Kellogg Co. v. National Labor Relations Board

840 F.3d 322, 2016 FED App. 0263P, 2016 U.S. App. LEXIS 21654
CourtCourt of Appeals for the Sixth Circuit
DecidedOctober 26, 2016
Docket15-2031/2183
StatusPublished
Cited by6 cases

This text of 840 F.3d 322 (Kellogg Co. v. National Labor Relations Board) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kellogg Co. v. National Labor Relations Board, 840 F.3d 322, 2016 FED App. 0263P, 2016 U.S. App. LEXIS 21654 (6th Cir. 2016).

Opinion

AMENDED OPINION

JULIA SMITH GIBBONS, Circuit Judge.

The Kellogg Company (Kellogg) and the Bakery, Confectionery, Tobacco Workers and Grain Millers Local Union 252-G (the Union) began negotiations for a *325 successor to their Memphis Agreement, a local collective bargaining agreement (CBA) that was to expire soon. Negotiations failed when the Union refused to negotiate with respect to any of Kellogg’s proposed revisions. Kellogg responded by locking out approximately 200 bargaining-unit employees. The National Labor Relations Board (the Board) found that Kellogg’s proposal effectively modified the terms of the unexpired Master Agreement, and therefore constituted an unlawful midterm modification in violation of the National Labor Relations Act (NLRA). Because we conclude that the proposal did not modify the express terms of the Master Agreement and because Milwaukee Spring, 268 N.L.R.B. 601 (1984), disclaims the “effective modification” theory imposed by the Board in this case, we grant the petition for review, grant enforcement and affirm the Board’s decision with respect to the information-request finding, and vacate the rest of the Board’s decision.

I.

The relationship between Kellogg and the Union is governed by two separate agreements: the Master Agreement and the supplemental Memphis Agreement. The Master Agreement was effective from September 30, 2012 through October 3, 2015 while the Memphis Agreement was in effect from October 22, 2010 until October 20, 2013. Prior to entering into the Master Agreement, Kellogg entered into “supplemental agreements” with the local union at each plant. The Master Agreement applies to four of Kellogg’s plants, including the Memphis, Tennessee plant while the Memphis Agreement is specific to the Memphis location. The Master Agreement explicitly covers “only those matters specifically included [t]herein.” Master Agreement 1, CA6 R. 23. It further provides that unless the parties agree, issues covered in the Master Agreement will not be subject to negotiation “in an effort to secure changes in or to secure a new Supplemental Agreement” and issues covered in the supplemental agreements will not be subject to negotiation “in an effort to secure changes in or a new version of [the Master] Agreement.” Id. at 2.

The Master Agreement grants regular employees various benefits such as severance pay, paid holidays, insurance benefits, and participation in a stock purchase and dividend reinvestment plan. The Master Agreement does not distinguish between regular and non-regular employees except for one reference in the Wage Appendix, which governs “[a]ll matters pertaining to hourly wages,” id. at 33, and establishes a rate of $6.00 per hour less than “job rate ... for all work performed by non-regular employees, such as temporary and casual employees.” Id. at 66-67 (emphasis added). This is the only reference to non-regular employees or casual employees in the Master Agreement.

The Memphis Agreement, however, distinguishes between regular and casual employees. Section 107 of the Memphis Agreement defines the purpose of the “casual program” as “providing] regular employees with relief from extended work schedules through the use of Casual employees.” Memphis Agreement 8, CA6 R. 23. Except in limited circumstances, casual employees under the Memphis Agreement would only be “used after overtime has been offered to regular employees” and generally could not be used when regular employees were on layoff. Id. at 8-9. The number of casual employees was also capped at 30% of the total number of regular employees. And though casual employees were offered some “fringe benefits” such as lunch, breaks, and other benefits provided in the Master Agreement’s Wage Appendix, they were otherwise not *326 subject to the terms and conditions of the Master Agreement or- Memphis Agreement.

On September 17, 2013, Kellogg and the Union began negotiations for a successor to the Memphis Agreement. The negotiations came to a standstill over Kellogg’s proposed modifications to the casual-program. Under Kellogg’s proposal, the casual program would no longer serve simply to provide scheduling relief to regular employees, but would “include any employees hired by Kellogg to perform production or any other bargaining unit work covered by” the Memphis Agreement, Kellogg’s Last/Best Offer 4, CA6 R. 23. Moreover, casual employees would no longer “be limited in the scope of their work, duties, tasks, hours, or in any other terms or conditions of employment” and could “be employed on. an indefinite basis,” giving Kellogg unrestricted “rights to hire, use, manage, or direct Casual employees.” Id. Casual employees would also be granted new rights, such as seniority rights, access to a grievance procedure, participation in the job bidding process, and priority in the event that Kellogg established an alternative crewing schedule. The Union steadfastly refused to negotiate with Kellogg concerning these proposals. For instance, when Kellogg’s representative pressed the Union for alternative solutions to its proposals, the Union representative replied, “No—I don’t have to do that. I know you are really nice but I don’t mind telling you no every time.” 2013 Memphis Suppl. Negotiations 23, Sept. 17, 2013, CA6 R. 23. Insisting that Kellogg was attempting to bargain for amendments to the Master Agreement, rather than the Memphis Agreement, the Union representative finally concluded negotiations stating, “we are done negotiating, we are done ... done forever.” 2013 Memphis Suppl. Negotiations 1, Oct. 15, ,2013, CA6 R. 23.

After the parties reached impasse, 1 Kellogg sent the Union its “Last/Best Offer” dated October 16,2013, threatening to lock out all Memphis bargaining unit employees effective October 22, 2013, if the Union declined to accept its offer by 7:00 a.m. on that date. When the Union did not respond, Kellogg locked out approximately 200 of its bargaining-unit employees.

The Union filed a complaint on March 27, 2014, and the ALJ held a trial on the alleged unfair labor practice charges, The ALJ noted that the Master Agreement covers little about casual employees, but that supplemental agreements “have determined the scope and operation of the casual employee program at the[ ] respective plants.” .Decision 23, CA6 R. 23, Therefore, the ALJ concluded that Kellogg’s proposals did not contravene the terms of the Master Agreement, but rather spoke to the provisions of the Memphis Agreement, so the proposals were not midterm modifications of the Master Agreement, but rather mandatory subjects of bargaining. He further determined that a bona fide impasse was reached between the parties due to the Union’s failure to negotiate the proposals, so Kellogg was entitled to impose a lockout.

The Board reversed the ALJ’s decision. It concluded that the ALJ “misperceived the impact” of Kellogg’s proposals, which was to permit Kellogg “to cease- hiring all regular employees in the future and replace them with lower paid ‘casual’ employees.” Decision and Order 5, CA6 R. 23 (emphasis added). Kellogg repeatedly sought analogous modifications to regular employees’ wages and benefits during the 2005, 2009, and 2012 negotiations of the Master Agreement, but the parties never

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840 F.3d 322, 2016 FED App. 0263P, 2016 U.S. App. LEXIS 21654, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kellogg-co-v-national-labor-relations-board-ca6-2016.