Special Mine Services

National Labor Relations Board - Board Decisions

Dec 16, 1994

315 N.L.R.B. 847 (N.L.R.B. 1994)

847
315 NLRB No. 123
SPECIAL MINE SERVICES
1 308 NLRB 711 (1992).
2 NLRB v. Special Mine Services, 11 F.3d 88 (7th Cir. 1993).
3 The Respondent did not file a statement of position. 4 NLRB v. Special Mine Services, supra at 89.
Special Mine Services, Inc. and Southern Illinois
Laborers’ District Council, Laborers’ Inter-
national Union of North America, AFL–CIO
Special Mine Services, Inc. and Smith’s Machine
and Tool Shop, Joint Employers and Southern
Illinois Laborers’ District Council, Laborers’
International Union of North America, AFL–
CIO. Cases 14–CA–21389 and 14–CA–21458
December 16, 1994
SUPPLEMENTAL DECISION AND ORDER
BY MEMBERS DEVANEY, BROWNING, AND COHEN
On August 31, 1992, the National Labor Relations
Board issued its Decision and Order1 finding that the
Respondent violated Section 8(a)(3) and (1) of the Na-
tional Labor Relations Act by subcontracting out its
connector-manufacturing operations and discharging 10
employees because of their union activities. The Board
ordered that the employees be reinstated with backpay
and that the Respondent cease and desist subcontract-
ing and restore the operations.
The Board sought enforcement of its Order with the
United States Court of Appeals for the Seventh Circuit.
On December 6, 1993, the court issued its decision.2
The court enforced all of the Board’s Order except the
restoration remedy. The court has remanded the res-
toration issue to the Board for further consideration.
In April 1994 the Board advised the parties that it
had accepted the remand and invited statements of po-
sition. The General Counsel filed a position statement.3
The Board has delegated its authority in this pro-
ceeding to a three-member panel.
For the reasons discussed below, the Board has de-
cided to remand this case to the Regional Director for
issuance of a compliance specification and further pro-
ceedings consistent with the court’s remand and the
Board’s Decision and Order in this case.
Background
On April 19, 1991, a representation election was
held among the Respondent’s battery repair department
employees. The election resulted in a tie, with three
challenged ballots. The Union filed objections. Soon
thereafter the Respondent laid off two known union
supporters, allegedly because of lack of work. In May
1991, the Respondent reached an agreement to sub-
contract the manufacture of its electrical connector
parts. In late May or early June 1991, the subcontract
took effect. The Respondent transferred the machinery
necessary to make its connector parts to the sub-
contractor and discharged eight employees.
The administrative law judge in the underlying
Board decision found that the Respondent violated
Section 8(a)(3) and (1) by subcontracting the work and
laying off the employees. The judge directed the Re-
spondent to cease and desist from subcontracting the
unit work and to reinstate the discharged employees.
The General Counsel filed exceptions to the judge’s
failure to include a restoration remedy for the subcon-
tracted work. The Respondent filed no response.
The Board adopted the judge’s findings and granted
the General Counsel’s unopposed restoration request,
stating at footnote 2:
The General Counsel excepts to the judge’s fail-
ure to order the Respondent to reestablish and re-
sume the connector work that it subcontracted for
unlawful reasons. We find merit to this exception
and shall require restoration of the status quo ante
in this respect. The Respondent may introduce at
compliance any evidence not available prior to the
hearing bearing on the appropriateness of this por-
tion of the remedy. See Lear Siegler, Inc., 295
NLRB 857, 860–862 (1989).
The Board then sought enforcement of its Order be-
fore the United States Court of Appeals for the Sev-
enth Circuit.
Court of Appeals Decision
The court agreed with the Board’s finding that the
Respondent’s subcontracting was unlawful. It noted
that, ‘‘The Board’s decision that the employer acted
for forbidden reasons is supported by substantial evi-
dence; we need not discuss the details.’’4 The court,
however, found the order to restore the operations to
be more ‘‘problematic.’’ The court went on to note:
‘‘It is the Board’s usual practice in cases in-
volving discriminatory relocation of operations to
require the employer to restore the operations in
question . . . unless the [employer] can dem-
onstrate that restoration of the status quo is inap-
propriate.’’ Lear Siegler, Inc., 295 NLRB 857,
860 (1989). . . . Special Mine Services does not
contest the rule but seeks shelter in the ‘‘unless’’
