McDonnell Douglas Corp.Download PDFNational Labor Relations Board - Board DecisionsNov 7, 1997324 N.L.R.B. 1202 (N.L.R.B. 1997) Copy Citation 1202 324 NLRB No. 183 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1 312 NLRB 373. 2 313 NLRB 868. 3 59 F.3d 230. The court expressly did not reach the merits of the unfair labor practice charge. Id. at 231, 236. 4 Member Fox did not participate in the decision on the merits. McDonnell Douglas Corporation; McDonnell Doug- las Electronic Systems Company, a Division of McDonnell Douglas Corporation; and McDon- nell Douglas Aerospace Information Services Company, a Division of McDonnell Douglas Corporation, Single and/or Joint employers and Southern California Professional Engineering Association and McDonnell Douglas Tulsa, a Division of McDonnell Douglas Corporation; McDonnell Douglas Space Systems Company, a Division of McDonnell Douglas Corporation; and Douglas Aircraft Company, a Division of McDonnell Douglas Corporation, Parties to the Contract. Case 21–CA–27479 November 7, 1997 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN GOULD AND MEMBERS FOX AND HIGGINS On September 24, 1993, the National Labor Rela- tions Board issued its Decision and Order in this pro- ceeding.1 Substantively, the Board found that the Re- spondent violated Section 8(a)(5) and (1) of the Na- tional Labor Relations Act by unilaterally, without the Union’s agreement, (1) removing bargaining unit em- ployees from the unit on their change of assignment from one to another of the Respondent’s component companies, and, approximately 3 months later and (2) returning these employees to the unit for approxi- mately 5 days, and then again removing them from the unit. Procedurally, as discussed below, the Board de- clined to defer consideration of the unfair labor prac- tice issues to the parties’ contractual grievance-arbitra- tion procedure. On November 29, 1993, the Respondent filed a mo- tion for reconsideration of the Board’s Decision and Order. On February 28, 1994, the Board denied the motion.2 On July 18, 1995, the United States Court of Ap- peals for the District of Columbia Circuit remanded the case to the Board for it to reconsider the issue of de- ferral to arbitration.3 On November 21 and 24, 1995, respectively, the Respondent and the General Counsel filed statements of position on remand, and on January 31, 1996, the Respondent filed a reply brief. The Board has delegated its authority in this pro- ceeding to a three-member panel.4 Upon reconsideration of the deferral issue, and for the reasons fully set forth below, the Board has de- cided to hold this case in abeyance, pending resort to the parties’ contractual grievance arbitration procedure. A. Background The facts are fully set forth in the Board’s underly- ing decision, at 312 NLRB 373. The facts relevant to our reconsideration of the deferral issue are as follows. The 1987–1990 collective-bargaining agreement be- tween the parties covered employees in certain job classifications in three companies, including the McDonnell-Douglas Astronautics Company-Huntington Beach (MDAC). Among these unit employees were computing analysts, computing engineers, computing specialists, and senior computing specialists. The con- tract also expressly covered certain employees in the above four classifications who were employed by the McDonnell-Douglas Aerospace Information Services Company (MDAIS), which was not itself a named party to the contract. As explained in the underlying decision, approximately 50 MDAIS unit employees were internally leased to MDAC and worked side-by- side with MDAC unit and nonunit employees at Hun- tington Beach. In December 1988, MDAC was reorganized into two new companies: McDonnell-Douglas Space Sys- tems Company (MDSSC) and McDonnell-Douglas Electronic Systems Company (MDESC), both of which continued to operate at Huntington Beach. MDAC’s unit and nonunit employees were reassigned to, and became employees of, either MDSSC or MDESC, de- pending upon the particular nature of their work, with- out change in representational status. After this reorganization, unit and nonunit employ- ees of MDESC and MDAIS worked side-by-side or in close proximity on the same or similar projects, and performed the same or similar technical and engineer- ing duties, under common MDESC first-line technical and work assignment supervision, with essentially the same wages, hours, and working conditions. MDAIS employees were supervised by both MDESC and MDAIS supervisors simultaneously. In October 1988, shortly before the above reorga- nization of MDAC onto MDSSC and MDESC, the Union and MDAC entered into the Embedded System Software Agreement (ESSA), which set guidelines for present and future unit placement of MDAC (soon to be MDSSC and MDESC) employees working in var- ious phases of the embedded software development lifecycle. More specifically, the parties agreed that em- ployees working in certain specified phases of the lifecycle were performing unit work, and would there- fore be in the unit, while other employees, working in other specified phases of the lifecycle, were not per- forming unit work, and would therefore not be in the unit. Finally, the parties agreed ‘‘to continue their ef- forts to achieve a practical and mutually satisfactory mechanism to insure compliance with the undertakings set forth above.’’ VerDate 11-MAY-2000 14:48 Apr 30, 2002 Jkt 197585 PO 00004 Frm 01202 Fmt 0610 Sfmt 0610 D:\NLRB\324.141 APPS10 PsN: APPS10 1203MCDONNELL DOUGLAS CORP. The ESSA was immediately applied by agreement of the parties to resolve the unit placement of eight MDAC employees. The ESSA was not, however, made applicable to the MDAIS employees leased to MDAC who were also working in the embedded system soft- ware development lifecycle. Indeed, at the time the ESSA was finalized and applied to MDAC employees in October 1988, there was no consideration given to applying it then or in the future to the MDAIS leased employees who were working in the various phases of the lifecycle. In fact, MDAIS employees had not been included in the Respondent’s comprehensive audit of lifecycle job functions leading up to the finalization of the ESSA. In December 1988, shortly after finalization of the ESSA, and around the same time of the reorganization of MDAC into MDSSC and MDESC, the Respond- ent’s parent company decided to reassign the MDAIS employees to the component companies to whom they were being leased, including MDESC. Consequently, these employees would become employees of the com- ponent companies themselves. There were 39 MDAIS employees reassigned to MDESC. Thirty-five of them were MDAIS unit em- ployees. Three of them remained unit employees in MDESC, changing their assignment (i.e., from MDAIS to MDESC) without any change in their representa- tional status. The other 32 MDAIS employees were working in the embedded system software lifecycle. The Respondent applied the ESSA to them, as new MDESC employees, and determined that the lifecycle phases in which they were currently working did not entail unit work as defined by the ESSA. The Re- spondent thereupon removed them from the unit. It is the Respondent’s removal of former MDAIS unit employees from the unit upon their change of as- signment from MDAIS to MDESC, without any cor- responding change in duties, tasks, location, or imme- diate supervision, that is principally alleged to have violated the Act. As a preliminary matter, the Board rejected the ad- ministrative law judge’s recommendation for deferral of the unfair labor practice issues to the grievance and arbitration machinery contained in the parties’ collec- tive-bargaining agreement. The Board found that the issue of whether the Respondent unlawfully removed the 32 former MDAIS employees from the bargaining unit necessarily involved the rights of those employees to be represented by the Union, and the Board there- fore declined to defer, on the grounds that representa- tion issues involve the application of basic statutory policy and standards, and are matters for decision ex- clusively by the Board, not an arbitrator. It is this de- ferral issue that the court has remanded for our recon- sideration. B. The Court’s Opinion The court stated that the Respondent’s ‘‘first defense was that it had acted with union consent, by virtue of the collective bargaining agreement and its later refine- ments.’’ 59 F.3d at 231. The court observed that ‘‘[t]he Board itself agrees that prior union consent is a complete defense to the unfair labor practice charge.’’ 59 F.3d at 233. Yet, in explaining its decision not to defer, the Board ‘‘cited no decision in which a party’s contractual consent could potentially have been dispositive but instead invoked ones where extra-con- tractual principles or interests were at stake.’’ 59 F.3d at 231. Further, the court found inadequate the Board’s ra- tionale that this case involves a ‘‘representation issue’’ and that those issues are never deferred to arbitration. 59 F.3d at 234. ‘‘Assuming that the issue in this case is properly called a ‘representation issue,’’’ the court found that ‘‘the Board’s categorical statement that ‘representation issues’ are not susceptible to resolution by contract does not square with Board precedent.’’ Id. In this connection, the court observed that ‘‘[t]he Board has never suggested that a union and employer cannot contractually bind each other as to the scope of the bargaining unit.’’ Id. In addition, the court stated that ‘‘the assertion that any representation issue is nec- essarily one for the Board alone is completely incon- sistent with the Board’s own statement of the sub- stantive rule governing this case—that union consent is a complete defense to the unfair labor practice charge.’’ 