National Labor Relations Board v. Albany Steel, Inc.

Citations: 17 F.3d 564; 145 L.R.R.M. (BNA) 2577; 1994 U.S. App. LEXIS 3488Docket: 503

Court: Court of Appeals for the Second Circuit; February 23, 1994; Federal Appellate Court

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The National Labor Relations Board (NLRB) filed a petition for enforcement of its November 9, 1992 order against Albany Steel, Inc. (ASI), which had withdrawn recognition of the Shopmen's Local Union No. 534, claiming the Union no longer had majority support among its workers. The NLRB found that ASI had engaged in unfair labor practices by not providing sufficient objective evidence to support its claim of the Union's loss of majority status and by failing to furnish requested information to the Union, violating Sections 8(a)(1) and (a)(5) of the National Labor Relations Act. The Court upheld the NLRB's finding that ASI's withdrawal of recognition was unsupported by evidence, but acknowledged sufficient doubt regarding the Union's majority status. Consequently, the Court ordered a Board-supervised secret ballot election to determine employee representation while granting conditional enforcement of the NLRB's order to bargain with the Union. ASI, which has employed Union representation for over 25 years, had previously faced legal challenges regarding its interactions with the Union, including a failed decertification effort by employees in 1988 due to ASI's unlawful assistance in that process.

While unfair labor practice charges were pending against the Union, it faced embezzlement allegations against its president, leading to a trusteeship in June 1989, with Robert Thomas appointed as administrator and negotiator. The Collective Bargaining Agreement (CBA) expired on November 30, 1988, and negotiations for a new agreement commenced amidst a nine-month pause following Thomas's appointment. In April 1990, Thomas requested negotiation dates from ASI's president, Hess, resulting in initial bargaining sessions starting June 28, 1990. Tensions escalated during negotiations, particularly on July 31, when Thomas walked out after a heated exchange. Both parties agreed to reconvene on August 29, 1990, but negotiations again broke down, leading Thomas to leave the session.

On September 27, 1990, Thomas informed Hess that the Union was ready to continue negotiations, despite the Company rejecting their contract proposal. Hess received this letter on October 1 and did not respond, while Thomas missed scheduled bargaining sessions on October 2 and 3. Throughout the negotiation period, there was limited interaction between the Union and employees, with a low turnout at an informational meeting and minimal support for the Union's financial requests. The Company initiated a drug-testing program and an employee assistance program, which prompted Thomas to oppose the drug testing. During meetings, employees made disparaging remarks about the Union, questioning its relevance. On November 27, 1990, Hess notified the Union of salary and pension increases, attributing the decision to the Union's lack of proposals, to which Thomas did not reply, leading to the Company's implementation of the increases.

On March 14, 1991, the Union requested information regarding unit employees from the Company, which responded on April 1, 1991, by refusing the request and withdrawing recognition of the Union, citing doubts about its majority representation based on eight objective reasons. Following this, the Union filed unfair labor practice charges on May 22, 1991. The Administrative Law Judge (ALJ) dismissed the Company’s justification for its good faith doubt, ruling that the Company's actions violated Sections 8(a)(1) and (a)(5) of the National Labor Relations Act (NLRA). The National Labor Relations Board (NLRB) adopted the ALJ's decision, corrected some factual findings, and ordered the Company to recognize and bargain with the Union, provide the requested information, and post a remedial notice. 

The NLRB now seeks enforcement of its order, while the Company contests it, asserting it had substantial evidence of the Union's diminished majority support. Although the NLRB found insufficient evidence to justify the Company's withdrawal of recognition, it acknowledged significant evidence that placed the Union's majority status in question, leading to an order for an election to clarify employees' preferences. Under the NLRA, employers are required to bargain with unions representing a majority of their workers, and recognition of a minority union constitutes an unfair labor practice. Certified unions are presumed to have majority status for one year, after which an employer can rebut this presumption with clear evidence of good faith doubt regarding the union's majority. The evaluation of such evidence must consider the overall circumstances.

The sufficiency of an employer's evidence regarding loss of majority status or good faith doubt is a factual question for the Board, subject to limited judicial review. The Board's determination must be upheld if supported by substantial evidence in the overall record. Reversal is only warranted if no rational trier of fact could reach the Board's conclusion. In this case, the Board found the employer's evidence insufficient to rebut the presumption of the Union's majority status based on eight factors cited by the Company, including internal Union issues, non-payment of dues, lack of employee contact, absence of grievances filed, surface bargaining, perceived Union ineffectiveness, employee sentiment against the Union, and lack of anti-union animus from the Company. 

The Board, accepting the ALJ's conclusion, dismissed many of these claims as unsupported. Evidence showed at least one informational meeting occurred, and the ALJ found that some meetings were held between Union representatives and employees. Additionally, the Union was deemed willing to represent employees, as demonstrated by participation in bargaining sessions and communication with the Company. The Company's conclusion regarding the Union's internal problems was also rejected, as it contradicted its assertion of readiness to negotiate a new collective bargaining agreement while simultaneously claiming the Union was defunct.

