TNS, Inc. v. National Labor Relations Board

Citations: 296 F.3d 384; 2002 WL 1467633Docket: Nos. 99-6379, 00-5433

Court: Court of Appeals for the Sixth Circuit; July 10, 2002; Federal Appellate Court

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TNS, Inc. petitioned the court to review an NLRB order that found the company violated Section 502 of the NLRA by failing to reinstate employees after they engaged in a job action in 1981 due to claims of "abnormally dangerous" working conditions. The employees walked out after their collective bargaining agreement expired and were subsequently replaced by permanent workers when negotiations failed. The NLRB had to interpret the ambiguous provisions of Section 502 to determine its applicability to this case, concluding that the law protected the employees' actions and that TNS’s refusal to reinstate them constituted a violation. 

TNS challenged the NLRB's decision on several grounds, including claims that the Board misinterpreted Section 502 by protecting employees without a no-strike provision, required only a good faith belief in dangerous conditions rather than actual existence, and improperly ruled that companies cannot permanently replace such workers. Additionally, TNS disputed the Board's factual findings regarding the employees' beliefs about their working conditions and the objective evidence of danger at the plant, which was regulated by the Nuclear Regulatory Commission. TNS also argued that the Board's delays warranted refusing to enforce its award. 

The court rejected TNS's statutory interpretation arguments, affirming the Board's understanding of Section 502, but partially accepted TNS's factual challenges and agreed with the argument regarding the Board's delay. Consequently, the court VACATED the Board’s decision. The case involved TNS’s manufacturing of armor-piercing projectiles from depleted uranium, a substance recognized for its carcinogenic and toxic risks.

The Paper, Allied-Industrial, Chemical and Energy Workers Union represented TNS employees and raised concerns about hazardous levels of DU dust and inadequate safety procedures during monthly inspections by a joint management-labor health and safety committee. On March 10, 1981, the Union issued an ultimatum stating employees would not return to work after April 30 unless safety issues identified in previous inspections were resolved. Negotiations for a new collective bargaining agreement began on March 24, 1981, during which TNS offered a wage increase and other changes, while the Union proposed a new health and safety clause and opposed extended layoff and probationary periods. The contract expired on May 1, 1981, leading to a work stoppage by Union members, which the Union claimed was justified under the NLRA’s Section 502 exemption for dangerous working conditions, contrary to TNS’s assertion that the stoppage was a strike. TNS informed employees on July 7, 1981, of plans to hire permanent replacements. After the Union offered to return to work on February 15, 1982, TNS refused reinstatement. The Union filed a complaint with the NLRB on August 18, 1982, alleging unfair labor practices by TNS for hiring replacements and denying reinstatement. TNS moved to dismiss, arguing the Union's claim was based on a belief of danger rather than actual dangerous conditions. An NLRB Administrative Law Judge granted the Union's motion to amend the complaint to reflect this. TNS subsequently appealed the amendment, which was rejected by the NLRB. The excerpt also notes that the Act does not compel employees to work against their will, nor does it classify quitting labor due to dangerous conditions as a strike.

Following the appeal, a different Administrative Law Judge (ALJ) conducted a de novo hearing as mandated by the National Labor Relations Board (NLRB) and concluded on July 31, 1987, that TNS violated Section 502. However, on December 23, 1992, the Board issued a Supplemental Decision reversing the ALJ’s findings, with a majority voting to dismiss all unfair labor allegations, though the analysis of Section 502 was divided with no consensus reached. The Union subsequently appealed, and on February 14, 1995, the D.C. Circuit remanded the case, criticizing the Board for lacking a clear position and appropriate legal standards. The court emphasized the need for a majority-supported statement of the applicable rule. 

More than four years later, on September 30, 1999, the Board issued its Second Supplemental Decision, which contradicted its previous stance and determined that Section 502 was applicable to the job action. It found that TNS had committed unfair labor practices by hiring permanent replacements and refusing to rehire employees involved in the work stoppage. The decision established a new four-part test for assessing Section 502's applicability regarding cumulative dangers to employee health and safety, requiring proof that employees: (1) believed in good faith that their working conditions were abnormally dangerous; (2) that this belief contributed to the work stoppage; (3) that the belief was backed by objective evidence; and (4) that the perceived danger posed an immediate threat to health or safety. The Board ordered TNS to reinstate and provide back pay to the employees involved in the work stoppage. TNS is appealing this order, which the Board seeks to enforce.

