National Association of Letter Carriers

LETTER CARRIERS (POSTAL SERVICE) 347 NLRB No. 27 289 National Association of Letter Carriers, AFL–CIO, Branch 1227 (United States Postal Service) and Terry Erwin and Terry Pennington. Cases 16– CB–6815 and 16–CB–6874 May 31, 2006 DECISION AND ORDER BY CHAIRMAN BATTISTA AND MEMBERS LIEBMAN AND WALSH On October 7, 2005, Administrative Law Judge Kelt- ner W. Locke issued the attached bench decision. The General Counsel filed exceptions and a brief in support of its exceptions. The Respondent filed an answering brief. The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge’s rulings, findings, and conclusions only to the extent consistent with this Decision, and to adopt the judge’s recommended Order dismissing the case. At issue in this case is whether the National Associa- tion of Letter Carriers, Branch 1227 (the Union) violated Section 8(b)(1)(A) of the Act by allocating a lesser por- tion of the proceeds of a grievance settlement to retirees than to active employees. The relevant facts, as set out more fully by the judge, are as follows. The Union represented a bargaining unit of letter carriers in Wichita Falls, Texas. On September 17, 1994, the local Postal Service management in Wich- ita Falls unilaterally reduced the unit employees’ breaks from two 15-minute breaks to two 10-minute breaks. In response, the Union filed a “class action grievance,” al- leging that the Postal Service’s action violated the par- ties’ collective-bargaining agreement. Following a hear- ing, an arbitrator issued an award in the matter on April 8, 2004, nearly 10 years after the original grievance was filed. The award stated that the Union was “entitled to a make-whole remedy for the carriers,” as compensation for the Postal Service’s forcing them to work an addi- tional 10 minutes per day. In addition, the arbitrator found that the carriers should have been paid at the over- time rate for that extra 10 minutes. The award directed the parties to “fashion the precise nature of this remedy,” including the apportionment of the award among the car- riers. The Union and the Postal Service ultimately agreed that the Postal Service would pay $800,000, and further agreed that the Union would provide the Postal Service with the names and amounts to be paid to each letter car- rier. In deciding how to apportion the settlement proceeds, union officials sought the advice of counsel. The Un- ion’s attorney informed the officials that the Union had no duty to include retirees in the distribution of the pro- ceeds. That is, if an individual was actively employed at the time of the contract violation but had retired by the time of settlement, there would be no duty to give that individual a share of the proceeds. The attorney based his advice on the Supreme Court’s decision in Chemical Workers v. Pittsburgh Plate Glass, 404 U.S. 157 (1971), in which the Court held that an employer did not violate Section 8(a)(5) and (1) of the Act by refusing to negoti- ate over its modification of retiree benefits, because retir- ees are not “employees” under the Act. Notwithstanding its counsel’s advice, the Union de- cided to allocate some of the settlement proceeds to the retired carriers. They received approximately half as much as carriers actively employed at the time of settle- ment.1 Following the Union’s distribution of the settle- ment proceeds, the Charging Parties, both of whom are retired carriers, filed unfair labor practice charges against the Union, alleging that the Union violated its duty of fair representation by failing to treat the retirees in the same manner as active employees. The judge dismissed the General Counsel’s complaint, finding that the Union did not owe a duty of representa- tion to the retirees. We adopt the judge’s dismissal of the complaint, but, in so doing, we do not reach the issue of whether the Union owed a duty of fair representation to the retirees. Instead we find that, even assuming that such a duty was owed, the Union did not breach that duty. The Supreme Court has recognized that a union vio- lates the duty of fair representation only if its actions are “arbitrary, discriminatory, or in bad faith.” Vaca v. Sipes, 386 U.S. 171, 190 (1967). Further, it is well es- tablished that “a union’s actions are arbitrary only if, in light of the factual and legal landscape at the time of the union’s actions, the union’s behavior is so far outside a ‘wide range of reasonableness’ as to be irrational.” Air Line Pilots Assn. v. O’Neill, 499 U.S. 65, 67 (1991) (in- ternal citation omitted). Here, the record establishes that the Union relied, in good faith, on the advice of counsel in allocating the set- tlement proceeds. That advice, in turn, was reasonable in light of the ambiguous nature of the legal landscape on the issue of whether unions owe any duty of fair repre- sentation to retirees. The Board has never directly ad- dressed this issue and, in light of the Supreme Court’s 1 No share of the settlement was allocated to the estates of deceased retirees. