Capitol City Lumber Company v. National Labor Relations Board

Citations: 721 F.2d 546; 4 Employee Benefits Cas. (BNA) 2530; 114 L.R.R.M. (BNA) 3429; 1983 U.S. App. LEXIS 15345Docket: 82-1682, 82-1850

Court: Court of Appeals for the Sixth Circuit; November 11, 1983; Federal Appellate Court

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Capitol City Lumber Company seeks review of a National Labor Relations Board (NLRB) order mandating payments to employee pension and welfare benefit funds for Teamsters Union, Local 580 members. The dispute originated from a collective bargaining agreement established in May 1979, which included a three-year commitment for fund contributions, despite being a one-year agreement. Although the employees ratified the contract, it was delayed in signing due to the company president's health issues. Concerns arose regarding the three-year commitment's implications, leading to a letter of understanding clarifying the necessity of the commitment for fund participation and outlining costs.

The collective bargaining agreement was renewed in May 1980, but the company failed to increase its contributions as required and ceased contributions entirely by May 1981. The union filed an unfair labor practice charge under sections 8(a)(5) and (1) of the Act, asserting the company violated its obligations. An administrative law judge found the company at fault, a decision upheld by the Board, which ordered the company to remit required contributions from May 1979 to April 1982.

On review, the company contended that the NLRB lacked jurisdiction, arguing that the issues raised pertained solely to a breach of the collective bargaining agreement rather than an unfair labor practice. However, the Board's authority is confined to unfair labor practices, not to adjudicate collective bargaining agreements directly.

The Board has the jurisdiction to resolve contractual disputes related to collective bargaining agreements when these disputes are integral to unfair labor practice complaints. In this case, the unfair labor practice involves the company's failure to negotiate changes to employment terms, specifically reductions in pension and welfare fund contributions, violating sections 8(a)(5) and (1) of the Act. The contractual violation is identical to the unfair labor practice, granting the Board jurisdiction over both matters.

The Supreme Court has previously affirmed the Board's jurisdiction in similar cases, such as NLRB v. C. C Plywood, where a company raised wages without consulting the union, breaching the collective bargaining agreement. Capitol City attempts to differentiate its case by citing the lack of an arbitration provision in C. C Plywood and claiming that an adequate remedy was available to the union in court. However, the Supreme Court's ruling in NLRB v. Strong counters these claims, stating that the Board can address unfair labor practices that also constitute contract breaches, irrespective of available remedies.

The Company argues that the Board's interpretation could lead to treating any collective bargaining agreement violation as an unfair labor practice, which Congress has not allowed. However, most disputes typically do not meet the threshold for unfair labor practices and are usually resolved through established grievance procedures. The Board has a history of deferring to arbitration but will assert jurisdiction if the arbitration process is unavailable, as seen in Detroit Edison Co., due to Capitol City's own actions preventing timely arbitration.

On the merits, the Company claims the Board's interpretation of the letter of understanding lacks substantial evidence, arguing that ambiguous contracts should be construed against the drafter. The Board disagrees with this interpretation, indicating that the evidence supports its findings.

The maxim in question serves as a last resort when all other interpretative methods fail; however, no such situation occurred in this case. The Board determined that the letter of understanding addressed Olson's concerns regarding employee awareness of settlement costs rather than attempting to change the company's three-year funding commitment. This conclusion is supported by substantial evidence, including testimony from union representative Cooper, and will not be overturned. 

The company contends that the Board's remedy was overly broad, specifically challenging the order to remit contributions to the pension and welfare funds from May 1, 1979, to April 30, 1982, arguing that no contract existed for the last year. This argument is rejected, as the commitment to the funds remained effective despite the collective bargaining agreement’s expiration on April 30, 1981. Consequently, the company was obligated to make back payments to the funds, and the Board had the authority to mandate these payments. 

The enforcement of the Board's order is affirmed, and the relevant provisions of Article XIX specify the required contributions per employee to the Welfare and Pension Funds during the specified periods. The letter of understanding outlines that a thirty-six-month commitment was necessary to align with the Michigan Conference of Teamsters Welfare Fund UE Plan and the Central States Southeast and Southwest Areas Pension Plan, detailing the negotiated financial package.