National Labor Relations Board v. Oregon Steel Mills, Inc., Oregon Steel Mills, Inc. v. National Labor Relations Board

47 F.3d 1536, 95 Daily Journal DAR 2326, 95 Cal. Daily Op. Serv. 1312, 148 L.R.R.M. (BNA) 2656, 1995 U.S. App. LEXIS 3320

• Court: Court of Appeals for the Ninth Circuit
• Decided: February 22, 1995
• Docket: 92-70645, 92-70658
• Status: Published

Opinions

Opinion by Judge NORRIS; Partial Concurrence and Partial Dissent by Judge ALARCON.

WILLIAM A. NORRIS, Circuit Judge:

The National Labor Relations Board seeks enforcement, and Oregon Steel seeks review, of the Board’s November 30, 1990 order declaring that Oregon Steel violated sections 8(a)(1) and (3) of the National Labor Relations Act (“Act”), 29 U.S.C. §§ 158(a)(1) and (3), by failing to reinstate former strikers and removing five former strikers from the preferential reinstatement list. We grant enforcement of the Board’s order.

I

Oregon Steel challenges on three grounds the ALJ’s and the NLRB’s decision that Oregon Steel violated sections 8(a)(1) and (3) of the National Labor Relations Act¹ by bypassing qualified former strikers in favor of temporary workers obtained through independent employment agencies.

“An employer must reinstate an economic striker who offers unconditionally to return to work, unless the employer has a substantial and legitimate business reason for refusing to do so.” Zapex Corp. v. NLRB, 621 F.2d 328, 333 (9th Cir.1980) (citing NLRB v. Int’l Van Lines, 409 U.S. 48, 50-51, 93 S.Ct. 74, 76-77, 34 L.Ed.2d 201 (1972)); NLRB v. Mackay Radio & Telegraph Co., 304 U.S. 333, 345-46, 58 S.Ct. 904, 910-11, 82 L.Ed. 1381 (1939)). “Although economic strikers may be permanently replaced, they are entitled to reinstatement when and if a job opens up for which the striker is qualified.” NLRB v. Champ Corp., 933 F.2d 688, 698 (9th Cir.1990), cert. denied, 502 U.S. 957, 112 S.Ct. 416, 116 L.Ed.2d 437 (1991).

First, Oregon Steel argues that the General Counsel failed to make out even a prima facie violation of the Act because its obligation to hire former strikers from the preferential reinstatement list applies only when it “hires [new employees] onto its own payroll.” Respondent/Cross-Petitioner Br. at 25, 28. The temporary workers were never on Oregon Steel’s “own payroll” since Oregon Steel paid only the independent employment agencies who provided the temporary workers. The agencies, in turn, then paid the temporary workers their wages and fringe benefits. This distinction is irrelevant.

The fact that Oregon Steel paid the employment agencies, who then paid the temporary workers, does not change the fact that Oregon Steel hired others to work at the same exact jobs performed by the former strikers prior to the strike while the preferential reinstatement list remained unexhaust-ed. This is the gravamen of the unfair labor practice alleged. As the Supreme Court noted in Fleetwood, and contrary to what the Company argues here, “[t]he right [of a former striker] to reinstatement does not depend upon technicalities....” Fleetwood, 389 U.S. at 381, 88 S.Ct. at 547.

Second, Oregon Steel argues that the Board misapplied the law by placing on Oregon Steel the burden of proving that former strikers were not rehired for legitimate and substantial business reasons. Oregon Steel contends that it had only the burden of production. This argument is precluded by both Supreme Court and Ninth Circuit precedent.

In NLRB v. Fleetwood Trailer Co., 389 U.S. 375, 88 S.Ct. 543, 19 L.Ed.2d 614 (1967), the Court, faced with the same facts before us in the instant ease — former strikers bypassed in filling positions, — made explicit that the employer bears the burden of proving a legitimate and substantial business justification:

unless the employer who refuses to reinstate strikers can show² that his action was due to “legitimate and substantial business justifications,” he is guilty of an unfair labor practice. NLRB v. Great Dane Trailers, 388 U.S. 26, 34, 87 S.Ct. 1792, 1797, 18 L.Ed.2d 1027 (1967). The burden of proving justification is on the employer. Id.

