RECON REFRACTORY & CONSTRUCTION INC., Petitioner, Industrial Professional & Technical Workers International Union, Suina, AFL-CIO, Petitioner-Intervenor, v. NATIONAL LABOR RELATIONS BOARD, Respondent, International Union, International Union of Bricklayers and Allied Craftworkers, and the International Union of Bricklayers and Allied Craftworkers, Local 4, Respondent-Intervenor.
No. 03-73064.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted March 7, 2005. Filed Sept. 13, 2005.
424 F.3d 980
Howard Z. Rosen, Los Angeles, CA, for petitioner-intervenor Industrial, Professional and Technical Workers International Union.
Margery E. Lieber, Eric G. Moskowitz, and Corinne E. Yourman, Washington, DC, for the respondent.
Daniel T. Purtell and Jeffrey B. Demain, San Francisco, CA, for respondent-intervenor International Union of Bricklayers and Allied Craftworkers, Local 4.
Before HALL, WARDLAW, and PAEZ, Circuit Judges.
PAEZ, Circuit Judge.
We are called upon to resolve a dispute between Recon Refractory & Construction Inc. (“Recon“) and the International Union of Bricklayers & Allied Craftworkers, Local 4 (“Bricklayers” or “Local 4“). To decrease its labor costs, Recon reassigned work previously performed by Bricklayers members, and protected by the Bricklay-
I.1
Dan Bellamy founded Recon, a refractory installation company,2 in 1990. Shortly thereafter, the company signed on to the National Refractory Agreement (“NRA“), the Bricklayers’ CBA, with the International Union of Bricklayers & Allied Craftworkers (“International“). Recon used Local 4 members to perform all refractory work for the next decade. Specifically, pursuant to the explicit terms of the NRA, Local 4 Bricklayers installed not just refractory brick, but “all refractory materials” including ceramic fiber (also known as Kao Wool), plastics, and spray insulation (or gunite). The NRA also included a clause preserving the Bricklayers’ right to perform “all work which has been historically or traditionally assigned” to Bricklayers.3
In early 1995, the Bricklayers eliminated its class of unskilled members, or “bricklayers’ helpers.” Recon, however, needed a union to represent those unskilled employees for a job at U.S. Borax Company, which required that its contractors use union labor. Rather than using more expensive journeyman Bricklayers to do the unskilled work, Recon sought another union. On November 1, 1996, Recon entered into a site-specific “project deal” with the IPTW to provide unskilled laborers who would work with Bricklayers on the U.S. Borax job. The IPTW-represented laborers performed only unskilled support tasks, and did not install brick or nonbrick refractory materials. Furthermore, Recon‘s contract with the IPTW did not in-
Recon‘s agreement with the IPTW was, as the Bricklayers describe it, “unusual.” Bellamy testified that the company itself “pursued” the union to represent its unskilled laborers. Executives at Recon “made several phone calls, talked to some other contractors that were covered by collective bargaining agreements and eventually ended up with the IPTW.” The IPTW-represented laborers were required to join the union and required to sign withdrawal cards to “deactivate” themselves from membership at the end of each job. Recon essentially paid those employees’ union dues, increasing their pay to offset the added cost. Through these maneuvers, Recon ensured that its laborers were not represented by any union on any job other than U.S. Borax.
Prompted by its customer Arco Refinery‘s demand for wage caps, Recon began negotiating with the Bricklayers in 1999 to decrease wage rates. On March 30, 1999, Bellamy requested that the Bricklayers International freeze the $0.75 per hour annual wage increase. The Bricklayers would not agree to concessions and would not do the work at the rates Recon proposed. In August, Recon again sought concessions, this time in the form of a 20% wage reduction, which the Bricklayers similarly refused. On August 16, Bellamy notified the Bricklayers of his intent to terminate the CBA effective November 14, 1999, or “as soon as permitted by law or contract.” After negotiations reached an impasse on October 14, Bellamy reaffirmed his intent to terminate the CBA the following month. The NRA expired on November 14, 1999. On December 7, Frank Collins, president of Bricklayers Local 4, notified the union membership that Recon had refused to sign the current NRA and therefore left “no choice but to regard Recon as a non-signatory contractor.”
