[1982] OLRB Rep. January 35
1373-81-U Radenko Bukvich, Victor Clarke, Michele D'Alonzo, Miodrag Psodorov, and Peter Lazaridis, Complainants, v. Local Union 304 Canadian Union of United Brewery, Flour, Cereal, Soft Drink and Distillery Workers, Respondent, v. Dufferin Aggregates, A Division of Dufferin Materials and Construction Ltd., Intervener.
BEFORE: M. G. Picher, Vice-Chairman.
APPEARANCES: J. D. G. Douglas for the complainants; J. C. Nelson and J. McNamee for the respondent; W. S. Cook and N. S. Roe for the intervener.
DECISION OF THE BOARD; January 18, 1982
This is a complaint under section 68 of the Labour Relations Act. The five grievors were laid off from their jobs as dependent contractor owner-operators of tandem trucks working out of a quarry at Milton operated by Dufferin Aggregates. The unusual twist is that their layoffs were, in effect, initiated by the union. The grievors claim that the actions of the union which resulted in their layoffs were in violation of its duty of fair representation described in section 68 of the Act.
The facts are not in dispute. In July of 1978 the respondent was certified by this Board as bargaining agent of all drivers working at or out of the Milton quarry (Board File No. 1880-76-R). There were forty-five employees in the bargaining unit at the time of certification. Since then two collective agreements have been negotiated. The current agreement, the product of a strike in the summer of 1980, is in effect from June 15, 1980 until December 31, 1982.
When the current collective agreement was executed, the unit numbered thirty-four drivers. Because of the nature of the services rendered, with drivers being paid by the load, the company is indifferent as to the number of drivers in the quarry as long as there are enough to handle the work available. The drivers on the other hand, who own their own trucks and have considerable financing costs and operating expenses to meet, are concerned with keeping a limit on the number of trucks in the quarry, to maximize their own revenues. To that end the following provisions were negotiated into the collective agreement:
ARTICLE IV
4.01 The Company will establish a drivers' list based on seniority. The number of drivers on such list shall not exceed thirty-four (34) but, if the Company proposes to increase such number it may do so after discussion with the Union Representative. Seniority shall mean total length of service with the Company. It is understood that this clause does not apply to temporary hiring to cover daily fluctuation of business.
4.02 There shall be no layoff during the life of this Agreement, it being understood that the drivers will share available work in accordance with present practice.
4.03 Drivers will receive available loads in accordance with the practice presently in effect.
4.04 The Company is entitled to call in truckers not on seniority list as it sees fit provided that, so far as practicable and the requirements of the Company's customers can be met satisfactorily, drivers on the seniority list shall have first call on loads at all times.
The evidence establishes that conditions in the industry have caused a continuing attrition in the number of drivers in the bargaining unit. At one time there were fifty-six drivers at work. There were forty-five at the time of certification. Shortly before the layoff that is the basis of this complaint, there were thirty-three drivers, three of whom quit. After the layoff, at the time of hearing, there were twenty-one owner-operators at work.
The dependency of the drivers in the bargaining unit on the work available at Dufferin is a matter of record. They do not obtain any meaningful income from alternative sources; as the Board's certification decision indicates, practically one hundred percent of the income of the drivers is derived from the Dufferin quarry (see Dufferin Aggregates, [1978] OLRB Rep. Mar. 278 at 280). There was no suggestion in the evidence before us that that has changed over the last three years.
The hardship experienced by the drivers is due in part to a general decline in the construction industry and to an increased use of independent trucking contractors who operate larger tractor trailer units. The evidence of owner-operator Radenko Bukvich establishes that things were especially lean in December of 1980 and January of 1981; for a period of five or six weeks he obtained practically no loads. At about that time a movement began among some of the drivers to change the collective agreement so that the company could have the right to lay off drivers by seniority. At that time Martin E. O'Brien, then the trucking supervisor of the company, made no secret of the fact that in his opinion the company could operate efficiently with twenty-five trucks rather than thirty-four. There was then little reason to doubt that the company would respond to an initiative of the union to amend the collective agreement to allow it to lay off junior drivers and distribute the available work among a smaller poo1 of senior drivers.
