UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


ASSOC MILK PRODCR

v.

NLRB


98-1481a

D.C. Cir. 1999


*	*	*


Edwards, Chief Judge: The National Labor Relations  Board ("Board")
seeks to enforce an order directing Associat- ed Milk Producers, Inc.
("Associated Milk") to bargain in  good faith with the Chauffeurs,
Teamsters and Helpers, Local  Union No. 238 ("Union"). The Board found
Associated Milk  in violation of s 8(a)(1) and (5) of the National
Labor Rela- tions Act ("NLRA") because Associated Milk refused to bar-
gain with the Union after it had been certified. See 29 U.S.C.  s
158(a)(1) and (5) (1994). The Union had been certified  after an
election in which 23 votes were cast for the Union, 20  against, and
challenges to 4 ballots were sustained. Associat- ed Milk argues that
the certification of the election was  invalid, because challenges to
three of the ballots should have  been rejected. Associated Milk seeks
to have this court  accept the votes of the challenged employees,
reverse the  Board's certification of the election, and vacate the
Board's  order that Associated Milk bargain in good faith.


The Union challenged the votes of three employees who, it  argued, were
not a part of the stipulated bargaining unit.  Prior to the election,
the Union and Associated Milk agreed  to a stipulated bargaining unit
consisting of "employees ...  employed by the Employer at its
Arlington, Iowa facility."  The Board's Regional Director determined
that the stipula- tion is unambiguous, but he then went on to treat it
as if it  were ambiguous by conducting an ex parte "investigation" 
which led him to conclude that the three employees did not  work at
the Arlington facility. For the most part, the Re- gional Director's
decision, affirmed by the Board, has no basis  in a record. This is
because his so-called investigation fell  short of a hearing pursuant
to which a record could have been  established. In the absence of such
a record, there is no basis  upon which to uphold the judgment of the
Board. According- ly, we remand the case to the Board for a hearing to
 determine whether the challenged employees are part of the 
stipulated bargaining unit.


It is clear from the briefs and arguments in this case that  the
parties, and possibly the Board as well, are terribly  confused over
the meaning of this court's decision in Avecor,  Inc. v. NLRB, 931
F.2d 924 (D.C. Cir. 1991), which we herein  clarify. The point of
confusion is over the Board's responsi- bility when it is faced with a
stipulated bargaining unit that is  ambiguous. As we explain below, in
such a situation, the  Board must seek to determine the parties'
intent through  normal methods of contract interpretation, including
the ex- amination of extrinsic evidence. Only when the stipulation is 
a nullity from which no intent can be discerned should the  Board
ignore the stipulated agreement and determine the  bargaining unit on
the basis of its community of interest test.


I. Background


The facts surrounding the election and the stipulated bar- gaining
agreement are uncontroverted. After the Union  petitioned to represent
Associated Milk's employees, the Un- ion and Associated Milk
stipulated to a bargaining unit. The  stipulation provides that the
Union would represent


[a]ll full-time and regular part-time production and main- tenance
employees, including lead persons, operators,  baggers, sanitation
workers, truck mechanics, milk quali- ty technicians, maintenance
workers, local drivers, bulk  truck drivers and waste water operator
employed by the  Employer at its Arlington, Iowa facility; excluding
all  over-the-road drivers, milk quality lab clerical employees, 
other clerical employees, salespersons, professional em- ployees,
guards and supervisors, as defined by the Na- tional Labor Relations


Decision and Direction of Election, reprinted in Petitioner's  Appendix
("P.A.") 18 (emphasis added). The Regional Di- rector approved the
stipulation, noting that it constitutes an  appropriate unit for the
purposes of collective bargaining  within the meaning of s 9(b) of the
NLRA. See id.


During the representation election, the Union challenged  the votes of
three bulk truck drivers on the basis that those  drivers were
employed not at Associated Milk's Arlington, 


Iowa facility, but, instead, at Associated Milk's Fredericks- burg
facility. Associated Milk disagreed. The stipulation is  clear that
the bargaining unit includes only employees who  work at the Arlington
facility; it is unclear whether the  three challenged drivers fit that
description.


Bulk truck drivers are responsible for delivering whole  milk from
neighboring farms to Associated Milk's processing  facilities.
Associated Milk employs a number of bulk drivers,  most of whom
deliver all of their loads to the Arlington  facility. The three
challenged drivers, however, deliver three  out of every four loads to
Associated Milk's Fredericksburg  facility. Only the fourth load is
delivered to Associated Milk's  Arlington facility. The Fredericksburg
facility is, however, a  part of the Arlington Division, which is
based at the Arling- ton facility. As a result, in addition to making
one out of four  deliveries to Arlington, there are other factors to
suggest the  drivers are employed at the Arlington facility. For
instance,  the challenged drivers wash and maintain their trucks at
the  Arlington facility, they are supervised by someone at Arling-
ton, and all of their personnel records are kept at Arlington.


