Int'l Longshore & Warehouse Union v. Nat'l Labor Relations Bd.
Opinion
The post-World War II growth in international maritime shipping has spawned a history of labor disputes along the West Coast of the United States between the Petitioner, the International Longshore and Warehouse Union (ILWU), and the Intervenor, the International Association of Machinists and Aerospace Workers, AFL-CIO (IAM). The battles between the two unions have played out in federal court,
see
Int'l Ass'n of Machinists & Aerospace Workers v. NLRB
,
In 2002, the Pacific Crane Maintenance Company (PCMC) began using a subsidiary, 1 the Pacific Marine Maintenance Company (PMMC) (together, Employer or PCMC/PMMC), to provide loading and unloading services to Maersk, a large shipping company, at three West Coast ports: Oakland and Long Beach, California and Tacoma, Washington. PCMC created PMMC to perform the Maersk contract because Maersk had purchased the terminal operations from a company named Sealand, which, as a condition of sale, required Maersk to recognize IAM as the union representative for the employees performing maintenance and repair (M&R) work at the three ports. Because PCMC was already bound by a collective bargaining agreement (CBA) with ILWU, it could not recognize IAM itself. Thus, from 2002 to 2006, PCMC continued to recognize ILWU while its subsidiary, PMMC, recognized IAM as the representative of the M&R employees at the Oakland and Tacoma ports. 2
In late 2004, in an effort to drive down costs, Maersk requested bids from both PCMC and PMMC for M&R work at the Oakland and Tacoma ports. PCMC responded with the lower bid and Maersk accepted it. As a result of losing the Oakland and Tacoma M&R work, on March 30, 2005, PMMC terminated its 100 M&R employees and shut down its operations completely. The next day, PCMC hired 76 of the former PMMC mechanics to do the
*1104
same M&R work and hired six additional former PMMC mechanics shortly thereafter. As a result of the change, however, PCMC ceased recognizing IAM and began recognizing ILWU as the former PMMC M&R employees' union. IAM responded with claims of unfair labor practices and the NLRB General Counsel brought charges against ILWU, PMMC and PCMC under the National Labor Relations Act,
ILWU raises three challenges to the Board's Decision and Order. First, it contends that the Board erred in concluding that the Employer was obligated to bargain with IAM over its decision to shut down PMMC and terminate its workforce. Second, it argues that the Board improperly excluded evidence that the M&R employees merged by accretion into the ILWU West Coast-wide employee bargaining unit. Third, it disputes the propriety of the Board remedy. For the following reasons, we deny ILWU's petition and grant the Board's cross-application for enforcement.
I. BACKGROUND
Maersk, and companies like it, transport goods around the world in large container ships packed with 20-foot metal containers. At port terminals, the shipping containers are unloaded by cranes and transported to off-site locations where they are "stripped" and distributed to their final destinations. The inverse process includes "stuffing" containers off-site and eventually loading them onto the cargo ships for export at the terminals. See Joint Appendix (JA) 693, 1218-19. The machinery and the containers used in this process periodically need maintenance and repair. Port-terminal contract repair companies, like the Employer, employ M&R mechanics to ensure the process runs smoothly.
The Board has previously chronicled the history of ILWU and IAM.
See, e.g.
,
Shipowners' Ass'n of the Pac. Coast
,
ILWU is more inclusive. Its bargaining unit is composed of a West Coast-wide group of longshoremen, stevedores, marine clerks, planners and longshore mechanics. A single CBA, the Pacific Coast Longshore and Clerks Agreement (PCL&CA), 3 binds ILWU, on one side, and the Pacific Maritime Association (PMA), a collection of approximately 70 maritime employers along the Pacific Coast (including PCMC), on the other. Pursuant to the PCL&CA, ILWU and PMA have established an employment *1105 dispatch system that is in effect along the Pacific Coast. The system operates through a series of "halls" that match employees to employers on a flexible basis so that labor can flow to the terminals that need it most. The Employer describes this system as its "lean staffing model." JA 412.
