The Ohio Edison Company, et al v. NLRB

Filing

OPINION and JUDGMENT filed : The petition for review is GRANTED, and the Board's application for enforcement of its May 21, 2015 decision and order is DENIED. Decision for publication. Danny J. Boggs and Raymond M. Kethledge (AUTHORING), Circuit Judges; and William H. Stafford, U.S. District Judge for the Northern District of Florida, sitting by designation. [15-1783, 15-1929]

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RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 17a0029p.06

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

THE OHIO EDISON COMPANY; FIRSTENERGY
GENERATION CORP;
Petitioners/Cross-Respondents,

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v.
NATIONAL LABOR RELATIONS BOARD,
Respondent/Cross-Petitioner.

Nos. 15-1783/1929

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On Petition for Review and Cross-Application for Enforcement
of an Order of the National Labor Relations Board.
Nos. 06-CA-092312; 08-CA-099595.
Argued: April 28, 2016
Decided and Filed: February 10, 2017
BOGGS and KETHLEDGE, Circuit Judges; STAFFORD, District Judge.*
_________________
COUNSEL
ARGUED: Nick A. Nykulak, ROSS, BRITTAIN & SCHONBERG, CO., L.P.A., Cleveland,
Ohio, for Petitioners/Cross-Respondents.
Benjamin M. Shultz, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C., Barbara Sheehy, NATIONAL LABOR
RELATIONS BOARD, Washington, D.C., for Respondent/Cross-Petitioner. ON BRIEF: Nick
A. Nykulak, ROSS, BRITTAIN & SCHONBERG, CO., L.P.A., Cleveland, Ohio, for
Petitioners/Cross-Respondents. Benjamin M. Shultz, UNITED STATES DEPARTMENT OF
JUSTICE, Washington, D.C., Linda Dreeben, Kira Dellinger Vol, Marni von Wilpert,
NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for Respondent/CrossPetitioner.

*

The Honorable William H. Stafford, Jr., Senior United States District Judge for the Northern District of
Florida, sitting by designation.

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_________________
OPINION
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KETHLEDGE, Circuit Judge. The question presented in this case is whether a union
representative’s generalized complaint about various reductions in employee benefits—including
significant cuts in the employer’s 401(k) matching payments and in retiree life-insurance
benefits—reflected a request on the union’s part to bargain specifically about a change to an
employee-recognition program that had never, over the course of four decades, been the subject
of bargaining between the union and the employer.

The monetary effect of that change

amounted to less than four dollars per union member per year. A divided panel of the National
Labor Relations Board construed the union representative’s generalized complaint as a request to
bargain about the employee-recognition program. That finding is not supported by substantial
evidence, and thus we deny the Board’s application for enforcement of its order.
FirstEnergy established an employee-recognition program in 1973. At first the company
gave tie tacks or charm bracelets to employees after their first and fifth years of service. In later
years, the company eliminated the first-year gift and allowed eligible employees to choose items
(such as alarm clocks and fishing rods) from a catalog that an outside vendor prepared for the
purpose. By 2012 the value of the five-year awards was $35, which increased to $69.50 for the
ten-year awards and $75 for the fifteen. The value of the awards thus amounted to about five to
seven dollars per year of service. Perhaps unsurprisingly, then, in the 39 years covered by the
record here, the company and the various unions representing its employees have never
bargained about the recognition program or mentioned the program in a collective-bargaining
agreement.
By September 2012, FirstEnergy’s revenue and stock price had dropped enough to reduce
its market capitalization by $1.3 billion. As a result, FirstEnergy implemented a range of costcutting measures, several of which affected employees. That month FirstEnergy’s Director of
Labor Relations, Eileen McNamara, and several other labor-relations executives called the
leaders of 23 union locals to tell them about the changes. On September 18, McNamara called
Herman Marshman, the president of Local 272 of the International Brotherhood of Electrical

