Armco Steel Corp.

ARMCO STEEL CORPORATION Armco Steel Corporation and United Steel Workers of America, AFL-CIO Armco Employees' Independent Federation, Inc. and United Steel Workers of America , AFL-CIO. Cases 9-CA-4210 and 9-CB-1392 June 10, 1970 DECISION AND ORDER BY MEMBERS FANNING, BROWN, AND JENKINS On February 19, 1970, Trial Examiner Paul E. Weil issued his Decision in the above-entitled con- solidated proceeding, finding that the Respondents had engaged in and were engaging in certain unfair labor practices within the meaning of the National Labor Relations Act, as amended, and recommend- ing that they cease and desist therefrom and take certain affirmative action, as set forth in the at- tached Trial Examiner's Decision. Thereafter, the Respondent Union and the Respondent Employer filed exceptions to the Trial Examiner's Decision and the Respondent Employer filed a supporting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its powers in connection with this case to a three- member panel. The Board has considered the Trial Examiner's Decision, the exceptions, the brief, and the entire stipulated record in this case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner.' We find no merit in the Respondents' arguments against our reaching the merits of this case. It ap- pears to us that the United States Court of Appeals for the Sixth Circuit is aware of the Board's posi- tion, which was before it when the Respondent Em- ployer sought to enjoin any further proceedings be- fore the Board on the instant complaint. In denying such an injunction, the court held that the Board "has jurisdiction to hear and decide the instant un- fair labor complaint subject to statutorily provided procedures."2 Moreover, in order to allay certain concerns of the court respecting "forum shopping," the General Counsel stated, on behalf of the Board, that any petition for enforcement would be filed in the Sixth Circuit and that if a petition were filed by a party to the proceeding in another circuit, the Board would support the transfer of the case to the ' As the record , exceptions , and brief adequately present the issues and the positions of the parties , the Respondent Employer's request for oral ar- gument is hereby denied 207 Sixth Circuit. We note that the court in its decision indicated no displeasure with our proceeding with this case. However, with all deference to the court, we believe that the uniform administration of the Act, for which we are responsible, requires that we ultimately seek a final disposition by the Supreme Court in order to resolve the conflict among the various circuits on this important issue. Therefore, we affirm the Trial Examiner's conclusion that the Respondent Employer and the Respondent Union violated Sections 8(a)(1) and 8(b)(I)(A) of the Act, respectively, by maintaining in effect the disputed no-distribution provision in their contract, but we wish to make it clear that our affirmance is intended as nothing more than respectful disagree- ment with the view of the Sixth Circuit on the un- derlying legal issue and an attempt to protect, until the conflict in the circuits is resolved by the Supreme Court, what we consider to be substantial employee rights. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the Recom- mended Order of the Trial Examiner, and hereby orders that the Respondent, Armco Steel Corpora- tion, Middletown, Ohio, and New Miami, Ohio, its officers, agents, successors, and assigns, and the Respondent, Armco Employees' Independent Federation, Inc., Middletown, Ohio, and New Miami, Ohio, its officers, agents, and representa- tives, shall take the action set forth in the Trial Ex- aminer's Recommended Order. MEMBER JENKINS , dissenting: Unlike my colleagues, I would dismiss the com- plaint. In Armco Steel Corporation v. N.L.R.B., 344 F.2d 621, the United States Court of Appeals for the Sixth Circuit denied enforcement of the Board's Order in that case and held that the no-distribution clause in the contract between the Company and the Armco Employees' Independent Federation, Inc., was a condition of employment and a proper subject for collective bargaining. The Board did not file a petition for certiorari to review the court's decision and subsequently acquiesced in the court's decision in Arnico Employees Independent Federa- tion, Inc.;' which involved the identical clause between the identical parties. I still remain firmly convinced of the invalidity of the clause. However, the instant case involves the identical clause ' At into Steel Corpirat,ont'. Ordman, 414 F 2d 259, 250 (C A 6) 155 NLRB 55 1, enfd 377F2d 140(CADC ) 183 NLRB No. 26 209 ARMCO STEEL CORPORATION period of 3 years which contained the same provi- sion. That contract has now expired and the parties have stipulated that a succeeding contract again contain the same language. The parties "updated" the record