clause—a portion of the doctrine to which courts
have devoted more attention, and which they have
insisted the Board respect. . . . Special Mine
Services documented the financial burden by es-
tablishing that its subcontractor supplied the con-
nectors for less than the cost Special Mine Serv-
ices had incurred to make them, and it contended
that other costs of running the oven at its main
plant (particularly the need to install heavy-duty
electrical circuits, without which the oven had op-
erated poorly) not only supported the original de-
848 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
5 Id. at 89.
6 Id. at 89.
7 Id. at 89–90.
8 Id. at 90.
9 Id. at 90.
10 What the court may have interpreted as the Respondent’s re-
sponse to the General Counsel’s exceptions is the Respondent’s late-
filed motion for reconsideration which the Board denied. At the time
the motion was filed, the Board was already seeking enforcement be-
fore the Seventh Circuit and thus no longer had jurisdiction.
cision to subcontract the work but also established
that taking the work in house would be unusually
expensive.5
The court further stated:
The administrative law judge did not rec-
ommend the restoration of the work, but neither
did he give reasons for not doing so. He stepped
lightly over the employer’s argument about its
electrical problem: he concluded that it is soluble,
but [at] what cost in time and money he did not
say. He discussed other cost savings, a subject to
which we return. In response to the General
Counsel’s exception on this subject, Special Mine
Services reiterated its contentions that resuming
the connector operations would impose heavy
capital and operating costs. If the union adherents
are rehired with backpay, Special Mine Services
contended, they will have a full remedy. To this
the Board replied (and this footnote is its whole
treatment of the subject):
The General Counsel excepts to the judge’s
failure to order the Respondent to reestablish
and resume the connector work that it subcon-
tracted for unlawful reasons. We find merit to
this exception and shall require restoration of
the status quo ante in this respect. The Re-
spondent may introduce at compliance any evi-
dence not available prior to the hearing bearing
on the appropriateness of this portion of the
remedy. See Lear Siegler, Inc., 295 NLRB 857,
860–862 (1989).6
The court then posited these questions:
Each party had arguments; why did the Board
choose one side rather than the other? . . .
Did the Board disbelieve the employer’s claim
that installing new electrical lines (and making
other adjustments) will be costly? Did it accept
the evidence but think these costs appropriate in
light of the magnitude of the injury inflicted on
the employees? Did the Board perhaps believe
that the costs will not be incurred at all, because
the union will agree to continuation of the sub-
contracting in exchange for higher wages (so that
the order will not produce a waste of resources,
but will only transfer wealth from employer to fu-
ture workers)? Did the Board rely on the ALJ’s
pooh-poohing of the employer’s cost savings
claim? . . .7
Or did the Board perhaps not consider the sub-
ject at all, postponing the ‘‘real’’ decision to a
compliance hearing? The final sentence of the
footnote suggests as much, although it implies
that only new evidence—and not the sort of argu-
ments made in the briefs on the basis of the
record the ALJ assembled—would count. If the
Board meant to put off decision, it is not clear
why it has asked us to enforce this portion of its
order. For our order would not just send the par-
ties to a new hearing for the introduction of fresh
evidence. Our order would direct Special Mine
Services to restore the connector fabrication to its
own plant, and the expense of doing so would be
no defense. When the Board defers decision, it
ought to defer the application for enforcement as
well. . . .8
The court concluded:
Forced to decide on this record, and with the
meager assistance of the Board, whether Special
Mine Services must be put in jeopardy of the con-
tempt process if it does not resume connector fab-
rication at its main plant, we must decline to en-
force the order. The Board may supply the miss-
ing explanation for its decision and file a new pe-
tition for enforcement, or it may conduct the com-
pliance proceedings and issue a fresh decision on
the enlarged record. What we will not do is put
judicial compulsion behind an order entered for
undisclosed reasons on a record the Board itself
apparently believes inadequate for decision.9
Board Decision on Remand
As a preliminary matter, we respectfully note that
the court inadvertently misstated one fact. The court is
apparently under the impression that the Respondent
filed a response to the General Counsel’s exceptions to
the judge’s failure to order restoration. As a result, the
court concludes that ‘‘each party’’ made arguments to
the Board and the Board ‘‘chose’’ one over the other.
