Hawaiian Dredging Construction Company, Inc.

HAWAIIAN DREDGING CONSTRUCTION CO. 81 Hawaiian Dredging Construction Company, Inc. and International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, Local 627. Case 37–CA–008316 February 9, 2015 DECISION AND ORDER BY CHAIRMAN PEARCE AND MEMBERS MISCIMARRA AND HIROZAWA On February 4, 2013, Administrative Law Judge Elea- nor Laws issued the attached decision. The General Counsel and the Charging Party each filed exceptions and a supporting brief, the Respondent filed an answer- ing brief, and the General Counsel filed a reply 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 Order.1 The judge recommended dismissing the complaint, which alleged that the Respondent, Hawaiian Dredging Construction Company, Inc., violated Section 8(a)(3) and (1) of the Act when it discharged, laid off, or terminated 13 members of the International Brotherhood of Boiler- makers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, Local 627 (the Boilermakers) upon repudiation of the Respondent’s 8(f) bargaining relationship with that union. The judge concluded that the Respondent had met its burden to establish that the discharges were motivated by a substantial and legitimate business justification. We disagree. The evidence establishes that the discharges were motivated by the alleged discriminatees’ union af- filiation, and therefore were unlawful. In the alternative, even assuming an absence of specific evidence of unlaw- ful motive, the Respondent’s conduct was “inherently destructive” of the employees’ rights and its asserted business justification did not outweigh the destructive impact. Accordingly, we find that the Respondent vio- lated Section 8(a)(3) and (1). I. FACTUAL BACKGROUND The Respondent is the largest general contractor in Hawaii, employing approximately 375 craft employees. At the time of the events at issue here, the Respondent was a member of the Association of Boilermakers Em- ployers of Hawaii (the Association). The Association and the Boilermakers had been parties to an 8(f) prehire collective-bargaining agreement for at least 20 years. 1 The name of Kona Akuna was included in the complaint but omit- ted from the list of alleged discriminatees in the judge’s decision. We correct this inadvertent error. Pursuant to this agreement, the Boilermakers provided the Respondent with employees to perform welding and other duties. The most recent agreement between the Association and the Boilermakers expired on September 30, 2010, at which time the parties had not reached a new agreement, despite ongoing negotiations. By email on October 1, the Boilermakers notified Tom Valentine, who was then the Respondent’s senior project manager and chairman of the Association, of its availability to continue negoti- ating. Attached to the email was a letter from the Boil- ermakers’ attorney, advising the Boilermakers that be- cause its agreement with the Association had expired, its members were free to cease working without notice. Also on October 1, a crew of Boilermakers-represented employees informed the Respondent that they would not perform work that day because the agreement had ex- pired. A week later, on October 8, the Association and the Boilermakers agreed to extend the terms of the ex- pired agreement through October 29, to facilitate further bargaining. The October 29 expiration date passed and negotia- tions continued into November, with the parties disagree- ing about the inclusion of certain benefits. On November 12, Valentine sent the Boilermakers four copies of the collective-bargaining agreement that he believed the par- ties had successfully negotiated. On November 17, the Boilermakers sent a letter to Valentine listing various corrections and additional terms relating to the disputed benefits. On December 6, Valentine informed the Boil- ermakers that the Association would not accept the addi- tional terms. That same day, the Association filed a charge with the Board, alleging that the Boilermakers violated Section 8(b)(3) of the Act by refusing to sign the purported agreement and by insisting on terms that had not been negotiated. On February 17, 2011, the Association received notice of the Regional Office’s decision to dismiss the Decem- ber 6 charge, on the ground that the parties had not reached a complete agreement. That same day, the As- sociation terminated its 8(f) relationship with the Boil- ermakers, and it informed the Boilermakers that the As- sociation would no longer be using its members for fu- ture work.2 The Respondent also temporarily shut down ongoing welding operations that day and issued termina- tion notices to its 13 Boilermakers-represented employ- ees (the alleged discriminatees). The notices cited “con- tract has expired” as the reason for the terminations.3 2 It is undisputed that the termination of the 8(f) relationship was lawful. 3 The General Counsel excepts to the judge’s finding that the dis- criminatees were “laid off,” contending instead that they were dis- 362 NLRB No. 10 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 82 On February 23, 2011, the Respondent entered into a collective-bargaining agreement with the United Plumb- ers and Pipefitters Union (the Pipefitters). The Respond- ent resumed its welding operations on March 1, the day the Pipefitters dispatched its first employee to the Re- spondent. About this time, the Respondent contacted 10 of the 13 alleged discriminatees, informed them that it had reached an agreement with the Pipefitters, and stated that the alleged discriminatees would need to speak to the Pipefitters’ leadership if they were interested in re- turning to work. Eight of the 13 alleged discriminatees registered with the Pipefitters, and the first was dis- patched to the Respondent on March 22, 2011. II. THE JUDGE’S DECISION The judge dismissed the complaint, finding that the Respondent’s discharge of its 13 Boilermakers- represented employees did not violate Section 8(a)(3) and (1) of the Act. The judge analyzed the discharges under the framework set forth in NLRB v. Great Dane Trailers, Inc., 388 U.S. 26 (1967). In a Great Dane analysis, the lawfulness of the employer’s conduct turns on the impact of its conduct on Section 7 rights. If an employer’s discriminatory conduct is “inherently de- structive” of employee rights, no proof of antiunion mo- tive is required, and the Board may find an unfair labor practice even if the employer comes forward with evi- dence that it was motivated by business considerations. If, on the other hand, the adverse impact on employee rights is “comparatively slight,” an antiunion motivation must be proved to sustain an 8(a)(3) charge if the em- ployer has come forward with evidence of a legitimate and substantial business justification for the conduct.4 Under either scenario, once it has been established that the employer engaged in discriminatory conduct that affected employee rights to some extent, the conduct will be found unlawful unless the employer establishes that it was motivated by legitimate objectives. Id. at 33–34. Under this framework, the judge rejected the General Counsel’s contention that the Respondent’s conduct was “inherently destructive” of the employees’ Section 7 rights. Because the Respondent considered the alleged discriminatees for reemployment without regard to their charged. We agree with the General Counsel. Each notice deemed the action the employee’s “separation,” and, as the parties stipulated, the Respondent did not inform the alleged discriminatees of any possibility of recall. Moreover, according to Valentine’s credited testimony, the Respondent no longer considered them to be employees. 4 The judge’s analysis at one point erroneously suggests that the Board will determine whether an employer’s conduct had a “compara- tively slight” impact on employee rights only after the conduct is first found to be “inherently destructive.” In fact, under Great Dane, the impact will be deemed to be either “comparatively slight” or “inherent- ly destructive.” 388 U.S. at 34. prior affiliation with the Boilermakers, the judge found that any adverse impact was “comparatively slight.” She concluded that, in any event, there was no violation be- cause the Respondent established a legitimate and sub- stantial business justification for the discharges. Specifi- cally, the judge found that the discharge of the alleged discriminatees following the expiration of the parties' contract was justified by the Respondent’s longstanding practice of performing craft work only under a valid col- lective-bargaining agreement. Alternatively, the judge found that the discharges would also be lawful under the Board’s motive-based Wright Line standard.5 On exceptions, the General Counsel and the Boiler- makers contend that the Respondent's discharge of all of its employees who had been referred by the Boilermakers constituted “inherently destructive” conduct. They fur- ther assert that the Respondent’s alleged practice of working only under a collective-bargaining agreement is not a sufficient justification for discriminatorily discharg- ing employees, particularly because the Respondent had, in fact, previously performed welding work without a collective-bargaining agreement during the period be- tween October 29, 2010 (when the Boilermakers’ agree- ment expired), and February 17, 2011 (when the Re- spondent terminated its relationship with the Boilermak- ers). Accordingly, they assert, the Respondent cannot prevail even if the effect of the discharges is found to be “comparatively slight.” III. ANALYSIS Contrary to the judge, we find that the discharges vio- lated Section 8(a)(3) and (1). As explained below, the discharges were unlawful under both Wright Line and Great Dane.6 5 Wright Line, 251 NLRB 1083 (1980), enfd. 662 F.2d 889 (1st Cir. 1981), cert. denied 455 U.S. 989 (1982), approved in NLRB v. Trans- portation Management Corp., 462 U.S. 393 (1983). 6 Although the General Counsel neither clearly advanced a Wright Line theory at the hearing nor excepted to the judge’s failure to find a violation under that framework, this does not preclude the Board from doing so. The complaint is sufficient to encompass a Wright Line theo- ry. It alleges that the Respondent discharged the employees “because [they] were members of the Union” and that this conduct violated Sec. 8(a)(3) and (1). The complaint need not plead a specific legal theory, as long as it contains “a clear and concise description of the acts which are claimed to constitute unfair labor practices.” See NLRB Rules and Regulations, Sec. 102.15. Indeed, the Board, with court approval, has often found violations for different reasons and on different theories from those of administrative law judges or the General Counsel where the unlawful conduct was alleged in the complaint. See, e.g., Pepsi America, Inc., 339 NLRB 986 (2003); Jefferson Electric Co., 274 NLRB 750, 750–751 (1985), enfd. 783 F.2d 679 (6th Cir. 1986). We note further that the Respondent’s posthearing brief to the judge ana- lyzed the case under Wright Line, and, as stated above, the judge in- cluded an alternative Wright Line analysis in her decision. HAWAIIAN DREDGING CONSTRUCTION CO. 83 A. The Respondent denies that the alleged discrimi- natees’ association with the Boilermakers played any role in its decision to discharge them. Rather, it con- tends, the sole reason for the discharge was that it no longer had a collective-bargaining agreement with the Boilermakers. Inasmuch as this case turns on the Re- spondent’s motive, Wright Line is the appropriate analyt- ical framework. See Nationsway Transport Services, 327 NLRB 1033, 1034 (1999). Under Wright Line, the General Counsel has the initial burden to show that protected conduct was a motivating factor in the employer’s decision. The elements com- monly required to support a finding of unlawful motiva- tion are union activity, the employer’s knowledge of that activity, and evidence of animus. The burden then shifts to the employer to demonstrate that it would have taken the same action even in the absence of the employees’ union activity. Wright Line, supra, 251 NLRB at 1089. We find that the General Counsel established discrimina- tory motive, and the Respondent has failed to meet its rebuttal burden. The first two elements of the Wright Line test are un- disputed: all of the alleged discriminatees were Boiler- makers members, and their union affiliation was known to the Respondent. The third element, animus, is readily established by the Respondent’s summary discharge of all of its Boilermakers-represented employees, and only its Boilermakers-represented employees. Although an employer is free to terminate an 8(f) relationship with a union after expiration of a contract, it cannot discrimina- torily discharge its employees because of their affiliation with that union.7 Here, however, it did just that. On February 17, the Association notified the Boilermakers that it was terminating their relationship and that it did not “intend to utilize members of the Boilermaker’s [sic] Union for future work.” The same day, the Respondent issued termination notices to all of its employees repre- sented by the Boilermakers. Those facts virtually com- pel a finding that the Respondent discharged the alleged discriminatees because of their Boilermakers’ affiliation. We further find that the Respondent has not met its re- buttal burden of demonstrating that it would have dis- charged the alleged discriminatees even in the absence of their affiliation with the Boilermakers. The Respondent maintains that it requires that all its craft work be per- 7 Cf. Automatic Sprinkler Corp., 319 NLRB 401, 402 fn. 4 (1995) (“The expiration of an 8(f) contract simply privileges a withdrawal of recognition, not a discriminatory discharge of employees.”), enf. denied 120 F.3d 612 (6th Cir. 1997), cert. denied 523 U.S. 1106 (1998); Jack Welsh Co., 284 NLRB 378, 379, 383 (1987) (finding 8(a)(3) violation where employees were discharged after employer decided to “go open shop” rather than renew its 8(f) agreement; employees were “never given an opportunity to quit”). formed under collective-bargaining agreements to avoid the instability and unpredictability of working without the protections of an agreement. It asserts that this busi- ness model—not the alleged discriminatees’ union affili- ation—was the reason for the discharges. We do not doubt that the Respondent’s practice is to rely on hiring halls for labor pursuant to prehire collec- tive-bargaining agreements. Upon examination of the full record, however, we are not persuaded that the Re- spondent so strictly adheres to that practice that it would have discharged the discriminatees on that basis alone. In fact, the evidence reveals the contrary. As the General Counsel observes, the Boilermakers-represented employ- ees performed craft work in the months leading up to the February 17, 2011 discharges. Even setting aside the period from November 12 until February 17—when the Respondent believed the parties had an enforceable agreement—there were two periods during which the Respondent knowingly operated without an agreement in place. The first period occurred from October 1 through 7. Although its agreement with the Boilermakers had expired on September 30, it was not until October 8 that the parties agreed to extend the terms of that agreement through October 29. Yet the Respondent continued to perform craft work during that week-long period. The dissent overlooks the probative value of this evidence, contending that the hiatus periods between contracts were treated as contract extensions by the parties pursu- ant to “tacit agreement.” It relies on the testimony of Valentine and the Respondent’s president, William Wil- son, that, when the Boilermakers’ membership rejected the Respondent’s latest offer on September 30, they be- lieved that the expired agreement would continue to be enforced. Although that may have initially been the case, the Union promptly and affirmatively dispelled this belief. On September 30, Union Business Manager Meyers called Valentine to inform him that because the contract was expiring and the membership had rejected the Respondent’s most recent proposal, they should re- sume negotiations that day. Valentine countered that immediate negotiations were unnecessary because the parties could continue working under the terms of the expired agreement. According to Valentine’s own testi- mony, Meyers expressly disagreed. (Tr. 195–196.) The Boilermakers’ subsequent actions confirm that it viewed the expired contract as inoperative. On October 1, the Boilermakers sent Valentine an email stating, “As you know Allen [Meyers] was available to continue ne- gotiations last night and will be available all day. At- tached is a letter for your information.” The attached letter, from the Boilermakers’ attorney, advised the Boil- ermakers that because its agreement with the Respondent DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 84 had expired, its members were free to cease working at any time. Valentine admitted that he perceived this as a threat that the Boilermakers would engage in a work stoppage, notwithstanding the no-strike clause contained in the parties’ expired agreement. And, in fact, Valen- tine’s concerns were substantiated later that day when the Boilermakers members announced a work stoppage. These actions hardly reflect a “tacit agreement” to extend the terms of the expired contract. The second period occurred from October 30 through November 12. The parties failed to reach a new agree- ment by the new October 29 expiration date and the Re- spondent again continued to perform welding work using Boilermakers members. Once again our dissenting col- league attempts to diminish the significance of this peri- od by asserting that Valentine believed that a new agreement had been reached before November 1. As evidence, he points to an exchange of emails between the Boilermakers and Valentine on November 1, in which the Boilermakers sent Valentine a document outlining the “new Hawaii Wage/Benefits Rates” and