National Labor Relations Board, Petitioner, v. Hayden Electric, Inc., Respondent, 693 F.2d 1358 (11th Cir. 1982)

The National Labor Relations Board (the "Board") petitions for enforcement of its Decision and Order of June 16, 1981 (the "Order"), 256 NLRB 104, pursuant to section 10(e) of the National Labor Relations Act (the "Act"), as amended, 29 U.S.C. § 160(e).¹  The Board, adopting the opinion of the administrative law judge, found that respondent Hayden Electric, Inc. ("Hayden Electric" or "Company") had violated sections 8(a) (1) and 8(a) (5) of the Act,²  29 U.S.C. § 158(a) (1) and (a) (5), by refusing to reinstate its former striking employees and by failing to comply with a collective bargaining agreement allegedly negotiated on its behalf by the National Electric Contractors Association, Inc. ("NECA") (Florida East Coast Chapter). Opposing enforcement of the Order, Hayden Electric argues that it permissibly withdrew from NECA and that the International Brotherhood of Electrical Workers, Local 728 (the "Union") consented to or acquiesced in its withdrawal from the multi-employer bargaining unit. Because we do not find substantial support in the record for the Board's holding, but find ample support in the record for the Company's contentions, we set aside the Board's Order and decline to enforce it.

FACTS

Hayden Electric is an electrical service contractor with its principal office and place of business located in Pompano Beach, Florida. From 1969 to 1975, the Company, either as a member of Florida East Coast Chapter, NECA or through written authorization, commissioned NECA to act as its agent in collective bargaining with the Union. NECA is the multi-employer bargaining unit³  of the electrical contracting industry, which exists for the purpose of representing its employer-members in negotiating and administering collective bargaining agreements. NECA regularly negotiated and executed multi-employer collective bargaining agreements with the Union on behalf of its employer-members, including Hayden Electric.

In 1975, the Company resigned from membership in NECA. In 1974, 1975, and 1976, Company owner Bruce Hayden sent a letter to the Union, with a copy to NECA, prior to the expiration of the then current NECA-Union collective bargaining agreement. The letter stated that Hayden Electric intended to exercise its option to cancel its contract with NECA. After each letter, the Company continued to abide by the terms of the then current collective bargaining agreement and to apply the terms of the subsequent labor agreement negotiated between the Union and NECA.

William H. Briley, formerly vice president of Hayden Electric, purchased the Company in May 1977 and became its president. Omitting to forward the customary letter resigning from NECA that year, Briley, the following year, sent a letter to James Weldon, Business Manager of the Union, with a copy to Marshall Williams, the Secretary Manager of NECA. This letter dated April 27, 1978 was similar to those sent in 1974, 1975, and 1976, regarding contract cancellation. The letter read:

Complying with the requirements of the IBEW 728, this letter is to advise, 150 days in advance, of our intention to exercise our option to cancel our contract with the local union 728.

We find our project bidding hindered and are unable to compete with non-unions paying lower costs and less benefits.

Due to our long standing relationship with the local, we hope economic conditions improve so this option does not have to be finalized.

Following receipt of the Company's letter, Weldon met with Briley in June 1978. Weldon asked Briley what was meant by the letter. Briley explained that he had sent the letter to protect himself from being bound to a new collective bargaining agreement.

On April 27, 1979, Briley sent Weldon a cancellation letter identical to the one he had given the year before. Briley also sent a copy of the letter to Williams. Again Weldon called Briley and arranged a meeting. When they met Briley explained that the letter was sent for the following purpose:

I told him again that the letter was insurance for Hayden Electric, that under the contract that letter had to be sent. And, that it was protection insurance and that it gave me the right to bargain for myself on a one-to-one ratio with Jimmy [Weldon], and to terminate the contract.

(Tr., Dec. 3, 1980, Vol. I, pg. 288).

During this meeting Weldon asked Briley what wage package would be acceptable to the Company. Briley replied that a fifty cent wage increase would probably be acceptable. Weldon replied that he did not think fifty cents was close to what the Union would be requesting in negotiations. At this meeting Briley requested that a double time provision for overtime in the contract be cut back to time and a half for residential service work.

About a month later, Weldon called Briley and arranged another meeting. They again discussed the collective bargaining agreement and Briley reiterated that a fifty cent wage increase was an acceptable figure. Weldon stated that the figure was much too low and that the Union was talking about a $3.00-4.00 per hour increase. Briley replied that his service truck operation could not live with such a large wage increase. During the discussion Briley again requested that the overtime rate be reduced. Briley also requested that there be a special service truck rate. Weldon asked Briley if he would consider having a shop steward in his shop. Briley replied that his initial reaction was not favorable to the request, but that if Weldon thought he had to do it, he would.