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 290 holding in Pittsburgh Plate Glass, 404 U.S. at 157, we cannot say that the attorney’s advice to the Union was without foundation. Under that advice, the Union could have given the retirees nothing. However, in an effort to be fair, the Union adopted a compromise position and gave each living retiree a half share. In these circum- stances, the Union’s distribution of the settlement pro- ceeds cannot be said to be arbitrary, discriminatory, or in bad faith. See Government Employees Local 888 (Bayley-Seton Hospital), 323 NLRB 717, 721–722 (1997) (no violation where union could reasonably have believed its actions were consistent with duty of fair rep- resentation due to unsettled nature of Board law) (quot- ing Electrical Workers IUE Local 444 (Paramax Sys- tems) v. NLRB, 41 F.3d 1532, 1534 (D.C. Cir. 1994)). Accordingly, we find that the Union did not breach any duty of fair representation that it may have owed to the retirees. ORDER The recommended Order of the administrative law judge is adopted and the complaint is dismissed. Aaron J. Epstein, Esq. and Edward B. Valverde, Esq., for the General Counsel. Thomas N. Ciantra, Esq. (Cohen, Weiss and Simon, LLP), of New York, New York, for the Respondent. BENCH DECISION AND CERTIFICATION STATEMENT OF THE CASE KELTNER W. LOCKE, Administrative Law Judge. I heard this case on September 6, 2005, in Wichita Falls, Texas. After the parties rested, I heard oral argument, and on September 7, 2005, issued a bench decision pursuant to Section 102.35(a)(1) of the Board’s Rules and Regulations, setting forth findings of fact and conclusions of law. In accordance with Section 102.45 of the Rules and Regulations, I certify the accuracy of, and attach as “Appendix A,” the portion of the transcript containing this deci- sion.1 The conclusions of law and Order are set forth below. CONCLUSIONS OF LAW 1. The Respondent, National Association of Letter Carriers, AFL–CIO, Branch 1227, is a labor organization within the mean- ing of Section 2(5) of the Act. 2. The Respondent is subject to the Board’s jurisdiction pursu- ant to Section 1209 of the Postal Reorganization Act. 3. The Respondent did not violate the National Labor Relations Act in any manner alleged in the complaint. On the findings of fact and conclusions of law, and on the en- tire record, I issue the following recommended2 1 The bench decision appears in uncorrected form at pages 202 through 214 of the transcript. The final version, after correction of oral and transcriptional errors, is attached as Appendix A to this Certifica- tion. 2 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and Regulations, these findings, conclusions, and recommended ORDER The case is dismissed. APPENDIX A BENCH DECISION This decision is issued pursuant to Section 102.35(a)(10) and Section 102.45 of the Board’s Rules and Regulations. Because the Union owed no duty of representation to individuals no longer in the bargaining unit, I conclude that it did not violate the Act. Procedural History On October 26, 2004, Charging Party Terry Erwin filed the ini- tial charge in Case 10-CB-6815, and served it the next day on National Association of Letter Carriers, AFL–CIO, Branch 1227. For brevity, I will refer to this charged party as the “Union,” “Branch 1227,” or the “Respondent.” Charging Party Terry Pennington filed the initial charge in Case 16-CB-6874 on January 24, 2005, and served it on the Respondent the next day. Both Erwin and Pennington later amended their respective charges. On May 31, 2005, the Regional Director for Region 16 of the Board issued an Order Consolidating Cases, Consolidated Com- plaint, and Notice of Hearing. Respondent filed an Answer on June 14, 2005 and a Motion to Dismiss on June 15, 2005. The General Counsel filed a Response in Opposition to Respondent’s Motion to Dismiss on July 8, 2005. By Order dated July 26, 2005, the Board denied the Motion to Dismiss. A hearing opened before me on September 6, 2005 in Wichita Falls, Texas. At that time, both the General Counsel and Respon- dent presented evidence and then argued the case orally. They also filed contemporaneous briefs. Today, September 7, 2005, I am issuing this bench decision. Background Although the Complaint alleges that Respondent is the exclu- sive representative of certain employees of the United States Postal Service, Respondent more accurately is described as the local affiliate of the Section 9(a) representative, the National As- sociation of Letter Carriers, AFL–CIO, which I will refer to as the “NALC.” The Postal Service has recognized the NALC as the exclusive bargaining representative of a unit consisting of city letter carriers. The Postal Service and the NALC have embodied such recognition in a series of collective-bargaining agreements, the most recent of which became effective on November 21, 2001 and