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,
Shaw’s Supermarkets, Inc. and United Food and Commercial Workers International
August 10, 2007
DECISION AND ORDER
By Chairman Battista and Members Liebman
and Schaumber
Upon a series of
charges and amended charges filed beginning on March 1, 2002, by the United
Food and Commercial Workers International Union, Local 1445, AFL–CIO (the
Union), the General Counsel of the National Labor Relations Board issued a
consolidated complaint on December 23, 2002, alleging, inter alia, that the
Respondent, Shaw’s Supermarkets, Inc., violated Section 8(a)(5) and (1) of the
Act by withdrawing recognition from the Union after the third year of a 5-year
contract. The Respondent filed a timely
answer admitting in part and denying in part the allegations of the complaint.
On February 13,
2003, the General Counsel filed a motion to transfer the proceeding to the
Board and for partial summary judgment.
The General Counsel seeks to sever and remand for a hearing all of the
complaint allegations except for the allegation that the Respondent unlawfully
withdrew recognition, on which the General Counsel seeks summary judgment. On February 15, 2003, the Board issued an
order transferring the proceeding to the Board and a Notice to Show Cause. On March 6, 2003, the Respondent filed an
opposition to the General Counsel’s motion and a cross-motion for partial
summary judgment concerning the withdrawal of recognition. On March 11, 2003, the
The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel.
On the entire
record and briefs, the Board makes the following
Findings of Fact
i.
jurisdiction
The Respondent, a
corporation with an office and place of business in
We find that the
Respondent is an employer engaged in commerce within the meaning of Section
2(6) and (7) of the Act and that the
ii. alleged
unfair labor practices
A. Facts
The Respondent and
the Union had a 5-year contract covering about 1600 full-time and regular
part-time employees at 12 of the Respondent’s stores in the
On February 2,
2002, a bargaining unit employee filed a decertification petition with the
Board. The petition was supported by
slips signed by bargaining unit employees stating, “I do not want UFCW Local
1445 to continue to represent me as my collective bargaining agent with my
employer, ‘Shaw’s Supermarkets, Inc.’” After filing the petition, the employee
who filed it continued to collect additional signatures. On February 11 and 20, 2002, the employee
provided those signed slips and photocopies of those previously submitted to
the Board to the Respondent. The
Respondent received more signed slips on February 26. An accounting firm hired by the Respondent
counted the slips and, on about February 27, submitted a report to the Respondent
stating that more than 900 signatures matched names on the list of bargaining
unit employees provided by the Respondent.
Based on this tabulation, the Respondent withdrew recognition on
February 28, 2002. The General Counsel
does not contend that the petition was tainted by any unfair labor practices.
B. Contentions of the Parties
The General
Counsel contends that an employer should not be allowed to withdraw recognition
during the term of a contract. The
General Counsel notes that in General
Cable Corp., 139 NLRB 1123 (1962), the Board held that a union’s majority
status cannot be questioned during the term of a 3-year contract. Citing Montgomery
Ward & Co., 137 NLRB 346 (1962), and Northern Pacific Sealcoating, 309 NLRB 759 (1992), the General
Counsel further notes that when a contract is for a term longer than 3 years,
it bars for its full term election petition filed by the employer or by an incumbent
union (though not one filed by an employee or another union).
The General
Counsel cites the Board’s explanation in Montgomery
Ward that the contract-bar doctrine seeks to afford the contracting parties
and employees a reasonable period of stability while also affording employees
the opportunity at reasonable times to change their bargaining representative
or cease being represented altogether.
The General Counsel emphasizes the statement in Montgomery Ward that the only reason for the possible disruption of
a contractual relationship is the effectuation of employees’ right to free
choice. While acknowledging that Montgomery Ward allows a petition by
employees or a rival union after the third year of a contract of longer
duration, the General Counsel highlights the Board’s statement in that case
that it could not permit employers or incumbent unions to take advantage of
whatever benefits may accrue from the contract with the knowledge that they
could avoid their contractual obligations by petitioning for an election.
