Sundor Brands Inc v. NLRB ( 1999 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued December 7, 1998 Decided February 26, 1999
No. 98-1184
Sundor Brands, 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
Terrence J. Nolan argued the cause for petitioner. With
him on the briefs was Christopher H. Mills.
Fred B. Jacob, Attorney, National Labor Relations Board,
argued the cause for respondent. With him on the brief were
Linda Sher, Associate General Counsel, John D. Burgoyne,
Acting Deputy Associate General Counsel, and Fred L. Corn-
nell, Supervisory Attorney.
Before: Ginsburg, Henderson and Rogers, Circuit Judges.
Opinion for the Court filed by Circuit Judge Ginsburg.
Ginsburg, Circuit Judge: Local 68 of the International
Union of Operating Engineers, AFL-CIO, petitioned the
National Labor Relations Board to hold a representation
election among certain employees at a plant operated by
petitioner Sundor Brands, Inc. Over Sundor's objection, the
Regional Director of the NLRB approved a less than plant-
wide bargaining unit and ordered an election. Sundor ap-
pealed the Regional Director's unit determination to the
Board, which affirmed. When the Union won the representa-
tion election, Sundor refused to bargain with it and was held
to have committed an unfair labor practice.
Sundor now petitions for review of the Board's order in the
unfair labor practice case on the ground that the underlying
bargaining unit determination is unlawful. We hold more
narrowly that the Board failed adequately to explain its unit
determination. Accordingly, we remand this matter for fur-
ther proceedings before the NLRB.
I. Background
In order to understand this controversy one must know
something about how Sundor manages its fruit juice beverage
plant in South Brunswick, New Jersey. Work there is orga-
nized pursuant to a team-based method of management that
Sundor calls its "High Performance Work System." Under
that system, the Company assigns most of its non-managerial
employees each to a so-called team. Instead of giving re-
sponsibility for a specific task to a specific individual, the
Company assigns all the tasks in a given part of the plant to a
team. It may, for example, give a team in the packing
department not only the job of operating the packing equip-
ment in its area, but also responsibility for maintaining that
equipment and for checking the quality of the product being
packed. Sundor expects each of its employees to be able to
perform all of the tasks for which his team may be responsi-
ble. At least in principle, therefore, the job duties of many
employees overlap significantly.
Each newly hired employee starts as a "Level 1 technician"
and receives a standard pay and benefit package. A Level 1
technician who demonstrates a mastery of basic operational
tasks may bid for a more specialized and better paying Level
2 position. A similar increase in specialization and pay
accompanies promotion to Level 3. All non-managerial em-
ployees are subject to the same disciplinary rules and stan-
dards for promotion, and all use the same parking lot, cafete-
ria, and smoking room.
Not all non-managerial employees are members of a work
team. Of particular relevance here, non-team members in-
clude the Maintenance Group Leaders (MGLs), the Level 3
Electrical and Instrumentation Technicians (EITs), and the
sole Level 3 Utilities Coordinator (UC).
In March, 1997 the Union petitioned the Regional Director
of the NLRB to hold a representation election for a bargain-
ing unit consisting of all full-time and regular part-time
Advanced Maintenance Technicians (AMTs), who are team
members; and of the EITs and UCs, who are not. Sundor
objected to the petition, contending that the employees the
Union sought to represent have nothing in common except
what they also share with all non-managerial employees.
Because of the homogenizing influence of the High Perfor-
mance Work System, the Company maintained, the only
appropriate bargaining unit would include all the non-
managerial employees in the plant.
After holding a hearing, the Regional Director ordered a
representation election for a unit consisting of all AMTs,
EITs, UCs, and MGLs. Despite the unusual organizational
scheme in the plant, he reasoned, these groups of employees
have a community of interest distinct from that of the other
employees because they: (1) have specialized skills related to
the maintenance of plant equipment; (2) are responsible for
the performance of maintenance tasks; (3) spend some part
of their working day in the maintenance shop; (4) interact
frequently with each other; (5) earn relatively high salaries;
and (6) insofar as they do maintenance work, are supervised
separately.
Upon Sundor's appeal, the Board generally affirmed but
held that, because the Company had raised a substantial
objection to their inclusion in the unit, Level 2 UCs should
cast ballots marked as challenged. The parties did not
receive the Board's order, however, until the election was
underway, and four of the five Level 2 UCs had already
voted. The Union won the election by a substantial margin
and the Board certified it as the exclusive bargaining repre-
sentative of the employees in the designated bargaining unit.
