NOTICE: This
opinion is subject to formal revision before publication in the bound volumes
of NLRB decisions. Readers are requested
to notify the Executive Secretary, National Labor Relations Board,
AG Communication
Systems Corporation and Lucent Technologies, a single employer and International Brotherhood of Electrical
Workers, Local 21, AFL–CIO and Communications
Workers of America, AFL–CIO, Party In Interest. Case 33–CA–14450
June 29, 2007
DECISION AND ORDER
By Chairman Battista and Members
Schaumber
and Walsh
i. introduction
The principal issue
presented is whether AG Communication Systems Corporation (AG) and Lucent Technologies
(Lucent), alleged to be a single employer, violated Section 8(a)(5) and (1) of
the National Labor Relations Act by refusing to bargain with International Brotherhood
of Electrical Workers, Local 21, AFL–CIO (IBEW Local 21), concerning the following
decision and its effects: to integrate a bargaining unit of AG employees
represented by IBEW Local 21 into a bargaining unit of Lucent employees represented
by Communications Workers of America, AFL–CIO (CWA).
We find, for the reasons
set forth below, that AG and Lucent comprised a single employer (the Respondent),
and that the Respondent’s management decision to integrate the two bargaining
units was exempt from bargaining under First
National Maintenance Corp. v. NLRB, 452 U.S. 666 (1981). We further find, however, that the Respondent
failed to satisfy its duty to bargain with IBEW Local 21 concerning the effects
of that decision, and thereby violated Section 8(a)(5) and (1) of the Act. Finally, we find, contrary to the dissent,
that a remedy under Transmarine Navigation
Corp., 170 NLRB 389 (1968), is unnecessary to ameliorate the effects bargaining
violation in this case.[1]
ii. factual background[2]
Lucent is engaged in the
manufacture, sale, and installation of telephone switching equipment. In early 2003, it employed a bargaining unit
of approximately 2700 telephone equipment installers represented by CWA. The most recent Lucent-CWA
collective-bargaining agreement was effective from March 1, 2003, to October
31, 2004.
AG is a joint venture company
created in 1989 by a corporate predecessor of Lucent and a corporate predecessor
of Verizon. AG also is engaged in the
manufacture, sale, and installation of telephone switching equipment. Its bargaining unit of approximately 250 telephone
equipment installers was represented by IBEW Local 21. The most recent collective-bargaining agreement
between AG and IBEW Local 21 was effective from October 1, 2000, to September
30, 2004. Telephone equipment installers
employed by AG and Lucent performed basically the same type of work but on
different telephone switching equipment.
The 1989 joint venture
agreement that created AG required Lucent to purchase 100 percent of AG stock
by December 31, 2003. By 2000, Lucent
owned about 90 percent of AG stock. On
February 3, 2003,[3] Lucent
purchased the remaining AG stock, and thus owned AG in its entirety.
Immediately following the
final purchase, Lucent took two key actions.
First, Lucent circulated an internal memo setting forth its plan to
integrate the AG installers, represented by IBEW Local 21, into a single
bargaining unit with Lucent’s installers, to be represented only by CWA.
Second, Lucent initiated
efforts to completely integrate AG into Lucent’s corporate structure; the goal
was to increase profitability by streamlining operations and reducing redundancies. Thus, at Lucent’s direction, joint teams of
managers from Lucent and AG worked closely together to accomplish the integration. By April 1, most departments of AG were integrated
into Lucent. Lucent assumed operational
and budgetary responsibility for those departments, and AG managers either
became Lucent employees or began reporting to counterparts at Lucent. In the meantime, within a few weeks of
circulating its internal memo about its plans, Lucent advised CWA of those
plans.
The integration of the AG
telephone equipment installers into Lucent also began in early 2003, although
the Respondent did not formally announce it until the summer of 2003. On July 17, Lucent notified IBEW Local 21 that,
as of August 1, the telephone equipment installers employed by AG would be integrated
into a single operational group with the telephone equipment installers
employed by Lucent. Lucent further
notified IBEW Local 21 that, as of August 1, all telephone equipment installers
would be represented by CWA in a single bargaining unit covered by the
Lucent-CWA collective-bargaining agreement.
Finally, Lucent informed IBEW Local 21 that it would no longer be
recognized as the representative of the AG equipment installers, and that “an accretion
will have occurred.”
On July 21, IBEW Local 21
requested bargaining with both AG and Lucent over the effects of the decision
to merge the two bargaining units.
Neither AG nor Lucent responded.
On August 1, the integration
of the two bargaining units into a single unit represented by CWA was completed.[4] As of that date, telephone equipment
installers who had been employed by AG became Lucent employees, and Lucent
applied the terms of its collective-bargaining agreement with CWA to them. Thereafter, Lucent dealt exclusively with CWA
as the bargaining representative of the former AG employees. Following August 1, Lucent bargained with CWA
over the effects of the integration.
