Regal Cinemas, Inc. v. NLRB, No. 01-1322 (D.C. Cir. 2003)

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 10, 2002 Decided January 31, 2003

No. 01-1322

Regal Cinemas, Inc.,

Petitioner

v.

National Labor Relations Board,

Respondent

On Petition for Review and Cross-Application

for Enforcement of an Order of the

National Labor Relations Board

Charles L. Warren argued the cause for the petitioner.

Richard L. Wyatt, Jr. was on brief.

Fred B. Jacob, Attorney, National Labor Relations Board,

argued the cause for the respondent. Arthur F. Rosenfeld,

General Counsel, John H. Ferguson, Associate General Coun-

sel, Aileen A. Armstrong, Deputy Associate General Counsel,

and Robert J. Englehart, Attorney, National Labor Relations

Board, were on brief. David S. Habenstreit and Ruth E.

Burdick, Attorneys, National Labor Relations Board, entered

appearances.

Before: Henderson, Tatel and Garland, Circuit Judges.

Opinion for the court filed by Circuit Judge Henderson.

Karen LeCraft Henderson, Circuit Judge: Regal Cine-

mas, Inc. (Regal) petitions for review of a June 20, 2001

decision and order of the National Labor Relations Board

(Board or NLRB) finding that Regal violated sections 8(a)(1)

and 8(a)(5) of the National Labor Relations Act (NLRA or

Act), 29 U.S.C. s 158(a)(1), (a)(5), by refusing to bargain in

good faith with three union locals before converting to

"manager-operated" theaters and terminating its union-

represented projectionists. On review, Regal argues that the

Board erred in (1) concluding that Regal had a duty to

bargain over its conversion to manager-operated theaters; (2)

applying a "waiver analysis" to the management rights clause

contained in the collective bargaining agreements between

Regal and the unions; (3) failing to find that one of the union

locals had waived its right to bargain over Regal's conversion

decision by failing to timely demand bargaining; and (4)

ordering Regal to reinstate the terminated projectionists.

We find that Regal's contentions are without merit and

therefore deny its petition for review and grant the NLRB's

cross-application for enforcement.

I. Background

A. Dedicated Projectionists and the Trend

Toward Manager-Operated Theaters

Regal is a Tennessee corporation that operates movie

theaters throughout the United States. Since its founding in

1989, Regal has expanded its business predominantly through

the acquisition of existing theaters and smaller, regional

theater chains. After an acquisition, Regal's practice has

been to evaluate the existing equipment, physical layout and

personnel in order to determine whether to convert the

theater into a "manager-operated" theater. Joint Deferred

Appendix (JDA) 484, 493-94. A typical movie theater em-

ploys a staff consisting of managers, assistant managers,

concessionists, box office employees, ushers and projection-

ists. In a manager-operated theater, however, managers and

assistant managers operate the projection equipment as part

of their regular duties, thereby eliminating the need to em-

ploy dedicated projectionists. Over the past ten years, the

general trend in the theater industry has been to eliminate

the projectionist position and to convert to manager-operated

theaters. JDA 486.

Today, the duties of a projectionist generally include the

following tasks: "threading" the film through the projector at

the beginning of each showing and disengaging the film at

each showing's end; monitoring the film's focus and volume

at the outset of each showing; preparing new films for the

projector's continuous film platter by splicing together the

film's multiple reels; performing the "breakdown" of older

movies that are no longer being shown; changing movie

"trailers" when necessary; fixing minor projector problems,

such as broken belts and loose splices; and cleaning both the

projection equipment and the projection booth. JDA 163-71,

210-21, 363-70, 432-35. The work required of a projectionist

prior to the start of a film--threading the film, pushing the

start button and checking the focus and volume--takes ap-

proximately five to ten minutes. JDA 202-03.

Not surprisingly, technological advances have greatly sim-

plified the projection process and have thus eliminated many

of the job duties originally performed by projectionists. As a

result of the so-called platter system, for example, projection-

ists no longer need to change reels during a showing. JDA

190-91, 206-07. In addition, a computerized projection sys-

tem now opens the curtains, changes the lighting, operates

the sound system and automatically rewinds the film. JDA

189-96. Many of these advances in projection technology,

including the platter system, occurred well before 1995, al-

though none took place after 1995 and before the present

litigation. JDA 208-09, 324, 351, 436-37.

 B. Regal's Bargaining History with the Union Locals

Regal's petition for review stems from its decision to

convert its movie theaters in Richmond, VA, Fort Wayne, IN

and Akron, OH to manager-operated theaters. This decision

affected the membership of three local affiliates of the Inter-

national Alliance of Theatrical and Stage Employees

(IATSE): Local 370 (Richmond), Local 364 (Akron) and Local

125 (Fort Wayne). We recount the relevant bargaining histo-

ry between Regal and the three union locals below.

1. Local 370

Regal acquired eight theaters in the Richmond, VA area in

1995. At the time of the acquisition, Local 370 had a collec-

tive bargaining agreement with Regal's predecessor that cov-

ered the projectionist employees at these theaters. JDA

529-539. With the collective bargaining agreement set to

expire on June 15, 1995, Regal gave Local 370 notice of its

intent to terminate the contract on April 17, 1995. JDA 602.