This chapter of the unions' story began in 1999, when Maersk purchased the Oakland, Tacoma and Long Beach port operations 4 from Sealand. As a condition of the sale, Sealand required Maersk to recognize IAM as the M&R mechanics' union in all three locations.
At that time, PCMC was performing M&R work for Maersk in Los Angeles and it was interested in expanding its work to the three newly acquired Maersk terminals. 5 Because PCMC was bound by the PCL&CA to recognize ILWU, however, Sealand's IAM-recognition requirement prevented PCMC from performing the work. In order to get around this obstacle, PCMC created PMMC. PMMC then bid on, and won, the Maersk contract. Thereafter, PMMC recognized IAM and began performing the M&R work at the former Sealand terminals.
On March 31, 2002, the IAM-Sealand (now IAM-PMMC) CBA was set to expire. Around the same time, Maersk consolidated its Southern California operations by merging its M&R workforce into a single terminal (Pier 400) in the Port of Los Angeles. As a result of the consolidation, Maersk no longer needed PMMC's services at the Long Beach terminal and instead contracted with PCMC to do its M&R work at the new consolidated Los Angeles terminal. As for the Oakland and Tacoma terminals, PMMC and IAM agreed to a CBA extension from April 1, 2002 to March 31, 2005 but did so only after more than a dozen bargaining sessions and a strike vote of unit employees.
In late 2004, with the March 31, 2005 CBA expiration date looming, Maersk solicited bids from both PCMC and PMMC for work at the Oakland and Tacoma terminals. PCMC submitted a bid of $64.46 per hour and PMMC submitted a bid of $72.88 per hour. At the ALJ hearing, PCMC and PMMC representatives explained the difference in price. PCMC representative Joseph Gregorio testified that the discussion regarding the different bid prices "always was focused upon the concept that there was differences [sic] in labor costs," including "benefits and pensions." JA 92. Similarly, PMMC informed Maersk that its higher bid resulted from a "collection of [employee] benefits." JA 172.
Maersk selected PCMC to do the work. Accordingly, on January 25, 2005, Maersk terminated its maintenance contract with PMMC, effective March 31, 2005. On January 26, PMMC notified IAM, informing it and its unit employees 6 that PMMC intended to terminate its operations on April 1. PMMC also explained how the unit employees could apply for employment with *1106 PCMC to continue working the same jobs. In early February, IAM requested that PMMC bargain over its decision to terminate work at the Oakland and Tacoma terminals. PMMC agreed to bargain over the effects of the terminations but asserted that it was Maersk's decision-not PMMC's-to use PCMC to perform the M&R work. Thus, PMMC refused to bargain about its decision to shut down operations.
Effective April 1, 2005, PMMC permanently "laid off" all of its M&R mechanics. JA 899-900 (Letter from Terry Murphy, PMMC Vice President, to IAM representatives). On March 31, PCMC hired 76 of the PMMC unit mechanics, requiring them to accept ILWU as their bargaining representative. 7 PCMC hired six more former PMMC mechanics shortly thereafter. For the most part, the mechanics continued to perform the same work at the same locations with the same tools and equipment. One difference was that PCMC began to transfer mechanics temporarily between the former- PMMC terminals of Oakland and Tacoma and other nearby terminals in accordance with the PCL&CA hiring halls and its "lean staffing model."
In early 2005, IAM pressed unfair labor practice (ULP) charges against PMMC and PCMC as "a single employer" and alternatively as "alter egos" under sections 8(a)(1), (2), (3), and (5) of the NLRA 8 ; it subsequently filed ULP charges against ILWU under sections 8(b)(1)(A) 9 and (2). 10 In 2007, the NLRB General Counsel filed a complaint alleging similar ULPs and moved to consolidate its charges with those filed by IAM. An ALJ granted the General Counsel's motion and heard the consolidated case in a 41-day hearing between September 13, 2007 and June 20, 2008. During the hearing, the parties narrowed the issues. First, PCMC and PMMC stipulated that they were a single employer. JA 608. The General Counsel disavowed any "successor" or "alter ego" theories of liability and agreed that the Employer had properly engaged in "effects bargaining." On February 12, 2009, the ALJ issued his opinion, recommending *1107 dismissal of all charges against ILWU and dismissal of all but one 11 charge against the Employer.