Valentine responded that certain benefits included in the document had not been discussed or agreed to. From these limited communications, the dissent infers an acknowledgment between the parties that they had reached a complete agreement. We are not prepared to make that leap. He also relies on Valentine’s uncorroborated testimony that he was informed that the agreement had been ratified by the Boilermakers’ membership sometime prior to the November 1 exchange. In addition to the lack of any evidence that ratification occurred, the dissent’s position is directly contradicted by the judge, who found that “[c]ontract negotiations continued into November[.]” As noted by the judge, the earliest indication of Valentine’s belief that the parties had reached a successor agreement is contained in a November 12 letter. In short, from October 1 through 7, and then again from October 30 until November 12, the Respondent continued its operations using Boilermakers-represented employees, despite not having a collective-bargaining agreement in place. We recognize that, during these periods, the Respond- ent had not yet repudiated its 8(f) relationship with the Boilermakers and, we presume, expected to negotiate a successor agreement with that union. This, however, is of little significance because the Respondent contends that it was the lack of an agreement with the Boilermak- ers—not the lack of a bargaining relationship—that led to its decision to discharge the alleged discriminatees. The Respondent has not come forward with any expla- nation for its inconsistent adherence to its asserted busi- ness model. Nor does it offer any basis for the proposi- tion that the discharges furthered its interest in maintain- ing operational stability. The Respondent cites the legis- lative history of Section 8(f), but makes no showing that the policy considerations there discussed—including predictability of labor costs and labor supply—were fac- tors in its decision to discharge the discriminatees. It is undisputed that there was welding work to be performed and, although we understand that the repudiation of the 8(f) relationship prevented the Respondent from seeking new referrals from the Boilermakers, it has not indicated that it needed additional labor beyond the number of Boilermakers members who had already been dispatched and were working for the Respondent. As to those em- ployees, the Respondent does not contend, let alone show, that it doubted their willingness to continue to perform work after February 17. Simply put, the evi- dence offered by the Respondent does not overcome the inference of discriminatory intent. Accordingly, we find that the Respondent has not carried its burden of estab- lishing that it would have discharged the discriminatees even in the absence of their union affiliation. The dis- charges therefore violated Section 8(a)(3) and (1).8 8 We do not dispute that the three “black-letter principles” cited by the dissent are “clear and well accepted.” But, as we have discussed, the first two principles—an employer’s right to repudiate an 8(f) rela- tionship with one union after the agreement expires and to enter into a new 8(f) agreement with a different union—do not answer or even address the question presented here: whether the employer may then discharge its employees who were members of the first union. The third principle—an employer’s right to permanently shut down its business—was enunciated by the Supreme Court in Textile Workers v. Darlington Mfg. Co., 380 U.S. 263 (1965). That case stands for the proposition that an employer’s decision to go out of business is a matter of management prerogative and does not violate the Act, even if moti- vated by antiunion considerations. But this case involves a temporary shutdown, not a permanent closure, and Darlington is therefore irrele- vant. In Darlington, where the employer closed its plant following the un- ion’s election, the Court held that an employer has an absolute right to completely terminate its entire business for any reason, even antiunion animus, and that such action will not constitute an unfair labor practice. The Court observed that the Act prohibits the discriminatory use of economic weapons for the purposes of obtaining future benefits. Thus, because an employer who undertakes a “bona fide” complete liquida- tion of a business in response to collective activity does not stand to gain any benefit from the resulting discouragement of such activity, that action is not the type of discrimination prohibited by the Act. Id. at 272. The Court was careful to distinguish other employer actions aimed at obtaining some future benefit— for example, “runaway shop” and “temporary closing” cases. Id. at 272–273, 275. The Court ob- served that a permanent partial closing would be unlawful if intended to discourage union activity among employees in the employer’s re- maining operations. Id. at 274–275. The Board and courts have consistently recognized that the Court’s logic is limited to permanent closings and has no applicability to sus- pensions of operations that are merely temporary. See, e.g., Plaza Properties of Michigan, Inc., 340 NLRB 983, 987 (2003); Bruce Dun- can Co. v. NLRB, 590 F.2d 1304, 1307 (4th Cir. 1979); NLRB v. South- HAWAIIAN DREDGING CONSTRUCTION CO. 85 B. Alternatively, as argued by the General Counsel, the Respondent’s discharge of all of its Boilermakers- represented employees was unlawful under NLRB v. Great Dane Trailers, supra, 388 U.S. 26. As previously stated, if an employer’s conduct is “inherently destruc- tive” of important employee rights, no proof of discrimi- natory motive is needed and the Board can find a viola- tion even if the employer introduces evidence of a busi- ness justification.9 Id. at 34. Conduct is deemed to be “inherently destructive” if it “would inevitably hinder future bargaining or create visible and continuing obsta- cles to the future exercise of employee rights.” D & S Leasing, 299 NLRB 658, 661 (1990), enfd. sub nom. NLRB v. Centra, Inc., 954 F.2d 366 (6th Cir. 1994), cert. denied 513 U.S. 983 (1994) (internal quotations omitted). The Board has applied the “inherently destructive” standard to similar situations where an employer dis- charges all employees of a particular craft because of their affiliation with and referral from a union. For ex- ample, in Catalytic Industrial Maintenance Co. (CIMCO), 301 NLRB 342 (1991), enfd. 964 F.2d 513 (5th Cir. 1992), the Board found that the employer vio- lated Section 8(a)(3) by discharging all of its electricians after the union that had referred them ended its 8(f) rela- tionship with the employer. Similarly, in Jack Welsh Co., 284 NLRB 378 (1987), the Board found a violation where the employer discharged employees after the expi- ration of its 8(f) contract and replaced them with unrep- resented employees. Both decisions found that specific evidence of antiunion motivation was unnecessary be- cause the discharges were inherently destructive of em- ployee rights. CIMCO, 301 NLRB at 347 fn. 17; Jack Welsh, 284 NLRB at 383 fn. 10. Applying those principles, we find that the Respond- ent’s discharge of its Boilermakers-represented employ- ees was inherently destructive of their right to member- ship in the union of their choosing, unencumbered by the threat of adverse employment action. As discussed above, it is clear from the facts that the Respondent, as in CIMCO and Jack Welsh, discharged the alleged discrim- inatees because of their affiliation with the Boilermakers. In declining to find the Respondent’s conduct inherent- ly destructive, the judge distinguished CIMCO and Jack Welsh as involving employers that sought to replace their employees with a nonunion work force. Here, the judge ern Plasma Corp., 626 F.2d 1287, 1292 (5th Cir. 1980); see also Flat Dog Productions, 347 NLRB 1180, 1196 (2006). We are aware of no decision applying Darlington to facts like those presented here. 9 For the reasons already discussed regarding the inapplicability of Darlington to the Respondent’s temporary partial shutdown, we reject the dissent’s argument that the “inherently destructive” theory is fore- closed by Darlington. reasoned, the Respondent never intended to become a nonunion shop and, in fact, ultimately informed the al- leged discriminatees that they could return to work through a referral from the Pipefitters. The judge’s rea- soning is flawed in two respects. First, discrimination on the basis of affiliation with one union instead of another is no less violative of Section 8(a)(3), than discrimination on the basis of union membership in general. The cases are legion that both forms of discrimination have the tendency to discourage or encourage union membership, and are therefore unlawful.10 Second, the judge’s reliance on the Respondent’s sub- sequent offer to allow the alleged discriminatees to return to work if they obtained a referral from the Pipefitters is misplaced. As in CIMCO, where the employer offered reemployment to its former union-represented employees after it hired a “core complement” of nonunion employ- ees, the Respondent’s offer does not undo the impact of the discriminatory discharges. CIMCO, supra, 301 NLRB at 346. Although the judge found that the Re- spondent “acted quickly” and “prioritized the continued employment” of the alleged discriminatees once it re- sumed operations on March 1, when the Pipefitters made its first dispatch under the new agreement, not one of the alleged discriminatees was among the employees initially dispatched by the Pipefitters. In fact, although six of the alleged discriminatees had registered with the Pipefitters as soon as February 25, it was not until March 22 that the first was actually dispatched to the Respondent—3 weeks after operations resumed and the first Pipefitters members were dispatched. Accordingly, the Respond- ent’s conduct harmed the alleged discriminatees by de- laying their ability to promptly return to work once the Respondent resumed its operations.11 We also reject the dissent’s assertion that the discrimi- natees would have been in a similar position even if they had been continuously employed or laid off during the temporary shutdown rather than terminated. It reasons that after the Respondent reached a new agreement with 10 See, e.g., Matros Automated Electrical Construction Corp., 353 NLRB 569, 572–573 (2008) (discrimination against employees because of their support of one union over another violated Sec. 8(a)(3) and (1)), enfd. 366 Fed. Appx. 184 (2d Cir. 2010); APF Carting, Inc., 336 NLRB 73 (2001) (same), enfd. 60 Fed. Appx. 832 (D.C. Cir. 2003). 11 Similarly, we are not persuaded by the dissent’s attempt to distin- guish CIMCO on the basis that the Boilermakers never informed the Respondent that it would permit its members to continue working with- out a collective-bargaining agreement. In CIMCO, the fact that the union told the employer that it would permit its members to continue working after termination of the bargaining relationship was significant because it undercut the employer’s defense that it believed hiring non- union employees was necessary to ensure a continuous work force. Here, by contrast, the Respondent asserted no basis for doubting the discriminatees’ willingness to continue working. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 86 the Pipefitters, the discriminatees would have had to withdraw from the Boilermakers and seek referral from the Pipefitters in order to “return” to work. To the con- trary, under Section 8(f)(2), when an employer termi- nates its 8(f) relationship with one union and enters into an 8(f) relationship with another union, the employees who were referred by the first union are entitled to a 7- day grace period to decide whether to join the new union in order to retain their jobs. See George C. Foss Co., 270 NLRB 232, 232 (1984), enfd. 752 F.2d 1407 (9th Cir. 1985). Meanwhile, the new union cannot require that the employees be terminated and be put through its own referral process. Austin & Wolfe Refrigeration, 202 NLRB 135, 135 (1973). In other words, if, instead of discharging them, the Respondent had continuously em- ployed the discriminatees when it temporarily ceased operations, they would have been able to promptly return to work once operations resumed rather than seek referral anew and await dispatch through the Pipefitters.12 Further, the fact that the discriminatees would have had to choose between membership in either the Boiler- makers or the Pipefitters at the end of the statutory grace period regardless of whether they were discharged does not undercut our finding that the discharges were inher- ently destructive. The dissent’s view that the Respond- ent’s actions were “inherently neutral” with regard to the discriminatees’ right to membership in a union of their choosing ignores the signal fact that they were dis- charged and lost several weeks of employment merely because they were members of the Boilermakers. Having concluded that the Respondent engaged in conduct that was “inherently destructive” of the alleged discriminatees’ Section 7 rights, we turn to the next step in the Great Dane analysis and examine whether the Re- spondent’s asserted business justification is sufficient to outweigh the destructive impact of the discharges.13 We find that it is not. As we have already noted, the record 12 The dissent quotes the Pipefitters agreement, which requires the Respondent to “secure all employees covered by this agreement through the employment office of the union.” It contends that if “se- cure all employees” includes recalling them from layoff, then even if the Respondent had laid off the welders rather than terminating them, it could not have recalled any Boilermakers-represented welders—even within the 7-day grace period—without breaching the Pipefitters agreement. This argument is at odds with the Respondent’s own inter- pretation of the agreement; the Respondent denies that the Pipefitters required the discharged employees to cease being Boilermakers mem- bers or to join the Pipefitters before expiration of the 7-day grace peri- od. (See R. Ans. Br. at 33–34.) 13 “[E]ven if the employer does come forward with counter explana- tions for his conduct in this situation, the Board may nevertheless draw an inference of improper motive from the conduct itself and exercise its duty to strike the proper balance between the asserted business justifi- cations and the invasion of employee rights in light of the Act and its policy.” NLRB v. Great Dane Trailers, supra, 388 U.S. at 33. does not support the Respondent’s contention that it re- quires that all of its craft work be performed under col- lective-bargaining agreements. Even assuming, however, that the Respondent discharged the alleged discrimi- natees because there was no collective-bargaining agreement in place, we would still find that this justifica- tion did not outweigh the harm done to the employees on account of their union affiliation. As the dissent correctly notes, the Respondent’s termi- nation of its relationship with the Boilermakers freed it of any “contractual obligation regarding the appropriate treatment of [its] employees” (emphasis supplied). It did not, however, extinguish the Respondent’s statutory ob- ligation to refrain from engaging in discriminatory treat- ment of its employees. To be clear, we do not dispute the importance of an employer’s interest in operational stability and predictability, and the Respondent’s lawful repudiation of its 8(f) relationship with the Boilermakers freed the Respondent of its commitment to continue to seek referrals from that union. We also recognize the Respondent’s right to exercise its managerial prerogative to cease operations temporarily. We disagree, however, that these interests justified the summary discharge of the employees who had already been referred from the Boil- ermakers and who were working for the Respondent when the 8(f) relationship ended. Put otherwise, after the Respondent ended its relationship with the Boilermakers on February 17, it was free to temporarily halt its opera- tions while it negotiated a new 8(f) agreement with an- other union. And, the Respondent was free to lay off the alleged discriminatees during this period, so long as they remained employees with an expectation of recall, there- by allowing them to return once operations resumed. Thereafter, at the end of the statutory 7-day grace period, the Respondent and the Pipefitters were free to require the alleged discriminatees, as a condition of continued employment, to meet the Pipefitters’ criteria for referral and become dues-paying members. What the Respond- ent could not do, however, was sever its employment relationship with the alleged discriminatees on account of their Boilermakers’ membership. For the reasons discussed, we conclude that the Re- spondent’s discharge of its 13 Boilermakers-represented employees upon the repudiation of its 8(f) relationship with that union violated Section 8(a)(3) and (1).14 14 Although we conclude that the Respondent’s conduct was “inher- ently destructive,” we note that there are no exceptions to the judge’s finding that the discharges had at least a “comparatively slight” adverse impact. Indeed, it is clear that the discharge of all employees associat- ed with a particular union is discriminatory on its face and that this discrimination has the potential to discourage union membership within the meaning of Sec. 8(a)(3). We would also find a violation applying this standard of Great Dane, under which the burden still rests with the HAWAIIAN DREDGING CONSTRUCTION CO. 87 CONCLUSIONS OF LAW 1. The Respondent is an employer engaged in com- merce within the meaning of Section 2(2), (6), and (7) of the Act. 2. The International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, Local 627 is a labor organization within the meaning of Section 2(5) of the Act. 3. The Respondent Employer has violated Section 8(a)(3) and (1) by discharging the following employees: Kona Akuna, Paul Aona, Crispin Bantoy, Domingo De- los Reyes, Jeffery Esmeralda, Joseph