Town & Country Electric, Inc. v. National Labor Relations Board
Opinion of the Court
The National Labor Relations Board found that Town & Country Electric, Inc. had violated sections 8(a)(1) and 8(a)(3) of the National Labor Relations Act (the “Act”), 29 U.S.C. §§ 158(a)(1) & (3), by discriminating against two full-time union organizers and nine other union members. Town & Country petitions for review of the Board’s decision and order, and the Board cross petitions for enforcement of its order. Because we find that the union organizers and the other union members were not “employees” within the meaning of section 2(3) of the Act, 29 U.S.C. § 152(3), and therefore not entitled to the Act’s protection, we deny enforcement of the order.
I.
In early September 1989, Town & Country, a large nonunion electrical contractor from Appleton, Wisconsin, obtained a contract to do electrical work at Boise Cascade’s paper mill in International Falls, Minnesota. After being awarded the contract, Town & Country learned that Minnesota law requires electrical contractors to employ one electrician licensed by the State of Minnesota for every two unlicensed electricians working at a job site in the state. None of Town & Country’s electricians had a Minnesota license. To help it recruit Minnesota-licensed electricians, Town & Country retained Amer-istaff Personnel Contractors, Ltd., a temporary employment agency from Green Bay, Wisconsin. Ameristaff advertised in a Minneapolis newspaper for licensed journeymen electricians. Ameristaff prescreened those who responded to the advertisement and scheduled interviews for seven applicants at a Minneapolis hotel on September 7.
Ron Sager, Town & Country’s human resources manager, Dennis Defferding, one of its project managers, and Steven Buelow, Ameristaffs president, flew from Appleton to Minneapolis to conduct the interviews. Due to inclement weather, they arrived at the hotel one and one-half hours late. Of the seven applicants with scheduled interviews, only one, Gary Weseman, was present. Also present for interviews, however, were approximately one dozen members of Local 292 of the International Brotherhood of Electrical Workers, including two full-time paid union officials. Officials of Local 292 had learned of the job advertisement and had encouraged union members to respond and, if hired, to organize the job site.
Sager and Defferding interviewed union member Craig Jones first because he said that he had to leave early. They then interviewed Weseman and offered him a job. Following these two interviews, Buelow informed Sager that none of the remaining applicants had preseheduled interviews and that from their applications they appeared to be union members. Sager then informed the applicants that he had decided to interview only applicants who had scheduled interviews because he had to return to Appleton to attend an important meeting that afternoon. When Sager asked all those without appointments to leave, Malcolm Hansen protested that he had called Ameristaffs office earlier that day and had been told to report to the hotel for an interview. After Buelow had called his office and confirmed that Hansen had indeed called Ameristaff after they had left for Minneapolis, Sager interviewed Han
On September 12, Town & Country’s crew, including Hansen, began work at Boise Cascade’s mill. At the job site, Hansen announced to the crew that he was there to organize for the union. Hansen talked continuously to his coworkers about the benefits of the union and relentlessly solicited them to sign with the union, even though they indicated that they were not interested. Hansen’s crewmates complained to their foreman about Hansen’s nonstop talking as well as his poor workmanship and low productivity.
After the crew had begun work at the job site, Sager learned that under Minnesota law an electrical contractor could not use temporary employees from an employment agency; rather, all employees had to be directly employed by the contractor itself. Sager informed Buelow about this law and about Hansen’s low productivity and poor workmanship; Buelow then discharged Hansen on September 14. Hansen asked Sager if Town & Country would hire him directly, but Sager refused to do so.
Affirming the Administrative Law Judge’s decision, the Board found that Town & Country had violated sections 8(a)(1) and 8(a)(3) of the Act by refusing to interview the two union officials and eight other union members because of their union affiliation and by refusing to retain Hansen because of his union activity at the job site. Town & Country Elec., Inc., 309 N.L.R.B. 1250, 1992 WL 390106 (1992). In so holding, the Board found that the two union organizers and the other union members, including Hansen, were employees within the meaning of section 2(3) of the Act. In its petition, Town & Country argues that this finding was improper.
II.
The Act “confers rights only on employees, not on unions or their nonemployee organizers.” Lechmere, Inc. v. NLRB, 502 U.S. 527, -, 112 S.Ct. 841, 845, 117 L.Ed.2d 79 (1992). Applicants for employment, however, have long been considered to be employees under the Act. Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 181-88, 61 S.Ct. 845, 846-50, 85 L.Ed. 1271 (1941). Although the task of defining the term “employee” has been assigned primarily to the Board as the agency created by Congress to administer the Act, Sure-Tan, Inc. v. NLRB, 467 U.S. 883, 891, 104 S.Ct. 2803, 2808, 81 L.Ed.2d 732 (citing NLRB v. Hearst Publications, Inc., 322 U.S. 111, 130, 64 S.Ct. 851, 860, 88 L.Ed. 1170 (1944)), the Board’s construction of the term is not immune from judicial review, Allied Chemical & Alkali Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157, 166, 92 S.Ct. 383, 391, 30 L.Ed.2d 341 (1971). We will uphold the Board’s interpretation only if it is reasonable. Sure-Tan, 467 U.S. at 891, 104 S.Ct. at 2808; Pittsburgh Plate Glass, 404 U.S. at 166, 92 S.Ct. at 391.
