[00:00:03] Speaker 01: Case number 15-1336 M.L. [00:00:05] Speaker 01: International Longshore and Warehouse Union Petitioner versus National Labor Relations Board. [00:00:12] Speaker 01: Mr. Riemann, the petitioner. [00:00:14] Speaker 01: Ms. [00:00:14] Speaker 01: Gaines, could respond. [00:01:20] Speaker 05: Good morning. [00:01:22] Speaker 05: Good morning, Your Honors. [00:01:24] Speaker 05: My name is Robert Reemar. [00:01:26] Speaker 05: I'm counsel for the IOWU Longshore Union. [00:01:29] Speaker 05: I've been an attorney for labor unions and employees all my life, and I find myself in the awkward position of arguing essentially an employer's position because of their decision to settle out the case without us. [00:01:46] Speaker 05: So here I am, and here goes. [00:01:48] Speaker 05: Fortunately, though, I think the law is very strong in our favor. [00:01:52] Speaker 05: I think that the favorable decision for us by the administrative law judge is exactly on point. [00:02:01] Speaker 04: If it's a single employer, if we take that, then [00:02:09] Speaker 04: doesn't that alter the case in the sense that if it's a single employer and the customer wants a lower price and the single employer in effect is deemed to have unilaterally lowered the wages and benefits of a group of employees by transferring them from one unit to another. [00:02:28] Speaker 04: Why is that wrong? [00:02:29] Speaker 04: If it's a single employer, that's the key to the case, isn't it? [00:02:33] Speaker 05: It should have been, but for the U.S. [00:02:35] Speaker 05: Supreme Court's decision in South Prairie construction, where the Court rejected unions' arguments, along with the line that you just said, Your Honor. [00:02:45] Speaker 05: The Court said that even in a situation where you have a single employer entity, [00:02:50] Speaker 05: whether it's by historic or they just have established separate divisions controlled by the same central corporation. [00:02:59] Speaker 03: I'm sorry, what's the case you just referred to? [00:03:01] Speaker 05: South Prairie Construction, Supreme Court case. [00:03:04] Speaker 05: What it held is that even when you have single employer entities, when you have separate collective bargaining units, [00:03:14] Speaker 05: You cannot presume, as the unions would argue, you cannot presume that what happens in one bargaining unit automatically applies to the other or to a non-union workforce. [00:03:26] Speaker 03: There's a little bit more here than just the single employer, right? [00:03:32] Speaker 03: There are findings by the board that the single employer and the ultimate consumer of the labor, which is, I don't know how you pronounce it, Maersk? [00:03:46] Speaker 03: Maersk. [00:03:47] Speaker 03: were all working together in order to effectuate arrangements that would enable the workers to be shifted from the high-cost union to the low-cost union, and that this was all driven by concern over labor costs. [00:04:08] Speaker 03: If all of that is supported by substantial evidence, what is the legal principle under which you could win this appeal? [00:04:17] Speaker 05: The legal principle is that Merck put out a bid and the discussions that you referred to, Your Honor, have to do with discussions about their bid and about their needs. [00:04:29] Speaker 05: Merck was familiar with both companies. [00:04:32] Speaker 05: Merck had a commercial contract with PMMC, which was the machinist group. [00:04:39] Speaker 05: They had contracts with PMMC in Tacoma and in Oakland. [00:04:43] Speaker 05: and with PC Embassy in Los Angeles for the ILWU. [00:04:48] Speaker 05: They were very familiar with the ways of the different workforces and the different bargaining units. [00:04:54] Speaker 05: Their position as a customer was, we like the arrangement for a lot of reasons, including labor costs, but also including efficiencies. [00:05:04] Speaker 05: much better for the ILWPC MC unit. [00:05:08] Speaker 05: And that's the one that we want to have now for Oakland and Tacoma, just like we do in Los Angeles. [00:05:15] Speaker 05: Once they made that decision, then there was nothing more to be done. [00:05:20] Speaker 05: The board says there should have been further bargaining with the IAM unit, with the machinists. [00:05:29] Speaker 05: Well, that would have involved bargaining over what the [00:05:33] Speaker 05: counter-response would be to the bid. [00:05:36] Speaker 05: It would have been bargaining about what the employer as a single employer's commercial counter-response would be concerning the bid. [00:05:44] Speaker 05: And it would have involved whether that would have been sufficient and acceptable for Merce to accept or whether it would have engaged in further bargaining. [00:05:53] Speaker 05: This is assuming that Merce was open to reconsidering the award that it gave. [00:05:58] Speaker 04: But why does Merce control what the employer can do to its employees? [00:06:04] Speaker 04: Well, Merce is in terms of unilateral change of the terms and conditions