The General
Counsel contends that a contract of more than 3 years’ duration should continue
to act as a bar for its entire term with respect to a withdrawal of recognition.
The General Counsel maintains that it would be unreasonable to allow an
employer to withdraw recognition at a time when it would not be allowed to take
the less disruptive step of filing an RM petition. As to effectuating employees’ right to free
choice, the General Counsel submits that the appropriate method is to hold an
election after employees file a timely decertification petition, as indeed
employees did here.
The General
Counsel urges the Board to reject any argument that Levitz Furniture Co. of the Pacific, 333 NLRB 717 (2001), stands
for the proposition that an employer is free to file an RM petition or to
withdraw recognition after the third year of a contract for a longer
period. In Levitz, the Board cited Auciello
Iron Works v. NLRB, 517
The Respondent
contends that it met the Levitz criterion
in that it had actual proof of loss of majority support to support its
withdrawal of recognition. The Respondent
notes that the Board in Levitz
rejected the argument that an employer should never be permitted to withdraw
recognition except after a Board-conducted election. The Respondent points out that in footnote 70
of Levitz, supra at 730, the Board stated: “An employer may not
lawfully withdraw recognition while a collective-bargaining agreement is in
effect, because an incumbent union enjoys a conclusive presumption of majority
status during the life of the contract (up to 3 years).” The Respondent maintains that, should the
Board adopt a rule that an employer cannot withdraw recognition before
expiration of a contract of more than 3 years’ duration even where there is
actual proof that the union has lost majority status, such a rule should be
applied only prospectively.
The Respondent
notes the statement in Levitz that if
a union actually has lost majority support, the employer must cease recognizing
it, both to give effect to employees’ free choice and to avoid violating
Section 8(a)(2) of the Act by recognizing a minority union. The Respondent states that the General
Counsel does not dispute the fact that the
The Respondent
argues that Levitz “decoupled” the
standard for withdrawal of recognition from the standard used to grant or deny
an RM petition, that Montgomery Ward
is distinguishable, and that employees are not limited to Board-conducted
elections as the sole means of exercising their Section 7 right to
self-determination.
The
C. Discussion
For the reasons
stated below, we grant the Respondent’s cross-motion for partial summary
judgment, and we dismiss the allegation that the Respondent unlawfully withdrew
recognition from the
The precise issue
presented here, which seems to be an issue of first impression, is whether an
employer may rely on evidence of actual loss of majority support to withdraw
recognition from a union after the third year of a contract of longer duration. For the following reasons, we find that it
may do so.
In Levitz,[2] supra, the Board rejected the view that an
employer should only be allowed to withdraw recognition following a
Board-conducted election, Levitz makes clear however, that the
unilateral withdrawal of recognition from an incumbent union is unlawful unless
that union has actually lost the support of a majority of the bargaining unit
employees. The Respondent’s evidence
satisfies that condition here. As
explained above, before it withdrew recognition from the
Further, although Levitz involved withdrawal of recognition
after contract expiration, the Board’s distinction in that case between the
showing required for a withdrawal of recognition and that required to obtain an
RM election has, in our view, broader and more general significance. Simply put, an employer, as here, in possession
of facts showing an actual loss of majority support for an incumbent union
should have wider freedom of action than an employer lacking such knowledge.
The task in this
case is to determine what the parameters of this wider freedom of action should
be. Ideally, we should fix these
parameters at a point where the policy goals of stability in labor relations
and employee freedom of choice—which are sometimes competing objectives—can
best be satisfied and reconciled. In the
present case, we believe that both of these policy goals can be effectively
accommodated by permitting the Respondent, which was in possession of untainted
evidence of the Union’s actual loss of majority support, to withdraw
recognition from the Union after the third year of a contract of longer
duration (in this case, a 5-year contract).
We reach this
conclusion for the following reasons.
