598 F.2d 216
100 L.R.R.M. (BNA) 2583, 194 U.S.App.D.C. 297,
85 Lab.Cas. P 11,049
PLUMBERS AND STEAMFITTERS LOCAL 342, UNITED ASSOCIATION OF
JOURNEYMEN AND APPRENTICES OF the PLUMBING AND
PIPE FITTING INDUSTRY OF the UNITED
STATES AND CANADA, AFL-CIO, Petitioners,
v.
NATIONAL LABOR RELATIONS BOARD, Respondent.
No. 76-1968.
United States Court of Appeals,
District of Columbia Circuit.
Argued Dec. 6, 1977.
Decided Jan. 23, 1979.
John L. Anderson, San Francisco, Cal., with whom Peter D. Nussbaum, San Francisco, Cal., Patrick C. O'Donoghue, Washington, D. C., were on the brief, for appellants.
Alan Banov, Atty., N. L. R. B., John S. Irving, Gen. Counsel, John D. Burgoyne, Carl L. Taylor, Associate Gen. Counsel and Elliott Moore, Deputy Associate Gen. Counsel, Washington, D. C., were on the brief, for respondent.
Before BAZELON, LEVENTHAL and ROBINSON, Circuit Judges.
Opinion for the Court filed by BAZELON, Circuit Judge.
Dissenting opinion filed by LEVENTHAL, Circuit Judge.
BAZELON, Circuit Judge:
Petitioners, Steamfitters Local 342 (Steamfitters), challenge a decision by the NLRB, holding that Steamfitters' refusal to install a pipe system fabricated by a subcontractor violated § 8(b)(4)(B) and § 8(e) of the National Labor Relations Act, 29 U.S.C. §§ 158(b)(4)(B) and 158(e) (1976). The Board has cross-petitioned for enforcement of its Order. Because we are unable to determine from the Board's decision precisely what work Steamfitters was claiming for its members, we cannot determine whether the refusal to handle was unlawful, and accordingly, we remand to the NLRB to clarify its decision.
I.
C. Overaa (Overaa) is a general contractor primarily engaged in building water and sewage facilities. Overaa is a signatory to a multi-employer collective bargaining agreement (the Agreement) with Steamfitters Local 342 which represents Overaa's plumbers and pipefitters.
The Agreement contains several provisions which regulate the fabrication of pipe on projects covered by the Agreement. The provisions are in essence "union standards" clauses, limiting the subcontracting of certain fabrication work to sub-contractors whose employees enjoy terms and conditions of employment that compare favorably with those guaranteed to workers covered by the Agreement.
In 1973, the East Bay Municipal Utilities District (East Bay MUD) chose Overaa as the general contractor for the Moraga pumping station. The specifications for the plant called for pipes ranging in diameter from 17 to 72 , most to be cement lined and coated with lead paint. Overaa subcontracted the fabrication of the pipe to Conduit Fabricators, Inc. (Conduit), whose pipefitters were represented by Teamsters Local 490, and received wages below those received by members of Steamfitters under the Agreement. Conduit prepared plans and drawings that were approved by East Bay MUD, and work began. The process of fabricating the pipe to the required specifications comprised seven stages. Employees of Conduit performed some of this work; other specialized companies completed the remainder, both on and off Conduit's premises.
By February 1974 Conduit had built and delivered the pipe for the Moraga plant. On June 4, 1974, while the pipe was awaiting installation, Dennis Gifford, a business agent for Steamfitters' predecessor, Plumbers Local 159, informed Charles Burgin, Overaa's pipefitting foreman and a member of Steamfitters, not to handle the pipe fabricated under the subcontract to Conduit. At the same time, Gifford informed Overaa's job superintendent that the pipe was "unsuitable" for installation by Steamfitters. For a period of time after Steamfitters' initial refusal to install the pipe fabricated by Conduit, Overaa managed to work around the disputed pipe, but by July 15 no further work could go forward. On July 18, after negotiations between Overaa and the union, Steamfitters agreed to permit Overaa's pipefitters to install the pipe, while the union sought redress through the contract's grievance procedures. Work then resumed on the pumping station, and was completed early the following year.
On July 19 and 24, Conduit filed unfair labor practice charges against Steamfitters, based on the union's refusal to install the pipe. After a hearing, the Administrative Law Judge (ALJ) found that Steamfitters' refusal to handle the pipe fabricated by Conduit violated § 8(b)(4)(B) and § 8(e) of the National Labor Relations Act. The ALJ concluded that the refusal to install the pipe violated § 8(b)(4)(B) because Overaa had no "right of control" over the work subcontracted to Conduit. Therefore, in the ALJ's view, Steamfitters' action was not directed at Overaa, but rather was unlawful "secondary" pressure directed at Conduit. J.A. 403-04. The ALJ also held that the union's attempt to enforce the union standards clause in this case violated § 8(e) because the work in question was not "fairly claimable" by Steamfitters. J.A. 404.
