                                                                                                                           Opinions of the United
2005 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


8-23-2005

St George Warehouse v. NLRB
Precedential or Non-Precedential: Precedential

Docket No. 04-2893




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                                         PRECEDENTIAL

   UNITED STATES COURT OF APPEALS FOR THE
               THIRD CIRCUIT


                 Nos. 04-2893 and 04-3363


            ST. GEORGE WAREHOUSE, INC.,
                       Petitioner in No. 04-2893
                         v.

       NATIONAL LABOR RELATIONS BOARD,
                    Petitioner in No. 04-3363


   On Application for Review and Cross-Application for
  Enforcement of an Order of the National Labor Relations
    Board Entered May 12, 2004, in Case 22-CA-24902


                    Argued May 9, 2005

      Before: SLOVITER and FISHER, Circuit Judges,
               and POLLAK,* District Judge.


*Honorable Louis H. Pollak, Senior District Judge for the
United States District Court for the Eastern District of
Pennsylvania, sitting by designation.

                              1
                  (Filed August 23, 2005)


JOHN A. CRANER, Esq. (argued)
Craner, Satkin & Scheer, P.A.
320 Park Avenue
P.O. Box 367
Scotch Plains, NJ 07076
      Attorney for St. George Warehouse, Inc.


DANIEL A. BLITZ, Esq. (argued)
MEREDITH L. JASON, Esq.
ARTHUR F. ROSENFELD, Esq.
JOHN E. HIGGINS, JR., Esq.
JOHN H. FERGUSON, Esq.
AILEEN A. ARMSTRONG, Esq.
National Labor Relations Board
1099 14 th Street, NW
Suite 8101
Washington, DC 20570
       Attorneys for National Labor Relations Board




                OPINION OF THE COURT




                             2
POLLAK, District Judge:

        St. George Warehouse, Inc. (“St. George”), a company
that warehouses shipping containers, petitions for review of
an order of the National Labor Relations Board (“NLRB” and
“Board”) finding that it violated section 8(a)(5) and 8(a)(1) of
the NLRA, 29 U.S.C. § 158(a)(1) and (5),1 by unilaterally
transferring unit work to temporary agency employees, who
are not union members. To remedy these violations, the Board
ordered St. George to restore the ratio of direct hires to
temporary agency employees to the status quo that existed just
prior to the union election. St. George contests the Board’s
order, arguing that the union’s complaint was time-barred,
that the hiring practices complained of were consistent with
the NLRA, and that the restoration remedy is “repugnant” to
the purposes and policies undergirding the NLRA. The Board
has cross-petitioned, seeking enforcement of its order. For the
reasons which follow, we will deny the petition for review
and enforce the order of the Board.

                               I.


1
 “Unfair labor practices by employer. It shall be an unfair
labor practice for an employer--
(1) to interfere with, restrain, or coerce employees in the
exercise of the rights guaranteed in section 7 [29 USCS §
157]; ... (5) to refuse to bargain collectively with the
representatives of his employees, subject to the provisions of
section 9(a) [29 USCS § 159(a)].” 29 USCS § 158(a).


                               3
        St. George is a corporation with an office and place of
business in South Kearny, New Jersey, that warehouses
containers from ships. On March 8, 1999, Local 641 of the
International Brotherhood of Teamsters (“IBT”) petitioned the
NLRB for a representation election of St. George’s warehouse
employees. According to Local 641, the unit was to include
“[a]ll full-time and regular part-time warehouse employees
employed by [St. George] at its South Kearny, New Jersey
facility, but excluding all temporary agency employees, office
clerical employees, professional employees, guards and
supervisors as defined in the Act.” J.A. at 11 (emphasis
added).2

       On April 14, 1999, a secret ballot election was held at
St. George. The union won the election and, on October 27,
2000, the union was certified. On December 19, 2000, the
union requested that St. George meet with it to begin the
collective bargaining process. St. George refused, and Local
641 filed an unfair labor practice charge. On April 10, 2001,
the Board ruled in favor of the union on summary judgment


2
 St. George represents, and the Board does not dispute, that
what distinguishes the “temporary agency employee” from the
employee eligible for inclusion in the unit is not the amount of
time for which each works for St. George but the employer of
each. In particular, the agency employee is jointly employed
by the agency and St. George, while the unit employee is
employed directly and exclusively by St. George.



                               4
and, on August 7, 2001, the Third Circuit enforced the
Board’s order directing St. George to bargain collectively
with the union. St. George Warehouse, Inc. v. NLRB, 261
F.3d 493 (3d Cir. 2001).