During the month of September, 1979, Weldon called Briley and requested a third meeting. The two met in Briley's office where Weldon indicated that the NECA contract would contain approximately a $2.85 per hour raise. Briley replied that it was much too high an increase for him to live with, but he raised his own offer to $1.25 an hour. Weldon rejected Briley's counter-offer as too low.

Briley attended several of the ongoing bargaining sessions between NECA and the Union. After one such session, Briley met with Williams and Crosley, NECA's attorney, in Williams' office. Briley told the NECA officials that he was not satisfied with the way negotiations were going and he wanted clarification as to the legality and effectiveness of his April letter. Crosley examined the letter and then told Briley, "You are free to go, but be careful." (Tr., Dec. 3, 1980, Vol. I, pp. 400-403).

In late September and early October, Briley attended three or four NECA meetings regarding the ongoing contract negotiations. By September 30, the Union and NECA negotiated a "cooling off" period of ten days to follow the expiration of the 1978 collective bargaining agreement. By October 10, no agreement had been reached, and the Union called a general strike against all the employers represented by NECA, including Hayden Electric. On November 3, 1979, the Union's membership ratified the terms of a new agreement. Weldon sent a mailgram to Briley the same day offering the immediate return to work of the Union's members and requesting further discussions of the dispute concerning the "state of contractual relations." The Company's employees were directed to report to work on Monday, November 5.

On November 7, Briley and Weldon met to discuss the November 3 offer to return to work. It was during this meeting that Weldon first informed Briley that he believed the Company's April 1979 termination letter was defective and had not withdrawn bargaining authority from NECA. Other issues discussed at the November 7 meeting included overtime and a special service truck rate. Weldon offered to take any journeyman electricians Hayden Electric had hired as strike replacements into the Union. At Weldon's request the two met again on November 15, 1979. During this meeting Weldon offered not to bring the two Union members Briley still had working for him up on intra-union charges for working for a non-union contractor. Again at this meeting Weldon and Briley discussed overtime and a special service truck rate.

Weldon met with Briley for the final time on December 15, 1979. At this meeting Weldon asked Briley whether he was going to pay his employees for the ten day "cooling off" period. Briley responded that the matter was under consideration. Weldon also asked whether Briley would pay fringe benefits for that period of time. Briley responded that he would.

In addition to the post-strike meetings between Briley and Weldon, Weldon sent five different written documents to Briley regarding the status of Hayden Electric and the Union's contractual relationship. The first such document was the mailgram sent on November 3, described earlier. The second written document was a letter dated November 7, 1979. The third written correspondence from Weldon was a letter dated January 16, 1980, informing Briley that Hayden Electric was in arrears for fringe benefit contributions due Union employees for the ten day cooling off period. The January 16 letter read as follows:

In checking our records, we find that you have not paid the fringe benefits due the employees you terminated and replaced with non-union people, for the month of October, 1979.

At our last negotiations meeting, it was my understanding that payment of the above mentioned fringes was under consideration and I requested that you present some type of a counter proposal concerning our negotiations.To date this has not occurred. I would appreciate hearing from you in this regard as soon as possible.

Weldon's next written communication is a letter dated March 6, 1980, written shortly after the Board's Regional Office dismissed an unfair labor practice charge filed against Hayden Electric by the Union. It read as follows:

In view of the recent NLRB decision, I would like to schedule another negotiating meeting with you. Please contact me so that we may arrange a suitable time and place.

Between November 5, 1979, and December 2, 1980, the date of the hearing for the unfair labor practice charges, Hayden Electric hired ten additional replacements for its former employees. The Company paid some of the replacement employees at a lower rate than the rate established in the expired agreement. It paid the other replacement workers at the expired agreement rate. Hayden Electric did not pay any at the higher rate established in the new labor agreement. The Company also unilaterally established different benefits, such as a major medical plan and incentive wage increases for its strike replacements, and unilaterally discontinued its contributions to the Union's fringe benefits fund.

DISCUSSION

The Board's decision that Hayden Electric violated sections 8(a) (1) and 8(a) (5) of the Act, with respect to both the constructive discharge of striking employees and the refusal to comply with the collective-bargaining agreement, flowed from its finding that Hayden Electric's attempted withdrawal from NECA on April 27, 1979 was ineffective. After reviewing the entire record, we hold that the Board's finding of unfair labor practices is not supported by substantial evidence.⁴  The burden of showing that the evidence is insufficient to support a finding of unfair labor practices is not as heavy, since the Board's subsidiary, but conclusive, finding of ineffective withdrawal is predicated on its interpretation of written evidence.⁵ 

In finding ineffective withdrawal of NECA bargaining authority, the Board relied on three writings. On February 28, 1978, Briley, on behalf of Hayden Electric, executed two separate documents with the Union. These documents, commonly referred to as "letters of assent," were bargaining authorizations from Hayden Electric to NECA; they authorized NECA to bargain on the Company's behalf with the Union.⁶  Both letters of assent require the Company to give the Union and NECA notice of its intent to withdraw NECA's bargaining authority at least 150 days prior to the expiration of the 1978 collective bargaining agreement. Accordingly, prior to the expiration of the 1978 labor agreement, Briley sent a cancellation letter to the Union, and a copy of same to NECA. This letter dated April 27, 1979 read as follows:

Complying with the requirements of the IBEW LU 728, this letter is to advise, 150 days in advance, of our intention to exercise our option to cancel our contract with the [sic] local union 728.