A group of senior drivers began to act on that prospect through the early months of 1981. A petition favouring the insertion of a layoff provision in the collective agreement was circulated among the senior drivers. As a result a meeting of the bargaining unit was held on June 3, 1981 to entertain a motion which would have authorized the union executive to re-open negotiations with the company to amend the no-layoff provision of the agreement. The motion passed by a margin of 14 to 10. The union executive, however, under the direction of Mr. Cameron Nelson, the full-time union officer who chaired the meeting, ruled that the vote was not sufficient to authorize re-opening the contract because it was passed by only a minority of the employees eligible to vote. It appears that under the union's rules a change of that magnitude requires a majority of all employees in the bargaining unit. As a result, Mr. Nelson, who had earlier told the meeting that in his opinion the motion was ill-advised and against the best interests of all of the employees, advised the owner-operators that the status quo would continue.
Undaunted, the senior drivers, led by shop steward A. Levin, petitioned again. A further meeting was held on July 13, 1981. As with the first meeting and a subsequent meeting on August 19, 1981, it is clear that all drivers in the unit got notice of the meeting and of the issue to be discussed and had a reasonable opportunity to speak and vote on the motion presented.
At the meeting of July 13, 1981, Mr. Nelson reiterated his personal opposition to removing the layoff prohibition from the collective agreement. He reminded the drivers that while senior drivers might be able to weather a first layoff they could be caught by bigger layoffs in the future. After some two hours of heated discussion a secret ballot vote was taken: the motion to re-open the contract carried 18 to 12, a majority of the employees in the bargaining unit.
The inevitable followed. The union executive, bound to carry out the wishes of the majority, approached the company and negotiated an amendment of the collective agreement. The amendment, tentatively agreed to on August 14, 1981, provided:
WHEREAS the parties hereto are parties to a collective agreement covering a bargaining unit of dependent contractor owner-drivers dated June 18, 1980;
The parties hereby agree that, subject to ratification:
- Article 4.02 of the aforesaid collective agreement shall be deleted and a new Article 4.02 shall be substituted. The new Article shall read as follows:
'4.02 Should the Company find it necessary to lay-off members of the bargaining unit due to lack of work, it shall do so in reverse order of seniority. During periods of lay-off, the Company shall maintain a lay-off list of drivers and shall recall them in order of seniority when work becomes available. Recalls shall be effected by telephone call and, if necessary, by telegram or registered letter sent to the driver's last known address. The Company will also advise the Union when it intends to lay—off or recall a driver.
On August 19, 1981, a final meeting of the bargaining unit was held to ratify the amendment. That meeting, again chaired by Mr. Nelson, is not irregular in respect of its procedures. The evidence establishes that adequate notice and a full opportunity to participate and vote was afforded all drivers in the bargaining unit. As expected, after a predictably stormy meeting, the amendment was ratified.
Two weeks later, by letter dated September 3, 1981, the company notified the union that nine drivers were laid off effective 5:00 p.m., September 4, 1981. There can be little doubt that the layoff had a harsh impact on the drivers affected. One of the grievors, Mike D'Alonzo, was unable to find other haulage work and was forced to sell his truck because of an inability to meet his finance payments. Mr. Bukvich testified that because of his financing obligations he may have to chose between losing his truck and losing his house. He is angry that the union could have permitted such a result through a process which he described as "the rich getting together . . . voting member against member".
Counsel for the complainants attacks the actions of the union in re-opening the contract on two grounds. Firstly he submits that the process of amendment was contrary to the duty of fair representation under section 68 of the Act. Secondly he maintains that the purpose and result, benefiting the majority at the expense of the minority, is itself contrary to the section.
It is submitted on behalf of the complainants that there was something less than good faith or an honesty of purpose in the manner in which the amendment was brought about. Their counsel also argued that in arriving at its decision the union did not adequately balance the interests of the two competing groups and failed to consider whether the benefit of the majority outweighed the harm to the minority.