Galzote, Manuel Gaoiran, Daniel Marzo Jr., Henry Merrill, Peter Pa- gaduan, Joselito Peji, Rolando Tirso, and Kenneth Val- dez. 4. The above unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. REMEDY Having found that the Respondent has engaged in cer- tain unfair labor practices, we shall order it to cease and desist and to take certain affirmative action designed to effectuate the policies of the Act. Specifically, having found that the Respondent violat- ed Section 8(a)(3) and (1) by discriminatorily discharg- ing 13 employees, we shall order that each of the affected employees be offered immediate and full reinstatement to their former positions, or, if those positions no longer exist, to substantially equivalent positions without preju- dice to their seniority or other rights and privileges pre- viously enjoyed, and make them whole, with interest, for any loss of earnings and other benefits they may have suffered as a result of the discrimination against them. Backpay shall be computed in accordance with F. W. Woolworth Co., 90 NLRB 289 (1950), with interest at the rate prescribed in New Horizons for the Retarded, 283 NLRB 1173 (1987), compounded daily as prescribed in Kentucky River Medical Center, 356 NLRB 6 (2010). In addition, we shall order the Respondent to compensate the employees for the adverse tax consequences, if any, of receiving lump-sum backpay awards and to file a re- port with the Social Security Administration allocating the backpay awards to the appropriate calendar quarters for each employee. Don Chavas, LLC d/b/a Tortillas Don Chavas, 361 NLRB 101 (2014). The Respondent additionally shall be ordered to re- move from its files any references to the unlawful dis- Respondent to establish a “legitimate and substantial business justifica- tion” for the discharges. Great Dane Trailers, supra, 388 U.S. at 34. For the reasons discussed above, we find that the Respondent did not sustain this burden because it has not shown that it was necessary to discharge, rather than simply lay off, the alleged discriminatees when it temporarily ceased its welding operations. charges of these employees and to notify them in writing that this has been done and that the unlawful actions will not be used against them in any way. ORDER The Respondent, Hawaiian Dredging Construction Company, Inc., Honolulu, Hawaii, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Discharging or otherwise discriminating against employees because of their membership in, activities on behalf of, or referral from, International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, Local 627, or any other labor organization. (b) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) Within 14 days of this Order, offer Kona Akuna, Paul Aona, Crispin Bantoy, Domingo Delos Reyes, Jef- fery Esmeralda, Joseph Galzote, Manuel Gaoiran, Daniel Marzo Jr., Henry Merrill, Peter Pagaduan, Joselito Peji, Rolando Tirso, and Kenneth Valdez immediate and full reinstatement to their former jobs or, if their jobs no longer exist, to substantially equivalent positions, with- out prejudice to their seniority or any other rights or priv- ileges previously enjoyed. (b) Make the affected employees whole for any loss of earnings and other benefits suffered as a result of the discrimination against them in the manner set forth in the remedy section of this decision. (c) Compensate the affected employees for the adverse tax consequences, if any, of receiving lump-sum backpay awards, and file a report with the Social Security Admin- istration allocating the backpay awards to the appropriate calendar quarters. (d) Within 14 days from the date of this Order, remove from its files any reference to the unlawful discharges, and within 3 days thereafter, notify the employees in writing this has been done and that these actions will not be used against them in any way. (e) Preserve and, within 14 days of a request, or such additional time as the Regional Director may allow for good cause shown, provide at a reasonable place desig- nated by the Board or its agents, all payroll records, so- cial security payment records, timecards, personnel rec- ords and reports, and all other records including an elec- tronic copy of such records if stored in electronic form, necessary to analyze the amount of backpay due under the terms of this Order (f) Within 14 days after service by the Subregion, post at its Honolulu, Hawaii facility copies of the attached DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 88 notice marked “Appendix.”15 Copies of the notice, on forms provided by the Regional Director for Subregion 37, after being signed by the Respondent's authorized representative, shall be posted by the Respondent and maintained for 60 consecutive days in conspicuous plac- es including all places where notices to employees are customarily posted. In addition to physical posting of paper notices, notices shall be distributed electronically, such as by email, posting on an intranet or an internet site, and/or other electronic means, if the Respondent customarily communicates with its employees by such means. Reasonable steps shall be taken by the Respond- ent to ensure that the notices are not altered, defaced, or covered by any other material. In the event that, during the pendency of these proceedings, the Respondent has gone out of business or closed the facility involved in these proceedings, the Respondent shall duplicate and mail, at its own expense, a copy of the notice to all cur- rent employees and former employees employed by the Respondent at any time during the period beginning on February 17, 2011. (g) Within 21 days after service by the Subregion, file with the Regional Director a sworn certification of a re- sponsible official on a form provided by the Subregion attesting to the steps that the Respondent has taken to comply. MEMBER MISCIMARRA, dissenting. I believe this case turns on three black-letter principles that are clear and well accepted. • When a “prehire” agreement exists be- tween a construction industry employer and a union, the employer has the right, on or after the agreement’s expiration, to repudiate the agreement and abandon any relationship with the union.1 • The same employer, absent a conflicting agreement, has the right to enter into a 15 If this Order is enforced by a judgment of a United States court of appeals, the words in the notice reading “Posted by Order of the Na- tional Labor Relations Board” shall read “Posted Pursuant to a Judg- ment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board.” 1 John Deklewa & Sons, Inc., 282 NLRB 1375, 1377–1378 (1987) (“[U]pon the expiration of [prehire] agreements, the signatory union will enjoy no presumption of majority status, and either party may repudiate the 8(f) bargaining relationship.”), enfd. sub nom. Iron Work- ers Local 3 v. NLRB, 843 F.2d 770 (3d Cir. 1988). Prehire agreements are expressly permitted under Sec. 8(f) of the Act, and they are gov- erned by special rules—including those established in part by Dekle- wa—based on considerations that uniquely pertain to the construction industry. different “pre-hire” agreement with a dif- ferent union.2 • The Act does not require any employer to remain in business or to continue any particular type of work. Every employer has the right, regardless of motivation towards the affected employees, to cease operations and to discharge employees, provided the same work is not performed by other employees and there is no pur- pose to “chill” union activity elsewhere.3 These three principles relate to what the employer did here. The Respondent, Hawaiian Dredging Construction Company, had a prehire agreement governing welding work. After the agreement expired, the Company en- tered into a new prehire agreement with a different un- ion. During the hiatus between the agreements, the em- ployer discontinued all welding operations, which meant (no surprise) there was no work for welders. Therefore, the existing welders were discharged. At the time, no union agreement was in effect and, accordingly, there were no applicable contract provisions that imposed any requirements on the Company concerning permanent or temporary closings, employment terminations, layoffs, or recalls. However, there is good news: the welding work resumed, and the Company contacted its former welders about obtaining potential employment pursuant to the new union agreement.4 As to the welding work—the 2 Sec. 8(f) expressly permits construction industry employers “to make an agreement” with a construction union regardless of whether the union has “majority” support among the employees and regardless of whether the new agreement requires employees to become members of the new union (subject to certain requirements and qualifications that have no relevance here). Congress enacted 8(f) in recognition of the fact that construction industry employers have a unique need to enter into labor agreements—even before they have employees and regard- less of whether employees support the union—because (i) construction industry unions, through their hiring halls, are often the source of labor for those employers, and (ii) prehire agreements enable employers to have enough information regarding labor costs to formulate bids for construction work. See Deklewa, 282 NLRB at 1380 (citation omitted). 3 Textile Workers v. Darlington Mfg. Co., 380 U.S. 263, 268–276 (1965) (employer has the “absolute right” to terminate its business or to implement a “partial closing,” even if motivated by antiunion animus, provided there is no “purpose to chill unionism” among other employ- ees). Unlike a complete or partial discontinuation of operations, a relocation or subcontracting based on antiunion considerations violates Sec. 8(a)(3), id. at 272–273 and fn. 16, and Federal law also prohibits employers from circumventing obligations under the Act by transfer- ring work to an alter ego or “disguised continuance” of the employer, id. at 270 (citing Southport Petroleum Co. v. NLRB, 315 U.S. 100, 106 (1942)). None of the latter types of changes are at issue here. 4 Respondent employed 13 welders under its initial prehire agree- ment who were discharged. It contacted 10 of the welders about poten- tial reemployment under the Pipefitters’ agreement, 8 of whom regis- HAWAIIAN DREDGING CONSTRUCTION CO. 89 only work relevant here—no former employees were discriminated against in favor of other employees. On these facts, the judge found the Respondent en- gaged in no violation, and she dismissed the complaint. My colleagues disagree, however, and find that the Re- spondent violated Section 8(a)(3) by terminating the former welders during the hiatus between contracts. I respectfully dissent because the judge’s disposition, in my view, was correct, and I disagree with my col- leagues’ finding of a violation, which is irreconcilable with the three black-letter principles stated above. As explained below, I believe my colleagues are incorrect in the following respects. First, under the Supreme Court decision in Darlington, the Respondent’s cessation of welding work was lawful without regard to its motivation, and it had no legal obli- gation—in the absence of work being performed—to refrain from employment terminations or layoffs, or to do one versus the other. Second, even if motivation is relevant, I believe the record does not reasonably support any finding of unlaw- ful motivation. To the extent this case involves dual mo- tives—which I believe is not established by the record evidence—the Respondent has satisfied its Wright Line burden to prove it would have taken the same actions without regard to any unlawful motivation.5 Third, I believe there is no reasonable justification for finding a violation on the basis that the Respondent’s actions were “inherently destructive.” This phrase, most often associated with the Supreme Court’s Great Dane decision,6 refers to conduct that—by its nature—carries with it a necessary inference of unlawful motivation. I believe any “inherently destructive” finding is foreclosed by Darlington. Moreover, as one can gather from the facts described above, Respondent here did not do any- thing unlawful, and nothing in the record reasonably proves that Respondent’s actions were “inherently de- structive” of protected employee rights. Facts Hawaiian Dredging Construction Company, Inc. (the Respondent or HDCC) is the largest general contractor in the State of Hawaii and the principal power and industri- al (P&I) contractor in the State. P&I work includes, for example, building and maintaining electric power plants and performing industrial mechanical work in water treatment plants. The Respondent performs P&I work through its P&I division. tered with the Pipefitters. There is no allegation that the Respondent engaged in unlawful discrimination with respect to these arrangements. 5 Wright Line, 251 NLRB 1083 (1980), enfd. 662 F.2d 899 (1st Cir. 1981), cert. denied 455 U.S. 989 (1982). 6 NLRB v. Great Dane Trailers, Inc., 388 U.S. 26 (1967). The Respondent is not a likely candidate to be en- meshed in unfair labor practice proceedings before the Board. For at least 20 years, the Respondent has per- formed all work requiring craft labor under collective- bargaining agreements. Consistent with that decades- long practice, for many years the Respondent’s P&I divi- sion performed welding work using welders supplied by the Charging Party, International Brotherhood of Boil- ermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, Local 627 (the Union, the Boilermakers, or Lo- cal 627), under 8(f) collective-bargaining agreements between the Union and the Association of Boilermakers Employers of Hawaii (the Association), of which the Respondent was a member. The most recent of these agreements was effective October 1, 2005, to September 30, 2010 (the 2005–2010 CBA). The Company’s dec- ades-old practice of performing craft work only under collective-bargaining agreements with trade unions is certainly consistent with the Act, which was enacted in part to “encourag[e] the practice and procedure of collec- tive bargaining.”7 The Association and the Union began meeting on Sep- tember 20, 2010, to negotiate a successor agreement. On September 30, the Union’s members rejected the Associ- ation’s offer for a new agreement. In the past, when the Respondent and one of the unions with which it partners were unable to conclude a successor agreement by the expiration date of their current agreement, the Respond- ent and the union treated the just-expired agreement as extended until a new agreement was reached. Based on that practice, the Respondent believed that the 2005– 2010 CBA would be extended by mutual, tacit agreement while bargaining continued.8 On October 1, the Union gave the Association notice that “[b]ecause recognition is under Section 8(f), either party is free to . . . take eco- nomic action or to cease bargaining,” and that its mem- bers were free to “cease working without any further 7 Sec. 1 of the Act. 8 William Wilson, the Respondent’s president, relevantly testified as follows: “I expected, as on several other occasions in recent years and the time I'm familiar with it where agreement was not reached between the [e]mployer and the [u]nion, that the conditions of the current agreement continued to be enforced, workers continued to show up to work and management continued to do that while the bargaining con- tinued” (Tr. 95–96.) Tom Valentine, at the time the Respondent’s senior project manager and chairman of the Association, operated under the same expectation. When the Union’s membership rejected the Respondent’s contract offer on September 30, Valentine spoke by telephone with Local 627 Business Manager B. Allen Meyers. Meyers told Valentine that he wanted to return to bargaining immediately, but Valentine saw no need, since (in his view) the terms and conditions of the 2005–2010 CBA continued to apply. As Wilson testified, the Re- spondent’s relationship with the trade unions “[has] been very much a partnership, a very cooperative arrangement” (Tr. 92). DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 90 notice.” The same day, five Boilermakers-represented employees showed up at one of the Respondent’s P&I projects and walked off the job. On October 8, the Association and the Union formally agreed to extend the 2005–2010 CBA until October 29, with any new agreement retroactive to October 1. The parties continued bargaining and reached an agreement on or about October 27. The Union’s members ratified the new contract, and Association Chairman Tom Valen- tine was informed of that fact. On November 1, Union Business Representative Gary Aycock sent an email to Valentine. Aycock attached to the email “the new Hawaii Wage/Benefit Rates that are effective October 1, 2010.” The attached document in- cluded two terms that Valentine believed had not been discussed or agreed to during the just-concluded negotia- tions: a “maintenance of benefits” provision adding 50 cents an hour to the Respondent’s Health & Welfare con- tribution “in the event additional contributions are neces- sary to maintain the existing level of benefits,” and 29 cents an hour for “MOST” (mobilization optimization stabilization and training) instead of the 24 cents an hour Valentine believed had been agreed to. The same day— November 1—Valentine replied to Aycock’s email, stat- ing that the parties “did not negotiate these [two] items” and asking Aycock to “[p]lease remove these items from the wage schedule.” Aycock did not respond. Subsequently, Valentine sent Local 627 Business Manager Meyers a letter dated November 12, enclosing four copies of a document that Valentine believed accu- rately reflected the parties’ new collective-bargaining agreement, which in his view did not include mainte- nance of benefits and the additional 5-cent contribution for MOST. Valentine’s letter stated that these items were “not included in the recently concluded negotia- tions.” At the hearing, Valentine testified that notwith- standing the back-and-forth over maintenance of benefits and MOST, he