We find our project bidding hindered and are unable to compete with non-union shops paying lower labor costs and less benefits.

Due to our long-standing relationship with the local, we hope economic conditions improve so that this option does not have to be finalized.

The Board found that Briley's April 27, 1979 letter was ambiguous and did not give the Union and NECA sufficient notice of the Company's intent to revoke NECA's authority to bargain on its behalf. We disagree.

The Board in Retail Associates, Inc., 120 NLRB 388 (1958), prescribed guidelines to govern withdrawal from multi-employer bargaining. Under these rules, an employer or union is free to withdraw from a multi-employer association for any reason prior to the date set for renegotiation of an existing contract or the date on which negotiations actually commence, provided adequate written notice is given. Once negotiations towards a new contract begin, however, a party may only withdraw if "mutual consent" is given or if "unusual circumstances" exist. Id. at 396. "This approach affords each party an opportunity to rescind its consent to multi-employer bargaining, but limits unilateral withdrawal during the period when such action would jeopardize the viability and effectiveness of the bargaining process. Even then, however, a necessary measure of flexibility is provided by the 'mutual consent' and 'unusual circumstances' exceptions." NLRB v. Charles D. Bonanno Linen Service, 630 F.2d 25, 28-29 (1st Cir. 1980). "This standard has won judicial approval." NLRB v. L.B. Priester & Son, Inc., 669 F.2d 355, 360 (5th Cir. 1982).⁷ 

There is no question that Briley's April 27, 1979 letter was timely. Perplexing, however, is the administrative law judge's determination that the letter was "ambiguous ... and provid [ed] nothing enlightening by its terms to indicate the Company's desire to withdraw NECA's bargaining authority." The terms of the cancellation letter become dispositive of the issue of withdrawal when read in conjunction with the letters of assent executed by Hayden Electric in February, 1978. The letters of assent specifically provide that NECA's bargaining authority "shall remain in effect until terminated by [Hayden Electric], giving written notice to ... NECA, and to the Local Union at least one hundred fifty (150) days prior to the then current anniversary date of the ... labor agreement." Briley's letter of April 27 to the Union and NECA makes specific reference to the letters of assent when it states, " [c]omplying with the IBEW LU 728, this letter is to advise, 150 days in advance, of [the Company's] intention to exercise [its] option to cancel [its] contract with the local union 728." The only reasonable construction that can be given this statement, in light of the requirements for revoking NECA's bargaining authority set forth in the letters of assent, is that it was a statement noticing the Company's intent to revoke NECA's bargaining authority. We refuse to construe the statement in any other manner, because to do so would disregard the literal meaning of the terms of the April 27 correspondence and the referenced letters of assent.⁸ 

In finding ineffective withdrawal, the Board relied heavily on Briley's admission that the April 27 letter was to serve as "insurance" to protect the Company in the event that NECA's bargaining resulted in a Union strike or in a labor agreement that was not in the Company's best interest. The Board's determination that this admission makes apparent the equivocating and ambiguous tenor of the April 27 letter to the Union is unfounded. We read Briley's reference to the April 27 letter as "insurance to preserve the Company's right to negotiate separately with the Union" as indicating a clear, convincing, and unequivocal intent to withdraw from the multi-employer bargaining unit.

As urged by the Board throughout this litigation, once Hayden Electric executed the letters of assent authorizing NECA to bargain on its behalf with the Union, it was obligated to adhere to the eventual labor agreement resulting from the collective bargaining process. The only way Hayden Electric could negotiate separately with the Union was to timely withdraw from NECA. Absent such withdrawal, the Company had no right to bargain individually with the Union. The only way the April 27 letter could insure the Company's right to negotiate separately with the Union is if the correspondence, in accordance with the terms of the letters of assent, advised the Union and NECA of the Company's intent to withdraw NECA's bargaining authority. Thus Briley's admission that the letter was insurance to preserve his right to bargain individually with the Union can only evidence the Company's intent to revoke NECA's bargaining authority and to give notice of such intent through its April 27 correspondence.

