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CONAGRA v. NATIONAL LABOR RELATIONS BOARD </h1> <p class="docCourt"> </p> <p> July 8, 1997 </p> <p class="case-parties"> <b>CONAGRA, INC., ET AL., PETITIONERS<br><br>v.<br><br>NATIONAL LABOR RELATIONS BOARD, RESPONDENT</b><br><br> </p> <div class="caseCopy"> <div class="facLeaderBoard"> <script type="text/javascript"><!-- google_ad_client = "ca-pub-1233285632737842"; /* FACLeaderBoard */ google_ad_slot = "8524463142"; google_ad_width = 728; google_ad_height = 90; //--> </script> <script type="text/javascript" src=""> </script> </div class="facLeaderBoard"> <div class="numbered-paragraph"><p><br> Before: Wald, Williams and Randolph, Circuit Judges.</p></div> <div class="numbered-paragraph"><p> Wald, Circuit Judge</p></div> <div class="numbered-paragraph"><p> FOR PUBLICATION</p></div> <div class="numbered-paragraph"><p> FOR THE DISTRICT OF COLUMBIA CIRCUIT</p></div> <div class="numbered-paragraph"><p> Argued May 9, 1997</p></div> <div class="numbered-paragraph"><p> On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board</p></div> <div class="numbered-paragraph"><p> Opinion for the Court filed by Circuit Judge Wald.</p></div> <div class="numbered-paragraph"><p> Separate concurring statement filed by Circuit Judge Wald.</p></div> <div class="numbered-paragraph"><p> In June of 1993, Molinos de Puerto Rico, Inc. ("Molinos"), a wholly-owned subsidiary of ConAgra, Inc. ("ConAgra"), began negotiating with the Congreso de Uniones Industriales de Puerto Rico ("the Union") concerning the establishment of a new collective bargaining agreement ("CBA"). The parties quickly found that their respective proposals were radically different: The Union wanted to raise wages and benefits above existing levels, while Molinos desired to lower them substantially. The parties failed to reach an agreement by October 28, the existing agreement's expiration date, and on November 1 Molinos locked out the employees. Between December, 1993, and March, 1994, the Union filed a series of charges with the National Labor Relations Board ("the Board"), alleging that Molinos' conduct surrounding the failed negotiations and lockout violated the National Labor Relations Act, 29 U.S.C. Section(s) 151 et seq. ("the Act"). The Board found that Molinos and ConAgra violated the Act by refusing to provide financial information requested by the Union, intentionally creating a negotiating impasse, and unilaterally altering the terms and conditions of employment in the absence of a genuine impasse. The Board now asks this court to enforce in full its order requiring Molinos and ConAgra to cease committing these violations, and ConAgra requests that we decline to enforce any portion of the order.</p></div> <div class="facAdFloatLeft"> <script type="text/javascript"><!-- google_ad_client = "ca-pub-1233285632737842"; /* FACContentLeftSkyscraperWide */ google_ad_slot = "1266897617"; google_ad_width = 160; google_ad_height = 600; //--> </script> <script type="text/javascript" src=""></script> </div class="facLeaderBoard"> <div class="numbered-paragraph"><p> We reject the Board's finding that Molinos and ConAgra violated the Act by failing to provide all of the financial information requested by the Union. In our view, the Board's conclusion that Molinos effectively claimed an "inability to pay" the wages proposed by the Union, thereby triggering an obligation to provide supporting financial information upon request, represented an unacknowledged and unexplained departure from the Board's decision in The Nielsen Lithographing Company, 305 N.L.R.B. 697 (1991). We also reject the Board's conclusion that Molinos engaged in unlawful "surface bargaining," as unsupported by substantial evidence in the record considered as a whole. With regard to the Board's finding that a ConAgra executive violated the Act by seeking to condition the provision of financial information to the Union on the Union's withdrawal of an "unfair labor practice" charge, we remand the matter to the Board for its consideration of whether this finding may stand despite our rejection of the other findings.</p></div> <div class="numbered-paragraph"><p> I. Background</p></div> <div class="numbered-paragraph"><p> Molinos and the Union began negotiations for a new CBA on June 17, 1993. Molinos' representatives initially made a presentation that focused on Molinos' position and importance within ConAgra, and on the gap between the wages paid by Molinos under the existing CBA and those paid by Molinos' competitors in Puerto Rico. The presentation included a chart showing that Molinos paid an average hourly wage of $17.84 while its competitors paid between $5.64 and $13.76, another showing that Molinos' profits represented 1.6% of ConAgra's profits in 1992, and another indicating that Molinos' sales volume in animal feed had declined sharply during the prior year. After the presentation, Molinos' chief negotiator presented the Union with Molinos' proposal to cut wages from $17.84 to $11.11. At the next session, the Union representative accused Molinos of negotiating in bad faith. Molinos' representative acknowledged that the proposal was "radical," adding that "we need to be competitive," and "[w]e want the company to continue." Deferred Appendix ("D.A.") at 959. <a href="#D*fn1" name="S*fn1">*fn1</a> The Union and Molinos then devoted the next eight negotiating sessions to non-economic proposals.