believed the parties had an agreement. Meyers replied to Valentine by letter dated November 17, insisting that the two disputed terms be included, and setting a deadline of November 30 for Valentine to sign an agreement that included the disputed terms. The Un- ion subsequently extended this deadline to December 6. Meanwhile, the Respondent contracted with Hawaiian Electric Company (HECO) to perform welding work at HECO’s Kahe 4 Power Plant during a planned mainte- nance outage. At its peak, the Kahe 4 project would re- quire the Respondent to employ approximately 20 weld- ers assigned to that project. Under the recently conclud- ed agreement (as under the 2005–2010 CBA), the Re- spondent was required to obtain welders by referral from the Union (unless the Union was unable to fulfill a re- quest within 48 hours, in which case the Respondent was entitled to “employ applicants from any other available source”). On Friday, December 3, the Respondent asked the Union to dispatch a welder to the Kahe 4 project on Monday, December 6. No welder showed up on Decem- ber 6, and Valentine learned that Aycock was directing Boilermakers welders not to report to the Respondent’s projects. That same day (December 6), Valentine emailed Ay- cock. “I do not understand the reason for this failure to honor the dispatch,” Valentine wrote. “We have a dis- puted contract and our position has always been that up- on resolution the contract would be retroactive to Octo- ber 1, 2010.” Valentine also reiterated that the Union’s version of the contract “does not reflect the agreement from recently concluded contract negotiations.” Valen- tine informed Aycock that the Respondent intended to file an unfair labor practice charge. That charge, also dated December 6, alleged that the Union, on or about November 17 (the date of Business Manager Meyers’ letter to Valentine), violated Section 8(b)(3) by “refusing to sign a negotiated agreement and attempting to include terms in the . . . agreement that were neither discussed nor negotiated.” On December 7, the Union failed to honor a dispatch request for three welders for the Kahe 4 project. On De- cember 9, the Union dispatched one welder to the Kahe 4 project, but without giving the Respondent advance no- tice who was coming or when he would arrive, contrary to the Union’s usual practice. On December 12, Valentine emailed a status update to the Respondent’s management team. Valentine informed the team that the Respondent had submitted 13 dispatch requests for journeymen welders for the Kahe 4 project, and that with one exception the Union had failed to hon- or the dispatch on the date requested. “These delays,” Valentine wrote, “have been for at least two days, some have been for 3 to 4 days and some have not been an- swered at all.” Valentine stated that the Respondent had contacted some Boilermakers welders “directly (as per- mitted by contract if the [U]nion fails to respond to our dispatch within 48 hours),” and had learned that the Un- ion had told those individuals “not to report to any HDCC job or suffer the sanctions from the [U]nion.”9 9 I take administrative notice that art. 17.1.20 of the constitution of the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers provides that “[n]o member shall accept employment with a nonunion contractor without prior written approval by the Business Manager or where there is no Business Man- ager, by the President of the Local Lodge having the jurisdiction over the territory.” Under art. 17.5.1, the penalties for violating art. 17.1.20 include reprimand, fine, suspension, and expulsion. I infer that these are the “sanctions” Valentine referred to in his December 12 email.See HAWAIIAN DREDGING CONSTRUCTION CO. 91 Valentine expressed concern that HECO “could termi- nate [the Respondent’s] contract” for the Kahe 4 project “[i]f the [U]nion continues this practice.” Meanwhile, welds performed by welders the Union had dispatched failed HECO’s quality-control testing, and HECO directed the Respondent to terminate four Boilermakers welders. In an effort to retain the Kahe 4 project work, the Respondent transferred eight welders from other projects to the Kahe 4 project and shut down those other projects. The transfers were insufficient to offset the manpower shortages caused by the Union’s sporadic and untimely referrals, and HECO reassigned the Kahe 4 project work to another contractor. On De- cember 20, Valentine reported these developments to Aycock, reminding Aycock that for the past several years HECO had provided “the overwhelming majority of [B]oilermaker work in Hawaii,” and expressing concern that the Union’s untimely dispatches and the poor per- formance of the welders it referred “are causing HECO to reevaluate its . . . relationship with HDCC and the [B]oilermakers.” Valentine asked the Union to explain “how [it] will correct these immediate problems.” The Union did not respond. On February 14, 2011, the Region dismissed the Re- spondent’s 8(b)(3) charge, finding that the parties “did not reach a complete agreement on terms and conditions of employment.” By letter dated February 17, Valentine notified the Union that the Respondent was terminating their relationship. The same day, the Respondent dis- charged its 13 remaining welders and ceased performing all welding work.10 On or about February 19,11 Valentine, Respondent’s vice president, Dan Guinaugh, and its In-House Counsel Gary Yokoyama met with representatives of the Plumb- ers and Pipefitters Union, Local 675 (the Pipefitters) to discuss a possible agreement. Guinaugh asked the Pipe- fitters if they “would take our former Boilermaker em- ployees as Pipefitters” (Tr. 223)—i.e., if the Pipefitters would dispense with their usual requirements and refer https://www.boilermakers.org/files/leadership/2011_IBB_Constitution. pdf (last visited June 30, 2014). 10 The judge characterized these as layoffs. I agree with my col- leagues that the employees were discharged. 11 The precise date of the first meeting between the Respondent and the Pipefitters is uncertain. Valentine testified as follows: Q. And how much before this February 23rd meeting was the previous meeting? A. Just a few days. It was after we had sent the termination letter to the Boilermakers and it was in that time frame. I know it was a couple days after that and a few days before this. I don't remember precisely the date. Q. So it was sometime between February 17th and Febru- ary 23rd? A. Yes. (Tr. 222.) the former employees back to the Respondent. The Pipe- fitters refused to do so for two reasons. First, the parties were contemplating that HDCC would become signatory to the Pipefitters multiemployer agreement covering ap- proximately 60 contractors, and that contract contained a “most favored nations” clause. Under that clause, the Pipefitters would have to extend to all signatory employ- ers any special consideration in referrals given to the Respondent, and it was unwilling to do so. Second, the Pipefitters wanted to ensure that HDCC’s former em- ployees possessed the necessary skills to work for any of their signatory employers, and therefore they were un- willing to waive the welding test required of all prospec- tive registrants in its hiring hall. Guinaugh offered to give the Pipefitters a list of names of the former employ- ees. The Pipefitters declined, saying that they could not solicit membership of another union’s members. On February 23, the Respondent and the Pipefitters met again. Bill Wilson, HDCC’s president, attended this meeting, and he repeated Guinaugh’s request from the first meeting, asking the Pipefitters to take HDCC’s for- mer employees unconditionally. The Pipefitters again declined to do so. During this meeting, the Respondent became signatory to the Pipefitters multiemployer agreement. That agreement contained an exclusive refer- ral provision, which required the Respondent to “secure all employees covered by this agreement” by referral from the Pipefitters’ hiring hall (unless the Pipefitters could not supply the Respondent’s needs within three working days of the request).12 The Pipefitters agree- ment also contained a union-security provision.13 The Respondent promptly notified its former employees that they could return to the Respondent through the Pipefit- ters if they chose to14 and if they met the Pipefitters’ re- 12 Pipefitters Agreement, Exh. “A”: Referral Procedure, sec. 3 (R. Exh. 22 at Bates No. HDCC 000517): “The individual employer must secure all employees covered by this agreement through the employ- ment office of the union except as provided in Section 11 herein be- low.” Sec. 11 (R. Exh. 22 at Bates No. HDCC 000518) provides that “[i]n the event that the Union does not dispatch any applicants within three (3) working days following the day of the request of the individu- al employer . . . , the individual employer may employ any person . . . .” 13 Pipefitters Agreement, art. III, sec. 7 (R. Exh. 22 at Bates No. HDCC 000492): “The employer shall require each employee covered by this agreement to become and remain a member of the union as a condition of employment from and after the 8th day following the date of his/her employment or the effective date of this agreement, whichev- er is later.” 14 Valentine testified that he told former employees that “this was a decision you need to make, you know, what you believe is best for you, but these are the options available” (Tr. 226). Most of the former em- ployees were contacted by Valentine’s subordinate, Superintendent Forrest Ramey (Tr. 274–276). Ramey told them that he “didn’t know exactly what the process was or what hurdles they would have to DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 92 ferral requirements. The Respondent provided its former employees a warehouse where they could practice in preparation for the Pipefitters’ welding test. The Re- spondent furnished the necessary tools, equipment, raw materials, and welding rods, and also provided coaching. Several former employees took advantage of the Re- spondent’s offer. At the time, the Pipefitters’ “bench” was empty: anyone who met the Pipefitters’ qualifica- tions and signed the out-of-work list would have been dispatched. By February 25, 6 of the Respondent’s 13 former employees had registered with the Pipefitters; by May 12, 8 had registered. On March 1, the Pipefitters dispatched the first welder to the Respondent under the parties’ newly concluded agreement, and the Respondent resumed performing welding work. Between February 17, when it terminated its 8(f) bargaining relationship with the Boilermakers, and March 1, when it obtained its first welder referred under the Pipefitters agreement, the Respondent per- formed no welding work. Discussion The General Counsel alleged that the Respondent vio- lated Section 8(a)(3) when it discharged its Boilermak- ers-represented welders. The judge dismissed the com- plaint. Analyzing the allegation under Great Dane Trailers,15 the judge found that (i) the discharges were not “inherently destructive” of employee rights; and (ii) the discharges had a “comparatively slight” adverse ef- fect on employee rights, the Respondent established a legitimate and substantial business justification for the discharges—the absence of an agreement with the Boil- ermakers and HDCC’s decades-long practice of perform- ing all craft work solely under collective-bargaining agreements—and the General Counsel did not prove an antiunion motive.16 Alternatively, under Wright Line, the judge assumed the General Counsel met his initial burden and found that the Respondent would have dis- charged the Boilermakers-represented welders regardless of any antiunion motive based on that same longstanding practice. My colleagues reverse the judge’s decision. They find that the Respondent violated Section 8(a)(3) under both Wright Line and Great Dane Trailers. I would find Wright Line inapplicable for two reasons. First, this case involves a cessation of work that was lawful under Dar- lington and similar cases without regard to the Respond- ent’s motivation towards the alleged discriminatees, and cross, but that there was a path and that if they were interested in returning, they needed to start down it” (Tr. 275). 15 388 U.S. at 26. 16 As my colleagues note, the judge misstated the Great Dane framework. I agree with their correction. Respondent’s employees were not discriminated against in favor of any other individuals. Second, Wright Line articulates a burden-shifting approach that applies in du- al-motive (sometimes called “mixed motive”) situations, and the record here reasonably supports no motive other than what the Respondent articulated: it wanted to have an applicable prehire agreement before proceeding with welding work, and the cessation of welding work— absent such an agreement—resulted in the disputed em- ployment terminations. Even assuming Wright Line applies, and further as- suming (as did the judge) that the General Counsel met his initial burden under Wright Line, I would find that the record establishes that Respondent satisfied its burden under Wright Line—i.e., to prove it would have taken the same actions in the absence of any antiunion motivation. Finally, I would find no violation notwithstanding my colleagues “inherently destructive” characterization in reliance on Great Dane. My reasons follow. A. Respondent’s Actions were Lawful Under the Supreme Court’s Darlington Decision In Darlington, the Supreme Court considered two types of employer actions. First, the Court held that “when an employer closes his entire business, even if the liquidation is motivated by vindictiveness toward the union, such action is not an unfair labor practice.”17 Se- cond, the Court held that a “partial closing”—where oth- er parts of the business continue operating—was also lawful, even if caused by antiunion considerations, un- less the record shows (a) the partial closing was “moti- vated by a purpose to chill unionism” among other em- ployees, and (b) “the employer may reasonably have foreseen that such closing would likely have that ef- fect.”18 The Darlington decision was applied by the Board in A. C. Rochat Co.,19 where the employer shut down its sheet metal installation operations for antiunion reasons, resulting in the layoff of 17 employees, but continued the sale of air-conditioning and refrigeration equipment.20 The Board indicated that the discontinued installation services “were unquestionably important to its sales ac- tivities, and vice versa,” and the evidence also showed 17 380 U.S. at 273–274. 18 Id. at 275. 19 163 NLRB 421 (1967). 20 Although the displaced employees in A. C. Rochat were described as being “laid off,” the Board did not differentiate between layoffs and employment terminations. However, the Board’s decision makes clear that the employees were not regarded as having any expectation of recall because the discontinuation of sheet metal operations was de- scribed as “permanent,” and the employer went so far as to restrict its remaining operations so they would not require sheet metal installation. Id. at 422. HAWAIIAN DREDGING CONSTRUCTION CO. 93 that, following the antiunion curtailment of sheet metal installation, the employer “restricted its sales to transac- tions that would not require [sheet metal] installation.”21 The Board held that Darlington compelled a finding that these actions by the Respondent were lawful. The Board found the record did not support a conclusion that the employer had a purpose of discouraging union activity among remaining employees. The Board also applied Darlington in Purolator Ar- mored, Inc.,22 where the employer was engaged in ar- mored car and related services, including a “coin room operation” where change bags were prepared in response to customer orders.23 After the coin room employees voted to be union-represented (by a near-unanimous vote), the employer shut down the coin room for anti- union reasons while continuing its other operations.24 Significantly, the judge analyzed the cessation of “coin room” operations under Wright Line (the judge reasoned that the case presented “dual-motive considerations”)25 and under Darlington.26 The judge found that the cessa- tion of “coin room” operations violated Section 8(a)(3) under both types of analysis. Significantly, the judge in Purolator concluded that each analysis was “valid and independent of the other,” and he stated: “The Wright Line theory is, in my view, an alternative theory of violation to Darlington.”27 This position was squarely rejected by the Board, which held that the cessation of “coin room” operations—while the remainder of the business remained ongoing—could be held unlawful only pursuant to Darlington. Thus, the Board stated: The judge determined that the two analyses of the case [under Wright Line and Darlington] stood independent of each other, and either view of the case was valid. We do not agree. Thus, to be a violation under Dar- lington, a partial closing must not only be discriminato- ry, but must be motivated by a desire to chill unionism of an employer's other employees, and it must be rea- 21 Id. 22 268 NLRB 1268 (1984), enfd. 764 F.2d 1423 (11th Cir. 1985). 23 Id. at 1271. 24 Id. at 1273–1275. 25 Id. at 1280. 26 The judge rendered an initial decision based exclusively on a Wright Line “dual motive” analysis, and the Board remanded the case for further consideration as to the applicability of Darlington. The Board’s remand in Purolator was unpublished, but it is referenced in the Board’s subsequent opinion, 268 NLRB at 1268 fn. 3, and in the judge’s “supplemental decision on remand,” id. at 1287–1291, which appears following his initial opinion, id. at 1270–1287. 