In order to contest the Board's unit determination, Sundor
refused to bargain with the Union. The Board held that the
Company thereby violated ss 8(a)(1) and (5) of the National
Labor Relations Act, 29 U.S.C. ss 158(a)(1) and (5), and
ordered it to bargain. Sundor now petitions for review of the
Board's order and the Board cross-applies for its enforce-
ment.
II. Analysis
Under s 9(b) of the National Labor Relations Act, 29
U.S.C. s 159(b), the Board may certify a group of employees
as a bargaining unit only if they share a substantial "commu-
nity of interest." Bentson Contracting Co. v. NLRB, 941
F.2d 1262, 1265 (D.C. Cir. 1991). To determine whether this
standard is met in a particular case, the Board considers a
variety of factors, including the employees' "wages, hours and
other working conditions; commonality of supervision; de-
gree of skill and common functions; frequency of contact and
interchange with other employees; and functional inte-
gration." Ore-Ida Foods, Inc., 313 N.L.R.B. 1016, 1019
(1994), enforced, 66 F.3d 328 (7th Cir. 1995). No one factor is
controlling. See Airco, Inc., 273 N.L.R.B. 348, 348 (1984).
Upon judicial review the Board's unit determination, if sup-
ported by substantial evidence, see Cleveland Constr., Inc. v.
NLRB, 44 F.3d 1010, 1014 (D.C. Cir. 1995), is entitled to
"wide deference" from the court. Willamette Indus., Inc. v.
NLRB, 144 F.3d 877, 878 (D.C. Cir. 1998).
A.Adherence to Precedent
Sundor first argues that the unit determination in this case
constitutes an improper departure from Board precedent.
The Board has generally presumed that a plant-wide unit is
appropriate. See, e.g., Kalamazoo Paper Box Corp., 136
N.L.R.B. 134, 137 (1962).* It follows, according to Sundor,
that a smaller unit is presumptively inappropriate, yet the
Board failed to consider whether this presumption was over-
come in this case.
The argument is without merit. In American Hospital
Association v. NLRB, 499 U.S. 606 (1991), the Supreme
Court made it clear that the Board may certify any appropri-
ate unit, and is not limited to the "single most appropriate"
one. Id. at 610. That a plant-wide unit presumptively would
be proper, therefore, has no necessary bearing upon whether
a smaller unit also would be proper. Rather, the Board
applies the presumption in favor of a plant-wide unit only
when the union proposes and the employer opposes such a
unit, not when the union proposes a smaller unit. See, e.g.,
Airco, 273 N.L.R.B. at 348-49; see also American Hosp.
Ass'n, 499 U.S. at 610 ("[T]he initiative in selecting an appro-
priate unit resides with the employees" seeking representa-
tion).
Nor, Sundor's argument to the contrary notwithstanding,
does the Board's general rule conflict with s 9(c)(5) of the
Act, 29 U.S.C. s 159(c)(5) ("In determining whether a unit is
appropriate ... the extent to which the employees have
organized shall not be controlling"). To be sure, by applying
the presumption as it does the Board gives the Union an
initial advantage should any conflict ensue regarding the
proper scope of the bargaining unit. This modest benefit,
however, hardly grants "controlling" weight to the extent the
Union has organized the employees. See NLRB v. Metropol-
itan Life Ins. Co., 380 U.S. 438, 441-42 (1965) (s 9(c)(5) "was
not intended to prohibit the Board from considering the
extent of organization as one factor, though not the control-
ling factor, in its unit determination").
__________
* The Board has created one industry-specific exception to this
general principle, but it plainly does not apply here. See Willam-
ette, 144 F.3d at 879-80 (Board has consistently approved only
plant-wide units in the lumber industry).
B.Substantial Evidence
Sundor's more weighty objection is to the sufficiency of the
evidence supporting the Board's unit determination. As not-
ed above, that decision was predicated upon the Regional
Director's analysis of six factors. Because there is no sugges-
tion in either the Regional Director's decision or the Board's
order affirming it that any of those factors was unnecessary
to its decision, we must assume that the Board relied upon
each of them. If any one is unsupported by evidence in the
record, therefore, the Board must reconsider its unit determi-
nation. See SEC v. Chenery Corp., 318 U.S. 80, 87 (1943)
("The grounds upon which an administrative order must be
judged are those upon which the record discloses that its
action was based"). Cf. Fleshman v. West, 138 F.3d 1429,
1433 (Fed. Cir. 1998) (remand unnecessary where it is clear
that agency would have reached the same result had it
applied correct reasoning). In the event, we conclude that
there is sufficient evidence in the record to support the
Board's reliance upon two, and perhaps a third,* of the six
factors it invoked; its reliance upon the other three is unjusti-
fied.