While these negotiations were in process and before the NRA expired, Bellamy mentioned to David Bohannan, who worked with him at Recon, that he wanted to “giv[e] somebody else some of the Bricklayers work,” and specifically mentioned the work in dispute.4 “[Bellamy] figured if [the Bricklayers] are not going to give him a freeze he would just go ahead and get somebody else to do the work.” Bohannan testified that Bellamy “personally told me he was going to stick it to the International and the Bricklayers especially Frank Collins .... [b]ecause they will not go his way, they will not help Recon out by taking a freeze on the wages.” Mauro Romagnoli, a Bricklayers officer, testified that Bellamy told him that another union was claiming the Bricklayers work. When Romagnoli told Bellamy that would probably force a jurisdictional dispute, “he told me that is where he wanted it to go.” He assured me that this was just the tool to try and force Frank [Collins] and the International to do something in order to meet his demands of a lesser wage or special agreement, whatever he wanted at the time. And he assured me he could break it off at any time—[the] use of these other people to do the Bricklayers work. After the NRA expired in November, Recon expanded the scope of
On December 20, 1999, Recon signed a new contract with the Bricklayers, effective retroactively to November 14, 1999, which included the same scope of work provision as the 1990 agreement. In January 2000, however, the Bricklayers discovered that Recon was performing nonbrick refractory installation work—the work in dispute—at the Arco job site with non-Bricklayer employees,6 without informing Local 4 as the NRA required. This was the first time since Recon‘s founding that employees other than Bricklayers had performed this type of refractory work. Recon Refractory, 339 N.L.R.B. at 828. The Bricklayers filed a grievance on January 28, 2000, alleging that the assignment of work to non-Bricklayers employees violated their contract with Recon.
Recon took the position that the scope of the Bricklayers’ work included only refractory brick installation, and not installation of other refractory materials such as ceramic fiber. On February 1, Recon informed the IPTW of the Bricklayers’ grievance and solicited the IPTW‘s response. The next day, the IPTW formally claimed jurisdiction over the disputed work and threatened “immediate economic action against Recon” should the Bricklayers perform the work. At a meeting on February 4, 2000, Recon informed the Bricklayers that it was assigning all nonbrick refractory installation work at its Arco Refinery job to the IPTW, and only brick work to the Bricklayers. At this meeting, the Bricklayers learned that Recon was signatory with the IPTW at jobs beyond the U.S. Borax site, and that the employees performing the work in dispute were represented by the IPTW. The Bricklayers’ representatives at that meeting disputed Recon‘s interpretation of the NRA‘s work assignment clause, and asserted their right to the work in dispute.
The Bricklayers filed a complaint in the district court against Recon on June 21, 2000, for breach of the CBA under
In response to the IPTW‘s threats of economic action, Recon filed unfair labor practice charges with the Board on August 4, 2000. The Bricklayers filed a similar charge on November 16, 2000. Both Re-
II.
Recon challenges the Board‘s decision to quash notice of hearing on two grounds. First, it claims that the Board‘s factual findings were not supported by substantial evidence. It also objects to the Board‘s authority to determine that Recon itself created the dispute with the Bricklayers. Second, Recon argues that the Board‘s legal conclusions are erroneous, and objects to the Board‘s decision to look beyond the literal violation of § 8(b)(4)(D) to determine “the real nature and origin of the dispute.” Id. at 827 (quotation marks omitted). We have jurisdiction over Recon‘s appeal from the Board‘s final order quashing notice of hearing under § 10(f) of the NLRA,
A. Substantial Evidence Supports the Board‘s Factual Findings
After reviewing the evidence taken at a lengthy evidentiary hearing, the Board concluded that Bricklayers had performed the work in dispute at all times prior to Recon‘s reassignment in January 2000. Recon Refractory, 339 N.L.R.B. at 828. Specifically, the Board found that the Bricklayers’ Local 4 members had performed the disputed work pursuant to the terms of the successive NRAs for a decade prior to January 2000. Consequently, when Recon assigned the work in dispute to IPTW-represented laborers at Arco, it was the first time that Recon had failed to assign refractory work in southern California to Local 4-represented bricklayers.
