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,
New Process Steel, LP[1]
and District Lodge 34, International
Association of Machinists and Aerospace Workers, AFL–CIO. Case
25–CA–30470
September 25, 2008
DECISION AND ORDER
By Chairman Schaumber and Member Liebman
On May 1, 2008, Administrative Law Judge David I. Goldman issued the attached decision. The Respondent filed exceptions and a supporting brief, the General Counsel filed an answering brief, and the Respondent filed a reply.
The National Labor Relations Board[2] has considered the decision[3] and the record in light of the exceptions and briefs, and has decided to affirm the judge’s rulings, findings,[4] and conclusions and to adopt the recommended Order.[5]
ORDER
The National Labor Relations Board adopts the recommended
Order of the administrative law judge and orders that the Respondent, New
Process Steel, LP,
Dated,
______________________________________
Peter C. Schaumber, Chairman
______________________________________
Wilma B. Liebman, Member
(seal) National
Labor Relations Board
Fredric D. Roberson, Esq., for the General Counsel.
Joseph W. Ambash, Esq. (Greenberg Traurig,
LLP.), of
DECISION
Introduction
David I. Goldman, Administrative Law Judge. This case arises from an employer’s repudiation of an initial collective-bargaining agreement reached with its employees union. At the conclusion of 11 months of collective bargaining the union agreed to the employer’s contract proposal which contained what the employer’s bargainer called “a lot of take-aways.” When the union accepted this offer, the employer, admittedly motivated by the approaching expiration of the certification year bar and “chatter” about a decertification petition, resisted initialing the agreement, saying it would sign after ratification. The union put the agreement to a vote of employees and, following its established procedures, when less than a majority voted in favor of the contract, this triggered a strike vote requiring supermajority approval, and failing to garner approval for the strike, the contract was deemed accepted. The acceptance was reported to the employer which executed and implemented the agreement. However, a few weeks later, after investigating the procedure followed by the union for ratifying the contract, the employer declared the contract ineffective.
The Government contends that the employer was required to abide by the agreement reached with the union and executed after the union advised the employer of the completion of its contract ratification procedures. The employer contends that a favorable vote on the agreement by employees was an agreed-to condition precedent of the contract, and the union’s failure to secure such a vote means that the contract never came into effect. Alternatively, the employer contends that if a favorable vote by the employees in favor of the agreement was not a condition precedent of the agreement, then there was not a “meeting of the minds” between the parties and no contract formed on that basis.
Statement of the Case
Based on an unfair labor practice charge filed September
17, 2007, by District Lodge 34, International Association of Machinists and
Aerospace Workers, AFL–CIO (IAM or Union), the General Counsel of the National Labor
Relations Board (Board) issued a complaint on December 28, 2007, alleging violations of Section 8(a)(1) and (5) of the
National Labor Relations Act (Act) by New Process Steel, LP (NPS, Employer, or
Company). NPS filed a timely answer to
the complaint denying all violations of the Act. This dispute was tried in
Jurisdiction
The complaint alleges, Respondent admits, and I find that
at all material times NPS has been an employer engaged in commerce within the
meaning of Section 2(2), (6), and (7) of the Act. The complaint alleges, the Respondent admits,
and I find that the
Findings of Fact
New Process Steel operates five steel processing
facilities, four in the
The Union was certified as the exclusive bargaining representative
of a bargaining unit of NPS’s
The parties met approximately 25 times between September
2006 and August 2007, and by July 31, the Company had offered at least 46
written counterproposals to the
This exchange during the final bargaining session was
first and only time in negotiations that the subject of the agreement’s
ratification was verbally mentioned between the parties. At no time was there discussion of the
ratification procedures the
While there had been no mention of ratification or ratification
procedures, three documents exchanged during negotiations referenced
ratification. One was in the final
proposal accepted by the
A second ratification reference was contained in the Employer’s
initial set of bargaining proposals, provided to the
As proposals are considered by the parties, agreements on Articles an[d]/or Sections of the proposed labor contract will probably occur on a clause-by-clause basis. It is the Company’s position that these agreements will not become contractually effective until the day and date that a total agreement on all parts of the contract is reached, ratified, and signed by all parties.
