Staffco of Brooklyn, LLC v. NLRB , 888 F.3d 1297 ( 2018 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 9, 2018 Decided May 4, 2018
No. 16-1311
STAFFCO OF BROOKLYN, LLC,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
NEW YORK STATE NURSES ASSOCIATION,
INTERVENOR
Consolidated with 16-1363
On Petition for Review and Cross-Application
for Enforcement of an Order of
the National Labor Relations Board
Nicholas M. Reiter argued the cause for petitioner. With
him on the briefs was Benjamin E. Stockman. Moxila A.
Upadhyaya entered an appearance.
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Jared D. Cantor, Attorney, National Labor Relations
Board, argued the cause for respondent. With him on the brief
were Richard F. Griffin, General Counsel at the time the brief
was submitted, John H. Ferguson, Associate General Counsel,
Linda Dreeben, Deputy Associate General Counsel, and Kira
Dellinger Vol, Supervisory Attorney.
Richard M. Seltzer argued the cause for intervenor. With
him on the brief was Kate M. Swearengen.
Before: PILLARD and WILKINS, Circuit Judges, and
SENTELLE, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge
SENTELLE.
SENTELLE, Senior Circuit Judge: StaffCo of Brooklyn,
LLC (“StaffCo”), petitions for review of a National Labor
Relations Board (“NLRB” or “the Board”) order finding that
StaffCo violated section 8(a)(5) and (1) of the National Labor
Relations Act (“the Act”), 29 U.S.C. § 158(a)(5) and (1), by
unilaterally discontinuing contributions to a Union pension
plan upon the expiration of a collective bargaining agreement
(“CBA”). StaffCo contends that: (1) the Union expressly
waived its right to bargain as to pension contributions; (2) the
Union impliedly waived its right to bargain by failing to
diligently request bargaining; and (3) it was impossible for
StaffCo to continue making contributions because the pension
plan would not have accepted the payments. Because we reject
these defenses and the Board’s findings are supported by
substantial evidence on the record, we deny StaffCo’s petition
for review and grant the Board’s cross-application for
enforcement.
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I. Background
A. Factual Background
The State University of New York Downstate Medical
Center (“SUNY Downstate”) contracted with StaffCo to
provide non-physician staff at Long Island College Hospital.
StaffCo hired nurses and nurse practitioners to staff the
Hospital and nearby school clinics run by the Hospital.
Intervenor New York State Nurses Association represents the
employees as collective bargaining agents and entered into a
CBA effective May 29, 2011, through May 28, 2012.
Under the CBA, StaffCo agreed to participate in the
Union’s pension plan and contribute to it. StaffCo and the
Union also agreed to be bound by the terms and provisions of
the plan as set out in its Agreement and Declaration of Trust.
The admission requirements of the plan dictate that the CBA of
an admitted employer must not be inconsistent with the plan
itself or its trust agreement. The plan documents include a
Policy for Continuation of Coverage Upon Expiration of a
Collective Bargaining Agreement (“the Policy”). The Policy
sets the conditions on which Plan coverage would continue if a
CBA or interim agreement expired. The relevant portion of the
Policy states:
Upon expiration or termination of a collective
bargaining agreement, if (i) the employer has
not submitted to the Plan Office a new [CBA]
which satisfies the requirements of (A) above
[for new CBAs] and has not complied with the
provisions of (B)(1) above [governing
continuation of coverage], or (ii) the employer
owes contributions to the Fund for more than
two months (without regard to when such
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contributions are payable), the employer’s
participation in and status as an Employer under
the Fund shall forthwith terminate, the service
of such employer’s employees shall no longer
be credited under the Plan, the employer and the
Association, shall be notified in writing, and the
employees of the employer shall be notified in
writing five business days thereafter, that the
employer is no longer maintaining the Plan and
that the covered employment of the employees
of the employer terminated on the
expiration/termination date of the [CBA].
After expiration of the initial CBA, the parties signed three
extensions and two interim agreements ensuring continuation
of pension coverage. The last extension was signed on March
13, 2014, and would expire on May 22, 2014. May 22 was
significant because the Hospital was to shut down after that
date. That date was also significant because StaffCo would
face additional pension liability if it remained in the plan
beyond May 22.
SUNY Downstate faced serious financial difficulties as
early as 2012. SUNY Downstate’s trustees voted to close the
Hospital in February 2013, but that closure was repeatedly
delayed by litigation involving the Union and other community
and labor groups. In February 2014 a settlement was reached
that kept the Hospital open through at least May 22, 2014.