remains in effect at this time. I conclude that the Board has jurisdiction of this matter pursuant to Section 1209 of the Postal Reorganization Act. Additionally, I conclude that the following unit, represented by the NALC, is an appropriate unit for collective bargaining: All city letter carriers, EXCLUDING managerial and supervi- sory personnel; professional employees; employees engaged in personnel work in other than a purely non-confidential clerical capacity; security guards as defined in Public Law 91- 375, 1201(2); all postal inspection service employees; em- Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the Board, and all objections to them shall be deemed waived for all pur- poses. LETTER CARRIERS (POSTAL SERVICE) 291 ployees in the supplemental work force as defined in Article 7; rural letter carriers; mail handlers, maintenance employees, special delivery messengers, motor vehicle employees, and postal clerks. The NALC has delegated responsibilities to Respondent to ad- minister the collective-bargaining agreement at the local level in Wichita Falls. Based upon the testimony of Gene Goodwin, who is the NALC national business agent for its region 10, and the testimony of Branch 1227 president Renae Young, I find that both Young and Goodwin were agents of Respondent, within the meaning of Section 2(13) of the Act, at all material times. At the beginning of September 1994, unit employees in Wichita Falls were receiving two 15-minute paid work breaks each day. They had done so for a number of years. However, on about Sep- tember 17, 2004, over the Union’s objection, local management reduced the breaks from 15 to 10 minutes. The Union filed what it calls a “class action grievance.” The grievance made its way slowly through the contractual dispute resolution procedure and, after 9 years, came before an arbitra- tor, who conducted a hearing on March 4, 2004. The arbitrator, Louise B. Wolitz, issued an award dated April 8, 2004. Arbitrator Wolitz found that management had violated the col- lective-bargaining agreement by unilaterally reducing the breaks. She ordered the employer to restore the two 15-minute break peri- ods within 20 days. She further ordered: The Union is entitled to a make-whole remedy for the carri- ers. That remedy should reflect the fact that the carriers have been forced to work an extra ten minutes per day, and would have worked the ten minutes per day at the overtime rate if their routes had been evaluated to reflect fifteen-minute breaks rather than ten-minute breaks. The arbitrator directs the parties to meet to fashion the precise nature of this remedy and how the total settlement will be distributed to the carriers. The remedy should cover the period from the date in 1994 when the breaks were improperly reduced to ten-minutes in violation of the National Agreement through the date on which the fifteen-minute breaks are restored. The arbitrator retained jurisdiction “for purposes of assisting the parties with fashioning and implementing the remedy, if necessary.” Union officials negotiated with Postal Service management. The two sides ultimately agreed that the Postal Service would pay $800,000 “to the city letter carriers in Wichita Falls, TX. The local Union will furnish to the Postal Service the names and the amounts to be paid to each letter carrier; not to exceed the total of $800,000.” The present controversy arises out of how the Union appor- tioned and distributed the $800,000. The General Counsel alleges that the Union’s action breached the duty of fair repre- sentation. Specifically, Complaint paragraph 10 alleges that “Respondent has failed to represent Charging Parties Erwin, Pennington, and other similarly situated employees for reasons that are arbitrary, unfair, and in bad faith, and has breached the duty of fair representation it owes to the employees it represents,” in violation of Section 8(b)(1)(A) of the Act. Respondent denies these allegations. How the Union Split the “Pie” One possible method of apportioning the $800,000 would have entailed examining the time and payroll records of all letter carri- ers who worked in Wichita Falls at any time after September 17, 1994, and counting up how many breaks each employee took. For each employee, multiplying the total number of breaks times five would yield the number of extra minutes worked, which were to be compensated at the employee’s overtime pay rate. Theoretically, such calculations are possible, because the Postal Service keeps time records, called “clock rings,” showing when and how long each employee worked. However, Union officials concluded that in practice, making such calculations for a sizable number of employees over a 10-year period would be exceedingly difficult. So instead, Union officials decided to divide the money using a formula which depended on years of service in the bar- gaining unit and on whether the employee was still working in the bargaining unit. Respondent’s Answer admits that