In challenging the result counsel for the complainants reiterates the imbalance of interests. He argues that while a union might in some circumstances have to make decisions adverse to a group of employees, it must have compelling reasons to do so. In his submission the transfer of profits from one group to another, particularly when the individuals concerned are contractors who compete for work in the same marketplace, is not a good faith exercise of the duty of fair representation, and may in fact constitute a restrictive trade practice. He argues that that is the more so where the union's action is at its own initiative to disturb a collective agreement in mid term. He submits that the union could not without discrimination, arbitrariness or bad faith disturb the vested right of the drivers to be protected against layoffs for the duration of the collective agreement. He emphasizes that the terms of that agreement were gained in part from a long and difficult strike to which the laid off drivers made a substantial contribution. In his view the actions of the majority were designed purely to expropriate for themselves the business and profits of the minority in circumstances that did not justify such extreme action, and are inconsistent with the union's duty of fair representation of all of the drivers.
Counsel for the union submits that there has been no violation, either procedurally or in substance, of the duty of fair representation. In his submission the bargaining unit was faced with a degenerating economic condition characterized by a shrinking demand for the drivers' services. He argues that when the drivers were faced with the harsh reality of a declining amount of work they were entitled, by the open and democratic means of union majority rule, to opt for a different way to slice the pie. He submits that by choosing the time-honored means of attrition by seniority the union had adopted an accepted industrial relations rule and had not singled out individuals for arbitrary, discriminatory or bad faith treatment. In response to the complainant's charge that they have been victims of a tyranny of the majority, counsel for the union responds that after all the union is a democratic institution in which the wishes of the majority must govern. He maintains that to the extent that in this case those wishes were expressed and executed without arbitrariness, discrimination or bad faith, through a process of open and fair deliberation followed by a secret ballot vote, there can be no violation of the duty of fair representation.
Allocating work and wages, whether in scarcity or in plenty, is the central fact in any scheme of collective bargaining. The struggle between union and management over the division of profits in the form of wage and benefits settlements usually gets the bulk of public attention. The less visible question, however, of which employees will work and how much they will get is often no less important. It may generate as much heat inside the union hall as does the confrontation with the employer outside. That kind of internal union tension stands in high relief in the facts of this case.
There are those who maintain that it is inconsistent with the duty of a trade union to. fairly represent individual employees for the union to take steps that will prejudice employees' vital job interests, including their job security. That view has generally been associated with the argument for an absolute right of individuals to have access to arbitration for such serious consequences as the loss of their employment. (See, e.g. Blumrosen, Legal Protection for Critical Job Interest: Union Management Authority Versus Employee Autonomy (1959), 13 Rutgers L. Rev. 631.)
The fact, however, that a union may be required in bargaining to make a hard decision that has a serious economic impact on individuals, up to and including the loss of their jobs, cannot of itself make that decision unlawful. That kind of decision is, moreover, not unusual. In making collective agreements it is practically impossible for unions to avoid making decisions that benefit one class of employees at the expense of another. For example when a union opts for more wages rather than better pension provisions it benefits its younger members rather than the older ones. Trade-offs of that kind are the everyday stuff of collective bargaining.
Under the Labour Relations Act such decisions are lawful so long as they are not arbitrary, discriminatory or in bad faith within the meaning of section 68 of the Act. In the knowledge that unions are commonly required to make hard decisions affecting their members, those words have been deliberately chosen by the Legislature to avoid undue interference in the internal affairs of trade unions. The Board's powers of review over union actions under the section go only to matters of representation, when the quality of representation falls below the limited threefold standard set out in section 68. The issue in these proceedings, therefore, is whether the union's decision to re-open the contract and effectively allow junior employees to be laid off was arbitrary, discriminatory or in bad faith.