Meeting with union representatives on May 22, 1995, Regal

informed Local 370 of its intent to convert its Richmond

theaters to manager-operated and to eliminate the projection-

ist position. JDA 197-98, 497. Upon further discussions

with Local 370, however, Regal ultimately agreed to convert

only three of the eight theaters. JDA 172-76. Accordingly,

Regal and Local 370 entered into a collective bargaining

agreement covering the projectionist employees at the re-

maining five theaters. JDA 586-92. The agreement con-

tained a management rights clause, which read as follows:

The COMPANY shall have the right to intro-

duce new or improved work methods, facilities,

equipment, machinery, processes and procedures of

work and to change or eliminate existing methods,

facilities, equipment, machinery, processes and pro-

cedures or work ... and to automate[.] [T]he

COMPANY agrees to negotiate the effects [of such

decisions] on the employees.

JDA 590 (redundant phrase omitted). According to Regal

negotiators, the purpose of the management rights clause was

to allow Regal to convert to manger-operated theaters with-

out having to bargain with Local 370 beforehand. JDA 496.

The parties did not discuss the management rights clause,

however, during the 1995 negotiations.1 JDA 176, 268-70.

The agreement between Regal and Local 370 was effective

from November 24, 1995 to November 23, 1997. JDA 586-92.

On September 22, 1997, Local 370 wrote to Regal request-

ing a meeting to discuss a new collective bargaining agree-

ment. JDA 644-45. This letter crossed in the mail with a

letter from Regal to Local 370 in which Regal gave notice of

its intent to convert to manager-operated theaters and to

eliminate the projectionist position as of November 24, 1997.

JDA 640. Regal did offer to bargain, however, over the

effects of its decision. JDA 640. Although the parties met in

October 1997, Local 370 refused to bargain over the effects of

Regal's decision while Regal refused to bargain over the

decision itself. As a result, Regal terminated the remaining

projectionists at the end of their shifts on November 23, 1997

and converted the five theaters to manager-operated.

2. Local 364

Regal purchased Montrose Movies in 1994, thereby assum-

ing its predecessor's bargaining relationship with Local 364,

the IATSE affiliate that represented dedicated projectionists

in the Akron, OH area. Although Regal and Local 364

entered into a collective bargaining agreement in 1994, the

parties began negotiations anew in 1995 when Regal pur-

chased two other theaters in the area. The parties eventually

reached agreement on a contract that combined all three

theaters under a single collective bargaining agreement, ef-

__________

1 The collective bargaining agreement between Local 370 and

Regal's predecessor contained a similarly worded management

rights clause. Compare JDA 525 with JDA 590. According to

Local 370, the purpose of that clause was to enable the employer to

update equipment and to accommodate technological changes in

projection work. JDA 199-200, 245-47.

fective October 13, 1995 to October 12, 1997. JDA 580-85.

This contract contained a management rights clause identical

to the one included in Regal's collective bargaining agreement

with Local 370. Compare JDA 583 with JDA 590. Once

again, however, the parties did not discuss the management

rights clause during the contract negotiations. JDA 443.

On July 21, 1997, Regal notified Local 364 that it intended

to convert to manager-operated theaters and to eliminate the

projectionist position. JDA 637. Local 364 responded to

Regal's letter on August 25, 1997 and requested a meeting.

JDA 639. The parties had difficulty communicating with one

another throughout September and did not meet until Octo-

ber 8, 1997. JDA 444. At this meeting, Local 364 sought to

negotiate a new collective bargaining agreement retaining the

projectionist position; Regal, however, was willing to discuss

only the effects of its conversion decision. JDA 444-46. No

meeting occurred after this date. Regal therefore terminated

the remaining projectionists at the end of their shifts on

October 12, 1997 and converted its Akron theaters to manag-

er-operated.

3. Local 125

Regal purchased seven theaters in the Fort Wayne, IN

area between 1993 and 1994. Local 125 represented the

dedicated projectionists at these theaters and entered into

separate collective bargaining agreements with Regal for the

projectionists working at each theater. JDA 553-74. On

January 2, 1996, Regal notified Local 125 of its decision to

terminate these contracts and to convert to manager-operated

theaters. JDA 604. Regal subsequently agreed to delay the

conversion of three of the theaters, however, in exchange for

wage concessions. JDA 347-48, 358-62. The final contract

between Regal and Local 125 contained a management rights

clause nearly identical to those included in its contracts with

Local 370 and Local 364. Compare JDA 596 with JDA 583

and 590. Although Regal negotiators testified that the pur-

pose of the management rights clause was to allow Regal to

convert to manager-operated theaters without first having to

bargain with Local 125, JDA 496, very little discussion of the

clause took place during the negotiations.2 JDA 349-51. The

agreement between Regal and Local 125 was in effect from

March 29, 1996 to March 28, 1997. JDA 593-99.

On January 16, 1997, Local 125 contacted Regal in an

attempt to negotiate a successor agreement. JDA 605. Re-

gal soon informed the union, however, that it had decided to

convert the remaining Fort Wayne theaters to manager-

operated and to eliminate the projectionist position. JDA

606. Subsequent negotiations proved futile as Regal refused

to bargain over its conversion decision and Local 125 refused

to bargain over the effects of Regal's decision. As a result,

Regal terminated the remaining projectionists at the end of

their shifts on March 28, 1997 and converted the theaters to

manager-operated.

