Walnut Creek Honda Associates 2, Inc. v. National Labor Relations Board
Docket: Nos. 95-70278, 95-70343
Court: Court of Appeals for the Ninth Circuit; July 16, 1996; Federal Appellate Court
An appeal has been made regarding an NLRB decision mandating Walnut Creek Honda (Honda) to restore lost wages and benefits to striking workers. The strike commenced following unsuccessful negotiations over a collective bargaining agreement (CBA) between Honda and the Machinists Automotive Trades District Lodge No. 190 (the Union). The NLRB determined that the strike was in response to Honda's unfair labor practice of negotiating to impasse over a permissive subject of bargaining and ordered the restoration of wages and benefits, which Honda is appealing.
Honda operates an automobile dealership in Walnut Creek, California, with the Union representing its mechanics and parts department employees. The existing CBA was set to expire on June 30, 1992, and during negotiations in June, Honda disclosed its membership in the New Car Dealers of Contra Costa (the "Association"), which required Honda to negotiate labor matters solely through the Association. Despite five negotiation meetings, Honda and the Union could not reach an agreement, leading to the strike on July 1, 1992. After the strike, Honda began hiring permanent replacements and notified strikers that they were "permanently replaced," requiring them to reapply for their positions.
On October 23, 1992, the strikers, represented by the Union, offered to return to work, but Honda classified them as economic strikers and placed them on a preferential hiring list, leading to their rehiring with reduced wages and benefits. The Union subsequently filed an unfair labor practice charge against Honda for not restoring the strikers to their original terms. The NLRB's complaint alleged that Honda bargained to impasse on the issue of Association membership, while Honda claimed the primary dispute was over the CBA's length. An evidentiary hearing revealed conflicting testimonies from both Honda's negotiator and Union representatives regarding the impact of Association membership on the strike, with the Union representatives expressing strong opposition to Honda’s membership in the Association.
Honda's final offer, which sought to adopt the Association Collective Bargaining Agreement (CBA), was rejected by employees who subsequently voted to strike. Cardoza sought to negotiate with Waud to prevent the strike, suggesting he could secure employee consent for Honda joining the Association if Waud could guarantee no strikes next year. Waud declined, stating that if the Association struck, the employees would also need to strike. Cardoza proposed delaying Honda's entry into the Association for a year to avoid a potential strike in 1993, but Waud rejected this as well. Testimonies from Cardoza and Tolentino indicated the Union's opposition to the Association CBA, and the Administrative Law Judge (ALJ) found their accounts more credible than Waud's. The ALJ noted inconsistencies in Waud's statements regarding the Union’s stance and ultimately ordered Honda to reinstate the strikers with back pay. The National Labor Relations Board (NLRB) upheld the ALJ’s decision, and Honda’s appeal highlighted the standard of review, emphasizing that NLRB findings must be supported by substantial evidence and that the ALJ's credibility assessments warrant deference. The NLRB concluded that Honda engaged in an unfair labor practice by bargaining to impasse over a permissive subject, as outlined in Section 8(a)(5) of the National Labor Relations Act, which mandates good faith bargaining over mandatory subjects like wages and working conditions.
Parties cannot insist on permissive subjects to the point of impasse. The size or scope of the bargaining unit is identified as a permissive subject, while the length of the Collective Bargaining Agreement (CBA) is a mandatory subject. The National Labor Relations Board (NLRB) has recognized its expertise in evaluating impasse issues, which is a factual determination based on its experience with bargaining problems. An impasse is defined as a deadlock where parties, despite good faith efforts, cannot reach an agreement. Factors considered in determining an impasse include the number and duration of meetings and the overall timeline of negotiations, though there is no set formula for establishing an impasse.
In the case at hand, Honda contended that the Administrative Law Judge (ALJ) erred in finding an impasse on June 30, 1992. The ALJ’s finding was supported by substantial evidence, including Honda's submission of a "best and final offer," which the Union rejected, leading to a strike vote. Honda's flat rejection of a last-minute compromise further indicated an impasse. While Honda argued that negotiations continued after this date, an impasse does not require a complete breakdown of discussions. It can be a temporary deadlock, which may eventually be resolved through negotiation or economic pressure, as illustrated by Honda's strategy of hiring strike replacements. The ALJ and NLRB's expertise in such matters is acknowledged, and their decision that an impasse was reached on June 30, 1992, is upheld.
The ALJ determined that the primary dispute between the parties was Honda's attempt to join the Association and impose its collective bargaining agreement (CBA) on employees. Honda contended that the dispute actually revolved around the length of the CBA, supported by a letter from Union counsel David Rosenfeld, which stated no objections to Honda joining the Association. However, this letter also indicated that the CBA must include a clause rejecting recognition of any Association strike in 1993 and that full adoption of the Association's CBA would occur only after a new agreement was reached. The ALJ discounted the letter's impact, noting it reflected the Union's ongoing objection to the scope of the bargaining unit, now framed as opposition to adopting the Association's CBA. The ALJ found credible testimonies from Cardoza and Tolentino supporting the view that the impasse centered on Honda’s attempt to adopt the Association's CBA, while Honda’s Waud was deemed less credible. The ALJ's credibility determinations, which are given special deference, were not contradicted by substantial evidence. Consequently, the finding that the impasse was related to the bargaining unit's scope was upheld. The court affirmed the NLRB's decision, highlighting the ALJ’s well-reasoned and insightful ruling, and denied Honda's petition for review while enforcing the NLRB's order. The Union's counsel also mentioned that one striker was hired by a different company.
