Pacemaker Yacht Company, A Division of Mission Marine, Inc. v. National Labor Relations Board, 663 F.2d 455, 3rd Cir. (1981)
Pacemaker Yacht Company, A Division of Mission Marine, Inc. v. National Labor Relations Board, 663 F.2d 455, 3rd Cir. (1981)
Pacemaker Yacht Company, A Division of Mission Marine, Inc. v. National Labor Relations Board, 663 F.2d 455, 3rd Cir. (1981)
2d 455
108 L.R.R.M. (BNA) 2817, 92 Lab.Cas. P 13,059
Pacemaker Yacht Company (the Company) petitions for review of a final order
of the National Labor Relations Board (the Board) directing the Company to
cease and desist from restraining or coercing employees in the exercise of rights
protected by section 7 of the National Labor Relations Act, 29 U.S.C. 157
(1976), and to reinstate employees who had been fired for striking. The Board
has cross-applied for enforcement of its order. This court has jurisdiction under
29 U.S.C. 160(e) & (f) (1976).
I.
2
In 1978, the Company and Teamsters Union 158 (the Union) were parties to a
collective bargaining agreement covering employees at two plants in New
Jersey. The agreement required the Company to contribute forty cents per hour
worked by each employee to the Teamsters Health and Welfare Fund of
Philadelphia and Vicinity-Local 158. The Fund retained an independent
insurance carrier to underwrite employee health and welfare benefits. The
Company was not involved in the administration of the Fund, and at all times
fulfilled its obligation under the collective bargaining agreement.
In early 1978, the Fund failed to pay premiums to the insurance carrier, and
consequently the underwriter refused to pay the claims of the employee
beneficiaries. On June 20, 1978, most employees at both plants went on strike
in protest of the Fund's delinquency. Throughout the day, Union officials
advised striking employees that the work stoppage violated the collective
bargaining agreement and urged them to return to work. The Company mailed a
notice to all employees advising them that the strike violated Article X of the
collective bargaining agreement, which prohibited "all strikes, picketing ... or
other interruption of the Company's operations," and stating that any employee
who failed to report to the next shift would "be considered to have quit his job"
and would be permanently replaced. One hundred and twenty-six employees
who continued to strike after receiving this notice were discharged. The Union
submitted a grievance on behalf of these employees, which proceeded to
arbitration pursuant to the collective bargaining agreement. The arbitrator found
that the strike violated Article X of the collective bargaining agreement but
ruled that the discharge penalty was too severe, and ordered the Company to
reinstate all strikers except those who instigated the strike. The Company
complied with the award, and reinstated all but twenty employees who were
identified as instigators in a subsequent grievance procedure.
The Union filed an unfair labor practice charge against the Company, alleging
that the discharges restrained employees in their exercise of protected activity in
violation of section 8(a)(1) of the Act. The administrative law judge dismissed
the complaint, finding that the employees had waived their right to strike in
Article X. The Board disagreed, and held that the no-strike clause in Article X
did not waive employees' right to strike over the Fund's failure to pay insurance
premiums. The Board examined the collective bargaining agreement and
extrinsic evidence and concluded that "the union could not have made a clear
and unmistakable waiver of the employees' right to strike to put pressure on the
Fund since the parties never foresaw the possibility of such a situation."
Pacemaker Yacht Co., 253 N.L.R.B. No. 95, 1980-81 Labor L.Rep. (CCH) P
17,733, at 28,579. Consequently, the Board found that the discharges violated
section 8(a)(1) and ordered the Company to reinstate the employees with full
seniority and backpay. The Company petitioned for review of that order and the
Board cross-applied for enforcement.
II.
5
The Company urges that the Board's order should not be enforced for three
reasons. First, the Company disputes the Board's finding that the no-strike
clause in Article X of the collective bargaining agreement did not constitute a
waiver of the right to strike over the Fund's failure to pay premiums to the
insurance carrier. Second, it argues that the Board erred in failing to defer to the
arbitrator's award in accordance with the standards established in Spielberg
Manufacturing Co., 112 N.L.R.B. 1080 (1955). Finally, the Company contends
that the strike was not protected activity under section 7 of the Act because the
work stoppage involved a matter beyond its control. Because we find the
waiver issue dispositive, it is unnecessary to address the Company's other
arguments.
III.
6
Assuming, without deciding, that the strike at issue was protected activity
under section 7 of the Act, we start with the proposition that generally
employees may, through the collective bargaining process, waive the right to
engage in this protected activity. Mastro Plastics Corp. v. NLRB, 350 U.S. 270,
280, 76 S.Ct. 349, 356, 100 L.Ed. 309 (1956). We have cautioned, however,
that such a waiver must be "clear and unmistakable and that explicit language
will not be read expansively." Delaware Coca-Cola Bottling Co. v. General
Teamsters Local 326, 624 F.2d 1182, 1187-88 (3d Cir. 1980).