Among other things, the seniority lists of the two bargaining units were
dovetailed, so that former AG installers were accorded seniority dates with
Lucent that reflected their service with AG.
iii. the judge’s decision
The judge surveyed the
bargaining landscape as of August 1, when Lucent completed the integration of
the two bargaining units and AG ceased to exist as an operating entity. The judge concluded that on August 1 neither
AG nor Lucent owed any bargaining obligation to IBEW Local 21, and he recommended
that the complaint be dismissed in its entirety.
With respect to AG, the
judge found that on August 1, AG no longer employed any telephone equipment installers,
and thus had no duty to engage in bargaining with IBEW Local 21. The judge found that AG “simply had nothing
to do with” the integration of the two bargaining units.
With respect to Lucent, the
judge found that, as of the completion of the integration on August 1, it owed
a bargaining obligation only to CWA, the representative of the integrated
unit. Consequently, the judge also found
that Lucent had no duty to bargain with IBEW Local 21, because it did not
represent any of Lucent’s telephone equipment installers. The judge did not address the Respondent’s
argument, discussed below, that its decision to integrate the two bargaining
units was exempt from bargaining under First
National Maintenance Corp. v. NLRB, supra, 452 U.S. 666.
Finally, the judge found
that the single employer doctrine has “no relevance” to this case, because it
applies only to two ongoing businesses being operated as a single entity. The judge reasoned that, as of August 1, only
Lucent was operating, and AG no longer employed any telephone equipment installers.
iv. discussion
In his exceptions, the General
Counsel states that his theory of this case is that Lucent and AG became a
single employer prior to the integration
of the bargaining units on August 1; and that prior to August 1, Lucent and AG, as a single employer, failed to
bargain with IBEW Local 21 over that decision and its effects. As noted, the judge did not address the
General Counsel’s theory; instead, the judge focused on the situation as it
existed on August 1, after the integration of the bargaining units was completed
and AG ceased to exist.
For the reasons set forth
below, we find that prior to August 1, Lucent and AG became a single employer,
and that, as a single employer, they owed a duty to IBEW Local 21 to bargain
over the effects of the decision to integrate the Lucent and AG bargaining
units, but not over the decision itself.
A. Lucent and AG were
a Single Employer
The Board’s single-employer
principles are well established. A
single-employer relationship exists when two or more employing entities are in
reality a single-integrated enterprise.
As the Board has explained:
Four criteria determine
whether a single-employer relationship exists: (1) common ownership; (2) common
management; (3) functional interrelation of operations; and (4) centralized
control of labor relations. It is well established that not all of these
criteria need to be present to establish single-employer status.
Single-employer status ultimately depends on all the circumstances of a case
and is characterized by the absence of an arm’s-length relationship found among
unintegrated companies. The Board has
generally held that the most critical factor is centralized control over labor
relations. Common ownership, while
significant, is not determinative in the absence of centralized control over
labor relations. [Footnotes and
quotation marks omitted.]
Mercy
Applying those principles
to the facts before us, we find that the record establishes that Lucent and AG
constituted a single employer by April 1, and certainly no later than July 17,
when the Respondent informed IBEW Local 21 of the planned integration. Indeed, all four of the Board’s
single-employer criteria are present in this case.
The first criterion, common
ownership, is clearly present. By
February, Lucent had purchased 100 percent of AG stock.
The second criterion,
common management, is also established.
By April 1, Lucent had largely accomplished its effort to integrate AG’s
corporate structure and overall operations into its own. As the judge found, Lucent had assumed operational
and budgetary responsibility for many, if not all, AG departments. In particular, AG’s highest-ranking officers
and managers, including its president, head of administration, and head of
sales, had been replaced by Lucent personnel.
AG’s human resources director had begun reporting to a member of Lucent
management.
The evidence of common
management, moreover, was not limited to the upper echelons of AG’s corporate
hierarchy. On April 1, Lucent Vice
President Barbara Landmann began managing the AG telephone equipment installers
bargaining unit, with particular responsibility to oversee financial
performance of the unit and to ensure that customer commitments were met. On that same date, AG’s head of installation
services, Dan Melsek, who had previously been responsible for overseeing the
unit, became an employee of Lucent.
Shortly thereafter, AG’s two managers responsible for, respectively, telephone
equipment installation services for the eastern and western
The record contains
persuasive evidence of the third criterion supporting a single-employer finding—functional
interrelation of operations between Lucent and AG. Primarily, this criterion is evidenced by the
integration of most AG departments into Lucent effective April 1. As Lucent itself described the situation in
an April 2 memorandum: “Organization Transition Managers from [Lucent] and [AG]
have completed a joint effort to merge AG[] functions into Lucent effective
April 1.” In addition, we cite the
following specific evidence from the record:
·
On February 7,
Lucent Vice President Landmann e-mailed the then-head of AG’s installation
services, Melsek: “Just wanted to make sure you know I mean that together, our
teams will evaluate every opportunity that comes up regardless of customer to
make sure we’re in-sync on who has the deployment lead.”