There is nothing inherently unlawful in a union making a decision that favours a group of employees over another. From the earliest decisions interpreting section 68 of the Act the Board has recognized the need for unions to have the latitude to make decisions that may favour certain employees at the expense of others. As the Board put it in Ford Motor Co. of Canada Ltd. [1973] OLRB Rep. Oct. 519, in applying what was then section 60 of the Act, (at pp. 525-26):
In practical terms the relationship between members of the bargaining unit and the trade union is one of majority control. The relationship is not strictly one of contract between employee members of the union and the union, but rather the relationship is such that the system created more closely resembles the Legislative process than a contractual relationship; see Cox, Rights Under a Collective Agreement, 69 Harv. L. Rev. 601 (1956).
Section 60 of The Labour Relations Act seeks to ensure that individual's rights are not abused by the majority of the bargaining unit; it is an attempt to achieve a balance between the individual interests and the majority interest by recognizing that the exclusive bargaining agent has a duty to consider all the separate interests in the performance of its obligations. The duty has been described as the duty of fair representation. The emphasis is on fairness — it is a duty to act fairly in the interests of all members of the bargaining unit, minority factions, as well as majority factions, individual employees, as well as the collective group, members as well as non-members, craft employees as well as industrial employees. It is not a duty which makes the union the guarantor or insurer for every situation in which an individual employee is aggrieved or adversely affected; rather, the statute attempts to have the union consider the position of all groups and to weigh the competing interests of minorities, individuals and other like groups in arriving at its decision.
In this case the complainants ask the Board to conclude that the decision to effectively eliminate the jobs of a minority is in itself a violation of the duty to fairly represent the members of the minority. Counsel for the complainants argues that the grievors had a contractual right and expectation to work out of the quarry over the life of the collective agreement, and that to re-open the contract to undo that right is a violation of their vested rights inconsistent with the duty of fair representation.
As compelling as that argument may seem, in my view it does not assist the understanding of the issue to simply assert that the members of a minority have an absolute right to be protected against negative consequences to their job security. The collective agreement is a contract made between the employer and the union. They are the parties to it, and any benefits which it confers on individual employees are necessarily subject to the possibility of amendment between the parties. In this regard it should be recalled that a collective agreement is not "a bundle of individual contracts between employer and employee negotiated by the union as agent for the employees". (Syndicat Catholique des Employees de Magasins de Quebec, Inc. v. Compagnie Paquet Ltee, [1959] S.C.R. 205; (1959), 1959 CanLII 51 (SCC), 18 D.L.R. (2d) 346; Mc Gavin Toastmaster Ltd. v. Ainscough (1975), 54 D.L.R. (3d) I (S.C.C.))
That is not to say that a trade union can with impunity disregard the interests of the employees it represents or take either a hostile or an indifferent attitude where employees' critical interests are at stake. In discharging its duty to fairly represent all of the employees in a bargaining unit a union must address its mind to the circumstances of those who may be adversely affected by its decision. It has a duty to weigh the competing interests of the employees it represents and make a considered judgment the procedure and result of which must be neither arbitrary, discriminatory nor in bad faith.
Counsel for the complainants submits that in this case the union has not properly balanced the interests of the two groups of employees involved. He argues that if the union cannot show that the marginal advantage which the union's decision gives the majority outweighs the disadvantage to the minority, it has violated the duty of fair representation. In other words, he maintains that the union must justify its decision, and absent such justification the Board should conclude that the union's action is in violation of the duty of fair representation.
That submission must be considered with great caution. To adopt that standard in an unqualified way risks placing the Board in the position of being the arbiter of the political correctness of a union decision. The weighing of competing interests and the ultimate choice as to which outcome is preferable is a highly subjective decision, inevitably influenced by the inherent values, viewpoints and preferences of the decision maker. In the collective bargaining context such choices are highly political, and to that extent unions are required to act as responsive political bodies.