However, StaffCo continued to employ Union unit members at
the Hospital until October 31, 2014—when it closed—and
continued to employ four unit employees beyond that date in
school clinics. After May 22, 2014, StaffCo neither submitted
pension contributions to the Plan nor otherwise made pension
contributions for unit employees.
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B. Proceedings Below
The Union filed an unfair labor practice charge with the
NLRB on August 5, 2014, alleging that StaffCo failed to make
payments to the pension plan. StaffCo did not deny that it had
ceased making pension contributions. It raised a number of
affirmative defenses, three of which form the basis for
StaffCo’s petition for review. StaffCo first asserted that the
Union waived its right to bargain by accepting the adoption in
the CBA of the Policy language quoted above. Second,
StaffCo argued that the Union received notice of the unilateral
change StaffCo planned to make but had failed to timely
demand bargaining on the issue, waiving its right to bargain.
Finally, StaffCo raised an impossibility defense, arguing that it
could not continue to make pension contributions because the
plan would not accept contributions absent a CBA or interim
agreement. First an administrative law judge and then a panel
of the Board resolved all issues against StaffCo.
The administrative law judge found that the Union had not
in the Policy clearly and unmistakably waived its right to
bargain, made credibility determinations in favor of Union
witnesses, found that StaffCo failed to give the Union notice of
the impending unilateral change in pension contributions and
that the Union had timely demanded bargaining, and found that
StaffCo failed to carry its burden on its impossibility defense.
A divided Board panel affirmed the ALJ’s findings and
conclusions. 364 NLRB No. 102 at 1 (2016). StaffCo
petitioned this court for review; the Board cross-petitioned for
enforcement; and the Union obtained leave to intervene on
behalf of the Board.
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II. Discussion
Under the Act, an employer has a duty to bargain
collectively with a union representing employees. 29 U.S.C.
§ 158(a)(5). Any unilateral change in an existing term or
condition of employment that is a mandatory subject of
bargaining is an unfair labor practice. NLRB v. Katz, 369 U.S.
736, 743, 747 (1962). This rule continues to apply when a CBA
expires. Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 198
(1991). Thus, obligatory terms and conditions of employment
must be maintained while a new agreement is negotiated, and
this duty to maintain the status quo is statutory rather than
contractual. Id. at 198, 206-07. Only a new CBA or a good-
faith impasse in negotiations ends this duty, unless the union
waives its right to bargain. Triple A Fire Prot., Inc., 315 NLRB
409, 414 (1994). A union may expressly waive its right to
bargain by a waiver that is “clear and unmistakable” or may
implicitly waive by failing to timely demand bargaining. Regal
Cinemas, Inc. v. NLRB, 317 F.3d 300, 312, 314 (D.C. Cir.
2003).
StaffCo does not deny that by failing to make pension
contributions, it failed to meet its status quo obligations.
Therefore, we address the three affirmative defenses raised.
A. Express Waiver of the Right to Bargain
We first consider whether the Union waived its right to
bargain as to pension contributions by accepting the terms of
the Policy. We do not defer to NLRB’s legal conclusions
interpreting labor agreements. NLRB v. U.S. Postal Serv., 8
F.3d 832, 837 (D.C. Cir. 1993). We do, however, defer to
NLRB fact-finding if supported by substantial evidence. See
Oak Harbor Freight Lines, Inc. v. NLRB, 855 F.3d 436, 440
(D.C. Cir. 2017). Our deference to NLRB fact-finding extends
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to findings related to the contract, including evidence of intent
from “bargaining history,” Local Union No. 47, Int’l Bhd. of
Elec. Workers v. NLRB, 927 F.2d 635, 640 (D.C. Cir. 1991),
and other “factual findings on matters bearing on the intent of
the parties,” Local Union 1395, Int’l Bhd. of Elec. Workers v.
NLRB, 797 F.2d 1027, 1030 (D.C. Cir. 1986).
The Board and courts have long held that to be effective, a
union’s express waiver of a statutory right “must be clear and
unmistakable.” Metro. Edison Co. v. NLRB, 460 U.S. 693, 708
(1983). In other words, “we will not infer from a general
contractual provision that the parties intended to waive a
statutorily protected right unless the undertaking is ‘explicitly
stated.’” Id. Moreover, under our precedent “the party
claiming waiver . . . ha[s] the burden of proof.” Oak Harbor,
855 F.3d at 442. Although this circuit has held that in many
cases an antecedent question of contract coverage must be
answered before addressing whether clear and unmistakable
waiver has occurred, see generally U.S. Postal Serv., 8 F.3d at
836-37, StaffCo does not contend that those precedents govern
these facts.