·
Also on February
7, Lucent’s senior director for operations and planning e-mailed Lucent Vice
President Landmann about whether AG installers or Lucent installers should be assigned
certain work, stating, “I think we should be careful here not to have it look
like we [Lucent] sent the work to AG. It
should appear as if the customer selected AG to perform the work.”
·
By February 24,
the Lucent credit and loan administration group had assumed credit evaluation
functions for AG, and the Lucent treasury department had initiated steps to become
signatories on AG bank accounts.
·
On March 10,
Lucent’s human resources director set a meeting between Lucent management and
the AG human resources director “to review and determine who are the critical
[AG] folks that need to be retained in the near term or until 1/1/04” and
stated that Lucent’s chief financial officer “has requested some number of
headcount reductions by Mid-April across all of the AG functions.”
·
By April 1, the
head of AG customer support had to check with someone from Lucent if he “wanted
to do anything significant,” as testified to by Stephen Muscat, Lucent’s
director of work force relations.
·
Pursuant to
decisions made by Lucent, AG scheduled training for Lucent telephone equipment
installers at AG’s offices during June, July and August.
The record thus shows a
clear interrelation of operations between Lucent and AG.
Turning to the final criterion,
centralized control of labor relations, the record shows that by April, Lucent,
not AG, was making the critical decisions arising under the AG-IBEW Local 21
collective-bargaining relationship. The
record establishes that Lucent accomplished this by dictating the conduct of AG’s
manager of labor relations, Patrick Murphy, who was ostensibly responsible for
administering the collective-bargaining agreement between AG and IBEW Local
21. Lucent’s control over Murphy
extended to the failure to provide information to IBEW Local 21, to the layoff
of AG installers, and, ultimately, to the matter of effects bargaining.
Murphy was aware in
February of Lucent’s decision to integrate the AG installers into a single
bargaining unit with the Lucent installers represented by CWA. However, Lucent directed Murphy not to inform
IBEW Local 21 of the integration, and Murphy followed Lucent’s direction. Once Lucent completed its purchase of AG
stock in February, IBEW Local 21 made a number of inquiries to Murphy about the
effect on AG installers, and even filed a contractual grievance about the
matter. Despite these inquiries, Murphy,
pursuant to Lucent’s direction, never informed IBEW Local 21 of the integration,
even though the AG-IBEW Local 21 collective-bargaining agreement was still in
effect.
Similarly, Lucent’s
significant control over AG’s labor relations is demonstrated by evidence that
Lucent effectively dictated the layoff of AG employees. The record shows:
·
A February 4
Lucent memorandum entitled “AG Labor Policy” stated, inter alia, that prior
to April 1, “AG should adjust its staffing to the appropriate level.”
·
As noted above, a
Lucent memorandum of March 10 stated that Lucent’s chief financial officer “has
requested some number of headcount reductions by mid-April across all of the AG
functions.”
·
On April 16, AG
provided Lucent with a list of telephone equipment installers targeted to be
laid off on May 3.
·
Further, in a
July 9 memorandum, Lucent Vice President Landmann informed the AG installation
service managers for the eastern and western United States that she was not
happy with AG financial results; that they had not taken sufficient action
previously; and that, as a result, she was asking Lucent Vice President Davis
to “step in and basically lead [Read: dictate]
the downsizing exercise.” [Brackets and bold in original.]
Finally, when Lucent
announced in July that the AG installers would be merged into a single unit
with the Lucent installers, AG did not independently respond to IBEW Local 21’s
request for effects bargaining. As
Murphy explained in his testimony, “all decisions related to that were made by
Lucent management, and [AG] management or residues of [AG] management,
including myself, deferred any activities and correspondence related to those
decisions to Lucent.” Summing it up, Murphy
admitted that “the decision not to negotiate . . . over the merger of Local 21
and its effects was a Lucent decision and AG management simply followed the
directions of Lucent.” (Emphasis added.)
Lucent thus controlled AG’s response on
yet another key labor relations issue: whether to engage in effects bargaining.[5]
In summing up the essence
of a single-employer relationship, the Board has observed that “[s]ingle employer
status is characterized by the absence of an arm’s-length relationship found
among unintegrated companies.” RBE Electronics of S.D., 320 NLRB 80
(1995). Certainly, the evidence detailed
above shows that by April 1, and certainly no later than July 17, Lucent and AG
lacked an arm’s-length relationship and therefore constituted a single employer.[6]
B. The Respondent’s
Duty to Bargain with
IBEW Local 21
1. Decision bargaining
The Respondent argues in
its exceptions that its decision to purchase AG in its entirety, close AG operations,
and completely integrate all aspects of the two companies, including the two
bargaining units, was a core entrepreneurial management decision exempt from
bargaining under First National
Maintenance Corp. v. NLRB, supra, 452 U.S. 666.[7] We find merit in the Respondent’s
exception.
