Unpublished Disposition, 852 F.2d 571 (9th Cir. 1988)

ORDER^* 

El Torito-La Fiesta Restaurants, Inc. ("El Torito") petitions for review of a decision of the National Labor Relations Board holding that El Torito violated sections 8(a) (1) and (5) of the National Labor Relations Act, 29 U.S.C. §§ 158(a) (1) and (5), by refusing to honor a collective bargaining agreement. The NLRB applies for enforcement of its order.

We find substantial evidence in the record to support the Board's determination that, having signed the agreements recognizing Local 100 as the successor to Local 6 and having adopted the collective bargaining agreement between El Torito's predecessor in interest and Local 6, El Torito is now estopped from challenging Local 100's assumption of Local 6's representational rights. We therefore deny El Torito's petition for review on that issue.

We must, however, remand for clarification of the reasoning behind the Board's decision that the contract barred the employer's challenge to Local 100's majority status. We are unable to determine from the Board's decision whether this is an appropriate case for application of the contract bar rule, which prohibits the employer from challenging an incumbent union's majority status during the term of a collective bargaining agreement. Westwood Import Co., Inc. v. NLRB, 681 F.2d 664, 666 (9th Cir. 1982).

As we read the Board's decision, it determined that the contract bars the employer's challenge to Local 100's majority status even though only eight of the approximately 180 employees at the El Torito restaurant were employees of the Red Coach Grill. The Board cited Ocean Systems, Inc., 227 NLRB 1593, 1595 (1977), enf'd, 571 F.2d 859 (5th Cir. 1978), for the proposition that " [t]he mere occurrence of work force expansion and turnover does not rebut the presumption of continuing union majority." We find reliance on Ocean Systems confusing; that case did not concern the contract bar doctrine, but rather, the conceptually distinct rule presuming continued majority support during the year following an employer's initial recognition of a union. The Board's reliance on Schmutz Foundry and Machine Co., 251 NLRB 1494 (1980), is confusing for the same reason.

On the face of it, this appears to be the sort of case in which the Board has in the past recognized an exception to the contract bar rule: The employer shut down operations pending a major renovation of the restaurant and reopened later with almost entirely new employees. See, e.g., General Extrusion Co., Inc. 121 NLRB 1165, 1167 (1958) (recognizing an exception to the contract bar rule when an employer resumes operations, at the same or a new location, after an indefinite period of closing, with new employees); Montgomery Ward & Co., Inc., 137 NLRB 346, 350-51 (1962) (contract bars challenge to union's majority status unless there is substantial change in the employer's operations or in the character of the bargaining unit); see Harte & Co., Inc., 278 NLRB 947, 948 (1986) ("an existing contract will remain in effect after a relocation if the operations at the new facility are substantially the same as those at the old and if transferees from the old plant constitute a substantial percentage--approximately 40 percent or more--of the new plant employee complement"). We are concerned by the Board's apparent failure to consider cases such as Harte & Co., Montgomery Ward & Co., and General Extrusion, in which the Board has recognized an exception to the contract bar rule in somewhat similar circumstances. "Although the Board has considerable discretion in the formulation and application of its contract-bar rule, it must explain departures from that rule." Bob's Big Boy Family Restaurants v. NLRB, 625 F.2d 850, 853-54 (9th Cir. 1980). Because the Board's decision does not show the basis for the Board's ruling, the court is unable properly to review the Board's action. Accordingly, we remand the matter to permit the Board to clarify the reasons for, or to reconsider, its decision that the contract barred El Torito from challenging Local 100's majority status.

The petition for review is DENIED in part, the cross-application for enforcement is DENIED, and the matter is REMANDED to the National Labor Relations Board.