First, we agree with the Board’s statement in General Cable Corp., supra, that
if the contract bar period were expanded beyond 3 years, “stability of
industrial relations would . . . be so heavily weighted against employee freedom
of choice as to create an inequitable imbalance.”
Second, where, as
here, the Respondent withdrew recognition after the third year of the contract
and only after receiving uncontested evidence of actual loss of majority
support, the interest of preserving stability in bargaining relationships is
necessarily tempered. The bargaining
relationship has, in fact, matured, and the employees have had the benefit of 3
years of undisturbed experience with the
Third, the evidence
of actual loss of majority support also reflects that a majority of the unit
employees have reconsidered the desirability of continued union representation
and have decided against it. They
reached this decision not while the union was still negotiating for a first
contract or even during the first 3 years of the contract. Rather, they did so only after 3 years of
experience under that contract, and in a context free of coercion or employer
instigation. Thus, the protection of
employees’ statutory right to choose whether or not to be represented is
clearly a compelling interest in this case.
Given these
considerations, we find that the parameters for an employer’s wider freedom of
action must be set to permit an employer, relying on untainted evidence of a
union’s actual loss of majority support, to withdraw recognition from the union
after the third year of a contract of longer duration. The context of the present case makes clear
that these parameters are appropriate:
the goal of stability of labor relations having been satisfied, and
evidence of the Union’s actual loss of majority support having been presented,
the goal of employee freedom of choice must be vindicated. Permitting the Respondent to withdraw
recognition from the
It is true, as the General Counsel and the
Charging Party emphasize, that an employer cannot file a petition while a
contract to which it is a party is in effect.
However, such a petition would be based simply on an uncertainty as to
the union’s majority status. The instant
case involves the fact that the
While it is true
that the Respondent could have awaited the outcome of the decertification
election, the ready availability of blocking charges—which, indeed, were filed here—and
the delay attendant upon their resolution render this course of action
problematic where a union has actually lost majority support. Continuing to recognize and deal with such a
union is as deleterious to employee rights as failing to recognize a union that
enjoys majority support.
Our dissenting
colleague says that the “blocking charge rule” was reaffirmed in Levitz.
However, we note that the Levitz
decision had two parts. In the first part,
the Board held that a withdrawal of recognition was privileged where there is a
loss of majority support for the union.
The second part held that where there is only an uncertainty as to
majority status, the RM petition is the route to be followed. The discussion of the blocking charge rule
concerns the second part of Levitz. The instant case involves the first part of Levitz.
Our point is simply that where, as here and in the first part of Levitz, there is a loss of majority,
there is no need to use election processes procedures which can be delayed by
blocking charges.
Montgomery Ward, supra, does not require a different
result. That case prohibits the filing
of a petition during the term of a contract by the employer or the incumbent
union, which has not occurred here. The
action taken here was premised on the fact of loss of majority. In light of the loss of majority, and the
delays that can attend the processing of a petition, we would permit the
withdrawal of recognition, so that the employees will not be forced to endure,
for the rest of the agreement, representation they no longer desire.
Notwithstanding
the compelling Section 7 interests at stake, our dissenting colleague, relying
on Hexton Furniture Co., 111 NLRB 342
(1955), contends that it would be anomalous to hold that an employer may withdraw
recognition at a time when it would not be permitted to petition for an
election. Hexton, however, is inapposite. There, the union and the
respondent, on November 24, 1952, signed a collective-bargaining agreement
effective to December 15, 1954, and from year to year thereafter in the absence
of notice to terminate by either party.
The respondent withdrew recognition from the union on December 4, 1953,
less than 13 months after entering into the contract. Thus, in Hexton,
the withdrawal of recognition occurred at a time when, under contract bar
rules, a question concerning representation could not be raised– i.e., the
union’s status could not be challenged.