We review the Board‘s findings of fact for substantial evidence. NLRA § 10(e),
Although the Board ultimately quashed notice of the hearing, it made that decision after eighteen days of hearings eliciting substantial testimony and documentary evidence. Recon Refractory, 339 N.L.R.B. at 825. The facts underlying the dispute were clearly before the Board and were a primary subject of inquiry at the hearing; the Board‘s order quashing notice of hearing was based on those facts. The Board is empowered to make factual findings in the course of determining its own jurisdiction under
Furthermore, our review of the record suggests that the evidence was more than sufficient to support the Board‘s findings. First, substantial evidence supports the finding that Bricklayers had performed the disputed work at all times prior to Recon‘s reassignment at the Arco job site.10 Frank Collins, for example, testified that to his knowledge, non-Bricklayer laborers never installed any refractory materials of any kind prior to this dispute. Although Bricklayers field representatives were charged with notifying Collins of changes in work assignments and ensuring that Bricklayers’ work was not assigned to other employees, no field representative ever notified him of any such changes before January 2000. Kenneth Golden, a laborer foreman, testified that laborers did not perform installation of brick, ceramic fiber, castables, or any other refractory material. He testified that he did not see laborers performing refractory installation and that those tasks were performed by Bricklayers
Second, the Board‘s finding that Recon created the dispute is also supported by substantial evidence. As noted above, witnesses testified that Bellamy made his intentions quite clear: he wanted to force a jurisdictional dispute as a tool to gain wage concessions from the Bricklayers. He acknowledged that he was using IPTW-represented laborers “to do the Bricklayers work.” And Bricklayer Paul Garcia testified that he spoke with Bellamy on November 30, 1999, who told him “if I wanted to come back to work that I was going to have to show the laborers how to do the Bricklayers’ work.” There is significant evidence in the record to support the finding that this dispute was created by Recon‘s alleged breach of its contract with the Bricklayers. We therefore reject Recon‘s objections to the Board‘s factual findings.
B. The Board‘s Legal Conclusions Were Not Arbitrary and Capricious
Based on these findings, the Board found this dispute inappropriate for resolution through a § 10(k) proceeding. Recon Refractory, 339 N.L.R.B. at 828. Although viewed literally the IPTW‘s threats did provide reasonable cause to believe that a violation of
Recon objects to this decision, arguing that the Board erred by considering whether the dispute was “actually jurisdictional” rather than simply determining whether “reasonable cause” existed to believe that a violation of
The Supreme Court explained the deferential nature of the arbitrary and capricious standard in Motor Vehicle Manufacturers Association of the United States, Inc. v. State Farm Mutual Auto Insurance Company as follows:
463 U.S. 29, 43 (1983). The Court noted that the scope of review is narrow and that we “must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.” Id. (quotation marks omitted). Under this deferential standard, we find no error in the Board‘s decision.Normally, an agency rule would be arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.
Ample precedent supports the Board‘s conclusion that an award of work under § 10(k) is not warranted where the dispute is not “actually jurisdictional.” Recon Refractory, 339 N.L.R.B. at 827. Section 10(k) of the NLRA was enacted to provide a mechanism for resolving jurisdictional disputes between competing unions. The Supreme Court recognized that the law was designed “to protect employers from being ‘the helpless victims of quarrels that do not concern them at all.‘” NLRB v. Radio and Television Broad. Eng‘rs Union, Local 1212 (CBS), 364 U.S. 573, 581 (1961) (quoting H.R.Rep. No. 80-245, at 23 (1947)). In CBS, the Court noted that the statutory scheme presumes “that the employer has been placed in a situation where he finds it impossible to secure the benefits of stability from either of these contracts, not because he refuses to satisfy the unions, but because the situation is such that he cannot satisfy them.” Id. at 582. In short, § 10(k) was enacted to “protect employers trapped between two competing unions.” USCP-WESCO II, 827 F.2d at 584. It was not, however, intended to authorize the Board to resolve disputes that are truly between an employer and a union. Id.