In bargaining changes that affect the competing interests of employees a union has a two stage involvement: firstly it must be the forum for resolving the conflict between sometimes irreconcilable employee interests; secondly it must act as the spokesman for the interests that carry the day. Once the internal choice is made the union must approach the employer with the force and conviction of a body with a single voice. To view the union in this later stage as the antagonist of the minority is to misconceive the process. Professor Cox, in discussing the processing of grievances, usefully summarized this dimension of union activity as follows:
When the interests of several groups conflict, or future needs run contrary to present desires, or when the individual's claim endangers group interests, the union's function is to resolve the competition by reaching an accommodation or striking a balance. The process is political. It involves a mélange of power, numerical strength, mutual aid, reason, prejudice, and emotion. Limits must be placed on the authority of the group, but within the zone of fairness and rationality this method of self-government probably works better than the edicts of any outside arbiter. A large part of the daily grist of union business is resolving differences among employees poorly camouflaged as disputes with the employer.
(Cox, "Rights Under a Labour Agreement", (1956), 69 Harv. L. Rev. 601 at 626-27.)
The weight of authority supports the view put forward by counsel for the complainants that special considerations attach to any decision by a union that alters or abrogates the job security of employees. That is especially true in relation to seniority rights. Seniority rights, built up over time, usually over a number of successive collective agreements, represent an employee's stake in critical interests such as promotion, pension rights and his rights of layoff and recall. The concept of seniority comes as close as any to approximating a form of industrial relations property right for the individual employee, and its consideration by labour boards in fair representation complaints is particularly instructive.
The special consideration attaching to decisions affecting seniority in assessing the duty of fair representation was expressed as follows by the B.C. Labour Relations Board in B.C. Distillery Company Limited, [1978] 1 Can L.R.B.R. 375 at 381:
... The fact of the matter is that existing seniority clauses take on a much more compelling hue than other contract clauses. This is a good statement of the reasons why:
... Seniority enables an employee to acquire valuable interests by his work, to capitalize his labor and obtain something more than a day's wages for his continued production. When seniority determines promotion rights, it gives the employee a claim to better jobs when they become available; when seniority determines the order of layoff, it provides the employee a measure of insurance against unemployment. Seniority does not guarantee that vacancies in higher rated jobs will be filled or that any jobs will be available; but by giving the senior employee priority when a choice is made as to who will be promoted or who will remain employed, seniority gives an employee an interest of substantial practical value. As Professor Aaron has pointed out, more than any other provision of the collective agreement . . . seniority affects the economic security of the individual covered by its terms, and it has understandably come to be viewed as one of the most highly prized possessions of any employee. Seniority may be the most valuable capital asset of an employee of long service.
Summers and Love. Work Sharing as an Alternative to Layoffs by Seniority, (1976), 124 U. of Pa. L.R. 893, at p. 902.
Employees in the plant know their position on the seniority list. They believe that they have earned the spot by their long service. They have firm expectations that that position will remain unaltered. Suppose then that the union and the employer negotiate a change in that clause, one which has the effect of re-shuffling positions on the seniority list. How does the adversely affected employee naturally perceive that contract change? He believes that the parties have simply taken a valuable asset belonging to him and given it to another employee. That perspective is most dramatic in a layoff situation in which the total number of jobs in the plant is being reduced:
In a layoff situation, however, seniority takes on an importance of a wholly different determination necessarily carries with it all the other employment rights ordered by seniority — overtime, shift preferences, promotions, and the rest. In addition, layoff may jeopardize or destroy other valuable rights attached to employment or accumulated by long service. Layoff may result in termination of group medical or life insurance which the employee cannot afford to continue individually. If the layoff continues long enough to terminate seniority the employee may lose the longer vacations, accumulated sick leave, longevity pay, and perhaps even pension benefits, earned by length of service. When employees are confronted with mass layoffs, the symbolic and real importance of seniority is most compelling; deviation from the order of seniority is viewed as repudiation of 'vested right'. It deprives the senior employee not only of his security but of all other values he has earned by his length of service.
Summers and Love, pp. 904-905.
And for these pragmatic reasons, the law simply cannot take the attitude that because the union and the employer freely negotiated the original seniority clauses, they are also able to change that existing clause at will. As Professor Archibald Cox has said: "When established seniority rights are changed, the bargaining representative should be required to show some practical justification beyond the desire of the majority to share the job opportunities theretofore enjoyed by a smaller group," (Cox, The Duty of Fair Representation, (1957), 2 Villanova L.R. 151 at p. 64.)
