Matanuska Electric Assn.

National Labor Relations Board - Board Decisions

Apr 13, 2001

333 N.L.R.B. 964 (N.L.R.B. 2001)

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 964
Matanuska Electric Association, Inc. and International
Brotherhood of Electrical Workers, Local Union
1547, International Brotherhood of Electrical
Workers, AFL–CIO. Case 19–CA–25303
April 13, 2001
DECISION AND ORDER
BY CHAIRMAN TRUESDALE AND MEMBERS
HURTGEN AND WALSH
This case presents the issue of whether Matanuska
Electric Association, Inc. (MEA or the Respondent) vio-
lated Section 8(a)(1) of the Act by amending its bylaws to
provide that a member of the local union that represents
MEA’s employees, as well as anyone who lives with and
is financially interdependent with the union member, can-
not become or remain a member of MEA’s board of direc-
tors. The Board has decided, for the reasons stated below,
that even assuming MEA’s amended bylaw restricts the
Section 7 rights of employees, it does not violate the Act
because it serves MEA’s legitimate interest in ensuring
that it has the undivided loyalty of those who direct its
operations.
On May 19, 1998, the Respondent, the Union, and the
General Counsel (collectively the parties) jointly filed a
motion to transfer proceeding to the Board and a stipula-
tion of facts. The parties agreed that the stipulation of
facts and attached exhibits, including the charge, the com-
plaint, and the answer to the complaint, constitute the en-
tire record in this case, and that no oral testimony is nec-
essary or desired by any of the parties. The parties further
stipulated that they waived a hearing before an adminis-
trative law judge, and the making of findings of fact and
conclusions of law and the issuance of a decision by a
judge, and that they desired to submit this case directly to
the Board for findings of fact, conclusions of law, and the
issuance of an order by the Board.
On September 29, 1998, the Board issued an Order ap-
proving the stipulation, granting the motion, and transfer-
ring the proceeding to the Board. On October 9, 1998, the
Board granted a motion filed by Chugach Electric Asso-
ciation (Chugach) for leave to file a brief as amicus cu-
riae. Thereafter, the parties and the amicus curiae filed
briefs.1

1 The General Counsel filed a motion to strike portions of Chugach’s
brief and all attached exhibits. The Union also filed a motion to strike
Chugach’s brief and all attached exhibits in their entirety. The General
Counsel and the Union contend that the exhibits are not a part of the
stipulated record, and that the attachment of the exhibits and the legal
argument based on them circumvents the procedure by which the case is
before the Board. In its opposition, Chugach argues that its brief with
attached exhibits was within the proper scope of an amicus curiae filing.
In the alternative, it offers a marked copy of its brief deleting references
to the exhibits.
The Board has delegated its authority in this proceeding
to a three-member panel.
On the basis of the record and briefs, the Board makes
the following
FINDINGS OF FACT
I. JURISDICTION
At all material times, the MEA has been an Alaska cor-
poration, with an office and principal place of business in
Palmer, Alaska, where it is engaged in the business of
operating an electric utility. During the 12 months pre-
ceding the filing of the stipulation, a representative period,
in the course and conduct of its business operations, MEA
had gross revenue in excess of $250,000. During the
same representative period, MEA, in the course and con-
duct of its business operations, sold and shipped goods or
provided service to customers within the State of Alaska,
which customers were themselves engaged in interstate
commerce by other than indirect means, with a total value
of in excess of $50,000. During the same representative
period, MEA, in the course and conduct of its business
operations, purchased and caused to be transferred and
delivered to its facilities within the State of Alaska, goods
and materials valued at in excess of $50,000 directly from
sources outside the State, or from suppliers within the
State which in turn obtained such goods and materials
directly from sources outside the State.
At all material times, MEA has been an employer en-
gaged in commerce within the meaning of Section 2(2),
(6), and (7) of the Act. At all material times, the Union
has been a labor organization within the meaning of Sec-
tion 2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
A. Stipulated Facts
The parties stipulated that by virtue of Section 9(a) of
the Act, the Union is the collective-bargaining representa-
tive of certain MEA employees in three separate bargain-
ing units. The Union also has collective-bargaining
agreements with numerous employers throughout Alaska,
including approximately 10 major contracts covering em-
ployees who live within the MEA service area.
MEA is a nonprofit electrical cooperative organized
pursuant to the Alaska Electric and Telephone Coopera-
tive Act (Alaska Stat. sec. 10.25.010, et seq.). It provides
electric service to individuals and businesses located
within its service area as designated by the certificate of
In filing the Joint Motion to Transfer Proceedings to the Board, the
parties agreed that the stipulation of facts with exhibits constituted the
entire record in this proceeding. Accordingly, we grant the motions to
strike Chugach’s attached exhibits that are not part of the stipulated
record. Further, we accept Chugach’s marked copy of its brief deleting
all references to those exhibits.
333 NLRB No. 130
MATANUSKA ELECTRIC ASSN. 965
public convenience and necessity issued by the Alaska
Public Utilities Commission. MEA’s service area gener-
ally encompasses the communities of Palmer, Wasilla,
and Eagle River, Alaska.
Provisions for electrical cooperative membership, board
of directors, bylaws, and other related topics are set forth
under Alaska State law (Alaska Stat. sec. 10.25.010, et
seq.). Under that law, MEA’s board of directors is com-
posed of seven members who are elected for terms of 3
years on a rotating basis by the membership. At all rele-
vant times, MEA employees have been prohibited from
serving on the board of directors under MEA’s bylaws.
No party contests the legality of this prohibition. Board
members do not receive a salary, but are paid $20 for at-
tendance at each meeting of the board, which meets on a
monthly basis.
The board manages the business affairs of MEA. It es-
tablishes and carries out the general policies of MEA,
including the relationship between the board and the gen-
eral manager, adoption of workplace policies, annual
budgetary operations, handling of election results, com-
pensation plans, safety, investment of uncommitted funds,
insurance and bonding, approval of depreciation rates,
management plans, property leasing guidelines, ratifica-
tion of collective-bargaining agreements, and expenditure
of association funds.
Alaska Stat. section 10.25.070 contains, inter alia, pro-
visions on the adoption, amendment, and repeal of by-
laws. MEA received a petition in the spring of 1997, in
advance of the annual meeting of the membership, from a
group of MEA members requesting a vote on the follow-
ing bylaw amendment:

