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,
Coastal Cargo Company, Inc. and International Brotherhood of Teamsters, Local Union No. 270. Case 15–CA–18215
January 30, 2009
DECISION AND ORDER
By Chairman Liebman and Member Schaumber
On September 29, 2008, Administrative Law Judge Michael A. Marcionese issued the attached decision. The Respondent filed exceptions and a supporting brief, and the General Counsel filed an answering brief.
The National Labor Relations Board has considered the decision and record in light of the exceptions and briefs and has decided to affirm the judge’s rulings, findings, and conclusions[1] and to adopt the recommended Order.[2]
ORDER
The
National Labor Relations Board adopts the recommended Order of the administrative
law judge and orders that the Respondent, Coastal Cargo Company, Inc.,
Dated,
Wilma B. Liebman,
Chairman
Peter C. Schaumber, Member
(seal) National
Labor Relations Board
Joseph A.
Hoffman Jr., Esq. and Fernando de Juan,
Esq., for the General Counsel.
Peyton S. Irby Jr., Esq., for the Respondent.
Louis L. Robein Jr., Esq., for the Charging Party.
DECISION
Statement of the Case
Michael A. Marcionese, Administrative Law Judge. I heard this case in
On April 7,
2008, the Respondent filed its answer to the complaint, admitting that it
increased its employees’ wages on October 2, 2006, but denying that it
committed any unfair labor practice by doing so. Although it raised no
affirmative defenses in the answer, the Respondent argued at the hearing and on
brief that it was permitted to act unilaterally because of exigent circumstances
beyond its control. The Respondent also argued that the
On the entire
record, including my observation of the demeanor of the witnesses, and after
considering the briefs filed by the General Counsel, the Charging Party, and
Respondent,1 I make the following
Findings of Fact
i. jurisdiction
The Respondent,
a corporation, engaged in the longshoreman and stevedoring industry at the
ii. alleged unfair labor practices
As noted above,
the Respondent admitted increasing its employees’ wages on October 2, 2006.
There is also no dispute that the Respondent and the
On October 18,
2005, the day after unlawfully implementing its contract proposal, which took
away many benefits that existed under the last contract, the Respondent’s executive
vice president and chief operating officer, David Mannella, hand-delivered the
following letter to the
As we discussed during the time we were trying to restore operations after Hurricane Katrina and in negotiations, it may be necessary to pay in excess of the wage rate. As you were advised, if that unusual condition arises, the roster employees will receive equal to or excess of any rate paid to casual employees.
If you have any question, please advise.
Negrotto did not
respond to the letter at that time. He testified that the only time he and
Mannella “discussed” wages prior to receiving this letter was in the context of
contract negotiations, when the parties were discussing the rate to be included
in the contract. Negrotto denied that
there was any discussion about raising the wage rate specifically as a result
of Katrina. At most, according to Negrotto, he and Mannella discussed generally
the impact of Katrina on themselves and people in the
Mannella had a
somewhat different recollection of events preceding this letter. According to
Mannella, he and Negrotto had “numerous discussions,” post-Katrina, before he
hand-delivered the October 18 letter. Mannella testified that a common theme
throughout these “discussions” was the effect of the hurricane on the supply of
labor in
Negrotto
testified that he heard nothing further from the Respondent on this subject
until he received another letter from Mannella, dated September 26, 2006,
almost 1-year later.4 In this
letter, Mannella advised the
In accordance with our letter to you of October 18, 2005, the current labor market requires Coastal to offer increased wages to attract qualified lift operators. As stated previously, roster employees will receive no less than any casual employee.
If you have any questions or comments, please advise.
Negrotto denied have any conversation
with Mannella before receiving this letter. Mannella testified that he spoke to
Negrotto a couple days before sending the letter. According to Mannella, he
told Negrotto that he was going to be providing this letter to the
This time, the
Please be advised that Teamsters Local Union 270 does not recognize your letter of October 18, 2005, because your current contract is in appeal with the National Labor Relations Board.