In
First National Maintenance, the Court held that the employer, which
provided cleaning and maintenance services to commercial establishments, was
not required to bargain with a union over its decision to discontinue operations
at a nursing home and discharge its employees working there, after it was unable
to secure an increase in its management fee.
The Court reasoned that the employer’s decision to shut down a part of
its business constituted a significant “change in the scope and direction of
the enterprise [which] is akin to the decision whether to be in business at all.”
The
First National Maintenance test is applicable to determine here whether
the Respondent had an obligation to bargain about its decision to integrate the
two bargaining units. The Respondent’s decision to shut down part of its
business—all AG operations—and integrate the two companies, including the two
bargaining units, had, as in First
National Maintenance, a direct impact on the employment of the former AG
installers: their terms and conditions of employment would thereafter be
controlled by a different collective-bargaining agreement. As in First
National Maintenance, the Respondent’s decision had as its focus the
Respondent’s economic profitability: to streamline operations and eliminate
redundancies between the two companies.
The question under First National
Maintenance is whether the benefit of requiring the Respondent to bargain
over the integration decision outweighs
the burden placed on the conduct of the Respondent’s business.
When labor costs underlie
an employer’s management decision, that decision is particularly amenable to
the collective-bargaining process. The
Supreme Court has emphasized that “a desire to reduce labor costs” is a matter “peculiarly
suitable for resolution within the collective bargaining framework.” First
National Maintenance, supra, at 680, quoting Fibreboard Paper Products v. NLRB, 379
The
record here shows that the Respondent’s integration decision was not animated
by a desire to reduce labor costs related to the telephone equipment
installers. Indeed, neither the General
Counsel nor IBEW Local 21 even argue that labor costs were lower under the Lucent-CWA
collective-bargaining agreement than under the AG-IBEW Local 21
collective-bargaining agreement. Rather,
the record supports the Respondent’s assertion that the integration was
motivated by its desire to increase profitability by merging duplicative
corporate departments, and to secure the opportunity to sell a different type
of telephone switching equipment to a new set of customers.
Moreover,
the integration process involved large-scale organizational restructuring conducted
by joint teams of Lucent and AG management.
Requiring bargaining over the integration decision would place a
significant burden on the Respondent’s achievement of its comprehensive
business reorganization.
Accordingly,
we find that the burden on the conduct of the Respondent’s business outweighs
any benefit that might be gained from bargaining with IBEW Local 21 over its
decision to integrate Lucent and AG, which encompassed the integration of the
two units. The Respondent’s integration
decision is not suitable for resolution through collective bargaining because
it lies at the core of the Respondent’s entrepreneurial control and decision making. See Fibreboard Paper Products v. NLRB, supra at 223 (Stewart, J., concurring). We
thus find that the integration was a management decision exempt from
bargaining under First National Maintenance.[8]
2. Effects bargaining
In First National Maintenance, the Supreme Court also held that, even when an employer’s decision
to shut down part of its operations is exempt from bargaining, the employer is
nevertheless obligated to bargain with the union over the effects of that
decision. 452
The Respondent’s decision
to close part of its business fits squarely into the mold of management
decisions requiring an employer to engage, upon union request, in effects
bargaining. The Respondent closed AG,
and concomitantly integrated AG’s operations, including its installation
operation, into Lucent’s operations. The
record shows that the Respondent never responded to IBEW Local 21’s July 21
written request to bargain over the effects of the decision to merge the two
installer bargaining units. On these
facts, we find the conclusion inescapable that the Respondent, as a single
employer, violated Section 8(a)(5) and (1) of the Act.
C. The Appropriate
Remedy
The Board’s standard remedy
in effects bargaining cases is the remedy set forth in Transmarine Navigation Corp., 170 NLRB 389 (1968). See, e.g.,
A Transmarine limited bargaining order and backpay remedy
is not awarded in every effects bargaining case, however. See, e.g., National Terminal Baking Corp., 190 NLRB 465 fn. 1 (1971). Rather, in fashioning a remedy for an effects
bargaining violation, the Board may consider any particular or unusual circumstances
of the case. See, e.g., Compact Video
Services, 319 NLRB 131 fn. 1 (1995), enfd. 121 F.3d 478 (9th Cir. 1997); Willamette
Tug & Barge Co., supra at
283.
We find that, under the
unusual circumstances of this case, a limited bargaining and backpay remedy
under Transmarine is not warranted.
