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Colorado Fire Sprinkler, Inc. v. National Labor Relations Board

United States Court of Appeals, District of Columbia Circuit

June 8, 2018

Colorado Fire Sprinkler, Inc., Petitioner
v.
National Labor Relations Board, Respondent Road Sprinkler Fitters Local Union No. 669, U.A., AFL-CIO, Intervenor

          Argued September 7, 2017

          On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board

          Thomas A. Lenz argued the cause for petitioner. With him on the briefs was L. Brent Garrett.

          John N. Raudabaugh and Glenn M. Taubman were on the brief for amicus curiae Robert Blackwell in support of Colorado Fire Sprinkler, Inc.

          Jeffrey W. Burritt, Attorney, National Labor Relations Board, argued the cause for respondent. With him on the brief were Richard F. Griffin, Jr., General Counsel at the time the brief was filed, Jennifer Abruzzo, Deputy General Counsel at the time the brief was filed, John H. Ferguson, Associate Deputy Counsel, Linda Dreeben, Deputy Associate General Counsel, and Usha Dheenan, Supervisory Attorney.

          William W. Osborne Jr. argued the cause and filed the brief for intervenor, Road Sprinkler Fitters Local Union 669, U.A., AFL-CIO.

          Before: Rogers and Millett, Circuit Judges, and Randolph, Senior Circuit Judge.

          MILLETT, CIRCUIT JUDGE.

         When the Colorado Fire Sprinkler company's labor agreement with the Road Sprinkler Fitters Union expired, the Company announced that it would no longer recognize or negotiate with the Union as a representative of the Company's employees. The Company asserted a right under Section 8(f) of the National Labor Relations Act, 29 U.S.C. § 158(f) (which applies to labor agreements in the construction and building industries), to walk away from the union relationship. The Union begged to differ, contending that a different provision of the National Labor Relations Act, Section 9(a), 29 U.S.C. § 159(a), obligated the Company to continue negotiating in good faith with the Union. The Union filed a grievance, and the National Labor Relations Board sided with the Union. Because the Board's decision rested on insubstantial evidence and failed to address important evidence supporting the Company, we grant the Company's petition for review, deny the Board's cross-application for enforcement, vacate the Board's decision, and remand.

         I

         A This is a tale of two statutory provisions, and of a Union's effort to move between them.

         Under the more commonly employed Section 9(a) of the National Labor Relations Act, a union that obtains the support of "the majority of the employees in a unit" will become the recognized representative of those employees, and the employer will be obligated to communicate and negotiate with it on the terms and conditions of employment. 29 U.S.C. § 159(a). A union recognized under Section 9(a) "enjoys numerous benefits, including a conclusive presumption of majority status during the term of any collective-bargaining agreement, up to three years." Raymond F. Kravis Center for the Performing Arts, Inc. v. NLRB, 550 F.3d 1183, 1188 (D.C. Cir. 2008) (citation omitted). An employer's refusal to bargain with a union recognized as the employees' Section 9(a) representative is an unfair labor practice. See 29 U.S.C. § 158(a)(5).

         A different rule operates in the building and construction industries. For those businesses, labor costs need to be known in advance so that companies can bid for work. In addition, union organization is difficult because projects can be relatively short-lived and employees migrate between jobs. See Nova Plumbing, Inc. v. NLRB, 330 F.3d 531, 534 (D.C. Cir. 2003) (explaining that Section 8(f) addresses "the unique nature" of industries that "need to draw on a pool of skilled workers and to know their labor costs up front in order to generate accurate bids, " and in which employees often "work for multiple companies over short, sporadic periods").

         To address those challenges, Section 8(f) of the National Labor Relations Act allows employers and unions in the building and construction industries to enter into what is known as a "pre-hire agreement." Nova Plumbing, 330 F.3d at 534 (citation omitted). Under such an agreement, the business and union agree in advance that a particular union will represent employees, and they may even negotiate the initial terms and conditions of employment directly between themselves. That can all occur without any vote by the employees, or even before a single employee is hired. See 29 U.S.C. § 158(f).

         A pre-hire agreement in the construction and building industries is presumed to be governed by Section 8(f) rather than Section 9(a). Allied Mechanical Services, Inc. v. NLRB, 668 F.3d 758, 766 (D.C. Cir. 2012). A Section 8(f) relationship can convert into a Section 9(a) relationship only if the union "either petition[s] for a representation election or demand[s] recognition from the employer by providing proof of majority support." M & M Backhoe Service, Inc. v. NLRB, 469 F.3d 1047, 1050 (D.C. Cir. 2006).

         Under the more commonplace Section 9(a) union representation, when a collective bargaining agreement expires, the employer generally must continue to negotiate with the union in good faith and preserve the status quo in employment terms and conditions. See, e.g., NLRB v. Katz, 369 U.S. 736, 743 (1962) (holding that "an employer's unilateral change in conditions of employment under negotiation" is a violation of the National Labor Relations Act because "it is a circumvention of the duty to negotiate"); Nova Plumbing, 330 F.3d at 534 (noting that, under Section 9(a), when a collective bargaining agreement expires, an employer must "continue bargaining * * * unless the company can demonstrate either that the union has in fact lost majority support or that the employer has a good faith uncertainty as to the union's status").

         Not so for Section 8(f) agreements. For them, the employer (or the union) "may repudiate the terms of a pre-hire agreement when it expires, " and the employer has "no obligation to bargain with the union" upon expiration. M & M Backhoe, 469 F.3d at 1048.

         That is all a long way of saying that, when a labor agreement expires, an employer's rights and obligations under Section 8(f) and Section 9(a) of the National Labor Relations Act are ...


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