Brown & Sharpe Mfg. Co.

National Labor Relations Board - Board Decisions

Sep 27, 1993

312 N.L.R.B. 444 (N.L.R.B. 1993)

444
312 NLRB No. 71
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 On August 28, 1990, the National Labor Relations Board issued
its Decision and Order in this proceeding dismissing the complaint.
See 299 NLRB 586. District Lodge 64, International Association of
Machinists and Aerospace Workers, AFL–CIO and its Local Lodges
883, 1088 and 1142 filed with the D.C. Circuit a petition for review
of the Board’s Order.
In an opinion dated November 29, 1991, the court remanded the
case to the Board. District Lodge 64, International Association of
Machinists and Aerospace Workers, AFL–CIO, and its Local Lodges
883, 1088, and 1142 v. NLRB, No. 90–1503.
By letter dated February 19, 1992, the Board notified the parties
that it had accepted the court’s remand and that statements of posi-
tion could be filed with respect to the issues raised by the remand.
The General Counsel and the Respondent filed statements of position
with the Board.
2 273 NLRB 1389 (1985), enfd. mem. 785 F.2d 304 (4th Cir.
1986).
3 327 U.S. 392, 397 (1946).
4 See, e.g., Crown Cork Co., 255 NLRB 14 (1981); ACF Indus-
tries, 231 NLRB 83 (1977); Burgess Construction, 227 NLRB 765
(1977); Avila Group, Inc., 218 NLRB 633 (1975).
5 We note also that Holmberg does not itself explain what kinds
of action by a defendant will be regarded as acts of fraudulent con-
cealment. By embracing Holmberg, we do not necessarily adopt all
the glosses on the fraudulent concealment doctrine set forth by var-
ious Federal courts. See Teamsters Local 170 v. NLRB, 993 F.2d
990 (1st Cir. 1993) (noting that Board holdings have not followed
Federal cases allowing a finding of fraudulent concealment on the
basis of a ‘‘self-concealing scheme’’ as opposed to independent af-
firmative acts of concealment). In addition to considerations that
have shaped that doctrine in the courts, the Board properly considers
‘‘the industrial relations policy favoring finality in the resolution of
labor disputes.’’ Id. Board cases on the standard for determining
whether ‘‘concealment’’ is present are cited at fns. 21–23, infra.
6 553 F.2d 220 (D.C. Cir. 1977).
7 Id. at 228.
Brown & Sharpe Manufacturing Company and Dis-
trict Lodge 64, International Association of
Machinists & Aerospace Workers, AFL–CIO,
and its Local Lodges 883, 1088 and 1142 and
Local No. 119, International Federation of Pro-
fessional & Technical Engineers, AFL–CIO.
Cases 1–CA–19224, 1–CA–19690, 1–CA–19958,
1–CA–20283, 1–CA–20291, 1–CA–20304, 1–CA–
20508, 1–CA–21560, and 1–CA–19567
September 27, 1993
SUPPLEMENTAL DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
DEVANEY AND RAUDABAUGH
This case is on remand from the United States Court
of Appeals for the District of Columbia. This court
asked the Board to explain the standard that it applied
to find that allegations of bad-faith bargaining in this
case are time-barred under Section 10(b) of the Act.1
In the underlying proceeding, the General Counsel
reinstated charges alleging bad-faith bargaining, which
charges he had dismissed 2 years earlier. Relying on
the discovery of documents concerning the Respond-
ent’s preparations for negotiations, the General Coun-
sel contended that, under the rationale of Ducane
Heating Corp.,2 the Respondent’s failure to disclose
the documents amounted to a fraudulent concealment
of operative facts warranting the tolling of the 10(b)
limitations period. The Board rejected this contention.
It reviewed the evidence allegedly concealed and con-
cluded that the Respondent’s failure to disclose the
documents did not amount to a fraudulent concealment
of ‘‘operative facts’’ under Ducane. On review, the
court upheld the Ducane doctrine and its retroactive
application to this case. However, the court held that
the Board did not explicitly embrace any particular
standard in finding that the documents did not amount
to ‘‘operative facts’’ and left obscure how significant
the evidence must be to constitute ‘‘operative facts’’
within the meaning of the Ducane exception.
