(AUD) is a pro-labor, non-profit organization dedicated to advancing the principles and practices of democratic trade unionism in the North American labor movement.

Beneli v. NLRB: Local 428 Operating Engineer Keeps Fighting

Kim Beneli was a forklift and crane operator and member of Operating Engineers (IUOE) Local 428 and employed by Babcock and Wilcox Construction Co. She was also a steward, and an aggressive one.1 In one instance, regarding her contention that a union member was being underpaid, she was approached at the job site not by the company rep. from Babcock but by a rep from the company’s customer, Arizona Public Service (APS), and he asked her what the issue was. She explained. The Babcock Rep. got wind of this conversation and told Beneli he was furious that she had spoken to APS, even though the APS Rep. approached her. She apologized.

Soon thereafter, she was told to come to a meeting with two Babcock Reps. To her surprise, she was told she was being suspended for three days without pay for two safety violations: 1) she allegedly failed to fill out a safety form and 2) for eating a pastry at a safety meeting. Beneli said “So this is this is the f_____ game you guys are going to play?” She was immediately discharged. The union grieved the discharge, arguing that the suspension and firing were retaliation for her activities as steward. The union presented evidence that just several hours before the suspension the Babcock Rep. approached the union’s business agent and told him he wanted Beneli discharged because she was raising contractual issues.

The grievance went all the way to a joint employer/union arbitration panel, pursuant to the contract. Beneli then filed a charge with NLRB Region 28, which told her by letter that it would defer to the outcome of the arbitration panel. The panel upheld the firing, finding there was just cause. The panel stated that the union had argued that the firing violated the contract because she was terminated without just cause, for use of profanity.

Unhappy with the outcome, Beneli asked NLRB Region 28 not to defer to the panel’s decision. Region 28 reviewed the decision and sided with Beneli and chose not to defer, finding the outcome of the grievance “repugnant to the [National Labor Relations] Act.” The Region filed a Complaint against the employer Babcock. The Region’s Complaint went to its Division of Judges in San Francisco for a hearing. The judge assigned overruled the Region’s Complaint and deferred again to the panel.

Beneli appealed the deferral to the five-member NLRB National Office in Washington DC. This prompted the Board’s review of its own standard and it invited briefs from interested parties and amici. In UDR 206, AUD director and attorney Michael Goldberg described the amicus brief he submitted on behalf of AUD.

On Dec. 15, 2014 the National Board ruled on the deferral standard and the Beneli case. The Board changed the standard, finding it did not adequately protect employee rights. The Board notes that it is the sole entity charged with preventing unfair labor acts as defined in NLRA Section 7 (the right to form, join or assist labor organizations to bargain collectively through representatives of one’s own choosing and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid organizations) and Sections 8(a)(3) (making it unlawful for employers to interfere with the exercise of those Section 7 rights by engaging in unfair labor practices that would restrain or coerce employees trying to exercise their Section 7 rights or to discourage or encourage membership in any labor organization.)

The Board also points out that the NLRA declares it to be the policy of the United States “to eliminate the causes of obstructions to the free flow of commerce by promoting collective bargaining” which typically include a grievance procedure and a neutral arbitrator or arbitral board to render a decision. Thus arbitration is also central to the NLRA’s stated policy goal of providing for a resolution of conflicts that does not impede the flow of commerce.

It is these two policy objectives that the deferral standard must balance.

The Board found that the current deferral standard “does not adequately protect employees’ exercise of their rights under section 7”. The basic problem was that it presumed an arbitrator or panel adequately considered whether Section 7 or 8 rights were violated by assuming that if the statutory issues were presented to the arbitrator, he, she or it must have considered them. There did not need to be any record or proof that the arbitrator actually did consider Section 7 and 8 rights.

The new standard modifies the old one such that the party urging deferral by the Board must show that 1) the arbitrator was authorized to decide the ULP, 2) the arbitrator was presented with and considered the statutory issues, and 3) the arbitration award is consistent with NLRB policy. Thus, now the party asking the Board not to intervene must prove that the arbitrator considered the statutory issues.

However, this new standard did not help Kim Beneli. The NLRB did not apply the new standard to Beneli vs. Babcock and Wilcox Construction Co., because it is only applying the new standard for future, not pending, cases. The rationale for delayed application is that existing CBA procedures were written assuming the current standard, where arbitrators did not have to provide evidence that they considered the Section 7 and 8 rights of the grievant. Future CBAs would need to incorporate such language. Using the current (old) standard then, the NLRB deferred to the arbitrator that upheld Beneli’s firing.

It is possible, had the Board used the new standard, that it would not have deferred to the arbitration panel, but as the old standard only required that the panel be presented an issue “factually parallel” to the unfair labor practice issue, such as a general “just cause” issue, it deferred.

Beneli has not given up. She has retained an attorney and has submitted a Petition seeking Judicial Review of the NLRB decision in federal court, the 9th Circuit. The Petition for Review was accepted by the court on Nov 15th and is currently in progress. So Beneli vs. Babcock and Wilcox Construction is now Beneli vs. the NLRB. No briefing schedule has been set by the court because the parties have been referred by the Court to mediation. If that does not resolve the case, the AUD may be filing an amicus brief before the 9th Circuit, arguing that the new standard should be applied at least to this case if not to all pending cases, and that even the old deferral standard should not be applied to cases, like this one, where the “arbitration” was conducted not by a neutral arbitrator but instead by a joint union-employer grievance panel.

If the appeal proceeds to briefing, AUD will argue: (1) that the new standard should be applied to all pending cases. An arbitration or joint board that was not presented with the statutory issue deserves no deference. (2) Even the old standard must be applied with respect to the values of the Act. The new standard of presented-with-the-issue does not eliminate the need to scrutinize decisions for obvious bias and pretext, as in a discharge ostensibly for bad language. This will continue to be grounds for nondeference even in future cases in which arbitrators will clearly be presented NLRA issues. (3) The instant case is a good example of why joint boards should not always receive the same deference as neutral arbitrators, citing research by our former director, Professor Clyde Summers.

Stay tuned for updates.

1. Facts presented here are according to the NLRB Administrative Law Judge’s Statement of the Case, according to which, Beneli regularly pointed out when the contract was not being followed and instructed the employer reps to follow it on more than one occasion.