of the prior proceeding by their stipulation and agreed state- ment of facts. The facts contained therein show that since the earlier case the unit has become slightly smaller, shrinking from around 6,150 em- ployees to around 5,835 employees. Certain plant gates have been closed and certain others opened, a new public thoroughfare has been created near three of the entrances, and the places of residence of the employees in the unit have remained sub- stantially the same except that a few more em- ployees live farther from the plant. The appearance of the above facts in the stipula- tion seems to be responsive to the decision of the Circuit Court which can be considered to have based its refusal to enforce the Board's order at least in part upon the accessibility of employees to the distribution of information by means other than the distribution by employees of literature on plant premises. In the Board's decision such evidence was deemed irrelevant on the theory that the contrac- tual clause interfered with employees in exercising their basic rights under the Act. Respondent3 raises a number of procedural issues by way of defense. I shall consider them before I reach the merits of the case. First Respondent contends that "under univer- sally understood and accepted principles of res ju- dicata and collateral estoppel the prior judgments and Board final orders upholding the validity of the contract clause here in dispute bar the present complaint." Respondent has reference to various former cases which had to do with this issue. How- ever, the only one of those cases that could raise this defense is the judgment of the Sixth Circuit in Armco Steel Corp. v. N.L.R.B., at 344 F.2d 621 (1965 ), which reversed the Board's decision re- ported at 148 NLRB 1179 and set aside the order of the Board.' It is clear that the contract clause with which we are dealing here is of precisely the same import as that dealt with by the Sixth Circuit in the cited case and there can be no doubt that the Sixth Circuit held at the time it considered that case that the contractual clause was valid. Thereafter, the issue having been considered by various circuits, a dif- ference of opinion has appeared among the circuits, with the Ninth Circuit agreeing with the Sixth that the clause is a valid exercise of the employer's and the union's right by contract to place limitations Hereinafter the designation Respondent refers to the position taken b5 Respondent Armco and concurred in by Respondent Independent The other cases cited by Respondent do not in fact constitute final or- ders of the Board or any court on the merits of the dispute with which we are here concerned N L R B v General Motors Corporation, 345 F 2d 516, and the Seventh Circuit in the leading case on the issue N L R B v Gale Products, Dn tston of Outboard Marine Corp , 337 F 2d 370 (1964) upon the exercise of their organizational rights by employees,5 while the Fifth Circuit held that the right to distribute literature is a personal right which cannot be waived by a union,' and the Eighth Circuit agreed with the Fifth Circuit.? The Board has held that it is the duty of the Trial Examiner to adhere to Board precedents until the Board indicates acquiescence in the contrary views of a Circuit Court of Appeals or until the Supreme Court of the United States has ruled otherwise.' The Board met this precise procedural issue in the second General Motors Corporation case at 158 NLRB 1723, and found no resjudicata or collateral estoppel. Respondent's attempt to distinguish the second General Motors case on the ground that the charge in that case was filed by a different party than the charge in the original case must fail . A reading of the case reveals that the Board distinctly decided that under the authority of Commissioner of Inter- nal Revenue v. Sunnen, 333 U.S. 591, the parties are not bound by res judicata or collateral estoppel where the second proceeding involved an instru- ment or transaction "identical with but in a form separable from the one dealt with in the first proceeding." Accordingly the Board found the parties were not bound by the result reached in the previous General Motors case. The Board separate- ly pointed out that the lack of privity between the charging parties further barred the application of the doctrine res judicata. There can be no doubt from the Board's decision that either ground suf- fices to bar the application of the doctrine res ju- dicata . In its per curiani decision refusing to enforce the Board's order the Ninth Circuit gave no ex- planation whatsoever. Assuming that one could at- tribute to the circuit the explanation that it did not agree with the Board's decision with regard to the argument of res judicata or collateral estoppel I am aware of no action taken by the Board to indicate its acquiescence in that decision nor of any decision by the