On Petition For Review and for Enforcement of a decision and order of the National Labor Relations Board (NLRB No. 4-CA-21968)
BEFORE: GREENBERG and McKEE, Circuit Judges, and GREENAWAY,*fn*
GREENAWAY, JR., District Judge.
The critical issue before this Court is whether petitioner Dorsey Trailers, Inc. ("Dorsey") violated the National Labor Relations Act (the "Act") when it entered into a subcontracting agreement without first negotiating with its employees' union representatives. The National Labor Relations Board (the "Board" or "N.L.R.B.") reversed the Administrative Law Judge's ("ALJ") conclusion that no such violation existed.
Dorsey now appeals the Board's Decision and Order which holds that Dorsey violated sections 8(a)(1) and (5) of the Act. *fn1 Dorsey also appeals the Board's decision that it shall provide its union employees with lost overtime payments incurred as a result of the subcontracting violations. Cross-petitioner N.L.R.B. seeks enforcement of its order. This Court will grant the petition for review but will enforce the Board's Decision and Order in part.
Dorsey manufactures platform and dump trailers in its Northumberland, Pennsylvania plant. *fn2 The United Auto Worker's International and its Local 1868 (the "Union") is the exclusive bargaining representative for Dorsey's production, maintenance and stock room employees. *fn3 A collective bargaining agreement, effective from March 4, 1992 to March 1, 1995, governed the relationship between Dorsey and the represented employees.
On November 14, 1994, a trial was held before the Honorable Karl H. Buschmann, the administrative law judge assigned to this matter. The ALJ made the following findings of facts which provide the factual basis for our consideration: *fn4
In 1993, in response to a rising backlog of work orders and increasing customer demand, the petitioner entered into an informal agreement with Bankhead Enterprises in Atlanta, Georgia, an independent company, which had the capability to produce flatbed and dump trailers. Pursuant to this informal agreement, the petitioner engineers the unit, purchases the material, and ships the material . . . and engineering packages to Bankhead, which then supplies the labor for assembling the trailers. Prior to this arrangement, the petitioner had only shipped out parts for warranty purposes. Bankhead produces two trailers per week for the petitioner's customers located in Florida, Georgia, Tennessee, and North and South Carolina. The informal agreement also provides that Bankhead will not compete with the petitioner by producing trailers on its own. Profits are apportioned 60 percent to the petitioners and 40 percent to Bankhead. It is undisputed that the petitioner entered into this agreement and effectuated the agreement without prior notice to the Union and without bargaining with the Union at any time.
On August 9, 1993, the Union filed a "Charge Against Employer" with the Board alleging that Dorsey, in violation of sections 8(a)(1) and (5), engaged in unfair labor practices when it:
1) Unilaterally implemented revised "regular hours for shifts," specified in the parties collective bargaining agreement, and unilaterally revised contractual wages for three employees working Sunday 11PM to Monday 7AM shift. Employer negotiated changes directly with affected bargaining unit employees. The Employer also has denied and/or failed to provide within a reasonable time, relevant information which was requested in connection with such changes.
2) Unilaterally implemented new job duties and the wages for such for bargaining unit employees working on what is referred to as light duty jobs. Employer negotiated changes directly with affected bargaining unit employees. The Employer has also denied and/or failed to provide within a reasonable time, relevant information which was requested in connection with such changes.
3) Refused to bargain collectively with the undersigned labor organization concerning bargaining unit work being subcontracted and/or moved to Florida. The Employer has also denied and/or failed to provide within a reasonable time, relevant information which was requested in connection with the movement and/or subcontracting of such work.
On April 29, 1994, the General Counsel for the Board filed a Complaint and Notice of Hearing against Dorsey.
On February 15, 1995, the ALJ concluded that Dorsey's light duty transfer assignments, as well as its refusal to inform the Union of this practice, violated sections 8(a)(1) and (5). The ALJ dismissed the subcontracting element of the complaint premised upon his finding that the subcontracting agreement was not a subject of mandatory Union bargaining; however, he did find that Dorsey had violated sections 8(a)(1) and (5) based upon its refusal to provide the Union with requested information relevant to the subcontracting agreement.
The General Counsel and Dorsey filed exceptions to the ALJ decision and appealed to the Board. On July 5, 1996,
the Board issued a Decision and Order adopting, with modification, the findings of the ALJ. In major part, the modification found that the subcontracting agreement was a subject of mandatory Union bargaining. In so finding, the Board wrote:
that the Respondent's decision to subcontract work was not a change in the "scope and direction" of its business going to a core entrepreneurial concern, but rather a direct replacement of the Northumberland unit employees by the Bankhead employees to perform unit work.
Dorsey Trailers, Inc., Northumberland, Pa. Plant, 321 NLRB 87, 88 (1996). The Board required Dorsey to rescind ...