        In 2002, the union filed a second unfair practice charge
with the NLRB. That charge alleged that St. George had
decided, some time after the union election, to stop making
direct hires, and to replace terminated or departed workers
exclusively with agency (i.e., non-unit) employees. As a result
of this practice, the unit decreased from 42 employees at the
time of the election to 8 employees by July 2002, when the
union and St. George appeared before an ALJ for a hearing
inquiring into St. George’s hiring practices. It is undisputed
that the decision to replace departing direct hires with
temporary agency workers was made unilaterally, without
notice to the union or an opportunity for it to bargain.

       The ALJ found that St. George had altered the status
quo that existed before the union election. More specifically,
the ALJ determined that prior to the union’s election, which
was held in April 1999, St. George did not have a policy or
practice of hiring agency warehousemen to replace direct
hires who left St. George’s employ. The ALJ concluded that
St. George’s unilateral transfer of unit work to temporary
agency employees without giving the union notice and the
opportunity to bargain violated section 8(a)(5) and (1) of the




                               5
NLRA, 29 U.S.C. §158(a)(5) and (1).3
        In reviewing the ALJ’s decision, the Board agreed with
the ALJ’s finding that St. George had violated section 8(a)(5)
and (1) by unilaterally transferring work to agency employees.
The Board disagreed with the ALJ’s proposed remedy for the
section 8(a)(5) and (1) violations, however. The ALJ had
recommended that St. George immediately restore and
maintain the ratio of direct hires to agency employees that
existed at the time of the union election, which the ALJ found
to be 7:1. The Board determined that the 7:1 ratio was not
entirely appropriate because, prior to the union election, the
total number of agency employees used by St. George
fluctuated from week to week, as did the total number of
direct hires. The ALJ’s 7:1 ratio did not account for this
fluctuation. Thus, the Board decided to leave to the
compliance stage the determination of the proportion of direct
hires and agency employees that St. George must maintain in



3
 The ALJ found further that St. George violated these same
provisions by (a) failing to furnish the union with the names
and addresses of the temporary agencies supplying workers to
St. George, as well as the contracts governing the terms of
employment of the temporary agency workers; and (b)
engaging in surface bargaining (i.e., by failing to engage in
good faith bargaining). The Board affirmed the ALJ with
respect to St. George’s failure to supply the information that
the union requested, but rejected the ALJ’s finding with
respect to surface bargaining. Neither of these issues is before
this court.

                               6
order for the unit to be properly restored.4
       St. George has petitioned for review, and the Board has
cross-petitioned for enforcement of its order.

                              II.

        Section 10(b) of the NLRA, 29 U.S.C. § 160(b),
provides in relevant part that “no complaint shall issue based
on any unfair labor practice occurring more than six months
prior to the filing of the charge with the Board and the service
of a copy thereof upon the person against whom such charge
is made.” St. George argues that the union was aware of the
labor practice of which it complains more than six months
before November 26, 2001, when the union filed its charge. In
particular, St. George maintains that, as of December 2000,
Jan Katz, who was made the union’s business agent in April


4
 The Board’s order also required St. George to notify, and on
request bargain collectively with, the union before
implementing any changes in the terms of the unit members’
employment; provide the union with the information it
requested regarding the agencies and the agency workers’
employment terms; post copies of the Board’s decision at the
warehouse; and notify the Board by sworn affidavit sent
within 21 days of the date of the Board’s decision that St.
George was in compliance.
       Because the Board found that St. George had not
engaged in surface bargaining, it rejected the remedy that the
ALJ had proposed to address this alleged violation.


                               7
2001, knew or should have known about St. George’s transfer
of unit positions to temporary agency employees. St. George
thus contends that the union’s complaint is time-barred.

        St. George presented this argument to both the ALJ
and the Board. The ALJ found that Katz, who testified that it
was August 2001 when he first learned of the shift in
employee composition, was credible. The Board agreed that
St. George had not met its burden of establishing that the
union had actual or constructive notice of St. George’s hiring
practices prior to August 2001. St. George nonetheless asks
the court to reject Katz’s testimony and credit instead the
testimony of Tony Daniels, from whose statements St. George
infers that Katz would have learned of the unilateral transfers
in April 2001.