The Board has accepted the court’s remand and sets
forth here a clarification of the Ducane exception and
how it applies in this case.
The Board consistently has applied the equitable
doctrine set forth in Holmberg v. Armbrecht.3 Under
that doctrine, if a party ‘‘has been injured by fraud and
‘remains in ignorance of it without any fault or want
of diligence or care on his part, the bar of the statute
does not begin to run until the fraud is discovered
. . . .’’’4 This doctrine is the basis of the Ducane ex-
ception for fraudulent concealment. It is the doctrine
which guided the Board’s initial decision in this pro-
ceeding, and it guides us now.
Concededly, the Board did not state expressly that
it was applying the Holmberg doctrine. In addition, the
Holmberg doctrine does not explicitly set forth a stand-
ard concerning the character of the evidence that is
concealed.5 As to that issue, the D.C. Circuit cited
Fitzgerald v. Seamans,6 a case which relies on
Holmberg. In Fitzgerald, the D.C. Circuit stated that
‘‘deliberate concealment of material facts’’ tolls the
Federal statutes of limitations until the plaintiff discov-
ers or with due diligence should have discovered the
basis of the lawsuit.7 (Emphasis added by court in in-
stant case.) We agree with the Fitzgerald standard. We
recognize that, in Ducane and in other subsequent
cases, including the instant case, the Board used the
phrase ‘‘operative facts.’’ We regret doing so. We did
not intend to denote a disagreement with the standard
of ‘‘material facts,’’ the phrase used in Fitzgerald. In
this case and in the future, we shall use the latter term.
A. The Board’s Historical Application of the
Holmberg Doctrine
The Holmberg doctrine, as described in Fitzgerald
and as applied by the Board, has three critical require-
ments: (1) deliberate concealment has occurred; (2)
material facts were the object of the concealment; and
(3) the injured party was ignorant of those facts, with-
out any fault or want of due diligence on its part. All
445BROWN & SHARPE MFG. CO.
8 Because the Board found the evidence was not material to the
cause of action, it was unnecessary to reach the other elements of
the Holmberg doctrine.
Chairman Stephens agreed with the analysis concerning material
facts. He also relied on the judge’s analysis of fraudulent conceal-
ment. See his dissent in Kanakis Co., 293 NLRB 435 (1989).
9 Avila Group, Inc., supra at 639.
10 Burgess Construction, supra at 766.
11 ACF Industries, supra at 83 fn. 1.
12 Crown Cork Co., supra at 22.
13 Safety-Kleen Corp., 279 NLRB 1117, 1119 (1986).
14 265 NLRB 1457, 1458 (1982).
15 Ducane Heating Corp., supra at 1390.
16 Burgess Construction, supra.
17 Lehigh Lumber Co., 238 NLRB 675 (1978).
18 ACF Industries, supra.
19 Strawsine Mfg. Co., 280 NLRB 553 (1986).
20 O’Neill, Ltd., 288 NLRB 1354 (1988).
21 Barnard Engineering Co., 295 NLRB 226 (1989).
22 Girardi Distributors, 307 NLRB 1497 (1992), enfd. sub nom.
Teamsters Local 170 v. NLRB, supra; John Morrell & Co., 304
NLRB 896 (1991); Al Bryant, Inc., 260 NLRB 128, 134–135 (1982).
Compare with O’Neill, Ltd., supra, where the Board found that the
respondent’s exculpatory statements were part of a scheme of con-
cealment and thus contributed to a finding that the limitations period
should be tolled.
Member Devaney dissented in John Morrell & Co., supra, and
finds it unnecessary to rely on it.
23 Safety-Kleen Corp., supra.
24 Duff-Norton Co., 275 NLRB 646 (1985).
25 We believe our approach is similar to that in Hohri v. U.S., 782
F.2d 227, 249–250 fn. 57 (D.C Cir. 1986), where the court clarified
its standard for tolling a statute of limitations in a case of conceal-
ment. There, the court stated:
We do not provide for tolling simply because a plaintiff’s ability
to mount a successful case has been impaired in some degree.