United States Supreme Court reversing the Board. Accordingly I am bound, by the Board's ac- tion in the General Motors case, to find in the in- stant case that the doctrine resjudicata or collateral estoppel is not applicable herein. Respondent contends that "if the Trial Examiner should feel ... that the Board's General Motors case precludes him from dismissing on the basis of argument II then he can and must dismiss on the basis of argument III." The gist of argument III is that the complaint must be dismissed because the contract it attacks is no longer in essence but has been renewed and "thus the estoppel the General 6 N.L.R.B. v. Mid-States Metal Products, Inc., 403 F.2d 702 (1968). t International Assoctanon of Machuusts etc Distrut No 9 [McDonnell Douglas Corporation] v N L R B, 415 F 2d 113 (1969), enfg 171 NLRB No 35 "International Assoctanon of Maclutusti and Aerospace Wor/.en, District No 9 (McDonnell Douglas Corporation), 171 NLRB No 35, and cases there cited DECISIONS OF NATIONAL LABOR RELATIONS BOARD 208 between the identical parties, albeit in a different contract. I think that considerations favoring "an end to litigation " at some point-expense, effort, prior decision of the same issue, lapse of time-all impel us here to regard this issue, between these parties, as finally determined and closed. Thus, as a matter of policy and judgment, I cannot see that it in any way effectuates the policies of the Act to proceed with this case to a wholly predictable reversal by the Court of Appeals which has previ- ously determined the matter contrary to our views. Accordingly, I would dismiss the complaint. lation and Agreed Statement of Facts for the pur- pose of avoiding a formal hearing on the complaint. All parties filed briefs in support of their respective positions. In its brief Respondent Armco reiterated its arguments contained in its Motion to Dismiss which have been ruled upon by Trial Examiner Schneider. After due, consideration of the Stipulation and Agreed Statement of Facts, which are hereby received, and the joint exhibits attached to the stipulation and in contemplation of the briefs, I make the following: FINDINGS OF FACT TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE PAUL E. WEIL, Trial Examiner: On charges filed March 6, 1967, by United Steel Workers of Amer- ica, AFL-CIO, hereinafter called Steelworkers, against Armco Steel Corporation, hereinafter called Respondent Armco, and Armco Employees' Inde- pendent Federation, Inc., hereinafter called Respondent Independent, the General Counsel of the National Labor Relations Board, herein called the Board, by the Regional Director for Region 9 (Cincinnati), issued an Order Consolidating Cases, Complaint and Notice of Hearing against Respond- ent Armco and Respondent Independent alleging that Respondent Armco violated Section 8(a)(1) of the Act and that Respondent Independent violated Section 8(b)( I )(A) of the Act by maintaining in their collective-bargaining agreement a provision prohibiting distribution or posting by employees of literature upon company property except as ap- proved by the Company. In its duly filed answer Respondent Armco set up five affirmative defenses, admitted all the facts alleged in the complaint but denied the legal conclusions attendant thereto and prayed for an order directing the General Counsel to refrain from any further attacks upon the said "no distribution" clause. By its duly filed answer Respondent Independent adopted the defenses set forth in Respondent Arm- co's answer, complained that the complaint is harassing and oppressive to it, requested dismissal of the complaint, and joined in Respondent Arm- co's prayer for further relief. Immediately thereafter Respondent Armco filed a Motion to Dismiss and for Affirmative Relief, couched in hyperbolic terms, which in effect reiterated the five affirmative defenses contained in the complaint. The motion of Respondent Armco was opposed by the General Counsel and an order denying said mo- tion issued on May 13, 1969, signed by Trial Ex- aminer Charles W. Schneider. Thereafter the parties filed with the Chief Trial Examiner a Stipu- I. THE BUSINESS OF RESPONDENT ARMCO Respondent Armco is an Ohio corporation with its principal office in Middletown, Ohio, and with plants in Middletown and New Miami, Ohio, where it is engaged in the manufacture, fabrication, and sale of steel and related metal products. During the past year, a representative period, Respondent Armco had a direct outflow in interstate com- merce of its products valued in excess of $50,000 which it sold and shipped from its places of busi- ness directly to points outside the State of Ohio. Respondent Armco is and has been an employer engaging in commerce within the meaning of Sec- tion 2(6) and (7) of the Act at all times material herein. II. THE LABOR ORGANIZATIONS INVOLVED Respondents Independent and