       “The final determination of credibility rests with the
Administrative Law Judge as long as he considers all relevant
factors and sufficiently explains his resolutions.” NLRB v. W.
C. McQuaide, Inc., 552 F.2d 519, 526 n.14 (3d Cir. 1977).
Further, “[t]he ALJ's credibility determinations should not be
reversed unless inherently incredible or patently
unreasonable.” Atlantic Limousine, Inc. v. NLRB, 243 F.3d
711, 718-19 (3d Cir. 2001) (quoting NLRB v. Lee Hotel
Corp., 13 F.3d 1347 (9th Cir. 1994)). We will not substitute
our own credibility finding for the ALJ’s, especially where, as
the ALJ noted was the case here, a witness’s testimony is
corroborated by documentary evidence and the testimony of
other witnesses. Accordingly, we find no error in the Board’s
determination that the charge was not time-barred.


                               8
                              III.

       Because St. George’s practice of supplementing direct
hires with temporary agency employees pre-dated the union
election, and because the union certification specifically
excluded, inter alia, “temporary agency employees,” St.
George argues that it was free to hire temporary agency
employees in whatever numbers it chose without first seeking
union approval.

       The ALJ found that the decision to replace direct hires
with temporary agency employees occurred some time after
the union election, but before certification, and that this
decision marked a significant change from St. George’s pre-
election hiring practices, according to which it used agency
employees only to supplement and augment the workforce
consisting of direct hires, and not to replace the direct hires.

        “[A]n employer that chooses unilaterally to change its
employees' terms and conditions of employment between the
time of an election and the time of certification does so at its
own peril, if the union is ultimately certified.” Overnite
Transportation Co., 335 N.L.R.B. 372, 372-373 (2001). The
record amply supports the ALJ’s findings regarding the
timing and significance of St. George’s decision to replace
direct hires with temporary agency workers. “The findings of
the Board with respect to questions of fact if supported by
substantial evidence on the record considered as a whole shall
be conclusive.” 29 U.S.C. § 160(e). Accordingly, we find no
reason to disturb the ALJ’s conclusion, which the Board
adopted, that St. George was required to bargain with the

                               9
union over the issue of replacing departing or terminated
direct hires with agency employees, and that St. George’s
failure to do so constituted a violation of section 8(a)(5) and
(1) of the NLRA.
                                IV.

       St. George contests, on a number of grounds, the
portion of the Board’s remedy requiring St. George to restore
the employee composition existing prior to the union
election.5



5
 Citing 29 U.S.C. § 160(e) and 29 C.F.R. § 102.48(d), the
Board argues that, because St. George did not move for
reconsideration of the Board’s restoration remedy, St.
George’s objections to that remedy are not properly before
this court. Section 160(e) provides, in pertinent part, that
“[n]o objection that has not been urged before the Board, its
member, agent, or agency, shall be considered by the court,
unless the failure or neglect to urge such objection shall be
excused because of extraordinary circumstances.” St. George
did contest the restoration remedy before the Board, however,
and so § 160(e) does not bar the issue before the court. While
29 C.F.R. § 102.48(d)(1) states, in pertinent part, that a party
“may, because of extraordinary circumstances, move for
reconsideration, rehearing, or reopening of the record after the
Board decision or order,” it does not make reconsideration a
prerequisite to presenting a claim in court. Thus, we find no
bar to St. George’s objections to the restoration remedy.


                               10
        In general, the Board’s power to fashion remedies for
unfair labor practices is a “broad and discretionary one,
subject to limited review.” Fibreboard Paper Products Corp.
v. NLRB, 379 U.S. 203, 216 (1964). Further, the NLRB
frequently orders restoration to the status quo ante in cases,
like the instant one, where the employer unilaterally alters the
conditions of employment. See, e.g., id. at 215; NLRB v.
Cauthorne, 691 F.2d 1023, 1025 (D.C. Cir. 1982); Taylor
Warehouse Corp. v. NLRB, 98 F.3d 892 (6th Cir. 1996);
Southwest Forest Indus. v. NLRB, 841 F.2d 270, 274 (9th Cir.
1988); Duke University and Amalgamated Transit Union,
Local 1328, 315 N.L.R.B. 1291 (1995); Land O’Lakes, 299
N.L.R.B. 982 (2000).

        St. George nonetheless opposes the restoration remedy.
It argues that the Board’s remedy would be appropriate only if
St. George had terminated some of the direct hires because of
their involvement with the union, which would constitute a
violation of section 8(a)(3) of the NLRA,6 and that neither the
ALJ nor the Board found that St. George had committed such
a violation. The argument is wide of the mark. The restoration
remedy need not be limited to section 8(a)(3) violations in
order for it to “be adapted to the situation which calls for
redress.” N.L.R.B. v. Mackay Radio & Telegraph Co., 304


6
 Section 8(a)(3), 29 U.S.C. § 158(a)(3), defines an unfair
labor practice as “discrimination in regard to hire or tenure of
employment or any term or condition of employment to
encourage or discourage membership in any labor
organization.”

