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Exxon Chemical Company v. National Labor Relations Board

October 26, 2004


On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board

Before: Ginsburg, Chief Judge, and Edwards and Rogers, Circuit Judges.

The opinion of the court was delivered by: Rogers, Circuit Judge

Argued September 16, 2004

After Exxon Chemical Company ceased operating its Bayway Chemical Plant in Linden, New Jersey because it formed a joint venture, the union representing certain Bayway employees filed three grievances alleging that Exxon had violated the parties' collective bargaining agreement ("CBA"). Exxon refused to arbitrate the grievances. The National Labor Relations Board ruled that the company had violated section 8(a)(1) and (5) of the National Labor Relations Act ("the Act"), 29 U.S.C. § 158(a)(1), (5). Relying on Velan Valve Corp., 316 N.L.R.B. 1273 (1995), Exxon petitions for review on the principal ground that its refusal to arbitrate was not an unfair labor practice as a matter of law. We deny the petition for review and grant the Board's cross-application for enforcement of its Order.


For over thirty years, the International Brotherhood of Teamsters, Local 887 ("the Union") represented the operating, mechanical, and maintenance employees at Exxon's Bayway Chemical Plant. Exxon's most recent CBA with the Union took effect on March 2, 1996, and was scheduled to expire on June 1, 1999, although it effectively terminated on December 31, 1998, due to the formation of a joint venture between Exxon and Shell Chemical Company. The formal grievance/arbitration procedures outlined in Articles 20 and 21 of the CBA defined "grievance" as "a claim by an employee or the Union that the Company has violated an express provision of this Agreement." These provisions also provided that "[a]lthough the Company hears a claim as a grievance, it does not waive its right to take the position that the claim is not a grievance." The CBA also set time limits for the Union to act or otherwise forfeit its right to arbitrate a grievance. It further provided that "[w]hen an employee is to be laid off ... [he/she] will receive six (6) months notice" and a severance allowance. Finally, the CBA stated, in Article 5, that "[t]his Agreement does not affect the [Company's] Benefit Program[, including its] Thrift Plan ... or the administration thereof. This provision, however, is not a waiver of such rights as the Union has to bargain concerning these programs."

In July 1996, Exxon announced to its employees that it was forming a joint venture, Infineum, to which it intended to sell its Bayway operation. On October 31, 1996, Exxon notified the Union that all Bayway employees it represented would be laid off when the joint venture became operational. Exxon provided updates about the impending layoffs over the next two years.

During that two-year period, Exxon and the Union engaged in "effects" bargaining regarding the joint venture. The parties principally discussed whether Infineum was bound by the CBA and the extent to which it would hire the current workforce, as well as the related issues of whether and when Exxon would have to escrow or sequester monies to cover severance payments. The information that the Union received during these sessions about Infineum's formation caused it to file numerous grievances and unfair labor practice charges, including alleging that Exxon had improperly denied severance pay and retirement benefits to employees after its notice of layoff. The "effects" bargaining resulted in an agreement on November 24, 1998 ("November Agreement"). The Union agreed to withdraw its pending grievances and unfair labor practice charges "relating to the formation of Infineum" and "not to initiate or reinstitute these or substantially similar claims against Exxon in any forum whatsoever." Exxon, in turn, provided job assurances for nine unit employees and agreed to pay all employees until December 31, 1998. The agreement also stated that the Union and Infineum would begin meeting with the aim of reaching a collective bargaining agreement by December 31, 1998, a task they accomplished on December 20, 1998.

On December 31, 1998, the last day Exxon operated its Bayway plant, Exxon laid off all unit employees and gave them their final paychecks, including severance pay. Exxon, however, did not provide a 6% matching contribution to the Thrift Fund for the severance pay as it did for regular pay, and it also decided to transfer the Thrift Fund to Infineum. On January 29, 1999, the Union orally notified Exxon of three grievances to be filed; written notification followed the next day. The grievances complained that Exxon (1) failed to provide the contractually-required six months' notice before layoff, (2) failed to match the employees' thrift contributions from severance payments, and (3) unilaterally decided to transfer the employees' thrift accounts to the Infineum savings plan. Exxon did not respond initially in writing to the grievances.