Under the facts here, no purpose would be served by ordering bargaining over
the effects of the Respondent’s integration of the AG telephone equipment
installer unit into the Lucent telephone equipment installer unit, as there appears
to be little or nothing over which to bargain. There is no contention that the
terms and conditions of employment received by the former AG installers after
their integration into the CWA-represented Lucent installer unit were in any
way inferior to the terms and conditions of employment that they had received
prior to the units’ merger. Indeed, as noted above, the former AG installers’ seniority
was dovetailed with that of the Lucent installers, so that the AG installers
received full credit for their employment with AG. Additionally, while the
Board has held that “[e]ffects bargaining can include such topics as layoffs,
severance pay, health insurance coverage and conversion rights, preferential
hiring at other of the employer’s operations, and reference letters for jobs
with other employers,”[10]
there is no basis in this case for effects bargaining over such topics related
to loss of employment, because the former AG installers continued to be employed
by the Respondent with full pay and benefits. Finally, the former AG installers
continued to retain union representation after their integration into the
Lucent unit, albeit representation by a CWA local rather than an IBEW local.
It
is also significant that the Respondent bargained with CWA for many of the
matters that would be the substance of bargaining with IBEW Local 21. A
positive outcome for former AG installers was achieved. As a result of that bargaining, the seniority
lists of the two units of installers were dovetailed, giving each former AG
installer a seniority date with Lucent that reflected his service with AG. As the judge observed, had the Respondent
been required to engage in effects bargaining with both CWA and IBEW Local 21,
the former AG installers may well have received diminished seniority rights in
light of the greater bargaining power of the larger CWA bargaining unit. These practical considerations cannot be
ignored.
Given
that the former AG installers suffered no detriment from the Respondent’s
failure to engage in effects bargaining over their integration into the Lucent
installer unit and that there would be little or nothing over which to bargain
if effects bargaining were ordered, imposition of a Transmarine
bargaining order in this case is unwarranted.
Further, inasmuch as the Transmarine monetary remedy is designed
to help effectuate a bargaining order, a monetary remedy is likewise
unwarranted here. Indeed, a backpay
order would result only in a backpay windfall to former AG installers. Thus, we
find that awarding a Transmarine remedy would serve no useful purpose in
this case.[11]
We
recognize that the Board is not the arbiter of the substantive terms of bargaining
proposals. However, this is not to say
that, in devising a remedy in this case, we are required to ignore CWA’s
bargaining achievements for those who were the victims of the earlier refusal
to bargain with Local 21.
We
further recognize the theoretical possibility that bargaining with IBEW Local
21 could have achieved additional benefits and protection for the AG
employees. However, it is difficult to
say what they would be. In addition, CWA
is the Section 9(a) representative now, and we are concerned about the
artificial imposition of a second union on the scene.[12] Any agreement reached with IBEW Local 21
would likely be disruptive of the agreement reached between the Respondent and
CWA, the extant representative.
In
contending that a Transmarine bargaining and backpay is necessary here,
our dissenting colleague emphasizes the fact that the Respondent refrained for
several months from notifying IBEW Local 21 of its decision to integrate the AG
installer unit into the Lucent installer unit and took steps to conceal this
decision from Local 21, even though it had notified CWA, which represented the
Lucent unit, of the decision. We do not condone the Respondent’s conduct. The
complaint, however, did not allege that the Respondent violated the Act by concealing
its decision from IBEW Local 21 or that it engaged in bad-faith bargaining. Under
the Act, the purpose of our remedy is not
to punish a respondent for its misconduct, but to expunge the actual
consequences of the unfair labor practice. See Republic Steel Corp. v. NLRB, 311
For
these reasons, we decline to award a limited
bargaining order and backpay remedy under Transmarine.
Rather, we shall limit the remedial relief in the circumstances of this
case to ordering that the Respondent cease and desist its unlawful conduct and
post an appropriate notice.
ORDER
The National Labor
Relations Board orders that the Respondent, AG Communication Systems
Corporation and Lucent Technologies, a single employer,
1. Cease and desist from
(a) Failing to bargain in
good faith with International Brotherhood of Electrical Workers, Local 21, AFL–CIO
(IBEW Local 21), concerning the effects on employees represented by it of the
Respondent’s decision to integrate those employees into another bargaining unit
of the Respondent’s employees, represented by Communications Workers of America,
AFL–CIO.
(b) In any like or related
manner interfering with, restraining, or coercing employees in the exercise of
the rights guaranteed them by Section 7 of the Act.
2. Take the following
affirmative action necessary to effectuate the policies of the Act.
(a) Within 14 days after
service by the Region, post at its facilities in
(b) Within 21 days after
service by the Region, file with the Regional Director a sworn certification of
a responsible official on a form provided by the Region attesting to the steps
that the Respondent has taken to comply.
It
is further ordered that the complaint is
dismissed insofar as it alleges violations not specifically found.
Dated,
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Robert J. Battista, |
Chairman |
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Peter C. Schaumber, |
Member |
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(Seal) National Labor Relations Board
Member
Walsh, dissenting in part.
