Before: Wald, Silberman, and Rogers, Circuit Judges.
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 11, 1995
On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board
Opinion for the Court filed by Circuit Judge Silberman.
Local 32B-32J, Service Employees International Union, AFL-CIO, petitions for review of a National Labor Relations Board decision holding that the Local's demand for arbitration against Nevins Realty Corp. was an unfair labor practice in violation of Section(s) 8(b)(4)(ii)(B) (secondary boycott) of the National Labor Relations Act, and imposing a broad cease and desist order and attorney's fees on the Local. We deny the petition as to the violation and the attorney's fee award, but grant the petition as to the scope of the cease and desist order.
The Local has represented a superintendent and (for some years) a porter employed by Nevins at a building in Brooklyn since 1965. The Local and Nevins have signed successive collective bargaining agreements - using the Local's form contract - for these two employees. The form contract lists categories of work under the Local's jurisdiction - including porters, matrons, and cleaning persons - but was modified in early versions by inserting riders to indicate that only the superintendent and porter were covered and by deleting references to other categories of service employees. The agreement for January 1, 1987, through January 31, 1990, did not delete these other work categories, although an unnumbered inserted sheet of paper stated that "This agreement covering the Superintendent shall expire December 31, 1989."
Nevins has always contracted out the cleaning work and the cleaning subcontractors have consistently employed Local members. In 1989, a dispute arose over whether the agreement covered the subcontractor's employees. Nevins had become dissatisfied with the services of the cleaning subcontractor, ISS Maintenance. The Local, hearing that Nevins wanted to replace ISS, told Nevins that under the agreement's subcontracting clause, Nevins must employ a union subcontractor that would maintain the wage and benefit structure. *fn1 Nevins subsequently retained a new union subcontractor, Guardian Service Industries, Inc., but also filed a demand for arbitration over the interpretation of the contract, claiming the cleaning work was not "heretofore performed" by bargaining unit employees and was therefore not protected by the subcontracting clause. The Local sent Nevins a letter stating that Nevins did not have to employ a union subcontractor, but that any subcontractor chosen must comply with the terms of the subcontracting clause by hiring the former employees and providing the same wage and benefit structure. Before there was any resolution of the matter, Nevins withdrew its arbitration demand.
In 1990, Nevins refused to renew the contract because it did not delete references to other categories of employees; Nevins reasserted that the contract should cover only the superintendent and porter and not the employees of any cleaning subcontractor. No new agreement was signed, but the previous contract continued in force under an "Evergreen Clause." *fn2 Nevins again became dissatisfied with the cleaning subcontractor, and replaced Guardian with Golden Mark Maintenance, Ltd., who employed members of a rival union. The Local had an ongoing dispute with Golden over Golden's refusal to hire its members. The Local promptly wrote Nevins, reasserting its position that the new subcontractor must hire the old employees and provide the same wage and benefit structure, although the cleaning subcontractor was not obliged to sign an agreement with the Local. (The Local also told Golden that it represented the former cleaning employees and demanded that Golden hire them in compliance with the subcontracting clause.) When Nevins did not respond, the Local filed a demand for arbitration, alleging that Nevins had breached the contract's subcontracting clause by failing to require Golden to hire the former employees and maintain the wage and benefit structure. Nevins then filed an unfair labor practice charge with the Board. The Regional Director issued a complaint and the Local immediately halted the arbitration proceedings pending the outcome of the unfair labor practice claim.
The ALJ determined that the Local had violated Section(s) 8(b)(4)(ii)(B) by making the demand for arbitration because the work in question had never been done by members of the bargaining unit and therefore was not fairly claimable. Local 32B-32J, Service Employees Int'l Union and Nevins Realty Corp., reported at 313 N.L.R.B. 392 (1992). The object of the arbitration demand accordingly was not to preserve bargaining unit work with Nevins, but to further the Local's position in its primary labor dispute with Golden. The Local's resort to arbitration had an illegal objective because the contract interpretation the Local sought would necessarily violate Section(s) 8(e) as a "hot cargo" agreement. It was therefore inappropriate under Bill Johnson's Restaurants, Inc. v. NLRB, 461 U.S. 731, 740-44, 748-49 (1983), to allow the arbitration to proceed. The ALJ issued a broad cease and desist Order based on "the policy of the Union to interpret and apply its industry-wide collective-bargaining agreement in a consistent and uniform manner," Local 32B-32J, 313 N.L.R.B. at 403, and required that the Local withdraw its demand for arbitration and reimburse Nevins for "all reasonable expenses and legal fees, with interest, incurred in defending against the arbitration demand," id. *fn3
The Local appealed, and the NLRB affirmed in a split decision. The Board noted that the arbitration "was not aimed at resolving a dispute involving Nevins' employees but rather was done to satisfy the [Local's] interests elsewhere.... [T]his secondary object is apparent on examination of the basis for [the Local's] grievance." Local 32B-32J, Service Employees Int'l Union and Nevins Realty Corp., 313 N.L.R.B. 392, 392 (1993). The Local's work preservation defense lacked merit because the work in question "had always been performed by employees of various ...