27 Id. at 1290 fn. 1. sonably foreseeable that the closing will have that chilling effect.28 It is undisputed here that the Respondent entirely ceased its welding operations at a time when there was no applicable prehire agreement: the Boilermakers’ agreement had expired, and Respondent had not yet en- tered into its new Pipefitters’ agreement. The welding work was not relocated, contracted out, or performed by someone employed by a different entity. There is no evidence that Respondent benefited from the temporary nature of its cessation of welding operations.29 Nor is there any doubt that the terminated Boilermakers were displaced because of the cessation of welding operations. During the posttermination period (until Respondent re- sumed welding operations under the Pipefitters’ agree- ment), there was no work for welders to do. In these circumstances, the Supreme Court’s decision in Darlington requires a conclusion that Respondent had the right to cease welding operations, regardless of moti- vation, while the remainder of its business remained on- going, absent evidence that Respondent had the “pur- pose” of chilling union activity among other employees. Because the record provides no support for such a pur- pose, I believe this precludes a finding that Respondent’s actions violated the Act. B. Respondent’s Conduct does not Involve Dual Motives Subject to Scrutiny Under Wright Line Even if Wright Line were otherwise applicable here, it applies only in dual-motive cases, and this is not a dual- motive case.30 The record establishes that Respondent discharged the Boilermakers-represented welders for one reason and one reason only: it performs craft work, such as welding, solely under collective-bargaining agree- ments. Thus, when the Region determined that the Re- spondent and the Boilermakers had failed to reach agreement on a successor 8(f) contract, the Respondent repudiated its bargaining relationship with the Boiler- makers (as it was entitled to do under Deklewa31), ceased 28 Id. at 1268 fn. 3 (emphasis added). 29 Thus, there is no evidence that Respondent temporarily ceased op- erations so that “employees, by renouncing the union, could cause the plant to reopen.” Darlington, 380 U.S. at 273. Indeed, as noted in the introduction, the Respondent as a construction employer had the abso- lute right, under Deklewa, to abandon its Boilermakers’ relationship and to enter into a new prehire agreement with the Pipefitters, without regard to employee sentiments regarding either union. Respondent’s prior employees were not employed when Respondent resumed weld- ing operations, but these arrangements are not alleged to be unlawful. 30 That explains why, as the judge noted, “[n]either the Acting Gen- eral Counsel nor the Union argued that this case should be decided under . . . Wright Line.” 31 282 NLRB at 1377–1378 (holding that upon the expiration of an 8(f) agreement, “the signatory union will enjoy no presumption of DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 94 performing all work requiring craft labor supplied by the Boilermakers (in keeping with its longstanding practice), and terminated the employment of its Boilermakers- represented employees (who had no work to do). The Respondent’s decades-old practice of performing craft work with employees referred by its trade-union partners under collective-bargaining agreements was the one and only reason for the discharges, and a dual-motive analy- sis does not apply. C. Respondent’s Conduct was not Unlawful Even if Wright Line Applies But even assuming Wright Line applies, and further as- suming that the General Counsel met his initial burden,32 the Respondent established its affirmative defense— again, by showing that it discharged its Boilermakers- represented employees based on its longstanding practice of performing craft work under collective-bargaining agreements. My colleagues find that the Respondent failed to establish this defense because they believe it did not adhere to this practice with perfect consistency. They cite two instances of nonadherence. They are in- correct on both counts. First, my colleagues contend that the Respondent failed to adhere to its policy between October 30 and November 12. To the contrary, Tom Valentine, Re- spondent’s senior project manager and Association chairman, reasonably believed that a new collective- bargaining agreement had been concluded prior to No- vember 1. On a date the record fails to pin down with exactitude, but sometime before November 1, Valentine was informed that the parties had reached an agreement and that the Union’s membership had ratified it. Moreo- ver, the record shows that as of November 1, the Union also believed that a new agreement had been reached. On November 1, Boilermakers Business Representative Gary Aycock sent Valentine an email attaching what Aycock called “the new Hawaii Wage/Benefit Rates that are effective October 1, 2010.” Since the parties’ Octo- majority status, and either party may repudiate the 8(f) bargaining relationship”). 32 In assuming for argument’s sake that the General Counsel met his initial burden under Wright Line, I note that the Respondent’s actions clearly show that it did not harbor animus towards its welders because of their affiliation with the Boilermakers. The Respondent twice re- quested that the Pipefitters accept those individuals without requiring them to meet the Pipefitters’ referral requirements. When the Pipefit- ters refused to do so, the Respondent contacted the former employees, told them what they would have to do to register with the Pipefitters, and provided a facility and materials so that they could practice for the Pipefitters’ welding test. In short, the Respondent made every effort to enable its former employees to be referred back to its employ if they so chose. At the same time, by discharging them, it left them free to choose to remain Boilermakers, which they could not have done had they remained employed by the Respondent. See infra. ber 8 agreement formally extending the 2005–2010 CBA until October 29 provided that any successor agreement “[would] be paid retroactive to the expiration (September 30, 2010) of the current Hawaii Articles of Agreement” (GC Exh. 3), the only basis for Aycock to assert that new wage and benefit rates were in effect retroactive to Octo- ber 1 was his belief that a successor agreement had been reached and ratified. Valentine’s reply to Aycock’s email, also dated November 1, reaffirms his reciprocal belief that the parties had reached an agreement. In that reply, Valentine disputed two items Aycock included in the “Wage/Benefit Rates” on the ground that they “were not discussed and are not included in the agreement.” Although the parties continued to disagree whether those two terms were or were not part of the agreement, Valen- tine testified that he believed the parties had an agree- ment. As shown, that belief was formed prior to No- vember 1. Second, my colleagues point to the period from Octo- ber 1 to October 7—i.e., from the day after the 2005– 2010 CBA expired to the day before the parties formally agreed to extend the 2005–2010 CBA through October 29—as another period during which the Respondent failed to adhere to its practice of performing craft work only with a collective-bargaining agreement in place. Here, I believe my colleagues fail to appreciate the na- ture of the Respondent’s collective-bargaining relation- ships, which historically had been “very cooperative,” in the words of HDCC President Wilson. The evidence shows that in practice, the Respondent and the unions with which it partners have treated hiatus periods be- tween 8(f) contracts as contract extensions. Thus, Wil- son testified that when September 30, 2010, arrived and a successor agreement had not yet been reached, I expected, as on several other occasions in recent years and the time I’m familiar with it where agree- ment was not reached between the [e]mployer and the [u]nion, that the conditions of the current agreement continued to be enforced, workers continued to show up to work and management continued to do that while the bargaining continued. And so my expectation was that bargaining would continue, but the idea that they would not work or potentially not work as subsequently occurred, I did not expect. (Tr. 95–96 (emphasis added).) Wilson refers to just-expired agreements as “current” agreements, with which both par- ties continued to comply while bargaining progressed. Val- entine’s response to Local 627 Business Manager Meyers on September 30 reflects the same expectation. That even- ing, Meyers telephoned Valentine to inform him that the membership had rejected the Respondent’s latest offer. HAWAIIAN DREDGING CONSTRUCTION CO. 95 Meyers wanted to resume bargaining immediately, but Val- entine told him that he did not think that was necessary since (in his view) the terms and conditions of the 2005–2010 CBA continued to apply (Tr. 193–194). Thus, from the Respondent’s perspective, during hiatus periods (such as the period from October 1 to 7), it was ad- hering to its practice of performing craft work only under collective-bargaining agreements because it deemed those agreements extended during such periods by tacit agree- ment.33 In sum, the Respondent’s practice, to which it consist- ently adhered, was to perform all craft work under col- lective-bargaining agreements. Between October 1, 2010 and February 14, 2011, the Respondent continued to per- form welding work using Boilermakers-represented welders (when it could get them), believing that (a) the 2005–2010 CBA continued to apply in keeping with past practice during hiatus periods (October 1–7), or (b) the 2005–2010 CBA continued to apply under the parties’ October 8 extension agreement (October 8–29), or (c) a successor agreement was in place, notwithstanding dif- ferences of opinion concerning two items (on or about October 30 forward). On February 14, 2011, the Region found that the parties had not reached a successor agree- ment. On February 17, in keeping with its consistent practice of performing craft work solely under collective- bargaining agreements, the Respondent ceased perform- ing all Boilermakers-craft work and discharged its re- maining Boilermakers-represented employees, who had no work to do. Even assuming, as my colleagues find, that the General Counsel met his initial burden under Wright Line with respect to the discharges, the Respond- ent has established its affirmative defense under Wright Line by showing that those employees would have been 33 Even assuming there was a brief gap of less than a week in Re- spondent’s decades-long practice of performing all craft work under collective-bargaining agreements, I believe this cannot reasonably be regarded as defeating Respondent’s Wright Line defense. Under the majority’s view, the only way the Respondent could establish a valid Wright Line defense would have been to immediately cease all welding work the very moment the 2005–2010 CBA expired, but this would have been contrary to Respondent’s long history of bridging such hiatus periods cooperatively. In this respect, not only does my colleagues’ position sacrifice common sense on the altar of the law, it would clearly undermine labor relations stability—one of the core principles the Board is charged with preserving under the Act—to suggest that the Respondent here could have acted lawfully only by (i) immediately discontinuing all welding work based on a CBA hiatus of less than 1 week, and (ii) disregarding Respondent’s long history of informal co- operation in dealings with the Boilermakers and multiple other trade unions. Colgate‐Palmolive‐Peet Co. v. NLRB, 338 U.S. 355, 362–363 (1949) (“To achieve stability of labor relations was the primary objec- tive of Congress in enacting the National Labor Relations Act”); NLRB v. Appleton Electric Co., 296 F.2d 202, 206 (7th Cir. 1961) (a “basic policy of the Act [is] to achieve stability of labor relations”). discharged in any event based on the Respondent’s dec- ades-long practice of performing all craft work under collective-bargaining agreements. D. Respondent’s Conduct was not “Inherently Destructive” Under Great Dane I also disagree with my colleagues’ alternative finding that the discharge of the Boilermakers-represented weld- ers was “inherently destructive” of employee rights. Specifically, they find that the discharge was “inherently destructive of their right to membership in the union of their choosing.” They acknowledge, however, that the Respondent would have acted lawfully had it laid off those employees instead. But the truth is, a layoff would have impacted their union-membership choice just the same as the discharge did. Section 8(a)(3) does not prohibit all types of “discrim- ination.” Rather, it only prohibits “discrimination . . . to encourage or discourage membership in any labor or- ganization.” See also NLRB v. Radio Officers (A. H. Bull S.S. Co.), 347 U.S. 17, 43 (1954) (Sec. 8(a)(3) does not “outlaw discrimination in employment as such; only such discrimination as encourages or discourages member- ship in a labor organization is proscribed” (emphasis added).) Although a motive to discourage membership in a labor organization must be proven in every case— usually based on evidence of subjective intent—the Su- preme Court has held that “[s]ome conduct may by its very nature contain the implications of the required in- tent; the natural foreseeable consequences of certain ac- tion warrant the inference.” NLRB v. Erie Resistor Corp., 373 U.S. 221, 227 (1963) (quoting NLRB v. Radio Officers, 347 U.S. at 44) (emphasis added; internal quo- tation marks omitted). “That is, some conduct carries with it ‘unavoidable consequences which the employer not only foresaw but which he must have intended’ and thus bears ‘its own indicia of intent.’” NLRB v. Great Dane Trailers, 388 U.S. at 33 (quoting NLRB v. Erie Resistor, 373 U.S. at 231) (emphasis added).34 My colleagues acknowledge that the Respondent was free to suspend welding work on February 17 until it had 34 The facts of Great Dane Trailers illustrate what the Court meant by conduct that bears its own indicia of an intent to discourage mem- bership in a labor organization. There, the employer “refused to pay striking employees vacation benefits accrued under a terminated collec- tive bargaining agreement while it announced an intention to pay such benefits to striker replacements, returning strikers, and nonstrikers who had been at work on a certain date during the strike.” 388 U.S. at 27. As the Court observed, “[t]he act of paying accrued benefits to one group of employees while announcing the extinction of the same bene- fits for another group of employees who are distinguishable only by their participation in protected concerted activity surely may have a discouraging effect on either present or future concerted activity.” Id. at 32. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 96 reached a new 8(f) agreement with another union, and to lay off its remaining welders with an expectation of re- call. The sole remaining question, therefore, is whether discharging the Boilermakers-represented employees carried “unavoidable consequences” to the exercise of the welders’ right to membership in the union of their choosing that a layoff would have avoided. Only if that question is answered in the affirmative would it be rea- sonable to find that the discharge “bears its own indicia of [an] intent” to discourage union membership. Against this backdrop, I believe there are two prob- lems with my colleagues’ finding that Respondent’s con- duct was “inherently destructive” within the meaning of Great Dane and the other cases, referenced above, where the employer’s conduct “by its very nature” violated Sec- tion 8(a)(3) by encouraging or discouraging membership in a labor organization. First, the Supreme Court in Darlington foreclosed reli- ance on the “inherently destructive” theory in a case such as this one, where the employer exercised its lawful right to cease operations. In Darlington, regarding a partial cessation of operations (where the employer’s actions would be unlawful only if motivated by discrimination aimed at “chilling” union activity among remaining em- ployees), the Supreme Court stated that even the “closing [of] a plant following the election of a union is not, ab- sent an inquiry into the employer’s motive, inherently discriminatory. We are thus not confronted with a situa- tion where the employer ‘must be held to intend the very consequences which foreseeably and inescapably flow from his actions,’ . . . in which the Board could find a violation of § 8(a)(3) without an examination into mo- tive.”35 The Supreme Court in Darlington elaborated: It does not suffice to establish the unfair labor practice charged here to argue that the Darlington closing nec- essarily had an adverse impact upon unionization in such other plants. We have heretofore observed that employer action which has a foreseeable consequence of discouraging concerted activities generally does not amount to a violation of § 8(a)(3) in the absence of a showing of motivation which is aimed at achieving the prohibited effect. . . . In an area which trenches so closely upon otherwise legitimate employer preroga- tives, we consider the absence of Board findings on this score a fatal defect in its decision.36 Second, even if such an inquiry were not precluded under Darlington, the hallmark characteristic of “inher- 35 380 U.S. at 269 fn. 10 (quoting Erie Resistor, 373 U.S. at 228) (other citations omitted). 36 Id. at 276. ently destructive” actions—that their “very nature con- tain the implications of the required intent” because of their “natural foreseeable consequences”37—cannot be reasonably associated with Respondent’s conduct. Here, the potential union sentiments and union affiliation of Respondent’s welders predictably would have been the same regardless of whether the Respondent laid off the employees when it ceased welding work subject to recall (the action my colleagues find the Act required) or ter- minated those employees (the action that Respondent actually took). If employees had been laid off after the Respondent ceased welding work without a union contract, and after Respondent abandoned its relationship with the Boiler- makers, the employees would have had the option of remaining Boilermakers and accepting referrals from the Boilermakers’ hiring hall to other employers. Had those employees been recalled by the Respondent when it re- sumed doing welding work under its new Pipefitters’ agreement, the recalled employees would have had to withdraw from the Boilermakers Union and become members of the Pipefitters (no later than their eighth day of work). Under article 17.1.20 of the Boilermakers’ constitution, members are prohibited from working for a nonunion contractor.38 37 Erie Resistor, 373 U.S. at 227 (emphasis added; internal quota- tion omitted). 