The Policy states that StaffCo’s “participation in and status
as an Employer” under the plan would “terminate” at CBA
expiration, that StaffCo would “no longer maintain[] the Plan,”
and that employees’ service “shall no longer be credited under
the Plan.” Therefore, StaffCo contends the Policy effects a
waiver of the Union’s right to bargain over pension
contributions. StaffCo argues that we recently addressed
similar language in a pension plan document in Oak Harbor
Freight Lines v. NLRB and found a waiver of the right to
bargain. 855 F.3d at 439, 441-42. However, the pension plan
language in Oak Harbor is distinguishable.
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In Oak Harbor, the relevant pension fund document
expressly gave the employer the right to unilaterally cease
making payments to the pension plan:
Upon expiration of the current or any
subsequent bargaining agreement requiring
contributions, the employer agrees to continue
to contribute to the trust in the same manner and
amount as required in the most recent expired
bargaining agreement until such time as the
[employer or union] either notifies the other
party in writing . . . of its intent to cancel such
obligation five days after receipt of notice or
enter[s] into a successor bargaining agreement.
Id. at 439 (emphasis added). This language expressly grants
the employer the right to cease making payments without
violating its status quo obligations to the Union, and to do so
unilaterally—the employer must continue making payments
“until” either it or the union “notifies the other party in writing
. . . of its intent to cancel such obligation.” Id. In short, the
employer in Oak Harbor could “cancel [its] obligation.” Id.
The language in this case is not so clear and unmistakable.
StaffCo points to no language in the Policy that expressly
provides it with a unilateral right to cease making pension
contributions. To conclude from the Policy language that
StaffCo can unilaterally cease making contributions depends
on an inference. That StaffCo’s “participation in and status as
an Employer . . . terminate[s],” that employee service “shall no
longer be credited,” and that StaffCo will “no longer maintain[]
the plan” upon expiration of a CBA or interim agreement do
not expressly grant a right to end contributions—all require a
further inference. The end of StaffCo’s “participation” in or
“maintenance” of the plan does not necessarily require such an
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inference. Rather, as the Board found, the Policy language
could be read to clarify StaffCo’s position as to the pension
plan, not with regard to the Union, and therefore the Policy
lacks the clarity needed to waive the Union’s right to bargain
about the pension contributions. Under the clear and
unmistakable waiver rule, which places the burden on StaffCo,
the Policy language falls short of establishing waiver.
StaffCo argues that the Board improperly distinguished its
own precedent in Cauthorne Trucking, 256 NLRB 721 (1981),
where the Board found waiver of the right to bargain. Like Oak
Harbor, however, Cauthorne is distinguishable from this case.
Cauthorne’s pension document clearly stated that “any
[Employer’s] obligation . . . shall terminate” at CBA
expiration. 256 NLRB at 722. Moreover, the Board’s finding
of no waiver in this case accords with its practice of “appl[ying]
Cauthorne . . . ‘narrowly,’” only finding waiver “where there
is explicit contract language authorizing an employer to cancel
its obligations.” Oak Harbor, 855 F.3d at 441-42 (quoting The
Finley Hosp., 359 NLRB 156, 159 n.5 (2012)). The Board
properly distinguished Cauthorne.
StaffCo also attempts to rely on evidence of the parties’
past practices to bolster its case that the Union waived its right
to bargain. Specifically, StaffCo points to (1) the Union’s
quickly moving to have four different interim or extension
agreements approved and (2) testimony by Union witnesses
and other evidence that StaffCo claims show the Union
understood an extension was necessary to ensure pension
contributions continued.
The portions of the record StaffCo relies upon do not
unambiguously show that the Union understood that interim
agreements were necessary for contributions to continue, much
less that the Union understood the Policy to waive its right to
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bargain. That the Union moved quickly to ensure CBA
extensions were in place shows at most that it had some
concern that motivated it to act, not that ensuring pension
contributions was its concern. One Union witness, Michelle
Green, did state that the Union was anxious to get an extension
of the CBA because “we wanted to make sure that the Pension
Fund contributions would continue from – – that the Pension
Fund would accept contributions from the Employer.” This
statement itself is not crystalline, and in an email Green stated
that the reason to pursue an interim agreement is “to continue
the pension benefit.” The Board considered this evidence and
resolved any conflict against StaffCo. Even though the record
is not unambiguous, substantial evidence supports that finding.
