National Labor Relations Board v. DeBartelo
Opinion of the Court
The National Labor Relations Board (the “Board”) petitions this court to enforce the Board’s order directing respondent Simon DeBartolo Group
Background
The relevant facts, as summarized in the Board’s opinion, are as follows:
Prior to December 1995, the Smith Haven Mall was owned by Prudential Inc. and was managed by General Growth. General Growth had a collective-bargaining agreement with the Union covering a unit of about 35 housekeeping employees employed as housekeepers, machine operators, and other building maintenance employees. Also included in the unit were four maintenance A mechanics who operated the mall’s heating and air-conditioning system. There was no interchange between the HVAC employees and the housekeeping employees.
On December 28, 1995, the Respondent bought the mall from Prudential and terminated General Growth as the cleaning contractor.... [Representatives of the Respondent met with the unit employees and told them that the Respondent was contracting out the housekeeping and maintenance services to an outside cleaning contractor, but that it intended to handle the HVAC work on an in-house basis with its own employees.... Later on December 28, all four of the former General Growth HVAC employees were hired. No other applicants were hired. The four HVAC employees performed the same jobs they formerly performed for General Growth, maintaining and running the mail’s heating and air-conditioning system. The [administrative law] judge found “as a fact that the HVAC employees performed essentially the same duties and job functions for Respondent as they did for General.”2
On December 27, the Union’s counsel, apparently aware of the impending sale, sent a letter ... requesting the Respondent to contact him “for purposes of arranging for negotiations for terms and conditions of employment to be embodied in a formal collective bargaining agreement.” On December 28, the Respondent’s counsel replied, stating that because the Respondent had not yet completed its hiring process, it was unable to agree to the Union’s request for contract negotiations.
Simon DeBartelo Group, 325 N.L.R.B. at 1154.
On these facts, the administrative law judge (“ALJ”) concluded that diminution in the size of the bargaining unit and the change in the types of jobs within it constituted a sufficient change of circumstances to defeat any continuing obligation on De-Bartolo’s part to bargain with the union. A three-member panel of the Board reversed, by a two-to-one vote, finding that “the diminution of unit scope under the circumstances presented here is insufficient to meaningfully affect the way the employees view their job situations, and would not significantly affect employee attitudes concerning union representation.” Id. at 1156.
Discussion
This case arises against the backdrop of settled law governing when a bargaining obligation between an employer and a union survives a change in the firm’s ownership.
For a year after a union has been certified it is entitled to a “conclusive presumption of majority status,” Fall Fiver Dyeing & Finishing Corp. v. N.L.R.B., 482 U.S. 27, 37, 107 S.Ct. 2225, 96 L.Ed.2d 22 (1987), and thereafter to a “rebuttable presumption of majority support.” Id. at 38, 107 S.Ct. 2225. These presumptions govern an employer’s duty to bargain with its employees’ chosen collective bargaining agent. See id. at 41, 107 S.Ct. 2225; Banknote Corp. of America v. N.L.R.B., 84 F.3d 637, 642 (2d Cir. 1996). And unless the employer first demonstrates a good-faith basis for believing that the union has lost majority status, that employer may not avoid bargaining by invoking doubts about the union’s continued workplace support. See N.L.R.B. v. Katz’s Delicatessen of Houston Street, Inc., 80 F.3d 755, 764 (2d Cir. 1996); Nazareth Regional High Sch. v. N.L.R.B., 549 F.2d 873, 880 (2d Cir. 1977).
When a new employer takes over an enterprise, the employees’ choice of a union is not negated by “a mere change of employers or of ownership in the employing industry.” Fall River Dyeing, 482 U.S. at 37, 107 S.Ct. 2225 (quoting N.L.R.B. v. Burns Int'l Security Servs., Inc., 406 U.S. 272, 279, 92 S.Ct. 1571, 32 L.Ed.2d 61 (1972)). Indeed, the policies undergirding the presumptions of continued union support are “particularly pertinent in the successorship situation.” Id. at 38-40, 107 S.Ct. 2225 (explaining that requiring a successor to recognize an incumbent union ensures (a) that the “choice of a union [by employees] is [not] subject to the vagaries of an enterprises’s transformation,” and (b) forestalls attempts to use changes in ownership “as a way of getting rid of a labor contract and ... eliminating] [the union’s] continuing presence.”)