PROPOSED AMENDMENT

Add a new Section 3(d) to Article IV, Section 3 of the
Association’s Bylaws to read as follows:

Section 3 Qualifications: No person shall be eligible to
become or remain a board member of the Association
who:
. . . .
(d) is a member, officer, director, or employee of any
union local currently acting as a bargaining agent for
any group of Association employees or lives in the same
household with and is financially interdependent with
any person included with this Section 3(d).

The proposed amendment was submitted to MEA on
March 3, 1997. On April 7, 1997, MEA gave notice of
the annual membership meeting. The text of the proposed
amendment was contained in the notice, including a sum-
mary of the reasons for the amendment. The summary
stated in part: “Because one of the functions of the board
is to ratify union contracts, as well as to consider matters
as to which the Association’s management and the union
are in disagreement, a director who is also a member of a
local union negotiating with the Association may be seen
as having a conflict of interest, even if that person is not
an employee of the Association.”
At the annual membership meeting on April 30, 1997,
members of MEA, by a vote of 4986 for and 2505 against,
voted to add the proposed new section 3(d) to the bylaws
as quoted above. The parties agree that the term “finan-
cially interdependent” used in the amended section 3(d)
includes spouses. The Union takes the position that the
term also includes children. MEA has not taken a position
on whether the term includes children.
During April 1997, Douglas Mills was on the MEA
board of directors and was a member of the Union. He
was an employee within the meaning of the Act because
he was employed by Matanuska Telephone Association, a
statutory employer. In response to the new bylaw, Mills
resigned from the Union so that he could continue in his
capacity as a member of the MEA board of directors.
B. Contentions of the Parties
1. The General Counsel
The General Counsel argues that MEA’s bylaw dis-
courages membership in the Union on its face. He further
argues that there is no legitimate business reason for this
facial discrimination. In this regard, the General Counsel
rejects the argument that the bylaw prevents a conflict of
interest. He asserts that if MEA were really concerned
about such conflicts it could address them in a much nar-
rower fashion by requiring such members of the board of
directors to abstain from votes on union matters.
The General Counsel contends that although MEA’s
bylaw has no direct connection to an employee’s em-
ployment elsewhere, it does have an indirect impact upon
an employee’s employment situation. Thus, a statutory
employee like Mills, who gives up his membership in the
Union in order to serve on MEA’s board of directors,
must forfeit the right to serve on union committees and
have a voice in the negotiation and terms and conditions
of employment with his own Employer.
2. The Respondent
The Respondent argues that members of the board of
directors are viewed as agents of the Employer under
Board precedent. See, e.g., Nemacolin Country Club, 291
NLRB 456 (1988), and Escambia River Electric Coopera-
tive, Inc., 265 NLRB 973 (1982).
Additionally, the Respondent contends that MEA’s
members have the right to demand undivided loyalty from
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 966
the board members who have the power to make most of
the important decisions about how to manage the corpora-
tion’s business. The Respondent points to the Supreme
Court’s decision in Beasley v. Food Fair of North Caro-
lina, 416 U.S. 653, 661–662 (1974), recognizing that em-
ployers may demand the undivided loyalty of their agents.
The Respondent argues that the bylaw is reasonably tai-
lored to ensure loyalty of board members on matters deal-
ing with a union that has a collective-bargaining relation-
ship with MEA.
3. The Union
The Union contends that the practical effect of the by-
law amendment is to coerce International Brotherhood of
Electrical Workers (IBEW) members who are interested
in serving on the MEA board into resigning their IBEW
membership. The Union also claims that the bylaw co-
erces IBEW members, including those members em-