In this case, we must decide whether two separate but related classes of individuals were employees within the meaning of the Act. We first consider whether the two full-time union organizers were statutory employees and then decide the same issue for the other nine union members, including Hansen.
A.
The circuits are split on whether paid union organizers are employees under the Act. In H.B. Zachry Co. v. NLRB, 886 F.2d 70, 72 (4th Cir. 1989), the Fourth Circuit, joining the Sixth Circuit, NLRB v. Elias Brothers Big Boy, Inc., 327 F.2d 421, 427 (6th Cir. 1964), held that a union organizer is not a bona fide employee within the meaning of section 2(3). Zachry had refused .to hire a paid full-time union organizer who had applied for work, upon the union’s instruction, to organize Zachry’s employees. Had the organizer been hired, he would have remained concurrently employed and supervised by the union. The union would have made up any shortfall in his salary, continued to make payments for his fringe benefits, and paid for his travel expenses and any other living expenses related to the job. In reach
On the other hand, in Willmar Electric Service, Inc. v. NLRB, 968 F.2d 1327, 1329-31 (D.C.Cir. 1992), cert. denied, — U.S.-, 113 S.Ct. 1252, 122 L.Ed.2d 651 (1993), the D.C.Circuit, agreeing with the Second Circuit, NLRB v. Henlopen Manufacturing Co., 599 F.2d 26, 30 (2d Cir. 1979), reached a contrary decision. See also Escada (USA) Inc. v. NLRB, 970 F.2d 898 (3d Cir. 1992) (enforcing the Board’s order without an opinion). Willmar had refused to hire a job applicant who was employed by a union when he applied, sought the job for the purpose of organizing Willmar’s work force, planned to retain an employment relationship with the union, and planned to return to being a full-time union employee. Rejecting Zachry’s holding, the court held that the Board could reasonably determine that an individual “who is employed simultaneously by a union and a company is an ‘employee’” under section 2(3). Willmar, 968 F.2d at 1330-31.
The Fourth Circuit has recently adhered to its decision in Zachry, expressly declining to revisit it in the light of Willmar. Ultrasystems Western Constructors, Inc. v. NLRB, 18 F.3d 251, 255 (4th Cir. 1994).
We find Zachry to be more persuasive than Willmar. Section 2(3)’s definition of “employee,”
Under common law, an agent has a duty to act solely for the benefit of his principal in all matters connected with his agency. Restatement (Second) of Agency § 387 (1957). More specifically, an agent is subject to a duty not to act on behalf of a person or entity whose interests conflict with those of the principal in matters in which the agent is employed. Id. § 394. Pursuant to this obligation, a person may be the servant of two masters at one time only if service to one does not involve abandonment of or conflict with service to the other. Id. § 226. Ordinarily, however, the control a master can properly exercise over the conduct of a servant prevents simultaneous service for two independent employers. Id. cmt a.
The Board argues that working simultaneously for the union as a paid organizer and for a nonunion employer does not involve a conflict of interest. The Board contends that the Act is founded on a belief that an employee may legitimately give allegiance to both a union and an employer.
Were this a case involving a typical job applicant, we might well agree that an employee may be simultaneously loyal to his union and to his nonunion employer. The two union organizers, however, were not typical applicants. They were not in search of a job; they already had one. The organizers wanted to enter Town & Country’s work
B.
We further find that the union members who applied, including Hansen, were not employees entitled to the Act’s protection. Like the union organizers, these applicants were also under Local 292’s control. Although not full-time organizers, they were encouraged by Local 292 to apply and to organize Town & Country’s employees if hired. The union would pay those hired the difference between union scale and Town & Country’s wages as well as their travel expenses.
Having found that none of the alleged dis-criminatees were employees under the Act and that therefore no violations of the Act occurred, we need not consider Town & Country’s remaining two arguments: that the Board improperly approved the ALJ’s use of an irrebuttable presumption that all nonunion employers are unlawfully motivated to discriminate against individuals who are affiliated with a union, and that the Board failed to follow precedent that permits employers to prohibit solicitation during work time.
Enforcement of the order is denied.
. Section 2(3) provides in full: The term “employee” shall include any employee, and shall not be limited to the employees of a particular employer, unless this subchapter explicitly states otherwise, and shall include any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute or because of any unfair labor practice, and who has not obtained any other regular and substantially equivalent employment, but shall not in-elude any individual employed as an agricultural laborer, or in the domestic service of any family or person at his home, or any individual employed by his parent or spouse, or any individual having the status of an independent contractor, or any individual employed as a supervisor, or any individual employed by an employer subject to the Railway Labor Act, as amended from time to time, or by any other person who is not an employer as herein defined. 29 U.S.C. § 152(3).
. Indeed, for Hansen's organizational efforts at the Boise Cascade job site, he received almost $1100 from the union, as compared to $725 from Ameristaff.
Reference
- Full Case Name
- TOWN & COUNTRY ELECTRIC, INC. v. NATIONAL LABOR RELATIONS BOARD, International Brotherhood of Electrical Workers, Local 292, Intervenor/Respondent TOWN & COUNTRY ELECTRIC, INC. Ameristaff Personnel Contractors, Ltd. v. NATIONAL LABOR RELATIONS BOARD, International Brotherhood of Electrical Workers, Local 292, Intervenor/Petitioner
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- Published