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


INTL BRHD ELEC #702

v.

NLRB


99-1137a

D.C. Cir. 2000


*	*	*


Karen LeCraft Henderson, Circuit Judge: Local 702 and  Local 148 of the
International Brotherhood of Electrical  Workers, AFL-CIO
(collectively Unions) challenge a decision  of the National Labor
Relations Board (NLRB, Board) hold- ing that the Central Illinois
Public Service Company (CIPS)  did not commit an unfair labor practice
when it locked out its  employees during contract negotiations. CIPS,
326 N.L.R.B.  No. 89, 1998 WL 600788 (Aug. 27, 1988). Reversing the 
decision of the administrative law judge (ALJ), the Board  found that
the lockout, implemented in response to the Un- ions' "inside game"
tactics, was not "inherently destructive of  employee rights," was
justified by legitimate business inter- ests and was not motivated by
anti-union animus. Because  we conclude the Board's decision is in
accord with the law and  supported by substantial evidence, we deny
the Unions' peti- tions for review.


I.


In April 1992 CIPS, a public utility which generates and  distributes
electricity and gas in Illinois, began negotiating  with each of the
Unions over contracts to succeed those  expiring in June 1992. When no
agreement was reached by 


March 1993 CIPS submitted a "final" offer to each of the  Unions, which
each voted to reject. In lieu of striking, the  Unions decided to
institute an "inside game" strategy under  which their members agreed
to refuse to work voluntary  over-time and generally to "work-to-rule"
(e.g., "adhering  strictly to all company safety and other rules;
doing exactly  and only what they were told; reporting to work
precisely on  time and parking work trucks at company facilities at
day's  end (thus precluding employees from responding to after- hours
emergencies); presenting all grievances as a group;  advising
non-employees to report unsafe conditions; and ad- vising customers of
their right to various company informa- tion and of their right to
have their meters checked annually  for accuracy," CIPS, slip op. at
1, 1998 WL 600788, at *1).  The Unions began the inside game strategy
on April 24, 1993  and continued to negotiate while carrying it out.
At 4:00 a.m.  on May 20, 1993 CIPS instituted a lockout of all members
of  the two locals. Negotiations continued during the lockout  and
CIPS reached an agreement with Local 148 in June,  thereby ending the
lockout of its members. Local 148 none- theless remained off the job
in support of Local 702. CIPS  ended the lockout of Local 702 on
August 25, 1993, although  no contract agreement was reached until


Each of the Unions filed unfair labor practice charges with  the NLRB,
alleging violations of section 8(a)(1), (3) and (5) of  the National
Labor Relations Act, 29 U.S.C. s 158(a)(1), (3),  (5). Following a
hearing the ALJ judge issued a decision  dated May 20, 1996, which
found that CIPS had violated all  three cited subsections. In relevant
part, the ALJ's decision  concluded that the work-to-rule campaign
constituted protect- ed activity for which the lockout was intended as
punishment  in violation of section 8(a)(3). In a 2-1 decision dated
August  27, 1998 the Board reversed the ALJ on the section 8(a)(3) 
lockout charge, concluding the lockout was instituted not out  of
anti-union animus but with the dual "legitimate and sub- stantial"
business justifications of facilitating contract negoti- ations and of
countering the economic effects of the inside  game strategy. See
CIPS, slip op. at 4-7, 1998 WL 600788, at  *6-10.


II.


