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Carrier Air Conditioning Co. v. National Labor Relations Board

as amended: December 2, 1976.

CARRIER AIR CONDITIONING CO., PETITIONER,
v.
NATIONAL LABOR RELATIONS BOARD, RESPONDENT, AND SHEET METAL WORKERS' INTERNATIONAL ASSOCIATION, LOCAL 28, AFL-CIO, INTERVENOR



Review of an order of the National Labor Relations Board, dismissing unfair labor practice charges against New York sheet metal workers' union by manufacturer-prefabricator of plenums for air conditioning units and reversing findings of administrative law judge that union had violated §§ 8(b)(4)(i)(B), 8(b)(4)(ii)(B), and 8(e) of the National Labor Relations Act, in connection with application of "no subcontracting" clause in contract with local sheet metal contractors. Affirmed in part, reversed in part, and remanded.

Smith, Oakes and Meskill, Circuit Judges. Smith, Circuit Judge,

Author: Oakes

OAKES, Circuit Judge

A respected commentator on the difficult subject of labor secondary boycotts has written that "the pressures created by momentous problems of productivity and job security under changing technological and market conditions are contained or released by no more sensitive a legal instrument than a legislative determination to protect neutrals from being drawn into the disputes of others."*fn1 The case before us presents a classic confrontation between productivity and job security interests, with neutrals caught in the middle; the legal instrument, however far from the ideal, is sufficiently sensitive to furnish us guideposts to decision.

The productivity interest is espoused by the petitioner, Carrier Air Conditioning Co. (Carrier), the charging party before the National Labor Relations Board (the Board or NLRB); Carrier here seeks review of an NLRB order dismissing its General Counsel's complaint. The job security interest is espoused by Sheet Metal Workers' International Association, Local 28, AFL-CIO (the Union or Local 28), intervenor herein and the party against whom Carrier's charges were filed. The neutrals in this dispute are New York City area sheet metal and air conditioning contractors, who signed an agreement containing a "no subcontracting clause" that is central to this case. As enforced by the Union, the clause had the effect of preventing virtually all sales of a specific type of Carrier air conditioning unit - the Moduline - in New York City.

In its unfair labor practice charges, Carrier alleged that the no subcontracting clause violated § 8(e) of the National Labor Relations Act, 29 U.S.C. § 158(e), and that Local 28's actions in relation to the Moduline units violated § 8(b)(4), 29 U.S.C. § 158(b)(4). The Board's General Counsel issued a complaint to this effect, and an administrative law judge (ALJ) found that the Act had been violated as alleged. The NLRB reversed the ALJ, however, and dismissed the complaint. Sheet Metal Workers Local 28 (Carrier Air Conditioning Co.), 222 N.L.R.B. No. 110 (1976). Carrier's petition for review of the Board's decision was duly filed in this circuit, pursuant to § 10(f) of the Act, 29 U.S.C. § 160(f).

In reviewing the Board's decision, we are mindful of the Supreme Court's injunction in National Woodwork Manufacturers Association v. NLRB, 386 U.S. 612, 644, 18 L. Ed. 2d 357, 87 S. Ct. 1250 (1967), that the determination whether Sections 8(e) and 8(b)(4) have been violated necessarily involves an inquiry into "whether, under all the surrounding circumstances, the Union's objective was preservation of work . . ., or whether the agreements and [related activities] were tactically calculated to satisfy union objectives elsewhere." Thus our attention must be directed to the remoteness of the threat to the Union of job displacement by the product at issue, the history of relations between the Union and Carrier, and the "economic personality" of the industry. Id. at 644 n.38. Such an inquiry necessitates examination in depth of the facts, as to which the ALJ's findings regarding the credibility of witnesses will be adopted here, as they were by the NLRB, 222 N.L.R.B. No. 110, slip op. at 2 & n.3. This examination, coupled with the applicable law, leads us to conclude that the Board erred in various respects. We accordingly affirm in part, reverse in part, and remand for further proceedings.

I. FACTS

In an agreement with Local 28 for the time period August 1972 - June 1975,*fn2 the New York City Chapter of the Sheet Metal and Air Conditioning Contractors National Association (the Association) consented not to "subcontract out" work relating to, inter alia, "plenums," on the express ground that performance of this work by Local 28 members would help "preserv[e] . . . the work opportunities of the . . . sheet metal workers . . . within the collective bargaining unit . . ."*fn3 A plenum may be briefly described as a four-sided box made of sheet metal that is attached to an air conditioning unit; it helps to regulate the flow of air into a room, as well as to abate noise. If an Association contractor were to violate the agreement by subcontracting out work on plenums to employers other than those within the collective bargaining unit, the agreement provided for censure for the first offense and for the imposition of a fine, "commensurate with the loss . . . sustained by journeyman sheet metal workers by reason of such violation," for subsequent offenses. The amount of the "loss sustained" was to be determined by a Joint Adjustment Board established by the contract, the Board consisting of twelve members designated by the Association and twelve by the Union.