Additionally, be advised that if there is a change with
the current Collective Bargaining Agreement between [the Respondent and the
Mannella
testified that he was surprised by the
this issue is causing Coastal to not be
able to compete for skilled labor. We do not want to have to turn away customers
due to inability to perform the work. Please give consideration to my earlier
letter as the roster employees will benefit from this option.
While the
parties were exchanging this latest correspondence, the Board issued its order
in the prior case. By the time Negrotto responded to Mannella’s October 3 and
5, 2006 letters, he had received the Board’s order. On October 5, he wrote to
Mannella advising him that he had received the order and enclosing a copy for
Mannella. Negrotto referred to that portion of the Board’s decision stating
that the Respondent could not unilaterally make changes to employee’s wages,
etc. He concluded the letter with the following:
While I understand your position, it is imperative that
both parties adhere to the original contract. As stated in my previous letter,
any change to the current Collective Bargaining Agreement between [the
Respondent and the
Upon receipt of this letter, we stand ready to negotiate any terms and conditions of the current contract.
After exchanging
further correspondence, the parties ultimately met for the first time since the
prior unfair labor practice on October 19, 2006. At that meeting, the Respondent
gave the Union a letter stating that it had “rescinded any changes made to
employees’ wages, hours, and other terms and conditions of employment as
reflected in our October 13, 2005 contract proposal, that were implemented on
or after October 17, 2005.” According to Negrotto, the parties met for about 1
hour and discussed what the “status quo” should be in terms of roster size.5 No contract proposals were exchanged
and there was no discussion of the October 2 wage increase. Mannella admitted
that he did not specifically tell the Union on October 19, 2006, that the
Respondent had already raised employees’ wages, but he believed the
Mannella
admitted raising the rate for roster employees from $13.25 to $14.50 an hour on
October 2, 2006. The Respondent also raised the hourly rate it paid casual
employees I and II from the $9 and $10.25 rate in the last contract to $10 and
$12, respectively. The Respondent attempted to show that the Union had agreed
to this change by citing a contract proposal made at the June 23, 2008 meeting
in which the
The above
evidence does not establish, as the Respondent argues, that Negrotto or the
Mannella’s
testimony, that Negrotto “agreed” to the wage increase before the September 26,
2006 letter was sent, is not credible. Even Mannella acknowledged that Negrotto
never explicitly agreed to the wage increase that was implemented. The most
that can be said of Mannella’s testimony is that he believed that Negrotto “understood”
the labor market conditions affecting the Respondent’s operations and was sympathetic
to the need to attract and retain employees. In fact, Negrotto said as much in
his October 5, 2006 letter, when he objected to any unilateral change. What
Negrotto proposed instead is that the parties resume negotiations and address
the Respondent’s concerns as part of an overall contract settlement. This is
hardly an “agreement” that Respondent could raise wages by $1.25 an hour on
October 2, 2006.
Having rejected
the Respondent’s “waiver by agreement” argument, I must address the more substantial
defense raised by the Respondent, i.e., “exigent circumstances.” In Bottom Line Enterprises,7
the Board held that, “when parties are engaged in negotiations for a
collective-bargaining agreement, an employer’s obligation to refrain from
unilateral changes extends beyond the mere duty to give notice and an
opportunity to bargain about a particular subject matter. It encompasses a duty
to refrain from implementation at all, unless and until an overall impasse has
been reached in bargaining for an agreement as a whole.” The Board recognized
only two exceptions to this rule, i.e., delay or avoidance of bargaining by the
The Board, in RBE Electronics, supra, further refined
the “economic exigency” exception to the general duty to bargain by holding
that there may be other economic exigencies that, although not sufficiently
compelling to excuse bargaining altogether, would permit an employer to take
action without an overall impasse in negotiations. In such circumstances, an employer
will satisfy its bargaining obligation by providing adequate notice to the
union and an opportunity to bargain over the particular subject matter.