The Board sustained the ALJ's conclusion that Steamfitters' action violated both § 8(b)(4)(B) and § 8(e). Plumbers and Steamfitters Local 342, 225 N.L.R.B. 1364 (1976). The Board rejected the ALJ's "right to control" analysis of the § 8(b)(4)(B) violation, since under its contract with East Bay MUD, Overaa had full control in its choice of subcontractors. Instead, the Board found that because the work was not "fairly claimable" by Steamfitters the Union had violated both § 8(b)(4)(B) and § 8(e). The Board adopted as its own the recommended order proposed by the ALJ. Steamfitters petitions this court to review the Board's Order and the NLRB cross-petitions for enforcement.
II.
In reviewing decisions of the NLRB, our function is to determine whether the decision of the Board is supported by substantial evidence on the record considered as a whole. The problem posed by the Board's decision in this case is to determine just what, in fact, the Board has decided. The Supreme Court has made clear and the Board acknowledges, that not all so-called "work preservation" agreements such as the union standards clause in the Agreement violate the National Labor Relations Act. "The touchstone (in determining whether a refusal to handle violates the Act) is whether the agreement or its maintenance is addressed to the labor relations of the contracting employer Vis-a-vis his own employees." National Woodwork Manufacturers' Ass'n v. NLRB, 386 U.S. 612, 645, 87 S.Ct. 1250, 1269, 18 L.Ed.2d 357 (1967). Where the objective of a union standards clause is directed to the employer, it is primary activity, prohibited by neither § 8(b) (4) nor § 8(e). As then Circuit Judge Wright observed in an opinion which foreshadowed the Supreme Court's decision in National Woodwork:
Resolution of the difficult issue of primary Versus secondary activity . . . involves consideration of two factors: (1) jobs fairly claimable by the bargaining unit, and (2) preservation of those jobs for the bargaining unit. If the jobs are fairly claimable by the unit, they may, without violating either § 8(e) or § 8(b)(4)(A) or (B), be protected by provision for, and implementation of, no-subcontracting or union standards clauses in the bargaining agreements.
Thus, the liminal question in assessing the legality of the attempt to enforce a work preservation agreement is to determine what work the union in fact has claimed. On this critical question, however, the Board's decision is fatally ambiguous.
The Board adopted the recommended Order of the ALJ, who had directed Steamfitters to cease from "giving effect to the work preservation provisions of its agreement with C. Overaa & Co. in the manner herein found unlawful." J.A. 405. Neither the ALJ's opinion nor the Board's decision explicitly determines the precise scope of Steamfitters' claim, and therefore it is unclear what conduct the Board has proscribed.
The interpretation that flows most readily from the opinions of both the Board and ALJ is that Steamfitters conduct was prohibited because it had claimed the cutting and welding work on the lined and coated pipes, work that the ALJ viewed as an integral part of the larger process of cutting, welding, hydrostatically testing, stress relieving and lining the pipe. However, counsel for the Board, in its brief to this court and in oral argument, suggested a different interpretation: that Steamfitters committed an unfair labor practice because it had claimed the "entire fabrication of an integrated unit of stress-relieved, lined, tested and coated pipe." Counsel had recognized that had Steamfitters limited its claim to cutting and welding, such work might well be "fairly claimable" by Steamfitters. At first blush, accepting counsel's interpretation seems attractive, especially since Steamfitters has intimated that it might not oppose the order so interpreted. Nevertheless, when we are called on to review the Board's decision, we cannot simply adopt counsel's suggested interpretation as an expedient to eliminate the ambiguity left unresolved by the Board. Whatever merit there may be in an interpretation offered by counsel, "(t)he integrity of the administrative process demands no less than that the Board, not its legal representative" perform the functions entrusted to the Board. NLRB v. Food Store Employees, 417 U.S. 1, 9, 94 S.Ct. 2074, 2079, 40 L.Ed.2d 612 (1974).
For reviewing courts to substitute counsel's rationale or their discretion for that of the Board is incompatible with the orderly function of the process of judicial review. Such action would not vindicate, but would deprecate the administrative process for it would "propel the court into the domain which Congress has set aside exclusively for the administrative agency." Securities & Exchange Commission v. Chenery Corp. (332 U.S. 194, 196, 67 S.Ct. 1575, 1760, 91 L.Ed. 7995 (1947)).
NLRB v. Metropolitan Ins. Co., 380 U.S. 438, 444, 85 S.Ct. 1061, 1064, 13 L.Ed.2d 951 (1965). What is true for post hoc rationalization is A fortiori true for counsel's suggested determination of the substance of an administrative decision, particularly where the uncertainty turns on the resolution of questions of fact, a task entrusted by the Act to the ALJ in the first instance, and ultimately to the Board, subject to our limited review. To resolve the ambiguity in the Board's decision would be to intrude into the function which Congress has reserved to the Board to decide initially what acts constitute unfair labor practices.