“Good-faith bargaining
necessarily requires that claims made by either bargainer should be honest
claims.” NLRB v. Truitt Mfg. Co., 351
The Respondent contravened
this fundamental principle by concealing from IBEW Local 21 the Respondent’s
decision to merge AG’s telephone equipment installers, represented by IBEW
Local 21, into a unit of Lucent’s installers, and to grant exclusive representation
of that unit to CWA. When the Respondent
finally informed IBEW Local 21 of the imminent merger, IBEW Local 21
immediately requested bargaining over the effects of the decision, but received
no response.
I join with the majority in
all of its unfair labor practice findings, including the finding that the Respondent’s
refusal to engage in effects bargaining violated Section 8(a)(5) and (1) of the
Act. In my view, however, in the circumstances
of this case, a remedial cease-and-desist order and notice posting are simply inadequate
to remedy that violation. The Board’s
core purpose to encourage and protect the process of collective bargaining
compels the imposition of the full, traditional remedy for an effects-bargaining
violation, as set forth in Transmarine
Navigation Corp., 170 NLRB 389, 390 (1968):
the Board should order the Respondent to bargain with IBEW Local 21 over
the effects of its decision, and to provide the former AG employees with a
limited backpay remedy to ensure that meaningful bargaining takes place.
Background
The relevant facts are set
forth in the majority’s decision. Of
particular importance to me is that, in February 2003,2 as soon as Lucent embarked on its plan
to integrate the two groups of employees, Lucent so advised CWA, whom it had
decided would represent the merged unit.
Yet neither Lucent nor AG provided any information about the plan to
IBEW Local 21.
The failure to notify IBEW
Local 21 of the impending integration was no oversight. As the judge found, the Respondent “purposely
withheld” this information from IBEW Local 21 for some 5 months, until July
17. Lucent identified in early February
that one of the “jeopardies” of its plan to integrate the units was that “IBEW
may attempt to retain representation rights” by taking action before the NLRB. Accordingly, Lucent directed AG’s labor
relations manager, Patrick Murphy, not to inform IBEW Local 21 of the plan to
integrate the bargaining units. Murphy
assiduously abided by this directive.
Indeed, Murphy not only
failed to notify IBEW Local 21 of the integration plan, but he also thwarted
the legitimate attempts of IBEW Local 21 to learn about the plan. In February, IBEW Local 21 specifically asked
Murphy about the effect of Lucent’s purchase of AG on the IBEW-represented
employees. Murphy gave no meaningful response.
IBEW Local 21 made further
inquiries by expressly invoking its rights under its collective-bargaining agreement
with AG. It appropriately directed those
inquiries to Murphy, the management official responsible for administering the
agreement. But those efforts were rebuffed,
as well.
In early June, IBEW Local
21 learned that AG would be training Lucent installers on AG telephone
switching equipment. IBEW Local 21 Business
Representative Michael DeWitt notified Murphy via e-mail of his concern about
AG’s “intentions with respect to the Lucent employees after they have been
trained.” DeWitt expressly asked Murphy,
“If there is a plan associated with this [training] please share it with me.” Murphy responded that, other than for
cross-training purposes, “I am unable to provide definitive information on
management plans . . . for the use of the training.”
Thereafter, by e-mail dated
June 25, DeWitt notified Murphy that IBEW Local 21 viewed the training as an
effort “on the Company’s behalf to erode our jurisdiction of work under the
current Collective Bargaining Agreement.”
DeWitt requested that a meeting “be arranged immediately between IBEW,
yourself and any Lucent Manager with knowledge on this [training] issue to discuss
the effects of this action” on the IBEW Local 21 bargaining unit.3
Again, Murphy did not respond.4
Absent a response, DeWitt
informed Murphy via e-mail on July 2 that IBEW Local 21 was filing a contractual
grievance on the training matter, and he requested a third-step grievance
meeting. In the e-mail, DeWitt also
proposed the following settlement of its grievance:
[S]upply [IBEW Local 21]
with all pertinent plans and information on how the Lucent employees [trained
on AG equipment] will be utilized in the Company’s workforce.
Murphy replied on July 9
that the parties could meet on the matter on July 17, but he later canceled the
meeting. Thus, after more than 5 months
and numerous inquiries from IBEW Local 21, the Respondent still had not
informed IBEW Local 21 of the impending integration of the AG and Lucent
bargaining units.
Finally, DeWitt invoked
IBEW Local 21’s contractual right to meet on its grievance within 10 working
days of its filing. On the 10th day,
July 17, Lucent finally notified IBEW Local 21: (1) of its decision to
integrate the bargaining units, which it intended to implement in full just 2
weeks later, on August 1; (2) that the integrated unit would be represented
exclusively by CWA; and (3) that the Respondent would be withdrawing recognition
from IBEW Local 21. On July 21, DeWitt
requested in writing that AG and Lucent bargain with IBEW Local 21 over the
effects of that decision. He received no
response.