In Delaware Coca-Cola, we held that a single, broad, generally-worded nostrike clause does not constitute a clear and unmistakable waiver of the right of
employees to engage in a sympathy strike. 624 F.2d at 1187. Our holding was
squarely grounded upon the application of the principle of coterminous
interpretation to a single express no-strike clause. Under this rule of contract
interpretation, a no-strike clause is presumed to be no broader than the
arbitration clause in a collective bargaining agreement. See Gateway Coal Co.
v. United Mine Workers, 414 U.S. 368, 382, 94 S.Ct. 629, 639, 38 L.Ed.2d 583
(1974). Underlying this presumption is the theory that a no-strike clause is
generally a quid pro quo for an arbitration clause. See Textile Workers Union v.
Lincoln Mills, 353 U.S. 448, 455, 77 S.Ct. 912, 917, 1 L.Ed.2d 972 (1957). In
Delaware Coca-Cola, we were unable to find any extrinsic evidence indicating
that the parties had intended the no-strike clause to be broader than the
arbitration clause and thus held that since the sympathy strike was not
arbitrable, it was not barred by the no-strike clause.
8
ARTICLE IX
GRIEVANCE PROCEDURE
10 Should difference arise between the Company and its employees or between the
9.1
Company and the Union as to the interpretation or application of the provisions of
this Agreement, there shall be no suspension or stoppage of work and an earnest
effort shall be made to settle such differences immediately or in the manner
described below. (grievance procedures follow)
ARTICLE X
NO STRIKES OR LOCKOUT
11 So long as this Agreement is in effect, the Company agrees that there shall be
10.1
no lockouts and the Union agrees that there will be no strikes, picketing, slow
downs, deliberate curtailment of production, work stoppages of any kind or other
interruption of the Company's operations. In the event one or more employees fail to
abide by the provisions of this article, the Company retains full right to take any
disciplinary action it deems necessary, including discharge.
12 In the event that there is any disagreement as to whether or not the employee
10.2
has participated in such conduct, then this shall be deemed to be a grievance to be
settled in accordance with Article IX.
13
Co., 1980-81 Labor L.Rep. (CCH) P 17,733, at 23,580. Nonetheless, the Board
concluded that the "absence of evidence that the parties either considered or
discussed whether the no-strike clause would cover the situation which arose
here indicates that no clear and unmistakable waiver of the right to strike over
the Fund's inaction occurred." Id. Even apart from the general rule that courts
"owe no particular deference to the Board" on matters of contract interpretation,
Dow Chemical Co. v. NLRB, 636 F.2d 1352, 1358 (3d Cir. 1980), we believe
that the Board erred as a matter of law in concluding that Article X did not bar
the strike over the Fund's delinquency.
14
15
Extrinsic evidence provides additional support for our interpretation of the nostrike clause. Recognizing the "danger inherent in utilizing (evidence about the
conduct of the parties at the time of the strike) because it may not reflect the
parties' intention at the time of the execution of the contract," Delaware CocaCola, 624 F.2d at 1189, we note that the Union officials consistently advised
employees that their action violated the no-strike clause in the collective
bargaining agreement. The Union also apparently conceded this point before
the arbitrator. Unlike the ambiguous extrinsic evidence considered in Delaware
Coca-Cola, 624 F.2d at 1189-90, the statements of Union officials here, who
had signed the collective bargaining agreement, leave little doubt that they
regarded the strike as a violation of the collective bargaining agreement.
17
Although the Union's statements must be considered in light of the fact that the
strike resulted from employee dissatisfaction over the Union's administration of
the Fund, we believe they are entitled to some probative value. Cf. Iowa Beef
Processors v. Amalgamated Meat Cutters, 597 F.2d 1138, 1144 (8th Cir.), cert.
denied, 444 U.S. 840, 100 S.Ct. 79, 62 L.Ed.2d 52 (1979) (finding statements
by union officials that strike violated no-strike clause probative of contractual
intent where agreement required union to declare all strikes unauthorized).
18
Finally, the state of the law at the time the agreement was executed supports
the inference that by including two separate no-strike clauses the parties
intended to bar strikes over both arbitrable and nonarbitrable disputes. At the
time the contract was negotiated, the principle of coterminous interpretation
had been adopted by the Board and by at least one court. See Gary Hobart
Water Corp. v. NLRB, 210 N.L.R.B. 742 (1974), enforced, 511 F.2d 284, 288
(7th Cir.), cert. denied, 423 U.S. 925 (1975).1 From this we infer that the
inclusion of two no-strike clauses, one expressly tied to the arbitration clause
and one prohibiting all strikes, was intended to waive the employees' right to
strike over unforeseeable disputes, including the dispute over the Fund's failure
to pay insurance premiums.