[Emphasis added]
This case involves the elimination of a work sharing guarantee in favour of a provision of layoffs by seniority. A work sharing provision is one of a number of means, like seniority, like provisions prohibiting the contracting out of bargaining unit work, or like classification schemes, whereby job security can be directly affected. It is obviously a fundamental provision in any collective agreement, expressing as it does the choice and expectation of the employees respecting the allocation of work in times of scarcity. Commonly associated with the garment industry, work sharing represents a choice made by employees that in the even of hard times they will share the shrinking volume of work available rather than sever some employees from their jobs for the benefit of the remainder. That approach is readily understandable among dependent contractors who, like the complainants, operate with substantial capital investments in markets that fluctuate both with the economy and with the seasons. A hauler is arguably less secure if he is subject to layoff and recall at the discretion of this employer than if he has a contractual guarantee of a place in the quarry.
Work sharing has deep and abiding importance for the employees who are under it. Because it impacts on job security it represents an employee interest just as critical as a seniority provision. Action by a union to change or eradicate a work sharing or no-layoff provision must, therefore, be viewed seriously and be judged by the same standards as a change in seniority provisions. That is particularly so where, as here, employees have had the security and benefit of such a provision through successive collective agreements. The impact in this case is more dramatic still: as dependent contractors the complainants do not contribute to the Unemployment Insurance scheme. For them the consequences of a layoff are particularly hard, and the analogy to a change in seniority ranking provisions is extremely close. The decisions of the courts and labour boards on the relationship between seniority and the duty of fair representation therefore deserve close analysis.
The first full judicial elaboration of the issue of a union resolving competing approaches to seniority arose in the decision of the Supreme Court of the United States in Ford Motor Company v. Huffman (1953) 31 L.R.R.M. 2548. The case involved the negotiation of a clause in a collective agreement which would enable returning military veterans to use their military service prior to employment as credit towards their seniority. The authority of the union to negotiate such a proviso was challenged by union members who had worked longer than the veterans, but would accumulate less seniority under the new arrangement. The court held that "[a] wide range of reasonableness must be allowed" the bargaining representative (at 2551):
Any authority to negotiate derives its principal strength from a delegation to the negotiators of a discretion to make such concessions and accept such advantages as, in the light of all relevant considerations, they believe will best serve the interests of the parties represented Inevitable differences arise in the manner and degree to which the terms of any negotiated agreement affect individual employees and classes of employees. The mere existence of such differences does not make them invalid. The complete satisfaction of all who are represented is hardly to be expected. A wide range of reasonableness must be allowed a statutory bargaining representative in serving the unit it represents, subject always to complete good faith and honestly of purpose in the exercise of its discretion.
The Court went on to conclude that in agreeing to give seniority credit for military service the union had not breached the duty of fair representation.
The duty was considered further in Roberts v. Lehigh and New England Railway (1963) 54 LRRM 2265, a decision of the U.S. Court of Appeals, 3d Circuit. In that case the emphasis was placed on the legitimacy of the majority opinion in the union expressed through voting procedures. The company wished to revise a collective agreement to provide for the compulsory retirement of employees on reaching the age of 65. The proposal was initially rejected by the majority in a referendum ballot. Subsequently 30 employees who were over 66 years of age were laid off. The proposal was resubmitted and the majority accepted. The plaintiffs were involuntarily retired and alleged a breach of the union s duty of fair representation towards them. The court held that there existed no such breach because there was no evidence of "hostile discrimination" against the plaintiffs. The court adduced two principal reasons for its conclusion: first, that "[e]ach lodge consented to the inclusion of the provision in the agreement only after a majority of members voted in favor of it" (at 2267); second, "[t]he fact that the provision may favor younger workers who outnumber older ones with greater seniority rights is not a basis for a claim of hostile discrimination" (at id.).