The Unions challenge both the Board's interpretation of the  law and
its factual findings. "The courts accord a very high  degree of
deference to administrative adjudications by the  NLRB." United
Steelworkers Local 14534 v. NLRB, 983  F.2d 240, 244 (D.C. Cir. 1993).
"The Board has primary  responsibility for applying the general
provisions of the [Na- tional Labor Relations Act], and where its
interpretation of  what the Act requires is reasonable, in light of
the purposes  of the Act and the controlling precedent of the Supreme 
Court, courts should respect its policy choices." United Food  &
Commercial Workers Int'l Union v. NLRB, 880 F.2d 1422,  1428 (D.C.
Cir. 1989) (citing Pattern Makers' League of N.  Am. v. NLRB, 473 U.S.
95 (1985); Automobile Salesmen's  Union Local 1095 v. NLRB, 711 F.2d
383 (D.C. Cir. 1983)).  "[W]ith respect to questions of fact," "the
findings of the  Board ... if supported by substantial evidence on the
record  considered as a whole shall be conclusive." 29 U.S.C.  s
160(e). "Where the Board has disagreed with the ALJ, as  occurred
here, the standard of review with respect to the  substantiality of
the evidence does not change." United Food  & Commercial Workers v.
NLRB, 768 F.2d 1463, 1469-70  (D.C. Cir. 1985) (citing Universal
Camera Corp. v. NLRB,  340 U.S. 474, 496 (1951); General Teamsters
Local Union  No. 174 v. NLRB, 723 F.2d 966, 971 (D.C. Cir. 1983)). 
Nevertheless, "cases have made clear that '[t]he findings and 
decision of the [ALJ] form an important part of the "record"  on which
[the] judgment of substantiality is to be based,'  International
Brotherhood of Teamsters, Local No. 310 v.  NLRB, 587 F.2d 1176, 1180
(D.C. Cir. 1978), and that the  Board, when it disagrees with the ALJ,
'must make clear the  basis of its disagreement ...' General
Teamsters, supra, 723  F.2d at 971." Id. at 1470 (alteration in
original). In the end,  however, "[s]ince the Board is the agency
entrusted by Con- gress with the responsibility for making findings
under the  statute, 'it is not precluded from reaching a result
contrary to  that of the [ALJ] when there is substantial evidence in 
support of each result,' " and " 'is free to substitute its  judgment


873 F.2d 316, 319 (D.C. Cir. 1989) (quoting Sign & Pictorial  U., Local
1175 v. NLRB, 419 F.2d 726, 734 (D.C. Cir. 1969)  (alteration in
original)). Because we conclude the Board's  decision here was
supported by substantial evidence and its  disagreement with the ALJ
fully explained, we do not disturb  it.


Section 8(a)(3) of the National Labor Relations Act pro- vides in
relevant part: "It shall be an unfair labor practice for  an employer
... (3) by discrimination in regard to hire or  tenure of employment
or any term or condition of employ- ment to encourage or discourage
membership in any labor  organization:...." 29 U.S.C. s 158(a)(3). In
NLRB v. Great  Dane Trailers, 388 U.S. 26 (1967), the United States
Supreme  Court construed its precedent to establish a comprehensive 
framework for analyzing allegations of a section 8(a)(3) viola-


The statutory language 'discrimination * * * to * * *  discourage'
means that the finding of a violation normally  turns on whether the
discriminatory conduct was moti- vated by an antiunion purpose.
American Ship Build- ing Co. v. National Labor Relations Board, 380
U.S. 300,  85 S.Ct. 955 (1965). It was upon the motivation element 
that the Court of Appeals based its decision not to grant 
enforcement, and it is to that element which we now  turn. In three
recent opinions we considered employer  motivation in the context of
asserted s 8(a)(3) violations.  American Ship Building Co. v. National
Labor Rela- tions Board, supra; National Labor Relations Board v. 
Brown, 380 U.S. 278, 85 S.Ct. 980, 13 L.Ed.2d 839 (1965);  and
National Labor Relations Board v. Erie Resistor  Corp., [373 U.S. 221,
227, 83 S.Ct. 1139, 1144-45, 10  L.Ed.2d 308 (1963)]. We noted in Erie
Resistor, supra,  373 U.S. at 227, 83 S.Ct. at 1144, that proof of an 
antiunion motivation may make unlawful certain employ- er conduct
which would in other circumstances be lawful.  Some conduct, however,
is so 'inherently destructive of  employee interests' that it may be
deemed proscribed  without need for proof of an underlying improper
motive.  National Labor Relations Board v. Brown, supra, 380  U.S., at
287, 85 S.Ct. at 986, American Ship Building Co.  v. National Labor