                               11
U.S. 333, 348 (1938). The NLRB has in the past ordered
similar restoration remedies where no section 8(a)(3)
violation was found. See, e.g., Duke University, supra
(requiring that employer who was found to have violated
section 8(a)(5) and (1), by ceasing to hire full-time drivers
who would be union members and instead hiring non-union
part-time drivers, restore the unit to what it would have been
without the unlawful changes).

        St. George next argues that the Board’s remedy is
improper because it guarantees to the union a specific number
of constituents despite the fact that some of the former unit
workers departed voluntarily. The argument misconstrues the
remedy, however, for the Board’s order defers to the
compliance stage a determination of the proportion of union
to agency employees to be restored. Thus, at the compliance
stage, the Board could take ordinary attrition rates into
account in setting the target ratio.

        St. George argues further that the remedy gives the
union control over the agency hires without the benefit of an
election. The argument presumes that, to effectuate the
Board’s remedy, St. George would have to confer direct hire
status upon the temporary agency employees currently on its
workforce. Yet, while the ALJ suggested this option as one
way in which St. George could restore the status quo, neither
the ALJ nor the Board mandated this route. Moreover, even if
St. George did elect this route, “[t]here is ... nothing
permanent in a bargaining order, and if, after the effects of the
employer's acts have worn off, the employees clearly desire to
disavow the union, they can do so by filing a representation

                               12
petition.” NLRB v. Gissel Packing Co., 395 U.S. 575, 613
(1969).

       In its reply brief, St. George alleges that only a
minority of the currently employed direct hires continue to
support the union. Yet the record before us neither supports
nor controverts this contention, and so we intimate no view on
the question of whether changed circumstances have
undermined the propriety of the Board’s restoration remedy.7

        Finally, St. George argues that the relevant date for
purposes of ascertaining the status quo ante should not be
April 1999 because, according to St. George, “the Board
cannot go back more than six months from the date of filing
the charge.” St. George appears to glean this supposed
limitation from its readings of 29 U.S.C. § 160(b), and NLRB
v. Katz, 369 U.S. 736, 746 n.13 (1962). In fact, § 160(b) states
that “no complaint shall issue based upon any unfair labor
practice occurring more than six months prior to the filing of
the charge with the Board and the service of a copy thereof
upon the person against whom such charge is made....”


7
 It is possible that St. George will have an opportunity, at the
compliance stage, to present evidence regarding the current
state of union support. See, e.g., Duke University, 315
N.L.R.B. at 1291 (permitting employer to introduce evidence
at the compliance stage regarding appropriateness of
restoration remedy in light of post-trial events); We Can, Inc.,
315 N.L.R.B. 170 (1994) (same). But compare Lear Siegler,
Inc., 295 N.L.R.B. 857, 861 (1989).

                               13
(emphasis added). Similarly, the time bar at issue in Katz
pertained to the date of the filing of the charge relative to the
date of the allegedly unlawful conduct; Katz did not deal with
the issue of how far back the Board may look in fixing the
status quo ante. In short, neither Katz nor § 160(b) precludes
remedies that seek to address or restore conditions that existed
more than six months prior to the filing of an NLRB
complaint, and no such restriction exists elsewhere, see, e.g.,
Duke University, 315 N.L.R.B. at 1291-92 (ordering a
restoration to the status quo existing prior to the August 1991
union election in a case for which the charge was filed on
August 10, 1993, and amended on September 23, 1993).

       In short, St. George’s objections to the status quo
remedy are unpersuasive. That remedy addresses the
violations St. George committed, and is appropriately tailored
to redress the resultant harms. Accordingly, we will not
disturb the Board’s remedial order.8


8
 While the Board eschewed imposition of the ALJ’s
recommended restoration to a 7:1 ratio between unit and
temporary agency employees, we nonetheless presume that
the ALJ’s findings regarding the division of labor between the
two sets of employees will provide some guidance to the
Board at the compliance stage. We thus note that the 7:1 ratio
at which the ALJ arrived does not comport with his findings
of fact: The ALJ found that, at the time of the election, St.
George employed 7 agency employees and 42 direct hires, for
a total of 49 employees. The correct ratio between direct hires
and agency employees at the time of the election is thus 6:1,

                               14
                              V.

       For the foregoing reasons we will deny the Petition for
Review of the Order of the National Labor Relations Board
and grant the Cross-Application for Enforcement of the Order of
the National Labor Relations Board.




not 7:1.

                              15