38 The business manager of the member’s local has authority to make exceptions, but there is no evidence that Business Manager Mey- ers would have exercised that authority here, and there is evidence that he would not have. Union members had already been threatened with sanctions if they worked for HDCC. As Senior Project Manager Valen- tine reported to the Respondent’s management team on December 12, Boilermakers contacted directly by the Respondent—once the contrac- tual 48-hour waiting period had elapsed—reported that the Union had ordered them “not to report to any HDCC job or suffer the sanctions from the [U]nion.” Art. 17.5.1 of the Boilermakers’ constitution spells out those sanctions, which include fines, suspension, and expulsion. Moreover, the subsequent Pipefitters agreement, and the resulting requirement that the welders join the Pipefitters (no later than their eighth day of work), would have created yet another obstacle to their continued membership in the Boilermakers. Art. 17.1.4 of the Boiler- makers’ constitution prohibits members from “[m]aintaining member- ship in another labor organization that adversely affects the interest of this International Brotherhood”—and unlike art. 17.1.20, art. 17.1.4 does not authorize the business manager to make exceptions. Given the overlapping work jurisdictions of the Boilermakers and the Pipefit- ters—both supply welders to contractors—it is unlikely that member- ship in the Pipefitters would not be found to adversely affect the inter- est of the Boilermakers. Moreover, to sign the Pipefitters’ out-of-work list, the Pipefitters required HDCC’s former employees to withdraw from the Boilermakers. Tom Caughman, one of the employees HDCC discharged on February 17, testified that “[p]reviously, back in the ‘90s, to get on the [Pipefitters’] out-of-work list you would give them $50 and sign a piece or two of papers and then they would dispatch you. This time things were different. One of the forms you sign, at the bottom of the form it asks you if you’re a member of another [u]nion, HAWAIIAN DREDGING CONSTRUCTION CO. 97 Conversely, under the scenario that actually oc- curred—i.e., after the February 17 discharges of Re- spondent’s welders—the welders were in precisely the same position regarding their choice of union affiliation. Before Respondent resumed doing welding work, the discharged employees were free to remain members of the Boilermakers and to accept referrals to other employ- ers from the Boilermakers’ hiring hall. After Respondent resumed welding work under its new prehire agreement with the Pipefitters, the former welders could seek work from Respondent under the Pipefitters’ agreement. Simi- lar to the options available had they been laid off, accept- ing Respondent’s work under the Pipefitters’ agreement would have required the employees to withdraw from the Boilermakers (to avoid the risk of being fined, suspend- ed, or expelled under the Boilermakers’ constitution, described above), register with the Pipefitters so they could be referred to the Respondent or another signatory Pipefitters’ contractor from the Pipefitters’ hiring hall (the record reveals the Pipefitters’ hiring hall “bench” was empty), and join the Pipefitters no later than the eighth day of work on their new job. Either way—whether the employees were laid off or terminated—they had the same basic choice, which was either (i) accept a referral to Respondent (under its new agreement with the Pipefitters) or another signatory Pipe- fitters’ contractor and join the Pipefitters (no later than their eighth day of work), or (ii) remain a member of the Boilermakers and decline such work in favor of potential referrals to other employers using the Boilermakers’ hir- ing hall (since Respondent was no longer party to a Boil- ermakers’ agreement). The “natural foreseeable conse- quences” that resulted from discharging the welders, in comparison to the “natural foreseeable consequences” that would have resulted from laying them off, are iden- tical. In my view, only one reasonable conclusion can be drawn from the foregoing analysis. The discharge of the welders was not “inherently destructive of their right to membership in the union of their choosing,” as my col- leagues would have it. If it was inherently anything, it was inherently neutral in that regard because under either option—discharge or layoff—the employees would have faced the same choice. It is true that, had the Respondent merely “laid off” the employees when it ceased performing welding work, it might have attempted to recall them from layoff without the need for a referral from the Pipefitters’ hiring hall. Yet, I believe it is clear that nothing in the Act imposed and then it said words to the effect that you had to get a withdrawal from the other [u]nion” (Tr. 175). such a legal obligation on the Respondent. These actions undisputedly commenced during the Respondent’s hiatus between contracts. During that period, the Respondent had no contractual obligation regarding the appropriate treatment of employees for whom there was no work (i.e., whether to implement discharges or layoffs), nor was there any contractual obligation to recall anyone if and when welding operations resumed. Certainly, the Act did not require one course rather than the other. This is because (i) the Respondent had exercised the lawful right to abandon its Boilermakers’ relationship; and (ii) Section 8(d) of the Act prohibits the Board from impos- ing substantive contract terms on an employer.39 Moreo- ver, had the Respondent attempted to “recall” welders represented by the Boilermakers—when the Respondent was party to its new agreement with the Pipefitters–this would clearly have breached the Pipefitters agreement. 40 In short, the path pursued by the Respondent was the only one in which its former employees could be reemployed by the Respondent without making the Re- spondent liable for breaching the Pipefitters’ agreement (which it lawfully entered into) and without exposing the Respondent’s former employees to the risk of being fined by the Boilermakers (whose constitution prohibits work- ing for nonsignatory contractors). If one examines the situation from a wider perspective, it is equally apparent that the Respondent’s discharge of 39 Sec. 8(d) states that the duty to bargain collectively does not re- quire a party “to agree to a proposal or require the making of a conces- sion.” See also H. K. Porter Co. v. NLRB, 397 U.S. 99 (1970), where the Supreme Court stated: “It is implicit in the entire structure of the Act that the Board acts to oversee and referee the process of collective bargaining, leaving the results of the contest to the bargaining strengths of the parties. . . . The Board’s remedial powers under § 10 of the Act are broad, but they are limited to carrying out the policies of the Act itself. One of these fundamental policies is freedom of contract. While the parties' freedom of contract is not absolute under the Act, allowing the Board to compel agreement when the parties themselves are unable to agree would violate the fundamental premise on which the Act is based—private bargaining under governmental supervision of the procedure alone, without any official compulsion over the actual terms of the contract.” Id. at 107–108 (footnotes omitted) (emphasis added). The constraint associated with Sec. 8(d) prevents the Board from im- posing contract terms regardless of whether, as was the case here, no agreement is presently in effect. 40 The Pipefitters’ agreement requires the Respondent to “secure all employees covered by this agreement through the employment office of the union.” R. Exh. 22 at Bates No. HDCC 000517. As an exception to this requirement, the Respondent may employ any person “[i]n the event that the Union does not dispatch any applicants within three (3) working days following the day of the request of the individual em- ployer.” Id. at Bates No. HDCC 000518. That is the sole exception. As my colleagues observe, under Sec. 8(f)(2) the Pipefitters would not have been able to enforce the union-security clause of the Pipefitters’ agreement against employees recalled from layoff until the eighth day following their recall. But Sec. 8(f)(2) would not prevent those recalls from constituting a contract. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 98 its Boilermakers-represented welders was not inherently destructive of their rights under the Act. First, the Re- spondent did not discharge the employees and continue performing welding work. It ceased performing all such work, in keeping with its longstanding business practice of performing craft work only under collective- bargaining agreements. With no work to perform, the Respondent had to choose between discharging its weld- ers and laying them off with an expectation of recall, as my colleagues acknowledge. Nothing in the Act re- quired the Respondent to choose one option over the other. Second, as explained above, the effect on employ- ees’ exercise of their right to membership in the union of their choice would have been the same under either op- tion, layoff or discharge. Thus, it cannot be said that discharging them carried “unavoidable consequences” to the exercise of the welders’ right to membership in the union of their choosing that a lay off would have avoid- ed, such that the discharge bore “its own indicia of [an] intent” to discourage union membership. Third, having lost the Boilermakers as a labor source, the Respondent needed to secure a new source, and it had already identi- fied the Pipefitters as an alternative well before February 17, 2011, the discharge date.41 Fourth, the Respondent, long accustomed to dealing with trade unions, would naturally assume—as proved true—that the Pipefitters would insist on an exclusive referral system and union security, precluding the possibility that the former em- ployees could have remained in HDCC’s employ as members of the Boilermakers. Fifth, at its initial meeting with the Pipefitters on February 18 or 19 and again on February 23 when it signed an agreement, the Respond- ent tried to persuade the Pipefitters to accept its former employees without their having to meet the Pipefitters’ registration requirements. Sixth, when the Pipefitters refused this request, the Respondent did everything it reasonably could to help its former employees return to its employ if they so chose—informing them what they had to do to register with the Pipefitters, and furnishing a shop, tools, equipment, and materials necessary for those workers to prepare for the Pipefitters’ welding test. In my opinion, one cannot reasonably infer from this course of conduct an intent to discourage membership in any labor organization. 41 In a December 12, 2010 email to the Respondent’s management team, Valentine wrote: “With the current situation and the ongoing contract problems with the boilermakers I believe it’s time for HDCC to seriously consider evaluate [sic] if our relationship with the boiler- makers is the best option moving forward. For the past few years we’ve noticed that the skill level and professionalism of the boilermak- ers has been eroding at an alarming rate. With the new contract their compensation will be on par with pipefitters . . . .” (R. Exh. 15.) To support their finding of a violation under Great Dane, my colleagues principally rely on two cases: CIMCO, 301 NLRB 342 (1991), enfd. 964 F.2d 513 (5th Cir. 1992), and Jack Welsh, 284 NLRB 378 (1987). Both are clearly distinguishable from the circumstances presented here. In CIMCO, the union told the employer that the union would not object if its members continued to work for CIMCO after the IBEW withdrew from the GPA agree- ment, and CIMCO discharged them anyway.42 Here, there is no evidence the Respondent was ever informed that Business Manager Meyers would permit Boilermak- ers to be employed by the Respondent absent a collec- tive-bargaining agreement. I also believe the record con- tradicts my colleagues’ contention that the Respondent had no basis for doubting the discriminatees’ willingness to work in the absence of a CBA. Valentine was ex- pressly told by Boilermakers welders he contacted in December 2010—when the Boilermakers were failing to honor the Respondent’s dispatch requests—that the Un- ion had ordered them “not to report to any HDCC job or suffer the sanctions from the [U]nion.” Additionally, 42 In CIMCO, the respondent employer, which performed mainte- nance work at chemical facilities nationwide, was party to a General Presidents’ Project Maintenance Agreement (the “GPA agreement”) involving a number of international unions, including the IBEW. The GPA agreement covered all CIMCO’s maintenance work. Although the union parties to the GPA agreement were internationals, employees were referred to CIMCO under the GPA agreement by local unions. One of CIMCO’s projects involved maintenance work at a Sterling Chemical plant in Texas. IBEW Local 527 referred electricians to CIMCO at the Sterling site. Midway through the Sterling project, the president of the IBEW— the International—announced that it was withdrawing from the GPA agreement effective December 31, 1989. Bruce Uffelman, CIMCO’s labor relations manager, was concerned that as a result, Local 527 would stop referring workers to the Sterling site. The International assured Uffelman that it was leaving that decision entirely up to the Local, but Uffelman never asked Local 527 what it intended to do. Meanwhile, one of CIMCO’s site superintendents asked Local 527’s business manager whether Local 527 would object to its members working at the Sterling site after December 31. The business manager replied that he would not object. The site superintendent reported that response to CIMCO’s site manager, and the site manager reported it to Uffelman. Notwithstanding the business manager’s assurances, of which Uffelman was aware, on the last workday of 1989 CIMCO’s site manager (at Uffelman’s instructions) assembled the electricians and told them that because the IBEW was withdrawing from the GPA agreement, CIMCO would consider them all to have voluntarily quit effective December 31 (eliciting vocal protests to the contrary). Uf- felman testified that the electricians were deemed to have voluntarily quit because they had been referred by Local 527. CIMCO advertised for electricians in local newspapers, and many of the discharged elec- tricians applied. However, CIMCO instructed its site manager to hire a “core complement” of nonunion applicants before hiring any applicants who had “voluntarily quit.” CIMCO hired a “core complement” of roughly 20 nonunion electricians before considering and hiring any electricians formerly referred by Local 527. HAWAIIAN DREDGING CONSTRUCTION CO. 99 even if Meyers would have permitted Boilermakers- represented employees to work after HDCC contracted with the Pipefitters, the Pipefitters would have required those individuals to withdraw from the Boilermakers before permitting them to sign its out-of-work list. See supra fn. 37. Furthermore, in CIMCO, the employer re- fused to hire or consider its former employees until it had hired a “core complement” of nonunion employees. Here, the Respondent went to considerable lengths to help its former employees return to its employ. It asked the Pipefitters, twice, to accept the former employees for referral without having to meet the Pipefitters’ usual re- quirements, including a welding test—and when the Pipefitters declined to do so, the Respondent immediate- ly notified its former employees of the Pipefitters’ re- quirements, provided a facility for them to practice for the test, furnished the necessary tools, equipment, and materials, and even provided coaching. CIMCO does not support my colleagues’ 8(a)(3) finding. The other case cited by my colleagues—Jack Welsh Co., 284 NLRB 378 (1987)—is no more convincing. In Jack Welsh, the employer decided not to renew its 8(f) contract with Carpenters Local 690 and repudiated the bargaining relationship. The owner told his nephew, who was an employee, that he was “going open shop.” The nephew replied that he would have to quit because he belonged to a union. The owner then discharged the rest of the union carpenters, based on the assumption that they would also have to quit. The Board found that those discharges violated Section 8(a)(3) under Great Dane, reasoning that it was incumbent on the employer to give those employees an opportunity to decide for themselves whether to quit and remain union members, or continue working for the respondent after it went “open shop” and withdraw from the union. The key difference between Jack Welsh and the instant case is that here, employees were not denied the right to decide for themselves whether to quit and remain mem- bers of the Union or continue working and withdraw from the Union, for the simple reason that there was no “continue working” option. When the Region decided that HDCC and the Boilermakers did not have an agree- ment, HDCC stopped performing welding work alto- gether, in keeping with its practice of performing such work only under collective-bargaining agreements. With welding work at a standstill, there was no work for the employees to do, and no choice for employees to make between quitting or working. The only choice was for the Respondent to make between discharging its employ- ees or laying them off and recalling them once it had a contract with the Pipefitters. And, as explained above, that choice was neutral with respect to employees’ exer- cise of their right to membership in the union of their choice, since either way (layoff/recall or discharge), the employees would have to choose between the Boiler- makers and the Pipefitters. As also explained above, the Respondent’s choice was not neutral with respect to risk- ing a contract breach with the Pipefitters. Recalling its employees from layoff would have exposed the Re- spondent to a claim of having breached the exclusive referral article of the Pipefitters agreement. Discharging them and facilitating their transition to the Pipefitters for dispatch under that article was the risk-free alternative in that regard. CONCLUSION In sum, I believe the Respondent’s actions here were permissible under Deklewa, which governs prehire agreements, and under Darlington, which establishes that employers can cease operations regardless of their moti- vation (subject to limited exceptions that have no appli- cation in the instant case). Moreover, if this case is ana- lyzed under Wright Line or Great Dane, the record estab- lishes that the Respondent did not violate the Act. As a final matter, my colleagues find that the Respondent had available only a single lawful course of action, which was to place employees on “layoff” subject to “recall” when it lawfully ceased its welding operations. Howev- er, this conclusion improperly disregards the fact that the Respondent was in a hiatus between contracts and there- fore had no contractual obligations regarding employees displaced by a lack of work; the Respondent had no obli- gation to engage in bargaining regarding this issue be- cause it had lawfully abandoned its relationship with the Boilermakers following expiration of the Boilermakers’ agreement; and the Board is prohibited from imposing these types of substantive contractual terms on employ- ers or unions. For these reasons, I respectfully dissent. APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we vio- lated Federal labor law and has ordered us to post and obey this notice. FEDERAL LAW GIVES YOU THE RIGHT TO Form, join, or assist a union Choose representatives to bargain with us on your behalf Act together with other employees for your bene- fit and protection DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 100 Choose not to engage in any of these protected activities. WE WILL NOT discharge or otherwise discriminate against you because of your membership in, activities on behalf of, or referral from, International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, Local 627, or any other labor organization. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exercise of the rights listed above. WE WILL, within 14 days from the date of the Board’s Order, offer Kona Akuna, Paul Aona, Crispin Bantoy, Domingo Delos Reyes, Jeffery Esmeralda, Joseph Gal- zote, Manuel Gaoiran, Daniel Marzo Jr., Henry Merrill, Peter Pagaduan, Joselito Peji, Rolando Tirso, and Ken- neth Valdez full reinstatement to their former jobs or, if those jobs no longer exist, to substantially equivalent positions, without prejudice to their seniority or any oth- er rights or privileges previously enjoyed. WE WILL make Kona Akuna, Paul Aona, Crispin Ban- toy, Domingo Delos Reyes, Jeffery Esmeralda, Joseph Galzote, Manuel Gaoiran, Daniel Marzo Jr., Henry Mer- rill, Peter Pagaduan, Joselito Peji, Rolando Tirso, and Kenneth Valdez whole for any loss of earnings and other benefits resulting from their discharge, less any net inter- im earnings, plus interest. WE WILL compensate the affected employees for any adverse tax consequences of receiving lump-sum back- pay awards, and WE WILL file a report with the Social Security Administration allocating the backpay awards to the appropriate calendar quarters. WE WILL, within 14 days from the date of the Board’s Order, remove from our files any reference to our unlaw- ful discharges of the above named employees, and WE WILL, within 3 days thereafter, notify each of them that this has been done and that the discharges will not be used against them in any way. HAWAIIAN DREDGING CONSTRUCTION COMPANY, INC. The Board’s decision can be found at www.nlrb.gov/case/37-CA-008316 or by using the QR code below. Alternatively, you can obtain a copy of the decision from the Executive Secretary, National Labor Relations Board, 1099 14th Street, N.W., Washington, D.C. 20570, or by calling (202) 273-1940. Meredith A. Burns and Trent K. Kakuda, for the Acting General Counsel. Barry W. Marr and Megumi Sakae (Marr, Jones & Wang), for the Respondent. Caren Sencer and David Rosenfeld (Weinberg, Roger & Rosen- feld), for the Charging Party. DECISION STATEMENT OF THE CASE ELEANOR LAWS, Administrative Law Judge. This case was tried in Honolulu, Hawaii, on November 6–7, 2012. The Inter- national Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, Local 627 (the Boilermakers or the Union) filed the charge on May 12, 2011. The Acting General Counsel issued the original complaint on Novem- ber 30, 2011, and issued an amended complaint on January 13, 2012. Hawaiian Dredging Construction Company, Inc. (the Respondent or Hawaiian Dredging) filed a timely answer deny- ing all material complaint allegations. The Respondent filed a Motion for Summary Judgment on March 31, 2012, which the National Labor Relations Board (the Board) denied on Febru- ary 28, 2012. The Acting General Counsel issued a compliance specifica- tion and order consolidating the compliance specification with the amended complaint on September 10, 2012. The Respond- ent filed a timely answer. At the hearing, I severed the compli- ance specification from the amended complaint and took evi- dence on the unfair labor practices complaint only. The issue before me is whether Respondent’s layoffs of Ko- na Akuna, Paul Aona, Crispin Bantoy, Domingo Delos Reyes, Jeffery Esmeralda, Joseph Galzote, Manuel Gaoiran, Daniel Marzo Jr., Henry Merrill, Peter Pagaduan, Joselito Peji, Rolan- do Tirso, and Kenneth Valdez (the alleged discriminatees) vio- lated Section 8(a)(3) and (1) of the National Labor Relations Act (the Act). On the entire record, including my observation of the de- meanor of the witnesses, and after considering the briefs filed by the Acting General Counsel, the Respondent, and the Union, I make the following FINDINGS OF FACT I. JURISDICTION The Respondent, a Hawaii corporation, with an office and a place of business in Honolulu, Hawaii, is a general contractor in the construction industry. During the past 12 months and at all material times, it derived gross revenues in excess of $500,000 and purchased and received goods valued in excess of $50,000 directly from points outside the State of Hawaii. The HAWAIIAN DREDGING CONSTRUCTION CO. 101 parties admit, and I find, that the Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act and that the Union is a labor organization within the meaning of Section 2(5) of the Act. II. ALLEGED UNFAIR LABOR PRACTICES A. Background Hawaiian Dredging is the largest general contractor in the State of Hawaii with roughly 230 salaried employees and 375 craft labor employees. Its building projects include hotels, houses, highways and roads, and piers. The Respondent also does renovation and foundation work both for their own and other contractors’ projects. In addition, the Respondent is the state’s principal power and industrial contractor, and its em- ployees perform industrial work at sewage and wastewater treatment plants. The Respondent’s industrial operations con- sist of five divisions: heavy, waterfront, power and industrial, and two building oriented groups. For more than 20 years, Hawaiian Dredging has performed all craft work pursuant to collective-bargaining agreements (CBAs). (Tr. 90–91, 106, 253, 256.)1 William Wilson is the Respondent’s longtime president. Tom Valentine manages the Respondent’s power and industrial (P&I) division. The work he oversees is industrial mechanical construction and generally involves welding. Prior to January 2012, Valentine was a senior project manager. In that capacity, he oversaw power related projects. The Hawaiian Electric Company (HECO) has been, at all relevant times, the Respond- ent’s primary client in this area. Gordon Caughman, general foreman over the Pipefitters since March 2011, oversees the labor and mechanical work for the P&I division. He reports to the P&I division managers. Caughman was previously the Boilermakers’ general foreman. B. The Collective-Bargaining Relationship The Association of Boilermaker Employers of Hawaii (the Association) represents employer-members in negotiating and administering CBAs. From at least October 1, 2005, to Febru- ary 17, 2011, the Respondent was a member of the Associa- tion.2 For roughly 8 years up until February 2011, Valentine was chairman of the Association. For at least 20 years, up until February 17, 2011, the Boiler- makers and the Association were parties to a collective- bargaining relationship under Section 8(f) of the Act. Boiler- makers worked in Hawaiian Dredging’s P&I division. In addi- tion to welding, they did rigging, equipment setting, PVC work, and piping. Some employees worked on the same project through its completion, while other employees were transferred among jobs. 1 Abbreviations used in this decision are as follows: “Tr.” for tras- cript; “R. Exh.” for Respondent’s exhibit; and “GC Exh.” for Acting General Counsel’s exhibit. Although I have included several citations to the record to highlight particular testimony or exhibits, I emphasize that my findings and conclusions are based not solely on the evidence specifically cited but rather are based on my review and consideration of the entire record. 2 The other members were Arakaki Mechinical and Elayer Enterpris- es. The most recent CBA between the Association and the Boil- ermakers ran from October 1, 2005, through September 30, 2010. (GC Exh. 2.) Upon expiration of the contract, having not reached a new agreement, the parties agreed to extend its terms through October 29, 2010, with any new agreement ret- roactive to September 30. (GC Exh. 3.) On Friday October 1, 2010, the Boilermakers’ attorney sent, via email, a letter to Boilermakers’ business agent, Allen Mey- ers, informing him that because the CBA fell under Section 8(f), either party was free to cease bargaining or take economic action. He further noted that because the requisite 60-day no- tice had been given, the members of the Local 627 could cease working without further notice or bargaining. Boilermakers’ business representative, Gary Aycock, forwarded the letter to Valentine. (R. Exh. 3.) That same day, the Boilermakers ar- rived for work at the Sand Island wastewater facility and noti- fied Superintendent Manny Fernandez that they did not intend to work because their contract had expired. (Tr. 96; R. Exh. 4.) By Monday, October 4, the Boilermakers had resumed work. (Tr. 112.) Contract negotiations continued into November with the par- ties disagreeing about inclusion of maintenance of benefits provision and an increase in the mobilization optimization sta- bilization and training (MOST) benefit. (R. Exhs. 6, 7.) On November 12, Valentine forwarded to Meyers four copies of a CBA he believed the Boilermakers had ratified. (R. Exh. 7.) On November 17, Meyers sent a letter to Valentine that, in addition to pointing out minor corrections, instructed the Re- spondent to add a 50-cent-per-year maintenance of benefits provision and include an increase in the MOST contribution. Meyers requested a response no later than November 30, but this was extended to December 6. (R. Exh. 8; Tr. 262.) C. The Kahe 4 Project, Continued Negotiations, and Board Charges In December, Hawaiian Dredging contracted with HECO to provide about 20 Boilermaker welders for a powerplant outage at HECO’s Kahe 4 power plant (the Kahe 4 project). On De- cember 3, Hawaiian Dredging submitted a request to the Boil- ermakers to dispatch a welder to the Kahe 4 plant on December 6. (R. Exh. 10; Tr. 164, 203.) Superintendent Forrest Ramey notified management that the Boilermakers had not dispatched a worker on December 6. Caughman contacted Aycock to inquire, and Aycock stated that Meyers was handling dispatch- es from Arizona. According to Caughman, when he and Mey- ers spoke, Meyers asked, “words to the effect of” whether the Union had gotten management’s attention. Caughman also called Manuel (Kalani) Gaoiran, the worker who was supposed to report to the Kahe 4 project on December 6. By Caughman’s account, Gaoiran responded that he was told not to report and did not want to get stuck in the middle. (Tr. 166.) Valentine had to notify HECO about the dispatch problems, which caused him concern because HECO is his major customer. (R. Exh. 9, 10.) Later that same day, December 6, Aycock sent Valentine an email inquiring as to whether he intended to respond to the November 12 letter Meyers had sent him about the contract. Valentine responded, copying Meyers and others. He stated DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 102 that Meyers’ letter did not accurately reflect the agreement from the most recent negotiations. He further wrote, “I do not understand the reason for this failure to honor the dispatch. We have a disputed contract and our position has always been that upon resolution the contract would be retroactive to October 1, 2010.” He concluded by informing Aycock and Meyers that the Association had been advised to file an unfair labor practic- es complaint and would be doing so that day. (R. Exh. 11.) The Association filed charges with the NLRB on December 6, alleging that the Union violated Section 8(b)(3) of the Act by attempting to add a maintenance of benefits provision and in- crease the MOST benefit without first negotiating. (R. Exh. 12.) During the investigation of this charge, Hawaiian Dredg- ing requested mediation of the contract dispute through Federal Mediation and Conciliation Services (FCMS), but the Boiler- makers declined. (GC Exh. 1(k) Valentine Decl.) On December 7, the Boilermakers did not dispatch three journeymen requested for the Kahe 4 project. (R. Exh. 13.) One worker was dispatched the evening of December 9 without notice to the Respondent or HECO. Workers continued to show up at the site unannounced. Valentine sent Aycock an email on December 10, asking him to tell Hawaiian Dredging and HECO when it was dispatching Boilermakers to the Kahe 4 project. (R. Exh. 14.) On December 12, Valentine sent an e- mail to Wilson, then Vice President Dan Guinagh, and the Re- spondent’s in-house Counsel Gary Yokoyama, detailing the problems with staffing for the HECO project, expressing his concern about the Boilermakers’ failure to dispatch workers as well as the quality of their work, and opining that Hawaiian Dredging should consider terminating its relationship with them. (R. Exh. 15.) To provide manpower to the Kahe 4 pro- ject, the Respondent transferred its eight Boilermaker welders from other ongoing projects to the Kahe 4 project, forcing the other projects to shut down. (Tr. 263, 273–274.) According to a spreadsheet Ramey prepared, Boilermakers had failed to show for 24 12-hour shifts as of December 16. (R. Exh. 16.) HECO ultimately removed some work from Hawaiian Dredg- ing because of its inability to staff it. (Tr. 212, 273.) On December 18, HECO directed the Respondent to termi- nate four welders because their welds failed radiographic test- ing. Valentine directed the Boilermakers to prepare a written response as to how the Union would correct the problem so that he could present it to HECO. (R. Exhs. 17–18.) He did not receive a response. (Tr. 218.) D. Termination of the 8(f) Agreement and Layoffs Valentine received a letter from the Board on February 17, 2011, regarding the December 6, 2010 charges.3 The Board dismissed the charges, concluding that the parties did not reach complete agreement on the terms and conditions of employ- ment. (R. Exh. 21.) Relying on the Board’s dismissal, the Association terminated its relationship with the Boilermakers effective Monday, Feb- ruary 17, 2012, on the basis that there was no CBA in place. At around noon, Valentine and Ramey met with Caughman to 3 The letter is dated February 14 and date-stamped February 15, which was a Tuesday. inform him the Boilermaker employees were being laid off because there was no contract. The Boilermakers received termination notices at the end of the workday. (GC Exhs. 4– 19.) At the time, the employees did not receive notice of any plan to rehire them. The Respondent separated the employees because there was no contract in place, not due to a lack of work.4 E. Contract with the Pipefitters Union On February 18, 2011, Valentine and Guinaugh met with representatives of the Plumbers and Pipefitters Union, Local 675 (the Pipefitters) to discuss the possibility of entering into a contract. Guinagh asked the Pipefitters’ business manager and secretary/treasurer, Reginald Castanares, if he would accept Hawaiian Dredging’s former Boilermaker employees as the Pipefitters. Castanares stated that membership would be condi- tioned on following the Pipefitters’ standard practice of apply- ing, interviewing, and passing a welding test and a drug test.5 The Respondent and the Pipefitters became parties to a CBA on February 23.6 (R. Exh. 22.) In a meeting earlier that day, Wil- son informed Castanares that Hawaiian Dredging wanted the employees who had worked under the contract with the Boil- ermakers to continue working and asked if they could be re- ferred through the Pipefitters. Castanares responded with the same answer he had given to Guinaugh. Shortly after the contract with the Pipefitters was signed, Caughman and Ramey informed the alleged discriminatees that they could sign up with the Piperfitters if they wanted to con- tinue working for Hawaiian Dredging. Wilson did not believe the Boilermakers would have trouble passing the Pipefitters’ welding test because the work they had performed over the years had almost always met the Respondent’s contractual ob- ligations. The Respondent permitted them to use its warehouse facility to practice their welding skills in preparation for the welding test. Hawaiian Dredging performed no welding work between February 17 and March 1, 2011, when the first worker was dispatched under the February 23 contract with the Pipefit- ters. (Tr. 228.) By February 25, 2011, 6 out of the 13 alleged discriminates had registered with the Pipefitters. By May 12, 2011, eight had registered. (R. Exh. 23.) The additional five alleged discrimi- nates did not register. Wilson did not care which union referred the former Boiler- maker-employees to work for Hawaiian Dredging, as long as the work was performed under a contract. (Tr. 109.) III. ANALYSIS The issue before me is whether the Respondent laid off the alleged discriminatees in violation of Section 8(a)(3) and (1) of the Act.7 4 The parties entered into a stipulation on this fact. (Tr. 9–10.) 