Despite this ambiguity, the Regional Director found that  the
stipulation is unambiguous. He did not, however, treat it  that way:
He treated it like an ambiguous stipulation by  conducting an ex parte
investigation to determine whether, in  fact, the challenged bulk
drivers worked at the Arlington  facility. Based on the evidence he
gathered through the  investigation, the Regional Director upheld the
Union's chal- lenges. See Supplemental Decision and Certification of
Rep- resentative, reprinted in P.A. 26. Most of the evidence he 
gathered, however, is not in the record.


Associated Milk appealed the Regional Director's decision  asking the
Board either to reverse the Regional Director's  findings on the
challenged ballots or to remand for a hearing  according to the
Board's community of interest standard.  Associated Milk's position
was muddled. On the one hand, it  argued that the drivers fall within
the terms of the stipula- tion; on the other, it argued that the
parties' intent was not  clear and that the Board should determine the


unit on the basis of the community of interest standard. In  any case,
Associated Milk disputed many of the Regional  Director's findings.


Despite these factual disputes, and without much of a  record to
review, the Board denied Associated Milk's appeal.  Soon thereafter,
the Union attempted to bargain with Associ- ated Milk. Associated Milk
refused to bargain, choosing  instead to precipitate an unfair labor
practice charge so that  it could seek review of the Board's decision.
See Family  Serv. Agency San Francisco v. NLRB, 163 F.3d 1369, 1373 
n.2 (D.C. Cir. 1999) (noting that the proper path to seek  review of a
Board's certification of an election is to precipitate  an unfair
labor practice charge). The Union then filed a  charge against
Associated Milk and, based on that charge, the  Regional Director
filed a complaint alleging that Associated  Milk's refusal to bargain
with the Union was an unfair labor  practice. The Board, on a motion
for summary judgment,  upheld the complaint and ordered Associated
Milk to bargain  in good faith with the Union. This appeal followed.


II. Analysis


Under s 10(e) and (f) of the NLRA, 29 U.S.C. s 160(e), (f)  (1994),
this court will "reverse the Board if, upon reviewing  the record as a
whole, we conclude that the Board's findings  are not supported by
substantial evidence." Micro Pacific  Dev. Inc. v. NLRB, 178 F.3d
1325, 1329 (D.C. Cir. 1999)  (citation and internal quotation marks
omitted). Substantial  evidence "is more than a mere scintilla. It
means such  relevant evidence as a reasonable mind might accept as 
adequate to support a conclusion." Id. (quoting Consolidated  Edison
Co. v. NLRB, 305 U.S. 197, 229 (1938)). Associated  Milk argues that
the Board's order should be overturned  because the stipulation
unambiguously includes the three  challenged drivers. In the
alternative, Associated Milk ar- gues that if the stipulation is
ambiguous, the Board was  required to ignore the stipulation and
determine the status of  the three drivers by employing its normal
community of  interest standard. As petitioners put it, "either the


tion is unambiguous, and the Challenged Bulk Drivers ...  are included,
or the stipulation is ambiguous, and their inclu- sion had to be
determined under a community of interest  test." Petitioner's Opening
Br. at 30.


The Company's position is not only wrong, but it reflects a 
fundamental misunderstanding of the law regarding ambigu- ous
stipulations. Associated Milk is not alone in its confusion:  The
Board here seems to make the same mistake. It argues  that the
"parties here clearly and unambiguously defined the  unit." Br. for
the NLRB at 19. And it notes that its own  precedent states that "if
the unit description of that agree- ment is expressed in clear and
unambiguous terms, the Board  will not examine extrinsic evidence to
determine the parties'  intent regarding the bargaining unit
composition." Id. (quot- ing Laidlaw Transit, Inc., 322 N.L.R.B. 895,
895 (1997)).  Nonetheless, the Board then cites extrinsic evidence to
sup- port its interpretation of what it argues is an unambiguous 
stipulation. The Board's studious aversion to admitting that  the
stipulation is ambiguous suggests that it also believes that  an
ambiguous stipulation must be disregarded in favor of a  community of
interest inquiry. This belief is a misunder- standing of this court's
holding in Avecor, Inc. v. NLRB, 931  F.2d 924 (D.C. Cir. 1991), which


In Avecor, this court noted that when the Board creates a  bargaining
unit de novo, it "determines which employees  share common interests
such that they could fruitfully bar- gain in concert." 931 F.2d at
932. But, the court held,


[w]hen the parties stipulate the bargaining unit, ... the  Board has a
more limited role. First it must ensure that  the stipulated terms do
not conflict with fundamental  labor principles. Having done so, its
task is simply to  enforce the agreement. If the terms of the
stipulation  are unambiguous, the Board must hold the parties to its 
text. If the terms are ambiguous, the Board may look to  the usual
factors governing the definition of an 'appropri- ate unit,' including
the community-of-interest standard.


