Sandvik Rock Tools v. NLRB ( 1999 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
SANDVIK ROCK TOOLS, INCORPORATED,
Petitioner,
v. No. 98-2533
NATIONAL LABOR RELATIONS BOARD,
Respondent.
NATIONAL LABOR RELATIONS BOARD,
Petitioner,
v. No. 98-2692
SANDVIK ROCK TOOLS, INCORPORATED,
Respondent.
On Petition for Review and Cross-Application
for Enforcement of an Order
of the National Labor Relations Board.
(11-CA-17991)
Argued: June 10, 1999
Decided: August 16, 1999
Before LUTTIG and KING, Circuit Judges,
and BUTZNER, Senior Circuit Judge.
_________________________________________________________________
Petition for review denied and cross-application for enforcement
granted by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
ARGUED: Charles I. Cohen, MORGAN, LEWIS & BOCKIUS,
L.L.P., Washington, D.C., for Sandvik. Rachael Irene Gartner,
NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for
Board. ON BRIEF: Linda A. Way-Smith, MORGAN, LEWIS &
BOCKIUS, L.L.P., Washington, D.C., for Sandvik. Frederick L. Fein-
stein, General Counsel, Linda Sher, Associate General Counsel, John
D. Burgoyne, Acting Deputy Associate General Counsel, Margaret
Ann Gaines, Supervisory Attorney, NATIONAL LABOR RELA-
TIONS BOARD, Washington, D.C., for Board.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
Pursuant to 29 U.S.C. § 160(f), Sandvik Rock Tools, Inc.
("Sandvik") petitions this court for review of the September 20, 1998
Decision and Order of the National Labor Relations Board ("NLRB"
or "Board") that certified union representation of a group of Sandvik's
employees. The NLRB has filed a Cross-Application for Enforcement
of the Board's September 20, 1998 Decision and Order (the "Board's
Order"). Because we hold that the Board did not exceed its discretion
in determining the appropriate bargaining unit, we deny Sandvik's
petition for review and grant enforcement of the Board's Order.
I.
On February 23, 1998, the Shopmen's Local No. 753 of the Inter-
national Association of Bridge, Structural, Ornamental, and Reinforc-
ing Iron Workers ("Union") filed a Petition for Certification of
Representation with the NLRB. The Union sought to represent the
workers in Sandvik's Chemical Products Division ("CPD") and its
2
associated warehouse. Those workers comprise approximately one-
half of the production and maintenance employees at Sandvik's Bris-
tol, Virginia facilities. The Union narrowly won the ensuing election.
Subsequently, the Union filed an unfair labor practices claim
against Sandvik, alleging Sandvik had violated the National Labor
Relations Act ("NLRA") by refusing to bargain with the Union. Sand-
vik admitted it had refused to bargain, but defended its refusal on the
ground that the NLRB had directed the election in an inappropriate
bargaining unit. The Board rejected Sandvik's argument and, on Sep-
tember 20, 1998, ordered Sandvik to cease and desist from refusing
to bargain, to bargain upon request, and to provide the Union with
requested information. These proceedings followed.
II.
Sandvik, a Delaware corporation, owns and operates a three-
building fabrication business in an industrial park in Bristol. Sandvik
operates two divisions at this facility, the Mineral Tools Division
("MTD") and the CPD. Each division occupies its own building. A
third Sandvik building serves as a warehouse. All three buildings are
located in close proximity to one another.1 Although separate signs
identify the MTD and the CPD at the entrance to the industrial park,
the three buildings share a common entrance and a common parking
lot. The MTD and the CPD each employ approximately sixty persons.
The CPD and the MTD produce substantially different products.
The MTD manufactures carbide insert tool products used in mining
and construction rehabilitation. The CPD manufactures polyester
resin cartridges that provide structural integrity to mined-out rock sur-
faces, and also manufactures sealants that form air barriers on cinder
block walls. Sandvik maintains separate budgets and balance sheets
for the two Bristol divisions. The divisions have separate managers,
supervisors, and foremen, who report to the same Sandvik executive.
The MTD and the CPD share common administrative and upper man-
agement personnel, and there is a single Human Resources Depart-
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1 The NLRB Hearing Officer specifically found that the MTD building
and the CPD building are located 220 feet apart. The warehouse is
approximately 200 feet from the other two buildings.