</p></div> <div class="numbered-paragraph"><p> The parties returned to the wage proposals at their eleventh bargaining session, held on September 14, 1993. Molinos' representative began by reintroducing the graphs that Molinos' General Manager had used in his presentation at the first session, and soliciting the Union's response to the individual components of Molinos' economic proposals, each of which the Union rejected. The Union representative then stated that the Union wanted to use its own proposal, which called for an increase in hourly wages from $17.84 to $20.00, as the basis for negotiation. Molinos' representative agreed to consider the Union's wage proposal, but reiterated that Molinos needed to reduce its overall labor costs in order to stay competitive. At this point, the Union requested that Molinos turn over its certified financial statements for the prior five years. Molinos' representative asked the Union to submit its information request in writing and to explain its relevance to the negotiations, stating: "[O]ur petitions are not based on the financial statement, but more so on the competitiveness of our costs against a market that we have that which [sic] is much lower than ours," and: "The issue that we are bringing is not the Company's ability to pay, but more so the competitiveness in our market, specifically in our labor costs." Id. at 1003-04. The Union's representative acknowledged that he understood Molinos' assertion: "What you are saying is that the Company is not alleging that it does not have the ability to pay." Id. at 1004. Subsequently, on September 20, the Union sent Molinos a letter reiterating its information request, and adding a request for the names of all of Molinos' clients for the past three years; the letter included no explanation of the reasons for these requests or of their relevance to the bargaining process.</p></div> <div class="numbered-paragraph"><p> The parties continued to meet through the end of October, but made no substantial progress on the wage issue-the Union stood by its demand to increase wages above their existing levels, while Molinos continued to propose reducing wages below existing levels. The Union repeated its request for financial information (midway through one negotiating session, the Union's representative added requests for records of Molinos' "sales, the contracts," and "what each and every one of the supervisors, administrators, managers, salespersons and owner of the Company, earn," id. at 1034), while Molinos continued to assert that it had never claimed that it was in poor financial condition or was unable to pay the wages sought by the Union, and to ask that the Union explain the relevance of the requested information.</p></div> <div class="numbered-paragraph"><p> On October 27, Molinos' representative delivered the company's "last and final offer," along with a letter stating that the parties had reached an impasse and giving the Union notice of Molinos' intention to close its facilities that evening. Molinos locked out the employees on November 1, citing the failure to reach agreement regarding a new CBA. On November 30, the Union demanded that Molinos disclose the "profit margin for the rest of the feed industries that belong to the ConAgra group, how much is the operational cost for each item and a comparison of it with the other competitors within its geographical state for within the state of the United States where it is located [sic], and analyze the competitiveness margin followed by the company in said feed industry compared with its analogue in the United States." Id. at 834. In a December 29 letter, Molinos provided the Union with information regarding Molinos' wages, its competitors' wages, its pension plan, and the number of temporary workers employed at Molinos mills, but asserted that the Union was "not entitled" to requested information regarding financial statements, an additional two years' worth of information on sales to competitors, or any information regarding ConAgra companies other than Molinos; Molinos also claimed that it had no contracts with its competitors and did not understand the Union's reference to the "ConAgra group." Id. at 839. The parties unsuccessfully met with a mediator several times between November, 1993 and February, 1994.</p></div> <div class="numbered-paragraph"><p> In 1995, the Board petitioned a federal district court for a temporary injunction prohibiting Molinos from refusing to bargain in good faith, refusing to supply relevant information requested by the Union, unilaterally changing the terms and conditions of employment, or locking out Union employees. <a href="#D*fn2" name="S*fn2">*fn2</a> See Rivera-Vega v. ConAgra, Inc., 876 F. Supp. 1350 (D.P.R. 1995). Finding that there was "reasonable cause" to believe that Molinos had violated the Act, and that the Board's "unfair labor practice" charges were likely to succeed on the merits, the district court granted the requested preliminary injunction; the injunction was to expire automatically upon the Board's final disposition of the charges. See id. at 1372. The First Circuit affirmed the grant of the injunction later that year, holding that the district court's order constituted neither "clear error" nor an abuse of discretion. RiveraVega v. ConAgra, Inc., 70 F.3d 153, 156 (1st Cir. 1995).</p></div> <div class="numbered-paragraph"> <p> On June 13, 1995, one of the Board's Administrative Law Judges ("ALJs") issued a decision finding that Molinos had failed to bargain in good faith by withholding information it was obligated to provide, purposely creating a bargaining "impasse," and making unilateral changes in the terms and conditions of employment in the absence of a genuine impasse. See ConAgra, Inc., 321 N.L.R.B. 944, 949-65 (1996). The Board affirmed the ALJ's findings on August 20, ...</p> </div> </div> </div> <div id="caseToolTip" class="caseToolTip" style="display: none;"> <div class="toolTipHead"> </div> <div class="toolTipContent"> <p> Our website includes the first part of the main text of the court's opinion. 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