B. Implied Waiver By Failure to Timely
Demand Bargaining
We next consider petitioner’s argument that the Board
erred by “never consider[ing] StaffCo’s alternative argument
that the Union’s failure to diligently request bargaining about
pension benefits waived the status quo obligation.” As with the
first argument, petitioner is able to find some support in the
record and our precedents, but also as with the first argument,
it is insufficient for us to upset the findings and conclusions of
the Board.
Substantively, petitioner relies on well-established
principles of labor law. As we have held, “[i]f 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.’”
Regal Cinemas, 317 F.3d at 314 (quoting Golden Bay Freight
Lines, 267 NLRB 1073, 1080 (1983)). Failure to demand
bargaining after receiving notice of a planned unilateral change
waives the Union’s right to bargain. See id. While “[t]he
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burden is on the union to make its desires known,” it need not
“explicitly demand bargaining.” Prime Serv., Inc. v. NLRB,
266 F.3d 1233, 1238 (D.C. Cir. 2001). That is, “[a] union need
utter no particular words,” and “[t]he demand may be in writing
or it may be oral,” but “some indicia of a demand” must be
provided. Id.StaffCo argues that unrebutted evidence in the record
establishes that it provided notice to the Union and the Union
then failed to timely demand bargaining. We address only
whether the Union timely requested bargaining. Because the
Board’s determination that it did is supported by substantial
evidence, we cannot find fault with the Board’s ultimate
finding that the Union did not impliedly waive its right to
bargain.
While StaffCo argues that the Board ignored this
argument, and that the Board made no explicit findings as to
which the deferential standard of review can be applied, we
disagree. The ALJ made explicit findings and recited relevant
evidence and specifically rejected the argument. The Board
expressly “affirm[ed] the judge’s rulings, findings, and
conclusions” without excluding the portion of it dealing with
this subject. We grant that the judge’s findings were terse, but
tolerably so. We further grant that the Board’s performance on
this issue may be the bare minimum warranting deference, but
it does reach the bare minimum.
Significant for our review, the ALJ found credible the
testimony of Union witnesses “that the Union was seeking an
extension to the [CBA] since May 20 and repeatedly requested
that [StaffCo] continue with its pension contributions.” The
testimony credited included evidence that Eric Smith, a Union
official, at a May 20 labor-management meeting attended by
StaffCo’s CEO and an Assistant Vice President for Human
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Resources had requested that StaffCo remain current on its
pension obligations and sign a new extension of the CBA to
cover employees who would remain at LICH beyond the May
22 layoffs. The Board majority adopted this finding after
“carefully examin[ing] the record and find[ing] no basis for
reversing the [credibility] findings.”
“The court will not overturn the Board’s acceptance of an
ALJ’s resolution of conflicting testimony unless the ALJ’s
determinations are ‘hopelessly incredible’ or ‘self-
contradictory.’” Citizens Inv. Servs. Corp. v. NLRB, 430 F.3d
1195, 1198 (D.C. Cir. 2005) (quoting Teamsters Local Union
No. 171 v. NLRB, 863 F.2d 946, 953 (D.C. Cir. 1988)). The
arguments offered by StaffCo do not reach this stringent
standard. Substantial evidence on the record supports the
Board’s finding that the Union timely demanded bargaining.
C. Impossibility
StaffCo’s final argument raises the affirmative defense of
impossibility. StaffCo argues that the pension plan would have
rejected any status quo payments made after expiration of the
CBA. The Board rejected this argument, finding that StaffCo
had failed to meet its burden of showing that the plan would
have refused payment. We agree. StaffCo’s arguments are not
without convincing force. The gist of the relevant portion of
the plan set out above is that employers with terminated CBAs
should not expect to continue membership in the plan.
However, the record still falls short of establishing factual
impossibility on this issue where StaffCo bears the burden.
There is no evidence that StaffCo tendered payments and was
refused. There is no evidence that StaffCo attempted a
substitute compliance by some means such as the establishment
of an escrow. Cf. Clear Pine Mouldings, 238 NLRB 69, 80
(1978) (no violation where the employer “had only deposited
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the money in a bank account for disposition upon bargaining
[and] could do little else for the trust would not take it”). Given
the standard of review, we do not upset the Board’s
“‘reasonably defensible’ interpretation of the facts.” W & M
Props. of Conn., Inc. v. NLRB, 514 F.3d 1341, 1348 (D.C. Cir.
2008) (quoting Traction Wholesale Ctr. Co. v. NLRB, 216 F.3d
92, 99 (D.C. Cir. 2000)).
III. Conclusion
For the foregoing reasons, we deny StaffCo’s petition for
review and grant the Board’s cross-application to enforce its
order.