By contrast, in the instant case, the withdrawal of recognition occurred
after the third year of a contract of longer duration, a point in time at which
we find, for the reasons set out above, that a question concerning representation
may be raised. Further, in Hexton the Board found the withdrawal
unlawful in part because it agreed with the trial examiner that, if the union
had lost its majority by December 4, 1953, that loss was attributable to the
respondent’s unfair labor practices in soliciting and aiding employees to
withdraw from the union. In the instant
case, there is no contention that the loss of majority relied on by the Respondent
was tainted by unfair labor practices. In light of the significant differences
between Hexton and the instant case,
we disagree with our colleague’s view that Hexton
clearly stands for the principle that when an employer is proscribed from
filing an election petition, it is also prohibited from withdrawing recognition
Our dissenting
colleague also claims that we are permitting the employer to disregard its own
contract. However, this is not a case
where an employer simply decides, without justification, to ignore the
contract. Rather, this is a case where
the employer is responding to an unsolicited and uncoerced expression of a loss
of majority support for the union as a bargaining representative. Our dissenting colleague states that we do
not seem to believe that a Board election, based on the employee-filed
petition, will vindicate employee freedom of choice. This is untrue. Rather, our concern is that, in the time it
takes to ultimately resolve the representation case, employees will be forced
to endure representation that they have unquestionably rejected.[5]
This would be so even though those employees have had the benefit of 3 years of
experience with the
In regard to the
time that it can take to resolve a decertification election case, we note that,
in many cases, blocking charges are filed and delay the election until the
charges are resolved one way or another.
And, even absent such charges, a union election loss can be contested by
challenges and/or objections. Thus, we
see no basis for our colleague’s apparent view that the representation case
would have been resolved promptly if only the Respondent had not withdrawn
recognition.
For the foregoing
reasons, we find that, in the circumstances of this case, the Respondent’s
withdrawal of recognition was lawful.
ORDER
The allegation
that the Respondent unlawfully withdrew recognition from the
Dated,
Robert J. Battista, Chairman
Peter
C. Schaumber,
Member
(seal) National
Labor Relations Board
Member Liebman, dissenting.
For more than 40 years, the Board has maintained a clear rule that a party to a collective-bargaining agreement may not repudiate its own contract or, in most instances, petition the Board for an election during the life of that contract. When a contract is of longer than 3 years duration, however, the Board holds that a nonparty to that contract (either an employee or a rival union) may, with a sufficient showing of employee support, file a petition and obtain an election to settle a question concerning representation. This balance of statutorily-recognized interests serves to protect the right of employees to self-determination and to promote the interests of labor stability. The majority today permits an employer to disregard its agreement and unilaterally withdraw recognition from the union during the agreement’s term. It does so even though a valid employee-filed petition for an election was pending. Because the majority today arbitrarily departs from longstanding precedent and procedure—and reaches a result that serves neither of the Act’s goals—I dissent.
i.
The Respondent and the
It is well settled that a contract of longer than 3 years
duration does not bar the processing of a petition by a nonparty to that agreement. General
Cable Corp., 139 NLRB 1123 (1962); Montgomery
Ward & Co., 137 NLRB 346 (1962). See also Absorbent Cotton Co., 137 NLRB 908 (1962). Here, the employee-filed petition was
entirely appropriate under our precedent and the
In Montgomery Ward & Co., supra, the Board addressed the question of how to properly balance the policy interest in promoting employee freedom of choice with the interest in preserving the stability of contractual relationships. There, as here, an employer and a union were parties to a 5-year bargaining agreement. During the term of that agreement, the employer filed an election petition. Balancing the dual interests of employee freedom of choice and contract stability, the Board found that it would entertain timely petitions filed by employees or by rival unions, but would not process petitions filed by either of the contracting parties, during the entire term of their contract, except where an uncertified union sought to obtain the benefits of certification through the election process.
The Board’s rationale in Montgomery Ward is not limited to disallowing the processing of petitions filed by contractually-bound employers for the entire duration of a bargaining agreement. It applies to unilateral self-help too. Thus, the Montgomery Ward Board expressly found that the principle of that case—preserving the stability of contracts while ensuring employees’ freedom of choice—encompassed both the election process and conduct by a contractual party seeking to disregard the agreement. Addressing the freedom of choice interests validated through the election process, the Board stated:
The sole reason for the possible disruption of a contractual relationship is to give effect to the employees’ right to freedom of choice. There is no other valid rationale for the Board’s conducting an election in disregard of the agreement of the parties as to the term thereof or for the Board to permit the parties to disregard their own agreement, absent mutual consent, as where the contract is not asserted as a bar.
