the filing of the charge with the Board.” 29 U.S.C. § 160(b).
. See, e.g., Teamsters Local 42 v. NLRB,
. Even so, the Board notes in its brief that the Union did not know exactly how many employees would be transferred, what their jobs would be, or what percentage of the total Buena Park workforce they would constitute.
. Indeed, Leach initially maintained that the Buena Park relay employees did not constitute a separate and appropriate bargaining unit. See Joint Appendix 7 (Leach Answer and Affirmative Defenses to the unfair labor practice complaint).
. The theory relied on by our dissenting colleague — that the Union had constructive notice by virtue of what (the dissent assumes) the 35 initial transferees must have known — was not presented to the Board or in the briefs submitted to the court.
Dissenting Opinion
dissenting:
Leach’s violation of the National Labor Relations Act consisted of refusing to concede that its collective bargaining agreement continued to apply to employees in its Los Angeles Relay Division after it relocated them to its facility in Buena Park. On July 3,1991, having unequivocally stated its intention not to recognize the union that had been the workers’ bargaining representative in Los Angeles, the company started the move by relocating 35 workers (of the 280 ultimately moved), who immediately resumed their work making relays in the new location. Absent certain limiting conditions (discussed below), which never developed, this refusal to recognize the union violated the Act. See, e.g., Maj.Op. at 805. Here the majority and I diverge. The majority, as I understand it, says that the six-month limitations period under § 10(b) of the Act, 29 U.S.C. § 160(b), did not begin to run on July 3 because on that date (and for some time thereafter) the union lacked “access to sufficient information about the Buena Park operation to evaluate Leach’s bargaining obligations.” Maj.Op. at 807. The trouble with this, and the nub of my disagreement, is that by July 3 the union was on notice of facts that made the likelihood of any conditions that would negate Leach’s liability vanishingly remote. As Leach argued persuasively before us, see Pet.Br. at 27-29, the union was thus on notice of all it needed to know.
The majority observes that Leach failed to inform the union “what lay in store for relay production at Buena Park, what the appropriate bargaining unit might eventually look like, or whence its employees might ultimately come.” Maj.Op. at 807. Concretely, this refers to the possibility that relay workers from Los Angeles might have constituted less than a “substantial percentage” of the workers in what might emerge as the appropriate bargaining unit in Buena Park. See Maj.Op. at 805. This in turn could have occurred only if the relocated workers from L.A. were combined with employees already at Buena Park, or with new hires, so that the relocated workers from L.A. did not ultimately comprise a substantial percentage of the resulting bargaining unit at Buena Park.
In fact, no such blending appears ever to have been a serious possibility. There is no indication that the relocated employees ever worked at Buena Park with employees already there in such a way as to make the whole Buena Park operation the appropriate bargaining unit. Moreover, neither the union nor the Board has suggested that there was even loose talk of any new hires being brought into the relay unit, let alone in numbers that would have cast doubt on whether, at “substantial completion” of the transfer process, the transferees would constitute a substantial percentage of the unit of relay workers. That alone distinguishes Harte & Co.,
The 35 bargaining unit members knew, within hours of arrival at Buena Park, that they had not been blended into the old Buena Park unit and that no new workers had been hired into their unit. Of course it is possible that none of the 35 played any formal role in union activities, or even, conceivably, was a
Moreover, it is clear that if the union had filed an unfair labor practice charge on July 3, the Board would not have rejected it as premature. In Marine Optical, Inc.,
Given the essentially undisputed evidence of what the union could readily have ascertained on July 3, the Board’s application of its “substantial completion” analysis has silently dropped constructive notice out of § 10(b). Accordingly, I dissent.