Finally, the Company referenced ratification in an 18-page
single-space letter written by NPS negotiator Oesterle on July 31, 2007, in
which he indepthly summarized the status of negotiations and the parties’
positions. That letter included a summary
of the parties’ positions on the provision “parties and terms of agreement” and
included the statement that “[t]he Company proposes a one-year deal, effective
the date the contract is signed, executed, and ratified, whichever is later.” This provision, “parties and terms of agreement”
was listed in the Company’s letter as an “open” proposal, i.e., one on which no
agreement had been reached. There was no
reference to ratification contained in the final Company proposal on this provision
accepted by the
At the trial, Plant Manager Hartz explained the Respondent’s motive for wanting a vote of employees as a condition for the contract’s effectiveness: “There was a lot of talk in the shop about [ ] decertifying . . . and . . . this contract had a lot of take-aways and . . . [we w]anted to make sure they had an opportunity to, you know, voice their opinion, and vote for the contract and let their voice be heard.”
The Union scheduled a meeting and vote for Sunday, August
12, at a hotel in nearby
In the event that a strike vote fails to carry by the required two-thirds (2/3) majority vote, the collective bargaining agreement at issue will be accepted. This is because without the necessary membership support for a strike, our negotiators have no strength from which to insist on our bargaining demands. . . . Again, lodges are reminded that if the strike vote fails to carry, no strike sanction will be granted, and the contract will be accepted.
(Emphasis added in original.)
At the meeting, Chaszar
explained what we were going to do, the agenda for the day, which is we were going to go over the proposals, give everybody an opportunity to ask questions, and go into a vote which would be a secret ballot, and we also then explained what would happen if that vote failed, that we would have a second vote, which would be a vote to strike or not to strike.
It was explained at the meeting, at the beginning, and at
the end, that if the employees voted down the contract, but then did not vote
to strike by two-thirds majority, that the contract would be accepted by the
After an explanation of the contract the
Later that day, Chaszar called Oesterle and said that “we have an agreement.” NPS executed the agreement.
During that week, Hartz called NPS’s CEO Bob Proch at NPS’s
corporate headquarters in
As you know, the tentative agreement reached between the parties on August 9, 2007[,] was expressly subject to ratification by members of the bargaining unit. On August 12, 2007[,] you notified the company’s then-negotiator that the parties had an agreement, whereupon Mr. Hartz executed the purported contract on behalf of the company.
It has come to the company’s attention that, in fact, members of the bargaining unit voted not to ratify the contract. Apparently, you and other union representatives then told employees they were required to take a strike vote, and if the strike vote did not pass by a two-thirds majority, the tentative contract would then go into effect. When the contract ratification vote and strike vote failed, you nonetheless falsely told the company’s then-negotiator that the parties had reached an agreement.
Since ratification was an express precondition to the agreement, it is clear that there is not nor has there ever been, a contract between the company and the union.
Should you wish to resume negotiations, please contact me.
(Emphasis added in original.)
Discussion
The question in this case is whether the parties formed a
valid collective-bargaining agreement.
If so, the Employer’s admitted repudiation of the agreement violates
Section 8(a)(5) of the Act.
“‘Federal labor policy encourages the formation of collective-bargaining agreements,’ and ‘[i]t is the Board’s obligation to “protect the process by which employers and unions may reach agreements with respect to terms and conditions of employment.”’”6 In carrying out the obligation to encourage and protect the process of forming collective-bargaining agreements, the Board has always been clear that the Act imposes no requirement of employee or union member ratification of collective-bargaining agreements.7
The reason for this is that the “subject is unrelated to wages and terms and conditions of employment.” C & W Lektra Bat Co., 209 NLRB 1038, 1039 (1974), enfd. 513 F.2d 200 (6th Cir. 1975); Houchens Market of Elizabethtown, Inc., 155 NLRB 729, 730 (1965), enfd. 375 F.3d 208 (6th Cir. 1967). Unless the union and employer have agreed otherwise, “ratification is an internal union matter which is not subject to question by an employer.” Martin J. Barry Co., 241 NLRB 1011, 1013 (1979). As the Supreme Court has explained, in a discussion of a contractual “ballot clause” similar to a ratification provision, such a clause
deals only with relations between the employees and their unions. It substantially modifies the collective-bargaining system provided for in the statute by weakening the independence of the ‘representative’ chosen by the employees. It enables the employer, in effect, to deal with its employees rather than with their statutory representative.
NLRB v.