3
ment. All Sandvik employees at Bristol, regardless of division, are
governed by the same employee handbook and rules of conduct. All
employees also receive identical benefits and operate on virtually
identical pay scales. Both divisions use the same common carriers and
company vehicles for shipping and receiving.
Job qualifications for new employees are similar for both the MTD
and the CPD; however, the employees are trained in different skills
and use different equipment once on the job. The two divisions also
work on different shift schedules, with the MTD operating three
eight-hour shifts per day and the CPD operating two twelve-hour
shifts.
Although some employees have been permanently transferred from
one division to the other, employees are not temporarily transferred
between the MTD and the CPD. The employees of the two divisions
participate in some activities together, such as safety meetings or
company picnics, but they have separate facilities, break rooms, and
cafeterias on the job.
The warehouse is physically connected to the CPD by a conveyor
belt, and handles all of CPD's shipping and receiving functions. CPD
and the warehouse routinely interchange employees, such as helpers,
with each other. The MTD has its own shipping and receiving depart-
ment and associated storage site that are located within the MTD
building. Both divisions store their permanent records in the ware-
house.
In 1984, the Union filed a petition to represent all of Sandvik's pro-
duction and maintenance employees at the Bristol facility. The Union
lost that election. Until this recent election, there has been no collec-
tive bargaining history at the facility.
Sandvik maintains here that, based on the apparent"community of
interest" that exists between the MTD, CPD, and warehouse employ-
ees, the only plausible explanation for the Board's certification of a
bargaining unit consisting solely of the CPD and warehouse employ-
ees is that the Board improperly relied on the extent of the Union's
organization of those employees. Sandvik contends that, by placing
4
such reliance on the extent of the Union's organization, the Board
abused its discretion.
III.
A.
Section 9(b) of the NLRA, 29 U.S.C. § 159(b), grants the NLRB
the power to "decide in each case whether, in order to assure to
employees the fullest freedom in exercising the rights guaranteed by
this subchapter, the unit appropriate for the purposes of collective bar-
gaining shall be the employer unit, craft unit, plant unit, or subdivi-
sion thereof . . . ." 29 U.S.C. § 159(b). The Supreme Court has long
subscribed to the view that the NLRB possesses the widest possible
discretion in determining the appropriate bargaining unit. Arcadian
Shores, Inc. v. NLRB, 580 F.2d 118, 119 (4th Cir. 1978) (citing
Packard Motor Car Co. v. NLRB, 330 U.S. 485, 491 (1947)). This
wide discretion reflects acknowledgment of the Board's expertise in
such matters and its "need for `flexibility in shaping the [bargaining]
unit to the particular case.'" NLRB v. Lundy Packing Co., 68 F.3d
1577, 1579 (4th Cir. 1995) (quoting NLRB v. Action Automotive, Inc.,
469 U.S. 490, 494 (1985) (citation omitted)). It is also well estab-
lished that there may be more than one appropriate bargaining unit
within a single employment unit. Arcadian Shores, 580 F.2d at 119.
As we have observed, "the Board is free to select any one of these
appropriate units as the bargaining unit." Id. (citations omitted). An
employer challenging the Board's selection has the burden to prove
that the bargaining unit selected is "utterly inappropriate." Id. at 120.
Despite the grant of such wide discretion, the Board must still oper-
ate within its statutory parameters. Lundy Packing, 68 F.3d at 1580.
The NLRA mandates: "In determining whether a unit is appropriate
. . . the extent to which the employees have organized shall not be
controlling." Id. Therefore, although the Board may consider the
extent to which the employees have organized as one of many factors
in determining the appropriate bargaining unit, it may not give the
employees' extent of organization "controlling" weight. Id.Instead, to test a bargaining unit's appropriateness, the NLRB has
historically relied on the "community of interest" test. Id. That test
5
requires the Board to examine twelve equally important criteria in
determining whether the employees seeking to be represented by the
union share a sufficient community of interest to form an appropriate
bargaining unit. Id. The twelve factors the Board must examine are
the following:
(1) similarity in the scale and manner of determining the
earnings; (2) similarity in employment benefits, hours of
work, and other terms and conditions of employment;
(3) similarity in the kind of work performed; (4) similarity
in the qualifications, skills and training of the employees;
(5) frequency of contact or interchange among the employ-
ees; (6) geographic proximity; (7) continuity or integration
of production processes; (8) common supervision and deter-
mination of labor-relations policy; (9) relationship to the
administrative organization of the employer; (10) history of
collective bargaining; (11) desires of the affected employ-
ees; (12) extent of union organization.