C. The Board's Decision and Order

As a result of the foregoing events, the three Locals filed

unfair labor practice charges against Regal. After investigat-

ing the claims, the Board's General Counsel issued separate

complaints against Regal, which were subsequently consoli-

dated for hearing and decision. After a hearing on the

consolidated complaint, an Administrative Law Judge (ALJ)

concluded that Regal violated sections 8(a)(1) and 8(a)(5) of

the NLRA, 29 U.S.C. s 158(a)(1), (a)(5), by refusing to

bargain with the Locals before converting to manager-

operated theaters and terminating the union-represented pro-

jectionists. JDA 20. Rejecting Regal's arguments under

First National Maintenance Corp. v. NLRB, 452 U.S. 666

(1981), and Dubuque Packing Co., 303 N.L.R.B. 386 (1991),

the ALJ held that Regal had a duty to bargain under

Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203

(1964), and Torrington Industries, Inc., 307 N.L.R.B. 809

(1992). JDA 16-17. Applying a waiver analysis, the ALJ

also rejected Regal's argument that the management rights

__________

2 Discussion of the management rights clause was limited to

Regal's authority under the clause to annex an entertainment

center, called a "funscape," without first bargaining with Local 125.

JDA 349-51.

clause authorized Regal to convert to manager-operated the-

aters without first bargaining to impasse. JDA 17-19. Last-

ly, the ALJ rejected Regal's argument that Local 364 failed

to timely demand bargaining over Regal's conversion deci-

sion. JDA 19. The ALJ then ordered Regal, among other

remedies, to reinstate the terminated projectionists to their

former or substantially equivalent positions. JDA 20.

The Board adopted the ALJ's rulings, findings and conclu-

sions in its June 20, 2001 decision and order. JDA 9.

Adopting the ALJ's conclusion that Regal violated sections

8(a)(1) and 8(a)(5) of the NLRA by refusing to bargain over

its conversion decision, the Board emphasized the ALJ's

finding that "the reclassification or transfer of bargaining unit

work to managers or supervisors is a mandatory subject of

bargaining where it has an impact on unit work" and stated

that Regal "both transferred unit work to existing managers

and also hired new assistant managers to perform [that

work.]" JDA 9. With respect to the management rights

clause, the Board concluded that Regal's "decisions were not

founded on any new technological development" and that

"there was no clear and unmistakable waiver of bargaining

regarding the allocation of the work among different classifi-

cations of employees." JDA 9. The Board upheld the ALJ's

remaining conclusions without comment and affirmed the

ALJ's remedial order.3 JDA 11.

II. Analysis

We address each of Regal's challenges to the Board's

findings below.

A. The Statutory Duty to Bargain

On review, Regal first argues that the Board erroneously

concluded that it had a duty to bargain with the Locals over

__________

3 Although he concurred in the result reached by the Board

majority, Chairman Hurtgen disagreed with the ALJ's reliance

upon Fibreboard and Torrington, as well as with the ALJ's applica-

tion of a waiver analysis to the management rights clause. JDA

11-12.

its decision to convert to manager-operated theaters and

thereby eliminate the projectionist position. Regal's argu-

ment includes two distinct claims. First, Regal maintains

that the Board erroneously concluded that its conversion to

manager-operated theaters constituted a "transfer of bargain-

ing unit work." Second, Regal contends that the Board

applied the incorrect legal standard to determine whether

Regal had a duty to bargain.

We must uphold the Board's factual findings "if supported

by substantial evidence on the record considered as a whole."

29 U.S.C. s 160(e); Cobb Mech. Contractors, Inc. v. NLRB,

295 F.3d 1370, 1375 (D.C. Cir. 2002). Thus, with respect to

findings of fact, we "may [not] displace the Board's choice

between two fairly conflicting views, even though [we] would

justifiably have made a different choice had the matter been

before [us] de novo." Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951). Reviewing the Board's construction of

the NLRA, including its classification of bargaining subjects

as "terms and conditions of employment," 29 U.S.C. s 158(d),

we afford the Board's judgment "considerable deference,"

Ford Motor Co. v. NLRB, 441 U.S. 488, 495 (1979). We

therefore uphold the Board's construction of the Act if it is

"reasonably defensible." Id. at 497.

Because substantial evidence supports the Board's finding

that Regal transferred bargaining unit work to managers and

assistant managers, and because the Board acted reasonably

in adopting the ALJ's application of Fibreboard and Torring-

ton to the instant case, we uphold the Board's conclusion that

Regal had a duty to bargain over its decision to convert to

manager-operated theaters.

1. Substantial Evidence

Regal argues that the Board erred in finding that its

conversion to manager-operated theaters resulted in a trans-

fer of bargaining unit work to managers and assistant manag-

ers. Specifically, Regal maintains that the Board's "mischar-

acterization" stemmed from three factual errors, namely (1)

"finding that there was any legally significant transfer of

work at all"; (2) "finding no 'link' between the change in

technology and the decision to [convert] to manager-operated

theaters"; and (3) "finding that Regal 'hired new assistant

managers to perform' unit work." Br. for Pet'r at 23, 25, 28

(quoting JDA 9). Because the Board's factual findings are

supported by "substantial evidence," however, Regal's sundry

challenges must fail. 29 U.S.C. s 160(e).

First, Regal argues that "the Board erred in finding that

there was any legally significant transfer of work at all." Br.

for Pet'r at 23. Emphasizing the technological advances that

have changed the projectionist position over the years, Regal

maintains that "[t]he assignment of the few remaining mini-

mal tasks to managers and assistant mangers cannot, in any

real sense, be characterized as a transfer of work." Id. at 24.