Notwithstanding
these policy concerns, as with other nonmandatory or permissive subjects of
bargaining, the parties are free to bargain about and reach agreements,
regarding the presumptively internal union issue of ratification.8 Accordingly, “[an] employer [does] not violate
Sec. 8(a)(5) by refusing to execute a bargaining contract which the parties had
agreed would be subject to ratification by unit employees” but which the union
subsequently refuses to ratify. Hertz Corp., 304 NLRB 469 fn. 4 (1991); Santa Rosa Hospital, 272 NLRB 1004, 1006
(1984) (“the agreement reached on 9 March was subject to the express
condition of employee ratification; thus, no ‘agreement’ sufficient to
give rise to the Respondent’s legal obligation to execute a written contract
could exist prior to such employee ratification”).
However, the
policy concerns with maintaining a union’s independence and status as the
statutory representative have led the Board to take care not to hobble a union’s
ratification prerogatives in the absence of a true agreement with an employer
regarding ratification. Precisely
because “employee ratification marginally diminishes the statutory rights that
Congress has bestowed on unions as exclusive bargaining representatives both in
the negotiation of labor contracts and in the governance of its internal
affairs . . . it is entirely fitting that the Board insist on clear
evidence that a union has agreed as a contractual matter to surrender a degree
of its prerogatives.” Beatrice/Hunt-Wesson,
Inc., 302 NLRB 224, 226 (1991) (Chairman
Stephens concurring). Thus, the Board distinguishes between a union’s
expressions of intent to seek employee ratification, which the union can modify
or ignore at will, and an actual bilateral agreement with an employer to make
ratification a condition precedent to the formation of a binding contract. Only in the latter instance does the employer
have cause to complain about a union’s decision, contrary to its agreement, to
eschew the ratification process. And a
bilateral agreement making ratification a condition precedent for contract
formation is not established casually or equivocally. For instance, a union’s repeated statements
that it will take an agreement to its membership for ratification does not
establish a bilateral enforceable agreement to do so, even if it creates an
understanding between the parties that the union intends to undertake
ratification of the agreement.9 In order for the Board to find that
ratification is a condition precedent to an enforceable agreement, the
agreement by the parties to do so must be express.10
Absent an express agreement between the parties to this effect, employee
ratification is not a condition precedent for the formation of a binding
collective-bargaining agreement, and the union retains sole discretion over
whether to ratify the contract or not.
In
this case, the General Counsel takes the position that the
The Employer, on the other hand, takes the position that
the
Both parties
argue from the premise that some agreement on ratification was bilaterally
entered in to; they disagree on the scope and implications of that
agreement. Accordingly, I will assume,
without deciding, that this premise is correct.
In truth, I have some doubts on this score, but need not reach the issue.11
Even assuming
that the parties entered into a bilateral agreement at the conclusion of the
last bargaining session to make “ratification” a condition precedent to the
The Employer
does not have standing to challenge the method or mechanics of the
This is not to say that an employer, such as NPS, which has entered into an agreement making ratification a precondition to contract formation, is without standing to object (and refuse to sign the contract) if the union fails to undertake any ratification process. See, e.g., Hertz Corp., 304 NLRB 469 (1991) (union repudiated ratification agreement with employer and engaged in no ratification process, and therefore employer’s refusal to execute agreement was not a violation of the Act). But an employer’s right to take issue with a union’s compliance with a bilateral agreement to ratify is limited to those instances where a union has reneged and not undergone a ratification procedure. The employer does not have standing to object to the ratification procedures chosen by the union where the employer has not bargained for an agreement regarding the procedures to be utilized.
In this case, assuming an agreement between the parties to
ratify, there was no agreement, or even discussion, on the voting methods or
process which the
As explained by Judge Nations in Childers, supra at 711, in reasoning adopted by the Board and controlling here:
In this proceeding, though the contract stated that it was
“Subject to ratification,” there was no requirement that employees of the
Employer ratify the contract. The
condition precedent of “ratification” means as defined by the
A union does not automatically assume the obligation of
obtaining ratification of a contract negotiated on behalf of employees. If it does, however, ‘it is for the
See also West Co., 333 NLRB 1314, 1315 fn. 6, and 1320 (2001) (“we agree with the judge, for the reasons set forth by him, that it is for the Union to construe and apply its internal regulations relating to what would be sufficient to amount to ratification”; ALJ ruling: “even if the offer had been preconditioned upon ratification, it would be inappropriate to permit litigation of the Union’s adherence to its internal procedures in conducting the vote. The Respondent has no standing to question the validity of the procedures used by the union in ratifying the agreement”).
