Secret Negotiations Justified Contractor’s Withdrawal From Bargaining Unit After Accepting Multiemployer Agreement
The U.S. Court of Appeals for the Third Circuit (DE, NJ, PA, VI) has reversed a National Labor Relations Board decision that a roofing contractor that was bound to a collective bargaining agreement (CBA) negotiated by a multiemployer association early, even though the contractor’s notice of withdrawal from the multiemployer unit was timely under the terms of the original bargaining authorization, because its conduct indicated its assent.
The contractor, D.A. Nolt (Nolt), was bound to a commercial roofing CBA between the Roofing Contractors Association (RCA) and Roofers Local 30 that was set to expire on April 30, 2001. In June 1999, Nolt signed an authorization allowing RCA to negotiate a new CBA on its behalf and permitting Nolt to terminate that authority up until 90 days prior to the existing contract’s expiration. In June 2000, RCA and the union began negotiating for a successor CBA. The union asked RCA to keep the negotiations a secret, as it did not want its membership to find out that negotiations were underway. At the union’s request, RCA did not notify its members (outside of its bargaining committee) of the occurrence of the negotiations until a tentative agreement was reached. On July 12, 2000, RCA sent its members a cover letter and a ballot, which required the contractors to vote “accept,” “reject,” or “withdraw” from RCA. The letter included a copy portion of the original bargaining agent authorization stating that members could withdraw from RCA up to 90 days prior to the contract termination, which would be January 30, 2001. However, the letter also instructed members that, if they wished to withdraw authorization, they must vote “withdraw” on the ballot by July 14, 2000. Nolt returned the ballot with a vote of “accept,” and the tentative agreement was soon ratified by both sides. Nevertheless, on January 30, 2001, Nolt sent a letter to the RCA and the union stating that it was withdrawing its authorization from the RCA and that it would not be bound to the successor agreement. When the new CBA took effect on May 1, 2001, Nolt did not apply its terms.
The union filed unfair labor practice charges with the Board. The Board held that Nolt failed to establish that the conduct at issue constituted “unusual circumstances” as required for an employer to withdraw from a multiemployer bargaining unit after negotiations have begun. The Board further held that, even if RCA’s and the union’s conduct constituted “unusual circumstances,” Nolt was obligated to announce its intention to withdraw as soon as those circumstances became known. It failed to do so and was, therefore, bound to the terms of the new CBA. (See Human Resource & Labor News, Issue No. 1-04.)
The appeals court disagreed with the Board and refused its application for enforcement. The court held that the Board “improperly valued stability over freedom in the context of multiemployer bargaining” and wrongly concluded that “unusual circumstances” did not justify Nolt’s withdrawal. Past decisions of the Board have indicated that evidence of “collusion or conspiracy” would constitute “unusual circumstances.” In this case, the Board defined “collusion or conspiracy” as actions that are “deliberately intended to prevent an employer from exercising its right to withdraw.” Whether RCA and the union deliberately intended to prevent Nolt from exercising its right to withdraw is not as significant as whether the effect of their actions was to prevent Nolt from exercising its right to withdraw, the court said. It is enough to prove that there was a secret agreement that resulted in harm to Nolt.
The court also rejected the Board’s conclusion that Nolt forfeited its right to withdraw when it voted to “accept” the CBA. The Board failed to cite any cases to support the rule that an employer must withdraw as soon as “unusual circumstances” become manifest. The timing of the withdrawal must be evaluated in the overall context of the parties’ bargaining history. Because the letter to contractors included the express 90-day withdrawal provision, it was reasonable for Nolt to conclude that it could withdraw within 90 days of the old agreement’s expiration.
NLRB v. D.A. Nolt, Inc., Case Nos. 04-2321, 04-2681 (3rd Cir., 5/4/05).
return to top ]