Oberthur Tech. of America Corp v. NLRB

Citations: 865 F.3d 719; 2017 WL 3318754; 209 L.R.R.M. (BNA) 3425; 2017 U.S. App. LEXIS 14341Docket: 16-1265

Court: Court of Appeals for the D.C. Circuit; August 4, 2017; Federal Appellate Court

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Oberthur Technologies of America petitioned the United States Court of Appeals for the D.C. Circuit to review orders and a certification decision from the National Labor Relations Board (NLRB). The NLRB certified the International Brotherhood of Teamsters, Local 14M as the collective bargaining representative for a group of Oberthur employees after a representation election. The NLRB found that Oberthur violated the National Labor Relations Act by restricting employee speech and freezing wage benefits prior to the election. Oberthur's petition challenged these pre-election findings and the election's validity. 

The court noted that Oberthur manufactures various identification cards at its Exton, Pennsylvania facility. In 2012, Teamsters Local 14M initiated an organizing campaign, during which Oberthur prohibited union-related speech and froze employee wage benefits. Following this, the union filed unfair labor practice charges and requested a representation election, leading to a Stipulated Election Agreement that defined the bargaining unit and ensured a secret ballot election on September 7, 2012. Oberthur did not contest the election's validity but the union challenged two ballots cast by engineers, claiming they were “professional employees” and thus not part of the bargaining unit. These ballots were impounded, and the election results showed the union won by a narrow margin of 108 to 106 votes. The court ultimately denied Oberthur's petition and granted enforcement of the NLRB's orders.

In October 2012, unfair labor practice charges and challenges to a representation election were consolidated for a hearing before an Administrative Law Judge (ALJ). The ALJ determined that the company violated NLRA Sections 8(a)(1) and (3) by limiting union-related speech and imposing a freeze on employee wage benefits. The ALJ also upheld the union’s challenges to ballots cast by engineers DiTore and Sahijwana, classifying them as “professional employees” under NLRA § 9(b). Oberthur filed exceptions to these findings, introducing a new procedural objection regarding the election's validity.

On August 27, 2015, the National Labor Relations Board (NLRB) affirmed the ALJ’s findings, ordering Oberthur to lift the restrictions on union speech and compensate employees for wage benefit losses. The NLRB also sustained the union's challenges regarding DiTore and Sahijwana's ballots, dismissed Oberthur's late election validity challenge, and certified the union as the exclusive bargaining representative. Following the certification, Oberthur refused to bargain with the union, which allowed it to indirectly contest the certification through subsequent unfair labor practice proceedings.

On July 27, 2016, the NLRB ruled that Oberthur's refusal to bargain constituted violations of NLRA § 8(a)(1) and (5). Oberthur is now seeking review of both the 2015 and 2016 Board Orders, while the NLRB seeks enforcement of these orders. The court must uphold the NLRB's judgment unless it finds that the Board's conclusions lack substantial evidence or that it acted arbitrarily in applying the law.

Section 8(a)(1) prohibits employers from interfering with, restraining, or coercing employees regarding their rights under NLRA § 7, which includes communicating about union organizing. An employer's statement that tends to coerce or interfere with employees' rights to discuss union matters violates this section. Oberthur's argument that informing employees about a lawful policy cannot constitute a violation is undermined by the finding that it imposed a pre-election freeze that violated the Act. The National Labor Relations Board (NLRB) is entitled to summary enforcement due to this violation.

Additionally, warnings to employees to stop union-related discussions are violations of Section 8(a)(1). While non-solicitation rules for legitimate business interests are acceptable, restricting union discussions while allowing other topics is unlawful. The NLRB found Oberthur violated Section 8(a)(1) by imposing discriminatory restrictions on union-related speech. Evidence showed that discussions on non-union topics were permitted in work areas while union discussions were not, and Oberthur failed to justify this rule as necessary for business.

Oberthur contested the violation, arguing there was no evidence of limited organizing activity or discipline against employees. However, the mere existence of a rule likely to chill Section 7 activity can constitute an unfair labor practice, regardless of its enforcement. The NLRB concluded that Oberthur's actions had a reasonable tendency to coerce employees regarding union discussions.

Furthermore, the NLRB found Oberthur violated Section 8(a)(1) and (3) by freezing two employee wage benefit programs before a representation election. The company challenged both the unfair labor practice finding and the remedy, asserting that it should maintain employee benefits as if the union were not present during the election process.