As a result, a successor employer inherits its predecessor’s bargaining obligations whenever it structures its business in a manner that maintains (a) “substantial continuity” between old and new working conditions and (b) a total complement among which the old employees form a majority. Id. at 43, 107 S.Ct. 2225; accord Banknote Corp., 84 F.3d at 642; Saks & Co. v. N.L.R.B., 634 F.2d 681, 685-86 (2d Cir. 1980). And this is so even though a successor employer has an undoubted “prerogative ... independently to rearrange [its] business[ ].” Fall River Dyeing, 482 U.S. at 40, 107 S.Ct. 2225 (quoting Golden State Bottling Co. v. NLRB, 414 U.S. 168, 182, 94 S.Ct. 414, 38 L.Ed.2d 388 (1973)). Effectively then, a successor’s obligations to bargain with an incumbent union attach if, but only if, it “makes a conscious decision to maintain generally the same business and to hire a majority of its employees from the predecessor,” thereby evincing an intent “to take advantage of the trained work force of its predecessor.” Id. at 41,107 S.Ct. 2225.
The matter of substantial continuity “is primarily factual in nature and is based upon the totality of the circumstances of a given situation,” and it is evaluated principally from “the employees’ perspective,” the crucial question being “whether ‘those employees who have been retained will understandably view their job
In this case, where all four of DeBartolo’s HVAC employees were members of the predecessor unit, where there is no dispute that these employees constitute an appropriate bargaining unit,
Here, the undisputed facts showed that before and after the relevant change in management, the HVAC employees performed essentially the same tasks in the same size work unit with the same co-workers in the same facility on the same equipment and for the same customers.
DeBartolo contends, however, that these considerations are overcome by two differences between the old and new bargaining units. First, the .new unit is dramatically smaller than the old one, a change from 35 to 4 employees. Second, the new unit is significantly more homogenous than the
It is well-established', however, that, standing alone, a change in the size of the bargaining unit will not generally destroy the otherwise substantial continuity between the old and new employers.
In this case, however, the diminution of unit size has been accomplished through a method that is different from that used in previous cases. Here, it occurred by contracting out some of the job classifications within a single worksite. Earlier cases, instead, have generally dealt with situations in which a successor has acquired only a fraction of the workplaces within a multi-site bargaining unit, or has reduced the size of a single homogenous unit.
From the continuing employees’ perspective, a change in size may have relatively little relevance when, notwithstanding the elimination of other jobs within the bargaining unit, the continuing employees’ own classification remains essentially unchanged. Nor does greater homogeneity among the employees necessarily alter this. Indeed, there may be some reason to think that support for the union might rise, given that the HVAC employees would no longer have to contend with the union’s need to balance their interests against the potentially conflicting interests of members within other job classifications. Given these possibilities we are bound to follow the Board’s conclusion that the reduced bargaining unit size and increased unit homogeneity “would not significantly affect employee attitudes concerning union representation.” Simon DeBartelo Group, 325 N.L.R.B. at 1156.
The Board’s holding here is consistent with a long line of Board decisions finding
Ultimately, it lies with the Board, not this court, to make the fíne distinctions and subtle assessments necessary to decide whether, in any one unique set of circumstances, the nature and degree of similarity between enterprises suffices to meet the “substantial continuity” criterion. See N.L.R.B. v. Eastern Connecticut Health Servs., Inc., 815 F.2d 517, 518 (2d Cir. 1987) (per curiam ) (noting that the Board enjoys a “wide degree of discretion ... in resolving representation matters” (internal quotation marks and citation omitted)). In this case, the Board has discharged that responsibility with care and reason, and we see no basis for disturbing its conclusions.
Conclusion
We have considered all of respondent’s contentions, and, finding them to be merit-
. In its briefs, respondent refers to itself as Simon DeBartolo Group, and we will adopt this spelling notwithstanding the fact that the official caption and the Board’s decision refer to respondent as Simon DeBartelo Group.
. No exceptions have been filed to that finding. [note 2 in original]
. The dissenter, like the ALJ, relied on two Board decisions from the 1970's dealing with somewhat similar situations. The Board majority believed that, whatever the continued validity of these earlier decisions, more recent
. See Banknote Corp., 84 F.3d at 642 ("[T]he bargaining unit that a union seeks to represent [must] remain[ ] 'appropriate' under [the successor's] operations.”).