Id. (citing I.T.O. Corp. of Baltimore v. NLRB, 818 F.2d 1108, 1113
(4th Cir. 1987)).
B.
Applying the community of interest test in this case, the Board's
Hearing Officer found that it was "readily apparent that the produc-
tion and maintenance employees at the chemical and tool divisions
share a community of interest." Sandvik Rock Tools, Inc. v. Shop-
men's Local Union No. 753 of the Int'l. Assoc. of Bridge, Structural,
Ornamental & Reinforcing Iron Workers, AFL-CIO, 11-RC-6254,
slip op. at 5 (NLRB March 25, 1998) (hereinafter"Sandvik Slip Op.").
Since the CPD employees were a subset of the CPD and MTD
employees whom the Hearing Officer found shared a community of
interest, the CPD employees themselves clearly share a community of
interest. The Hearing Officer also found that the CPD and warehouse
employees shared a community of interest. This finding was based on
the warehouse's primary use for shipping and receiving CPD's prod-
ucts, the routine interchange between the two facilities, and the func-
tional integration of the tasks performed by the two groups'
employees. Id. at 3-4.
6
Sandvik argued before the Hearing Officer that the bargaining unit
should include the MTD employees. Id. at 3. While acknowledging
that the employer was contending that a unit of employees from both
divisions would constitute "a more comprehensive appropriate unit,"
the Hearing Officer did not find the employer's argument on the point
dispositive. Id. at 5. The Hearing Officer noted that the Board has
long held that a single-plant unit is presumptively an appropriate bar-
gaining unit, and determined that Sandvik had failed to overcome that
presumption.2 Id.
The Board has stated that the party opposing the unit bears the bur-
den of overcoming this presumption. Red Lobster , 300 NLRB 908,
910 (1990). To determine if the party has rebutted the presumption,
the Board examines factors such as the following: (1) control over
daily operations; (2) extent of local autonomy; (3) similarity of
skills, functions, and working conditions; (4) degree of employee
interchange; (5) distance between locations; and (6) the facility's
bargaining history, if any. ESCO Corp., 298 NLRB 837, 839 (1990).
These factors generally overlap with the "community of interest" test,
but as applied to the question of whether an employer has overcome
the single-plant unit presumption, the Board's consideration of the
functional -- as opposed to the administrative-- features of the
employer's operations dominate. Cf. id.The Hearing Officer comprehensively analyzed the proper factors
_________________________________________________________________
2 The Board has held the single-plant unit presumption to carry the day
unless the unit "has been so effectively merged into a more comprehen-
sive unit, or so functionally integrated, that it has lost its separate iden-
tity." See, e.g., Red Lobster , 300 NLRB 908, 910 (1990) (citations
omitted); ESCO Corp., 298 NLRB 837, 839 (1990) (citations omitted).
Sandvik argues that the Board's condition for overcoming the single-
plant unit presumption is too stringent. Even if Sandvik were correct that
a lesser showing could rebut this presumption, Sandvik's argument that
the MTD and CPD employees share a community of interest is insuffi-
cient as a matter of law to rebut the Board's decision. See Arcadian
Shores, 580 F.2d at 120 (employer must show"utterly inappropriate"
bargaining unit selection by the Board). We therefore do not decide
whether the Board's standard for rebuttal of the single-plant unit pre-
sumption is correct.
7
in making his finding that Sandvik had failed to rebut the single-plant
unit presumption. Sandvik Slip Op. at 5-6 (citations omitted). The
Hearing Officer determined that: (1) the two divisions lacked com-
mon supervision; (2) the divisions were not functionally integrated;
(3) MTD had infrequent contact with the CPD and warehouse
employees; and (4) there was only a minimal interchange and trans-
fer of employees between the two divisions. Id. Countervailing facts
such as the MTD's physical proximity, similarity in employee wages,
fringe benefits, and personnel practices, as well as the centralized
administrative functions of Sandvik, were found by the Board not to
outweigh the operational autonomy distinctions. Id.C.