As the General Counsel correctly observes, however, we have

previously recognized that the transfer of less work than

occurred here is not a mere de minimis violation of the

employer's duty to bargain where the change results in the

loss of bargaining unit jobs. Int'l Union, UAW v. NLRB, 381 F.2d 265, 266 (D.C. Cir), cert. denied, 389 U.S. 857 (1967)

(finding adverse impact on bargaining unit where change in

company's shipping method resulted in loss of six bargaining

unit jobs).4 Although technological advances have undoubt-

edly changed the scope of a projectionist's duties, the record

amply supports the Board's finding that the typical projec-

tionist still performs a number of tasks. JDA 163-71, 210-21,

363-70, 432-35. Given the existence of such tasks, plus the

undisputed fact that Regal's managers and assistant manag-

ers assumed these tasks after the conversion to manager-

__________

4 Regal attempts to distinguish International Union by arguing

that "nothing in the ... decision ... suggests that the work

underlying the jobs at issue had disappeared; rather, the work

apparently continued to exist at full historic levels, the only differ-

ence being that the employer assigned it to a different work group."

Reply Br. at 7. Regal's suggestion to the contrary notwithstanding,

the record amply supports the Board's finding that Regal "contin-

ues to employ the same methods and techniques for showing movies

that it employed before it eliminated the dedicated projectionist

position." JDA 9; see JDA 207-09, 324, 351, 436-37.

operated theaters, see Br. for Pet'r at 24, substantial evidence

supports the Board's finding that a "legally significant" trans-

fer of work occurred as a result of the conversion.

Next, Regal asserts that the Board erred "in finding no

'link' between the change in technology and the decision to

[convert] to manager-operated theaters." Br. for Pet'r at 25.

Although the General Counsel concedes that "the motion

picture industry experienced a period of dramatic technologi-

cal change, resulting in the automation of numerous tasks

previously performed by projectionists," Br. for Resp't at 43,

Regal maintains that "[t]he decision to eliminate the [projec-

tionist] position cannot be evaluated separately from the

decision to automate," Br. for Pet'r at 27. Yet Regal's

argument ignores a crucial fact: no advances in projection

technology occurred after 1995 and before the present litiga-

tion. JDA 208-09, 324, 351, 436-37. Indeed, most of the

technological advances took place during the 1980s. JDA

208-09, 324, 351, 436-37. Notably, Regal does not challenge

the ALJ's conclusion that "the same duties that the union

projectionists had been performing ... prior to the [conver-

sion] are still required and performed." JDA 18. Substantial

evidence thus supports the Board's conclusion that Regal's

"decisions were not founded on any new technological devel-

opment." JDA 9.

Finally, Regal argues that the Board erred "in finding that

Regal 'hired new assistant managers to perform' unit work."

Br. for Pet'r at 28 (quoting JDA 9). The Board's conclusion

stemmed from the ALJ's explicit finding that Regal hired

assistant managers to replace, at least in part, the terminated

projectionists. JDA 16-17. Regal maintains that its payroll

records "do not permit a conclusion that Regal hired new

assistant managers to replace the projectionists on a one-for-

one basis." Br. for Pet'r at 28. Any increase in management

staffing may be explained, Regal asserts, by normal seasonal

fluctuations in business, the release of a blockbuster film

("Titanic") and the temporary need to train managers and

assistant managers to perform projectionist duties. Reply

Br. at 8-11. Neither the Board nor the ALJ concluded,

however, that Regal hired new assistant managers to replace

the projectionists on a one-for-one basis. JDA 16 n.2 ("I find

... that some new assistant mangers have replaced projec-

tionist[s] although not necessarily on a quid pro quo basis.").

In addition to Regal's payroll records, JDA 73-115, testimoni-

al evidence supports the Board's conclusion that Regal hired

some additional managerial employees to perform projection-

ist duties after the conversion to manager-operated theaters,

JDA 187-88, 227-31, 295-98. Although the evidence presents

"two fairly conflicting views" of Regal's staffing increases

after the conversion, Universal Camera, 340 U.S. at 488,

substantial evidence supports the Board's findings.

2. The Reasonableness of the Board's Approach

Having concluded that substantial evidence supports the

Board's finding that Regal's conversion to manager-operated

theaters resulted in a transfer of bargaining unit work, we

now consider Regal's claim that the Board applied the incor-

rect legal standard to determine whether Regal had a duty to

bargain over the conversion decision itself. On review, Regal

maintains that the Board did not engage in the proper

bargainability analysis because it implicitly "relied on the

approach of Torrington to the exclusion of the approach in

First National Maintenance." Br. for Pet'r at 22. Given

our decision in Rock-Tenn Co. v. NLRB, 101 F.3d 1441 (D.C.

Cir. 1996), which upheld as reasonable the Board's application

of Fibreboard and Torrington to a subcontracting decision

that turned on labor cost considerations and involved " 'the

same work under similar conditions of employment,' " id. at

1446 (quoting Fibreboard, 379 U.S. at 213), we must reject

Regal's challenge.

a. The Legal Framework

Under section 8(a)(5) of the NLRA, an employer commits

an unfair labor practice by "refus[ing] to bargain collectively

with the representatives of his employees." 29 U.S.C.

s 158(a)(5). The obligation to "bargain collectively" requires

an employer to "confer in good faith with respect to wages,

hours, and other terms and conditions of employment." Id.

s 158(d). An employer thus violates section 8(a)(5) by unilat-

erally changing an existing term or condition of employment

without first bargaining to impasse.5 Litton Fin. Printing

Div. v. NLRB, 501 U.S. 190, 198 (1991).

The Supreme Court has interpreted the statutory phrase

"terms and conditions of employment" in two well-known

decisions. In Fibreboard Paper Products Corp. v. NLRB,

379 U.S. 203 (1964), the Court considered whether a compa-

ny's decision to hire an independent contractor to perform

maintenance work previously performed by union employees

violated the NLRA. Noting that "the [c]ompany merely

replaced existing employees with those of an independent

contractor to do the same work under similar conditions of

employment," id. at 213, the Court held that the company's

decision to "contract out" its maintenance work fell within the

phrase "terms and conditions of employment" and, conse-

quently, its unilateral action violated the NLRA, id. at 215.