With this goal of protecting innocent employers in mind, the Board has established a test for determining when a dispute is properly deemed jurisdictional and submitted to a § 10(k) hearing. The Board typically conducts a three-step inquiry to determine “whether there is reasonable cause to believe that § 8(b)(4)(D) of the Act has been violated.” Int‘l Alliance of Theatrical and Stage Employees, Local Union No. 39 (Shepard Exposition Services), 337 N.L.R.B. 721, 723 (2002). This requires a finding of reasonable cause to believe that (1) a union has used a proscribed means—such as picketing or threatening to picket—to enforce its claim to the work in dispute; (2) there are competing claims to the disputed work between rival groups of employees; and (3) there is no agreed-upon method for resolving the dispute voluntarily. Laborers Int‘l Union of N. Am., Local No. 1184 (Golden State Boring), 337 N.L.R.B. 157, 158 (2001). When these requirements are met, the Board will award the disputed work to one or the other of the vying unions, based on considerations such as the employer‘s past practice, industry custom, and contract rights. CBS, 364 U.S. at 577, 579.
In most situations where reasonable cause exists to believe § 8(b)(4)(D) has been violated, the Board is required to make an affirmative award of the work in dispute. Id. at 586. The Board, however, recognizes an exception to this rule upon a showing that “‘the union‘s members had previously performed the work in dispute and the union was not attempting to expand its work jurisdiction.‘” Shepard Exposition Services, 337 N.L.R.B. at 723 (quoting Teamsters Local
The Supreme Court has recognized this exception with approval, noting that “the Board has adopted the position that jurisdictional strikes in support of contract rights do not constitute violations of [§] 8(b)(4)(D) despite the fact that the language of that section contains no provision for special treatment of such strikes.” CBS, 364 U.S. at 577 n. 12. We also have adopted this exception, affirming Board decisions quashing notice of hearing on the ground that the dispute was not truly jurisdictional, despite a literal violation of
There are good reasons for such a policy. As the Supreme Court noted, “to fail to hold as controlling the contractual preemption of the work in dispute would be to encourage disregard for observance of binding obligations under collective-bargaining agreements and invite the very jurisdictional disputes Section 8(b)(4)(D) is intended to prevent.” CBS, 364 U.S. at 577 n. 12 (quoting Nat‘l Ass‘n of Broadcast Engineers (NBC), 105 N.L.R.B. 355, 364 (1953)). The Board has applied this rule out of respect for the bargain struck between the union and the employer, as well as for the positive benefits of work preservation clauses which would otherwise be rendered unenforceable. USCP-WESCO I, 280 N.L.R.B. at 821 (“To hold that this dispute is a jurisdictional dispute to be decided by the Board would not allow the [union] employees the benefit of their negotiated work preservation clause.“); see also SSA Terminal, 344 N.L.R.B. No. 126, at 3. We have endorsed that rationale, adding that the Board‘s decision to quash notice of hearing in such cases advances the Congressional policy favoring arbitration rather than Board resolution of labor disputes. USCP-WESCO II, 827 F.2d at 586 (“Too readily compelling Board resolution of labor disputes corrodes the congressional policy decision to favor arbitration of these disputes.“). Finally, the quashing of a § 10(k) hearing does not leave an employer entirely without a remedy. As the Board has noted, employers who create disputes by their own actions “must use other means, such as arbitration, to resolve conflicting work claims.” United Bhd. of Carpenters and Joiners of Am., Local No. 13 (First Chicago NBD Corp.), 331 N.L.R.B. 281, 282 (2000).