In reviewing TNS's challenges to the Board's statutory interpretations, the court applies the Chevron standard, assessing whether Congress has directly addressed the issue. If not, the court evaluates if the agency’s interpretation constitutes a permissible construction of the statute, upholding the Board's interpretation if it is deemed "permissible" and "reasonable," regardless of whether it is the only or preferred interpretation.

TNS argues that Section 502 should not apply in the current situation because it is intended only for cases where employees are bound by a "no-strike" provision. TNS claims the Board incorrectly interpreted Section 502 to include scenarios without such provisions. While TNS cites case law suggesting Section 502 applies solely in the context of "no-strike" clauses, the Board's interpretation is also supported by legal precedent, necessitating deference under the Chevron standard. TNS references several cases to bolster its argument, noting that Section 502 typically serves as an exception to "no-strike" obligations, allowing employees to cease work for safety reasons without facing legal repercussions. TNS contends that without a contractual "no-strike" provision, employees can choose to work in potentially hazardous conditions without needing protections from Section 502. However, both parties acknowledge that the legislative history of Section 502 does not explicitly address "no-strike" provisions. Ultimately, the Board's interpretation is deemed reasonable, as most cited cases involve express or implied "no-strike" clauses, with only one case—Tamara Foods—finding Section 502 inapplicable in the absence of a collective bargaining agreement.

Section 502 is interpreted differently regarding its applicability to "no-strike" provisions. It is not simply an exemption limited to circumstances where a no-strike provision exists. The Eighth Circuit's Tamara Foods case, which suggests a restrictive application of Section 502, is distinguishable because it found Section 502 inapplicable due to the absence of a collective bargaining agreement rather than a no-strike clause. The Board's position argues that denying job protection under Section 502 to unionized employees without a no-strike clause or to non-unionized employees would be illogical if Section 502 is meant to protect those engaged in lawful work stoppages.

Administrative law judges have previously held a limited interpretation of Section 502, but the Board has now issued a ruling affirming a broader applicability. Under the Chevron standard of review, this court must uphold the Board’s interpretation as reasonable since Congress has not explicitly defined the issue. The Board's new criteria for Section 502 require a good faith belief in abnormally dangerous conditions supported by objective evidence. TNS contends that actual abnormal danger must be proven for Section 502 to apply in work stoppages, referencing the Supreme Court’s Gateway Coal decision, which emphasizes the need for objective evidence of such conditions.

TNS also cites a previous ruling where employees could face discharge under a no-strike clause if later evidence does not support their belief in dangerous conditions. Historically, the Board has maintained that Section 502 applies only when abnormally dangerous conditions are objectively established, contradicting the new interpretation that allows protection based on a good faith belief alone.

Responses to TNS’s arguments highlight that while Gateway Coal appears to support TNS’s interpretation of Section 502, it actually involved a case where a striking union failed to provide objective evidence of abnormal danger, leading the Court to determine that Section 502 did not apply. Similarly, the Eighth Circuit’s Fruin-Colnon decision lacked evidence of abnormal danger. Although some case law favors TNS's reading, there is also substantial authority backing the Board's interpretation. The critical issue, as established in Knight Morley, is whether objective evidence indicates that working conditions could be viewed as "abnormally dangerous." The court clarified that Section 502 limits management's authority to require work under conditions employees sincerely believe are dangerous. Furthermore, in Banyard v. NLRB, the District of Columbia Circuit rejected an unsafe-in-fact standard for Section 502, emphasizing that the relevant inquiry is whether actual working conditions, supported by competent evidence, could reasonably be considered abnormally dangerous. The Board has also applied Section 502 to work stoppages even when conditions were not deemed abnormally dangerous, provided there was objective evidence of the employees' beliefs. TNS argues that the Board is not entitled to deference in its interpretation, asserting that Section 502 clearly requires actual abnormally dangerous conditions. However, the language of Section 502 is ambiguous and supports both interpretations, as demonstrated by the extensive case law. The Supreme Court's Chevron doctrine states that if Congress's intent is clear, it must be followed; if not, the agency's interpretation may be upheld if it is a permissible construction of the statute.