311, 85 S.Ct. at 963. That is, some conduct carries with  it
'unavoidable consequences which the employer not only  foresaw but
which he must have intended' and thus bears  'its own indicia of
intent.' National Labor Relations  Board v. Erie Resistor Corp.,
supra, at 228, 231, 83 S.Ct.  at 1145-1147. If the conduct in question
falls within this  'inherently destructive' category, the employer has
the  burden of explaining away, justifying or characterizing  'his
actions as something different than they appear on  their face,' and
if he fails, 'an unfair labor practice charge  is made out.' Id., at
228, 83 S.Ct. at 1145. And even if  the employer does come forward
with counter explana- tions for his conduct in this situation, the
Board may  nevertheless draw an inference of improper motive from  the
conduct itself and exercise its duty to strike the  proper balance
between the asserted business justifica- tions and the invasion of
employee rights in light of the  Act and its policy. Id., at 229, 83
S.Ct. at 1145. On the  other hand, when 'the resulting harm to
employee rights  is * * * comparatively slight, and a substantial and 
legitimate business end is served, the employers' conduct  is prima
facie lawful,' and an affirmative showing of  improper motivation must
be made. National Labor  Relations Board v. Brown, supra, 380 U.S. at
289, 85  S.Ct. at 987; American Ship Building Co. v. National  Labor
Relations Board, supra, 380 U.S. at 311-313, 85  S.Ct. at 963-964.


388 U.S. at 33-34. Applying this framework, the Board found  that the
CIPS lockout did not violate section 8(a)(3).


The Board first concluded that "the lockout in the instant  case,
standing alone, cannot be considered inherently destruc- tive of
employee rights," based on the Supreme Court's  holding in American
Ship Bldg. that "a lockout for the  purpose of applying pressure on a
union during a bargaining  dispute is not 'one of those acts which are
demonstrably so  destructive of collective bargaining that the Board
need not  inquire into employer motivation.' " CIPS, slip op. at 3,
1998  WL 600788, at *4 (quoting American Ship Bldg., 380 U.S. at 
309); see also slip op. at 3, 1998 WL 600788, at *4 (noting 


even in Brown, where employer took "additional step of  hiring
temporary replacements after the lockout to continue  operations,"
Supreme Court "found that such conduct is not  inherently destructive
of employee rights"). The Board  therefore determined "to treat [the
lockout] as having a  'comparatively slight' impact on employee rights
and apply  the second Great Dane test to determine the lockout's
legali- ty." CIPS, slip op. at 4, 1998 WL 600788, at *5. We agree 
with the Board's analysis. The Supreme Court made it clear  in
American Ship Bldg., as the Board observed, that a  lockout "does not
fall into that category of cases arising under  s 8(a)(3) in which the
Board may truncate its inquiry into  employer motivation." 380 U.S. at




__________

n 1 Local 702 contends the Board was required to "analyz[e] the 
specific facts in this case," in order to make the "inherently 
destructive" determination. See Local 702 Brief at 39-44. The  Supreme
Court decisions indicate, however, that an across-the- board lockout
"as a means to bring economic pressure to bear in  support of the
employer's bargaining position," 380 U.S. at 308, is  categorically
not "inherently destructive." See American Ship  Bldg., 380 U.S. at
310-12 ("Nor is the lockout one of those acts  which are demonstrably
so destructive of collective bargaining that  the Board need not
inquire into employer motivation, as might be  the case, for example,
if an employer permanently discharged his  unionized staff and
replaced them with employees known to be  possessed of a violent
antiunion animus.... This is not to deny  that there are some
practices which are inherently so prejudicial to  union interests and
so devoid of significant economic justification  that no specific
evidence of intent to discourage union membership  or other antiunion
animus is required. In some cases, it may be  that the employer's
conduct carries with it an inference of unlawful  intention so
compelling that it is justifiable to disbelieve the employ- er's
protestations of innocent purpose.... But this lockout does  not fall
into that category of cases arising under s 8(a)(3) in which  the
Board may truncate its inquiry into employer motivation.");  Brown,
380 U.S. at 284. ("[W]e do not see how the continued  operations of
respondents and their use of temporary replacements  imply hostile
motivation any more than the lockout itself; nor do we  see how they
are inherently more destructive of employee rights.").  Thus, the


