111 Lab.Cas. P 11,062
NATIONAL LABOR RELATIONS BOARD, Petitioner,
v.
W.L. MILLER COMPANY, Respondent,
Eastern Missouri Laborers District Council, Intervenor/Petitioner.
EASTERN MISSOURI LABORERS DISTRICT COUNCIL, Petitioner,
v.
W.L. MILLER COMPANY,
National Labor Relations Board, Respondent.
Nos. 87-2332, 87-2420.
United States Court of Appeals,
Eighth Circuit.
Submitted June 16, 1988.
Decided March 29, 1989.
Laurence Gold, Washington, D.C., for Eastern Missouri Laborers Dist. council.
John Ferguson, Washington, D.C., for N.L.R.B.
Jack L. Whitacre, Kansas City, Mo., for W.L. Miller Co.
Before JOHN R. GIBSON, Circuit Judge, BRIGHT, Senior Circuit Judge, and STUART*, Senior District Judge.
JOHN R. GIBSON, Circuit Judge.
The National Labor Relations Board seeks to enforce an order against the W.L. Miller Company for violation of sections 8(a)(1) and 8(a)(5) of the National Labor Relations Aсt, 29 U.S.C. Secs. 158(a)(1), (5) (1982). The alleged violations involve Miller's repudiation of a labor agreement validly accepted by the Associated General Contractors of Missouri, a multiemployer bargaining unit to which Miller belonged, and Miller's subsequent refusal to bargain with the Eastern Missouri Laborers Council, the Union signatory to the agreement. Miller argued before the Board that the agreement was simply a section 8(f) pre-hire agreement, 29 U.S.C. Sec. 158(f), which it could repudiate at will. The Board rejected this view, and instead retroactively applied a new rule announced in John J. Deklewa & Sons, Inc.,
I.
Miller began performing work in Missouri in 1972, but did not establish a continuing bargaining relationship with the Union. Its employees did not designate or select the Union or any other labor organization as their representative. Miller joined the Associated General Contractors of Missouri in 1979, but declined to adopt the labor agreements negotiated by that body. Before 1980, individual members of the Association were not bound by these agreements, but instead determined individually whether accepting them was in their own best interests. No provision in the association bylaws bound a member to any labor agreement. Miller advised the association manager that it had previously operated on an open shop basis in Missouri, and desired to continue in this manner.
On February 5, 1980, the association informed its members that the previous labor agreements were due to expire by the end of April, and that a committee was being formed to negotiate new agreements. The associаtion distributed "designation of representative" forms, which when signed by a member gave the committee the power to bind that member to the labor agreement. This form had not been used previously. Miller's President signed the form on February 8, but instructed the company's office manager to not mail the form without first ensuring that the form would not obligate Miller in any way. For some reason these instructions were not followed, and the form was mailed to the association. A tentative labor agreement was reached by May 6, and the association notified all members of a meeting where the final binding vote would take place. The contract was approved at that meeting, and a Mаy 9 bulletin informed all members that a binding contract extending from May 1, 1980 through April 30, 1983 had been concluded.
The Union immediately began trying to persuade Miller to abide by the terms of the contract. The Miller superintendent was contacted several times without success. On July 23 Miller informed the Union that it believed the contract to be a section 8(f) agrеement, that the majority of Miller employees were not Union members, and that this gave it a unilateral right to repudiate. Miller then terminated the agreement. The Union responded by filing an unfair labor practice complaint with the Board.
In an administrative hearing, the Administrative Law Judge found the relevant facts to be essentially as we have recited. In rejecting Miller's claim that it was not a party to the contract, the ALJ found that Miller and the seventy-nine other signatories had unequivocally intended to be bound as a group, and that therefore a valid multiemployer bargaining unit had been established. The ALJ further determined that the Union enjoyed majority status in the multiemployer unit as a whole, even though Miller's employees were not themselves Union members. As a result, a full relationship was established between the multiemployer unit and the Union. Under section 9(a) of the NLRA, 29 U.S.C. Sec. 159(a), this imposed a continuing obligation to bargain between the two parties. Miller's employees were in effect merged with the employees оf the other signatories, with the resultant conversion from a section 8(f) relationship to a section 9(a) relationship. The ALJ ultimately found Miller to be in violation of sections 8(a)(5) and (1). On August 19, 1981, he ordered Miller to sign and implement the 1980-83 contract, apply its terms retroactively to May 1, 1980, and recognize and bargain with the Union as the sole legitimate representative of the workers.
Miller filed exceptions with the Board on September 8, 1981, and both parties submitted briefs to that body. The Board did not issue a decision until July 23, 1987, almost six years after the ALJ's original order. Earlier in 1987 the Board had decided that the conversion doctrine relied on by the ALJ, which held section 8(f) agreements to be fully enforceable only if the Union enjoyed majority status in the appropriate unit of workers, would no longer be applied to section 8(f) agreements. See Deklewa, 282 N.L.R.B. at ----,
II.