59 F.3d at 235. Accordingly, because it found that ‘‘this case does not appear in any way to fit the Board’s stated ration- ale for refusing to defer—that the ultimate issue may be resolved solely by reference to the national labor laws,’’ the court remanded the case to the Board for further explanation of why its ‘‘decision not to defer to arbitration was a lawful departure in this case from its general policy of deferring to agreed-upon griev- ance and arbitration procedures.’’ 59 F.3d at 236. C. Positions of the Parties 1. The General Counsel The General Counsel asserts that the Board did not abuse its discretion in declining to defer to the parties’ contractual grievance-arbitration procedure, because the unilateral removal of employees from a bargaining unit is a representation issue involving application of the Act and therefore is inappropriate for arbitration. The General Counsel further argues that questions about the application of contractual definitions of the unit in terms of job classifications involve questions about the scope of the unit, and are thus representational matters appropriately addressed by the Board. The General Counsel additionally contends that the Board has con- VerDate 11-MAY-2000 14:48 Apr 30, 2002 Jkt 197585 PO 00004 Frm 01203 Fmt 0610 Sfmt 0610 D:\NLRB\324.141 APPS10 PsN: APPS10 1204 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 5 The General Counsel also argues that deferral is inappropriate be- cause there is no agreed-upon mechanism for resolution of the un- derlying dispute. 6 The Respondent also presents arguments in regard to the merits of the unfair labor practice charge. But, as seen, these matters are outside the scope of the court’s remand, and are thus not addressed herein. sistently refused to defer to contractual grievance-arbi- tration procedures where the issue is whether employ- ees should be included in or excluded from an existing unit as a result of employer reorganization or changes in the employees’ responsibilities, and that this is so even where such an issue might be resolved solely by interpretation of the collective-bargaining agreement, without reference to standards outside the contract.5 2. The Respondent The Respondent first asserts that the court’s finding in this regard is the law of the case, and that under this law of the case the Board is compelled to dismiss the complaint and defer the dispute to arbitration. The Respondent further argues that what it terms the classification issues here—even if characterized as rep- resentational—may readily be resolved through the parties’ grievance and arbitration procedures. The Re- spondent concedes that an employer may not alter the scope of a bargaining unit unilaterally. The Respondent contends, however, that the boundaries of the unit had previously been established by the parties by reference to the type of work being performed, and thus the as- serted classification dispute here—whether the MDAIS unit employees were to be classified out of the unit based upon the work they were performing at the time they were transferred to MDESC—does not involve an issue regarding the scope of the unit. Rather, argues the Respondent, the instant dispute concerns only the propriety of MDESC’s application of the previously agreed-upon criteria in the ESSA to determine whether the newly transferred MDAIS unit employees were to be classified out of the unit. The Respondent contends that the asserted classification dispute here is thus pre- cisely the type of dispute that should be deferred both as a matter of precedent and as a matter of sound labor relations policy. In essence, the Respondent contends that in applying the ESSA after the transfer of the MDAIS employees to MDESC, it was not attempting to change the scope of the unit, but was merely reclassifying the 32 newly transferred MDAIS unit employees out of the unit in accordance with its right to ‘‘classify’’ and ‘‘reclas- sify’’ employees under the collective-bargaining agree- ment. Further, the Respondent asserts that the Union had the contractual right to grieve any of the Respond- ent’s initial classification of unit employees out of the unit.6 D. Analysis On January 28, 1997, approximately a year and a half after the court’s remand, the Board issued its deci- sion in St. Mary’s Medical Center, 322 NLRB 954, a case of particular relevance here because it clarifies Board law on deferral to arbitration in representation proceedings. In St. Mary’s, the employer filed a peti- tion seeking to exclude a newly created position from the bargaining unit. The Employer relied on language in the contractual recognition clause ‘‘excluding . . . positions requiring 600 hours or more of formal train- ing, education, or apprenticeship.’’ Previously, a griev- ance had been filed seeking the inclusion of the posi- tion in the unit, and an arbitrator had issued an award rejecting the employer’s contract claim and including the new position in the bargaining unit. The Regional Director deferred to the arbitrator’s finding that the ‘‘600 hours’’ exclusionary language was not meant to apply to the position in question. In addition, the Re- gional Director independently determined, based on a community-of-interest analysis, that the position should be accreted to the existing unit. The employer filed a request for review with the Board, contending that the Regional Director erred in deferring to the arbitrator’s interpretation of the rec- ognition clause. The Board summarized the governing test as follows: Although the Board only infrequently defers to ar- bitration in representation proceedings, the Board will find deferral appropriate when the resolution of the issue turns solely on the proper interpreta- tion of the parties’ contract. See Hershey Foods Corp., 208 NLRB 452, 457 (1974). Where resolu- tion turns on statutory policy, the Board will not defer. Marion Power Shovel, 230 NLRB 576 (1977). Applying these principles to the facts of St. Mary’s, the Board found that the Regional Director correctly ‘‘limited the scope of his deferral to the issue which turned solely on contract interpretation—the meaning of the ‘600 hour’ exclusion language of the recognition clause.’’ The Board also found that the Regional Di- rector properly ‘‘refused to defer resolution of the ac- cretion issue but resolved the issue through an inde- pendent analysis.’’ Accordingly, the Board agreed with the Regional Director’s clarification of the unit to in- clude the newly created position. The Board’s decision in St. Mary’s goes far toward addressing the concerns the court expressed here and narrowing the area of possible disagreement between the Board and the court. In light of St. Mary’s, we agree with the court that the Board erred in its original decision in this proceeding when it indicated that it never defers to arbitration in cases involving represen- tation issues. 312 NLRB at 375. (‘‘Representation VerDate 11-MAY-2000 14:48 Apr 30, 2002 Jkt 197585 PO 00004 Frm 01204 Fmt 0610 Sfmt 0610 D:\NLRB\324.141 APPS10 PsN: APPS10 1205MCDONNELL DOUGLAS CORP. 7 Of course, in interpreting a collective-bargaining agreement, it is appropriate to look to both the contract language itself and relevant extrinsic evidence. See Electrical Workers IBEW Local 1395 v. NLRB, 797 F.2d 1027, 1036 (D.C. Cir. 1986). 8 312 NLRB at 377. 9 Id. 10 Chairman Gould agrees, for the reasons set forth above, that de- ferral of both the contractual and the representational issues is appro- priate in this case. He is also of the view that the presumption favor- ing deferral is not overcome by the fact that resolution of the 8(a)(5) issue may involve a representation issue in addition to the contrac- tual question. Thus, even absent the court’s remand of the deferral issue, Chairman Gould would find that deferral of both issues is ap- propriate. 11 See Spielberg Mfg. Co., 112 NLRB 1080 (1955); Olin Corp., 268 NLRB 573 (1984). issues . . . are matters for decision exclusively by the Board, not an arbitrator.’’) (Emphasis added.) The Board regrets using such overbroad language. The Board today reiterates what it said in St. Mary’s, i.e., although the Board ‘‘only infrequently defers to arbi- tration in representation proceedings,’’ deferral is ap- propriate ‘‘when the resolution of the issue turns solely on the proper interpretation of the parties’ contract.’’ 322 NLRB at 954. At the other end of the spectrum, the Board and the court would also appear to be in agreement that defer- ral is normally not warranted where the representation issue presented turns on statutory policy. Thus, the court discussed with apparent approval the Marion Power Shovel case cited in St. Mary’s, 59 F.3d at 235, and indicated that it agreed with the Board that defer- ral is not appropriate where ‘‘the ultimate issue may be resolved solely by reference to the national labor laws.’’ 59 F.3d at 236 (emphasis in original). Like St. Mary’s, the instant case presents both a ‘‘contract interpretation’’ issue and a ‘‘statutory pol- icy’’ issue. As discussed in our original decision, precedent establishes that an employer ‘‘violates the Act when it removes a substantial group of employees from a bargaining unit, unless it either (1) obtains the agreement of the union to do so, or (2) is able to es- tablish that the removed group is sufficiently dissimilar from the remainder of the unit to warrant removal.’’ 312 NLRB at 375; see 59 F.3d at 233. In remanding the case, the court stated that ‘‘the company’s primary defense is that its actions were fully authorized by its agreements with the union.’’ 