Steelworkers are both labor organizations within the meaning of Sec- tion 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES There are no facts in dispute in the instant case. At all relevant times Respondent Independent has been the collective-bargaining representative of Respondent Armco's employees at the Middletown and New Miami plants. Since 1944 the contract between the two Respondents has contained a provision that prohibits distribution or posting of literature by employees upon company property ex- cept as approved by the Company. It is clear that the parties have enforced this provision at all rele- vant times. The identical provision was considered by the Board in 1964 and found under the rule in Gale Products, Division of Outboard Marine Corp.' to violate Section 8(a)(1) of the Act.' Enforcement of the Board's order was refused by the United States Court of Appeals for the Sixth Circuit in 1965 (Armco Steel Corporation v. N.L.R.B., 344 F.2d 621). The then existing contract expired in 1966 and a new contract was entered into for a 1 142 NLRB 1246, enforcement denied 337 F 2d 390 (C A 7, 1964) 2 148 NLRB 1179 210 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Counsel seeks would not be mutual." Respondent argues if the General Counsel is not bound by the court's decision with regard to the earlier contract because the doctrine res judicata has no applica- tion, the Respondent could lawfully keep the clause in the 1969-71 contract if they lost the litigation in the instant case, just as the General Counsel could lawfully attack the clause in the 1969-71 contract if he lost in the instant case. Under these circum- stances Respondent points out the prosecution of the litigation of this, complaint is "a pointless exer- cise in utter futility." Respondent complains that Trial Examiner Schneider failed to come to grips with the argument of no mutual estoppel in dealing with its Motion to Dismiss the Instant Complaint. Respondent states in its brief "[T]he argument is that if the Board is not to be bound by an order ad- verse to it because of a new contract the Board cannot bind the parties beyond the term of the con- tract by issuing an order adverse to them." Respon- dent urges me, and the Board, to state explicitly the no mutual estoppel argument in our decisions and deal with it explicitly "and not by the invocation of a double standard which permits the Board's order to run past the term of the contract but not a court's refusal to enforce that order." As I view the argument Respondent is confusing an act with the consequences that stem from it. When the Board finds that an unfair labor practice has been committed, whether by the entry into a contract, as here, or the refusal to enter into a con- tract, or perhaps a discharge of an employee, or by any of a number of activities by which employers or unions can violate the Act, the Board commonly orders the parties to cease and desist from com- mitting the unfair labor practice. In the circum- stances that the unfair labor practice is embodied in a contract such as in the instant case, the Board commonly requires that the parties cease giving ef- fect to the contractual provision. The Board's order to that extent of course acts only on the then exist- ing contractual provision. It does not by its terms act on future contractual provisions since they are not then in existence and a cease-and-desist order cannot be effective with regard to a nonexistent contractual provision. However, additionally, when the Board has reasonable cause to believe that a party whom it has found to have violated the Act is liable to violate it again the Board issues a prospec- tive order that the offending party should also thenceforth prospectively not commit the unfair labor practice found to have been committed in the past. The prospective effect of such orders is separate and distinct from the cease-and-desist effect of such orders and they are considered as such both by the Board and the courts. In fact the breadth of prospective orders has been the subject of a great deal of litigation and the Board is oc- casionally required to trim its prospective order to encompass only such unfair labor practices as the record reveals Respondent to be prone to commit.9 Assuming the contract clause here in issue to be violative it can scarcely be said that Respondent has not shown a proclivity to commit this violation. Respondent argues that the clause has been in existence since 1944 and exists in its new contract, the successor to the one here under discussion. Thus the factors are present to warrant the Board in not only ordering that Respondent cease and desist from giving effect to the expired contract but prospectively to cease and desist from giving effect to any contract now or in the future contain- ing the clause which the Board finds unlawful. The mutual estoppel of which