In a March 26, 1999, letter to William Goodhart, an Exxon labor relations coordinator, Union trustee Al DeFreece formally requested arbitration on behalf of the Union. Exxon responded by letter of April 29, 1999, with Goodhart rejecting the request for arbitration on the grounds that the grievances were untimely, the November Agreement precluded the notice grievance, and the grievances relating to the thrift accounts were either raised or should have been raised during "effects" bargaining. DeFreece responded by letter of May 12, 1999, requesting arbitration and that Exxon make arrangements to select arbitrators. Upon receiving no response from Exxon, the Union's attorney attempted to obtain a designation by the American Arbitration Association ("AAA"). Goodhart responded by letter of July 2, 1999, that the grievances were not arbitrable, and Exxon's attorney reiterated this position by letters of July 6, July 26, and August 10, 1999, in response to the Union's continued attempt to pursue arbitration through the AAA. When the AAA declined to proceed with arbitration, the Union filed an unfair labor practice charge on September 1, 1999, alleging that Exxon refused to abide by the CBA's grievance/arbitration process to resolve the grievances.

After an evidentiary hearing, an Administrative Law Judge ("ALJ") found that the charge was timely because the Union did not have "clear and unequivocal notice of a violation of the Act" prior to March 1, 1999 (six months before the charge was filed on September 1), and that the "grievances are clearly covered by the grievance-arbitration provisions under the collective bargaining agreement." The Board agreed the charge was timely and, over Chairman Battista's dissent, also agreed that by refusing to select an arbitrator and to arbitrate the grievances, Exxon unilaterally abandoned or repudiated the grievance/arbitration procedure in violation of section 8(a)(1) and (5). The Board ordered Exxon to, among other things, submit the three grievances to arbitration and participate in the selection of an arbitrator. Exxon now petitions for review and the Board has filed a crossapplication for enforcement of its Order.


Under section 8(a)(5) of the Act, it is an unfair labor practice for an employer to refuse to bargain with its employees' chosen representative, 29 U.S.C. § 158(a)(5), and an employer who violates section 8(a)(5) also, derivatively, violates section 8(a)(1). See NLRB v. Centra, Inc., 954 F.2d 366, 367 n.1 (6th Cir. 1992); NLRB v. Newark Morning Ledger Co., 120 F.2d 262, 265 & n.1 (3d Cir. 1941); cf. Metro Edison Co. v. NLRB, 460 U.S. 693, 698 n.4 (1988). The court will uphold the Board's decision whether to assert jurisdiction over an employer's refusal to arbitrate so long as it is rational and consistent with the Act, and the Board's reasoning is adequate, rational, and not arbitrary. DaimlerChrysler Corp. v. NLRB, 288 F.3d 434, 444-45 (D.C. Cir. 2002); see also Carey v. Westinghouse Elec. Corp., 375 U.S. 261, 271 (1964). While the Board's interpretation of the scope of the parties' contractual agreement is subject to de novo review, Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 202-03 (1991), its findings of fact are conclusive if supported by substantial evidence in the record as a whole, Perdue Farms, Inc. v. NLRB, 144 F.3d 830, 834-35 (D.C. Cir. 1998); see also Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951). The court will overturn the Board's adoption of the ALJ's credibility determinations only if they "are `hopelessly incredible,' `self contradictory,' or `patently unsupportable.' " Cadbury Beverages, Inc. v NLRB, 160 F.3d 24, 28 (D.C. Cir. 1998) (quoting Capital Cleaning Contractors, Inc. v. NLRB, 147 F.3d 999, 1004 (D.C. Cir. 1998)).

We address at the outset Exxon's contention that the unfair labor practice charge was barred by the six-month limitations period in section 10(b) of the Act, 29 U.S.C. § 160(b). The statute begins to run when the unfair labor practice occurs. Leach v. NLRB, 54 F.3d 802, 806-07 (D.C. Cir. 1995); Teamsters Local Union No. 42 v. NLRB, 825 F.2d 608, 614-16 (1st Cir. 1987); NLRB v. Al Bryant, Inc., 711 F.2d 543, 547 (3rd Cir. 1983). Here, the unfair labor practice is Exxon's refusal to arbitrate. As the record makes clear, the Union did not request, and the employer therefore could not have refused, ...

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