59 F.3d at 233. There- fore, we now find, in light of St. Mary’s, that the first issue is suitable for deferral because it turns solely on the proper interpretation of the parties’ contract and ancillary agreements.7 With respect to the second issue, however, it is clear under St. Mary’s that defer- ral would normally not be appropriate because its reso- lution turns on statutory policy, i.e., an analysis of community-of-interest factors. In St. Mary’s, the Board was able to defer to the ar- bitration award on the contract issue, while deciding the statutory issue itself. Inasmuch as there is no arbi- tral award here, we cannot defer to an award in the sense of honoring it. However, we can defer to the ar- bitral process by holding in abeyance our processes while arbitration takes its course. The entire dispute in this case could be resolved through arbitration if an arbitrator were to conclude that the Union had agreed to permit the Respondent unilaterally to remove the MDAIS unit employees from the unit. If an arbitrator so found, there would be no need to resolve the representational statutory policy issue. If, on the other hand, the arbitrator were to find that the Union had not agreed to permit the Respond- ent unilaterally to remove the MDAIS unit employees from the unit, then it would be necessary to reach the second issue, a question that under St. Mary’s can nor- mally only be decided by the Board. Under the unique circumstances of this case, how- ever, including the court’s remand of the deferral issue to us, and the subsequent clarification of Board law in regard to deferral to arbitration in representation pro- ceedings in St. Mary’s, and also in order to avoid fur- ther bifurcating and segmenting the processing of this case, we shall defer as follows to the parties’ contrac- tual grievance-arbitration procedure. We defer the con- tractual issue of whether the Union had agreed to per- mit the Respondent, unilaterally: (a) to apply the ESSA to the then-recently-transferred MDAIS unit employ- ees, (b) to determine that they were no longer in the unit, and (c) to remove them from the unit.8 If the ar- bitrator finds that the Union did not so agree, then we defer to the arbitrator also the resultant representational statutory policy issue of whether, even absent the Union’s agreement, the job duties and functions, and terms and conditions of employment, of the then-re- cently-transferred MDAIS unit employees had become sufficiently dissimilar from those of the remaining unit employees so as to warrant the Respondent’s unilateral removal of the MDAIS employees from the unit upon their change of assignment to MDESC.9 In deferring both of these issues under the unique circumstances of this case, including the fact of the court’s remand, we emphasize than we are only mak- ing an exception to, and most decidedly not abandon- ing, our longstanding general policy, reiterated in St. Mary’s, against deferral of representation issues which can only be resolved through application of statutory policy—in this case, an analysis of community of in- terest factors.10 We emphasize also that any arbitral proceedings that do take place as a result of our defer- ral will remain subject to postarbitral review by the Board upon assertion by either party that the arbitral proceedings or decision—on either the contractual or representational issue —fail to satisfy our long-stand- ing requirements for postarbitral deferral.11 VerDate 11-MAY-2000 14:48 Apr 30, 2002 Jkt 197585 PO 00004 Frm 01205 Fmt 0610 Sfmt 0610 D:\NLRB\324.141 APPS10 PsN: APPS10 1206 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD ORDER The National Labor Relations Board orders that 1. The complaint, as amended, is dismissed. 2. The Order at 312 NLRB 373, 379 (1993) is re- scinded. 3. The Respondent’s First Affirmative Defense in its Answer to Amended Complaint as Amended is granted to the extent that it asserts that the complaint allega- tions should be deferred to the grievance and arbitra- tion provisions of the parties’ collective-bargaining agreement. 4. Jurisdiction of this proceeding is retained for the limited purpose of entertaining an appropriate and timely motion for further consideration on the proper showing that either (a) the dispute has not, with rea- sonable promptness after the issuance of this Supple- mental Decision and Order, been either resolved by amicable settlement in the grievance procedure or sub- mitted promptly to arbitration, or (b) the grievance or arbitration procedures have not been fair and regular or have reached a result that is repugnant to the Act, in- cluding, if applicable, a result that is repugnant to Board law in representational matters. VerDate 11-MAY-2000 14:48 Apr 30, 2002 Jkt 197585 PO 00004 Frm 01206 Fmt 0610 Sfmt 0610 D:\NLRB\324.141 APPS10 PsN: APPS10 Copy with citationCopy as parenthetical citation