Our decision to remand this case to the Board for clarification comports with the fundamental relation between the administrative process and reviewing courts. "The administrative process will best be vindicated by clarity in its exercise." Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 197, 61 S.Ct. 845, 853, 85 L.Ed. 1271 (1941). As the Supreme Court observed in SEC v. Chenery Corp. (Chenery II ), 332 U.S. 194, 196-97, 67 S.Ct. 1575, 1577, 91 L.Ed. 995 (1947):
It will not do for a court to be compelled to guess at the theory underlying the agency's action; nor can a court be expected to chisel that which must be precise from what the agency has left vague and indecisive. In other words, "We must know what a decision means before the duty becomes ours to say whether it is right or wrong." United States v. Chicago, M., St. P. & P. R. Co., 294 U.S. 499, 511, 55 S.Ct. 462, 79 L.Ed. 1023 (1935).
A remand in this case is appropriate not only to foster orderly administrative process, but also to avoid an unnecessary decision on novel and difficult questions of law under the Act. While the Supreme Court has noted that work preservation agreements with primary objectives are not prohibited by either § 8(b)(4) or § 8(e), the precise contours of permissible agreements have yet to be defined. We think it inconsistent with Congress' general scheme for judicial review under the Act to address such complex and important questions of statutory interpretation without the benefit of the agency's expertise in the first instance.
III.
Should the Board conclude on remand that Steamfitters has claimed only cutting and welding work, it will be necessary for the Board to define more clearly than in its first decision the relevant unit of employees for determining whether the work is fairly claimable by Steamfitters, a central issue in assessing whether a work preservation clause is primary.
If, on the other hand, the Board endorses the interpretation of its prior decision given by its counsel to this court, the Board of course will bear its customary responsibility to base its conclusion on substantial evidence on the record taken as a whole. To facilitate the process of review, and to assure that on remand the Board's decision reflects a careful consideration of the administrative record, the Board should indicate plainly the significance of crucial facts in the record which support the Board's determination of what work Steamfitters in fact claimed under the contract and through its refusal to handle pipe fabricated by Conduit.
The cause is remanded to the Board for further proceedings consistent with this opinion.
So ordered.
LEVENTHAL, Circuit Judge, dissenting:
I must respectfully disagree with my brethren as to the proper disposition of this case.
Briefly stated, this is a case where the National Labor Relations Board ordered Plumbers and Steamfitters Local 342 (Steamfitters) to cease and desist from its attempts to obtain work that was not fairly claimable and from attempting to enforce that claim by compelling an employer not to deal with a subcontractor.
The Board's opinion contains two themes. One is that the union had claimed not only the cutting and welding work which it had done in the past, but all of the work involved in fabricating the pipe, which in this particular context included the additional tasks of coating, annealing, and hydrostatic testing. The Board found this work was not fairly claimable. This conclusion was supported by substantial evidence. Moreover, since it is plain that whatever the relevant bargaining unit this work exceeded all historical justifications permissible under the work preservation doctrine, a Board injunction was fully justified. It is on this basis I would affirm.
The other theme of the Board is that even assuming that the union had claimed only cutting and welding, it still would have been in violation of the law. This theme would raise serious legal questions, as the majority notes.
The Board's mandate does not clearly state which of its alternative themes was relied on, and merely prohibits the continuance of the activity found unlawful by the Board. The Board's appellate counsel argues, in support of the Board's order, that it is to be construed narrowly, as prohibiting the claim for complete fabrication. Given this interpretation, the order is one that union counsel stated at oral argument would be acceptable. Obviously, if the order had been expressly limited in this manner, there would have been no appeal.
In these circumstances, it is only common sense to conclude that the narrow interpretation that is being put forward by the Board's counsel, and defines the order in a manner acceptable to the union, should be accepted by the court if it is not unreasonable, and that the case should be affirmed on that basis without further ado.
This common-sense solution is not followed by the majority. Instead, there must be at least one more round of proceedings before this case is finally disposed of. This the majority says, is required in the name of principle, and the common-sense solution cannot be followed because it would mean that the court would be intruding into the domain of the administrative agency.