Respondent speaks runs to the act; i.e., the contract clause in the instant case. It is effective only with regard to the Board's order, if such there be, to cease and desist from giving effect to the contract clause in issue in the instant case. But assuming the issuance herein of a prospective order the doctrine of mutual estoppel will require that both parties are estopped to re- litigate the effect of the preceding contract. Ac- cordingly the dilemma that looms so large in Respondent's mind does not appear to me to exist. The Respondent contends that the General Counsel violated section 6(b) cf the Administrative Procedure Act (5 U.S.C. Sec. 555(b)) and also the spirit of Section 10(b) of the Act. This issue too was raised before Trial Examiner Schneider in Respond- ent's Motion to Dismiss. I agree with Trial Ex- aminer Schneider in his disposition of this issue and I shall adopt the language with which he treated it as follows: As we have seen, 21 months elapsed between the filing of the instant charges and the issuance of complaint. In view of the na- ture of the issue and the previous litigation, such a delay would on its face seem unreasona- ble, warranting suspicion that the charge was being preserve on the remote chance that fu- ture events might make it useable. In such a situation the motion for dismissal might per- haps properly be granted for manifest preju- dice. However, the facts show this not to have been the case At the time the instant charges were filed, the Board had twice since the Court's first Armco decision (in Mid-States Metal Products and * in the second General Motors case) an- nounced its disagreement with the principle of law enunciated by the Court, and the Mid- States case was then pending before the Fifth Circuit for disposition. In such circumstances it was not inappropriate for the General Counsel to withhold action on the charges until the s N L R B v Local 926 latemattona! Lnuon of Opeiatnng Enga,ee, [Armco Drainage & Metal ProduUS, Inc 1, 267 F 2d 418 (C A 5) ARMCO STEEL CORPORATION Fifth Circuit had decided the Mid-States case. See Bryant Chucking Grinder Co. v. N.L.R.B., 389 F.2d 565 (C.A. 2, 1967). Indeed, it is dif- ficult to see what other prudent course the General Counsel could have followed in view of the provisions of Section 10(b) of the Act. Addressing myself to the merits of the case, it is clear that the contractual provision with which we :ire here dealing is substantially identical to con- tractual provisions found by the Board in the cases cited above.10 Respondent contends herein that the Board has not met its burden of proving that the clause is discriminatory in purpose or effect or that it significantly hampers effective communication with the employees by any union. Of course as the Board has pointed out in each of these cases the gravamen of the violation is not a possible dis- criminatory effect nor the curtailment of effective communication with employees by a union but rather the limits to a union's power to waive the in- dividual statutory rights of employees. The Board views such a contractual provision as an attempt to impair the freedom of employees to change their bargaining agent. In the instant case, as in the preceding cases, Respondent has presented no per- suasive countervailing considerations. The Board has held that the presumed benefit to the union and the employer of a peaceful contractual relationship is not such a countervailing consideration that it justifies the union in thus attempting to waive such guaranteed employee rights. A full discussion of this issue is to be found in the Board's second General Motors Corporation decision, supra, com- mencing at 1726 Nothing would be served by my quoting it at length or paraphrasing it, and I shall not do so. Respondent has presented no rationale under which they can prevail in my opinion Accordingly I find that as alleged the Respondent Employer is guilty of a violation of Section 8(a)(1) and Respon- dent Union of a violation of Section 8(b)( I )(A) by their maintenance of the disputed provision in their contract. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The unfair labor practices found to have oc- curred as set forth above, occurring in connection with the operation of Respondent Armco as described in section I, above, have a close, inti- mate, and substantial relation to trade, traffic, and commerce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow thereof. 