The Court cautioned, however, that its decision "does not

encompass other forms of 'contracting out' or 'subcontracting'

which arise daily in our complex economy." Id.

Nearly two decades later, the Supreme Court further de-

fined the duty to bargain in First National Maintenance

Corp. v. NLRB, 452 U.S. 666 (1981), which involved the

company's decision to cancel a service contract following a fee

dispute and its subsequent firing of the union employees it

had hired to work on the cancelled job. In First National

Maintenance, the Court identified three types of manage-

ment decisions: (1) those that have "only an indirect and

attenuated impact on the employment relationship," such as

decisions regarding advertising and financing; (2) those that

"are almost exclusively 'an aspect of the relationship' between

employer and employee," such as decisions related to produc-

tion quotas and work rules; and (3) those that have "a direct

impact on employment ... but [have] as [their] focus only the

__________

5 An employer who violates section 8(a)(5) also derivatively vio-

lates section 8(a)(1), which makes it unlawful for an employer "to

interfere with, restrain, or coerce employees in the exercise of"

their statutory labor rights. 29 U.S.C. s 158(a)(1).

economic profitability of" the business. Id. at 676-77 (quot-

ing Chem. & Alkali Workers v. Pittsburgh Plate Glass Co.,

404 U.S. 157, 178 (1971)). The Court concluded that the

employer's decision to close part of its business belonged in

the third category. Id. at 677. Such decisions require man-

datory bargaining, the Court reasoned, "only if the benefit,

for labor-management relations and the collective-bargaining

process, outweighs the burden placed on the conduct of the

business." Id. at 679. Applying this balancing test, the

Court held that the company did not have an obligation to

bargain before closing part of its business for purely econom-

ic reasons. Id. at 686. Although the Court "intimate[d] no

view as to other types of management decisions, such as plant

relocations ... [and] other kinds of subcontracting," id. at

686 n.22, it did observe that "Fibreboard implicitly engaged in

[the balancing] analysis" described above, id. at 679.

Despite the Supreme Court's observation that Fibreboard

and First National Maintenance represent a consistent ana-

lytical approach by which to determine the subjects of manda-

tory bargaining, the Board's attempts to integrate the two

decisions have generated some degree of confusion. Guided

by the principles of First National Maintenance, the Board

subsequently developed a burden-shifting test in Dubuque

Packing Co., 303 N.L.R.B. 386 (1991), enforced in relevant

part sub nom. United Food & Commercial Workers Local

150-A v. NLRB, 1 F.3d 24 (D.C. Cir. 1993), to determine

whether an employer's decision to relocate bargaining unit

work necessitated mandatory bargaining.6 We affirmed the

__________

6 Under Dubuque Packing's burden-shifting test, the General

Counsel must first establish a prima facie case "that the employer's

decision involved a relocation of unit work unaccompanied by a

basic change in the nature of the employer's operation." Dubuque

Packing, 303 N.L.R.B. at 391. If the General Counsel successfully

establishes a prima facie case, the burden shifts to the employer to

demonstrate that (1) "the work performed at the new location varies

significantly from the work performed at the former plant;" (2)

"the work performed at the former plant is to be discontinued

entirely and not moved to the new location;" or (3) "the employer's

decision involves a change in the scope or direction of the enter-

Board's decision on review, stating that the test "accords with

[Supreme Court] precedent [and] is fully defensible." United

Food, 1 F.3d at 32. The Board did not apply Dubuque's

burden-shifting test in Torrington Industries, Inc., 307

N.L.R.B. 809 (1992), however, because the case involved not a

relocation decision but a subcontracting decision, factually

similar to Fibreboard, in which the employer simply replaced

unit employees with non-unit employees to perform the same

work. Given that the Supreme Court had already addressed

this form of subcontracting in Fibreboard, the Board rea-

soned that "there is no need to apply any further tests in

order to determine whether the decision is subject to the

statutory duty to bargain." Id. at 810.

b. Regal's Challenge

Here, the Board affirmed the ALJ's conclusion that the

Fibreboard/Torrington approach governed Regal's decision to

convert to manager-operated theaters and thereby eliminate

the projectionist position. This conclusion stemmed directly

from the ALJ's determination that Regal "has continued to

operate the same business at the same locations and the only

change is in the identity of the employees doing the work."

JDA 16. On review, Regal maintains that the Board's deci-

sion cannot be sustained due to its reliance upon Torrington,

a decision that, in its view, "creates a virtual 'per se' rule that

is incompatible with the test established in First National

Maintenance." Br. for Pet'r at 17. Because the Board's

decision is both "reasonably defensible," Ford Motor Co., 441 U.S. at 497, and consistent with this court's precedent, see,

e.g., Rock-Tenn, 101 F.3d at 1446, we reject Regal's challenge.

Regal's argument relies chiefly upon the Third Circuit's

decision in Furniture Renters of America, Inc. v. NLRB, 36 F.3d 1240 (3d Cir. 1994), which criticized the Board for

__________

prise." Id. Alternatively, the employer may show that either (1)

"labor costs ... were not a factor in the decision" or (2) even if they

were a factor, "the union could not have offered labor cost conces-

sions that could have changed the employer's decision to relocate."

Id.

applying the Torrington standard to an employer's decision to

subcontract delivery services because of employee theft.