In my view the rationale of the Lehigh and New England Railway case is not compelling. The assertion that the will of the majority is a full answer to a charge of unfair representation has been subjected to strong criticism. (See Boyce, Fair Representation, the NLRB and the Courts, 1978, Industrial Research Unit, University of Pennsylvania.) Moreover, that approach is not consistent with the qualification expressed by Professor Cox in the passage cited in paragraph 29 above. The Board agrees with the view expressed by Professor Cox that a union transferring the job opportunities of a minority to a majority must be required to show some objective justification beyond the majority will. Predatory practices are not justified simply because they are implemented by a vote of the majority. To so conclude would be to eliminate any real protection to minorities, a result clearly inconsistent with the very origins of the duty of fair representation (Steele v. Louisville and Nashville Railroad Company (1944), 15 L.R.R.M. 708 (U.S.S. Ct.)
More recent U.S. decisions have, like the decision of the B.C. Board in the B.C. Distillery case, supra, stressed that when a majority transfers to itself employment advantages previously enjoyed by a minority it must show some objective justification beyond the mere will of the majority. The case of Barton Brands Ltd. v. NLRB(1976) 529 F2d793;91 LRRM 2241 (U.S. C.A. 7th Circuit) is an example. In the wake of the closing of one plant and the merger of two companies the union negotiated to alter seniority rights and endtail the seniority lists. Employees had initially voted for dovetailing when it was believed that a new plant would open. The union's endtailing negotiations began when it learned that the plan to open a new facility had been abandoned. The Court held that seniority rights, once established, cannot be expropriated simply for the benefit of the majority (at L.R.R.M. 2246):
In summary, since the established seniority rights of a minority of the Barton employees have been abridged by the 1972 collective bargaining agreement for no apparent reason other than political expediency, there seem to be sufficient grounds in this case to support the Board order.., in order to be absolved of liability the Union must show some objective justification for its conduct beyond that of placating the desires of the majority of the unit employees of the expense of the minority.
(emphasis added)
(See also Truck Driver Local 568 v. NLRB (Red Ball Motor Freight, Inc. (1967) 65 LRRM 2309 (U.S.C.A. D.C.); NLRB v. Teamsters Local 315 (Rhodes and Jamieson, Ltd.) (1976) 93 L.R.R.M. 2747, U.S.C.A. 9th Circuit; Beriault v. Warehousemen's Union (1978) 97 L.R.R.M. 2955 (U.S. Dist. Ct., Oregon). These decisions reflect the same approach taken in Canada by the Board in B. C. Distillery supra.)
In this case a majority of the union has transferred to itself work opportunities previously enjoyed by a minority. The issue then becomes whether the evidence discloses an objective justification for the union's action.
The Board must obviously use great care in assessing what is and what is not objective justification for a union's decision, particularly a decision relating to choices as to the allocation of goods in conditions of scarcity. In my view it would be clearly inappropriate for the Board to substitute its own view for the union's by simply asking itself whether it would have acted differently. To do that is to substitute one subjective standard for another, and not to consider the issue of objective justification. The appropriate standard to be adopted by this Board is not unlike that expressed by the Court in the judicial review of the decisions of arbitrators: the Board should ask not whether the decision is right or wrong or whether it agrees with it rather it should ask whether it is a decision that could reasonably be made in all of the circumstances, even if the Board might itself be inclined to disagree with it. Used in this sense "reasonable" must mean by the rational application of relevant factors, after considering and balancing all legitimate interests and without regard to extraneous factors.
In this case the evidence leaves little doubt that the union was faced with a deteriorating economic situation in early 1981. The number of trucks in the quarry had been continuously reduced by attrition over the previous three years. Following the strike in the summer of 1980 conditions had continued to decline with some ten or eleven owner-operators leaving the quarry. In January of 1981 to remain competitive the drivers agreed to postpone the implementation of a negotiated rate increase from January 1, 1981 to April 1, 1981. In May the union agreed to drop the haulage rate by a further 25 cents in hopes of remaining competitive with independent truckers and retaining a larger volume of work. Because of the downturn in construction generally, and the increased use of larger independent trailer trucks, the drivers in the bargaining unit were only barely surviving.