With all due respect, I submit that good sense does not necessarily mean bad law, and that the common-sense solution is not only congruent with principle, but specifically is in accordance with the approach used by the Supreme Court in J. I. Case Co. v. NLRB, 321 U.S. 332, 64 S.Ct. 576, 88 L.Ed. 762 (1944). In Case, the Court reviewed an order of the NLRB that would have been overbroad unless interpreted as suggested by appellate counsel. The Court accepted that suggested interpretation and modified the Board's order accordingly, 321 U.S. at 341, 64 S.Ct. at 582:
We agree (with the suggested interpretation) but the literal language of the order may well be read in quite different meaning, especially when separated from findings and standing alone in the Court's enforcement order. It then becomes the language of the Court, and the Court would not be bound to look upon the Board's construction as its own. Questions of construction had better be ironed out before enforcement orders issue than upon contempt proceedings. A party is entitled to a definition as exact as the circumstances permit of the acts which he can perform only on pain of contempt of court. Nor should he be ordered to desist from more on the theory that he may violate the literal language and then defend by resort to the Board's construction of it. Court's orders are not to be trifled with, nor should they invite litigation as to their meaning. It will occur often enough when every reasonable effort is made to avoid it. Where, as here, the literal language of the order goes beyond what the Board admits was intended, correction should be made.
It bears repetition that the Case opinion refers to the submission by appellate counsel as "what the Board admits was intended."
In the exercise of its judicial functions a court may properly accept the narrowing interpretation tendered by agency counsel. This is particularly appropriate in the NLRA enforcement scheme since the Board's General Counsel has unreviewable discretion to refuse to institute an unfair labor practice complaint. Vaca v. Sipes, 386 U.S. 171, 182, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967). We now know that an enforcement proceeding would never have been begun on the basis of a broader interpretation.
In Case the Supreme Court also recognized another point, that the power to enforce a NLRB order is equitable in nature; the court grants the relief sought only if consistent with the principles of equity. This adherence to equitable principles is premised on the recognition that an enforcement decree is akin to an injunction it commands obedience to a specific course of conduct under penalty contempt. Because of the potential for the imposition of the harsh sanction of contempt, the duties prescribed by the judgment of an enforcement court must be specified clearly. Case, supra, 321 U.S. at 341, 64 S.Ct. 576. This doctrine serves to obviate unnecessary intrusion into private activity, to avoid possible deterrence or penalizing of legitimate acts and to maintain respect for judicial decrees.
In exercising its function of determining the form of its enforcement decree, the court takes into account and gives deference to the substantive judgment of the agency. We are not "labor courts" and the Board's findings of fact, if supported by substantial evidence, must be affirmed. Similarly, the enforcement court defers to the Board's choice of the proper remedy, and will refrain from adding new elements to those ordered by the Board.
In sum, the court's function represents a balance between independent responsibility for the form of its enforcement decree and deference to the substantive judgment of the agency.
Contrary to the majority's assertions, affirming the Board's decision on the construction suggested by the Board's counsel does not violate the doctrine of SEC v. Chenery Corp., 318 U.S. 80, 63 S.Ct. 454, 462, 87 L.Ed. 626 (1943). Under Chenery, an administrative order cannot be upheld "unless the grounds upon which the agency acted in exercising its powers were those upon which its action can be sustained." The narrow interpretation presented to us by agency counsel is a ground "upon which the agency acted." The Board specifically found that Steamfitters attempted to claim the entire fabrication process and that such work was not fairly claimable. It remains a "ground upon which the agency acted," and a valid one, even though the Board made an alternative ruling (of dubious validity) that even if the union had claimed only the limited tasks of cutting and welding the work would still not be fairly claimable.
Accepting the interpretation advanced by the Board's counsel would not violate the rule against Post hoc rationalizations by agency counsel. That rule is merely a corollary of the Chenery doctrine; its purpose is to prevent the courts from deciding discretionary issues that have not been decided by the agency. Burlington Truck Lines v. U. S., 371 U.S. 156, 168-69, 83 S.Ct. 239, 9 L.Ed.2d 207 (1962). In the case before us, the Board exercised its discretion: it found that the entire fabrication process both had been claimed and was not fairly claimable, and these determinations are supported by substantial evidence and constitute a valid exercise of discretion.
While the NLRB order in this case is not entirely free from ambiguity, the Case ruling teaches us that our enforcement function includes the authority to tailor that order by adopting a narrow interpretation. I think it entirely reasonable to say that since the Board did not make it clear that it intended a broad injunction, the narrow interpretation tendered by NLRB counsel should be adopted as resolving any ambiguity in a reasonable, sound and proper way. The propriety of this course is underscored by the fact that it is an interpretation that avoids serious doubts as to validity, for under the narrow interpretation the order is valid notwithstanding the failure to define the bargaining unit, whereas under the broader interpretation that failure raises serious questions of validity. The union's counsel does not protest the decree as narrowly construed and this is helpful, although not controlling. The approach advocated by the majority creates unnecessary work, and elevates abstract logic over common sense and good judgment. The court should enforce the Board's order as construed to forbid claims by Steamfitters to the whole task of fabricating lined and coated pipe.