Noting that "[i]nflexibly applied, the holding in Torrington is

at odds with the principles of Fibreboard and First National

[Maintenance]," id. at 1247, the Third Circuit decried "the

Torrington manner of examining [a] decision to subcontract

only to see whether it is analogous to Fibreboard's general

factual framework" as "simplistic and ... potentially ham-

handed," id. at 1248. Determining whether a subcontracting

decision requires mandatory bargaining necessitates, the

Third Circuit reasoned, an examination of the reasons moti-

vating the decision. Id. Citing the Third Circuit's favorable

discussion of Dubuque, id. at 1246-48, Regal argues that the

Board should have applied Dubuque's burden-shifting frame-

work to Regal's decision to convert to manager-operated

theaters.

The Third Circuit's criticisms of Torrington aside,7 we have

long held that "[t]he allocation of work to a bargaining unit is

a 'term and condition of employment' "and that "an employer

__________

7 Although Regal correctly observes that Geiger Ready-Mix Co.

of Kansas City v. NLRB, 87 F.3d 1363, 1369 (D.C. Cir. 1996)

(holding that Board reasonably relied upon "transfer of unit work"

approach in case involving double-breasted employer), cited Furni-

ture Renters with approval, the Geiger decision maintained that

"the [court's transfer of work] approach ... is not inconsistent with

the Third Circuit's analysis in Furniture Renters." Specifically, the

court stated that "[t]he Third Circuit rightly pointed out that

whether unilateral action violates the [NLRA] depends less on the

'form that the employer's decision takes' and more on the 'reasons

motivating the decision.' " Id. (quoting Furniture Renters, 36 F.3d

at 1248 n.4 (emphasis in original)). The court recognized, however,

that "[a] change in the employer's established use of its union and

nonunion sides in work assignments will almost always involve

factors within the union's control." Id. (emphasis in original).

Accordingly, transfer of work decisions will almost always be suit-

able for resolution within the collective bargaining framework. See

id. The unusual contracting decision in Furniture Renters--where

the employer hired a subcontractor because of employee theft--is

thus the exception, not the rule, where transfer of work decisions

are concerned.

may not unilaterally attempt to divert work away from a

bargaining unit without fulfilling [its] statutory duty to bar-

gain." Road Sprinkler Fitters Local Union No. 669 v.

NLRB, 676 F.2d 826, 831 (D.C. Cir. 1982) (reviewing "double-

breasted" operation in which single employer transferred unit

work from union side of firm to non-union side of firm). We

have likewise recognized that "First National Maintenance is

inapposite" to transfer of work cases in the context of double-

breasted operations, finding Fibreboard to be the "more apt

precedent." Road Sprinkler Fitters Local Union No. 669 v.

NLRB, 789 F.2d 9, 16 n.22 (D.C. Cir. 1986) (reaffirming "the

principle that the diversion of bargaining unit work is a

mandatory subject of bargaining").

Most recently, in Rock-Tenn, we upheld the Board's appli-

cation of Fibreboard to an employer's decision to permanently

subcontract its trucking operations to a third party, thereby

eliminating the unit work previously performed by the em-

ployer's union-represented drivers. Rock-Tenn, 101 F.3d at

1446. Concluding that the Board "permissibly distinguishe[d]

what it calls a Fibreboard subcontract from a relocation

decision," i.e., the type of decision at issue in Dubuque

Packing, we held that it is "a permissible reading of the

[NLRA] in light of the Supreme Court opinions to hold that

when a subcontracting decision turns on labor cost consider-

ations and involves 'the same work under similar conditions of

employment,' it is a prototype Fibreboard case regardless of

the alleged futility of bargaining." Id. (quoting Fibreboard,

379 U.S. at 213).

Although the instant case involves a transfer of unit work

to managers and assistant managers, and not a transfer of

unit work to an outside subcontractor, we find this distinction

to be irrelevant. What matters, in our view, is that Regal,

like the employer in Rock-Tenn, transferred " 'the same

work' " performed by the union-represented projectionists to

its managers and assistant managers " 'under similar condi-

tions of employment,' " and did so, not because of technologi-

cal change but, instead, to reduce its labor costs. Id. Given

our conclusion that substantial evidence supports the finding

that Regal's conversion to manager-operated theaters result-

ed in a transfer of bargaining unit work, we find the ALJ's

legal approach, adopted by the Board, to be "reasonably

defensible." Ford Motor Co., 441 U.S. at 497.

B. The Management Rights Clause

Next we address Regal's argument that the Board errone-

ously interpreted the management rights clause contained in

the collective bargaining agreements between Regal and the

Locals. According to Regal, the Board erred in applying a

waiver analysis to the management rights clause because the

clause arguably covered Regal's decision to convert to manag-

er-operated theaters. Thus, Regal maintains, the Board

should have analyzed the management rights clause under

standard contract law principles. This argument fails.

Although a union may waive its statutory protection against

an employer's unilateral changes in subjects of mandatory

bargaining, we will not infer such a waiver from a general

contractual provision unless the waiver is " 'clear and unmis-

takable.' " Honeywell Int'l, Inc. v. NLRB, 253 F.3d 125, 133

(D.C. Cir. 2001) (quoting Metro. Edison Co. v. NLRB, 460 U.S. 693, 708 (1983)). In determining whether a union has

clearly and unmistakably waived its bargaining rights, we

consider the language of the collective bargaining agreement

as well as the bargaining history between the parties "when it

is crucial to understanding the purpose behind the contractual

language." Local Union No. 47, IBEW v. NLRB, 927 F.2d 635, 640 (D.C. Cir. 1991). Waiver analysis does not apply,

however, if a collective bargaining agreement "covers" the

challenged action. NLRB v. United States Postal Serv., 8 F.3d 832, 836-37 (D.C. Cir. 1993) (USPS). Unlike waiver, by

which a union knowingly and voluntarily relinquishes its right

to bargain, if a subject matter is "covered by" a collective

bargaining agreement, "the union has exercised its bargaining

right and the question of waiver is irrelevant." Dep't of Navy

v. FLRA, 962 F.2d 48, 50 (D.C. Cir. 1992). In such a case,

"the resolution of the refusal to bargain charge rests on an

interpretation of the contract at issue." USPS, 8 F.3d at 837.