19
negotiations, under the Board's view, employees would have been incapable of
waiving the right to strike over this dispute at all. We believe there is no basis
for limiting employees' ability to waive the right to strike over nonarbitrable
disputes simply because they were unforeseeable at the time the contract was
negotiated. Cf. United Steelworkers of America v. Warrior and Gulf Navigation
Co., 363 U.S. 574, 578-80, 80 S.Ct. 1347, 1350-51, 4 L.Ed.2d 1409 (1960) (a
collective bargaining agreement "is a generalized code to govern a myriad of
cases which the draftsmen cannot wholly anticipate.").
20
21
We thus hold that the general no-strike clause in Article X of the collective
bargaining agreement, not limited by the arbitration clause, constitutes a waiver
of the employees' right to strike over the Fund's failure to pay insurance
premiums.
IV.
22
The Company's petition for review will be granted and the Board's crossapplication for enforcement will be denied.
23
24
24
I.
25
Pacemaker in this case found itself caught in the crossfire between its
employees and their union. The company had fulfilled its contractual
responsibility of making contributions to the union's health and welfare fund,
but the Fund-over which Pacemaker had no control-had failed to pay premiums
to the Fund's insurance carrier, Republic National Life Insurance Co. As a
result, Republic refused to pay the medical and hospital claims of employee
beneficiaries.
26
The record discloses that the Fund, the Teamsters Health and Welfare Fund of
Philadelphia and Vicinity-Local 158, was, practically speaking, twice removed
from Pacemaker. Under its agreement with the union, Pacemaker, for each hour
worked by each of its employees, paid forty cents to the Fund, which was an
entity separate from the company and the union. It is conceded that Pacemaker
at all times faithfully complied with this obligation. The Fund was responsible
for selecting the insurance carrier and for paying the premiums for continued
medical and hospital coverage of the employees. Thus, when the Fund failed to
pay those premiums and Republic thereupon discontinued making benefit
payments to the employees, Pacemaker was powerless to remedy the problem.
The situation was well described by the union's lawyer, who told the Board's
administrative law judge:
This caused a problem with the employees because the employees started
getting contacts from various doctors and hospitals that the bills were not
getting paid. The employees went to the union to try to resolve the problem.
The union tried to make its best efforts to resolve the problem. Obviously, if the
fund itself being a separate entity was not able to make the payments, then the
union could not really do too much for the employees.
29
App. at 301a-302a. Clearly, if the union could not bring the situation under
control, Pacemaker, which was still another step removed from the Fund, could
not.
30
It was in this context that the employees became restive. As their dissatisfaction
with the administration of the Fund grew, the company sought to have the
union resolve the Fund's problems, but these endeavors were unsuccessful.
When no signs of progress were forthcoming, Pacemaker's employees, in an
attempt to put pressure on the union to remedy the Fund's delinquency, struck
Pacemaker and demonstrated outside one of Pacemaker's plants as well as the
union's headquarters. The strike-which, as we hold today, violated the no-strike
clause of the collective bargaining agreement-forced the company temporarily
to close both of its plants.
31
Thus, the record shows that the employees struck the company even though
their grievance was not with Pacemaker, but was with the Fund. They inflicted
a grave economic wound on their financially shaky employer (the company
subsequently initiated Chapter XI bankruptcy proceedings) despite the fact that
Pacemaker had no power to give them the relief they demanded and could not
even influence the entity which did have that power.
II.
32
Section 7 of the Act provides that "(e)mployees shall have the right ... to engage
in ... concerted activities for the purpose of collective bargaining or other
mutual aid or protection ...." 29 U.S.C. 157 (1976). However, employee
activities aimed at improving terms and conditions of employment can lose
their section 7 protection if carried out in a disruptive or otherwise inappropriate
manner. See Emporium Capwell Co. v. Western Addition Community Org.,
420 U.S. 50, 95 S.Ct. 977, 43 L.Ed.2d 12 (1975) (separate bargaining by
minority group of employees would undermine principle of collective
bargaining); NLRB v. Local Union No. 1229, IBEW (Jefferson Standard ), 346
U.S. 464, 477-78, 74 S.Ct. 172, 179, 98 L.Ed. 195 (1953) (disloyal employees
distributed leaflets disparaging quality of employer's product; "the means used
by the (employees) ... have deprived (them) of the protection of (section 7)");
Sullair P.T.O., Inc. v. NLRB, 641 F.2d 500 (7th Cir. 1981) (employee's
obscene language and disruptive behavior unprotected); Texas Instruments, Inc.
v. NLRB, 637 F.2d 822 (1st Cir. 1981) (employees disseminated confidential
wage information); National Vendors v. NLRB, 630 F.2d 1265, 1268 (8th Cir.