Sandvik does not contest the Board's determination that the CPD
and the warehouse constitute a single-plant unit. Rather, Sandvik dis-
putes aspects of the Board's fact-finding and contends that the
employees' community of interest requires a multi-plant bargaining
unit in this case.
1.
Sandvik contends that substantial evidence does not support the
following findings of the Board: (1) that the two divisions' produc-
tion processes are not functionally integrated, and do not use interre-
lated methods and technology; (2) that the CPD and the MTD lack
common supervision; and (3) that the employees of the two divisions
have "infrequent contact" and "minimal interchange." Sandvik asserts
that the two divisions' products are integrated and functionally related
because they are often used together by its customers. We are unper-
suaded by these assertions, however, because the Board's test looks
to whether the production processes of the two units are integrated
and interrelated, and does not concern whether the products them-
selves are marketed, sold, or used together.
Next, Sandvik urges that the evidence of a higher level supervisor
common to the CPD and the MTD is contrary to the Board's finding
that day-to-day supervision is performed separately in the two divi-
sions. Again, Sandvik misconstrues the nature of the Board's test
8
which looks to the nature of the employees' supervision at a daily
operational level.
Finally, Sandvik contends its evidence shows more than infrequent
contact and minimal interchange between the two divisions' employ-
ees. Based merely on Sandvik's evidence of annual joint company
picnics, newly created joint committees, and other joint activities of
unspecified frequencies, we cannot disagree with the Board's findings
of fact.
2.
Sandvik argues that the bargaining unit is inappropriate on the facts
here. In support of its argument, Sandvik analogizes the facts in this
case to those in our decision in NLRB v. Harry T. Campbell Sons'
Corp., 407 F.2d 969 (4th Cir. 1969), where we denied an enforcement
action due to the "extraordinary degree of integration and interdepen-
dence" of a company's calcite and quarry operations. See Campbell,
407 F.2d at 977-78. In Campbell, the calcite operation was entirely
dependent on the quarry. Id. at 977. The employees worked alongside
and in conjunction with each other, with the quarry workers perform-
ing work for the calcite operation. Id. For example, quarry trucks
driven by quarry employees brought stone to the calcite operation,
accompanied by and under the specific direction of a calcite operator.
Id. A company-wide personnel system also governed a uniform wages
and benefits program. Id. The court concluded there was not "even the
shadow of autonomy," and that there was "simply no way in which
the interests of the calcite employees [could] be disassociated from
their fellow employees . . . ." Id. at 978.
Although, as Sandvik contends (and the Board found), the CPD
and MTD employees share a "community of interest," that alone is
not enough to overcome the Board's unit determination. The "extraor-
dinary degree of integration and interdependence" in Campbell made
the two company operations inseparable, and thus justified overruling
the Board. See Campbell, 407 F.2d at 977-78. That inseparability is
not evident here. Although in Campbell the calcite operation could
not exist without the quarry, here the two divisions produce different
products that each sells directly to its own customers. Nothing in the
record establishes that the MTD is essential to the CPD's operation.
9
Both divisions sell mining products to different customers, although
there is an overlap in their customer base because they both market
to the mining industry.3
Unlike in Campbell, where the employees had similar skills and
routinely were exchanged between the two enterprises, the MTD and
CPD employees' skills are different, and employee transfers are infre-
quent and tend to be permanent relocations. Unlike in Campbell, the
two Sandvik divisions have separate business plans, budgets and
financial statements, as well as separate production and management
supervision. In sum, although the Sandvik divisions do share certain
features with the Campbell units, particularly with regard to personnel
administration and standards, there are substantial operating control
distinctions between the CPD and the MTD.
Sandvik also relies in this case on various authorities in which
courts have upheld the Board's approval of multi-unit bargaining units.4
These decisions confirm the Board's decision-making authority and
wide discretion, and are unpersuasive here, where Sandvik is required
to show that the Board abused its broad discretion.
Sandvik further contends that, based on the NLRA's policy ratio-
nale to "promote industrial peace," only the larger bargaining unit
should be certified.5 While the Board's governing policy is instruc-
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3 The Hearing Officer found that 85% of the MTD customers were also
customers of the CPD.