The Effects
Bargaining Violation
The effects bargaining
violation here is plainly established, as set forth above and in the majority
opinion. IBEW Local 21, upon finally
learning of the integration of the AG and Lucent bargaining units after months
of concealment, promptly made a request to both AG and Lucent to bargain over
the effects of that decision. It is
undisputed that neither one responded, and that no effects bargaining with IBEW
Local 21 ever occurred. The Respondent
thus violated Section 8(a)(5) and (1) of the Act. See, e.g., Asher Candy, Inc., 348
NLRB No. 60 (2006).5
Transmarine is
the Appropriate Remedy
On the facts of this case,
the majority’s conclusion that a cease-and-desist order and notice posting are
sufficient to remedy the bargaining violation is seriously flawed. The majority acknowledges that the traditional
remedy when a Respondent fails to lawfully engage in effects bargaining is set
forth in Transmarine, supra at 379. Transmarine
requires that the employer bargain, on request, over the effects of its
decision, and provide backpay from 5 days after the date of the Board’s decision
until the occurrence of one of four specified conditions.6
That remedy is supported by nearly 40 years of Board and court
precedent. See, e.g., Kirkwood Fabricators, Inc. v. NLRB, 862
F.2d 1303, 1307 (8th Cir. 1988).
The primary purpose of the Transmarine remedy is “to create an
incentive for the Company to bargain in good faith.” Nathan
Yorke v. NLRB, 709 F.2d 1138, 1145 (7th Cir. 1983), cert. denied 465
Achieving the objective of
meaningful bargaining is particularly necessary in this case in view of the
Respondent’s deliberate and deplorable 5-month effort to conceal from IBEW
Local 21 that its right to effects bargaining had been triggered. In First
National Maintenance, supra, the Supreme Court made clear that “bargaining
over effects must be conducted in a meaningful manner and at a meaningful time, and the Board may impose sanctions to insure
its adequacy.”
To make matters worse, the
record establishes that it was the Respondent’s intention all along to minimize
IBEW Local 21’s ability to effectively represent the AG employees when they
most needed such representation—at the time of their involuntary integration
into Lucent.8 In particular, the Respondent was determined
to thwart IBEW Local 21 by denying it time to avail itself of the Board’s
processes. As described, in February
2003 Lucent perceived as one of the “jeopardies” to its plan that “IBEW may
attempt to retain representation rights” by taking action before the NLRB. Accordingly, the Respondent took all necessary
steps to conceal its plan and then to delay bargaining. As Lucent Manager
This case thus cries out
for a full Transmarine remedy. The Respondent intentionally frustrated IBEW
Local 21’s right to engage in meaningful bargaining over the effects of the
integration of the AG and Lucent installer units. The only practicable way to remedy the Respondent’s
misconduct is to now require the Respondent to engage in effects bargaining in
accordance with Transmarine. Without a Transmarine
remedy, IBEW Local 21 will have been effectively deprived of any opportunity to engage in bargaining
and the Respondent will reap the benefits of its unlawful conduct.
The majority’s rationale
for denying a full Transmarine remedy
is simply without valid foundation. The
majority emphasizes that the Respondent engaged in effects bargaining with CWA,
and opines that the former AG installers likely fared better with CWA representing
them in that bargaining, as evidenced by CWA’s preservation of their
seniority. But that is simply no answer
to the fact that the Respondent owed an effects bargaining obligation to IBEW
Local 21, which was still the exclusive representative of the AG installers on
July 17. The majority ignores the basic
purpose of a Board remedial order: to “restore,
so far as possible, the status quo that would have obtained but for the
wrongful act.” NLRB v. J.H. Rutter-Rex Mfg. Co., 396
Moreover, contrary to the
majority’s suggestion, it is wholly irrelevant that the former AG bargaining
unit employees achieved a “positive outcome” being represented by CWA in
effects bargaining. It is not the Board’s
domain to “sit in judgment upon the substantive terms of collective bargaining
agreements.” NLRB v. American National Insurance Co., 343
The majority also errs by
relying on the possible “disrupti[on]” of the agreement between the Respondent
and CWA as a reason for withholding full remedial relief from IBEW Local
21. In the first place, the majority
gives no indication of what that disruption might consist; at this point, it is
a “theoretical possibility,” at best. In
any event, the majority’s hand-wringing over the Respondent’s ability to
fulfill its bargaining commitments to CWA is unpersuasive, given the majority’s
indifference to the Respondent’s fulfillment of its like commitment to IBEW
Local 21. The Board’s concern must be
with fully remedying the Respondent’s wrongdoing. If that proves troublesome for the Respondent,
it has only itself to blame. See W.R. Grace & Co. v. Rubber Workers Local
759, 461 U.S. 757, 767–770 (1983) (employer’s “dilemma” of conflicting
duties under an EEOC conciliation agreement and a collective-bargaining
agreement was “of the Company’s own making,” and no defense to arbitration
award against it).10
Finally, contrary to the
majority’s view, consideration of the Respondent’s purposeful delay and concealment
is fully warranted in devising an appropriate remedy here.11
It is the primary responsibility of the Board to devise remedies that
effectuate the policies of the Act, and the Board is vested with broad
discretion in that determination. See,
e.g., Sure-Tan, Inc. v. NLRB, 467 U.S
883, 898 (1984); Fibreboard Paper
Products v. NLRB, 379
Conclusion
The
Respondent’s purposeful misconduct is an affront to the process of good-faith
collective bargaining. The Board must
not shrink from its obligation to protect this process. That can be accomplished here only by imposing a full Transmarine
remedy, as the Board has done in effects-bargaining cases for nearly 40
years. Only in that manner will the
Board fulfill its responsibility to apply remedies that promote the collective-bargaining
process and, more broadly, effectuate the purposes of the Act. Sure-Tan, Inc. v. NLRB, supra at 898.