10 Gale Products, General Motors, /AM Dtctrici Au 9 (McDonnell Douglac Corp . ation ), and the first Aicnc a case 11 In the event no exceptions are filed as provided b^ Section 102 46 of the Rules and Regulations of the National Labor Relations Board, the V. THE REMEDY 211 Having found that Respondent Armco and Respondent Independent have violated and are violating Section 8(a)(1) and 8(b)( I )(A) of the Act, respectively, by maintaining in effect a provi- sion in the collective-bargaining agreement described above, I shall recommend that, they be ordered to cease and desist from maintaining, giv- ing effect to, or enforcing such provision in the ex- pired contract and prospectively that the Respond- ents shall not by contract or otherwise interfere with the right of employees to use the customary and vital channel of communication proscribed by the contract; i.e., the distribution of literature on their own time in nonworking portions of the plant. CONCLUSIONS OF LAW 1. Armco Steel Corporation is engaged in com- merce within the meaning of Section 2(6) and (7) of the Act. 2. Respondent Armco Employees' Independent Federation, Inc., is a labor organization within the meaning of Section 2(5) of the Act. 3. Respondent Armco and Respondent Indepen- dent, by maintaining in effect a collective-bargain- ing agreement prohibiting the distribution of litera- ture during nonworking time in nonworking areas of the Employer's property violated and are violat- ing Section 8(a)(1) and 8(b)(I)(A) of the Act, respectively. 4. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and ;7) of the Act. RECOMMENDED ORDER" Upon the basis of the foregoing findings of fact and conclusions of law and the entire record in this proceeding, I recommend that Respondent Armco Steel Corporation, its officers, agents, successors, and assigns, and Respondent Armco Employees' In- dependent Federation, Inc., its officers, agents, and representatives, shall. 1. Cease and desist from maintaining, giving ef- fect to, or enforcing any provision of a collective- bargaining agreement which prohibits any em- ployee from distributing literature on behalf of any labor organization other than the contracting labor organization or distributing literature in opposition to any labor organization where, in either case, the activity occurs in nonworking areas on nonworking time. findings , conclusions, recommenda ' ions, and Re-ommended Order herein shall, as provided in Section 102 48 of the Rules and Regulations, be adopted by the Board and become its findings , conclusions , and order, and all objections thereto shall be ueemed ssaived for.ill purposes 427-258 O-LT - 74 - 15 212 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 2. Take the following affirmative action which it is found will effectuate the policies of the Act. (a) Post at each of the employee bulletin boards in Respondent Employer's plants in Middletown and New Miami, Ohio, copies of the attached notice marked "Appendix. 11 1213 Copies of said notice, on forms provided by the Regional Director for Region 9, after being duly signed by representa- tives of Respondent Armco and Respondent Inde- pendent, shall be posted by them immediately upon receipt thereof, and be maintained by them for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by both Respondents to insure that said notices are not altered, defaced, or covered by any other material. (b) Notify the Regional Director for Region 9, in writing, within 20 days from the receipt of this Decision and Recommendation what steps have been taken to comply herewith.'' " In the event that the Board 's Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall be changed to read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." " The record reveals that b} contract bulletin boards are maintained by the Employer for the use of Respondent Union The intent of this provision is that notices be posted both on the "Union's bulletin boards" and those maintained by the Employer for its own use in posting notices to em- ployees " In the event that this Recommended Order is adopted by the Board, this provision shall be modified to read "Notify said Regional Director, in writing, within 10 days from the date of this Order, what steps Respondent has taken to comply herewith " APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT maintain, give effect to, or en- force any provision of a collective-bargaining agreement which prohibits any employee from distributing literature on behalf of any labor organization other than the contracting labor organization or distributing literature in op- position to any labor organization where, in either case, the activity occurs in nonworking areas on nonworking time. ARMCO STEEL CORPORATION (Employer) Dated By (Representative ) (Title) ARMCO EMPLOYEES' INDEPENDENT FEDERATION, INC. (Union) Dated By (Representative ) (Title) This is an official notice and must not be defaced by anyone. This notice must remain posted for 60 consecu- tive days from the date of posting and must not be altered, defaced, or covered by any other material. Any questions concerning this notice or com- pliance with its provisions may be directed to the Board 's Office, 550 Main Street, Federal Office Building , Room 2407, Cincinnati, Ohio 45202, Telephone 513-684-3686.