ployed by MEA, into resigning from the IBEW if the
member has a spouse or child who wants to serve on the
MEA board. According to the Union, MEA has coerced
and interfered with Mills’ and any other statutory employ-
ees’ Section 7 rights by maintaining and enforcing the
new bylaw.
The Union further contends that MEA has not provided
a substantial business justification for the bylaw. The
Union argues that prevention of conflict of interest is a
specious rationale for the amended bylaw. First, under
MEA board policy, the board does not have a direct role
in labor relations. Full responsibility for labor relations
and collective bargaining is delegated to the MEA general
manager. Second, the bylaw has different effects on
MEA’s union and nonunion employees. The children and
spouses of nonrepresented employees may serve on the
board of directors as long as the relationship is disclosed
to the MEA membership, while the children or spouse of a
represented employee could serve on the MEA board only
if the employee resigns membership in the Union. For
these reasons, the Union argues that the bylaw does not
prevent a conflict of interest. Instead, it coerces union
members to give up their Section 7 rights.
4. The amicus curiae
Chugach contends that service on the board of directors
of MEA is not an activity protected by Section 7 of the
Act. Pointing to the Supreme Court’s holding in Eastex,
Inc. v. NLRB, 437 U.S. 556, 567 (1978), that Section 7
extends to activities that relate to “employees’ interest as
employees,” Chugach argues that members of the board of
directors do not act as employees, but rather as members
of the management hierarchy.
Chugach also argues that MEA’s bylaws reflect the
common law prohibition against conflicts of interest. It
contends that permitting a member of a union representing
MEA employees to sit on the board of directors would
give rise to inherent and irreconcilable conflicts of inter-
est.
C. Analysis and Conclusions
As the parties recognize in their briefs, in deciding
whether the Respondent violated Section 8(a)(1) of the
Act by adopting the bylaw in issue, there are two ques-
tions that must be considered: First, does the bylaw tend
to interfere with, restrain, or coerce employees in the ex-
ercise of their Section 7 rights? Second, has the Respon-
dent established a legitimate business justification for the
bylaw? See generally Textile Workers v. Darlington Mfg.
Co., 380 U.S. 263, 268–269 (1965) (“Naturally, certain
business decisions will, to some degree, interfere with
concerted activities by employees. But it is only when the
interference with Section 7 rights outweighs the business
justification for the employer’s action that Section 8(a)(1)
is violated.”).
With respect to the first issue, we assume, without de-
ciding, that MEA’s bylaw restricts employees’ exercise of
Section 7 rights. Accordingly, we turn to the question of
whether the Respondent had a legitimate business justifi-
cation for the bylaw. The Respondent asserts that it en-
acted the bylaw in order to ensure the loyalty of the mem-
bers of its board of directors. Such members, the Respon-
dent argues, are its agents from whom it can demand un-
divided loyalty. We find merit in the Respondent’s argu-
ment.
According to the stipulated facts, MEA has a seven-
member board of directors that approves budgets and
management plans, manages the general business affairs
of MEA, and sets the overall direction for MEA. The
board has the authority to handle labor relations, but has
delegated that authority to the general manager who is
selected by the board. However, the board, not the gen-
eral manager, ratifies collective-bargaining agreements
tentatively agreed to by a negotiation team.
In other contexts, the Board has found members of a
corporate board of directors to be agents of the corpora-
tion within the meaning of Section 2(13) of the Act.2 In
Escambia River Electric Cooperative, Inc., supra, 265
NLRB at 981, for example, the Board adopted the judge’s
finding that members of the cooperative’s board of trus-
tees were agents of the cooperative. There, the judge
found that the power conferred on the board of trustees
was that normally associated with a board of directors and