Congress's intent regarding the interpretation of Section 502 is unclear, necessitating the application of the deferential Chevron standard of review. The court must uphold the Board’s interpretation that Section 502 requires only a good faith belief, supported by objective evidence, of abnormally dangerous working conditions. TNS contends that the Board wrongly interpreted Section 502 to prevent employers from permanently replacing workers engaged in a Section 502 work stoppage, arguing for parity with other types of work stoppages not linked to employer unfair practices. Citing prior case law, TNS asserts that since it has not committed an unfair labor practice under Section 8 of the NLRA, it should be allowed to permanently replace striking workers. However, the court rejects this argument, reaffirming that the Board's interpretation, which protects employees from permanent replacement during Section 502 actions, is reasonable and logical. This interpretation aligns with the notion that allowing replacements would undermine the special protections afforded to workers who act in good faith due to dangerous conditions. The court notes that a company’s refusal to reinstate strikers is only lawful if there is a substantial business justification, and the Board has determined that permanent replacement in the context of Section 502 actions would defeat its intended purpose of protecting workers from hazardous situations.

Congress has not addressed the issue at hand, and the court must uphold the Board's reasonable interpretation under the Chevron deference doctrine. The court previously rejected TNS’s arguments against the Board's four-part test related to Section 502, which pertains to employee work stoppages due to health and safety concerns. The Board determined that the NLRB General Counsel demonstrated by a preponderance of evidence that: (1) TNS employees held a good faith belief that their working conditions were abnormally dangerous, (2) this belief contributed to the work stoppage, (3) the belief was backed by objective evidence, and (4) the perceived danger posed an immediate threat to employee health or safety. Notably, the fourth requirement is interpreted flexibly due to the nature of cumulative dangers, making it easier to satisfy.

TNS primarily contests the validity of the first three findings. The court will uphold the Board's factual determinations if supported by substantial evidence, taking into account any contradictory evidence. TNS argues that the claims of dangerous working conditions were a pretext for economic motivations behind the strike, citing the timing of the job action coinciding with stalled negotiations and the absence of prior health and safety complaints. However, the court finds substantial evidence supports the Board’s conclusions regarding the employees' beliefs and their contribution to the work stoppage.

The Company argues that the Union's focus during the vote was on economic issues rather than workplace safety, citing discussions and graffiti on TNS property. The Company contends that Union members were largely unaware of the "objective evidence" of danger cited by the Board, suggesting this evidence could not have motivated the walkout. In contrast, the Board presents evidence of ongoing safety inspections and numerous complaints from the Union since October 1980, indicating employee concern for safety. The Board references a March 10, 1981 ultimatum from the Union, which stated that a walkout would be due to alleged workplace dangers. The Union claims employees were aware of unsafe exposure to DU dust and related medical symptoms, and TNS had informed some employees about elevated uranium levels in their urine. TNS's response was an insufficient respirator program, highlighting the peril to employee health.

The court recognizes that both sides present substantial evidence spanning two decades, but under the standard of review, the mere existence of conflicting evidence does not support TNS's case. To overturn the Board's findings regarding employee beliefs and motivations, the court must determine that those findings lack "substantial evidence on the record considered as a whole." TNS challenges the Board's conclusion that objective evidence supported employees’ beliefs in danger, arguing that the absence of regulatory action undermines this finding. The court rejects this argument, clarifying that the federal government fully regulates nuclear safety, referencing Silkwood v. Kerr-McGee Corp. to emphasize federal preemption in this area.

In *Pac. Gas and Elec. Co. v. State Energy Res. Conservation. Dev. Comm’n*, the U.S. Supreme Court established that the safety of nuclear technology falls under the exclusive jurisdiction of the Federal Government, specifically through the Nuclear Regulatory Commission (NRC), which succeeded the Atomic Energy Commission in 1974. Congress granted the NRC the authority to regulate nuclear materials to safeguard public health and safety, with the option to delegate certain regulatory functions to states under 42 U.S.C. 2021. Tennessee, as an "agreement state" since 1965, allows its Division of Public Health, Division of Radiological Health (TDRH) to regulate nuclear facilities like TNS using NRC guidelines.

