By Ronald Miller, J.D.
The watchman’s agreement cannot be colorably interpreted to permit employers to unilaterally impose an alternative disciplinary procedure contrary to the exclusive procedure in the CBA.
Assuming that both of the theories for violations can be applied, the D.C. Circuit sustained the NLRB’s determination that two employers made both a midterm contract modification and a unilateral change to the terms and conditions of employment of an employee covered by a watchmen’s agreement by applying the disciplinary procedure contained in a clerks’ agreement to discipline him. In view of the plain text of the watchmen’s agreement, the Board properly concluded that there was no “sound arguable basis” for the employers to apply the clerks’ agreement and enforce an arbitrator’s order. Moreover, by doing so, the employers unlawfully changed the terms and conditions of the employee’s employment. Judge Rao filed a separate opinion concurring in part and dissenting in part (Pacific Maritime Association v. NLRB, August 4, 2020, Rogers, J.).
The Pacific Maritime Association (PMA) is a multiemployer bargaining representative for its employer members, with the primary purpose of negotiating, executing and administering collective bargaining agreements. One of its members is Long Beach Container Terminal, which operates a marine container terminal at the Port of Long Beach and employs both watchmen and marine clerks. Each classification of employee is represented by a different union, and PMA has entered separate agreements with each union.
Anti-discrimination policy. Watchmen have long been represented by ILWU Local 26. Under the watchmen agreement, Local 26 and PMA jointly operate a dispatch hall that refers watchmen to work for PMA’s members. Article 16 of the agreement prohibits discrimination on the basis of race, color, national origin, or political beliefs. Article 18 established the rules and penalties governing watchmen’s conduct and provides the grievance machinery with respect to disputes arising under the agreement.
The marine clerks were represented by the ILWU (the International). The clerks’ agreement contained its own mechanism for signatory employers and employees to address disputes regarding covered longshore workers and marine clerks. Section 13.2 of the clerks’ agreement establishes a special grievance procedure for resolving allegations of discrimination or harassment. Under this streamlined procedure, an individual employee may file a complaint, which will be assigned directly to an arbitrator. The arbitrator must promptly schedule an evidentiary hearing to investigate the alleged incident. Within 14 days, the arbitrator is to issue a written decision that includes disciplinary penalties consistent with the clerks’ agreement. The arbitrator’s decision is final.
Work dispute. On March 28, 2017, a watchman represented by Local 26, and a marine clerk, represented by the International, were involved in a work-related argument during which both men engaged in racial name-calling. The two employees resolved the matter informally that day, but on March 30, the marine clerk filed a grievance pursuant to Section 13.2 of the clerks’ agreement. Long Beach informed Local 26 the next day that it was investigating the incident, and if necessary, would pursue discipline against the watchmen. It ultimately found insufficient evidence of wrongdoing to warrant formal charges.
Arbitration proceeding. In the meanwhile, the arbitrator was assigned to the Section 13.2 grievance. Local 26 told PMA that it was not bound by Section 13.2 and neither it nor the watchman would participate in the hearing. It further requested that PMA not take adverse action against Local 26 members based on these proceedings. PMA responded that Long Beach and its other members would implement whatever discipline the arbitrator determined was appropriate.
In his final decision, the arbitrator found that the watchman violated Section 13.2 policies and should be suspended from working at all PMA member terminals for 28 days. Local 26 appealed, but its jurisdictional argument was rejected. Thereafter, Local 26 filed unfair labor practice charges against PMA and Long Beach, alleging that they violated the NLRA by committing two theoretically distinct unfair labor practices in disciplining the watchman under the Section 13.2 procedure in the clerks’ agreement: (1) impermissibly modifying the terms of the watchmen’s agreement and (2) unilaterally imposing new terms and conditions of employment without bargaining.
Different theories of violation. The Board determined that the employers had violated Section 8(a)(5) and (1) under either of the alternative theories when it applied Section 13.2 of the clerks’ agreement to an employee represented by Local 26 and covered by the watchmen’s agreement, and when it disciplined him pursuant to the Section 13.2 process. The employers petitioned for review of the Board’s decision and the Board filed a cross application for enforcement.
As an initial matter, the D.C. Circuit observed that neither the Supreme Court nor it has spoken directly to the question of whether the Board has the authority to proceed on different theories of violation based on the same set of facts. However, the appeals court found that it need not do so in this case because the employers presented no challenge to the application of both theories to the same set of facts. Therefore, the court proceeded on the assumption that the Board may do so.
Contract modification. An employer violates Section 8(a)(5 and (1) by modifying the terms and conditions of employment established in a CBA. Here, the employers contended that they reasonably believed enforcing Section 13.2 of the clerks’ agreement against the watchman was consistent with the watchmen’s agreement. In their view, they did not modify the Article 18 procedures because no employer had filed a complaint as contemplated by the watchmen’s agreement; rather a marine clerk covered by the clerk’s agreement filed the complaint.
Agreeing with the Board, the appeals court concluded that the watchman’s agreement cannot be colorably interpreted to permit employers to unilaterally impose an alternative disciplinary procedure contrary to the exclusive procedure in the CBA, or affirmatively grant the employers the right to impose alternative disciplinary procedures unilaterally. Article 18(H) of the watchmen’s agreement expressly limited the employers’ ability to discipline employees “with respect to any dispute arising under the [Agreement]” unless the “grievance procedures have been exhausted.” The watchman’s alleged misconduct arose under Article 16’s antidiscrimination provisions. Thus, the employers could not reasonably conclude that enforcing the clerks’ agreement against the watchman was consistent with the watchman’s agreement under which he was covered.
Rejected also was the employers’ contention that Article 18(C) of the watchmen’s agreement affirmatively granted them the right to unilaterally discipline the watchman for racial harassment. Rather, the plain text of Article 18(C) limited the employers’ unrestricted right to discipline to the specific offenses involving “intoxication, pilferage, assault, incompetency, or failure to perform work as directed.” Thus, the employers failed to show that the Board erred in rejecting their attempt to come within the sound arguable basis exception for interpretation of the watchman’s agreement to permit their disciplinary action.
Unilateral change. Additionally, the employers asserted that the Board’s finding that there was a significant change to an established employment practice was not supported by substantial evidence. However, the appeals court observed that the record before the Board showed that the parties had consistently utilized the established Article 18 disciplinary procedure in the watchmen’s agreement to discipline bargaining unit employees. Thus, absent established disciplinary practices to resolve this type of dispute, the employers’ decision to enforce Section 13.2 against a covered watchman was a change in practice and was a deviation from the status quo that supported the Board’s determination that there was a unilateral change without bargaining.
Partial concurrence and partial dissent. Judge Rao would vacate the contract modification findings in this case. The dissent observed that the Board may find a contract modification only when an employer violates a specific contractual term that plainly bars the actions taken. Because the relevant CBA was silent or at least ambiguous as to the discipline imposed in this case, the employers had reasonable grounds for disciplinary actions under the “sound arguable basis” standard, asserted Judge Rao.
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