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Aggregate Industries v. National Labor Relations Board

United States Court of Appeals, District of Columbia Circuit

June 10, 2016

Aggregate Industries, Petitioner
National Labor Relations Board, Respondent

          Argued March 21, 2016

         On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board

          Richard N. Hill argued the cause for petitioner. On the briefs was James T. Winkler. Matthew T. Cecil entered an appearance.

          Nicole Lancia, Attorney, National Labor Relations Board, argued the cause for respondent. With her on the brief were Richard F. Griffin, Jr., General Counsel, John H. Ferguson, Associate General Counsel, Linda Dreeben, Deputy Associate General Counsel, and Elizabeth A. Heaney, Supervisory Attorney.

          Before: Wilkins, Circuit Judge, and Ginsburg and Randolph, Senior Circuit Judges.


          Randolph, Senior Circuit Judge:

         The evidentiary background of this case is complicated. The law is not. Aggregate Industries transferred work from one bargaining unit to another over the objections of the union representing both units. An administrative law judge found that because the company had bargained over the issue to impasse, it was entitled to make the change unilaterally. The National Labor Relations Board disagreed. Aggregate Indus., 359 N.L.R.B. No. 156, at 4 (July 8, 2013) (Board opinion).[1] The Board held that the company had not merely transferred work; it had changed the scope of a bargaining unit. Therefore, Aggregate Industries had no right to insist that the union bargain over the issue. The Board also held that even if the company had merely transferred work, it had not given the union a fair chance to bargain. We disagree with both of these conclusions. We therefore grant the petition for review on that issue. We uphold the Board's decision on a collateral matter.

         For the first several years of its existence, Aggregate Industries was only a construction business, and its work was governed by a contract with the Teamsters union - the Construction Agreement. In 2008, Aggregate decided to "throw some money" into the Ready-Mix concrete market. The company started three cement plants in the Las Vegas area, including one near Sloan Quarry, which Aggregate owned through its construction divisions. Aggregate hired twenty or so employees in the new division and began negotiating with the Teamsters for a contract to govern the Ready-Mix work. The resulting agreement, the Ready-Mix Agreement, mostly tracked the terms of the contracts that the Teamsters had signed with other Ready-Mix companies. But it was very different from the Construction Agreement. Most importantly, the Ready-Mix Agreement paid around $25 per hour and the Construction Agreement paid around $30.

         In the negotiations over the new contract, the union agreed that Aggregate could move nine drivers from the construction side of the business to the Ready-Mix division and drop their pay to the Ready-Mix rate. In their new positions, these nine employees drove oversized mining trucks in the vicinity of Sloan Quarry. But only one of the three cement plants was at the quarry, so the company still needed some way to do "material hauling" - carrying its aggregate over public roads to cement plants and construction sites. Under the union's contracts with other Ready-Mix companies, both kinds of work were done under Ready-Mix agreements and paid around $25 an hour. So the union suggested that Aggregate move more trucks, in addition to the nine, from the construction side to the Ready-Mix side. The union told the company that it could use construction drivers to do the work, because at the time, the dispatch procedure under the Ready-Mix Agreement allowed the company to pick the drivers they preferred rather than use a union-provided seniority list. The company would have to fire the drivers from the construction side of the business, but it could immediately rehire them - albeit at lower wages - to work under the Ready-Mix Agreement. However, the union insisted that if the company transferred the trucks, the move had to be complete and permanent. After the change, the company had to change the names on the trucks and could no longer use them for construction work.

         The company considered this possibility, but at the time, construction work was booming. Aggregate did not want to move trucks to the Ready-Mix division if that meant they could not do construction work part-time. Instead, the company decided to have drivers from the construction division do material hauling when they were not busy with construction, and to pay them Construction Agreement wages to do so. This was not a dramatic change; the construction unit had occasionally done material hauling work even before Aggregate started its Ready-Mix operations.[2] The company hoped to move those trucks permanently, and pay the drivers Ready-Mix wages, after the construction boom ended.

         In July 2010, as two large construction projects were winding down, Aggregate decided to follow through on its earlier plan. The union's leadership had recently changed, so the company informed the new administration that it would move trucks from the construction side of the business to the Ready-Mix division to do material hauling work. Aggregate knew that this would involve firing some of its construction drivers, but it hoped to hire the same drivers again, as the previous union administration had suggested. At a meeting on July 9, the union seemed to concede that the company could transfer the material hauling work, but said that maintaining the same drivers was not an option. The new administration had changed the Ready-Mix dispatch procedures, and drivers could no longer be called up by name, only by seniority. So the company resigned itself to the fact that it would have to fire the construction drivers and then use the new dispatch procedure to rehire different drivers under the Ready-Mix Agreement.

         A few weeks later, to the company's surprise, the union announced that it had a broader objection - it would not agree to transfer material hauling work after all, even if the company did not try to rehire the same drivers. At the earlier meeting, the union had apparently assumed that the old administration had signed off on the company's plan, but after considering the matter it concluded that this assumption was wrong.[3]

         Several more weeks went by, and the parties still had not reached an agreement. Finally, in late September the company made the change unilaterally and put in a dispatch order for material haul drivers under the Ready-Mix Agreement. When the union refused to fill the order, the company announced that it would exercise its contractual right to fill the jobs from other sources. Aggregate advertised the positions in the local newspaper and called a meeting of construction drivers on October 1. The company's general counsel told the drivers that Aggregate wanted to keep giving them work, but if they did material hauling, they would have to be covered by the Ready-Mix Agreement rather than the Construction Agreement. The company also offered a transition plan that gradually stepped down from the construction rate to the Ready-Mix rate. Soon afterward, the union filed the unfair labor practice charge that turned into this case, and the parties agreed to switch fifty-nine drivers from the Construction Agreement to the Ready-Mix Agreement pending the outcome of the charge. After the switch, the transferred drivers were paid Ready-Mix wages for most work. But when those drivers did part-time construction work, of which there was still a steady trickle, they were paid Construction Agreement wages.

         The key question here is whether Aggregate Industries transferred work or changed the scope of the bargaining unit. Transferring work between bargaining units is a mandatory subject of bargaining, and the union would be obligated to negotiate in good faith about such a proposal. Boise Cascade Corp. v. NLRB, 860 F.2d 471, 474 (D.C. Cir. 1988); see also NLRB v. Wooster Div. of Borg-Warner Corp., 356 U.S. 342, 348-49 (1958). If the union refused to bargain, or if negotiations reached an impasse, then the company could make the change unilaterally. Boise Cascade, 860 F.2d at 474. On the other hand, changing the scope of the bargaining unit is a permissive subject of bargaining. Idaho Statesman v. NLRB, 836 F.2d 1396, 1400 (D.C. Cir. 1988). The parties may bargain about the issue, but neither side is compelled to do so. Id.; see also ...

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