correctly concluded that under the Great Dane framework  the Board must
inquire "whether the Respondent possessed a  legitimate and
substantial business justification for the lock- out." CIPS, slip op.
at 4, 1998 WL 600788, at *5. The Board  reasonably found that CIPS had
two such justifications.


The first objective the Board attributed to CIPS was "to  force the
Unions to cease their inside game activities." CIPS,  slip op. at 4,
1998 WL 600788, at *5. Noting that the strike  that prompted the
lockout in Brown was "also an economic  bargaining weapon in support
of contract demands and no  less protected than the inside game that
the judge found was  protected in this case," the Board concluded that
the lockout  was a legitimate defense against the Unions' "inside game
 weapon" deployed as part of "economic warfare in the midst  of
bargaining negotiations with the hope of securing agree- ment on their
terms for new contracts." CIPS, slip op. at 4,  1998 WL 600788, at *5.
Applying the standard of review set  forth above, we find the Board's
conclusion--that CIPS's  defensive use of the lockout here against the
Unions' inside  game was as justified as the lockout in Brown aimed at
the  employees' economic strike--to be "reasonable, in light of the 
purposes of the Act and the controlling precedent of the  Supreme
Court," United Food, 880 F.2d at 1428. According- ly, we defer to the
Board's policy choice. Id.


We also agree that the second business objective the Board 
identified--"resolution of issues that were dividing the parties  in
their bargaining negotiations," CIPS, slip op. at 4, 1998 WL  600788,
at *6--was a legitimate one and supported by the  evidence. The Board
found as a fact that in implementing  the lockout CIPS "sought
resolution of issues that were  dividing the parties in their
bargaining negotiations," CIPS,  slip op. at 4, 1998 WL 600788, at *6,
based on the text of  letters CIPS's chief executive officer sent the
members of  each of the Unions on May 20, 1993, the day the lockout 
began. The bulk of each letter outlined the contract conces- sions
CIPS made in its final offer and the chronology of 




__________

n inquiries whether the particular lockout has a legitimate business 
justification and whether it was motivated by anti-union animus.


negotiations, culminating in the inside game. In addition, the  letter
to Local 702 members stressed that union negotiators  had continually
rejected CIPS's urging to place its offers  before the membership and
was accompanied by an analysis  of the differences between the
previous contract and CIPS's  final offer of a new one.2 The letters
to Local 148 explained  the Company's position on the one apparent
sticking point in  negotiations (the transfer of six union positions
to manage- ment). Each letter closed with the following language:


Like you, I am anxious to bring these issues to a  successful
conclusion and have you back at your jobs at  the earliest possible
date. I sincerely regret the disrup- tion this decision will bring
into your lives. My hope is  that this aspect of our labor dispute is


App. 632-33, 644-48. Given their focus and tenor (concen- trating on
the course and substance of negotiations and  CIPS's eagerness to
resolve the contract dispute), we con- clude the letters constitute
substantial evidence in support of  the Board's finding "that a
purpose of the lockout was to  affect the outcome of negotiations
between the Respondent  and the Unions." CIPS, slip op. at 5, 1998 WL
600788, at *7.  We therefore uphold the Board's consequent
determination  "that application of economic pressure in support of
this  bargaining position constitutes a legitimate and substantial 
business justification for the lockout within the meaning of  Great
Dane." CIPS, slip op. at 5, 1998 WL 600788, at *7.