That is incorrect. The Board made its decision to order
restoration based on the unopposed exceptions from
the General Counsel.10
That being said, we now respond to other issues of
concern raised by the court’s decision. The court sug-
gests that by allowing the parties to introduce evidence
at a compliance hearing relevant to restoration of the
status quo ante, the Board is ‘‘postponing’’ or ‘‘defer-
ring’’ its ‘‘real’’ decision. With all due respect, the
Board has not ‘‘deferred’’ decision in this case. In the
849SPECIAL MINE SERVICES
11 295 NLRB at 862.
12 295 NLRB at 862 fn. 33.
13 If after issuance of a compliance specification, it is determined
that a hearing is necessary, the Respondent may introduce at that
hearing any evidence not available prior to the unfair labor practice
hearing bearing on the appropriateness of the restoration remedy.
underlying proceeding the Respondent had an oppor-
tunity to argue, and did argue, that its decision to sub-
contract was motivated by economic considerations.
The Board rejected this argument, and the court has
agreed. In addition, Respondent had an opportunity to
argue that events occurring after the decision to sub-
contract, but before the hearing in this case, made a
restoration order inappropriate. As noted, the Board, in
the absence of a Respondent argument, ordered the
restoration remedy. The only issue left undecided by
the Board was whether newly discovered evidence,
e.g., evidence not previously available at the time of
the hearing, made a restoration order inappropriate.
That issue can be addressed in compliance proceed-
ings. As we stated in We Can, Inc., 315 NLRB No.
24 (Sept. 30, 1994),
We recognize, however, that in this case, as in
almost any case, evidence may come to light after
the close of the record in the unfair labor practice
hearing that may, if credited and found suffi-
ciently material, establish that some portion of the
remedy imposed by the Board is no longer appro-
priate.
We have provided for that contingency by allowing the
Respondent to introduce such new evidence at the
compliance stage of this proceeding.
With reference to the court’s concern that enforce-
ment of the restoration order in this case would un-
equivocally require the Respondent to restore its con-
nector manufacturing operations and that expense
would be no defense, we believe the court’s concern
is addressed by our procedures. The Board discussed
this issue in Lear Siegler, Inc., 295 NLRB 857 (1989).
The Board noted that several courts had refused to en-
force restoration orders. The Board observed that in
some of those cases the restoration orders had been un-
equivocal. The Board considered that the reviewing
courts might have thought that if those orders were en-
forced, the Board at compliance might ignore all evi-
dence of changed circumstances, require restoration of
operations even if that remedy was no longer appro-
priate, and bring contempt proceedings based on the
literal terms of the orders. The Board made clear in
Lear Siegler that its order expressly allowed the em-
ployer to introduce evidence at compliance concerning
the continued appropriateness of the restoration and re-
instatement portions of the remedy, and that the order
thus clearly implied that if the employer could dem-
onstrate that the restoration of its facility would be un-
duly burdensome, restoration would not be required.
The Board went on to say, ‘‘court enforcement of the
[o]rder in this case will enable the Board to require
restoration only if the [r]espondent cannot show that
restoration would impose an undue hardship.’’11 The
Board also emphasized that contempt proceedings
would not be brought against the employer for failing
to comply with its restoration order until the Board, in
compliance proceedings, had finally determined that
restoration was appropriate; the employer then failed to
comply with the restoration order; the Board’s order
was subsequently enforced; and the employer then re-
fused to comply with the order as enforced.12
Thus, here, as in Lear Siegler, the Respondent will
have the opportunity at the compliance phase of this
proceeding to present any evidence that has become
available since the earlier hearing that might bear on
the appropriateness of the restoration remedy. If it fails
to do so, or if the evidence it presents is unconvincing,
the restoration order will stand, subject to court review.
If, however, the Respondent presents evidence at com-
pliance that convinces the Board that restoration is no
longer appropriate, the Respondent will not be required
to carry out those portions of the Order, and will be
not be in danger of contempt proceedings for failing
to do so. See We Can, Inc., supra.
Consistent with the Board’s established practice of
leaving the details of the remedy to compliance, and
mindful of the two ‘‘options’’ given by the court, i.e.,
‘‘supply the missing explanation for its decision and
file a new petition for enforcement’’ or ‘‘conduct [a]
compliance proceeding[s] and issue a fresh decision,’’
we shall adopt the latter ‘‘option’’ and remand this
proceeding to the Regional Director for Region 14 who
shall issue a compliance specification and take any fur-
ther appropriate action consistent with this decision.13
ORDER
It is ordered that this proceeding is remanded to the
Regional Director for Region 14 for issuance of a
compliance specification and all further appropriate ac-
tion in accord with this decision.