The TDRH conducts periodic inspections to ensure compliance with regulations and has the authority to suspend or revoke operational licenses. Inspections have been ongoing since 1979, but a dispute arose regarding TNS’s compliance with NRC and TDRH regulations. Notably, no immediate danger was identified by the agencies, as they did not take decisive regulatory actions against TNS, indicating no current crisis or imminent threat to health and safety. 

TNS argued that the absence of significant regulatory action by the expert agencies should imply no "abnormal danger" exists. However, the National Labor Relations Board (NLRB) noted that while NRC and TDRH did not find conditions to be abnormally dangerous, employees had a reasonable good faith belief that the workplace was unsafe, supported by existing objective evidence. The NLRB maintained that it was not bound by the NRC and TDRH findings and utilized evidence of TDRH's violation citations to justify its conclusions regarding employees' safety concerns. Courts typically afford regulatory agencies like the NRC significant deference in their areas of expertise.

Courts generally exhibit reluctance to challenge agency decisions related to scientific matters within their expertise, as this deference enhances efficiency and prevents conflicting determinations between agencies. The Sixth Circuit, alongside other circuits, has established that safety regulations from the Nuclear Regulatory Commission (NRC) define the duty of care in radiation safety cases influenced by the Price-Anderson Act amendments. The National Labor Relations Board (NLRB) has historically accepted agency standards when evaluating claims of abnormal danger, rejecting such claims when no objective evidence supported them, particularly in cases involving compliance with federal regulations.

In a recent case, the NLRB did not label a condition as "abnormally dangerous" despite employees' beliefs to the contrary, as there was objective evidence supporting these beliefs, primarily derived from regulatory non-compliance letters. This raises concerns about potentially imposing stricter safety standards than those established by expert agencies. Critics argue that allowing employees to claim protection under Section 502 in situations where agencies have taken no decisive action could complicate compliance for companies and lead to manipulative use of job action protections. Nonetheless, the NLRB maintained that its findings did not contradict NRC determinations but were instead based on objective evidence of employees' concerns about workplace safety. The Board asserted that it is not obliged to fully defer to the NRC's decisions.

In the Supreme Court's Whirlpool decision, the Court evaluated a rule from the Secretary of Labor allowing workers to refuse work they reasonably believed to be dangerous. Opponents argued that the Occupational Safety and Health Act (OSH Act) did not explicitly support such a protected refusal and that employees could already address safety concerns through direct complaints to OSHA. The Court acknowledged the existence of OSHA but recognized situations where employees might justifiably believe that the OSH Act does not adequately protect them from imminent risks of serious injury or death. It noted that employees should not solely depend on statutory remedies when facing immediate danger. Consequently, the Secretary’s rule permits employees to refuse hazardous work without fear of employer retaliation if they are in good faith belief of imminent danger.

Although this case differs from Whirlpool—lacking an explicit rule from the Secretary and involving different statutes—it supports the idea that the Board can justify employee work stoppages based on radiation safety despite the absence of decisive regulatory action by the NRC. The NLRB is not legally barred from finding that objective evidence supports employees' beliefs in dangerous working conditions when relevant agencies have not acted. The Board's determination that substantial evidence showed TNS employees' good faith belief in an abnormally dangerous workplace was based on four factors cited from an Administrative Law Judge's decision, including that air quality exceeded maximum permissible concentrations at multiple workstations during the preceding quarter.

Prolonged use of respirators among employees was found to negatively impact their health, with average whole body uranium exposures significantly exceeding typical levels in the nuclear industry. Elevated uranium-in-urine levels indicated a serious risk of kidney damage. The Board determined that this evidence provided objective proof supporting the employees' belief that their workplace was unsafe. The Administrative Law Judge (ALJ) highlighted that the presence of depleted uranium (DU) dust in the air surpassed the Maximum Permissible Concentration (MPC) standard set by the TDRH, which governs exposure to airborne radioactive materials. Although engineering controls were expected to manage dust levels, the company had to implement a respirator program due to excessive dust concentrations. Despite noted discomfort from respirator use, it was viewed as a necessary response to hazardous conditions rather than a cause of danger itself. The ALJ's findings were also supported by a NIOSH investigation indicating that whole body doses for production workers between 1975 and 1980 were higher than those in other uranium industry sectors, raising further health concerns.