Instead, we provide for tolling only when concealment has so
impaired the plaintiff’s case that he is not able to survive a
threshold motion to dismiss for failure to tender a claim that
would advance beyond the pleading stage.
three elements must be met to warrant the tolling of
a statute of limitations. In the instant case, the majority
of the Board did not reach the first and third elements.
Instead, the majority addressed only the element of
whether the allegedly concealed evidence constituted
material facts.8 That is the only element we address
here.
Over the years, the Board has described the element
of material facts in the Holmberg doctrine in different
ways. It has referred to ‘‘violative conduct,’’9 an ‘‘act
constituting [the unfair labor practice],’’10 ‘‘vital infor-
mation,’’11 ‘‘material events,’’12 and ‘‘an essential ele-
ment needed to perfect [the charging party’s] case.’’13
In 1982, the Board began consistently to use the term
‘‘operative facts.’’ See Winer Motors.14 The majority
opinion in Winer Motors stated: ‘‘We agree with the
principle enunciated in the cases relied on by our dis-
senting colleagues that where a respondent fraudulently
conceals from a charging party the operative facts un-
derlying a violation of the Act, the limitations period
does not begin to run until the charging party knows
or should have known of such operative facts.’’
Holmberg was the lead case relied on by the dissenting
opinion in support of that principle. As the above
quotation demonstrates, the majority agreed with that
principle.
The Winer rule applied to charges that were with-
drawn and later resurrected. In Ducane, the Board held
that the same rule would apply to charges that were
dismissed and later resurrected. In both situations, a
resurrection of the charge, outside the 10(b) period,
would not be permitted unless there were ‘‘special cir-
cumstances in which a respondent fraudulently con-
ceals the operative facts underlying the alleged viola-
tion.’’15
The Board has applied the Holmberg doctrine in
8(a)(5) cases to find a tolling of the 10(b) period
where respondents have concealed the employment of
nonunion employees under nonunion conditions,16 the
dissolution of a multiemployer bargaining associa-
tion,17 the subcontracting of bargaining unit work,18
the closing and relocation of a plant,19 the closing and
reopening of a plant,20 and details of the interrelation-
ship between two companies so as to convey the im-
pression that the companies were entirely separate enti-
ties.21
In its application of the Holmberg doctrine, the
Board has not treated every act of concealment as a
form of fraudulent concealment that warrants tolling of
the limitations period. The Board has found that excul-
patory statements by a respondent which are false or
misleading are not sufficient to toll 10(b) where the
charging party independently was aware of certain
facts suggesting possible unlawful conduct.22 Simi-
larly, the Board has found that the concealment of an
unlawful motive for discharge will not toll the limita-
tions period if the charging party is aware of facts
which raise a question about the true motive for the
discharge.23 Finally, the Board has found no tolling of
the statute in an unlawful discharge case when the con-
cealed evidence did not have a direct bearing on the
performance of the discriminatee’s duties and thus did
not amount to concealment of an ‘‘operative fact’’ per-
taining to the alleged discharge.24
With respect to the issue under discussion, the rel-
evant principle applied in these cases is that concealed
evidence is ‘‘material’’ if it would make a critical dif-
ference between establishing a violation and not doing
so. Thus, if the absence of that evidence results in the
dismissal or withdrawal of the charge, the subsequent
discovery of that evidence will permit the resurrection
of the charge, provided that the other two elements are
present, viz, the evidence was fraudulently concealed
and the injured party could not have discovered the
evidence earlier through the exercise of due dili-
gence.25
This principle is illustrated in Duff-Norton. In that
case the concealed evidence was that a supervisor tam-
pered with machines in order to ‘‘set up’’ a quality
446 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
26 299 NLRB 586, 587.