The plenums of concern here are attached to the type of Carrier air conditioner known as the Moduline, which the ALJ found was "a new and different product." Opinion of James V. Constantine, Administrative Law Judge, slip op. at 21 [hereinafter cited as ALJ's Opinion]. The Moduline units are installed in ceilings and connected by ducts to a central fan room, where outside air is drawn into the building, conditioned, and forced by fan pressure through the ducts to the Moduline units. Air passes through the plenum portion of the unit and thence, by virtue of the plenum's air pressure being higher than room pressure, through a distribution baffle, past a bellows, and ultimately into a room through a diffuser. The entire Moduline unit, except for the diffuser slots, is concealed in the ceiling.

Carrier began marketing the first model of the Moduline series, Model 37P, in the early 1960s and around 1970 developed a more sophisticated unit known as Model 37A. Presently both types of units are marketed throughout the United States, except in New York City, and are installed with plenums that are prefabricated and attached at Carrier's Tyler, Texas, plant,*fn4 whose workers are organized by another local of the same international union here involved.

In reaching the conclusion that the Moduline is a "new" product, the ALJ evidently credited testimony by Carrier's "engineering section manager" for Modulines to the effect that attaching the plenum to the control unit is a far more complex operation on the Moduline than it is on conventional air conditioning units. See ALJ's Opinion at 11, 22. Specifically, the manager testified that the process of calibration, by which the bellows assembly is adjusted to assure proper plenum pressure and air flow, is the "whole heart" of the Moduline and that it requires the use of special calibration machines located only at the Texas plant. He further testified that Carrier's Texas plant is specifically designed to manufacture Modulines with the plenums attached, that the Texas personnel have been specially trained to perform the plenum calibrations, and that "it would be extremely difficult" to fabricate plenums and attach them to Modulines outside the Carrier Moduline plant. This difficulty is the greater on the more sophisticated Model 37A, because its "bellows assembly . . . is a part of the plenum [and] has to be attached to the plenum in order to be adjusted or calibrated."

The evidence credited by the ALJ indicates that Local 28 has consistently opposed installation of Modulines in the New York area. Carrier first sought to install the Model 37P units in 1966 in a hospital project and in Carrier's own offices in Manhattan. At a meeting late in that year, Local 28 officials told Carrier's district manager that the Modulines "could not come into New York" unless the plenums were made in New York in a shop affiliated with Local 28. When some of the 37P units were delivered in early 1967, the union officials stated that they could not be installed. A few days later, the officials and Carrier's district manager reached an agreement under which the Union would allow Modulines to be installed in the hospital project and Carrier's offices in exchange for Carrier's attempting to redesign the 37P so that the plenum could be made in New York and later joined to the remainder of the unit.

In late 1967 and 1968, the redesigned 37P was given its first test. After union officials objected to installation of 37Ps with prefabricated plenums in a Manhattan police office building, Carrier agreed to have the plenums manufactured by a New York sheet metal company whose employees were represented by Local 28. The plenums so manufactured, however, did not fit properly, leaked air, and were noisy; as a result, Carrier, which had guaranteed to the City the proper functioning of the units, was obliged to spend $10,000 correcting the defects. The ALJ found that the same problem occurred on a few other small projects in the late 1960s as to which, pursuant to Carrier's agreement with Local 28, plenums were made in New York and joined to the Texas-made control unit. The ALJ concluded that New York area sheet metal contractors were "[unable] . . . to fabricate a workable plenum." ALJ's Opinion at 22. Carrier's district manager, in testimony credited by the ALJ, see id., explained the business result of this inability in simple terms: "We just couldn't sell the [redesigned] unit."

In mid-1970, following the unveiling of the new Model 37A Moduline, Carrier spokesmen met with Union officials in an attempt to convince them that the new models should be allowed into New York with their prefabricated plenums. Carrier argued that the Model 37A could not be produced without a plenum installed at the factory. Meetings went on for over two years without any resolution of the dispute until, in October, 1972, following a change in Union leadership, the new president referred the issue to a ...


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