2 Sec. 2(13) provides:
In determining whether any person is acting as an “agent” of another
person so as to make such other person responsible for his acts, the
question of whether the specific acts performed were actually author-
ized or subsequently ratified shall not be controlling.
MATANUSKA ELECTRIC ASSN. 967
officers of a typical corporation. The board of trustees
had complete control over management of the coopera-
tive. The judge also relied on the limited number of trus-
tees and the fact that their control extended to labor rela-
tions. Having found that the trustees were agents of the
cooperative, the judge, with Board approval, concluded
that the cooperative was responsible for the conduct of its
trustees. See also Fort Vancouver Plywood Co., 235
NLRB 635, 637 fn. 1 (1978), enfd. as modified 604 F.2d
596 (9th Cir. 1979) (member of board of directors is agent
of respondent because of control exercised by board over
respondent’s affair and limited number of directors).
Here, as in Escambia River and Ford Vancouver Ply-
wood, the board of directors is limited in number (seven)
and exercises control over the business affairs of MEA. It
also maintains considerable control over the labor rela-
tions of MEA by ratifying any collective-bargaining
agreement tentatively reached by a negotiating team. For
these reasons, we agree with the Respondent that the
members of its board of directors are its agents within the
meaning of Section 2(13).
We also agree with the Respondent that its bylaw is a
lawful means of ensuring the undivided loyalty of its
agents. The Supreme Court has found that both manage-
ment and employees are entitled to loyal representatives.
In Metropolitan Edison Co. v. NLRB, 460 U.S. 693, 704–
705 fn. 9 (1983), the Court, in discussing the Taft-Hartley
amendment excluding supervisors from the coverage of
the Act, stated:

Congress was concerned that if supervisors were in-
cluded in a bargaining unit, “management will be de-
prived of the undivided loyalty of its foremen.” Florida
Power & Light Co. v. Electrical Workers, 417 U.S. 790,
809–810 . . . (1974) (quoting S.Rep. No. 104, 80th
Cong., 1st Sess. 5 (1947)). This concern was not limited
to ensuring the loyalty of management’s representatives.
The House Report recognized that “no one, whether
employer or employee need have as his agent one who
is obligated to those on the other side, or one whom, for
any reason, he does not trust.” H.R. Rep. No. 245, 80th
Cong., 1st Sess. 17 (1947) (emphasis in original); see
also id. at 14 (stating that management, “as well as
workers, are entitled to loyal representatives in the
plants”).

The Respondent argues that its bylaw prohibiting mem-
bers of its board of directors from membership in any un-
ion representing MEA employees is narrowly tailored to
serve MEA’s legitimate interest in ensuring that its board
members do not have any loyalties to the unions with
which it has bargaining relationships. We agree. The
bylaw does not prohibit all union members from serving
on the board of directors. The bylaw only prohibits board
members from holding membership in a union that is on
the other side of the bargaining table from MEA. Simi-
larly, MEA’s barring from the board of directors those
who live with and are financially interdependent with
members of a union representing MEA’s employees is a
narrow provision implementing its legitimate interest in
having as its agents only those persons whom it trusts to
act with undivided loyalty.
The Union contends that the bylaw is not rationally re-
lated to the goal of preventing a conflict of interest. In
this regard, the Union notes that nonmembers can be on
the Respondent’s board of directors, even if they are rep-
resented by the Union. The contention has no merit.
Nonmembers, unlike members, are not subject to the Un-
ion’s disciplinary control. Thus, they do not pose a risk
that a person on the board of directors could be disci-
plined by the Union for acting contrary to the Union’s
wishes.
For these reasons, we find that to the extent MEA’s by-
law may be a restraint on Section 7 rights, MEA’s legiti-
mate interest in having trusted agents with undivided loy-
alty justifies such restraint. Cf. Shenango Inc., 237 NLRB
1355 (1978) (union did not violate Sec. 8(b)(1)(A) by
removing dissident from his position as safety committee
chairman; union’s “legitimate interest in placing in offices
such as chairman of the safety committee those people it
considers can best serve the Union and its membership”
outweighs individual’s interest in retaining his office).
Accordingly, we shall dismiss the complaint.
ORDER
The complaint is dismissed.