Id. Avecor did not mean, however, that any time a stipula- tion is
ambiguous, the Board must ignore it and turn to the 


community of interest standard. In a stipulated unit case,  the Board's
primary responsibility is to discern the parties'  intent. That
responsibility does not fall away at the first hint  of ambiguity.
Rather, the Board should only turn to the  community of interest test
when it is unable to discern the  parties' intent from the
stipulation. In other words, the  ambiguity to which Avecor refers is
ambiguity about the  parties' intent, not ambiguity in the stipulation


When faced with a stipulated bargaining unit, the Board  must first
determine whether the stipulation is ambiguous.  If it is not, then
the Board must simply enforce the agree- ment. See id. If, however,
the stipulation is ambiguous, then  the Board must determine whether
the parties' intent can  nonetheless be discerned from the
stipulation. If the stipula- tion is a nullity such that the parties'
intent cannot be  discerned, then the Board determines the bargaining
unit by  employing its normal community of interest standard. See 
id.; International Union of Elec., Radio and Mach. Workers  v. NLRB,
418 F.2d 1191, 1201 (D.C. Cir. 1969) (noting that a  de novo approach
to determining the bargaining unit is  appropriate when intent of
parties cannot be discerned);  Venture Indus., Inc., 327 N.L.R.B. No.
165 (Mar. 19, 1999)  (noting that the Board will apply the community
of interest  test when the parties' intent is not clear).


If the parties' intent can be discerned, then the Board  should
interpret the ambiguous stipulation as one would  interpret an
ambiguous contract, including resort to extrinsic  evidence. See
International Union, 418 F.2d at 1201 (noting  that when a stipulation
is ambiguous, the Board properly  turns to extrinsic evidence "in
order to ascertain the intent of  the parties"). Avecor did not
articulate this approach, but it  certainly did not reject it either.
Moreover, some of our  sister circuits have followed it for years. See
NLRB v.  Barker Steel Co., 800 F.2d 284, 286 (1st Cir. 1986) (noting
that  where a stipulation is ambiguous, "the Board has the authori- ty
to interpret the agreement according to what it finds to  have been
the intent of the parties") (citation and internal  quotation marks
omitted); NLRB v. Detective Intelligence  Serv., 448 F.2d 1022, 1025
(9th Cir. 1971) ("[W]here a stipula-


tion is ambiguous, the Board has the authority to interpret  the
agreement according to what it finds to have been the  intent of the
parties."); NLRB v. Joclin Mfg. Co., 314 F.2d  627, 634 (2d Cir. 1963)
("Certainly [if] the stipulation ... was  ambiguous, evidence of
practical construction would be of  moment."). Indeed, the Board
itself recognizes its ability to  interpret ambiguous stipulations.
See Gala Food Processing,  Inc., 310 N.L.R.B. 1193, 1193 (1993)
(noting that the Board  has the authority to interpret ambiguous
stipulations by  resorting to extrinsic evidence as to parties'


However, in interpreting an ambiguous stipulation, the  Board must
create a record. An appellate court can only  uphold the Board's
findings as to the meaning of an ambigu- ous stipulation if those
findings are supported by substantial  evidence, see Micro Pacific
Dev. Inc., 178 F.3d at 1329, and  there will only be evidence to
support the Board's findings if  a record is created. Thus, the Board
must hold a hearing to  examine extrinsic evidence of the parties'
intent. Cf. Interna- tional Union, 418 F.2d at 1201 (holding that when
examining  extrinsic evidence to discern parties' intent, the Board
must  examine evidence from both sides).


The Board's failure to create a record in this case requires  us to
remand. The stipulation in this case indicates that the  bargaining
unit is to include "bulk truck drivers ... employed  by the Employer
at its Arlington, Iowa facility." Decision  and Direction of Election,
reprinted in P.A. 18. This stipula- tion is ambiguous. It clearly
expresses the parties' intent to  include only those bulk truck
drivers employed at the Arling- ton facility. However, there is
ambiguity about whether the  three challenged drivers fit that
description. That ambiguity  could not be resolved without reference
to extrinsic evidence.  The Regional Director knew that: He conducted
an investiga- tion to determine where the three challenged drivers
worked.  But he did not create a record. Thus, there is no substantial
 evidence to support his resolution of the ambiguity in the  Union's
favor. In other words, this court cannot know wheth- er there was any
evidence to support his finding that the  three challenged drivers
were not employed at the Arlington  facility.


III. Conclusion


For the reasons given above, enforcement of the Board's  order is
denied, the petition for review is granted, and the  case is remanded
to the Board for a hearing to determine  whether the three challenged
drivers belong in the bargaining  unit.