An employer cannot withhold wage increases due to a union organizing campaign. In this instance, the Board found that Oberthur violated Section 8(a)(1) and (3) by freezing wage benefits previously granted through two programs: 'Spot Bonuses' (awards for exceptional service ranging from $50 to $150) and a 'Wage Increase' program that increased employee salaries over 18 to 24 months for taking on more challenging roles. Oberthur admitted to freezing these benefits following the union's election petition. The freeze was communicated via an email from Human Resources Manager Diane Ware, which suggested the freeze was influenced by the union activity. Although Oberthur claimed the discretionary nature of the programs justified the freeze, evidence indicated that bonuses and wage increases had already been approved prior to the freeze. The NLRB determined that a traditional backpay remedy with interest was appropriate for those affected by the unlawful conduct. The Board noted an exception allowing for the postponement of wage increases if the employer clearly communicates that the delay is to avoid influencing the election outcome, with assurance that benefits would be reinstated post-election. However, substantial evidence indicated that Oberthur did not meet these requirements, as they failed to inform employees that the freeze was solely to avoid perceived influence and that benefits would be restored regardless of the election outcome. Oberthur’s objections to the Board’s remedy were deemed unmeritorious, as the Board has broad discretion in crafting remedies under NLRA § 10(c). The process for identifying affected employees and determining compensation was reserved for later compliance stages, and the Court has consistently refrained from addressing challenges to such remedial orders until they are fully outlined.

Oberthur contests the Board’s handling of a representation case concerning a stipulated election agreement that defined the bargaining unit as all full-time employees in fifteen departments at the Exton plant. The National Labor Relations Act (NLRA) § 9(b)(1) prohibits the Board from certifying a bargaining unit that combines professional and non-professional employees unless a majority of professional employees consent to inclusion. To address mixed units, the Board typically uses special ballots to gauge professional employees' preferences regarding union representation and unit inclusion. The agreement in this case did not clarify job titles but stated that employees from the specified departments were included, while temporary, seasonal, confidential employees, guards, and supervisors were excluded. The ballot posed a straightforward question about representation by a specific union, and the election was conducted without any timely objections from Oberthur.

However, the union did object to the eligibility of two engineers, DiTore and Sahijwana, arguing they were professional employees and thus ineligible to vote. The Board concurred, ruling their ballots should not be counted. Oberthur, in its petition for review, raised two objections: first, that the Board wrongly classified DiTore and Sahijwana as professional employees; second, that the election was invalid due to the denial of their rights to a Sonotone election. The Board upheld the Administrative Law Judge’s (ALJ) findings, which relied on four criteria from Section 2(12)(a) to assess the work of the two engineers, and the Board is given deference in these determinations.

Section 2(12)(a) defines a 'professional employee' as one engaged in predominantly intellectual work that requires discretion, judgment, and advanced knowledge typically acquired through specialized education. The ALJ classified DiTore as a 'Lean Engineer,' focused on enhancing manufacturing efficiency, and Sahijwana as a 'quality engineer' ensuring product standards and defect prevention. The company argued that the Board and ALJ misapplied a general approach to determine their professional status, but the ALJ detailed how both engineers performed non-routine work requiring independent application of their advanced skills and education. DiTore and Sahijwana were salaried employees with higher education, unlike other hourly workers in the Quality Control department with only high school diplomas. The Board's findings cited substantial evidence, including past precedent from the Westinghouse case, supporting the classification of both engineers as professionals. Additionally, although Oberthur claimed the election certification was invalid due to DiTore and Sahijwana not receiving Sonotone ballots, the company failed to raise this issue timely before the Board, limiting further review.

Objections to the election conduct must be submitted within seven days of the Board's ballot tally, reflecting the Board's policy prioritizing finality to promote industrial peace. Oberthur's argument regarding Sonotone was first presented over six months after this deadline, rendering it untimely. The Board appropriately dismissed it due to the lack of a timely objection or special circumstances justifying the delay. Additionally, the Board found Oberthur violated Sections 8(a)(1) and (5) by refusing to bargain with the union and denying information requests post-certification, which Oberthur does not contest. As the certification is deemed valid, the refusal to bargain and provide information constitutes a violation of the Act. Consequently, the Board's 2016 order for Oberthur to bargain in good faith and supply the requested information is enforced, while Oberthur’s petition for review is denied.