__________
* With regard to the unit members' pay, the Board's reasoning is
not entirely clear. The Board suggests in its brief that they receive
relatively high salaries because they are maintenance employees,
but that is not the case. The undisputed evidence shows that
Sundor determines its employees' pay exclusively with reference to
their experience and skill level; maintenance employees do not earn
more than equally skilled and equally senior non-maintenance em-
ployees. The Regional Director, however, may have meant only to
distinguish unit members, all of whom are Level 3 employees, from
non-unit employees, the majority of whom are at Levels 1 and 2.
Because the Board is not required to identify the most appropriate
unit, but only an appropriate one, see American Hosp. Ass'n, 499
U.S. at 610, a showing that the unit members are better paid than
most non-unit employees may provide a degree of support for the
conclusion that they have a distinct community of interests. Upon
remand, the Board will have to clarify its reasoning if it wants to
rely upon this ground.
First (in the latter category) is the degree to which the
employees in the unit interact with each other. The Board
points to testimony suggesting that the MGLs and the AMTs
have largely overlapping job responsibilities, and that the
AMTs are generally responsible for performing planned
maintenance work on production equipment. It also cites
evidence that Level 3 EITs regularly work alongside other
employees both within the designated unit as well as those
excluded from it, and that the "maintenance personnel" at-
tend a monthly meeting.
How the Board could conclude from this evidence that the
employees in the unit interact frequently with each other
eludes us. That the AMTs and the MGLs may have common
job duties does not mean they work together in performing
those duties. As to the Level 3 EITs, testimony in the record
confirms that they work with other unit employees in "main-
tenance or trouble-shooting functions" but there is no indica-
tion whether they do so with any frequency. The Board's
strongest point--but only by default--concerns the monthly
maintenance meetings: They show that members of the unit
have at least some contact with each other. As Sundor points
out, however, the AMTs attend meetings with employees
outside the unit not monthly but daily, and the UC interacts
most consistently with other utilities employees, not with
other members of the disputed unit. Perhaps the monthly
maintenance meetings are for some reason so significant that
they outweigh the apparently extensive, indeed daily, interac-
tion the AMTs have with employees outside the unit. The
Board has not, however, claimed as much, let alone told us
why.
Second, the Board based its decision in part upon the
Regional Director's conclusion that "[a]lthough most of [Sun-
dor's] skilled maintenance employees are members of teams
and receive some direction from team leaders, they receive
separate direction concerning the performance of their skilled
maintenance duties." Again, we fail to see how this factor, on
the facts of this case, lends any support to the Board's unit
determination. The Board admits--indeed, puzzlingly, seems
to assert--that each of the four groups in the bargaining unit,
even insofar as they do maintenance work, is supervised
separately, and that only two of them (the MGLs and the
AMTs) have even one supervisor (the Technology Manager)
in common. If, upon remand, the Board is to adhere to its
present unit determination, therefore, it must explain why
that decision is justified in spite of, not because of, the
disparate supervision of the employees in the unit.
Finally, the Board asserts that the employees in the unit
have the common task of ensuring that equipment at the
plant is properly maintained. At least as to the Level 3 UC,
however, that claim is grossly overstated. The testimony
describing the UC's responsibilities is that he does mainte-
nance work only to fill in for a Level 2 UC who is on vacation
or otherwise unavailable; the bulk of his time is devoted to
training more junior utilities personnel. Insofar as the
Board's decision to include the Level 3 UC is based upon his
responsibility for the maintenance of equipment, therefore, it
is unsupported by substantial evidence.
In short, three of the six factors upon which the Board
relied in reaching its decision are, in whole or in part, without
support in the record. In these circumstances, we must
remand this matter for the Board to reconsider its decision.
In so doing we express no opinion upon the question whether
the factors for which there is support in the record could
suffice by themselves to support the Board's present unit
determination.
C.Late Notice of the Board's Order
Sundor maintains that the Board, by failing to inform the
parties before voting began that the Level 2 UCs were to cast
challenged ballots, unfairly interfered with the election. Em-
ployees who voted for the Union believing that it would
represent the Level 2 UCs, the Company suggests, may have
voted differently had they known that those employees would
likely be excluded from the unit.
Whatever the merits of this contention, Sundor did not
timely raise it before the Board. Under 29 C.F.R.
s 102.69(a), an objection to conduct allegedly affecting the
result of a representation election must be made within seven
days of the Board's tally of the ballots. Because the Compa-
ny neither raised its objection in a timely fashion nor alleged
special circumstances that could excuse its tardiness, the
Board properly declined to consider it.
III. Conclusion
For the foregoing reasons, the petition for review is grant-
ed, the Board's cross-application for enforcement is denied,
and this matter is remanded to the Board for further pro-
ceedings.
So ordered.