4 Sandvik cites several cases for the proposition that the NLRB has
found a smaller bargaining unit inappropriate as compared to a larger
unit: NLRB v. Cell Agricultural Mfg. Co., 41 F.3d 389 (8th Cir. 1994);
NLRB v. Williams, 195 F.2d 669 (4th Cir. 1952); Neodata Prod-
uct/Distribution Inc., 312 NLRB 987 (1993); Alma Plastics Co., 265
NLRB 479 (1982); and Caron Int'l, Inc., 222 NLRB 508 (1976).
5 Sandvik's characterization of the NLRA's guiding policy is inexact,
and diminishes the multiplicity of interests that the Act is intended to
protect. The public policy embodied in the Act was enunciated in 1947
as follows:
It is hereby declared to be the policy of the United States to elim-
inate the causes of certain substantial obstructions to the free
10
tive, the policy does not prohibit appropriate smaller bargaining units,
as the Board found appropriate here. Sandvik failed to meet its burden
to prove that the unit selected is "utterly inappropriate." See Arcadian
Shores, Inc. v. NLRB, 580 F.2d 118, 120 (4th Cir. 1978).
3.
Sandvik argues that the Board's decision violates NLRA § 9(c)(5),
which prohibits the extent to which the employees have organized
from being either the exclusive or controlling factor in defining the
bargaining unit. See 29 U.S.C. § 159(c)(5). While the previous failed
attempt to unionize the combined MTD and CPD suggests that the
MTD employees are less pro-union than their counterparts in the
CPD, that inference alone is insufficient to establish a § 9(c)(5) viola-
tion. See Arcadian Shores, 580 F.2d at 120. As in Arcadian Shores,
the separation and independence between the functions of the workers
within the bargaining unit and those outside is a reasonable basis for
the exclusion of the latter. Id.Sandvik argues unpersuasively that our decision in NLRB v. Lundy
Packing Co., 68 F.3d 1577 (4th Cir. 1995), is factually analogous and
controlling here. In Lundy Packing, the union certified a bargaining
unit consisting of production and maintenance employees, but
excluded the quality control employees who spent a large percentage
of their working time on the production floor alongside the production
and maintenance employees. Lundy Packing, 68 F.3d at 1580. We
noted that the Board's purported "distinguishing factors" between the
included and excluded workers did not in fact distinguish between the
two groups, as some workers in the production and maintenance
group had similar job characteristics as the quality control employees.
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flow of commerce and to mitigate and eliminate these obstruc-
tions when they have occurred by encouraging the practice and
procedure of collective bargaining and by protecting the exercise
by workers of full freedom of association, self-organization, and
designation of representatives of their own choosing, for the pur-
pose of negotiating the terms and conditions of their employment
or other mutual aid or protection.
29 U.S.C. § 151 (findings and declaration of policy).
11
Id. at 1580-81. We decided that these "meager differences" were
problematic because the excluded employees' tasks were essential to
the company's operation. Id. We also noted that the Board's past
position as to those same employee classifications at other companies
was inconsistent with its position in Lundy Packing, without any justi-
fication. Id. at 1582-83. We therefore concluded that the bargaining
unit decision was impermissibly dominated by the extent of organiza-
tion, and denied enforcement of the Board's order. Id. at 1582-83.
The Lundy Packing facts are simply not analogous to this case.
Unlike the MTD employees here, the excluded employees in Lundy
Packing performed tasks that were essential to the entire company's
operation; the Board's ruling in Lundy Packing was inconsistent with
its position in a long history of prior decisions; and the Board had no
explanation for the inconsistency. The determinations underpinning
our decision in Lundy Packing have not been demonstrated here. Con-
sequently, we cannot say in this case that the extent of union organi-
zation was either the exclusive factor or the controlling factor in the
Board's unit determination.
IV.
Pursuant to the foregoing, we are unable to conclude that the Board
abused its discretion in connection with its September 20, 1998 Deci-
sion and Order. The petition for review is therefore denied, and the
cross-application for enforcement of the Board's Order is accordingly
granted.
PETITION FOR REVIEW DENIED AND CROSS-
APPLICATION FOR ENFORCEMENT GRANTED
12