Bargaining in good faith in such time sensitive circumstances need not be
protracted. 320 NLRB at 81–82. Even in these circumstances, the Board still
requires the employer to prove that its proposed changes are “compelled” by external
events that are beyond the employer’s control or not reasonably foreseeable.
The exception is limited to situations where “time is of the essence.”
In Port Printing AD & Specialties,8 the
Board applied the above principals to a case where an employer had unilaterally
laid-off employees and thereafter used nonbargaining unit employees and
supervisors to perform bargaining unit work. The layoff at issue occurred when
the employer was forced to close its facility by a mandatory evacuation order
from the mayor due to the impending arrival of Hurricane Rita, Katrina’s sister
in wreaking havoc and destruction. About a week later, when the Respondent
resumed operations, it used the nonunit employees to perform the work done by
laid-off unit employees. The Board found that the hurricane and evacuation
order were the type of economic exigency recognized in Bottom Line and its progeny and excused the employer’s unilateral
action in laying off the employees. However, a majority of the Board found that
the decision to use nonunit employees to perform unit work was not excused by
the hurricane. The Board found that the need for immediate decisionmaking
created by the hurricane was over by the time the employer made this decision.
The employer had sufficient time to bargain over this decision but failed to do
so. The Board thus found a violation of the Act.
In Pleasantview Nursing Home, supra, the
Board dealt with a situation similar to that here. In the midst of negotiations
for a new collective-bargaining agreement, the employer unilaterally raised the
wages of certain employees in the unit, claiming that it was unable to attract
new recruits due to a tight labor market. The Board rejected the employer’s economic
exigency defense, finding that it was not the type of extraordinary event
justifying unilateral action. Nor was the employer entitled to rely upon the
lesser bargaining obligation recognized in RBE
Electronics, supra. As the Board found, the employer failed to show that “time
was of the essence” with respect to its employment situation, and that “prompt
action” was “compelled independent of the overall ongoing bargaining process.
335 NLRB at 962.
In this case,
Mannella testified that the Respondent was “compelled” to increase the wage
rate of its roster employees on October 2, 2006, because of the labor market
conditions in
Although the
labor shortage in
The Respondent
also relies on the testimony of its Hiring Superintendent John Duke and General
Manager Don Zemo to establish the need to raise wages. However, as with
Mannella, this testimony is devoid of any specifics that would explain why the
Respondent had to act unilaterally on October 2, 2006. Duke testified that
roster employees had been coming to him threatening to leave for higher pay
since soon after Hurricane Katrina. He cited the higher pay available at two competitors
in the port, one an ILA-represented company and the other a nonunion one. But
both employers had historically paid higher wages than the Respondent, even
before the storm. Duke and Zemo also testified that the Respondent attempted to
address the labor shortage by offering forklift training to new hires,
presumably casuals, but that the individuals receiving this training would
leave for higher pay in construction once they got their OSHA certification.
Again, this was an ongoing problem which started with the first class of
trainees in late 2005. As with Mannella, when pressed to identify a single
employee who quit for higher pay, Duke was unable to do so. Zemo testified that
he was aware of the employees’ concern about pay from reports he received from
Duke, yet he also could not cite any specifics as to employee and date. What
Zemo did acknowledge is that the Respondent’s management had been discussing an
increase in the wage rate for roster employees since mid-2006, but did not make
a decision to make a change until late September. When asked if the date chosen
for the increase, October 2, was a “magic date,” Zemo said it was not. Zemo
candidly testified that it would not have made a difference if the rate was
increased on September 2 or November 2, 2006.