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Workers. McNamara read from a prepared script and explained that, as of January 1, 2013, the
company would reduce its cap for 401(k) matching payments by 33%, reduce its retiree lifeinsurance benefit by 60%, and cap its educational-reimbursement benefit for the first time. She
also told Marshman that employees would receive a service award every ten years rather than
every five. When McNamara was done, Marshman responded, “Oh no you don’t! Again? Now
you know I have to file a board charge honey.” Marshman added that he would “have to come to
Akron [the company headquarters] for this one.” McNamara emailed her supervisor to tell him
that “[Marshman] is not happy” and that she was “sure [Marshman] is serious about the charge
and coming to Akron.”
Marshman never followed through on the promise to come to Akron. Six weeks after the
call with McNamara, however, Marshman filed an unfair labor-practices charge with the Board
on behalf of Local 272. The charge asserted that FirstEnergy had violated its duty to bargain in
good faith with the union, see 29 U.S.C. § 158(a), “by making unilateral changes in 401(k)
savings, future retiree benefits, educational reimbursement, and employee service awards.”
For reasons not revealed by the record, the litigation of this charge concerned only the
change with the least monetary significance—namely, the employee-service awards.

Over

FirstEnergy’s objections, an administrative-law judge acting on the Board’s behalf found that the
employee-recognition program was a mandatory subject of bargaining under the National Labor
Relations Act, that Marshman’s comments to McNamara amounted to a request to bargain about
the program, and that FirstEnergy failed to bargain with the union (a point that neither side
disputed) before changing the award cycle for each employee from five years to ten. The ALJ
therefore ordered FirstEnergy to rescind its change to the program and to give the appropriate
award to the 43 employees who had not received an award as a result of the change. The Board
affirmed the ALJ’s order on a 2-1 vote, with Member Miscimarra dissenting on the ground that,
“[a]t most, Marshman’s responses constitute the type of protest or objection that the Board, in
numerous cases, has found not to be [the subject of bargaining].”

Ohio Edison Co.,

362 N.L.R.B. No. 88, at *3 (May 21, 2015). FirstEnergy thereafter brought this petition for
review and the Board filed a cross-application for enforcement of its order.

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FirstEnergy challenges both the Board’s determination that the employee-recognition
program rose to the level of “wages, hours, and other terms and conditions of employment[,]”
29 U.S.C. § 158(d), and its finding that Marshman’s comments to McNamara amounted to a
request to bargain about the program. We choose to begin with the latter finding, which we
review for substantial evidence, that is, evidence sufficient “for a reasonable factfinder to reach
the conclusions the Board has reached.” Peters v. NLRB, 153 F.3d 289, 294 (6th Cir. 1998).
The parties agree on the applicable standard as to whether a union has made a request to
bargain about an employer’s proposed change in a condition of employment. As the Third
Circuit put it in a seminal case, “[a] request to bargain need follow no specific form or be made
in any specific words so long as there is a clear communication of meaning, and the employer
understands that a demand is being made.” NLRB v. Barney’s Supercenter, Inc., 296 F.2d 91, 93
(3d Cir. 1961); see also, e.g., Dupont Dow Elastomers, L.L.C. v. NLRB, 296 F.3d 495, 507 (6th
Cir. 2002) (“[a]s long as it is clear that a union wants to bargain on behalf of its members, ‘a
demand to bargain collectively need assume no particular form’” (quoting NLRB v. Wayne
Convalescent Ctr., Inc., 465 F.2d 1039, 1043 n. 7 (6th Cir. 1972))). Thus the substance of a
union’s request, not the form, is what counts; but the substance must clearly be a request to
bargain.
We make two other points about the applicable standard.

First, “‘the bargaining

representative must do more than merely protest the change; it must meet its obligation to
request bargaining.’” YHA, Inc. v. NLRB, 2 F.3d 168, 173 (6th Cir. 1993) (quoting Jim Walter
Res., Inc., 289 N.L.R.B. 1441, 1442 (1988)). The difference between the two is straightforward:
to protest is to seek change by expressing disapproval; to request bargaining, in contrast, is to
seek change by signaling a willingness to offer something in return. Cf. Black’s Law Dictionary
169 (9th ed. 2009) (defining “bargain” as an agreement “for the exchange of promises or
performances”). Second, in determining whether a union has requested bargaining, “[s]tatements
and acts of the union or the employer cannot be viewed in isolation.” Barney’s Supercenter,
296 F.2d at 93. Instead we consider “all the circumstances.” Id.
The Board’s two-member majority neglected to consider all the circumstances here.
Instead, the Board focused almost exclusively on Marshman’s comments during the call with

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McNamara—which to some extent is understandable, since those comments are the only actions
on behalf of Local 272 that could possibly amount to a request to bargain. Those comments, to
reiterate, came after McNamara had read her script, and were the following: “Oh no you don’t!
Again? Now you know I have to file a board charge honey[,]” and that Marshman would “have
to come to Akron [the company headquarters] for this one.”