 Applying a waiver analysis, the Board concluded that the

management rights clause did not constitute a "clear and

unmistakable waiver of bargaining regarding the allocation of

the work among different classifications of employees." JDA

9. Relying upon our decision in USPS, 8 F.3d at 836-38,

Regal argues that the Board should have applied a "covered

by" analysis to the management rights clause. Specifically,

Regal argues that the management rights clause, which ex-

pressly authorized Regal "to introduce new or improved work

methods ... processes and procedures" and "to change or

eliminate existing ... procedures or work," JDA 583, 590,

596, implicitly afforded Regal "the right to change or elimi-

nate projectionist work" without first bargaining, Br. for Pet'r

at 32-33. Regal attempts to buttress its reading of the

management rights clause by emphasizing, among other con-

textual factors, the fact that the parties adopted the clause

only after Regal had made known to the Locals its intent to

convert all of its theaters to manager-operated.

Regal's reliance on USPS is misplaced. Although Regal

correctly observes that we rejected the Board's "crabbed

reading of the 'waiver'/'covered by' distinction" in USPS--a

reading which relied upon the fact that the management

rights clause did not specifically refer to the type of employer

decision at issue in the case--Regal overlooks crucial differ-

ences between the management rights clause at issue in

USPS and its own. USPS, 8 F.3d at 838. The broadly

worded management rights clause in USPS gave the Postal

Service "the exclusive right" "[t]o hire promote, transfer,

assign, and retain employees in positions within the Postal

Service," "[t]o maintain the efficiency of the operations en-

trusted to it" and "[t]o determine the methods, means, and

personnel by which such operations are to be conducted." Id.

at 835. Rejecting the Board's waiver analysis, we held that

the above language "covered" the Postal Service's unilateral

decision to change the work schedules of its employees. Id.

at 838.

Here, Regal advocates a more expansive reading of a much

narrower management rights clause. Unlike the clause in

USPS, id. at 835, Regal's management rights clause does not

grant the authority to "hire, promote, transfer, assign, and

retain employees," see JDA 583, 590, 596. As the General

Counsel observes, the plain language of the clause involves

"only the right to introduce new technology, machinery, and

methods for the projectionists to execute the tasks they are to

perform." Br. for Resp't at 37. In fact, the clause mentions

"employees" only with respect to Regal's obligation "to nego-

tiate the effects [of such decisions] on the employees." JDA

583, 590, 596. Regal thus fashions its "covered by" argument

around the language giving it the authority to change or

eliminate existing methods, procedures "or work." JDA 583,

590, 596. But Regal's actions here are not embraced by the

literal language of the management rights clause. As dis-

cussed above, the record shows that Regal's decision involved

no change in the "methods" or "procedures" of projection and

no elimination of "work." Rather, Regal merely transferred

to managers work that was previously done by projectionists.

Moreover, we have previously cautioned that "the canon of

ejusdem generis ('of the same kind or class') counsels against

... reading [a] general phrase to include conduct wholly

unlike that specified in the immediately preceding list of

prohibited acts." Mohave Elec. Coop., Inc. v. NLRB, 206 F.3d 1183, 1191-92 (D.C. Cir. 2000). We therefore find that

the language of the management rights clause fails to support

Regal's argument that the clause authorized its unilateral

decision to convert all of its theaters to manager-operated.

The bargaining history between Regal and the Locals

likewise fails to support Regal's claim. Although Regal re-

peatedly emphasizes that it made known to the Locals its

intent to convert all of its theaters to manager-operated

before they separately agreed to the management rights

clause, Regal "does not and apparently [cannot] show that

any specific discussions occurred during negotiations that

equated or tied in that 'intention' with its introduction of the

management rights clause." JDA 18. Absent such affirma-

tive evidence, we are loath to conclude that a union would

knowingly agree to a clause that would effectively permit the

employer to unilaterally extinguish the bargaining unit alto-

gether. Hence, Regal's argument that the Locals should

have understood that the management rights clause permit-

ted Regal to eliminate the projectionist position simply fails.

Accordingly, we affirm the Board's conclusion that the Locals

did not clearly and unmistakably waive their right to bargain

over the transfer of unit work to non-unit employees. See

Honeywell Int'l, 253 F.3d at 133.

C. Failure to Timely Request Bargaining

Asserting that Local 364 failed to timely demand bargain-

ing over the effects of its conversion decision, Regal further

argues that Local 364 should be deemed to have waived its

right to bargain over the conversion decision itself. Because

the Board--upholding the ALJ's decision without comment--

reasonably concluded that a more prompt response to Regal's

conversion decision would have been futile, we reject Regal's

challenge.