The Board rejected the ALJ's dismissal recommendations. It concluded that the Employer had violated sections 8(a)(5) and (2) of the NLRA, based largely on "the parties' stipulation that PMMC and PCMC were at all times material a single employer."
Pac. Crane Maint. Co., Inc. &/or Pac. Marine Maint. Co., LLC
,
The Employer and ILWU originally sought review in the United States Court of Appeals for the Ninth Circuit.
Pac. Crane Maint. Co. v. NLRB
, No. 13-72463 (9th Cir. July 12, 2013). While that appeal was pending, the United States Supreme Court decided
NLRB v. Noel Canning
, --- U.S. ----,
II. EMPLOYER'S DUTY TO BARGAIN
"We will uphold a decision of the Board unless it relied upon findings that are not supported by substantial evidence, failed to apply the proper legal standard, or departed from its precedent without providing a reasoned justification for doing so."
E.I. Du Pont De Nemours & Co. v. NLRB
,
This case comes to us in an unusual posture. Because PCMC/PMMC settled its dispute with the Board and IAM, we are called upon to review only the Board's conclusion that ILWU violated sections 8(b)(1)(A) and (2) of the NLRA by accepting the Employer's recognition as the union representative of the M&R mechanics at the Oakland and Tacoma ports. To review that determination, however, we must first determine whether the Employer had an obligation to bargain with IAM under sections 8(a)(5) and (d) before it shut down PMMC's operations. As we discuss infra , we conclude that the Employer had such an obligation-and violated it.
*1108
A union violates section 8(b)(1)(A) by exercising exclusive bargaining authority when it does not, in fact, have the support of an uncoerced majority of the employees in the relevant bargaining unit.
Int'l Ladies' Garment Workers' Union v. NLRB
,
Key to our ultimate decision is whether IAM-rather than ILWU-continued as the appropriate representative of the M&R mechanics at the Oakland and Tacoma terminals once PMMC ceased operations. Put simply, if IAM remained the appropriate union for the unit employees, ILWU was not permitted to accept the Employer's recognition. On this issue, ILWU has two arguments. First, it argues that the Employer properly terminated its relationship with IAM when it shut down PMMC's operations without bargaining and therefore PCMC-as a separate corporate entity-could hire employees without regard to their past IAM representation. Second, ILWU asserts that the employees formerly represented by IAM merged by accretion into the existing ILWU West Coast-wide bargaining unit. We address these arguments in turn.
A. Employer's Termination Decision
Under section 8(a)(5), an employer commits an unfair labor practice if it "refuse[s] to bargain collectively with the representatives of [its] employees."
Under section 8(d), an employer's decision to replace employees in an "existing bargaining unit with those of an independent contractor to do the same work under similar conditions of employment" is a subject of mandatory bargaining.
Fibreboard Paper Prods. Corp. v. NLRB
,
At the same time, an employer's duty to bargain is not limitless and the NLRA does not prohibit a business from making independent economic decisions unrelated to labor relations.
First Nat'l Maint.
,
When one company buys another, the transaction can qualify as a "core business decision" that falls outside the "terms and conditions" of employment contemplated by section 8(d).
See
AG Comm'ns Sys. Corp.
,
We conclude that the Employer was required to bargain over its decision to shut down PMMC's operations and transfer them to PCMC. First, the record makes clear that the difference in bid
*1110
prices was based almost exclusively on labor-related costs, which are "peculiarly suitable for resolution within the collective bargaining framework."
First Nat'l Maint.