"(T)he general rule adopted by the courts has been to look at a variety of
factors, including the reasonableness of the means of protest, in order to
determine if the employees' activities were protected." Abilities & Goodwill,
supra, 612 F.2d at 9. As the court stated in Texas Instruments, supra, 637 F.2d
at 830, "Not all conduct that can, in some general sense, be characterized as an
exercise of a right enumerated in section 7 is afforded the protection of the
Act.... (R)ights under section 7 must in each instance be understood in relation
to the concrete facts of a particular case" (citations omitted).
34
The argument for denying employee actions protected status is even stronger
when the actions of employees unnecessarily and unfairly inflict economic
harm on an employer who is neither responsible for the complained-of
condition nor has any power to correct it. See NLRB v. Bretz Fuel Co., 210
F.2d 392, 397 (4th Cir. 1954). As one commentator has written, "The argument
that economic pressure should be unprotected (where the employer lacks
interest or control) is ... convincing." Getman, The Protection of Economic
Pressure by Section 7 of the National Labor Relations Act, 115 U.Pa.L.Rev.
1195, 1221 (1967).
35
36
The teaching of Eastex, Inc. v. NLRB, 437 U.S. 556, 98 S.Ct. 2505, 57 L.Ed.2d
428 (1978), a case cited by both parties, is not to the contrary. In Eastex, the
most recent Supreme Court expression concerning protected activity, the Court
held that an employer could not prohibit the distribution, in nonworking areas
of the employer's property during nonworking time, of a union newsletter that,
Eastex argued that the distribution of the newsletter did not come within the
"mutual aid or protection" language of section 7 because the newsletter did not
relate to a specific dispute between the employees and their own employer over
an issue which the employer had the right or power to affect. Id. at 563, 98
S.Ct. at 2511. The Court rejected the employer's argument, finding "no warrant
for (the company's) view that employees lose their protection under the 'mutual
aid or protection' clause when they seek to improve terms and conditions of
employment or otherwise improve their lot as employees through channels
outside the immediate employee-employer relationship." Id. at 565, 98 S.Ct. at
2512. The Court observed that the subjects addressed in the newsletter could
have a significant impact on the union's strength at the bargaining table and on
the level of wages negotiated with the employer. Id. at 569, 98 S.Ct. at 2514.
38
It was in this special context, however, where half the newsletter's contents
were clearly protected and where no strike occurred, that the Court rejected
Eastex's "lack of control" argument. In doing so, the Court took pains to stress
the limited nature of its holding. The Court observed, for example, that "the
employer ha(d) not attempted to show that distribution (of the newsletter)
would interfere with plant discipline or production." Id. at 572, 98 S.Ct. at
2515. More significantly, however, the Court acknowledged that "even when
concerted activity comes within the scope of the 'mutual aid or protection'
clause, the forms such activity permissibly may take may well depend on the
object of the activity," and proceeded to quote from Professor Getman's article.
Id. at 568 n.18, 98 S.Ct. at 2513 n.18. Thus, while Eastex bears upon the
subject of protected activity and recognizes that protection may vary with the
form and object of the activity, Eastex is not this case.
39
The form the employee activity took in this case makes the situation with which
we are confronted totally different from the circumstances before the Court in
Eastex. Although here, as in Eastex, the source of employee dissatisfaction lay
in matters beyond the employer's control, unlike Eastex, the means used to
express the employee grievances in the instant case had a substantially greater
negative impact on the innocent employer. Moreover, while in Eastex, the
employer could not show how it was prejudiced by the mere distribution of a
protected newsletter in nonworking areas during nonworking time, the
employer here was forced by the unwarranted actions of its employees to close
I would thus hold that on the facts of this case, where the company concededly
fulfilled all its responsibilities with respect to its collective bargaining
agreement and the health and welfare fund, and the employees' grievance was
solely with the Fund, the employees' strike against the company which
employed them, did not constitute protected activity within the meaning of
section 7 of the Act. This being the case, I would not reach the waiver issue
discussed by the majority, with whose reasoning I, in any event, agree.
We are not confronted here with an asserted waiver of the right to strike over an
employer's unfair labor practices. Cf. Mastro Plastics Co. v. NLRB, 350 U.S.
270, 76 S.Ct. 346, 100 L.Ed. 309 (1956) (finding strong policy against unfair
labor practices and the right of employees to select their own bargaining
representatives precludes implied waiver of right to strike over unfair labor
practices). We also note that in this case the employer does not seek to enjoin a
strike under 301(a) of the Labor Management Relations Act, 29 U.S.C. 184
(1976). See Buffalo Forge Co. v. United Steelworkers, 428 U.S. 397, 96 S.Ct.
3141, 49 L.Ed.2d 1022 (1976)