it distributed the $800,000 as follows: “[A]ctive carriers as of the time of the settlement who had worked 10 years under the challenged practice each received $10,000; active carriers who had worked less than 10 years re- ceived a proportional share of $10,000 depending on their years of service; carriers who had retired as of the settlement date who had worked 10 years under the challenged practice received approxi- mately $5,000 with retires with lesser service receiving propor- tionally lesser amounts, and carriers who otherwise separated from the craft or moved into management positions received pro- portionately less than retirees.” I find that the Union distributed the $800,000 in the manner it admitted in its Answer. Before deciding on this allocation scheme, Union officials had obtained legal advice. The Union’s attorney had told them that the Union had no duty to give retirees any of the settlement pro- ceeds. The Union’s counsel based this opinion on a Supreme Court decision, Allied Chemical & Alkali Workers v. Pittsburgh Plate Glass, 404 U.S. 157 (1971). The court held that an em- ployer had no duty to negotiate with a union representing a unit of its workers concerning modification of benefits paid to retirees. Because the retirees had ceased work without expectation of fur- ther employment with the company, they were not members of the bargaining unit and the benefits they received were not mandatory subjects of bargaining. The Union’s counsel argues that since the retirees are not part of the bargaining unit, the Union has no duty to represent them. There can be no breach of the duty of fair representation when there is no duty of representation at all. Notwithstanding the attorney’s advice, Union president Young wanted the retirees to have some share of the arbitral award. She and the other Union officials decided that retirees should receive approximately half as much as employees still working in the bargaining unit. Thus, a retiree with 10 years service in the bar- gaining unit would receive about $5,000. At about the same time Arbitrator Wolitz heard the decade-old grievance, Terry Pennington retired. He began his retirement in March 2004 after about 26 years in the bargaining unit. Thus, for about the last nine-and-one-half years of his employment, Pen- nington had been affected by the employer’s reduction in break- time. However, because he had already retired before the Union distributed the arbitral award, Pennington only received DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 292 $4,957.54, about half what he would have received if he had still been working. The other charging party, Terry Erwin, had retired in October 2003 after about 35 years employment. He received $4,790.90 from the arbitral award. The Union admits that this is about half the amount distributed to an employee of similar experience who was still in the bargaining unit. The General Counsel does not allege that the Union treated the retired employees less favorably because they had engaged in any kind of protected activity. Indeed, the record would not support such a theory. For example, one of the charging parties, Penning- ton, remains an associate member of the Union but the other, Er- win, had resigned. Yet they both received essentially the same treatment. Rather, the Complaint alleges that the Union’s action breached the duty of fair representation “for reasons that are arbitrary, un- fair, and in bad faith. . .” Under well established precedent, union action which is sufficiently arbitrary and unfair can violate Section 8(b)(1)(A) even absent any discriminatory intent. However, the law gives a union considerable leeway in deciding how to fulfill its responsibilities as exclusive bargaining representative. To violate Section 8(b)(1)(A), a union action must be so far outside a “wide range of reasonableness” that it is wholly irrational or arbi- trary. See Air Line Pilots v. O’Neill, 499 U.S. 65 (1991). Analysis The General Counsel argues that because the Union undertook to represent all of the affected employees, including those who later retired before the distribution of the award, the Union had a duty to treat them in a similar fashion “absent some legitimate basis to treat them differently.” Such a legitimate basis, the gov- ernment contends, is lacking here. Citing United Steelworkers Local 2869, 239 NLRB 982 (1978), Respondent asserts that once an individual leaves the bargaining unit, it no longer has a duty to represent him. There can be no breach of a duty which does not exist. Respondent also cited Branch 6070, National Association of Letter Carriers, AFL–CIO, 316 NLRB 235 (1995). That latter case concerns a union’s decision not to distribute part of a grievance award to individuals who had left the bargain- ing unit. However, the judge’s decision, adopted by the Board, was not based on a finding that the Union had no duty to represent the former unit employees. Rather, the judge concluded