. See id. at 643-47 (discussing when and how a bargaining demand is required to trigger a successor's obligation to bargain with an incumbent union).
. Respondent seeks to dispute the Board's adoption of the ALJ’s finding that "HVAC employees performed essentially the same duties and job functions for Respondent as they did for General” and asserts that, to the contrary, there were significant changes in their responsibilities and work practices. But we have no power to entertain this line of argument because respondent failed to take exception below to the factual findings. See KBI Security Serv., Inc. v. N.L.R.B., 91 F.3d 291, 294 (2d Cir. 1996). And this remains true notwithstanding the fact that, despite these findings, the ALJ's decision sided with respondent. See N.L.R.B. v. GAIU Local 13-B, Graphic Arts Int’l Union, 682 F.2d 304, 311-12 (2d Cir. 1982) (holding that where a party has prevailed before the ALJ but receives an adverse ruling from the Board, it waives any objections not preserved through either cross-exception to the ALJ's findings or a motion for reconsideration following the Board's decision).
. Respondent offered no evidence that the HVAC employees were dissatisfied with the union. See Nazareth Regional High Sch., 549 F.2d at 880 (holding that, to rebut a presumption of majority status, "the employer must produce clear and convincing evidence of loss of union support capable of raising a reasonable doubt of the union's continuing majority” (internal quotation marks and citation omitted)); see also Katz’s Delicatessen, 80 F.3d at 764.
. See, e.g., Nazareth Regional High Sch., 549 F.2d at 876 (successor employer took over operations of one out of predecessor’s nine schools); Fabsteel, 587 F.2d at 690-91 (successor purchased one out of predecessor's seven steel plants); Zim’s Foodliner, 495 F.2d at 1133 (successor acquired two of predecessor's 57 stores), Saks & Co., 634 F.2d at 686 (successor’s unit of 20 workers included 16 from the predecessor's 35-employee unit).
.Aside from the question of whether the changes in unit size and structure would alter the HVAC employees attitudes toward the union, there is also the possibility that, because they form an unrepresentative sample of the previous unit, their level of support for the union differs from that prevailing in the old unit as a whole. Whether, in such circumstances, the appropriate approach is, as the Board has done here, to presume the same or greater level of union support as in the prior
. In view of this authority, we find unpersuasive respondent’s reliance on two other Board decisions, both over twenty-five years old, declining to find successorship in circumstances that were, in some respects, similar to those present here. See Nova Servs. Co., 213 N.L.R.B. 95 (1974); Atlantic Technical Servs. Corp., 202 N.L.R.B. 169 (1973), enf'd, 498 F.2d 680 (D.C.Cir. 1974). The Board has both persuasively explained why those cases are factually distinguishable and pointed out their doubtful precedential value in light of its own subsequent decisions. See, e.g., Lincoln Park Zoological Soc’y, 322 N.L.R.B. at 265 (distinguishing Nova Services and noting that it “is of questionable precedential value since it has been limited to its own facts [by Hydrolines, Inc., 305 N.L.R.B. 416, 423 n. 43 (1991)]”, and also distinguishing Atlantic Technical Services); Louis Pappas’ Homosassa Springs Restaurant, 275 N.L.R.B. at 1526 (distinguishing Atlantic Technical Services).
We also note that one of the grounds on which the Board in Atlantic Technical• Services found against successorship — that the new employer was “a small organization, just recently organized for the purpose of performing small technical support service contracts,” whereas the predecessor was Trans World Airlines, a large, national "company engaged primarily in transportation and related fields” — is in tension with our holding in Cablevision Systems Development Co. that “the relevant comparison is not between Ca-blevision [the successor] and Broadway [the predecessor] on a total basis, but between the specific operations involving the union members.” 671 F.2d at 739.
. Given the level of deference to the Board that is required of us, it is also possible that, had it reached the opposite conclusion, we would find that result also to be reasonable and supported by substantial evidence. We have no occasion to consider, and therefore do not decide, that question.
Reference
- Full Case Name
- NATIONAL LABOR RELATIONS BOARD v. Simon DeBARTELO Group A/W M.S. Simon Property Group A/W M.S. Management Associates Inc. c/o Smith Haven Mall, Local 32B-32J, Service Employees International Union AFL-CIO, Intervenor
- Cited By
- 1 case
- Status
- Published