Having
considered the evidence offered by the Respondent, I conclude that the Respondent
has not met its heavy burden of proof that “exigent circumstances” required the
Respondent to act unilaterally. As is clear from the above recitation of the
evidence, there was no extraordinary unforeseen event in September 2006 that
required immediate action. The extraordinary event here, as in Port Printing AD & Specialties,
supra, was the hurricane itself. But
that occurred more than a year before the Respondent took action. Respondent’s
own witnesses acknowledged that the labor shortage was an ongoing problem for
that whole period but never once did the Respondent approach the
Even considering
the Respondent’s actions under the lesser standard of RBE Electronics, supra, I find that the Respondent has not met its
burden. The Respondent has not shown here that “time was of the essence” in
raising its roster employees’ rates. In fact, according to Zemo, the Respondent
could have waited until November 2 and it would not have made a difference. So,
why not bargain with the
Based on the
above and the record as a whole, I find that the Respondent increased the wage
rate of unit employees on October 2, 2006, without providing the
Conclusion of Law
By unilaterally
increasing the wage rate of unit employees on October 2, 2006, the Respondent
has failed and refused to bargain collectively with the Union and has engaged
in unfair labor practices affecting commerce within the meaning of Section
8(a)(1) and (5) and Section 2(6) and (7) of the Act.
Remedy
Having found
that the Respondent has engaged in certain unfair labor practices, I find that
it must be ordered to cease and desist and to take certain affirmative action
designed to effectuate the policies of the Act. At a minimum, the Respondent
will be ordered once again to refrain from changing the wages, hours and other
terms and conditions of its employees until it has satisfied its statutory
bargaining obligation to the Union, to bargain with the
The General
Counsel specifically requests an order requiring the Respondent to return the
wages of roster employees to the rates set forth in the collective-bargaining
agreement that expired in September 2005. According to the General Counsel,
this is the only remedy that will restore the Union to the bargaining position
it held prior to the unlawful conduct, thus, giving it leverage to engage in
meaningful bargaining. Such a remedy, however, would reduce employees’ wages by
$1.25 an hour. The Respondent objects to such a remedy, arguing that it would
surely result in the exodus of the majority of the employees remaining on the
roster and leave the Respondent incapable of operating its business. Under the
Respondent’s view, the parties should start bargaining from the current rate of
pay, citing the
The problem with
the General Counsel’s recommended remedy is that, while the Union would gain
leverage in bargaining since it could trade the wage increase the Respondent
wants for something the Union wants, it would almost surely lead to disaffection
of the employees from the Union. On the other hand, the remedy proposed by the
Respondent would essentially leave the
Having
considered the matter, I shall adhere to the policy of the Board enunciated in Boise Cascade Corp.:
In cases where the Respondent has granted
benefits to unit employees unilaterally but on a nondiscriminatory basis, the
Board makes clear that, absent a request by the employees’ union to bargain
over a particular grant of benefits, the Board’s order is not to be construed
as requiring the employer to rescind benefits. When benefits are in the hands
of employees and the only unlawfulness in their original grant is that the
union was not consulted, it makes sense to leave it at the option of the union
whether to leave things as they are or to reopen the subject and bargain over
the particular grant. A Board order requiring a change in the status quo to the
detriment of all the employees would not effectuate the purposes of the Act.
304 NLRB 94, 96 (1991). See also Steel-Fab, Inc., 212 NLRB 363 fn. 1
(1974).
Accordingly, I
shall recommend that the Respondent be ordered to rescind the wage increase
only if requested to do so by the
On these
findings of fact and conclusions of law and on the entire record, I issue the
following recommended10
ORDER
The Respondent,
Coastal Cargo Company, Inc.,
1.1 Cease and
desist from
(a) Unilaterally
changing the wages, hours, or other terms and conditions of employment of its
employees in the bargaining unit represented by International Brotherhood of
Teamsters, Local Union No. 270 (the
(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) Upon a
request from the
(b) On request,
bargain with the
All checkers, lift drivers, loaders,
flagmen, etc. employed at the Respondent’s
(c) Within 14
days after service by the Region, post at its facility in
(d) 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.
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 unilaterally make changes to your wages, hours, or other
terms and conditions of employment without bargaining in good faith to agreement
or impasse with your Union, the International Brotherhood of Teamsters, Local Union
No. 270.
We will not in any like or related manner interfere with, restrain, or
coerce you in the exercise of the rights guaranteed you by Section 7 of the
Act.
We will, upon a request by the
We will, upon request, bargain in good faith with your
Coastal Cargo Company, Inc.