Both Miller аnd the Union ask us to evaluate the Deklewa rule itself. Miller argues that any rule mandating the enforcement of pre-hire agreements is contrary to Congressional intent in enacting section 8(f), and is therefore an impermissible construction of that statute. Similarly, the Union argues that although the Board's new interpretation is correct in enforcing section 8(f) agreements during their lifetime, it exceeded its power in deciding that such agreements produce no continuing obligation to bargain following the expiration of the initial agreement.
The Third Circuit has recently enforced Deklewa in International Ass'n of Bridge, Structural and Ornamental Iron Workers v. NLRB,
Contrary to Miller's assertions, the Supreme Court decisions of NLRB v. Iron Workеrs Local 103 (Higdon Constr. Co.),
III.
The remaining issue is whether the Deklewa rule should be applied retroactively. The Deklewa Board decided to apply the rule "to all pending cases in whatever stage." Deklewa, 282 N.L.R.B. at ----,
Miller cites two arguments for the proposition that retroactive application of Deklewa would be manifestly unjust in this case. First, Miller argues that the repudiation in question was permitted by law at the time it was made. This is a powerful argument, and has been used by other courts to avoid retroactive application of Deklewa. See, e.g., National Automatic Sprinkler Indus. Pension Fund v. American Automatic Fire Protection,
We are hesitant to adopt a strict rule that an employer cоuld never have reasonably relied on its ability to repudiate a section 8(f) agreement. There were obviously some situations where a Union signatory did not enjoy anything close to majority status, and the possibility of conversion was therefore remote. When two parties negotiate at arm's length, both aware that the law currently рermits repudiation of any contract they make unless certain events occur, the probability of those events happening will influence the terms of the contract. Applying Deklewa to a situation such as this would "undermine the prior contract between the parties," Construction Indus. Welfare Fund,
In the present case we are satisfied that conversion had already taken place when Miller tried to repudiate. The rule for multiemployer agreements is set out in Amado Electric,
Miller's second theory of manifest injustice arises from the delay of the Board in deciding the case. The parties made clear in argument that the live issue before us is not underpayment of the employees, but rather Miller's failure to make contributions to the Union's benefit fund. We have no hesitation in determining that the retroactive application of the Deklewa rule renders Miller liable for the contributions to the fund. The interest, however, raises additional concerns. Miller repudiated the contract on July 23, 1980. After the complaint was filed, the ALJ issued his ruling on August 19, 1981 and Miller filed its exceptions with the Board on September 8, 1981. The contract in question was to run from May 1, 1980 to April 30, 1983. The Deklewa rule arose in a substantially later time frame. In Deklewa the employer resigned membership in the association and repudiated the contract with the Union on September 30, 1983. After the Union filed charges, a complaint was issued November 28, 1983, which was amended March 8, 1984, and the parties filed a stipulation of facts and waived hearings before an ALJ stating a desire to submit the case to the Board. This was granted by an order of October 15, 1984. On March 24, 1986 the case was orally argued before the Board, and the decision handed down February 26, 1987. Thus, the controversy in Deklewa arose and the litigation was waged long after the contract at issue in this case expired.
Under thesе circumstances, with the sole issue before us involving payment into the Union's benefit fund, and considering the ALJ's findings that none of Miller's employees were ever members of the Union, we conclude that it would be manifestly unjust to award interest for the entire period. We are satisfied that interest should be awarded only for the period from May 1, 1980 to April 30, 1983, аnd from the time of the Board's decision in this case, July 23, 1987, until the date that the interest is finally paid. We realize, as hinted in argument, that the Board had a number of concerns which caused it to reevaluate the issues presented by this case, and that those concerns were not addressed until the decision in Deklewa. Miller, however, should not be required to pay interest during this deliberate, if not leisurely, consideration of the issues in this action. To rule otherwise would be granting the Union a windfall. We are satisfied that the interest we award gives it just recovery for the loss of these funds.
IV.
In summary, we hold that the Board's Deklewa decision is a rational interpretation of section 8(f), and is therefore vаlid. The Union's petition for review is accordingly denied. We additionally defer to the Board's decision to apply the new rule retroactively, absent a showing of manifest injustice. We find manifest injustice only with respect to the interest assessed against Miller, and accordingly we grant the Board's application for enforcement, with intеrest to be awarded only from May 1, 1980 to April 30, 1983, and commencing again on July 23, 1987.
Notes
The HONORABLE WILLIAM C. STUART, Senior United States District Judge for the Southern District of Iowa, sitting by designation
As the Board points out, the previous rule had twice been rejected by the District of Columbia Circuit. The rule had also been sharply questioned by the Third Circuit. The Supreme Court silenced these voices with Higdon, but only by finding the voidability construction reasonable, and therefore entitled to deference. The Board was apparently moved by these criticisms, however, and began a thorough reevaluation of its policy. This review culminated with the new rule announced in Deklewa
Several circuits give deference absent a showing оf manifest injustice. See Iron Workers (Deklewa),