5 The Pipefitters’ CBA contains a “Uniform Conditions” provision (most favored nation clause) which would be violated by a deviation of its hiring and referral procedures. 6 The CBA between the Pipefitters’ Union and the Respondent was also pursuant to Sec. 8(f) of the Act. 7 The Association’s termination of its 8(f) relationship with the Un- ion is not at issue in this case. The Association is not named in the HAWAIIAN DREDGING CONSTRUCTION CO. 103 Both the Acting General Counsel and the Charging Party ar- gue that the layoffs were inherently destructive of employee rights, and therefore antiunion motivation may be inferred. NLRB v. Great Dane Trailers, Inc., 388 U.S. 26, 34 (1967). Before jumping into analysis under Great Dane or any famil- iar legal paradigm, it is important to point out the extremely unique factual scenario this case presents. Much of the case law that has developed under Great Dane and its progeny con- cerns strikes, lockouts, and other actions where the parties have some sort of continuing obligation to each other. This case occurs in a very different context that derives from the unique nature of the construction industry. Here, the Association had lawfully terminated its 8(f) relationship with the Union, and the parties therefore had no continuing contractual obligations to each other. The majority of the case law also concerns replac- ing union workers with nonunion workers and/or workers not affiliated with the union that is a party to the case. Here, con- sistent with its longstanding practice, the Respondent refused to go “open shop” and would only employ craft workers who were affiliated with a union and were operating under a CBA, regardless of any particular union affiliation. Against this unu- sual factual backdrop, I turn to the legal analysis. Under Great Dane, if the employer’s conduct is “inherently destructive” of important employee rights, no proof of an anti- union motivation is needed and the Board can find an unfair labor practice even if the employer introduces evidence that the conduct was based upon important business considerations. If the adverse effect of the discriminatory conduct on employee rights is “comparatively slight,” and the employer has come forward with evidence of legitimate and substantial business justifications for its actions, antiunion motivation must be proved to sustain the charge. Ibid. The burden is upon the employer to establish that it was motivated by legitimate objec- tives. The first question to answer, then, is whether the employer’s conduct was “inherently destructive” of important employee rights. “Inherently destructive” conduct involves actions “that exhibit hostility to the process of collective bargaining,” and that have “far reaching effects which could hinder future bar- gaining; i.e., conduct that creates visible and continuing obsta- cles to the future exercise of employee rights.” Esmark, Inc. v. NLRB, 887 F.2d 739 (7th Cir. 1989) (quoting Portland Willamette Co. v. NLRB, 534 F.2d 1331, 1334 (9th Cir. 1976). See also Roosevelt Memorial Medical Center, 348 NLRB 1016 (2006); Bud Antle, Inc., 347 NLRB 87 (2006). In addition, “conduct which discriminates solely upon the basis of partici- pation in strikes or union activity” may be inherently destruc- tive. Portland Willamette Co, 534 F.2d at 1334. In the instant case, there was no future bargaining to occur between at the time of the layoffs, as the Association had law- fully terminated the 8(f) agreement with the Boilermakers Un- ion. As such, the Respondent’s actions did not hinder future bargaining. complaint. The Union had contended that termination of the 8(f) rela- tionship violated the Act, but this charge was investigated and dis- missed. As to whether the layoffs distinguished among workers based on participation in protected activity, the evidence shows that all employees who had worked under the terminated 8(f) agreement but no longer were covered by a CBA were laid off, regardless of union or any other protected activity. The em- ployees who had worked under the contract with the Boiler- makers were afforded the same opportunity to work as any other employee, i.e., under a contract once one was in place. The Respondent had no obligation to treat the employees who had worked under the former Boilermakers’ contract more favorably than its other craft workers by permitting them to work without the protections of a CBA. In short, the Respond- ent laid off the alleged discriminatees because they were no longer working under a contract, not because they were mem- bers of the Boilermakers or any other union.8 Once a new CBA was in place, the Respondent facilitated returning the employ- ees to work, as detailed above, on a nondiscriminatory basis. Accordingly, the Respondent’s actions here are not “demon- strably so destructive . . . that the Board need not inquire into employer motivation, as might be the case, for example, if an employer permanently discharged his unionized staff and re- placed them with employees known to be possessed of a violent antiunion animus.” American Ship Building Co. v. NLRB, 380 U.S. 300, 309 (1965). See also D&S Leasing, 299 NLRB 658, 659 (1990) (terminating employees and refusing to rehire them to escape bargaining obligations inherently destructive). Based on the unique facts of this case, I do not find that the Respond- ent’s conduct was inherently destructive of employee rights. The Acting General Counsel and the Union assert that the Respondent was required to continuously employ the alleged discriminatees. This, however, assumes a right to employment on terms inconsistent with the Respondent’s longstanding prac- tice of having its craft work performed under CBAs rather than a right to be free from discrimination. Though the transition was not seamless, the Respondent acted quickly and its manag- ers clearly prioritized the continued employment of the alleged discriminatees without regard to whether they were still mem- bers of the Boilermakers Union. The Acting General Counsel and the Union further assert that the employees were laid off simply because they were members of the Boilermakers Union. As noted above, the dis- tinguishing factor was not Boilermaker membership but rather lack of a CBA. Though the two did go hand in hand under the circumstances present, this does not imply discrimination given the facts of this case. As the Supreme Court stated in American Ship Building. Co., 380 U.S. at 311–313: [W]e have consistently construed the section to leave un- scathed a wide range of employer actions taken to serve legit- imate business interests in some significant fashion, even though the act committed may tend to discourage union membership. See, e.g., National Labor Relations Board v. Mackay Radio & Telegraph Co., 304 U.S. 333, 347, 58 S.Ct. 904, 911, 82 L.Ed. 1381. 8 Management did not know whether the alleged discriminatees re- mained Boilermakers union members. (GC Exh. 1(m), Valentine Dec- laration.) DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 104 It is true that the employees suffered economic disadvantage because of their union's insistence on demands unacceptable to the employer, but this is also true of many steps which an em- ployer may take during a bargaining conflict, and the existence of an arguable possibility that someone may feel himself dis- couraged in his union membership or discriminated against by reason of that membership cannot suffice to label them viola- tions of Section 8(a)(3) absent some unlawful intention. Though there is no bargaining conflict before me in the in- stant case, the Court’s reasoning regarding the absence of un- lawful intention, under the circumstances present, is nonethe- less persuasive. Assuming, without finding, that the conduct was inherently destructive, the next step is to consider the degree to which the Respondent's conduct affected important employee rights. For the reasons that follow, I find the adverse effect on employee rights was “comparatively slight.” No welding work was per- formed between February 17 and March 1, 2011, when the first employee under the new contract with the Pipefitters was sent to work. As set forth above, the employees working under the former contract with the Boilermakers were considered for work under the new contract without regard to their Boilermak- er status, and in fact the Respondent facilitated their re- employment. The Respondent’s burden at this juncture is to prove it had legitimate and substantial business justifications for its actions. The Respondent’s asserted justification, simply put, is that it requires its craft employees to perform work under CBAs.9 More specifically, the Respondent points to the reasons Section 8(f) was enacted. As the Respondent notes, the legislative his- tory of Section 8(f) shows it was added to the Act because of the construction industry employer’s need to “know his labor costs before making the estimate upon which his bid will be based” and “to ensure the employers in the construction indus- try would have a readily available supply of skilled craft work- ers for quick referral.” S. Rep. No. 86–187 (1959). See also NLRB v. Bridge Workers Local 103, 434 U.S. 335, 348–349 (1978). Neither the Acting General Counsel nor the Union has refuted the Respondent’s evidence that, for at least the past 20 years, it has exclusively relied on the union hiring halls to pro- vide labor to it under CBAs governed by Section 8(f). I find that such reliance, given the purpose of Section 8(f) and the mutual safeguards 8(f) agreements provide to both parties, con- stitutes a legitimate business justification.10 The Acting General Counsel and the Union assert that the Board’s decision in CIMCO, 301 NLRB 342 (1991), enfd. 963 F.2d 513 (5th Cir. 1992), controls and requires me to find the 9 Neither the Acting General Counsel nor the Union argued that this case should be decided under the Board’s familiar analysis in Wright Line, 251 NLRB 1083 (1980). Assuming such analysis governs and that the Acting General Counsel has met its initial burden, I find that the Respondent’s requirement to have its craft work performed pursu- ant to CBAs is a legitimate nondiscriminatory reason for its actions, and the Acting General Counsel has not presented evidence to show this was pretext. 10 The problems the Respondent faced after the CBA with the Boil- ermakers expired, detailed above, underscore its rationale for requiring work to be performed under a valid enforceable contract. Respondent violated Section 8(a)(3) and (1). There are materi- al distinctions, however, between CIMCO and the instant case. In CIMCO, the union terminated its 8(f) agreement with the company at a particular worksite that employed electricians, and the company disputed the legitimacy of this action. There- after, in response to unsubstantiated rumors that the union was not going to permit its members to work at the site, the compa- ny terminated them but stated it considered them to have volun- tarily quit. The company then placed ads in the paper and, although all the electricians who had been referred by the union applied, it hired a “core group” of employees who exclusively were not from the union. Thereafter, it hired some of the elec- tricians who had previously been referred by the union. The Board agreed with the administrative law judge that this course of conduct was inherently destructive of employee rights. The key to the judge’s finding was that the employees were termi- nated because they had been referred by the union, and the company took this action because the union would not agree to reinstate its participation in the 8(f) agreement. In the instant case, unlike in CIMCO, the Respondent did not advertise for outside nonunion employees. The company in CIMCO discriminated in its hiring when it initially only con- sidered the electricians who had not previously been referred by the union. By stark contrast, the Respondent here did not con- sider or hire any nonunion employees to resume work without a CBA in place, and did not at any point favor workers who were unaffiliated with the Boilermakers. The evidence shows that the Respondent facilitated the Boilermakers’ referral under the new CBA and considered them for hire from the outset on a nondiscriminatory basis. Finally, unlike in CIMCO, the Re- spondent was not attempting to coerce the Boilermakers, as the Association had already lawfully terminated the 8(f) relation- ship. Accordingly, I find that the rationale in CIMCO does not fit the facts of this case. Assuming a finding that the Respondent’s conduct was in- herently destructive, I find that, unlike in CIMCO, the Re- spondent has met its burden to prove it had legitimate and sub- stantial business justifications for its actions, as set forth above. The rationale set forth in CIMCO rested on unwarranted specu- lation that the electricians the union had referred would not show up for work if hired as nonunion workers. The rationale here is grounded in the fact that there was no longer a contract governing the work at issue, and the Respondent’s legitimate business model requires all craft work to be performed under a CBA.11 The Board’s analysis in Jack Welsh Co., 284 NLRB 378 (1987), does not apply, and merely obfuscates the legal issue presented in the case at hand. In Jack Welsh, upon expiration of an 8(f) agreement between the employer and the union, the company went “open shop” and Welsh, the owner, terminated 11 The Union avers that the Respondent argued other business justifi- cations, including work disruptions and quality issues. The Respond- ent, however, has consistently argued that it laid off the alleged dis- criminatees because of the Board’s determination that no contract ex- isted. While the Respondent has asserted that some of the problems that arose after the CBA expired illustrate why it maintains a practice of only having craft work performed under contracts, the problems them- selves were not alleged as business justifications. HAWAIIAN DREDGING CONSTRUCTION CO. 105 three union-member employees. The Board found this violated the Act because the employees were not given the option to continue working in the new nonunion environment. Here, the Respondent never intended to become a nonunion shop. Ra- ther, the Respondent took steps to get a new contract into place promptly and facilitated the alleged discrimnatees’ continued employment, as detailed above. There is no evidence to sup- port a finding that the Respondent attempted to subvert unioni- zation or the Act. The Charging Party further asserts that the Respondent’s de- cision to lay off the alleged discriminatees because they lacked union representation and a union contract violates the Act to the same degree it would to take the same action because they were represented. The complaint contains no such allegation on its face or by amendment, it was not litigated or defended, and I therefore do not consider it. Likewise, the Acting General Counsel hypothesizes that had the Respondent terminated the alleged discriminatees at the insistence of the Pipefitters, both Respondent and the Pipefitters Union would have violated the Act under the Board’s reasoning in Austin & Wolfe Refrigera- tion, 202 NLRB 135 (1973). As this was neither asserted in the complaint nor litigated, and is argued from a speculative stance only, I do not consider it. The Acting General Counsel notes that the Respondent could have required the alleged discriminatees to join the Piperfitters pursuant to a valid security clause after the 7-day grace period Section 8(f) provides. Citing to Acme Tile & Terazzo Co., 306 NLRB 479, 480–481 (1992), reaffirmed after remand by 318 NLRB 425, enfd. 87 F.3d 558 (1st Cir. 1996), the Acting Gen- eral counsel asserts that this is only permissible when there is continuous employment. Acme Tile concerned pressure to join the Bricklayers Union immediately, without the requisite grace period, in the context of the Bricklayers’ ongoing campaign to force the workers to join their union. There is no evidence the Respondent attempted to subvert any required waiting period, nor is there evidence that the Respondent was assisting the Pipefitters in some sort of campaign to force the alleged dis- criminatees to join its union. Finally, the Acting General Counsel cites to National Fabricators, Inc., 295 NLRB 1095 (1989) (quoting Gatliff Business Products, 276 NLRB 543, 558 (1985)), for the proposition that laying off employees who are likely to engage in protected activities “is the kind of coercive discrimination that naturally tends to discourage unionization and other concerted activity.” This is unpersuasive given that there is no hint that the Respondent was discouraging union activity or any rights protected under the Act.12 Based on the foregoing, considering the unique factual cir- cumstances present in this case, I find the Acting General Counsel has failed to prove that the Respondent violated the Act as alleged. CONCLUSION OF LAW The Respondent’s actions of laying off the alleged discrimi- natees did not violate Section 8(a)(3) and (1) of the Act. [Recommended Order for dismissal omitted from publica- tion.] 12 The Acting General Counsel also references Steel Fabricators, Inc., 271 NLRB 524, 532 (1984). That case, however, involved layoffs following an unlawful refusal to bargain, whereas there was no further duty to bargain in the instant case.