NPS’s position is that once it is conceded that the parties agreed to “ratification,” the employer is graced with standing to argue whether that ratification meets standards the employer finds reasonable, desirable, or advantageous, but for which the employer failed to expressly bargain. I think this is a key error. The Federal labor policy disfavoring employer interference in the relationship between employees and their collective-bargaining representatives does not evaporate by virtue of an agreement between the employer and union that there will be “ratification” of a contract. A union entering into such an agreement is bound to engage in a ratification process to render the contract effective—it cannot eschew ratification entirely, as the union did in Hertz Corp., supra—but the union still maintains control over that process unless the process it utilizes runs afoul of an express agreement between the employer and union. A contrary holding would eviscerate Federal labor policy’s concern with union independence and lead, as it does in this case, to the spectacle of an employer that bargained for “ratification” scouring union documents and literature (R. Br. at 10–12, 25–26) for statements that support its claim that the union did not comply with its own procedures or carried out ratification in a manner that does not meet standards the employer would impose. Such contentions, and indeed, the Employer’s entire argument, reveal the thorough interference with internal union matters to which the NPS position inexorably leads. Federal labor policy foresees the problem and Board precedent has dealt with it. Whether cast as an issue “involving the voluntary waiver of a union’s statutory rights—the evidence of which [must] be clear and unmistakable,”14 or simply as a way of preserving union autonomy in internal affairs and discouraging employer interference in the union-employee relationship,15 the right of the employer to challenge and dictate ratification procedure is strictly confined to the procedures conceded by the union to the employer through agreement.
This point may be seen in operation in the Board cases on
which NPS relies the most. Thus, in Hertz Corp., the union, after agreeing
to ratification held none—no vote or process at all. Similarly, in Beatrice/Hunt-Wesson, Inc., 302 NLRB 224 (1991), allegations
similar to those at issue here were dismissed against an employer. In that case, the Board relied upon a
memorandum of agreement executed by the parties to find that the employer and
union explicitly agreed as a condition precedent that the tentative contract
would be recommended to “the members of the bargaining unit for ratification as
soon as possible.” 302 NLRB 224 fn. 1,
and 228 fn. 3. After the bargaining unit
employees repeatedly rejected the proposed contract, “the
“[T]he employer and union in Childers never established during negotiations what the union meant
by ‘ratification,’ nor did they even discuss ratification during their
negotiations. Therefore, the method of
ratification was left for the union to determine. In contrast, the Respondent and
In his concurrence in Beatrice/Hunt-Wesson, Chairman Stephens made this point separately, approvingly citing a General Counsel Advice memorandum, Nichols Homeshield, Case 18–CA–8439 (1983) (available on Lexis at 1983 NLRB GCM Lexis 78), where
The employer and the union had initially reached agreement on all terms and conditions of employment, subject to ratification. However, the employer then proposed, and the union acquiesced in, a revision that called for participation by both union members and nonmembers in the ratification vote. The General Counsel noted that because nothing at first was said as to who would participate in the vote, the issue normally would be an internal matter that the union could resolve unilaterally. But the General Counsel then concluded that the evidence of a subsequent agreement on full employee participation was clear enough, and the employer could refuse to execute as long as ratification was not conducted in accordance with the parties’ agreement.
Beatrice/Hunt-Wesson,
supra at 226 fn. 14 (emphasis added).
Thus, Chairman Stephens endorsed the view that an undefined agreement to
ratify leaves to the union the unilateral discretion on the methods and
procedures of that ratification. That
discretion is narrowed only and to the extent that the parties agree to
specific rules or procedures for that ratification. In this case, the parties’ agreement did not
prescribe the ratification procedures, and NPS has no standing to challenge the
methods utilized by the
The Employer offers two further closely related arguments. NPS contends that the agreement to “ratify” is an agreement to use the ratification
procedure preferred by Respondent: namely an up or down vote by the bargaining
unit employees on whether a majority (presumably a majority of those voting,
and not a majority of those in the unit, although this is not clear) support or
reject the contract. NPS contends that “‘[r]atify,’
when used in the field of labor relations has a generally prevailing meaning of
a vote in favor by a majority of bargaining unit members” and that “the
However, there is no basis for Respondent’s view that an
agreement to ratify must mean, or must be interpreted to mean,
ratification as envisioned by the Respondent.