389 U.S. at 378, 88 S.Ct. at 545-46 (emphasis added). In NLRB v. Rockwood & Co., 834 F.2d 837 (9th Cir.1987), we followed Fleet-wood in holding that when an employer fails to rehire striking workers and hires others in their stead, the employer has the burden of proving that it did so for legitimate and substantial business reasons. Id. at 840-41; see also Zapex Corp. v. NLRB, 621 F.2d 328, 334 (9th Cir.1980); NLRB v. Murray Prods., Inc., 584 F.2d 934, 939 (9th Cir.1978).³

Finally, Oregon Steel asserts that “[t]he ALJ would apparently preclude employers with [preferential reinstatement lists] from contracting with outside agencies for labor,” and that “[t]he ALJ is not charged with the responsibility of operating Oregon Steel Mills profitably for the benefit of its employee/owners.” Petitioner/Cross-Respondent’s Br. at 28. Oregon Steel exaggerates the reach of the ALJ’s and the Board’s decision.

The Board’s affirmance of the ALJ’s decision in this case hardly signals the death knell for the hiring of temporary workers post-strike. All the law requires is that the employer meet its burden of proving that the decision to hire temporary workers was made for legitimate and substantial business reasons. All the Board decided here is that Oregon Steel failed to provide sufficient evidence to carry its burden on this issue. The broad question framed by Oregon Steel— whether an employer with a preferential reinstatement list can ever contract with outside agencies for labor — is not before us. Certainly it is not the ease that the hiring of temporary workers always constitutes a legitimate and substantial business justification. That question necessarily depends on the individual business circumstances of each employer. Thus, the question truly before us is whether this employer — Oregon Steel— carried its burden of proving that hiring temporary workers rather than rehiring former strikers was justified by a legitimate and substantial business reason.

Oregon Steel asserted that it did not rehire former strikers because it was cheaper to hire temporary labor. In holding that the evidence presented by Oregon Steel was insufficient to meet its burden of persuasion, the ALJ and the Board noted Oregon Steel’s failure “to offer a financial or accounting analysis” of its purported cost savings, as well as its failure to “show a nexus between its use of contract labor and the company’s economic health.” ER at 25. The Board further relied on evidence showing that Oregon Steel (1) documents labor costs, yet failed to produce any records; (2) sometimes pays temporary workers “substantially more” than it pays other employees; and (3) significantly increased cost savings prior to its use of temporary workers. ER at 21-22, 25.

We must accept the Board’s findings of fact if they are “supported by substantial evidence, ... even if the court might reach a different conclusion based on the same evidence.” Sierra Publishing Co. v. NLRB, 889 F.2d 210, 215 (9th Cir.1989). The record amply supports the Board’s finding that Oregon Steel did not carry its burden of proving that hiring temporary workers rather than rehiring former strikers was cost-justified.

II

Oregon Steel also challenges the Board’s holding that it violated the Act by (a) removing three former strikers from the preferential reinstatement list due to Oregon Steel’s determination that these former strikers had received substantially equivalent employment elsewhere; and (b) removing two former strikers from the preferential reinstatement list due to Oregon Steel’s determination that these former strikers had refused the Company’s offer of substantially equivalent employment. Because the Board’s findings are supported by substantial evidence, we reject Oregon Steel’s contentions. We agree with the Board that the Company unlawfully removed these five employees from the preferential reinstatement list.

An employer may remove a former striker from a preferential reinstatement list if the former striker has found “regular and substantially equivalent employment” elsewhere. 29 U.S.C. § 152(3); NLRB v. Rockwood, & Co., 834 F.2d 837, 839 (9th Cir.1987). An employer may also remove a former striker if he or she refuses the employer’s offer of substantially equivalent employment. Rockwood, 834 F.2d at 841-42.

“The words ‘substantially equivalent’ cover many things, including rate of pay, hours, working conditions, location of the work, kind of work, and seniority rights....” NLRB v. Carlisle Lumber Co., 99 F.2d 533, 539 (9th Cir.1938), cert. denied, 306 U.S. 646, 59 S.Ct. 586, 83 L.Ed. 1045 (1939).