that the Union’s actions fell within the range of reasonableness. The deci- sion may be read, therefore, as suggesting that the Union did have such a representation duty, but discharged it in a lawful manner. Although this is nearly an issue of first impression, I am not writing on an entirely blank slate. Were that the case, I would have little difficulty in concluding that the Union’s duty to repre- sent these employees did not simply disappear when they decided to retire. That strikes me as an unjust and unnecessary extension of the Pittsburgh Plate Glass principle. In the present case, Union officials made a point of characteriz- ing the grievance in question as a “class action grievance.” How- ever, this term does not appear in the contractual grievance provi- sions, so I conclude that it does not refer to a particular category of grievance to which special rules apply. The term does appear in other decisions involving the NALC but I believe it is more a descriptive phrase than a term of art. It obviously signifies a sin- gle grievance that affects many employees. If the Union had filed a separate grievance for each employee who suffered harm because of the unilateral reduction in break time, the facts would appear quite different. Suppose, for exam- ple, that in 1994, the Union had filed a separate grievance for Pennington and had pursued it on his behalf for a decade. Further suppose that the Union then dropped the grievance when Penning- ton retired. That result would not inspire particularly positive feelings in an observer, but it would not appear to offend the Act. When a union becomes an exclusive bargaining representative, under Section 9(a) of the Act, it not only acquires authority but also responsibili- ties that require time and attention. Expending those resources on behalf of someone no longer in the unit could well diminish them for the employees still under the union’s aegis. The General Counsel argues that the Union, having undertaken to represent the now-retired employees, has a continuing duty. In effect, the government would treat the retirees as still being in the unit for the limited purpose of the grievance. Such an argument greatly appeals to my sense of fairness, but I do not believe that it accords with existing Board law. In Branch 529, National Association of Letter Carriers, AFL– CIO, 319 NLRB 879 (1995), Member Cohen, concurring in a footnote, expresses the view that since a grievance was filed and settled while a certain individual remained in the bargaining unit, the union “must represent her fairly, even if this extends the repre- sentation into postemployment periods.” 319 NLRB at 881, foot- note 11. However, the other two members of the Board panel did not adopt this theory. In my view, it would not be appropriate for a judge to decide a case based upon an opinion not yet adopted by the Board, no matter how appealing that rationale might appear. In Local 888, American Federation of Government Employees (Bayley-Seton Hospital), 308 NLRB 646 (1992), the Board dealt with a highly unusual fact situation involving a rival union becom- ing the exclusive bargaining representative. Based on the rather unique facts of that case, the Board held that the first union con- tinued to have a duty to arbitrate a grievance even though it no longer was the exclusive representative of the unit. That prece- dent might have relevance to the present case. However, absent other authority more directly on point, I would hesitate to dilate this narrow exception to encompass the present situation. In sum, the extant case law leads me to conclude that the Union did not breach a duty of fair representation because it owed no representation duty to the retirees. This conclusion leads in turn to dismissal of the Complaint. Accordingly, I do not reach the question of whether the Union acted within its wide range of reasonableness. Clearly, this range has limits. A union, for example, may not simply deposit a griev- ance settlement in its own treasury rather than distributing to the affected employees. The Union’s actions in the present case appear to be pretty close to the edge of the range of reasonableness. Rather than do- ing the difficult math, the Union adopted a formula which was to some extent arbitrary. However, I do not reach the issue of whether the action was so arbitrary as to violate the Act. When the transcript of this proceeding has been prepared, I will issue a Certification which attaches as an appendix the portion of LETTER CARRIERS (POSTAL SERVICE) 293 the transcript reporting this bench decision. This Certification also will include provisions relating to the Findings of Fact, Conclu- sions of Law, and Order. When that Certification is served upon the parties, the time period for filing an appeal will begin to run. Throughout this proceeding, all counsel have displayed the highest standards of civility and professionalism, which I truly appreciate. The hearing is closed.