It is not that NPS’s preferred ratification process is
unreasonable. It is just not
self-evident, and, indeed, it is contrary to the way the IAM and other unions
proceed. The word “ratification” itself
means to “approve and sanction” (Webster’s Third New International Dictionary
(1986)) and, as noted, supra, unions choose to approve and sanction contracts
in a myriad of ways. As discussed, the
IAM’s procedure is a ratification procedure, involving multiple votes by
employees, weighted toward acceptance of the contract unless a supermajority is
willing to strike in support of a better proposal. NPS cannot impose its model of ratification
on the Union by claims that the
Finally, as a corollary of its argument, NPS contends that
since it claims it intended ratification to mean an up or down vote by employees,
if the Union did not, there was no “meeting of the minds” and, therefore, no
contract. This is entirely unpersuasive. First, for the reasons discussed, supra, I do
not credit the claims of Hartz, for which no objective support exists, that
throughout negotiations, his unexpressed understanding of the Employer’s intent
was that it was proposing the particular form of ratification it now seeks to
impose as a condition precedent to contract formation. However, even if that were his (and Oesterle’s)
unexpressed view, as referenced above, a “meeting of the minds” is determined “not by the parties’ subjective
inclinations, but by their intent as objectively manifested in what they said
to each other.” MK-Ferguson Co., 296 NLRB 776 fn. 2 (1989). Or, as the Board has recently explained, “[t]he
expression ‘meeting of the minds’ is based on the objective terms of the
contract, not on the parties’ subjective understanding of those terms.” Winward
Teachers Assn., 346 NLRB 1148, 1150 (2006).
The expression is a misnomer to the extent it is used to suggest that for
there to be a contract that “both parties have an identical understanding of
the agreed-upon terms.”
The Board’s recent decision in Winward Teachers Assn., supra, is instructive. In that case, the parties negotiated language stating that “[t]he School has the right to pay bonuses without Union approval.” Subsequently, the union refused to execute the contract, contending that this language did not adequately describe its understanding, which included the additional requirement that the bonuses the school had a right to pay be disbursed in a manner that was “fair and equitable and across the board.” The Board rejected the union’s contentions, holding that “[w]here the parties have agreed on the contract’s actual terms, disagreements over the interpretation of those terms do not provide a defense to a refusal to sign the contract.” 346 NLRB at 1150.
Similarly, in the instant case, assuming an agreement to “ratify”
or for “ratification” of the contract involving voting, nothing more than that
was stated or written, much less agreed.
That the
The Respondent and the General Counsel contend that NPS
and the
Conclusions of Law
1. Respondent New Process Steel, LP is an employer within the meaning of Section 2(2), (6), and (7) of the Act.
2. Charging Party
District Lodge 34, International Association of Machinists and Aerospace Workers,
AFL–CIO (
3. At all times
since August 25, 2006, the
All full-time and part-time production and maintenance employees employed by Respondent at its Butler, Indiana facility, but excluding all office clerical employees, professional employees, sales representatives, managerial employees, team leaders, guards, supervisors as defined by the Act, and all other employees.
4. Respondent and
the
5. Respondent
violated Section 8(a)(1) and (5) of the Act by refusing to adhere to and
repudiating its collective-bargaining agreement with the
6. The unfair labor practices committed by Respondent affect commerce within the meaning of Section 2(6) and (7) of the Act.
Remedy
Having found that Respondent has engaged in certain unfair
labor practices, I find that it must be ordered to cease and desist therefrom
and to take certain affirmative action designed to effectuate the policies of
the Act. Respondent must, upon request
of the Union, adhere to the collective-bargaining agreement reached with the
Union, restoring and giving effect to its terms retroactive to August, 12,
2007, and continuing those terms and conditions in effect unless and until
changed through collective bargaining with the Union. If no such request is made by the Union,
Respondent must bargain upon request with the
Respondent shall make whole its employees for losses in earnings and other benefits which they may have suffered as a result of Respondent’s repudiation of and refusal to adhere to the collective-bargaining agreement, to be calculated in the manner set forth in Ogle Protection Service, 183 NLRB 682 (1970), enfd. 444 F.2d 502 (6th Cir. 1971). Interest on all sums shall be computed as prescribed in accordance with New Horizons for the Retarded, 283 NLRB 1173 (1987).19
The Respondent shall post an appropriate informational notice, as described in the attached appendix. This notice shall be posted in the Respondent’s facility or wherever the notices to employees are regularly posted for 60 days without anything covering it up or defacing its contents. When the notice is issued to the Respondent, it shall sign it or otherwise notify Region 25 for the Board what action it will take with respect to this decision. In the event that, during the pendency of these proceedings, the Respondent has gone out of business or closed the facility involved in these proceedings, the Respondent shall duplicate and mail, at its own expense, a copy of the notice to all current employees and former employees employed by the Respondent at any time since September 11, 2007.