In this regard the evidence of Milovan Stanisic is particularly instructive. Called as a witness by the complainants, Mr. Stanisic has worked as a driver in the quarry for nine years. He believed he stood approximately 17th or 18th in seniority at the time the issue of re-opening the contract arose. Mr. Stanisic favoured the layoff provision. By his own unchallenged account, he did not know what number of employees would be laid off if the contract were re-opened and was given no assurance that he would not. He decided however, that he would be better off either out of the quarry entirely, working elsewhere, or in the quarry sharing a viable volume of work among a smaller number of trucks. In his own words "I had to protect myself, sitting there doing little work with high costs I had to protect myself from going out of business". For Stanisic marking time in the quarry was intolerable; he preferred the risk of layoff with the alternative chance of better work in the quarry, to the seemingly hopeless stagnation of the previous months.
That is not to say that Stanisic's view was shared by everyone. To be sure, there were employees at the top and bottom end of the seniority list for whom the outcome of a layoff would be more predictable. There is, however, no evidence to suggest that the truckers could know with any certainty where the cut-off point would be in a layoff. There was inevitably a number in the middle of the scale for whom, like Mr. Stanisic, the outcome could not be certain. It is significant that these employees, no less than the mostjunior and most senior, had to make a choice between work sharing and layoffs by seniority. It would be unrealistic to think that most if not all drivers voted without giving some thought to their chances of survival. The fact, however, that some drivers in the position of Mr. Stanisic were willing to risk the unknown on the simple basis that the economic status quo was intolerable to them is in my view a compelling factor in understanding the decision which was made and assessing the objective justification for it.
This was a crisis decision — like a decision about how to determine who will survive in an overcrowded lifeboat. If the union had decided to transfer work from the minority to the majority in a time of relative prosperity, where its obvious motive was to increase the already profitable position of some drivers at the expense of others, it would be difficult to avoid the conclusion that its decision was in violation of the duty to provide representation free of invidious favoritism. That is clearly not the situation. I am satisfied on the evidence that continued economic hardship forced the union's members to question and eventually to reject the wisdom of the work sharing provision in their collective agreement. For them sharing the work, or more accurately, sharing the lack of it, was no longer a viable means of doing business as dependent contractors.
In reaching its decision did the union adequately balance the competing interests of the majority and the minority? In considering that question it is helpful to weigh the relative advantages and disadvantages of work sharing for all of the truckers. For them work sharing was not a guarantee against unemployment. Under the collective agreement as it stood before it was re-opened there was ample scope for attrition in the quarry. The only difference under work sharing as compared to under layoffs by seniority is that as the volume of work diminished attrition would be by order of poverty. Drivers with greater financial obligations would be less able to survive lean periods than those who owned their trucks outright. Under that system, given continual shrinkage, the poor would go first and the rich would go last.
The drivers were in a "no win" situation. Absent an upturn in the volume of business (in which case layoffs would not be a problem) someone was going to be hurt by the economic pressure. In these circumstances can the union be faulted for choosing an alternative by which those with the longest investment of service in the quarry should go last? The union was not content with a system which, in effect, gave the shrinking work in the quarry to those with the financial strength to bid for it. It chose instead to let seniority prevail. In asking whether the ultimate decision is one that could be reasonably made I do not see how the union can be faulted for preferring what a particularly helpful study has called a political mode of allocation over a market mode of allocation in a time of scarcity. (See Calabresi and Bobbitt, Tragic Choices, New York, 1978, at pp. 3 1-41).
This Board cannot conclude that in the difficult circumstances facing it, the union's decision to alter its system of work allocation was without objective justification. Without ignoring the hardship on the junior employees who were eventually affected by the union s decision, I must conclude that the decision to renegotiate the work sharing provision was one which the union was entitled to make in the circumstances, and that neither the motive nor the consequences of its decision violated its duty of fair representation. For reasons elaborated above, I am also satisfied that the procedure followed by the union was free of arbitrariness, discrimination or bad faith.
For the foregoing reasons the complaint is dismissed.