Finally, having found two substantial and legitimate busi- ness
objectives, the Board undertook the third inquiry of the  Great Dane
framework: asking whether the Unions had  made an "affirmative showing
of improper motivation," such  as through "evidence indicating that
the lockout was intended  to 'discourage union membership' or that was
[sic] used 'in  the service of designs inimical to the process of
collective  bargaining.' " CIPS, slip op. at 6, 1998 WL 600788, at *9 
(quoting American Ship Bldg., 380 U.S. at 308, 312-313). 




__________

n 2 According to the ALJ, a similar analysis was included with the 
letters to Local 148 members, CIPS, ALJ Dec. 23 [App. 806], but it 
does not appear in the appendix filed with the court.


The Board reasonably found "that 'not only is there absent in  [sic]
the record any independent evidence of improper motive,  but the
record contains positive evidence of the [Respon- dent's] good faith.'
" CIPS, slip op. at 7, 1998 WL 600788, at  *10 (quoting Brown, 380
U.S. at 290). As examples of such  evidence, the Board pointed to
CIPS's long and stable bar- gaining relationship with the Unions and
its lengthy, good  faith attempts to reach a contract here, including
its clearly  expressed desire in the May 20, 1993 letter to resolve
differ- ences and resume business as usual as soon as possible. We 
conclude the Board's historic and continuing good faith deal- ing with
the Union, combined with the absence of affirmative  evidence showing
anti-union animus, sufficiently supports the  Board's finding here.


Despite the Board's faithful adherence to Great Dane and  its
predecessors and specific factual findings, the Unions  challenge the
Board's decision on two grounds: (1) precedent  precludes the Board's
finding that CIPS's use of the lockout  as an economic defense to the
Unions' economic inside game  weapon was in furtherance of a
permissible business interest  and (2) the finding of no anti-union
animus on CIPS's part is  belied by the record. We find neither
argument a basis for  overturning the Board's determination.


First, the Unions contend the Board's acceptance of the  economic
defense justification is contrary to Supreme Court  precedent which,
the Unions maintain, requires finding the  lockout unlawful because it
was intended to curtail "protect- ed" activity, namely the inside game
tactics. As the Board  correctly observed, however, that activity may
be protected  does not insulate it from counteraction by an employer. 
CIPS, slip op. at 4, 1998 WL 600788, at *5 (noting: "To hold  that it
is not a legitimate business justification for the Re- spondent to
defend against this weapon with a lockout in  order to force the
Unions to yield, ignores the Court's obser- vation in American Ship
that the 'right to bargain collectively  does not entail any "right"
to insist on one's position free  from economic disadvantage.' ")
(quoting 380 U.S. at 309); see  Machinists v. Wisconsin Employment
Relations Comm'n,  427 U.S. 132, 152-53 (1976) ("[E]ven were the


sented in the instant case 'protected' activity within the  meaning of
s 7, economic weapons were available to counter  the Union's refusal
to work overtime, e.g., a lockout....")  (citing American Ship Bldg.)
(footnote omitted). The strikes  in both American Ship Bldg. and
Brown, as the Board noted,  were also protected activities--yet the
employers' responsive  lockouts in those cases were upheld by the
Supreme Court.  We see no reason to treat differently the lockout here
which  was implemented in response to the inside game strategy that 
the Unions adopted as an alternative to a strike.