137 NLRB at 348 (emphasis added).
If a party to a contract may not even file an election petition with the Board during the entire contract term, it is not surprising that self-help is also prohibited. This common sense rule has been the law for decades. As the Board stated in Hexton Furniture Co., 111 NLRB 342, 344 (1955):
Otherwise, we should have the anomalous result of an
employer being permitted unilaterally to redetermine his employees’ bargaining
representative at a time when the Board would refuse to make such redetermination
because the time is inappropriate for such action. Accordingly, by withdrawing recognition from
the Union during the middle of the contract term, the Respondent unlawfully
refused to bargain with the
Montgomery Ward simply follows the principle of Hexton Furniture. It permits nonparties to the contract to file an election petition and thereby appropriately raise a question concerning representation, but bars an election based on a petition filed by a contracting party. And, as Hexton Furniture makes clear: if the employer’s petition is impermissible, then there can be no unilateral withdrawal of recognition either.1
ii.
Holding a party to its contractual agreement is a cornerstone of our Act. Indeed, Section 8 (d), which defines the parties’ bargaining obligations, restricts the unilateral abandonment of a bargaining agreement during its term, as occurred here. Section 8 (d) states that:
[W]here there is in effect a collective-bargaining contract covering employees . . . the duty to bargain collectively shall also mean that no party to such contract shall terminate or modify such contract, unless the party desiring such termination or modification . . . continues in full force and effect . . . all the terms and conditions of the existing contract for a period of sixty days after such notice is given or until the expiration of such contract, whichever occurs later.
These restrictions become inapplicable under Section 8 (d) “upon an intervening certification of the Board” pursuant to Section 9 (a) of the Act “under which the labor organization . . . which is a party to the contract, has . . . ceased to be the representative of the employees.” Thus, Montgomery Ward is part and parcel of this statutory scheme: it provides for an election process where nonparties to the contract may question the union’s continued majority status, while the integrity of the contract is preserved unless and until the Board certifies a contrary result pursuant to a valid election.
Even during the decertification election process itself labor stability remains fundamental. Thus, when there is an incumbent bargaining representative and a decertification election is directed, the Board does not permit unilateral self-help upon the tally of ballots, but only after issuance of the certification of results. See W. A. Krueger, 325 NLRB 1225 (1990). This principle serves to preserve the status quo until it is clear that the interests of self-determination prevail. By permitting the undermining of the election process here, the majority’s validation of the Respondent’s self-help unilateral action erodes the principles of W.A. Krueger.
iii.
The majority suggests that the Respondent’s self-help during the contract term is supported by our decision in Levitz Furniture of the Pacific, 333 NLRB 717 (2001). That case does not support the notion that an employer may unilaterally withdraw recognition when it may not even file an election petition. Indeed, Levitz stands for precisely the opposite notion. In Levitz, the Board applied a stricter standard before permitting unilateral action—and a less stringent standard for the filing of a petition (actual loss of majority status for withdrawal, but only a good faith reasonable uncertainty for a petition). In this case, the majority acknowledges that the employer could not file its own petition, but, based on the same sequence of events, permits self-help. This is directly contrary to the principles of Levitz.