The Company presented five factors to justify its decision to withdraw recognition of the Union, focusing on good faith doubt regarding the Union's majority status. 

1. **Surface Bargaining**: The Company accused Union representative Thomas of "surface bargaining" based on his absence from two scheduled sessions and his premature exits from two more, arguing this indicated an obstruction to reaching an agreement. However, evidence suggests Thomas's actions were a response to heated discussions and perceived impasse, not deliberate obstruction. Additionally, Thomas may have believed negotiations were no longer active due to the Company's lack of response to his inquiries. The Board found this factor insufficient to support the Company’s claims.

2. **Financial Support for the Union**: The Company argued that the absence of dues payments from Union members indicated a loss of majority support. The Board countered that dues ceased because the Company stopped collecting them after the contract expired and Thomas advised employees that dues payments were unnecessary without a contract. While the Board's reasoning has merit, the absence of dues payments, especially when the Union sought financial support and received negative responses, could lead an employer to reasonably question the Union's majority status. Nonetheless, this factor alone does not justify the Company’s withdrawal of recognition.

3. **Lack of Grievance Filings**: The Company claimed that the Union's failure to file grievances indicated a lack of effort to protect employee rights, thus supporting its good faith doubt about the Union's status. The Board rejected this argument, stating that the Union's lack of grievance filings post-contract did not represent a change from its previous practices. However, evidence indicated that the Union had been active in filing grievances prior to 1988, suggesting a significant change that supports the Company’s position.

Overall, while the Company cited these factors, the Board concluded that they did not sufficiently substantiate the withdrawal of recognition from the Union.

Employee sentiment regarding the Union is a critical factor in evaluating the Company's good faith doubt of the Union's majority status. Testimony revealed that during meetings concerning the employee assistance program, employees questioned the Union's existence and expressed feelings of no longer being represented, with 42 employees potentially sharing these sentiments. However, the Administrative Law Judge (ALJ) dismissed the Company's reliance on this sentiment, stating it did not reflect a numerical majority's views and noted the previous unfair labor practices affected the credibility of statements made to Hess.

While the National Labor Relations Board (NLRB) discredited the ALJ's findings, it did not clarify the relevance of employee sentiment. The Board acknowledged that the expressed dissatisfaction did not equate to a majority repudiation of the Union. The Company also noted the absence of anti-union animus, but this alone does not indicate loss of majority status.

Ultimately, five factors cited by the Company to support its good faith doubt were rejected, including the Union's internal issues and lack of contact with employees. However, the evidence of employee sentiment, lack of financial support for the Union, and the Union's failure to file grievances were not entirely dismissed. Collectively, these factors suggested some persuasive evidence of the Company's good faith doubt. Nonetheless, due to the stringent standards required for withdrawing recognition and the deference afforded to Board determinations, the conclusion remains that the Company did not sufficiently prove its good faith doubt to justify withdrawal of recognition from the Union.

A previously active union at ASI has not secured a new collective bargaining agreement (CBA) since November 1988, has not received financial support since the last CBA expired, and has not filed grievances for the unit employees. This lack of activity, coupled with employee sentiments, indicates that a majority of ASI's employees may have stopped supporting the Union, possibly believing it to have ceased operations without formally rejecting it. The Company proposes a Board-supervised election to clarify the Union's status, which would address uncertainties regarding majority support while acknowledging the Board's finding of insufficient evidence for the Company's withdrawal of recognition. However, this poses challenges, as the Board employs the same reasonable good faith standard for ordering elections as for recognizing unions and polling employees. This creates disincentives for employers to request elections, as the proof required to obtain one is akin to that needed to withdraw recognition. Courts have criticized this approach, noting that it diminishes the incentive for employers to seek clarification through elections. The Board acknowledges that elections are the most reliable indicators of employee preferences, suggesting that employers should be encouraged to pursue elections instead of simply withdrawing recognition. The document argues that when an employer presents objective evidence of diminished union support, an election should be warranted, as this may lead employers to opt for an election rather than risk committing an unfair labor practice by withdrawing recognition. The discussion of the NLRB's standards for employer-conducted polls is deferred for another occasion.

The conclusion acknowledges the Board's finding of insufficient evidence to justify the Company's withdrawal of recognition but indicates that there is enough evidence to cast doubt on the Union's majority status, warranting an election. This aligns with precedent allowing employee polling in similar circumstances. The court expresses reluctance to contradict the Board's practices but believes that such a disagreement is preferable to enforcing a remedial bargaining order amidst uncertainty regarding the Union's majority status. The Company's additional arguments are deemed meritless. Consequently, the court conditionally enforces the Board's order, mandating an election within 90 days and requiring the Company to notify employees. Should the Union be chosen, the Company must comply with the Board's order.