This case is a far cry from the typical § 10(k) scenario in which the unions’ quarrel “is of so little interest to the employer that he seems perfectly willing to assign work to either if the other will just let him alone.” CBS, 364 U.S. at 579. To the contrary, Recon intentionally created this dispute in an attempt to avoid its contractual obligations and lower its wage rates. Like USCP-WESCO, this case revolves around a contractual dispute between an employer and the only union whose members had historically performed the work in question. 280 N.L.R.B. at 818. And like USCP-WESCO, the Board based its decision to quash on the fact that “but for [the employer‘s] violation of the contract [the union] would not be in any position to claim the work....” Id. at 819.
To be sure, Recon now faces competing claims to the work in dispute by the Bricklayers and the IPTW. But Safeway Stores held that where an employer creates a dispute by transferring work to another group of employees who had no previous claim to that work, the dispute is not “actually jurisdictional” in the statutory sense and the Board will not make a § 10(k) ruling.13 134 N.L.R.B. at 1323. Here, the IPTW‘s claim to the work very clearly postdates Recon‘s reassignment of the work in dispute. At the time of the reas-
Recon attempts to distinguish Safeway Stores and USCP-WESCO; there are, surely, certain factual differences among the cases. USCP-WESCO, for example, involved two employers and began as a dispute over subcontracting. 280 N.L.R.B. at 818. And in Safeway Stores, there was no indication that the union receiving the work had threatened or engaged in any economic action—instead, the picketing union was “attempt[ing] to retrieve the jobs of its members.” 134 N.L.R.B. at 1323. But these factual distinctions did not affect the Board‘s reasoning in either case. Instead, the critical fact the Board relied on in each case was that the employer had created the dispute by its own unilateral actions.14 Id.; see USCP-WESCO I, 280 N.L.R.B. at 822; see also SSA Terminal, 344 N.L.R.B. No. 126, at 4 (quashing notice of hearing because the employer “by its own unilateral actions ... has created a work preservation dispute“). This case therefore falls clearly within the established precedent.
Even if we had not decided that this case is squarely controlled by precedent, it is clear that the Board‘s reliance on Safeway Stores and USCP-WESCO is “reasonably defensible.” USCP-WESCO II, 827 F.2d at 583. The determination that this case was not actually jurisdictional and therefore inappropriate for resolution under § 10(k) cannot be considered arbitrary and capricious. In sum, § 10(k) cannot be used as a tool to aid employers in avoiding their contractual obligations to employees when the terms of those contracts become inconvenient. We agree with the Board that this dispute is not appropriate for resolution under § 10(k).
Recon‘s petition for review of the Board‘s decision and order quashing notice of hearing is therefore DENIED.
Notes
NRA Article II § C (1999).The Employer agrees to assign to employees represented by [the Bricklayers] all work which has been historically or traditionally assigned to members of the International Union of Bricklayers and Allied Craftsmen, including but not limited to: dipping, setting, buttering, bedding, hanging, pointing, grouting, caulking, cutting, toothing, fitting, plumbing, aligning, laying, flagging, leveling, installation of gaskets and expansion joint material, grinding, vibrating, tamping, guniting, insulating, and spraying of all refractory materials, anchoring of all refractory materials by all means including bolting and welding, ceramic welding, removal and cleaning of masonry materials to be reinstalled, final sandblasting of surfaces to receive additional refractory materials, installation of chemical coatings, fire-proofing, and membrane materials by any method required, surface spraying of all refractory materials, and leaning of coke oven walls, chambers and flues. Temporary bracing in coke oven repairs shall be done by employees represented by [the Bricklayers], in coordination with other trades.
It shall be an unfair labor practice for a labor organization or its agents ... to threaten, coerce, or restrain any person engaged in commerce ..., where ... an object thereof is ... forcing or requiring any employer to assign particular work to employees in a particular labor organization ... rather than to employees in another labor organization ...
Whenever it is charged that any person has engaged in an unfair labor practice within the meaning of [§ 8(b)(4)(D)], the Board is empowered and directed to hear and determine the dispute out of which such unfair labor practice shall have arisen ...