These comments expressed

disapproval, to be sure; but that establishes only protest. The pertinent question is whether, in
light of the record as a whole, they clearly signaled a request to bargain. On that point they were
at best ambiguous rather than clear. The threat to file a “board charge” was not a request to
bargain; to the contrary, a charge is a formal protest that commences administrative proceedings
rather than negotiations. Nor was Marshman’s threat (which turned out to be empty) to “come to
Akron” clearly a request to bargain. The company and the Board both interpret this comment to
mean that Marshman “wanted to complain to Tony Alexander,” who was the company’s CEO at
the time. Board Br. at 45 (quoting McNamara’s testimony). But a complaint is more like a
protest than a request to bargain. And if Marshman wanted to engage in collective bargaining,
the person with whom he would do so was not Alexander, but the person already on the phone
with him: Eileen McNamara, the company’s Director of Labor Relations. The reality is that
Marshman’s comments were cryptic rather than clear.
The surrounding circumstances only undermine the Board’s interpretation of the phone
call. To begin, the Board largely overlooks that the change to the employee-recognition program
was hardly the only change that McNamara described on the call. To the contrary, she described
several other changes—including that the company would reduce by one-third the cap for its
401(k) matching payments and cut the retiree life-insurance benefit from $25,000 to $10,000—
whose financial consequences for the Local’s members were far greater than whether they had to
wait ten years rather than five to receive a free alarm clock or fishing rod. That is not to say the
employee-recognition program was unimportant: such programs recognize the dignity and
dedication of persons who otherwise might receive little recognition.

But bargaining in a

business setting usually concerns money rather than symbolism, and here the monetary
consequences of the change to the recognition program amounted to less than four dollars per
member per year. Hence one can be skeptical that Marshman’s comments reflected a desire to
bargain about that program in particular. That skepticism only grows when one considers that

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the parties had never bargained about the program between its inception in 1973 and the events
giving rise to this litigation 39 years later. Common sense and the parties’ course of dealings
therefore provide good reason to think that, whatever Marshman meant by his comments, he did
not mean (much less clearly mean) that he wanted to bargain about the employee-recognition
program.
The Board contends that McNamara’s email to her supervisor shortly after the phone call
shows that she indeed thought that Marshman had requested bargaining about the employeerecognition program. We fail to see how. The email stated that “[Marshman] is not happy” and
that “[Marshman] is serious about the charge and coming to Akron.” Id. Those comments
reflect protest as much as, if not more than, they reflect a request to bargain. And again they
give little reason to think that Marshman was complaining about the employee-recognition
program in particular.
The Board also contends that our decision in Peters is “materially analogous” to this
case. But there the surrounding circumstances could hardly have been more different, since the
employer had unilaterally renounced its entire collective bargaining agreement with the union.
Peters, 153 F.3d at 292. The union’s written request for a meeting to discuss the status of that
agreement was thus reasonably viewed as a request to bargain.
Finally, the Board contends that Local 272’s unfair labor-practices charge six weeks after
the call shows that Marshman requested bargaining about the employee-recognition program
during the call. Again we do not see it. As the Board itself recognizes, an unfair labor-practice
charge is no substitute for a request to bargain. See Board Br. at 48; NLRB v. Okla. Fixture Co.,
79 F.3d 1030, 1037 (10th Cir. 1996) (“[t]he filing of an unfair labor practice charge does not
relieve the Union of its obligation to request bargaining”); Associated Milk Producers, Inc.,
300 N.L.R.B. 561, 564 (1990) (“[i]t was incumbent on the Union to request bargaining—not
merely to protest or file an unfair labor practice charge”). Moreover, as already discussed, the
charge itself was a form of protest. On these facts the charge does not convert Marshman’s
comments into a request for bargaining.

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The record in this case, construed reasonably and as a whole, would not allow a
reasonable person to find that Marshman’s comments during his call with McNamara were
clearly a request to engage—for the first time ever—in collective bargaining about the
employee-recognition program. The record instead supports the view of the Board’s dissenting
member in this case.
*

*

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We grant FirstEnergy’s petition for review, and deny the Board’s application for
enforcement of its May 21, 2015 Decision and Order.