If an employer gives a union advance notice of its intention

to make a change to a term or condition of employment, "it is

incumbent upon the [u]nion to act with due diligence in

requesting bargaining" in order to avoid waiving any of its

claims under the NLRA. Golden Bay Freight Lines, 267

N.L.R.B. 1073, 1080 (1983). A union is "not required to go

through the motions of requesting bargaining," however, if it

is clear that an employer has made its decision and will not

negotiate. Gratiot Cmty. Hosp., 312 N.L.R.B. 1075, 1080

(1993), enforced in relevant part, 51 F.3d 1255, 1259-60 (6th

Cir. 1995). The Board does not require "futile gestures," id.,

because "[n]otice of a fait accompli is simply not the sort of

timely notice upon which the waiver defense is predicated,"

Int'l Ladies' Garment Workers Union v. NLRB, 463 F.2d 907, 919 (D.C. Cir. 1972).

On review, Regal argues that Local 364 waived any right it

may have had to demand bargaining by not being available to

meet until October 8, 1997, almost three months after Regal

originally notified the Local of its conversion decision and

only days before the decision's implementation. Noting that

"a formal request to bargain about [Regal's] decision would

[have been] futile," the ALJ concluded that Local 364's "fail-

ure to quickly respond to [Regal's] notice ... is no defense to

[Regal's] unilateral action." JDA 19. The record provides

substantial support for the ALJ's conclusion. As the General

Counsel correctly observes, Regal's July 21, 1997 letter to

Local 364 "did not ask the [Local] to negotiate a proposal to

eliminate the dedicated projectionist position," Br. for Resp't

at 46, but simply informed it that "the Company has decided

to go manager operated in the Akron area theaters" and that

"its decision has the effect of eliminating the projectionist's

[sic] positions," JDA 637. Moreover, when the parties finally

met in October 1997, Regal steadfastly refused to bargain

over its decision, informing the Local that the decision had

"been made months ago and [could not] be changed." JDA

454. The Board's decision reviewing Regal's untimeliness

contention is thus a reasonable one and is therefore affirmed.

D. The Board's Remedial Order

Lastly, we turn to Regal's claim that the Board's remedial

order does not effectuate the purposes of the NLRA and,

accordingly, is unenforceable. Having found that Regal vio-

lated the NLRA by converting to manager-operated theaters

without first bargaining with the Locals, the Board ordered

Regal, among other remedies, to reinstate the terminated

projectionists. JDA 11, 20-21. Because Regal's compliance

with the Board's remedial order is not unduly burdensome,

Regal's challenge fails.

Under section 10(c) of the NLRA, the Board has the

authority "to take such affirmative action[,] including rein-

statement of employees with or without back pay, as will

effectuate the policies of [the Act]." 29 U.S.C. s 160(c).

Consistent with this provision, the purpose of a remedial

order is "to 'restor[e] the economic status quo that would

have obtained but for the company's wrongful [action.]' "

Southwest Merch. Corp. v. NLRB, 53 F.3d 1334, 1344 (D.C.

Cir. 1995) (quoting NLRB v. J.H. Rutter-Rex Mfg. Co., 396 U.S. 258, 263 (1969)). We have previously recognized, howev-

er, that reinstatement is an inappropriate remedy if it would

be "unduly economically burdensome" for the employer.

Teamsters Local Union No. 171 v. NLRB, 863 F.2d 946, 957-

58 (D.C. Cir. 1988), cert. denied, 490 U.S. 1065 (1989). To

demonstrate undue burden, the employer must show that

"the Board's [remedial] order would require a substantial

outlay of new capital or otherwise cause undue financial

hardship." Id. at 958.

Relying chiefly on Dorsey Trailers, Inc. v. NLRB, 233 F.3d 831 (4th Cir. 2000), Regal first argues that "a restoration

remedy is beyond the authority of the Board when the unfair

labor practice does not involve discriminatory conduct." Br.

for Pet'r at 39-40. Regal's reliance upon Dorsey Trailers is

misplaced. Although the Fourth Circuit refused to enforce

the Board's restoration order in Dorsey Trailers, the decision

rested, in part, upon the court's conclusion that the employer

did not violate its duty to bargain when it unilaterally closed

one of its manufacturing plants. Dorsey Trailers, 233 F.3d at

845. Contrary to Regal's assertions, this court has recog-

nized restoration as a presumptively valid remedy where the

employer violates its duty to bargain. See Power, Inc. v.

NLRB, 40 F.3d 409, 425 (D.C. Cir. 1994) (employer unilateral-

ly subcontracted bargaining unit work).

On somewhat firmer ground, Regal next argues that we

should not enforce the Board's reinstatement order because

reinstating the terminated projectionists would impose an

undue burden upon its business. Specifically, Regal main-

tains that the Board's order is unduly burdensome because it

"would force Regal to spend significant amounts of money to

pay employees to spend the vast majority of their time doing

nothing." Br. for Pet'r at 40. Regal's argument fails, howev-

er, because the Board's remedial order does not require

"capital expenditures," "the importation of expertise not now

possessed," or "the coordination of ... activities that [Regal]

lacks the experience and expertise to effectively handle."

JDA 11. Regal's bare statements about the economic costs of

reinstating the terminated projectionists fail to meet our

"undue burden" test. See Teamsters Local Union, 863 F.2d

at 958. Given the "high degree of deference" we afford the

Board's choice of remedies, Teamsters Local 115 v. NLRB,

640 F.2d 392, 399 (D.C. Cir.), cert. denied, 454 U.S. 827

(1981), we affirm the Board's remedial order reinstating the

terminated projectionists.8

III. Conclusion

For the foregoing reasons, the petition for review is denied

and the cross-application for enforcement is granted.

So ordered.

__________

8 As the Board noted below, however, Regal is not precluded from

presenting new evidence on the reinstatement issue at the compli-

ance stage of this proceeding. See, e.g., Lear Siegler, Inc., 295

N.L.R.B. 857, 861-62 (1989).