Respondent shall, within 14 days of a request, or such additional time as the Regional Director may allow for good cause shown, provide at a reasonable place designated by the Board or its agents, all payroll records, social security payment records, timecards, personnel records and reports, and all other records, including an electronic copy of such records if stored in electronic form, necessary to analyze the amount of backpay due under the terms of this Order.
On these findings of fact and conclusions of law and on the entire record, I issue the following recommended20
Order
The Respondent, New Process Steel, LP,
1. Cease and desist from
(a) Repudiating and refusing to adhere to the
collective-bargaining agreement reached with the
(b) In any like or related manner interfering with, restraining, or coercing employees in the exercise of rights guaranteed to them by Section 7 of the Act.
2. Take the
following affirmative action which is necessary to effectuate the purposes of the Act.
(a) Upon request of the Union, adhere to the collective-bargaining
agreement reached with the Union, restoring and giving effect to its terms retroactive
to August, 12, 2007, and continuing those terms and conditions in effect unless
and until changed through collective bargaining with the Union. If no such request is made by the Union,
bargain upon request with the
(b) Make all affected employees whole, with interest, in the manner set forth in the remedy section of this Decision and Order, for any loss of earnings and other benefits suffered as a result of Respondent’s repudiation of and refusal to adhere to the collective-bargaining agreement reached with the Union and effective by its terms August 12, 2007.
(c) Preserve and, within 14 days of a request, or such additional time as the Regional Director may allow for good cause shown, make available at a reasonable place designated by the Board or its agents for examination and copying, all payroll records, social security payment records, timecards, personnel records and reports, and all other records, including an electronic copy of the records if stored in electronic form, necessary to analyze the amount of backpay due under the terms of this Order.
(d) Within 14 days after service by the Region, post at
its facility in
(e) Within 21 days after service by the Region, file with the Regional Director for Region 25 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 with the provisions of this Order.
Dated,
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
repudiate or refuse to adhere to the collective-bargaining agreement reached
with the
We will not in any like or related manner interfere with, restrain, or coerce employees in the exercise of the rights guaranteed them by Federal law.
We will,
upon request by the Union, adhere to the collective-bargaining agreement
reached with the Union and effective August 12, 2007, giving effect to its
terms retroactive to August, 12, 2007, and continuing those terms and conditions
in effect unless and until changed through collective bargaining with the
Union. If no such request is made by the
Union, we will, upon request, bargain with the
We will make
all affected employees whole, with interest, for any loss of earnings and other
benefits suffered as a result of our repudiation of and refusal to adhere to
the collective-bargaining agreement reached with the
New Process Steel, LP
[1] In several of the General Counsel’s submissions to the Board, the Respondent is identified as New Process Steel of Indiana, Inc. We note that the Respondent’s correct name, as reflected in the caption above, is New Process Steel, LP.
[2] Effective midnight December 28, 2007, Members Liebman, Schaumber, Kirsanow, and Walsh delegated to Members Liebman, Schaumber, and Kirsanow, as a three-member group, all of the Board’s powers in anticipation of the expiration of the terms of Members Kirsanow and Walsh on December 31, 2007. Pursuant to this delegation, Chairman Schaumber and Member Liebman constitute a quorum of the three-member group. As a quorum, they have the authority to issue decisions and orders in unfair labor practice and representation cases. See Sec. 3(b) of the Act.
[3]
Although Chairman Schaumber agrees with the judge that the Respondent
unlawfully repudiated the contract, he does not rely on a number of the judge’s
statements. For example, the judge
expressed doubts and engaged in extensive discussion about whether the parties agreed
to contract ratification despite Union Negotiator Chaszar’s specific testimony
that he agreed to the Respondent’s requirement that ratification was a
condition precedent to the contract, and despite the judge’s acknowledgement
that he need not reach the issue. Furthermore,
the judge questioned the Respondent’s professed concern for its employees’
rights by speculating that its real motivation for refusing to sign the
contract was getting rid of the
[4] The Respondent has excepted to some of the judge’s credibility findings. The Board’s established policy is not to overrule an administrative law judge’s credibility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incorrect. Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have carefully examined the record and find no basis for reversing the findings.
[5] The Respondent has requested oral argument. The request is denied as the record, exceptions, and briefs adequately present the issues and the positions of the parties.