A

Oregon Steel contends that it was not required to hire former strikers John Maxwell, David Vasil, and Michael Loupe because they had found substantially equivalent employment ■ elsewhere. The Board adopted the ALJ’s findings that each of these workers’ post-strike positions were not substantially equivalent to their pre-strike positions.

1. John Maxwell

At Oregon Steel, Maxwell held a highly skilled position as a journeyman millwright. After the strike, Maxwell obtained employment as a trainee journeyman millwright at a local foundry. In addition to the reduced seniority, Maxwell also suffered a wage cut of approximately $4.22 an hour. These facts are substantial evidence in support of the Board’s finding that Maxwell’s new job at the foundry was not substantially equivalent to his pre-strike position at Oregon Steel.

2. David Vasil

Vasil’s new job, unlike his position at Oregon Steel, required him to travel “100 percent of the time in the States of Oregon, Washington, Idaho and Montana.” ER 11. The Board concluded, and we agree, that Vasil’s new job was not substantially equivalent because of the requirement that he continuously travel away from his home and family in Portland.

3. Michael Loupe

At Oregon Steel Loupe ground and leveled steel plates and operated a rotary shear machine — all indoors. At his post-strike position at Schnitzer Company, Loupe worked outdoors in rain gear, removing mud and waste from car bodies. Furthermore, unlike Oregon Steel, Loupe’s new employer did not provide shower facilities. In addition to the more onerous working conditions at Schnitzer, Loupe suffered reduced seniority and a reduced potential for advancement. This record amply supports the Board’s finding that Loupe’s new position was not substantially equivalent to his position at Oregon Steel.

B

Oregon Steel contends that the jobs which it offered Dan Hunker and Jeanne Wilson were substantially equivalent to their pre-strike positions. Because both Hunker and Wilson rejected the job offers, Oregon Steel asserts that it lawfully removed them from the preferential reinstatement list. The Board found that the new positions offered by Oregon Steel were not substantially equivalent to Hunker’s and Wilson’s pre-strike positions. We agree.

Both Hunker and Wilson were offered positions as stores clerks. Stores clerks are required to work both nights and weekends. At their previous jobs with Oregon Steel, neither Hunker nor Wilson worked anything but the weekday shift. This record supports the Board’s finding. See NLRB v. Rockwood & Co., 834 F.2d 837, 841 (9th Cir.1987) (holding that two jobs were not substantially equivalent in part because one was on a more “onerous shift” — the graveyard shift).

We GRANT ENFORCEMENT of the Board’s order in full.

1 . Section 8 of the National Labor Relations Act provides:

(a) It shall be an unfair labor practice for an employer—

(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this title;

(3) by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization. ...

2 . "To make apparent or clear by evidence, to prove.” Black's Law Dictionary 1379 (6th ed. 1990) (emphasis added).

3 . Accord Waterbary Hosp. v. NLRB, 950 F.2d 849, 855 (2d Cir.1991); Newport News Shipbuilding and Dry Dock Co. v. NLRB, 738 F.2d 1404, 1408 (4th Cir.1984); NLRB v. S. Greyhound Lines, 426 F.2d 1299, 1302 (5th Cir.1970); Wright Tool Co. v. NLRB, 854 F.2d 812, 813-14 (6th Cir.1988); NLRB v. Augusta Bakery Corp., 957 F .2d 1467, 1473 (7th Cir.1992); Randall v. NLRB, 687 F.2d 1240, 1245 & n. 7 (8th Cir.1982), cert. denied, 461 U.S. 914, 103 S.Ct. 1892, 77 L.Ed.2d 282 (1983); Midwest Solvents, Inc. v. NLRB, 696 F.2d 763, 765-67 (10th Cir.1982); Eastern Air Lines v. Air Line Pilots Ass’n Int’l, 920 F.2d 722, 725 (11th Cir.1990), cert. denied, 502 U.S. 901, 112 S.Ct. 278, 116 L.Ed.2d 229 (1991).