decided: March 31, 1972; As Amended May 25, 1972.
Previously Reported at 459 F.2d 374.
Staley, Adams and Max Rosenn, Circuit Judges.
This case comes to us upon the petition of the AFL-CIO Joint Negotiating Committee for Phelps Dodge ("the committee" or "the unions") to review and set aside an order of the National Labor Relations Board and upon the Board's cross-application to enforce that order.*fn1 The Board found that the various unions constituting the committee had engaged in unfair labor practices during negotiations for collective bargaining contracts with Phelps Dodge Corporation and various of its subsidiaries ("Phelps Dodge" or "the company.")
The negotiations involved took place during most of 1967 and part of 1968. Phelps Dodge is engaged, inter alia, in the mining, concentrating and smelting of ores, principally copper ore, in the western part of the United States. Its Western Operations division includes four locations in Arizona. Also involved in the negotiations were two whollyowned subsidiary corporations, Phelps Dodge Refining Corporation, which operates a refinery at El Paso, Texas, and Phelps Dodge Copper Products Corporation, engaged in the manufacture of copper wire and cable at Fordyce, Arkansas, and in Yonkers, New York.
The Board ruled that the unions, by conditioning settlement of negotiations covering the Phelps Dodge Western Operations upon simultaneous and satisfactory settlement of contracts in other bargaining units in other company locations and by striking in support of that demand, had unlawfully attempted to engage in company-wide bargaining beyond the scope of established bargaining units. The Board found that insistence upon simultaneous settlements was part of an over-all strategy by the Arizona unions to enlarge the bargaining unit by merging the bargaining of separate units. It ruled that the conduct of negotiations on a basis broader than the established bargaining unit is non-mandatory, and the unions' insistence that Phelps Dodge engage in such bargaining was violative of the National Labor Relations Act.
The scope of our review in the instant case is limited to the determination of whether or not the Board's findings are supported by substantial evidence in the record and have a basis in law. NLRB v. Hearst Publications, Inc., 322 U.S. 111, 64 S. Ct. 851, 88 L. Ed. 1170 (1944); Local Union No. 519, United Ass'n of Journeymen and Apprentices of Plumbing and Pipe Fitting Industry of United States and Canada, A.F.L.-C.I.O. v. NLRB, 135 U.S.App.D.C. 105, 416 F.2d 1120 (C.A.D.C., 1969).
In the 1967-1968 negotiations the many unions representing employees at the Western Operations bargained through the medium of the AFL-CIO Joint Negotiating Committee for Phelps Dodge.*fn2 Prior to 1967, bargaining at the Western Operations had varied, being conducted at times on the basis of negotiations with individual unions and at times on the basis of negotiations with combinations of various unions. In 1967, the parties agreed to the joinder of all of the bargaining units in Arizona locations into a single negotiating format,*fn3 the Joint Committee. At the outset, negotiations were also opening at locations operated by Phelps Dodge subsidiaries in El Paso and Rhode Island. A request was made by the unions that Phelps Dodge agree to joint bargaining on a company-wide basis wherever negotiations were open. The company rejected the request. The unions subsequently abandoned this demand, and separate negotiations ensued at the various company locations.
At this point, the Board and the unions begin to disagree on the facts as well as the law. The Board contends, and the trial examiner so found, that the over-all objective of a company-wide labor agreement was never abandoned and that the unions persisted in pursuing this objective in bargaining with Phelps Dodge. The Board's analysis of the evidence begins with an overview of the nationwide dispute and strike in the copper industry in 1967. The Board notes that the unions representing employee units in this industry joined their efforts and directed them against the four major copper producers, one of which is Phelps Dodge.*fn4 The bargaining goals which the unions intended to seek throughout the copper industry were formulated in March of 1967 at the unions' Nonferrous Industry Conference. Included among those goals were company-wide master agreements and common contract termination dates. It is the Board's position that the record of negotiations, viewed as a whole, demonstrates that these goals were never abandoned. The Board cites the unions' demand for a "most favored nations" clause,*fn5 their demand for a limited no strike provision, their demand for common contract expiration dates, and their demand for simultaneous settlements of all contracts as corroborative evidence of an effort to compel Phelps Dodge to engage in company-wide bargaining.
The unions' joint negotiating committee, petitioners in this court, deny that they were attempting to engage in company-wide bargaining. Petitioners candidly admit that one of their bargaining goals had been to establish company master agreements and common expiration dates. They assert that this demand for master agreements was abandoned prior to the strike and contend that their demand for simultaneous settlements, which they admittedly did not abandon, was not an attempt to engage in illegal company-wide bargaining. Petitioners point out that negotiations were conducted separately in the various units of Phelps Dodge and that there was no insistence on discussion in one locale as to the contract of another locale.
We deem it necessary at this point to restate that this matter is before us on a petition to review and set aside an opinion and order of the NLRB. We reiterate in order to emphasize the fact that the Board opinion and order must stand or fall upon the findings of fact and conclusions of law contained therein. In the instant case, counsel for the Board has advanced an argument in support of the Board's order that is really a rationalization of the Board's decision.*fn6 We may not consider such an argument. "An administrative order cannot be upheld unless the grounds upon which the agency acted. . . were those upon which its action can be sustained." SEC v. Chenery Corp., 318 U.S. 80, 95, 63 S. Ct. 454, 462, 87 L. Ed. 626 (1943). We cannot accept counsel's post hoc rationalizations for agency action. NLRB v. Metropolitan Life Insurance Co., 380 U.S. 438, 85 S. Ct. 1061, 13 L. Ed. 2d 951 (1965).
The Board found that the strikes conducted by the unions throughout the facilities of Phelps Dodge were intended, in substantial part, to force the company to accede to a demand for an agreement on terms and conditions of employment to be applicable generally on a company-wide basis. After examining the decision by the trial examiner and the Board's opinion, we conclude that the Board's finding was based largely upon its belief that the unions began negotiations with the intention to secure company-wide master contracts and never abandoned that goal. The Board's opinion cites public statements made by union officials during the strike as well as a union publication to support its contention that company-wide bargaining was the principal factor underlying the copper strike. The Board then cites as corroborative evidence of an effort to force company-wide bargaining the unions' insistence to impasse on the demands set forth earlier. Convinced that the unions had never abandoned the objective of company-wide contracts, the Board found those demands to have been mere stratagems to achieve that end.*fn7
We find that the Board's opinion and order are not substantiated by the record and are without a basis in law. The Board concedes that it did not find the union's insistence on the four demands to be a per se violation of the Act; rather the Board asserts that those demands were part of an over-all strategy to force the company to negotiate on a basis broader than the established bargaining units. The Board, in the exercise of its discretion, may of course find bad faith bargaining even with regard to mandatory subjects if done with a closed mind. Such a finding must be supported by sufficient evidence of bad faith in the record of negotiations. Texas Foundries, Inc. v. NLRB, 211 F.2d 791 (C.A.5, 1954). The Board's opinion in the instant case, however, does not find that the unions bargained in bad faith. As we read it, the Board's opinion finds that even assuming the ...