27 Id.
28 Id. at 589. In our initial decision, we also stated that we found
no inherent contradiction between the Respondent’s June position
papers and steering committee’s minutes on job preference and man-
datory transfers and the Respondent’s September position papers for
actual negotiations. Id. In so doing, we did not intend to suggest that
only an inexplicable contradiction would be sufficient to warrant
tolling of the statute. We were, instead, only disagreeing with the
General Counsel’s argument that the June documents contradicted
the September documents.
control inspector for discharge. Concededly, the evi-
dence was relevant to the allegation of unlawful dis-
charge. However, the Board essentially found that this
evidence would not have made a critical difference in
establishing a violation. The tampering caused the pro-
duction of defective parts. The inspector was dis-
charged for failure to spot the defective parts. Even if
the evidence concerning the tampering had been ad-
duced, the fact would remain that the inspector failed
to spot the defective parts. In sum, the concealed evi-
dence would not have made a critical difference in es-
tablishing a violation.
B. The Board’s Use of the Holmberg Doctrine in
this Case
Applying this standard in the instant case, the Board
concluded that the Respondent’s position papers were
not critical to the establishment of a violation. In
reaching this conclusion, we reviewed the documents
in a light most favorable to the General Counsel by as-
suming that they were authentic expressions of the Re-
spondent’s bargaining intentions. We did so despite the
fact that they were records of preliminary meetings
held some 3 months in advance of actual negotiations.
We analyzed the statements concerning job pref-
erence and mandatory transfers in the context of the
entire document in which they appeared. Our review of
the statements on job preference revealed only two
statements which could support the General Counsel’s
case. The job preference position paper ended with a
summary which stated, inter alia, ‘‘Shop management
does not feel job preference significantly affects the
cost of operating the shop.’’26 The paper recommended
that the issue not be raised in negotiations. Standing
alone, these statements supported the allegation that
job preference was not important for the Respondent.
The statements thus raised questions as to why the
matter was later pressed in negotiations. When the po-
sition paper was read as a whole, however, it indicated
that job preference was a serious issue over which the
Respondent and the Union had struggled for 3 years,
that the recommendation not to negotiate job pref-
erence was based on a concern that failure at the nego-
tiation table would weaken the Respondent’s position
if job preference were arbitrated, and that shop man-
agers found that job preference was a ‘‘general annoy-
ance’’ which made their jobs harder even though it had
a minimum cost impact.27 The document as a whole,
therefore, did not make a critical difference in estab-
lishing the General Counsel’s case.28
We also took into account the indication in the
steering committee’s minutes that no final decision on
job preference was taken at the June 1, 1981 steering
committee’s meeting. Instead, the minutes recorded
that two representatives of a higher level of manage-
ment stated they might want to review the issue again.
On its face, therefore, the documents showed that the
Respondent considered the issue of enough importance
to its negotiating stance to leave it open rather than to
drop it conclusively.
We reached a similar conclusion on the mandatory
transfer documents. The position paper on transfers
stated that managers had been able to use lack of
work, temporary, and company-requested transfers
with ‘‘very few problems,’’ and noted that the Union
had not held the Respondent to its contractual obliga-
tions to give a 5-day notice prior to layoff in cases
where employees were to be transferred due to lack of
work. The minutes of the steering committee stated
that the managers ‘‘could live with the language as it
is.’’ These statements, standing alone, supported the al-
legation that mandatory transfers were not an impor-
tant issue for the Respondent. The steering commit-
tee’s minutes, however, showed that representatives of
a higher level of management did not fully accept the
shop managers’ view on transfers and ‘‘expressed con-
cern that we may still want to change the language.’’
As in the case of job preference, the documents as a
whole indicated that the Respondent considered the
issue of enough importance to its negotiating stance to
leave it open for consideration.
Reviewing the allegedly concealed documents as a
whole and assuming they were an authentic expression
of the Respondent’s bargaining intentions, we found
that they did not support the allegation that the Re-
spondent engaged in surface bargaining.
We reaffirm these findings. Applying the standard
set forth above, we conclude that, although the docu-
ments may be relevant to the charge of surface bar-
gaining, they do not make a critical difference in es-
tablishing a violation. They therefore do not constitute
material facts. Accordingly, the alleged concealment of
these facts does not toll the 10(b) period.
ORDER
The National Labor Relations Board reaffirms its
Order in the underlying proceeding, 299 NLRB 586
(1990), and dismisses the complaint.