,
In arguing that the transition from PMMC to PCMC was a "core entrepreneurial decision" rather than a term or condition of employment, ILWU attempts to attribute PCMC's lower bid to its "lean staffing model." Pet'r's Br. 20-24. This argument ignores the fact that PCMC's "lean staffing model" is tied to its membership in the PMA and the PMA's CBA with ILWU's West Coast-wide bargaining unit. If PCMC had not recognized ILWU as the union representing the former PMMC employees, it would not have had access to the hiring hall or the flexible transfer policies of the PCL&CA. Accordingly, we do not view the "lean staffing model" as an independent business construct unique to PCMC but instead as a provision of the PCL&CA applicable to every PMA employer.
See
Sw. Steel & Supply, Inc. v. NLRB
,
Our conclusion turns heavily on PMMC and PCMC's single-employer stipulation.
See
Farmers Co-op. Elevator Ass'n Non-Stock of Big Springs, Neb. v. Strand
,
Nor did PMMC lose Maersk as a client, as was the case in
First National
.
B. Employees' Bargaining Unit
Having concluded that PCMC/PMMC had an obligation to bargain with IAM, we turn to ILWU's "accretion" argument and the Board's determination of the appropriate bargaining unit.
See
S. Prairie Constr. Co. v. Local No. 627
,
Under section 9(b) of the NLRA, the Board has authority to delineate employee bargaining units.
Serramonte Oldsmobile, Inc. v. NLRB
,
In weighing the "community of interest" of a merged workforce, the Board sometimes applies the doctrine of "accretion."
Dean Transp., Inc. v. NLRB
,
*1112 The history of IAM's multi-terminal bargaining unit is plain. It covers a 40-year period with the M&R employees at the Oakland and Tacoma terminals. ILWU does not contest that IAM was the legitimate union representative of the M&R mechanics at those locations before March 31, 2005. Nor could it, as Sealand's insistence on the continuity of IAM as the mechanics' union prompted PCMC to create PMMC to perform the Maersk contract in the first place. JA 23 (PCMC/PMMC co-owner Steve McLeod testifying that "purpose of creating [PMMC] was to have an entity to respond to a proposal to do maintenance work for [Maersk]"). Indeed, PCMC/PMMC was required to recognize the IAM bargaining unit as a condition of the Sealand contract.
Moreover, the Board found as a fact that, "[a]s of March 31 ... the unit employees generally continued to perform the same work at the same location, with the same tools and equipment as they had before the merger, working under separate immediate supervision from the ILWU-represented employees."
PCMC/PMMC I
,
We reject the argument that the PMMC M&R employees were merged by accretion into the West Coast-wide ILWU workforce. Moreover, we decline ILWU's invitation to look past March 31 at all for our "community of interest" assessment because any post-March 31 "accretion" necessarily occurred
after
the Employer violated section 8(a)(5) by failing to bargain over its decision to switch operations from PMMC to PCMC. In these circumstances, the Board correctly discounted any evidence tied to "impermissible changes made unilaterally by the employer."
Dodge of Naperville
,
In sum, we hold that substantial evidence supports the Board's conclusion that the M&R employees at the Oakland and Tacoma ports were not part of ILWU's West Coast-wide bargaining unit and the Employer's duty to bargain with the existing IAM bargaining unit was not extinguished by virtue of the accretion doctrine. Because IAM continued as the appropriate bargaining representative for the M&R mechanics at the Oakland and Tacoma terminals after March 31, 2005, ILWU violated sections 8(b)(1)(A) and (2) of the NLRA when it accepted recognition from the Employer. 12
*1113 III. BOARD REMEDY
Finally, ILWU challenges the Board remedy. Specifically, ILWU points out that PCMC has ceased operations and paid roughly $130,000 to each of the approximately 100 unit employees formerly represented by IAM at the Oakland and Tacoma terminals as part of its settlement. Accordingly, it argues that the Board remedy improperly provides a "windfall," or double recovery, to IAM. Pet'r's Br. 58.
Under section 10(e) of the NLRA, our review of Board decisions is limited to issues the parties in fact raised before the Board.
Before the Board, ILWU did not challenge the Board remedy in light of the Employer's settlement with IAM and its members. Nor did ILWU move for reconsideration once it learned of the Employer's settlement.
