Union's Memorial Period Strikes Protected; Employer's Exercise of Right to Amend Employee Bonus Plan was ULP: DC Circuit | Practical Law

Union's Memorial Period Strikes Protected; Employer's Exercise of Right to Amend Employee Bonus Plan was ULP: DC Circuit | Practical Law

The US Court of Appeals for the District of Columbia Circuit ruled in Chevron Mining, Inc. v. NLRB that a collective bargaining agreement (CBA) gave a union the right to engage in memorial period work stoppages for any purpose. The court enforced the National Labor Relations Board's (NLRB) decision and order holding that the employer, which reserved the right to amend employee bonus plan for employees, committed an unfair labor practice (ULP) in violation of the National Labor Relations Act (NLRA) by exercising that right in retaliation for the union's protected memorial period work stoppages.

Union's Memorial Period Strikes Protected; Employer's Exercise of Right to Amend Employee Bonus Plan was ULP: DC Circuit

by PLC Labor & Employment
Published on 10 Jul 2012 • USA (National/Federal)
The US Court of Appeals for the District of Columbia Circuit ruled in Chevron Mining, Inc. v. NLRB that a collective bargaining agreement (CBA) gave a union the right to engage in memorial period work stoppages for any purpose. The court enforced the National Labor Relations Board's (NLRB) decision and order holding that the employer, which reserved the right to amend employee bonus plan for employees, committed an unfair labor practice (ULP) in violation of the National Labor Relations Act (NLRA) by exercising that right in retaliation for the union's protected memorial period work stoppages.

Key Litigated Issues

On July 3, 2012, the US Court of Appeals for the District of Columbia Circuit issued an opinion in Chevron Mining, Inc. v. NLRB. The key litigated issues in the case were whether:
  • A collective bargaining agreement (CBA) provided union-represented employees the right to engage in "memorial periods," which are unpaid work stoppages for any purpose that have been part of most mine worker collective bargaining agreements since the 1970s.
  • An employer that had a contractual right to unilaterally amend its employee bonus plan violated Sections 8(a)(1) and (3) of the NLRA by amending it to withhold bonus payments to employees in mines that engaged in memorial period stoppages that did not apply to all mines (including mines of other employers) in a mine workers' union district.

Background

The United Mine Workers of America (union) and Chevron Mining, Inc. (CMI) are parties to a collective bargaining agreement (CBA) at the North River Mine in Alabama (mine). The CBA includes a clause that gives the union the ability to call memorial periods. The union and CMI are also parties to an agreement that:
  • Allows union-represented employees to participate in CMI's employee bonus plan, which provides bonus payouts based on financial and safety achievements at the mine.
  • Gives CMI the authority to change the bonus plan unilaterally.
  • Provides that disputes over these changes are not arbitrable.
If the union objects, its sole recourse is to quit the agreement.
In February and July of 2004, the union, after providing proper notice, called six memorial days at the mine to pressure CMI about ongoing grievances that were being arbitrated. Although the work stoppages cost CMI $1.5 to $2.5 million in pre-tax profit, CMI took no immediate action in response.
In February, 2005, CMI amended the bonus plan so that no financial achievement bonus would be paid to union-represented employees in the mine if the union called a memorial day that does not cover all mines in the same district. The union's district system were geographic regions that might contain mines owned by several employers. At the same time, CMI offered a one-time 6% bonus that paid $700,000 to union-represented employees at the mine.
In April 2005, the union filed unfair labor practice (ULP) charges with the NLRB alleging that CMI's amendment to the bonus plan was retaliation for the union's exercise of its contractual right to call memorial days at the mine. The NLRB's General Counsel issued a complaint in October 2005.
In September 2010, the panel (Board) heading the NLRB's judicial functions issued a decision holding that:
  • The union's use of memorial periods to place economic pressure on CMI in support of pending grievances was protected activity.
  • CMI's amendment to the bonus plan was in retaliation for the union's protected activity and a ULP under Wright Line.
  • CMI's defenses were either unconvincing or barred by the stipulation.
CMI filed a petition for review in the D.C. Circuit and the Board filed a cross-application for enforcement.

Outcome

Three circuit judges considered the decision. In a 2-1 decision (Senior Circuit Judge Williams dissented), the D.C. Circuit denied the employer's petition and granted the NLRB's cross-petition for enforcement. Specifically, the court upheld the Board's decision that CMI's amendment to its employee bonus plan in response to the decision of the union calling memorial period work stoppages was a ULP.
The court reviewed the terms of the parties' CBA and affirmed that the Board correctly considered extrinsic evidence stipulated into the record because the CBA was ambiguous about the purposes for which a union could call for memorial period work stoppages. The court:
  • Found that Arch of West Virginia v. Mine Workers Local Union 5958 explained that courts, and therefore the Board, could not scrutinize the union's motivation for memorial period work stoppages, suggesting that they could be for any reason.
  • Rejected CMI's assertion that although it stipulated to the Board that Arch of West Virginia provided extrinsic evidence about the history of memorial periods in mine workers' CBAs, that the holding in that case was correct or could be extended to this case. CMI stipulated before the Board that "the history and purpose of the Memorial Periods Clause was addressed in the attached decisions," which included Arch of West Virginia.
  • Rejected CMI's argument that a memorial period can only be called to commemorate the death of a miner or a mining disaster.
  • Concluded that the union had a protected contractual right to engage in the memorial period work stoppages to apply economic pressure to CMI to resolve its pending grievances because they could call for memorial periods for any reason.
  • Concluded that under the Wright Line test, CMI's amendment to the bonus plan was unlawfully retaliatory because it was in response to earlier memorial periods and intended to persuade the union not to exercise its contractual rights to engage in non-district wide memorial period work stoppages in the future.

Practical Implications

A reservation of rights to amend certain terms and conditions of employment for union-represented employees may insulate an employer from a ULP for failing to bargain, but it will not sanction unilateral action to discourages unions or employees from engaging in activity protected by the NLRA.
Whenever employers stipulate to documents, decisions or agreements, they should consider stating clearly in the record for what reason they are stipulating and what arguments about those documents they intend to preserve. Alternatively, they should not stipulate about documents and decisions in collateral matters that contain issues they dispute. Here, the D.C. Circuit rejected the employer's arguments about the merits of Arch of West Virginia and its application to the case primarily because it agreed to make that case part of the record before the Board under a vague stipulation and preserved no arguments about it.
For more information on the overview of collective bargaining obligations under the NLRA, see Practice Note, Collective Bargaining under the National Labor Relations Act. To learn more about employee rights and prohibited unfair labor practices under the NLRA, see Practice Note, Employee Rights and Unfair Labor Practices under the National Labor Relations Act.

Court Documents