Further, to the extent that the majority finds in Levitz support for a 3-year maximum period under Section 8 (a) (5), it is mistaken. Footnote 70 of Levitz states that “(a)n employer may not lawfully withdraw recognition while a collective-bargaining agreement is in effect, because an incumbent union enjoys a conclusive presumption of majority status during the life of the contract (up to 3 years).” Footnote 70 of Levitz arises in the context of the Board’s discussion there of the employer’s announcement of a withdrawal of recognition at the end of the contract. The reference to a contract “up to 3 years” pertains to the general contract-bar period. General Cable, supra. And, typically, the contract bar period is coextensive with the period in which there is a conclusive presumption of majority status. Hexton Furniture Co., supra. But, as to the Respondent here, a party to a 5-year contract, the prohibition against the filing of an election petition covers the entire duration of the bargaining agreement, not just for 3 years. Montgomery Ward, supra. Indeed, the majority acknowledges this principle. The reference to 3 years in Levitz, therefore, does not apply to the Respondent because its contract-bar period is 5 years (under Montgomery Ward). And, because the period for a withdrawal of recognition is co-extensive with the contract-bar period applicable to the Respondent (under Hexton), that period is also 5 years. Accordingly, it follows that, under all of the precedent discussed, including Levitz, the Respondent’s unilateral mid-term withdrawal from a binding contract is unlawful under Section 8 (a) (5) and (1).
iv.
The majority claims that the Respondent’s unilateral self-help here, in contrast to a Board election, better balances the interest of contract stability and the interest of employee self-determination. According to the majority, “the goal of employee freedom of choice must be vindicated.” Ironically, the majority does not seem to believe that a Board election, based on an employee-filed petition, will vindicate employee freedom of choice.
The majority says that an election is insufficient because a blocking charge can delay the validation of employees’ freedom of choice. But it is the Respondent’s unilateral action here—an alleged unfair labor practice frustrating a fair and free election—that blocked the election. It is circular to argue, as the majority does, that the Respondent’s self-help must be permitted because that action has delayed an election.
The majority concludes that permitting a withdrawal of recognition is necessary “so that employees will not be forced to endure, for the rest of the agreement, representation they no longer desire.” Of course, an election would have been conducted immediately but for the Respondent’s unilateral action. And, if employees decided to reject representation, the agreement would be nullified. The majority, however, insists that evidence of loss of majority support justifies a resort to self-help, because the Board may take too long to conclude an election, given the possibility of blocking charges (which delay the conduct of an election) and objections to election conduct (which delay certification of the outcome). Self-help may well be more efficient than following safeguards designed to protect employee free choice, but there is no support in our case law for the majority’s rationale—just the opposite.2
As to the interest of contract stability, the majority claims that interest is validated because the parties (and employees) already have lived under their contract for 3 years. But the parties’ bargain is for 5 years. The Board did not impose a 5-year agreement. The parties struck that bargain. And, as discussed, our longstanding precedent mandates that parties to an agreement cannot ordinarily walk away from their agreement during its term. It is mystifying how permitting a party to walk away from a contract preserves, in any recognizable form, the interests of contract stability. Indeed, the majority affirms precedent, Montgomery Ward, which dictates that the interest of contract stability is so strong that the Respondent cannot even file a petition—only nonparties can do that.
It is far more sensible to proceed with the election to validate the interest of employees’ freedom of choice while, at the same time, holding the contractual parties to their bargain—unless and until the election tells us contractual stability must give way to the competing interest. Here, while purportedly striking an appropriate balance of interests, the majority scuttles both the election process and the contract. It is a peculiar form of balancing when neither interest is accommodated fairly.
v.
Approving the restriction of an employer’s freedom to withdraw recognition from a union after entering into a collective-bargaining agreement, the Supreme Court has observed that “[t]here is nothing unreasonable in giving a short leash to the employer as vindicator of its employees’ organizational freedom.”3 Here, in contrast, the majority gives the employer a remarkably long leash—permitting the employer to act unilaterally not merely during the term of a collective-bargaining agreement, but also where employees have filed an election petition with the Board. Indeed, an employer now may engage in self-help in circumstances where it is not permitted to seek a Board election. Because that anomalous result places employers’ freedom of action above both of the Act’s carefully-balanced goals, today’s decision is neither rational nor consistent with the Act. I dissent.
Dated,
Wilma
B. Liebman, Member
National
Labor Relations Board