1 Respondent filed a posthearing motion to correct the record. That motion is granted. Accordingly, “no” is added as the last word to LL. 3 on p. 15; at LL. 19 of p. 15 “unratified” is inserted in place of “ungratified”; all references in the transcript to the name “Proche” are corrected to read “Proch.”
2 The bargaining unit
represented by the
All full-time and part-time
production and maintenance employees employed by Respondent at its Butler,
Indiana facility, but excluding all office clerical employees, professional
employees, sales representatives, managerial employees, team leaders, guards,
supervisors as defined by the Act, and all other employees.
3 All subsequent dates refer to 2007, unless otherwise indicated.
4 Hartz repeatedly
testified, in blatantly self-serving testimony cued by Respondent’s counsel,
that his “understanding” of these written but undiscussed references to
“ratification” was “that there would be a positive vote” by employees. (Tr. 45, 47, 49.) Similarly, Hartz testified that his
understanding was that in order for the contract to be effective that there had
to be “a favorable vote for the contract.”
(Tr. 39.) This “understanding”
was not shared with the
5 An employer that violates Sec. 8(a)(5) also derivatively violates Sec. 8(a)(1). ABF Freight System, 325 NLRB 546 fn. 3 (1998).
6 Valley Central Emergency Veterinary Hospital, 349 NLRB at 1127, quoting, American Protective Services, 319 NLRB 902, 904 (1995) (fn. omitted).
7 North Country Motors Ltd., 146 NLRB 671, 674 (1964) (“The Act imposes no obligation upon a bargaining agent to obtain employee ratification of a contract it negotiates in their behalf”); Teamsters v. NLRB, 587 F.2d 1176, 1182 (D.C. Cir. 1978) (“The Labor Act does not require a union to accord its rank-and-file members the right to ratify a collective-bargaining contract which it has negotiated”).
8 Of course, as with any nonmandatory subject of bargaining, a party may not insist to impasse or condition negotiations or overall agreement on the other party’s acceptance of a contractually enforceable ratification provision. See Borg-Warner Corp., supra at 349.
9 Personal Optics, 342 NLRB 958, 962 (2004) (“Even if the Union’s prior statements
arguably may have led the Respondent to believe that the Union would conduct a
vote of the bargaining unit, there was never any such agreement between the
parties. Accordingly, we agree with the
judge that the
10 Valley Central Emergency Veterinary Hospital, supra at 1126, 1132 (condition precedent of employee ratification must be express and not created by union negotiator stating at first bargaining session that “both sides would take any agreement back for ratification” and by union telling mediator that union would recommend employee ratification if employer agreed to union security clause (which it later did)); West Co., 333 NLRB 1314, 1320 (2001) (“there was no explicit agreement regarding ratification and the situation is unlike Beatrice/Hunt-Wesson, Hertz, and Santa Rosa”); Auciello Iron Works, Inc., 303 NLRB 562, 565 (1991) (“The Board has consistently held that where there was no evidence of an explicit agreement between the negotiating parties about union ratification, the formality of such a vote by the union membership is not required as the foundation of a binding collective-bargaining agreement”), enfd. denied on other grounds 980 F.2d 804 (1st Cir. 1992); Hertz Corp., supra (finding “express oral bilateral agreement to submit the parties’ negotiated contract to a ratification vote”); Zayre Department Stores, 289 NLRB 1183 (1988) (no condition precedent of employee ratification based on employer’s announcement at final bargaining session that it is “prepared to sign the agreement subject to acceptance or ratification by the employees” and at conclusion of this session union “said the contract isn’t acceptable to us, but we will take it to a vote”); Seneca Environmental Products, supra at 628–629, 631 (“ratification, to be a condition precedent to a collective-bargaining agreement, must be agreed upon in express words and not merely implied”); Martin J. Barry & Co., supra.; C & W Lektra Bat Co., supra at 1039 (“There is no evidence that the parties agreed in express words to such a condition [of contract ratification]”).
