United Retail Workers Union Local 881 v. National Labor Relations Board

BAUER, Circuit Judge. This case comes to us on remand from the Supreme Court of the United States. We had held in United Retail Workers Union, Local 881 v. NLRB, 774 F.2d 752 (7th Cir.1985), that the National Labor Relations Board did not exceed its statutory authority when it required a union to allow nonunion members of the bargaining unit represented by that union to vote when the union was considering merger or affiliation with another union. The Supreme Court vacated our decision, United Retail Workers Union, Local 881 v. NLRB, — U.S. -, 106 S.Ct. 1787, 90 L.Ed.2d 333 (1986), and remanded the case here for further consideration in light of the recent Supreme Court case of NLRB v. Financial Institution Employees of America, Local 1182, 475 U.S. -, 106 S.Ct. 1007, 89 L.Ed.2d 151 (1986). Upon consideration of this case in light of the Financial Institution case, we find the NLRB did exceed its statutory authority in requiring nonunion employees in a bargaining unit to vote when a union considers merger or affiliation with another union. We, therefore, grant the United Retail Workers’ petition for review and overturn the NLRB’s decision. I. Petitioner, the United Retail Workers Union, Local 881, is an entity created by merger of the United Retail Workers Union and the United Food and Commercial Workers Union. After the unions merged, May Department Stores, an employer whose employees had been represented by the pre-merger United Retail Workers Union, refused to recognize or deal with the post-merger United Retail Workers Union. The union then filed unfair labor practice charges with the National Labor Relations Board against May Department Stores, alleging violations of sections 8(a)(5) and 8(a)(1) of the National Labor Relations Act. 29 U.S.C. §§ 158(a)(5) and (1). To determine whether May Department Stores had engaged in an unfair labor practice by refusing to deal with the post-merger union, the NLRB applied its traditional two-prong analysis as modified by what is known as its “Amoco rule.” In this analysis, the NLRB determines whether the union conducted the vote approving the merger with sufficient due process and then determines whether there is sufficient continuity of interest between the pre- and post-merger unions. As modified by the Amoco rule (first expounded in Amoco Production Co., 262 N.L.R.B. 1240 (1982)), the NLRB also determines as a threshold matter whether the union allowed all employees in the bargaining unit to vote on the merger decision. If any of these conditions are not met, the NLRB will not require an employer to bargain with the post-merger union. [423] Applying this analysis to the instant case, the NLRB found it unnecessary to go any further than the threshold issue. The NLRB held that because United Retail Workers had not allowed nonunion members of the bargaining unit to vote on the merger decision, it was not an unfair labor practice for May Department Stores to refuse to bargain with the post-merger union. May Department Stores Co., 268 N.L.R.B. 979 (1984). The union appealed to this court, and in United Retail Workers Union, Local 881 v. NLRB, 774 F.2d 752 (7th Cir.1985), we upheld the NLRB’s decision and denied the union’s petition for review. Subsequently, the Supreme Court decided NLRB v. Financial Institution Employees of America, Local 1182, — U.S. -, 106 S.Ct. 1007, 89 L.Ed.2d 151 (1986), in which the court overturned the NLRB’s Amoco rule as irrational and beyond the NLRB’s statutory authority. The Supreme Court then granted the United Retail Workers’ petition for writ of certiorari, vacated this court’s decision, and remanded the case for reconsideration in light of the Financial Institution decision. II. Financial Institution held that the NLRB “exceeded its authority under the [National Labor Relations Act] in requiring that nonunion employees be allowed to vote for affiliation before it would order the employer to bargain with the affiliated union,” Financial Institution, 106 S.Ct. at 1017, and that holding controls this case. Although this case involves merger of two unions rather than affiliation, the relevant considerations are the same. Indeed, this is a stronger case than Financial Institution for overturning the NLRB’s requirement that nonunion members vote because both parties agree that in this case, due to the small number of nonunion employees, participation by nonunion employees in the vote could not have affected the outcome. Accordingly, we follow Financial Institution and hold that the NLRB cannot require the United Retail Workers to allow nonunion employees to vote on the merger before ordering May Department Stores to bargain with the post-merger union. We express no opinion regarding any remaining issues not presented in this appeal. Whether the merger vote was conducted with sufficient process or whether there is sufficient continuity between the unions as well as any other remaining issues are for the NLRB’s determination in the first instance. III. United Retail Workers’ petition for review is granted and the decision of the NLRB finding that May Department Stores had not engaged in an unfair labor practice on the ground that nonunion employees did not vote on the union merger is reversed. The case is remanded for further proceedings consistent with this opinion.