ON PETITION FOR REVIEW AND CROSS APPLICATION FOR ENFORCEMENT OF AN ORDER OF THE NATIONAL LABOR RELATIONS BOARD.
Aldisert, Gibbons and Weis, Circuit Judges.
The major question in this petition for review and cross-application for enforcement of a National Labor Relations Board order is whether the Board should have considered the effect of Boys Markets, Inc. v. Retail Clerks Union, 398 U.S. 235, 26 L. Ed. 2d 199, 90 S. Ct. 1583 (1970). The Board found that the company had committed an unfair labor practice, and that the union struck in protest, but that the strike breached a no-strike clause in a labor contract providing for grievance and arbitration procedures. Although we will not disturb the Board's conclusion that the company committed an initial unfair labor practice, we will grant the petition for review of other portions of the Board's order and remand the proceedings to the Board for reconsideration.
The case derives from a dispute between the Dow Chemical Company and a local of the Allied and Technical Workers Union*fn1 representing latex department employees at the Dow plant in Allyn's Point, Connecticut. Prior to May of 1971, 16 of the 19 latex department employees worked on a "7 and 2" shift -- seven days on the job, then two days off; three others worked a regular five-day week. After the company lost a large customer, with a resulting sales drop, it decided to institute a five-day work week for all latex department employees. The company estimated that, as a consequence of the change, the 16 affected employees would earn approximately $570 less annually*fn2 due to the reduction in hours worked, the elimination of overtime, and the loss of weekend and holiday premiums. The union protested the company's proposed action, contending that the company could not implement the change without first bargaining. The company answered that, under the labor contract's management-rights clause, it could make the change without bargaining.*fn3
The collective bargaining agreement in effect at the time contained a no-strike, no-lockout provision which preserved to the union a limited right to strike. The union could not strike, however, unless and until three pre-conditions had been satisfied: first, a five-step grievance procedure had to be exhausted; second, a written request to proceed to arbitration had to be filed within 30 days of the completion of the five steps; third, the arbitration process had to be completed or refused by the company.*fn4 Step 5 of the grievance procedure provided:
Step 5. Should a satisfactory solution not be arrived at in Step 4, the Union chairman of the grievance committee shall so notify the Plant Manager, or appointee, in writing and within ten days the Company shall arrange for the unresolved case to be reviewed by the Midland Division Manager in charge of the Allyn's Point Plant or his appointees.
The parties agree that they completed the first four steps of the grievance procedure, with the Step 4 meeting taking place on June 3, 1971. On June 4, the Friday before the schedule change was to be implemented, a union representative, the company's industrial relations manager for the plant, and the company's industrial relations manager for the division encompassing the plant conducted a three-way telephone conversation. Nothing was said about a Step 5 meeting. The following Monday, June 7, a company representative and a union representative addressed about 100 production employees in the plant parking lot. After the meeting, the union representative testified, "the whole thing erupted", with the employees shouting that they were not going to work.*fn5 Picketing began the next day. Subsequent meetings with state mediation officials failed. During the summer, the company wrote three letters beseeching the employees to discontinue the "unlawful strike". On July 23, the company wrote telling the employees that it would begin hiring replacements July 29. By letter of August 9, the company rescinded the collective bargaining agreement. Eight days later the company terminated the striking employees. Shortly thereafter a majority of the then-employees petitioned the company stating that they no longer wished to be represented by Local 13744. Consequently, by letter dated August 28, the company informed the union that it would no longer recognize the union as bargaining agent for the hourly rated employees at the plant.
When the dispute reached the National Labor Relations Board, the company argued alternatively (1) that it had the right to implement the schedule change under the management-rights clause, and (2) that, if it did not, the union's strike was unprotected activity in derogation of the collective bargaining agreement. Accordingly, the company contended it had the right to rescind the collective bargaining agreement, terminate the employees and refuse to recognize the union as the bargaining agent.
The union, on the other hand, argued that it had complied sufficiently with the grievance procedure so that the strike was not violative of the no-strike clause. Even if the strike did violate the contract, however, the union argued that the strike was in protest of an unfair labor practice and therefore protected activity. Accordingly, none of the company's subsequent actions was permissible.
The administrative law judge's conclusions may be summarized as follows:
(1) The company violated Sections 8(a)(5) and 8(a)(1) by unilaterally announcing and scheduling the shift changes for the latex department.*fn6
(2) The union did not complete Step 5 of the grievance procedure, nor did it make a written request for arbitration.
(3) Mastro Plastics Corp. v. NLRB, 350 U.S. 270, 100 L. Ed. 309, 76 S. Ct. 349 (1956), held that a strike designed, not to modify or terminate a collective bargaining agreement, but "to protest the unfair labor practices of petitioners," ibid. at 286, was protected activity.
The Court underscored two complementary, congressionally-endorsed policies of labor law: one seeking to preserve a competitive business economy, the other seeking to preserve the rights of labor to organize and bargain collectively for better conditions. Ibid. 350 U.S. at 279-80. The Court recognized that, assuming fair representation, a collective bargaining agreement could waive a union's right to strike during the term of the contract. However, it was found that, viewed as a whole, the contract in Mastro Plastics dealt "solely with the economic relationship between the employers and their employees." Ibid. at 281. Accordingly, there was an insufficient basis for implying that the union had contracted not to strike at all, even against an unfair labor practice.
In Mastro Plastics the company's initial unfair labor practice was termed "a flagrant example of interference by the employers with the expressly protected right of their employees to select their own bargaining representative." Ibid. 350 U.S. at 278. Relying upon this finding the NLRB has adopted the rule that "only strikes in protest against serious unfair labor practices should be held immune from general no-strike clauses." Arlan's Department Store of Michigan, Inc., 133 N.L.R.B. 802, 807 (1961) (emphasis added). On the facts of this case, the company's "unilateral conduct, although found to be an unfair labor practice, was not of such serious nature as to be 'destructive of the foundation on which collective bargaining must rest.'" App. at 416a (opinion of administrative law judge, quoting Mastro Plastics, supra, 350 U.S. at 281). Therefore, the strike that began on June 7 "was unprotected from its inception." Ibid. at 417a.*fn7
(4) The company did not violate Sections 8(a)(5) and 8(a)(1) when it rescinded the collective bargaining agreement, because the union previously had breached the contract's no-strike clause.
(5) The striking employees forfeited whatever rights they had had to reinstatement by participating in the unprotected strike. Accordingly, the company did not violate Sections 8(a)(3)*fn8 and 8(a)(1) by terminating the striking employees.
(6) Because the terminations were lawful, the company did not violate Section 8(a)(5) by withdrawing recognition of the union.
On these conclusions, the administrative law judge found that no remedial action was appropriate and recommended that the complaint be dismissed in its entirety.
By a vote of two-to-one, a three-member panel of the Board affirmed the administrative law judge's rulings, findings and conclusions, and adopted his recommended order. The majority did not issue an opinion. Member Fanning dissented in part and filed an opinion. He agreed that the company's initial action violated Section 8(a)(5). He stated, however, that he interpreted Mastro Plastics to permit strikes in protest of any unfair labor practices, not just serious ones; moreover, assuming Arlan's Department Store to be the rule, the company's violation of the Act was a ...