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National Labor Relations Board v. Economics Laboratory Inc.

argued: July 18, 1988.


Application for Enforcement of an Order of the National Labor Relations Board, Board Docket No: 22-CA-15086.

Higginbotham, Becker, and Rosenn, Circuit Judges.

Author: Rosenn


ROSENN, Circuit Judge.

Petitioner National Labor Relations Board (the Board) applies for enforcement of an order directing respondent Economics Laboratory, Inc. (Ecolab or the Company)*fn1 to bargain with the Highway and Local Motor Freight Drivers, Dockmen and Helpers, Local Union No. 701 a/w International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (the Union) as Ecolab's exclusive employee representative.

Ecolab, a manufacturer of industrial detergents, consented to a decertification election to determine the representative status of the Union. Four of the ballots cast at the election were challenged, two by the Company and two by the decertification petitioner, each alleging that the challenged voters were ineligible because they were on Long Term Disability (LTD). The Acting Regional Director (RD) declared the challenged voters eligible, counted their votes, and certified the Union. Ecolab nonetheless refused to bargain with the Union, arguing that the Board's RD had arbitrarily and capriciously determined that LTD recipients were eligible to vote. The Board rejected Ecolab's objections, and held that Ecolab's refusal to bargain constituted an unfair labor practice. We deny the Board's petition for enforcement.*fn2


Under the consent agreement, eligible voters included employees who were employed during a specified pay period as well as employees "who did not work during said payroll period because they were ill." Employees who resigned or were discharged for cause were excluded.

One hundred four individuals cast ballots at the January 1987 election. Ecolab challenged the votes of Marcelo Cruz and Barbara Sturman, while the decertification petitioner, John Galya, challenged the votes of Christine Person and Victor Hunt.*fn3 A count of the remaining ballots revealed fifty votes for, and fifty votes against, the Union. Because the four challenged ballots affected the election results, the Acting Regional Director conducted an ex parte administrative investigation. Ecolab presented documentary evidence to support its contention that the individuals were no longer employees. The RD considered Ecolab's submissions, refused to hold a hearing on the employment status of the challenged voters, and concluded that the votes should be counted because the employees had not resigned or been discharged. Each of the challenged votes favored the Union, and as a result, the RD certified Local 701 as the bargaining unit's exclusive representative.

A. The LTD Program and Indicia of Employee Status

The LTD program is funded by employee and employer contributions to a trust administered by an insurance company.*fn4 Employees are eligible for LTD after a six month waiting period during which they receive Short Term Disability (STD) benefits.*fn5 To be eligible for LTD benefits, an employee must be (1) totally disabled, (2) under the care of a doctor, and (3) unable to work for pay. LTD payments continue after twelve months only if the claimant is unable to become qualified for any subsequent job. As long as eligibility is maintained, benefits continue to age sixty-five or seventy, depending upon the employee's age at the time of the disability.

Ecolab's written description of the LTD program suggests that the participants are no longer employees. It states:

If it is medically possible for you to go through retraining in a rehabilitation center to learn a new skill or return to your old job, EL wants to provide this opportunity and give you top priority in returning to work with EL. However, returning you to work with the company will depend on your successful rehabilitation and the availability of a job.

Ecolab asserts that it reemployed only one of twenty-three LTD recipients, and that the returning employee was treated as a new applicant. Two other individuals who completed LTD status sought, but were denied, reemployment.

The collective bargaining agreement (CBA) in force before the election required Ecolab to "post as a permanent bid the job of any employee who has been on disability for six (6) months and goes on Long Term Disability." (Emphasis added). Thus, this provision empowered the employer to permanently replace any employee who, after six months, went on LTD. The CBA also provided that individuals retained their accumulated seniority for up to three years of "no work," including three years of disability. LTD participants received credit for accumulated seniority only after returning to work. Because seniority was not a consideration in determining whether an LTD recipient would be rehired, a returning employee could not displace a less senior employee from his position.

Finally, Ecolab's policy and practice was to delete the names of LTD recipients from both its payroll and its "Status of Employees Report". Ecolab contends that individuals removed from the report are not considered employees for any purpose.

B. The Challenged Voters

Ecolab submitted undisputed documentary evidence regarding the contested voters' medical conditions and disability status. The RD's investigator also interviewed the voters to determine whether, at the time of the election, they intended to return to work.

Marcello Cruz, a chemical compound operator, began receiving STD payments in February 1984, almost three years prior to the election. He additionally received LTD and Social Security Disability Income (SSDI) benefits effective August 1984. Undisputed medical evidence demonstrates that Cruz, who suffers from "severe bilateral venous insufficiency of [the] lower extremities," " leg ulcers," and "essential hypertension," is totally disabled and will never recover sufficiently to return to work. Because Cruz was unavailable during the investigation, it is unknown whether he had an intention to attempt to return to work.

Victor Hunt, a fork lift operator, began receiving STD benefits in February 1986, and LTD benefits in August of that year. There is no evidence that he received SSDI benefits. Hunt suffers from liver dysfunction, bradycardia, bronchial asthma, viral syndrome, mitral valve prolapse, paroxysmal atrial fibrillation, and panic attacks. According to undisputed medical evidence, Hunt's ailments are non-curable and he is totally disabled. ...

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