Not only did Hayden Electric give sufficient notice of its intention to withdraw bargaining authority from NECA, but we conclude that the evidence of record shows that the Union consented to or acquiesced in the Company's withdrawal from the multi-employer bargaining unit. It is well-established that a union's acquiescence in or implied consent to an employer's untimely or ineffective withdrawal will excuse that employer's subsequent refusal to honor a bargaining agreement negotiated by the union and the multi-employer association. NLRB v. Callier, 630 F.2d 595 (8th Cir. 1980); Fairmont Foods Co. v. NLRB, 471 F.2d 1170 (8th Cir. 1972); NLRB v. Spun-Jee Corporation, 385 F.2d 379 (2d Cir. 1972). The Board in I.C. Refrigeration Service, 200 NLRB 687, 690 (1972), enunciated the test for determining whether a union has consented to an untimely withdrawal:

Where a union expresses its willingness to meet and discuss terms peculiar to an individual employer's operation, and listen to counter proposals, the Board has found that such conduct evidences acquiescence in an otherwise untimely withdrawal, even though the union ultimately insisted that the employer could sign only the association contract.

In the instant case, the facts clearly show that the Union engaged in direct negotiations with Hayden Electric after receipt of the Company's April 27 withdrawal notice. Weldon, on behalf of the Union, met on several occasions with Briley and discussed substantive contract issues such as overtime pay and a special service contract rate. The parties also discussed wage package and overtime problems, and the possibility of the Company contributing welfare fund payments for a certain designated period. Particularly enlightening is Weldon's own testimony at trial regarding the way the meetings with Briley were proceeding:

I find it very frustrating that not once has Briley maintained any position, other than to just say that he can go on to NECA meetings, and this and that, and: Yes, I am going to go non-union. I am sorry you went on strike, and so now I am going to go non-union. He has never lived up to his responsibilities in any way, shape, or form. If it was his intention that he had cancelled properly the bargaining rights of NECA, he had never bargained. I said: So, I don't know what you are doing Bill. You have got me very frustrated and upset, and what have you. Now if nothing else, you ought to start giving me some proposals and doing something. You have done nothing... I asked him at some subsequent meeting, would he come up with some kind of proposals and I would do whatever I thought was appropriate with them, but he had never given me any proposals, not once. That was going on for about two months then.

(Tr., Dec. 3, 1980, Vol. I, p. 93).

Thus, Weldon's own admissions at trial, along with the types of issues raised and discussed during his post-April 27 meetings with Briley, indicate the Union's willingness to meet and discuss terms peculiar to the Company's operation and to listen to counter proposals. Further evidence of individual bargaining between the Union and Hayden Electric is found in Weldon's letters to Briley. On November 3, 1979, on behalf of the striking employees, Weldon sent Briley an offer to return to work. Nowhere in the mailgram was it stated that the Union considered Hayden Electric to be bound to the collective bargaining agreement negotiated by NECA. Rather, the mailgram indicated that the Union wanted to engage in further negotiations:

Local 728, International Brotherhood of Electrical Workers offers to return to work immediately and to discuss dispute with you concerning the state of contractual relations. Please call undersigned to make arrangements.

The theme of individual bargaining is carried out in Weldon's next written communication to Briley. In a letter dated January 16, 1980, Weldon again solicits counter proposals from Briley while failing to indicate his belief that Hayden Electric was bound to the new labor agreement:

In checking our records, we find that you have not paid the fringe benefits due the employees you terminated and replaced with non-Union people, for the month of October 1979.

At our last negotiations meeting, it was my understanding that payment of the above-mentioned fringes was under consideration and I requested that you present some type of a counter proposal concerning our negotiations.

To date this has not occurred. I would appreciate hearing from you in this regard as soon as possible.

By letter dated March 6, 1980, which was shortly after the unfair labor practice charge was dismissed by the Regional Office, Weldon requested further negotiations with Briley without stating the Union's belief that Hayden Electric was bound to the NECA-Union agreement:

In view of the recent N.L.R.B. decision, I would like to schedule another negotiating meeting with you. Please contact me so that we may arrange a suitable time and place.

The above-quoted letters are proof positive that Weldon was engaged in serious bargaining with Briley.⁹  It may be, as urged by Weldon throughout this litigation, that he believed Briley was not being responsive in the collective-bargaining process. This belief, however, does not discount the rather obvious attempt by the Union to engage in separate negotiations with Hayden Electric. Under the test set forth in I.C. Refrigeration, it is clear that the Union consented to or acquiesced in the Company's withdrawal from NECA.

For these reasons, we conclude that the Board's findings that Hayden Electric failed to give a timely unequivocal notice of withdrawal to the Union and that the Union did not consent to or acquiesce in the ineffective withdrawal are not supported by the record. Consequently, we hold that Hayden Electric's withdrawal from NECA on April 27, 1979 was effective, and its constructive discharge of striking employees along with its refusal to comply with the 1979 collective-bargaining agreement did not violate Secs. 8(a) (5) and 8(a) (1) of the Act.

Enforcement DENIED.