TDRH adopted NRC regulations limiting external radiation exposure to 5 rems per year. The Board concluded that TNS workers, despite having higher-than-average exposure compared to U.S. nuclear industries, remained within NRC/TDRH regulatory limits. Regarding uranium exposure, TNS utilized depleted uranium (DU) in manufacturing, which is both a low-level radioactive material and a toxic heavy metal. TDRH monitored radiation and uranium intake, but there was no binding NRC regulation on uranium levels in employees’ kidneys; only a non-binding guideline existed, suggesting potential kidney damage at urine levels exceeding 130 micrograms per liter (ug/l). The guideline established a notice level at 15 ug/l and an action level at 30 ug/l, prompting investigation and removal from work, respectively. However, TDRH applied the more lenient DARCOM standard, which set notice and action levels at 50 ug/l and 100 ug/l, respectively. According to the NIOSH report from 1977-1981, 52% of TNS employees had urine samples exceeding 50 ug/l, and 19.5% exceeded 100 ug/l. The report indicated that urine uranium concentrations surpassed NRC guidelines but complied with DARCOM standards. The Board relied on these measurements to support claims of an abnormally dangerous workplace, noting that TNS complied with limits set by regulatory agencies, which include significant safety margins. The ALJ acknowledged that comparing evidence to regulatory standards was an objective assessment method. Ultimately, the evidence indicated TNS largely adhered to safety regulations, suggesting no abnormal danger in the workplace.

A lack of emergency action by the NRC or its state counterpart does not, by itself, preclude the NLRB from finding that employees had objective reasons to believe their workplace was dangerously unsafe. However, the existence of regulatory oversight and the decision not to act must be considered. Concrete health measurements established by these agencies also play a critical role and cannot be entirely dismissed by the NLRB without supporting evidence. Factors such as unaddressed egregious evidence or slow regulatory response may contribute to the situation but do not negate the impact of the regulators' inaction. The Supreme Court mandates that courts evaluate NLRB fact-finding based on substantial evidence, considering both supporting and contradictory evidence. In this case, the evidence relied upon by the Board is deemed weak, particularly regarding respirator use, which may indicate improved conditions rather than danger. Consequently, the Board's conclusion that employees had objective support for their safety concerns lacks substantial evidence when viewed in the context of the overall record.

Regarding delays in agency determinations, courts typically show deference and do not deny enforcement based solely on delay, especially when it could unfairly benefit employers at the expense of employees. Although the Administrative Procedures Act emphasizes timely action, courts have occasionally denied enforcement due to excessive delays that render it inequitable. However, this circuit generally enforces Board decisions despite delays unless there is evidence that the delay prejudiced the company or provided an unfair advantage to the Board or union.

TNS argues that the Board's decision to order back pay and reinstatement is prejudicial due to the lengthy duration of the case, spanning 18 years, which has resulted in significant back pay accumulation. The company contends that changes in its operations over this period make reinstatement of employees unrealistic. A precedent in Olivetti Office U.S.A. Inc. v. NLRB supports similar modifications of back pay and reinstatement orders due to prolonged case delays and operational changes within the company. The Board claims that the delays were justified by the complexity of the case and efforts to reach a settlement. However, substantial delays are noted, with the case filed in 1982 and the ALJ's decision only issued in 1987, followed by further delays until 1999 for a second decision after remand. The court finds it unreasonable to hold TNS accountable for damages accruing over this extensive time, leading to the decision to vacate the Board's ruling regarding TNS's obligations under Section 502.

The excerpt also highlights severe workplace conditions at TNS, where employees were exposed to hazardous materials, including radioactive substances, resulting in significant health risks. Testimonies reveal that employees faced extreme contamination, with dust and soot covering their bodies and respiratory exposure to toxic substances. Despite the hazardous environment, management declined to conduct testing for contaminants due to cost concerns. A NIOSH report indicated that while some workers had significant exposure levels in the late 1970s, TNS was compliant with regulatory standards by 1978, as no workers exceeded exposure limits thereafter.