13
Therefore, under section 10(e), we cannot modify the relief granted absent "extraordinary circumstances."
See
NLRB v. Ochoa Fertilizer Corp.
,
That said, ILWU has an opportunity to make its objection known at the compliance stage of the Board proceedings.
See
Sure-Tan, Inc. v. NLRB
,
For the foregoing reasons, we deny ILWU's petition for review and grant the Board's cross-application for enforcement against ILWU.
So ordered.
PCMC joined with another company, Marine Terminals Corporation, to create PMMC. As discussed infra , the parties have stipulated that PCMC and PMMC are a "single employer" and, accordingly, Marine Terminals Corporation has no relevance to the case.
For reasons discussed infra , the Long Beach terminal is no longer at issue.
The PCL&CA CBA comprises multiple documents, including (1) the Pacific Coast Clerks Contract Document (PCCCD), which governs marine clerks and planners; (2) the Pacific Coast Longshore Contract Document (PCLCD), which governs longshore workers, including stevedores and longshore mechanics; and (3) the Safety Code Contract. JA 479-82; 610-16. We refer to the documents together as the PCL&CA.
Maersk leased terminals from the ports. For example, Maersk leased berths 20-24 at the Port of Oakland and contracted with PMMC to do its M&R work at those berths.
See
Ports Am. Outer Harbor, LLC
,
PMMC's Oakland and Tacoma terminals served a second shipping company, Horizon Lines, which accounted for a small portion of PMMC's work. Horizon received the same services as Maersk through a contractual "me-too" relationship tied to Maersk's contract with PMMC. Maersk was the primary shipping company, however, and Horizon Lines had no role in the contract negotiations described herein.
Although the January 26 letter was addressed to IAM representatives, it was also "[p]osted and distributed to employees covered by the 2002-2005 IAM/PMMC contract." JA 900.
When PCMC extended employment offers to former PMMC mechanics, it made clear that "[a]ll of our operations are covered by our coast-wide contract with [ILWU]." JA 908. Specifically, the PCL&CA contained a "union security" clause providing that "[a]ny employee who becomes fully registered during the life of the Agreement shall ... become and remain a member of the [ILWU] in good standing as a condition of employment." JA 665. Thus, ILWU membership was an explicit requirement of PCMC employment.
Section 8(a) provides:
It shall be an unfair labor practice for an employer ... (1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 ... (2) to dominate or interfere with the formation or administration of any labor organization or contribute financial or other support to it ... (3) by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization ... (5) to refuse to bargain collectively with the representatives of his employees ....
Section 8(b)(1)(A) provides, in relevant part, that it "shall be an unfair labor practice" for a union to "restrain or coerce ... employees in the exercise of the rights guaranteed in section 157,"
Section 8(b)(2) provides: "It shall be an unfair labor practice for a labor organization or its agents ... to cause or attempt to cause an employer to discriminate against an employee in violation of subsection (a)(3) or to discriminate against an employee with respect to whom membership in such organization has been denied or terminated ...."
The ALJ found that the Employer violated sections 8(a)(1) and (5) of the NLRA by removing IAM material posted on a bulletin board at the Maersk terminal before March 31, 2005. That finding is not challenged here.
It is undisputed that the PCMC-ILWU CBA contains a "union-security" clause that requires membership in ILWU as a condition of PCMC employment, JA 665, and that PCMC enforced the clause when it hired the former PMMC mechanics,
see
PCMC/PMMC I
,
The Employer moved for reconsideration regarding the merits of the Board Order. JA 1372. The Board denied the motion. Id. at 1376.
Reference
- Full Case Name
- INTERNATIONAL LONGSHORE & WAREHOUSE UNION, Petitioner v. NATIONAL LABOR RELATIONS BOARD, Respondent International Association of MacHinists and Aerospace Workers, AFL-CIO; District Lodge 190 ; Local Lodge 1546; District Lodge 160, Et Al., Intervenors
- Cited By
- 11 cases
- Status
- Published