We also believe the Board's endorsement of the economic  defense
justification is, contrary to the Unions' insistence,  consistent with
its own precedent. The Unions rely most  heavily here on the Board's
decisions in Riverside Cement  Co., 296 N.L.R.B. 840 (1989), Thrift
Drug Co, 204 N.L.R.B. 41  (1973), and Carlson Roofing, 245 N.L.R.B. 13
(1979). The  Board reasonably distinguished Riverside on the ground
that  the action taken there was not in furtherance of "lawful 
bargaining" but was an attempt to implement "a unilateral  change in
the employees' contractual terms of employment"  by requiring
employees to furnish specific personal tools  which, under their
collective bargaining agreement, they were  expressly exempted from
furnishing. CIPS, slip op. at 6-7  n.20, 1998 WL 600788, at *15 n.20.
Any worker who did not  provide his own tools was locked out. In
finding a section  8(a)(3) violation, the Riverside Board stressed
that the "denial  of work was limited to only those employees who
engaged in  action they were entitled to take under the contract" and 
therefore "was not a lawful lockout," which is "generally  permissible
in anticipation of a strike or in support of an  employer's legitimate
bargaining position." 296 N.L.R.B. at  841. Similarly, in Thrift Drug
Co., the Board found a section  8(a)(3) violation where the employer
suspended a single pick- eting employee solely on the ground the
employee "was  unlawfully selected for suspension because of her
activities on  behalf of the Union." 204 N.L.R.B. at 41. In contrast
to  Riverside and Thrift Drug, the lockout here was directed 
unit-wide, not to specific employees engaged in specific acts. 


finding that the lockout there violated section 8(a)(3) was  overturned
on review by the Seventh Circuit. See Carlson  Roofing Co. v. NLRB,
627 F.2d 77, 82 (7th Cir. 1980).


The Unions also argue that the Board ignored the ALJ's  credibility
determinations and findings regarding the true  motive behind the
lockout. The Board, however, expressly  accepted the ALJ's finding
that the lockout was implemented  "in reprisal" for the inside game,
ALJ Decision at 22, 1998  WL 600788, at *35, CIPS, slip op. at 2, 1998
WL 600788, at  *2, but then found the motive was "not ...
impermissible,"  CIPS, slip op. at 4, 1998 WL 600788, at *5. The ALJ
based  his motive finding on statements by company management  that it
would have "preferred" and been "better off with" a  strike or lockout
than with the inside game strategy, under  which unit employees "were
getting the best of both worlds"  by "putting pressure on the Company
while still getting their  paycheck for the daytime work." ALJ Dec. at
65 [App. 848].  Neither this testimony nor the finding itself is at
odds with  the Board's finding that CIPS implemented the lockout as an
 economic response to the inside game, which CIPS viewed as 
economically injurious. The Board's principal factual dispute  with
the ALJ was on how to construe the text of the May 20,  1993 letters
and the Board decision sufficiently explains its  differing, and we
believe more defensible, interpretation of  the letters' language. See
Mathews Readymix, Inc. v.  NLRB, 165 F.3d 74, 77 (D.C. Cir. 1999)
("Board's findings of  fact are conclusive if supported by substantial
evidence,"  provided it "make clear the basis of its disagreement"
when  reversing ALJ) (citing Avecor, Inc. v. NLRB, 931 F.2d 924,  928
(D.C. Cir. 1991); United Food & Commercial Workers  Int'l Union, Local
152 v. NLRB, 768 F.2d 1463, 1470 (D.C.  Cir. 1985)).


Finally, Local 128 challenges the Board's finding that its  members
were locked out in order to obtain a contract on the  ground that
agreement on a contract with Local 128 (as  distinct from Local 702)
was imminent. We accept the  Board's finding as supported by the
facts. The record estab- lishes that Local 128 acted in unison with
Local 207 in  planning and implementing the inside game and that, even


after CIPS terminated the lockout of Local 128, its members  stayed
away from work in support of Local 702 (as they might  well have done
ab initio if CIPS had not locked them out). It  was therefore not
unreasonable for CIPS and the Board to  treat the two locals as a
single bargaining force. In fact,  given the unified actions of the
two locals, lockout of only one  might well have suggested unlawful
discrimination under the  Board's decisions in Riverside and Thrift
Drug. See supra p.  12.


For the preceding reasons, the Unions' petitions for review  are


Denied.