Dated,
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Dennis P. Walsh, |
Member |
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National Labor Relations Board
APPENDIX
Notice
To Employees
Posted
by Order of the
National
Labor Relations Board
An Agency of the
The National Labor
Relations Board has found that we violated Federal labor law and has ordered us
to post and obey this notice.
federal law gives you
the right to
Form, join, or assist a
union
Choose representatives to
bargain with us on your behalf
Act together with other
employees for your benefit and protection
Choose not to engage in any
of these protected activities.
We will not fail to
bargain in good faith with International Brotherhood of Electrical Workers,
Local 21, AFL–CIO (IBEW Local 21), concerning the effects on employees represented
by it of our decision to integrate those employees into another bargaining unit
of our employees, represented by Communications Workers of America, and to
withdraw recognition from IBEW Local 21.
We will not in any
like or related manner interfere with, restrain, or coerce you in the exercise
of the rights set forth above.
Ag Communication Systems Corporation and Lucent
Technologies, a single employer
Nicholas Ohanesian and Ava Pyrtel, Esqs, for the
General Counsel.
Michael F. McGahan and Donald Kruger, Esqs. (Epstein, Becker & Green, P.C.), of
Gerald A. Golden and Jason Kim, Esqs. (Neal, Gerber & Eisenberg), of
Gilbert A. Cornfield, Esq. (Cornfield & Feldman),
of
Theodore E. Meckler, of
DECISION
Statement of the Case
Arthur J.
Amchan, Administrative Law Judge.
This case was tried in
More specifically, the General Counsel alleges that the Respondents effectuated this merger without affording the Charging Party an opportunity to bargain over the decision to merge the bargaining units, or the effects of the merger. Respondents deny that they were a single employer at any time, and each contends that it had no obligation to bargain with the IBEW about the merger or its effects.
On the entire record, including my observation of the demeanor of the witnesses, and after considering the briefs filed by the General Counsel, AG Communications Systems Corporation, Lucent Technologies, and the Charging Party, IBEW Local 21, I make the following
Findings of Fact
i. jurisdiction
AG Communications Corporation (AGCS) and Lucent Technologies were engaged in the manufacture, sale, and installation of telephone switching equipment prior to August 1, 2003. On that date, AGCS’ installation services employees were integrated with Lucent’s installation services organization. AGCS, so far as this record shows, was not engaged in the installation of telecommunications equipment after July 31, 2003.2
Respondents admit and I find that they were employers engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act at all times relevant to this matter, and that the Union, the International Brotherhood of Electrical Workers, Local 21, is and was at all relevant times a labor organization within the meaning of Section 2(5) of the Act.
ii. alleged unfair labor practices
Background
AG Communications Systems Corporation (AGCS) was created in 1989 as a joint venture between AT&T, a predecessor of Lucent, and GTE, a predecessor of Verizon.3 Pursuant to the joint venture agreement, Lucent was obligated to purchase 100 percent of AGCS’ stock by December 31, 2003. Lucent increased its ownership share of AGCS in stages. Lucent initially owned 49 percent of AGCS stock. This increased to approximately 80 percent in 1994 and to approximately 90 percent in 2000. Local 21, or its predecessor, IBEW Local 336, was apprised of each occasion that Lucent increased the percentage of its ownership of AGCS and was aware that by the end of 2003, Lucent would own 100percent of AGCS stock.
In late 2002 or early 2003, Lucent decided to accelerate the final phase of this purchase. On February 3, 2003, Lucent purchased the remaining 9.9 percent of AGCS stock. AGCS installation services employees were primarily engaged in the installation of AGCS’ GTD5 switch, used principally by Verizon. Lucent installers primarily worked with Lucent’s 5-ESS switch, which was sold to a variety of customers. Lucent sold 10–20