of employment. [00:06:11] Speaker 05: Merce isn't in control of what the employer can do with its employees. [00:06:16] Speaker 04: Right. [00:06:17] Speaker 04: So Merce wants a lower price, as does anyone in that situation, but that doesn't give carte blanche the employer to then [00:06:32] Speaker 04: unilaterally change the terms and benefits. [00:06:37] Speaker 05: It does not give carte blanche to the employer but the situation here is one where it was impossible for PMMC [00:06:46] Speaker 05: to do to provide under its bargaining unit with the machinists to provide what Maersk wanted. [00:06:54] Speaker 05: It was impossible because unlike PMMC and the longshore coast-wise bargaining unit, there were no other workforces that were IEM within the PMMC bargaining unit that they can [00:07:10] Speaker 05: interchange with. [00:07:11] Speaker 05: They couldn't pull from other locations in the port because there were none. [00:07:17] Speaker 05: Whereas with Longshore there were all sorts of other locations that PCMC was able to pull from and that provided for the lean staff model. [00:07:26] Speaker 05: The other impossibility was that there was no established hiring hall for PMMC and the IAM to utilize. [00:07:36] Speaker 05: If, as the board proposes here, the remedy would be, well, or the proper legal course would have been, you have to go back and negotiate these things. [00:07:48] Speaker 05: That's essentially negotiating what the customer wants and then coming back and presenting some sort of counter proposal for further commercial bargaining concerning the customer's bid. [00:08:02] Speaker 05: The other answer to the question about [00:08:05] Speaker 05: Ken Mersk as a customer, how can it dictate what the employment decisions are of a company like MMC and PCMC? [00:08:19] Speaker 05: Merce wasn't directing who was actually going to be employed for PCMC. [00:08:25] Speaker 05: PCMC could have done a couple of other things. [00:08:27] Speaker 05: They could have had other workers, if they chose, that were already incumbent employees on their payroll and brought those workers in to perform the jobs here, to perform the new bid. [00:08:42] Speaker 05: They could have also hired from the outside. [00:08:44] Speaker 05: That's perfectly lawful. [00:08:46] Speaker 05: What they couldn't do. [00:08:47] Speaker 05: How does what you just said help your case? [00:08:50] Speaker 05: It helps the case because it establishes that there wasn't the decision about the bidding, signing the award, was not a decision about specifically [00:09:04] Speaker 05: determining employment relationships. [00:09:08] Speaker 05: That was still left up to the employer. [00:09:13] Speaker 04: And then the employer chose to unilaterally, in effect, change [00:09:20] Speaker 04: You know, I'm speaking, I'm oversimplifying here, but basically to change the wages and benefits for a group of employees, in effect, instead of doing the things that you mentioned, which could have been done. [00:09:33] Speaker 05: Well, if they had, if MERSC had, sorry, if PCMC, PMMC, if the employer had [00:09:43] Speaker 05: hired people from the outside or shifted other incumbent PCMC longshoremen to the jobs, that would have been perfectly proper. [00:09:55] Speaker 05: It would have provided for exactly what Merck wants without Merck dictating exactly who the people were to be hired. [00:10:03] Speaker 05: But what happened was [00:10:05] Speaker 05: The employer chose to, it also highlights the fact that there's two different things going on here. [00:10:11] Speaker 05: There's the termination of the bid to PMMC and then the layoff of those people and then what happens to those people. [00:10:20] Speaker 05: They don't necessarily come over to PCMC to be hired. [00:10:23] Speaker 05: PCMC chooses. [00:10:25] Speaker 05: The vast bulk of them did. [00:10:27] Speaker 05: That's right. [00:10:28] Speaker 05: Vass Volkerman did. [00:10:29] Speaker 05: And under a traditional successorship doctrine analysis that could have, maybe would have triggered a bargaining obligation, but for reasons which, you know, I really don't understand, the general counsel withdrew that. [00:10:45] Speaker 05: That's out of the case. [00:10:46] Speaker 05: It's out of the case. [00:10:47] Speaker 05: So there isn't an obligation under successorship for the other piece, the other bucket of the single employer to [00:10:55] Speaker 05: assume a bargaining obligation as a result of hiring all of the workers from PMMC. [00:11:02] Speaker 05: Okay. [00:11:03] Speaker 04: Why don't we hear from the board and we'll give you a few minutes on rebuttal. [00:11:05] Speaker 05: Thank you, Your Honors. [00:11:19] Speaker 00: Good morning. [00:11:19] Speaker 00: Amy Ginn for the National Labor Relations Board. [00:11:22] Speaker 00: In this case, the company's purpose overall was to lower its labor costs and to satisfy its customer. [00:11:28] Speaker 00: And to do so, it moved employees to a different union contract, which was not the union that they