Petition for enforcement of a decision and order of the National Labor Relations Board finding respondent's noncompliance with promise in settlement agreement to bargain with union a violation of Section 8(a)(5) of the National Labor Relations Act, 29 U.S.C. § 158(a)(5) and directing respondent to bargain in good faith with Union. Enforcement granted.
Before Feinberg, Timbers and Meskill, Circuit Judges.
The National Labor Relations Board seeks enforcement of its order requiring All Brand Printing Corporation to bargain in good faith with the New York Printing Pressmen and Offset Workers Union, Local 51, International Printing Pressmen and Assistants Union of North America, AFL-CIO. The Board's petition raises the rarely litigated question of the effect of an employer's agreement to bargain, made as part of a settlement of an unfair labor practice proceeding. For reasons set forth below, we enforce the Board's order.
The background of the settlement agreement here involved is somewhat unusual. The Company was in Chapter XI bankruptcy proceedings from December 1971 to March 1975, during which time it operated as a debtor in possession. A little over a year before the bankruptcy proceedings began, the Union had been certified as the bargaining agent for the Company's skilled employees, after a Board-conducted election. The Union then attempted to negotiate with company officials several times during the months following and the Company continuously replied that it could not afford a union contract. In November 1971, the Union filed an unfair labor practice charge with the Board.*fn1 In December 1971, on the same day that the Company filed its Chapter XI petition, the Regional Director of the Board issued a complaint alleging that the Company had violated section 8(a)(5) and (1) of the National Labor Relations Act, 29 U.S.C. § 151 et seq.
In the Chapter XI proceeding, the district judge issued the usual order restraining all persons from proceeding with any actions against the Company, and the Board and the Union were notified that the restraint applied to them. The Board then moved in the bankruptcy court for a modification of the restraining order, and the settlement now at issue was reached during a recess of the hearing on the motion. By its terms, the Company and the Union agreed that the Union would withdraw its unfair labor practice charge before the Board in return for the Company's promise that it would commence bargaining with the Union 60 days after an arrangement with the Company's creditors was confirmed by the bankruptcy court. Pursuant to the agreement, the Union's attorney appeared at the scheduled Board hearing on the complaint against the Company, and requested permission to withdraw the Union's charge. An attorney appeared for the General Counsel for the Board and stated that the General Counsel approved the withdrawal request and had no objection to dismissal of the complaint. The administrative law judge then approved the Union's request to withdraw its charge, and dismissed the complaint.
Three years later, in March 1975, the bankruptcy court confirmed an arrangement with the Company's creditors. Apparently, the Union was not informed of this event until almost four months later. After several delays, the parties finally held a bargaining session in October 1975. At this time, the Company appeared interested in the Union's proposals and promised to furnish the Union with information about the Company's employees, their wages and benefits. Less than a month later, the Company changed its position and informed the Union that it would not provide the promised information and that it would not negotiate further because it could not afford a contract. After the Company reiterated this position several times, the Union again filed charges with the Board.
The administrative law judge found, after a hearing, that the Company had violated the Act by refusing to bargain since September 4, 1975. The Board adopted the findings and conclusions of the administrative law judge, 236 NLRB No. 14 (1978), and ordered the Company to cease and desist its unfair labor practices, to bargain with the Union and to furnish the Union with information relevant to the collective bargaining negotiations and contract proposals. This application to enforce the Board's order followed.
The Company argues that it was not obliged to bargain with the Union because it had a good faith doubt as to the Union's majority status. The Board rejoins that the settlement agreement precludes the Company from challenging the Union's majority status until there has been a reasonable period of bargaining in accordance with the settlement agreement. The Company responds that obligations imposed by an "out-of-Board" settlement agreement cannot be the basis of a refusal to bargain charge.
We turn first to the question of the effect of the settlement agreement. The Board's own procedures contemplate various kinds of agreements settling unfair labor practice cases. A formal settlement is subject to approval of the Board in Washington, D.C. and "the Board may issue an order requiring the respondent to take action appropriate to the terms of the settlement"; ordinarily, such an agreement also contains "the respondent's consent to the Board's application for the entry" of an enforcement decree in "the appropriate circuit court of appeals." See NLRB Statements of Procedure, Series 8, 29 C.F.R. § 101.9(b)(1). Informal settlement agreements are not subject to Board approval and do not become the subject of a Board order, but they must be approved by a regional director and, in some instances, by an administrative law judge. See id. §§ 101.7, 101.9. A settlement prior to the issuance of a complaint must be informal. After a complaint is issued, the Board prefers a formal settlement, but the Regional Director has discretion to approve an informal settlement prior to commencement of the hearing. After the opening of the hearing, any settlement must be approved by the administrative law judge. The settlement at this stage can be either formal or informal. See id.
The law is clear that an employer must engage in one full year of good faith bargaining with a union following its certification, regardless of any changes in the majority status of the union. See Brooks v. NLRB, 348 U.S. 96, 75 S. Ct. 176, 99 L. Ed. 125 (1954). The purpose of this insulated period is to give collective bargaining time to produce results and to promote stability in industrial relations. If the employer refuses to bargain in good faith during the certification year, the Board has the power to extend or renew the certification year as a remedy for a section 8(a)(5) violation. See Franks Bros. Co. v. NLRB, 321 U.S. 702, 64 S. Ct. 817, 88 L. Ed. 1020 (1944); Glomac Plastics, Inc. v. NLRB, 592 F.2d 94 at 100-101 (2d Cir. 1979), and cases cited therein. The insulated period has also been applied to an employer's agreement to bargain with a union in settlement of a section 8(a)(5) charge. If the settlement agreement is valid, then the employer must bargain in compliance with it for a reasonable time without regard to whether the union continues to have the support of a majority of the employees. See Poole Foundry & Machine Co. v. NLRB, 192 F.2d 740 (4th Cir. 1951), Cert. denied, 342 U.S. 954, 72 S. Ct. 626, 96 L. Ed. 709 (1952).
Turning then to the effect of the settlement agreement here, we have found very few reported decisions on the subject, other than Poole Foundry, supra, probably because the parties usually fulfill their obligations under such agreements. In NLRB v. Vantran Electric Corp., 580 F.2d 921 (7th Cir. 1978), the Seventh Circuit discussed the differences between formal and informal settlements and held that the two types of agreement should be treated differently. The court stated:
The critical issue which emerges in the present case is whether the agreement was a valid settlement agreement. Although we are willing to approve an extension of the Board's remedial powers to enforce bargaining provisions of totally private, out-of-Board settlement agreements, we perceive the need for some standards in this area. We distinguish between Board-approved and out-of-Board settlements because, . . . a Board-approved settlement "clearly manifests an administrative determination by the Board that some remedial action is necessary to safeguard the public interests intended to be protected by the National Labor Relations Act." Poole Foundry & Machinery Co. v. N.L.R.B., (192 F.2d) at 743. In out-of-Board settlements, on the other hand, the Board has had no opportunity to determine whether any remedial action is appropriate. It merely acquiesces in the request of the charging party to withdraw charges and may do so without knowledge of the settlement agreement or all pertinent background ...