11 It is notable that not one word was
uttered by either party to the other regarding ratification during
approximately 20–25
bargaining sessions over the course of 11 months, until after the union accepted (and signed off) on the Respondent’s
complete proposal for a new collective-bargaining agreement. The prior written references to ratification
were inadequate to create a binding agreement on ratification. As to two of them—the one in the 18-page July
2007 letter summarizing bargaining, and the
one attached to NPS’s opening bargaining proposals on October 2006—they were
simply NPS proposals and there is no evidence they were accepted. Neither is reflected in the final proposal
accepted by the
If agreement on ratification is to be found the focus must be
on the verbal exchange between negotiators after
the
Perhaps the strongest
point for Respondent is that union negotiator Chaszar agreed on
cross-examination that when the
12 Id.
(summarizing and quoting from Childers Products Co., 276 NLRB 709, 711
(1985), review denied mem. 791 F.2d 915 (3d Cir. 1986)); Newtown Corp., 280 NLRB 350, 351 (1986) (“even if ratification were
a precondition, we find that Respondent has no standing to question the
validity of the procedures used by the Union in ratifying the agreement. It is well settled that ratification is an
internal union matter which is not subject to question by an employer. Here, there was a meeting at which a vote was
taken, and the
13 Union
practices run the gamut, but procedures substantially similar to those utilized
by the
14 Beatrice/Hunt-Wesson, Inc., 302 NLRB at 226 (Chairman Stephens concurring) (citing Metropolitan Edison Co. v. NLRB, 460 U.S. 693 (1983)).
15 Borg-Warner Corp., supra.
16 NPS also argues vigorously that a General Counsel internal Advice memorandum, Machinists Lodge 1746 (United Technologies Corp.), Case 39–CB–761 (December 20, 1985) (available on Lexis at 1985 NLRB GCM LEXIS 90), supports its position. It does not, and not just because Advice memoranda do not constitute Board precedent. Kysor Industrial Corp., 307 NLRB 598, 602 fn. 4 (1992), enfd. w/o op. 9 F.3d 108 (6th Cir. 1993). In Machinists Lodge 1746, the General Counsel’s Division of Advice counseled against prosecuting an IAM local, which utilized the same ratification process at issue here, but then refused to sign the agreement after the employees did not vote to accept the contract and did not vote to strike. This, the employer contended, was at odds with the union’s longtime practice and, the employer argued, the IAM should be required to execute the contract in accordance with its longstanding ratification process. The General Counsel’s Division of Advice recommended dismissal, precisely because “it does not appear that the parties ever expressly agreed that a vote by members to reject an offer but not to strike automatically created a contract.” In truth, the case is more inapposite than contradictory of Respondent’s position, since in Machinists Lodge 1746, there was no condition precedent which the union was bound to undertake before accepting the contract. But more generally, the case affirms the extent of union discretion in carrying out and implementing ratification procedures in the absence of an express agreement between the parties as to the precise methods and procedures required.
17 The instant case offers an instructive contrast with the ALJ’s decision in Teamsters Local 926 (Penske Truck), Case 6–CB–11383 (September 4, 2007) (available on the NLRB website), cited by NPS. There, the General Counsel failed to show a meeting of the minds between the parties on a key issue in negotiations—the staffing of a newly created position—which had been discussed, but as to which there had been neither oral agreement nor any language in the written agreement pertaining to the issue. It was not that the parties held subjectively different views on the meaning of an oral or written agreement on the issue, rather, there was nothing agreed to on the key issue. That is decisively different than the NPS’s claim here, where it insists that the parties agreed to ratification, but then claims no meeting of the minds because the parties had different subjective views on the best way to conduct a ratification.
18
Throughout its brief and at trial, NPS suggested that its stance on
ratification was a product of its concern with employee rights, and an
awareness of the potential for decertification of the union as the employees’
representative. As the United States
Supreme Court has warned, in the context of an employer seeking to withdraw
recognition from a union based on its perception of the employees’ lack of
support for the union: “[t]he Board is
accordingly entitled to suspicion when faced with an employer’s benevolence as its workers’
champion against their certified union.” Auciello Iron Works, Inc. v. NLRB, 517
“The facts Respondent knew
of the Union’s membership problems; had received a petition by the employees to
oust the Union; had heard ‘rumbles’ about employee dissatisfaction . . . and
knew the Union’s certification year expired [soon], all tend to suggest that
Respondent was more interested in getting rid of the Union than in obtaining
any legitimate benefit for itself in having the contract ratified and, indeed
that insistence on ratification . . . was intended toward this end.” 209 NLRB at 1039.
Here, as in C & W Lektra Bat Co., the employer’s interest in removing the union is not directly at issue, but serves as a rejoinder to the concern for employee rights with which it vests its position.
19 The
remedy and recommended Order shall not include direction to Respondent to
reimburse the
20 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and Regulations, the findings, conclusions, and recommended Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for all purposes.
21 If this
Order is enforced by a judgment of a