chose for the representation. [00:11:36] Speaker 00: What the board found was required in terms of bargaining was that as a single employer, [00:11:42] Speaker 00: The company had an obligation to bargain with the machinist over two specific things. [00:11:47] Speaker 00: One, the decision to lay off the employees for PMMC, and two, the terms and conditions of employment for these individuals as they became new hires at PCMC. [00:11:59] Speaker 00: So the board did not find an obligation [00:12:01] Speaker 00: to bargain over the contents of a bid to a customer, but rather to bargain over what the terms and conditions of employment would be for these individuals who are continuing to do the same work in the same place for the same customer after this change over. [00:12:17] Speaker 02: And for the same employer, basically. [00:12:22] Speaker 00: I'm sorry, Your Honor? [00:12:23] Speaker 02: And for the same employer. [00:12:25] Speaker 00: Yes, and for the same employer, which is, of course, what this case turns on, that this is a single employer with an obligation to its employees to bargain whatever entity of its corporate enterprise that those employees are working for. [00:12:42] Speaker 00: As the board found, the company could have bargained over many issues that address Merck's concern over labor costs. [00:12:55] Speaker 00: overwhelmingly the concern in changing the contractor. [00:13:00] Speaker 00: The board also found that Merck wanted a continuity of workforce as part of changing over. [00:13:07] Speaker 00: There were discussions that they wanted to have the same mechanics doing the work as before. [00:13:14] Speaker 00: With respect to whether the machinist could have provided all the things that were necessary to get the cost down to the point that the customer wanted, as this Court has found and as the Board found here, the futility of bargaining is not an excuse for not engaging in that bargaining. [00:13:30] Speaker 00: And it's simply unknown whether the machinist could have met those demands because they were never asked to do so. [00:13:38] Speaker 00: With respect to the next step, which is the argument that the machinist, once this occurred, that the unit was accreted into the overall coast-wide unit, the board properly found, giving significant weight to the party's bargaining history, as the board does in these situations, that the machinist unit survived the transfer work and was not merged into the larger longshore union unit. [00:14:05] Speaker 00: In that way this case is very similar to this court's decision in Dodge of Naperville Naperville pardon me upholding the board's finding there that a failure to bargain over initial terms and conditions of employment Thus changing the employees Terms and conditions upon insertion into a larger unit that could not justify withdrawal of recognition from the smaller unit and that's very similar to the situation here [00:14:36] Speaker 00: On one last point with respect to the board's remedy in this case, we'd just like to point out as we did in our brief that the union has not preserved that argument before this court by not challenging the remedy to the board at the time it was ordered. [00:14:54] Speaker 04: Okay, anything else? [00:14:55] Speaker 00: Nothing else, unless you have any further questions. [00:14:57] Speaker 00: Okay, thank you. [00:14:58] Speaker 00: Thank you. [00:14:59] Speaker 04: Give you a minute for rebuttal. [00:15:04] Speaker 05: Thank you, Your Honor. [00:15:05] Speaker 05: What the board failed to do was to apply the governing standard of the test that's been established by this court in road sprinklers and in Geiger construction cases and the test is whether the change when you have [00:15:22] Speaker 05: basically double breasted type competing bargaining units where work is shifted from one bargaining unit to the other in a single employer's situation. [00:15:31] Speaker 05: The test is whether the change, quote, was due to external economic circumstances or to a change in the employer's established practices with regard to the assignment of the work. [00:15:47] Speaker 05: which Council for the NLRB said is directly on point, specifically applies, as it had to, the established test that I just read. [00:15:57] Speaker 05: In that situation, Napperville found as a matter of the facts that all of the changes were instigated by the employer itself. [00:16:06] Speaker 05: Here, it's undisputed that Merck, the customer, instigated the changes here. [00:16:12] Speaker 05: Here, it's undisputed that the facts show that it was an external force, specifically Merck, that ended up creating the very changes that the board claims are unlawful. [00:16:25] Speaker 05: The failure to apply the standard that's established in Rhodes Sprinkler and Geiger and in Naperville is an error of law that requires that this court vacate the decision and remand it back to the board. [00:16:39] Speaker 05: Thank you very much. [00:16:40] Speaker 05: Thank you. [00:16:40] Speaker 05: The case is submitted.